life insurance to the masses and offering value-added services
has always been top agenda for the Life Insurance Corporation
of India (LIC). It has now made its services more extensive
and accessible by extending its WAN to the far corners of
the nation. The next step is serving insurance policies on
the Web. by Brian Pereira and Minu Sirsalewala
the customer base of a services-oriented company is almost
four crore, and service contracts usually span a human life
cycle, enduring customer satisfaction right through becomes
quite a challenge for a company. In such a business scenario,
robust and extensive networking becomes mandatory for all
The Life Insurance Corporation of India (LIC) is one of the
biggest implementers of IT solutions in the country, and it's
a perfect example of an enterprise that uses IT to the hilt
to streamline operations and take customer satisfaction to
higher levels. It has now extended its wide area network (WAN),
voice-enabled it, and set up a Web server.
For the customer, the experience of doing business with LIC
will soon be highly simplified. A policy holder will no longer
need to visit the branch office and run from pillar to post,
to check the status of a policy for he will soon be able to
do this online (akin to Internet banking). And in the near
future, if someone lodges a complaint online or requests a
change in the policy, it won't be lost under a heap of dusty
box files. S. Lakshmanan, Chief-Information Technology, LIC,
says the new operational procedures will enable it to address
customer grievances within a week.
Yes, LIC is pleased with all the new technology. Its online
collections for premiums are rising rapidly every month. And
because the new network is voice-enabled, the company has
cut down drastically on costs for long-distance calls.
But this new experience may be a precursor of many new things
to come. For in the coming months LIC is going to introduce
many new online services, as it further enhances the network.
In fact, network upgrades are an ongoing activity at LIC since
PHASES OF DEVELOPMENT
The LIC wide area network is still evolving and has been through
two phases of development. It will be completed in the third
phase (this year). So far LIC has spent between Rs 80 - 100
core on the project, which was initiated in 1997. Network
design was done in 1995. When completed, all 100 divisions
of LIC will be connected to the WAN. For administrative purposes,
LIC as an organization is divided into 100 divisions located
all over the country. So far 52 divisions have been connected
to the WAN and the balance 48 will be connected during the
The nationwide WAN is arranged in a hierarchical fashion.
The Central Office (C.O.) at Nariman Point, Mumbai is the
network core. Next in the hierarchy are the seven Zonal Offices
located at Mumbai, Delhi, Calcutta, Chennai, Kanpur, Hyderabad,
and Bhopal. The district/divisional offices (also known as
MAN centers) come next, and these are in turn linked to the
branch offices, which are at the lowest tier in the hierarchy.
All branch offices have LANs. To date, there are a total of
89 MAN centers.
LIC has 2,048 branches across the nation. By the end of March
2002, it intends to connect 1,495 branches to the WAN.
In the first phase (1997), LIC connected 70 branches in Mumbai
(excluding Thane). These were connected using a mix of 9.6
Kbps and 64 Kbps links. During this phase seven MAN centers
(Chennai, Bangalore, Delhi, Calcutta, Pune, Hyderabad, and
Ahmedabad) became operational. The eight MAN centers (including
one in Mumbai) were interconnected on the WAN using 64 Kbps
During the second phase 33 MAN centers became operational
and these were interconnected on the WAN for data and VoIP
traffic. Towards the end of this phase 52 divisions were connected
that includes 41 MAN centers (each metro has multiple divisions).
A total of 663 branches were interconnected.
In the third phase LIC will connect another 48 MAN centers.
It is also setting up video conferencing links between Mumbai
and six other zonal locations. The 64 Kbps lines between the
zonal centers are also being upgraded to 2 MB links for this
purpose. During this phase, the 9.6 Kbps links connecting
the older MAN centers will be upgraded to 64 Kbps.
The network integrators who worked on this project faced certain
challenges during various stages of development. There were
equipment compatibility issues, sporadic router crashes and
the need for effective middleware.
At one point the DoT issued a circular saying that -48v D.C.
modems should be used, but LIC had already purchased A.C.
modems (as these were being used by the DOT earlier). So these
had to be replaced at many locations to maintain compatibility
with DoT premise equipment.
Another bottleneck was choking of router memory, especially
at the C.O. in Mumbai. This was due to the fact that the original
network design was 'flat.'
Explains K. Chitra, Assistant Secretary (IT), LIC, "When
we began, we did not foresee the problem caused by a flat
design, because the implementation at each center was being
done independently, without any interconnectivity feature.
So when we connected 663 branches, every branch router was
reflecting the address of all the other branches. The router
memory (at the branch level) was insufficient for storing
so many addresses/paths. As a result, we often faced some
performance related issues initially."
Because of the flat design a branch router in Chennai for
instance, reflected the IP addresses of all branch routers
So LIC upgraded its routers (details later) and also switched
to the hierarchical design. Now a branch router in Chennai
reflects the address of the router at the Chennai MAN center
(which is the next immediate hop in the hierarchy). The hierarchical
design conserves memory and also cuts down the number of routes
we had 1,200 routes in the core router, but this has dropped
to 66 routes. So 75-80 percent of the router memory has been
saved. When memory is saved, the efficiency of the router
increases. More packets can come in and the routing is faster.
And data packets don't get lost," explains Chitra.
One of the key components required was Middleware, to interconnect
the branches. "We initially considered MQ series but
found that it was very expensive. So our team found a more
simple and cost effective solution. We are now using UnixWare's
queuing system and shared memory feature for network connectivity,"
An external agency (Neo Computers) arranged for the middleware
(network programs). The processes and Daemons were written
by the LIC team, in-house.
There are two sides to the network the Web server that offers
customer services through the Internet, and the nationwide
intranet (WAN) which uses leased lines and VSATs for connectivity.
The WAN is being upgraded for zone/division communication
using VoIP and video conferencing technologies.
Being a public sector organization, LIC's practices are monitored
by the Central Vigilance Commission (CVC). Hence, specific
brands and equipment were selected as per the CVCs guidelines.
Dr. D. B. Phatak, Head, Kanwal Rekhi School of Information
Technology, IIT-Mumbai, is the technical advisor for this
Database servers and routing equipment form the heart of this
network. The WAN is structured for distributed processing
and there is no central database--each division maintains
a database of policy holders. The servers at the branch and
district offices hold policy information for customers residing
at these respective areas only. The Central Office in Mumbai,
maintains an index of policy numbers and the corresponding
IP addresses of the servers on which these policies reside.
For the first MAN center, LIC went in for Sun servers. Later
on, for the other two MAN centers, Intel servers were selected,
to maintain compatibility with the branch applications and
systems. The servers at the MAN centers are being upgraded
to the Intel Xeon platform. However, Sun servers are being
used for Web services.
found that Intel servers offered the same functionality (as
the Sun servers) and we were more confident with these, hence
the change in platform," explains LICs IT Head,
The servers at the MAN center run on the SCO UnixWare 7 operating
system and have the MF COBOL application. The branch centers
use Softek Cobol.
Mail servers and application servers (for CRM) will be deployed
at a later stage.
For the leased line network, LIC has chosen Cisco routers,
RAD modems/multiplexers and Cisco or D-Link unmanaged switches.
Chitra says the routers at the zonal centres had to be upgraded
as more MAN centers were added to the network. Initially,
Cisco 2600 series routers were chosen for servicing the first
10 MAN centers (under seven zonal offices). But these were
replaced with Cisco 3640 series last year, when another 33
MAN centers were connected. The routers at the zonal offices
were once again upgraded to 3600 series as the network expanded,
to connect 89 MAN centers in 100 divisions.
Cisco 3640 series routers (at the seven zonal offices) could
not service all the divisions (MAN centers) under them. So
at the zonal level we upgraded the routers to Cisco 3660 series
(3661/62)," says Chitra. "The 3661/62 is a six slot
router and it was chosen because it has more memory capacity
and greater processing power. These routers also offer more
slots for leased line terminations."
Presently, the MAN centers use Cisco 3640 routers and the
branches use Cisco 1750/1720 series routers. These routers
are voice enabled, but at present only data passes through.
The links between the MAN centers and zonal centers carry
both voice and data.
The modems and multiplexer (MUX) are other essential equipment,
and RAD products were chosen. The MUX helps in consolidating
separate channels, cuts down the number of modems and also
reduces margin for failure.
Explains Chitra, "In the Central Office we had 20 lines
coming in to the router. We could have gone in for an E1 channel
(30 x 64 Kbps lines) from DoT. But this would require 30 separate
modems. Also, in that case, if the E1 channel went down, then
the whole line would fail. Hence we decided to go in for a
RAD MUX which is similar to the equipment available at DoT.
We have gone in for an E1 channel at our Bangalore, Thane,
Pune and Mumbai MAN centers."
However, MUX units are not being used at other locations,
which use E1 channels instead for this an E1 card is placed
in the router.
Three types of modems are used on the WAN RAD ASM20, RAD ASM31
and RAD E1. The RAD ASM20 is a four-wire modem, while RAD
ASM31 is two-wire modem.
Five divisional offices/MAN centers and 15 branches will have
VSAT connectivity, for linking distant divisions/branches
(like those in the Eastern region), with the C.O. in Mumbai.
The MAN centers with VSATs are Bongaigaon, Silchar, Jorhat,
VSAT connectivity has been provided by HCL Comnet. SCPC-PAMA
will be used for VSATs.
Since LIC made significant investments in EPABX equipment
two years earlier, it has decided to link its existing voice
communication system with the WAN, instead of going in for
next generation IP phones and VOIP switches/gateways.
The technology is from Cisco and it involves voice-enabling
the routers. This is done by putting special modules and cards
(NM2V and VIC2E&M) in the router. The cards are connected
to an EPABX unit. Digital handsets (from Tata Telecom) are
connected to the EPABX.
Getting deeper into the technology, Chitra explains that the
router has six slots-- four of these are assigned for voice
while two are for data.
fit NM2V modules into these slots. NM2V is the base module
required for fitting the VIC2E&M card. A cable connects
the VIC2E&M card to the EPABX. Each NM2V module has two
voice ports. Each NM2V will take two VIC2E&Ms. Each VIC2E&M
will have two channels. So we put two VIC2E&Ms per slot
and this effectively gives four voice channels per slot. The
zonal office routers have one slot assigned for voice using
one NM2V and two VIC2E&M."
The routers support both data and voice. On the Central Office
router four slots are for voice thereby resulting in 16 voice
channels (48 extensions). This means 16 voice sessions can
take place simultaneously. The zonal offices have got four
voice channels (12 extensions).
the other two data slots in the C.O. router, we have put an
E1 card in one, which connects to the MUX. The slot has the
NM4T card which is for connecting four 2 MB lines, to Delhi,
Chennai, Calcutta, and Hyderabad," says Chitra.
To cut down on travel expenses, LIC is implementing a video
conferencing solution between its C.O. in Mumbai and six other
locations. For this purpose, two locations (Kanpur and Bhopal)
will have ISDN connectivity while the other four locations
(Calcutta, Chennai, Delhi, and Hyderabad) will have 2 MB links.
Zydacron equipment has been selected for video conferencing
(as per guidelines from the CVC). At the C.O. the video conferencing
equipment is not being connected to the router directly instead
it is being connected to an Ezenia MCU (multi-conferencing
A Web server has been set up at the central office (www.licindia.com)
for the purpose of offering policy holders basic services.
In the near future a registered user can avail of services
like making modifications to a policy (change of address,
change of nominee), querying the status of the policy, etc.
Already, LIC can send policy holders premium notices by e-mail.
According to LIC, 70,000 users have already registered for
the status report.
At present, policy holders can pay premiums online through
service providers (ICICI bank, HDFC bank, UTI bank, Bank of
Punjab, Corporation Bank, Billjunction.com and Timesofmoney.com.)
the website we will be offering a statement of all the premiums
paid during the financial year, for filing of income tax returns.
We plan to provide more value-added services later,"
says LIC's IT Head, Lakshmanan.
When a policy holder registers at the website, the system
checks his details with the server at the relevant MAN center.
Then his record is fetched from the MAN server and put on
the Web server. It takes a day to complete this process. Thereafter,
any change that takes place in the policy account (like further
payments of premiums, change in nominee, change in address)
is reflected on the Web server, and also on the branch server's
Sun E420 servers are used for the Web server at the Central
office. The Checkpoint Enterprise Firewall (running on a Sun
UltraSparc server) is also used. A similar set up exists at
the Internet service provider's (VSNL) premise. A 128 Kbps
ISDN line is used for connecting the Web server (at the C.O)
to the ISP server.
Currently, the Web server and intranet/WAN are not directly
connected, but LIC will interconnect the two with a leased
line and put in a firewall in between.
Both policy holders and LIC are now enjoying the benefits
of the Web server facility. Instead of running from table
to table (or office to office), policy holders can now view
the status of their policy from anywhere on the Web.
Further, customers can use the Web for placing complains/grievances
and these can be resolved within a week.
LIC is benefiting too. Payments via the Web are going up every
month, and workflow processes have been streamlined. As of
February 2002, there were 2,872 collections for premiums made
through the Web, amounting to Rs 86,28,410.
collections we are getting via the Internet are much more
than what we would get through a service provider. It has
also reduced the time taken for the transaction," says
LICs IT Head, Lakshmanan. "We are paying the bank
(service provider) Rs 3 per transaction as collection charges.
But we also have to send a notice to the bank, collect the
payments, etc. When doing this the traditional way, it takes
a much longer time."
The WAN and Web server have also boosted the morale of the
employees. "The level of computerization in our organization
has increased and most staff members know how to operate a
computer. We are also advancing loans to the LIC agents to
purchase computers. These agents can also take some services
to the policy holders from his machine at home," says
a proud Lakshmanan.
LIC is in the final stages of setting up Call Centers at eight
locations, and connecting these to the WAN. In addition, there
are interactive voice response (IVR) systems at 56 locations.
"Looking forward, we will have an all-India database
with data warehousing. We will be interconnecting the call
centers," informs Lakshmanan. "This will enable
a person staying in New Delhi to find out the status of the
policy which was taken in Mumbai, for instance."
Life Insurance Corporation of India (LIC) is a
1,93,621.69 crore public sector enterprise (total
assets as of 31st March 2001). It is in the business
of selling insurance products and related services.
LIC has 1,25,000 employees and 6,28,301 agents
across the country, and it services approximately
four crore policy holders.
This corporation grew by over 60 percent in the
last financial year, notwithstanding the opening
up of the insurance sector. LIC's operations span
the length and breadth of the nation through seven
zonal offices, 100 divisional offices, and 2,048
Servicing so many customers across the country
is quite a challenging task, and LIC wanted to
improve customer services by streamlining processes
and making policies more accessible to customers.
It also needed to reduce costs on travel and intra-office
An extensive network with a Web front-end to make
policies and services more accessible. LIC connected
more branches, district centers and zonal offices
to the WAN in a hierarchical arrangement. It then
set up a Web server so that policy holders could
lodge complaints online, modify policy information
or just check the status of policies.
To cut costs on travel and long distance calls,
LIC chose to voice-enable its WAN and deploy video
conferencing solutions. It needed to upgrade its
leased lines for voice and video traffic. This
involved replacing older routers with new voice-enabled
one's having more memory and processing power.
While doing so, LIC also interfaced its EPABX
voice communications systems with the WAN.
The upgraded and extended WAN streamlines processes,
making it easier for customers and LIC staff to
check the status of policies, address grievances,
and act on feedback.
Collections via the Web reduce time taken for
transactions. All this translates to improved
efficiency levels in service.
LIC is also saving on intra-office long distance
communications, thanks to the use of VoIP and
video conferencing technologies on its WAN.