A CPP Report On LIFE INSURANCE CORPORATION LIMITED For the partial fulfilment of the award of degree of BBA Under

the supervision of:Dr. J.K Chandel Assistant Professor Submitted To:The Director Submitted By : MUKESH RANI Class: MBA 5 year 3rdsem Roll no. : 30 Registration no. : 12 UD - 58

INSTITUTE OF MANAGEMENT STUDIES Kurukshetra University, Kurukshetra August December 2013

DECLARATION

I, MUKESH hereby declare that I have completed the report entitled assigned to me by the Institute, to be submitted in the partial fulfillment of the MBA 5 Year Degree from Kurukshetra University. Further, I declared that this is original work done by me and the information provided in the study is authentic to the best of my knowledge and belief.

Signature MUKESH

ACKNOWLEDGEMENT

In this project, I have made an honest and dedicated attempt to make the Project Report so easy to understand for a person who is willing to get knowledge about the LIFE INSURANCE CORPORATION LIMITED. I am deeply indebted to my esteemed teacher & our chairman Prof. M.K Jain, K.U.K., because he gave me opportunity of making project report. I am also thankful to my lecturer as well as my supervisor (Guide) Mr. J.K CHANDEL for their kind support & suggestion for making project report.

MUKESH MBA 3 sem

rd

SIGNATURE Roll No. 30

CONTENT Chapter No. 1. Title of the Chapter Insurance Sector 1.1 Introduction 1.2 History 1.3 Players in the sector Life Insurance Corpration 2.1 Introduction 2.2 History 2.3 Product and Services 2.4 Organisational Structure Analysis and Interpretation 3.1 Financial Analysis 3.2 Marketing Analysis SWOT Analysis and Conclusion Learning From The Report REFERENCES Page no.

2.

3.

4. 5.

CHAPTER-1 INTRODUCTION Brief Introduction of Sector A insurance sector is a boon to a countrys economy. The sector facilitates long-term funds for infrastructure development and simultaneously strengthens the risk-taking ability of the country. Indias rapid economic growth and development over the past decade is considered to be very significant on the global canvas. Indian insurance sector is poised to mark great progress in the years the come. Over the past few years, many foreign insurance companies have ventured into the Indian landscape in order to harness the immense untapped latent potential of this industry. Moreover, the favourable regulatory environment ensures stability and fair play in the entire market. The total insurance market stood at US$ 72 billion in FY12 and is expected to touch US$ 139 billion by 2015. Over FY03-12, life insurance premiums increased at a compound annual growth rate (CAGR) of 20.1 per cent. Private players have increased their market share in the life insurance market to 29.3 per cent in FY12 from 2 per cent in FY03. The rapid development in Tier II and Tier III cities and growth in new bankable households have led to the emergence of a large insurable class with an appetite for sophisticated life insurance products. LIC is still the market leader, with 70.7 per cent share in FY12, followed by ICICI Prudential, with 4.9 per cent share. The Insurance Regulatory and Development Authority (IRDA) has recently allowed life insurance companies that have completed 10 years of operations to raise capital through initial public offerings (IPOs). Insurance products are also covered under the exempt, exempt, exempt (EEE) method of taxation, which translates to an effective tax benefit of approximately 30 per cent on select investments. Crop insurance market in India is the largest in the world, covering around 30 million farmers. The Government of India plans to increase the coverage to 50 million during the 12th Five-Year Plan. Health insurance continues to be one of the most rapidly growing sectors in the Indian insurance industry. Penetration of health insurance is expected to more than double by 2020.

History
Insurance: Nov 2012 India is one of the fastest growing insurance markets in the world. Growing interest towards insurance among people; innovative products and distribution channels are aiding the growth of insurance sector. Increasing demand for insurance is offshoring. The total insurance market has grown from US$ 13 billion in FY02 to US$ 70 billion in the year FY11. Over FY03-11, premiums have increased at a compound annual growth rate (CAGR) of 20.5 per cent. Motor insurance forms the largest non-life segment with a share of 43 per cent followed by Health insurance accounting 23 per cent of the total. The Insurance Regulatory and Development Authority (IRDA) Act, 1999, has allowed a foreign direct investment (FDI) of up to 26 per cent in the insurance sector on automatic route subject to obtaining license from IRDA. Authorities are now considering an increase of FDI limit to 49 per cent through the Insurance Laws Amendment Bill. IRDA recently allowed life insurance companies that have completed 10 years of operations to raise capital through initial public offerings (IPOs). Investments from the private sector are increasing as they see a huge opportunity in the growing insurance sector of the country. Insurance: March 2013

India is one of the fastest growing insurance markets in the world. Growing interest towards insurance among people; innovative products and distribution channels are aiding the growth of the sector. The Indian insurance market has grown from US$ 13 billion in FY02 to US$ 70 billion in FY11 and is further expected to grow to US$ 139 billion in FY15. Over FY02-11, life insurance premiums increased at a compound annual growth rate (CAGR) of 21.6 per cent. Motor insurance forms the largest non-life segment with a share of 41 per cent followed by health insurance accounting 23 per cent of the total in FY12. The emergence of an affluent middle class is triggering the demand for both life and non-life personal insurance. The Insurance Regulatory and Development Authority (IRDA) Act, 1999, has allowed foreign direct investment (FDI) of up to 26 per cent in the insurance sector on automatic route subject to obtaining license from IRDA. The Cabinet has also approved increase of FDI limit to 49 per cent

through the Insurance Laws Amendment Bill (2008). The opening of pension market with the passing of the Pension Fund Regulatory Development Authority (PFRDA) Bill 2011 will make the market more conducive for private life insurers. Further, the rapid development in tier II and tier III cities and growth in new bankable households have led to the emergence of a large insurable class with an appetite for sophisticated life insurance products. PLAYERS IN THE INSURANCE SECTOR LIFE CORPORATION OF INDIA Life Insurance Corporation (LIC) came into existence on 1st September 1956 through the amalgamation of 154 Indian insurance companies, 16 non-Indian companies and 75 provident. The amalgamation was achieved with the help of Life Insurance Act passed by the Parliament in the same year. The LIC was created with the goal of reaching all the insurable people in the country and providing them financial coverage at a reasonable price. In the year 1956, LIC had 5 zonal offices, 33 divisional offices and 212 branch offices. With time there was a need for a branch office at every district headquarter and many branches were opened, which raised the pace of the organization. LIC now has 2048 fully computerized branch offices, 100 divisional offices, 7 zonal offices and the corporate office. At present, online premium collection facility is being offered in selected cities as LIC has tied up with some banks and service providers. For providing customer satisfaction the organization has introduced various schemes such as ECS, ATM premium payment facility, IVRS, Info centers which are set up in various cities including Mumbai, Bangalore, Chennai, Kolkata, New Delhi, Pune and many more. It has also come up with SATELLITE SAMPARK offices providing easy access to policyholders. LIC has crossed many milestones and set standards for itself fostering unmatched performance.

Objectives

Holding the money with obligation and using it in the best possible manner in the interests of the policyholder and the community.

Bringing attractive savings plans and making them easily accessible to the policyholders. Giving attractive returns to the people and keeping in mind national priorities. Being trustworthy to the customers and develop the spirit of corporate social responsibility. Spreading insurance in both rural and urban areas and covering all the insurable persons at a reasonable cost.

Bringing in plans and policies favorable to the changing environment.

Providing efficient service and involving people in the organization for their satisfaction.

Bajaj Allianz General Insurance Company Limited Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and AllianzAGofGermany.

Bajaj Allianz General Insurance came into existence on 2nd May 2001, when it got certification of Registration from the Insurance and Regulatory Development Authority. Bajaj Auto has a share of 74%, whereas Allianz has the remaining 26%. In the very first year, the company made a strong position for itself in the industry and was reckoned amongst the top private insurers. The premium income of the company as on 31st March 2006 was Rs. 1285 crores, whereas the profit after tax made was Rs. 52 crores. Bajaj Allianz has a Pan India network covering over 100 towns from Jammu to Thiruvananthapuram and aims to spread its operations in many other cities.

The vision of the organization is to be the first choice for customers, and provide job satisfaction to the employees and create shareholder value. The organization strives to excel in its products and services, providing total customer satisfaction.

Bajaj Allianz serves customers in all areas of General and Health Insurance as well as Risk Management. It has in-depth knowledge of the local market and extensive distribution network with expertise, stability and experience. It has a capital base of Rs. 147 crores, and is allowed to serve both the General and Health insurance.

It has achieved iAAA rating, by ICRA Limited and has the highest claims- paying ability and a stable position in the market. In a 2006 survey, Business World has rated it among the Most Respected Companies, putting it at No.2 position in Insurance sector.

The Company provides the following products under general insurance:

Travel Insurance Asset Insurance Health Insurance Corporate Insurance

ICICI Prudential Life Insurance Company

ICICI Prudential is a joint venture between ICICI bank and Prudential plc, both having strong operations in their respective countries. ICICI bank is one of the leading banks in India providing quality financial services and Prudential is an international financial service provider headquartered at United Kingdom. ICICI and Prudential have respective shares of 74% and 26%. The Company started operating in December 2000. Currently, total capital with the company is Rs. 18.15 billion. ICICI Prudential was the first insurance company in India to receive a National Insurer Financial Strength rating of AAA (Ind.) from Fitch ratings. It has been given the honour of being among the Most Trusted Brands in the industry by Economic Times for 3 consecutive years. It has a network of 450 branches, over 1,50,000 insurance advisors and 18 bancassurance partners.

As the organization grows and develops, it keeps introducing new range of products and services and enhancing the quality of plans and solutions given to the customers. The distribution network is one of the best, and is spreading across the length and breadth of the country. As on December 31, 2006, it had made imprints in over 360 cities and towns in India. It has over 1,75,000 advisors across the country, serving clients with full commitment. It has tied up with ICICI Bank, Bank of India, Federal Bank, Lord Krishna Bank, some co-operative banks, NGOs, MFIs and corporates for making inroads into the rural areas.

Products Insurance Solutions for Individuals: ICICI Prudential Life Insurance offers several novel, customercentric products for customers at every stage of life. The products and services offered by the organization are in various fields, such as:

Savings & Wealth Creation Solutions

Premier Life Gold LifeLink Super Invest Shield Life New Cash Plus Cash Bak Life Time Super & Life Time Plus Save 'n' Protect.

Retirement Solutions

Life Link Super Pension Forever Life Immediate Annuity Life Time Super

Child Plans

Education insurance - Smart Kid

Protection Solutions

Life Guard Home Assure

Group Insurance Solutions ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees.

Group Immediate Annuities Group Term Plan Group Superannuation Plan Group Gratuity Plan

ICICI Lombard General Insurance ICICI Lombard General Insurance Company Limited is a joint venture between ICICI Bank Limited and Fairfax Financial Holdings Limited. ICICI bank is India's second largest bank; Fairfax is Canadabased, engaged in general insurance, reinsurance, insurance claims management and investment management. ICICI Lombard General Insurance Company commenced its operations in general insurance business in August 2001.

ICICI Lombard is India's number one private insurance company; it is also the first general insurance company to be given certification of ISO 9001:2000. The company provides simple and fast documentation, fast claims settlement, online policy issuance, and comprehensive product line. It has also been given iAAA rating by ICRA for having highest claims paying ability. In the very first year of operations, it was able to reach financial breakeven and achieve underwriting breakeven in the second year. Security is provided through encryption and it is the first company to provide digitally

signed documents. It has been honored as the most Customer Responsive Company by the Economic Times. Times of India has designated it as the Best Housing Insurance in the Smart Living Awards by 360 degrees. It has also been awarded Gold Shield for "Excellence in Financial Reporting". It is among the top three companies to be awarded the "General Insurance Company of the Year" at the 10th Asia Insurance Industry Awards.

Products Business Solutions

Industrial All Risk Fire and Special Perils Electronic Equipment Insurance Fidelity Insurance Consequential Loss (Fire) Insurance Tea Corp Insurance Burglary Insurance Machinery

Personal Solutions

Group Personal Accidents Health Health Insurance

Project Solutions

Contractors' All Risk Contractors' Plant & Machinery Erection All Risk Performance Guarantee

Liability Solutions

Director's & Officers Liability Product Liability Workmen's Compensation Event Insurance

Product Liability

Travel Insurance

Senior Citizen Overseas Travel Individual Overseas Travel Corporate Overseas Travel Domestic Travel

Birla Sun Life Insurance Company Limited Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between Aditya Birla Group and Sun Life Financial Inc. BSLI started functioning in March 2001 after getting the certificate of registration from IRDA.

Birla Sun Life Insurance Company Limited introduced unit Linked Life Insurance Solutions in India. Within a short span of time it was able to establish itself as a leading player in the Private Life Insurance Industry. It has been innovative and come up with customer-centric products to provide safety and services. The company has web-enabled IT systems for better customer services and a strong distribution channel which is easily approachable. The company shows corporate governance and a high degree of transparency in all business practices. It has professional knowledge and global expertise of Aditya Birla Group.

Birla Sunlife Insurance has been providing first class financial solutions to its customers and has been amongst the top three private sector life insurance companies.

Its mission is to be amongst the top players in the eyes of customers and the first choice of insurance and retirement solutions to individuals and groups. These innovative solutions are linked with global and technical expertise and are deployed by a multi channel distribution network and enhanced technology.

The company aims at keeping all people associated with it - customers, clients, stakeholders and employees- happy and fully satisfied. It wants to provide value added products and services to the customers, job satisfaction to employees and highest returns to the shareholders.

Qualities like integrity, commitment, passion, and speed are the core values of the company. The

products offered by the company are:

Individual Life Protection

Premium Back Term Plan Birla Sun Life Term Plan

Saving

Simply Life Flexi Save Plus Supreme Life Life Companion Flexi Cash Flow Prime Life Flexi Save Plus

Children

Children's Dream Plan

Retirement

Flexi Secure Life Retirement Plan II

Riders

Critical Illness Plus Rider Term Rider Waiver of Premium Critical Illness Rider Critical Illness - Woman Rider Accidental Death and Dismemberment Rider

TATA AIG General Insurance Tata AIG General Insurance Company Ltd. is a joint venture between Tata Sons and American International Group, Inc. (AIG). The Tata Group is holding 74 per cent stake and the rest 26 percent is

held by AIG. The company has got the expertise, knowledge and strength of both the organizations.

Tata AIG General Insurance Company was founded on January 22, 2001. It offers general insurance in various categories, such as automobile, home, personal accident, travel, energy, marine, property and casualty and specialized financial solutions. Jamsetji Tata founded Tata Group in 1860s. It has an estimated turnover of around US $ 14.25 billion. It has spread its operations in various fields such as steel, power, hotels, airlines, software services, communications, etc. Some of its major projects have been Tata Tea, Tata Steel, Tata Chemicals, Titan, Tanishq, Voltas, Westside and Tata Motors. Its imprints are made on the telecommunication and technology sector. Regarding telecommunications, it is the largest international long distance service provider. Approximately two- third of the equity of Tata Sons is held by a host of national institutions in science and technology, medical services and performing arts. By combining the ethical values with business acumen and fulfilling its commitment to the nation, it has become one of the largest groups in India.

American International Group, Inc. (AIG) is the leading international player in insurance and financial services. Its network spreads across 130 nations. AIG member companies serve all types of customers, be it commercial or individual. AIG is among the leading insurers and the largest underwriter of insurance. Aircraft leasing, financial products and trading are some of the services offered by AIG. AIG has a global expertise of fulfilling the customer-centric needs. It has specialized investment management capabilities in equities, fixed income, alternative investments and real estate. AIG's stock has been listed in the New York Stock Exchange as well as stock exchanges in London, Paris, Switzerland and Tokyo.

The organization caters to individuals, small businesses and corporates. Individual plans include motor, home, accident & health and travel insurance, whereas corporate plans include accident & health, travel, energy, property, marine and liability plans.

New India Assurance Company Sir Dorab Tata founded New India Assurance Company on 23rd July 1919. It has 1068 offices comprising of 26 regional offices, 393 divisional offices and 648 branches with more than 21,000 employees.It is one of the largest Non- Life insurers in Afro- Asia and the first one to cross Rs. 5,000 crores of Gross Premium. It has a global network expanding in countries like Japan, U.K., Middle East, Fiji and Australia. Its international operations started in 1920 and have spread across 24 countries

having a network of 19 branches, 12 agencies, 2 associate companies and 2 subsidiary companies. The company contributes 80% of total overseas premium in India.The company has a highly qualified staff, which excel in both expertise and knowledge and are trained to provide satisfaction to the customers. It is the only company able to establish strong relationships overseas and has a record of successful trading outside India. The performance has been outstanding and the company has been able to maintain a strong position in the market.

It has been the pioneer in various fields such as:

Setting up an Aviation Insurance Department in 1946. Handling the complete insurance requirements of the Indian Shipping Fleet. Introduced its own Training School. Pioneering the concept of 'Model Office Training'. Creating department in Engineering insurance. Satellite insurance.

The company wants to develop itself as the best general insurance company in the industry. It is concerned about the society and community, and provides financial security at reasonable prices. The company gives utmost importance to customer needs and there is transparency in its operations. Some of the policies and schemes introduced by the company are:

Public Liability Policy Jewellers Block Policy Pravasi Bharatiya Bima Yojana Policy Universal Health Insurance Scheme Fire Policy

IFFCO Tokio General Insurance IFFCO Tokio General Insurance is a customer-centric company aiming to be easily accessible and approachable to all sections of society. It offers products and services that provide quality at reasonable cost. The organization has the deep knowledge of IFFCO and thus developed a business plan that has both stability and integrity.

It has set global standards for itself and is the only private general insurance company in India to make 5 consecutive years of experience. ITGI has been one of the few companies to show underwriting profits within four years of operations.

The company focuses on delivering creative solutions to its customers. IFFCO Tokio General Insurance has 273 employees present in 68 cities, dedicated to give full satisfaction to the customers. It is the first company to underwrite mega policies for a fertilizer and automobile client.

The Oriental Insurance Company Ltd. The Oriental Insurance Company Ltd. (OICL) is one of the general insurance companies under the support of the General Insurance Corporation (GIC) of India. It came into existence in the year 1947 and is one of the oldest organizations in India. It caters to all sections and sectors ranging from MNCs to rural sector. The headquarters of the company are situated at Delhi and it has 21 Regional Offices, 311 Divisional Offices and 635 Branch offices. It has a team of hard working employees, having the talent to take the company to new heights. Also the company shows concern for both the employees and customers. It provides special covers for large projects like power plants, steel plants and chemical plants.

It believes in actively participating in economic growth by being a dynamic organization catering to the society with full commitment and efficiency. The main objectives of the company are to serve the insurance needs of the entire community, provide services at reasonable cost, make optimum utilization of the funds, maintaining global standards, minimization of losses and retention of business.

HDFC Standard Life Insurance Company Limited HDFC Standard Life Insurance Company Limited is one of the first companies to be licensed by IRDA to operate in the Insurance sector. The company came into existence on 14th August 2000. Both Crisil and ICRA have honored it with AAA Ratings. Similarly Moody's and Standard and Poors have also honoured it AAA ratings. HDFC holds 81.4% share in HDFC and the remaining 18.6% stake is with Standard Life. It integrates the strong expertise and stability of Standard Life and HDFC.

It is one of the most trusted companies; it is easily accessible and approachable, offering value services to its customers. The company aims to provide:

Innovative products to cater to different needs of different customers Customer service of the highest order Use of technology to improve service standards Value for money for customers Increasing market share

Professionalism in carrying out business

CHAPTER 2 LIFE INSURANCE CORPORATION LIMITED Introduction Life insurance in India made its debut well over 100 years ago.

In our country, which is one of the most populated in the world, the prominence of insurance is not as widely understood, as it ought to be. What follows is an attempt to acquaint readers with some of the concepts of life insurance, with special reference to LIC.

It should, however, be clearly understood that the following content is by no means an exhaustive description of the terms and conditions of an LIC policy or its benefits or privileges.

For more details, please contact our branch or divisional office. Any LIC Agent will be glad to help you choose the life insurance plan to meet your needs and render policy servicing.

Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:

The date of maturity, or Specified dates at periodic intervals, or Unfortunate death, if it occurs earlier.

Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner. By and large, life insurance is civilisation's partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person:

1. That of dying prematurely leaving a dependent family to fend for itself. 2. That of living till old age without visible means of support.

Who Can Buy A Policy?

Any person who has attained majority and is eligible to enter into a valid contract can insure himself/herself and those in whom he/she has insurable interest.

Policies can also be taken, subject to certain conditions, on the life of one's spouse or children. While underwriting proposals, certain factors such as the policyholders state of health, the proponent's income and other relevant factors are considered by the Corporation.

Insurance For Women

Prior to nationalisation (1956), many private insurance companies would offer insurance to female lives with some extra premium or on restrictive conditions. However, after nationalisation of life insurance, the terms under which life insurance is granted to female lives have been reviewed from time-to-time.

At present, women who work and earn an income are treated at par with men. In other cases, a restrictive clause is imposed, only if the age of the female is up to 30 years and if she does not have an income attracting Income Tax.

Medical And Non-Medical Schemes

Life insurance is normally offered after a medical examination of the life to be assured. However, to facilitate greater spread of insurance and also to avoid inconvenience, LIC has been extending insurance cover without any medical examination, subject to certain conditions. With Profit And Without Profit Plans

An insurance policy can be 'with' or 'without' profit. In the former, bonuses disclosed, if any, after periodical valuations are allotted to the policy and are payable along with the contracted amount.

In 'without' profit plan the contracted amount is paid without any addition. The premium rate charged for a 'with' profit policy is therefore higher than for a 'without' profit policy.

Keyman Insurance

Keyman insurance is taken by a business firm on the life of key employee(s) to protect the firm against financial losses, which may occur due to the premature demise of the Keyman.

OBJECTIVES OF LIC

Spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost.

Maximize mobilization of people's savings by making insurance-linked savings adequately attractive.

Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best advantage of the investors as well as the community as a whole, keeping in view national priorities and obligations of attractive return.

Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders.

Act as trustees of the insured public in their individual and collective capacities. Meet the various life insurance needs of the community that would arise in the changing social and economic environment.

Involve all people working in the Corporation to the best of their capability in furthering the

interests of the insured public by providing efficient service with courtesy.

HISTORY Brief History Of Insurance

The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years. Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a

disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total businessin-force as Rs.298 crore in 1938. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 nonIndian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Re-organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organisation servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with re-organisation happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies. Today LIC functions with 2048 fully computerized branch offices, 109 divisional offices, 8 zonal offices, 992 satallite offices and the Corporate office. LICs Wide Area Network covers 109 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LICs ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks

and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over one crore policies during the current year. It has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the corresponding period of the previous year. From then to now, LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families.

Some of the important milestones in the life insurance business in India are: 1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution

of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the

general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated Ltd., Company and the Ltd. grouped New and into India the four companies viz. the National the

Insurance Oriental

Company Insurance

Assurance United India

Company Insurance

Ltd.,

Company

Ltd. GIC incorporated as a company. Mission "Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns, and by rendering resources for economic development."

Vision "A trans-nationally competitive financial conglomerate of significance to societies and Pride of India."

PRODUCT & SERVICES INSURANCE PLANS As individuals it is inherent to differ. Each individual's insurance needs and requirements are different from that of the others. LIC's Insurance Plans are policies that talk to you individually and give you the most suitable options that can fit your requirement. Bima Account Plans Endowment Plans Chlidren Plans Plans For Handicapped Dependents Endowment Assurance Plans Plans For High Worth Individuals Money Back Plans Whole Life Plans PENSION PLANS Pension Plans are Individual Plans that gaze into your future and foresee financial stability during your old age. These policies are most suited for senior citizens and those planning a secure future, so that you never give up on the best things in life.

UNIT PLANS Unit plans are investment plans for those who realise the worth of hard-earned money. These plans help you see your savings yield rich benefits and help you save tax even if you don't have consistent income.

SPECIAL PLANS LICs Special Plans are not plans but opportunities that knock on your door once in a lifetime. These plans are a perfect blend of insurance, investment and a lifetime of happiness! Golden Jubliee Plans Micro Insurance Plans MICRO INSURANCE PLANS LICs Micro Insurance Plans are not plans but opportunities that knock on your door once in a lifetime. These plans are a perfect blend of insurance, investment and a lifetime of happiness! WITHDRAWN PLANS HEALTH PLANS GROUP SCHEMES Home Loans- It provides a range of services serving various needs of individuals, NRIs and pensioners related to housing. Corporate Loans- The company offers financial assistance to corporate for purchasing, constructing, renovating and repair of housing property. Builders/Developers- It provides loans to builders or developers for construction of housing projects for commercialisation.

ORGANISATIONAL STRUCTURE S.No 1 3 2 4 5 6 7 8 9 10 Name D K Mehrotra Sunita Sharma Nitin K Jage Sushobhan Sarker Dhananjay Mungale S Ravi K Narasimha Murthy B N Shukla Jagdish Capoor Savita Singh Designation Chairman Managing Director Company Secretary Non Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director

CHAPTER 3 ANALYSIS & INTERPRETATION Table 3(a);- Profit and Loss Account:March13 Net sales Total Income Total Expenditure EBIT EBT Profit and Loss 7575.92 7658.88 353.18 7298.16 1373.57 1023.21 March12 6114.86 6137.95 385.75 5744.78 1153.72 837.60 March11 4620.09 4639.34 469.29 4163.42 1065.34 745.66 March10 3456.24 3475.46 147.53 3321.55 910.38 661.29 March09 2880.17 2893.33 154.33 2734.01 716.65 524.72

Profit of the year in 2013 is increased as compare to the year 2012 because of reported profit after tax. This is good for the company because company has earned profit as compare to last year... It will improve the goodwill of the company.. Table 3(b):- Balance Sheet March13 Net worth Total Liabilities Net Block Total Current Assets TotalCurrent Liabilities Net Current Assets 64939.47 53311.34 47881.36 36721.51 26492.09 6481.29 65186.47 62.37 80313.23 15373.76 March12 5682.21 53552.12 62.24 64191.79 10880.45 March11 4169.10 49331.94 33.85 52182.25 4300.90 March10 3387.67 38145.83 33.51 38820.65 2099.14 March09 2234.10 27655.75 32.33 28221.41 1729.32

The net Current Assets are increased in year 2013 as compare to year 2012. This is due to the reported profit after tax.

CHAPTER 4 SWOT ANALYSIS SWOT Analysis 1. Largest state-owned life insurance company in India, and also the country's largest investor 2. Has over 2000 branches across all parts of India and more than 10,00,000 agents. 3. With Largest fund base it is the biggest investor in India 4. Has over 115,000 employees across India 5. According to The Brand Trust Report, LIC is the 8th most trusted brand of India 6. LIC has subsidiaries like LIC Housing Finance Limited, LIC Cards Services Limited, LIC Nomura Mutual Fund, Strength LIC(Nepal)Ltd, LIC(Lanka)Ltd, LIC(International)BSC(C) 1. It has an image of a Government agency and hence lacks innovation 2. Being a Government agency, red tape and bureaucracy causes problems 3. Managing a huge workforce during economic crisis meant Weakness overburdened due to salaries 1. Use of Technology to provide effective services to cater to urban population. Opportunity 2. Government Schemes implementation 1. Economic crisis 2. Entry of new NBFCs in the sector Threats 3. Varying Govt policies

CONCLUSION
Insurance is an integral part of any personal financial plan. The type of insurance and the amount of coverage you obtain all depends on your unique financial and family circumstances, and must be evaluated carefully. When considering purchasing coverage, you should review all the potential risks and the financial impact of these risks on your financial health. This will help you determine what options to look for and what questions to ask. What you need to keep in mind is that you do not want to be underinsured or overinsured, which means you have to do your homework before you buy. And as with any type of financial product, you must read the fine print and consult with a competent advisor.

Today LIC functions with 2048 fully computerized branch offices, 109 divisional offices, 8 zonal offices, 992 satallite offices and the Corporate office. LICs Wide Area Network covers 109 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LICs ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. Home Loans- It provides a range of services serving various needs of individuals, NRIs and pensioners related to housing. Corporate Loans- The company offers financial assistance to corporate for purchasing, constructing, renovating and repair of housing property.

Annexure:Profit & Loss - LIC Ltd. Mar'13 Mar'12 Mar'11 Mar'10 Mar'09

12Months

12Months

12Months

12Months

12Months

INCOME:

Sales Turnover

7575.92

6114.86

4620.09

3456.24

2880.17

Excise Duty

.00

.00

.00

.00

.00

NET SALES

7575.92

6114.86

4620.09

3456.24

2880.17

Other Income

TOTAL INCOME

7658.88

6137.95

4639.34

3475.46

2893.33

EXPENDITURE:

Manufacturing Expenses

.00

.00

.00

.00

.00

Material Consumed

.00

.00

.00

.00

.00

Personal Expenses

90.41

72.44

68.09

48.49

44.86

Selling Expenses

.00

110.85

98.80

84.35

65.04

Administrative Expenses

262.78

202.46

302.41

14.69

44.43

Expenses Capitalised

.00

.00

.00

.00

.00

Provisions Made

.00

.00

.00

.00

.00

TOTAL EXPENDITURE

353.18

385.75

469.29

147.53

154.33

Operating Profit

7222.74

5729.11

4150.80

3308.71

2725.84

EBITDA

7305.70

5752.21

4170.04

3327.92

2739.00

Depreciation

7.53

7.42

6.24

6.37

4.99

Other Write-offs

.00

.00

.38

.00

.00

EBIT

7298.16

5744.78

4163.42

3321.55

2734.01

Interest

5924.60

4591.07

3098.09

2411.17

2017.36

EBT

1373.57

1153.72

1065.34

910.38

716.65

Taxes

350.36

316.72

319.67

249.09

191.93

Profit and Loss for the Year

1023.21

837.00

745.66

661.29

524.72

Non Recurring Items

.00

77.09

228.60

-.07

10.58

Other Non Cash Adjustments

.00

.11

.23

.95

-3.69

Other Adjustments

.00

.00

.00

.00

.00

REPORTED PAT

1023.21

914.20

974.49

662.18

531.62

KEY ITEMS

Preference Dividend

.00

.00

.00

.00

.00

Equity Dividend

191.77

181.68

166.13

142.40

110.41

Equity Dividend (%)

189.88

179.88

174.88

149.89

129.90

Shares in Issue (Lakhs)

5046.63

5046.63

4746.63

949.33

849.33

EPS - Annualised (Rs)

20.28

18.11

20.53

69.75

62.59

Capital Structure - LIC Housing Finance Ltd.

Authorized Period Instrument Capital

Issued Capital -PAIDUPShares Face Value Capital (Rs. Cr) 100.9 100.9 94.9 94.9 84.

From 2012 2011 2010 2009 2008

To 2013 2012 2011 2010 2009

(Rs. cr) Equity Share 150.0 Equity Share 150.0 Equity Share 150.0 Equity Share 150.0 Equity Share 150.0

(Rs. cr) 100.9 100.9 94.9 94.9 84.9

(nos)

504663000 2.0 504663000 2.0 474663000 2.0 94932600 84932600 10.0 10.0

BalanceSheet - LIC Housing Finance Ltd.

Particulars

Mar'13

Mar'12

Mar'11 12

Mar'10 12 Months 95.00 3292.68 3387.67 31014.98 3743.17 38145.83

Mar'09 12 Months 85.00 2149.10 2234.10 23523.95 1897.71 27655.75

Liabilities Share Capital Reserves & Surplus Net Worth Secured Loan Unsecured Loan TOTAL LIABILITIES Assets Gross Block (-) Acc. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets

12 Months 101.00 6380.29 6481.29 54975.35 3729.83 65186.47

12 Months Months 101.00 5581.21 5682.21 44614.54 3255.37 53552.12 95.00 4074.11 4169.10 40700.61 4462.22 49331.94

115.25 52.88 62.37 .00 184.63 .00 60.63 1465.56 78787.04 80313.23

108.15 45.92 62.24 14.53 164.03 .00 65.08 279.29 63847.42 64191.79

72.81 38.96 33.85 13.58 1403.15 .00 .00 435.19 51747.07 52182.25

66.34 32.83 33.51 2.11 1388.70 .00 .00 267.00 38553.65 38820.65

59.63 27.30 32.33 2.19 1129.15 .00 .00 135.29 28086.12 28221.41

Current Liabilities Provisions Total Current Liabilities NET CURRENT ASSETS Misc. Expenses TOTAL ASSETS(A+B+C+D+E)

14389.24 984.53 15373.76 64939.47 .00

9988.32 892.13 10880.45 53311.34 .00

3601.35 699.55 4300.90 47881.36 .00

1691.36 407.78 2099.14 36721.51 .00

1338.78 390.55 1729.32 26492.09 .00

65186.47

53552.12

49331.94

38145.83

27655.75

Shareholding Pattern - LIC Housing Finance Ltd.

Holder's Name Promoters ForeignInstitutions GeneralPublic NBanksMutualFunds FinancialInstitutions OtherCompanies Others ForeignNRI ForeignOcb CentralGovt

No of Shares 173442495 190496396 48444281 30630944 13940997 13175047 1808563 1738098 170294 39425

% Share Holding 36.54% 40.13% 10.21% 6.45% 2.94% 2.78% 0.38% 0.37% 0.04% 0.01%

LEARNING FROM THE REPORT

Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter.

REFERENCES 1. WWW.GOOGLE.COM 2. WWW.LIC.CO.INDIA 3. WWW.ECONOMICTIMES.COM 4. WWW.MONEYCONTROL.COM 5. WWW.SCRIBD.COM