SUMMER TRAINING PROJECT REPORT

Jeevan Rakshak Life Multi Services

"Insurance Advisor"

Submitted in partial fulfillment of the requirement of

Bachelors of Business Administration (BBA)

Training Supervisor :
Shailendra Pratap
Submitted By:
Mohd Shoeb
B.B.A. VIth Sem.

SESSION 2009 – 2010

 Springdale College of Management
Studies, affiliated to M.J.P. Rohilkhand
University, Bareilly(U.P.)

ACKNOWLEDGEMENT

In this section of research work I would like to

forward my heartiest gratitude to the people who
have devoted their precious time towards putting
their valuable efforts that was Mandatory for the
completion of the entire project.

This work bears the imprints of many persons

whose valuable assistance and insightful
suggestions have made this project worthy.

With sincere thoughts and deep sense of

gratitude, I would like to take this opportunity to
express my sincere to thanks to our Mr. Hemat
Jagota and our scholar faculty Mr.Joshi Sir whose
able guidance helped to me to give the present
shape of the project.

I feel immense pleasure in extending my

gratitude to all for motivating me for completing
my project. I shall ever remain grateful to all for
motivating me for completing my project. I shall
ever remain to all of them for there wishes ,which
inspire me to come out with flying colors in the
path of honesty and humanity.
I am also thankful to my parents who has helped
me. Present work would not have been possible
without their kind support.

Mohd. Shoeb
 TABLE OF CONTENTS

S.No. Chapter
1 Declaration
2 Introduction
3 Life Insurance - A Basic Need
4 Insurance Advisors- Tasks Performed
5 Insurance Advisors -Work Activities
6 Insurance Advisors - Job Description
7 Company Profile
8 Competition Information
9 Annexures -
LIC Policy List
 Market Share of Life Insurers
 Life Insurance Offices
 Distribution of The Offices
 List of Private Life Insurance
Companies
10 Bibliography
 DECLARATION

This is for general declaration purposes only that all

relevant work pertaining to presented miniature project
on :

" Practical Working of Insurance Advisor

In
Jeevan Rakshak Life Multi Services"

has been solely completed by me. Besides unavoidable

links to certain references the overall work is absolutely
original in nature.

Mohd. Shoeb
INTRODUCTION
The
In India, Insurance is a national matter, in which life and general
insurance is yet a booming sector with huge possibilities for different
global companies, as life insurance premiums account to 2.5% and
general insurance premiums account to 0.65% of India's GDP. The
Indian Insurance sector has gone through several phases and
changes, especially after 1999, when the Govt. of India opened up the
insurance sector for private companies to solicit insurance, allowing
FDI up to 26%. Since then, the Insurance sector in India is considered
as a flourishing market amongst global insurance companies.
However, the largest life insurance company in India is still owned by
the government.

The history of Insurance in India dates back to 1818, when Oriental

Life Insurance Company was established by Europeans in Kolkata to
cater to their requirements. Nevertheless, there was discrimination
among the life of foreigners and Indians, as higher premiums were
charged from the latter. In 1870, Indians took a sigh of relief when
Bombay Mutual Life Assurance Society, the first Indian insurance
company covered Indian lives at normal rates. Onset of the 20th
century brought a drastic change in the Insurance sector.
 In 1912, the Govt. of India passed two acts - the Life Insurance
Companies Act, and the Provident Fund Act - to regulate the
insurance business. National Insurance Company Ltd, founded in
1906, is the oldest existing insurance company in India. Earlier, the
Insurance sector had only two state insurers - Life Insurers i.e. Life
Insurance Corporation of India (LIC), and General Insurers i.e.
General Insurance Corporation of India (GIC). In December 2000,
these subsidiaries were de-linked from parent company and were
declared independent insurance companies: Oriental Insurance
Company Limited, New India Assurance Company Limited, National
Insurance Company Limited and United India Insurance Company
Limited.
About Insurance
Insurance, in law and economics, is a form of risk management primarily
used to hedge against the risk of a contingent loss. Insurance is defined
as the equitable transfer of the risk of a loss, from one entity to another, in
exchange for a premium, and can be thought of as a guaranteed small
loss to prevent a large, possibly devastating loss. An insurer is a
company selling the insurance; an insured is the person or entity buying
the insurance. The insurance rate is a factor used to determine the
amount to be charged for a certain amount of insurance coverage, called
the premium.
About Life Insurance: - Life insurance provides a monetary benefit to
a decedent's family or other designated beneficiary, and may specifically
provide for income to an insured person's family, burial, funeral and other
final expenses. Life insurance policies often allow the option of having the
proceeds paid to the beneficiary either in a lump sum cash payment or an
annuity. Annuities provide a stream of payments and are generally
classified as insurance because they are issued by insurance companies
and regulated as insurance and require the same kinds of actuarial and
investment management expertise that life insurance requires. Annuities
and pensions that pay a benefit for life are sometimes regarded as
insurance against the possibility that a retiree will outlive his or her
financial resources. In that sense, they are the complement of life
insurance and, from an underwriting perspective, are the mirror image of
life insurance. Certain life insurance contracts accumulate cash values,
which may be taken by the insured if the policy is surrendered or which
may be borrowed against. Some policies, such as annuities and
endowment policies, are financial instruments to accumulate or liquidate
wealth when it is needed. In many countries, such as the U.S. and the
UK, the tax law provides that the interest on this cash value is not taxable
under certain circumstances. This leads to widespread use of life
insurance as a tax-efficient method of saving as well as protection in the
event of early death.

Principles of insurance
Commercially insurable risks typically share seven common
characteristics: -
1. A large number of homogeneous exposure units. The vast majority
of insurance policies are provided for individual members of very large
classes. Automobile insurance, for example, covered about 175 million
automobiles in the United States in 2004. The existence of a large
number of homogeneous exposure units allows insurers to benefit from
the so-called “law of large numbers” which in effect states that as the
number of exposure units increases, the actual results are increasingly
likely to become close to expected results. There are exceptions to this
criterion. Lloyd’s of London is famous for insuring the life or health of
actors, actresses and sports figures. Satellite Launch insurance covers
events that are infrequent. Large commercial property policies may insure
exceptional properties for which there are no ‘homogeneous’ exposure
units. Despite failing on this criterion, many exposures like these are
generally considered to be insurable.
2. Definite Loss. The event that gives rise to the loss that is subject to
the insured, at least in principle, take place at a known time, in a known
place, and from a known cause. The classic example is death of an
insured person on a life insurance policy. Fire, automobile accidents, and
worker injuries may all easily meet this criterion. Other types of losses
may only be definite in theory. Occupational disease, for instance, may
involve prolonged exposure to injurious conditions where no specific time,
place or cause is identifiable. Ideally, the time, place and cause of a loss
should be clear enough that a reasonable person, with sufficient
information, could objectively verify all three elements.
3. Accidental Loss. The event that constitutes the trigger of a claim
should be fortuitous, or at least outside the control of the beneficiary of
the insurance. The loss should be ‘pure,’ in the sense that it results from
an event for which there is only the opportunity for cost. Events that
contain speculative elements, such as ordinary business risks, are
generally not considered insurable.
4. Large Loss. The size of the loss must be meaningful from the
perspective of the insured. Insurance premiums need to cover both the
expected cost of losses, plus the cost of issuing and administering the
policy, adjusting losses, and supplying the capital needed to reasonably
assure that the insurer will be able to pay claims. For small losses these
latter costs may be several times the size of the expected cost of losses.
There is little point in paying such costs unless the protection offered has
real value to a buyer.
5. Affordable Premium. If the likelihood of an insured event is so high,
or the cost of the event so large, that the resulting premium is large
relative to the amount of protection offered, it is not likely that anyone will
buy insurance, even if on offer. Further, as the accounting profession
formally recognizes in financial accounting standards, the premium
cannot be so large that there is not a reasonable chance of a significant
loss to the insurer. If there is no such chance of loss, the transaction may
have the form of insurance, but not the substance.
6. Calculable Loss. There are two elements that must be at least
estimable, if not formally calculable: the probability of loss, and the
attendant cost. Probability of loss is generally an empirical exercise, while
cost has more to do with the ability of a reasonable person in possession
of a copy of the insurance policy and a proof of loss associated with a
claim presented under that policy to make a reasonably definite and
objective evaluation of the amount of the loss recoverable as a result of
the claim.
7. Limited risk of catastrophically large losses. The essential risk is
often aggregation. If the same event can cause losses to numerous
policyholders of the same insurer, the ability of that insurer to issue
policies becomes constrained, not by factors surrounding the individual
characteristics of a given policyholder, but by the factors surrounding the
sum of all policyholders so exposed. Typically, insurers prefer to limit their
exposure to a loss from a single event to some small portion of their
capital base, on the order of 5 percent. Where the loss can be
aggregated, or an individual policy could produce exceptionally large
claims, the capital constraint will restrict an insurer's appetite for
additional policyholders. The classic example is earthquake insurance,
where the ability of an underwriter to issue a new policy depends on the
number and size of the policies that it has already underwritten. Wind
insurance in hurricane zones, particularly along coast lines, is another
example of this phenomenon. In extreme cases, the aggregation can
affect the entire industry, since the combined capital of insurers and
reinsurers can be small compared to the needs of potential policyholders
in areas exposed to aggregation risk. In commercial fire insurance it is
possible to find single properties whose total exposed value is well in
excess of any individual insurer’s capital constraint. Such properties are
generally shared among several insurers, or are insured by a single
insurer who syndicates the risk into the reinsurance market.
Types of insurance
Any risk that can be quantified can potentially be insured. Specific kinds
of risk that may give rise to claims are known as "perils". An insurance
policy will set out in detail which perils are covered by the policy and
which are not. Below are (non-exhaustive) lists of the many different
types of insurance that exist. A single policy may cover risks in one or
more of the categories set out below. For example, auto insurance would
typically cover both property risk (covering the risk of theft or damage to
the car) and liability risk (covering legal claims from causing an accident).
1. Business Insurance: -
2. Auto Insurance:
3. Home Insurance: -
4. Health Insurance
5. Disability Insurance
6. Casualty Insurance
7. Property Insurance
8. Liability insurance
9. Life Insurance.
10. Other Types: -
Collateral protection insurance or CPI, insures property (primarily
vehicles) held as collateral for loans made by lending institutions.
Defense Base Act Workers' compensation or DBA Insurance provides
coverage for civilian workers hired by the government to perform
contracts outside the U.S. and Canada. DBA is required for all U.S.
citizens, U.S. residents, U.S. Green Card holders, and all employees or
subcontractors hired on overseas government contracts. Depending on
the country, Foreign Nationals must also be covered under DBA. This
coverage typically includes expenses related to medical treatment and
loss of wages, as well as disability and death benefits.
Expatriate insurance provides individuals and organizations operating
outside of their home country with protection for automobiles, property,
health, liability and business pursuits.
Financial loss insurance protects individuals and companies against
various financial risks. For example, a business might purchase coverage
to protect it from loss of sales if a fire in a factory prevented it from
carrying out its business for a time. Insurance might also cover the failure
of a creditor to pay money it owes to the insured. This type of insurance is
frequently referred to as "business interruption insurance." Fidelity bonds
and surety bonds are included in this category, although these products
provide a benefit to a third party (the "obligee") in the event the insured
party (usually referred to as the "obligor") fails to perform its obligations
under a contract with the obligee.
Locked funds insurance is a little-known hybrid insurance policy jointly
issued by governments and banks. It is used to protect public funds from
tamper by unauthorized parties. In special cases, a government may
authorize its use in protecting semi-private funds which are liable to
tamper. The terms of this type of insurance are usually very strict.
Therefore it is used only in extreme cases where maximum security of
funds is required.
Nuclear incident insurance covers damages resulting from an incident
involving radioactive materials and is generally arranged at the national
level.
Pet insurance insures pets against accidents and illnesses - some
companies cover routine/wellness care and burial, as well.
Pollution Insurance, which consists of first-party coverage for
contamination of insured property either by external or on-site sources.
Coverage for liability to third parties arising from contamination of air,
water, or land due to the sudden and accidental release of hazardous
materials from the insured site. The policy usually covers the costs of
cleanup and may include coverage for releases from underground
storage tanks. Intentional acts are specifically excluded.
Purchase insurance is aimed at providing protection on the products
people purchase. It can cover individual purchase protection, warranties,
guarantees, care plans and even mobile phone insurance. Such
insurance is normally very limited in the scope of problems that are
covered by the policy.
Title insurance provides a guarantee that title to real property is vested in
the purchaser and/or mortgagee, free and clear of liens or
encumbrances. It is usually issued in conjunction with a search of the
public records performed at the time of a real estate transaction.
Travel insurance is an insurance cover taken by those who travel abroad,
which covers certain losses such as medical expenses, loss of personal
belongings, travel delay, personal liabilities, etc.
 Life Insurance a Basic Need

Life insurance is a contract providing for payment of a sum of money to

the person assured or, failing him, to the person entitled to receive the
same, on the happening of certain event.

A family is generally dependent for its food, clothing and shelter on the
income brought in at regular intervals by the bread winner of the family.
So long as the he lives and the income is received steadily, that family is
secure; but should death suddenly intervene the family may be left in a
very difficult situation and sometimes, in stark poverty.

Uncertainty of death is inherent in human life. It is this uncertainty that is

risk, which gives rise to the necessity for some form of protection against
the financial loss arising from death; insurance substitutes this uncertainty
by certainty.
Few Advantages of Life Insurance.

1. It is superior to an ordinary savings plans:

This is so because unlike other saving plans, it affords full protection
against risk of death. In case of death, the full sum assured is made
available under a life assurance policy; whereas under other savings
schemes the total accumulated savings alone will be available. The latter
will be considerably less than the sum assured, if death occurs during
early years.
2. Insurance encourages and forces thrift:
A savings deposit can be too easily withdrawn. Many may not be able to
resist the temptation of using the balance for some less worthy purpose.
On the other hand, the payment of life insurance premiums becomes a
habit and comes to be viewed wit the same seriousness as the payment
of interest on a mortgage. Thus insurance, in effect brings about
compulsory saving.

3. Easy settlement and protection against creditors:

The life assured can name a person or persons to whom the policy
moneys would be payable in the event of his death. The proceeds of a life
insurance policy can be protected against.The claims of the creditors of
the life assured by effecting a valid assignment of the policy. A married
women’s property act policy constitutes a trust in favor of the wife and
children and no separate assignment is necessary. The beneficiaries are
fully protected from creditors except to the extent of any interest in the
policy retained by the assured.
4. Administering the legacy for beneficiaries:
It often happens that a provision which a husband or father has made
through insurance is quickly lost through speculative or unwise
investment or by unnecessary expenditure on luxuries. These
contingencies can be provided against in the case of insurance. The
policyholder can arrange that in the in the event of his death the
beneficiary should receive, instead of a single sum (a). payment of the
net claim amount by equal installments over a specified period of years,
or (b).payment of the claim amount by smaller monthly installments over
the selected period followed by a lump sum at the end thereof.
5. Ready marketability and suitability for quick borrowings:
After an initial period, if the policy holder finds himself unable to continue
payment of premiums he can surrender the policy for a cash sum.
Alternatively he can tide over a temporary difficulty by taking loan on the
sole security of the policy without delay. Further a life insurance policy is
sometimes acceptable as security for a commercial loan.

6. Tax relief:
For computing income tax (especially in India the Indian income tax act)
follows deduction from income tax payable, a certain percentage of a
portion of the taxable income of individuals which is diverted to payment
of insurance premiums. When this tax relief is taken into account it will be
found that the assured is n effect paying a lower premium for his
insurance.
How Insurance Works
The mechanism of insurance is very simple. People who are exposed to
the same risks come together and agree that, if any one of the members
suffers a loss, the others will share the loss and make good to the person
who lost. All people who send goods by ship are exposed to the same
risk related to water damage, ship sinking, piracy, etc. those owning
factories are not exposed to these risks, but they are exposed to different
kinds of risks like, fire, hailstorms, earthquakes, lightening, burglary, etc.
like this, different kinds of risks can be identified and separate groups,
made including those exposed to such risks. By this method, the risk is
spread among the community and the likely big impact on one is reduced
to smaller manageable impacts on all.
If a Jumbo Jet with more than 350 passenger’s crashes, the loss would
run into several crores of rupees. No airline would be able to bear such a
loss. It is unlikely that many Jumbo Jets will crash at the same time. If
100 airline companies flying Jumbo Jets, come together into an insurance
pool, whenever one of the jumbo jets in the pool crashes, the loss to be
borne by each airline would come down to a few lakhs of rupees. Thus,
insurance is a business ‘sharing’.
Role of Insurance in Economic Development
 For economic development, investments are necessary.
Investments are made out of savings. A life insurance company is a
major instrument for the mobilization of savings of people,
particularly from the middle and lower income groups. These
savings are channeled into investments for economic growth.
 An insurance company’s strength lies in the fact that huge amounts
come by way of premiums. Every premium represents a risk that is
covered by that premium. In effect, therefore, these vast amounts
represent pooling of risks. The funds are collected and held in trust
for the benefit of the policyholders.
 The management of insurance companies is required to keep this
aspect in mind and make all its decisions in ways that benefit the
community. This applies also to its investments. This is why
successful insurance companies would not be found investing in
speculative ventures. Their investments benefit the society at large.
 The system of insurance provides numerous direct and indirect
benefits to the individual and his family as well as to industry and
commerce and to the community and the nation as a whole. Those
who insure, both individuals and corporate, are directly benefited
because they are protected from the consequences of the loss that
may be caused by the accident or fortuitous event. Insurance, thus,
 in a sense protects the capital in industry and releases the capital
for further expansion and development of business and industry.
 The every existence of risk that is, uncertainty concerning the
future, is a severe handicaps in economic activities. Insurance
removes the fear, worry and anxiety associated with this future
uncertainty and thus encourages free investment of capital in
business enterprises and promotes efficient use of existing
resources.
 Thus insurance encourages commercial and industrial development
and there by contributes to a vigorous economy and increased
national productivity.
 Present day organization of industry, commerce and trade depend
entirely on insurance for their operation, banks and financial
institutions lend money to industrial and commercial undertakings
only on the basis of the collateral security of insurance. No bank or
financial institution would advance loans on property unless it is
insured against loss or damage by insurable perils.
 Insurers are closely associated with several agencies and
institutions engaged in fire loss prevention, cargo loss prevention,
cargo loss prevention, industrial safety and road safety. Before
acceptance of a risk, insurers arrange survey and inspection of the
property to be insured, by qualified engineers and other experts.
 The object of these surveys is not only to assess the risk for rating
purposes but also to suggest and recommend to the insured,
various improvements in the risk, which will attract lower rates of
premium and what is more important , reduce the loss potential. For
example, burglary surveyors make recommendation in regard to
security measures such as better locking system, appointment of
 Watchman, etc. Engineering surveys play a most useful part in
accident prevention as valuable technical advice is provided in
respect of plant and machinery.
 Insurance ranks with export trade, shipping and banking services as
earner of foreign exchange to the country. It helps to earn foreign
exchange and represent invisible exports.
Insurance Advisors- Tasks Performed
Attend meetings, seminars and programs to learn about new products
and services, learn new skills, and receive technical assistance in
developing new accounts.

Calculate premiums and establish payment method.

Call on policyholders to deliver and explain policy, to analyze insurance

program and suggest additions or changes, or to change
beneficiaries.

Confer with clients to obtain and provide information when claims are
made on a policy.

Contact underwriter and submit forms to obtain binder coverage.

Customize insurance programs to suit individual customers, often

covering a variety of risks.

Develop marketing strategies to compete with other individuals or

companies who sell insurance.

Ensure that policy requirements are fulfilled, including any necessary

medical examinations and the completion of appropriate forms.

Explain features, advantages and disadvantages of various policies to

promote sale of insurance plans.

Explain necessary bookkeeping requirements for customer to implement

and provide group insurance program.

Inspect property, examining its general condition, type of construction,

age, and other characteristics, to decide if it is a good insurance risk.
Install bookkeeping systems and resolve system problems.

Interview prospective clients to obtain data about their financial resources

and needs, the physical condition of the person or property to be
insured, and to discuss any existing coverage.

Monitor insurance claims to ensure they are settled equitably for both the
client and the insurer.

Perform administrative tasks, such as maintaining records and handling

policy renewals.

Plan and oversee incorporation of insurance program into bookkeeping

system of company.

Seek out new clients and develop clientele by networking to find new
customers and generate lists of prospective clients.

Select company that offers type of coverage requested by client to

underwrite policy.

Sell various types of insurance policies to businesses and individuals on

behalf of insurance companies, including automobile, fire, life,
property, medical and dental insurance or specialized policies such as
marine, farm/crop, and medical malpractice.

Insurance Advisors -Work Activities

Access media advertising services

Calculate insurance premiums or awards

Calculate rates for organization's products or services

Communicate visually or verbally

Compute financial data

Conduct sales presentations

Determine customer needs

Evaluate degree of financial risk

Fill out business or government forms

Follow contract, property, or insurance laws

Inspect property

Install computer programs

Interview customers

Maintain records, reports, or files

Make decisions

Make presentations

Motivate people

Obtain information from individuals

Provide customer service

Sell insurance policies

Use accounting or bookkeeping software

Use computers to enter, access or retrieve data

Use interpersonal communication techniques

Use knowledge of written communication in sales work

Use marketing techniques

Use telephone communication techniques

Use word processing or desktop publishing software

Insurance Advisors - Job Description
Insurance is one of the biggest industries in the financial world. Insurance
policies are sold by agents who act as the front line people of insurance
companies. An insurance agent job description will be helpful for people
to decide whether they will be able to work as an insurance agent. Here
we have some details to read on insurance agent job description.
Insurance agent jobs are becoming popular with an increasing number of
people looking towards insurance as a career. Insurance agents can work
for agencies, brokerage firms and insurance companies or work as
independent insurance agents. An understanding of insurance agent job
description is necessary for prospective insurance agents, before taking
the plunge into insurance careers.

Insurance agents provide help to individuals and companies to choose a

policy suitable to their needs. Insurance can be grouped into categories
such as life insurance, medical insurance, property insurance, etc.
Insurance agents are not only involved in selling policies but also prepare
reports, maintain records and seek new clients along with other works. An
important role of insurance agents is to help beneficiaries make claims
when the policy matures or the insured person passes away.

Insurance agents work as agents, selling products of an insurance

company or sell different policies, for different companies. Insurance
agents can specialize in particular fields such as life, property liability,
health / disability and other insurance policies. Insurance agents also sell
financial products related to insurance policies and other products related
to insurance.
What are the Qualifications for Becoming an Insurance Agent?

Insurance companies hire people with college degrees but high school
graduates who have a proven sales track record are also considered.
Those candidates who are multi-lingual, with a strong knowledge of
subjects related to insurance are mostly preferred. Agents have to clear
an exam conducted by licensing authorities of different states, who
provide licenses to insurance agents before they can start their work.
Agents have to obtain separate licenses to sell different types of
insurance such as life, health, property and casualty insurance. The
agents require a separate license from the state authority to sell financial
products, like, mutual funds, securities, etc. which are related to
insurance. Insurance companies also provide the opportunity of higher
education so that the agents can advance their career along with the
evolving industry.

How can you get a Job in the Insurance Industry?

The simplest way of becoming an insurance agent is to consult

experienced insurance brokers and insurance agents who are already in
the business. Different choices that need to be made will be easier for a
fresher, if they get advice from the experienced ones. Licensing
authorities can also provide information for specialization as they are the
ones who conduct tests for license purpose. Prospective agents can
apply to insurance companies, agencies or brokerage firms who deal in
specialized subjects.
What are the Opportunities for Career Advancement for Insurance
Agents?

Special courses are provided to new and experienced agents to improve

their skills and grow in their jobs. Agents advance to their next level of
employment after clearing exams which are conducted by the state
licensing authorities. Insurance agents can rise to the position of
underwriters and grow to become managers, agency heads or start their
own agencies.

What are the Working Conditions of an Insurance Agent?

The working conditions of an insurance agent depend on the type of

insurance that the agent deals in. There are different approaches for
different types of policies. Agents dealing in life insurance can make a
sale oriented approach. Clients for property and health insurance need
lesser convincing than other clients. Insurance agents mostly work
outside their offices, at places convenient for their clients. Sometimes
they have to work on weekends and their work time can extend beyond
forty hours per week. Those who work part time earn on the basis of their
commission and they can put in extra hours to earn a higher pay.

How Much Do Insurance Agents Earn?

The earnings of insurance agents usually depend on their capabilities and
selling skills. Independent agents earn commission according to the
number of policies sold. Agents who work for agencies and insurance
companies earn a salary or a salary with commissions and bonus. Those
who work for firms or insurance companies receive benefits that is
extended to employees in similar professions. The special benefits
usually includes support for continuing education, training for licensing,
office space or clerical support.

Prospective candidates can use the various insurance agent job

descriptions which are available and decide whether insurance as a
career is suitable for him / her.
COMPANY
PROFILE
 Life Insurance
Corporation of India

Type Government-owned corporation

Industry Insurance
Founded 1 September 1956
Headquarters Mumbi, India
T. S. Vijayan (Chairman)
D. K. Mehrotra, Thomas Mathew
Key people
and A. Dasgupta (Managing
Directors)
Life insurance
Products Pensions
Mutual funds
Total assets Rs. 8 trillion (US$ 170.4 billion)
Owner(s) Government of India
Employees 112,184 (2008)
LIC Housing Finance Limited
LIC(Nepal)Ltd
Subsidiaries
LIC(Lanka)Ltd
LIC(International)BSC(C)
Website LICindia.com

Life Insurance Corporation of India

The Life Insurance Corporation of India (LIC) is the largest life
insurance company in India, and also the country's largest investor.; it is
fully owned by the Government of India. It also funds close to 24.6% of
the Indian Government's expenses. It has assets estimated of Rs. 8
trillion (US$ 170.4 billion). It was founded in 1956.

The Life Insurance Corporation of India (LIC) is the largest life insurance
company in India and also the country's largest investor. It is fully owned
by the government of India. It also funds close to 24.6% of the Indian
Government's expenses. It was founded in 1956.

Headquartered in Mumbai, which is considered the financial capital of

India, the Life Insurance Corporation of India currently has 8 zonal Offices
and 101 divisional offices located in different parts of India, at least 2048
branches located in different cities and towns of India along with satellite
Offices attached to about some 50 Branches, and has a network of
around 1.2 million agents for soliciting life insurance business from the
public.

History

The Oriental Life Insurance Company, the first corporate entity in India
offering life insurance coverage, was established in Calcutta in 1818 by
Bipin Behari Dasgupta and others. Europeans in India were its primary
target market, and it charged Indians heftier premiums. The Bombay
Mutual Life Assurance Society, formed in 1870, was the first native
insurance provider. Other insurance companies established in the pre-
independence era included

• Bharat Insurance Company (1896)

• United India (1906)

• National Indian (1906)

 • National Insurance (1906)

• Co-operative Assurance (1906)

• Hindustan Co-operatives (1907)

• Indian Mercantile

• General Assurance

• Swadeshi Life (later Bombay Life)

The first 150 years were marked mostly by turbulent economic conditions.
It witnessed, India's First War of Independence, adverse effects of the
World War I and World War II on the economy of India, and in between
them the period of world wide economic crises triggered by the Great
depression. The first half of the 20th century also saw a heightened
struggle for India's independence. The aggregate effect of these events
led to a high rate of bankruptcies and liquidation of life insurance
companies in India. This had adversely affected the faith of the general
public in the utility of obtaining life cover.

The Life Insurance Act and the Provident Fund Act were passed in 1912,
providing the first regulatory mechanisms in the Life Insurance industry.
The Indian Insurance Companies Act of 1928 authorized the government
to obtain statistical information from companies operating in both life and
non-life insurance areas. The subsequent Insurance Act of 1938 brought
stricter state control over an industry that had seen several financially
unsound ventures fail. A bill was also introduced in the Legislative
Assembly in 1944 to nationalize the insurance industry.
Nationalization

In 1955, parliamentarian Amol Barate raised the matter of insurance fraud

by owners of private insurance companies. In the ensuing investigations,
one of India's wealthiest businessmen, Ram Kishan Dalmia, owner of the
Times of India newspaper, was sent to prison for two years. Eventually,
the Parliament of India passed the Life Insurance of India Act on 1956-
06-19, and the Life Insurance Corporation of India was created on 1956-
09-01, by consolidating the life insurance business of 245 private life
insurers and other entities offering life insurance services. Nationalization
of the life insurance business in India was a result of the Industrial Policy
Resolution of 1956, which had created a policy framework for extending
state control over at least seventeen sectors of the economy, including
the life insurance. The company began operations with 5 zonal offices, 33
divisional offices and 212 branch offices. LIC received another set back
with Mundra fraud but it escaped with least damage from Harshad Mehta
scam. There are intermittent rumours in media but LIC has largely
escaped large scale scandals of the type encountered by erstwhile UTI
largely because of its immunity from being transparent in the name of
confidentiality in the era of RTI. Often there is consumer demand to open
the investment portfolio of LIC but no body knows if it will be good for the
corporation. But there is a great and undue reliance on the management
environment of this great corporation. People are scared after what has
happened to Goldman Sachs or Lehman Brothers in USA and elsewhere,
which were equally or more big and great.

Current status

LIC building, at Connaught Place, New Delhi, designed by Charles

Correa, 1986.
Over its existence of around 50 years, Life Insurance Corporation of
India, which commanded a monopoly of soliciting and selling life
insurance in India, created huge surpluses, and contributed around 7 %
of India's GDP in 2006.

The Corporation, which started its business with around 300 offices, 5.6
million policies and a corpus of INR 459 million (US$ 92 million as per the
1959 exchange rate of roughly Rs. 5 for a US $
http://data.un.org/Data.aspx?d=CDB&f=srID:6080), has grown to 25000
servicing around 180 million policies and a corpus of over Rs. 8 trillion
(US$ 170.4 billion).

The organization now comprises 2048 branches, 109 divisional offices

and 8 zonal offices, and employs over 1,002,149 agents.The corporate
Office of LIC is in Mumbai. It also operates in 12 other countries, primarily
to cater to the needs of Non Resident Indians.

With the change in the India's economic philosophy from the early 1990s,
and the subsequent relaxation of state control over several sectors of the
economy, the monopolistic position of the Life Insurance Corporation of
India was diluted, and it has had to compete with a number of other
corporate entities, Indian as well as transnational Life Insurance brands.
However, it still manages to be the largest player in the Indian market,
with the lion's share of 55%.

The recent Economic Times Brand Equity Survey rated LIC as the No. 1
Service Brand of the Country.

In the financial year 2006-07 Life Insurance Corporation of India's number

of policy holders are said to have crossed a whopping 200 million (fourth
in terms of population of the countries of the world)
Subsidiaries

LIC owns the following subsidiaries:

• Life Insurance Corporation of India International: This is a joint

venture offshore company promoted by LIC which commenced
operations in July, 1989 with the objectives of offering US$
denominated policies to cater to the insurance needs of NRIs and
providing insurance services to holders of LIC policies currently
residing in the Gulf. LIC International operates in all GCC countries.

• LIC Nepal: A joint venture company formed in 2001 with the Vishal
Group of Industries, Nepal.

• LIC Lanka: A joint venture company formed in 2003 with the

Bartleet Group of Companies, Sri Lanka.

• LIC Housing Finance: Incorporated in 19 June 1989, its main

objective is to provide long term finance for construction or
purchase of houses or apartments. It has a Dubai office.

• LICHFL Care Homes: A wholly owned subsidiary of LIC Housing

Finance, it builds and operates "Assisted Community Living
Centres" for senior citizens.

People

LIC is one of the largest employers in India. The organization is headed

by 4 officers, namely the Chairman and three Managing Directors. The
top brass is appointed by the Government of India after an intensive
selection procedure. Though the company was accused to go by mere
seniority in number of years for the selection of the senior management,
this has changed as seen in the case of Thomas Matthew and A.
Dasgupta (Managing Directors).

• The Chairman assumes authority of the CEO and chairs the board
while the Managing Directors are allotted the three main categories
of the organization's functioning.

• The current Chairman, Mr. T.S. Vijayan, is particularly responsible

for the major IT infrastructure turnaround that the organization has
witnessed and for its advanced EDMS structure.

• D.K. Mehrotra manages the Marketing Units of LIC, which also

happens to be one of the largest spenders on advertising in India.

• Thomas Mathew manages the close to $187 billion investment

portfolio of the company, which is the largest investor in the country.

• A. Dasgupta manages the engineering and other functions, many of

which are very advanced in the Indian corporate scenario.

Objectives of LIC of India

• Spread and provide life insurance to the masses at a reasonable

cost.

• 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.

• Promote amongst all agents and employees of the Corporation a

sense of participation, pride and job satisfaction through discharge
of their duties with dedication towards achievement of Corporate
Objective.

OVERVIEW

The Life Insurance Corporation of India (LIC) is the largest life

insurance company in India fully owned by the Government of India.

LIC has assets estimated of 8 Trillion Rupees (or about $170 Billion
dollars) and has a network of around 1.2 million of its agents for soliciting
life insurance business from the public.
LIC has more than 2048 branches and offices in various cities and towns
of India.
Life Insurance Corporation of India (LIC) is a Government of India
enterprise, and is said to be the largest life insurance company and
also the largest investor of the country. LIC had been established on
the 1st of September, 1956, after the Life Insurance Corporation Act
had been passed by the Parliament of India in the same year. The
corporation is aimed at providing life insurance services primarily to
the rural masses and the socially & economically backward sections
of the Indian society. It also aims at promoting the people for saving
their money, and offers attractive savings features along with various
insurance policies.

Vital Details

The headquarters of Life Insurance Corporation of India are located

in Mumbai, and as of April 2009 it has 8 zonal offices, 101 divisional
offices and 2048 branches located in different towns and cities of
India. Along with a workforce of 112,184 employees serving the
institution, more than 1 Million agents of the Life Insurance
Corporation of India are helping the people nationwide in adopting
the various life insurance policies being offered by the corporation.
Apart from India, LIC is also present in 12 other countries currently,
fulfilling the life insurance needs of its overseas customers most of
which are Non Resident Indians (NRIs).
During the financial year 2006-07, the total number of Life Insurance
Corporation of India policy holders were more than 200 Million, which
was equal to the population of fourth largest populous country in the
world at that time.

Subsidiaries
Life Insurance Corporation of India has a number of subsidiaries
which help it in leveraging its potential to the maximum, providing an
enhanced set of diversified services to its customers. These
subsidiaries include LIC International, LIC Nepal, LIC Lanka, LIC
Housing Finance and LICHFL Care Homes.

Head Office

Life Insurance Corporation of India,

"Yogakshema", Jeevan Bima Marg,
Mumbai - 400021
Website: www.licindia.com.
COMPETITION
INFORMATION
Compititor Information
LIC has following Main Competitors -

 Bajaj Allianz Life Insurance Company Limited

 Birla Sun Life Insurance Co. Ltd
 HDFC Standard life Insurance Co. Ltd
 ICICI Prudential Life Insurance Co. Ltd.
 ING Vysya Life Insurance Company Ltd.
 Max New York Life Insurance Co. Ltd
 Kotak Mahindra Old Mutual Life Insurance Limited
 SBI Life Insurance Co. Ltd
 Tata AIG Life Insurance Company Limited
 Reliance Life Insurance Company Limited.
 Aviva Life Insurance Co. India Pvt. Ltd.
 Sahara India Life Insurance
 Bharti AXA Life Insurance
 Annexures
LIFE INSURANCE POLICY LIST
1. Aam Admi Bima Yojana lic policy

2. Amulya Jeevan-I lic policy

3. Anmol Jeevan-I lic policy

4. Bima Bachat lic policy

5. Bima Nivesh 2005 lic policy

6. CDA Endowment Vesting At 18 lic policy

7. CDA Endowment Vesting At 21 lic policy

8. Child Career Plan lic policy

9. Child Future Plan lic policy

10. Educational Annuity Plan lic policy

11. Fortune Plus lic policy

12. Gratuity Plus lic policy

13. Group Critical Illness Riderlic policy

14. Group Gratuity Scheme lic policy

15. Group Insurance Scheme in Lieu Of EDLI lic policy

16. Group Leave Encashment Schemelic policy

17. Group Mortgage Redemption Assurance Scheme lic policy

18. Group Savings Linked Insurance Scheme lic policy

19. Group Super Annuation Scheme lic policy

20. Group Term Insurance Schemes lic policy

21. Health Plus lic policy

22. JanaShree Bima Yojana (JBY) lic policy

23. Jeevan Aadhar lic policy

24. Jeevan Akshay-V lic policy

25. Jeevan Amrit lic policy

26. Jeevan Anand lic policy

27. Jeevan Anurag lic policy

28. Jeevan Bharati lic policy

29. Jeevan Kishore Jeevan Chhaya lic policy

30. Jeevan Madhur lic policy

31. Jeevan Mitra(Double CoverEndowment Plan) lic policy

32. Jeevan Mitra(Triple CoverEndowment Plan) lic policy

33. Jeevan Nidhi lic policy

34. Jeevan Pramukh lic policy

35. Jeevan Saathi lic policy

36. Jeevan Saral lic policy

37. Jeevan Shree-I lic policy

38. Jeevan Surabhi-15 Years lic policy

39. Jeevan Surabhi-20 Years lic policy

40. Jeevan Surabhi-25 Years lic policy

41. Jeevan Tarang lic policy

42. Jeevan Vishwas lic policy

43. Komal Jeevan lic policy

44. Market Plus I lic policy

45. Marriage Endowment lic policy

46. Money Plus-I lic policy

47. Mortgage Redemption lic policy

48. New Bima Gold lic policy

49. New Janaraksha Plan lic policy

50. New Jeevan Dhara-I lic policy

51. New Jeevan Suraksha-I lic policy

52. Profit Plus lic policy

53. Shiksha Sahayog Yojana lic policy

54. The Convertible Term Assurance Policy lic policy

55. The Endowment Assurance Policy lic policy

56. The Endowment Assurance

57. Policy-Limited Payment lic policy

58. The Money Back Policy-20 Years lic policy

59. The Money Back Policy-25 Years lic policy

60. The Whole Life Policy lic policy

61. The Whole Life Policy- Limited Payment lic policy

62. The Whole Life Policy- Single Premium lic policy

63. Two Year Temporary Assurance Policy lic policy

 MARKET SHARE OF LIFE INSURERS (Per cent)
Insurer 2006-07 2007-08
Regular Premium
LIC 65.89 47.77
Private Sector 34.11 52.23
Total 100.00 100.00
Single Premium
LIC 86.96 86.99
Private Sector 13.04 13.01
Total 100.00 100.00
First Year Premium
LIC 74.32 64.02
Private Sector 25.68 35.98
Total 100.00 100.00
Renewal Premium
LIC 89.02 83.42
Private Sector 10.98 16.58
Total 100.00 100.00
Total Premium
LIC 81.90 74.39
Private Sector 18.10 25.61
Total 100.00 100.00
LIFE INSURANCE OFFICES (AS ON MARCH 31, 2008)

Insurer 2001 2002 2003 2004 2005 2006 2007 2008

Private 13 116 254 416 804 1645 3072 6391

LIC 2186 2190 2191 2196 2197 2220 2301 2522

Industry 2199 2306 2445 2612 3001 3865 5373 8913

Total

Note: Office as defined under Section 64 VC of the insurance Act, 1938

DISTRIBUTION OF OFFICES OF LIFE INSURERS AS ON MARCH 31, 2008

Insurer Metro Urban Semi- Others Total

urban

Private 628 1169 2692 1902 6391

LIC 311 468 848 895 2522

Industry 939 1637 3540 2797 8913

Total
 Life insurance companies (private)
S. Insurers Foreign partners Year of
No. Operation

1 HDFC Standard Life Insurance Co. Standard Life Assurance, UK 2000-01

Ltd.

2 Max New York Life Insurance Co. Ltd. New York Life, USA 2000-01

3 ICICI Prudential Life Insurance Co. Prudential, UK 2000-01

Ltd.

4 Om Kotak Life Insurance Co. Ltd. Old Mutual, South Africa 2001-02

5 Birla Sun Life Insurance Co. Ltd. Sun Life, Canada 2000-01

6 Tata-AIG Life Insurance Co. Ltd. American International Assurance Co. 2000-01

7 SBI Life Insurance Co. Ltd. BNP Paribas Assurance SA, France 2001-02

8 ING Vysya Life Insurance Co. Ltd. ING Insurance International, B.V., 2001-02
Netherlands

9 Allianz Bajaj Life Insurance Co. Ltd. Allianz, Germany 2001-02

10 Metlife India Insurance Co. Ltd. Metlife International Holdings Ltd., 2001-02
USA

11 Reliance Life Insurance Co. Ltd. 2001-02

12 AVIVA AVIVA International Holdings Ltd., UK 2002-03

13 Sahara Life Insurance Co.Ltd. 2004-05

14 Shriram Life Insurance Co. Ltd. Sanlam, South Africa 2005-06

15 Bharti AXA Life Insurance Co. Ltd. AXA Holdings, France 2006-07

16 Future Generali India Life Insurance Pantaloon Retail Ltd; Sain Marketing 2007-08
Company Ltd. Network Pvt. Ltd.; Generali, Italy

17 IDBI Fortis Life Insurance Company Fortis, Netherlands 2007-08

Ltd.

18 Canara HSBC OBC Life Insurance HSBC, UK 2008-09

Company Ltd.

19 DLF Pramerica Life Insurance Co. Ltd. Prudential of America 2008-09

20 Aegon Religare Life Insurance Religare, Netherlands 2008-09

Company Ltd.
BIBLIOGRAPHY
 BIBLIOGRAPHY
The work presented here has been prepared
and polished with the help of several sources. I feel
it my moral responsibility to enlist the used
sources, thereby the list is given below. I feel
extremely obligated to the content creators of
these resources and truly appreciate their spirit.

Websites:-
 www.Wikipedia.org
 http://www.buzzle.com
 http://www.insurancejobs.com
 http://careerplanning.about.com
 www.licindia.com
 www.wikipedia.org
 www.icallinsurance.com
 www.bimaonline.com
 www.irdaindia.org
 www.censusofindia.org
Books:-
 Insurance Fundamentals, Environment and
Procedures by B S Bodla, M C Garg, K P Singh.
 Life insurance and General Insurance from ICMR.
Others:-
 T.S. Ramakrishna Rau, Insurance Chronicle,
January 2009
 Endowment plans now, Business India, March
2009
 Niraj Bajaj , ‘insuring a bright future’ ,business
India, April2008
 Articles related to insurance from various news
papers like The Times of India, The Hindu,
Economic Times, Business Standard etc.
 IRDA Journal