A CASE STUDY ON

LIFE INSURANCE CORPORATION OF

INDIA

One of the World’s Largest

Life Insurance Company
INTRODUCTION
Life Insurance Corporation was formed as a government regulated monopoly in
September 1956 by an act of Parliamentary, (LIC Act 1956) with a capital
contribution of Rs 50 million. Over the years, LIC built a strong distribution and
agent network. By now, LIC had 2048 branches and 6,28,301 agents across the
country. LIC was a financial powerhouse, with a presence in mutual funds and
housing loans besides life insurance.
The company had insured more than 23 crore people in the country through its
individual and group schemes. Of the 60-80 million life insurance policies
outstanding, 48% were from the rural and semi urban areas. This is very impressive
since no company in any other industry had been able to tap the rural market to this
extent. Other branches out of India- UK, Fiji, Mauritius, Nepal, Sri Lanka, Kenya,
Bahrain, Oman, Qatar, Kuwait, UAE, Saudi Arabia. It has assets estimated of 5
Trillion Rupees. Headquartered in Mumbai , which is considered the financial
capital of India. Today LIC can boast of great achievements in IT and investment
under able Chairmanship of T S Vijayan.
 HISTORICAL PERSPECTIVE
The British opened Bombay Insurance In 1818 it was conceived as The Bombay Mutual Life
general insurance in India Company Ltd was a means to provide for Insurance Society started its
around the year 1700. established in 1793. English Widows. business in 1870.

The Oriental Assurance

Company was
established in 1880.

The insurance business Nationalization was justified on

grew at a faster pace the grounds that it would create
after independence. much needed funds for rapid
Industrialization.
MISSION AND VISION OF LIC

Vision
“A trans-nationally competitive financial conglomerate of
significance to societies & PRIDE OF INDIA“
 FINANCIAL HIGHLIGHTS

 Total Premium Income : Rs. 1,57,186.55 crore

 Total Income : Rs. 2,00,280.68 crore
 Payments to Policyholders : Rs. 53,250.37 crore

As on Rs. (in crores) As on Rs. (in crores)

31.3.2000 1,61,002.02 31.3.2000 1,54,043.73
31.3.2001 1,92,514.65 31.3.2001 1,86,024.75
31.3.2002 2,45,331.46 31.3.2002 2,27,008.98
31.3.2003 2,89,895.52 31.3.2003 2,73,004.96
31.3.2004 3,67,359.84 31.3.2004 3,21,753.53
31.3.2006 5,52,447.33 31.3.2006 4,63,147.62
31.3.2007 6,74,514.78 31.3.2007 5,72,602.80
31.3.2008 8,03,820.00 31.3.2008 6,86,616.00
31.3.2009 8,73,551.35 31.3.2009 8,07,317.45
Market shares of different insurance companies

1.97
4.12 1.8 4.8 Max New York Life Insurance Co. Ltd.
1.14

3.81
ICICI Prudential Life Insurance
Company Ltd.
Birla Sun Life Insurance Company
6.86 Ltd.
Tata AIG Life Insurance Company
2.22 Ltd.
SBI Life Insurance Company Limited
.
Bajaj Allianz Life Insurance Company
Limited
Reliance Life

LIC of India
70.52
Others
 SWOT ANALYSIS

It is the oldest and most well experienced Its employees and other staff are lethargic
player having a Pan India presence. and least motivated to render prompt and
sincere customer service.

LIC has a strong and very well developed After sales customer grievance redressal
distribution network. mechanism is inefficient.

The top management or bosses are

mediocre and there is large scale corruption
in main office.

It has the advantage of government The top management or bosses are

guarantee is accompanied with it. mediocre and there is large scale corruption
in main office.

It is having a huge consumer base and is Agents not taking into account the needs of
evolved as one of the most powerful brands people and promote policies having high
of the country. Commissions only.
 SWOT ANALYSIS

People becoming more aware

and demanding so there is
scope for a whole lot of
innovative products.

Pension markets, health Red-tapism is very much persistent.

insurance and large real estate
portfolio.
Objective of LIC

To conduct business with utmost economy and keeping in mind that the money belongs to the
policyholders.

To maximize mobilization of people’s savings by making insurance linked savings adequately

attractive.

It acts as a trustee of the insured public in its individual and collective capacities.

To meet the various life insurance need of the community that would arise in the changing social and
economic environment.
CONTRIBUTION TO INDIAN ECONOMY:

Life Insurance is the only

sector which garners
long term savings.

Strong positive
correlation between
development of capital
markets and
insurance/pension
structure.
VALUES OF LIC
CULTURE
INVESTMENT PORTFOLIO OF LIC OF INDIA

About
About 15% is
invested in 35% in other
infrastructural investments, to
and social be governed by
sector exposure
investments. prudential
norms
COMPETITIVE STRENGTH

Large market share.

Low cost operations.

Its marketing.

Developing special capabilities & competencies.

Product innovation.
LIC MARKETING STRATEGY

The Visakhapatnam division of the LIC has signed MoUs with two private
broking firms for marketing its products, as provided for in the Insurance
Regulatory and Development Authority (IRDA) Act.
Setting a new trend, the divisional office signed memoranda of understanding
with Insol Insurance Solutions Pvt Ltd, a broking firm, and Vijay Sai Associates,
corporate agents, for the purpose.
Mr Surendra Behera, the divisional manager, said that LIC was aggressively
marketing its products through private channels as well.
INTERACTIVE VOICE RESPONSE SYSTEMS

IVRS has been made functional in more than 50 centers all over the
country. This would enable customers to ring up LIC and receive
information about their policies on telephone. This information could
also be faxed on demand to the customer.
AWARDS WON BY LIC
Reader’s Digest Trusted Brand Award (Platinum) 2009.

CNBC Awaaz Consumer Award, 2008.

NDTV Profit Business Leadership Award, 2008.

IT USER 2008 NASSCOM Award.

RECOMMENDATIONS:
To increase the level of insurance penetration LIC may focus on bringing products that suit to
the rural customers.

LIC should also tie up with several other banks apart from the existing ones to sell its products
i.e. through banc assurance .

The Company has the option of tying up with local NGO’s for selling its rural insurance
products.

Customer friendly documentation i.e. it should be made easier and faster.

LIC should keep a check that its agents equally promote all its products.

LIC may provide additional funds to its development officers and agents.

Some special focus should be laid on individual risk coverage while designing the products.
CONCLUSION
Growth of Indian Economy is not a consumption driven but it is an investment
driven growth, and opens a wide variety of Investment Avenue. Competition
means to compete, fight with other business in the insurance industry to get
maximum market share or profits, income, sales etc. The entry of private sector
insurance companies into the Indian insurance sector triggered off a series of
changes in the industry. Even with the stiff competition in the market place, it is
evident from the study that the public sector giant LIC dominates the Indian
insurance industry.LIC is competing with 16 other companies in the insurance
sector and has successfully managed not only to beat the competition but also has
taken advantage of the competition to increase its market share and premium
income. Thus, LIC has taken the competition positively as a means to innovate,
develop and re-engineer itself to the market. In this project, an attempt is made to
determine the present competition in the Insurance and effective strategies to
overcome the competition.
BE INSURED & BE SAFE

THANK YOU