BRIEF HISTORY OF LIFE INSURANCE IN INDIA<br /><ul><li>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.</li></li></ul><li>Cont…<br />1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.<br />1938: Earlier legislation consolidated and amended the Insurance Act with the objective of protecting the interests of the insuring public.<br />1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalized.<br />
.<br />On September 1st, 1956 Life Insurance Corporation of India was created, by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs 5 crore from the Government of India .<br />With an 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.<br />
The Life Insurance Corporation of India<br />It is the largest life insurance company in India and also the country's largest investor.<br />It is fully owned by the Government of India. It also funds close to 24.6% of the Indian Government's expenses.<br />It has assets estimated of 5 Trillion Rupees.<br />
MISSION:<br />"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."<br />
VISION:<br />"A trans-nationally competitive financial conglomerate of significance to societies and Pride of India."<br />
<ul><li>1957: It crossed to Rs.200 crore of new business.
June 1989:LIC housing finance limited (LICHFL) was established.</li></ul>MILESTONES OF LIC<br />
Cont….<br /><ul><li>July 1989:LIC of India international was established.
In 1990’s: LICHFC grew into a premium housing finance company, disbursing over Rs. 50 billion of loans.
In 2001: LIC NEPAL ,a joint venture company formed with the Vishal Group of Industries ,Nepal .</li></li></ul><li>Cont….<br /><ul><li>In 2003: LIC LANKA , A joint venture company formed with the Bartleet group of companies Sri Lanka.
In 15th Oct 2005: It has crossed the milestone of issuing 1,01,32,955 new policies.
2006-07: LIC India’s number of policy holder crossed a whopping 200 million.(fourth in terms of population of the countries of the world)</li></li></ul><li>BOARD OF DIRECTORS<br />Shri. T.S. Vijayan (Chairman)Shri. D.K. Mehrotra (Managing Director - LIC)Shri. Thomas Mathew T. (Managing Director - LIC)Shri. A.K. Dasgupta (Managing Director - LIC)Shri. Ashok Chawla(Finance Secretary, Ministry of Finance, Govt. of India)<br />Shri. G.C. Chaturvedi(Additional Secretary, Department of Financial Services, Ministry of Finance, Govt. of India.)<br />Shri. YogeshLohiya(Chairman cum Managing Director, GIC of India)<br />Shri. T.C. Venkat Subramanian (Chairman & Managing Director. Export Import Bank of India)Dr. SooranadRajashekhran<br />Shri. Monis R. Kidwai<br />Shri T. S. Vijayan,Chairman<br />Shri D.K. Mehrotra<br />Shri Thomas Mathew T.<br />Shri. A.K. Dasgupta<br />
Life Insurance Corporation of India<br />Type : Government-owned corporation<br />Founded : September 1, 1956<br />Headquarters : Headquarters in Mumbai, India. 8 zonal Offices and 101 divisional offices <br />Branches : 2048<br />Agents : 1.2 million approx<br />Industry : Life insurance<br />Products : Individual Life Insurance,Group Insurance and Pension Plans<br />Total assets : Rs 5 Trillion ($200 Billion USD)<br />Employees : 112,184<br />Parent : NIL<br />Subsidiaries : LIC Housing Finance Limited, LIC(Nepal)Ltd, LIC(Lanka)Ltd, <br /> LIC(International)BSC(C),Behrain,<br />Website : http://www.licindia.com<br />
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, and the corporate office in the year 1956.<br />Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7 zonal offices and the Corporate office<br />
GOLDEN PEACOCK AWARD FOR EXCELLENCE IN CORPORATE GOVERNANCE, 2007<br />CNBC Awaaz Consumer Awards 2008 <br />ASIA BRAND CONGRESS BRAND LEADERSHIP AWARD 2008 Pitch Award -" Rank 1 " India's Top 50 service Brands<br />
Trusted Brand Award 2009 in the Platinum category <br />Brand Equity Most Trusted Brand 2009 Top in Insurance Category<br />Golden Peacock Innovative Product / Service Award - 2009<br />
PROBLEMS RELATED TO LIC HRM:<br /><ul><li>Many of these problems related to the fact that it was a public sector organization.
The corporation's managers were too bureaucratic.
The work culture in the organization was sloppy.
Strong trade unions made it difficult for managers to get the work done.
The corporation's development officers focused on their own earnings and incentives, rather than on customer satisfaction.</li></li></ul><li>Some Of The Qualities LIC seek in an Agent are:<br />Self-motivation<br />A master communicator<br />A go-getter<br />A graduate<br />
WHY GRADUATES?<br /><ul><li>To cater to the needs of the knowledge oriented market place.
To increase the continuous link base with its clientele.
To set higher standards of quality in service and salesmanship in competition to those provided by private insurance players in the market.</li></li></ul><li>TRAINING<br /><ul><li>100 hours training regarding insurance business and its products.
A written examination is conducted and the qualifiers are issued license by the IRDA Act 1999
The license issued under the Act as per the norms of the Regulations is valid for a period of 3 years.
A 17-18 days training schedule covers the mandatory IRDA training requirements and LIC product training module.</li></li></ul><li>REWARDS & RECOGNITION<br /><ul><li>Depending upon level of business generated, agent becomes member of Clubs, such as Corporate Club, Chairman Club, etc.
Advisors can also qualify for the renowned MRDT (Million Dollar Round Table), an exclusive international insurance advisors club.
Attend seminars held at exotic international and domestic locations each year.</li></li></ul><li>Attractive Commission Rates<br />On most of the standard policies LIC agents gets paid commission as per the following rates:<br /><ul><li>Up to 25% of 1st year premium with 10% Bonus Commission
Up to 5% thereafter till the policies continues</li></ul>Every time a policy holder pays his installment premium, the agent receives his commission<br />
CORPORATE SOCIAL RESPOSIBILITY<br />The Corporation has been promoting Social Welfare<br />through investments in Infrastructure and Social Sector which includes:<br /><ul><li>Projects/Schemes for generation and transmission of Power,
Development of Roads, Bridges & Road Transport.</li></li></ul><li>LIC GOLDEN JUBILEE FOUNDATION<br />The main objectives of the Golden Jubilee Foundation are:<br /><ul><li>Relief of poverty or distress.
The advancement of any other object of general public utility.</li></ul>It also provides scholarships to students from economically weaker families for pursuing higher studies under the scheme “LIC GOLDEN JUBILEE SCHOLARSHIP”<br />
OTHER CSR ACTIVITIES<br /><ul><li>Prime Ministers’ National Relief Fund
Chief Ministers’ Relief Funds of various states
Rajiv Gandhi Foundation to help relief measures in case of calamities such as Earthquake, Tsunami etc.</li></li></ul><li>PRODUCTS AND SERVICES OF LIC<br />INSURANCE PLANS<br />PENSION PLANS<br />UNIT LINKED PLANS<br />SPECIAL PLANS<br />
Strengths:<br />High penetration rate in rural area.<br />It is the oldest and most well experienced player having a Pan India presence.<br />LIC has a strong and very well developed distribution network<br />It has a large product portfolio and claim settlement is easier to get.<br />It has the advantage of government guarantee accompanied with it.<br />
Weakness:<br />The corporation's managers are too bureaucratic.<br />Inefficient use of its human resources.<br />After sales ,customer grievance redressal mechanism is inefficient.<br />Agents not taking into account the needs of people and promote policies having high commissions only.<br />
Opportunity:<br />Emergence of a huge middle class income consumer market in the country.<br />People becoming more aware and demanding so there is scope for a whole lot of innovative products.<br /> Pension markets, health insurance and large real estate portfolio.<br />Strong growth potential.<br />
Strategy:<br />In January 2000, International consultants Booze Allen & Hamilton were hired And it adopted a three-pronged business strategy for business, which involved<br /> Reduction in premiums,<br /> Higher returns and <br /> Introduction of new products.<br />
Contribution to Indian Economy<br /><ul><li>Life Insurance is the only sector which garners long term savings.
Spread of financial services in rural areas and amongst socially less privileged.
LIC DURING RECESSION<br /><ul><li>LIC of India has for the first time shown a 7 per cent increase in the overall market share in order to affirm its hold in the sector.
People repose a lot of faith in the LIC as when most of the private insurance firms were not showing any upward trend, LIC was one of the few players in the insurance sector to show surplus growth.
LIC have hired about 5,000 employees and 500 officers despite the economic slowdown.
Today LIC have 23-crore policyholders across the country. </li></li></ul><li>
Continuous dialogue</li></li></ul><li>RECOMMENDATIONS<br />Need analysis of customer is must before giving any advice.<br />The agent should have good knowledge of various investment instruments.<br />The focus should be on providing solution rather than selling product.<br />Agent ,Advisor should stress on building long term relationship with customer rather than one time selling.<br />