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LIC Sectoral Presentation

The Life Insurance Corporation of India (LIC) is a government-owned insurance and investment corporation established in 1956 to address insurance fraud by consolidating 245 private insurers. With a strong market presence, it offers various insurance products, employs over 114,000 individuals, and engages in corporate social responsibility activities. The corporation is facing challenges such as low insurance penetration, competition from private insurers, and government disinvestment proposals while exploring future strategies for growth.

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Life Insurance Cooperation of India (LIC) is an Indian Government owned Insurance and investment cooperation under the ownership of Ministry of Finance, Government of India. LIC has four MDs and one chairman. Currently, MR Kumar is serving as the chairman of the corporation and TC Suseel Kumar, Vipin Anand, Mukesh Kumar Gupta, and Raj Kumar are serving as the MDs of LIC. Nature of Company: Statutory Corporation Established By An Act Of Parliament - LIC Act 1956. History of Company: 1. In 1955, parliamentarian Feroz Gandhi raised the matter of insurance fraud by owners of private insurance agencies. 2. The Parliament of India passed the Life Insurance of India Act on 19 June 1956, creating the Life Insurance Corporation of India to address this issue. 3. It consolidated the business of 245 private life insurers and other entities offering life insurance services; this consisted of 154 life insurance companies, 16 foreign companies and 75 provident companies. 4. The nationalization of the life insurance business in India was a result of the Industrial Policy Resolution of 1956. 5. Surendranath Tagore had founded Hindustan Insurance Society which later become LIC.
The central office of Life Insurance Corporation is located at Mumbai and it has 8 zonal offices. The LIC has 22 departments each headed by an Executive Director. LIC follows a horizontal line of command & vertical line of command, while each department is headed by an Executive Director, the Zonal offices are headed by a Zonal Manager. There are 3 layers of Horizontal Management : Senior Divisional Manager(I/C) ➡️Zonal Manager(I/C)➡️ the Chairman/MD. There are also 3 layers of vertical management : Managers of Divisions ➡️Regional Managers of Zonal Office ➡️ Executive Directors of Central office.
Marketing Department • LIC has designed a marketing mix with several products in accordance with the requirements of the common people. Insurance is mainly taken out with the purpose of providing for the family members in case of death by natural causes or accident to the breadwinner of the family. • LIC offers its customers various insurance products such as the following-Life Insurance, Investment Management, Health Insurance, Mutual Fund, Property Insurance, Auto Insurance, Home Insurance, Casualty Insurance, Liability Insurance, Credit Insurance Product Marketing Strategy • Premium charged against policies( includes mortality, expenses , interest and charges) • Interest charged for defaulting in payment of premium. • Commission charged for underwriting and consultancy. Product Pricing Policy • Direct Distribution • Indirect Distribution • i) Direct Distribution- Bank, Post Office, Brokers and Friends-Friends-Family etc. • ii) Indirect Distribution- Online Strategy, Calling, WhatsApp, Facebook, Twitter, E-mail, Customer Services, Company Websites And YouTube etc. Product Distribution Strategy • 1) Advertising And Publicity • 2) Organization Of Conference And Seminar • 3) Incentive To Policyholder • 4) Exhibition • 5) Participation in fairs and festivals • 6) Mobile Publicity Van. Product Promotion Strategy
SWOT Analysis Strength • India’s largest Insurance service provider . • Brand Image • Fund Base Weakness • Culture • Poor Advertising • Too many restrictions Opportunities • Cybersecurity • Online Services • Shift from protection to prevention. Threats • Competition • Change of government • Change of Policies Competitors in the Market Private sector insurance companies like HDFC Life Insurance Co. Ltd, Max Life Insurance Co. ltd. etc. Future Strategy • Offers • Increase Market Value
Human Resources 1 .Recruitment policy • Selection is normally made on the basis of a LIC written test followed by an interview of the candidate who qualifies the written test. • Selected candidates in the interview are then subject to pass the test of being medically fit taken by the medical examiner authority of LIC. • For apprenticeship, a candidate have to undergo insurance related training and pass a test on the same. • For zonal office recruitment , candidate have to match the eligibility criteria as per the zone notification followed by test, interview, selection and allocation of job area. 2.Employee Health, Safety and Welfare Policy • In any institutions or organization, it was first and foremost to see the Welfare Measures taken. Below factors are to improve the welfare measure & working environment in the LIC which in turn would increase the productivity among the employees: • Satisfaction of education facilities • Sanitary facilities • Drinking water facilities • Recreational facilities • Canteen facilities • Housing facilities • Medical facilities • Sufficient and adequate infrastructure 3.Employee Retention policy • Employee retention refers to the ability of an organization to retain its employees. LIC is known for the benefits it offers to retain and satisfy their employees which are: • Perks and insurance sales related incentives • Promotions • Pension plan • Retirement benefits • Interest free loans • Mediclaim policy and group insurance • Bonus and gratuity • Various other office allowances like travel, transport , mobile etc.
4.Policy Review • Trade reforms and gender discrimination • Health Hazards. • Unawareness of labor laws and terms of employment also cause unrest 5.Total no of employees including branches • LIC had 1,14,498 employee out of 25,602 were women 6.CSR activities and environment protection policy • LIC HFL has identified the fields it would like to focus its efforts and energy on, following focus areas: • Promoting health Care • Enhancing education • Promotion of national heritage, art, culture and sports • . Disaster management • Prime Minister’s Relief Fund and other funds mentioned in the schedule VII
Finance Department • The total gross income • 2017-18 total business Rs. 27527 crore • 2018-19 total business Rs. 39956 crore • 2019-2020 total business Rs. 250936 crore 1.Annual turnover of the company (last 3 years) • Dec 2020 = Rs. 25,625 crore from stock sale • Nov 2019 = Rs. 14000 crore • Sep 2018= Rs. 20000 crore 2.Profitability (last 3 years) • The government owns 100% stake in LIC. • Insurance Corporation of India is an Indian government owned insurance and investment corporation under the ownership of Ministry of Finance, Government of India. 3. Stakeholders associated with the company • Household People, Companies, NRI, HNI 4. Clients • Human Right Policy • Health & Environment Policy • Code of conduct for Agents • Whistle Blower Policy • Safety & Occasional Policy 5. Operation Policies & Hurdles
Impact of Govt. Budget on the Industry IPO for LIC in 2021 Union Budget In year 2021, government of India had proposed to significantly enhance the authorized capital of Life Insurance Corporation of India (LIC), to INR 250bn ($3.4bn) to facilitate IPO Impact of Exim Policy on Exports and Imports Oversupply Trade Flow: Valuation of broad competitive impacts to U.S. industry Proportionality and the Trade Flow Analysis Trade Flow Analysis: 1.Cost Analysis 2. Benefit Analysis 3.Net trade flow Mergers and Acquisitions •1. On January 21, 2019 LIC completed the acquisition of 51% in IDBI bank, making it majority shareholder of IDBI Bank. Owing to this Reserve Bank of India (RBI) re-classified IDBI bank as a Private Sector Bank for regulatory purposes with effect from January 21, 2019, vide a Press Release dated March 14, 2019. •2. Will merge with Private Insurance Companies Corporate Wars 1. LIC employee’ protest against Centre's disinvestment proposal, oppose move 2. The employees' union of Life Insurance Corporation of India strongly opposed the government's plan to sell a part of its holding in the country's largest financial institution through a public issue. Scope for developments
External Environment National And Global Issues Affecting The Industry • Low insurance penetration and density rates prevail in India. • Before the outbreak of COVID-19 in India, only a meagre 10% of people showed interest in purchasing insurance to cover medical emergencies, including pandemics and infectious diseases. Now, however, 71% of people consider it as a necessity Initiatives by Government to promote the industry • Foreign Direct Investment (FDI) limit for the insurance sector increased from 26% to 49%. • Life insurance companies operational for 10+ years are now allowed to go public by IRDA • Government plans to divest a significant stake in PSU general insurance companies in order to execute the steep disinvestment target. Several flagship schemes have been launched by the government to boost the insurance sector. Environmental Issues ,If any • Insurance could also be a useful tool in adaptation process towards the global environmental change. • Environmental change brings uncertainty and ambiguity into this historical pricing process because past events are no longer a reliable predictor of future events. Insurers demand higher premium with the change of global environment.’ • Extreme weather events pose a huge risk, not just to property insurers, but to health and life insurance providers too.
Interesting facts should be known about LIC • From the year 2006, LIC has been continuously winning the Readers' Digest Trusted brand award. • LIC Golden Jubilee Foundation was established in 2006 as a charity organization. Golden Jubilee Scholarship award is given to the meritorious students in standard XII of school education or equivalent. • LIC's slogan योगक्षेमम् वहाम्यहम (yogakshemam vahamyaham) is in Sanskrit which loosely translates into English as "Your welfare is our responsibility". This is derived from the 22nd verse of the Bhagwad Gita’s 9th chapter. • As of 2019, LIC had total life fund of ₹28.3 trillion. The total value of sold policies in the year 2018–19 is ₹21.4 million. Life Insurance Corporation of India settled 26 million claims in 2018–19. It has 290 million policy holders. • In November 2020, LIC launched its first software application, ANANDA, an acronym for ‘Atmanirbhar Agents New Business Digital App’ or the on-boarding process with the aid of the agent/broker to get life insurance policy through paperless module. • The scope of IoT in Indian insurance market continues to go beyond telematics and customer risk assessment. Currently, there are 110+ InsurTech start-ups operating in India.
Chairman- MR Kumar MD- Vipin Anand MD- Mukesh Kumar Gupta MD- Raj Kumar MD- TC Suseel Kumar