Life Insurance Corporation


Life Insurance Corporation of India is an Indian state-owned insurance group and investment corporation owned by the Government of India.
The Life insurance Corporation of India was founded on September 1, 1956, when the Parliament of India passed the Life Insurance of India Act that nationalized the insurance industry in India. Over 245 insurance companies and provident societies were merged to create the state-owned Life Insurance Corporation of India.
As of 2019, Life Insurance Corporation of India 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.

History

Founding organisations

The Oriental Life Insurance Company, the first company in India offering life insurance coverage, was established in Kolkata in 1818. Its primary target market was the Europeans based in India, and it charged Indians heftier premiums. Surendranath Tagore had founded Hindustan Insurance Society, which later became Life Insurance Corporation.
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
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 worldwide economic crises triggered by the Great depression. The first half of the 20th century saw a heightened struggle for India's independence. The aggregate effect of these events led to a high rate of and liquidation of life insurance companies in India. This had adversely affected the faith of the general in the utility of obtaining life cover.

Nationalization in 1956

In 1955, parliamentarian Feroze Gandhi raised the matter of insurance fraud by owners of private insurance agencies. In the ensuing investigations, one of India's wealthiest businessmen, Ramkrishna Dalmia, owner of the Times of India newspaper, was sent to prison for two years.
The Parliament of India passed the Life Insurance of India Act on 19 June 1956 creating the Life Insurance Corporation of India, which started operating in September of that year. 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. The 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 17 sectors of the economy, including life insurance.

Structure

The LIC's executive board consists of Chairman, currently M R Kumar, and Managing Directors, Vipin Anand, T. C. Suseel Kumar, Mukesh Kumar Gupta and Raj Kumar
The Central Office of LIC is based out of Mumbai which sits The Chairman, all four Managing Directors, and all Executive Directors. LIC has a total of 8 Zonal Offices namely Delhi, Mumbai, Hyderabad, Chennai, Kanpur, Kolkata, Bhopal & Patna.

LIC's Contribution to the five year plans over the years

PlanYearInvestment
21956-1961₹184 Cr
31961-1966₹285 Cr
41969-1974₹1,530 Cr
51974-1979₹2,942 Cr
61980-1985₹7,140 Cr
71985-1990₹12,969 Cr
81992-1997₹56,097 Cr
91997-2002₹1,70,929 Cr
102002-2007₹3,94,779 Cr
112007-2012₹7,04,720 Cr
122012-2017₹14,23,055 Cr
132017-2022₹28,01,483 Cr

Growth as a monopoly

From its creation, the Life Insurance Corporation of India, which commanded a monopoly of soliciting and selling life insurance in India, created huge surpluses and by 2006 was contributing around 7% of India's GDP.
The corporation, which started its business with around 300 offices, 5.7 million policies and a corpus of INR 45.9 crores, had grown to 25,000 servicing around 350 million policies and a corpus of over by the end of the 20th century.

Liberalisation post 2000s

In August 2000, the Indian Government embarked on a program to liberalise the insurance sector and opened it up for the private sector. LIC emerged as a beneficiary from this process with robust performance, albeit on a base substantially higher than the private sector.
In 2013 the first year premium compound annual growth rate was 24.53% while total life premium CAGR was 19.28% matching the growth of the life insurance industry and outperforming general economic growth.

Operations

Today LIC functions with 2048 fully computerized branch offices, 8 zonal offices, around 113 divisional offices, 2,048 branches and 1408 satellite offices and the Central Office; it also has 73 customer zones and 25 metro-area service hubs located in different cities and towns of India. It also has a network of 1,537,064 individual agents, 342 Corporate Agents, 109 Referral Agents, 114 Brokers and 42 Banks for soliciting life insurance business from the public.
The LIC has 22 departments each headed by an Executive Director namely Marketing, Bankassurance, Corporate Communication, Personnel, CRM, Direct Marketing, E&OS, F&A, IT/BPR, Inspection, Investment, SBU/Estates, Investment Operations, P&GS, Actuarial, Chairman Sectt, F&A, Micro Insurance, RTI, HRD, Engineering, and Vigilance.
The LIC has 8 Zonal Offices headed by a Zonal Manager namely North Zone headquartered at Delhi, Central Zone headquartered at Bhopal, East Zone headquartered at Kolkata, West Zone headquartered at Mumbai, South Zone headquartered at Chennai, East Central Zone headquartered at Patna, North Central Zone headquartered at Kanpur and South Central Zone headquartered at Hyderabad. The Zonal Manager is one of the key decision-makers of the corporation after the Board.
The 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 who oversees all the departments & divisions of the Zone - Making him De-facto CEO of the Zone. The zonal departmental heads are Regional Managers. Divisions are headed by Sr. Divisional Manager who oversees all the departments & branches of the division. There are 3 layers of Horizontal Management namely Senior Divisional Manager, Zonal Manager & the Chairman/MD. There are also 3 layers of vertical management namely Managers of Divisions, Regional Managers of Zonal Office & the Executive Directors of Central office. Horizontal Management is considered key managers of the corporation.
Cadre/Rank NamePosting Designations
ChairmanChairman
Managing DirectorManaging Director
Zonal ManagerZonal Manager, Executive Director, CEO of Subsidiary
Zonal ManagerRegional Manager, Chief, Director, CEO of Subsidiary
Sr Divisional ManagerDeputy Zonal Manager, SDM, Principal, Faculty Member, Regional Manager, Secretary
Divisional ManagerChief Manager, DM, Secretary, Dy Secretary, Marketing Manager, Principal, Faculty Member
Assistant Divisional ManagerSr. Branch Manager, Sr. Branch Manager, Manager, Manager, Dy Secretary, Faculty Member
Administrative OfficerBranch Manager, BM, AO
Assistant Administrative OfficerABM, AAO, PA, Deputy Manager,

Now LIC also has the 1899 branches of IDBI bank at its disposal thus it can carry out its insurance business through these branches of the bank.

Slogan

LIC's slogan yogakshemam vahamyaham is in Sanskrit which loosely translates into English as "Your welfare is our responsibility". This is derived from ancient Hindu text, the Bhagavad Gita's 9th chapter, 22nd. The slogan can be seen in the logo, written in Devanagari script.
This line means "I carry what they lack, and I preserve what they have", when taken in context of the entire verse.

Awards and recognitions

As on 31 March 2018, LIC had 111,979 employees, out of which 24,510 were women.
Category of employeesTotal NumberNo. of Women
Class-I Officers32,8037,041
Class-II Development Officers22,8301,148
Class III/IV employees64,34616,321
Total11400024,510

Agency strength

The total number of Agents on our Roll is 11,48,811 as at 31.03.2018 as against 11,31,181 as on 31.03.2017. The number of Active Agents is 10,71,945 as at 31.03.2018 as compared to 10,46,484 as on 31.03.2017.

Initiatives

Golden Jubilee Foundation
LIC Golden Jubilee Foundation was established in 2006 as a charity organization. This entity has the aim of promoting education, alleviation of poverty, and providing better living conditions for the under privileged. Out of all the activities conducted by the organisation, Golden Jubilee Scholarship awards is the best known. Each year, this award is given to the meritorious students in standard XII of school education or equivalent, who wish to continue their studies and have a parental income less than.

Holdings

LIC holds shares worth about ₹2.33 lakh crore in all the Nifty companies put together, but it lowered its holding in a total of 27 Nifty companies during the quarter.
The cumulative value of LIC holding in these 27 companies fell by little over ₹8,000 crore during the quarter shows the analysis of changes in their shareholding patterns.
Individually, LIC is estimated to have sold shares worth ₹500-1,000 crore in each of Mahindra & Mahindra, HDFC Bank, ICICI Bank, Tata Motors, L&T, HDFC, Wipro, SBI, Maruti Suzuki, Dr Reddys and Bajaj Auto.
The insurance behemoth also trimmed holdings in Ambuja Cements, Cipla, TCS, Lupin and Asian Paints. A marginal decline was also witnessed in its stakes in companies such as IDFC, Hindustan Unilever, Grasim, ACC, BPCL, Bank of Baroda, Punjab National Bank, Sun Pharma and Tata Power.
On the other hand, LIC further ramped up its stake in a total of 14 Nifty constituents with purchase of shares worth an estimated ₹4,000 crore.
The major companies where LIC has raised its stake include Infosys, RIL, Coal India Ltd and Cairn India. Other such companies are ITC, Power Grid Corp, NTPC, Siemens, Bharti Airtel and Hero MotoCorp.
The state-run insurer also marginally hiked its exposure in Ultratech, Gail India, Ranbaxy, Kotak Mahindra Bank and HCL Technologies, while its shareholding remained almost unchanged in companies like ONGC, Tata Steel, BHEL and Reliance Infra.
Among the Nifty companies, LIC's holding in terms of value in 2012 were estimated to be the highest in ITC, followed by RIL, ONGC, SBI, L&T, and ICICI Bank.
The share price drop in ITC on 18 July 2017 had caused LIC a major loss of around 7000 Crores.
LIC now also holds 51% stake in IDBI bank thus making it the only insurer in India to own a bank, since regulations prohibit insurers from holding more than 15% stake in any company, LIC will have to decide a timeline for paring its stake in IDBI bank; also LIC will have to pare its stake in LIC Housing Finance Ltd as a company cannot be promoter of 2 finance companies carrying out same housing finance business so either LIC has to sell its stake in LIC housing or close down housing business of IDBI bank.