Presentation on LIC of India

By :Naveen Ahlawat

WHAT IS LIFE INSURANCE?

Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against. The contract is valid for payment of the insured amount during: The date of maturity, or Specified dates at periodic intervals, or Unfortunate death, if it occurs earlier.

Introduction to LIC
Life Insurance Corporation of India (LIC) is the largest insurance group and investment company in India. Its a state-owned where Government of India has 100% stake. LIC also funds close to 24.6% of the Indian Government's expenses. It has assets estimated of 13.25 trillion (US$239.83 billion).It was founded in 1956. Headquartered in Mumbai, financial and commercial capital of India, the Life Insurance Corporation of India currently has 8 zonal Offices and 113 divisional offices located in different parts of India

 Shri D.K. Mehrotra, (Current-in-Charge & CHAIRMAN, LIC ) The slogan of LIC is "Yogakshemam Vahamyaham" which translates from Sanskrit to "Your welfare is our responsibility Over its existence of around 50 years, Life Insurance Corporation of India, which commanded a monopoly of soliciting and selling life insurance in India and contribute 7% of GDP.

LIC SUBSIDIARIES
LIC INERNATIONAL 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 LTD. The Company is recognized by National Housing Bank and listed on the National Stock Exchange (NSE) & Bombay Stock Exchange Limited (BSE). LIC Housing Finance Ltd. is one of the largest Housing Finance Company in India. Incorporated on 19th June 1989 under the Companies Act, 1956. LIC MUTUL FUND LTD. Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989 and contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882.

Life Insurance Vs. Other Savings

Contract of Insurance Protection Aid to Thrift Tax Relief Money When You Need It Insurance For Women Medical And Non-Medical Schemes Keyman Insurance

Objective of LIC:
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.

Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders. Act as trustees of the insured

 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. 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

INSURANCE SECTOR REFORMS 1994 In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N. Malhotra was formed. Set up with the objective of complementing the reforms initiated in the financial sector. Aimed at "creating a more efficient and competitive financial system

Key recommendations 1994

(1) STRUCTURE (2) COMPETITION (3) REGULATORY BODY (4) INVESTMENTS

Mission/vision:
Mission "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." Vision "A trans-nationally competitive financial conglomerate of significance to societies and Pride of India."

POLICIES (SCHEMES)
1. Insurance Plans 2. Pension Plans 3. Unit Plans 4. Special Plans 5. Group Scheme

Swot analysis
STRENGTHS: Domestic image of HDFC supported by Prudentials international image is strength of the company. Strong and well spread network of qualified intermediaries and sales person. Strong capital and reserve base. The company provides customer service of the highest order WEAKNESS: Heavy management expenses and administrative costs. Low customer confidence on the private players.

OPPORTUNITIES
Insurable population According to ING only 10% of the population is insure which represents around 30% of the insurable population. This suggests more than 300m people, with the potential to buy insurance, remain uninsured. There will be inflow of managerial and financial expertise from the worlds leading insurance markets. Further the burden of educating consumers will also be shared among many
players.

THREATS
Reorganization of PSUs. The all PSUs have started to redefine their services to attract customers attention. A few foreign Insurance companies have been permitted to increase their number branches and its entry has taken away some business of the existing companies.

SWOT ANALYSIS LIC

STRENGTHS: Indias top insurance company and best among Public sector company. Provide better infrastructure than any other Public company. WEAKNESSES: Average waiting time for the customer is 15 to 20 minutes. No separate customer care unit

OPPORTUNITIES: Setup a marketing cell at the local branch. Ensure that policies are diversified across several customer segments

THREATS: Growth of private players has led to shifting emphasis from public sector companies.

Thank You