Life Insurance

Corporation

Life Insurance Corporation of India

(abbreviated as LIC) 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.[2][1]
 Life Insurance Corporation

Yogakshemam Vahamyaham

Type Statutory
Corporation
established by an
Act of Parliament-
LIC Act 1956

Industry Financial services

Founded 1 September 1956

Mumbai, India
Headquarters
Key people S B Mainak
(Managing Director)
M R Kumar
(Chairman)

Products Life insurance,

health insurance,
Investment
management,
Banking,
Mutual fund

Revenue ₹337,000 crore

(US$47 billion)
 (2019)
Operating income ₹32,241 crore
(US$4.5 billion)
Net income ₹29,956 crore
(US$4.2 billion)
(2019)
Total assets ₹3,111,847 crore
(US$440 billion)
(2019)
Owner Government of India
(100%)
Number of 111979 (Mar 2019)[1]
employees
Subsidiaries IDBI Bank
LIC Housing Finance
 Lic Pension Fund Ltd
Lic International
Lic Cards Services
Lic Mutual Fund

Website www.licindia.in

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

LIC Zonal Office, 'Night View From Connaught Place

Park'

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.[3] Surendranath Tagore had
founded Hindustan Insurance Society,
which later became Life Insurance
Corporation.[4]
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

Postal Life Insurance (PLI) was

introduced on 1 February 1884
Bharat Insurance Company (1896)
United India (1906)
National Indian (1906)
 National Insurance (1906)
Co-operative Assurance (1906)
Hindustan Co-operatives (1907)
Indian Mercantile
General Assurance
Swadeshi Life (later Bombay Life)
Sahyadri Insurance (Merged into LIC,
1986)

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 …

LIC Zonal Office, at Connaught Place, New Delhi,

designed by Charles Correa, 1991.
LIC Building at Chennai, was the tallest building in
India when it was inaugurated in 1959

In 1955, parliamentarian Feroz 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[5][6]

LIC's Contribution to the five

year plans over the years
Plan Year Investment

2 1956-1961 ₹184 Cr

3 1961-1966 ₹285 Cr

4 1969-1974 ₹1,530 Cr

5 1974-1979 ₹2,942 Cr

6 1980-1985 ₹7,140 Cr

7 1985-1990 ₹12,969 Cr

8 1992-1997 ₹56,097 Cr

9 1997-2002 ₹1,70,929 Cr

10 2002-2007 ₹3,94,779 Cr

11 2007-2012 ₹7,04,720 Cr

12 2012-2017 ₹14,23,055 Cr

13 2017-2022 ₹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 (US$92 million as per the 1959
exchange rate of roughly ₹5 for US$1),[7]
had grown to 25,000 servicing around
350 million policies and a corpus of over
₹800,000 crore (US$110 billion) 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 (CAGR) was 24.53%
while total life premium CAGR was
19.28% matching the growth of the life
insurance industry and outperforming
general economic growth.[8]

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;[9] it also has 54
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.
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
vahaamyaham 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 .[10]
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" (refers to
Krishna speaking to Arjuna), when taken
in context of the entire verse.

Awards and recognitions

The Economic Times Brand Equity
Survey 2012 rated LIC as the No. 6
 Most Trusted Service Brand of India.[11]
From the year 2006, LIC has been
continuously winning the Readers'
Digest Trusted brand award.
Voted India's Most Trusted brand in the
BFSI category according to the Brand
Trust Report for 4 continuous years -
2011-2014 according to the Brand
Trust Report.[12]

Employees and agents

As on 31 March 2018, LIC had 111,979
employees, out of which 24,510 were
women .

Category of employees Total Number No. of Women

Class-I Officers 32,803 7,041

Class-II Development Officers 22,830 1,148

Class III/IV employees 56,346 16,321

Total 111,979 24,510

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.[13]

IDBI Bank Employees

Now IDBI bank Employees have also
joined the work force of LIC. However,
they are not treated as same as LIC
employees.

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 ₹100,000
(US$1,400).[14]

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
(₹27,326 crore), followed by RIL (₹21,659
crore), ONGC (₹17,764 crore), SBI
(₹17,058 crore), L&T (₹16,800 crore), and
ICICI Bank (₹10,006 crore).[15]
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. [16]

See also
Insurance in India
Insurance
LIC Housing Finance
References
1. https://www.licindia.in/getattachme
nt/Bottom-Links/annual-report/LIC-
Annual-Report-2015-16.pdf.aspx
2. Anushka. "LIC - Life Insurance
Corporation Of India" . My LIC India.
Retrieved 18 February 2020.
3. "History" . LIC. Archived from the
original on 16 December 2013.
Retrieved 15 December 2013.
4. "Lunch on lotus leaves" .
www.telegraphindia.com. Retrieved
19 December 2018.
5. "board structure" . moneycontrol.
Retrieved 14 February 2019.
6. "bod" .
7. "UNdata | record view | Exchange
rate, US$ per national currency,
period average (IMF)" . Data.un.org.
22 May 2008. Retrieved 30 August
2010.
8. CA. Nirmal Ghorawat (31 January
2013). "Perspectives on Life
Insurance Industry in India « CA.
Nirmal Ghorawat's Blog" .
Canirmalg.wordpress.com. Retrieved
14 June 2013.
9. "Annual Report 2011-2012" (PDF).
LIC. Archived from the original
(PDF) on 28 June 2014. Retrieved
10 December 2013.
10. "Bhagavad-gita As It Is Chapter 9
Verse 22" . Vedabase.net. Archived
from the original on 23 October
2013. Retrieved 15 December 2013.
11. "Most Trusted Brands 2012: Top 50
Service Brands" . Economic Times. 7
November 2015. Retrieved
15 December 2013.
12. "The Economics Times" .
13. [1]
14. "Golden Jubilee Scholarship
Scheme" . LIC. Archived from the
original on 15 December 2013.
Retrieved 15 December 2013.
15. PTI. "LIC cuts stake in 27 Nifty firms;
sells shares worth Rs 8,000 crore" .
@businessline. Retrieved
19 December 2018.
16. "NSE - National Stock Exchange of
India Ltd" . www.nseindia.com.
Retrieved 24 August 2018.
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