Corporate Accounting

Assignment
Study Report on LIC

Name: Alan Brian Fernandes

Course: B.com {Hons} 

Semester IV 

Batch: 2018 - 2021 

Enrollment No: A40104618018

About Company

The Life Insurance Corporation of India popularly known as “LIC of India” was
incorporated on September 1, 1956 by nationalizing 245 Indian as well as foreign
companies. It was established 52 years ago with a view to provide an insurance
cover against various risk in life. It is the largest life insurance company in India
and also the country’s largest investor. It is fully owned by the Government of
India and headquarter is Mumbai. Today LIC function with 2048 fully
computerized branch offices, 100 divisional offices, 7 Zonal offices and the
corporate office. LIC’s wide area Network cover 100 divisional offices and
connects all the branches through a Metro area network. LIC has tied up with some
Banks and service providers to offer on- line premium collection facility in
selected cities. LICs ECS and ATM premium payment facility is an addition to
customer convenience. LIC has crossed many milestones and has set
unprecedented performance records in various aspect of life insurance business.
LIC’s motive is to take protection to light the lamps of security in as many homes
as possible and to help the people in providing security to their families.

LIC over the years

1818 - Life Insurance in its modern form came to India from England. Oriental
Life Insurance Company started by Europeans in Calcutta was the first life
insurance company on Indian Soil.

1956 - The Parliament of India passed the Life Insurance Corporation Act on June
19. The Life Insurance Corporation of India (LIC) was created on September 1.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices and a
corporate office.
1964 - Computers were introduced into the workings of LIC.

1995 - In July, LIC started a drive of On Line Service to Policyholders and Agents
through computer.

2000 - The insurance sector was liberalized in March through the Insurance
Regulatory and Development Authority (IRDA) Bill.

2005 - LIC functions with 91 centers, more than 2035 branches networked under
WAN.

2019 - Of India's 24 life insurance business, LIC is the sole public sector company.

2020 - LIC functions with 2048 fully computerized branch offices, 113 divisional
offices, 8 zonal offices, 1381 satellite offices and the Corporate office. According
to Bloomberg, LIC's assets add up to over Rs.30 lakh crore. LIC holds the largest
market share in the life insurance market.
Report of LIC

Starting with an initial capital of Rs 5 crore in 1956, LIC has assets of over Rs
31,11,847.28 crore with life fund to the tune of Rs 28,28,320.12 crore.

As per the graph, in 1999 the share price was at Rs. 7.78 at reached its highest
share price in 2017 at Rs.779. Due to the ongoing pandemic the share prices have
gradually dropped to Rs. 263 as of the latest date.

For the year ending March 2019 LIC Housing Finance has declared an equity
dividend of 380.00% amounting to Rs 7.6 per share. At the current share price of
Rs 261.85 this results in a dividend yield of 2.9%. The company has a good
dividend track report and has consistently declared dividends for the last 5 years.
The table below shows the Bonus rates declared for LIC Jeevan Anand Policy.
Bonus Value = Sum Assured / 1000 x Bonus Rate = 5,00,000 / 1,000 x Bonus Rate

Year Policy Term (in years) Bonus Rate

2018-2019 5 38
6 to 10 38
11 to 15 41
16 to 20 45
> 20 49
2017-2018 5 38
6 to 10 38
11 to 15 41
16 to 20 45
> 20 49
2016-2017 5 38
6 to 10 38
11 to 15 41
16 to 20 45
> 20 49
2015-2016 < 11 38
11 to 15 41
16 to 20 45
> 20 49
2014-2015 < 11 38
11 to 15 41
16 to 20 45
> 20 49
2013-2014 < 11 37
 11 to 15 40

16 to 20 44
> 20 48
2012-2013 < 11 37
11 to 15 40
16 to 20 44
> 20 48
2011-2012 < 11 36
11 to 15 39
16 to 20 43
> 20 47
2010-2011 < 11 36
11 to 15 39
16 to 20 43
> 20 47
2009-2010 < 11 34
11 to 15 37
16 to 20 41
> 20 45
2008-2009 < 11 34
11 to 15 37
16 to 20 41
> 20 45
2007-2008 < 11 34
11 to 15 37
16 to 20 41
> 20 45
2006-2007 < 11 34
 11 to 15 37

16 to 20 41
> 20 45
2005-2006 < 11 32
11 to 15 36
16 to 20 40
> 20 44
2004-2005 5 30
6 to 10 34
11 to 15 38
16 to 20 43
> 20 47
2003-2004 5 34
6 to 10 38
11 to 15 43
16 to 20 49
> 20 53

Conclusion

It can be seen that over the years LIC has always one goal of providing the best life
insurance products which has enabled to keep growing their market share over the
years and is the leading life insurance company with almost 70% market share.

The dividend of the company has always had a gradual increase which has
benefited the company as well as the investors. The share price dropped to a low of
Rs. 220 in May but as of present it has shown an increase to Rs. 263. Bonus issues
of LIC as well show a consistent rate on bonus issues.
Due to Covid 19 it has brought lot of fluctuations in the market but having LIC as
an investment is always a positive addition to your investments. LIC always gives
out the best plans which benefits ever party involved. LIC has always had constant
growth in their revenues which help them deliver the best products as well as
maintaining shareholder wealth.

References

 https://economictimes.indiatimes.com/industry/banking/finance/insure/lic-
assets-rise-to-rs-31-11-lakh-crore/articleshow/70936754.cms?from=mdr
 https://shodhganga.inflibnet.ac.in/bitstream/10603/4848/13/13_chapter
%204.pdf
 https://www.thehindu.com/business/Economy/lic-through-the-
years/article30741800.ece
 https://www.myinsuranceclub.com/life-insurance/companies/lic-of-
india/jeevan-anand/bonus-rates