© 2019 IJRAR November 2019, Volume 6, Issue 4 www.ijrar.

org (E-ISSN 2348-1269, P- ISSN 2349-5138)

An analysis of Sector wise Investment Management of

Life Insurance Corporation of India
Dr. Suyog A. Amrutrao
Director,
Department of Management Science, Dr. Babasaheb Ambedkar Marathwada University,
Sub-Campus, Osmanabad. Maharashtra

Abstract

Insurance industry in India has seen in growth in the last decade. It introduced vast number of new products in market.
It leads to a hard competition with a positive and healthy outcome. It plays dynamic role in the welfare of its economy.
Insurance industry considerably increases the opportunities for savings amongst the individuals and safeguards future. It
helps the insurance sector form a massive pool of funds. From these funds the insurance sector highly contributes to the
capital markets. Hence it increases large infrastructure developments in India. Fund collected from market (Policy owner)
are invested by the LIC again in various investment options to get return from it. This study is to find out and analyze
the investment done by LIC. It will give various out like trends in investment.

Key words: Investment, Insurance, Economy

Introduction

Life Insurance and Non-life Insurance are two category of Insurance. The Non-life Insurance sector is also termed as
General Insurance. Life Insurance and the Non-life Insurance is governed by the IRDAI (Insurance Regulatory and
Development Authority of India).

IRDA is to monitor the entire insurance sector in India. It is also act like a custodian of all the insurance consumer rights.
All the insurers have to stand by the rules and regulations of the IRDAI. The Insurance sector in India consists of total
57 insurance companies. 24 companies are the life insurance providers and the remaining 33 are non-life insurers.
Amongst those there are seven public sector companies. LIC offer coverage to the life of the individuals. Non-life
insurance companies offer coverage with our day-to-day living like travel, health, our car and bikes, and home insurance.
It is also include non-life insurance companies provide who coverage for industrial equipment’s. Crop insurance for
farmers, gadget insurance for mobiles, pet insurance etc. are some more insurance products available by the general
insurance companies in India. The life insurance companies have gained an investment prospectus in the recent times
with an idea of providing insurance along with a growth of your savings.

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Objectives

To study the insurance sector and specially LIC in insurance sector.

To analyze investment done by LIC in various sector.

Methodology

This study is about analyzing sector wise investment done by LIC. Secondary data has collected. Primary data has used
like discussion with policy holders. RBI data has used for analysis. This is analysis has shown by table and graphs.

Insurance Market size

 Government taking efforts to insuring the uninsured has regularly pushed insurance penetration in the country
and increase of insurance schemes.
 In Insurance industry Gross premiums written in India reached
 Rs 5.53 trillion (US$ 94.48 billion) in FY18 (Rs 4.58 trillion (US$ 71.1 billion) from life insurance and Rs 1.51
trillion (US$ 23.38 billion) from non-life insurance)
 Overall insurance penetration (premiums as % of GDP) in India reached 3.69 per cent in 2017 from 2.71 per cent
in 2001.
 In FY19 (up to October 2018), premium from new life insurance business increased 3.66 per cent year-on-year
to Rs 1.09 trillion (US$ 15.46 billion).
 In FY19 (up to October 2018), gross direct premiums of non-life insurers reached Rs 962.05 billion (US$ 13.71
billion), showing a year-on-year growth rate of 12.40 per cent.

Life Insurance Corporation

Life Insurance Corporation of India (LIC) was established in 1956. Life Insurance Corporation of India (LIC) is the
major insurance company in country. It has very large customer base. The claim settlement ratio of 98.04% for the year
2017-18. Life Insurance Corporation of India offers a various range of insurance portfolio catering to a variety of needs
of its customers. The LIC of India has 2,048 branches and 1,337,064 agents. They are operating in different cities and
towns all over the country. LIC is a state owned insurance group and investment company. Its estimated asset value of
Rs 1,88,3018.82 crore hence it is largest insurance company in India. LIC offers a variety of insurance products to its
customers such as insurance plans, pension plans, Unit Linked plans, special plans and group schemes and online child
insurance plans

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Customer awareness about LIC

Oldest Insurance Company in India Trust of people in LIC

Highest Market Share Good Claim settlement percentage

Varieties of Product Government support

Schemes of LIC

Endowment Plan LIC ULIP Plans

Whole Life Plans LIC Pension Plans

Money Back Plans LIC Micro Insurance Plans

LIC Social Security Schemes LIC Group Plans

Term Assurance Plans LIC's New Group Leave Encashment Plan

Data Analysis

Sector Wise Investment

( In Crore)

Year Public Private Joint Cooperative

2010 678374 236135 71 3667
2011 799009 267518 82 3667
2012 899655 300510 85 3567
2013 1018781 329308 86 822
2014 1194261 316024 94 754
2015 1369713 337997 94 685
2016 1578842 345852 96 1159
2017 1797369 385729 94 986
2018 2046432 395296 108 838
2019 2264149 396317 102 996

(Source: https://www.rbi.org.in/Scripts/Publications)

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(Table No. 1 showing Sector Wise Investment done by LIC since 10 year.)

Investment in Public and Private Sector since 10 year

2500000

2000000

1500000

1000000

500000

0
1 2 3 4 5 6 7 8 9 10
( In Crore) Public Private

(Fig. No. 1 showing Sector Wise Investment done by LIC in Public and Private Sector since 10 year.)

Investment in Joint and Coperative Sector since 10 year

4000
3500
3000
2500
2000 Joint

1500 Coperative

1000
500
0
( In Crore)1 2 3 4 5 6 7 8 9 10

(Fig. No. 2 showing Sector Wise Investment done by LIC in Joint and Cooperative Sector since 10 year.)

Discussion

In the above mentioned table investment done by LIC in Public and Private sector has shown. If we understand
public sector like, the section of a nation's economy, which is under the control of government, whether it is central,
state or local, is known as the Public Sector. The section of a nation's economy, which owned and controlled by
private individuals or companies is known as Private Sector. Public sector investment has increasing trends since 10
year and private investment is stable compare to public investment. 2264149 Crore has investment by LIC in public
sector till 2019 and 396317 core has invested in private sector. It shows the government project has used these funds.

Joint and cooperative sector has also used as investment platform by LIC. Joint Sector is the ownership, control and
management are shared jointly by the Government, the private entrepreneurs and the public at large. The
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management and control of a joint sector enterprise lies with the nominees or representatives of the Government,
private businessmen and the public. Cooperative is like an autonomous association of persons united voluntarily to
meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-
controlled enterprise. LIC was investing majority of its fund in cooperatives but after 2013 they have taken major
shift and reduces its investment in cooperative. 996 crore get invested in 2019 and 3667 crore in 2010. Trends are
in declining in cooperatives. In Joint sector the number of investment is limited but trend is increasing as LIC
invested 71 crore in 2010 and 112 in 2019.

Instrument Wise Investment

( In Crore)
Stock Exchange
Loans
Year Securities
2010 872062 45855
2011 1026492 43784
2012 1162388 41430
2013 1307333 41664
2014 1468886 42247
2015 1668047 40442
2016 1891161 34788
2017 2152592 31586
2018 2415496 27178
2019 2636655 24909
(Source: https://www.rbi.org.in/Scripts/Publications)

(Table No. 2 showing Instrument Wise Investment done by LIC in Stock Exchange Securities and Loans since 10
year.)

Investment in Stock Exchange Securities since 10 year

3000000

2500000

2000000

1500000

1000000

500000

0
1 2 3 4 5 6 7 8 9 10
( In Crore) Year

(Fig. No. 3 showing Instrument Wise Investment done by LIC in Stock Exchange Securities since 10 year.)

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Investment in Loans since 10 year

50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
( In Crore)
1 2 3 4 5 6 7 8 9 10

(Fig. No. 4 showing Instrument Wise Investment done by LIC in Loans since 10 year.)

Discussion

Above table shows the LIC is publically credited insurance company. People prefer LIC for investment purpose
also. Various stock exchange securities are available in market. If we understand stock market security. A stock
exchange, securities exchange is a facility where stockbrokers and traders can buy and sell securities, such as shares
of stock and bonds and other financial instruments. Stock exchanges may also provide facilities for the issue and
redemption of such securities and instruments and capital events including the payment of income and dividends.
Securities from market are on top from LIC point of view the trends since 10 years is very increasing like 872062
crore investment in 2010 and 2636655 crore invested in 2019. Stock market has various options. After globalization
industry playing vital role in economic development of country.

LIC policy holder can take loan from LIC as well but the trend of loans is in decreasing. The current LIC policy loan
interest rate is in the range of 10-12%. Given that the loan taken against the policy is secured by the LIC policy
itself, interest rates on such loans are quite low and hence, make them an attractive personal loan option. Loans on
LIC policy can be availed from LIC or other leading banks. 45855 crore were given in 2010 and 24909 crore given
in 2019.

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Conclusion

Above analysis shows that LIC first gives preference to Security of investment, Liquidity, Credential. The claim
settlement rate is also good. Fund manager have good portfolio policies hence they are survive and performing goof
in market. Sector wise investment shows that they want to utilize maximum. It helps corporation and investor to get
their return in good rate. As time change researcher have observed that percentage of investment have also changed
like shifting from one sector to another. Private insurance company has given competition with LIC but government
organization is reputation LIC have in the customer mind. LIC now must shift to others investment option too. They
have market linked policy which gives stock market related option to customer. This study has come to know the
trends and sector wise investment done by LIC

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