AN ORGANISTAIONAL STUDY OF INSTITUTIONAL

TRAINING AT LIFE INSURANCE CORPORATION

A Project Report submitted to the SRM Institute of Science & Technology in partialfulfillment of the
requirements

for the award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted by

THARANIASH M (RA2252001020039)

Under the guidance of

DR. LOGANATHAN (Faculty Guide)

BALARAMAN G, ZONAL MANAGER (Company Guide)

FACULTY OF MANAGEMENT

SRM Institute of Science & Technology Ramapuram, Chennai 89.

April 2024
 FACULTY OF MANAGEMENT
SRM INSTITUTE OF SCIENCE & TECHNOLOGY
Ramapuram Campus

Certificate

This is to certify that the project Report entitled “AN ORGANISTAIONAL

STUDY OF INSTITUTIONAL TRAINING AT LIFE INSURANCE
CORPORATION”, in partial fulfillment of the requirements for the award of the
Degree of Master of Business Administration is a record of original work
undergone by THARANIASH M(RA2252001020039) during the year 2022-2024
of his/her study in FACULTY OF MANAGEMENT, SRM Institute of Science &
Technology, Ramapuram Campus under my supervision and the report has not
formed the basis for the award of any Degree/Fellowship or other similar title to any
candidate of any University.
Place: Chennai – 89

Date: DR. LOGANATHAN

(Faculty Guide)

Dr. R. Arulmoli Dr. C. Sundar

HOD/MBA Dean (Management Studies)

SRM Institute of Science & Technology, Ramapuram Campus FACULTY OF MANAGEMENT

Chennai – 89.

Submitted to FACULTY OF MANAGEMENT, SRM Institute of Science & Technology

(Ramapuram Campus) for the examination held on 10 / 05 /2024.

EXAMINER-1 EXAMINER-2
 DECLARATION

I, SUKESHRAJ SV, hereby declare that the project Report, entitled “ AN ORGANISTAIONAL STUDY OF
INSTITUTIONAL TRAINING AT LIFE INSURANCE CORPORATION” submitted to the SRM Institute of
Science & Technology in partial fulfillment of the requirements for the award of the Degree of Master of Business
Administration is a record of original work undergone by me during the period 01.03.2024 to 15.4.2024 under the
supervision and guidance of DR. LOGANATHAN, FACULTY OF MANAGEMENT, SRM Institute of Science &
Technology, Ramapuram Campus and it has not formed the basis for the award of any Degree/Fellowship or other
similar title to any candidate of any University.

Place: Chennai – 89 Signature of the Student

Date:
 ACKNOWLEDGEMENT

I am extremely thankful to our Chancellor, SRM Institute of Science & Technology, for his invaluable
support. I wish to express my profound gratitude to my venerable Chairman, SRM Institute of Science &
Technology, Ramapuram, for kind permission to undergo project work successfully. I express my heartfelt thanks to
our Dean, SRM Institute of Science & Technology, Ramapuram Campus who provided all facilities for carrying out
this project.

I immensely thank our Head of the department, for his valuable suggestions and guidance for the completion
of project work. I express my sincere thanks to BALARAMAN G, ZONAL MANAGER, LIFE INSURANCE
CORPORATION and my Project Guide DR.LOGANATHAN, for guiding me throughout the work. I thank God
Almighty for showering his perennial blessing on me for giving me the courage to pursue this project work
successfully.

THARANIASH M
(RA2252001020039)
 TABLE OF CONTENTS

CHAPTER TITLE PAGE NO

Introduction
2
1.1 Introduction of the study
3
1.2 Objective of the Study
3
I 1.3 Importance of the study
3
1.4 Scope of Study
3
1.5 Period of the study
3
1.6 Chapterization

Industry and Company Profile

5
2.1 Industry Profile
II 15
2.2 Company Profile
22
2.3 Product Profile

Functioning of various Departments

3.1 HR Department 29
3.2 Finance Department 37

III 3.3 Marketing Department 41

3.4 Financial Statement Analysis 45
-Income statement 50
-Balance Sheet 52
-Cash flow statement
-Ratio analysis
IV Conclusion

4.1 Findings 58
4.2 suggestions 58
4.3 SWOT Analysis 59
4.4 conclusion 60
CHAPTER –I
1.1 Introduction

Life Insurance in its modern form came to India from England in the year 1818. Oriental Life
Insurance Company started by Europeans in Calcutta was the first life insurance company on
Indian Soil. All the insurance companies established during that period were brought up with the
purpose of looking after the needs of European community and Indian natives were notbeing
insured by these companies. However, later with the efforts of eminent people like Babu Muttylal
Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were
being treated as sub-standard lives and heavy extra premiums were being charged on them.
Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company
in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly
patriotic motives, insurance companies came into existence to carry the message of insurance and
social security through insurance to various sectors of society. Bharat Insurance Company (1896)
was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907
gave rise to more insurance companies. The United India in Madras, National Indian and National
Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In
1907, Hindustan Co-operative Insurance Company took its birthin one of the rooms of the
Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile,
General Assurance and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to regulate insurance
business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were
passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables
and periodical valuations of companies should be certified by an actuary. But the Act discriminated
between foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business. From
44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total
business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies many
financially unsound concerns were also floated which failed miserably. The Insurance
Act 1938 was the first legislation governing not only life insurance but also non-life insurance
to provide strict state control over insurance business. The demand for nationalization of life
insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill
to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it
was much later on the 19th of January, 1956, that life insurance in India was nationalized. About
154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in
India at the time of nationalization. Nationalization was accomplished in two stages; initially the
management of the companies was taken over by means of an Ordinance, and later, the ownership
too by means of a comprehensive bill. The Parliament of India passed the Life Insurance
Corporation Act on the 19th of June 1956, andthe Life Insurance Corporation of India was
created on 1st September, 1956, with the objective of spreading life insurance much more widely
and in particular to the rural areas with a view to reach all insurable persons in the country,
providing them adequate financial cover at a reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate
office in the year 1956. Since life insurance contracts are long term contracts and during the
currency of the policy it requires a variety of services need was felt in the later years to expand the
operations and place a branch office at each district headquarter. Re-organization of LIC took
place and large numbers of new branch offices were opened. As a result of re-organization
servicing functions were transferred to the branches, and branches were made accounting units.
It worked wonders with the performance of the corporation. It may be seen that from about
200.00crores of New Business in 1957 the corporation crossed 1000.00crores only in the year
1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But
with re-organization happening in the early eighties, by 1985-86 LIC had already crossed
7000.00crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 113 divisional offices, 8 zonal
offices, 1381 satallite offices and the Corporate office. LIC’s Wide Area Network covers
113divisional 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. LIC’s ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centres have been commissioned at
Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other
cities. With a vision of providing easy access to its policyholders, LIC has launched its
SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate anywhere servicing and
many other conveniences in the future.

LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance
and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over
one crore policies during the current year. It has crossed the milestone of issuing 1,01,32,955 new
policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the corresponding period
of the previous year.

From then to now, LIC has crossed many milestones and has set unprecedented performance
records in various aspects of life insurance business. The same motives which inspired our
forefathers to bring insurance into existence in this country inspire us at LIC to take this message
of protection to light the lamps of security in as many homes as possible and to help the people
in providing security to their families.

1.2 Importance of the study

Life insurance provides money, or what's known as a death benefit, to your chosen beneficiary
after you die. It can help give your loved ones access to money when they need it. Understanding
life insurance can help you plan for your family's long-term financial needs.
1.3 Scope of the study

The main aim of a life insurance cover is to secure the needs of dependents after one’s untimely
death. In addition to the emotional suffering, the financial insecurity arising out of losing the
primary earner can be immense. This is the reason why most personal finance experts suggest
that life insurance should be the main part of one’s investment planning. In India, life insurance
is yet to reach its full potential as the awareness about life insurance products is pretty low.
While the Indian life insurance industry has witnessed a lot of transformation ever since the entry
of private players, it still has a long way to go in terms of protecting the entire population of our
country.

1.4 Period of study

Summer internship was done for 6 Weeks at SRIVARI INSURANCE understanding the
organizational functions and different functional department working and co-existence in the
company.

1.5 Chapterization:

 Chapter 1: This chapter contains, introduction, objective, importance, scope and period of
the study
 Chapter 2: This chapter contains of company and industry profile, product profile.
 Chapter 3: This chapter contains of functions of various department of the firm.
 Chapter 4: This chapter contains the findings, suggestions and conclusions of the study.
CHAPTER - II
2.1 Industry Profile

Life Insurance Corporation of India (LIC), owned by the Government of India, is a provider of
life insurance plans. The company offers endowment plans, money back plans, term assurance
plans, pension plans, special plans, unit plans, group schemes, child plans, and health insurance
plans. It operates through zonal offices in Mumbai, Kolkata, Chennai, Hyderabad, Delhi,
Kanpur, Bhopal and Patna. LIC offers insurance products in India through associates and agents.
The company and its associates also have operations in Fiji, Mauritius, the UK, Bahrain, the
UAE, Kuwait, Qatar, Oman, Nepal, Sri Lanka, Saudi Arabia and Kenya. LIC is headquartered in
Mumbai, India.

History of Life Insurance of Corporation

The story of insurance is probably as old as the story of mankind. The same instinct that
prompts modern businessmen today to secure themselves against loss and disaster existed in
primitive men also. They too sought to avert the evil consequences of fire and flood and loss
of life and were willing to make some sort of sacrifice in order to achieve security. Though
the concept of insurance is largely a development of the recent past, particularly after the
industrial era – past few centuries – yet its beginnings date back almost 6000 years.

Life Insurance in its modern form came to India from England in the year 1818. Oriental Life
Insurance Company started by Europeans in Calcutta was the first life insurance company on
Indian Soil. All the insurance companies established during that period were brought up with
the purpose of looking after the needs of European community and Indian natives were not
being insured by these companies. However, later with the efforts of eminent people like
Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But
Indian lives were being treated as sub-standard lives and heavy extra premiums were being
charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian
life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as
Indian enterprise with highly patriotic motives, insurance companies came into existence to
carry the message of insurance and social security through insurance to various sectors of
society. Bharat Insurance Company (1896) was also one of such companies inspired by
nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies.
The United India in Madras, National Indian and National Insurance in Calcutta and the Co-
operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative
Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet
Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi
Life (later Bombay Life) were some of the companies established during the same period.
Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the
Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance
Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations
of companies should be certified by an actuary. But the Act discriminated between foreign
and Indian companies on many accounts, putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business. From
44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with
total business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance
companies many financially unsound concerns were also floated which failed miserably. The
Insurance Act 1938 was the first legislation governing not only life insurance but also non-life
insurance to provide strict state control over insurance business. The demand for
nationalization of life insurance industry was made repeatedly in the past but it gathered
momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January, 1956, that life
insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian
companies and 75 provident were operating in India at the time of nationalization.
Nationalization was accomplished in two stages; initially the management of the companies
was taken over by means of an Ordinance, and later, the ownership too by means of a
comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the
19th of June 1956, and the Life Insurance Corporation of India was created on 1st September,
1956, with the objective of spreading life insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in the country, providing them adequate
financial cover at a reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate
office in the year 1956. Since life insurance contracts are long term contracts and during the
currency of the policy it requires a variety of services need was felt in the later years to
expand the operations and place a branch office at each district headquarter. Re-organization
of LIC took place and large numbers of new branch offices were opened. As a result of re-
organisation servicing functions were transferred to the branches, and branches were made
accounting units. It worked wonders with the performance of the corporation. It may be seen
that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00
crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore
mark of new business. But with re-organisation happening in the early eighties, by 1985-86
LIC had already crossed 7000.00 crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 113 divisional offices, 8
zonal offices, 1381 satallite offices and the Corporate office. LIC’s Wide Area Network
covers 113divisional 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. LIC’s ECS and ATM premium payment facility is an addition to
customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been
commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi,
Pune and many other cities. With a vision of providing easy access to its policyholders, LIC
has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and
closer to the customer. The digitalized records of the satellite offices will facilitate anywhere
servicing and many other conveniences in the future.

LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC
has issued over one crore policies during the current year. It has crossed the milestone of
issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67%
over the corresponding period of the previous year.
From then to now, LIC has crossed many milestones and has set unprecedented performance
records in various aspects of life insurance business. The same motives which inspired our
forefathers to bring insurance into existence in this country inspire us at LIC to take this
message of protection to light the lamps of security in as many homes as possible and to help
the people in providing security to their families.

» Some of the important milestones in the life insurance business in India

are:

1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started
functioning.

1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started
its business.

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective
of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by the central
government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the Triton
Insurance Company Ltd., the first general insurance company established in the year 1850 in
Calcutta by the British.

» Some of the important milestones in the general insurance business in

India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a code
of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency margins
and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the general
insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies viz. the National Insurance
Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd.
and the United India Insurance Company Ltd. GIC incorporated as a company.

LIC stands for Life Insurance Corporation of India. It started its operations as a corporate firm in
September 1956 after the Life Insurance of India Act was passed by India’s Parliament in June
1956. The LIC Act came into effect from July 1956. It helped in the nationalization of the private
insurance industry in India. LIC of India was formed by merging 154 life insurance companies, 16
foreign companies and 75 provident companies. It is one of the largest financial institutions in
India. It has an asset value of over 2,529,390 crores. The headquarters of LIC is in Mumbai,
Maharashtra.
The main slogan of LIC is- “Yogakshemam Vahamyaham” meaning “Your welfare is our
responsibility”. It is in Sanskrit and is obtained from the 22nd verse of the Bhagavad Gita’s 9th
chapter. The chairman of Life Insurance of India is Mr M.R Kumar.

Role of LIC in Indian Economy

LIC is known as India's largest government-owned life insurance and Investment Corporation. The
main role of LIC is to invest in global financial markets and different government securities after
gathering funds from people through their various life insurance policies. At least 75% of these
gathered funds are to be invested in Central and State Government securities, as stated by one of
the LIC rules.

Functions of LIC
The major functions of LIC are as follows:-

 Collect people’s savings in exchange for an insurance policy and promote savings in the
country.
 Protect the capital of the people by investing funds into government securities.
 Issue insurance policies at affordable rates
 Provide various loans like direct loans to industries, housing loans, loans to various national
projects at reasonable interest rate
Objectives of LIC

 LIC aims to spread awareness about the importance of life insurance among people living
in rural areas and people who are a part of socially and economically backward classes.
 To allow employees to understand what they need to do to succeed.
 To set goals for trainees to achieve in steps toward a larger outcome, such as mastering
technical skills.
 To support business goals through the completion of training objectives.
 To Provide trainers with a clear method of measuring trainees progress through the
program.
 To identify challenges to learning.
 To connect objectives to business goals.
 To ensure objectives are realistic and attainable
2.2 Company profile

In India, insurance has a deep-rooted history. It finds mention in thewritings of Manu,

(Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya(Arthasastra). The writings talk in
terms of pooling of resources that could bere-distributed in times of calamities such as fire,
floods, epidemics andfamine. This was probably a pre-cursor to modern day insurance. Ancient
Indian history has preserved the earliest traces of insurance in the form of marine trade loans and
carriers’ contracts. Insurance in India has evolved over time heavily drawing from
other countries, England in particular.

The process of insurance has been evolved to safeguard the interests of people from uncertainty
by providing certainty of payment at a given contingency. Life insurance in its modern form
came to India from England in1818 with the formation of Oriental Life Insurance Company
(OLIC) in Calcutta mainly by Europeans to help widows of their kin. Later, due to persuasion by
one of its directors (Shri Babu Muttyal Seal), Indians were also covered by the company. By
1868, 285 companies were doing business of insurance in India. Earlier these companies were
governed by Indian company act 1866. By 1870, 174 companies ceased to exist, when British
parliament enacted insurance Act 1870. These companies were however, insuring European
lives. Those Indians who were offered insurance cover were treated as sub-standard lives and
were accepted with an extra premium of 15% to 20%.
 2.3 Product Profile

LIC Life Insurance Products

LIC provides numerous schemes to its policyholders. It offers different schemes for different
categories and segments of the Indian economy. It is the largest insurance policy company in terms
of the number of policies it has issued to date. Some of the policies are as follows:-

 Insurance Plans
 Pension Plans
 Unit Linked Plans
 Micro Insurance Plans
 Withdrawn Plans
 Health Plans

Insurance plans:
 Children plans ( Jeevan kishore, Jeevan Chhaya etc)
 Plan for handicapped dependents ( Jeevan Aadhar, Jeevan Vishwas)
 Endowment assurance plans (jeevan Mitra Jeevan Janraksha, Jivan Amrit ect)
 Money back plans ( Jeevan Anand, Jeevan Tarang etc.)
 Term assurance plan (Anmol Jeevan-1, Amulya Jeevan-1)

Pension plans:
 Jeevan Nidhi
 Jeevan Akshay
 New Jeevan Dhara
 New Jeevan Suraksha
Unit linked plans
 Market plus
 Profit plus
 Fortune plus
 Money plus

Special plans:
 Health plan
 Health protection plus
 Health plus
 Special plan
 Bima nivesh 2005
 Jeevan saral
 Jeevan Mashur

Endowment Plan
Sr. No. Product Name Plan No.
1 LIC's Bima Jyoti 860
2 LIC's Bima Ratna 864
3 LIC's Dhan Sanchay 865
4 LIC's New Endowment Plan 914
5 LIC's New Jeevan Anand 915
6 LIC's Single Premium Endowment Plan 917
7 LIC's Jeevan Lakshya 933
8 LIC's Jeevan Labh 936
9 LIC's Aadhaar Stambh 943
10 LIC's Aadhaar Shila 944

Whole Life Plans

Sr. No. Product Name Plan No.
1 LICs Jeevan Umang 945
Money Back Plans
Sr. No. Product Name Plan No.
1 LIC's Dhan Rekha 863
2 LIC's New Bima Bachat 916
3 LIC's NEW MONEY BACK PLAN - 20 YEARS 920
4 LIC’s NEW MONEY BACK PLAN - 25 YEARS 921
5 LICs Jeevan Umang 945
6 LIC's NEW CHILDREN'S MONEY BACK PLAN 932
7 LIC's Jeevan Tarun 934
8 LIC's Jeevan Shiromani 947
9 LIC's Bima Shree 948

Term Assurance Plans

Sr. No. Product Name Plan No.
1 LIC's TECH TERM 854
2 LIC's Jeevan Amar 855
3 LIC's Saral Jeevan Bima 859

RIDER
Sr. No. Product Name
1 LIC's Linked Accidental Death Benefit Rider
2 LIC's Accidental Death and Disability Benefit Rider
3 LIC's Accident Benefit Rider
4 LIC's Premium Waiver Benefit Rider
5 LIC’s New Critical Illness Benefit Rider
6 LIC's NEW TERM ASSURANCE RIDER
7 LIC's Premium Waiver Benefit Rider (With Auto Cover)

Pension Plans
Sr. No. Product Name Plan No.
1 "Pradhan Mantri Vaya Vandana Yojana " 856
2 LIC's Jeevan Akshay - VII 857
3 LIC's New Jeevan Shanti 858
4 LIC's Saral Pension 862

Unit Linked Plans

Unit plans are investment plans for those who realise the worth of hard-earned money. These
plans help you see your savings yield rich benefits and help you save tax even if you don't
have consistent income.
Sr. No. Product Name Plan No.
1 LIC's NIVESH PLUS 849
2 LIC's SIIP 852
3 LIC's NEW ENDOWMENT PLUS 935

Micro Insurance Plans

LIC’s Micro Insurance Plans are not plans but opportunities that knock on your door once in a
lifetime. These plans are a perfect blend of insurance, investment and a lifetime of happiness!.

Sr. No. Product Name Plan No.

1 LIC's Bhagya Lakshmi 939
2 LICs New Jeevan Mangal 940
3 LIC’s Micro Bachat Plan 951

Health Plans
Sr. No. Product Name Plan No. UIN
1 LIC's Cancer Cover 905 512
2 LIC's Arogya Rakshak 906 512
CHAPTER - III
3.1 HUMAN RESOURCES DEPARTMENT

The human resource development plays a very important role in every public/private
organization. It enhances the performance of the employee of every organization i.e., Public
as well as private sector. It maintains the competitive environment and prepares the
employee for better work. In the life insurance corporation of India the training imparted
through various programs to upgrade the skill and knowledge of employee. It has prepared
the employee for alternate growth of the organization.

3.1.1 FUNCTIONS OF HUMAN RESOURCES DEPARTMENT

The areas which their virtual university focuses on are:

 HR practices
 Organizational behaviors
 People management
 Recruitment and retention
 Training and development
HR PRACTICES:

HR PRACTICES these have a continuing and significant influence on employment productivity.

And look at the best practices in the industry to cope with an increasing number of employees
encountering new working environments, cultures, restructuring and the pervasive and often
deleterious effects of technology.
• ORGANIZATIONAL BEHAVIOR takes a micro-view on emphasizing behavior in
organization of individuals and small groups. Individual behavior includes perception, values,
learning, motivation, personality, while group behavior includes group dynamics,
communication, power and politics.
• PEOPLE MANAGEMENT all about the skill in getting diverse workforces to work together
towards achieving organizational goals and objectives.

PERFORMANCE MANAGEMENT
Future oriented continuous process to which managers and employees need to devote time, all
the time. It encompasses performance appraisal, self-assessment, reward systems and total
quality management.
• RECRUITMENT & RETENTION the key area of focus here is getting the right person for the
job. This has an important part in achieving strategic goals and has an impact on employment
stability and turnover.
• TRAINING AND DEVELOPMENT provides an insight into the how's and whys of training,
right from an employee's induction to his exit in an organization.

TRAINING OF FIELD PERSONALS IN LIC INDIA

Life Insurance Corporation provides the special training to their personals. The focus of F.P.T is
to develop the professionalism in the field of personnel. It focuses to prepare the field personnel
to compete in the market. It develops skills in personnel according the need of insurance market.
The corporation has their own training center. The corporation has zonal training center and sales
training center where some special officer posts as faculty, who provides the training and update
them as per the demand of the market. It also updates the field personnel about the market
change and present scenario of life business. There are two types of training program in life
insurance Corporation of India.

Training for Administrative Human Resources

The life insurance corporation of India also provides the training their employees who worked as
administrative officers. The training of these employees is very important to maintain the healthy
environment in the corporation. The corporation has also conducted one year eradicates
escalation program in the collaboration of IIM, Ahmedabad. In the year 2012-13 fifteen officers
successfully completed program. The corporation is conducting a training program on 'business
leadership for senior divisional manager with the collaboration of ISB' Hyderabad. The
corporation is providing the better training in house as well as external. It is collaborating with
the best institute of repute in India for training of their administrative and field personals.

PROMOTION POLOCIES IN LIFE INSURANCE COMPANIES

Promotions of the employees are done on the various classes, which are as follows
• Class 1: this class comprises of officials at the highest ranks in the organization.
Class 1 includes the chairman, the managing directors, the executive directors, the zonal
managers, senior’s divisional managers, branch managers or administrative officers to assistant
branch managers or assistant administrative officers.
• Class 2: this class comprises of development officers. These development officers have agents
under them who work on commission and not on salary. This class brings in the business for
LIC.
• Class 3: this class comprises of all the administrative staff. Tyhey are higher- grade
assistants (HGA), assistants, record clerks (RC), cashiers and machine operators.
• Class 4: this class comprises of the sub-staff. They are the peons, watchmen, sweepers,
drivers, etc.
POLICICES REGARDING EMPLOYEE CONDUCT AND DISCIPLINE
Given Here Below Are Some Rules And Regulation Regarding Employee Conduct And
Discipline.
• OBLIGATION TO MAINTAIN SECRECY - an employee should not communicate
directly or indirectly and official documents or information to any employee or other person to
whom he is not authorized to communicate.
• PARTICIPATION IN DEMONSTRATION - an officer of LIC is expected not to
participate in any kind of demonstration, resort nor abet to any kind of a strike.
• PRIVATE TRADING - employees of LIC are not allowed to engage directly or indirectly in
any kind of trade or business. They are not allowed to be involved in the promotion or
management of any other company registered under the Indian companies act

PARTLY-TIME WORK - no employee is allowed to take any kind of part-time

work for a private or public body.
• ACCEPTANCE OF GIFT - an employee of LIC is not allowed to accept nor permit his
wife or any family member to accept any gift of more than a trifling value.

3.2 FINANCE DEPARTMENT

In 1914 there were only 44 companies; by 1940 this number grew to195. Business in force
during this period grew from Rs.22.44crores toRs.304.03crores (1628381 polices). Life fund
steadily grew from Rs.6.36crores to Rs.62.41crores. In 1938, the insurance business was heavily
regulated by enactment of insurance Act 1938(based on draft bill presented by Sir N.N.Sarcar in
Legislative Assembly in January 1937). From here onwards the growth of life insurance was
quite steady except for a setback in1947-48 due to aftermath of partition of Indian. In 1948, there
were 209insurances, with 712.76crores business in force under 3,016, 000 policies. The life fund
by then grew to 150.39crores
3.3 FUNCTION DEPARTMENT
1. Analysis of financial position and performance
2. Financial control
3. Identification of financial sources
4. Internal audit
5. Payment collection of all departments

Financial Transaction Structure:

On most of the standard policies LIC agents gets paid commission as per the following
rates:
 Up to 25% of 1st year premium with 10% bonus commission
 Up to 10% of 2nd and 3 year premium
 Up to 5% thereafter till the policies continues

Every time a policy holder pays his installment premium, the agent receives his commission

Pre-Independence Scenario -
With the patriotic fervour of Non-Corporation Movement (1919) and Civil Disobedience
Movement (1929), number of Indian companies entered the insurance arena. Eminent figures in
political area like Mahatma Gandhi and Pandit Nehru openly encouraged Indians to enter the
fray. In 1914 there were only 44 companies; by 1940 this number grew to195. Business in force
during this period grew from Rs.22.44crores toRs.304.03crores (1628381 polices). Life fund
steadily grew from Rs.6.36crores to Rs.62.41crores. In 1938, the insurance business was heavily
regulated by enactment of insurance Act 1938(based on draft bill presented by Sir N.N.Sarcar in
Legislative Assembly in January 1937). From here onwards the growth of life insurance was
quite steady except for a setback in1947-48 due to aftermath of partition of Indian. In 1948, there
were 209insurances, with 712.76crores business in force under 3,016, 000 policies. The life fund
by then grew to 150.39crores.
Nationalization of Life Insurance (1956) -
Despite the mushroom growth of many insurance companies per capita insurance in Indian was
merelyRs.8.00 in 1944(against Rs.2, 000 in US and Rs.600 in UK), besides some companies
were indulging in malpractices, and a number of companies went in to liquidation. Big industry
houses were controlling the insurance and banking business resulting in inters looking of funds
between banks and insurance companies. This shook the faith of insuring public in insurance
companies as custodians of their savings and security. The Government of India nationalized the
life insurance industry in January, 1956 by merging about 250 life insurance companies and
forming Life Insurance Corporation of India (LIC), which started functioning from 01.09.1956.

LIC formed by an Act of Parliament. LIC Act, 1956, with a capital contribution of Rs. 5crore
from the Government of India.

Post Nationalization Trend -

After completing the arduous task of integration of about 250 life insurance companies, the LIC
of India gave an exemplary performance in achieving various objectives of nationalization.
The following table shows the achievements of LIC in 40 odd years of its existence.

Table
Growth of LIC between 1959 and 1999
S.No Particulars 1959 1999
1 ANNUAL 336.3Crores 75606Crores
BUSINESS: 8,00,000 14857000
Sum Assured Policies 14Crores 4171Crores
First year premium
2 BUSINESS IN 1477Crores 459201Crores
FORCE: 5686000 91726000
Sum Assured 74Crores 16136Crores
Policies
Renewal Premium
3 GROUP 5.29Crores 69558Crores
BUSINESS IN
FORCE:
Sum Assured
4 LIFE FUND 41040Crores 127389.06Crores
Source: Annual Reports of LIC.
In spite of phenomenal progress of LIC of India, especially in the 80s,the government and public
at large were not quite satisfied with it. By signing GATT, the government of India committed to
opening of insurance sector to private sector – to local and global operators. A committee under
the chairmanship of late R.N.Malhotra (Ex- governor of RBI) was appointed by the government
to look into all the aspects of insurance industry in India. The committee too, opined that in its
about 40 years of existence, LIC had been able to insure only 22 percentage of the insurable
population. A moot reason may be the lack of competition. Further, the monopoly has resulted in
lack of sensitivity to the policy holders. There is a greater scope for product innovation and
service improvement. The committee recommended a number of measures to revamp LIC of
India, GIC of India and its four subsidiaries. It also recommended allowing outside insurance
companies to operate in India with an Indian partner. After a great deal of discussion, finally the
Lok Sabha has enacted the Insurance Regulatory and Development Authority Act, 1999.In terms
of the act, Insurance Regulatory and Development Authority is being set-up to regulate and
develop the insurance industry by opening it up to the private sector. Foreign insurance
companies can enter into the insurance sector in India only with an Indian partner, as a joint-
venture, with a capital contribution up to a maximum of 26 percentage of the capital in the joint-
venture. The Authority has the power to frame regulations under Section114A of the Insurance
Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of
companies for carrying on insurance business to protection of policyholders’ interests. Today
LIC functions with 2048 fully computerized branch offices, 113divisional offices, 8 zonal
offices, 992 satellite offices and the corporate office.LIC also has a network of around 13,37,064
individual agents, 242 Corporate Agents, 79 Referral Agents, 98 Brokers and 42 Banks
(as on 31.3.2011) for soliciting life insurance business from the public. The slogan of LIC is
"Zindagike saath bhi, Zindagi ke baad bhi". Its main asset is its staff strength of 1.15lakh
employees and including about 21,000 class-I officers. Mean while LIC is also planning to
expand its overseas presence by setting up a subsidiary in Singapore. LIC already has presence in
countries like the UK, Mauritius,Kenya, Nepal and Sri Lanka. In the Middle East, LIC is present
in Saudi Arabia, Kuwait, Dubai, Abu Dhabi, Oman and Qatar business in overseas and has
regional offices in Fuji, Mauritius and the UK.LIC’s Wide Area Network covers 113 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. LIC’s
ECS and ATM premium payment facility is an addition to customer convenience. Apart from
on-line Kiosks and IVRS, Info Centre have been commissioned at Mumbai, Ahmedabad,
Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities with a vision
of providing easy access to its policyholders. LIC has launched its SATELLITESAMPARK
offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized
records of the satellite offices will facilitate any where servicing and many other conveniences in
the future.

INSURANCE SECTOR REFORMS

In 1993, Malhotra Committee- headed by former Finance Secretary and RBI Governor R.N.
Malhotra- was formed to evaluate the Indian insurance industry and recommend its future
direction. The Malhotra committee was set up with the objective of complementing the reforms
initiated in the financial sector. The reforms were aimed at creating a more efficient and
competitive financial System suitable for the requirements of the economy keeping in mind the
structural changes. Currently underway and recognizing that insurance is an important part of the
overall financial system where it was necessary to address the need for similar reforms. In 1994,
the committee submitted the report and some of the key recommendations included:

I) STRUCTURE
 Government stake in the insurance Companies to be brought down to50%.
 Government should take over the holdings of GIC and its subsidiaries so that these
subsidiaries can act as independent corporations

All the insurance companies should be given greater freedom to operate.

II) COMPETITION
 Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter
the sector.
 No Company should deal in both Life and General Insurance through a single entity.
 Foreign companies may be allowed to enter the industry in collaboration with the
domestic companies.
 Postal Life Insurance should be allowed to operate in the rural market.
 Only one State Level Life Insurance Company should be allowed to operate in each state.

III) REGULATORY BODY

 The Insurance Act should be changed.
 An Insurance Regulatory body should be set up.
 Controller of Insurance- a part of the Finance Ministry- should be made independent.

IV) INVESTMENTS
 Mandatory Investments of LIC Life Fund in government securities to be reduced from
75% to 50%.
 GIC and its subsidiaries are not to hold more than 5% in any company(there current
holdings to be brought down to this level over a period of time).

V) CUSTOMER SERVICE
 LIC should pay interest on delays in payments beyond 30 days.
 Insurance companies must be encouraged to set up unit linked pension plans.
 Computerization of operations and updating of technology to be carried out in
the insurance industry. The committee emphasized that in order to improve the customer
services and increase the coverage of insurance policies, industry should be opened up to
competition. But at the same time, the committee felt the need to exercise caution as any
failure on the part of new players could ruin the public confidence in the industry. Hence,
it was decided to allow competition in a limited way by stipulating the minimum capital
requirement of Rs.100crores.The committee felt the need to provide greater autonomy to
insurance companies in order to improve their performance and enable them to act as
 independent companies with economic motives. For this purpose, it had proposed setting
up an independent regulatory body- The Insurance Regulatory and Development
Authority. Reforms in the Insurance sector were initiated with the passage of the IRDA
Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory
body in April 2000 has fastidiously stuck to its schedule of framing regulations and
registering the private sector insurance companies. Since being set up as an independent
statutory body the IRDA has put in a framework of globally compatible regulations. The
approval of institutions for imparting training to agents has also ensured that the
insurance companies would have a trained workforce of insurance agents in place to sell
their products.

Insurance companies in India

Today there are 23 life insurance companies operating in the country.

List of Life Insurers

Apart from Life Insurance Corporation, the public sector life insurer, there are 23 other private
sector life insurers, most of them joint ventures between Indian groups and global insurance
giants.

Life Insurer in Public Sector

1. Life Insurance Corporation of India

Life Insurers in Private Sector

Insurance Industry in the year 2000-2012 had 23 new entrants, namely:

 Table 1.2
Private Life Insurers
S.No. Date of Reg. Name of the Company
1 23.10.2000 HDFC Standard Life Insurance Company Ltd.
2 15.11.2000 Max New York Life Insurance Co. Ltd.
3 24.11.2000 ICICI Prudential Life Insurance Company Ltd.
4 10.01.2001 Kotak Mahindra Old Mutual Life Insurance
Limited
5 31.01.2001 Birla Sun Life Insurance Company Ltd.
6 12.02.2001 Tata AIG Life Insurance Company Ltd.
7 30.03.2001 SBI Life Insurance Company limited.
8 02.08.2001 ING Vysya Life Insurance Company Private
Limited
9 03.08.2001 Bajaj Allianz Life Insurance Company Limited
10 06.08.2001 Met life India Insurance Company Ltd.
11 03.01.2002 Reliance Life Insurance Company Limited.
12 14.05.2002 Aviva Life Insurance Co. India Ltd.
13 06.02.2004 Sahara India Insurance Company Ltd.
14 17.11.2005 Shriram Life Insurance Company Ltd.
15 14.07.2006 Bharti AXA Life Insurance Company Ltd.
16 04.09.2006 Future General India Life Insurance Company
Limited
17 19.12.2007 IDBI Federal Life Insurance Company Ltd.
18 08.05.2008 Canara HSBC Oriental Bank of Commerce Life
Insurance Company Ltd.
19 27.06.2008 Aegon Religare Life Insurance Company Ltd.
20 27.06.2008 DLF Pramerica Life Insurance Company Ltd.
21 04.03.2009 Star Union Dai-ichi Life Insurance Co. Ltd.,
22 05.11.2009 India First Life Insurance Company Ltd.
23 10.05.2011 Edellweiss Tokio Life Insurance Company Ltd.
3.4 MARKETING DEPARTMENT
The Marketing mix of LIC is consists of 7Ps, but here we are discussing major four strategies
which are:
1. Price
2. Place
3. Promotion
4. Product

 Price:
The main objective of LIC is to offer enough financial cover at a reasonable and
affordable cost to all insurance persons. LIC’s product range is as its price range.
On the official website, there is a premium calculator service where the premium for
each scheme of LIC can be calculated which is dependent on age
For the ease of the customers, a premium can be paid through the official website of the
company. As for the tax, the rate will be different for different schemes. LIC offers a very
vast and huge range of diversified products catering to the needs of various sections of
people in India and outside of India. It offers individual solutions considering their
specific financial requirement and risk profile and helps to solve it.

 Product Strategy of LIC

Insurance is mainly taken out to provide for the family members in case of death by
natural causes or accidents. LIC has designed several products according to the
requirements of the common people

 Placing Strategy of LIC

LIC currently has eight zone offices, 109 divisional offices, 992 satellite offices, 2,048 branches,
and a large number of corporate offices. It also boasts a network of 242 corporate agents,
1,337,064 individual agents, 79 referral agents, and 98 brokers that have ties to 42 banks. LIC-
Life Insurance is a service industry, the distribution of its products is done through various
 channels – directly or indirectly. Many routes are taken to reach the potential customer and the
most important and basic channel member until this date has been the “Insurance agent”.
Physical delivery of service items, in this case, finances, and support, at the correct time and
location, is a key component of LIC’s marketing strategy. The organization’s channel of
distribution consists of different agents, brokers, development officers, retail services related to
finance, branch office, alliance with banks and distributors, corporate agencies, and proper and
well-maintained infrastructure.

Promotion Strategy of LIC

The promotional strategy of LIC is straightforward. Its main aim is to keep consumers updated
about its various policies and its brand. To fulfill this, it has taken steps like exhibitions, personal
sellings, demonstrations at events, new schemes, and advertising. They had also distributed some
stationery like diaries, calendars as gifts, and incentives to the policyholders. As promotional
activities, advertisements are presented on televisions, newspapers, and billboards. A mobile van is
used to create awareness programs across the rural areas of the company. LIC-Life Insurance has a
website and a webpage where it provides extensive information on any conceivable query in order
to satisfy customers. The majority of advertising is driven towards insurance which can be
purchased by the common man to increase the reach of the company and at the same time, the sale
of the product. Thus, the major objective of all the advertising and promotion was brand retention
 .

3.5 FINANCIAL STATEMENT

INCOME STATEMENT
CASH FLOW STATEMENT
BALANCE SHEET
RATIO ANALYSIS
CHAPTER - IV
 4.1 Finding and Recommendations

Findings:
 It is found that the employees of LIC are always busy with respond to the requests
of customers/ policy holders.
 It is found that the majority of the customers feels safe and expressed their
happiness in their transactions with LIC.
 It is found that the negligible portion of the employees in LIC don’t have the
knowledge of all the policies of LIC.

Recommendations
In the modernized well advanced hi-tech approach to the customer every possible facilities and
effort to build up the confidence of the rising policy holders towards. Insurance companies, to
complete one another nothing is left to recommend. But some recommendations that are intensely
felt and highly required for insures to sustain in the market.

These are as follows:

a) More and more transparency should be ascertained between insurers and policy holders.
b) Particularly, in the emerging boom in the insurance company, every insurance company
should be customer centered, and well versed in the handling of the problem and grievances
of the policy holders.
c) Each and every product launched by the Insurance Company should be in favor of
increasing need of policy holders.

IRDA should be more and more responsible to the insurance sector by determining some
standard. It should be mandatory to every insurer’s to make more responsible and responsive
to the policy holders so that comprehensive understanding may be developed among policy
holders. It may be beneficial on both side.
 4.2 Suggestions
During the study it is found that policy holders prefer banking and insurance together. They
prefer private insurance sector because they provide them the banking facility and lot of value
added services. So it will be beneficial both to the common public and the LIC if it offers
banking facility to the policy holder and the common public.

The overall performance evaluation of Life Insurance Corporation of India is consistent. The
working groups have been worked hard of their functions but still some drawbacks are left
behind, for that suggestions are as under:

1. LIC should try to increase their selling of plans to introduce new plans with
different kinds of facilities, so that it can increase its income amount,
especially Premium amount.
2. As private insurance companies capture the market now a day, therefore,
LIC should strengthen their working & should launch plans with more
facilities.
3. The Corporation should strive to increase its business by issuing more and
more policies in order to retain its market share in the competitive scenario.
4. Operating cost as compared to premium underwritten should be controlled.
5. A comparative statement of performance between LIC and various
insurance companies may help increase the business
6. A comparative statement of performance of operating expenses of LIC and
various insurance companies may help to narrow down the cost.
7. LIC of India should continue making investments, but secured investments
should be made

4.3 SWOT Analysis:

Strengths:
1. Largest state-owned life insurance company in India, and also the country's largest investor
2. Has over 2000 branches across all parts of India and more than 1000000 agents.
3. With Largest fund base it is the biggest investor in India 4. Have over 115,000 employees across
India
5. According to the Brand Trust Report, LIC is the 8th most trusted brand of India
6. LIC has subsidiaries like LIC Housing Finance Limited, LIC Cards Services Limited, LIC
Nomura Mutual Fund, LIC (Nepal) Ltd, LIC (Lanka) Ltd, LIC(International) BSC(C)

Weaknesses:
1. It has an image of a Government agency and hence lacks innovation
2. Being a Government agency, red tape and bureaucracy causes problems
3. Managing a huge workforce during economic crisis meant overburdened due to salaries

Opportunities:
1. Use of Technology to provide effective services to cater to urban population.
2. Government Schemes implementation

Threats
1. Economic crisis
2. Entry of new NBFCs in the sector
3. Varying Government policies Environmental Scanning Political environment: - Political
environment highlight the probable government laws and regulations, security measures and
restrictions that can apply to the industry as a whole.
The probable environment that effect the automobile industry are:
1. Laws and regulations had affected the automobile industry since its outburst. These laws
generally revolved around the environmental norms that were to be fulfilled by any car industry.
Thus the car manufacturers had to take care of the environmental issues during manufacturing of
cars.
2. Taxes and government foreign policies are critical for the automobile industry. The
foreign policies help to us decide the probability of success in the global market.
4.4 Conclusions:
This study has analyzed the data collected from the policy holders and has brought out the
expectations of the policy holders and their preferences. It has also offered suggestions that can be
implemented for the benefit of the common public and the Government. After overhauling the all
situation that boosted a number of Pvt. Companies associated with multinational in the Insurance
Sector to give befitting competition to the established behemoth LIC in public sector, we come at
the conclusion that:

There is very tough competition among the private insurance companies on the level of new trend
of advertising to lull a major part of Customers. LIC is not left behind in the present race of
advertisement. The entry of the Pvt. Players in the Insurance Sector has expanded the product
segment to meet the different level of the requirement of the customers. It has brought about greater
choice to the customers. Private insurers have restricted reach to the customers. LIC has vast
market and very firm grip on its traditional customers and monopoly of life insurance products.
Bank assurance - that allows life insurers to leverage on the risk product through bank network,
was adopted by private players. But LIC was also not left behind as picking up majority stake in
the corporation Bank and large equity stake in the Oriental Bank of Commerce. IRDA is also
playing very comprehensive role by regulating norms mandating to private players in this sector,
that increases the confidence level of the customers to the private players.