INTRODUCTION Life Insurance Corporation of India (LIC) was formed in September, 1956 by an Act of Parliament, viz.
, Life Insurance Corporation Act, 1956, with capital contribution of Rs.50 million, from the Government of India. Since nationalization, LIC has built up a vast network of 2,048 branches, 100 divisions and 7 zonal offices spread over the country. The Life Insurance Corporation of India also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. OBJECTIVE OF LIC Maximize mobilization of people's savings by making insurancelinked 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 public in their individual and collective capacities. 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. INSURANCE PLANS As individuals it is inherent to differ. Each individuals insurance needs and requirements are different from that of the others. LICs Insurance Plans are policies that talk to you individually and give you the most suitable options that can fit your requirement. PENSION PLANS Pension Plans are Individual Plans that gaze into your future and foresee financial stability during your old age. These policies are most suited for senior citizens and those planning a secure future, so that you never give up on the best things in life.
WITHDRAWN PLAN Strength : It is the oldest and most well experienced player having a Pan India presence. SPECIAL PLANS LIC’s Special Plans are not plans but opportunities that knock on your door once in a lifetime. LIC has a strong and very well developed distribution network. Very slow decision making process and internal problems between top management and lower cadre staff. It is having a huge consumer base and is evolved as one of the most powerful brands of the country.UNIT 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. These plans are a perfect blend of insurance. It has the advantage of government guarantee is accompanied with it. It has a large product portfolio and claim settlement is easier to get. and allows you to enjoy group benefits at really low costs. Agents not taking into account the needs of people and promote policies having high commissions only. Largest insurance Company in the world in Customer Base (23 crore customers) Weakness: Its employees and other staff are lethargic and least motivated to render prompt and sincere customer service. investment and a lifetime of happiness! GROUP SCHEME Group Insurance Scheme is life insurance protection to groups of people. associations. This scheme is ideal for employers.
. societies etc. After sales customer grievance redressal mechanism is inefficient.
Threats: Decreased in bank rate: the decreased bank rate is the biggest threat for the life insurance sector. which affects the life insurance sector. Technological. that insurance companies working efficiently and fast service. Easy accesses to development in the more advance market provide further opportunity to upgrade their working. Pension markets. Today’s human life becomes full uncertain. The flight of talent to new entrants is already in evidence. so they prefer protection against the risk. Interest rate of P. The top management or bosses are mediocre and there is large scale corruption in main office. This is the opportunity for the life insurance sector. It has become threats for the life insurance industry. Therefore they prefer life insurance.F and bank saving create threat to insurance sector. financial or specific area based avenues of absorbing improved system are also now more easily available. The development officers and agents who are the foundation pillars of LIC are not provided with extra funds and powers to promote its products aggressively. Opportunity: Emergence of a huge middle income consumer market in the country. All other saving is obviously the threat for life insurance sector. People becoming more aware and demanding so there is scope for a whole lot of innovative products. In the life insurance corporation the pricing decisions are concerned with –
. Fraud in insurance sector: the major problem fraud. So. PRICING: The strategies may be high or low pricing keeping in view the level or standard of customers or the policyholders. Retaining qualified and competent executives will be considerable challenges for existing companies. health insurance and large real estate portfolio. Fluctuation in the bank rate makes big difference for the life insurance industry. and could be on the rise for some time to come.
LIC became synonymous with life insurance. TARGET MARKETING The customer profile in the insurance industry is changing with the introduction of large number of divergent intermediaries such as brokers. To avoid the interference in communication to customer. For the average Indian. The premium charged against the policies Interest charged for defaulting the payment of premium and credit facility. They used creative slogans which affects the customer’s mindset and able to attract their attention. and are more demanding in terms of better service and speedier responses. it could afford to have a very limited focus on marketing. doesn’t lose the main objective. and over the years it built up an enviable brand image in both rural and urban areas. LIC did not standardize its practices nor did it focused on providing better customer service to the policyholders. Commission charged for underwriting and consultancy activities PROMOTION: LIC has taken help of advertising agencies to promote the Brand LIC. with people buying its policies due to the tax concessions attached to it. corporate agents. The industry now deals with customers who know what they want and when. MARKETING STRATEGIES Until the Indian insurance industry was liberalized. they reduced the number of ad agencies and worked with limited number of those agencies so that the message reached to customer. On account of its position as a monopoly. Since it enjoyed monopoly status. LIC did not have any clear marketing strategies. Those slogans helped LIC to make the customer emotionally attached to services provided by them. The company grew by leaps and bounds. They spend huge amount of money in advertising and sales promotions to build their brand equity and identity. With the industry all set to move to a detariffed
there will be considerable improvement in customer service levels.regime by 2007. settlement of claims. Free premium due reminders Claim Review Committee Revival Of Lapsed Policy Provide online platform (LIC Helpline)to policyholders and LIC agent
. earthquakes. product innovation and newer standards of underwriting. cyclones. PROBLEMS LIC has had many problems relating to the efficient use of its human resources since the time it was set up. Strong trade unions made it difficult for managers to get the work done. The corporation's managers were too bureaucratic. issue of duplicate policies. Many of these problems related to the fact that it was a public sector organization. etc when the policyholder are affected by natural calamities such as droughts. floods. rather than on customer satisfaction STRATEGIES The Corporation generally allows concessions on payment of premiums. The work culture in the organization was sloppy. etc. The corporation's development officers focused on their own earnings and incentives.