Welcome to the presentation on

LIC of India

One of the Worlds Largest

Life Insurance Company
voted No. 1 Most Trusted Service Brand
for 2008-09 by Brand Equity - Economic
Times for sixth year in succession

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54
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1956-Nationalisation of the life Insurance sector.

Life Insurance Corporation came into
existence in the same year. The LIC absorbed
154 Indian, 16 non-Indian insurers and 75
provident societies 245 Indian and foreign
insurers in all.
LIC had monopoly till the late 90s when the
Insurance sector was reopened to the
private sector.

1993-The Government set up a committee under

the chairmanship of RN Malhotra, former
Governor of RBI, to propose recommendations
for reforms in the insurance sector
1999-Following the recommendations of the
Malhotra Committee report, the Insurance
Regulatory and Development Authority
(IRDA) was constituted as an autonomous
body to regulate and develop the insurance
industry.
2000 -The IRDA was incorporated as a statutory
body.

Macro Economic Trends

GDP grew at the rate of 6.7% for the year
2008-09 .
2009-10- GDP growth estimated at 7.2 %.
Household Savings.2006-07
2007-08
2008-09
34.2 %
37.7 %
37.9 %
. Household savings in financial assetsMore than 11 %

Percentage Distribution of Financial Saving of the

Household Sector (Gross)

Item

2006-07

2007-08 2008-09 #

Financial Saving
100.0
100.0
100.0
a)
Currency
10.2
11.4
12.5
b)
Deposits
49.1
52.2
58.5
(Banks, NBFC etc.)
c) Shares &
9.0
12.4
2.6
Debentures
d)Claims on Govt.
3.0
-4.0
-3.1
e) Insurance Funds 17.7
18.0
20.1
i)
life insurance 17.1
17.4
19.5
ii)
postal insurance 0.3
0.4
0.3
iii)
state insurance 0.3
0.2
0.3
iv)
Provident and 11.1
9.9
9.5
Pension Fund
P: Provisional, # : Preliminary Estimates. Source: RBI Annual Report 2008-09

Trend in Life Insurance market

Favourable macro economic environment and positive
trend in growth of Household savings have significantly
influenced growth of Life Insurance business during the
recent years. The Insurance Industry has registered total
FYP of Rs.69284.00 crores in 2008-09 as compared to
Rs.78552.70 crores in the year 2007-08.
LIC has been able to maintain a significant share in Life
Insurance market in spite of intense competition and
expanded market base. LIC as the largest insurer in Life
Insurance Market maintained 58.06% share in premium
and 70.52% in Individual policies in the financial year
ending March 2009. While in Group Insurance the share
of LIC was 71.95% and in Policies 85.24% by the end of
March 2009.

Insurance Penetration

Low Insurance penetration- 2.8 % of GDP

World Average- 6-9 %
Highest in South Africa-15 %
Still 75 % of Indian Population not covered
by Insurance
So,there is a huge market for Life
Insurance---expected to grow at 20-30%
for next 10-15 years.

Our Mission and Vision

Mission
Ensure & enhance the quality of life of
people through financial security by
providing products and services of
aspired attributes with competitive
returns, and by rendering resources for
economic development.

Vision
A trans-nationally competitive
financial conglomerate of significance to
societies & PRIDE OF INDIA

Our Values

Our Culture

Citizens Charter
Our Commitment to the Community
Provide insurance cover and financial security
to every insurable person.
Conduct all aspects of our business keeping in
view its interest and national priorities.
Provide them prompt, efficient and courteous
service.
Act as trustees of their funds and invest the
funds to their best advantage.
Conduct our business with utmost economy
and on sound business principles.

 All 2048 branches of LIC are

computerized.
LICs WAN covers 109 Divisions.
Branches are connected by MAN.
Online Premium Payments.
A new Zonal office and 9 new
Divisions opened this year.
807 Satellite Sampark offices opened
to bring LIC to your doorstep
IVRS facility available in 59 Urban
centers.
Kiosks installed in 150 Select Centers.
Info Center working in 8 centers.

 Our website www.licindia.in offers

Enterprise Portal for customers.
Online Premium Payments through 8
banks and three payment gateways,
billjunction.com, billdesk.com &
timesmoney.com
Premium payment through ATMs of
Corporation Bank, UTI Bank
Premium payment through ECS in
select centres
IVRS facility available in 59 Urban
centers.
Kiosks installed in 150 Select
Centers.
Info Center working in 8 centers.

International Operations
LIC has three off-shore offices at Fiji,
Mauritius, and U.K.
Five Joint Venture Companies functioning
at Saudi Arabia, Nepal, Sri
Lanka,Bahrain,Kenya
Representative Office opened at
Singapore.
Planning to enter Australian life insurance
market.

Policies to be guaranteed by Central

Government
The sums assured by all policies issued by the
Corporation including any bonuses declared in
respect thereof and, subject to the provisions
contained in section 14 the amounts assured by
all policies issued by any insurer the liabilities
under which have vested in the Corporation
under this act, and all bonuses declared in
respect thereof, whether before or after the
appointed day, shall be guaranteed as to
payment in cash by the Central Government.
- Section 37 of LIC ACT, 1956

Our Proud Position - contd

INDIAS largest Financial Institutional Investor
both in equity market and term loans
An Institutional Builder promoting NSE, NCDEX,
LIC Mutual fund, Stock Holding Corporation of
India, National Insurance Academy, Insurance
Institute of India
LICs e-portal (website) has won Webbys
Consumers voted best website award

 CHILD CAREER PLAN

(Plan 184)
CHILD FUTURE PLAN
(Plan 185)
JEEVAN AMRIT
(Plan 186)
Market Plus-1(Plan
191)
Money Plus-1(Plan
no.193)

PROFIT PLUS
(Plan 188)
CHILD FORTUNE
PLUS (Plan194)
JEEVAN AKSHAY 6
(Plan 189)
Jeevan Nischay(Plan
no.199)
Wealth Plus(Plan
no.801)

Financial Highlights during FY 2008-2009

Total Premium Income

:
Total Income
:
Payments to Policyholders :

Rs. 157186.55 crore

Rs. 200280.65crore
Rs 53250 crore

As on

Rs. (in crores)

As on

Rs. (in crores)

31.3.2007
31.3.2008
31.3.2009

6,74,514.78
7,72,753.72
8,73,551.35

31.3.2007
31.3.2008
31.3.2009

5,72,602.80
6,98,506.91
8,07,317.43

Individual
Assurances

Policies
(in crores)

2007-2008

23.59

2008-2009

25.78

No. of policies : 3.58 crores

Sum-Assured : Rs. 390053 crores
First Premium : Rs. 35321 crores

Ratio of outstanding claims: 0.07%

It s the largest number settled by any

life insurer in the world

LIC settles 1.49 Crore claims i.e 47100

claims every working day i.e. 2 claims
settled every second.

Year

Number
(in lakhs)
2007-08 144.53
2008-09 149

Amount
Rs. (in crores)
35,607.20
37893.00

INVESTMENT IN GOVT. & SOCIAL SECTOR (Rs. IN

CRORES)
Type of Investment As on ( Provisional

31.03.07

31.03.08
297943
89234

31.03.09
318673
110697

CENTRAL GOVT. SECURITIES 272498

STATE GOVT. & OTHER GOVT. 64285
GUARANTEED MARKETABLE
SECURITIES
Sub Total ( A)
36783
387177
429370
HOUSING & INFRASTRUCTURE
INVESTMENT
a) HOUSING
22451 24325
34185
b) POWER
37881
41120
48090
c) IRRIGATION / WATER SUPPLY 7500
6649
6022
& SEWARAGE
d) ROAD, PORT & BRIDGES
1516
1154
7218
e) OTHERS ( Incl. Railways)
4398
8774
5274
Sub Total ( B)
73746
82022
100789
TOTAL (A+B)
410529
469199
530159

Pension & Group Business &

Social Security Schemes
in 2008-09
Pension &
Group Schemes

Growth

Social Security
Schemes

No. of New lives

(in lakhs)

207-06

35 %

110.64

Premium Income
(Rs. in crore)

12517.32

35 %

175.05

Solvency Margin
IRDA made it mandatory for all the life insurance
companies.
Solvency Margin-Solvency margin, in simple
terms, means the excess of assets an insurance
company is required to maintain over its
liabilities. Like capital adequacy ratio in banks,
solvency margin is part of the prudential norms.
To satisfy the solvency margins, insurers have to
build up reserve as their business grows.

 For example, if a company collects Rs 20 as

premium and provides an insurance cover
for Rs 100, the risk element is Rs 80. The
solvency margin is calculated on Rs 80.
Life insurance companies are expected to
maintain a 150% solvency margin.
LIC was the first one to protest the IRDA
norms, but it subsequently made provision
as per IRDA norms.

AC Nielsen ORG-MARG Survey 2004 to 2009

(For the 6th consecutive

year)

Awards won by LIC

Awaaz Consumer
Award 2007, 2008
& 2009 given by
CNBC_TV

Golden Peacock
Global Award
2005,
2006 and
2007,2008,2009

Asia Insurance
Merit 2008 &
2009 in
Corporate Social
Responsibility

Our Glory

No.1 in Net
Worth

No.1 in Net
Profit

Reader Digests
Trusted Brand
Award 2006 &
2007,2008,2009

No.2 in Total
Income

Business Worlds
Most Respected Co.
Award 2007,2008 &
2009.

Our Proud Position

Selected Super Brands India Awards 2006-07 &

2007-08 & 2008-09
NDTV Profit Business Leadership Award 2000