Life Insurance Corporation

2021-07-10T03:16:42Z

2405:201:5501:5800:F487:677A:38E9:3D8D:

{{short description|Indian state owned life insurance company}}
{{Use dmy dates|date=May 2017}}
{{Use Indian English|date=June 2016}}
{{Infobox company
| name = Life Insurance Corporation
| logo = File:Life Insurance Corporation of India (logo).svg
| logo_size = 250px
| logo_caption = ''Yogakshemam Vahamyaham''
| type = [[Government-owned corporation|Statutory Corporation]] established by an [[Act of Parliament]]- LIC Act 1956 
| key_people = {{ubl|M R Kumar (Chairman)|Mukesh Gupta (Managing Director)Vipin Anand (Managing Director)|Siddharth Mohanty (Managing Director)|Rajkumar (Managing Director)}}
| industry = [[Insurance]] and [[Financial services]]
| products = {{ubl|[[Life insurance]] |[[Health insurance]] |[[Investment management]] |[[Mutual fund]]}}
| revenue = {{Increase}} {{INRConvert|56078439|l}} (2019)<ref name=6-K>{{cite web|url=https://licindia.in/getattachment/Bottom-Links/annual-report/LIC-AR-2018-19-Final-web.pdf.aspx|title=Life Insurance Corporation Ltd. Financial Statements |website=licindia.in}}</ref>
| operating_income = {{Increase}} {{INRConvert|270348|l}} (2019)<ref name=6-K/>
| net_income = {{Increase}} {{INRConvert|268849|l}} (2019)<ref name=6-K/>
| assets = {{Increase}} {{INRConvert|311184727|l}} (2019)<ref name=6-K/>
| equity =
| owner = [[Government of India]] (100%)
| parent = [[Ministry of Finance]] , [[Government of India]]
| num_employees = 114,000 (2020)<ref name=6-K/>
| subsid = {{ubl|[[LIC Housing Finance]]|LIC International Ltd|LIC Cards Services Ltd|LIC Mutual Fund Ltd|LIC Pension Fund Ltd|[[Industrial Development Bank of India]]}}
| footnotes =
| homepage = {{URL|http://www.licindia.in/}}
| foundation = {{Start date and age|1956|09|01|df=yes|p=yes}}
| location = [[Mumbai, India]]
}}

'''Life Insurance Corporation of India''' (abbreviated as '''LIC''') is an Indian [[Government of India|government owned]] [[insurance]] and [[investment]] corporation. It is under the [[ownership]] of [[Ministry of Finance (India)|Ministry of Finance]] , [[Government of India]] .

The Life insurance Corporation of India was established on 1 September 1956, when the [[Parliament of India]] passed the Life Insurance of India Act that nationalized the insurance industry in India. Over 245 insurance companies and provident societies were merged to create the state-owned Life Insurance Corporation of India.<ref>{{Cite web|url=https://www.mylicindia.com/lic-life-insurance-corporation-of-india/|title=LIC – Life Insurance Corporation Of India|last=Anushka|website=My LIC India|language=en-US|access-date=2020-02-18}}</ref><ref name="licindia.in">https://www.licindia.in/getattachment/Bottom-Links/annual-report/LIC-Annual-Report-2015-16.pdf.aspx</ref>

As of 2019, Life Insurance Corporation of India had total life fund of ₹28.3 trillion. The total value of sold policies in the year 2018–19 is ₹21.4 million. Life Insurance Corporation of India settled 26 million claims in 2018–19. It has 290 million policy holders.

==History==
[[File:LIC Chennai.JPG|thumbnail|[[LIC Building]] at [[Chennai]], was the tallest building in India when it was inaugurated in 1959|326x326px]]
===Founding organisations===
The Oriental Life Insurance Company, the first company in India offering life insurance coverage, was established in [[Kolkata]] in 1818. Its primary target market was the Europeans based in India, and it charged Indians heftier premiums.<ref name="History">{{cite web|url=http://www.licindia.in/history.htm |title=History |publisher=LIC |access-date=15 December 2013 |url-status=dead |archive-url=https://web.archive.org/web/20131216111317/http://www.licindia.in/history.htm |archive-date=16 December 2013 |df=dmy }}</ref> [[Surendranath Tagore]] had founded Hindustan Insurance Society, which later became Life Insurance Corporation.<ref>{{cite web|url=https://www.telegraphindia.com/states/west-bengal/lunch-on-lotus-leaves/cid/1265929|title=Lunch on lotus leaves|website=www.telegraphindia.com|access-date=19 December 2018}}</ref> Check [https://www.gitmobiles.com/this-is-the-special-policy-of-lic/ Special Policy] Of LIC.

The Bombay Mutual Life Assurance Society, formed in 1870, was the first native insurance provider. Other insurance companies established in the pre-independence era included
* Postal Life Insurance (PLI) was introduced on 1 February 1884
* Bharat Insurance Company (1896)
* [[United India Insurance Company|United India]] (1906)
* National Indian (1906)
* [[National Insurance Company|National Insurance]] (1906)
* Co-operative Assurance (1906)
* Hindustan Co-operatives (1907)
* The New India Assurance Co Ltd (1919)
* Indian Mercantile
* General Assurance
* Swadeshi Life (later Bombay Life)
* Sahyadri Insurance (Merged into LIC, 1986)

The first 150 years were marked mostly by turbulent economic conditions. It witnessed [[Indian rebellion of 1857|India's First War of Independence]], adverse effects of the [[World War I]] and [[World War II]] on the [[economy of India]], and in between them the period of worldwide economic crises triggered by the [[Great depression]]. The first half of the 20th century saw a heightened struggle for [[India's independence movement|India's independence]]. The aggregate effect of these events led to a high rate of and [[liquidation]] of life insurance companies in India. This had adversely affected the faith of the general in the utility of obtaining life cover.

===Nationalization in 1956===
In 1955, parliamentarian [[Feroze Gandhi]] raised the matter of insurance fraud by owners of private insurance agencies. In the ensuing investigations, one of India's wealthiest businessmen, Sachin Devkekar, owner of the ''[[Times of India]]'' newspaper, was sent to prison for two years.<ref name="Sasi Bhushan">{{cite web |last1=Bhushan |first1=Sasi |title=Excerpts: Feroze Gandhi: A Political Biography by Shashi Bhushan |url=https://www.cse.iitk.ac.in/users/amit/books/bhushan-1977-feroze-gandhi-political.html |website=www.cse.iitk.ac.in |access-date=10 March 2021}}</ref>

The [[Parliament of India]] passed the Life Insurance of India Act on 19 June 1956 creating the Life Insurance Corporation of India, which started operating in September of that year. It consolidated the business of 245 private life insurers and other entities offering life insurance services; this consisted of 154 life insurance companies, 16 foreign companies and 75 provident companies. The nationalization of the life insurance business in India was a result of the [[Industrial Policy Resolution of 1956]], which had created a policy framework for extending state control over at least 17 sectors of the economy, including life insurance.{{fact|date=June 2021}}

===IPO===
Finance Minister [[Nirmala Sitharaman]] announced a proposal to conduct an [[initial public offering]] for LIC in the [[2021 Union budget of India|2021 Union Budget]].<ref>{{cite web |title=LIC IPO: Good news for LIC insurance policy holders! Modi government confirms this big development |url=https://www.zeebiz.com/market-news/news-lic-ipo-good-news-for-lic-insurance-policy-holders-modi-government-confirms-this-big-development-149083 |website=Zee Business |access-date=7 March 2021 |date=10 February 2021}}</ref> The IPO is expected to be held in FY22. The Government of India will remain the majority shareholder after the public listing. Ten percent of shares are proposed to be allotted to existing LIC policyholders.<ref>{{cite web |title=Government proposes to hike LIC authorised capital to Rs 25,000 crore |url=https://economictimes.indiatimes.com/markets/ipos/fpos/government-proposes-to-hike-lic-authorised-capital-to-rs-25000-crore/articleshow/81375724.cms |website=The Economic Times |access-date=7 March 2021}}</ref> In year 2021, government of India had proposed to significantly enhance the authorised capital of Life Insurance Corporation of India (LIC), to INR 250bn ($3.4bn) to facilitate its public listing scheduled for the next fiscal year which will begin on 1 April.<ref>{{cite news |title=India: Govt plans to increase authorised capital of LIC by 2.5x to prepare for IPO |url=https://www.asiainsurancereview.com/News/View-NewsLetter-Article/id/75834/Type/eDaily/India-Govt-plans-to-increase-authorised-capital-of-LIC-by-2-5x-to-prepare-for-IPO |access-date=22 April 2021 |publisher=Asia Insurance Review |date=8 March 2021}}</ref>

==Structure==
The LIC's executive board consists of Chairman, currently M R Kumar, and Managing Directors, Vipin Anand, T. C. Suseel Kumar, Mukesh Kumar Gupta and Raj Kumar<ref>{{cite news|url= https://www.moneycontrol.com/news/business/companies/mr-kumar-appointed-lic-chairman-vipin-anand-tc-sushil-kumar-named-managing-directors-3644101.html/amp |title=board structure |work=moneycontrol |access-date=14 February 2019}}</ref><ref>{{cite web|url= https://www.licindia.in/Top-Links/About-Us/Board-Of-Directors |title=bod}}</ref>

The Central Office of LIC is based out of Mumbai which sits The Chairman, all four Managing Directors, and all Executive Directors (Department Heads). LIC has a total of 8 Zonal Offices namely [[Delhi]], [[Chennai]], [[Mumbai]], [[Hyderabad]], [[Kanpur]], [[Kolkata]], [[Bhopal]] & [[Patna]].[[File:LIC Zonal Office.jpg|thumb|right|LIC Zonal Office, 'Night View From Connaught Place Park']]

== LIC's Contribution to the five year plans over the years ==

{| class="wikitable"
|-
! Plan !! Year !! Investment
|-
| 2 || 1956–1961 || ₹184 Cr
|-
| 3 || 1961–1966 || ₹285 Cr
|-
| 4 || 1969–1974 || ₹1,530 Cr
|-
| 5 || 1974–1979 || ₹2,942 Cr
|-
| 6 || 1980–1985 || ₹7,140 Cr
|-
| 7 || 1985–1990 || ₹12,969 Cr
|-
| 8 || 1992–1997 || ₹56,097 Cr
|-
| 9 || 1997–2002 || ₹1,70,929 Cr
|-
| 10 ||2002–2007 || ₹3,94,779 Cr
|-
| 11 ||2007–2012 || ₹7,04,720 Cr
|-
| 12 ||2012–2017 || ₹14,23,055 Cr
|-
| 13 ||2017–2022 || ₹28,01,483 Cr
|-
|}

===Growth as a monopoly===
From its creation, the Life Insurance Corporation of India, which commanded a [[monopoly]] of soliciting and selling life insurance in India, created huge surpluses and by 2006 was contributing around 7% of India's [[Gross Domestic Product|GDP]].{{Citation needed|date=March 2012}}

The corporation, which started its business with around 300 offices, 5.7 million policies and a [[Capital (economics)|corpus]] of ₹45.9 crores (US$92 million as per the 1959 exchange rate of roughly {{INR}}5 for US$1),<ref>{{cite web|url=http://data.un.org/Data.aspx?d=CDB&f=srID:6080 |title=UNdata | record view | Exchange rate, US$ per national currency, period average (IMF) |publisher=Data.un.org |date=22 May 2008 |access-date=30 August 2010}} {{Dead link|date=October 2010|bot=H3llBot}}</ref> had grown to 25,000 servicing around 350 million policies and a [[Capital (economics)|corpus]] of over {{INRConvert|800000|c}} by the end of the 20th century.

===Liberalisation post 2000s===
In August 2000, the [[Indian Government]] embarked on a program to liberalise the insurance sector and opened it up for the private sector. LIC emerged as a beneficiary from this process with robust performance, albeit on a base substantially higher than the private sector.

In 2013, the first year premium [[compound annual growth rate]] (CAGR) was 24.53% while total life premium CAGR was 19.28% matching the growth of the life insurance industry and outperforming general economic growth.<ref>{{cite web|author=CA. Nirmal Ghorawat |url=http://canirmalg.wordpress.com/2013/01/31/few-perspectives-on-life-insurance-in-india/ |title=Perspectives on Life Insurance Industry in India « CA. Nirmal Ghorawat's Blog |publisher=Canirmalg.wordpress.com |date=31 January 2013 |access-date=14 June 2013}}</ref>

==Operations==
Today LIC functions with 2048 fully computerized branch offices, 8 zonal offices, around 113 divisional offices, 2,048 branches and 1408 satellite offices and the Central Office;<ref name=AR201112>{{cite web|url=http://www.licindia.in/Annual_Report_2012.pdf |title=Annual Report 2011–2012 |publisher=LIC |access-date=10 December 2013 |url-status=dead |archive-url=https://web.archive.org/web/20140628044340/http://licindia.in/Annual_Report_2012.pdf |archive-date=28 June 2014 |df=dmy }}</ref> it also has 73<ref name="ReferenceA">https://www.licindia.in/getattachment/Bottom-Links/annual-report/LIC-AR-2018-19-Final-web.pdf.aspx</ref> customer zones and 25 metro-area service hubs located in different cities and towns of India. It also has a network of 1,537,064 individual agents, 342 Corporate Agents, 109 Referral Agents, 114 Brokers and 42 Banks for soliciting life insurance business from the public.

The LIC has 22 departments each headed by an Executive Director namely Marketing, Bankassurance (B&AC), Corporate Communication, Personnel, CRM, Direct Marketing, E&OS, F&A, IT/BPR, Inspection, Investment, SBU/Estates, Investment Operations, P&GS, Actuarial, Chairman Sectt, F&A, Micro Insurance, RTI, HRD, Engineering, and Vigilance.<ref name="ReferenceA"/>

The LIC has 8 Zonal Offices headed by a Zonal Manager(I/C) (Executive Director Cadre) who is one of the key decision-makers of the corporation after the Board
{| class="wikitable"
|+
|North Zone
|New Delhi
|-
|Central Zone
|Bhopal
|-
!East Zone
!Kolkata
|-
!West Zone
!Mumbai
|-
|South Zone
|Chennai
|-
|East Central Zone
|Patna
|-
|North Central Zone
|Kanpur
|-
|South Central Zone
|Hyderabad
|}
The LIC follows a horizontal line of command & vertical line of command, while each department is headed by an Executive Director, the Zonal offices are headed by a Zonal Manager who oversees all the departments & divisions of the Zone – making him de facto CEO of the Zone. The zonal departmental heads are Regional Managers. Divisions are headed by Sr. Divisional Manager(I/C) who oversees all the departments & branches of the division. There are 3 layers of Horizontal Management namely Senior Divisional Manager(I/C), Zonal Manager(I/C) & the Chairman/MD. There are also 3 layers of vertical management namely Managers of Divisions, Regional Managers of Zonal Office & the Executive Directors of Central office. Horizontal Management is considered key managers of the corporation.

{| class="wikitable"
|+ The Cadre list & Possible designations of Class 1 officers (Increasing order)
|-
! Cadre/Rank Name !! Posting Designations
|-
| Chairman || Chairman
|-
| Managing Director || Managing Director
|-
| Zonal Manager(Special) || Zonal Manager(I/C), Executive Director, CEO of Subsidiary
|-
| Zonal Manager(Ordinary)(3 Year Cadre) || Regional Manager, Chief, Director, CEO of Subsidiary
|-
| Sr Divisional Manager || Deputy Zonal Manager, SDM(I/C), Principal, Faculty Member, Regional Manager, Secretary
|-
| Divisional Manager || Chief Manager, DM, Secretary, Dy Secretary, Marketing Manager, Principal, Faculty Member
|-
| Assistant Divisional Manager || Sr. Branch Manager (I/C), Sr. Branch Manager(Sales), Manager(Admin), Manager, Dy Secretary, Faculty Member
|-
| Administrative Officer || Branch Manager(I/C), BM(SALES), AO
|-
| Assistant Administrative Officer || ABM(Sales), AAO, PA, Deputy Manager,
|}

Now LIC also has the 1899 branches of [[IDBI]] bank at its disposal thus it can carry out its insurance business through these branches of the bank.

==Slogan==
LIC's slogan योगक्षेमम् वहाम्यहम (''yogakshemam vahamyaham)'' is in [[Sanskrit]] which loosely translates into English as "Your welfare is our responsibility". This is derived from the 22nd verse of the [[Bhagavad Gita]]'s 9th chapter.<ref>{{cite web|url=http://vedabase.net/bg/9/22/en |title=Bhagavad-gita As It Is Chapter 9 Verse 22 |publisher=Vedabase.net |access-date=15 December 2013 |url-status=dead |archive-url=https://web.archive.org/web/20131023045529/http://vedabase.net/bg/9/22/en |archive-date=23 October 2013 |df=dmy }}</ref> The slogan can be seen in the logo, written in [[Devanagari]] script.
This line means "I carry what they lack, and I preserve what they have" (refers to [[Krishna]] speaking to [[Arjuna]]), when taken in context of the entire verse.

==Awards and recognitions==
* The Economic Times Brand Equity Survey 2012 rated LIC as the No. 6 Most Trusted Service Brand of India.<ref>{{cite news|url=http://economictimes.indiatimes.com/features/brand-equity/most-trusted-brands-2012-top-50-service-brands/articleshow/17101285.cms |newspaper=Economic Times |title=Most Trusted Brands 2012: Top 50 Service Brands|date=7 November 2015 |access-date=15 December 2013}}</ref>
* From the year 2006, LIC has been continuously winning the Readers' Digest Trusted brand award.
* Voted India's Most Trusted brand in the BFSI category according to the Brand Trust Report for 4 continuous years – 2011–2014 according to the [[The Brand Trust Report|Brand Trust Report]].<ref>{{Cite news|url = http://articles.economictimes.indiatimes.com/2012-01-23/news/30655455_1_brand-trust-report-trust-research-advisory-n-chandramouli|title = The Economics Times}}</ref>

==Employees and agents==
As on 31 March 2020, LIC had 1,14,498 employees, out of which 25,602 were women.
{| class="wikitable"
|-
! Category of employees!! Total Number!! No. of Women
|-
| Class-I Officers || {{0|00}}32,433 || {{0|000}}7202
|-
| Class-II Development Officers|| {{0|00}}24,388 || {{0|000}}1,458
|-
| Class III/IV employees || {{0|00}}57,677 || {{0|00}}16,942
|-
| Total || {{0|0}}1,14,498 || {{0|00}}25,602
|}

=== Agency strength ===

The total number of agents on roll is 12,08,826 (of which 10,80,809 were active agents) as of March 2020 as against 11,79,229 as of March 2019.

==Initiatives==
'''Golden Jubilee Foundation''' 
LIC Golden Jubilee Foundation was established in 2006 as a charity organization. This entity has the aim of promoting education, alleviation of poverty, and providing better living conditions for the under privileged. Out of all the activities conducted by the organisation, Golden Jubilee Scholarship awards is the best known. Each year, this award is given to the meritorious students in standard XII of school education or equivalent, who wish to continue their studies and have a parental income less than {{INRConvert|100000}}.<ref>{{cite web|url=http://www.licindia.in/GJF_scholarship.htm |title=Golden Jubilee Scholarship Scheme |publisher=LIC |access-date=15 December 2013 |url-status=dead |archive-url=https://web.archive.org/web/20131215095442/http://www.licindia.in/GJF_scholarship.htm |archive-date=15 December 2013 |df=dmy }}</ref>

==Holdings==
LIC invests in sectors such as banks, cement, chemicals and fertilizers, electricity and transmission, electrical and electronics, engineering, construction and infrastructure, fast-moving consumer goods, finance and investments, healthcare, hotels, information technology, metals and mining, motor vehicles, and ancillaries, oil and natural resources, retail, textiles, transportation, and logistics.

Among the Nifty companies, LIC's holding in terms of value in 2012 was estimated to be the highest in ITC (₹27,326 crores), followed by RIL (₹21,659 crores), ONGC (₹17,764 crores), SBI (₹17,058 crores), L&T (₹16,800 crores), and ICICI Bank (₹10,006 crores).<ref>{{cite web|url=https://www.thehindubusinessline.com/markets/stock-markets/lic-cuts-stake-in-27-nifty-firms-sells-shares-worth-rs-8000-crore/article20572603.ece1|title=LIC cuts stake in 27 Nifty firms; sells shares worth Rs 8,000 crore|last=PTI|website=@businessline|access-date=19 December 2018}}</ref> The share price drop in ITC on 18 July 2017 had caused LIC a major loss of around 7000 crores during the financial year.

LIC also holds a 51% stake in IDBI Bank, making it the only insurer in India to own a bank, since regulations prohibit insurers from holding more than 15% stake in any company, LIC will have to decide a timeline for paring its stake in [[IDBI Bank|IDBI bank]]; also LIC may have to pare its stake in [[LIC Housing Finance|LIC Housing Finance Ltd]] as a company cannot be the promoter of two finance companies carrying out same housing finance business in India.<ref>{{Cite web|url=https://www.nseindia.com/live_market/dynaContent/live_watch/equities_stock_watch.htm|title=NSE – National Stock Exchange of India Ltd.|website=www.nseindia.com|language=en|access-date=2018-08-24}}</ref>

==See also==
* [[Insurance in India]]
* [[Insurance]]
* [[LIC Housing Finance]]

==References==
{{reflist|2}}



== External links ==
{{commons category|Life Insurance Corporation of India}}

* {{Official}}

{{Insurance in India}}
{{Indian PSU}}
{{Major insurance companies}}{{Financial services in India}}
{{DEFAULTSORT:Life Insurance Corporation Of India}}
[[Category:Financial services companies based in Mumbai]]
[[Category:Government-owned insurance companies of India]]
[[Category:Financial services companies established in 1956]]
[[Category:Life insurance companies of India]]
[[Category:Indian companies established in 1956]]
[[Category:Life Insurance Corporation| ]]
[[Category:1956 establishments in Bombay State]]

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Life Insurance Corporation