What Makes LIC A Behemoth?

Life Insurance Corporation of India, headquartered in Mumbai, is an investment corporation owned by the Government of India. It is under the ownership of the Ministry of Finance, Government of India. LIC of India was created on 1st September 1956 when the Government of India passed the Life Insurance of India Act, nationalizing the Private Insurance Industry in India.

The Company was formed by merging 154 Life Insurance Companies, 16 Foreign Companies and 75 Provident Companies. As of today, it is one of the largest financial institutions in India having an Asset Value of INR 380,400,000 Lakhs.

Products Basket of LIC

In India, LIC is synonymous with life insurance, as the company is a pioneer in offering the best Life Insurance Products that cater to every budget and preference. No matter what of which walk/stage of life an individual is in, LIC of India offers various Life Insurance Plans at affordable premium rates. Being a government-owned Life Insurance Company, the plans offered by LIC are always in demand and cater to a versatile range of customers.

Here are various Life Insurance Products offered by the Life Insurance Corporation:

• Endowment Plans
• Money-Back Plans
• Term Assurance Plans
• Whole Life Plans
• Pension Plans
• Group Plans
• Unit Linked Plans
• Micro Insurance Plans
• Withdrawn Plans
• Health Plans

Functions of LIC

The major functions of LIC are as follows:

• The main function of LIC is to collect the savings of the people through a life insurance policy and invest that money in various financial markets.
• To issue Insurance Policies at affordable rates to the People.
• To invest fund into Government Securities so as to protect the capital of the people who have given their money to LIC.
• It is one of the major stakeholders in many of the blue- chip companies in the Indian Stock Market.
• Invests in the various corporates via bonds and securities, thus supports corporate funding in an indirect way.
• Provides refinancing activities through SFCs in different states and cities.
• Provides various loans like direct loans to industries, housing loans, loans to various national projects at reasonable interest rates.

Analysis of Income

India’s largest life insurer, LIC, continues its impressive performance despite a highly challenging Business environment due to the Corona Pandemic for the entire previous year.

Premium Income

Individual Assurance Segment contributes Maximum to the Total Premium Income of The Corporation i.e. 66.02%.

Net Income

LIC generates around 60% of the Net Income from the Premium Income.

LIC’s Net Income increased by about 11% in Fiscal 2021.

Payments To Policyholders

• On the Claims front, inspite of severe constraints due to Covid Pandemic, LIC settled 2.19 Crore Maturity claims, Money Back Claims and Annuities, amounting to Rs 1,16,265.15 Crores.
• According to the IRDAI’s Annual Report 2020-21, the claim settlement ratio of LIC was 98.62% as of March 31, 2021 compared to 96.69% as of March 31, 2020.

Competitive Strengths of LIC

India's Largest Insurance Company

LIC currently operates across India with 2048 fully computerized branches, 8 zonal offices, about 113 divisional offices, 2,048 branch offices and 1381 satellite offices and corporate offices. Moreover, Currently, LIC has 1,337,064 individual agents, 242 corporate agents, 89 referral agents, 98 brokers and 42 banks for selling life insurance to the general public.

Brand Image

LIC has a strong brand image in India. Its tagline Yogakshemam Mahamyaham, which means welfare for all, is widely known. The Economic Time Brand Equity Survey of 2015 voted LIC as the most trusted insurance provider in India.

Asset Base

The Corporation has huge assets of around INR 380,400,000 lakh and is also India's largest investor, giving it enormous power in India's financial sector.

Strong Network

LIC has a network of around 13,53,808 Agents along with the strength of 1,08,987 Employees across India.

Subsidiaries and Associates

LIC has strong Subsidiaries and Associates like LIC Pension Fund Limited, LIC Cards Services Limited, LIC Cards Services Limited, LIC Mutual Fund Trustee Company Private Limited, LIC Mutual Fund Asset Management Company Limited and LIC Housing Finance Limited.

What Makes LIC A Behemoth?

There are many factors like Premium Income, Total Income, Profit After Tax, Total Investments, and Number of Offices. In the below diagram, you can easily understand how these factors make LIC a behemoth.