History
LIC Zonal Office, 'Night View From Connaught Place Park'
Founding organisations
The Oriental Life Insurance Company, the first company in India offering life insurance coverage, was established in
Kolkata
in 1818 by "Anita Bhavsar" and others. Its primary target market was
the Europeans based in India, and it charged Indians heftier premiums.
[4] Surendranath Tagore had founded Hindusthan Insurance Society, which later became Life Insurance Corporation.
[5]
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 (1906)
- National Indian (1906)
- National Insurance (1906)
- Co-operative Assurance (1906)
- Hindustan Co-operatives (1907)
- 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
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. 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 public in the utility of obtaining life cover.
Nationalisation in 1956
LIC Building at Chennai, was the tallest building in India when it was inaugurated in 1959
In 1955, parliamentarian Amol Barate raised the matter of insurance
fraud by owners of private insurance agencies. In the ensuing
investigations, one of India's wealthiest businessmen, Ramkrishna
Dalmia, owner of the
Times of India newspaper, was sent to prison for two years.
The
Parliament of India
passed the Life Insurance of India Act on June 19, 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 nationalisation 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.
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
GDP.
[citation needed]
The corporation, which started its business with around 300 offices, 5.7 million policies and a
corpus of INR 45.9 crores (US$92 million as per the 1959 exchange rate of roughly
₹5 for US$1),
[6] had grown to 25,000 servicing around 350 million policies and a
corpus of over
₹800,000 crore (US$120 billion) 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.
[7]
Operations
Today
LIC functions with 2048 fully computerized branch offices, 8 zonal
offices, around 113 divisional offices, 2,048 branches and 1381
satellite offices and corporate offices;
[1]
it also has 54 customer zones and 25 metro-area service hubs located in
different cities and towns of India. It also has a network of 1,337,064
individual agents, 242 Corporate Agents, 89 Referral Agents, 98 Brokers
and 42 Banks for soliciting life insurance business from the public.
Slogan
LIC's slogan
yogakshemam vahamyaha is in
Sanskrit language which translates in English as "Your welfare is our responsibility". This is derived from ancient Hindu text, the
Bhagavad Gita's 9th chapter, 22nd verse.
[8] The slogan can be seen in the logo, written in
Devanagari script.
Awards and recognitions
- The Economic Times Brand Equity Survey 2012 rated LIC as the No. 6 Most Trusted Service Brand of India.[9]
- 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 Brand Trust Report.[10]
Employees and agents
As on 31 March 2014, LIC had 1,20,388 employees, out of which 24,867 were women (20.65%).
| Category of employees |
Total Number |
No. of Women |
| Class-I Officers |
31,420 |
6,297 |
| Class-II Development Officers |
26,621 |
1,033 |
| Class III/IV employees |
62,347 |
17,542 |
| Total |
1,20,388 |
24,867 |
Agency strength LIC had 11,95,916 agents as on 31 March 2014, out of which the number of active agents were 11,32,677 (94.71%).
[11]
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
₹100,000 (US$1,500).
[12]
In news : About holdings in various companies
LIC
holds shares worth about Rs 2.33 lakh crore in all the Nifty companies
put together, but it lowered its holding in a total of 27 Nifty
companies during the quarter.
The cumulative value of LIC holding in these 27 companies fell by
little over Rs 8,000 crore during the quarter shows the analysis of
changes in their shareholding patterns.
Individually, LIC is estimated to have sold shares worth Rs 500-1,000
crore in each of Mahindra & Mahindra, HDFC Bank, ICICI Bank, Tata
Motors, L&T, HDFC, Wipro, SBI, Maruti Suzuki, Dr Reddys and Bajaj
Auto.
The insurance behemoth also trimmed holdings in Ambuja Cements,
Cipla, TCS, Lupin and Asian Paints. A marginal decline was also
witnessed in its stakes in companies such as IDFC, Hindustan Unilever,
Grasim, ACC, BPCL, Bank of Baroda, Punjab National Bank, Sun Pharma and
Tata Power.
On the other hand, LIC further ramped up its stake in a total of 14
Nifty constituents with purchase of shares worth an estimated Rs 4,000
crore.
The major companies where LIC has raised its stake include Infosys,
RIL,Coal India Ltd and Cairn India. Other such companies are ITC, Power
Grid Corp, NTPC, Siemens, Bharti Airtel and Hero MotoCorp.
The state-run insurer also marginally hiked its exposure in
Ultratech, Gail India, Ranbaxy, Kotak Mahindra Bank and HCL
Technologies, while its shareholding remained almost unchanged in
companies like ONGC, Tata Steel, BHEL and Reliance Infra.
Among the Nifty companies, LIC’s holding in terms of value is
estimated to be highest in ITC (Rs 27,326 crore), followed by RIL (Rs
21,659 crore), ONGC (Rs 17,764 crore), SBI (Rs 17,058 crore), L&T
(Rs 16,800 crore), and ICICI Bank (Rs 10,006 crore). its
[13]
See also
References
