CHAPTER NO.

TOPIC

PAGE NO.

I.

INTRODUCTION TO INSURANCE 1.1 WHAT IS LIFE INSURANCE ? 1.2 WHY WE NEED LIFE INSURANCE ? 1.3 LIFE INSURANCE V/S OTHER SAVINGS 1.4 WHO CAN BUY POLICY ?

II.

INTRODUCTION TO LIC 2.1 BRIEF HISTORY OF LIFE INSURANCE CORPORATION OF INDIA 2.2 NATIONALIZATION 2.3 CURRENT STATUS 2.4 GOLDEN JUBILEE FOUNDATION 2.5 OBJECTIVE OF LIC 2.6 MISSION / VISION 2.7 BOARD OF DIRECTORS 2.8 OPERATION OF LIC 2.9 NETWORKS OF LIC 2.10 INTERNATIONAL OPERATION/ ASSOCIATES 2.11 MARKET SHARES OF ALL INSURANCE COMPANY IN INDIA 2.12 INFORMATION TECHNOLOGY AND LIC 2.13 AWARDS BY LIC 2.14 PRIVATE INSURANCE COMPANIES IN INDIA

III.

PRODUCTS OF LIC 3.1 INSURANCE 3.2 PENSION 3.3 UNIT 3.4 SPECIAL 3.5 GROUP INSURANCE SCHEME 3.6 WITHDRAWAL PLAN 3.7 HEALTH PLAN 3.8 DIFFERENT POLICY IN DETAIL 3.9 GUIDELINES FOR POLICYHOLDERS

IV.

SWOT ANALYSIS OF LIC

V.

FINDING AND CONCLUSION

VI.

BIBLOGRAPHY

What Is Life Insurance

Life insurance is a contract that pledges payment of an amount to the person assured (or hisnominee) on the happening of the event insured against.The contract is valid for payment of the insured amount during: The date of maturity, or Specified dates at periodic intervals, or Unfortunate death, if it occurs earlier.

Why We Need Insurance:

Life insurance is a contact by which you can protect yourself against specific uncertainties by paying a premium over a period. Since each one of us during our lives are faced with numerousrisks-falling health, financial losses, accident and even fatalities. Protection You need life insurance to be there and protect the people you love, making sure that your familyhas a means to look after itself after you are gone. It is a thoughtful business concept designed to protect the economic value of a human life for the benefit of those financially dependent on him. Retirement Life insurance makes sure that you have regular income after you retire and helps you maintainyour standard of living. It can ensure that your post-retirement years are spent in peace andcomfort. Savings and Investments

Insurance is a means to Save and Invest. Your periodic premiums are like Savings and you areassured of a lump sum amount on maturity. A policy can come in handy at the time of your childs education or marriage! Besides, it can be used as supplemental retirement income. Tax Benefits Life insurance is one of the best tax saving options today. Your tax can be saved twice on a lifeinsurance policy.

Brief History Of life Insurance corporation of india

The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years. Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society

heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in

1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Re-organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organisation servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with re-organisation happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 109 divisional offices, 8 zonal offices, 992 satallite offices and the Corporate office. LICs Wide Area Network covers 109 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LICs ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over one crore policies during the current year. It has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the corresponding period of the previous year. From then to now, LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families.

Some of the important milestones in the life insurance business in India are: 1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

Nationalization
In 1955, parliamentarian Feroze Gandhi raised the matter of insurance fraud by owner's of private insurance companies. In the ensuing investigations, one of India'swealthiest businessmen,Ram Kishan Dalmia, owner of the Times of India newspaper, was sent to prison for two months. Eventually, theParliament of Indiapassed the LifeInsurance of India Act on1956-06-19, and the Life Insurance

Corporation of India was created on1956-09-01,by consolidating the life insurance business of 245 private life insurers and other entities offering life insurance services. Nationalizationof the life insurance business in India was a result of the Industrial Policy Resolutionof 1956, which had created a policy framework for extending state control over atleast seventeen sectors of the economy, including the life insurance. The company began operations with 5 zonal offices, 33 divisional offices and 212 branch offices.

Mission "Explore and 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 and Pride of India."

Board of directors
Shri D.K. Mehrotra, (CHAIRMAN, LIC ) Shri Thomas Mathew T. (Managing Director, LIC ) Shri Sushobhan Sarker (Managing Director, LIC ) Shri Arvind Mayaram (Secretary, Department of Economic Affairs, Ministry of Finance, Govt. of India.) Shri Rajiv Takru (Secretary, Department of Financial Services, Ministry of Finance, Govt. of India.)

Shri A.K. Roy (Chairman cum Managing Director, GIC.) Shri M.V. Tanksale (Chairman & Managing Director, Central Bank of India ) Shri Anup Prakash Garg Shri Sanjay Jain Shri Ashok Singh Shri K.S. Sampath

Operation of LIC We Operate All Over India

Network of LIC
All Life Insurance Corporation branches in the country would be interconnectedunder Metro Area Network (MAN) inaugurated here on Thursday.Speaking at the function, K Vaidyalingam, LIC southern zonal manager, said about1500 branches would be getting covered under MAN in which the premium amountof the policy holder could be remitted in any branch. Besides, the policy holder getshis status report, policy position, revival and quotation from the network. In every onehour the system got upgraded, he said.In southern region there are about 10 lakh new policy holders with a business of Rs6500 crore. About settlement of claims, 92 per cent of policies were settled on or before maturity, he said, adding, LIC was in a better position and 100 per centconnectivity was taking place.Kottayam stood third in premium collection during the period between April toAugust 2002, the first being Kozhikode and Thiruvananthapuram in second positionin southern region.The premium amount collected in 2001 was Rs.74,000 crore through 2.32 crore new policies by 8.2 lakh agents. LIC has introduced a new group insurance scheme for Corporation Bank deposit holders.

MARKET SHARE OF ALL LIFE INSURANCE COMPANY IN INDIA

Awards Received in 2011-12

Readers Digest

Superbrands

Asian Leadership Awards

ET Brand Equity's Most Trusted

CNBC AWAAZ

Dainik Bhaskar Group

LIC Products
INSURANCE PLAN As individuals it is inherent to differ. Each individual's insurance needs and requirements are different from that of the others. LIC's Insurance Plans are policies that talk to you individually and give you the most suitable options that can fit your requirement. Bima Account 1 Bima Account 2

Endowment Plus

Jeevan Anurag

Komal Jeevan

CDA Endowment Vesting At 21 Marriage Endowment Or CDA Endowment Vesting At 18 Educational Annuity Plan Jeevan Kishore Child Career Plan Jeevan Ankur Jeevan Chhaya Child Future Plan

Jeevan Aadhar Jeevan Vishwas

The Endowment Assurance Policy The Endowment Assurance Policy-Limited Payment Jeevan Mitra(Double Cover Endowment Plan) Jeevan Mitra(Triple Cover Endowment Plan) Jeevan Anand New Janaraksha Plan Jeevan Amrit Jeevan Sugam

Jeevan Shree-I Jeevan Pramukh

The Money Back Policy-20 Years The Money Back Policy-25 Years Jeevan Surabhi-15 Years Jeevan Surabhi-20 Years Jeevan Surabhi-25 Years

Bima Bachat

Jeevan Bharati - I

The Whole Life Policy The Whole Life Policy- Limited Payment The Whole Life Policy- Single Premium Jeevan Anand Jeevan Tarang

Two Year Temporary Assurance Policy The Convertible Term Assurance Policy Anmol Jeevan-I Amulya Jeevan-I

Jeevan Saathi

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.

Jeevan Akshay-VI New Jeevan Nidhi

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.

Endowment Plus Flexi Plus

SPECIAL PLANS LICs Special Plans are not plans but opportunities that knock on your door once in a lifetime. These plans are a perfect blend of insurance, investment and a lifetime of happiness!

New Bima Gold

Jeevan Madhur Jeevan Mangal Jeevan Deep

Bima Nivesh 2005 Jeevan Saral

GROUP INSURANCE SCHEME Group Insurance Scheme is life insurance protection to groups of people. This scheme is ideal for employers, associations, societies etc. and allows you to enjoy group benefits at really low costs.

Group Term Insurance Schemes Group Insurance Scheme in Lieu Of EDLI Group Gratuity Scheme Group Savings Linked Insurance Scheme Group Leave Encashment Scheme Group Mortgage Redemption Assurance Scheme Group Critical Illness Rider

JanaShree Bima Yojana (JBY) Shiksha Sahayog Yojana Aam Admi Bima Yojana

WITHDRAWAN PLANS Jeevan Nischay Wealth Plus Jeevan Aastha Jeevan Varsha Fortune Plus Health Plus Pension Plus New Jeevan Dhara-I Jeevan Vriddhi Market Plus I Profit Plus Money Plus-I Child Fortune Plus Jeevan Saathi Plus Samridhi Plus Jeevan Nidhi New Jeevan Suraksha-I Jeevan Vaibhav (Single Premium Endowment Assurance Plan)

HEALTH PLANS

Health Protection Plus

Jeevan Arogya

SWOT ANALYSIS OF THE COMPANY

The SWOT analysis involves an in depth study of the strength and weakness of the provided organization and it also provides information to the promoter, consultant, other agencies and helps in long term viability of the project.

Strength :
1. It is the oldest and most well experienced player having a Pan India presence. 2. LIC has a strong and very well developed distribution network. 3. It is having a huge consumer base and is evolved as one of the most powerful brands of the country. 4. It has a large product portfolio and claim settlement is easier to get. 5. It has the advantage of government guarantee is accompanied with it. 6. Largest insurance Company in the world in Customer Base (23 crore customers)

7. No.1 insurance company in the world in terms of agency (about 1.1 Million agents) 8. LIC is No.1 insurer in the world in Volume & Sold around 3.75 Cr.Policies in 2007-2008. 9. 2nd Biggest Real Estate Owner next to Indian Railways. 10.LIC is one of the Highest income tax playing Organization. For Financial Year 2007-08, LIC has paid advance Tax Rs.2627. 14 Cr. & Service Tax Rs.1292. 15 Cr.

11.Has Highest insurance Professionals ( Club Member agents ) 12.Only 4 countries in the world have more population that LIC`s policy holders. 13.No.1 insurance Company in the world in terms of claims paid. 14.LIC Settles 2.21 claims per second, LIC settled 139 lakhs claims during the year
2007-2008.

15.Prompt settlement of claims (97% maturity claim settled on or before due date) 16.One of the Lowest outstanding Claim Ratio in the world ( Maturity+S B Claim0.07%)

Advanced Technology-For better Customer Service 1. Computerized and networked 2048 branch offices and 159 satellite offices throughout the country. 2. Use of High Tech-WAN,LAN,IVRS & EDMS 3. LIC is second largest PC user in the country. 4. EDMS to make LIC a paperless office- Enabling Policy servicing & payments

through all branchs in the country. 5. Premium Payment Facility extended through networked 2048 branches, ECS, ATM's through internet, online portals, collecting bank (Axis Bank), AP online, through SMS, through selected agents, Now LIC Premium can also be paid through. 6. "Suvidha info Serve KIOSKS" all over India. 7. Policy Holder's Portal allow on line access to policy status and other details. 8. Info centre set up in 12 cities for customers to interact easily. Dial-1251 for details. 9. 45 interactive Voice Response System (IVRS) centers all over the country to provide information on policy servicing. Facility is available 24 7, Facility can be availed on following phone Nos. 1251 OR 020-25514248.

Social Strength
LIC - an institution builder promoting many financial and insurance institutes like NSE, NCDEX, LIC Mutual Fund, Stock Holding Corporation of India, National insurance Academy, insurance institute of India etc. LIC has foreign operations in Mauritius, Fiji and London and has joint venture operating in Sri lanka, Nepal, Bahrain & Saudi Arabia. New offices will be hortly oprned in Australia, USA&Canada. LIC is known as "Pension Provider" of the country. 1st Pension company in India is floated by LIC as "LIC Pension Fund Ltd" on 21st Nov 2007. First to create waves in micro insurance sector by insuring people below the poverty line. In year 2007-2008, 8.54 lac policies sold through "Jeevan Madhur"Plan. Widest range of plans (about 48) for every need of the customer of 0 to 79 years of

age. Biggest Portfolio of Group insurance schemes available. "Jeevan Saral" one of the product of LIC got "Best innovation product " award from I.R.D.A. LIC has covered lick Risk of 1.13 crore citizens through "AAM ADMI BIMA YOJANA" & " JANASHREE BIMA YOJANA". Very Unique Salary saving Portfolio. Highest Number of Corporate Clients in Group insurance Scheme. Expending Distribution Channel through Bancassurances, Corporate Agencies, Broker ship & Chief Life insurarance Advisor (CLIA). New East - Central Zonal Office opened at patina to caterto the needs of states of Bihar, Jharkhand and Orissa. 5 new Divisional offices were also opened in 2007-08. Pune D.O.was splited in 2 divisions, viz Pune Division (i) and Pune Division (ii). "Golden Jubilee Foundations" established for undertaking charitable activities like education, health, relief of poverty etc.

People's Money for People's Welfare

LIC invested more than 11,630 crores, in infrastructure sector is Rs.56,691crores In socially oriented sector like water, drainage & housing etc, LIC has invested Rs.5,635 crores during 2007-08 & total investment in this sector is Rs.32,321 crores. Total investment in Social Sector Rs.89,000 Crs. Different incentive schemes for villages, Schools and Banks under Bima Gram, Bima School and Bima Banks. Total investment in Nation Building Activities is 5,76,000 Crs.

Financial Strengths
LIC's investment income in 2007-08 was Rs.40,655 crores. Out of Total income of Rs, 1,76,559.28 Crs. Total Assets of the corporation as on 31.3.07 were Rs. 6,74,514.78 Crs. Largest institutional investor in Share Market. On an average Rs.100 crore invested every day. During theyear 2007 LIC earned the profit Rs.10,000 Crs. from the Sale of Equity. Largest Financial institutional investor both Equity market & Term House.

Weakness :
sincerecustomer service.

taking into account the needs of people and promote policies having high commissions only.

management and lower cadre staff.

rge scale corruption in main office.

provided with extra funds and powers to promote its products aggressively.

Opportunity :
umer market in the country.

innovativeproducts.

Todays human life becomes full uncertain, so they prefer protection against the risk. Therefore they prefer life insurance. This is the opportunity for the life insurance sector.

Easy accesses to development in the more advance market provide further

opportunity to upgrade their working. Technological, financial or specific area based avenues of absorbing improved system are also now more easily available. So, that insurance companies working efficiently and fast service. Increased economic activities: increase in the economic activity has become the opportunity for the life insurance sector. The activity such as development in the automobile industry, development in the shipping industry. The growth in the GDP shows the opportunity for this industry. The growth rate expected this year 7-7.5%. So this is also one of the opportunities for the life insurance sector. Uncovered market: The Indian insurance market is the one of the least markets in the world. India has a population 1044.15 million out of which only 77.7 million have a life insurance policy. Almost 300 million people in the country can afford to buy life insurance but of this only 20 % have an insurance cover. Thus there lies a big opportunity for the life insurance industry. No doubt lots of marketing and promotional efforts have to be done for trapping the uncovered portion of the huge market. Indias insurance has long way to catch up with the rest of the world. According to the institute of charted financial analyst of India. India is the 23rd largest insurance market in the world. India accounts for just 0.4% of the global insurance market which is very low. the ratios of premium to GDP for India stands at only 3% against 5.2% in US ,6.5%in UK. To enter into rural market where customer awareness about insurance is low by effective and efficient marketing strategies.

 To sell insurance products through electronic Medias. Natural calamities: natural calamities taking place now days have created a concern for life insurance among the public. Because of natural calamities like earthquake, flood, and cyclone people have become conscious about benefits and need of insurance. Thus through a calamity it has become a considerably big opportunity for the industry. Growing population: the growth in the population (approximately 1.7%) is very high. It is said that one Australia is added in our country every year. Thus potential customers for the life insurance industry. It has become an opportunity for the life insurance industry. The lack of comprehensive social security system combined with a willingness to save means that Indian people demand for pension products will be large. Thus, it has become an opportunity for the life insurance industry. India has traditionally been a highly savings oriented country. Needless to say, if the insurance market is properly tapped, it is possible to raise life insurance premium as a percentage of GDP from its existing level. Thus, it has become an opportunity for the life insurance industry. To use Internet and e-commerce technologies to dramatically cut the costs and/or to pursue new sales-growth opportunities. With the help of technology it has become easy for the companies to reach the customer quickly, easily, efficiently and in a better way. Also the companies can cut down the cost of operation up to considerable level. Thus technology has thrown lots of

opportunity for the company. Liberalized government policy toward insurance sector: the government has liberalized the government policy in the life insurance sector. Now a day role of government has changed. Due to liberalized policy of government the country is benefited in earning foreign inflows: the domestic company can also collaborate with foreign country and can create synergy. Thus there is great opportunity for those who can trap it. Exist the option of joint venture& alliance etc. for companies to create Synergy, value as well as competitive capabilities for the firms.

Threats:
Private entrants are naturally targeting the profitable and more lucrative segments, by providing better service, new products and flexibility. They are targeting the bigger corporate the other clients in the well established metropolitan center. These new entrants succeeded in eating share of the existing entities. This creates threat among rival firms itself. Decreased in bank rate: the decreased bank rate is the biggest threat for the life insurance sector. Fluctuation in the bank rate makes big difference for the life insurance industry. It has become threats for the life insurance industry.

Interest rate of P.F and bank saving create threat to insurance sector. All other

saving is obviously the threat for life insurance sector.

Increasing intensity of competition among industry rivals-may cause squeeze (fall) on profit margins. Consumers education- consumers are more and more confused because the market players are offering large number of product range. As at present the awareness level is not much, it is only because the education level is only 62 %( in which only 10% are well educated). Fraud in insurance sector: the major problem fraud, which affects the life insurance sector. The flight of talent to new entrants is already in evidence, and could be on the rise for some time to come. Retaining qualified and competent executives will be considerable challenges for existing companies. One very serious danger that the government on units is likely to face is that even if at some point of time, the government does decide to disinvest a portion of its equity; they may not be fully free from government interference. They could face a peculiar problem that although paper and in terms of legal definition they would not be public sector units. In effects, their working could be no different from what it was before their ownership pattern change. This could be genuine threats since they would be competing with units which are free from such artificial and unnecessary restrictions. The new units, equipped with state of arts equipment and innovative procedure

would have an in-built edge over the erstwhile public sector units, which until recently had no such opportunity and incentives. Due to possible negative impact on employment, there were no serious efforts at updating technology and equipment. The resultant inadequate investment in infrastructure could lead to their lagging behind in the race.

FINDINGS AND CONCLUSIONS

LIC is the giant of the insurance sector. The overall size of LIC is much more than that of all private insurance companies. Private insurers are in expansion mode andare increasing their size but are still much behind LIC. Total premium deposits inLIC is much higher than the private insurance companies. Total premium of LIC inFY 07-08 was 149789 crores which three times more than that of private insurance companies. Income of LIC is much greater than private insurance companies. Last year total income from investments of LIC was 48244.14 crores which was nearly equal to thetotal income of the all private insurance companies. By this we can imagine how bigthe LIC is. are lagging much behind LIC. Size of Balance sheet of LIC is seven times bigger than that of private insurance companies. If we see the total number of policies issued by LIC and private insurance companies, we find that there is a huge gap between them. No doubt that LIC is a well established player in the field of insurance and many private companies have just started their business. Hence it is obvious that LIC is having large number of policyholders. Size of balance sheet of private insurance companies

Number of branches of private insurance companies is increasing as the new players are entering in this market. Also the established players are in expansion phase andhence are expanding there business. There are many private insurance companies andhence there total number of branches has gone past LIC in

the last financial year. Butoffices of private insurance companies are mostly in urban areas and still it is LICwhich covers most of the area.

Hence we see that LIC is leading when it comes to size. It is giant in insurancesector having huge network and customer base.

We see that due to excellent service quality and attractive offers private insurance companies have started getting a number of customers. They are growing rapidly.Though LIC is also increasing its customer base but private insurance companies are moving at a fast pace. Though the income of private insurance companies is negligible when compared with LIC but then also the pace with which they are increasing their income is tremendous. Private insurance companies are expanding their business and will certainly going to give a tough competition to LIC in the coming days. LIC is certainly having a large customer base. Private insurance companies are not having that much number of customer base but they are increasing it rapidly. They have registered a decent growth of 104.64 % in number of new policies in the year 2006-07. Last year also their growth rate was 67.4 %. LIC, being the oldest player in the existing insurance market, has the biggest market share of 73.9 % which was 87.3% five years earlier. We see that private insurance companies are penetrating in the customer base of LIC.

Overall we can see that private insurance companies are giving a tough competition to the LIC and will certainly create a good business for themselves in the coming days.

There are many new entrants in this sector. There are many private insurance companies who have reported loss in this and previous years. This is the main reason why private insurance companies lag behind LIC in case of business per branch. There is a big difference between them.

New business is increasingly going towards private insurance companies but still the customer base of LIC is very strong. In issuing new policies per branch also, they areahead of private insurance companies though not by very large margin.

Customer base of LIC is very strong and still business per branch, profit per branch or premium per branch, they are leading much ahead of private insurance companies.

LIC has not shown their good concern when the matter of grievance handling comes. Private insurance companies are far ahead in this matter. LIC has just resolved 25%cases in the last five years while private insurance companies have resolved nearly 70% cases. This is a matter from where customer shift starts. We have seen the rapidincrease in customer base of private insurance companies which can be very muchaffected by this factor.

Overall we have seen that still LIC is very famous but private insurance companies aregrowing at exceptionally fast pace. Private companies show due concern in grievancemanagement and brings innovative schemes to attract the customers. Right now theyare giving good competition to LIC and very soon they will give very tough competitionto Life Corporation of India.

BIBLIOGRAPHY
BROCHURES / INFORMATION BOOKLETS Product List L.I.C. L.I.C. Annual Report, 2006 ICICI Annual Report, 2006 HDFC Annual Report, 2006 Malhotra Committee Report on Reforms in the Insurance Sector, 1993. The Insurance Regulatory and Development Authority Bill, 1999.

NEWSPAPERS / MAGAZINES The Economic Times The Insurance Times Insurance Post

BOOKS Dr. Gupta S.P& Dr. Gupta M.P., Business Statistics by Addition 2004, NewDelhi,

WEBSITES w.w.w.liclndia.com www.lrdaindia.org.com www.indiainfoline.com www.icici.com www.hdfc.com72