The comparative analysis of life insurance corporation and private

insurance companies
Submitted by:

Harshad R (17040142060)

Shilpi Singh (17040142023)

Gowtham (17040141030 )

Batch 2017-22

Prof. Gyanashree Dutta

Alliance School of Law

Alliance University, Bangalore

Date of Submission: 14.04.2021

Background

India is one of the fastest growing economies of the world. It is now Asia’s third largest
economy. The insurance industry has contributed in India’s growth story in recent years. The
contour of insurance business has been changing across the globe and the rippling effect of the
same can be observed in the Indian market as well as insurance industry is a growth oriented
industry. In India too, the industry has started to reveal the potential after liberalization and
privatization of the sector. The topic basically revolves around the life insurance sector which
has been recently opened for the private companies. LIC has for a long period of time has
enjoyed a dominant market of life insurance and the fact cannot be denied that LIC has a pre
accomplished market leadership which makes it difficult for the new companies to compete.
While the new companies struggle to increase their market in India, LIC continue to leverage
advantage of its old establishment and government support for maintaining its growth. But now a
day the market opened up and there many private players competing in the market. There are
twenty four (annual report 2012-13 issued by IRDA) Private life Insurance companies entered in
the industry. After the entry of these private companies, the market share of LIC has been
considerably reduced. For the past some year’s private companies have launched many
innovations in the industry in terms of products, market channels and advertisement of products,
agent training and customer services etc. This research paper attempts to study the comparative
analysis of LIC & Private Life Insurance Companies in India and analyze the performance of
LIC and private life insurance companies in India.

Scope of the study

The coverage of the study is limited to the comparative analysis of life insurance corporation and
private insurance companies. The research paper tries to analyze the study with primary and
secondary resources.

Objective of the study

● To make comparative analysis of LIC and private insurance companies.

● To analyze the growth of LIC and private companies.

 ● To compare grievance management of LIC and private companies.

● To compare the performance of LIC and private insurance companies in India.

Literature Review

1. Parmasivan, C. (2015). A Comparative Study of Public and Private Life Insurance

Companies in India. IJMRR Vol.1, Issue 7, Pp.15-18
Dr.Parmasivan (2015) made a comparative study of public and private life insurance
companies in India. To measure financial performance solvency ratio, current ratio and
debt equity ratio have been calculated. The study indicates that LIC continues to
dominate the sector. Private sector insurance companies used the new business channels
of marketing when compared with LIC. Selling more unit-linked plans helps private
insurers grab market share from LIC. Solvency ratio of private insurers was much better
than LIC. Servicing of
death claims was better in case of LIC as compared to private life insurers.

2. Gairola, V. (2016) A Comparative Study of Public and Private Life Insurance

Companies. IJMBS Vol. 6, Issue 4, Pp.15-18.
Dr. Vikas Gairola (2016) compared public and private life insurance companies in post
liberalization era. The study compares public and private sector life insurance companies
in terms of new policies issued, total premium income and market share. The study shows
that private life insurers put efforts to improve its performance year after year and
affected the LIC in many ways. To overcome and compete with this situation LIC
introduced new and attractive insurance plans, put efforts for better customer relationship
management and effective advertising. There is very huge potential in life insurance
sector as the population of India is very huge and still there is untapped life insurance
market.
 3. Mishra, K. (2015). A Comparative Study of Public and Private Life Insurance Companies
in India. IJRFM Volume 5, Issue 9, Pp.16-19
Krishna (2015) made a comparative study of public and private life insurance companies
in India. For the purpose market share, fresh business premium, number of new policies
issued and total life insurance premium compared. In terms of all parameters LIC is
dominating. The study concluded that the insurance companies have to ensure quality
products at a competitive price, companies can lower the price of the product by reducing
the cost. Their survival depends upon their performance in profitability, productivity,
efficiency and service quality

4. Sharma and Chowhan (2013) in the research paper "A Comparative Study of Public &
Private Life Insurance",
The researcher made an attempt to analyse the performance of public and private life
insurance companies in India. Researches concluded that with the entry of private
players, the competition is becoming intense. In order to satisfy the customers, every
company is trying to implement new creations and innovative product characteristics to
attract customers.

Research Problem

Insurance industry in India has come a long way from the day of its inception. In today's scenario
of a well-regulated life insurance market under the hawkish eye and strong governance of
Insurance Regulatory and Development Authority of India (IRDAI), there are still doubts and
worries in the minds of the customers, especially when it comes to trusting the private players
with their lives and investments.

Research Questions

1. Whether the safety of the investment made in life insurance companies and private
companies shall be protected by the regulatory body?
2. Whether the LIC term insurances percentage is more than the private insurance?
 3. What makes the private insurance companies safe or risk for investments?

Hypothesis

The private insurance companies always tend to reject customer's claims more than Life
insurance companies.

Research Methodology

For the purpose of the research problem the researchers has opted Doctrinal Research Method.
The author has studied relevant literature available in books, articled, journals and case laws.

Tentative Chapterization

1. Introduction
1.1 Background
1.2 Objective and scope
1.3 Research Question
1.4 Hypothesis
1.5 Research Methodology
2. Insurance Act, 1938
3. The Life Insurance Corporation of India: 1956
4. Role and functions of LIC
5. Insurance Sectors Reforms
6. LIC compares with private insurers
7. Suggestions & Conclusion

Bibliography

● Primary sources

1. Insurance act 1938

 2. The LIC of India 1956
3. Insurance regulatory & development authority act(IRDA) 1999

● Secondary resources

1. Parmasivan, C. (2015). A Comparative Study of Public and Private Life Insurance

Companies in India. IJMRR Vol.1, Issue 7, Pp.15-18
2. Gairola, V. (2016) A Comparative Study of Public and Private Life Insurance
Companies. IJMBS Vol. 6, Issue 4, Pp.15-18.
3. Mishra, K. (2015). A Comparative Study of Public and Private Life Insurance
Companies in India. IJRFM Volume 5, Issue 9, Pp.16-19

Webliography

● https://www.medindia.net

● http://www.sgrrits.org/

● http://dailytools.in/insuranceknowledge/LICAct

● https://www.scribd.com

● https://shodhganga.inflibnet.ac.in