Life Insurance Corporation of

India (LIC)
Presented by :

Ashokk Remi John

Ashish Sasidharan
Ashutosh Kumar Singh
Avinash Jaiswal
Avinash S

Subject: CBE
Date 17th October 2018
NBFCs
• A Non Banking Financial Company (NBFC) is a company registered under the
Companies Act, 1956 of India, engaged in the business of loans and advances,
acquisition of shares, stock, bonds, hire-purchase insurance business or chit-fund
business.
• It does not include any institution whose principal business includes agriculture,
industrial activity or the sale, purchase or construction of immovable property.

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NBFCs
• Non-banking finance companies (NBFCs) have scripted a great success story. In terms of financial
assets, NBFCs have recorded a healthy growth—a compound annual growth rate (CAGR) of 19%
over the past few years and expected to reach nearly 18% by 2018–19.

• The aggregate balance sheet size of the NBFCs sector expanded by 14.5% during 2016-17 as
compared to 15.5% during 2015-16.

• Whereas the banking sector has had an average NPA of around 10% in 2016-17, NBFCs have done
a better job of managing risk by capping the sector’s NPAs at around 4.5%.NPAs(10.3 lakh Crore)

• Overall, NBFCs were on their way to setting a record of a robust growth of 19–22% CAGR in retail
credit to reach an AUM of approximately 6.044 trillion INR by March 2017. 3
Difference between NBFCs and
Banks

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HISTORY
• 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.

• The Life Insurance Corporation of India was founded in 1956 when the Parliament of India passed
the Life Insurance of India Act that nationalised the private insurance industry in India. Over 245
insurance companies and provident societies were merged to create the state owned Life
Insurance Corporation.
Contd…
• 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 1 st September of that year.

• Life Insurance Corporation of India (LIC) is an Indian state-owned insurance group and
investment company headquartered in Mumbai. It is the largest insurance company in India with
an estimated asset value of ₹2,854,193 crore(2017).

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Key Managerial Personnel

Shri V K Sharma(Chairman)

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Logo,Tagline & USP
LOGO

TAGLINE Yogakshemam Vahamyaham

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OVERSEAS OPERATION
A. Foreign Branches
LIC has three off-shore office at Fiji, Mauritius and U.K.

B. Foreign Joint Venture Companies

• Life Insurance Corporation Bahrain
• Life Insurance Corporation (Nepal) Ltd
• Life Insurance Corporation (Lanka) Ltd
• Kenindia Assurance Company Ltd.
• Saudi Indian Company for Co-operative Insurance
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Mergers and acquisition
• LIC board approved the acquisition of up to 51% stake in IDBI Bank
• LIC has been looking to enter the banking space by acquiring a
majority stake in IDBI Bank as the deal is expected to provide business
synergies.
• LIC has recently tied up with Corporation Bank and Vijay Bank for
distribution of its products.

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Market share of the organization

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• Gross premiums written in India reached ₹ 5.53 trillion (US$ 94.48 billion) in FY18,
with ₹ 4.58 trillion (US$ 71.1 billion) from life insurance and ₹ 1.51 trillion (US$
23.38 billion) from non-life insurance. Overall insurance penetration (premiums as
% of GDP) in India reached 3.69 per cent in 2017 from 2.71 per cent in 2001.
• In FY19 (up to August 2018), premium from new life insurance business increased
6.20 per cent year-on-year to ₹ 755.88 billion (US$ 11.28 billion). In FY19 (up to
July 2018), gross direct premiums of non-life insurers reached ₹ 49,067.47 crore
(US$ 7.32 billion), showing a year-on-year growth rate of 13.91 per cent.

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Strengths
• Largest state-owned life insurance company in India, and also the
country's largest investor.
• LIC has a strong brand image in India
• LIC has a huge fund base of around 150 billion USD which makes LIC -
India’s biggest investor.
• LIC has around 13,37,064 individual agents, 242 Corporate Agents, 89
Referral Agents, 98 Brokers across India who cover each nook and
corner of the country.
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Weaknesses
• It has an image of a Government agency and hence lacks innovation.
• Poor advertisement strategy.
• LIC has a huge employees strength and most of them work from their
own setups.
Opportunities
• Online Services
• Technology is improving to the point that paperless transactions are
available.
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Threats
• Entry of new NBFCs in the sector.
• With privatization of insurance, LIC has lost its older glory and today
faces stiff competition from private insurance players who have
brought in more glamour into the industry.
• With every new government the fiscal and monetary policies change
with the result that policies need to be reworked accordingly.

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Porter’s Five Force Model

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Political Factors:
• Increased service tax on premium
• Ending of Government Monopoly.
• Increase in FDI Limit.
Economic Factors:
• Increase In Gross domestic saving
• Contribution to country’s GDP.
• More Competition. 20
Social Factors:
• India has a diverse population mix. About of which 250-300 million are middle
class family. Only 22% have insurance. Hence a major segment is untapped.
• Job Opportunities in Insurance Sector.
Technological Factors :
• Online Services.
• IVRS
• Policy status and Payment of premium through Internet.

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Legal Factors:
• IRDA Act 1999 : IRDA has duty to promote, regulate and ensure orderly
growth of insurance and re-insurance business in India.
• The Insurance Laws Act 2015: Its aim is to boost insurance sector in india.
Environmental Factors:
• The insurance industry prices products based on past loss experience,
relying on statistics and probabilities.
• Insurers demand higher premium with the change of global environment.
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Market Capitalization
• LIC’s share has fallen to 67.32% as of March this year from
75.44% in March 2014. This means that during these five
years, more and more individuals preferred private sector
insurers over LIC.
• The insurance behemoth’s share in the number of policies
(both group and individual) has fallen to 74% as of March
this year from 84% five years ago. What this means is that
LIC is losing customers hand over fist to private sector
insurers.

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 Financial Performance
• CASH & CASH EQUIVALENTS AT THE END OF THE YEAR
2016-2017 2017-2018 Decreased
Rs.3274216.45 lakhs Rs.2269356.02 lakhs 69.30%

• Profit on sales
Q3 of 2017 Q3 of 2018 Increased
Rs.35.95 billion Rs.75.5 billion 110%

• Premium revenue
Q3 of 2017 Q3 of 2018 Increased
Rs.565.7 billion Rs.680.3 billion 20%

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Thankyou

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