Life Insurance Corporation of India (LIC)

The Life Insurance Corporation of India (LIC) is a public multinational life insurance company headquartered in Mumbai. As India's largest insurance provider and institutional investor, LIC manages assets worth INR 52.52 trillion (US$660 billion) as of March 2024. It operates under the ownership of the Government of India and is overseen by the Ministry of Finance.

Established on 1 September 1956, LIC was formed through the nationalisation of the insurance industry when the Parliament of India passed the Life Insurance of India Act. This historic move merged over 245 insurance companies and provident societies into a single, unified entity. Since then, LIC has become a cornerstone of India's financial sector, offering a wide range of life insurance products and services to millions of policyholders.

As of 2019, LIC served 290 million policyholders and managed a total life fund of INR 28.3 trillion. In the fiscal year 2018-19, LIC sold policies worth INR 21.4 million and settled 26 million claims, highlighting its extensive reach and efficiency. In 2022, LIC was ranked 98th on the Fortune Global 500 list, with a revenue of INR 775,283 crore (equivalent to INR 8.2 trillion or US$100 billion in 2023) and a profit of INR 4,415 crore (equivalent to INR 47 billion or US$590 million in 2023).

LIC's success is built on its commitment to providing affordable and reliable life insurance to every corner of India. The corporation offers a broad range of products, including life insurance, health insurance, and investment management services. LIC also plays a crucial role in supporting the Indian economy through responsible investments and financial inclusion initiatives. With a robust network of branches, satellite offices, and online services, LIC continues to uphold its mission of ensuring financial security and improving the quality of life for its policyholders across the nation.

Life insurance as we know it today was introduced to India by the British in 1818. The first life insurance company on Indian soil was the Oriental Life Insurance Company, established in Calcutta by Europeans. Initially, these companies catered exclusively to the European community, leaving Indian natives uninsured. However, with the efforts of notable individuals like Babu Muttylal Seal, foreign life insurance companies began to insure Indian lives, albeit at higher premiums due to perceived risks.

The first Indian life insurance company, the Bombay Mutual Life Assurance Society, was founded in 1870. It was the first to offer insurance to Indians at standard rates. This marked the beginning of Indian-run insurance companies, which aimed to promote social security and insurance awareness among the Indian population. Companies like the Bharat Insurance Company, established in 1896, were driven by nationalistic sentiments. The Swadeshi movement of 1905-1907 further encouraged the establishment of more Indian insurance companies, including United India in Madras, National Indian and National Insurance in Calcutta, and Co-operative Assurance in Lahore.

Before 1912, India had no laws to regulate the insurance industry. The Life Insurance Companies Act and the Provident Fund Act were passed in 1912, marking the first step towards regulation. These laws required companies to have their premium rate tables and periodic valuations certified by an actuary, but they still favoured foreign companies over Indian ones.

The early 20th century saw significant growth in the Indian insurance industry. By 1938, the number of insurance companies had grown from 44 to 176, with total business-in-force increasing from Rs.22.44 crore to Rs.298 crore. However, this rapid growth also led to the emergence of financially unstable companies, prompting the enactment of the Insurance Act of 1938. This Act provided strict state control over both life and non-life insurance businesses.

Calls for the nationalisation of the life insurance industry grew louder over time, culminating in 1944 when a bill to amend the Life Insurance Act was introduced in the Legislative Assembly. However, it wasn't until 19 January 1956 that life insurance in India was nationalised. At the time, there were 154 Indian insurance companies, 16 foreign companies, and 75 provident societies operating in the country. Nationalisation occurred in two stages: first, the management of these companies was taken over by an ordinance, and later, ownership was transferred through a comprehensive bill.

The Indian Parliament passed the Life Insurance Corporation Act on 19 June 1956, leading to the creation of the Life Insurance Corporation of India (LIC) on 1 September 1956. The goal was to spread life insurance widely, especially in rural areas, and provide adequate financial cover at a reasonable cost.

In its early years, LIC operated with five zonal offices, 33 divisional offices, and 212 branch offices. Over time, the need for more branches became apparent, leading to a major reorganisation. This reorganisation saw the establishment of numerous new branches, which took over various servicing functions and became accounting units. This restructuring significantly improved LIC's performance. From Rs.200 crore of new business in 1957, LIC crossed Rs.1000 crore by 1969-70 and Rs.2000 crore within the next decade. By 1985-86, LIC had crossed Rs.7000 crore in new policies.

Today, LIC operates with 2048 fully computerised branch offices, 113 divisional offices, eight zonal offices, 1381 satellite offices, and its corporate office. LIC's Wide Area Network connects all 113 divisional offices and branches through a Metro Area Network. LIC has also partnered with banks and service providers to offer online premium collection facilities in selected cities. Customer conveniences include ECS and ATM premium payment options, online kiosks, IVRS, and Info Centres in major cities. LIC has also launched SATELLITE SAMPARK offices to bring services closer to customers, with digital records enabling convenient servicing.

Despite the liberalisation of the insurance market, LIC remains the dominant life insurer in India, consistently surpassing its performance records. LIC issued over one crore policies during the current year, achieving a milestone of 1,01,32,955 new policies by 15 October 2005, reflecting a healthy growth rate of 16.67% over the previous year. From its inception to the present day, LIC has set numerous records in the life insurance industry. The same motivations that inspired the founders of the insurance industry in India continue to drive LIC today, as it strives to bring protection and financial security to as many homes as possible, helping individuals safeguard their families' futures.

Key Milestones in Life Insurance in India

• 1818: The Oriental Life Insurance Company, the first life insurance company in India, begins operations.
• 1870: The Bombay Mutual Life Assurance Society, the first Indian life insurance company, is established.
• 1912: The Indian Life Assurance Companies Act, the first statute to regulate life insurance, is enacted.
• 1928: The Indian Insurance Companies Act is passed to enable the government to collect statistical information about life and non-life insurance businesses.
• 1938: The Insurance Act consolidates and amends previous legislation to protect the interests of the insuring public.
• 1956: The central government nationalises 245 Indian and foreign insurers and provident societies, forming LIC with a capital contribution of Rs.5 crore from the Government of India.

Key Milestones in General Insurance in India

• 1850: The Triton Insurance Company Ltd., the first general insurance company in India, is established in Calcutta by the British.
• 1907: The Indian Mercantile Insurance Ltd., the first company to transact all classes of general insurance business, is set up.
• 1957: The General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for fair business practices.
• 1968: The Insurance Act is amended to regulate investments, set minimum solvency margins, and establish the Tariff Advisory Committee.
• 1972: The General Insurance Business (Nationalisation) Act nationalises the general insurance business, consolidating 107 insurers into four companies: National Insurance Company Ltd., New India Assurance Company Ltd., Oriental Insurance Company Ltd., and United India Insurance Company Ltd., with GIC incorporated as a co

The Life Insurance Corporation of India (LIC)'s mission is to provide inexpensive and dependable life insurance to all corners of India. LIC's goal is to provide financial security for individuals and families by delivering a wide choice of insurance products suited to their specific needs. Recognising the importance of financial security, LIC is committed to making life insurance accessible and understood to everybody, with a particular emphasis on underserved and rural regions. LIC works to increase these communities' financial well-being and resilience, providing a sense of security and stability. Furthermore, LIC is dedicated to providing exceptional customer service and support while always improving its services to better serve its customers. Through innovation, ethics, and a profound knowledge of customer needs, LIC seeks to uphold its legacy as a trusted and dependable life insurance provider, contributing to the overall socio-economic development of India.

The vision of the Life Insurance Corporation of India (LIC) is to be a world-class organisation that provides innovative and comprehensive insurance solutions. LIC aims to be the most trusted and preferred life insurance provider in India, known for its focus on customers and ethical practices. They strive to improve the quality of life for their policyholders by ensuring financial security and supporting economic growth through responsible investments. LIC is committed to delivering value and satisfaction to its customers, employees, and stakeholders. By adopting the best practices in the industry and leveraging technology, LIC seeks to create a positive impact on society and contribute to the nation’s progress. LIC envisions a future where every individual and family in India has access to reliable life insurance, enabling them to achieve financial stability and peace of mind. Through continuous innovation and a strong commitment to service excellence, LIC aspires to uphold its legacy and set new benchmarks in the insurance sector.

The Life Insurance Corporation of India (LIC) offers a wide range of products and services designed to meet the diverse needs of its customers. These include traditional life insurance policies, term life insurance, unit-linked insurance plans (ULIPs), endowment policies, and money-back policies. LIC also provides whole life insurance, which ensures lifetime coverage, and retirement plans that help individuals secure a stable income post-retirement.

LIC's life insurance products cater to various needs and life stages, offering financial security and peace of mind to policyholders and their families. Term life insurance plans provide high coverage at affordable premiums, ensuring financial protection in the event of an untimely demise. ULIPs combine the benefits of insurance and investment, allowing policyholders to build wealth while enjoying life cover. Endowment and money-back policies are designed to offer a mix of savings and protection, making them suitable for those seeking financial goals alongside life insurance.

In addition to life insurance, LIC offers health insurance products that provide coverage for medical expenses, ensuring financial support during health crises. These health plans are designed to cover hospitalisation costs, critical illnesses, and other medical expenses, helping policyholders manage their healthcare needs without financial strain.

LIC's investment management services include a range of options such as asset management, risk management, mutual funds, exchange-traded funds (ETFs), index funds, and fund of funds. These services cater to both individual and institutional investors, offering diverse investment opportunities to meet various financial goals. LIC's mutual funds provide options for investors to participate in the equity and debt markets, while ETFs and index funds offer low-cost investment avenues.

To enhance customer convenience, LIC has introduced various online services. Policyholders can make premium payments through ECS (Electronic Clearing Service) and ATMs, ensuring timely payments without the hassle of visiting branches. LIC has also established online kiosks and an Interactive Voice Response System (IVRS), allowing customers to access policy information and services with ease. Furthermore, LIC has set up satellite offices to provide easier access to its services, particularly in rural and remote areas, ensuring that insurance and financial services are within reach for all.