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  • Published on: 14th September 2019
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LIC of India- Journey of Responsibility

Nurturing hopes to Realizing Dreams

Independence was a time of great social and structural change for India. Getting accustomed to the newly acquired freedom, establishing social and political order, providing for the needs of citizens and establishment of sturdy Governance were the most important orders of the day.

It was around the same time that life insurance as a concept gained roots India. There was a huge potential in the market with only a handful of service provider to bridge the gap between demand and supply. Educating people on life insurance and making them aware of the need and extent of coverage were the tasks being faced by early insurance providers operating in India.

Insurance organization established during the British Raj was yet to perfect their operations and achieve a wider coverage of nation's population. Needs  such a higher level of penetration  and economic growth brought about institutionalization  of India through an ordinance in 1956 which imbibed 245 national and foreign insurers in all; 170 Indian and non-Indian insurers and 75 provident societies, into LIC.

With growth of the newly formed India and expanding the reach of life insurance in the mind< LIC began its operations in earnest in September 1956 and began its journey with 5 Zonal Offices, Divisional Offices and 209 Branch Offices. Initial days of operations were met with reluctance from policy buyers to accept life insurance. However, slowly and steadily, life insurance began to find its way into financial planning of people and emerged as smart investment in the long run.

As business continued to expand, need for a larger workforce was intensely felt. Huge potential promised by a large numbers of untapped individuals was one of the primary factors. contributing to an agency model being adopted by LIC. Today the agency force of LIC contributes to a substantial percentage of business and a strong network of over 10.61 lakh successful LIC agents are employed to extend the benefits of life insurance to citizens either not covered by life insurance or having insufficient.

Objectives of LIC

LIC of India works by certain objectives

These objectives are

  Life insurance  to all people at reasonable cost

  Making insurance as an important saving instrument.

LIC over the years – Milestones achieved

In a journey spread across 6 decades, LIC has achieved seven significant milestones over the course of time. A chronological accoutnof the Corportation since its inception enumerates following milestones


1967: First computer installed at Mumbai office and EDP (Electronic Data Processing) department started functioning

1969: LIC crossed the mark of Rs. 1000 crore premiums collected.


1981 : Reorganization of operation to make Branches primary servicing centers.

1982 : Microprocessors introduced in pilot Divisional offices of Delhi, Bangalore and Cuddapah

1985: Sum Assured on new policies crossed Rs. 7000 crore.

1987: Group insurance Scheme to cover ladles agricultural laborers launched   

1988: Social Security Group Scheme launched

1989: LIC International BSC © established in Bahrain.


Late 1990s witnessed new business growing to over 92000 crore worth of Sum Assured abd a remarkable 32% growth in New Business.

1995: Front end computerization started

1997: Intitiaion of branch networking through Metro Area Netwrork

1999: LIC crossed 1 crore policy mark in a single fiscal.

1999- 2000 : Launch of IVRS by LIC


All 2048 branches brought FEAP operation Janashree bima Yojana launched.


The facility to pay premium through internet was introduced . LIC ( Nepal) Ltd. Was launched Intriduction Bima Plus, the list init Linked Plan by LIC. Scholarship Scheme Shiksha Sahyog Yojana launched.


Launch of LIC, call centre also known as the ‘Info Center' and implementation of Corporate Messaging Solution


Premium payment through Kiosks and bank ATMs was introduced. First Branch Office in Muscat was set up LIC (Lanka) ltd. was launched.


LIC grew to a position o market leadership in terms fo number of ULIPs sold. D & B certified LIC as number 1 in Net Wortth and Net Ptofit among Top 500 Indian Companies.


LIC's Enterprise Portal inaugurated in Chennai. LIC was named ‘Super Brand of India'.


LIC sold more than 3 crore Policies in a single fiscal new business rose to 2.89. Lakh Crore Digitalization of policy records.


LIC con tribute about 7% of national GDP.


LIC launched first online immediate annuity product, Jeevan Akshay VI.


Withdrawal of old products and revamping  of Portfolio and as per IRDAI guidelines .


LIC expands international presence to Bangladesh.


Coming to terns with New Market operatives.

Right since its inception, LIC had enjoyed market monopoly. Year after year of unbridled growth an number of policies and turnover soon saw lic rising to become onbe the to Financial institutions in  Indian economy and play a pivotal role in contributing to public welfare through the pool of public funds acquired via insurance premium.

Last decade of 20th century saw Indian economy evolving to a great extent and the first winds of change were seen in the form of  Liberalization.

 Primary objective of Liberalization to ensure competitive forces to govern various fields and insurance sector was among the focus sectors to be opened up.

 Year 2000 saw liberalization reforms coming into effect and with it market was opened to indian and foreign private players in insurance sectors.

 IRDAI( Insurance Regulatory and Development Authority of India was established to regulate affairs of Insurance

 LIC, being the only organization  operating in insurance market since many decades played a supportive role for both IRDAI and competition wiath essential (espectilly mortality) data governing the industry.

 Many changed were brought about in Organization to respond to changing market dynamics.

 Many existing policies were withdrawn impacting first and second year new business premiums. This was countered by a healthy growth of renewal premiums, which sustained LIC.

 One of the most forward thinking changes that LIC adapted was strengthening of its distribution channel which w extended to various source li

Today LIC's network is Operation

LIC - The Nation Builder

Socially and economically diverse population of India shows a marked variance in their financial standing as wll life cover needs. Operating in a vast market and catering to comsumers from all walks of life, LIC has achieved a tremendous feat when it comes to coverage it has gained across the country.In addition to their role as public insurer fro india LIC has always made a strong contribution to national development.

LIC's investment across platforms like Civil Infrastructure, contribution to GDP, development of financial markets and its role as financial institution have been instrumental in national progress through.

In less than 60 years of operations, LIC's contribution towards social welfare and community development is upward of more than 4 L crore.

LIC utilizes public savings invested with them for Civil and Social Infrastructure such as schools, healthcare institutions , vocational training centers, libraries, housing development, electrification , road transport, old age homes and the likes

LIC, through its various subsidiaries is involved in providing various financial services such as pension, housing finances, mutual funds, credit card, care homes, etc.

By means of such investments , LIC ensures financial as well as Socio- economic strength of the nation is maintained and augmented

The mighty, multifaceted force of LIC

There are various aspects of LIC over the years which underline the strength and dominance LIC brings to the insurance business in india. Be it Life Funds pan India and Global presence , sheer volume of numbers when it comes to consumer base, investment, integration of IT in their day to day operation LIC has mastered and bettered all

Here is look at numbers that make LIC a mighty, multifaceted giant in Indian Economy.

 Percentage of Total Claim settled (Maturity + Death Claim) ------ More than 99.75%

 Amount of claim settled -----more than Rs.1,02,000.00 Crore

 Branches 2048 spread across INDIA

 Capital market Investment as on 31.03. 2

 Number of claims settled in 2017-18---

 Subsidiaries  are LIC HFL, Financial Services Limited, LIC Housing Finance Limited, LIC HFL care Homes Limited, LIC Mutual Funds, AMC Limited , LIC card services, Limited , LIC pension fund Limited.

 Presence in more than 14 countries across the world.

 Total Assets Rs. 22,30,378.65 crore

 Total life fund,57,625.38 Crore

 Total premium Income Rs.2,66,225.38

All these parameters succinctly highlight the strength and somince of LIC as one of the largest insurers in the world.

 The Digital Era & challenges it posed

Digital revolution has taken consumers with a whirlwind and has been instrumental in modifying consumer behavior over the past 2-3 decades. There is immense development brought by advent of technology, internet and web service have expanded the world of consumer by leaps and bounds.

With the onset of computer age, LIC had overwhelming task at hand: facing the paradigm altering change and adapting to changing consumer patterns. What made LIC's task even more taxing was their huge costumer based which needed to be digitized.

 Initial progress on digitization was very slow; backend and frontend support systems to be established, networking to be perfected ( local as well as wide are), software to be mastered and so forth.

 During the same time, computers were also passing through an age of evolution with hardware as well as software advancing by the day. All this took a long time to assimilate and perfect.

 Another challenge faced as the  time was initial apprehension of employees towards computerization which was misconceived in loss of jobs.

 With the advent of technology computers have today become an integral part life at LIC

Online transactions have made their way into the habits of Indian consumers and LIC greatly benefitted from the digital reforms introduced. Responses tine as well as reach has increased may fold, while processes and settlement have an improved turn-around time.

The LIC Edge

LIC always enjoys over its counterparts in the industry. While private players continue to grow, a special consideration always given to LIC by the consumers. With an extensive network designed to reach majority of consumers, LIC enjoys the statuys of being among the topmost insurers through out the globe. Some of the factors contributing to continued trust reposed in LIC by consumers are

 One of the lowest outstanding claim ratio in the world

 Prompt settlement of claims

 An extensive network of consumers services and ease of access for premium payments

 Being the forerunner of many innovative initiatives life Pension funds, Micro insurance, etc

 Contribution to the financial health of the country

 LIC offices/service branches in the remotest parts of the country

 Digitized policy records of monumental consumer data base and so forth.

Extensive network of LIC allows consumer the assurance of a branch or a satellite office in the vicinity, no matter how remote their location is. In addition, digitization of records allows prompt and easy access to consumer data and consequently better and faster service. All these factors lend tremendous strength to LIC and contribute to its continued dominance of Indian Insurance market.

Warding off Competition

How LIC does it

Introduction of liberalization in India afforded private insurers and opportunity toi enter the market. These new entrants caused some erosion of LIC's market share in the initial years forcing LIC to adapt at a rapid pace. Throughout its years of existence , LIC had always evolved gradually which posed a challenging situation with the advent of liberalization is the situation demanded  a quick and decisive response.

However, with years of expertise and collective market intelligence, LIC adapted to changing market directives admirably and came back with new initiatioves and counter strategies to regain the lost market share.

Important initiatives which helped LIC to regain market share substantially

 Policy changes with the corporation

 Revamp of product bouquet

 Increased efficiency and service operation

 Swift Digitalization and co centralization of consumer data of consumer data etc.,

 Exponential growth in smaller pockets of the country.

 Another factor contributing to retention of prime spot for LIC in the case of access provided for their consumers.

 LIC has also initiated several customer centric initiatives like Enterprise document Management System, Dedicated portal for customers, etc.,

 New channels like CLIA(Chief Life  Insurance Advisor), Bancassirance and alterntive channels, Direct marketing enhanced the reach and competence which led to further strengthening of the organization.

 \Health insurance is another field giging substantial support to LIC's business.

LIC continuously strives to scan market scenario, attends to changes, foresees, business avenues and realigns itself to sustain. Pioneering products combined with an astute understanding of the market allows LIC to reorganize itself to outperform competition.

Procedures on Salary saving scheme

Under Salary saving scheme, the employee at the time of applying for insurance, normally pays two monthly insurance installments of premium and signs on authority Letter. The subsequent premiums are to be deducted from the salary and paid by the employer to the Life insurance Corporation based on the Letter of Authority given by the employee. In the matter of Recovery and Remittance of premium of premium under Salary Savings Scheme, the procedure to be adopted is explained below:

A. Recoveries form Salaries :

1. As stated above, two installment of premium are collected for all new proposals direct from the proponents and recovery from their salaries  commences only from the third month of entry.

2. For such new entrants in a month a list giving the names of the employees with the letters of authorization are sent by about the 25th of the succeeding month( i.e.) at the end of the month prior to the one in which the recoveries are to commence. This enables the employees to register the request for recovery and to make all preliminary arrangements at your and to arrange for the deduction of premia from the salaries or the concerned employees in the subsequent month.. Recoveries are be effected only from the salaries commencing from the month indicated in the list.

3. These lists and letters of authorization by the employees are the basis for recovery of the premia from their salaries.

4. It is suggested that a Register of such authorization letter be maintained at the employer end for any  reference with regard to the recoveries .For all Government Offices the G.O itself provides for maintenance of such Register ( Form NO. B/C).

5. Once the amount of recovery is taken note of it will be permanent item in the deduction column of the pay Bill unless authority for deduction  is WITH DRAWN. It is better to discourage withdrawals within 3 years as it would amount to heavy loss to the policyholders as the polices acquire Surrender/ Paid-up Values only after 3 years.


6. To enable the employer to remit the amount from the salaries of the employees on the basis of the letters of authorization, LIC regularly send monthly demand invoice in duplicate, with a form of reconciliation. This is being sent before the last day of every month, it is better not to wait for such demand lists to effect the recoveries but to proceed with the deduction on the basis of authorization letters.

7. LIC's demand list will be only in the serial order of the policy numbers. In the case of an institution where there are large number of employees, and if he employer desires to have all the policies of each employer together in our demand list LIC might consider the same provided each employee is allotted a salary roll number and an advice in this regard is sent to LIC. Normally such a facility can ne extended only to institutions where LIC have a minimum of at least 500 policies. However, each case will be considered on its merits.

8. Deductions in each month wi8ll have to be remitted to the Office of the Corporation servicing the employer SSS, within a week from date of making deductions lony with copy of LIC Demand list and reconciliation statement . The Cheque should written as payable to LIC of India and send along with the copy of the invoice of the employer own statement drawn in the form supplied by lic. While checking LIC demand list if the employer find that the recovery gas b it been made for any item, rule through the item, on the original statement and note the reasons for the non-payment against the items in the remarks column. If the employer finds that an addition is to be made, make the addition at the end of the statement giving Policy Number, name ,amount and the reason for addition. If the employee is transferred from one department to another or from one office to the other the name of  the concerned departments and/or the office and the Paying authority code  Number, if available, must be stated.

9. A Consolidated receipt is issued to the employer for the total remittance and thereafter the amount is appropriated to the respective policies at our end.

10. The employer will find from the above that the LIC monthly demand invoice is ONLY for the purpose of your reconciling and sending the collection to lic and NOT For arranging the recovery from salaries. The employer will, Therefore, appreciate that of recovering the premiums there is not need to wait for Demand invoice s from the LIC.

11. As stated above the monthly Demand next by LIC in duplicate is intended ofr reconciliation and payment of collections to LIC. In case employer do not get the demands even at the time of employee payment, although LIC do not anticipate any such instance, some cases of lose in postal transit have been brought to LIC's notice, the collections need not be with held at employer end. They may be sent LIC reconciling with the amount paid for the previous month, giving the additions and for deletion, if any.

C. General.

12. IT is necessary to inform the Corporation when an employee leave the service or it transferred from one office or department to another. While informing the transfers, the name of Office or Department and the one where he was working before must be given.

13. The department will make change in the demand list based on the information received from the employer regarding transfer –in and transfer-out and exite, for which may be specified.

14. In between the date on which the change occurs and the date on which this has been given affected to in out demand, there is likely to be some  time lag.  Therefore, even if the policyholder's name does not appear in the Demand List the regular monthly deduction should be continued as long as the Authority for deduction is not withdrawn by the employee. By doing this only the policy holder's interest be fully protected.

15. IF a person is transferred to any other offices of the employers establishment where the Salary saving scheme is operating, the employee will be entitled to the facility of premium deduction. Information of such transfers must be communicated to LIC at once tp take necessary action .

16. In order to bring the demand updated it is desirable the  employer informs LIC to all the change in the staff immediately they occur. The employer need not wait to incorporate these in the demands as more often. The changes communicate to LIC through involves in a routine manner are receive late and the names of the employees to appear in the wrong invoice in the meanwhile

17. If there is any difficulty, in preparing reconciliation statement or information on any other matter is required, the employer may contact Life Insurance Corporation Branch Manager. .

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