When it was incorporated on September 1, 1956, insurance behemoth Life Insurance Corporation of India (LIC) started off with an initial capital of Rs 5 crore. On its 61st birthday, LIC collects more than Rs 340 crore as new premium every single day (as per FY17 premium data).
According to data from the Life Insurance Council, LIC collected new premiums of Rs 124396.27 crore in FY17 which roughly translates to a whopping Rs 340 crore a day.
When it comes to the number of policies, LIC sold 20,131,500 policies in the last financial year (FY17) which means that the insurer sold almost 55,155 policies every single day of the year. Today, the insurer has assets of Rs 25 lakh crore with a life fund to the tune of Rs 2,323,802.59 crore.
Often labelled as a conservative organisation, LIC slowly worked its way into the top and refuses to budge from its position, both in terms of market share and premium collected, even as 23 other private life insurers have been giving stiff competition to the state-owned player.
In a statement, LIC said that they started with 168 offices in 1956 and today with over 4897 offices it has 1.15 lakh employees, 11.31 lakh agents, 29 crore plus policies in force. LIC’s market share in terms of number of policies was 76.09 percent, garnering over 20 million new policies as on March 31, 2017.
In 2016-17, LIC of India settled 215.58 lakh claims amounting to Rs 1,12,700.41 crore. As per the Insurance Regulatory and Development Authority of India (IRDAI), LIC has the best claims settlement ratio with 98.34 percent maturity claims and 99.63 percent of death claims in FY17.
An insurer which started as a small entity aiming to tap the insurable population of India is popularly called the ‘Big Brother’ in the sector, not just because of its size in the insurance market, but also because it is the largest institutional investor in the country’s equity markets.
The largest employer of insurance agents in the country, LIC has still relied on this man-force even as its peers in the industry have turned to banks and online channels for selling insurance. No wonder, in terms of brand loyalty, it has topped charts for a long time.
Often called a slow mover in terms of technology, the insurer is also slowly catching up with private sector peers in terms of online products with policies generating almost 2X more volumes than other insurers.
Former Chairman SB Mathur had also admitted that initially computerization progressed at a snail's pace, and LIC took its first step in the 1960s. "There was just one computer in the Mumbai office, a Classic IBM 1040. Another computer was sent to our second biggest office in Calcutta. However, the CPM government did not let us use it," he had said.
Being one of the first users of technology also had its ill-effects. When Mathur was heading the Gwalior branch, if a computer developed some problem, they had to call engineers from Delhi.
They would take the Shatabdi Express the next morning and were most likely to dismiss the glitch as a software problem. Then they had to call for a software engineer, who was equally less likely to accept it as a software issue. Overall, it would take three to four days to solve one computer problem.
LIC was operating at a time when death was the scariest event in an individual’s lifecycle and convincing an individual or family to plan for ‘death’ was a big no-no. With help from creative agencies, the ‘Zindagi ke saaath bhi, zindagi ke baad bhi’ campaign helped them bridge the gap and has stayed on as their most iconic campaigns.
While it is established as a commercial organisation, LIC also set up the LIC Golden Jubilee Foundation in 2006 for relief of poverty or distress, advancement of education, medical relief and advancement of any other object of general public utility. It has supported multiple projects with support of non-governmental organisations.
Touted as the white knight in the government’s disinvestment schemes, a tag which LIC constantly denies, the market is waiting for the next big event in the insurer’s life history, its initial public offering (IPO). Not only would it be the most valued company if listed, it would be the largest ever IPO by a company. Whether or not it will bite the bullet still remains to be seen.
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