Life Insurance Corporation of India Share Price

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was founded on September 1, 1956, under the Life Insurance Corporation Act, 1956. It began operations after obtaining a Certificate of Registration on September 20, 1956, issued by the Controller of Insurance. In line with the Insurance Act, LIC was granted permission to engage in the life insurance business in India and abroad. Over the years, the company has expanded its services, covering various life insurance sectors, including individual life insurance, group insurance, health insurance, pension plans, and micro-insurance products, making it the largest life insurer in India.

The organisation underwent significant regulatory changes in the 2000s. Notably, LIC acquired the Certificate of Registration from the Insurance Regulatory and Development Authority of India (IRDAI) on January 1, 2001, which was renewed annually until the process was discontinued in December 2014. Since then, LIC has been compliant with the IRDAI regulations, which govern insurance policies and practices in India. The company is also subject to the IRDA Act, 1999, ensuring that its operations are in line with the country's insurance industry standards.

LIC's Business Portfolio

LIC's business encompasses a wide range of insurance products and services. These include:

• Individual Life Insurance
• Group Insurance
• Participating & Non-Participating Policies
• Pension Plans
• Gratuity and Superannuation Schemes
• Unit-Linked Insurance Products (ULIPs)
• Health Insurance
• Micro Insurance

With its extensive product portfolio, LIC caters to the needs of both urban and rural populations. The company has introduced several innovative products over the years, including Jeevan Akshay, Jeevan Shanti, and Bima Ratna, which have been well-received in the market.

Milestones in LIC's Journey

Since its inception, LIC has achieved numerous milestones. Some of the key moments in its journey are listed below:

• 1956: LIC established foreign branches in Fiji and Mauritius.
• 1960: The first foreign branch was established in the United Kingdom.
• 1963-1964: LIC became a pioneer in the Indian insurance industry by installing computers in Mumbai and Kolkata to enhance operational efficiency.
• 1989: LIC expanded its portfolio with the establishment of LIC Housing Finance Limited and LIC Mutual Fund.
• 1999: It launched operations in Qatar.
• 2000: LIC extended its services to Nepal through a subsidiary.
• 2008: The company introduced LIC Cards Services Limited, providing credit card services.
• 2019: LIC acquired a 51% stake in IDBI Bank, marking its entry into the banking industry.

Financial Performance

• Profit After Tax (PAT): LIC reported a profit after tax of INR 40,676 crore for FY 2024, compared to INR 36,397 crore in FY 2023, indicating a year-over-year growth.
• Total Premium Income: The total premium income for FY 2024 was INR 4,75,070 crore, showing a slight increase from INR 4,74,005 crore in FY 2023.
• New Business Premium Income (Individual): The new business premium income for individual policies was INR 57,716 crore in FY 2024, a slight decrease from INR 58,757 crore in FY 2023.
• Renewal Premium (Individual): This segment saw a growth of 5.15%, with renewal premiums increasing to INR 2,46,052 crore from INR 2,34,006 crore in the previous year.
• Number of Policies Sold (Individual): LIC sold 2,03,92,973 individual policies in FY 2024, slightly down from 2,04,28,937 policies in FY 2023.
• Indian Embedded Value (IEV): The IEV increased by 24.92% to INR 7,27,344 crore.
• Value of New Business (VNB): The VNB increased by 4.66% to INR 9,583 crore.
• Assets Under Management (AUM): AUM increased by 16.48% to INR 51,21,887 crore.
• Market Share: LIC maintained a market share of 38.44% in the individual business and 72.30% in the group business.

Expansion into Global Markets

Over the years, LIC has expanded its operations beyond India. Through these foreign branches, LIC offers life insurance products tailored to meet the needs of the local population, while also catering to the Indian diaspora.

In recent years, LIC has further expanded its international footprint by setting up subsidiaries and forging strategic partnerships in countries such as Singapore, Bangladesh, and Sri Lanka. Its joint ventures with local companies have helped it penetrate new markets and diversify its revenue streams.

Technological Advancements and Digital Initiatives

LIC has embraced technology to enhance customer experience and streamline its operations. Some of the key technological initiatives taken by the corporation include:

• 1998: Introduction of IVRS and information kiosks to provide policyholders with easy access to information.
• 2003: LIC launched Varishtha Pension Bima Yojana, marking the introduction of its first premium payment facility through ATM.
• 2010: The company introduced online paperless underwriting and SMS-based services for policyholders.
• 2017: Premium payments through digital wallets and UPI were introduced, catering to the growing demand for digital payment options.
• 2020: The corporation launched an online and paperless process for micro insurance policies and introduced various customer-friendly measures during the COVID-19 pandemic.
• 2022: LIC introduced a mobile application for agents, facilitating easier customer acquisition and policy management.

Comparison with Other Indian Insurers

In comparison to other leading insurance companies like HDFC Life and SBI Life Insurance, LIC holds a dominant market share of around 66.2% in terms of new business premiums as of FY 2022-23. While private players have made strides in terms of profitability and digital transformation, LIC continues to benefit from its extensive distribution network, government backing, and strong brand equity.

However, private insurers have been quicker to adopt InsurTech solutions, which has helped them streamline operations and improve customer engagement. For example, HDFC Life has introduced several innovative products, such as Click2Protect, a fully digital term plan that can be purchased online without any paperwork. Additionally, SBI Life has leveraged its banking channels for cross-selling insurance products.

Challenges and Opportunities

Despite its significant market share, LIC faces several challenges, including:

• Competition from Private Insurers: LIC needs to focus on introducing more innovative products to compete with private insurers.
• Digital Transformation: While LIC has made strides in digitalization, it still lags behind some of its competitors in terms of digital offerings and customer experience.
• Profitability: LIC's profitability margins are lower compared to private sector players, who have been able to generate higher returns on equity by focusing on more profitable segments.

On the flip side, LIC has numerous opportunities to grow, particularly in the health insurance and pension product segments. With more people becoming aware of the benefits of health and life insurance, LIC's vast distribution network and strong brand will help it capture a larger share of these growing markets.

Outlook Overview

LIC has come a long way since its inception in 1956. With its vast distribution network, strong brand, and government backing, it continues to dominate the Indian life insurance market. However, to maintain its leadership position in an increasingly competitive market, LIC must focus on innovation, digital transformation, and improving profitability. The road ahead is filled with challenges, but also immense opportunities for growth, both in India and abroad.