1.

INTRODUCTION

1.1 Insurance Industry

1.1.1 History

The story of insurance is probably as old as the story of mankind. The same instinct that
prompts modern businessman today to secure themselves against loss and disaster existed in
primitive men also. They too sought to avert the evil consequences of fire and flood and loss
of life and were willing to make some sort of sacrifice in order to achieve security. Though
the concept of insurance is largely a development of the recent past, particularly after the
industrial era – past few centuries – yet its beginnings date almost 6000 years. 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. All the insurance companies established during that period were brought up with the
purpose of looking after the needs of European community and Indian natives were not being
insured by these companies. However, later with the efforts of eminent people like Babu
Muttylal seal, the foreign life insurance companies started insuring Indian lives. But Indian
lives were being treated as sub- standard lives and heavy extra premiums were being charged
on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life
insurance company in the year 1870, and covered Indian lives at normal rates. Starting as
Indian enterprise with highly patriotic motives, insurance companies came into existence to
carry the message of insurance and social security through insurance to various sectors of
society. Bharat Insurance Company (1896) was also one of such companies inspired by
nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies.
The United Indian in Madras, National Indian and National Insurance in Calcutta and the Co-
operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative
Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great
poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and
Swadeshi Life (later Bombay Life) were some of the companies established during the same
period. Prior to 1912 Indian had no legislation to regulate insurance business. In the year
1912, the Life Insurance Companies Act, and the provident Fund Act were passed. The Life
Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. But the Act discriminated between
foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business from
44 companies with total business-in-force as Rs.22.44 Crore, it rose to 176 companies with
total business-in-force as Rs.298 Crore in 1938. During the mushrooming of insurance
companies many financially unsound concerns were also floated which failed miserably. The
Insurance Act 1938 was the first legislation governing not only life insurance but also non-
life insurance to provide strict state control over insurance business. The demand for
nationalization of life insurance industry was made repeatedly in the past but it gathered
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momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January, 1956, that life
insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian
companies and 75 provident were operating in India at the time of nationalization.
Nationalization was accomplished in two stages; initially the management of the companies
was taken over by means of an Ordinance, and later, the ownership too by means of a
comprehensive bill.

1.1.2. Liberalization of Indian Economy:

Liberalization of domestic financial market had been common characteristic in many

countries which includes industrially developed countries as well as the developing countries.
However, there is a substantial amount of debate in economic research regarding the benefits
of deregulation. The theoretical rationale for industry deregulation as rooted in neoclassical
economic studies beginning in the 1960s which questioned the merits of economic regulation.
Neoclassical economists tend to support deregulation and often argue that countries should
rapidly deregulate industries and liberalize markets. In the theory, this will promote greater
efficiency, greater professionalism in the market, introduction of more product and services
and increase in the size of market. It is argued that multinationals can also help to create more
consumer confidence and improve market conduct practices. They can also enhance the
stability and image of the industry by encouraging financial transparency and the adherence
to internationally accepted disclosure requirements. In the context of insurance services,
deregulation generally leads to market liberalization.

In India Insurance has a deep-rooted history it finds mention in the writing of Manu (Manu
Smriti) Yagnavalkya (Dharmasastra) and Kautilya (Arthasastra). The writings talk in terms of
pulling of resources that could be redistributed in times of calamities such as fires, floods,
epidemics etc. This was probably precursor to modern day insurance. Ancient Indian history
has preserved the earliest traces of insurance in the form of marine trade loans and carriers
contracts. Insurance in India has evolved overtime heavily drawing from other countries,
England in particular.

As an overview of the Indian Insurance sector it may be said that with largest no of Life
Insurance Policies inforce in the world, Insurance happens to be a mega opportunity in India.
It is a business growing at the rate of 15-20 percent annually & presently is of the order of Rs
450 billion. Together with banking services, it adds about 7% to the country’s GDP. Gross
Premium collection is nearly 2% of GDP & funds available with LIC for investments are 8%
of GDP.

The life insurance market was opened to private players because of low penetration of life
insurance, non availability of customer oriented products, low level of customer satisfaction,
higher premium rates and lack of professionalism on the part of the insurer and a very low
Page | 2
spread of life insurance in the country. In addition, signing of the GATT (General Agreement
on Tariff and Trade) made way for the opening of the insurance sector to global players. The
opening of the Indian insurance sector was aimed at fostering competition and innovation
with greater variety of product and growth of the insurance business. This thesis will
highlight the post liberalization scenario in the life insurance sector in India to see whether
the objective behind the opening of the life insurance have been achieved or on the right
direction towards achieving the objective laid down by the policy makers. There are 24 life
insurers including LIC of India as on 31st December 2016. A well developed & evolved
insurance sector is needed for economic development as it provides long-term funds for
infrastructure development & at the same time strengthens the risk-taking ability. It is
estimated that over the next ten years India would require investments of the order of 1
trillion US $ . The insurance sector, to some extent can enable investments in infrastructure
development to sustain economic growth of the country.

About us

Every day we wake up to the fact that more than 250 million lives are part of our family
called LIC.

We are humbled by the magnitude of the responsibility we carry and realize the lives that are
associated with us are very valuable indeed.

Though this journey started over five decades ago, we are still conscious of the fact that,
while insurance may be a business for us, being part of millions of lives every day for the
past 59 years has been a process called TRUST.

Page | 3
A true saga Of Trust.

Exhibit 1.1 Operation :-We operate all over India

Table 1.1 Milestone of insurance regulation in the 20th & 21st Century

year Significant regulatory events

1912 The Indian Life Insurance Company Act

1928 The Indian Insurance Companies Act

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 1938 The Insurance Act: comprehensive Act to Regulate business in India

1956 Nationalization of life insurance business in India with monopoly awarded to LIC of

India

1972 Nationalization of General insurance business in India with formation of a holding

company General Insurance Corporation

1993 Setting up of Malhotra Committee

1994 Recommendation of Malhotra Committee published

1995 Setting up of Mukherjee Committee

1996 Setting up of (interim) Insurance Regulatory Authority (IRA) Recommendation of the

IRA

1997 Mukherjee Committee report submitted but not made public

1997 The Government gives greater Authority to LIC, GIC and its subsidiaries with regards

to the restructuring of boards and flexibilty in investment norms aimed at channeling

funds to the infrastructure sector.

1998 The cabinet decides to allow 40% foreign equity in private insurance companies and

14% to Non-resident Indians and foreign institutional Investors.

1999 The Standing Committee headed by Murali Deora decides that foreign equity in private

insurance should be limited to 26%. IRA bill is renamed the Insurance Regulatory and

Development Authority bill.

1999 Cabinet clears Insurance Regulatory and Development Authority Bill

2000 President gives Assent to the Insurance Regulatory and Development Authority Bill

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 2002 Establishment of Insurance Regulatory Development Authority (protection of policy
holders interest) Regulations.
2014 IRDA renamed IRDAI i.e., Insurance Regulatory Development Authority of India by
promulgation of Insurance Laws (Amendment ordinance,2014, by the President of India
on Dec 26,2014)

1.2 Company Profile

1.2.1 Mission
“ Ensures and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering
resouces for economic development”

1.2.2 Vision
“A trans-nationally competitive financial conglomerate of significance to societies and Pride
of India”

1.2.3 About Company

The Insurance sector in India is nearly 193 years old and can be termed as in the third phase
of its existence. Today, the life Insurance business ranked 9th among the 156 countries and
the 1share of Life Insurance sector in global market was 2.45 percent in 2009. This chapter
defines the concept of life insurance and gives an overall summary of the long and eventful
journey of Indian life insurance industry –From the British Raj to Monopoly Raj to Swaraj..
Insurance business in India is classified primarily as life Insurance and General Insurance.
Life Insurance is basically associated with risk of human lives. It provides protection to
household against the premature death of its bread winner or income earning member.
Individuals buy life insurance product by paying certain amount of money which is called
premium to the life insurance company for contractual agreements to provide a shield in case
of eventualities. Therefore, Life insurance is a contract under the provision of the respective
national laws or conventions or commercial practices that agree to pay a contracted sum of
money to the person whose life is insured in the event of death or on the happening of any
other event agree upon by the parties to the contract.

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 The journey of Indian Insurance Industry has so far been very eventful in the way that it has
come in full circle from privatization of insurance firms to creation of monopoly and back to
privatization and liberalization. The journey can be divided into three phases viz. pre
nationalization phase (Before 1956), nationalized era (1956-2000) and liberalization era
(2000 onwards). The first phase was the long growth phase before the nationalization of life
insurance and characterized by unfettered market access. In the second phase the entire sector
become state monopoly. The third phase after 2000 was of liberalization and was
characterized by several new players competing with the large public sector giant i.e. LIC of
India. Insurance Regularity and Development Authority (IRDA) has now undertaken the sole
responsibility to control and regulate insurance business.

The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956,
and the Life Insurance Corporation of India was created on 1st September, 1956, with the
objective of spreading life insurance much more widely and in particular to the rural areas
with a reach all insurable persons in the country, providing them adequate financial cover at a
reasonable cost. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart
from its corporate office in the year 1956. Since life insurance contracts are long term
contracts and during the currency of the policy it requires a variety of services need was felt
in the later years to expand the operations and place a branch office at each district
headquarter. Re-organization of LIC took place and large numbers of new branch offices
were opened.

As a result of re-organisation servicing function were transferred to the branches, and

branches were made accounting units. It worked wonders with the performance of the
corporation. It may be seen that from about 200.00 Crore of new Business in 1957 the
corporation crossed 1000.00 Crore only in the year 1969-70, and it took another 10 years for
LIC to cross 2000.00 Crore mark of new business. But with re-organization happening in the
early eighties, by 1985-86 LIC had already crossed 7000.00 Crore Sum Assured on new
policies.

Today LIC functions with 2048 fully computerized branch offices, 113 divisional offices,8
zonal offices,1401 Satellite offices and the Corporate office,1240 mini offices,2169 life
plus,33992 premium points. LIC’s Wide Area Network covers 113 divisional offices and
connects all the branches through a Metro Area Network. LIC has tied up with some Banks
and Service provider to offer on-line premium collection facility in selective cities. LIC’s
ECS and ATM premium payment facility is an addition to customer convenience.

Apart from on-line Kiosks and IVRS, Info centres have been commissioned at Mumbai,
Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other
cities. With a vision of providing easy access to its policyholders, LIC has launched its
SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate anywhere servicing and
many other convenience in the future.

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LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past records.
During the Financial Year 2015-16 LIC has procured 2.05 crore new policies as against 2.02
crore in the previous year registering a marginal growth of 1.23%. As on 15th January 2017,
LIC has achieved total first premium of Rs 27350.67 crore & total no. of policy 1,23,85,968.
During this period LIC has shown huge growth of an individual single premium count i.e., on
First Premium Income 167.75% & on No of Policy (NOP) 35.88%. As on 31st December,
2016 LIC has captured 71.75%. Market share on premium & 74.76% on No of Policy (NOP).

From then to now, LIC has crossed many milestones and has set unprecedented performance
records in various aspects of life insurance business. The same motives which inspired our
forefathers to bring insurance into existence in this country inspire us at LIC to take this
message of protection to light the lamps of security on as many homes as possible and to help
the people in providing security to their families.

1.2.4 Advantages:

1. Life insurance provides an infusion of cash for dealing with the adverse financial
consequences of the insured’s death.
2. Life insurance enjoys favorable tax treatment unlike any other financial instrument.
3. Death benefits are generally income-tax-free to the beneficiary.
4. Death benefits may be estate-tax free if the policy is owned properly.
5. Cash values grow tax deferred during the insured’s lifetime.
6. Cash value withdrawals are treated on a first-in-first-out (FIFO) basis, therefore cash
value withdrawals up to the total premiums paid are generally income-tax free.
7. Policy loans are income tax free.

A life insurance policy may be exchanged for another life insurance policy (or for an annuity)
without incurring current taxation.

1.2.5 Disadvantages:

1. Policyholders forego some current expenditure to pay policy premiums.

Moreover, life insurance is typically purchased for the benefit of others and
usually only indirectly for the insured person.
2. Cash surrender values are usually less than the premiums paid in the first several
policy years and sometimes a policy owner may not recover the premiums paid if
the policy is surrendered.
3. The life insurance purchase decision and the positioning of the life insurance can
be complex especially if the insurance is for estate planning, business situations
or complex family situations.
4. The life insurance acquisition process can be annoying and perplexing (e.g. Is the
life insurance agent trustworthy? Is this the right product and carrier? How can
medical underwriting be streamlined?).

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1.3 SWOT ANALYSIS:
Strengths 1.Largest state owned insurance company in India, and also the
country’s largest investor.
2.Have over 2000 branches across all parts of India and more than
10,00,000 agents.
3.Withy largest fund base it is the biggest investor in India.
4.Has over 1,15,000 employees across in India.
5.According to the Brand Trust Report, LIC is the 8th most trusted
brand of India.
6.LIC has subsidiaries like LIC Housing Finance Limited, LIC Cards
Services Limited, LIC Nomura Mutual Fund, LIC(Nepal)Ltd.
Weaknesses 1.It has an image of a Government agency and hence lacks innovation.
2.Being a Government agency, red tape and bureaucracy causes
problems.
3.Managing a huge work force during economic crisis meant
overburdened due to salaries.
Opportunities 1.Use of Technology to provide effective services to cater to
urban population.
2.Government Schemes implementation.
Threats 1.Economic crisis.
2.Entry of new NBFCs in the sector.
3.Varying Govt policies.

1.4 Awards Won:

 We enlist some of the recent awards received by LIC :

 Outlook Money NDTV profit—“Best Life Insurer Award “ was conferred upon
LIC.
 LIC has also won the “Golden Peacock Award” for Excellence in Corporate
Governance “Web 18- Genius of the Web Award” was also conferred on us for
the best website in Insurance Category.
 Adjudged “Number One Service Brand” in India by Economic Times and AC
Nielsen ORG Marg for the year 2007 for the fourth consecutive year.
 Award for “Customer and Brand Loyalty” in the Insurance Sector.
 LIC adjudged as “Best Life Insurance Company of the year “-at the Second
NDTV profit Business Leadership Awards-2007.
 LIC adjudged the “Most Preferred Life Insurance Company of the year” at the
CNBC Awaaz Consumer Awards 2007 third time in succession.
 Awarded Reader Digest’s “Trusted Brand” 2006 (voted by consumers) as well
as 2007. Largest Financial Institutional Investors-both in equity market and term
loans.

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  LIC-An Institution Builder promoting many financial and insurance institutes
like NSE, NCDEX, LIC Mutual Fund, Stock Holding Corporation of India,
National Insurance Academy, Insurance Institute of India etc.
 LIC is the second largest PC user in the country.
 We have in our basket of different plans catering to the changing needs of
different segment of the society-basic insurance plans (whole life, endowment
and money back), Term Assurance Plans, Pension Plans, Capital market linked
Plans etc.

1.5 Our New Products :

1) Endowment Type Plans:-

 New Endowment Plan (Table 814)
 New Jeevan Anand (Table 815)
 Jeevan Raksha (Table 827)
 Limited Premium Endowment (Table 830)
 Jeevan Lakshya (Table 833)
 Jeevan Laabh (Table 836)
 Jeevan Pragati (Table 838)
 Adhaar Stambh (Table 843)
 Adhaar Shila (Table 844)

2) Money Back Type Pans:-

 New Money Back 20 Years (Table 820)
 New Money Back 25 Years (Table 821)
 Bima Diamond (Table 844)
 Jeevan Umang (Table 845)
3) Children’s Plan:-

 New Children’s Money Back Plan (Table 832)

 Jeevan Tarun (Table 834)

4) Single Premium Plan:-

 New Bima Bachat (Table 816)
 Single Premium Endowment Plan (Table 817)

5) Term Plans:-
 Anmol Jeevan - || (Table 822)
 Amulya Jeevan-|| (Table 823)

6) Pension Plans :-
 Jeevan Akshay- V| (Table 189)
 New Jeevan Nidhi (Table 818)
 PMV Vandhana Yojna (Table 842)

7) ULIP Plans:-
 New Endowment Plus (Table 835)
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 8) Health Plans :-
 Jeevan Arogy (Table 904)

Table 1.7 IRDA Authorized Life insurers:

S.No NAME OF THE NAME OF THE NAME OF THE TELEPHONE NO./FAX

COMPANY PRINCIPAL APPOINTED NO./ E-MAIL & WEB
OFFICER ACTUARRY ADDRESS
1 Bajaj Allianz Life Mr Anuj Agarwal Dhulipala Tel:020-66026777
Insurance Company SAISRINIVAS Fax:020-66026789
Limited.
GE Plaza, Aliport Road
, Yerawada Pune
411006
2 Birla Sun Life MrPankajRazdan ANIL KUMAR Tel:02266917777
Insurance Co.Ltd MD & CEO SINGH Toll free:18002707000
Reg. Office: One India
Bulls Centre ,Tower 1,
16th floor, Jupiter Mill
Compound, 841,
SenapatiBapatMarg,
Elphinstone Road,
Mumbai-400013.
3 HDFC Life Insurance Mr.AmitabhChaud Mr.SrinivasanPa Tel:022-67516666
Co.Ltd hry rthasarathy
19th Floor,
LodhaExcelus , Apollo
Mills Compound,
N.M.Joshi Road,
Mahalaxmi,
Mumbai-400011
4 ICICI Prudential Life Mr.Sandeep SatyanJambunat Tel:02240391600
Insurance Co.Ltd Bakshi han Fax no:02266622031
ICICI Prolife Towers ,
1089, Appa saheb
Marathi Marg, Prabha
devi,
Mumbai 400025
5 Exide Life Insurance Mr. Kshitij Jain Mr.B.N.Ranagar Tel:080-25328000
Company Limited ajan Fax:080-25559764
ING Vysya Home,
5thFloor, #22 Mahatma
Gandhi Road
Bangalore-560001.
6 Life Insurance Mr.S.K.Roy P K ARORA Tel:022-66598000
Corporation Of India
Yogakshema, Jeevan
Bima Marg, Post Box
Page | 11
 No.19953 Mumbai
400021
7 Max Life Insurance Co Shri Rajesh Sud Mr. Jose Tel:0124-2561717
Ltd Chathuparambil Fax:0124-2561764
11th Floor, DLF Squre, John
Jacaranda Marg, DLF
City, Phase-II,
GURGAON 122002
8 PNB Metlife India MrTarunChugh P.K.Dinakar Tel:080-26438638
Insurance Co Ltd. MD & CEO Fax:080-26521970
Brigade Seshamahal, Toll free no.1800-425-6969
No.5, Vami Vilas Road tchugh@pnbmetlife.com
, Basavanagudi,
Bangalore-560004
9 Kotak Mahindra Old Mr.G.Murlidhar Mr.Sunil Sharma Tel:022-66057777
Mutual Life Insurance Fax:022-67425649/50
Limited
4th Floor,
VinayBhavya
Complex, 159A, CST
Road Kalina,
Santacruz(East),
Mumbai:400098
10 SBI Life Insurance Co Mr.AtanuSen Mr.SubhenduBal Tel:022-61910011
Ltd Fax:022-56621471
Nataraj, M.V.Road&
Western Express
Highway
Junction,Andheri(East)
, Mumbai-400069
11 Tata AIA Life Mr.M.Suresh Mr.HeerakBasu Tel:022-66479000
Insurance Company Fax:022-66550711
Limited
14th Floor, TOWER-
A, Peninsula Business
Park
SenapatiBapatMarg
Mumbai
400013
12 Reliance Life Mr.Anup Rau Mr. Tel:022-
Insurance Company Velamuri PritheshChaubey 30883434/30887261
Limited Fax:022-30886587
9th floor & 10th floor,
Building No.2, R-Tech
Park, Nirol Compound,
Next to hub Mall,
Behind I- Flex
Building,

Page | 12
 Goregaon(East),Mumb
ai-400063
13 Aviva Life Insurance Mr.T.R.Ramachan Mr.Sanjeeb Tel:012-270 90000/01
Company India dran Kumar Fax: 0124-270 9007.
Limited
Aviva Tower,Sector
Road, Opposite Golf
Cource,
DLF-Phase V, Sector-
43, Gurgaon- 122003
14 Sahara India Life Mr Sanjay Mr.Pravir Tel:0522-2329568
Insurance Co.Ltd Agarwal, Chandra Fax:0522-2332683
#1,SaharaIndia MD & CEO E-mail-
Bhawan, Kopoorthala sanjay.agarwal@life.sahara
Complex, .co.in
Lucknow 226024
15 Shiram Life Insurance MrManoj Kumar Mr Michael Board:+914023009400
Co. Ltd Jain Frylinck
Ramky Selenium, Plot
No 31 & 32 Beside
Andhra Bank Training
Centre, Financial
District,
Gachibowli,Hydrabad-
500032
16 Bharti AXA Life Mr.Sandeep Mr.Rajeev Tel:022-40306300/6301
Insurance Company Ghosh Kumar Fax:022-40306347
Ltd
601-602 6th Floor,
Raheja Titanium off
Western Express
Highway Goregaon (E)
Mumbai-400063
17 Future Generali India Mr Munish Sharda Mr. Bikash Tel No:022-40976802
Life Insurance MD & CEO Choudhary Fax no:022-40976600
Company Limited Munish.sharda@futuregene
6th Floor, Tower – 3, rali.in
Indiabulls Finance
Centre,
SenapatiBapatMarg,
Eliphinstone Road(W),
Mumbai-400013
18 IDBI Federal Life Mr Vighnesh Ms. Pournima Tel No:022-66552836
Insurance Company Sahane Gupte Email:vighnesh.shahane@i
Ltd. dbifederal.com
Tradeview, 1st Floor,
Oasis Complex,
Kamala City,

Page | 13
 P.B.Marg, Lower Panel
(W),
Mumbai-400013
19 Canara HSBC Oriental Mr.John David Mr. Tel:0124-4535500
Bank of Commerce Holden ChiragShamjiRat Fax: 0124 4535999
Life Insurance CEO & WTD hod
Company Ltd
Augustia Point, 2nd
Floor, DLF Golf
Course Road, Sector-
53, Gurgaon-Haryana
(INDIA) 122002
20 AEGON Religare Life Mr K S Patrick Cutrin Tel No:022 61180100
Insurance Company Gopalakrishnan Fax No:022 67293333
Limited Email:ks.gopalakrishnan@
Building No 3, Third aegonreligare.com
Floor, Unit No.1 Nesco
IT Park, Western
Express Highway,
Goregaon(E)
Mumbai-400063
21 DHFL Pramerica Life MrAnoop Kumar Mr. Pradeep Ph.no-
Insurance Co.Ltd Pabby Kumar Thapliyal +911244697000(BOARD)
4th Floor Tower B, (MD & CEO) Fax no-01244697100/200
Building No.-9, DLF Anoop.pabby@dhflprameri
Cyber city, Phase-III, ca.com
Gurgaon-122002.
22 Star Union Dai-ichi Mr.GirishPandura Mr.ISambasivaR Phone:022-39546211
Life Insurance Co.Ltd ngKulkarni ao e-mail:ceo@sudlife.in
Star house 3rd (MD & CEO)
floor,(West Wing), C-
5,Bandra-
kurlaComplex,Bandra(
East),
Mumbai-400051
23 IndianFirst Life Dr.P.Nandagopal Mr.Chandan Phone:022 39418700
Insurance Company Kumar Fax:022 33259500
Limited Khasnobis
301,B Wing, The
Qube,Infinity Park,
Dindoshi-Film City
Road,Malad(East),Mu
mbai-400097

Page | 14
24 Edelweiss Tokio Life Mr Deepak Mittal Ms.Anuradha Tel No:022 40636015
Insurance Co. Ltd. Lal Fax No:022 43428161
Edelwess House, off
C.S.T. Road, Kalina,
Mumbai: 400098

1.8 OBJECTIVES OF LIC

Spread life insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching all insurable persons in the country and
providing them adequate financial cover against death at a reasonable cost.

 Maximize mobilization of people’s savings by making insurance linked savings

adequately attractive.
 Bear in mind, in the investment of funds, the primary obligation to its policyholders,
whose money it holds in trust, without losing sight of the interest of the community as
a whole; the funds to be deployed to the best advantage of the investors as well as the
community as a whole, keeping in view national priorities and obligations of attractive
return.
 Conduct business with utmost economy and with the full realization that the moneys
belongs to the policy holders.
 Act as trustees of the insured public in their individual and collective capacities.
 Meet the various life insurance needs of the community that would arise in the changing
social and economic environment .
 Involve all people working in the Corporation to the best of their capabilities in
furthering the interests of the insured public by providing efficient service with
courtesy.
 Promote amongst all agents and employees of the Corporation a sense of participation
, pride and job satisfaction through discharge of their duties with dedication towards
achievement of Corporate Objective.
 Claim Settlement Performance (2015-2016):
Total Claims Settled- 215.71 lakh
Total amount of claims paid (including Micro Insurance and P&Gs) – 101041.65
Crore
Percentage of Maturity claims settled – 99.75
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 Percentage of Death claims settled -99.55

 Customer Centric Initiatives:

Claims Review Committee:-

The Corporation settles a large number of death claims every year. Only in case of
fraudulent suppression of material information will the liability be repudiated. The
number of death claims repudiated is, however, very small. Even in these cases, an
opportunity is given to the claimant to make a representation for consideration by the
Review Committees at the zonal Office and the Central Office. As a result of such
review, depending on the merits of each case, appropriate decision are taken. The
Claims Review Committees at the central and Zonal Offices have among other
members a retired High Court/District Court Judge.
Grievance Redressal Machinery:-
Policyholders’ Grievance Redressal Cells exist in all the Offices of the Corporation,
headed by Senior officers who can be approached by policyholder for redressal of
their grievances, on any day but particularly on every Monday between 2.30 p.m. and
4.30 p.m. without prior appointment.
All Branch Offices - Chief Manager/Sr./ Branch Manager
All Divisional Offices - Marketing Manager
All Zonal Offices - Regional Manager (CRM)
Central Offices - Executive Director/ Chief/Secretary (CRM)
The Policyholder can avail of himself/herself the facility of toll-free telephone
systems in Delhi and Mumbai or contact us through the LIC website www.licindia.in.
LIC’s website is rich in information on products/ Services.

1.9 ALTERNATIVE PREMIUM PAYMENT CHANNELS

1) INTERNET PAYMENT:
As many as seven Banks – HDFC , Centurian Bank of Punjab, AXIS Bank,
Corporation Bank, Federal Bank and Citibank and Bill Collection Service Providers –
Billjunction.com, and Billdesk.com are our Service Providers. Any policyholder who
has a bank account in India can use this facility

2) ELECTRONIC CLEARANCE SERVICE:

This service is currently available in selected cities. It will be extended to other

centres where the RBI has extended their ECS facility. A policyholder having an
account in any bank which is a member of the local Clearing House can opt for ECS
debit to pay premiums. The advantage in this system is that once the option is
exercised, the policyholder need not visit a Branch for paying the premium or
collecting the receipts. On the day indicated by the policyholder, the premium amount
will be directly debited to the bank account of the policy holder and the receipt will be
issued by the designated branch office.
ECS Monthly Mode : ECS channel of premium payment for monthly mode policies
introduced from proposal stage for all plans without the 5% extra charge. The
Mandate Form , duly certified by the Banker has to be submitted along with the
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 Proposal Form for new policy. You can download the mandate form from our
website www.licindia.in

3) ATMs of Corporation Bank and Axis Bank :

Premium can be paid through the ATMs of Corporation Bank and AXIS Bank.ICICI
bank provides this facility to all the customers registered for EBPP(Electronic Build
Presentation on Payment) .This service is available for Corporation Bank and AXIS
Bank Account Holder who are also our policy holders. Policy information will be
available at the ATM during the days of grace for premium payment. On payment of
premium, the policyholder will get an acknowledgement receipt from the ATM and
later on, a designated Branch will send the actual receipt to the policyholder.
Online collection of premium through AXIS Bank : Renewal premium can be paid at
all Axis Bank Branches either by using AXIS Bank cheque and/or by cash. A receipt
is generated by the Bank and signed on behalf of LIC by the AXIS Bank Official and
handed over to the customer.

4) Premium Points:
Some agents who are high performers are given the benefit of having a premium
point at their own place from where any premium can be collected on behalf of
L.I.C .
So this may be called a new channel of premium payment.

5) Life Plus Centers:

Life Plus Centers of Senior Business Associate (SBA) are also authorized to
collect premium through cash and Cheques.
Under Online Payment Channels, premium receipt is issued instantly by the
service provider.

6) LIC Mobile Application:

Premium can be paid online using LIC Mobile application on Windows and
Android phones.

1.10 OUR SOCIAL RESPONSIBILITY

LIC offers life-insurance protection under group policies to various group such as
employer-employee, co-operatives, weaker section of society etc. and insurance
coverage to people at subsidized rates under social security group scheme like
Janashree Bima Yojana. Aam Admi Bima Yojana – It is a scheme for Rural Landless
Households. The scheme is for the Central and State/Union territory Governments and
administered by LIC.
Jeevan Madhur – LIC has launched a micro-insurance cum savings plan with profits
wherein premiums can be paid in weekly, fortnightly, monthly, quarterly, half-yearly
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 or yearly intervals was introduced last year. The sum assured varies from Rs 5000/- to
Rs 30000/-.
Golden Jubilee Foundation was formed with a view to channelize our social
responsibilities and to give a formal shape to the same a public trust named Golden
Jubilee Foundation was formed with a purpose of undertaking charitable activities
namely, relief of poverty or distress, education, medical relief and advancement of
any other object of general public utility.

Table 1.11 LIC’s Investments During Five Year Plan Period:-

Plan Year Gross Investments (Crore)
II 1956-1961 184
III 1961-1966 285
IV 1969-1974 1530
V 1974-1979 2942
VI 1980-1985 7140
VII 1985-1990 12969
VIII 1992-1997 56097
IX 1997-2002 170929
X 2002-2007 394779
XI 2007-2012 704151
XII 2012-2017 752633

This chapter provides comprehensive survey of literature on the topic of insurance

sector liberalization and related trends. Insurance markets worldwide have changed in
the last two decades. Liberalization, deregulation, globalization of insurance
institutions, intensified competition, electronic commerce, ban assurance etc. are
among the challenges faced by insurance markets now. These developing trends pose
both global and local challenges for insurance firms. Analysis of various key
insurance market highlights various homogeneous trends in the global insurance
market. First, the process of deregulation can be seen in most part of the world.
Several countries have deregulated their insurance market at the national and regional
level, which include Europe, Japan and United States. The second trend is the
promotion of globalization throughout the world. For instance, China committed to
liberalize the insurance sector with its entry into World Trade Organization (WTO) in
2001. The third major trend is the wave of privatization. The number of government
owned insurance companies is becoming smaller and some countries have almost
entirely eliminated government-run insurance companies. Their findings thus
suggested that liberalization and deregulation together promote efficiency. But, to
what extent the mere change of ownership (privatization) or the strengthening of
competition (liberalization) is responsible for an efficiency gain is still unclear.
Moreover privatization and liberalization often take place simultaneously, and so it is
hard to disintegrate the effects simultaneously. The literatures detailing the impact of
liberalization and deregulation on insurance industry’s performance is still scant. The
studies on the impact of deregulation and liberalization reforms will be reviewed in

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 this chapter for different countries including India. Of the researches, insurer’s
efficiency improvement has been the main concern.

2. OBJECTIVE OF THE STUDY

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In this study my main objective is :-

1. Making people aware about the LIC Schemes.

2. To gain the trust of the public so that they able to open account in LIC.
3. To know about the emerging Insurance Market in India in post
liberalization period (since 2000).
4. To know about the performance of LIC and other private players since
2000.
5. To analyse the growth of insurance industry.
6. To study the procedures conducted by the company for maintaining and
retaining the customers with better services.

3. Literature Review

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1. R.Kumar and K.Vaidya(2004) -in their article tiled, “Differentiation Strategies of
Insurance Companies” had studied that customer relationship management tools must be
used extensively and effectively to identify cross selling opportunities. They had also
foreseen the use of e-service, namely, customer service through Internet that could play a
major role in facilitating the process of servicing insurance products to their policy
holders.

2. H.S. Sandhu and N. Bala (2006) - in their article “Marketing of Life Insurance Services
Revisited” have suggested that life insurance sector had grown with time. Its importance
had significantly increased in the post liberalization era. The study concluded that owing
to the changing and newly evolving scenarios in the life insurance industry, the research
needs to be expanded further by including various other aspects like the role of
information technology, bank assurance and customer relationship management.

3. B.S. Bodla and S.Verma (2007) - in their article entitled, “Life Insurance Policies in
Rural Area: Understanding Buyer Behaviour” have showed that the maximum number of
policyholders belonged to the age group of 31- 40 years, and 70 per cent of them had a
monthly income of 8000 and only 12 per cent of the total respondents were females. Most
of the respondents were from private business and had an education only up to school
level. Agents were found to be the main source of information and motivation to rural
people. LIC had the maximum (93%) penetration in the rural market as compared to other
players with the most preferred policy being the money back policy followed by
endowment policies. The role of advertisement was found to be able to make an impact to
motivate rural people to buy insurance policies. It was also observed that people had less
faith in private players.

4. H. Delport et. (2011) -in their article entitled, “Relationship Intention of South African
Banking and Life Insurance Customers” have found that the banking and life insurance
firms were now focusing on retaining and building long-term relationships with their
existing customer base by implementing a relationship marketing strategy. However, they
found that not all customers were willing to invest in building long-term relationships. So,
firms needed to identify and target those customers who had a high relationship intention
that is those who intend to support long-term relationships with the firm they are currently
associated with.

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5. R. Jampala and V. Rao (2007) -in their article on “Distribution Channels of LIC” have
found that although a number of intermediaries or distribution channels like corporate
agents, brokers and referrals had emerged over time, LIC was not able to capitalize on
them and hence could not make good business from these channels. They had bemoaned
that during the year 2004-05, the new distribution channels contributed just 1.12 per cent
of total business of LIC. However, the effect of these emerging distribution channels on
the private players was significant as their business grew by 40.70 per cent during 2004-
05. The study concluded that unless LIC uses these new emerging distribution channels
effectively and efficiently, it cannot survive in the highly competitive insurance market.
LIC needs to find new measures and apply them to improve its business further.

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 4: DATA COLLECTION & RESEARCH METHODOLOGY

This chapter analyses the effect of liberalization on the market structure in terms of
concentration of life insurance industry. This chapter first discusses the concept of
concentration and gives measurement in various indicators.
Research is the systematic process of collecting and analysing information to
increase our understanding of the phenomenon under study. It is the function of the
researcher to contribute to the understanding of the phenomenon and to communicate that
to others.

4.1 Data Collection:

The Data is divided in two parts:

a) Primary data
b) Secondary data.

a) Primary Data- is the data, which is collected directly by direct personal interview,
indirect oral investigation, survey, information received through local agents,
Questionaire to observe the customers, policy holders, personal observation.

b) Secondary Data- is the data, which is collected from:

 Various books
 Magazine and material.
 Internet.
 Facts sheets of various LIC holders.

The data which is stored in the organization and provide by the FINANCE people are
also secondary data. The various information is taken out regarding that subject as well
other subject from various souces and stored. The last year data can also be secondary
data. This data is kept for the internal use of the organization. In this report data plays a
very crucial role.

4.2. RESEARCH DESIGN

The research is qualitative and descriptive in nature. Qualitative research is that talk
about the quality of the subject to be researched and Descriptive research is one that
describes things as exist in present.

4.3 DATA COLLECTION DESIGN

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 4.3.1 Sources of data

Primary Sources- I have used questionnaire as primary source for collecting data for my
study.
Secondary sources- I had collected my secondary data from website & journals.

4.3.2. Sampling

It represents whole population. It is the process of choosing a sample from whole

cpopulation. I have choosen a sample of high class & middle class people which have
invested in insurance policy.

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 6: DATA ANALYSIS & INTERPRETATION

1. Your overall rating for LICI?

a) Excellent b) Very c) Good d) Average

good

Rating for LICI

10% 14%

Excellent
Very good
33% Good
Average

43%

Interpretation: The above study shows that the overall rating for LIC in India has been
very good from time to time. That means people in India have relied on LIC’s different
investment plans.

2. Have you taken any new policies during last 3 years ?

a) Yes b) No

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 Have you taken any new policies?

27%

73%

no yes

Interpretation: The above study shows that after Liberalization Privatization

Globalization many private players enter into the Indian market so, the share of LIC
drastically in decreasing trend that’s why no additional policies were taken by the existing
policy holder.

3. Does after sales service help out to sell a policy to an existing

customer?

a) Yes b) No c) Don’t know

does after sales service help out?

29%

48%

23%

yes no Don’t know

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 Interpretation: After sales service, LIC had introduced new things for customers
such as mobile registration & sms alert, provide LIC details through email registration,
collection of renewal premium through insurance advisors and customers get happy.
From this chart, we came to know that 50% customer agree to buy a new policy

4. Is it helpful to the customers of LIC to have various alternative

premium payment channels?
a) Yes b) No c) Don’t know

Alternative Payment Channels

10%
15%

75%

yes no don’t know

Interpretation: As one of the top insurance providers in India, Life Insurance

Corporation offers a wide range of insurance products that suit the various demand of
the insurance seekers. With the annual increase in the salary of an individual, the
amount of income tax he/she has to pay also increase.

5. Does it help to increase the savings of a customer via Life Insurance?

a) Yes b) No c) Don’t know

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 25%

20% 55%

Yes No Don’t know

Interpretation: After 1991 the Indian Life Insurance industry has geared up in all
respects, as well as it is being forced to face a lot competition from many national and
international private insurance players. Because LIC continuously lunching its various
products with attractive scheme to threaten the incumbents.

6. How do you perceive the future of LICI in this open market i.e.
Liberalized Era?

a) May increase b) May remain c) May decrease

same

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 Future of LICI

5%

14%

81%

May increase May remain same May decrease

Interpretation: Once upon a time LIC plays a monopoly role, after liberalization many
private players had included. In liberalized era financial service had improved in the
competitive market & perfectly designed plans for every segment of customers. So the 75%
customers perception is that future of LIC may increase.

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 7. RESULT FINDINGS

The outcome from the above study it is clear that LIC achieves it goals slowly but definitely.
It launches different investment scheme which help both rich and poor people to save
something for betterment of their future. LIC ease its premium payment procedures by
launching “ Direct Pay” facility which helps the policyholder to make payment easily through
their bank account via internet banking facility within a due date. As we know many private
incumbents enter into the market but reliance of the people with LIC product is positive and
strong.

The main findings of the study shows that the market share of LIC increases day by day
instead of private players remain in the market. Which help the company to grow and achieve
its mission, vision and objective in sound way.

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 8.LIMITATIONS OF THE STUDY

The importance of the project lies in the fact that the liberalization is an important phase of
insurance industry. The need for private entry has been justified on various grounds such as
enhancing the efficiency of operation, achieving a greater density and penetration of life
insurance in the country, greater mobilization of long term saving etc. However there are
emerging issues in the light of liberalization which required constant monitoring of the
policy programs. And there is little research in these aspects. Present study will strengthen the
knowledge and literature in the field and also helpful to policy programs, potential insurers,
researchers, academicians and general readers who are interested in Indian life insurance
sector. Over all, the thesis is expected to provide a brief over view on the over all impact of
insurance sector reform measures on life insurance sector in India. There are many other
issues or effects of liberalization and all of them cannot be examined here .The main problem
faced was the dearth of data. Due to time lag in publishing of official data, the data
considered was from financial year 2001-02 to 2009-10. Sometimes, there was lack of
consistency and uniformity in the format of the data or annual reports published. Therefore
the study has limited itself to analyze and interpret the impact to f insurance liberalization on
the topics of concentration, efficiency, productivity and innovation.

Time :The time available for preparing this project is found to be inadequate .As
insurance sector is a very vast and dynamic sector so due to time limit many pertinent
issues governing the insurance sector could not be studied in depth.
Data: The whole change in insurance sector & insurance products (since 2000) has been
analyzed on the basis of all India data collected from different sources. There is every
possibility that may be some relevant data is left due inaccessibility to that data.

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 9. RECOMMENDATION

Innovations are the introduction or adoption of new ideas, process, product or services,
developed internally or acquired from external environment. The adoption of innovation
flows from and is contingent upon an organization‘s repertoire of technical, strategic and
administrative skills. Liberalization has given way for establishment of new companies in
Insurance sector and consequently competition is leading to innovation. Therefore this
chapter of the thesis examines new innovations visible in the wake of insurance sector‘s
liberalization.

1: Product
2: Customer services
3: Marketing Strategies

1: Product

Products offered before liberalization and after liberalization are given in this section. Before
liberalization, the range of product available was very limited. India has an enormous middle
class that can afford to buy life insurance product as per their need. However after the
liberalization, there was a major change in the insurance product offered by the insurance
companies and insurance services covers opted for by the customers. It is difficult to specify
exact number of policies or product that LIC or others have, since time to time; some
products were introduced or withdrawn with small variation of time and may be counted as
new product.

2: Customer Services

With liberalization of insurance sector, it has become very important for insurers to improve customer
satisfaction and loyalty. In fact, service quality is an important means of differentiation and path to
achieve business success in the competitive environment. Customer service is a derivative of a mix of
human reactions influenced by a host stimuli emanating from within and outside the organization. Any
improvement in customer services cannot be attained in isolation, unless the entire gamut of factors
affecting it is taken into account and managed properly. Customers and employees need active
participation in the process of developing a healthy relationship which involves a thorough overhaul of
the approach of insurance company towards customer relations management.

Help Us to Serve You Better

Admission Of Age:-

Age is the main basis of calculation of premium under life insurance policies.
The following are accepted as evidence of age:

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  Certified extract from Municipal or Local Body’s records made at the time of birth.
 Certificate of Baptism or Certified Extract from Family Bible, if it contains age or date of birth.
 Certified Extract from School or College records, if age or date of birth is stated therein.
 Certified Extract from Service Register in the case of Govt. employees and employees of Quasi-
Govt. Institutions or
 Passport issued by the Passport Authorities in India.

Payment Of Premium:

 By cash, local cheque (subject to realization of cheque), Demand Draft at Branch Office.
 The DD and cheques or Money Order may be sent by post.
 You can pay your premiums at any of our Branches as 99% of our Branches are networked.
 Many Banks do accept standing instructions to remit the premiums. So by providing a standing
instruction to your Bank to debit your account for the premium amount and send it vide a banker’s
cheque to LIC, on the due dates and months mentioned on your policy bond.
 Through Internet : Payment of premiums can be made through Internet through Service Providers
viz. HDFC Bank, ICICI Bank, Times of Money, Bill Junction, UTI Bank, Bank of Punjab,
Citibank, Corporation Bank, Federal Bank and Bill Desk.
 Premium payment can also be made through ATMs of Corporation Bank and UTI Bank.
 Premium payment can also be made through Electronic Clearing Service (ECS) which has been
launched at Mumbai, Hyderabad, Chennai, Kolkata, New Delhi, Kanpur, Bangalore, Vijayawada,
Patna, Jaipur, Chandigarh, Trivandrum, Ahmadabad, Pune, Goa and Nagpur, Secunderabad &
Visakhapatnam. A policyholder having an account in any Bank which is a Member of the local
Clearing House can opt for ECS debit to pay premiums. The policyholders wishing to use this
system would have to fill up a Mandate Form available at our Branches/DO and get it certified by
the Bank. The certified Mandate Forms are to be submitted to our BO/DO.

Policy can be anywhere in India.

 Citibank Kiosks at Industrial Assurance Building, Church gate, New India Building, Santacruz,
Jeevan Shikha Building, Borivili are dedicated for collection of premiums through cheques.

Days Of Grace:

 Policyholder should pay the premiums on due dates. However, a grace period of one month but not
less than 30 days will be allowed for payment of yearly/half-yearly/quarterly premiums and 15 days
for monthly premiums.
 When the days of grace expire on a Sunday or a public holiday, the premium may be paid on the
following working day to keep the policy in force.
 If the premium is not paid before the expiry of the days of grace, the policy lapses.

Revival Of Lapsed Policy:

 If the policy has lapsed, it can be revived during the life time of the life assured, within a period of
five years from the date of the first unpaid premium but before the date of maturity subject to
certain conditions.
 The Corporation offers three convenient schemes of revival viz., Ordinary Revival, Special Revival
and Installment Revival. Policies can also be revived under Loan-cum-Revival and SB-cum-
Revival schemes.
 Request for revival may be made to the Branch Office servicing the policy.

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Change Of Address And Transfer Of Policy Records:

 The policyholder should immediately intimate the change of his/her address to the Branch Office
servicing the policy. The correct address facilitates better service and quicker settlement of claims.
 Policy records can also be transferred from one Branch Office to another for servicing, as requested
by the policyholder.

Loss Of Policy Document:

 The Policy Document is an evidence of the contract between the Insurer and the Insured. Hence the
policyholder should preserve the Policy Bond till the contracted amount under it is settled.
 Loss of the Policy Document should be immediately intimated to the Branch Office where it is
serviced.

Loans:-

 Loans are granted on policies to the extent of 90% of Surrender Value of the policies which are in
force and 85% of the Surrender Value in case of policies which are paid-up, inclusive of the cash
value of bonus. The rate of interest charged at present is 9% p.a. payable half-yearly.
 Loans are not granted for a period shorter than six months. The Conditions and Privileges printed
on the back of the Policy Bond states whether a particular policy is with or without the loan facility.

Relief To Policyholders:-

 The Corporation generally allows concessions on payment of premiums, settlement of claims, issue
of duplicate policies, etc when the policyholder are affected by natural calamities such as droughts,
cyclones, floods, earthquakes, etc.

Nomination:-

 Nomination is a right conferred on the holder of a Policy of Life Assurance on his own life to
appoint a person/s to receive policy moneys in the event of the policy becoming a claim by the
assureds’ death. The Nominee does not get any other benefit except to receive the policy moneys
on the death of the Life Assured. A nomination may be changed or cancelled by the life assured
whenever he likes without the consent of the Nominee.
Ensure nomination exists in the policy for easy settlement of claims.

Assignment:-

 Assignment means transfer of rights, title and interest. When an assignment is executed, all rights,
title and interest in respect of the property assigned are immediately transferred to the Assignee/s
and the Assignee/s become the owner/s of the policy subject to any lawful condition made in the
assignment.
 Assignment can be either conditional or absolute. On assignment (other than to LIC), Nomination
automatically stands cancelled. Hence, when such a policy is reassigned, the policyholder will have
to make a fresh nomination to avoid delay in settlement of claim.

Survival Benefit/Maturity Claims:-

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  LIC settles survival benefit/maturity claims on or before the due date.
 Policyholder are intimated well in advance by the Branch Office which services the policy
regarding the payment, and the necessary Discharge Voucher is also sent for execution by the
assured. In case the policyholder does not get any intimation from the Branch Office concerned,
he/she should contact them, quoting the Policy Number.
 Survival Benefit payment up to Rs.60,000/- are settled without insisting for Policy Bond and
Discharge Voucher.

Death Claims:-

 If the life assured dies during the term of the policy, death claim arises. The death of the
policyholder should be immediately intimated in writing to the Branch Office where the policy is
serviced along with the following particulars:
1. The No./s of the policy/ies
2. The name of the policyholder
3. Death Certificate issued by concerned Authority
4. The date of death
5. The cause of death and
6. Claimant’s relationship with the deceased
 On receipt of the intimation of death, necessary claim forms are sent by the Branch Office for
completion along with instructions regarding the procedure to be followed by the claimant.
 The claims which have arisen after a period of three years are treated as non-early claims and
settled within 30 days from the date of receipt of all requirements.
 The claims that have arisen within a period of two years from the date of commencement of the
policy, are treated as early claims and investigation is compulsory in such cases.
 The claim is usually payable to the nominee/assignee or the legal heirs, as the case may be.
However, if the deceased policyholder has not nominated/assigned the policy or if he/she has not
made a suitable provision regarding the policy moneys by way of a Will, the claim is payable to the
holder of a Succession Certificate or some such evidence of title from a Court of Law.
 The Corporation grants claims concessions under certain Plans whereby payment of full sum
assured is made, subject to the deduction of unpaid premiums with interest till the date of death and
unpaid premiums falling due before the next anniversary of the policy, in the event of the death of
the life assured within a period of six months or one year from the date of the first unpaid premium,
provided premiums have been paid for at least three years and five years respectively.

Claim Review Committee:

The Corporation settles a large number of Death Claims every year. Only in case of fraudulent suppression
of material information is the liability repudiated. This is to ensure that claims are not paid to fraudulent
persons at the cost of honest policyholders. The number of Death Claims repudiated is, however, very
small. Even in these cases, an opportunity is given to the claimant to make a representation for
consideration by the Review Committees of the Zonal office and the Central Office. As a result of such
review, depending on the merits of each case, appropriate decisions are taken. The Claims Review
Committees of the Central and Zonal Offices have among their Members, a retired High Court/District
Court Judge. This has helped providing transparency and confidence in our operations and has resulted in
greater satisfaction among claimants, policyholders and public.

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3: Marketing Strategies
Marketing includes all those activities carried on to transfer goods and services from manufacturer to
consumer. Marketing channels are sets of interdependent organizations involved in the process of making a
product or services available to customers. Marketing mix is a unique combination of basic ingredients of
marketing viz. product, price, and place i.e. channels of distribution and promotion. Insurance being a
service business requires marketing department to play a key role in delivery of services. Private sector entry
has brought with it a transformation not only in product choice but also in the way life insurance is
distributed. Previously, agents provided the primary method of acquiring new policies in India as they
originated almost all of the LIC's business. This trend is an Asia-wide phenomenon as most of the business
of life insurers in Asia is originated by agents.

Information Technology On LIC

LIC has been one of the pioneering organizations in India who introduced the leverage of Information
Technology in servicing and in their business. Data pertaining to almost 10 crore policies is being held
on computers in LIC. We have gone in for relevant and appropriate technology over the years.

1964 saw the introduction of computers in LIC. Unit Record Machines introduced in late 1950’s were
phased out in 1980’s and replaced by Microprocessors based computers in Branch and Divisional
Offices for Back Office Computerization. Standardization of Hardware and Software commenced in
1990’s. Standard Computer Packages were developed and implemented for Ordinary and Salary
Savings Scheme (SSS) Policies.

FRONT END OPERATIONS

With a view to enhancing customer responsiveness and services , in July 1995, LIC started a drive of
On Line Service to Policyholders and Agents through Computer. This on line service enabled
policyholders to receive immediate policy status report , prompt acceptance of their premium and get
Revival Quotation, Loan Quotation on demand. Incorporating change of address can be done on line.
Quicker completion of proposals and dispatch of policy documents have become a reality. All our 2048
branches across the country have been covered under front-end operations. Thus all our 100 divisional
offices have achieved the distinction of 100% branch computerisation. New payment related Modules
pertaining to both ordinary & SSS policies have been added to the Front End Package catering to Loan,
Claims and Development Officers’ Appraisal. All these modules help to reduce time-lag and ensure
accuracy.

METRO AREA NETWORK

A Metropolitan Area Network, connecting 74 branches in Mumbai was commissioned in November,

1997, enabling policyholders in Mumbai to pay their Premium or get their Status Report, Surrender
Value Quotation, Loan Quotation etc. from ANY Branch in the city. The System has been working
successfully. More than 10,000 transactions are carried out over this Network on any given working
day. Such Networks have been implemented in other cities also.

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 WIDE AREA NETWORK

All 7 Zonal Offices and all the MAN centres are connected through a Wide Area Network (WAN). This
will enable a customer to view his policy data and pay premium from any branch of any MAN city. As
at November 2005, we have 91 centers in India with more than 2035 branches networked under WAN.

INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS)

IVRS has already been made functional in 59 centers all over the country. This would enable customers
to ring up LIC and receive information (e.g. next premium due, Status, Loan Amount, Maturity
payment due, Accumulated Bonus etc.) about their policies on the telephone. This information could
also be faxed on demand to the customer.

LIC ON THE INTERNET

Our Internet site is an information bank. We have displayed information about LIC & its offices. Efforts
are on to upgrade our web site to make it dynamic and interactive. The addresses/e-mail Ids of our
Zonal Offices, Zonal Training Centers, Management Development Center, Overseas Branches,
Divisional Offices and also all Branch Offices with a view to speed up the communication process.

PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET

(You have to register for these services)

LIC has given its policyholders a unique facility to pay premiums through Internet absolutely free and
also view their policy details on Internet premium payments. There are 11 service providers with whom
L I C has signed the agreement to provide this service.

INFORMATION KIOSKS

We have set up 150 Interactive Touch screen based Multimedia KIOSKS in prime locations in metros
and some major cities for dissemination information to general public on our products and services.
These KIOSKS are enable to provide policy details and accept premium payments.

INFO CENTRES

We have also set up 8 call centres, manned by skilled employees to provide you with information about
our Products, Policy Services, Branch addresses and other organizational information.

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 10.SUGGESTIONS

There are almost 25 Crore policyholders of LIC & LIC works as trustee for its policyholders. Every year
LIC earns huge amount of premium & that money is invested in different funds. Premium is used in
different developmental and nation building activities. The funds in which LIC invests money are Life Fund,
Pension & General Annuity Fund, Group Fund and Unit Linked Fund etc. Every year LIC invests huge
amount of money in life fund. The money invested in life fund is used for infrastructural development in
India. Life fund money is used to make new housing complexes, roadways, railways, ports & bridges & to
develop power supply, irrigational facility, water supply & sewerage system and to develop existing roads,
railways and bridges . Term assurance /traditional insurance products are the inflow to the life fund, as
traditional insurance products help to generate long term funds. The premium earned from traditional
insurance products is invested in nation building activities.
But current product portfolio of LIC is highly skewed in favor of single premium plans. At present, 82-
83% of LIC’s business from new policy sales comes from it. Single premium plans contributed 76% of
LIC’s new business premium in 2013-14.LIC sold 1.79 cr. conventional products. In case of new policy
sales 82-83% policy sold is ULIP in 2007-08; only 17-18% policy sold is conventional policy. Now
from 2008, LIC is trying to shift its focus from unit linked plans to traditional insurance plans in order
to ensure long term growth.
LIC has life long growth we can identify from the survey.

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 11.CONCLUSION

The current reforms in Indian insurance sector have facilitated many functional changes over the past decade.
This study aims to provide an assessment of deregulation with respect to industry scenario, concentration,
efficiency, productivity and innovation in the Indian life insurance industry. Customers services in private
companies far outway the facilities offered in the public sector LIC. It was found that LIC has reinvented its
strategies to stay abreast with IRDA regulations and provide varied facilities to its customers. Majority of the
respondants were of the opinions that the services provided by private companies have re-defined the whole
concept of Insurance. When LIC was the only insurance company customers were at a disadvantage due to its
monopoly position & seller oriented selling of Life Insurance products.

However, in the post Liberalised Era Life Insurance products are now need based & customer centries.
Customers have shown a clear preference for private Life Insurance. Companies due to their persistent
efforts to build new client & written existing clients. There is definitely a shift of customers preference but
this would be even more evident if private companies continue to re-invent themselves, develope customer
need based product, eliminate mis-selling & concentrate on customer satisfaction as its main prerogative.

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 12. ANNEXURE

1) Your overall rating for LICI?

2) Have you taken any new policy during last 3 years?

3) Does after sales service help out to sell a policy to an existing customer?

4) Is it helpful to the customers of LIC to have various alternative premium payment channel?

5) Does it help to increase the savings of a customer via Life Insurance?

6) How do you perceive the future of LICI in this open market liberalized Era?

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 13: BIBLIOGRAPHY

1: Kumar Jogendra (2005), “Insurance: Industry on Growth Path”, Life Insurance Today, 1(9),6-10
2.Annual Reports of LIC from 1999-2000 to 2007 to 2013

3.Modern Accounting Theory and Management Accounting (Debasis Bannerjee).

4:Financial Management (Khan and Jain).

5:Financial Management (Prasanna Chandra).

6: www.google.com

7:www.licindia.com

8:www.irdagovt.com

9:IRDA Annual Report.

10: www.licofindia.com

11.2000 IRDA formations (IRA to IRDA).

12: www.irdaact.co.in

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