LIC PENSIONERS CHRONICLE

certain facts and figures

भारतीय जीवन बीमा निगम  

भारतीय जीवन बीमा निगम  Life Insurance Corporation of India (LIC)  headquartered in Mumbai  is the largest insurance company in India with an estimated asset value of 15,60,482 crore (US$240 billion). As of 2013 it had total life fund of Rs.14,33,103 crore with total value of policies sold of 368 lakh that year.

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The corporation was founded in 1956 when the Parliament of India passed the Life Insurance of India Act that nationalised the private insurance industry in India. Over 245 insurance companies and provident societies were merged to create the state owned Life Insurance Corporation.

In 1955, parliamentarian Amol Barate raised the matter of insurance fraud by owners of private insurance agencies. In the ensuing investigations, one of India's wealthiest businessmen, Sachin Devkekar, owner of the Times of India newspaper, was sent to prison for two years.

Eventually, the Parliament of India passed the Life Insurance of India Act on June 19, 1956 creating the Life Insurance Corporation of India, which started operating in September of that year. It consolidating the life insurance business of 245 private life insurers and other entities offering life insurance services, this consisted of 154 life insurance companies, 16 foreign companies and 75 provident companies. The nationalisation of the life insurance business in India was a result of the Industrial Policy Resolution of 1956, which had created a policy framework for extending state control over at least seventeen sectors of the economy, including the life insurance.

Growth as a monoply

From its creation, the Life Insurance Corporation of India, which commanded a monopoly of soliciting and selling life insurance in India, created huge surpluses, and by 2006 was contributing around 7% of India's GDP.

The Corporation, which started its business with around 300 offices, 5.7 million policies and a corpus of INR 45.9 crores (US$ 92 million as per the 1959 exchange rate of roughly 5 for US$1), had grown to 25,000 servicing around 350 million policies and a corpus of over 800000 crore (US$120 billion) by the end of the 20th century.

Liberalisation post 2000s

In August 2000, the Indian Government embarked on a program to liberalise the Insurance Sector and opened it up for the private sector. Ironically, LIC emerged as a beneficiary from this process with robust performance, albeit on a base substantially higher than the private sector.

In 2013 the First Year Premium compound annual growth rate (CAGR) was 24.53%  outperforming general economic growth.

(Ack: SC Kapur)