Last Updated on October 3, 2023 by BFSLTeam BFSLTeam
Table of Content
An Overview
Life Insurance Corporation of India (LIC) is not just a household name in India but an institution that has played a pivotal role in the financial lives of millions. This blog will take you on a journey through the history of LIC, its current performance, and its promising future. We’ll also explore the advantages of investing in LIC and answer five frequently asked questions about this iconic institution.
History of LIC
Founded in 1956, LIC is a state-owned insurance and investment company headquartered in Mumbai, India. It was created by the merger of 245 insurance companies and provident societies. The main objective behind the establishment of LIC was to spread the message of life insurance and provide financial security to people across the country.
Over the years, LIC has become the largest insurance company in India and one of the largest in the world in terms of the number of policies it manages. Its rich history is marked by consistent growth, financial stability, and a commitment to serving the people of India.
The share price of LIC as of September 26, 2023 was Rs 645.00, which was down by 0.26% from the previous closing price of Rs 647.80. The share price fluctuated between Rs 649.00 and Rs 659.80 during the day. The company had a market capitalization of Rs 4.08 trillion and a price-to-earnings ratio of 9.11.
The share price of LIC has increased by 13.78% in the last year, but has decreased by 10.08% in the last month. The share price reached its 52-week high of Rs 754.40 on July 15, 2023 and its 52-week low of Rs 530.20 on October 1, 2022.
The company reported a net profit of Rs 78.15 billion for the quarter ended June 30, 2023, which was an increase of 120.28% from the same quarter last year. The company attributed the increase in profit to a change in its accounting policy.
Current Performance of LIC
The company is the market leader in the Indian life insurance sector with a 62% share in terms of new premiums as of December 2022. The company has a loyal customer base and a massive distribution network that gives it an edge over its competitors. However, the company also faces increasing competition from private players such as SBI Life, HDFC Life, ICICI Prudential, and Max Life, who are offering more innovative and customised products and services to attract customers.
The company also saw a 15% increase in its net premium income and a 19.1% margin in its gross value of new business (VNB), which measures the expected profit from new premiums. These numbers indicate that LIC has a strong profitability and growth potential in the life insurance sector.
LIC continued to dominate the Indian insurance market. It had a significant market share, owing to its vast network of agents, strong brand reputation, and an extensive range of insurance and investment products. LIC has consistently shown robust financial performance and maintained a high claim settlement ratio, instilling trust among its policyholders.
Future Outlook of LIC
The future outlook of LIC is a topic that many investors and analysts are interested in, as the company is one of the largest and most influential players in the Indian life insurance sector. LIC has a strong competitive advantage due to its large customer base, huge agency network, strong brand equity, and sovereign guarantee on its policies. However, the company also faces some challenges such as regulatory changes, increasing competition, rising costs, and evolving customer preferences.
LIC offers a wide range of products such as term insurance, endowment plans, money back plans, pension plans, unit-linked plans, and health insurance plans. The company has a diversified portfolio that caters to different customer segments and needs. However, the company also needs to innovate and adapt to the changing preferences and expectations of its customers, especially in terms of digitalisation, personalisation, and convenience.
Advantages of Investing in LIC
Investing in LIC comes with several advantages:
- Financial Security: LIC’s primary mission is to provide financial security to individuals and families. By purchasing LIC policies, you ensure that your loved ones are protected in case of an unfortunate event.
- Tax Benefits: Many LIC policies offer tax benefits under Section 80C and 10(10D) of the Income Tax Act. This means you can save on taxes while securing your financial future.
- High Claim Settlement Ratio: LIC has consistently maintained a high claim settlement ratio, which means that a significant percentage of claims are settled, providing peace of mind to policyholders and their beneficiaries.
- Variety of Products: LIC offers a wide range of insurance and investment products to cater to different financial goals and risk appetites. Whether you want pure life insurance, savings, or investment options, LIC has something for everyone.
- Trust and Reputation: LIC’s long-standing reputation for reliability and stability is unmatched. It has weathered economic ups and downs, which has further cemented its status as a trusted institution.
Wrapping Up
LIC has stood the test of time and continues to be a beacon of financial security for millions of Indians. Its rich history, strong financial performance, and commitment to policyholders make it a trusted choice for insurance and investment needs. As you consider your financial goals and insurance needs, LIC remains a formidable institution to explore.
Frequently Asked Questions (FAQs)
LIC consistently maintains a high claim settlement ratio, often above 95%, which indicates its commitment to settling claims promptly.
Yes, LIC has a user-friendly online portal where you can research, compare, and purchase policies. The online platform offers convenience and transparency.
The cost of LIC premiums varies depending on the type of policy, your age, and the coverage amount. While some policies may have higher premiums, they often come with substantial benefits and tax advantages.
Yes, you can change the nominee in your LIC policy. LIC allows policyholders to update their nominee information by filling out the required forms and providing the necessary documentation.
No, LIC offers a diverse range of products, including life insurance, health insurance, retirement plans, and investment options. You can choose the product that best suits your financial goals.
