LIC stands for Life Insurance Corporation of India. After India’s Parliament passed the Life Insurance Corporation Act in June 1956, it began operating as a corporate entity in September of that same year. The LIC Act became effective in July of 1956. It contributed to the nationalization of India’s private insurance industry. It is one of India’s most important financial institutions. The LIC’s corporate office is located in Mumbai, Maharashtra.
Functions Of LIC
Some of the major functions of LIC are as follows:-
- Encourage saving by accepting people’s contributions in exchange for an insurance policy.
- Investing in government securities.
- Providing insurance plans at reasonable prices.
- Offer a range of loans at affordable interest rates, including direct loans to industries, mortgage loans, and financing for numerous national initiatives.
- It is a significant shareholder in a number of the blue-chip listed companies on the Indian stock market.
- Additionally, it offers refinancing operations via State Finance Corporations (SFCs) in several cities and states.
- It provides loans for numerous national initiatives that are crucial for economic development.
- It gives financial support for initiatives that benefit society, such as electrification, sewage, water channelization, etc.
Objectives Of LIC
- LIC intends to raise awareness of the value of life insurance among rural citizens and those who belong to economically and socially underprivileged sectors.
- It strives to meet the community’s life insurance demands, which are susceptible to change due to the transforming social and economic climate.
- It seeks to operate profitably while keeping in mind that the money belongs to the policyholders.
- It aims to maximize the mobility of individuals’ savings via attractive insurance-linked savings.
History of LIC:
In the year 1818, life insurance as we know it now was introduced to India from England. The first life insurance firm on Indian soil was the Oriental Life Insurance Company, founded in Calcutta by Europeans. Indian nationals were not covered by any of the insurance firms founded during that time because they were all created with the intention of serving the needs of European society. Later on, however, thanks to the efforts of notable individuals like Babu Muttylal Seal, foreign life insurance companies began covering Indian lives. However, Indian lives were classified as second-class lives and were subject to significant premium increases.
In 1870, the Bombay Mutual Life Assurance Society became the first life insurance provider in India, and it offered standard rates for coverage of Indian lives. In order to spread awareness of insurance and social security through insurance to various societal groups, insurance companies first emerged as extremely patriotic Indian businesses. One of these nationalist-inspired businesses was the Bharat Insurance Company, founded in 1896. More insurance businesses were founded as a result of the Swadeshi movement from 1905–1907. Established in 1906 were United India in Madras, the National Indian and National Insurance in Calcutta, and the Co-operative Assurance in Lahore. The Hindustan Co-operative Insurance Company was founded in 1907 in a chamber of the Jorasanko, the famed poet Rabindranath Tagore’s residence in Calcutta.
During this time, businesses including the Indian Mercantile, General Assurance, and Swadeshi Life (later Bombay Life) were founded. India did not have any legislation governing the insurance industry prior to 1912. The Provident Fund Act and the Life Insurance Companies Act were both passed in 1912. The Life Insurance Companies Act of 1912 mandated that an actuary certify the premium rate tables and periodic company valuations. However, the Act discriminated in numerous ways between foreign and Indian enterprises, which disadvantaged the latter.
During the first two decades of the twentieth century, the insurance industry expanded significantly. In 1938, it increased from 44 firms with a total business-in-force of Rs.22.44 crore to 176 companies with a total business-in-force of Rs.298 crore. Many financially questionable ventures that were floated during the insurance industry’s explosion also failed terribly. The Insurance Act of 1938 was the first piece of legislation to strictly impose governmental control over the insurance industry and to regulate both life and non-life insurance. A bill to alter the Life Insurance Act of 1938 was filed in the Legislative Assembly in 1944, which gave rise to a growing call for the nationalization of the life insurance sector.
However, the nationalization of life insurance in India didn’t occur until much later, on January 19, 1956. At the time of nationalization, there were around 154 Indian insurance companies, 16 foreign companies, and 75 provident organizations. The process of nationalization was carried out in two phases; first, the administration of the enterprises was taken over through an ordinance, and later, the ownership was taken over through a complete statute.
The Life Insurance Corporation Act was approved by the Indian Parliament on June 19, 1956, and the Life Insurance Corporation of India was established on September 1, 1956, with the aim of extending life insurance much more broadly and, in particular, to rural areas in order to reach all insurable persons in the nation and offer them adequate financial protection at a fair price. Aside from its corporate office, LIC had 212 branch offices, 33 divisional offices, and 5 zonal offices by 1956. The necessity to extend the business and set up a branch office at each district headquarters was felt in the later years because life insurance contracts are long-term contracts and require a variety of services during the currency of the policy. The LIC underwent reorganization, and numerous new branch offices were established.
Reorganization led to the transfer of servicing responsibilities to the branches, which were made accounting units. The corporation’s performance was greatly improved by it. From about 200.00 crores in new business in 1957, the organization only surpassed 1,000.00 crores in 1969-70, and it took another decade for LIC to surpass 2,000.00 crores in new business. However, because of the reorganization that took place in the early 1980s, by 1985–1986 LIC share had already surpassed 7000.00 crores in sum assured to new policies.
A total of 2048 completely computerized branch offices, 113 divisional offices, 8 zonal offices, 1381 satellite offices, and the corporate headquarters are currently used by LIC to carry out its operations.
Life Insurance Corporation Of India Shareholding Pattern
| Category of shareholder | Total no. shares held | Shareholding as a % of total no. of shares |
| (A) Promoter & Promoter Group | 6,10,36,22,781 | 96.50 |
| (B) Public | 22,13,74,920 | 3.50 |
| (C1) Shares underlying DRs | 0 | 0.00 |
| (C2) Shares held by Employee Trust | 0 | 0.00 |
| C) Non-Promoter-Non Public | 0 | 0.00 |
| Grand Total | 6,32,49,97,701 | 100.00 |
Summary statement holding of specified securities as of 30 Jun 2022
| Category & Name of the Shareholders | Total no. shares held | Shareholding % |
| B1) Institutions | 0 | 0 |
| Mutual Funds | 4,70,24,137 | 0.74 |
| Alternate Investment Funds | 47,067 | 0.00 |
| Foreign Portfolio Investors | 78,48,520 | 0.12 |
| Financial Institutions/ Banks | 78,71,080 | 0.12 |
| Any Other (specify) | 1,19,22,274 | 0.19 |
| Qualified Institutional Buyer | 1,19,22,274 | 0.19 |
| Sub Total B1 | 7,47,13,078 | 1.18 |
| B2) Central Government/ State Government(s)/ President of India | 0 | 0.00 |
| B3) Non-Institutions | 0 | 0.00 |
| Individual LIC share capital upto Rs. 2 Lacs | 11,86,10,742 | 1.88 |
| Individual LIC share capital in excess of Rs. 2 Lacs | 49,87,150 | 0.08 |
| NBFCs registered with RBI | 1,81,862 | 0.00 |
| Any Other (specify) | 2,28,82,088 | 0.36 |
| Bodies Corporate | 1,98,18,690 | 0.31 |
| Non-Resident Indian (NRI) | 21,17,042 | 0.03 |
| Trusts | 2,26,199 | 0.00 |
| Clearing Members | 7,20,157 | 0.01 |
| Sub Total B3 | 14,66,61,842 | 2.32 |
| B=B1+B2+B3 | 22,13,74,920 | 3.50 |
Statement showing shareholding pattern of the Public shareholder as of 30 Jun 2022
Key Highlights for April – June 2022 (Q1) of FY 2022-23
- The Total Premium Income for the quarter ended June 30th, 2022, increased by 20.35 percent for LIC Share, reaching Rs. 98,352 crores as compared to Rs. 81,721 crores for the quarter ended June 30th, 2021, in the preceding year. For the quarter that ended on June 30th, 2022, profit after tax (PAT) was Rs.682.88 crore.
- When compared to the full-year market share of 63.25% for FY 2021–2022, marketing activities rose, and LIC’s overall business momentum was robust. As a result, the company’s overall market share by First Year Premium Income (as per the Insurance Regulatory and Development Authority of India ) grew to 65.42% for the quarter ending June 30th, 2022. For the three months that ended on June 30th, 2021, the market share of First Year Premium Income was 67.52%.
- The total premium for the quarter that ended on June 30th, 2022, was Rs. 10,270 crores on an annualized premium equivalent (APE) basis. Of this, the Individual Business accounted for 62.80 percent (Rs. 6,450 crores) and the Group Business for 37.20 percent (Rs. 3,819 crores). On an APE basis, the share of par products in the individual firm was 92.25 percent, while the remaining 7.75 percent was attributable to non-par products. When compared to the same quarter last year, when 23.07 lakh policies were sold, a total of 36.81 lakh policies were sold in the individual segment, representing an increase of 59.56 %.
- The persistency ratios on a premium basis for the 13th month and 61st month for the quarter that ended on June 30, 2022, were 75.75% and 58.99%, respectively. For the same quarter that ended on June 30th, 2021, the equivalent persistency ratios were 72.49% and 56%, respectively.
- The persistency ratios on a number of policies basis for the 13th month and 61st month for the quarter ended June 30, 2022, were 63.85% and 47.51%, respectively. For the same quarter that ended on June 30th, 2021, the equivalent persistency ratios were 61.26% and 44.87%, respectively. Comparing the quarter ending June 30th, 2021 to the quarter ending June 30th, 2022, the persistency has generally increased on both the basis of premiums and policies.
- As of June 30th2022, the asset under management has climbed by 7.57% to Rs. 41.02 lakh crore from Rs. 38.13 lakh crore the previous year.
- In comparison to the period ending June 30th, 2021, the Yield on Investments for funds held by policyholders that do not include unrealized profits was 7.74% in 2022. The Net Non-Performing Assets in the Policyholders’ Fund decreased to Rs 9 Crore as of June 30th, 2022, compared to Rs 194 Crore as of June 30th, 2021. In comparison to the gross NPA of Rs 26,620 crore, a provision of Rs 26,611 crore has been made for the fiscal quarter ended June 30th, 2022.
- In comparison to the quarter that ended June 30th, 2021, which had a solvency ratio of 173.34%, the quarter that ended June 30th, 2022 had a solvency ratio of 188.54%. The Value of New Business (VNB) (Gross) was 1,861 Crore for the quarter that ended on June 30th, 2022. For the time frame that ended on June 30th, 2022, the VNB margins are 13.6%. (Net).
- For the quarter that concluded on June 30th, 2022, the Group’s Gross VNB was Rs. 583 Crore and the Individual Business’ Gross VNB was Rs. 1277 Crore. The Gross VNB margins for their Individual and Group businesses were 19.80% and 15.26%, respectively. Gross VNB margins for the Individual business’s Par and Non-Par (including Linked) businesses were 14.38% and 84.20%, respectively.
Key operational and financial metrics:
| Sr No. | Particulars | Q1 FY 2023 (Rs in Crs) | Q1 FY 2022 (Rs in Crs) | Growth %age |
| 1 | Total New Business Premium Income (Individual) | 10,938 | 8,040 | 36.04 |
| 2 | Renewal Premium (Individual) | 49,069 | 45,048 | 8.93 |
| 3 | Total Premium (Individual) | 60,007 | 53,088 | 13.03 |
| 4 | Group Business Premium | 38,345 | 28,633 | 33.92 |
| 5 | Total Premium Income | 98,352 | 81,721 | 20.35 |
| 6 | Number of Policies sold | 36,81,764 | 23,07,513 | 59.56 |
| 7 | Assets under Management | 41,02,041.84 | 38,13,370.14 | 7.57 |
Frequently Asked Questions (FAQs)
-
What is the LIC share price?
LIC share price is INR 653.00 as of 21 September 2022.
-
What are the 52-week high and low of LIC Share price?
As on 21 September 2022:
-
- 52-wk high 920.00
- 52-wk low 650.00
-
What are the key metrics to analyze LIC Share Price?
Key metrics to analyze any share price are: 52-week high, a 52-week low, 1-year return, 5-year return, etc.
-
Who are the peers of LIC Share?
Peers of LIC include Bajaj Finserv Ltd, SBI Life Insurance Company Ltd, and HDFC Life Insurance Company Ltd.
-
What is the market cap of LIC Stocks?
The market cap of LIC is 4.1 Lakh Crore as on 21 September 2022.
Interested in how we think about the markets?
Read more: Zen And The Art Of Investing
Watch/hear on YouTube:
Start investing through a platform that brings goal planning and investing to your fingertips. Visit Kuvera.in to discover Direct Plans and Fixed Deposits and start investing today.
#MutualFundSahiHai #KuveraSabseSahiHai!
