Life Insurance Corporation of India (LIC) is an Indian central public sector undertaking headquartered in

Mumbai Mumbai (, ; also known as Bombay — List of renamed Indian cities and states#Maharashtra, the official name until 1995) is the capital city of the Indian States and union territories of India, state of Maharashtra and the ''de facto'' fin ...

, Maharashtra,

India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...

. It is under the ownership of

Ministry of Finance A ministry of finance is a part of the government in most countries that is responsible for matters related to the finance. Lists of current ministries of finance Named "Ministry" * Ministry of Finance (Afghanistan) * Ministry of Finance and Ec ...

Government of India The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, ...

. The Life Insurance Corporation of India was established on 1 September 1956, when the

Parliament of India The Parliament of India ( IAST: ) is the supreme legislative body of the Republic of India. It is a bicameral legislature composed of the president of India and two houses: the Rajya Sabha (Council of States) and the Lok Sabha (House of the ...

passed the Life Insurance of India Act, nationalizing the insurance industry in India. Over 245 insurance companies and provident societies were merged together.https://www.licindia.in/getattachment/Bottom-Links/annual-report/LIC-Annual-Report-2015-16.pdf.aspx LIC reported 290 million policyholders as of 2019, a total life fund of ₹28.3 trillion and a total value of sold policies in the year 2018–19 of ₹21.4 million. The company also reported to have settled 26 million claims in 2018–19. It ranked 98th on the 2022

Fortune Global 500 The ''Fortune'' Global 500, also known as Global 500, is an annual ranking of the top 500 corporations worldwide as measured by revenue. The list is compiled and published annually by ''Fortune'' magazine. Methodology Until 1989, it listed onl ...

list with a revenue of and a profit of .

History

Founding organisations

The Oriental Life Insurance Company, the first company in India offering life insurance coverage, was established in

Kolkata Kolkata (, or , ; also known as Calcutta , the official name until 2001) is the capital of the Indian state of West Bengal, on the eastern bank of the Hooghly River west of the border with Bangladesh. It is the primary business, comme ...

in 1818. Its primary target market was the population of Europeans in India, and it charged Indians heftier premiums.

Surendranath Tagore Surendranath Tagore (1872–1940) was a Bengali author, literary scholar, and translator. He is particularly noted for translating a number of works of Rabindranath Tagore to English. Early life and background A member of the Tagore family of ...

had founded Hindustan Insurance Society, which later became Life Insurance Corporation. The Bombay Mutual Life Assurance Society, formed in 1870, was the first native insurance provider. Other insurance companies established in the pre-independence era include: * Postal Life Insurance (PLI) was introduced on 1 February 1884 * Bharat Insurance Company (1896) * United India (1906) * National Indian (1906) *

National Insurance National Insurance (NI) is a fundamental component of the welfare state in the United Kingdom. It acts as a form of social security, since payment of NI contributions establishes entitlement to certain state benefits for workers and their fami ...

(1906) * Co-operative Assurance (1906) * Hindustan Co-operatives (1907) * The New India Assurance Co Ltd (1919) * Indian Mercantile * General Assurance * Swadeshi Life (later Bombay Life) * Sahyadri Insurance (Merged into LIC, 1986) These companies were established when India was marked mostly by turbulent economic and political conditions including the

Indian rebellion of 1857 The Indian Rebellion of 1857 was a major uprising in India in 1857–58 against the rule of the British East India Company, which functioned as a sovereign power on behalf of the British Crown. The rebellion began on 10 May 1857 in the fo ...

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and

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposing ...

. The effect of these events led to a high liquidation rate of life insurance companies in India and adversely affected the faith of the general public in the value of obtaining life insurance.

Nationalization in 1956

In 1956, parliamentarian

Feroze Gandhi Feroze Gandhi (born Feroze Jehangir Ghandy;: "Feroze Gandhi was also from the Nehrus' home town, Allahabad. A Parsi by faith, he at first spelt his surname 'Ghandy'. However, after he joined the national movement as a young man, he changed th ...

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

Initial public offering

Finance Minister Nirmala Sitharaman announced a proposal to conduct an

initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...

for LIC in the 2021 Union Budget. The IPO is expected to occur in 2022, and the Government of India will remain the majority shareholder after the public listing. Ten percent of shares are proposed to be allotted to existing LIC policyholders. In year 2021, the government of India had proposed to significantly enhance the authorised capital of the LIC of India, to to facilitate its public listing scheduled for the next fiscal year which will begin on 1 April. Due to the scale of the offering and the LIC's ownership structure, the deal has been referred to as "India's Aramco moment" in reference to the comparable 2019 IPO of Saudi Aramco. The LIC announced it would open its IPO to the public on 4 May 2022, and the process would be concluded on May 9. Through this IPO, the

is now aiming to raise ₹21,000 crore, as opposed to raising between ₹65,000 crore to ₹70,000 crore by diluting the 5% equity earlier. As per the IPO price band for 3.5% stakes for ₹21,000 crore, the valuation comes to around ₹6 lakh crore.

Structure

The Central Office of LIC is based out of Mumbai. There are a total of 8 zonal offices, located in

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Chennai Chennai (, ), formerly known as Madras ( the official name until 1996), is the capital city of Tamil Nadu, the southernmost Indian state. The largest city of the state in area and population, Chennai is located on the Coromandel Coast of th ...

Hyderabad Hyderabad ( ; , ) is the capital and largest city of the Indian state of Telangana and the ''de jure'' capital of Andhra Pradesh. It occupies on the Deccan Plateau along the banks of the Musi River, in the northern part of Southern India ...

, Kanpur,

, Bhopal and

Patna Patna ( ), historically known as Pataliputra, is the capital and largest city of the state of Bihar in India. According to the United Nations, as of 2018, Patna had a population of 2.35 million, making it the 19th largest city in India. ...

Liberalisation post 2000s

In August 2000, the

Indian Government The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, ...

embarked on a program to liberalise the insurance sector and opened it up to the private sector. The LIC benefited from this process and in 2013 reported the first year premium

compound annual growth rate Compound annual growth rate (CAGR) is a business and investing specific term for the geometric progression ratio that provides a constant rate of return over the time period. CAGR is not an accounting term, but it is often used to describe some ele ...

(CAGR) was 24.53% while total life premium CAGR was 19.28% matching the growth of the life insurance industry and outperforming general economic growth.

Awards and recognitions

The Economic Times Brand Equity Survey 2012 rated LIC as the 6th Most Trusted Service Brand of India. The LIC was also voted India's Most Trusted brand in the BFSI category according to the Brand Trust Report from 2011 to 2014.

Golden Jubilee Foundation

The LIC Golden Jubilee Foundation was established in 2006 as a charity organization. The entity has the aim of promoting education, alleviating poverty, and providing better living conditions for the underprivileged. The Golden Jubilee Scholarship award is one of the best known parts of the foundation. Each year, this award is given to the meritorious students in the 12th standard who wish to continue their studies, and have a parental income less than .

Financial

Holdings

The LIC invests in sectors such as banks, cement, chemicals and fertilizers, electricity and transmission, electrical and electronics, engineering, construction and infrastructure, fast-moving consumer goods, finance and investments, healthcare, hotels, information technology, metals and mining, motor vehicles, and ancillaries, oil and natural resources, retail, textiles, transportation, and logistics.

References

External links

* {{DEFAULTSORT:Life Insurance Corporation Of India 2022 initial public offerings Financial services companies based in Mumbai Government-owned insurance companies of India Financial services companies established in 1956 Life insurance companies of India Indian companies established in 1956 1956 establishments in Bombay State