Life Insurance Corporation India

Life Insurance Corporation India

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Life Insurance Corporation India –

Life Insurance Corporation India (LIC) is an Indian statutory insurance and investment corporation headquartered in the city of Mumbai, India. It is under the ownership of the Government of India. LIC is a major force in the stock market, with holdings valued at Rs 9.89 lakh crore at the end of March 2022. The value of LIC’s holdings is at an all-time high. LIC owns a large stake in blue-chip companies including Reliance Industries, TCSSBI, and even ITC.

Life Insurance Corporation India

History –

The Life Insurance Corporation India was established on 1 September 1956, when the Parliament of India passed the Life Insurance of India Act which nationalized the insurance industry in India. Over 245 insurance companies and provident societies were merged to create the state-owned Life Insurance Corporation of India.

Operations –

Today Life Insurance Corporation India functions with 2048 fully computerized branch offices, 8 zonal offices, around 113 divisional offices, 2,048 branches, and 1408 satellite offices and the Central Office. It also has 73 customer zones and 25 metro-area service hubs located in different cities and towns of India. It also has a network of 1,537,064 individual agents, 342 Corporate Agents, 109 Referral Agents, 114 Brokers, and 42 Banks for soliciting life insurance business from the public.

The Life Insurance Corporation India has 22 departments each headed by an Executive Director namely Marketing, Bank assurance (B&AC), Corporate Communication, Personnel, CRM, Direct Marketing, E&OS, F&A, IT/BPR, Inspection, Investment, SBU/Estates, Investment Operations, P&GS, Actuarial, Chairman Sectt, F&A, Micro Insurance, RTI, HRD, Engineering, and Vigilance.

LIC Investments –

  1. IDBI Bank is LIC’s largest shareholding with a 49.24% stake as of March 31, 2022.
  2. LIC Housing Finance is the second-largest stock holding of LIC with a 45.24% stake. LIC Housing Finance is a subsidiary of LIC.
  3. ITC is the third-largest stock holding of LIC, owning a 15.83% stake in the company.
  4. LIC holds 14.16% of NMDC.
  5. LIC holds 13.12% in Mahanagar Telephone Nigam.
  6. LIC holds 12.18% in Hindustan Copper.
  7. LIC holds 11.88% in Larsen & Toubro.
  8. LIC holds 11.71% in Oil India.
  9. LIC holds 11.33% in Castron India.
  10. LIC holds 11.22 % of Rajesh Exports.

In terms of Value,

  1. Reliance Industries was the largest stock holding of LIC as of March 31, 2022, valued at Rs 1.08 lakh crore.
  2. Tata Consultancy Services is the second-largest stake in value terms with a stake valued at Rs 50,543 crore.
  3. The stake in the ITC, the cigarette to hospitality firm valued at Rs 48,883 crore at the end of March this year.
  4.  Other top holdings in terms of value were Infosys, State Bank of India, ICICI Bank, L&T, HUL, IDBI Bank, and HDFC Bank.

Is LIC Good Investment –

Life Insurance Corporation India is the largest insurance provider company in India, with a market share of more than 66 percent in new business premiums. The company offers participating insurance products and non-participating products. It operates globally in Fiji, Mauritius, Bangladesh, Nepal, Singapore, Sri Lanka, UAE, Bahrain, Qatar, Kuwait, and the United Kingdom.

According to Researchers, Insurance is a business of scale, and there is no company to match the scale of LIC. LIC is one of India’s most trusted brands. Trust is the most important factor in purchasing insurance, and it carries a lot more weight when it comes from a government company. LIC is available at an embedded value per share of 1.1 times whereas HDFC Life is trading at a price to the embedded value of 4-times, SBI Life at 3-times, and ICICI Prudential Life at around 2-times. As a result, LIC offers the investor an excellent opportunity at a reasonable price.

Life Insurance Corporation India is larger than the overall Indian mutual funds industry. LIC invests the majority of its debt instruments in sovereign and AAA-rated securities, while more than 90 percent of its equity investments are in stocks that are part of the Nifty 200 and BSE 200 indices.

Key Takeaways –

  1. LIC owns a large stake in blue-chip companies including Reliance Industries, TCS, SBI, and even ITC.
  2. LIC has a lower embedded value per share as compared to its competitors.
  3. LIC is largest insurance provider company in India.
  4. LIC’s total assets under management (AUM) are greater than the AUM of the entire mutual fund industry.
  5. It has a strong agent network.
  6. It has lower profit margins than its competitors.
  7. LIC has consistently lost market share.

Also Check – Banking Battle In India

For more information about LIC,

Visit – Life Insurance Corporation India

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2 comments

  1. Actually, the con for the LIC Stock is as follows:

    1. Low margins: Though LIC owned tons of Stock in blue-chip companies all the profit from these equities goes to the policyholder in the form of returns and bonuses.

    2. Low Profitability: With a Sales/Revenue near Rs. 7 Lakh Crore, it has a Net Profit of less than Rs. 3000 cr. which is very less when we compare it with its peers.

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