Best of Insurance: LIC
Life Insurance Corporation of India (LIC) is the largest insurance company in India. The (LIC) was established about 49 years ago in 1956, with a view to provide an insurance cover against various risks in life. The corporate office of LIC is situated in Mumbai. ‘Yogakshema’, the name of LIC of India's corporate headquarters, is derived from the Rig Veda. This Sanskrit term means "well-being". The Corporation has enjoyed a monopoly status since its inception and has become synonymous with life insurance in the country.
LIC has its branches in all major cities of India. It has 2048 Branches and over 10 Lakh agents spread all over the country. The main asset of LIC is its staff strength of 1.24 Lakh employees. The immense reach of LIC can be gauged from the fact that LIC settles 1.43 claims every second.
From 1956 to 2000 saw the Life Insurance Corporation of India emerge as a giant financial institution and the lone organization providing life insurance. The institution succeeded in penetrating many areas and segments of the population and in garnering public money for public welfare.
Currently, the Board of Directors comprise of the Chairman Mr.A.K.Shukla and three Managing Directors. The non official members are seven in number and include such distinguished names from varied fields, such as Mrs. (Dr.) Swati Piramal , Director (Nicholas Piramal India Ltd.), Dr. Arvind Virmani, Director and CEO (Indian Council for Research on International Eco. Relations) and Mrs. Pushpa Girimaji (Social Activist).
At the industry level, along with the Government and the General Insurance Corporation (GIC), it has helped establish the National Insurance Academy. It presently transacts in:
• Individual life insurance businesses
• Group insurance businesses
• Social security schemes and pensions
• Grants housing loans through its subsidiary
• Markets savings and investment products through its mutual fund.
LIC has been one of the pioneering organizations in India, which ushered in the use of information technology in their business on a very large scale. LIC has fully computerized most of its branches all over India. Metropolitan Area Network (MAN), Wide Area Network (WAN), Interactive Voice Response Systems and Interactive Touch Screen based Multimedia kiosks have been set up all over the country. These systems connect all the branches and zonal offices of LIC. The main aim behind this is to deliver more value and satisfaction to the policyholders.
Today, LIC has 100 divisional offices and has established extensive training facilities at all levels. At the apex are the Management Development Institute, seven Zonal Training Centres and 35 Sales Training Centres. Since its business is growing with each passing day, it needs an increasing number of employees.
Career opportunities in LIC include positions as Career Agents. Minimum qualification is 10+2 in the subject fields of Insurance, Accountancy/Auditing, Office Secretary / Stenography, Banking or Office Management.
The most lucrative job with LIC is that of an Agent. LIC offers free professional training to qualify as an Agent under the IRDA rules. To qualify as an LIC Agent candidates need to have passed 10+2 (in urban areas) or the 10th Standard (in rural areas). Apart from this they also need to have good communication skills.
The positions of Administrative Officer (AO) and Assistant Administrative Officer (AAO) belong to the class I officer group. They should hold a graduate/postgraduate degree in any subject with minimum of 50% marks. Recruitment is done by LIC Central Office at Mumbai. The job begins with the candidates joining LIC on a probation-cum-training period of six months. Assistant Administrative Officers (AAOs) can choose any of the areas from Administration, Development and Accounts. After three years of working as AAOs they can be promoted to AOs.
Other positions include Assistants, Typists, Machine Operators, Stenographer, Telephone Operators and Clerks. They are recruited by the Divisional Office. Candidates need to be graduates in any discipline with a good typing speed.
LIC pays off about Rs 6,000 crore annually to 5.6 million policyholders. In the year 2000 Life Insurance Corporation (LIC), sold close to 20 million new policies with a turnover of US$ 5 billion. It adds about seven percent to the country’s GDP. LIC is gearing itself to become a major multinational life insurance organization. For this it has taken several initiatives ensuring state-of-the-art services to its clients. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom.
As per the Government guidelines, LIC invests a major portion of its funds in Central, State Governments and other approved securities including special deposits with the Government of India. LIC extends assistance to develop infrastructure facilities like housing, rural electrification, water supply, sewerage. It provides financial assistance to the corporates by way of term loans and underwriting and direct subscriptions to shares and debentures. LIC also provides resource support to financial institutions through subscription to their shares, bonds and by way of term loans.
For years life insurance remained a monopoly of LIC. It was only after the Malhotra Committee Report that the sector was finally opened up to private players in 2001. The Malhotra Committee on Insurance Sector reforms recommended privatization of LIC with Government retaining 50% stake.
After the liberalization the entrance of foreign players has added to the competition for LIC in the market. But, because of this competition the LIC has gained in strength. This is due to the deepening of the market consequent to the awareness created by the new companies. LIC has a well established and extensive distribution channel and presence. New players may find it expensive and time consuming to bring up a distribution network to such standards.
LIC continues to enhance the quality of life of people through financial security by providing products and services with competitive returns and render resource support for economic development.