The Life Insurance Corporation of India was established on 1 September 1956, when the Parliament of India passed the Life Insurance of India Act, nationalising the insurance industry in India. Over 245 insurance companies and provident societies were merged.[5][6]
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 having settled 26 million claims in 2018–19. It ranked 98th on the 2022 Fortune Global 500 list with a revenue of ₹775,283 crore (equivalent to ₹8.2 trillion or US$100 billion in 2023) and a profit of ₹4,415 crore (equivalent to ₹47 billion or US$590 million in 2023).[7]
History
LIC Building at Chennai, was the tallest building in India when it was inaugurated in 1959
Founding organisations
The Oriental Life Insurance Company, the first company in India to offer life insurance coverage, was established in Kolkata in 1818 by Bipin Das Gupta. Its primary target market was India.[8]
Surendranath Tagore had founded Hindustan Insurance Society in the same time period, which later became the Life Insurance Corporation.[9]
The Bombay Mutual Life Assurance Society was formed in 1870, almost half a century later. It was the first native insurance provider of Western India. Other insurance companies established in the pre-independence era include:
Postal Life Insurance (PLI) was introduced on 1 February 1884
These companies were established when India was marked mostly by turbulent economic and political conditions including the Indian rebellion of 1857, World War I and World War II. 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 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.[10]
Initial public offering
This section needs to be updated. The reason given is: IPO has happened. Please help update this article to reflect recent events or newly available information. (February 2024)
Finance Minister Nirmala Sitharaman announced a proposal to conduct an initial public offering for LIC in the 2021 Union Budget.[11] 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.[12] In year 2021, the government of India had proposed to enhance the authorized capital of the LIC of India, to ₹250 billion (US$3.1 billion) to facilitate its public listing scheduled for the next fiscal year which will begin on 1 April.[13]
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.[14]
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 Government of India 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.[15] As per the IPO price band for 3.5% stakes for ₹21,000 crore, the valuation comes to around ₹6 lakh crore.
In August 2000, the Indian Government 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 that the first year premium compound annual growth rate (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.[16]
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 ₹200,000 (US$2,500).[17]
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.[18]
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₹784,889 crore (US$98 billion) (2023)[1]
