Investment Analysis Final

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CHAPTER 1

INTRODUCTION

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INTRODUCTION

Brief History Of Insurance

The story of insurance is probably as old as the story of mankind. The same instinct that

prompts modern businessmen today to secure themselves against loss and disaster

existed in primitive men also. They too sought to avert the evil consequences of fire and

flood and loss of life and were willing to make some sort of sacrifice in order to

achieve security. Though the concept of insurance is largely a development of the

recent past, particularly after the industrial era -past few centuries - yet its beginnings

date back almost 6000 years.

Life Insurance in its modern form came to India from England in the year 1818.

Oriental Life Insurance Company started by Europeans in Calcutta was the first life

insurance company on Indian Soil. All the insurance companies established during that

period were brought up with the purpose of looking after the needs of European

community and Indian natives were not being insured by these companies. However,

later with the efforts of eminent people like Babu Muttylal Seal, the foreign life

insurance companies started insuring Indian lives. But Indian lives were being treated as

sub-standard lives and heavy extra premiums were being charged on them. Bombay

Mutual Life Assurance Society heralded the birth of first Indian life insurance company

in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise

with highly patriotic motives, insurance companies came into existence to carry the

message of insurance and social security through insurance to various sectors of society.

Bharat Insurance Company (1896) was also one of such companies inspired by

nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance

companies. The United India in Madras, National Indian and National Insurance in

Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907,

Hindustan Cooperative Insurance Company took its birth in one of the rooms of the

Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian

Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the

companies established during the same period. Prior to 1912 India had no legislation to

regulate insurance business. In the year 1912, the Life Insurance Companies Act, and

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the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it

necessary that the premium rate tables and periodical valuations of companies should

be certified by an actuary. But the Act discriminated between foreign and Indian

companies on many accounts, putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance

business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to

176 companies with total business-in-force as Rs.298 crore in 1938. During the

mushrooming of insurance companies many financially unsound concerns were also

floated which failed miserably. The Insurance Act 1938 was the first legislation

governing not only life insurance but also non-life insurance to provide strict state

control over insurance business. The demand for nationalization of life insurance

industry was made repeatedly in the past but it gathered momentum in 1944 when a

bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly.

However, it was much later on the 19th of January 1956 that life insurance in India

was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and

75 provident were operating in India at the time of nationalization. Nationalization was

accomplished in two stages; initially the management of the companies was taken over

by means of an Ordinance, and later, the ownership too by means of a comprehensive

bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of

June 1956, and the Life Insurance Corporation of India was created on 1st September,

1956, with the objective of spreading life insurance much more widely and in

particular to the rural areas with a view to reach all insurable persons in the country,

providing them adequate financial cover at a reasonable cost.

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Indian Insurance Industry

With a large population and untapped market, insurance happens to be a dig

opportunity in India. The insurance business is growing at an annual rate of 21.9 per

cent. Together with banking services, it accounts for about 7.1 per cent to the countrys

GDP. However Insurance penetration tends to rise as income increases, particularly in

life insurance. India with about 200 milion middle class households shows a potential

for insurance industry. Saturation of markets in many developed economies has made

in the Indian market even more attractive for global insurance majors. The insurance

sector was opened up for private participation four years ago and the private players are

active in the liberalized environment. The insurance market have witnessed dynamic

changes which includes presence of a fair number of insurers both life and non-life

segment. Most of the private insurance companies have formed joint venture partnering

well with recognized foreign players across the globe. The Indian insurance market

accounts only for 0.59 per cent of USD 2,627 bilion global insurance market. Consumer

awareness has improved. Competition has brought more products and better customer

serving. It has had a positive impact on the economy terms of income generation and

employment growth.

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OBJECTIVES

OF STUDY

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OBJECTIVES OF STUDY:

To analysis impact of IT on LIC.

To understand the various plans marketed by LIC.

To study the investment pattern in LIC of India for the years: 1988-1998, 2003-2009 .

To analyse and conclude the investment pattern the LIC of India for the years : 1988-1998,2003-2009 through their annual reports.

SCOPE:

The study emphasises only on analysis and understanding of thefollowing:

o Plans marketed by LIC.

o Impact of IT on LIC .

o Investment of LIC of India through annual report

METHODOLOGY:

All the data is collected from secondary sources such as internet, yearlydiaries, agents manual, annual reports, etc.

Data is analyzed with the help of graph charts.

Data is analyzed also with the help of pie charts.

Percentages are calculated to give a better picture of the growth.

PERCENTAGE = (INDIVIDUAL VALUE X 100)/TOTAL

LIMITATIONS:

The study is done on Secondary data as primary data is not available

The study is for limited period of 45 days.

The findings cannot be accurately generalized.

Due to limitation of time, the study was dependent more on booksrather than practical learning.

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CHAPTER 2

INTRODUCTION

ABOUT LIFEINSURANCE

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INTRODUCTION ABOUT LIFE INSURANCE

What Is Life Insurance?

Life Insurance is a contract that pledges payment of an amount to the person

assured (or his nominee) on the happening of the event insured against.

The Contract is valid for payment of the insured amount during:

The date of maturity, or

Specified dates at periodic intervals, or Unfortunate death, if it occurs earlier.

Among other things, the contract also provides for the payment of premium

periodically to the Corporation by the policy holder Life Insurance is universally

acknowledged to be an institution, which eliminates risk, substituting certainty for

uncertainty and comes to the timely aid of the family in the unfortunate event of death

of the breadwinner.

By and large, life insurance is civilizations partial solution to the problems

caused by death. Life insurance, in short, is concerned with two hazards that stand

across the life-path of every person:

1. That of dying prematurely leaving a department family to fend for itself.

2. That of living till old age without visible means of support.

Life Insurance Vs Other Savings

CONTRACT OF INSURANCE:

A contract of insurance is a contract of utmost good faith technically known as

uberrima fides. The doctrine of disclosing all material facts is embodied in this

important principle, which applies to all forms of insurance. At the time of taking a

policy, policyholder should ensure that all questions in the proposal form are correctly

answered. Any misrepresentation, non-disclosure or fraud in any document leading to

the acceptance of the risk would render the insurance contract null and void.

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PROTECTION:

Savings through life insurance guarantee full protection against risk of death of

the saver. Also, in case of demise, life insurance assures payment of the entire amount

assured (with bonuses wherever applicable) whereas in other savings schemes, only the

amount saved (with interest) is payable.

Aid To Thrift:

Life insurance encourages 'thrift'. It allows long-term savings since payments

can be made effortlessly because of the 'easy instalment' facility built into the scheme.

(Premium payment for insurance is either monthly, quarterly, half yearly or yearly).

For example: The Salary Saving Scheme popularly known as SSS, provides a convenient

method of paying premium each month by deduction from one's salary.

In this case the employer directly pays the deducted premium to LIC. The

Salary Saving Scheme is ideal for any institution or establishment subject to specified

terms and conditions.

Liquidity:

In case of insurance, it is easy to acquire loans on the sole security of any policy

that has acquired loan value. Besides, a life insurance policy is also generally accepted

as security, even for a commercial loan.

Tax Relief:

Life Insurance is the best way to enjoy tax deductions on income tax and wealth

tax. This is available for amounts paid by way of premium for life insurance subject to

income tax rates in force.

Assessees can also avail of provisions in the law for tax relief. In such cases the

assured in effect pays a lower premium for insurance than otherwise.

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Money When You Need It:

A policy that has a suitable insurance plan or a combination of different plans

can be effectively used to meet certain monetary needs that may arise from time-to-

time.

Children's education, start-in-life or marriage provision or even periodical

needs for cash over a stretch of time can be less stressful with the help of these policies.

Alternatively, policy money can be made available at the time of one's

retirement from service and used for any specific purpose, such as, purchase of a house

or for other investments. Also, loans are granted to policyholders for house building or

for purchase of flats (subject to certain conditions).

Who Can Buy A Policy?

Any person who has attained majority and is eligible to enter into a valid

contract can insure himself/herself and those in whom he/she has insurable interest.

Policies can also be taken, subject to certain conditions, on the life of one's

spouse or children. While underwriting proposals, certain factors such as the

policyholder's state of health, the proponent's income and other relevant factors are

considered by the Corporation.

Insurance For Women

Prior to nationalisation (1956), many private insurance companies would offer

insurance to female lives with some extra premium or on restrictive conditions.

However, after nationalisation of life insurance, the terms under which life insurance is

granted to female lives have been reviewed from time-to-time.

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At present, women who work and earn an income are treated at par with men. In

other cases, a restrictive clause is imposed, only if the age of the female is up to 30

years and if she does not have an income attracting Income Tax.

Medical And Non-Medical Schemes

Life insurance is normally offered after a medical examination of the life to be

assured. However, to facilitate greater spread of insurance and also to avoid

inconvenience, LIC has been extending insurance cover without any medical

examination, subject to certain conditions.

With Profit And Without Profit Plans

An insurance policy can be with or without profit. In the former, bonuses

disclosed, if any, after periodical valuations are allotted to the policy and are payable

along with the contracted amount.

In without profit plan the contracted amount is paid without any addition. The

premium rate charged for a 'with' profit policy is therefore higher than for a 'without'

profit policy.

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Key man Insurance

Key man insurance is taken by a business firm on the life of key employee(s) to

project the firm against financial losses, which may occur due to the premature demise

of the Key man

Some of the important milestones in the life insurance business in India are:

1818: Oriental Life Insurance Company, the first life insurance company on Indian soil

started functioning.

1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company

started its business.

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate

the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect

statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the

objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by the

central government and nationalized. LIC formed by an Act of Parliament, viz. LIC

Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the

Triton Insurance Company Ltd., the first general insurance company established in theyear 1850 in Calcutta by the British.

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CHAPTER 3

COMPANY PROFILE

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Introduction about Life Insurance Corporation (LIC):

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from

its corporate office in the year 1956. Since life insurance contracts are long term

contracts and during the currency of the policy it requires a variety of services need was

felt in the later years to expand the operations and place a branch office at each district

headquarter, re-organization of LIC took place and large numbers of new branch offices

were opened. As a result of re-organisation servicing functions were transferred to the

branches, and branches were made accounting units. It worked wonders with the

performance of the corporation. It may be seen that from about 200.00 crores of New

Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it

took another 10 years for LIC to cross 2000.00 crore mark of new business. But with

re-organisation happening in the early eighties, by 1985-86 LIC had already crossed

7000.00 crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 100

divisional offices, 7 zonal offices and the Corporate office. LIC's Wide Area Network

covers 100 divisional offices and connects ail the branches through a Metro Area

Network. LIC has tied up with some Banks and Service providers to offer on-line

premium collection facility in selected cities. LIC's ECS and ATM premium payment

facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS,

Info Centers have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai,Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing

easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices.

The satellite offices are smaller, leaner and closer to the customer. The digitalized

records of the satellite offices will facilitate anywhere servicing and many other

conveniences in the future. LIC continues to be the dominant life insurer even in the

liberalized scenario of Indian insurance and is moving fast on a new growth trajectory

surpassing its own past records. LIC has issued over one crore policies during the current

year. It has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct,

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200&, posting a healthy growth rate of 16.67% over the corresponding period of the

previous year. From then to now, LIC has crossed many milestones and has set

unprecedented performance records in various aspects of life insurance business. The

same motives which inspired our forefathers to bring insurance into existence in this

country inspire us at LIC to take this message of protection to light the lamps of security

in as many homes as possible and to help the people in providing security to their

families.

LIC OF INDIA:

Life insurance in India made its debut well over 100 years ago. In our country,

which is one of the most populated in the world, the prominence of insurance is not as

widely understood, as it ought to be. What follows is an attempt to acquaint readers

with some of the concepts of life insurance, with special reference to LIC. It

should, however, be clearly understood that the following content is by no means an

exhaustive description of the terms and conditions of an LIC policy or its benefits or

privileges.

Life Insurance

The life Insurance industry recorded a premium income of Rs. 82854.80 crore

during the financial year 2004-05 as against Rs. 66653.75 crore in the previous

financial year recording a growth of 24.31 per cnet. The contribution of first year

premium, single premium and renewal premium to the total premium was Rs. 15881.33

crore (19.16 per cent) Rs. 10336.30 crore (12.47 per cent): and Rs. 56637.16 crore

(68.36 per cent). Respectively. In the year 2000-01, when the industry was opened up to

the private players, the life insurance premium was Rs. 34.898.48 crore which

constituted of Rs. 6996.95 crore of first year premium Rs. 25191.07 crore of renewal

premium and Rs. 2740.45 crore of single premium, post opening up, single

premiumhad declined from Rs. 9,194.07 crore in the year 2001-02 to Rs. 5674.14 crore

in 2002-03 with the withdrawal of the guaranteed return policies. Though it went up

marginally in 2003-04 to Rs. 5936.50 crore (4.62 per cent growth 2004-05, however,

witnesses a significant shift with the single premium income raising to Rs. 10336.30

crore showing 74.11 per cent growth over 2003-04.

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OBJECTIVES:

Spread Life Insurance widely and in particular to the rural areas and to the socially and

economically backward classes with a view to reaching all insurable persons in the

country and providing them adequate financial cover against death at a reasonable cost.

Maximize mobilization of people's savings by making insurance-linked savings adequately

attractive.

Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose

money it holds in trust, without losing sight of the interest of the community as a

whole; the funds to be deployed to the best advantage of the investors as well as the

community as a whole, keeping in view national priorities and obligations of attractive

return.

Conduct business with utmost economy and with the full realization that the moneys belong to the

policyholders.

Act as trustees of the insured public in their individual and collective capacities.

Meet the various life insurance needs of the community that would arise in the changing social

and economic environment.

Involve all people working in the Corporation to the best of their capability in furthering the

interests of the insured public by providing efficient service with courtesy.

Promote amongst all agents and employees of the Corporation a sense of participation, pride

and job satisfaction through discharge of their duties with dedication towards

achievement of Corporate Objective.

MISION / VISION:

Mission

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Explore and enhance the quality of life of people through financial security

by providing products and services of aspired attributes with competitive returns, and

by rendering resources for economic development.

Vision

A trans-nationally competitive financial conglomerate of significance to

societies and Pride of India.

LIC Operations in India

AWARDS TO LIC OF INDIA

1. Loyalty awards 2008 Insurance sector.

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2. Golden peacock award for Excellence incorporate governance.

3. NDTV profit business leadership award 2007.

4. CNBC awaaz consumer award 2007.

5. Readers Digest Most trusted brand award 2005

6. Awaaz consumer award 2006.

7. NDTV profit business awards.

8. Awaaz consumer award 2005.

9. Business world awards 2004

10. Outlook money awards 2004.

11. Dun & Brad Street 2004.

12. Super brands India 2003-04.

13. Super brands India 2004-05.

14. Product/service award 2004.

ACHIEVEMENTS BY LIC OF INDIA

We list some of the recent awards received by LIC:

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Awaaz Consumer Awards 2006 given by CNBC TV 18 Best Life Insurance

Brand in India an award given on the basis of a market / consumer survey done in

conjunction with AC Neilson ORG Marg and Economic Times.

Golden peacock Global Award for Corporate Social Responsibility in emergineeconomics (public sector) for the year 2005 by world Council for Corporate

Governance.

LIC adjudged No. 1 in Net Worth & Net Profit and No. 2 in Total Income

among the TOP 500 Companies of India By Dun & Brandstreet.

Outlook money Award Best Life Insurer 2004.

Golden Peacock Innovative Product / Service Award for the Year 2004.

Adjudged Number one service Brand in India By Economic Times and AC Neilsen Org marg for the year 2004 for the second consecutive year.

Golden Peacock Award for being the winner of special Commendation

Certificate of Excellence in Corporate Governance (PSU sector)

Adjudged No. 1 Insurance Company Award at the Business world Most

Respected Company Awards 2004.

Largest Institutional Investor in India and second Largest in Asia among

insurers.LIC An Institution Builder promoting many financial and insurance institutes

like NSE, NCDEX, LIC Mutual Fund, Stock Holding Corporation of India, national

Insurance Academy, Insurance institute of India etc.,

LIC is the second largest PC user in the country.

LIC has been given the best IT user award in insurance sector for the year 2002

by NASSCOM and indiatimes.com.

LIC is the number one insurer in the world in volume and has sold around 24m policies in 2004-05.

Largest Financial Institutional Investor both in equity market and term loans.

LIC Posted a growth rate of around 42% in premium income for the year 2004-

05.

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INFORMATION TECHNOLOGY AND LIC

LIC has been one of the pioneering organizations in India who introduced the

leverage of Information Technology in servicing and in their business. Data pertaining

to almost 10 crore policies is being held on computers in LIC. We have gone in for

relevant and appropriate technology over the years.

1964 saw the introduction of computers in LIC. Unit Record Machines

introduced in late 1950's were phased out in 1980's and replaced by Microprocessors

based computers in Branch and Divisional Offices for Back Office Computerization.

Standardization of Hardware and Software commenced in 1990's. Standard Computer

Packages were developed and implemented for Ordinary and Salary Savings Scheme

(SSS) Policies.

FRONT END OPERATIONS

With a view to enhancing customer responsiveness and services, in July 1995,

LIC started a drive of On Line Service to Policyholders and Agents through Computer.

This on line service enabled policyholders to receive immediate policy status report,

prompt acceptance of their premium and get Revival Quotation, Loan Quotation on

demand. Incorporating change of address can be done on line. Quicker completion of

proposals and dispatch of policy documents have become a reality. All our 2048

branches across the country have been covered under front-end operations. Thus all our

100 divisional offices have achieved the distinction of 100% branch computerisation.

New payment related Modules pertaining to both ordinary & SSS policies have been

added to the Front End Package catering to Loan, Claims and Development Officers'

Appraisal. All these modules help to reduce time-lag and ensure accuracy.

METRO AREA NETWORK

A Metropolitan Area Network, connecting 74 branches in Mumbai was

commissioned in November, 1997, enabling policyholders in Mumbai to pay their

Premium or get their Status Report, Surrender Value Quotation, Loan Quotation etc.

from ANY Branch in the city. The System has been working successfully. More than

10,000 transactions are carried out over this Network on any given working day. Such

Networks have been implemented in other cities also.

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Wide Area Network

All 7 Zonal Offices and all the MAN centres are connected through a Wide

Area Network (WAN). This will enable a customer to view his policy data and pay premium from any branch of any MAN city. As at November 2005/ we have 91 centers

in India with more than 2035 branches networked under WAN.

INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS)

IVRS has already been made functional in 59 centers all over the country. This

would enable customers to ring up LIC and receive information (e.g. next premium due,Status, Loan Amount, Maturity payment due, Accumulated Bonus etc.) about their

policies on the telephone. This information could also be faxed on demand to the

customer.

LIC ON THE INTERNET

Our Internet site is an information bank. We have displayed information about

LIC & its offices. Efforts are on to upgrade our web site to make it dynamic and

interactive. The addresses/e-mail Ids of ur Zonal Offices, Zonal Training Centers,

Management Development Center, Overseas Branches, Divisional Offices and also all

Branch Offices with a view to speed up the communication process.

PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET

(You have to register for these services)

LIC has given its policyholders a unique facility to pay premiums through

Internet absolutely free and also view their policy details on Internet premium

payments. There are 11 service providers with whom L I C has signed the agreement to

provide this service.

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INFORMATION KIOSKS

LIC have set up 150 Interactive Touch screen based Multimedia KIOSKS in

prime locations in metros and some major cities for dissemination information togeneral public on our products and services. These KIOSKS are enable to provide policy

details and accept premium payments.

INFO CENTRES

LIC have also set up 8 call centers, manned by skilled employees to provide

you with information about our Products, Policy Services, Branch addresses and

other organizational information.

BOARD OF DIERECTORS:

Members On The Board Of The Corporation

Shri. T.S. Vijayan (Chairman)

Shri. D.K. Mehrotra (Managing Director - LIC)

Shri. Thomas Mathew T (Managing Director - LIC)

Shri. A.K.Dasguptha (Managing Director - LIC)

Shri. Arun Ramanathan. Secretary (Financial Sector), Department of Economic Affairs,

Ministry Of Finance , Govt of India .

Smt. Sindhushree Khullar , Addl. Secretary, Department of Economic Affairs, Ministry of

Finance

Shri Yogesh Lohiya (Chairman cum Managing Director, GIC of India)

Shri T.C. Venkat Subramanian, Chairman & Managing Director. Export Import Bank of India.

Shri. Amitav Kothari (Chartered Accountant)

Shri. Sunil Kant Munjal (MD & CEO, Hero Corporate Services Ltd.)

Dr. A.Jayagovind (Director, National Law School of India)

Smt. Pushpa Girimaji (Social Activist)

Dr. (Ms.) Swati Piramal ( Director, Nicholas Piramal Ltd.)

Dr.Gautam Barua ( Director, IIT, Guwahati)

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HIGHLIGHTS

Shri A. K. Dasgupta takes over as Managing Director of Life Insurance

Corporation of India.

Life Insurance Corporation of India added another feather to its cap by winning

the Championship Award at the Corporate Olympics held at Mumbai.

EDMS Agreement Executed.

LIC & UTI bank tie up for a unique IT enabled initiative for collection of LIC

Premiums.

LIC has launched two Childrens palns LICs Child Career plan and Child

Future plan.

Dena Bank ties up with Life Insurance Corporation of India to launch Group

Mortgage Redemption Assurance Scheme for Housing Loan Borrowers.

Central Adv. For purchase of plots for Brush Offices / Staff

Rs. 11,784.58 crore Bonus from LIC to its Policy Holders for the year 2005-06.

LIC Launches Money Plus (Plan No 180)-A Unit Linked Endoment plan

LIC Inaugurates its Hi-tech Data Center & Launches the Life Unsurance

Customer Data Warehouse

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Life Insurance Corporation of India (LIC). One of the largest Life Insurance

Companies in the world with in-force policy base of 190 Milion, announces the formal

Inauguration of its Corporation Active Data Warehouse (CADW) and World class DataCenter which will house the entire IT Infrastructure relating to all core applications of

LIC. The data center has been built with redundancies in each and every area so as to

ensure that there is no single point of feature.

LIC launches Jeevan Madhur A Micro Insurance Product LIC? Jeevan

Madhur?? A Micro Insurance Product was launched today in the esteemed presence of

Dr. A.P.J. Abdul Kalam, President of India. President was kind enough to hand over

policy bonds to the first two policyholders and four NGOs in a colourful function held

in Vigyan Bhavan, New Delhi. The function was presided over by Shri P.

Chidambaram, Honble Union Minister for Finance and attended by Mr. S.S.

Palanimanickam Honble Union Minister of State for Revenue, Micro Insurance

Product is targeted to cover the low income group and especially those who have no

fixed and stable income.

LIC has been awarded the NDTV Profit Business Leader in Insurance award

at New Delhi. Shri T.S. Vijayan, Chairman of LIC accepted the award from Shri

Manmohan Singh, Prime Minister of India.

Infosys Technologies has bought the worlds largest group LIC from LIC for a

sum assured of around Rs. 6000 Crore with a premium of around Rs. 3 Crore.

BSNL has bought the biggest corporate group life insurance policy in the world

for 3.5 lakh employees and a S.A. of Rs. 4,770 Crore from the LIC.

1806 LIC branches are inter connected WAN (Wide Area Network) till 2007

Jan.

LIC has offices in Bahrain, Kuwait, Dubai, Nepal, Muscut, & Srilanka .

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LIC has over 16 Cr. Policyholders

LIC settles 1-46 claims every second.

LIC is divided into 7 zones in India.

Financial year upto Feb 2006 1 st premium stands at over Rs. 15,700 Crore.

The LICs Chandigarh division has been ranked first in the country.

LIC wins Awaaz Consumer Award 2006 LIC has won the Awaaz Consumer

Award 2006 in the Insurance category, as the most preferred brand of Insurance

Companies (Life).

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PLANS MARKETED BY LIC

LIC offers a basket of schemes to meet the various needs of an individual and

his family

I. Basic Life Insurance Plans:

Whole Life Assurance Plan: A low cost insurance plan where the Sum Assured is

payable on the death of the life assured, whenever it occurs.

Endowment Assurance Plan: under this plan, sum Assured is payable on maturity

or on the death of the life assured, if easier.

Jeevan Anand: This is a unique with profits plan, which combines the features of the

Endowment And Whole Life Plans. The basic sum assured plus accrued bonus is

payable to the policyholder on his survival till the end of the premium paying

terms. An additional sum assd is payable to the nominee on death of the policy

holder after expiry of prem. Paying terms. On death during the premium paying

terms, the basic sum assured plus bonus is payable to the nominee and the policy

comes to an end.

II) Terms Assured Plans:

Anmol Jeevan : This is a pure Term Assurance Plan for terms 10, 15 or 20 yrs. and

provided for payments of sum Assd. On death of policyholder during term of the

policy.

Two-Year Temporary Assurance Plan: Terms assurance for period of 2years is

available under this plan. The sum assured is payable only on death of the life

assured during the policy term.

Convertible Term Assurance Plan: The plan provides for term assurance for 5 to 7

years with an option to purchase a new limited Payment Whole life Policy or an

Endowment Assurance Policy without having to undergo fresh med. exam. At

anytime during the specified term except during last 2 yrs. provided the policy is

in full force.

New Bima Kiran: In addition to return of premium paid, this plan provides for

Loyalty Addition, if any, inbuilt accident covers and Free Term Cover after

maturity, if the policy is in full force on the date of maturity.

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III) Plans For Children:

Various children's Plans are available, viz., Children's Deferred Endowment

Assurance, Jeevan Balya, Bal vidya, Komal Jeevan, and Jeevan Kishore.

Jeevan Sukanya is specially designed for girls.

IV) Pension Plans:

These plans provide for immediately or deferred pension. The annuitant has

five options of annuity payments to choose from. Premiums paid under new

Jeevan Suraksha-I up to Rs.10, 000 /- are exempted from income tax under

Section 80 CCC.

V) Plans For Handicapped Dependants:

1) Jeevan Aadhar: This is limited payment whole life policy with guaranteed

additions at the rate of Rs.100/- per thousand sum assured p.a. where the

claim amount is paid partly in a lump sum and partly in the form of an

annuity. Income Tax relief under section 80 DD of Income Tax Act 1961, is

available.

2) Jeevan Vishwas: This is an Endowment plan designed for handicapped

dependants whose degree of handicap may not fulfill the definition of

disability laid down for the Jeevan Aadhar plan. The benefits is payable

partly in a lump sum and partly in the form of an annuity (pension). The

plan also provides the Guaranteed and loyalty additions.

VI) Other Plans:

Jeevan Griha (Double &Triple Cover): Designed specially for people desirous of

obtaining a housing loan with the policy acting as collateral security and to

ensure repayment of the loan in the event of premature death of the borrower.

Mortgage Redemption: Suitable for borrower repaying the loan in installments as it

ensures that the outstanding loan is repaid in the event of the borrower's death.

Bhavishva Jeevan: A special Endowment plan ideally suited for Professionals Film

Actors, Artists etc. with a limited span of high income.

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New Jana Raksha: Ideal for people with no regular income. It provides for death

cover for a period of 3 years from the first unpaid premium, provided at least 2

full years premium have been paid.

Double Endowment: This is an Endowment Assurance Plan with double the Sum

Assured Payable on maturity.

Fixed Term (Marriage) Endowment/Educational Annuity: A plan suitable

provision for education, start-in-life or marriage of children.

Convertible Whole Life: This policy is issued as a Whole Life plan with an option to

convert it into an Endowment Assurance at the end of the 5 years. A plan suitable

for those who cannot afford high premium in the initial years but have

prospects of increased income within a few years.

Money Back Plan: Besides providing life cover during the term of the policy, the sum

assured is paid in installments by way of survival benefits during the term of the

policy.

Jeevan Surabhi: A money Back Plan where premiums are payable for a limited

period, with periodical increase in insurance cover.

Jeevan Rekha: This plan is the combination of a Whole Life and Money Back

plan. 10% of sum is payable on survival after every five years from the

date of commencement. Sum assessed plus vested bonuses are payable on

death of the life assured at any point of time without deduction of survival

benefit paid earlier.

Jeevan Samriddhi: This is a Money Back type plan with provision for

Guaranteed Addition and Loyalty Addition, if any, payable on maturity

or death earlier. The plan is available for terms 12, 15, 20 & 25 years.

Jeevan saathi: A double cover joint life endowment assurance plan for

husband & wife.

Jeevan chhava: An ideal plan to provide for a Childs higher education.

Jeevan mitra: A Double-or-Triple risk cover endowment assurance plan

providing for twice or thrice the sum assured payable on the death of the

life assured during the policy term.

New ieevan shree: A limited payment endowment assurance plan withattractive Guaranteed additions and loyalty additions, if any.

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Asha Deep-II: the plan provides, besides death and maturity payment,

contingent benefits in the case of life assured suffers from any of the four

defined ailments.

Bima Nivesh- 2002: A single premium plan of assurance with compounding

guaranteed additions at the rate of Rs.60/- per thousand sum assured p.a.

The same premium is payable for a given policy term, irrespective of age

at entry.

Jeevan Asha-II: The plan provides, besides death & maturity benefits, payment

towards the cost of certain surgical procedures & periodical survival benefit

payments. There is also a provision for guaranteed addition.

New Bima Gold: This a Unique with profit moneyback type plan. Premiums paid

over the term of the plan are paid back in installments. This will be paid at

specified duration in case L.A. survives during the policy term. Life Insurance

Cover is not only available during the term but also during the extended term

of the plan.

Amulya Jeevan: This is a pure term assurance plan like Anmol Jeevan. This is a

plan where minimum S.A. is 25 lakhs. The plan is allowed to Physically

Handicaped persons with loss of 1 limb with standard extra rates.

Jeevan Tarang: This is a whole Life Plan which provides for Annual Survival

Benefit at the rate of 51/2% of the S.A. for life time after one year from the

choosen Accumulation Period.

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VII) Unit-Linked Plan :

BIMA PLUS:

A unit linked plan provides an opportunity for the discerning investor to benefit

from the returns available in the Capital market without most of the risks inherent in

direct investment in the capital market. Bima plus offers a choice of three funds

(Secured, balanced & Risk) with different risk profiles depending on different patterns

of investment in equities, debts & liquid assets. The policyholder is allocated units

which are valued every week. The plan offers life cover & accidental cover up to Rs. 2

lakh.

MONEY PLUS:

This is a UNIT LINKED ENDOWMENT PLAN which offers Investment cum

Insurance during the term of the policy. The Policy holder can choose the level of Life

Cover within lower or higher limits .

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What does an LIC agent do?

Most people have their first contact with an insurance company through an

insurance sales agent. These workers help individuals, families, and businesses select

insurance policies that provide the best protection for their lives, health, and property.

Insurance sales agents who work exclusively for one insurance company are referred to

as captive agents. Independent insurance agents, or brokers, represent several

companies and place insurance policies for their clients with the company that offers the

best rate and coverage. In either case, agents prepare reports, maintain records, seek out

new clients, and, in the event of a loss, help policyholders settle their insurance claims.

Increasingly, some are also offering their clients financial analysis or advice on ways

the clients can minimize risk.

Insurance sales agents commonly referred to as "producers" in the insurance

industry, sell one or more types of insurance, such as property and casualty, life, health,

disability, and long-term care. Property and casualty insurance agents sell policies that

protect individuals and businesses from financial loss resulting from automobile

accidents, fire, theft, storms, and other events that can damage property. For businesses,

property and casualty insurance can also cover injured workers' compensation, product

liability claims, or medical malpractice claims. Life insurance agents specialize in selling

policies that pay beneficiaries when a policyholder dies. Depending on the

policyholder's circumstances, a cash-value policy can be designed to provide retirement

income, funds for the education of children, or other benefits. Life insurance agents

also seli annuities that promise a retirement income. Health insurance agents sell health

insurance policies that cover the costs of medical care and loss of income due to illness

or injury. They also may sell dental insurance and short- and long-term-disability

insurance policies. The growth of the Internet in the insurance industry is gradually

altering the relationship between agent and client. In the past, agents devoted much of

their time to marketing and selling products to new clients, a practice that is now

changing. Increasingly, clients are obtaining insurance quotes from a company's Web

site and then contacting the company directly to purchase policies. This interaction

gives the client a more active role in selecting a policy at the best price, while reducingthe amount of time agents spend actively seeking new clients. Because insurance sales

32


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agents also obtain many new accounts through referrals, it is important that they

maintain regular contact with their clients to ensure that the clients' financial needs are

being met. Developing a satisfied clientele that will recommend an agent's services to

other potential customers is a key to success in this field.

Training:

Our agents go through both generic and specific, professional programs that

help them remain well-informed and knowledgeable about the company's products in

the market. There is a further focus on soft skills such as communication, managing

long-term relationships and selling skills, which are very relevant in a service-driven

industry like life insurance. State of the art infrastructure training facilities coupled

with an excellent faculty, guarantee an exceptional learning environment. For agents

who might be occupied with their daily business/professional routines. A 17-18 day

training schedule covers the mandatory IRDA training requirements and LIC product-

training module. Revision session ensure that the candidates thoroughly understand the

course contents and are well prepared for the licensing examination. Theoretical

training is interspersed with practical appointment settings with potential customers,

giving agents a feel of how their business will work from the very first day. All

through, the Development Officer and the management provide continuous support to

the advisors in achieving independence towards garnering business.

Career:

Career development is emphasized upon from the very day the agent joins the

system. Though individual meetings with his or her Development Officer, the agent

can discuss various issues related to business development and career enhancement.

Expectations from the organization in terms of chalking a career in the insurance

industry are also discussed.

Absorption into the management is another career enhancement option provided

at LIC. This program helps agents build a full time career as a Development Officer in

the organization, offering great potential for managing a team of agents and personaldevelopment.

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ALTERNATE PAYMENT CHANNELS

I) Premium Payment through Net Banking facility provided by authorized banks

and other service providers.

To pay your premiums through Net Banking facility provided by the banks,

choose among any of the following service providers:

Authorized Banks:-

HDFC Bank

IClCI Bank

Bank of Punjab

UTlBank

Oriental Bank of Commerce -SBU Secunderabad

Federal Bank

Corporation Bank

Citibank

Authorised Service Providers (available only in select cities) :-

Binjunction.com

Tiniesofmoney.com

BillDesk.com

About Premium Collections Received Through Net-Banking

II ) Premium Payment through Electronic Clearing Service (ECS)

Electronic Clearance Service of Reserve Bank of India is a well established, quick,

reliable and economic processing for periodic bill payments. LIC is happy to offer this

facility to its valued customer totally FREE for payment of premiums. Presently, this

system of premium payment is provided at Mumbai, Chennai, Delhi, Kolkata,

Bangalore, Kanpur, Vijaywada, Patna, Jaipur, Chandigarh, Thiruvananthapuram and

Hyderabad ECS only. The policyholders having accounts in the banks in these cites,

which are members of clearing house can avail of this facility for all policies

irrespective of the LIC branch to which these policies are attached for servicing. This

would be gradually extended to other ECS centers and the information would be madeavailable on our web site.

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I) Benefits to the policyholders:

This is a free service to our policyholders.

This will save their time in visiting LIC Office to pay the premiums, This will save their cost and effort in sending across the premium

payments to LIC through postal/courier service/ through their

representatives This easy and automatic method of premium payment will

keep the insurance protection intact and the chances of lapse of the policy

wilt be eliminated.

The one time standing instructions in the form of a Mandate is sufficient

to pay the future premiums as and when they fall due. This facility of easy premium payment can be availed of not only in respect

of the policies of self but also on the policies effected on the lives of the

close relatives like spouse and dependent children (i.e.) the relatives on

whom policies the policyholder can claim I.T. relief for the payment of

premiums.

II) The procedure for availing of the service and the processes involved:

In order to avail of this service, the policyholders should have

their Bank Account in an ECS Centre and the Bank should be

member of the Clearing House.

Policyholder should fill up the ECS Mandate Form and get it verified

and certified by the Bank where the Bank Account is maintained.

The Mandate Form should be sent to the nearest LIC Branch

Office or to the Manager (CRM) of the Divisional Office with a photocopyor a cancelled leaf of the MICR cheque for further processing.

As and when the premium becomes due, LIC will raise a debit to the

Account of the policyholder through the ECS process and collect the

proceeds.

The debit will be raised on the date indicated by the policyholder which

should be between one month in advance of and the grace period allowed

for in paying the due premium.

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It is understood that on the due date of debit, the specified Bank

Account will have sufficient balance to cover the premium dues,

otherwise it will be treated as a case of cheque dishonour and the

policyholder would be informed accordingly. The first transaction after the authorisation may take one month time in

getting through the process commenced.

LIC will send the policyholders its official receipt by post after

realising the premium amount from the respective Bank A/c.

Policyholders desirous of availing of this service may download the ECS

Mandate Form given below.

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CHAPTER 4

DATA ANALYSIS

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LICS MARKET SHARE

LIC

OTHERS

LIC HAS CAPTURED 73.82% OF THE WHOLE MARKETS 1 ST YEAR

PREMIUM

OTHERS HOLD JUST 26.18% OF THE WHOLE

39

73.82 %26.18 %


40/67

DISTRIBUTION OF OTHER INSURERS MARKET SHARE:

Name of the Company Percentage

AMP SANMAR 0.54

AVIVA 0.13

BAJAJ ALLIANZ 5.94

BIRLA SUNLIFE 1.91

HDFC STANDARD 3.11

ICICI PRUDENTIAL 7.26

ING VYSYA 0.64

KOTAK MAHINDRA OLD MUTUAL 0.72

MAX NEWYORK 1.35

MET LIFE 0.4

SAHARA LIFE 0.05

SBI LIFE 1.49

TATA AIG 1.63

40


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DISTRIBUTION OF MARKET SHARE AMONG PVT.

LIFE INSURANCE CO.S

AMP SANMAR

AVIVA

BAJAJ ALIANZ

BIRLA SUNLIFE

HDFCSTANDARD

ICICI PRUDENTIAL

ING VYSYA

KOTAK MAHINDRA OLDMUTUALMAX NEWYORK

MET LIFE

SAHARA LIFE

SBI LIFE

TATA AIG

41

0.13 %0.54 %

5.94 %

1.91 %

3.11 %7.26 %

0.64 %

0.72 %

1.35 %

0.05 %0.4 %

1.49 %

1.63 %


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INVESTMENT OF LIC IN THE YEAR 1988 :

(In Crores)

TYPES OF INVESTMENT 31-3-87PERCENTAGE OUT

OF TOTAL1. Central Govt. Sec. 4675 39.602. State Govt. & other Govt.

Guaranteed Marketable Sec.

1683 14.26

3. Electricity (SEBs) 2603 22.054. Housing 1872 15.86

5. Water Supply & Sewerage(Mun + Z.P)

718 6.08

6. State Road Transport Corpn. 180 1.527. Loans to Industrial Est. 37 0.318. Loans to Sugar Co-op 37 0.319. Development Authority 1 0.0110. Roadways, Port, Railways - -11. Power Generation

(Pvt. Sector)

- -

12. Municipal Cop. - -Total :- 11806 100.00

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Investments in 1988

0

5

10

15

20

25

30

35

40

Central Govt. Sec.

State Govt. Sec.

Electricity

Housing

Water Supply

State Road Transport

Loans to Industries

Loans to Sugar Co-Op

Developm ent Authority

Roadw ays Port Rail

Powe r Generation

Municipal Corpn

ANALYSIS FOR 1988:

Major portion of the investments of the Life Insurance Corporation of

India were captured by the state Govt. securities.

Life Insurance Corporation concentrated only in the Public sector and the

Private sector was completely Neglicted.

53.86% (1+2) of LICs Investments are Invested in the securities.

45.52% (4+5+6+9) of LICs Investments were Invested in the

Development of Infrastructure of the Country.

0.62% (7+8) was given as loans for the growth of Industries in India.

43

39.60%

14.26%22.05%

15.86%

6.08%

1.52% 0.31%

1988


44/67

LICs INVESTMENTS IN THE YEAR 1998 :

(In Crores)



Guaranteed Marketable Sec.

8906 13.08

3. Electricity (SEBs) 8214 12.074. Housing 10967 16.105. Water Supply & Sewerage

(Mun + Z.P)

2028 3.00

6. State Road Transport Corpn. 540 0.797. Loans to Industrial Est. 45 0.06

8. Loans to Sugar Co-op 37 0.059. Development Authority 1 0.0110. Roadways, Port, Railways - -11. Power Generation

(Pvt. Sector)

- -

12. Municipal Cop. - -Total :- 68068 100.00

INVESTMENTS IN 1998

4454.84 %


45/67


46/67

LICS investments in central Govt. securities increased from 39.6% -

54.84%.

But their was a decline in the investment in State Govt. and other Govt.

securities, it reduced from 14.26% - 13.08%.

How ever their was an increase in the net investment in securities, it increased

by 26.10% (when compared to 1988) and at the end was 67.92% of the total

investments.

Investment in the development of infrastructure was 31.97% of the total

when compared to 45.52% in the previous year, that means their was a decline of

29.77% when compared to 1988.

This year loans to industrial estate's and sugar co-op increased from marginal

0.62% to 1.1% and showed an increase of 77.42%

On the whole the Life Insurance Corporation Of India showed a very good

growth rate in their investments in 1988 their total investments were 11806 crores

but in this year it showed an increase of 476.55%

LIC's investments increased by almost 5 times in 10 years which showed a great

increase of 50% per year on an average.

Looking at the speed growth of LIC OF INDIA it was quite clear for every one

that LIC OF INDIA was heading towards becoming the worlds no 1 insurance

company.

Looking at current year the expected performance of the corporation was

increasing at a rapid pace.

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INVESTMENT OF LIC OF INDIA IN THE YEAR 2003 :

(In Crores)



Guaranteed marketable Sec.

10471 12.94


(Mun + Z.P)

2264 2.8


8. Loans to Sugar Co-op 37 0.059. Development Authority 1 0.0110. Roadways, Port, Railways 25 0.0311. Power Generation

(Pvt. Sector)

276 0.34

12. Municipal Cop. 4 0.34Total :- 80945 100.00

INVESTMENTS IN 2003

47

56.68%


48/67

0

5

10

15

20

25

30

35

40

45

50

55

60

2003

Central Govt. Sec

State Govt. Sec.

Electricity

HousingWater Supply


Loans to Industries

Loans to Sugar Co-op

Development Authority

Roadways, Ports, Rail

Power Generation

MUNICIPAL Corpn.

FIELD OF INVESTMENTS

ANALYSIS OF 2003:

Like the previous year this year also the major portion of the investments was

captured by central government securities.

Their was an increase in investment in central Govt. securities from 54.84% -

56.68, it showed an Increase of 3.35%

48

12.94%11.31%

15.12%

2.8%0.68%

0.34%


49/67

Following the trend of past 11 years this year also the net investment in

securities increased, it was 54.84 in the previous year and rose to 56.68 in this

year, showing an increase of 2.5%.

Investment in the development of infrastructure at the beginning was 45.52%and at the end was 29.96%, which showed a decline of 34.18% which was quite

considerable

Loans to industries was stable at 1.1% of the total investments

There is an important point to be seen in this year as this is the first time LIC

started to invest in power generation of private sector.

It is from this year LIC started directly investing in the private sector.

The investment in the power generation of private sector was 0.34% of the

total investment.

From this year LIC started investing in developing transport i.e., railways, ports,

roadways. The percentage of investment in this was 0.03% which was quite

marginal.

LIC started to help the municipal councils and corporations from this year and

the percentage of investment stood at 0.005% and the amount invested was 4 crores.


(In Crores)

TYPES OF INVESTMENT 31-3-04 PERCENTAGE OUT

49


50/67



12928 13.19


(Mun + Z.P)

2508 2.56

6. State Road Transport Corpn. 671 0.687. Loans to Industrial Est. 45 0.058. Loans to Sugar Co-op 37 0.049. Development Authority 1 0.00110. Roadways, Port, Railways 25 0.0311. Power Generation

(Pvt. Sector)

801 0.82


INVESTMENTS IN 2004

50

57.33%


51/67

0

5

10

15

20

25

30

35

40

45

50

55

60

2004

Central Govt. Sec

State Govt. Sec.

Electricity

HousingWater Supply


Loans to Industries




Power Generation

MUNICIPAL Corpn.


ANALYSIS OF 2004:

Total net investment in securities was 56.68% which raised to

70.52% showing a growth rate of 24.42%

Total investments in development activity in this year was

rs28808 crores which was 29.45 of the total investment, remaining almost

stable who compared to 29.96 in the previous year.

Percentage of investments granted as loan has declined by 27.3% and

stood at 0.08% of the total investment.

Direct investment in private sector has raised by 140.39% and was

0.82% of the total when compared to 0.34 in the previous year.


51

13.19%10.81%

14.50%

2.56%0.68%

0.82%


52/67

(In Crores)


OF TOTAL1. Central Govt. Sec. 70533 59.83

2. State Govt. & other Govt.Guaranteed marketable Sec.

14156 12.01


(Mun + Z.P)

2997 2.54

6. State Road Transport Corpn. 736 0.627. Loans to Industrial Est. 45 0.048. Loans to Sugar Co-op 37 0.03

9. Development Authority 1 0.00110. Roadways, Port, Railways 85 0.0711. Power Generation

(Pvt. Sector)

1478 1.25


INVESTMENTS IN 2005

52

59.83%


53/67

0

5

10

15

20

25

30

35

40

45

50

55

60

65

2005

Central Govt. Sec

State Govt. Sec.

Electricity

HousingWater Supply


Loans to Industries




Power Generation

MUNICIPAL Corpn.


ANALYSIS OF 2004:


71.84% showing a growth rate of 1.87%, but the growth rate declined by

92.3%

Total investments in development activity in this year was rs31178

crores which was 28.09% of the total investment, remaining almost stable

who compared to 29.45% in the previous year.

Percentage of investments granted as loan has declined by 12.5% and

stood at 0.07% of the total investment.

Direct investment in private sector has raised by 45% and was

1.25% of the total when compared to 0.8% in the previous year.

53

12.01%10.12%

13.22%

2.54%0.62%

1.25%


54/67


(In Crores)




17877 12.78


(Mun + Z.P)

3657 2.61


8. Loans to Sugar Co-op 37 0.039. Development Authority 1 0.00110. Roadways, Port, Railways 325 0.2311. Power Generation

(Pvt. Sector)

1615 1.15


INVESTMENTS IN 2006

05

101520253035404550556065

2006

Central Govt. SecState Govt. Sec.

Electricity

Housing

Water Supply


Loans to Industries



54

60.88%

12.78%8.86%

12.86%

2.61%0.56%

1.15%


55/67


ANALYSIS OF 2005:


73.65% showing a growth rate of 2.52%, showing a good increase when

compared to th eprevious year

Total investments in development activity in this year was

rs36786 crores which was 26.29% of the total investment, showing a

decline of 6.41% whe compared to 28.09% in the previous year.

Percentage of investments granted as loan has declined by 14.3% andstood at 0.06% of the total investment.

Direct investment in private sector has decreased by 8% and was

1.15% of the total when compared to 1.25% in the previous year.

INVESTMENT OF LIC OF INDIA IN THE YEAR 2007:

(In Crores)



55


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2. State Govt. & other Govt.


21463 12.38

3. Electricity (SEBs) 13447 7.764. Housing 19054 10.99

5. Water Supply & Sewerage(Mun + Z.P)

4000 2.31

6. State Road Transport Corpn. 893 0.527. Loans to Industrial Est. 45 0.038. Loans to Sugar Co-op 37 0.029. Development Authority 1 0.00110. Roadways, Port, Railways 681 0.3911. Power Generation

(Pvt. Sector)

3797 2.91


INVESTMENTS IN 2007

56

63.41%


57/67

0

5

10

15

20

25

30

35

40

45

50

55

60

65

2007

Central Govt. Sec

State Govt. Sec.

Electricity

HousingWater Supply


Loans to Industries




Power Generation

MUNICIPAL Corpn.


ANALYSIS OF 2006:

Even this year investment in the central Govt. securities increased

like the past trend, it increased by 4.15% and stood at 63.41% out of the

total investments

The total net investments in securities stood at 75.79% i.e., more

than % of the total investments, showing a growth of 2.91%

Total investment in the development of infrastructure Rs. 41887

crores, which is 24.16% of the total

Investment in the private sector was 2.19% of the total in 2002,

showing a growth rate of 90.43%

There is an important point to be noted that from past 4 years LIC

of India was investing 4 crores in the M uncipal Corporations but from this

year this amount increased to 14 crores.

The investment in development authority remains constant for the

whole period.


57

12.38%7.76%

12.99%

2.31%0.52%

2.19%0.39%


58/67

(In Crores)




28988 13.58


(Mun + Z.P)

4420 2.07



(Pvt. Sector)

6105 2.90


INVESTMENTS IN 2008

58

64.30%


59/67

0

5

10

15

20

25

30

35

40

45

50

55

60

65

2008

Central Govt. Sec

State Govt. Sec.

Electricity

HousingWater Supply


Loans to Industries




Power Generation

MUNICIPAL Corpn.


ANALYSIS OF INVESTMENTS IN 2007:

Investment in central Govt. securities goes up even further from

63.41% - 64.3%, showing growth rate of 1.4%

Net investment in securities increased 75.79% - 78.88%, showing a

net increase of 4.08%

Investment in the development of infrastructure was 24.17%,

which reduced to 22.13

Loans granted reduced by 20% and stood at 0.04%

Direct investment in Pvt. sector was 2.19% in the previous year and raised by 32.42% and stood at 2.9% of the total investment.


59

13.58%

6.80% 9.34%

2.07%0.64%

2.90%0.37%


60/67

(In Crores)




37402 14.60


(Mun + Z.P)

7111 2.77



(Pvt. Sector)

6412 2.50


INVESTMENTS IN 2009

60

13.58%6.80% 9.34%2.07% 0.64% 2.90%0.37%

0

5

10

15

20

25

30

35

40

45

50

5560

65

2009

Central Govt. Sec

State Govt. Sec.

Electricity

Housing

Water Supply


Loans to Industries




Power Generation

MUNICIPAL Corpn.


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ANALYSIS OF INVESTMENTS IN 2009:

Investment in central Govt. securities goes up even further from

64.30% - 65.18%, showing growth rate of 0.88%

Net investment in securities increased 78.88% - 83.35%, showing a

net increase of 4.47%

Investment in the development of infrastructure was 22.13%,

which reduced to 19.73

Loans granted stable stood at 0.04%

Direct investment in Pvt. sector was 2.90% in the previous year

and reduced by 11.16% and stood at 2.5% of the total investment.

TOTAL NET INVESTMENTS YEARLY

Total investments

61


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Amount InCrores

0

50000

100000

150000

200000

250000 198719982003200420052006200720082009

62

1988 1998 2003 2004 2005 2006 2007 2008 2009Years


63/67

GRAPH SHOWING NET INVESTMENTS YEARLY

Total investments

63

0

50000

100000

150000

200000

250000

300000

1 2 3 4 5 6 7 8 9

year total investment

1


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CHAPTER 5

FINDINGS

&

SUGGESTIONS

FINDINGS/ SUGGESTIONS

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Steady growth can be seen in the investments of LIC of India

Growth of LIC from 1988-1998 was 476.55% which is almost 5 times

From 1998-2003 was 15.91%

From 2003-2004 the growth rate of LIC of India increased and stood at

21.07%

From 2004-2005 increase of growth rate declined from 21.07% - 20.3%

when compared to the previous year

From 2005-2006 increase of growth rate further decline to 18.69%

From 2006-2007 this showed the maximum growth when compared to

the previous years, as the growth rate jumped to 23.9% when compared to the

previous year

From 2007-2008 this year the increase of growth rate remained almost

stable showing a gr owth of 23.9% when compared to 21.9% in the previous year.

From 2008-2009 this year the increase of growth rate remained almost

stable showing a gr owth of 23.13% when compared to 23.9% in the previous

year.

From 1988-2009 LIC of India showed overall growth of 2169.27%

when compared to the basic starting period of 1988.

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CHAPTER 6

BIBLIOGRAPHY

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BIBLIOGRAPHY

Web Sites

www.licindia.in

www.cnbc.com

www.irdaonline.org

www.google.com

Books

IRDA Annual Reports

LIC Annual Reports

Yearly Diaries

Agents Manual

Investment Analysis Final

Documents