A COMPARATIVE ANALYSIS OF LIFE INSURANCE CORPORATION AND PRIVATE INSURANCE COMPANIES

BY: SONAKSHI GARG (080) VANYA KAPOORIA (089)

LIFE INSURANCE COMPANIES OPERATING IN INDIA

S. No.

Insurers

Foreign Partners

Regn. No.

Date of Registration

Life Insurance Corporation of India

1

---

512

01.09.1956

HDFC Standard
2

Standard Life Assurance, UK New York Life, USA Prudential Plc, UK Old Mutual, South Africa Sun Life, Canada American International Assurance Co., USA

101 104 105 107 109 110

23.10.2000 15.11.2000 24.11.2000 10.01.2001 31.01.2001 12.02.2001

Max New York

3

ICICI Prudential
4

Kotak Mahindra Old Mutual

5

Birla Sun Life

6

TATA AIG
7

SBI Life
8

BNP Paribas Assurance SA, France ING Insurance International B.V, Netherlands

111 114

29.03.2001 02.08.2001

ING Vysya
9

Bajaj Allianz
10

Allianz, Germany Metlife International Holdings Ltd., USA

116 117

03.08.2001 06.08.2001

Metlife
11

Reliance
12

---

121

03.01.2002

Aviva

Aviva International Holdings Ltd., UK

122

14.05.2002

13

Sahara
14

---

127

06.02.2004

Shriram
15

Sanlam, South Africa

AXA Holdings, France Generali, Italy Ageas, Europe HSBC, UK Aegon ,Netherlands Prudential of America, USA Dai-ichi Mutual Life Insurance,Japan Legal & General Middle East Limited, UK

128
130 133 135 136 138 140 142 143

17.11.2005
14.07.2006 04.09.2007 19.12.2007 08.05.2008 27.06.2008 27.06.2008 26.12.2008 05.11.2009

Bharti AXA
16

Future Generali
17

IDBI Federal
18

Canara HSBC OBC

19

Aegon Religare
20

DLF Pramerica
21

Star Union Dai-ichi

22

IndiaFirst

23

Edelweiss Tokio
24

Tokio Marine Holding Inc,Japan

147

12.05.2011

Life Insurance Corporation Of India

MISSION

"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."

SWOT ANALYSIS
Strength :

Weakness :

It is the oldest and most well experienced player having a Pan India presence. LIC has a strong and very well developed distribution network. It is having a huge consumer base and is evolved as one of the most powerful brands of the country. It has a large product portfolio and claim settlement is easier to get.

Its employees and other staff are lethargic and least motivated to render prompt and sincere customer service. After sales customer grievance redressal mechanism is inefficient. Agents not taking into account the needs of people and promote policies having high commissions only. Very slow decision making process and internal problems between top management and lower cadre staff. The top management or bosses are mediocre and there is large scale corruption in main office.

It has the advantage of government guarantee is accompanied with it.

SWOT ANALYSIS (cont..)

Opportunity :
Emergence of a huge middle

Threats :
There is too much internal

income consumer market in the country

People becoming more aware and

discord.
Entry of new private players in

industry.
Red-tapism is very much

demanding so there is scope for a whole lot of innovative products.

Pension markets, health

persistent.

insurance and large real estate portfolio.

OBJECTIVE
To compare the performance of LIC and

private insurance companies in India. To find out the performances of LIC and private insurance companies in each category (size, growth and efficiency) To compare grievance management of LIC and private insurance companies.

LIMITATIONS:
Could reach to a limited number of documents of

different insurance companies in regard to the management and other policies and resultant figures so as to identify the exact cause of their lag in performance.
Due to the limited time could not study all the

insurance companies original documents and policies individually.

Non-Proficiency in technical aspects of insurance

companies might have hindered the best analysis of the findings.

RESEARCH DESIGN :
Type of research design : Analytical and descriptive Research Data collection : Statistical Tools : Secondary Sources Weighted Mean Bar Graphs

RESEARCH PROCESS
Size 30% A. Total Premium 10% B. Total No. of Policies 10% C. Total No. of Branches 10% Growth 45% A. First Premium 15% B. Increase in No. of Policies 15% C. Growth in Market Share 15% Grievance Handling 25%

1. SIZE :
(A) TOTAL PREMIUM :
Rank Avg. Premium (in crore)

Points

Points multiplied by weightage (10%)

LIC

164890.388

6.67

PRIVATE CO.

62362.678

0.5

3.33

Average premium of LIC is much more than that of all insurance companies altogether. LICs average premium of the last five years is nearly 2.6 times the average premium of the all other private insurance companies

(B) TOTAL NUMBER OF POLICIES :

Avg. No. Of policies (in lakhs)
LIC 375.312

Rank

Points

1 2

1 0.5

Points multiplied by weightage (10%) 6.67

3.33

PRIVATE CO. 123.32

LIC is an undoubted leader in the field of average number of policies per year in the last five years. It is seen that private insurance companies are gaining momentum and are trying to defeat LIC in case of new insurances. Main reason behind LIC having such a large number of policies is the trust of a common man. LIC being a government agency has got a faith of indian mass. People are not yet prepared to give their savings in the hands of private players

(c) TOTAL NUMBER OF BRANCHES :

Total Branches Rank Points Points multiplied by weightage (10%) 3.33 6.67

LIC PRIVATE CO.

28945 70380

2 1

0.5 1

When the matter of total number of branches comes its very much obvious that LIC, being the oldest existing insurance company in India, has the large number of offices in the country by any single insurance company. Since the number of private insurance companies is increasing, with continuous expansion in their business, now the number of branches of all private players has crossed the number of branches of LIC.

2. GROWTH : (A) FIRST YEAR PREMIUM :

Avg. % Rank growth in first year premium
LIC 29.374 2 1

Points

0.5 1

Points multiplied by weightage (15%) 5

10

PRIVATE CO. 35.73

LIC has attained lesser growth in the first year premium in past five years in comparison to the private players who have attained the growth of 35.73% in the last five years.

(B) NUMBER OF POLICIES:

Avg. % growth in number of policies 3.87 Rank Points Points multiplied by weightage (15%) 5
10

LIC

2 1

0.5 1

PRIVATE CO. 31.66

Private players are doing extremely well as they are increasing their customer base rapidly.

(C) MARKET SHARE:

Avg. % market share Rank Points Points multiplied by weightage (15%) 5
10

LIC

-2.424

2 1

0.5 1

PRIVATE CO. 2.424

LIC is still the market leader in insurance industry with 69.78 % share. But we cannot forget that in last five years market share of LIC has decreased. It was 81.9 % in year 2006-07 which came down to 69.78 % in 2010-11.

3. GRIEVANCE HANDLING :
Avg.% Grievance handled
LIC 70.475

Rank

Points

2 1

0.5 1

Points multiplied by weightage (25%) 8.33

16.67

PRIVATE CO. 81.975

Grievance Handling is one of the major issues in any organization. It plays an important role in Insurance sector. People do attract towards companies who handles their grievances. Here we see that private players are much ahead of LIC when the matter comes to grievance management. In the last five years LIC has resolved only 70.475 % of cases brought in front of them while the percentage of cases resolved in case of private players is 81.975 %.

This shows that private players are very serious about their image and are working hard to provide the solution of the problems of the people as early as possible.

TOTAL POINTS TABLE :

FACTORS Size Total Premium Total number of Policies Total number of Branches 6.67 6.67 3.33 3.33 3.33 6.67 LIC PRIVATE CO.

Growth Growth in Premium Growth in number of Policies Growth in Market share 5 5 5 10 10 10

Grievance Handling

8.33

16.7

TOTAL POINTS

40

60

FINDINGS & CONCLUSIONS:

LIC is leading when it comes to size. It is giant in insurance sector

having huge network and customer base.

Private insurance companies are giving a tough competition to the

LIC and will certainly create a good business for themselves in the coming days.
LIC is very famous but private insurance companies are growing

at exceptionally fast pace. Private companies show due concern in grievance management and brings innovative schemes to attract the customers. Right now they are giving good competition to LIC and very soon they will give very tough competition to Life Corporation of India.