Life Insurance Corporation of India*



Case Code : CLBS016
Publication date : 2004
Subject : Business Strategy
Industry : Insurance
Length : 04 Pages
Price : Rs. 50

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Key words:

Joint ventures, corporate agents, over-the-counter (OTC), brand value

* This caselet is intended for use only in class discussions.
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The case provides a detailed insight into the strategies adopted by Indian insurance major Life Insurance Corporation (LIC) of India in various areas. The case also provides an insight into the life insurance industry’s structure in India and the changes that took place after the entry of private players into the market.


 » The changes sweeping the Indian insurance industry after the entry of private players

 » Steps taken by LIC to combat the competition.


Life Insurance Corporation was formed as a government regulated monopoly in September 1956 by an Act of Parliament, (LIC Act 1956) with a capital contribution of Rs. 50 million. Over the years, LIC built a strong distribution and agent network.

By 2000, LIC had 2048 branches and 500,000 agents across the country. With income from premiums totalling Rs. 6,262 crore and a Rs. 1,60,935 crore asset base for fiscal 2001, LIC was a financial powerhouse, with a presence in mutual funds and housing loans besides life insurance.

The company had insured more than 11.5 crore people in the country through its individual and group schemes. Of the 60-80 million life insurance policies outstanding, 48% were from the rural and semi urban areas. This was very impressive since no company in any other industry had been able to tap the rural market to this extent. LIC’s annual revenue growth rate was 8.8% during 1993-2000....

Questions for Discussion:

1. Write a brief note on LIC’s reaction to the entry of foreign players. Critically examine the steps taken by LIC to face the competition from MNCs.

2. Do you think LIC will be able to remain the market leader in the insurance business in the long run? Give reasons for your answer.