TABLE OF CONTENT

Title
Preface
Acknowledgement
Certificate
Declaration

Chapter-1

Introduction of Lic
History of Lic

Chapter-2

Objectives of the study

Chapter-3

Research methodology

Chapter-4

Ratio analysis of Lic

Swot

Chapter-5

Finding
limitations
suggestions

Chapter-6

Conclusion
Bibliography

Page no.
I
ii
iii
iv

Project report on
Ratio analysis of life insurance
company
FOR THE PARTIAL FULFILMENT OF
THE DEGREE OF BACHLORE OF
BUSINESS ADMINISTRATION
Session: 2014-15

SUBMITTED BY
Guidence
Mohsina Anjum
Roll no- BBA/12/16
BBA 5TH SEM
Department

Under The
Sanay Soni
Faculty of B.B.A

BATCH 4TH

LIC LOGO

preface
I am Pleased to presently the project
report on Ratio analysis of
life insurance
company before my respected readers. It is a humble
attempt from my part to judge the project Report on
Ratio analysis of life insurance company
This study deals with a number of topics
that will help the reader understand and learn about
ratio analysis of life insurance company.
The research starts with a short Introduction
of life insurance company followed by line of objective
and research Methodology.
Then come the ratio analysis of lic, finding,
suggestions, limitation, and conclusion of the research
reports.
Language of the reports is simple lucid.
Attempts have been made to arrange the subject
matter in a systematic and well- knit style. Efforts have
also been made to deal with all topics precisely and
gently.

Mohsina anjum
B.B.A 5th Sem

ACKNOWLEDGEMENT
Preparing a project of this nature is an arduous
task and I was fortunate enough to get support from a
large number of persons. I wish to express my deep
sense of gratitude to all those who generously helped in
successful completion of this report by sharing their
invaluable time and knowledge.
It is my proud and privileges to express my
deep regards to Respected Dr.J.P.N Pandey, principal, Dr.
Anand Tiwari, Dr.Navin Gidran HOD Department of
Business Management, Govt. Girls P.G. College of
Excellence, Sagar, for allowing me to undertake this
project.
I feel extremely exhilarated to have completed
this project under the able and inspiring guidance of
Mr.sanjay soni, he rendered me all possible help and
guidance while reviewing the manuscript in finalizing
the report.
I also extend my deep regards to my teachers,
family members, friends and all those whose
encouragement has infused courage in me to complete
the work successfully.

CERTificate
The project report titled the Ratio analysis of life
insurance company has been prepared by mohsina anjum
B.B.A. 5thsem under the guidance and supervision of
mr.sanjay Soni, for the partial fulfillment of the degree of
B.B.A.

Signature of the
Supervisor:

Signature of the
Head of the
Department:

Signature
of the
Examiner:

DECLARATION BY THE CANDIDATE

I declare that the project report
titled the Ratio analysis of life insurance
company is my own work conducted under the
supervision of mr.sanjay soni, Department of
Business Management, Govt.Girls P.G.College of
Excellence sagar. To,the best of my knowledge
the report does not contain any work , which has
been summited for the award of any degree,
anywhere.

mohsina anjum
: B.B.A.5 SEM
th

Name:
Semester

INTRODUCTION OF L .I .C
The Life Insurance Corporation of India popularly known as
"LIC of India" was incorporated on September 1, 1956 by nationalizing 245
Indian as well as foreign companies. It was established 58 years ago with a view
to provide an insurance cover against various risk in life. The luminaries who
spearheaded this move at that time visualized an entity that will provide life
insurance to Indians, especially the vast rural people, at an economical cost and
channel the savings for the betterment of the nation. It is the largest life
insurance company in India and also the countrys largest investor. It is fully
owned by the Government of India and headquarter is Mumbai.
Life Insurance Corporation of India (LIC) is an Indian state-owned insurance
group and investment company headquartered in Mumbai. It is the largest
insurance company in India with an estimated asset value of
1560481.84 crore (US$260 billion). As of 2013 it had total life fund of
Rs.1433103.14 crore with total value of policies sold of 367.82 lakhs that year.
The company was founded in 1956 when the Parliament of India passed the Life
Insurance of India Act that nationalized the private insurance industry in India.
Over 245 insurance companies and provident societies were merged to create the
owned Life Insurance Corporation.

HISTORY OF

LIC

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 Co-operative 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 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.
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, 109
divisional offices, 8 zonal offices, 992 satallite offices and the Corporate office.
LICs Wide Area Network covers 109 divisional offices and connects all 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.
LICs ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centres 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,
2005, 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

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 policyholder. 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 leaves a dependent 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.
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 installment' 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.
Assesses 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.

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 timeto-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
policyholders state of health, the proponent's income and other relevant factors
are considered by the Corporation.
Insurance For Women
Prior to nationalization (1956), many private insurance companies would offer
insurance to female lives with some extra premium or on restrictive conditions.
However, after nationalization of life insurance, the terms under which life
insurance is granted to female lives have been reviewed from time-to-time.
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

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.
Keyman Insurance
Keyman insurance is taken by a business firm on the life of key employee(s) to
protect the firm against financial losses, which may occur due to the premature
demise of the Keyman.

INSURANCE COMPANIES IN INDIA

In India, Insurance is a national matter, in which life and

general insuranc as life insurance premiums account to 2.5% and general
insurance premiums account to 0.65% of India's GDP. The Indian Insurance
sector has gone through several phases and changes, especially after 1999, when
the Govt. of India opened up the insurance sector for private companies to solicit
insurance by passing Insurance Regulatory and Development Authority (IRDA)
Bill, allowing FDI up to 26%. Since then, the Insurance sector in India is
considered as a flourishing market amongst global insurance companies.
However, the largest life insurance company in India is still owned by the
government.
The history of Insurance in India dates back to 1818, when
Oriental Life Insurance Company was established by Europeans in Kolkata to
cater to their requirements. Nevertheless, there was discrimination among the
life of foreigners and Indians, as higher premiums were charged from the latter.
In 1870, Indians took a sigh of relief when Bombay Mutual Life Assurance
Society, the first Indian insurance company covered Indian lives at normal rates.
Onset of the 20th century brought a drastic change in the Insurance sector.
In 1912, the Govt. of India passed two acts - the Life Insurance Companies Act,
and the Provident Fund Act - to regulate the insurance business. National
Insurance Company Ltd, founded in 1906, is the oldest existing insurance
company in India. Earlier, the Insurance sector had only two state insurers - Life
Insurers i.e. Life Insurance Corporation of India (LIC), and General Insurers i.e.
General Insurance Corporation of India (GIC). In December 2000, these
subsidiaries were de-linked from parent company and were declared
independent insurance companies: Oriental Insurance Company Limited, New
India Assurance Company Limited, National Insurance Company Limited and
United India Insurance Company Limited.

With an annual growth rate of 15-20% and the largest number of life insurance
policies in force, the potential of the Indian insurance industry is huge. Total
value of the Indian insurance market (2004-05) is estimated at Rs. 450 billion
(US$10 billion).
The life insurance industry in India grew by an impressive 36%, with premium
income from new business at Rs. 253.43 billion during the fiscal year 20042011, braving stiff competition from private insurers. This report, "Indian
Insurance Industry: New Avenues for Growth 2012", finds that the market share
of the state behemoth, LIC, has clocked 21.87% growth in business at Rs.197.86
billion by selling 2.4 billion new policies in 2004-05. But this was still not
enough to arrest the fall in its market share, as private players grew by 129% to
mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in 2003-04.
Though the total volume of LIC's business increased in the fiscal year (20042011) compared to the previous one, its market share came down from 87.04 to
78.07%. The 14 private insurers increased their market share from about 13% to
about 22% in a year's time. The figures for the first two months of the fiscal year
2011-06 also speak of the growing share of the private insurers. The share of
LIC for this period has further come down to 75 percent, while the private
players have grabbed over 24 percent.
There are presently 12 general insurance companies with four public sector
companies and eight private insurers and private insurance companies
collectively have a 10% share of the non-life insurance market.

COMPANY PROFILE

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 Co-operative 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 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.

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-organization
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 reorganization 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. LICs Wide Area
Network covers 100 divisional offices and connects all 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. LICs 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,
2011, 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.

milestons
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 the year 1850 in Calcutta by the British.
Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact
all classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India,

frames a code of conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum
solvency margins and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act, 1972 nationalized
the general insurance business in India with effect from 1st January 1973.107
insurers amalgamated and grouped into four companies viz. the National
Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental
Insurance Company Ltd. and the United India Insurance Company Ltd. GIC
incorporated as a company.

LIC SUBSIDIARIES
Tha Unlike provisions for private players in the insurance
sector, the LIC Act provides for setting up subsidiaries through policy holders
fund. It is due to the LIC act that LIC of India has a number of subsidiaries
which help it in leveraging its potential to the maximum, providing an enhanced
set of diversified services to its customers. These subsidiaries include LIC
International, LIC Nepal, LIC Lanka, LIC Housing Finance and LIC Mutual
Fund.
LIC INERNATIONAL
This is a joint venture offshore company promoted by LIC which commenced
operations in July, 1989 with the objectives of offering US$ denominated
policies to cater to the insurance needs of NRIs and providing insurance services
to holders of LIC policies currently residing in the Gulf. LIC International
operates in all GCC countries.
LIC NEPAL
A joint venture company formed in 2001 with the Vishal Group of Industries,
Nepal.
LIC LANKA
A joint venture company formed in 2003 with the Bartleet Group of Companies,
Sri Lanka.
LIC HOUSING FINANCE LTD.
The Company is recognized by National Housing Bank and listed on the
National Stock Exchange (NSE) & Bombay Stock Exchange Limited (BSE).
LIC Housing Finance Ltd. is one of the largest Housing Finance Company in
India. Incorporated on 19th June 1989 under the Companies Act, 1956, the
company was promoted by LIC of India and went public in the year 1994. Its
main objective is to provide long term finance for construction or purchase of
houses or apartments. It has a Dubai office.

LIC MUTUL FUND LTD

Life Insurance Corporation of India set up LIC Mutual Fund
on 19th June 1989 and contributed Rs. 2 Crores towards the corpus of the Fund.
LIC Mutual Fund was constituted as a Trust in accordance with the provisions of
the Indian Trust Act, 1882.
There are some other subsidiaries of LIC which are
1. LIC Mutual Fund Asset Management Company Ltd.
2. LIC HFL Care Homes Ltd.
3. LICHFL Asset Management Company Private Limited.
4. LICHFL Trustee Company Private Limited.
5. LICHFL Financial Services Limited, etc.

REVENUE
US $46,794 million (2012)

PROFIT
US $3,257 million (2012)

TOTAL ASSETS
1325000 crore (US$220 billion) (2010)

EMPLOYEES AND AGENTS

As on 31 March 2012, LIC had 119,767 employees, out of which 24,295 were women
(20%).

OBJECTIVES OF LIC

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

savings adequately attractive.

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.

MISSION/VISSIon

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."
VISSION
"A trans-nationally competitive financial conglomerate of significance to
societies and Pride of India."
SLOGAN
LIC's

slogan yogakshemam

vahamyaha is

in Sanskrit language

which

translates in English as "Your welfare is our responsibility". This is derived from

ancient Hindu text, the Bhagavad Gita's 9th chapter, 22nd verse. The slogan can
be seen in the logo, written in Devanagari script.

BOARD OF DIRECTORS
Members on the Board of the Corporation

1. Chairman: Shri. T.S. Vijayan

2. Managing Director: Shri. D.K. Mehrotra
3. Managing Director: Shri. Thomas Mathew T.
4. Managing Director: Shri. A.K. Dasgupta
5. Finance Secretary: Shri. Ashok Chawla (Ministry of Finance, Govt. of India)
6. Additional Secretary: Shri. G.C. Chaturvedi (Department of Financial
Services, Ministry of Finance, Govt. of India.)
7. Chairman cum Managing Director: Shri. Yogesh Lohiya (GIC of India)
8. Chairman & Managing Director: Shri. T.C. Venkat Subramanian (Export
Import Bank of India)
9. Dr. Sooranad Rajashekhran
10. Shri. Monis R. Kidwai

AWARDS AND ACHIVEMENTS

Brand Equity Most Trusted Brand Golden

2014 Top in Insurance Category

Innovative

Product / Service Award 2014

Readers
Loyalty Awards - 2014

Peacock

Award

Digest
2014

in

Trusted
the

Brand

Platinum

category

CNBC Awaaz Consumer Awards NDTV Profit Business Leadership

2008

Award 2008

INDY's

Silver

Award

for

Best INDY's Silver Award for Best in

Corporate Film

House Magazine

IT USER 2008 NASCOM

Selected

Business

Super brand

India 2008

ASIA BRAND CONGRESS BRAND Pitch Award -" Rank 1 " India's
LEADERSHIP AWARD 2008

Top 50 service Brands

Loyalty Awards 2008 - Insurance SKOCH Challengers Award 2008

Sector

Readers
Award

for Jeevan Madhur

Digest
2008

in

Trusted

Brand Golden

the

Platinum Excellence

category.

Peacock
in

Award

for

Corporate

Governance

Web 18 Genius of the web awards

2007

RATIO ANALYSIS
It refers to the systematic use of ratios to
interpret the financial statements in terms of the operating

performance and financial position of a firm.

It involves

comparison for a meaningful interpretation of the financial

statements.
In view of the needs of various uses of ratios
the ratios, which can be calculated from the accounting data are
classified into the following broad categories
A. Liquidity Ratio
B. Turnover Ratio
C. Solvency or Leverage ratios
D. Profitability ratios

Ratio Analysis
Purpose:
To identify aspects of a businesss performance to aid decision making

 Quantitative process may need to be supplemented by qualitative factors

to get a complete picture
5 main areas:
1. Liquidity the ability of the firm to pay its way
2. Investment/shareholders information to enable decisions to be
made on the extent of the risk and the earning potential of a
business investment
3. Gearing information on the relationship between the exposure of
the business to loans as opposed to share capital
4. Profitability how effective the firm is at generating profits given
sales and or its capital assets
5. Financial the rate at which the company sells its stock and the
efficiency with which it uses its assets

Acid Test
Also referred to as the Quick ratio
(Current assets stock) : liabilities
1:1 seen as ideal

 The omission of stock gives an indication of the cash the firm has in
relation to its liabilities (what it owes)
A ratio of 3:1 therefore would suggest the firm has 3 times as much cash
as it owes very healthy!
A ratio of 0.5:1 would suggest the firm has twice as many liabilities as it
has cash to pay for those liabilities. This might put the firm under pressure
but is not in itself the end of the world!

Current Ratio
Looks at the ratio between Current Assets and Current Liabilities
Current Ratio = Current Assets : Current Liabilities
Ideal level? 1.5 : 1
A ratio of 5 : 1 would imply the firm has 5 of assets to cover every 1 in
liabilities
A ratio of 0.75 : 1 would suggest the firm has only 75p in assets available
to cover every 1 it owes
Too high Might suggest that too much of its assets are tied up in
unproductive activities too much stock, for example?
Too low - risk of not being able to pay your way

Investment/Shareholders
Earnings per share profit after tax / number of shares
Price earnings ratio market price / earnings per share the higher the
better generally. Comparison with other firms helps to identify value
placed on the market of the business.
Dividend yield ordinary share dividend / market price x 100 higher the
better. Relates the return on the investment to the share price.

Profitability
Gross Profit Margin = Gross profit / turnover x 100
The higher the better
Enables the firm to assess the impact of its sales and how much it cost to
generate (produce) those sales
A gross profit margin of 45% means that for every 1 of sales, the firm
makes 45p in gross profit

Asset Turnover
Asset Turnover = Sales turnover / assets employed
Using assets to generate profit
Asset turnover x net profit margin = ROCE

Stock Turnover
Stock turnover = Cost of goods sold / stock expressed as times per year
The rate at which a companys stock is turned over
A high stock turnover might mean increased efficiency?
But: dependent on the type of business supermarkets might have
high stock turnover ratios whereas a shop selling high value
musical instruments might have low stock turnover ratio
Low stock turnover could mean poor customer satisfaction if
people are not buying the goods (Marks and Spencer?)

Debtor Days
Debtor Days = Debtors / sales turnover x 365
Shorter the better
Gives a measure of how long it takes the business to recover debts
Can be skewed by the degree of credit facility a firm offers

Key Financial Ratios of LIC

Mar '14
INVESTMENT Valuation Ratios
Face Value
2.00
Dividend Per SHARE
4.50
Operating Profit Per Share (Rs)
175.45
Net Operating Profit Per Share
181.93
(Rs)
Free Reserves Per Share (Rs)
-Bonus in Equity Capital
-Profitability Ratios
Operating Profit Margin(%)
96.43
Profit Before Interest And Tax
94.77
Margin(%)
Gross Profit Margin(%)
96.35
Cash Profit Margin(%)
14.19
Adjusted Cash Margin(%)
14.19
Net Profit Margin(%)
14.11
Adjusted Net Profit Margin(%)
14.11
Return On Capital Employed(%) 11.39
Return On Net Worth(%)
17.48
Adjusted Return on Net Worth(%) 17.48
Return on Assets Excluding
149.27
Revaluations
Return on Assets Including
149.27
Revaluations
Return on Long Term FUNDS
11.96
(%)
Liquidity And Solvency Ratios
Current Ratio
3.98
Quick Ratio
5.67
Debt Equity Ratio
9.49
Long Term Debt Equity Ratio
8.99
Debt Coverage Ratios
Interest Cover
1.25

Mar '13

Mar '12

Mar '11

Mar '10

2.00
3.80
143.12

2.00
3.60
113.52

2.00
3.50
87.45

10.00
15.00
348.53

150.12

121.17

97.33

364.07

---

76.14
--

54.36
--

217.07
--

95.33

93.69

89.84

95.73

94.20

93.21

89.33

95.01

95.23
13.45
13.45
13.35
13.35
11.19
15.78
15.78

93.57
13.75
13.75
14.89
14.89
10.72
16.08
14.73

89.70
16.21
16.21
21.00
21.00
8.43
23.37
17.88

95.54
19.21
19.21
19.05
19.05
8.70
19.54
19.52

128.43

112.59

87.83

356.85

128.43

112.59

87.83

356.85

11.63

11.00

8.53

8.89

4.00
5.21
9.06
8.68

4.74
5.88
8.42
8.19

10.80
12.09
10.83
10.75

13.32
18.45
10.26
10.07

1.23

1.25

1.35

1.38

Total Debt to Owners FUND

9.49
FINANCIAL Charges Coverage
1.26
Ratio
FINANCIAL Charges Coverage
1.18
Ratio Post Tax
Management Efficiency Ratios
Inventory Turnover Ratio
-Debtors Turnover Ratio
142.44
INVESTMENTS Turnover Ratio -Fixed Assets Turnover Ratio
-Total Assets Turnover Ratio
-Asset Turnover Ratio
0.13

9.06

8.42

10.83

10.26

1.23

1.25

1.35

1.38

1.17

1.20

1.32

1.28

-120.53
---0.13

-93.96
---0.12

-----0.11

-----0.11

Average Raw Material Holding

-Average Finished Goods Held
-Number of Days In Working
3,093.96
Capital
Profit & Loss Account Ratios
Material Cost Composition
-Imported Composition of Raw
-Materials Consumed
Selling
Distribution
Cost
-Composition
Expenses as Composition of Total
-Sales
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit 17.24
Dividend Payout Ratio Cash Profit 17.14
Earning Retention Ratio
82.76
Cash Earning Retention Ratio
82.86
AdjustedCash Flow Times
53.93

---

---

---

---

3,090.27

3,169.00

3,769.32

3,824.89

--

--

--

--

--

--

--

--

--

1.81

2.13

2.44

--

--

--

0.01

18.74
18.60
81.26
81.40
56.95

19.87
19.71
78.30
78.49
56.69

17.04
16.93
77.73
77.92
60.03

25.15
24.91
74.81
75.05
52.06

Mar '14

Mar '13

Mar '12

Mar '11

Mar '10

26.10
149.27

20.28
128.43

18.11
112.59

20.53
87.83

69.75
356.85

Earnings Per SHARE

Book Value

OBJECTIVES OF THE STUDY

1.

To impart knowledge about the history and objectives of the company and
also its different subsidiaries.

2.

To aware the readers about the different plans and policies provided by
LIC, there value and benefits to its customers.

3.

To Know about the different Ratio of LIC.

4.

The objective of study is to know the market position and financial

position of LIC compare to other Private Players.

5.

To know about the effects of different ratio in operating of lic.

RESEARCH METHODOLOGY

Research Methodology is a systematic

method of discovering new facts or verifying old facts, their
sequence, inter-relationship, casual explanation and the natural
laws which governs them. In it we study the various steps that
are generally adopted by a researcher in the studying his
research problem along with the logic behind them.Different
stages involved in research consists of enacting the problem,
formulating a hypothesis, collecting the facts or data, analyzing
the facts and reaching certain conclusion either in the form of
solution towards the concerned problem or in generalization for
some theoretical formulation.
defination
According to Clifford Woody research comprises defining
and redefining problems, formulating hypothesis or suggested
solutions; collecting, organizing and evaluating data; making
deductions and reaching conclusions; and at last carefully
testing the conclusions to determine whether they fit the
formulating hypothesis.
Type of Sample Design:

Judgment Sampling

Sample Size:
In Research Methodology mainly Data plays an important
role.
The Data is divided in two parts:
a) Primary Data.
b) Secondary Data.
1.Primary Data is the data, which is collected directly by direct
personal interview,

Interview, indirect oral investigation, Information received

through

local

agents,

Drafting

schedule,

drafting

questionnaire.
2. Secondary Data is the data, which is collected from:
Various books.

Magazine and material

Internet
In this project report I have included only

secondary data because it is a

analytical rearch .The data

which is stored in the organization and provide by the HR people

are also secondary data.
The various information is taken out regarding
that subject as well other subject from various sources and
stored. The last years data stored can also be secondary data.
This data is kept for the internal use of the organization.
The HR manual is for the internal use of the
organization they are secondary data which help people to gain
information. In this report the data plays a very crucial role. For
this report the data was provided to me by HR department and
other departmental head in the organization.

POLICIES (SCHEMES)
Life Insurance Corporation of India provides number of
products to its costumers. LIC differentiated their policies into five different
types which are:
1. Insurance Plans
2. Pension Plans
3. Unit Plans
4. Special Plans
5. Group Scheme
1.INSURANCE PLANS
As individuals it is inherent to differ. Each individuals
insurance needs and requirements are different from that of the others. LICs
Insurance Plans are policies that talk to you individually and give you the most
suitable options that can fit your requirement.

Jeevan Anurag
CDA Endowment Vesting

Komal Jeevan

At 21
CDA Endowment Vesting

Marriage

At 18
Jeevan Kishore
Child Career Plan
Child Fortune Plus

Endowment

Educational Annuity Plan

Jeevan Chhaya
Child Future Plan

Or

Jeevan Aadhar
Jeevan Vishwas
The Endowment Assurance Policy
The Endowment Assurance Policy-Limited Payment
Jeevan Mitra(Double Cover Endowment Plan)
Jeevan Mitra(Triple Cover Endowment Plan)
Jeevan Anand
New Janaraksha Plan
Jeevan Amrit
Jeevan Shree-I
Jeevan Pramukh
The Money Back Policy-20 Years
The Money Back Policy-25 Years
Jeevan Surabhi-15 Years
Jeevan Surabhi-20 Years
Jeevan Surabhi-25 Years
Bima Bachat
Jeevan Bharati - I
The Whole Life Policy
The Whole Life Policy- Limited Payment
The Whole Life Policy- Single Premium
Jeevan Anand
Jeevan Tarang
Two Year Temporary Assurance Policy
The Convertible Term Assurance Policy
Anmol Jeevan-I
Amulya Jeevan-I
Jeevan Saathi Plus
Jeevan Saathi

Mortgage Redemption

2.PENSION PLANS
Pension Plans are Individual Plans that gaze into your future and
foresee financial stability during your old age. These policies are most suited for senior
citizens and those planning a secure future, so that you never give up on the best things
in life.

Jeevan Nidhi
Jeevan Akshay-VI
New Jeevan Dhara-I
New Jeevan Suraksha-I

Jeevan Mangal

3. GROUP SCHEME
Group Insurance Scheme is life insurance protection to
groups of people. This scheme is ideal for employers, associations, societies
etc. and allows you to enjoy group benefits at really low costs.

Group LIC's Superannuation Plus

Group Term Insurance Schemes
Group Insurance Scheme in Lieu Of EDLI
Group Gratuity Scheme
Group Super Annuation Scheme
Group Savings Linked Insurance Scheme
Group Leave Encashment Scheme
Group Mortgage Redemption Assurance Scheme
Gratuity Plus

Group Critical Illness Rider

JanaShree Bima Yojana (JBY)
Shiksha Sahayog Yojana
Aam Admi Bima Yojana

PRODUCTS BY LIC
INSURANCE PLANS

1. Jeevan Anand
Features or Product summary:
This plan is a combination of Endowment Assurance and
Whole Life plans. It provides financial protection against death throughout the
lifetime of the life assured with the provision of payment of a lump sum at the
end of the selected term in case of his survival.
Premium:
Premiums are payable yearly, half-yearly, quarterly, monthly or through salary

deductions as opted by you throughout the selected term of the policy or till
earlier death.
Bonuses:
This is a with-profit plan and participates in the profits of the Corporations life
insurance business. It gets a share of the profits in the form of bonuses. Simple
Reversionary Bonuses are declared per thousand Sum Assured annually at the
end of each financial year. Once declared, they form part of the guaranteed
benefits of the plan. Bonuses will be added during the selected term or till death,
if it occurs earlier. Final (Additional) Bonus may also be payable provided the
policy has run for certain minimum period
Benefits
Benefits in case of death during the selected term:
The Sum Assured along with the vested bonuses is payable on death in a lump
sum.
Benefits in case of survival to the end of selected term:
The Sum Assured along with the vested bonuses is payable in a lump sum on
survival to the end of the term. An additional Sum Assured is payable on death
thereafter.
Accident Benefit:
An additional Sum Assured (subject to a limit of Rs.5 lakh) is payable in a lump
sum on death due to accident up to age 70 of life assured. In case of permanent
disability of the life assured due to accident this additional Sum assured is
payable

in

installments.

Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra
protection/option. An additional premium is required to be paid for these
benefits.
Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender

values

are

availableonthe

planearliertermination

of

the

contract.

Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 3 years or more.
The guaranteed surrender value is 30% of the basic premiums paid excluding the
first years premium. Any extra premium(s) paid and premium(s) towards
Accident Benefit are also excluded.
Corporations policy on surrenders:
In practice, the Corporation will pay a Special Surrender Value which is either
equal to or more than the Guaranteed Surrender Value. The benefit payable on
surrender reflects the discounted value of the reduced claim amount that would
be payable on death or at maturity. This value will depend on the duration for
which premiums have been paid and the policy duration at the date of surrender.
In some circumstances, in case of early termination of the policy, the surrender
value payable may be less than the total premium paid.

2. Jeevan Shree-I
Product summary:
This is an Endowment Assurance plan offering the choice of many convenient
premiums paying terms. It provides financial protection against death
throughout the term of plan with the payment of maturity amount on survival to
the end of the policy term.
Premiums:
Premiums are payable yearly, half-yearly, quarterly or through Salary
deductions, as opted by you, throughout the premium paying term or till earlier
death. Alternatively premium may be paid in one lump sum (Single premium).
Guaranteed Additions:

The policy provides for the Guaranteed Additions at the rate of Rs. 50/- per
thousand Sum Assured for each completed year for first five years of the policy.
The Guaranteed Additions are payable along with the Basic Sum Assured at the
time

of

claim.

Bonuses:
The policy participates in the profits of the Corporations life insurance business
from the 6th year onwards. It will get a share of the profits in the form of
bonuses. Simple Reversionary Bonuses will be declared per thousand Basic Sum
Assured annually at the end of each financial year. Once declared, they will
form part of the guaranteed benefits of the plan.
Benefits
Death Benefit:
The Sum Assured along with guaranteed additions and vested bonuses, if any, is
payable in a lump sum on death of the life assured during the policy term.
Maturity Benefit:
The Sum Assured along with guaranteed additions and reversionary bonuses, if
any is payable in a lump sum on survival to the end of the policy term.
Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra
protection/option. An additional premium is required to be paid for these
benefits.
Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender
value is available on the plan on earlier termination of the contract.
Guaranteed Surrender Value:
The policy may be surrendered after it has been in force for 3 years or more. The
guaranteed surrender value is 30% of the basic premiums paid excluding the
first years premium. In case of a single premium policy the guaranteed
surrender value is 90% of the single premium paid excluding any extra

premium.
Corporations policy on surrenders:
In practice, the Corporation will pay a Special Surrender Value which is either
equal to or more than the Guaranteed Surrender Value. The benefit payable on
surrender reflects the discounted value of the reduced claim amount that would
be payable on death or at maturity. This value will depend on the duration for
which premiums have been paid and the policy duration at the date of surrender.
In some circumstances, in case of early termination of the policy, the surrender
value payable may be less than the total premium paid.

Bima Bachat
What is Bima Bachat?
LICs Bima Bachat is a money-back policy which offers
financial security and assurance to the policy holder and his family. Bima
Bachat requires the policy holder to pay only one premium. The amount paid for
the premium depends on the duration of the policy taken and life insurance is
available till the date of maturity.

What other benefits do I receive during the specified duration of the policy?

For a term of 9 years: The policy holder will receive 15% of the sum assured at
the end of every 3rd and 6th policy year.

For a term 12 years: The policy holder will receive 15% of the sum assured at
the end of every 3rd, 6th and 9th policy year.

For a term 15 years: The policy holder will receive15% of the sum assured at the
end of every 3rd, 6th, 9th and 12th policy year.
What additional benefits do I get upon maturity?
If the policy holder outlives the duration of the policy, at the time of maturity, a
single premium payment (excluding extra premium) is made along with loyalty

additions,

if

any.

How much insurance do I get?

The policy holder is insured for an amount equal to the sum assured.
What about the installment received already?
The

insurance

cover

is

irrespective

of

the

installments

received.

When am I eligible for the guaranteed surrender value?

The guaranteed surrender value is available only after completion of at least one
policy year. This value is equal to 90 % of the single premium paid (excluding
extra

premium).

What other benefits does this insurance cover offer?

Bima Bachat is the only money-back policy that offers a loan facility. The rate
of interest for this will be determined from time to time by the corporation.
Presently the rate of interest is 9% p.a. payable half-yearly.
It also offers other benefits like the 15 day cooling off period, grace period and
revival.
Who is eligible for the policy? Are there other conditions or restrictions?
The following are the requirements that one needs to be aware of before
applying for this policy:
The person applying for the policy should have completed 15 years and should
not be older than 66 years.
The policy will mature when the person is 75 years old.
There is a choice of three terms to choose from (9, 12 and 15 years) for the
policy depending on the age and requirement of the applicant.
The minimum sum that needs to be assured is Rs 20,000/- and there is no limit
on the amount that can be assured.
It is important to note that the sum assured should be in multiples of Rs 5000/

PENSION PLANS
1. New Jeevan Dhara-I

Features Product summary:

These are Deferred Annuity plans that allow the policyholder to make provision
for regular income after the selected term.
Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary
deduction, as opted by you, throughout the term of the policy or till earlier
death. Alternatively, the premium may be paid in one lump sum (single
premium).
Tax Benefits:
Tax relief under Section 80ccc is available on premiums paid under New Jeevan
Suraksha I (Table No.147). The premiums paid under New Jeevan Dhara I
(Table No.148) qualify for tax relief under Section 88.
Bonuses:
These are with-profit plans and participate in the profits of the Corporations
annuity / pension business. Policies get a share of the profits in the form of
bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured
annually at the end of each financial year. Once declared, they form part of the
guaranteed benefits of the plan. Final (Additional) Bonuses may also be payable
provided policy has run for a certain minimum period.
Death Benefit:
On death of the Life Assured during the term of the policy the basic premiums
paid, excluding any rider premiums or extra premiums, up to the date of death
accumulated with interest at such rates as decided by the Corporation will be
payable to the nominee. Currently, the interest rate is 3%, 4% or 5 % if the death
occurs within the first 10 years, 20 years or thereafter respectively.
Maturity Benefit:
At maturity the policyholder can encash up to a maximum 25% of the maturity
proceeds as a tax-free lump sum. The balance should be compulsorily converted
to an annuity at the rates applicable at the time of maturity of the policy. The

policyholder has the choice of opting for any one of 5 annuity options. The
annuity options available are:
(i) annuity payable for remainder of life
(ii) annuity payable for life with guaranteed period of 5, 10, 15 or 20 years
(iii) Joint life and last survivor annuity to the annuitant and his/ her spouse under
which annuity payable to the spouse on death of the purchaser will be 50% of
that payable to the annuitant
(iv) Life annuity with a return of purchase price on death of the annuitant
(v) Life annuity increasing at a simple rate of 3% per annum
Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra
protection/option. An additional premium is required to be paid for these
benefits.
Surrender Value:
Buying a life insurance contract is a long-term commitment. However,
surrender value is available on the plan on earlier termination of the contract.
Guaranteed Surrender Value:
The policy may be surrendered after it has been in force for 2 years or more but
before the vesting date. The guaranteed surrender value is 90% of the basic
premiums paid excluding the first years premium. In case of a single premium
policy the guaranteed surrender value is allowed after 2 years from the date of
commencement of the policy.

SWOT ANALYSIS OF LIC

The SWOT analysis involves an in depth study of the strength and
weakness of the provided organization and it also provides information to the

promoter, consultant, other agencies and helps in long term viability of the
project.
STRENGTH
1. It is the oldest and most well experienced player having a Plan India presence.
2. LIC has a strong and very well developed distribution network.
3. It is has consumer base and evolved as one of the most powerful brands of the
country.
4. It has a large product portfolio and claim settlement is easier to get.
5. It has the advantage of government guarantee is accompanied with it.
WEAKNESS
1. Its employees and other staff are lethargic and least motivated to render
prompt and sincere customer service.
2. After sales customer grievance redressal mechanism is inefficient.
3. Agents not taking into account the needs of people and promote policies
having high commissions only.
4. Very slow decision making and internal problems between top management
and lower cadre staff.
5. The top management or boss are mediocre and there is large scale corruption
in main office.
6. The development officers and agents who are the foundation pillars of LIC are
not provided with extra funds and powers to promote its products aggressively.
OPPURTUNITIES
1. Emergency of a huge concern over average income consumers of market in
the country
2. People becoming more aware and demanding so there is scope for a whole lot
of innovative products.
3. Pension markets, health insurance and large real estate portfolio.
THREATS
1. There is too much internal discord. 2. Entry of new private players in industry.

SUMMARY OF FINDINGS
Ratio analysis is an important tool for financial statement
analysis. Here we studied various ratios relating to measurement of the financial

performance such as current ratio, quick ratio, debt equity ratio, proprietary
ratio, gross profit ratio etc. In the previous chapter we made a detailed analysis
of the lic. from 2011 to 2014. The major findings are given below
The study shows there is a continuous changes in the current ratio and also it
is not satisfactory when compare to actual standard of 2:1.

Current ratio in the year 2011, it is showing 1.05% and later on it went on
increasing way i.e. in 2006 1.44%, 2007 1.36, 2008-1.37%.

Current ratio in past three years it was getting to meet the standard, but in the
year of 2014 again it went down to 1.07%.

The quick ratio for this company is same as mentioned in the above table.
Because as there is no inventory and prepaid expenses to deduct in this
company as it is insurance company we cannot find inventory.
The study shows that the debt equity ratio is satisfactory from the creditors
point of view that is in the year 2011 the percentage of ratio is 2.65%, in 2006
3.73%, in the year 2007 5.50%, in 2008- 6.33% and in 2014 it is 5.29%.

The study shows that the proprietary ratio to fixed assets is 2011- 4.37%,
2006- 10.53%, 2007- 11.36%, 2008- 9.96%, 2014- 12.73%.

The study shows that the proprietary ratio to current ratio is in 2011-2.79%,
2006- 1.64%, 2007- 1.55%, 2008- 1.55%, 2014- 1.91%.

The study shows that gross profit ratio of the company was went on
decreasing but it is recovering from more loss to less loss and the percentage
of ratio is, in the year 2011 is -0.13%, in 2006 it is -0.08%, in 2007 it is
-0.04%, in 2008 it is -0.05%, in 2014 it is -0.09%

SUGGESTION

&

RECOMMENDATION
The modernized well advanced hi-tech approach to the customer
every possible facilities and effort to build up the confidence of the rising policy
holders towards. Insurance companies, to complete one another nothing is left to
recommend. But some recommendations that are intensely felt and highly
required for insures to sustain . These are as follows:

a) Company has to make some provision to improve gross profit ratio.

b) The well versed in the handling of problem and grievances of the policy
holders.
c) Current ratio should be 2/1 as standard.
The should be more and more responsible to insurance sector by
determining some standard. It should be mandatory to every insurers to make
more and more responsible and responsive to the policy holders so that
comprehensive understanding may be developed among policy holders. It
may be beneficial on both sides.

LIMITATIONS
Thought the present study aims to achieve the above
mentioned objectives in full earnest and accuracy, it may be
hampered due to certain limitations, some of the limitations of this
study may be summarized as follows,
This report is based on financial data ratio analysis based on

confidential data of which is not easily available

And getting acculrate responses from the respondents due to the

problems. They may be refusing to co-operate.

Respondents may have to be contacted repeatedly or alternate

respondent may have to be identified..

CONCLUSION
After completing the project it is concluded that
Life insurance company develop its various plans and
policies, flexible in nature, according to the requirements of
its targeted or customers and is thus beneficial to its
customers in various ways. The most important benefit it
provides to its customers is that it is a government owned
company. This lead to increase in the satisfaction level of its
customer that is why LIC has more than 200 million policy
holders which is equal to the fourth largest country in world.
Therefore it is not only beneficial but better than other
insurance companies not only regarding its product but also
its services.

BIBLIOGRAPHY
Information and data used in the project has been collected
from the following sources:-

Webside:
1. www.licindia.com
2. www.licmutual.com
3. www.lichousing.com
4. www.wikipedia.org
5.www.ratioanalysisof lic

Magazine:
1.Outlook Money Magazine
12th August 2014, 09 September 2014
2.Money Today Magazine
11 June 2014, September 2014

Chapter
2

chapter 3

Chapter
4

Chapter
5

Chapter
1

Chapter
6