TABLE OF CONTENT

Title Page no.PrefaceAcknowledgementCertificateDeclaration

Iiiiiiiv

Chapter-1 Introduction of LicHistory of Lic

Chapter-2 Objectives of the study

Chapter-3 Research methodology

Chapter-4 Ratio analysis of LicSwot

Chapter-5 Findinglimitationssuggestions

Chapter-6 Conclusion

Bibliography V

Project report onRatio analysis of life insurance company

FOR THE PARTIAL FULFILMENT OF THE DEGREE OF BACHLORE OF BUSINESS ADMINISTRATION

Session: 2014-15

SUBMITTED BY Under The GuidenceMohsina Anjum Sanay Soni Roll no- BBA/12/16 Faculty of B.B.ABBA 5TH SEM Department 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 Signature of the Signature Supervisor: Head of the of the Department: 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.

Name: mohsina anjum Semester: B.B.A.5thSEM

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 country’s 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. LIC’s 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. LIC’s 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 civilization’s 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 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 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 2004-

2011, 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 (2004-

2011) 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 re-

organization 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 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. 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,

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

2014 Top in Insurance Category

Golden Peacock Innovative

Product / Service Award – 2014

Loyalty Awards - 2014

Readers Digest Trusted Brand

Award 2014 in the Platinum

category

CNBC Awaaz Consumer Awards

2008

NDTV Profit Business Leadership

Award 2008

INDY's Silver Award for Best

Corporate Film

INDY's Silver Award for Best in

House Magazine

IT USER 2008  NASCOM Selected Business Super brand

India 2008

ASIA BRAND CONGRESS BRAND

LEADERSHIP AWARD 2008

Pitch Award -" Rank 1 " India's

Top 50 service Brands

Loyalty Awards 2008 - Insurance

Sector

SKOCH Challengers Award 2008

for Jeevan Madhur

Readers Digest Trusted Brand

Award 2008 in the Platinum

category.

Golden Peacock Award for

Excellence in 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 RatioB. Turnover RatioC. Solvency or Leverage ratiosD. Profitability ratios

Ratio Analysis

Ratio Analysis

• Purpose:

• To identify aspects of a business’s 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

Liquidity

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

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 company’s 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 Mar '13 Mar '12 Mar '11 Mar '10

INVESTMENT  Valuation RatiosFace Value 2.00 2.00 2.00 2.00 10.00Dividend Per SHARE 4.50 3.80 3.60 3.50 15.00Operating Profit Per Share (Rs) 175.45 143.12 113.52 87.45 348.53Net Operating Profit Per Share (Rs) 181.93 150.12 121.17 97.33 364.07

Free Reserves Per Share (Rs) -- -- 76.14 54.36 217.07Bonus in Equity Capital -- -- -- -- --Profitability RatiosOperating Profit Margin(%) 96.43 95.33 93.69 89.84 95.73Profit Before Interest And Tax Margin(%) 94.77 94.20 93.21 89.33 95.01

Gross Profit Margin(%) 96.35 95.23 93.57 89.70 95.54Cash Profit Margin(%) 14.19 13.45 13.75 16.21 19.21Adjusted Cash Margin(%) 14.19 13.45 13.75 16.21 19.21Net Profit Margin(%) 14.11 13.35 14.89 21.00 19.05Adjusted Net Profit Margin(%) 14.11 13.35 14.89 21.00 19.05Return On Capital Employed(%) 11.39 11.19 10.72 8.43 8.70Return On Net Worth(%) 17.48 15.78 16.08 23.37 19.54Adjusted Return on Net Worth(%) 17.48 15.78 14.73 17.88 19.52Return on Assets Excluding Revaluations 149.27 128.43 112.59 87.83 356.85

Return on Assets Including Revaluations 149.27 128.43 112.59 87.83 356.85

Return on Long Term FUNDS(%) 11.96 11.63 11.00 8.53 8.89

Liquidity And Solvency RatiosCurrent Ratio 3.98 4.00 4.74 10.80 13.32Quick Ratio 5.67 5.21 5.88 12.09 18.45Debt Equity Ratio 9.49 9.06 8.42 10.83 10.26Long Term Debt Equity Ratio 8.99 8.68 8.19 10.75 10.07Debt Coverage RatiosInterest Cover 1.25 1.23 1.25 1.35 1.38

Total Debt to Owners FUND 9.49 9.06 8.42 10.83 10.26FINANCIAL  Charges Coverage Ratio 1.26 1.23 1.25 1.35 1.38

FINANCIAL  Charges Coverage Ratio Post Tax 1.18 1.17 1.20 1.32 1.28

Management Efficiency RatiosInventory Turnover Ratio -- -- -- -- --Debtors Turnover Ratio 142.44 120.53 93.96 -- --INVESTMENTS  Turnover Ratio -- -- -- -- --Fixed Assets Turnover Ratio -- -- -- -- --Total Assets Turnover Ratio -- -- -- -- --Asset Turnover Ratio 0.13 0.13 0.12 0.11 0.11

Average Raw Material Holding -- -- -- -- --Average Finished Goods Held -- -- -- -- --Number of Days In Working Capital 3,093.96 3,090.27 3,169.00 3,769.32 3,824.89

Profit & Loss Account RatiosMaterial Cost Composition -- -- -- -- --Imported Composition of Raw Materials Consumed -- -- -- -- --

Selling Distribution Cost Composition -- -- 1.81 2.13 2.44

Expenses as Composition of Total Sales -- -- -- -- 0.01

Cash Flow Indicator RatiosDividend Payout Ratio Net Profit 17.24 18.74 19.87 17.04 25.15Dividend Payout Ratio Cash Profit 17.14 18.60 19.71 16.93 24.91Earning Retention Ratio 82.76 81.26 78.30 77.73 74.81Cash Earning Retention Ratio 82.86 81.40 78.49 77.92 75.05AdjustedCash Flow Times 53.93 56.95 56.69 60.03 52.06

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Earnings Per SHARE 26.10 20.28 18.11 20.53 69.75Book Value 149.27 128.43 112.59 87.83 356.85

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 a schedule, drafting a 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 individual’s

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 Komal Jeevan

CDA Endowment Vesting

At 21 Marriage Endowment Or

Educational Annuity Plan CDA Endowment Vesting

At 18

Jeevan Kishore Jeevan Chhaya

Child Career Plan Child Future Plan

Child Fortune Plus    

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

3. GROUP SCHEME

Group Insurance Scheme is life insurance protection to groups of people. This scheme is ideal for employers, associations, societies

Jeevan Mangal

etc. and allows you to enjoy group benefits at really low costs.

Group LIC's Superannuation PlusGroup Term Insurance Schemes Group Insurance Scheme in Lieu Of EDLI Group Gratuity Scheme Group Super Annuation SchemeGroup Savings Linked Insurance SchemeGroup Leave Encashment SchemeGroup Mortgage Redemption Assurance SchemeGratuity PlusGroup Critical Illness Rider

JanaShree Bima Yojana (JBY)Shiksha Sahayog YojanaAam 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 Corporation’s 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 year’s premium. Any extra premium(s) paid and premium(s) towards

Accident Benefit are also excluded.

Corporation’s 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 Corporation’s 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 year’s premium. In case of a single premium policy the guaranteed

surrender value is 90% of the single premium paid excluding any extra

premium.

Corporation’s 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?

LIC’s 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 Corporation’s

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 year’s 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.

OPPURTUNITIES1. 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