56 years of
Nation building
“LIC the pride of India ”
On 1st September 2012, LIC completes 56 years of its
glorious and purposeful existence. It was on this day in the year 1956, that
LIC of India came into being with the government of India nationalizing the life
insurance business through an ordinance on 19th January 1956. Ever since 1956, LIC has progressed from
strength to strength. In the process, it has fulfilled its objectives and has
been immensely contributing to the nation building activities. Today, LIC is an
Institution of national importance and operates at a very large scale and
efficiency. It has created a significant value for its customers and dominates
the life insurance industry in our country. LIC has institutionalized a culture
of Trust within its organization which is the basis for its extraordinary
success. LIC has grown today to be the premiere public sector financial
institution and the pride of India .
LIC has invested Rs. 8,19,835 crores as on 31.3.2012 in
central/state government securities, power generation, road transport, water
supply, housing and other social activities. LIC has played a very important
role in nation building. LIC’s contribution to the Five Year Plans has been
commendable. It contributed Rs. 184
crore to the second Five Year Plan (1956-61), Rs. 3, 94,779 to tenth Five Year Plan (2002-2007) and Rs.7,04,151 Crores to the eleventh Five Year Plan
(2007-2012. The most amazing aspect is that around 25% of internal borrowings
of the central government are met by LIC every year. On an initial investment of Rs.5 crores in
the year 1956 by the Union Government, it’s share of the valuation surplus of 5% for the year
2011-12 worked out to be Rs. 1281.23 Crore. With an investment of just Rs.5
crore, till this fiscal year end, the government received a cumulative dividend
of Rs. 11,376.10 Crore which is unimaginable in any other institution. The
Government of India has entrusted several social security schemes to LIC. Over
1.63 crore landless households under Aam Aadmi Bima Yojana till date are
covered by LIC. Taking up the cause of financial inclusion, over 57.76 lac
people have been insured under LIC’s Micro insurance schemes. As a part of
Corporate Social Responsibility, the ‘Golden Jubilee Foundation’ has been
dedicated to the cause of promoting education, health and to provide relief to
the people who are poor. So far LIC has sanctioned more than 140 projects worth
Rs.18.06 crores, across the country. LIC Golden Jubilee Scholarship Scheme
provides scholarship to economically weaker sections of the society to pursue
higher education. Every year 1000 deserving students are given scholarship
under this scheme dedicated towards nation building; LIC is one of the
strongest pillars of India ’s
social and economic structure.
Ever since the opening up of the insurance sector in the year 2000,
LIC is performing marvelously dominating the insurance market. The public sector LIC has surprised the
critics with a very strong performance.
The Compounded Annual Growth Rate
(CAGR) of LIC during the last ten years has jumped to 30.24% from 15.23% since
inception. LIC’s total policies have risen from 10.12 Croresin to 34 Crores in
conventional business along with 10.45
crores of customer base in group business. LIC’s Life fund has grown
from 1.54 lakh crore to 12.83 lakh
crore. LIC’s asset base has grown from 1.60 lac crore to 14.17 lakh crore by
September 2012. The new business premium has gone up from Rs.5930 Crore to Rs.
81515 Crore. Total Premium Income has increased from Rs.27489 Crore to
202802.90 Crore. Thus, through this amazing performance, LIC has retained it’s
domination over the market. It is
holding on to a market share of 81 percent in number of policies and 74 percent
in new business premium. The LIC has
also an impressive share of 87.4% in the total assets under management. Insurance
is a promise which needs to be fulfilled on the happening of an eventuality.
LIC settles 99.86% of the claims which is a world record. The track record of the private insurance
companies on settlement of claims is abysmally low. In spite of such a strong performance, it is
surprising to note that the rating agencies to facilitate the entry of foreign
capital to access the domestic savings of the Indian people, are trying to arm
twist by down grading the investment rating of LIC ironically quoting that LIC
is exposed to investments in government securities.
The performance of private insurance companies even after a decade
of operation is not encouraging. Out of the 23 private insurance companies, 16
have reported operating losses and majority of them are yet to break even. The
private insurance companies sell more than 90% of their policies in ULIPs where
the returns are dependent on the vagaries of the volatile stock market. According
to the government, the public sector LIC has dominated the investment in
infrastructure development by accounting for more than 94% where as the private
companies are unable to invest for infrastructure development of our country.
In spite of the sterling performance by the Life Insurance
Corporation of India ,
the government, under pressure from the international finance capital, is
making attempts to weaken the public sector. The Insurance Laws (amendment)
bill 2008 which seeks to increase the FDI cap in insurance from 26% to 49% is a
pointer in this direction. More Over, the hurdles created by IRDA with regard
to clearing new plans, in recruitment of agents, suspending group
superannuation scheme (P&GS) etc are all the hindrances which LIC is able
to successfully overcome till now.
However, the most inspiring and enthusing development during the
year was that we could successfully defeat the attempts of the government to
privatize LIC of India. The LIC Act Amendment Bill (2009) was passed in the
Parliament by amending all the sections/clauses which would have been otherwise
detrimental to the interests of LIC and its policy holders. The arguments
placed by the AIIEA before the standing committee of parliament were upheld.
The bill which originally aimed at disinvestment of LIC and removing the
sovereign guarantee of government on premiums etc., was subsequently passed in
parliament by dropping all these issues. This is one of the most remarkable
achievements of AIIEA to protect the interests of LIC, its customers and the
nation’s economic sovereignty.
The insurance employees organized under the banner of AIIEA are
committed to strengthen the public sector insurance industry and to the cause
of 44 crore policyholders of LIC of India. We shall take a pledge on this
momentous occasion to strengthen LIC on all fronts. Let us rededicate ourselves
to this humble and noble cause. Our conscious and sustained campaign from the
‘SEATS TO THE STREETS’ alone will help us in achieving the goals.
No comments:
Post a Comment