Evaluation of LIC in Post Liberalised Era

Abstract

The constitution of IRDA in August, 2000, opened up the market for private players in the insurance sector. In spite of privatization, the public sector giant, Life Insurance Corporation of India (LIC) has been still dominating the domestic insurance market. The paper reviews secondary study conducted to narrate ongoing debates on the privatization and globalization of insurance sector. Then, a comparative analysis of pattern of growth of life insurance industry comprising of LIC and other private players has been carried out. The paper finds that after over 40 years of successful journey, LIC still holds the dominant position while private players also gain grounds. However, though Indian Insurance sector has a huge potentiality, penetration of life insurance in Indian society is still limited as evident by various indicators. Moreover, LIC once having monopoly in this sector, is losing out to its private competitors. Unless strategic issues such as diversification of products, changing demography, demand for pensions, and allowing greater freedom with respect to its investments are addressed, LIC may find it difficult to adapt to liberalized scenario. The present study is an endeavor to evaluate the growth of LIC of India in the competitive scenario of liberalized and globalized insurance sector.