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Complete SWOT Analysis of LIC – An Indian Statutory Insurance & Investment Corporation

Updated on: Feb 6, 2022

In our previous blog, we talked about the SWOT Analysis of Progressive. This time let’s dig into the SWOT Analysis of LIC.

LIC provides a diverse range of insurance products that cater to the needs of various segments of the population in India and abroad. It provides customized insurance solutions based on their unique financial needs and risk profile, as well as assistance in resolving them.

Another aspect that made LIC the giant it is now in its marketing efforts. As the world connects, marketing changes, and when you are interested in learning about the latest – check out our Free MasterClass on Digital Marketing 101 from IIDE CEO and Founder Karan Shah.

Do you want to learn how LIC became so successful in the financial technology industry? In this blog, we will learn about the SWOT Analysis of LIC and decode the answer. 

But, before we begin with the SWOT Analysis of LIC, let us learn more about LIC the company, founding, products, financial status, and competitors.

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About LIC

SWOT Analysis of LIC - LIC Money

The Life Insurance Corporation (LIC), also known as the Bharatiya Jeevan Beema Nigam, is an Indian government corporation founded in 1956. It is an insurance firm headquartered in Mumbai with 8 zone offices and 101 divisional offices. LIC provides mutual funds, health insurance, and investment management services in addition to life insurance.

LIC is India’s largest insurance firm, with 2048 completely computerized branches, 8 zonal offices, 113 divisional offices, 1381 satellite offices, and corporate offices spread around the country. In various Indian cities and towns, the country is divided into 54 customer zones and 25 service centres. For selling life insurance to the general public, LIC has 1,337,064 individual agents, 242 corporate agents, 89 referral agents, 98 brokers, and 42 banks.

 

Quick Stats on LIC
Founder Surendranath Tagore
Year Founded 1956
Origin Mumbai, India
No. of Employees 114,000
Company Type Public
Market Cap $13.5 Billion (2021)
Annual Revenue $74 Billion (2019)
Net Income/ Profit $360 Million (2019)

 

Products of LIC

LIC’s Insurance Plans are insurance that speaks to you individually and recommends the best solutions to meet your needs.

  • Life Insurance
  • Health Insurance
  • Investment Management
  • Mutual Fund


Competitors of LIC

  • HDFC
  • GRUH Finance
  • AAVAS Finance 
  • SBI Life Insurance
  • Sahara Life Insurance


Now that we understand the company’s core business, let’s delve into the SWOT analysis of LIC.


SWOT Analysis of LIC

A SWOT analysis determines the strengths, weaknesses, opportunities, and threats of a company. It is a proven management paradigm that allows LIC to benchmark its business and performance against that of its competitors and the industry as a whole.

This is a great tool for identifying where the business is doing well, where it is failing, developing countermeasures, and determining how the business can grow.

To better understand the SWOT Analysis of LIC, refer to the infographics image below

SWOT Analysis of LIC - SWOT Infographics of LIC

Now first let’s begin with the strengths of the company from the SWOT analysis of LIC.

Strengths of LIC

The unique skills of a company that gives it an edge in gaining more market share, attracting more customers, and maximizing profits are known as its strengths. The following are LIC’s strengths:

  • Brand Image: In India, the LIC brand has a good reputation. Yogakshemam Mahamyaham, which translates to “welfare for all,” is the company’s slogan. In 2015, the Economic Times Brand Equity Survey named LIC as India’s most trustworthy insurance provider.
  • Asset Base: LIC has over USD 150 billion in assets and is India’s largest investor, giving it significant clout in the Indian financial system.
  • Agent Network: LIC has a nationwide agent network of 1,337,064 individual agents, 242 corporate agents, 89 referral agents, 98 brokers, and 42 banks, reaching every corner of India.
  • International Subsidiary: LIC has a robust subsidiary network that includes LIC Housing Finance Limited, LIC Cards Services Limited, LIC Nomura Mutual Fund, LIC (Nepal) Ltd, LIC (Lanka) Ltd, LIC (International), BSC, and LIC (Nepal) Ltd. (C).
  • Various Services: A customer portal in LIC offers various services to customers who can save time and even buy policies online. Customers can now calculate premium, bonus amount, tax calculation, check the status of their policy, calculate loan amount, download form and pay premium online.
  • Brand Reputation: The company has built a strong brand reputation that offers a wide variety, transparency, and convenience to its customers. So, if you also want to build & promote a positive brand image, enrol in our online reputation management course to become an expert in it.
  • Financial Position: LIC’s high renewal rates provide a clear view of future business and offer excellent profitability. It uses a capital-efficient model with low operating costs.


Weakness of LIC
 

  • Organizational Culture: Because LIC is so closely associated with the government, it has a very loose and leisurely work culture. This is a flaw in comparison to current private insurance firms that are strategic thinkers.
  • Poor Advertising Strategy: LIC spends less money on advertising than commercial suppliers, which is evident in the quality of the ads it distributes.
  • Too Many Restrictions: Because LIC is a government-owned firm, it is subject to a slew of regulations and is constantly beset by bureaucratic hurdles. This slows down decision-making at LIC.
  • Overworked: LIC employs a significant number of people, the majority of whom operate from their own offices. The organization frequently faces difficulties in paying workers’ salaries and resolving concerns.
  • Often Slow to Respond to Changing Needs: A lot of customers nowadays doubt their policies & insurances and LIC has been unable to serve them on time.
  • Privacy issues: A lot of customers nowadays have privacy issues regarding whether to invest in such policies or not so this can be one of the weaknesses that LIC could face.


Opportunities for LIC 

  • Cyber Threats as Opportunities: There have been several instances of data breaches and security system breaches. Insurance coverage against cybersecurity threats might be a tremendous opportunity at a time when cybersecurity is a threat.
  • Online Services: People have started looking more at possibilities like insurance as a result of the expansion of internet services, and knowledge of it is now higher than it was previously. This gives labour-intensive suppliers like LIC the option to save money by substituting people with technology.
  • Shift From Protection To Prevention: There is a general trend toward risk prevention rather than risk mitigation, which indicates that insurance companies should concentrate on risk prevention rather than risk mitigation.
  • Social Media: Huge organizations are leveraging such tools to stay relevant and are seeking specialists for the same, so if you are interested in the field, check out our social media marketing course to get started.
  • Lower Cost: LIC shifted to digital distribution as the market changed and competition increased. These changes have resulted in a significant decrease in the average cost of distribution services.


Threats to LIC

  • Competition: Since insurance was privatized, LIC has lost its lustre and now confronts intense competition from private insurance businesses that have given the industry a new lease on life.
  • Changes in Government: Because fiscal and monetary policies vary with each new government, tactics must be altered correspondingly. This results in a slew of issues.
  • Technology: Nowadays, most financial service providers use online banking and financial brokerage services to make technology an intrinsic element of their business. The LIC, on the other hand, still has a lot of catching up to do in terms of technology.
  • New Comers: Several new players have entered the market and are gaining market share by taking market share from existing companies. LIC is at risk because these new entrants could steal its customers.
  •  


This ends our detailed SWOT analysis of LIC. Let us conclude our learning below.

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To Conclude

In the Indian insurance business, LIC is the largest life insurance corporation. Its powerful brand, which is backed up by years of experience and a well-established network, has allowed it to stay at the top for a long time. They employ a variety of marketing strategies, including internet, offline, and direct marketing. Focusing more on digital marketing and having a strong social media presence might help the organization improve its marketing approach.

To enable this rapid growth, they must ensure that more and more people buy insurance online. The only way to achieve this is to better serve customers to support the company’s growth.

With increasing competition in a saturated market like fintech, companies must fight back by winning over their customers through better marketing efforts. In a changing landscape where digital marketing is paramount, knowledge of the field is a must for all marketing enthusiasts. If you are interested in learning more and upskilling, check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.

We hope this blog on the SWOT analysis of LIC has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.

If you enjoy in-depth company research just like the SWOT analysis of LIC, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for taking the time to read this, and do share your thoughts on this case study of the SWOT analysis of LIC in the comments section below.

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Aditya Shastri

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

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