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

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

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