Life Insurance Corporation Of India IPO

Positive Factors: LIC is a part insurance and part investment products company. Their plans are a combination of insurance and investment with a guaranteed return. LIC has over 13.5 lakh agents who play brings most of the new business. LIC plans offer 'fixed returns' along with life insurance coverage. This makes it easy to sell by agents and brings peace of mind to the insurers. LIC has high trust in the public for both life insurance as well as investment done with them. LIC is synonymous with insurance in India. LIC manage asset of Rs 39 lakh crores. That is more money than the entire mutual fund industry combined. They invest these funds across stocks and bonds. They own 4% of all listed stocks in India and more government bonds than the RBI. Leading insurance provider company in India and fifth largest global insurer by GWP. A range of life insurance products to meet varied insurance needs of individuals.

Challenges: LIC has poor new policy growth as they continue losing market share to private insurance players, especially in urban areas. The margin in insurance + investment products is low. It's very difficult to value LIC as the business model is unlike any other company. LIC collects money upfront and then promises to compensate policyholders at a later stage. The premiums they collect (part insurance and part investment) cannot be recognized as revenue.