LIC IPO SWOT Analysis 2022 Details

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TradingBuzzr is a one-stop place for all LIC IPO SWOT [Strength, Weakness, Opportunity, & Threat] Analysis, news, and other important information to help you analyze the LIC IPO.

Let’s delve into LIC IPO SWOT analysis.

STRENGTHS:

  • LIC is the country’s biggest Insurance company. LIC, as of now, has a skillet and a vast PAN India operation under its working. It functions 2048 offices in 8 zonal workplaces around 113 divisional workplaces. It also has 1381 satellite offices along with corporate workplaces. 
  • For its huge business, LIC has classified its operation by distributing its workforce of the country into 54 client zones and 25 metro-region administration centres. The company has 1,337,064 individual specialists, 242 Corporate Agents, 98 Brokers, another 89 Referral Agents and 42 Banks under its wide distribution network.
  • LIC has a solid marking with the most valuable and trusted brand image. Its main motto is Yogakshemam Mahamyaham which implies assistance for everything is greatly perceived. 
  • LIC has a gigantic found base of 150 billion USD and is additionally the greatest financial investor in the country. 
  • LIC has fabricated a culture among its agents where they sell a policy to the customers and put resources for the sales group to get the maximum benefit from it.
  • LIC has an effective history of launching new policies for the betterment of society.
  • We only see LIC as an insurance company, but it is dependable for many raw materials. Because of it, LIC ensures no supply chain disruption in the system.
  • LIC has been run by a team of excellent professionals at all levels, whether operational, technical, financial or management. LIC’s other strength is the training program it serves its employees. It helps to enhance and uplift the skillset of the team working in the LIC.
  • Through the customer portal of LIC, one can access different kinds of services. As a result, LIC has become a One-stop solution from the calculation of premium, policy buying and checking status. It also gives regular notifications and updates along with the attached forms required throughout the process.
  • LIC initially started as an Offline platform company, but it has successfully revolutionized as a Digital Policy and Insurance company due to the digital revolution. It empowered the organization to increase and downsize, considering the interest conditions on the lookout.
  • LIC’s has the highest renewal rates in the insurance sector. Due to its strong net cash flows, solid financial operational parameters and a capital-efficient working model.
  • LIC has a very strong and robust International and national subsidiary network. Some of the subsidiaries of the LIC IPO are:
LIC Housing Finance Limited    LIC Cards Services Limited  
            LIC Nomura Mutual Fund                 LIC (Nepal) Ltd
            LIC (Lanka) Ltd                 LIC (International)
BSC                   IDBI Bank

WEAKNESSES: 

  • LIC being a PSU, follows the slow and slack government work culture. It is the biggest downfall and weakness of the LIC compared to the private company who are generally fast and quick decision and policy implementors.
  • In contrast to the other companies, LIC doesn’t spend much on promotion. Also, the quality of the promotion advertisement is way inferior compared to the other private players of the sector.
  • Being a government company, LIC is supposed to follow a large number of restrictions and abide to follow the rules and regulations that hamper the ability of the company to maximize profits and in operational terms.
  • Though LIC has a big team at its disposal which helps it, at the same time, it is another weakness as the company needs to pay their salaries along with other incentives, which leads to a huge financial stint on the company.
  • In recent years, LIC marked a decrease in their profitability and other margins, and for the very first time, it was also below the industry standard.
  • The COVID-19 has severely impacted LIC as many claims were provoked, which led to a huge hit on the company.
  • Though LIC has diversified its operations and provides various kinds of services, the profitability and revenue other than its main or core business are very less than their core business.
  • LIC isn’t good at the demand forecasting ability, due to which it holds higher inventory days as compared to its peers.
  • Although LIC is an undisputed market leader in its category, it has lost its market share as new rivals have come up with a better product mix and new innovative policy that is attracting many customers now. To overcome it, LIC needs to build a feedback system to outreach and counter these difficulties.
  • LIC has its work ethics and works culture. As a result, it faces difficulty mixing or setting up a JV due to its different stand compared to other companies in the sector.
  • LIC’s other major weakness is that it is slow to adapt to any advancement or technical upgradation.

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OPPORTUNITIES:

  • In today’s world, Cybersecurity is a major issue. LIC itself has a huge database and IT support system. Somehow if LIC can make up a system or any service in the field of Cybersecurity, that will boost up the financial parameters of the company and unlock the next potential of revenue from many other digital streams.
  • Due to Digital India Movement, the shift has become more digital and LIC. The company has started to provide the facilities on a digital level which has led to convenience and helped the LIC to be more cost-effective. It has allowed the company to upgrade its operation, add a new revenue stream and carry out cost management.
  • Due to the overall shift of pattern from security to anticipation, being a game-changer for insurance companies, LIC has developed a framework to enhance focus and setup on hazard counteraction than hazard moderation arrangements.
  • LIC has more discretionary cash flow as insurance today is considered an investment rather than a protection. It is a perfect stage for LIC to launch a new lucrative policy for society’s betterment and profitability margins.
  • LIC can grow multiple folds by having proper branding and proper setup through Online and Social Media platforms.
  • Stable free income gives valuable chances to put resources into other segments. As LIC will have more money, they can invest more in the market carry out new advancements along with upgradation. It will help the company to open for new opportunities in the business.
  • The market advancement will prompt the weakening of the LIC’s contenders.
  • LIC has a vast database, which it has established offline, and the new online platform can hold an opportunity in data analytics and insight business.
  • Due to the government regulations and guidelines, LIC can now participate via investments in the emerging market and the SME setup.
  • Financial increase and expansion in client spending, following quite a while of the downturn and slow development rate in the business, provides a perfect shot for LIC to catch new clients and increment its value.
  • The government has imposed a new tax policy that can fundamentally affect the approach to carrying out business with an increased chance and business setup for already established market leaders in the sector such as LIC.
  • New environmental policies address an extraordinary chance for LIC to commute home its benefit in innovation and gain a very high significant proportion of the market share in the unique product mix where LIC initially lacked.

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THREATS:

  • After carrying out privatization of the insurance sector, LIC has lost its supremacy and is now exposed to stiff competition from the private players.
  • LIC, being a PSU, needs to face and comply with each new government’s changing financial and money related approaches. It accounts for a lot of issues.
  • Innovation is another threat to LIC. Today financial and insurance business is highly digitalized. And in no doubt, LIC is way behind its competitors in terms of technology. Though LIC has huge potential if it doesn’t stand tall in terms of technology, it might face a threat very soon.
  • The threat by the Newcomers in the business. The insurance sector is highly fragmented as it faces competition from organized and unorganized players. Stable productivity has expanded the number of players in the industry.
  • LIC also faces a threat from the rise in raw material cost. It can hamper the LIC productivity in terms of the operation and financial setup.
  • Expanding patterns toward non-interference in the American economy can prompt comparative responses from other governments. It can adversely affect the worldwide deals of the LIC.
  • Compliance with all the latest guidelines.
  • The local distributors are working on the ground root level, thus enjoying higher margins than these insurance companies.
  • Rising compensation levels, for example, $15 an hour and expanding costs in China and other countries, can prompt genuine strain on productivity and the LIC’s profitability.
  • LIC may be infused to set up extra assets into IDBI Bank.
  • Changes in their Corporation’s overflow appropriation procedure might bring down the allure of their contributing items; in this way, it will hurt their business.
  • LIC is vulnerable to a few functional dangers, the advancement of any of which could have a significant hindering impact on their business.
  • Misconduct misbehavior of the staff is another threat to the LIC. We hope that this LIC IPO SWOT analysis will help give you some insight into this company’s strengths, weaknesses, opportunities for improvement, and potential threats.

To Know More About LIC IPO, Click here LIC Financial Parameters & Financial Balance Sheet

LIC IPO Lead Managers:

  1. Axis Capital Limited
  2. BofA Securities India Limited
  3. Citigroup Global Markets India Private Limited
  4. Goldman Sachs (India) Securities Private Limited
  5. ICICI Securities Limited
  6. J.P. Morgan India Private Limited
  7. JM Financial Consultants Private Limited
  8. Kotak Mahindra Capital Company Limited
  9. Nomura Financial Advisory And Securities (India) Pvt Ltd
  10. SBI Capital Markets Limited

Company Contact Details:

Life Insurance Corporation of India
Yogakshema, Jeevan Bima Marg
Nariman Point, Mumbai 400 021,

Phone: +91 22 6659 8732
Email: Investors@licindia.com
Website: http://www.licindia.in/

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