Are you going to apply in the upcoming LIC IPO? Why or why not?
Initially we need to understand the business model of the LIC to decide whether to apply or not. I am giving a neutral view about the company.
LIC success lies on two big reasons.
- Trust - People strongly beleive the brand because in past and present also it has guarenteed the amount it has to pay. Also it is a government company and it will never go banrupcy. Even if it goes bankrupcy policies are backed by sovereign by government i.e the goverment will pay you the amount that you are owed.
- Networking system - The manual netwoking system of LIC is so strong that it can manage to sell policies to even a very remote location. Because the LIC agents are there to sell the policies and more they sell more the commision amount nthey will get.
- With all the above reasons LIC became a superpower in insurance sector.
- You may wonder, then why I am not applying for IPO. Reasons are listed for your view.
- Even though the company has a good networking system I could not see LIC becoming digital convenient.