Bhubaneswar: The mega player in the life insurance sector of the country – the public sector behemoth Life Insurance Corporation of India (LIC) – seems busy in cutting employee cost over the years.
As per its last quarterly data, though the company’s total income was down in the quarter ending Dec 2024, the market leader’s net profit has increased to 11,056cr from Rs 7620.86cr in the quarter ending in September 2024.
The last quarter data shows the public sector company’s has posted a dip in its total income from sales and other operations.
The net sales/income in quarter ending Dec 2024 dropped to 1.06lakh cr from1.19 lakhcr in quarter ending Sept 2024.
It seems the public sector company has gone for cost cutting with axe falling on employee costs. The last quarter data shows employee costs of the company has improved to Rs 6,691 cr from Rs 7739cr in quarter ending Sept 2024.
Though this is an improvement for the company financials, as per its balance sheet, the reduced number highlighted how the public sector life insurance giant is working on trimming its workforce.
LIC’S DIGITAL ‘DIVE’
LIC introduced Ananda (Atma Nirbhar agent's new business applications) in 2020, where an agent can seamlessly call the customer, enter the customer's details in the app and then send a link to them to pay the premium.
Moreover, the country’s largest insurer has launched a new digital transformation project called Digital Innovation and Value Enhancement (DIVE) in the year 2023/24.
Under the project, LIC has digitialised its other domains and services including claims settlement, loans and other key offerings, to ensure easy access for clients.
LIC ‘DIVES’ DOWN EMPLOYEE SIZE
It seems the public sector organisation’s digital tilt has impacted its recruitment in a big way. The public sector giant’s permanent employee strength has reduced drastically. The largest insurance company’s is no more a 1 Lakh workforce co.
Sample the DIVE down.
- 2019-20 – 1.14498 lakh permanent workforce
- 2020-21 – 1.08987 lakh
- 2021-22 – 1.04036 lakh
- 2022-23 – 98.463K
- 2023-24 – 98.661K
A glance at the data shared by MoS Finance Pankaj Chaudhary in the Parliament shows that since 2020, the largest insurer of the country has pruned its permanent workforce by nearly 14% (13.8). The national insurer has pruned its workforce size by 15,837. The data shows consistent decline over the years.
In the last 5-year period, workforce pruning has been the minimum in the year 2023-24, the year before general elections.
MINISTRY OF FINANCE REASON
In a written statement in Rajya Sabha, the Minister of State Pankaj Chaudhary has washed off government’s role in LIC recruitments.
The minister said:
- LIC is a Board governed commercial entity.
- The requirement of manpower is determined by LIC keeping in view of following factors
- Business requirement
- Spread of activities
- Superannuation
- Voluntary retirements
- Death of employees
The minister states that appointment of officers and staff is done accordingly by LIC and it varies from year to year based on their requirements.
ANALYSIS
As the Union Minister of State explained that recruit is done on the above said factors, the public sector agency business in growing, and its requirement has also grown. The largest insurance company is broad-basing its activities.
This show the job intake factors are present.
When the attrition factors like superannuation, VRS and untimely death of employee come into play, despite the presence of intake factors, the public sector company is not seem keen for intakes as per requirement courtesy digitization ‘DIVE’ of its processes.
This resulted in job downsizing of LIC employees.
