LIC Eyes Tech Overhaul with $2B Digital Push
India’s Life Insurance Corporation (LIC), once synonymous with traditional insurance, is preparing for a technological leap. The behemoth is investing $2 billion in what could be one of the most ambitious digital overhauls in India’s financial services sector.
The plan is structured around three critical pillars: infrastructure modernization, agent enablement, and customer experience transformation.
Legacy to Cloud: Core Overhaul
LIC’s core systems still run on mainframes and batch-processing modules — remnants of a different era. The upgrade plan will shift these to a microservices-based, cloud-native infrastructure powered by public and hybrid cloud providers. Tata Consultancy Services (TCS) and Infosys are in close contention for multi-year implementation contracts.
This foundational change will allow LIC to adopt real-time policy issuance, automated claims processing, and predictive analytics — long the domain of newer private insurers and fintechs.
Empowering the Agent Network
LIC has over 1.3 million agents — the world’s largest insurance sales force. However, they operate with minimal digital support. The overhaul includes launching a mobile-first CRM for agents, real-time commission dashboards, and AI-driven lead recommendations based on geography and policy history.
This agent tech stack will be piloted in four metro cities before a nationwide rollout in FY26.
Customer-First: The Experience Layer
From mobile apps and chatbots to WhatsApp claim filing, LIC aims to modernize every customer touchpoint. Their goal: reduce new policy issuance from 14 days to 48 hours and claims settlement from 28 days to under a week.
“The trust LIC commands must now be matched with digital convenience,” said an IRDAI spokesperson. New apps will support vernacular UI, voice inputs, and Aadhaar-based e-KYC to widen accessibility.
Risks and Roadblocks
While LIC’s digital pivot is ambitious, execution remains a concern. Organizational inertia, vendor dependency, and data security are major risks. Analysts point to LIC’s historically bureaucratic decision-making process and low IT spending (<2% of revenue) as hurdles that must be addressed.
Market Reaction
Since the announcement, LIC’s stock has surged 12% amid broader optimism on public sector transformation. Brokerages including ICICI Securities and Motilal Oswal have revised LIC’s long-term outlook to “Buy.”
What’s Next
LIC has appointed a Chief Digital Officer from a global insurance major. A dedicated digital transformation task force is being created, reporting directly to the board. The first deliverables — customer mobile apps and a re-engineered online policy portal — are slated for December 2025.
If successful, LIC’s transformation could serve as a blueprint for legacy financial institutions seeking digital relevance in a hypercompetitive, tech-first world.