INSURANCE INDUSTRY

CONTENTS INTRODUCTIONHISTORYWHY DO WE NEED ITTYPES OF INSURANCE TYPES OF INSURANCE INDUSTRYMARKET SHARELAWS OF COMPANYPORTER’S 5 MODELSWOT ANALYSISCONCLUSION

INTRODUCTION

WHAT IS INSURANCE?Definition:

Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

Insurance, whether life or non-life, provides people with a reasonable degree of security and assurance that they will be protected in an event of a calamity or failure of any sort.

HISTORY OF INSURANCE INDUSTRY Evolution India 1818 - Oriental Life Insurance

Company -1st Insurance Company 1870 - Bombay Mutual Life Assurance Society

– 1st Life Insurance Company 1912 - The Indian Life Assurance Companies

Act enacted the 1st Law to Regulate the Life Insurance Business

1928 - The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life & non-life insurance businesses

HISTORY OF INSURANCE INDUSTRY 1938: Earlier legislation consolidated & amended

the Insurance Act with the objective of protecting the interests of the insuring public

1956: 245 Indian & foreign insurers & provident societies are taken over by the central government & nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The first General Insurance Company established in the year 1850 in Calcutta by the British.

HISTORY OF INSURANCE INDUSTRYToday, Lloyd’s of London is an insurance

icon.

- Not an insurance company, but an exclusive insurance market.

TOP INSURANCE COMPANIESLICSBI LIFE INSURANCEBIRLA SUN LIFE INSURANCERELIANCE LIFE INSURANCETATA AIGICICI LOMBARDHDFC STANDARD LIFE INSURANCE

WHY DO WE NEED IT??There are 2 reasons :

1)PRIMARY REASONS Life is full of uncertainties. Provides the much required RISK COVER. Serves as a financial buffer in the wake of any

unfavorable and un-foreseen circumstances. Ensures that near and dear ones are not left in

financial doldrums due to any exigency. The risk cover that insurance provides has no

parallels in the financial world.

WHY DO WE NEED IT??2)SECONDARY REASONSMoney back plans provides an element of

liquidity by returning a portion of the sum assured at regular intervals. This is in addition to the risk cover

Unit linked plans invest a percentage of the premiums in market securities and provide returns. This combines market linked returns along with risk cover

WHY DO WE NEED IT??

WHY DO WE NEED IT??

TYPES OF INSURANCE

TYPES OF INSURANCE

LIFE INSURANCE GENERAL INSURANCE      AUTO INSURANCE

MEDICAL & HEALTH INSURANCETRAVEL INSURANCEHOUSE INSURANCE

DIFFERENT TYPES OF INSURANCE INDUSTRY

IRDAInsurance Regulatory and Development

Authority (IRDA) is an autonomous apex statutory body which regulates and develops the insurance industry in India. It was constituted by a Parliament of India act called Insurance Regulatory and Development Authority Act, 1999  and duly passed by the Government of India.

IRDAThe agency operates from its headquarters

at Hyderabad, Andhra Pradesh where it shifted from Delhi in 2001.

IRDA batted for a hike in the foreign direct investment (FDI) limit to 49 per cent in the insurance sector from the erstwhile 26 per cent.The FDI limit in insurance sector was raised to 49% in July 2013.

IRDAAs per the section 4 of IRDA Act'

1999, Insurance Regulatory and Development Authority (IRDA, which was constituted by an act of parliament) specify the composition of Authority. IRDA is a ten member body consisting of:

A Chairman,-(T.S. Vijayan)

IRDAFour part-time members,-(Anup

Wadhawan,S.B. Mathur,Prof. V.K.Gupta,CA. Subodh Kr. Agarwal)

Five whole-time members,-(R.K. Nair,M. Ram Prasad,S. Roy Chowdhary,D.D. Singh)

All members are appointed by the Government of India.

LIC

LICLife Insurance Corporation of

India (LIC) is an Indian state-owned insurance group and investment company headquartered in Mumbai. It is the largest insurance company in India with an estimated asset value of 1560481.84 crore(US$250 billion).As of 2013 it had total life fund of Rs.1433103.14 crore with total value of policies sold of 367.82 lakh that year.

LICThe company was founded in 1956 when

the Parliament of India passed the Life Insurance of India Act that nationalized the private insurance industry in India. Over 245 insurance companies and provident societies were merged to create the state owned Life Insurance Corporation.

LICLIC continues to be the dominant life

insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over one crore policies during the current year. It has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the corresponding period of the previous year.

SBI

SBISBI Life Insurance is a joint venture

between State Bank of India and BNP ParibasCardif.

SBI owns 74% of the total capital and BNP Paribas Cardif the remaining 26%.

Understanding Various Aspects & Leveraging Online Platform for Channel Development: A case of Bancassurance Channel.

PLANS OF SBI Health Plans Group Plans Individual Plans:- Individual Plans are further

classified into:-1. United linked plan2. Child plan3. Pension plan4. Protection plan5. Saving plan

BIRLA SUN LIFE INSURANCE

HISTORYLaunched just before 9 years but still

managed to be amongst leading player(7th) in private insurance industry.

Strong fundamentals based on the Aditya Birla Group’s local insight and Sun Life financials global expertise.

Birla Sun Life Insurance pioneered the unique Unit Linked Life Insurance Solutions in India

HISTORYHaving 1, 68,090 active advisors, and sold

2.5 million policies.Current AUM of BSLI stands Rs. 8165

crore as on February 28, 2009In April 2009, achieved the landmark of

processing 100% of its claims.

PROTECTION PLAN Birla Sun Life Insurance High Net

worth Plan.   Birla Sun Life Insurance Term Plan.  

SAVING PLANBirla Sun Life Insurance Dream Plan.Birla Sun Life Insurance Simply Life.

HEALTH INSURANCEBSLI Health Plan.BSLI Universal Health Plan.

RETIREMENT PLANSBirla Sun Life Insurance Secure 58

Plan.   Birla Sun Life Insurance Freedom 58.  

HDFC

HDFC Standard Life Insurance Company Ltd. is one of India’s leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India’s leading housing finance institution and The Standard Life Assurance Company, a leading provider of financial services from the United Kingdom.

BAJAJ ALLIANZBajaj Allianz General Insurance Company

Limited is a joint venture between Bajaj Auto Limited and Allianz SE. Both enjoy a reputation of expertise, stability and strength.

Bajaj allianz today has a network presence in over 200 towns spread across the length and breadth of the country.

From Surat to Siliguri and Jammu to Thiruvananthapuram, all the offices are interconnected with the Head Office at Pune.

BAJAJ ALLIANZDealing in these sectors:-

Travel Insurance Health Insurance Corporate Insurance Motor Insurance

MARKET SHARE1) LIC2) ICICI3) HDFC

Market Statistics

Life Insurance Funds accounts to 15% of household Savings & may grow upto 20% in future.

Insurance Penetration in India is 2.6% of GDP compared to Korea(6.77%) & Singapore(6.38%).

India is ranked 19th position in Insurance with a growth of 19% p.a.

Non Life Insurance have lower penetration and rural people needs awareness.

620 tn rupees investment is anticipated for infrastructure development in future.

ACT GOVERNING INSURANCENo regulation till 1866Indian Companies Act (1866). the Indian Life Assurance

Companies Act (1912)the Provident Insurance Societies Act

(1912)Indian Insurance Companies

Act(1928)

SWOT ANALYSISStrengths:

• Strong capital and reserve.

• Technically Skilled Manpower.

• Innovative product for different demography.

SWOT ANALYSISWeakness:

• High administration & management expenses.

• Vertical organizational structure.

• Lower Reliability on Pvt. Players.

SWOT ANALYSISOpportunities:

• Inflow of global managerial & financial expertise.

• Liberalization results to wider choices.

• Introduce global innovations and practices.

SWOT ANALYSISThreats:

• Cut-throat competition.

• New Entrants.

• customers switching to other company.

CSR ACTIVITIESHDFC Life has always believed

that establishing a strong and ethical foundation is an essential prerequisite for long-term sustainable growth. Integrity and people care are two of our key fundamental values which we follow.

Example: Life insurance penetration increases with affluence

0

2

4

6

8

10

12

0 1 2 31,000 10,000 100,000100

Insurance premium as % GDP

GDP per capita in USD (log scale)

Threshold for insurance pick-up

Three avenues for growth

Addition of new customers

Existing customers buy more

Extension to new geographies

1

2

3INDIA

... INSURANCE IS POISED FOR GROWTH45

INDIA INSURANCE INDUSTRY STATUS46

Insurance premiumas % of GDPInsurance premiumper capita (Rs)

2.3%

590

0.62%

160

Number of players 14 14(1)

Premium income (Rs '000 Cr)

63 17

2004 2004Life Non-Life

~1.2%

~280

~0.4%

~100

1 4

27.5 9.4CAGR: 23% CAGR: 16%

2000 2000

India Has Come A Long Way In The Last Four Years

Several new products and channels(1) Includes 4 nationalised companiesSource: IRDA, Swiss Re

CONCLUSIONToday most of the insurance companies are recruiting

agents who are professionals who can sell their unsought insurance products.

Companies also provide better policies based on customer needs and demands.

In this Competitive market companies provide better service Quality, Pricing, Advertisement and Promotional activities.

CONCLUSIONCRM is used to retain the customers and

communicate with them.

By another 20 yrs 50% of population is expected to have at least one sort of an insurance.

AJINKYA SHINDEB’SHRI KHEDKARSWAPNIL RAUT