INSURANCE

Hey, You look busy in
deep thoughts !
What happened ?

Hey, You look busy in
deep thoughts !
What happened ?

Nothing much, just
got Diwali bonus and
planning where to
employee that
money!
I suggest you to
take a LIFE
INSURANCE POLIY
. It has some great
benefits !

BENEFITS
• It replaces your lost income once you are gone and creates the
much needed financial security
SAFETY NET FOR LOVED
ONES
• You can get a regular stream of income every monthACHIEVING RETIREMENT
GOAL
• Deductions to income is available u/s 80C of income tax act ,
benefits upto 1.5 lacsTAX BENEFITS
• Lower premium , more benefits
EARLIER THE CHEAPER
• Death is inevitable and the least you can do to secure the financial
future is subscribing to insurance policyPEACE OF MIND

Also can you help me
out with things to
consider for making
the right choice!
Ya sure , why not !

Number 1: Calculate how much term
insurance coverage you need:
Estimate your
dependent
family’s monthly
expenses and
multiply it with
150.
Liabilities on the
account of home
loan, personal
loan, credit card
bills.
Liquid assets you
already have in
the form of FDs,
stocks or mutual
funds.
Expenses planned
on the account of
important life goals
that are likely to
happen in the next
15 years. Like your
children’s higher
studies or their
marriage.
Retirement corpus
that you would
want to leave for
your spouse on
his or her
retirement.

Number 2: Determine
the tenure of your plan:

Number 3: Target
the highest
Peace-of-Mind
per rupee
premium:
• It is important for you to be happy
with your decision about the
insurance plan you have picked,
which would be a combination of
the premium you pay and your
perception about your insurance
provider.

CHOOSE YOUR ADD-ONS WISELY
Waiver of
premium on
disability/
crtical
illness
Additional
cover for
death due
to accident
Cover for
critical
illness
NUMBER
4:

Can you tell the
earning mechanism? Ya sure , why not !

01
02
03
08
09
10
04
05
06
07
W H O
S H O U L D
B U Y ?
• EARNING
MEMBER
• HAS
DEPENDENTS
A G E
C O V E R
H O W
M U C H T O
C O V E R
ANNUAL SALARY x
20 TIMES
A m o u n t
s e t t l e m e n t
r a t i o
W h e r e t o
b u y
R e a s o n s
w h y
c l a i m s a r e
r e j e c t e d
W H E N T O
T A K E ?
T E R M P L A N V S
E N D O W N M E N T
P L A N
R I D E R S
C L A I M
S E T T L E M E N T
R A T I O
Factors to
be considered
Before
buying LIFE
insurance

0
1
02
03
04
05 06
07
W H I C H P L A N
• Floater or Individual
• When to buy
• Amount to be insured
N O C L A I M
B O N U S
C L A I M
S E T T L E M E N T
R A T I O
G E O G R A P H I C A L
L O C A T I O N
P R E P O S T
H O S P I T A L I Z A T I O N
E X P E N S E S
W A R D L I M I T
D I S E A S E
C O V E R A G E
How to choose health insurance?

2
B
6T E R M
P L A N
LET’S BREAK THE CONVENTIONAL MINDSET
H E A D I N
G
Some text goes
here.Some text goes
here. Some text
goes here.
A
6
E N D O W
M E N T
P L A N
1s t Year
Premium Outflow
3r d Year
Premium Outflow
5t h Year
INFLOW
4t h Year
Premium Outflow
2n d Year
Premium Outflow
1s t Year
Premium Outflow
3r d Year
Premium Outflow
5t h Year
No Inflow
4t h Year
Premium Outflow
2n d Year
Premium Outflow

BUYING LIFE COVER
The purpose of
buying pure life
insurance is to secure
the finances of your
dependents if you
were to die. It is not
an investment vehicle
to get returns
DECISION
Buying a term plan
CALCULATION
For a 30 year old non smoker
Sum Assured Term (Premium)
Rs 1 crore 10 years
Annual Premium Tenure
Rs 12,258 20 years
Invest in Equity (MF, ETFs)
Rs 7.22 crore
DECISION (HDFC's Classic Assure Plus
Plan)
Buying a endowment plan
CALCULATION
For a 30 year old non smoker
Sum Assured Term (Premium)
Rs 1 crore 10 years
Annual Premium Tenure
Rs 12,13,977 20 years
FV (including bonus)
Rs 3.22 crore

Insurance FRAUD

Who commits a fraud?

Fraud by sellers of insurance

Fraud by buyers of insurance

Fraud in Life Insurance

Fraud in Health Insurance

Fraud in Automobile Insurance

Fraud in Property Insurance

Fraud in Workers’ Compensation
Insurance

Use of Technology to combat Frauds

Legality of Insurance Fraud

Interesting Facts on Insurance Fraud

GLOBALISATION IN INSURANCE SECTOR
•Globalization is defined as a process by which goods, services, capital, people, information,
and ideas flow across national borders.” (Grewal/Levy)
•It is the opening of local and nationalistic perspective to a broader outlook of an interconnected
and interdependent world with free transfer of capital, goods, and services across national
frontier.
•Thriving insurance sector is of vital importance to every modern economy. The nature of the
insurance business is such that the cash inflow of insurance companies is constant while the
payout is deferred and contingency related.
•This characteristic feature of their business makes insurance companies the biggest investors
in long gestation infrastructure development projects in all developed and aspiring nations. This
is the most compelling reason why private sector (and foreign) companies, which will spread
the insurance habit in the societal and consumer interest are urgently required in this vital
sector of the economy.

BACKGROUNDThe experience after independence in insurance sector showed that the ultimate objective remained
largely unfulfilled due to :
• the relatively low spread of insurance in the Country
•Inefficient functioning of the public sector insurance companies
• and the untapped potential for mobilizing long term financial resources to finance the growth of
infrastructure
So, the government set up an Insurance returns Committee in April, 1993 under the chairmanship of
R. N. Malhotra, to suggest reforms in the insurance sector including improving the functioning of the
LIC, GIC and strengthening the regulatory system.
The committee submitted its report to union finance minister on 7-01-1994, recommending a phased
program of liberalization and called for a private sector entry and restructuring of LIC and GIC.
On the basis of their recommendation, IRDA was established in 1999 & private sector entry was
permitted in October 2000.

WHY FOREIGN INSURANCE CO. IN THIS SECTOR
.
• Motives behind
the movement of
foreign insurance
companies.
PUSH
FACTORS
• Motive behind
allowing the
foreign companies
to operate in local
market.
PULL
FACTORS
Globalization of Insurance market, as a part of the overall process of liberalization in
emerging and other countries enabled the foreign insurance companies to enter in those
countries and benefited both.
Driving forces of insurance market globalisation are categorised as-:
ECONOMIES OF SCALE
POTENTIAL FUTURE GROWTH IN
EMERGING MARKETS
INCREASING GLOBAL TRADE
SUNSTANTIAL REQUIREMENT OF CAPITAL
INCREASE IN EFFICIENCY IN THIS SECTOR
IMPROVE QUALITY OF SERVICE

BENEFITS TO COUNTRIES ALLOWING
GLOBALIZATION IN THIS SECTOR
Economy related benefits to the local
country:
•Foreign Insurance Companies add further
momentum to mobilization of savings.
•Resources and Capital allocation in the Domestic
Market increases.
•Improves the financial stability in the host country.
•Facilitates improvement in production and Trade
Insurance market related benefits :
Capital structure of entire insurance industry
improves.
• Market efficiency improves due to
information dissemination.
• Management efficiency increases because
foreign companies bring with them global
experience and management innovation.
• Range of available products increases
because foreign companies bring with them a
wide range of products and product
development expertise.
• Increased competition
• Customer' service improves.
Globalization also improves market conduct
and Ethical Business Standard

INNOVATIONS
IN INSURANCE
INSURTECH, AI AND
OTHER DISRUPTIONS

8 MAJOR TRENDS
HEALTH AT HAND
REAL TIME EXPERTISE
AI& ME
BEYOND BOUNDARIES
NEW WORKING WAYS
COVID-19 CRISIS RESPONSE
COMMERCIAL LINE TRANSFORMATION
MERGERS & ACQUISITIONS

Health at Hand
The life insurance companies are changing their value propositions away from mortality protection and
redesigning their offerings.
Customers are willing to share their personal data(derived from IoT wearables) in return for clear benefits-
financial and health outcomes and reduced premium payments.
Covid-19 Crisis Response
Many insurance companies are focusing on helping their customers to navigate
the impact of the crisis on their lives or business.
PZU(Poland) came up with its lifeband- a wearable device that reduces the risk
of transferring COVID-19

Real Time Expertise
The pandemic has forced the insurance sector to reevaluate how employees deliver relevant customer
experiences and they will seek offerings that are more personalized, real-time, relevant and seamless
Examples include open peril policy; Using KYC technology for real time and low cost customer onboarding.
AI & Me
Insurance companies are adopting AI tools and practices to speed up the
automation of basic tasks in existing workflows.

Beyond Boundaries
The insurance companies are and must look forward to today’s ecosystem driven digital economy to access
new customer pools, create new revenue streams and embed their brands deeper into their customer’s
everyday life.
New Working Ways
The workforce of the insurance organisations need to be brought along in the
digital journey to successfully transform the insurance business to elevate
their workforce to greater efficiency, effectiveness and better levels of
performance through automation, AI, extended reality and more.

Commercial Line Transformation
Commercial Insurance is going through a transformation as there is more innovative offerings in
terms of better risk management using digital channels for service and distribution and providing
the commercial customers a more transparent and seamless experience.
In a highly competitive environment, incumbent firms can no longer rely
on organic growth or internal innovation. The winners will be those that
can forge alliances with innovative start-ups; ally with InsurTech; and
consolidate with their peers. A rapidly changing industry will require
unprecedented dealmaking skills.
Mergers & Acquisitions

Challenges to growth

Pathway to Growth
● ANALYSE the markets (geographical, product and demographic) in which they compete and determine
the path to profitable growth.
● EVALUATE the entire customer value chain for better personalised experience.
● REIMAGINING product design through the lens of challenging interest rates and regulations.
● OPTIMISE in-force to enhance value creation and greater adaptability of resources to new opportunities
● INVEST in the future of work and reskilling efforts to ensure preparedness for the decade ahead.

Insurance

LIFE INSURANCE IN INDIA
LIC
OTHERS
₹31 TRILLION
WORTH OF ASSETS
₹40 TRILLION
INSURANCE INDUSTRY

23 PRIVATE SECTOR
LIFE INSURANCE
COMPANIES
LIC

Government
of India
LIC IPO
Only Shareholder

REDISTRIBUTION
PROFITS
5% TO
SHAREHOLDERS
95% TO
POLICYHOLDERS
LICLIFE INSURANCE CORPORATION OF INDIA

TWO KINDS OF POLICIES
PARTICIPATING
NON-PARTICIPATING
Part of company
profits + other
policy benefits
Fixed
payout
CUSTOMERS
INVESTORS

HIGHER BONUS
ON POLICIES
PRIORITIZE INTERESTS
OF SHAREHOLDERS
INVERT
STRUCTURE
WON’T BE AS
ATTRACTIVE
SHAREHOLDERS WON’T MAKE MONEY

10%
DISINVESTMENT 90% GOVERNMENT
OWNED
GOVERNMENT OWNED ENTITY

MOTHER INDIAMOTHER INDIA
BAILING OUT WRECKED COMPANIES
MAKING IMPRUDENT INVESTMENTS
PRIORITIZING ITS OWN INTEREST