1) The document discusses the insurance sector in India, including its history and evolution from the 19th century to present day.
2) It covers the major players like LIC, GIC, and IRDA, and types of insurance policies including life, health, fire, and motor insurance.
3) The current insurance landscape in India is growing rapidly but there remains significant potential for further expansion, as over 75% of the population still lacks insurance coverage.
2. What is insurance?
The definition of insurance can be made from two
points:
Functional definition.
Contractual definition.
FUNCTIONAL DEFINITION
Insurance is a co-operative device to spread the
loss caused by a particular risk over a number of
persons who are exposed to it and who agree to
insure themselves against the risk
3. Contractual Definition
In the words of justice Tindall, “Insurance is a
contract in which a sum of money is paid to
the assured as consideration of insurer’s
incurring the risk of paying a large sum upon
a given contingency.”
4. Policy
•
The policy contract of
insurance is known as the
policy. Certain exclusions, or
exceptions to property and
casualty insurance are stated
in the policy. Meaning that
there are certain exceptions
to coverage, that relieves the
insurance company from
paying.
5. Indemnify
• Compensation for harm done
to one party.
• The individual who accepts
the compensation is known
as the insured, and the
person who agrees to
indemnify is the insurer.
6. Beneficiary
•
This individual is the recipient of the amount to be
paid. The maximum amount of compensation that
can be received is known as the face value.
8. Division of Insurance Sector
INSURANCE
LIFE
INSURANCE
GENERAL INSURANCE
FIRE
INSURANCE
MARINE
INSURANCE
MEDICLAIM
MOTOR
VEHICLE
9. Insured Items
•
There are limitless things that you
can insure, in order to keep them
protected, but the most important
ones are:
-Insurance intended to compensate
for harm to the insured person’s
real property.
YOUR HOUSE
YOU
YOUR
BOAT
YOUR FAMILY
3
1
2
5
YOUR AWESOME
CAR
4
10. LIFE INSURANCE
Life insurance is a written contract between the
insured and the insurer, that provides for the
payment of the insured sum on the date of the
maturity of the contract or on the unfortunate
death of the insured, whichever occurs earlier.
11. GENERAL INSURANCE
• General insurance or non-life insurance
policies, including automobile and
homeowners policies, provide payments
depending on the loss from a particular
financial event. General insurance typically
comprises any insurance that is not
determined to be life insurance.
12. TYPES OF GENERAL INSURANCE
Health insurance
Business insurance
Automobile insurance
Fire insurance
• Agricultural Insurance
• Credit Insurance
• Property Insurance
• Mortgage Insurance
• Pet Insurance
• Interest Rate Insurance
• Income Protection
14. HEALTH INSURANCE
Just like one looks to safeguard ones
wealth, these policies ensure guarding the
insurer's health against any calamities that
may cause long term harm to ones life and
even hamper ones earning ability for a
lifetime. Some examples of this type of
policy are mediclaim policy, personal
accident, group accident, traffic accident,
etc.
15. Business Insurance
Risks of loss of profits/business, goods, plant and
machinery are most profound in case of business.
Under this head they cover the most widely used
policies that cover a business from any loss of the
above kind. Some of these policies are burglary
insurance, shopkeepers insurance, key-man
insurance, marine insurance, public liability
insurance, workmen compensation insurance, air
transit insurance, fidelity guarantee insurance etc.
16. Automobile Insurance
Auto Policy is required to be taken to
cover the risks that arise to the owner,
vehicle and third party. This includes the
Compulsory Vehicle Policy (In India, by
the Motor Vehicles Act, every car owner
is required to covered against Act risks)
and the Comprehensive Vehicle Policy.
18. Marine Insurance Contract
“Under Mariner Insurance Act, 1963, Marine Insurance Contract
is an agreement whereby the insurer undertakes to indemnify
the assured, in the manner and to the extent thereby agreed,
against losses incidental to Marine adventure.”
19. SCOPE OF MARINE INSURANCE
HULL INSURANCE: Hull Insurance involves insurance of ships
including vessel machinery.
CARGO INSURANCE: Goods and commodities transported by
sea is the subject matter of Cargo Insurance.
20. FIRE INSURANCE
FIRE INSURANCE
This policy is required to be taken to prevent
any loss of profits / property from incidental
fire.
Eg:
fire
insurance
and
fire
consequential loss policy.
22. “There is no stronger force than an
idea whose time has come.”
Victor Hugo
(19th Century French Novelist)
Banks & Insurers across the World have realized
Bancassurance is the distribution channel, which
would help them achieve economies of scale and
boost their revenues in the 21st Century.
23. BANCASSURANCE - DEFINITION
• The sale of insurance and other similar products
through a bank.
• This can help the consumer in some situations;
for example, when a bank requires life insurance
for those receiving a mortgage loan, the
consumer could purchase the insurance directly
from the bank.
24. POTENTIAL OF BANCASSURANCE IN
INDIA…
Banks are major players in the Indian Financial
System:
-> 67,000 branches(32,000 rural and 14,700 semi urban)
-> Enormous retail account base of 450 mn Deposit A/c
-> Total deposit base of Rs. 14 trillion (USD 300 bn)
Brick & Mortar Model of Banking
Approximately 80% of Banking Transactions are done
at the Bank Branches
Very High Trust in the Banking System
Bank Managers looked upon as “Financial Advisors”
25. FORMS OF BANCASSURANCE
ARRANGEMENTS
Strategic Alliance: There is a tie-up between a bank
and an insurance company. The bank only markets the
products of the insurance company.
Full Integration: This arrangement entails a full
integration of banking and insurance services. The
bank sells the insurance products under its brand
acting as a provider of financial solutions matching
customer needs.
Mixed Models: Under this approach, the marketing is
done by the insurer's staff and the bank is responsible
for generating leads only. In other words, the database
of the bank is sold to the insurance company.
27. Evolution
• Insurance in modern form originated in the Mediterranean during the 13th
century.
• Marine insurance is the oldest form of insurance followed by life insurance and
fire insurance.
• The history of life insurance in India dates back to 1818 when it was conceived
as a means to provide for English Widows.
• Oriental life Insurance Company was the first insurer and was incorporated at
Calcutta in 1818
• Insurance regulation formally began in India through the passing of two acts
- Life Insurance companies Act of 1912
- Provident Fund Act of 1912
28. HISTORY OF INSURANCE IN INDIA
Phase
Phase I
a. Life Insurance
b. General Insurance
Phase II
a.Life Insurance
b.General Insurance
Phase III
Life Insurance and
General Insurance
3/6/2014
Period
Industry
1818 to 1956
(about 138 yrs)
Many (245) private sector companies only,
competitive market.
1850 to 1972
(about 122 yrs)
Many (107) private sector companies only,
competitive market.
1956 to 2000
(about 44 yrs)
Nationalization, public sector
monopoly, only one company.
1972 to 2000
(about 28 yrs)
Nationalization, public sector monopoly, only
one company with its four subsidiaries.
After 2000
or
State
Opened to the entry of private domestic and
foreign companies, mixed sector of public and
private sector units, oligopoly of public sector
companies (14 life insurance and 12 general
insurance companies)
28
29. Origin And Growth Of Insurance Sector:
# In fiscal 2000-01, the Indian federal government lifted
all entry restrictions for private sector investors.
# Foreign investment insurance market was also allowed
with 26 percent cap.
# GIC was converted into India's national reinsure From
December,2000.
# All the subsidiaries working under the GIC umbrella
were restructured as independent insurance
companies.
30. Origin And Growth Of Insurance Sector:
# Till end of FY 1999-2000, two state-run insurance
companies, namely, Life Insurance Corporation (LIC)
and General Insurance Corporation (GIC) were the
monopoly insurance providers in India.
#Under GIC there were four subsidiaries:
–National Insurance Company Ltd.
–Oriental Insurance Company Ltd.
–New India Assurance Company Ltd.
–United India Assurance Company Ltd
31. Life Insurance Companies In India
1. Bajaj Allianz Life Insurance Company Limited
2. Birla Sun Life Insurance Co. Ltd
3. HDFC Standard Life Insurance Co. Ltd
4. ICICI Prudential Life Insurance Co. Ltd.
5. ING Vysya Life Insurance Company Ltd.
6. Life Insurance Corporation of India
7. Max New York Life Insurance Co. Ltd
8. Met Life India Insurance Company Ltd.
9. Kotak Mahindra Old Mutual Life Insurance Limited
10. SBI Life Insurance Co. Ltd
11. Tata AIG Life Insurance Company Limited
12. Reliance Life Insurance Company Limited.
13. Aviva Life Insurance Co. India Pvt. Ltd.
14. Sahara India Life Insurance Co, Ltd.
15. Shriram Life Insurance Co, Ltd.
16. Bharti AXA Life Insurance Company Ltd.
17. Future Generali Life Insurance Company Ltd.
18. IDBI Fortis Life Insurance Company Ltd.
19. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd
20. AEGON Religare Life Insurance Company Limited.
21. DLF Pramerica Life Insurance Co. Ltd.
22. Star Union Dai-ichi Life Insurance Comp. Ltd
32. Non-Life Insurance companies in India
# Bajaj Allianz General Insurance Co. Ltd.
# ICICI Lombard General Insurance Co. Ltd.
# IFFCO Tokyo General Insurance Co. Ltd.
# National Insurance Co. Ltd.
# New India Assurance Co. Ltd.
# Oriental Insurance Co. Ltd.
# Reliance General Insurance Co. Ltd.
# Royal Sundaram Alliance Insurance Co. Ltd.
# Tata AIG Life Insurance Co. Ltd.
# United India Insurance Co. Ltd
Reinsurers:
# General Insurance Corporation of India.
35. Life Insurance Corporation of India (LIC) was formed in
September 1956 by an Act of Parliament, LIC Act 1956 with a
contribution of Rs. 50 million.
The then Finance Minister Mr. C. D. Deshmukh while piloting the
bill for nationalization outlined the objectives of LIC thus: “To
conduct the business with utmost economy with the spirit of
trusteeship; to charge premium no higher than warranted by strict
actuarial considerations; to invest the funds for obtaining maximum
yield for the policy holders consistent with safety of capital; to
render prompt and efficient service to policy holders thereby
making Insurance widely popular”.
3/6/2014
35
36. LIC OF INDIA contd…
Presently the LIC has a network of seven zones; 100 divisions and 2,048
branches, personnel exceed seven lakhs employees and over six lakhs
agents.
Vision: A trans-nationally competitive financial conglomerate of
significance to societies and Pride of India.
Mission: To explore and enhance the quality of the life of people through
financial security by providing products and services of aspired
attributes with competitive returns and by rendering resources for
economic development.
Values: Caring and Courtesy, Initiatives and Innovation, Integrity and
Transparency, Quality and Returns, Participation and Relationship,
and Trustworthiness and Reliability
Culture: Agility (quickness), Adaptability, Collaboration, Commitment,
Discipline, Empowerment, Sensitivity, and Excellence.
3/6/2014
36
37. LIC OF INDIA contd…
Objectives
• Spread Life Insurance widely and in particular to the rural areas.
• Maximise mobilization of people’s savings by making insurancelinked savings adequately attractive.
• Deployment of funds to the best of advantage of the investors as
well as the community as whole, keeping in view national priorities
and obligations of attractive return.
• Conduct of business at most economy and with the full realisation
that the money belongs to the policyholders.
• Act as trustee of the insured public in their individual and collective
capacities.
3/6/2014
37
42. CURRENT SCENARIO
•Growing at the rate of 15-20% annually
•75% population has no insurance
• Adds 7% to country’s GDP
•LIC market share come down to 75% and private
insurers increased over 24%
•Annuity or pension product have over 33% of market
•Unity linked insurance scheme have monopoly
43. GENERAL INSURANCE CORPORATION (GIC)
• Prior nationalization there were 68 Indian insurers (including
LIC) and 45 non-Indian insurers did the business.
• In Nov. 1972, the general insurance business was nationalized by
the General Insurance Business (Nationalized), Act 1972
(GIBNA) and vested in the hand of the GIC and its four
subsidiaries viz.
1. National Insurance Co. Ltd.,
2. New India Assurance Co. Ltd.,
3. Oriental Fire and General Insurance Co. Ltd., and
4. United India Insurance Co. Ltd.
• GIC was incorporated as a holding company in 1992.
• General Insurance Business is completely owned by the
government.
• The paid up capital of GIC was fully subscribed by the
Government and of four subsidiaries.
• It was controlled by a single organization with four subsidiaries.
3/6/2014
43
44. G I C contd…
• GIC’s four subsidiaries:
1. National Insurance Co. Ltd.,
2. New India Assurance Co. Ltd.,
3. Oriental Fire and General Insurance Co. Ltd., and
4. United India Insurance Co. Ltd.
• The Govt of India took over Control, supervision, and policy
making is with GIC.
• The premium income for GIC comes mainly through the obligatory
reinsurance premium on a quota share basis from subsidiaries on
their direct business in India (almost 20% of subsidiaries business
come to GIC).
3/6/2014
44
46. IRDA’S MISSION
To protect the interests of the policyholders, to regulate, promote
and ensure orderly growth of the insurance industry and for
matters connected therewith or incidental thereto.
Composition of Authority under IRDA Act, 1999
As 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.
The Authority is a ten member team consisting of
a. a Chairman;
b. five whole-time members;
c. four part-time members,
(all appointed by the Government of India)
3/6/2014
46
47. Current Scenario
• In 1993, Malhotra Committee was formed and several
Insurance Reforms were made.
–
–
–
–
–
Redesigned the Structure
Increased Competition
Regulatory body (IRDA)
Investments
Customer Service
48. Present scenario
•
•
•
•
•
•
•
•
•
•
•
•
•
1. Enormous mismatch in global healthcare financing
2. Developing countrieshave 84% of population & 90% of disease burden
3. By 2020, world population-7.5 billion
By 2050, world population
9 billion
Most of the growth in developing countries.
4. According to NHA of India 2001-02, sources of finance in health sector
Household
68.8%
Central Govt.
7.2%
State Govt.
14.4%
Private Firms
3%
Public Firms
2%
External Funds
2%
Local Govt.
2.2%
49. (continued)
•
•
•
•
•
•
Govt. spending on health care of GDP
0.9%
Private spending 4 to 4.5% of GDP
Overall Out of Pocket Expense
80%
(incentivises supplier induced demand)
In Bihar & UP, it is
90%
NSS (1995-96) showed that rich consumed public
service 3 times > the poor
50. Comparison of risk pooling and
equity of financing methods
Financing method
Risk pooling
Equity
General revenue
Widest risk pooling
Most equitable
Social insurance
Within the covered
population
Redistributive within
the covered
population
Group
Within a group
Redistributive within
a group
Individual
Within an age/sex group
Not equitable
Community Financing
Within a community
Redistribution within
a community
User fees
No risk pooling
Not equitable
Private insurance
51. CONCLUSION
• Growth of Indian economy is an investment
driven growth
• Opens a wide variety of investment
avenues
• Companies help to gain knowledge of
products and services
• Achieve a better standard for near future life
52. (continued)
REASONS- Unable to take treatment.
a.
b.
c.
Mostly illiterate and poor.
First priority is food. Rest later.
Prefer traditional / local / home made remedies.
Public facilities:
far from reach – distance and
if managed to reach – poor quality treatment
to purchase medicines etc from out side
Can’t afford high treatment cost: in Pvt. Hosp.
Borrowing money, sale of property–make them poorer.
53. 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.
54. Strategic Policies
•
•
•
•
•
•
Identification of Markets
Assessment of Risks
Penetration and exploitation of markets
control over investment and operating costs
Finding best prospects
Newer Marketing Strategies
55. SWOT analysis
Strengths
Weakness
•Strong capital and reserve
•High administration & management
expenses
•Technically Skilled Manpower
•Vertical organisational structure
•Innovative product for different
demography
•Lower Reliability on Pvt. Players
Opportunities
Threats
•Inflow of global managerial & financial
expertise
•Cut-throat competition
•New Entrants
•Liberalization results to wider choices
•customers switching to other company
•Introduce global innovations and practises
56. Conclusion
• Today 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.
• CRM 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.
57. Aviva Life Insurance Company India Limited
Life Shield
AEGON Religare Life Insurance Company
Limited.
Decreasing Term Plan
Increasing Term Plan
Level Term Plan
Birla Sun Life Insurance Co. Ltd
Birla Sun Life Insurance Premium Back Term
Plan
Birla Sun Life Insurance Term Plan
Birla Sub Life Insurance HNWI Term Plan
Bharti AXA Life Insurance Company Ltd.
Secure Confident
Bajaj Allianz Life Insurance Company Limited
Protector
New Risk Care
Term Care
Future Generali India Life Insurance
Company Limit
Future Care
ING Vysya Life Insurance Company Ltd.
ING Term Life Plus
ING Term Life
ICICI Prudential Life Insurance Co. Ltd
Life Guard Return of Premium
Life Guard Regular Premium
Home Assure Loan cover term insurance
Life Guard Single Premium
IDBI Fortis Life Insurance Company Ltd.
Home Assurance
Kotak Mahindra Old Mutual Life Insurance
Limited
Kotak Premium Return Plan
Kotak Term / Preferred Term Plan
Life Insurance Corporation of India
The Convertible Term Assurance Policy
Mortgage Redemption
New Bima Gold
Two Year Temporary Assurance Policy
Anmol Jeevan-I
Amulya Jeevan-I
Max New York Life Insurance Co. Ltd
Five Yr Renewable and Convertible Plan (Non - Par)
Level Term Plan
Met Life India Insurance Company Ltd.
MET Suraksha - TROP
MET Suraksha
Met -MortgageMet-Mortgage Protector
Reliance Life Insurance Company Limited.
Reliance Simple Term Plan
Reliance Special Credit Guardian Plan
Reliance Special Term Plan
Reliance Credit Guardian Plan
Sahara India Life Insurance Co, Ltd.
Sahara Kavach
Shriram Life Insurance Co. Ltd.
Shri Suraksha
SBI Life Insurance Co. Ltd
SBI Swadhan
SBI Shield
Tata AIG Life Insurance Company Limited
Tata AIG Life LifePlus
Tata AIG Life Raksha 10/15/20/25
Tata AIG Life Assure
HDFC Standard Life Insurance Co. Ltd
Loan Cover Term Assurance Plan
Term Assurance Plan
Home Loan Protection Plan
