In$%ran&e ' (olle&)i*e +earin, o- Ri$. Insurance is nothing but a system of spreading the risk of one onto the shoulders of many. While it becomes somehat impossible for a man to bear by himself !""# loss to his on property or interest arising out of an unforeseen contingency$ insurance is a method or process hich distributes the burden of the loss on a number of persons ithin the group formed for this particular purpose. %asic &uman trait is to be a'erse to the idea of risk taking. Insurance$ hether life or non(life$ pro'ides people ith a reasonable degree of security and assurance that they ill be protected in the e'ent of a calamity or failure of any sort. Insurance may be described as a social de'ice to reduce or eliminate risk of loss to life and property. Under the plan of insurance$ a large number of people associate themsel'es by sharing risks attached to indi'iduals. The risks$ hich can be insured against$ include fire$ the perils of sea$ death and accidents and burglary. )ny risk contingent upon these$ may be insured against at a premium commensurate ith the risk in'ol'ed. Thus collecti'e bearing of risk is insurance. Insurance Indemnifies )ssets * Income. +'ery )sset has a 'alue and generates Income to its Oner. There is a normally e,pected -ife(time for the )sset during hich time it is e,pected to perform. If the )sset gets lost earlier$ being destroyed or made Non(functional through an )ccident or other unfortunate e'ent the Oner is .re/udiced. Insurance helps to reduce CON0+1U+NC+0 of such )d'erse Circumstances hich are called Risks Insurance is the science of spreading of the risk. It is the system of spreading the losses of an Indi'idual o'er a group of Indi'iduals Insurance is a 2ethod of sharing of financial losses of a fe from a common fund formed out of Contribution of the many ho are e3ually e,posed to the same loss What is uncertainty for an Indi'idual becomes a certainty for a 4roup. This is the basis of )ll Insurance Operations. Thus insurance con'ert uncertainties to certainty D+5INITION0 The definition of insurance can be made from to points6 1 5unctional definition. 2 Contractual definition. Functional definition Insurance is a co(operati'e de'ice to spread the loss caused by a particular risk o'er a number of persons ho are e,posed to it and ho agree to insure themsel'es against the risk. General Definition Insurance has been defined to be that in hich a sum of money as a premium is paid in consideration of the insurer7s incurring the risk of paying a large sum upon a gi'en contingency. In the ords of 8ohn 2agee$ 9Insurance is a plan by themsel'es hich large number of people associate and transfer to the shoulders of all$ risks that attach to indi'iduals.: Fundamental Definition In the ords of D.0. &ansell$ 9Insurance accumulated contributions of all parties participating in the scheme.: Contractual Definition In the ords of /ustice Tindall$ 9Insurance is a contract in hich a sum of money is paid to the assured as consideration of insurer7s incurring the risk of paying a large sum upon a gi'en contingency.:
&I0TOR; O5 IN0UR)NC+ Worldwide History To talk about the insurance companies$ insurance in modern form had occurred after the 4reat 5ire in -ondon in !<<< hich destroyed myriad houses. Nicholas %arbon$ folloing the disaster$ had established +ngland=s first fire insurance company >The 5ire Office? in!<@". In the United 0tates$ the first insurance company hich pro'ided fire insurance as formed in 0outh CarolinaA in !BCD.The practice of perpetual insurance against fire as populariEed by %en/amin 5ranklin. In !BFD$ he founded the .hiladelphia Contribution ship for the Insurance of &ouses. In India$ the Oriental -ife Insurance Company as started in !@!@ by +uropeans$ much before independence. The first indigenous insurance company in India as started in the year !@B" in the form of %ombay 2utual -ife )ssurance 0ociety. Babylonia The roots of insurance might be traced to %abylonia$ here traders ere encouraged to assume the risks of the cara'an trade through loans that ere repaid >ith interest? only after the goods had arri'ed safelyGa practice resembling bottomry and gi'en legal force in the Code of &ammurabi >c.D!"" %.C.?. The .hoenicians and the 4reeks applied a similar system to their seaborne commerce. The Romans used burial clubs as a form of life insurance$ pro'iding funeral e,penses for members and later payments to the sur'i'ors. Europe With the groth of tons and trade in +urope$ the medie'al guilds undertook to protect their members from loss by fire and shipreck$ to ransom them from capti'ity by pirates$ and to pro'ide decent burial and support in sickness and po'erty London In -ondon$ -loyd=s Coffee &ouse >!<@@? as a place here merchants$ ship( oners$ and underriters met to transact business. %y the end of the !@th cent. -loyd=s had progressed into one of the first modern insurance companies. In !<HC the astronomer +dmond &alley constructed the first mortality table$ based on the statistical las of mortality and compound interest. The table$ corrected >!BF<? by 8oseph Dodson$ made it possible to scale the premium rate to ageA pre'iously the rate had been the same for all ages. New York City The Ne ;ork fire of !@CF called attention to the need for ade3uate reser'es to meet une,pectedly large lossesA 2assachusetts as the first state to re3uire companies by la >!@CB? to maintain such reser'es. The great Chicago fire >!@B!? emphasiEed the costly nature of fires in structurally dense modern cities. Reinsurance$ hereby losses are distributed among many companies$ as de'ised to meet such situations and is no common in other lines of insurance. The Workmen=s Compensation )ct of !@HB in %ritain re3uired employers to insure their employees against industrial accidents. .ublic liability insurance$ fostered by legislation$ made its appearance in the !@@"sA it attained ma/or importance ith the ad'ent of the automobile In recent years insurance premiums >particularly for liability policies? ha'e increased rapidly$ lea'ing unprecedented numbers of )mericans uninsured. 2any blame the insurance conglomerates$ contending that U.0. citiEens are paying for bad risks made by the companies. Insurance companies place the burden of guilt on la firms and their clients$ ho they say ha'e brought unreasonably large ci'il suits to court$ a trend that has become so common in the United 0tates that legislation has been proposed to limit lasuit aards. Catastrophic earth3uakes$ hurricanes$ and ildfires in late !H@"s and the H"s ha'e also strained many insurance company=s reser'es. nsurance ndian !istory The history of life insurance in India dates back to !@!@ hen it as concei'ed as a means to pro'ide for +nglish Widos. Interestingly in those days a higher premium as charged for Indian li'es than the non(Indian li'es as Indian li'es ere considered more riskier for co'erage. The %ombay 2utual -ife Insurance 0ociety started its business in !@B". It as the first company to charge same premium for both Indian and non(Indian li'es. The Oriental )ssurance Company as established in !@@". The 4eneral insurance business in India$ on the other hand$ can trace its roots to the Triton >Tital? Insurance Company -imited$ the first general insurance company established in the year !@F" in Calcutta by the %ritish. Till the end of nineteenth century insurance business as almost entirely in the hands of o'erseas companies. Insurance regulation formally began in India ith the passing of the -ife Insurance Companies )ct of !H!D and the pro'ident fund )ct of !H!D. 0e'eral frauds during D"=s and C"=s sullied insurance business in India. %y !HC@ there ere !B< insurance companies. The first comprehensi'e legislation as introduced ith the Insurance )ct of !HC@ that pro'ided strict 0tate Control o'er insurance business. The insurance business gre at a faster pace after independence. Indian companies strengthened their hold on this business but despite the groth that as itnessed$ insurance remained an urban phenomenon. The 4o'ernment of India in !HF<$ brought together o'er DI" pri'ate life insurers and pro'ident societies under one nationaliEed monopoly corporation and -ife Insurance Corporation >-IC? as born. NationaliEation as /ustified on the grounds that it ould create much needed funds for rapid industrialiEation. This as in conformity ith the 4o'ernment=s chosen path of 0tate lead planning and de'elopment. The >non(life? insurance business continued to thri'e ith the pri'ate sector till !HBD. Their operations ere restricted to organiEed trade and industry in large cities. The general insurance industry as nationaliEed in !HBD. With this$ nearly !"B insurers ere amalgamated and grouped into four companies( National Insurance Company$ Ne India )ssurance Company$ Oriental Insurance Company and United India Insurance Company. These ere subsidiaries of the 4eneral Insurance Company >4IC?. The general insurance business as nationaliEed after the promulgation of 4eneral Insurance %usiness >NationaliEations? )ct$ !HBD. The post(nationaliEation general insurance business as undertaken by the 4eneral Insurance Corporation of India >4IC? and its I subsidiaries6 !. Oriental Insurance Company -imitedA D. Ne India )ssurance Company -imitedA C. National Insurance Company -imitedA and I. United India Insurance Company -imited. "ome of t!e important milestones in t!e life insurance business in ndia are# !@F" 6 Non life insurance debuts ith triton insurance company. !@B" 6%ombay mutual life assurance society is the first Indian oned life insurer !H!D6 The Indian -ife )ssurance Companies )ct enacted as the first statute to regulate the life insurance business. !HD@ 6The Indian Insurance Companies )ct enacted to enable the go'ernment to collect statistical information about both life and non(life insurance businesses. !HC@6 +arlier legislation consolidated and amended to by the Insurance )ct ith the ob/ecti'e of protecting the interests of the insuring public. !HF<6 DIF Indian and foreign insurers and pro'ident societies taken o'er by the central go'ernment and nationaliEed. -IC formed by an )ct of .arliament$ 'iE. -IC )ct$ !HF<$ ith a capital contribution of Rs. F Crore from the 4o'ernment of India. The 4eneral insurance business in India$ on the other hand$ can trace its roots to the Triton Insurance Company -td.$ the first general insurance company established in the year !@F" in Calcutta by the %ritish. "ome of t!e important milestones in t!e $eneral insurance business in ndia are# !H"B The Indian 2ercantile Insurance -td. set up$ the first company to transact all classes of general insurance of India. !HFB 4eneral Insurance Council$ a ing of the Insurance )ssociation of India$ frames a code of conduct for ensuring fair conduct and sound business practices. !H<@ The Insurance )ct amended to regulate in'estments and set minimum sol'ency margins and the Tariff )d'isory Committee set up. !HBD The 4eneral Insurance %usiness >NationaliEation? )ct$ !HBD nationaliEed the general insurance business in India ith effect from !st 8anuary !HBC. !"B insurers amalgamated and grouped into four companies7 'iE. the National Insurance Company -td.$ the Ne India )ssurance Company -td.$ the Oriental Insurance Company -td. and the United India Insurance Company -td. 4IC incorporated as a company. 2alhotra Committee In !HHC$ 2alhotra Committee( headed by former 5inance 0ecretary and R%I 4o'ernor R.N. 2alhotra( as formed to e'aluate the Indian insurance industry and recommend its future direction. The 2alhotra committee as set up ith the ob/ecti'e of complementing the reforms initiated in the financial sector. The reforms ere aimed at creating a more efficient and competiti'e financial system suitable for the re3uirements of the economy keeping in mind the structural changes currently underay and recogniEing that insurance is an important part of the o'erall financial 0ystem here it as necessary to address the need for similar reforms. In !HHI$ the committee submitted the report and some of the key recommendations included6 i% "tructure 4o'ernment should take o'er the holdings of 4IC and its subsidiaries so that these subsidiaries can act as independent corporations. )ll the insurance companies should be gi'en greater freedom to operate. ii% Competition .ri'ate Companies ith a minimum paid up capital of Rs.!bn should be alloed to enter the sector. No Company should deal in both -ife and 4eneral Insurance through a single entity. 5oreign companies may be alloed to enter the industry in collaboration ith the domestic companies. .ostal -ife Insurance should be alloed to operate in the rural market. Only one 0tate -e'el -ife Insurance Company should be alloed to operate in each state. iii% &e$ulatory Body The Insurance )ct should be changed. )n Insurance Regulatory body should be set up. Controller of Insurance( a part of the 5inance 2inistry( should be made independent i'% n'estments 2andatory In'estments of -IC -ife 5und in go'ernment securities to be reduced from BF# to F"#. 4IC and its subsidiaries are not to hold more than F# in any company >there current holdings to be brought don to this le'el o'er a period of time? '? Customer 0er'ice -IC should pay interest on delays in payments beyond C" days. Insurance companies must be encouraged to set up unit linked pension plans. ComputeriEation of operations and updating of technology to be carried out in the insurance industry The committee emphasiEed that in order to impro'e the customer ser'ices and increase the co'erage of insurance policies$ industry should be opened up to competition. %ut at the same time$ the committee felt the need to e,ercise caution as any failure on the part of ne players could ruin the public confidence in the industry. The committee felt the need to pro'ide greater autonomy to insurance companies in order to impro'e their performance and enable them to act as independent companies ith economic moti'es. 5or this purpose$ it had proposed setting up an independent regulatory body( The Insurance Regulatory and De'elopment )uthority. Reforms in the Insurance sector ere initiated ith the passage of the IRD) %ill in .arliament in December !HHH. The IRD) since its incorporation as a statutory body in )pril D""" has fastidiously stuck to its schedule of framing regulations and registering the pri'ate sector insurance companies. 0ince being set up as an independent statutory body the IRD) has put in a frameork of globally compatible regulations. The other decision taken simultaneously to pro'ide the supporting systems to the insurance sector and in particular the life insurance companies as the launch of the IRD) online ser'ice for issue and reneal of licenses to agents. The appro'al of institutions for imparting training to agents has also ensured that the insurance companies ould ha'e a trained orkforce of insurance agents in place to sell their products. .UR.O0+ O5 IN0UR)NC+ 1. Insurance spreads the economic burden of losses by using funds contributed by members of the group to pay for them. Thus$ it is a loss spreading de'ice. 2. The fundamental purpose of insurance hoe'er is neither the spreading nor the pre'ention of losses. Rather$ it is reduction of the uncertainty hich is caused by aareness of the possibility of loss. 3. )n insurance scheme pro'ides certainty for the indi'idual members of the group by a'eraging loss costs. The contribution made by the indi'idual to the group is assumed$ on the basis of predictions$ to be his share of losses suffered by the group. In e,change for this contribution$ he is assured that the group ill assume any losses that in'ol'e him. &e transfers his risk to the group and a'erages his loss costs$ thus substituting certainty for uncertainty. &e pays a certain premium instead of facing the uncertainty of the possibility of large loss. 5UNCTION O5 IN0UR)NC+ The functions of Insurance can be bifurcated into three parts6 !. .rimary 5unctions D. 0econdary 5unctions C. Other 5unctions The primary functions of insurance include the folloing6 .ro'ide .rotection The primary function of insurance is to pro'ide protection against future risk$ accidents and uncertainty. Insurance cannot check the happening of the risk$ but can certainly pro'ide for the losses of risk. Collecti'e bearing of risk Insurance is a mean by hich fe losses are shared among larger number of people. )ll the insured contribute the premiums toards a fund and out of hich the persons +,posed to a particular risk is paid. )ssessment of risk Insurance determines the probable 'olume of risk by e'aluating 'arious factors that gi'e rise to risk. Risk is the basis for determining the premium rate also . .ro'ide Certainty Insurance is a de'ice$ hich helps to change from uncertainty to certainty. Insurance is de'ice hereby the uncertain risks may be made more certain. Research and publicity Insurers also spend money in research and publicity in creating risk consciousness amongst hich has a far reaching effect on reduction in national aste. The secondary functions of insurance include the folloing6 .re'ention of -osses .re'ention of losses causes lesser payment to the assured by the insurer and this ill encourage for more sa'ings by ay of premium. Reduced rate of premiums stimulate for more business and better protection to the insured. 0mall capital to co'er larger risks Insurance relie'es the businessmen from security in'estments$ by paying small amount of premium against larger risks and uncertainty. Contributes toards the de'elopment of larger industries Insurance pro'ides de'elopment opportunity to those larger industries ha'ing more risks in their setting up. +'en the financial institutions may be prepared to gi'e credit to sick industrial units hich ha'e insured their assets including plant and machinery. If impro'es efficiency The insurance eliminates orries and miseries of loans at death and destruction of property. The carefree person an de'ote his body and soul together for better achie'ement. It impro'es not only his efficiency$ but the efficiencies of the masses are also ad'anced. It helps economic progress The insurance by protecting the society from huge losses of damage$ destruction and death$ pro'ides an initiati'e to ork hard for the betterment of the masses. The ne,t factor of economic progress. The capital is also immensely pro'ided by the masses. The property$ the 'aluable assets$ the man$ the machine and the society cannot lose much at the disaster. The other functions of insurance include the folloing 6 2eans of sa'ings and in'estment Insurance ser'es as sa'ings and in'estment$ insurance is a compulsory ay of sa'ings and it restricts the unnecessary e,penses by the insured=s 5or the purpose of a'ailing income(ta, e,emptions also$ people in'est in insurance. 0ource of earning foreign e,change Insurance is an international business. The country can earn foreign e,change by ay of issue of marine insurance policies and 'arious other ays. Risk 5ree trade Insurance promotes e,ports insurance$ hich makes the foreign trade risk free ith the help of different types of policies under marine insurance co'er. N)TUR+ O5 IN0UR)NC+ 0haring of risk Insurance is a de'ice to share the financial losses hich might be fall on an indi'idual or his family on the happening of specified e'ent. The e'ent may be death$ incase of life insurance$ marine perils$ marine insurance$ fire in fire insurance and other certain e'ents in general insurance.
Co(operati'e De'ice The most important feature of e'ery insurance plan is the co(operation of large number of persons ho$ agree to share the financial loss arising due to a particular risk hich is insured. )ll co(operati'e de'ices$ there is no compulsion here on anybody to purchase the insurance policy. Jalue of risk The risk is e'aluated before inuring to charge the amount of share of an insured$ here is called$ consideration or premium. If there is e,pectation of more loss$ higher premium may be charged. 0o$ the probability of loss is calculated at the time of insurance. .ayment at Contingency The payment is made at a certain contingency insured. If the contingency occurs$ payment is made. 0ince the life insurance is a contract of certainty$ because the contingency$ the death or the e,piry of term$ ill certainly occur$ the payment is certain. )mount of payment The amount of payment depends upon the 'alue of loss occurred due to the particular insured risk pro'ided insurance is there up to that amount. In case of life insurance$ the insurer promises to pay a fi,ed sum on the happening of an e'en. >+ither death or the e,piry of the term?. -arge number of insured persons The co(operation of a small number of persons may also be insurance but in that case$ the cost of insurance to each number may be higher. In case of large number of persons opposite condition is applicable. Insurance is not gambling The insurance is /ust opposite of gambling. In gambling by bidding the persons e,poses himself to risk of losing $in the insurance the insured is alays opposed to risk and ill suffer loss if he is not insured. Insurance is not charity Charity is gi'en ithout consideration but security and safety pro'ided by insurance is not possible ithout consideration or premium. It pro'ides security and safety to an indi'idual and to the society although it is a kind of business because inconsideration of premium it guarantees the payment of loss. .RINCI.-+ O5 IN0UR)NC+ .rinciples of Co(operation. Insurance is co(operati'e de'ice. If one person is pro'iding for his on losses$ it can not be strictly insurance because in insurance$ the loss is shared by a group of persons ho are illing to co(operate. It is the duty and responsibility of the insurer to obtain ade3uate funds from the members of the society to pay them at the happening of the insured risk. Thus$ the shares of loss took the form of premium. Today$ all the insured gi'e a premium to /oin the scheme of insurance. Thus$ the insured are co(operating to share the loss of an indi'idual be payment of a premium in ad'ance. .rinciples of .robability The loss in the shape of premium can be distributed only on the basis of theory of probability. The chances of loss are estimated in ad'ance to affi, the amount of premium. 0ince the degree of loss depends upon 'arious factors$ the affecting factors are analyEed before determining the amount of loss. With the help of this principle$ the uncertainty of loss is con'erted into certainty. The insurer ill ha'e not to suffer loss as ell ha'e to gain indfall. Therefore$ the insurer has to charge only so much of amount hich is ade3uate to meet the loss. The probability tells hat the chances of loss are and hat ill be the amount of losses. The insurance$ on the basis of past e,perience$ present conditions and future prospects$ fi,es the amount of premium. Without premium$ no(operation is possible and the premium can not be calculated ithout the help of theory of probability$ and conse3uently no insurance is possible. 0o$ these to principles are the to main legs of insurance.
5OR2)TION O5 IN0UR)NC+ R+4U-)TION )ND D+J+-O.2+NT )UT&ORIT; )CT The Insurance )ct$ !HC@ had pro'ided for setting up of the Controller of Insurance to act as a strong and poerful super'isory and regulatory authority for insurance. .ost nationaliEation$ the role of Controller of Insurance diminished considerably in significance since the 4o'ernment oned the insurance companies. %ut the scenario changed ith the pri'ate and foreign companies foraying in to the insurance sector. This necessitated the need for a strong$ independent and autonomous Insurance Regulatory )uthority as felt. )s the enacting of legislation ould ha'e taken time$ the then 4o'ernment constituted through a 4o'ernment resolution an Interim Insurance Regulatory )uthority pending the enactment of a comprehensi'e legislation. The Insurance Regulatory and De'elopment )uthority )ct$ !HHH is an act to pro'ide for the establishment of an )uthority to protect the interests of holders of insurance policies$ to regulate$ promote and ensure orderly groth of the insurance industry and for matters connected thereith or incidental thereto and further to amend the Insurance )ct$ !HC@$ the -ife Insurance Corporation )ct$ !HF< and the 4eneral insurance %usiness >NationaliEation? )ct$ !HBD to end the monopoly of the -ife Insurance Corporation of India >for life insurance business? and 4eneral Insurance Corporation and its subsidiaries >for general insurance business?. The act e,tends to the hole of India and ill come into force on such date as the Central 4o'ernment may$ by notification in the Official 4aEette specify. Different dates may be appointed for different pro'isions of this )ct. The )ct has defined certain termsA some of the most important ones are as follos appointed day means the date on hich the )uthority is established under the act. )uthority means the established under this )ct. Interim Insurance Regulatory )uthority means the Insurance Regulatory )uthority set up by the Central 4o'ernment through Resolution No. !B>D?K HI(lns( J dated the DCrd 8anuary$ !HH<. Words and e,pressions used and not defined in this )ct but defined in the Insurance )ct$ !HC@ or the -ife Insurance Corporation )ct$ !HF< or the 4eneral Insurance %usiness >NationaliEation? )ct$ !HBD shall ha'e the meanings respecti'ely assigned to them in those )cts. ) ne definition of LIndian Insurance CompanyL has been inserted. LIndian insurance companyL means any insurer being a company >a? hich is formed and registered under the Companies )ct$ !HF< >b? in hich the aggregate holdings of e3uity shares by a foreign company$ either by itself or through its subsidiary companies or its nominees$ do not e,ceed tenty(si, per cent. .aid up capital in such Indian insurance company >c? hose sole purpose is to carry on life insurance business$ general insurance business or re(insurance business.
CO2.)N; .RO5I-+ %irla 0un -ife Insurance Company -imited >%0-I? M ' (ision To create long term 'alue along ith market leadership
2ission To help people mitigate risks of life$ accident$ health and money at all stages and under all circumstances +nhance the financial future of our customers$ including enterprises. Jalues Integrity Commitment .assion 0eamlessness %irla -ife Insurance Co -td market share of the company increased from !.DD# to D.!!# in D""B("@. The company mo'ed to the Bth position in D""B("@ from @the a year before$ pushing don 2a, Ne ;ork -ife insurance company. )bout %irla 0un -ife Insurance Company -imited %irla 0un -ife Insurance pioneered the uni3ue Unit -inked -ife Insurance 0olutions in India. Within I years of its launch$ %0-I has cemented its position as a leading player in the .ri'ate -ife Insurance Industry. There has been focus on In'estment -inked Insurance .roducts$ supported ith protection products to maintain leadership in product inno'ation. 2ulti Distribution Channels( Direct 0ales 5orce$ )lternate Channels and 4roup offering con'enient channels of purchase to customers. Web(enabled IT systems for superior customer ser'ices. 5irst to ha'e issued policies o'er the Internet. Corporate go'ernance and a high degree of transparency in all business practices and procedures. 5irst to ha'e an operational %usiness Continuity .lan. 0trong fundamentals based on the )ditya %irla group=s local insight and 0un -ife financial global e,pertise. .)RTN+R0&I. %riefing mediapersons$ %irla said$ LThe insurance sector$ hich is a knoledge based industry is to be one of our core business. Our 'ision is to be among the top fi'e insurance companies in India and in this regard$ e ha'e aligned ith one of the best companies(the 0un -ife financial group. The partnership is based on 'alues$ mutual respect$ integrity and customer focus. 0un life financial is indeed delighted to be back in India in the insurance sector after almost I" years.L LOur group holding is BI per cent$ ith Indian Rayon and %irla 4lobal 5inance -td ha'ing a stake of <H per cent and F per cent respecti'ely$ hile 0un -ife financial holds D< per cent. The current capitaliEation of this 'enture stands at Rs !D" crore.L &e informed the gathering that the current funding for the insurance business Lin no ay affects Indian Rayon=s e,isting capL. LConsidering the immense groth potential of the life insurance business$ this 'enture ill definitely create 'alue for our three lakh shareholders. Our group=s e,tensi'e presence in India as ell as our netork of employees$ shareholders and distributors is a great ad'antage$ hich our insurance business ill le'erage. We ha'e a recepti'e population of o'er a million stakeholders$L %irla added. &e also said that the ne team for the insurance company as declared and that Don 0teard$ chairman * C+O of 0un -ife financial ser'ices$ takes o'er as the chairman of the %irla 0un -ife insurance board of directors. Numarmanagalam %irla continues as a director on the board. The total !D directors ha'e been nominated consisting of si, directors each from )ditya %irla group and %irla 0un -ife insurance company. 8OINT J+NTUR+0 %irla 0un -ife under the management of 2r. Nani %. 8a'eri as the C+O is a Rs. !@" crore e3uity capital company. %irla 0un -ife Insurance Co. -td is a D<6BI /oint 'enture beteen 0un -ife 5inancial 0er'ices Canada and )ditya %irla 4roup. 8ust four years don the industry pipeline$ %irla 0un -ife Insurance or %0-I has secured a lead in pri'ate life insurance market. )bout the )ditya %irla 4roup6 The )ditya %irla 4roup has a turno'er e,ceeding Rs. D@$""" crores >as on C! 2arch D""I? and is one of the largest business houses in India. It en/oys a leadership position in all the sectors in hich it operates. With o'er BF business units$ spanning the 0outh +ast )sian belt$ )frica$ Canada and the UN$ among others$ it is reckoned as India=s first multinational corporation. The group is anchored by BD$""" employees and has se'en lakh shareholders$ ith an asset base of o'er Rs.DC$""" crores. )bout 0un -ife 5inancial Inc.6 0un -ife 5inancial Inc. is a leading international financial ser'ices organiEation pro'iding a di'erse range of ealth accumulation and protection products and ser'ices to indi'iduals and corporate customers. Tracing its roots back to !@<F$ 0un -ife 5inancial and its partners today ha'e operations in key markets orldide$ including Canada$ the United 0tates$ the United Ningdom$ &ong Nong$ the .hilippines$ 8apan$ Indonesia$ India$ China and %ermuda. )s of C! 2arch D""I$ the 0un -ife 5inancial group of companies had total assets under management of U0D D@D billion. 0un -ife 5inancial Inc. trades on the Toronto >T0O?$ Ne ;ork >N;0+? and .hilippine >.0+? stock e,changes under ticker symbol L0-5L. 0.)N O5 OR4)NI0)TION (EO (!O Senior /i&e Pre$iden)- Dire&) Sale$ !or&e$ Senior /i&e Pre$iden) 0"l)erna)e (hannel "nd Gro%1 2i-e Senior /i&e Pre$iden) and "11oin)ed "&)%ar3 /i&e Pre$iden) - Mar.e)in, and (omm%ni&a)ion /i&e Pre$iden) - Plannin,4 2e,al and !inan&e /i&e Pre$iden) - Te&hnolo,3 /i&e Pre$iden) - Im1lemen)a)ion4 (on)rol and "dmini$)ra)ion /i&e Pre$iden) - (lien) Ser*i&e$ and Underwri)in, /i&e Pre$iden) - !ield O1era)ion$ Dire&) Sale$ !or&e
N+; .+R0ON0 5ame Nani 8a'eri De$i,na)ion (EO 5ame )nil 8. 8hala De$i,na)ion (!O 5ame +. N. 4o'eia De$i,na)ion Senior /i&e Pre$iden) - Dire&) Sale$ !or&e 5ame .. Nandagopal De$i,na)ion Senior /i&e Pre$iden) - "l)erna)e (hannel and Gro%1 2i-e 5ame N.0. 4opalakrishnan De$i,na)ion Senior /i&e Pre$iden) and "11oin)ed "&)%ar3 5ame )n/ana 4real De$i,na)ion /i&e Pre$iden) - Mar.e)in, and (omm%ni&a)ion 5ame 2ayank %athal De$i,na)ion /i&e Pre$iden) - Plannin,4 2e,al and !inan&e 5ame 2.C Raisinghani De$i,na)ion /i&e Pre$iden) - Te&hnolo,3 5ame 0nehal 0hah De$i,na)ion /i&e Pre$iden) - Im1lemen)a)ion4 (on)rol and "dmini$)ra)ion 5ame 2ario %raganEa De$i,na)ion /i&e Pre$iden) - (lien) Ser*i&e$ and Underwri)in, 5ame 2urli Iyer De$i,na)ion /i&e Pre$iden) - !ield O1era)ion$ Dire&) Sale$ !or&e %U0IN+00 .+R5OR2)NC+ IN T&+ -)0T 5I0C)- )chie'ed a first year eighted annualiEed premium of Rs. D$D"I crores$ as against Rs. HFC corers in the pre'ious year a groth of o'er !C!#$ amongst the highest in the industry impro'ed market share considerably ranked number si, amongst pri'ate sector players Re'enue groth of HI# to Rs. I$"!D corers$ from Rs. D$"<H crores last year -aunched !" products in indi'idual life segment and D in 4roup business segment )n aggressi'e groth in customer contact points No. of branches has gron from !CB to CCH$ ith another D<! branches going on stream from 1! D""@("H No. of agents has gron from F<$ """ to !!F$ """$ o'er the year 0trong fund performance 5UTUR+ .+R5OR2)NC+ .-)NNIN4 Comparati'e study of %0-I7s %usiness .erformance 1! 5; D""B("@ and 1! 5; D""@("H %0-I >1! 5; D""B("@? %0-I >1! 5; D""@("H? Mar.e) Share-6.78 Mar.e) Share-@.!F# Grow)h Ra)e Indi*id%al 9 Gro%1# Grow)h Ra)e Indi*id%al 9 Gro%1# 228 1768 "nn%ali:ed Premi%m E;%i*alen) "PE# "nn%ali:ed Premi%m E;%i*alen) "PE# R$. 1<=.> Rs. F"B.I %irla 0un -ife Insurance Company -td. >%0-I?$ the pioneer of Unit -inked -ife Insurance plans amongst the pri'ate life insurers in India$ has registered strong groth amongst the pri'ate life insurers$ as per reports for the 1! of the fiscal D""@("H. )s per the 1! 5; D""@("H figures$ %0-I has a market share of @.!F# amongst pri'ate life insurance players as compared to %0-I7s market share for 1! 5; D""B("@$ hich as I.H#$ indeed a significant leap. %0-I7s life insurance business has achie'ed a groth rate of 1768. The total ).+ >)nnualiEed .remium +3ui'alent? is at R$. =?7.6&rore$. @%irla 0un -ife Insurance continues its momentum into the ne fiscal year ith an increased market share of @.!F# for 1! 5; D""@("H >amongst pri'ate life insurance players? and a groth rate of !HI#. The first 3uarter 5; D""@("H has seen a ramp up on account of our e,pansion in distribution netork ith <"" branches nationally as on 8uly D""@$ our inno'ati'e product suite and superior 3uartile fund performance$ resulting in the present high groth rate and market share4A $aid 2r. Jikram 2ehmi$ .resident * C+O$ and %irla 0un -ife Insurance .RODUCT0 .rotection .olicies6 o %irla 0un -ife Term .lan o .remium %ack Term .lan 0a'ings %ased .olicies6 o %irla 0un life Insurance 0aral 8ee'an o %irla 0un -ife Insurance 4old(.lus o 0upreme -ife o Dream .lan o Classic -ife .remium o 0imply -ife o .rime -ife .remium o .rime -ife o -ife Companion o 5le,i Cash 5lo o 5le,i 0a'e .lus o 5le,i -ife -ine o 0ingle .remium %ond Retirement 0olutions6 o 5le,i secure -ife Retirement .lan II Child .olicy6 o Children=s Dream .lan .olicies 5or Rural India6 o %ima 0uraksha 0uper o %ima Dhan 0anchay o %ima Na'ach ;o/ana )ccident .rotection .olicies o )ccidental Death Rider o )ccidental Death Dismemberment Rider o Term Rider o Critical Illness Rider o Wai'er .5 .remiums o Critical Illness .lus Rider o Critical Illness(Woman Rider %esides these the 4roup Insurance .roducts by %irla 0un -ife Insurance include 4roup .rotection 0olutions that offers you insurance at affordable prices$ 4roup 0uperannuation and 4ratuity .lans$ 0ingle .remium 4roup Term .lan and 4roup Credit 4uard .lan. 0pecial NRI Insurance .olicies on offer by %irla 0un life includeB o .rime -ife .remium o .rime -ife o -ife Companion o 5le,i -ife -ine .lan o 5le,i 0a'e .lus o 5le,i Cash 5lo o Classic -ife .remier o 0ingle .remium %ond o 0imply -ife The current range of products offered by %0-I includes6 5le,i -ife -ine 5le,i Cash 5lo 5le,i 0a'e .lus 5le,i 0ecure -ife Classic -ife .remier %irla 0un -ife Term * .remium %ack Term .lan -ife Companion .rime -ife * .rime -ife .remier 4old .lus 0imply -ife 0ingle .remium %ond 0upreme -ife Children7s Dream .lan$ Dream .lan %irla 0un -ife Insurance 4old(.lus .lan %irla 0un -ife %ima Na'ach ;o/ana %irla 0un -ife 4roup .rotection 0olutions %irla 0un -ife 0ocial De'elopment .lan %irla 0un -ife 4roup 4ratuity .lan %irla 0un -ife 4roup 0uperannuation .lan %irla 0un -ife 4roup Interest Credit .lan %irla 0un -ife Credit 4uard .lan C&)NN+-0 O5 DI0TRI%UTION The distribution channels by %0-I include Direst sales force )lternate channels IT systems 4roups to ensure con'enience of the potential customers &ighly professional dealing Corporate go'ernance Complete transparency has earned %irla 0un -ife Insurance Co -td the trust of its customers. .ION++RIN4 )CTIJITI+0 The many pioneering acti'ities by %irla 0unlife include6( Unit -inked -ife Insurance 0olutions In'estment -inked Insurance .roducts Web(%ased Insurance .olicies sale %irla 0un -ife Insurance Company -imited also offers6( 25 >2utual 5und? International e3uity funds Dream plans in insurance products that gi'e you complete transparency and 'alue(for(money. )00+T UND+R 2)N)4+2+NT The total )ssets Under 2anagement >)U2s? of the company are appro,imately Rs.IF"" corers as of 8une C"$ D""B. %0-I has one of the highest persistency ratios of HB.B# in terms of premium$ amongst pri'ate life insurers. Its Outstanding Claims Ratio continues to be the best in the industry at ".I!#. 5UTUR+ 4ROWT& 0TR)T+4I+0 .-)N0 2umbai 2arch F %irla 0un -ife Insurance hopes to grab a fair share of the groing insurance market and be among the top three in to years. 2r Jikram 2ehmi$ .resident and C+O$ said that the accent ould no be on aggressi'e groth. LThe life insurance industry is groing at !"" per cent. We plan to introduce inno'ati'e products and e,pand our channel reach$L said 2r 2ehmi$ ho took o'er as C+O in December D""<. &e as earlier C+O of Idea Cellular. The company has registered I" per cent groth in ne business premium to Rs FBH crore in the first !" months of the fiscal$ against Rs I!I crore in the pre'ious year. On loer rate of groth hen compared to other insurance companies$ 2r 2ehmi said6 LTo a certain e,tent it as a conscious decision$ since other companies do not ha'e many long(term products. %esides$ there has been a change in the leadership of the company.L In terms of maturity 'alue$ most of %irla 0un -ife=s products ha'e a term of !F years$ said an official. The company is e,ploring distribution tie(ups ith other companies in the %irla group$ 2r. 2ehmi said. LWe ill e'aluate all the opportunities e ha'e to build synergies among the group companies and try to e'ol'e a lo(cost distribution model.L Currently$ the company has a tie(up ith Idea Cellular to offer group term insurance co'er for subscribers aged !@(CF. It is in talks ith non(life insurance companies to design a composite micro( insurance product. 2r. 2ehmi also said that the company=s a'erage premium per policy as close to the industry a'erage of Rs D"$""". It is likely to be loer in the future as insurers reach out to smaller tons and loer income groups. On breaking e'en$ he said that if the company had to gro$ break(e'en ould ha'e to be postponed. On 2onday the company launched the PChildren=s Dream .lan$= a unit( linked insurance plan ith guaranteed maturity benefits. The plan combines a guaranteed return on sa'ings ith upside potential based on the performance of the in'estment funds. The policy administration charge is customiEed and is deducted on a monthly basis. 1U+0TION T&)T W+ )0N+D TO %IR-) 0UN -I5+ I2.ORT)NT 1U+0TION %D2 >%U0IN+00 D+J-O.2+NT 2)N)4+R? What is %0-I= s in'estment philosophy and stock picking strategyQ %0-I6( Our primary ob/ecti'e is to pro'ide CON0I0T+NT and long(term returns to our policyholders. 5or stock picking$ our emphasis is on outstanding track record of management$ clear 'isibility of groth$ financial strengths and a scalable business model. We focus on blue(chip companies ith e,cellent track record$ management 'ision and the best degree of corporate go'ernance. What are the 'arious fund options pro'ided to policyholders by %0-IQ %0-I6(%0-I has been a pioneer of Unit -inked plans in India. Our product range on the Indi'idual life and 4roup front largely consists of Unit -inked plans. We ha'e a range of fund options on our indi'idual and group plans. The e3uity component in this fund option 'aries from !" # to H" #. We recommend our policyholders to select their fund options based on their risk tolerance le'el and the future need of capital. 0ome of the fund options listed belo for Indi'idual life plans are6 N+; 0TR+N4T& 5inancial +,pertise )s a /oint 'enture of leading financial ser'ices groups. %IR-) 0UN -I5+ has the financial e,pertise re3uired to manage your long(term in'estments safely and efficiently. Range of 0olutions They ha'e a range of indi'idual and group solutions$ hich can be easily customiEed to specific needs. There group solutions ha'e been designed to offer you complete fle,ibility combined ith a lo charging structure. 0trong +thical Jalues6 5und +3uity Component .rotector Up to !" # %uilder Up to D" # +nhancer Up to CF # Creator Up to F" # 2agnifier Up to H" # %IR-) 0UN -I5+ is an ethical and Cultural OrganiEation. 5alse selling or false commitment ith the customers is not alloed. 2ost respected .ri'ate Insurance Company. Comment India7s insurance sector is likely to clock an unprecedented groth of o'er D"" per cent by D""H(!". During this period$ pri'ate players ill gro at !I" per cent oing to their aggressi'e marketing techni3ues as against a groth rate of CF(I" per cent of state oned insurance companies. The Chamber e,pects the total insurance business to reach Rs. D""" billion in the ne,t to years from current le'el of Rs. F"" billion. On account of intense marketing strategies adopted by pri'ate insurance players$ the market share of state oned insurance companies like 4IC$ -IC and others ha'e already come don to B" per cent in the last four(fi'e years from o'er HB per cent and more intense competition is likely to be itnessed in the near future. Till 'ery recently$ the insurance sector as largely under the go'ernment. &oe'er$ many pri'ate multinational firms ha'e no entered the scene$ such as &D5C$ ICICI$ Nodak 2ahindra and %irla 0unlife. )nyone interested in this field can either ork in one of the areas of insurance6 life$ general and postal or become an agent or an insurance sur'eyor. In an insurance company a person can take a$ /ob in. The skills re3uired to succeed in this field are almost the same as those for any marketing or sales(related /ob. Q ;ou ha'e to be outspoken$ gentle$ persuasi'e$ calm$ and 'ery good at hate'er responsibility you take. ;ou ha'e to remember that here you ha'e to persuade people to go for your insurance policy as against the hordes of such policies a'ailable in the market. To be eligible for a license$ an insurance sur'eyor must ha'e one of the folloing6 5elloship of associate ship through the e,am held by the Institute of Insurance 0ur'eyors and )d/usters >II0)?$ 2umbaiQ Degree or diploma in architecture from a recogniEed uni'ersity With increasing aareness for life insurance$ the customer base * mi, is changing rapidly. %irla 0un -ife Insurance has been on a high groth path. The report clearly shos ho %0-I is emerging as the preferred life insurance pro'ider for higher age brackets. )n increase in customers in the less than ! laky income group 'alidates there efforts in increasing spread and reach) 5or ;TD 8anuary D""@. %0-I7s Ne %usiness .remium stood at Rs.!DFH.D" cores$ a !!B# increase o'er same period last year. The )U2 for %irla 0un -ife Insurance is in e,cess of Rs.<FH" cores as on DHth 5ebruary$ D""@. Its Outstanding Claims Ratio is ".I!#. %0-I has a pan(India branch presence of CCH branches ith o'er !$ ""$""" ad'isors nationally$ out of hich o'er F"" ad'isors are members of the prestigious 2illion Dollar Round Table >2DRT?. %0-I has insured o'er D million li'es since inception$ comprising o'er !.F million through its indi'idual business and the rest through its 4roup business. %irla 0un -ife Insurance >%0-I? in its B successful years of operations has contributed significantly to the groth and de'elopment of the life insurance industry in India. It pioneered the launch of Unit -inked -ife Insurance plans amongst the pri'ate players in India. It as the first player in the industry to sell its policies through the %anc assurance route and through the Internet. It as the first pri'ate sector player to introduce a pure Term plan in the Indian market. This as supported by sales practices$ hich brought a degree of transparency that as entirely ne to the market. The process of getting sales illustrations signed by customers$ offering a free look period on all policies$ hich are no industry standards ere introduced by %0-I. %eing a customer centric company$ %0-I has in'ested hea'ily in technology to build orld class processing capabilities. %0-I has co'ered more than D million li'es since inception and its customer base is spread across more than !F"" tons and cities in India. )ll this has assisted the company in cementing its place amongst the leaders in the industry in terms of ne business premium income.