THE BIG LOSE OUT

Private insurers lose out

even an LIC gains.
 Insurance Industry
 Life and general insurance - booming sector

 Life insurance - premiums account to 2.5%

General insurance premiums account to 0.65% of India's GDP.

1999 - Private companies

FDI - 26%

Private insurance posted a loss of Rs 780 crore in fiscal 2008-09

T.R Ramachandran, MD and CEO, Aviva Life
Insurance: “The highly competitive environment and
the overall slowdown have made it a challenging six
months for the industry”.

 IRDA put a limit on charge of ULIP customers. So

insurers have to re-price their products .

Average growth rates could stabilise at 10-15%.

Rider for Growth
Cost controls & efficient distribution models & branch
structure

V. Vaidyanathan, ICICI Prudential Life - ”We are

completely focussed on improving our business efficiency ,
looking at the branch structure and cutting costs.” When
growth goes back to 8-9% the need for insurance will grow,
too.

Pankaj Desai, Executive Director, Kotak Mahindra Old

Mutual Life Insurance:”The agency distribution model is
expensive in initial years and not very efficient. Agent need
to be trained intensively but their performance may vary”.
Reliance life & Kotak Mahindra - alternative sources
of capital - including a share issue, fuelling growth
with internal cash generations instead of capital
infusions.

Builting strategies on realistic mix of bancassuarance

and agency model
Money Back

Kotak Mahindra Life - profit of Rs14 crore against a

loss of Rs72 crore in 2007-08.

Bajaj Allianz life managed a tidy profit of Rs 45 crore in

2008-09 against a loss of Rs 16 crore the previous year.

SBI life - provision of RS 97 crore and a loss of Rs26

crores against a profit of Rs 34 crores in 2007-08.

Players are changing their focus from new business to

renewal business.