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TABLE OF CONTENTS
1. AN INTRODUCTION TO INSURANCE SECTOR IN INDIA 1.1 AN OVERVIEW OF INSURANCE INDUSTRY 2. TECHNOLOGY 3. PEST ANALYSIS IN INSURANCE SECTOR IN INDIA 4. REGULATORY ACTS 5. ROLES & FUNCTIONS OF IRDA 6. INDIAN INSURANCE SECTOR OVERVIEW 6.1 TRENDS IN LIFE INSURANCE BUSINESS 7. TOP 10 INSURANCE COMPANIES IN INDIA 8. 7 P’S OF INSURANCE SECTOR 9. SWOT ANALYSIS 10. LIST OF INSURANCE COMPANIES IN INDIA 11. BIBLOGRAPHY
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1 AN INTRODUCTION TO THE INSURANCE SECTOR IN INDIA
A) INSURANCE IN INDIA: The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries. With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It is a business growing at the rate of 15-20 percent annually and presently is of the order of Rs 450 Billion. Together with banking services, it adds about 7 per cent to the country‟s GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. Yet, nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. In addition, this part of the population is subject to weak social security and pension systems with hardly any old age income security. This is an indicator that growth potential for the insurance sector is immense. A well-developed and evolved insurance sector is necessary for economic development as it provides long-term funds for infrastructure development and at the same time strengthens the risk taking ability. It has estimated that, over the next ten years India would require investments of the order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain economic growth of the country. Insurance is a federal subject in India. Two legislations govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector in India has come a full circle from being an open competitive market to nationalization and back
5 to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries. Insurance in India started without any regulation in the Nineteenth Century. It was a typical story of a colonial era: a few British insurance companies dominating the market serving mostly large urban centres. After the independence, it took a dramatic turn. Insurance was nationalized. First, the life insurance companies were nationalized in 1956, and then the general insurance business was nationalized in 1972. Only in 1999 private insurance companies have been allowed back into the business of insurance with a maximum of 26% of foreign holding. In what follows, we describe how and why of regulation and deregulation. The entry of the State Bank of India with its proposal of bank assurance brings a new dynamics in the game. We study the collective experience of the other countries in Asia already deregulated their markets and have allowed foreign companies to participate. If the experience of the other countries is any guide, the dominance of the Life Insurance Corporation and the General Insurance Corporation is not going to disappear any time soon. Insurance under the British Raj Life insurance in the modern form was first set up in India through a British company called the Oriental Life Insurance Company in 1818 followed by the Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance Society in 1829. All of these companies operated in India but did not insure the lives of Indians. They were there insuring the lives of Europeans living in India. Some of the companies that started later did provide insurance for Indians. But, they were treated as "substandard" and therefore had to pay an extra premium of
20% or more. The first company that had policies that could be bought by Indians with "fair value" was the Bombay Mutual Life Assurance Society starting in 1871. The first general insurance company, Triton Insurance Company Ltd., was established in 1850. It was owned and operated by the British. The first indigenous
general insurance company was the Indian Mercantile Insurance Company Limited set up in Bombay in 1907. By 1938, the insurance market in India was buzzing with 176 companies (both life and non-life). However, the industry was plagued by fraud. Hence, a comprehensive set of regulations was put in place to stem this problem (see Table 1). By 1956, there were 154 Indian insurance companies, 16 non-Indian insurance companies and 75 provident societies that were issuing life insurance policies. Most of these policies were cantered in the cities (especially around big cities like Bombay, Calcutta, Delhi and Madras). In 1956, the then finance minister S. D. Deshmukh announced nationalization of the life insurance business.
The nationalization of life insurance was justified mainly on three counts. (1) It was perceived that private companies would not promote insurance in rural areas. (2) The Government would be in a better position to channel resources for saving and investment by taking over the business of life insurance. (3) Bankruptcies of life insurance companies had become a big problem (at the time of takeover, 25 insurance companies were already bankrupt and another 25 were on the verge of bankruptcy). The experience of the next four decades would temper these views.
C) Important milestones in the life insurance business in India:
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian, foreign insurers and provident societies were took over by Central government and nationalized. LIC formed by an Act of Parliament- LIC Act 1956- with a capital contribution of Rs. 5 crores from the Government of India.
5 . frames a code of conduct for ensuring fair conduct and sound business practices. 1957: General Insurance Council. set up. GIC incorporated as a company. and the United India Insurance Company Ltd.D) Important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. General Insurance was however a comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata. General Insurance followed suit and was nationalized in 1973.the first company to transact all classes of general insurance business. 1972 with effect from 1st January 1973. 1. General Insurance Corporation of India was set up as the controlling body with New India. the New India Assurance Company Limited. 1972: The general insurance business in India nationalized through The General Insurance Business (Nationalization) Act. For this purpose Malhotra Committee was formed during this year who submitted their report in 1994 and Insurance Regulatory Development Act (IRDA) was passed in 1999.1 AN OVERVIEW OF INSURANCE INDUSTRY Insurance has a long history in India. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. National and Oriental as its subsidiaries. Life Insurance Corporation of India was formed by consolidating the operations of various insurance companies. 107 insurers amalgamated and grouped into four companies. Life Insurance in its current form was introduced in 1818 when Oriental Life Insurance Company began its operations in India. United India. a wing of the Insurance Association of India. Resultantly Indian Insurance was opened for private companies and Private Insurance Company effectively started operations from 2001. Life Insurance was the first to nationalize in 1956. the Oriental Insurance Company Ltd. The process of opening up the insurance sector was initiated against the background of Economic Reform process which commenced from 1991.the National Insurance Company Limited. History of Insurance in India can be broadly bifurcated into three eras: a) Pre Nationalization b) Nationalization and c) Post Nationalization.
6 . The insurance market have witnessed dynamic changes which includes presence of a fairly large number of insurers both life and non-life segment. the insurance industry in India today stands at a crossroads as competition intensifies and companies prepare survival strategies in a detariffed scenario. and as it matures and new players enter. The health insurance sector has tremendous growth potential. nine private non-life insurers and six public sector companies. The deepening of the health database over time will also allow players to develop and price products for larger segments of society. There are opportunities in the pensions sector where regulations are being framed. For years now. But the reality is that the intense competition in the last five years has made it difficult for new entrants to keep pace with the leaders and thereby failing to make any impact in the market. Most of the private insurance companies have formed joint venture partnering well recognized foreign players across the globe. Less than 10 % of Indians above the age of 60 receive pensions. There are now 29 insurance companies operating in the Indian market – 14 private life insurers.Insurance Market. State Insurers Continue To Dominate There may be room for many more players in a large underinsured market like India with a population of over one billion. With many more joint ventures in the offing. the private players are active in the liberalized environment. which would help JV partners to bring in funds for expansion. There is pressure from both within the country and outside on the Government to increase the Foreign Direct Investment (FDI) limit from the current 26% to 49%. product innovation and enhancement will increase. The IRDA has issued the first licence for a standalone health company in the country as many more players wait to enter.Present: The insurance sector was opened up for private participation four years ago.
18% of the life insurance market and over 26. products. increased competition will drive insurers to rural and semi-urban markets. Life Insurance Corporation of India (LIC). Intense Competition In a de-tariffed environment. 7 . corporate agents.82% in new business premium income in November 2005. Reaching Out To Customers No doubt. and are more demanding in terms of better service and speedier responses. had a share of 74.26% market share in terms of fresh premium. innovative sales methods and creditworthiness. Insurance companies will vie with each other to capture market share through better pricing and client segmentation. Similarly. The industry now deals with customers who know what they want and when. ICICI Lombard has focused on growing the market for general insurance products and increasing penetration within existing customers through product innovation and distribution.53% of the non-life market. the four public-sector non-life insurers – New India Assurance.47% as of October 2005. competition will manifest itself in prices. Oriental Insurance and United India Insurance – had a combined market share of 73. With the industry all set to move to a detariffed regime by 2007. The battle has so far been fought in the big urban cities.Also as the private sector controls over 26. underwriting criteria. and bancassurance. the public sector companies still call the shots. National Insurance. there will be considerable improvement in customer service levels.11% market share. but in the next few years. the customer profile in the insurance industry is changing with the introduction of large number of divergent intermediaries such as brokers. product innovation and newer standards of underwriting. The country’s largest life insurer. ICICI Prudential Life Insurance Company continues to lead the private sector with a 7. whereas ICICI Lombard General Insurance Company is the leader among the private non-life players with a 8.
However. It also plans to venture into the African and Asia-Pacific regions in 2006. there is a need to use the data for trend analysis and personalization. the UK. The next five years will be challenging but those that can build scale and market share will survive and prosper 2. and thus. they want personalized interactions and they look for more and more features and add ones and better service. Take the case of LIC. Nepal and will soon start operations in Saudi Arabia. with robust reinsurance programmes in place. The year 2005 was a testing phase for the general insurance industry with a series of catastrophes hitting the Indian sub-continent. Insurance industry is a data-rich industry. the opportunities in the Indian market place is immense. customers are getting increasingly sophisticated and tech-savvy. which has set its sight on becoming a major global player following a Rs280-crore investment from the Indian government. With life insurance premiums being just 2.5% of GDP and general insurance premiums being 0. People today don’t want to accept the current value propositions. TECHNOLOGY There is an evolutionary change in the technology that has revolutionized the entire insurance sector. Moreover. With increased competition among insurers. Sri Lanka.Global Standards While the world is eyeing India for growth and expansion. Today managing the customer intelligently is very critical for the insurer especially in the very competitive environment. Indian companies are becoming increasingly world class. Fiji. service has become a key issue. The insurance companies today must meet the need of the hour for more and more personalized approach for handling the customer. 8 .65% of GDP. The company now operates in Mauritius. insurers have successfully managed to tide over the crisis without any adverse impact on their balance sheets.
However. 3. and histories of the service inquiry. technology incentives and the rate of technological change. Social factors often look at the cultural aspects and include health consciousness. etc. age distribution. These products also may be able to learn from the customer’s previous knowledge database and to use their information when determining the relevance to the customers search request. claim records. automation. The technological factors relate to the application of new inventions and ideas such as R&D activity. social and technological analysis. laws and regulations. PEST ANALYSIS OF INSURANCE SECTOR IN INDIA PEST analysis of any industry sector investigates the important factors that are affecting the industry and influencing the companies operating in that sector. there is a need to developing better techniques to give customers a truly personalized experience. changes in tastes and buying patterns. With the explosion of Website and greater access to direct product or policy information. interest rates. many organizations are incorporating knowledge database-repositories of content that typically include a search engine and let the customers locate the all document and information related to their queries of request for services.Companies need to apply different set of rules and treatment strategies to different customer segments. economic. Personalization helps organizations to reach their customers with more impact and to generate new revenue through cross selling and up selling activities. To ensure that the customers are receiving personalized information. etc. Customers can hereby use the knowledge database to manage their products or the company information and invoices. to personalize interactions. exchange rates and inflation rate. tax policies. 9 . population growth rate. trade restrictions and tariffs etc.. The economic factors relate to changes in the wider economy such as economic growth. insurers are required to capture customer information in an integrated system. PEST is an acronym for political. Political factors include government policies relating to the industry.
the committee submitted the report and some of the key recommendations included: 1 a) Structure: Government stake in the insurance Companies must brought down to 50%. Malhotra Committee. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. competition in it and future prospects of that sector. b) Competition: Private Companies with a minimum paid up capital of Rs. This title is update at time of order to ensure it contains the most up-to-date information. The reforms was aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms. In 1994. 2 1 c) Regulatory Body: 1 10 . Postal Life Insurance was allowed to operate the rural market. Our product also presents a brief profile of the industry comprising of current market. Only one State Level Life Insurance Company should be allowed to operate in each state.1bn should allow entering the sector.N. E) INSURANCE SECTOR REFORMS: In 1993.The PEST Analysis is a perfect tool for managers and policy makers. The Malhotra committee was setup with the objective of complementing the reforms initiated in the financial sector. helping them in analyzing the forces that are driving their industry and how these factors will influence their businesses and the whole industry in general.headed by former Finance Secretary and RBI Governor R. This will take one business day.formed to evaluate the Indian insurance industry and recommend its future direction. All the insurance companies must have greater freedom to operate. Malhotra. No Company should deal in both Life and General Insurance through a single entity. Foreign companies were allowed to enter the industry in collaboration with the domestic companies.
1 d) Investments: Mandatory Investments of LIC Life Fund in government securities to was reduced from 75% to 50%. industry should be opened up to competition. Hedges risk against uncertainty. NEED FOR INSURANCE: 1 Superior to an ordinary savings plan as it provides full protection against risk of death. (Married Women's Property Act). 1 2 Encourages and forces compulsory savings unlike other saving instruments. a trust is created for wife and children as beneficiaries. it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.a part of the Finance Ministry.should be made independent. The committee emphasized that in order to improve the customer services and increase the coverage of insurance policies. 1 1 1 1 Offers tax relief to policyholders. 11 . GIC and its subsidiaries are not to hold more than 5% in any company (there current holdings to be brought down to this level over a period of time) 1 e) Customer Service: LIC should pay interest on delays in payments beyond 30 days. For a policy taken under the MWP Act 1874. the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Controller of Insurance. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the insurance industry. But at the same time.100 Crores. Provides loan to tie over a temporary difficult phase and is also acceptable as security for a commercial loan. Hence. An Insurance Regulatory body should be set up. wherein the saved money can be easily withdrawn.The Insurance Act should be changed.
1956 Even though the first legislation was enacted in 1938. then introduced the Insurance Regulatory and Development Authority Act in 1999. 1972 The General Insurance Business (Nationalization) Act 1972 was enacted to nationalize the 100 odd general insurance companies and subsequently merging them into four companies. there were not any private insurance companies in Indian insurance sector. General Insurance Business (Nationalization) Act. 1938 was the first legislation governing all forms of insurance to provide strict state control over insurance business. 1938 The Insurance Act. The Govt. through a Government ordinance. 1956 effective from 1. Insurance Regulatory and Development Authority Act. The Life Insurance Corporation Act.9. that life insurance in India was completely nationalized. Life Insurance Corporation Act. All the companies were amalgamated into National Insurance. thereby de-regulating the insurance sector 12 . REGULATORY ACTS: A number of acts govern the insurance sector The Insurance Act. New India Assurance. form Life Insurance Corporation after nationalization of the 245 companies (both Indian and foreign origin) into one entity. of India. 1999 Till 1999. United India Insurance. the society will benefit as catastrophic losses are spread globally 4. Based on the concept of sharing of losses. it was only in 19 January 1956.1956 was enacted in the same year to. Oriental Insurance.
ROLE & FUNCTIONS OF IRDA: Section 14 of IRDA Act. paid up equity capital of such Indian insurance company The company's sole purpose is to carry on life insurance business or general insurance business or reinsurance business. promote and ensure orderly growth of the insurance industry Insurance Regulatory and Development Authority (IRDA) was established. do not exceed 26%. Further. 1999 lays down the duties.and allowing private companies into the insurance. (1) Subject to the provisions of this Act and any other law for the time being in 13 . either by itself or through its subsidiary companies or its nominees. REGULATIONS FOR INDIAN INSURERS To protect the interests of holder of insurance policy and to regulate. The minimum paid up equity capital for life or general insurance business is 100crores The minimum paid up equity capital for carrying on reinsurance business has been prescribed as 200crores 5.. powers and functions of IRDA. 1956 The aggregate holdings of equity shares by a foreign company. foreign investment was also allowed and capped at 26% holding in the Indian insurance companies. Under the new dispensation Indian insurance companies in private sector were permitted to operate in India with the following conditions: Company is formed and registered under the Companies Act.
intermediaries.force. conducting enquiries and investigations including audit of the insurers. terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and 14 . advantages. (2) Without prejudice to the generality of the provisions contained in sub-section (1). the powers and functions of the Authority shall include. suspend or cancel such registration (B) Protection of the interests of the policy holders in matters concerning assigning of policy. code of conduct and practical training for intermediary or insurance intermediaries and agents (D) Specifying the code of conduct for surveyors and loss assessors (E) Promoting efficiency in the conduct of insurance business (F) Promoting and regulating professional organizations connected with the insurance and re-insurance business (G) Levying fees and other charges for carrying out the purposes of this Act (H) Calling for information from. modify. nomination by policy holders. promote and ensure orderly growth of the insurance business and re-insurance business. insurable interest. surrender value of policy and other terms and conditions of contracts of insurance (C) Specifying requisite qualifications. settlement of insurance claim. the Authority shall have the duty to regulate. (I) Control and regulation of the rates. undertaking inspection of. (A) Issue to the applicant a certificate of registration. renews. withdraw. insurance intermediaries and other organizations connected with the insurance business.
(M) Adjudication of disputes between insurers and intermediaries or insurance intermediaries (N) Supervising the functioning of the Tariff Advisory Committee (O) Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (f) (P) Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector (Q) Exercising such other powers as may be prescribed. The continued acceleration in saving and investment rates and sustained productive growth were the underpinnings of the growth momentum in the Indian economy during 2007.regulated by the Tariff Advisory Committee under section 64U of the Insurance Act. 6.6% 15 . improvement in the performance of the agriculture sector in India not only contained inflationary pressures on some agricultural commodities but also supported the growth momentum in the economy. INDIAN INSURANCE SECTOR OVERVIEW: The Indian economy continued to exhibit robust growth even though global economy experienced many uncertainties. 1938 (4 of 1938) (J) Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries (K) Regulating investment of funds by insurance companies. (L) Regulating maintenance of margin of solvency. The real GDP growth in 2007-08 though high at 9% was lower than the 9. The real GDP growth emanating from the industry and services sector declined slightly during 2007-08. However.08.
The current account deficit as a% of GDP was 1. The growth in the Index of Industrial Production during 2007-08 was 8. The gross domestic capital formation rate at the economy level increased from 35. A similar increase was observed in mutual funds also. The deceleration in the industry sector was also reflected in the Index of Industrial Production. A similar observation can be made about the investments in mutual funds.5% (as against 11. the BSE sensex has shown abnormally high levels and the gains were across all sectors of the index. Services sector continued to grow at double digit level.8% in 2006-07 contributed mainly by increase in the savings of private corporate sector and the public sector. It may be noted that during 2007-08. subsidies and extra budgetary liabilities. pass through of international crude oil prices. According to the preliminary estimates released by RBI on household financial savings for 2007-08. insurance funds constituted 17. Gross domestic savings as% of GDP at current market prices increased from 34.1% observed in 200607.9% in 2006-07. This has resulted in an increase in the share of insurance funds in the total household savings. Supply side pressures on key agricultural products. The above shift in the preferences towards insurance sector was mainly on account of the households preferring to invest in Unit Linked Insurance Products (ULIPs) of life insurers in the back ground of bullish stock market as the returns of a part of ULIPs depend on the behaviour of the stock market.5% in 2007-08 higher than 1. The saving preference of the households had slightly shifted away from the bank deposits in 2007-08 from that of 2006-07.3% in 2005-06 to 34.5% observed in 2006-07).recorded in 2006-07. Capital inflows on a sustained basis were observed in 2007-08 and net surplus on invisibles in the Balance of Payments was buoyant offsetting a significant part of the merchandise deficit. The fiscal position of both central and states improved during 2007-08 even though there were higher outflows on account of high interest payments. continued demand pressures have pushed the inflation rate as measured by 16 .5% in 2005-06 to 35.5% of the total gross financial savings of the households in 2007-08. Exports and imports accelerated during 2007-08 reflecting India’s diversified foreign trade.
The CSO has placed the real GDP growth originating in Agriculture. the real GDP growth in the economy worked 17 . The SEBI has undertaken many initiatives in making the operations of mutual funds more transparent and investor friendly. Several measures were also initiated to develop the private corporate debt market.7% at end March 2008 as against 5. capital markets and bond markets were undertaken by the respective regulators. on an average basis. On an average basis.0%.4% in 2006-07. However. Government Securities Regulations 2007 has come into force with effect from December 1.7% during 2007-08 than 5.6% recorded at end March 2007. The SEBI mandates FIIs to provide AAA rated foreign government securities as collaterals for margins against transactions in the derivatives segment.7% in 2006-07. This will help the insurance companies in participating in the negotiated dealing system for parking their excess funds.2 percent respectively. All the above measures undertaken by the various regulators will open opportunities for the insurance companies to park their funds in a profitable way. Accordingly.movements in wholesale price index to a higher level of 7. The Government on its part has helped in this process by allowing changes in the legal framework. it was lower at 4. During 2007-08 many policies regarding broadening and deepening of the financial markets. Insurance companies are now allowed to access the negotiated dealing system – order matching using the constituents’ subsidiary general ledger route.2 percent and 10.9% in March 2008 as against 6. However. The Union Budget 2007-08 has announced measures to develop bond. they may have to improve their skills in dealing with such complex exotic financial instruments. Industry and services during the first quarter of 2008-09 at 3. currency and derivatives market including launching of exchange traded currency and interest rate features and developing a transparent credit derivatives market with appropriate safeguards.2% as against 6. 2007. during 2007-08. it was 6. The growth in consumer price index for industrial workers was also high at 7.7% a year ago. 5. The policies undertaken in the financial markets will help the insurance companies in managing their assets in a prudent and profitable way.
as compared with 5. The overnight rates in the call market.12%.25%.8% as at endMarch 2008 and 3.2% recorded in the first quarter of the previous year.56% by end-September 2008. The yields on Government securities with one-year residual maturity increased from 7. While equity markets have fallen sharply in tandem with those in advanced economies.7%. The international financial system is gripped by extreme risk aversion in the wake of spectacular failures of among the world’s largest financial institutions. Inflation.49% at end-March 2008 to a high of 9.4% as on October 4. but uncertainties about their resilience to the global shocks have increased.00% at the end of March 2008 to 11. Deposit rates offered by the banks for various maturities increased by 50-175 basis points and the benchmark prime lending rates of Public Sector Banks increased by 125-150 basis points during the same period. market repo (outside the LAF) and collateralised borrowing and lending obligation (CBLO) hardened across the spectrum on account of tighter liquidity consequent upon gradual increases in the CRR during April-August 2008.3% a year ago.0% on a year-on-year basis in August 2008 from 7.2% a year ago.81% as compared with 8. At a disaggregated level. with the financial crises across the globe and melt down in the stock markets. measured by variations in the wholesale price index (WPI) on a year-on-year basis. the sentiments of the investors may turn the other way and many would like to invest their surpluses in safe 18 . showed a sharp increase to 9. prices of primary articles and manufactured products rose by 12. With buoyancy in stock markets. The weighted average discount rate of Certificates of Deposit increased from 10.5% a year ago. The outlook for the emerging economies remains positive. 2008 from 7. based on the consumer price index (CPI) for industrial workers.7 per cent and 9.out 7. The interest rates (both deposit and lending rates) rose significantly during the first two quarters of 2008-09. increased to 11. Industrial production and export volumes have slowed down. bond spreads have widened. while investors are willing to take risks and prepared to bear investment risks by opting for ULIPs.9% for the first quarter as against 9. respectively.0% and 4. The weighted average yields of Central Government securities were higher at 8. Inflation.
individual 19 . The number of policies written at the industry level declined by 7. the growth in life insurance business in near future may not be as robust as it was so far.45%. the investment income for the non-life insurance companies would also come down thus affecting the profits. insurance companies have gone aggressively on branch expansion and added technical manpower. the preference will be shifted away from ULIPs and life insurers may have to design traditional products with good incentives. they have to inject additional capital to maintain the regulatory requirement.and traditional financial instruments rather than take risks. With slump in the stock markets. As such. the personal disposable incomes will be lower thus affecting the savings and investment.31% while.20crore during the first quarter in the current financial year as against Rs. As such. Performance in the first quarter of 2008-09 (i) Life insurance: The life insurers underwrote a premium of Rs. With slow down in the economic growth.12511. because the investment income has been offsetting the underwriting lossless of the insurers so far. 6795. The slowdown in the industry and lower investments in the private corporate sector leads to lower asset formation.14320. over the corresponding period in the previous year. Further. that of private insurers increased by 72.78% While the number of policies written by LIC declined by 23. it is difficult to raise funds from the capital markets and promoters may find it difficult even to divest their own investments in a bearish stock market.56crore and the private insurers accounted for Rs. The premium underwritten by LIC declined by 12.00%.64crore. as insurance companies are closely monitored by their solvency margins. in the case of private insurers they grew by 44.80crore in the comparable period of last year recording a growth of 14. Of the total premium underwritten. In the recent past.88%. Of the total premium underwritten. The associated costs due to those are high and companies may find it difficult to sustain with high costs and low premiums. LIC accounted for Rs.36%. This together with lower merchandise trade affects the non-life insurance market. Under the present position in the financial markets.7524.
they were Rs.2248. recorded negative growth rates (-5.572.51% over the previous period. Marine.78crore in the rural sector.24crore respectively.96lakh and private insurers 12.40crore.1600.10995.74crore underwritten in the same period of last year. the public insurers witnessed positive growth rate 20 .23crore. Motor.1275. individual business was Rs.99crore. The Health segment recorded the highest growth (49.70crore as against Rs. Health and Miscellaneous segments by the non-life insurers were Rs.1075.58 per cent and 76.business accounted for Rs.67 per cent) in the first quarter of the current financial year over the corresponding quarter of 2007-08. Segment-wise. ECGC underwrote credit insurance of Rs.77lakh. lower than 68.2892.89crore underwritten in the same quarter of the last year.45crore respectively.80%) over in the same period. the premium underwritten in the Fire. The Fire segment witnessed negative growth (-13.53lakh policies with a premium of Rs.19crore and Rs.1772.14% and -4.65 and 40. (ii) Non-Life Insurers During the first quarter of current financial year.87% respectively reported in the previous year. Rs. The market share of LIC was 52. The life insurers covered 12.13lakh lives were covered recording a growth of 8.37% respectively) over the one year period.57crore and Rs. In respect of LIC.43% by underwriting premium to the tune of Rs. The public non-life insurers underwrote a premium of Rs.5236. The private non-life insures witnessed higher growth of 22.164.98%. In the case of private insurers.09crore in the previous year resulting in a significant growth of 86.1208.10crore and underwrote 13. the non-life insurers underwrote a premium of Rs.88.5720.30crore. Of the total lives covered under the group scheme.3624.15crore. Fire and Marine.85% over Rs.7448.18crore recording a growth of 17.17. LIC accounted for 38. In the Motor segment.78crore as against Rs. The market shares of public and private insurers were 59. higher by 14.3541. and Rs.35% respectively.90crore and group business for Rs.88 per cent in number of polices underwritten.50lakh lives in the social sector with a premium of Rs.94% in the first quarter of 2007-08. Under the group scheme 56. In terms of number of policies.85crore.71crore and group business was Rs.55% in the total premium collection and 63.5275.3324. Rs.8778.
The premium underwritten in the Motor segment in the first quarter of the current financial year was Rs. which constituted 58.09 per cent) in the premium underwritten despite issuing lesser number of policies. as a ratio of total number of policies worked out to 12. Australia Guardian Royal Exchange.72% (Public) and 41. issued in this quarter. US Chubb. The premium collection in the Health segment went up to Rs. The contribution from the Public and Private Life insurers in the total Motor premium was Rs. US J Rothschild. Germany American Int. constituting for 20.(23.1772. constituting 41.04crore (40. UK General Accident.29% in the total premium underwritten. The number of policies.2151.3624. UK Royal Sun Alliance.28% (Private) respectively in the first quarter of the current financial year. UK Group Legal & General. UK Gio. The shares of public and private non-life insurers in the Health segment remained similar to the Motor segment. This growth was sharper in the public insurers with 20%.19% in the total premium. UK Allstate. US Standard Life. INDIAN COMPANIES WITH FOREIGN PARTNERSHIP Indian Partner Alpic Finance Tata CK Birla Group ICICI Sundaram Finance Hindustan Times Ranbaxy HDFC Bombay Dyeing DCM Shriram Dabur Group Kotak Mahindra Godrej Sanmar Group Cholamandalam SK Modi 20th Century Finance M A Chidambaram Vysya Bank International Partner Allianz Holding.20%. UK Winterthur Insurance. Australia Canada Life Met Life ING 21 .95%. Group.57 in the first quarter of the current year.64%) respectively. US Zurich Insurance. Switzerland Commercial Union.23. In terms of number of policies issued Health segment recorded a growth of 12. UK Cigna.1473.19crore (59.36%) and Rs. Switzerland Prudential.
2009 Significantly. Department of State FY 2001 Country Commercial Guide: India REGISTERED INSURERS IN INDIA By the end of March 2009. Hyderabad and Bangalore. there were eighteen life insurance companies operating in India. by over 140%.. Metro : Delhi. Total 21 20 01 42 ** Includes two Standalone Health Insurance Companies – Star Health & Allied DISTRIBUTION OF OFFICES * OF LIFE INSURERS AS ON MARCH 31.Source: U. from 1908 to 4592 in 2008-09. Mumbai. Ltd. Aegon Religare life insurance company limited and canara HSBC Oriental Bank of Commerce Life Insurance Co. DLF Pramerica life insurance company limited were given Certificate of Registration by the Authority. 2) Based on the HRA classification of places done by the Ministry of Finance. 22 . the number of offices of private life insurers in semi-urban and smaller locations put together increased the highest. Subsequently.S. Insurer Metro Urban Semi-urban Others Total Private Total 628 1169 2692 1902 6391 LIC 311 468 848 895 2522 Industry Total 939 1637 3540 2797 8913 Note : 1) Data collected from life insurers through a special return. Kolkata. With these two new companies the total number of life insurance companies operating in India rose to 21.ECGC and AIC Insurance Co. and Apollo DKV Health Insurance Co. Type of business Public Sector Private Sector Life Insurance 1 20 General Insurance 6* 14** Re-insurance 1 0 Total 8 34 * Includes specialized insurance companies . Chennai.
The investor was no longer content with the so called security of capital provided under a policy of life insurance and started showing a preference for higher rate of return on his investments as also for capital appreciation. The traditional endowment policies were investing funds mainly in fixed interest Government securities and other safe investments to ensure the safety of capital. It was. B-1 and B-2 class cities of the HRA classification. However. Thus the traditional emphasis was always on security of capital rather than yield. The policyholder found that the sum assured guaranteed on maturity had really depreciated in real value because of the depreciation in the value of money. the Indian life insurance market is riding high on the unit linked insurance plans. TRENDS IN LIFE INSURANCE BUSINESS—UNIT LINKED INSURANCE PLANS It wasn’t too long back when the good old endowment plan was the preferred way to insure oneself against an eventuality and to set aside some savings to meet one’s financial objectives.Urban : A. Others : Places not listed in the HRA classification. it was observed that savings through life insurance were becoming unattractive and not meeting the aspirations of the policyholders. Today. ULIPs and its Features Unit linked insurance plans (ULIPs) are insurance plans that combine the benefit of investment with insurance. * Offices opened after seeking approval of the Authority. therefore found necessary for the insurance companies to think of a method whereby the expectation of the policyholders could be satisfied.1. with the inflationary trend witnessed all over the world. Semi-urban : C class cities of the HRA classification. The object was to provide a hedge against the inflation through a contract of insurance. 6. They give the investor an option to put a part of their 23 . Decline of assured return endowment plans and opening of the insurance sector saw the advent of ULIPs on the domestic insurance horizon.
Traditionally.2. Transparency 2. ULIPs have gained high acceptance due to the attractive features they offer.4. Option to withdraw money after few years (comfort required in case of exigency). 4. Being market. A choice of funds (ranging from equity.linked. debt. Flexibility to choose premium amount. Of course. Convenience of tracking one’s investment performance on a daily basis. government securities. Partial / Systematic withdrawal allowed 4. have a broader choice.1. Fund Options 4. The common types of funds available in ULIPs are Bond Fund. within a ULIP there are options wherein equity investments are capped. Low minimum tenure. 3. Flexibility 1.3 Option to change level of Premium even after the plan has started (Top up facility).1.1. These include: 1. Flexibility to change asset allocation by switching between funds. 1. Secure Fund. 2. 1.3. corporate bonds and the money market. 1.1. they were major beneficiaries of the secular rise in stock markets. ULIPs however. 2. cash or a combination).premium in various investment portfolios and derive the benefits depending upon the performance of the funds chosen by them. Liquidity 3. 3. Option to choose fund mix based on desired asset allocation. 24 . ULIPs were launched at an opportune time when stock markets had just taken off. They invest across the board in stocks. endowment plans have invested in government securities. Flexibility to choose Sum Assured. corporate bonds and money market instruments. 3. Protector Fund.2. Changes in the plan & net amount invested are known to the customer.2.2.
In addition to an even distribution of 2048 branches located in different towns and cities of India.23 Non-linked Business (%) 2006-07 11.30 LIC 29.31 70. Mortality charges.09 2007-08 9. Depending on one’s risk appetite one can choose the fund. LIC also has a network of around one million agents who solicit life insurance policies to the public. However the investment risk is borne by the investor.70 7. The movement of NAV enables the policy holder to assess the performance of his investment and accordingly make intervention in the form of switches. LIC presently has 7 Zonal Offices and 100 Divisional Offices situated all around the country.75 46. Policy/administration charges. Growth Fund.31 56. After opening up of the insurance sector. LIST OF TOP 10 INSURANCE COMPANIES IN INDIA: 1. The Life Insurance Corporation (LIC) of India founded in 1956 is the largest life insurance company in India owned solely by the Government of India. Unit-linked insurance policies (ULIPs) have become increasingly popular. Fund management charges. withdrawal and top-ups.24 58.76 Industry 41.70 70.69 29. and Enhancer Fund. Analysis of figures for the last three years indicates the growth pattern of unit linked business.91 2007-08 90. fees and deductions in ULIPs are Premium allocation charges. which is considered the financial capital of India. Index Fund.33 62. Surrender charges. TRENDS IN LIFE INSURANCE BUSINESS—UNIT LINKED INSURANCE PLANS Unit Linked Business (%) 2005-06 Private 82.Balanced Fund.25 53.67 37. The common type of charges. Fund switching charges and Service tax. Headquartered in Mumbai.69 43.77 2006-07 88. Insurance companies are required to declare the NAV of various ULIPs on a daily basis. 25 .30 2005-06 17.
It stresses on innovative aspect and opening of new markets. It is a leading financial institution that has carved a niche for itself all over the world. Tata AIG Insurance Solutions It is one of the leading insurance companies that provide both life insurance as well as general insurance. These occurrences led to loss of faith in insurance of the people of India. This pioneer company is a joint collaboration between the American International Group. This insurance company identifies the clients’ needs and works accordingly. 2001. It employs thousands of employees and offers various opportunities to people to build a prospective career. It believes in new economy and latest Internet technology. The first war of independence in 1857. Tata AIG Insurance Solutions is one of the most prestigious organizations in the business world. the World Wars 1 and 2 (1914-1918 and 1939-45) and India's national struggle for freedom in between had adverse effect on the economy. They own the company in the ratio of 26:74. Inc.History of LIC of India The first 150 years of the British Rule in India were characterized by turbulent economic conditions. Starting its operations on April 1. 2. 2001. It acquired its license for carrying out operations in India on February 12. General insurance products include: 26 . Tata AIG Insurance offers a number of products for the General Insurance holders. (AIG) and Tata Group. As a leading name in the financial world. Tata AIG Insurance provides facilities to both corporates and individuals. it identifies the potential and experience of the individual. In addition to this the period of world wide economic crisis in between the two World Wars termed as the period of Great Depression led to the high rate of bankruptcies and liquidation of most Life Insurance Companies in India that existed during that time. it seeks to serve different categories of people.
For the individuals. business organization and other association. Aviva Life Insurance India It is a private insurance company formed from a collaboration between the Aviva insurance group of UK and the Dabur group. For the corporates. employee benefits. At present in Aviva Life Insurance India. The products of Aviva insurance group of India are: • • • • LifeLong LifeSaver or EasyLife Plus Young Achiever LifeBond and LifeBond Plus 27 . Aviva's products are meant to provide customers flexibility. In 1995 Aviva was the first foreign insurance company to start its representative office in India. children and for retirement planning. the Aviva group is a 26% share holder and the Dabur group holds 74% shares in the joint venture. today stands as one of the leading provider of life and pension products to Europe and other parts of the world. Individual insurance Small business insurance Tata AIG Insurance offers flexible life insurance to the individuals. one of India's oldest and top producer of traditional health care products . there are various insurance products like group pensions. Tata AIG Insurance offers various products for adults. The history of Aviva Life Insurance India starts at 1834 during nationalization when Aviva was the largest foreign insurance group in terms of the compensation paid by the Indian Government. work place solutions and credit life. transparency and value for money. 3. History – Aviva insurance group in UK with a history dating back to 1696.
thus . M. Inc. 4. Growth Fund .The fund comprises of debt securities in the range of 60-100%. Aviva Life Insurance India have been able to reach out to those underprivileged who had no access to insurances till day. Private Limited and other private 28 .The fund comprises of debt securities in the range of 50-90%. Balanced Fund .Metlife India Insurance Company Limited: MetLife India Insurance Company Limited (MetLife) is an associate of MetLife. equities in the range of 0-20% and money market and cash in the range of 0-20%. the Jammu and Kashmir Bank. • equities in the range of 0-85% and money market and cash in the range of 0-20%.The fund will comprise of debt securities in the range of 0-50%. In Aviva Life Insurance India. Secure Fund . Pallonji and Co.The fund comprises of debt securities in the range of 50-100%. These fund provides investment security to the capital of the customers. and was established as a joint venture between MetLife International Holdings.. Through their association with Basix (a micro financial institution) and other NGOs. • equities in the range of 0-20% and money market and cash in the range of 0-20%.• • • • PensionPlus LifeShield Freedom LifePlan LifeBond5 The fund management operations of Aviva Life Insurance India is controlled from Mumbai and the fund options includes Unitized With-Profits Fund and four Unit Linked funds: • Protector Fund . by combining protection and long term savings the customers can safeguard and provide life products for their family with their changing needs. Inc. • equities in the range of 0-45% and money market and cash in the range of 0-10%.
which include individual life insurance plans and products.investors. Services offered by the MetLife companies: • • • • • • • • Life insurance Annuities Automobile and home insurance Retail banking Other financial services to individuals Group insurance Reinsurance Retirement and savings products and services 5.. The company also has some other joint venture partners in the form of Exide Industries Ltd. ING Vysya Life Insurance offers a host of life insurance products and services to its customers. Vysya Bank Limited . based in Bangalore. was established in the year 2001. ING Vysya Life Insurance ING Vysya Life Insurance Company Limited is one of the leading private insurance providers in India.who help the customers get the right product across the length and breadth of the country. Inc. Currently. through its associates. (INGI) . MetLife.one of the largest private sector banks in India.the second largest insurance company in the world. and GMR Industries. Enam Group and Ambuja Cement Ltd. 29 . with services spread across more than 600 locations via the banking partners and company-owned offices. extends its services to more than 70 million customers in the Americas. ING Vysya Life Insurance Company Ltd. It attends its customers by extending a range of modern products to different individuals and group customers. MetLife has in its kitty over 50.000 Financial Advisors.V. Asia Pacific and Europe. A joint venture between ING Insurance International B. MetLife is one of the quickest growing life insurance companies in India.
financial tools and calculators etc.group products.5 lakh customers. which can be listed as below: Individual Products ING Vysya Life Insurance offers a range of products that cater to the financial needs of individuals of every age. • • • • • Protection Plans Savings Plans Retirement Plans Investment Plans Riders Group Products ING Vysya Life Insurance offers comprehensive and cost-effective products to its customers: ING Smart Shield • • • Group Gratuity Employee Deposit Linked Insurance Group Term Life Insurance Plan 30 . The company has over 140 branches across the nation that serves more than 4. ING Vysya Life Insurance has over 3.000 sales insurance agents. Offerings: ING Vysya Life Insurance Company Limited offers a range of products to its customers.000 employees and more than 21.
a leading global name in the field of insurance. Investment Needs: It figures out the investment options for you. • • Child Calculator: It helps you calculate and plan the future of your child. accident. • and aspirations. The Financial Horoscope: It makes a comprehensive plan for your future Easy Plan Finder: It helps you find the plan that suits you best. health and money at every stage and under any circumstance. This insurance company is a result of a joint venture between Aditya Birla Group. Minimum Insurance Needs: It helps you calculate the minimum insurance cover Savings Needs: This savings calculator estimates the expenditure on your goals Retirement Needs: It helps you make plan for a steady income for your future. and retirement needs. The vision of the group is to create long term value together with market leadership. that you must have in order to protect the financial future of your family. Birla Sun Life Insurance has to its credit of being the first company in the field of financial solution to start the Business Continuity Plan. The primary aim of the company is to help customers ease risks of life. • • • taking into consideration all your savings. • 6. a multinational company in India and Sun Life Financial Inc. investment. The company works towards making the financial future and enterprises of the customers better than what they 31 .• Single Premium Level Term Plan Planning Tools NG Vysya Life Insurance offers a range of tools to help you chalk out your financial plans properly. Birla Sun Life Insurance Company Birla Sun Life Insurance Company also known as BSLI is one of the renowned names in the field of insurance in India.
full commitment.currently are. passion and ample speed. Web-enabled IT systems for superior customer services First to have issued policies over the Internet Corporate governance and a high degree of transparency in all business India. So whether the customer wants long term protection or short term protection plans. All the works undertaken at Birla is done with integrity. • supported with protection products to uphold leadership in product modernization • • • practices and procedures BSLI Solutions Birla Sun Life Insurance Company provides individual and other solutions to customers based on their varied needs. • private Life Insurance Industry. BSLI has made its position very strong as a leading player in the The company's focus has been on investment linked insurance products. Salient Features of BSLI Company • Birla Sun Life Insurance initiated the Unit Linked Life Insurance Solutions in In 4 years. The insurance solutions offered by the company are: • • • • • Protection Solution Retirement Solutions Children's Future Solutions Health & Wellness Solutions Wealth with Protection Solutions Birla Sun Life Insurance Products 32 . the company has it all for their clients.
The minimum age of a customer seeking this insurance must be 18 years and the maximum age must be 55 years. Birla Sun Life Insurance PrimeLife Premier 12. Birla Sun Life Insurance PrimeLife 2. Birla Sun Life Insurance Supreme-Life 7. The company aims to become the most admired life insurance company in India and has developed a strong corporate governance model based on the central value of excellence. Birla Sun Life Insurance Dream Plan 3. Birla Sun Life Insurance Flexi Save Plus 9. Max Life Insurance Company Max Life Insurance Company is one name in the field of insurance in India that offers a diverse range of products for a wide ranging variety of customers. Birla Sun Life Insurance ClassicLife Premier 13. Birla Sun Life Insurance Saral Jeevan Plan 11. Birla Sun Life Insurance Flexi Cash Flow 10. Birla Sun Life Insurance Single Premium Bond 7. Birla Sun Life Insurance SimplyLife 5. Premium payment options range from monthly to annual to quarterly to semi annually depending on the policies. 33 . The company Max New York Life Insurance is a joint business enterprise between India's leading Multibusiness Corporation Max India Limited and New York Life.Birla Sun Life Insurance Term Plan is ideal for those who are seeking to get insurance benefits at a lower price. Birla Sun Life Insurance Flexi Life Line 6. a Fortune 100 Company. Birla Sun Life Insurance LifeCompanion 8. Listed below is some of Birla Sun Life Insurance saving policies: 1. The plan covers all liabilities and provides complete security to the clients. Birla Sun Life Insurance Gold-Plus II 4.
the company also has 36 referral tie-ups with banks. All the individual plans guarantee the maximum protection at economic prices. retirement plans. Currently the company has more than eleven thousand employees in India working in the various insurance divisions. Other services like investment plans. insurance plans for children. Max Life Insurance puts special emphasis on the selection process of the insurance agent advisors. knowledge. 24 partnership distribution and alliance marketing relationships. Max offers a suite of products covering the sectors of both life insurance and health insurance sectors. psychometric test. Max Life Insurance Company has around 87. protection plans and deposit linked insurance plans to groups are also on offer. group. integrity and teamwork. Families that have double incomes can opt for covers separately. All the training is provided in-house to ensure control on the quality of the training offered.688 agent advisors at 712 offices across 389 cities in the country. Max Life Insurance Solutions Max New York Life Insurance provides individual. health insurance plans. career seminar and the final interview. Some of the life plan schemes consist of Five Yr Renewable and 34 . life and health insurance options to customers in India. Besides this. saving plans. group credit life plan. Max Life Insurance Company in India Merged in 2000. the company started its commercial operations in India one year later in 2001. The company has a multi channel distribution that is spread across all parts of the country. Max New York Life Plans The Life insurance plans from Max New York offers protection against any financial disruption that may hamper the smooth flow of life. The company has put in place a unique model of distribution to deepen our rural penetration and has 137 offices dedicated to rural areas. The selection process comprises of four stages namely: screening.honesty. rural plans. group gratuity cum term insurance plan.
20 year Endowment (Par). The child insurance plans take care of all the educational needs. Endowment to Age 60 (Par). a leading global name in the field of insurance. the idea is to ensure that money never becomes a reason for a child as to why one cannot have the education of their choice. Birla Sun Life Insurance Company Birla Sun Life Insurance Company also known as BSLI is one of the renowned names in the field of insurance in India. The company works towards making the financial future and enterprises of the customers better than what they 35 . SMART Steps™. The vision of the group is to create long term value together with market leadership. health and money at every stage and under any circumstance. The Max Life Insurance Child Plans consist of Children's Endowment to 18 (Par). accident. Level Term Policy. Life Gain™ Plus 25 (Par). Whole Life Participating. Max Life Insurance Child Plans There are several insurance plans offered by Max Life Insurance for children. This insurance company is a result of a joint venture between Aditya Birla Group. Some of the other plans offered by Max Life Insurance consist of: SMART Assure Life Maker™ Gold LifeLine MediCash™ LifeLine Safety Net™ LifeLine Wellness™ Life Maker™ Platinum Life Maker™ Premium LifeLine Wellness™ Plus LifeLine MediCash™ Plus Easy Life™ Retirement (Par) SMART Invest™ Pension Plus Max New York Life SMART Xpress Max New York Life LifeLine Healthy Family 8. SMART Steps™ Single Premium. a multinational company in India and Sun Life Financial Inc. Life Gain™ Plus 20 (Par). Children's Endowment to 24 (Par) and SMART Steps™ Plus. Life Pay™ Money Back.Convertible™. Birla Sun Life Insurance has to its credit of being the first company in the field of financial solution to start the Business Continuity Plan. Life Partner Plus™ and Max New York Life Secure Dreams. The primary aim of the company is to help customers ease risks of life. Life Gain™ Endowment.
All the works undertaken at Birla is done with integrity. The minimum age of a customer seeking this insurance must be 18 years and the maximum age must be 55 years. The insurance solutions offered by the company are: • • • • • Protection Solution Retirement Solutions Children's Future Solutions Health & Wellness Solutions Wealth with Protection Solutions Birla Sun Life Insurance Products Birla Sun Life Insurance Term Plan is ideal for those who are seeking to get insurance benefits at a lower price. Birla Sun Life Insurance Supreme-Life 36 . the company has it all for their clients. BSLI Solutions Birla Sun Life Insurance Company provides individual and other solutions to customers based on their varied needs. Birla Sun Life Insurance Flexi Life Line 6. Birla Sun Life Insurance Gold-Plus II 4. Premium payment options range from monthly to annual to quarterly to semi annually depending on the policies. Birla Sun Life Insurance Dream Plan 3. So whether the customer wants long term protection or short term protection plans. Birla Sun Life Insurance PrimeLife 2. full commitment. Listed below is some of Birla Sun Life Insurance saving policies: 1. Birla Sun Life Insurance SimplyLife 5. passion and ample speed. The plan covers all liabilities and provides complete security to the clients.currently are.
Birla Sun Life Insurance Single Premium Bond 9. 95 crore. highest by any private insurer. Birla Sun Life Insurance ClassicLife Premier 13. 2001 when it received the certificate of Registration from Insurance Regulatory and Development Authority (IRDA) for conducting General Insurance business in India including Health Insurance. expertise and stability in the insurance sector. Allianz SE holds the remaining 26%. offers a range of insurance products to its clients. the income of Bajaj Allianz Insurance went up to Rs.Bajaj Finserv Limited and Allianz SE. 2. in the last financial year. It can be added here that Bajaj Finserv Limited has very recently demerged from Bajaj Auto Limited. Birla Sun Life Insurance Saral Jeevan Plan 11. It also registered a net profit of Rs. While Bajaj Finserv Limited holds the 74% of the paid up capital of Rs. Birla Sun Life Insurance PrimeLife Premier 12. Bajaj Allianz General Insurance Bajaj Allianz General Insurance Company Limited or Bajaj Allianz Insurance is a joint venture between two of the most reputed names in the world of insurance . Bajaj Allianz Insurance started its journey on May 2.866 crore with a growth of 11% over the previous year. Offerings Bajaj Allianz General Insurance Company Ltd.7. Both of the names are known for their strength. 110 crore. Birla Sun Life Insurance LifeCompanion 8. The following insurances are offered by the company: • • Motor Insurance Asset Insurance 37 . Birla Sun Life Insurance Flexi Save Plus 9. Birla Sun Life Insurance Flexi Cash Flow 10. As on the end of March 2009.
The company launched national operations in December 2006.• • • Health Insurance Travel Insurance Corporate Insurance 10. SEVEN P’s OF INSURANCE SECTOR: 38 . one of India’s leading business groups with interests in telecom. world leader in financial protection and wealth management. 8. and AXA. Bharti AXA Life Insurance It is a joint venture between Bharti. The joint venture company has a 74% stake from Bharti and 26% stake of AXA. agri business and retail. Today. we have over 8000 employees across over 12 states in the country and a national footprint of distributors trained to provide quality financial advice and insurance solutions to the large Indian customer base.
While marketing the services. P roduct 39 . it is also pertinent that they think about the innovative promotional measures. Insurance comes under the service sector and while marketing this service. It is not sufficient that you perform well but it is also important that you let others know about the quality of your positive contributions. word of mouth communication needs due care and personal selling requires intensive care. The main function of Insurance is to provide protection against the possible chances of generating losses. retirement or uncertain events like theft. pension. The advertisement.7 Wherever there is uncertainty there is risk. We do not have any control over uncertainties which involves financial losses. fire. The creativity in the promotional measures is the need of the hour. It eliminates worries and miseries of losses by destruction of property and death. accident. public relations. It also provides capital to the society as the funds accumulated were invested in productive heads. etc. due care is to be taken in quality product and customer satisfaction. The risks may be certain events like death. Insurance is a financial service for collecting the savings of the public and providing them with risk coverage.
he not only buys a policy. process & physical attraction. its price.e. promotion.INSURANCE MARKETING: The term Insurance Marketing refers to the marketing of Insurance services with the aim to create customer and generate profit through customer satisfaction. the Life Insurance Corporation of India (LIC) and the General Insurance Corporation (GIC) are the two leading companies offering insurance services to the users. but along with it the assistance and advice of the agent. The Insurance Marketing focuses on the formulation of an ideal mix for Insurance business so that the Insurance organisation survives and thrives in the right perspective. place. an Insurance company sells services and therefore services are their product. Thus. the services or the schemes 40 . When a person or an organisation buys an Insurance policy from the insurance company. MARKETING --MIX FOR INSURANCE COMPANIES: The marketing mix is the combination of marketing activities that an organisation engages in so as to best meet the needs of its targeted market. Apart from offering life insurance policies. it means intangible service product. people.Product: A product means what we produce. If we produce goods. in the following manner: 1. A product is both what a seller has to sell and a buyer has to buy. it means tangible product and when we produce or generate services. they also offer underwriting and consulting services. The Insurance business deals in selling services and therefore due weight-age in the formation of marketing mix for the Insurance business is needed. In India. The above mentioned 7 P's can be used for marketing of Insurance products. the product. the prestige of the insurance company and the facilities of claims and compensation. It is natural that the users expect a reasonable return for their investment and the insurance companies want to maximize their profitability. The marketing mix includes sub-mixes of the 7 P's of marketing i. while deciding the product portfolio or the product-mix. Hence.
expense and interest. 41 . ii) Interest charged for defaulting the payment of premium and credit facility. The strategies may be high or low pricing keeping in view the level or standard of customers or the policyholders. The three main factors used for determining the premium rates under a life insurance plan are mortality. The premium rates are revised if there are any significant changes in any of these factors. The pricing in insurance is in the form of premium rates. The Group Insurance scheme is required to be promoted. The policy makers are required to activate the efforts.should be motivational. the pricing decision also governs the transformation of potential policyholders into actual policyholders. While initiating the innovative process it is necessary to take into consideration the strategies adopted by private and foreign insurance companies. the Crop Insurance is required to be expanded and the new schemes and policies for the villagers or the rural population are to be included. With a view of influencing the target market or prospects the formulation of pricing strategy becomes significant. In short. it is not that impressive. In a developing country like India where the disposable income in the hands of prospects is low. 2. the formulation of product-mix should be in the face of innovative product strategy. Investment in Government securities should be stopped and the investment should be channelized in private sector for maximizing profits.Pricing: In the insurance business the pricing decisions are concerned with: i) The premium charged against the policies. The introduction of Rural Career Agents Scheme has been found instrumental in inducing the rural prospects but the process is at infant stage and requires more professional excellence. It would be prudent that the LIC is allowed to pursue a policy of direct investment for rural development. The Life Insurance Corporation has intensified efforts to promote urban savings. but as far as rural savings are concerned. and iii) Commission charged for underwriting and consultancy activities.
This is also to process the services to the end user in such a way that a gap between the services. The management of agents and insurance personnel is found significant with the viewpoint of maintaining the norms for offering the services. The agents and the rural career agents acting as a link.Place: This component of the marketing mix is related to two important facets -i) Managing the insurance personnel. • Expenses: The cost of processing.promised and services -. The insurance personnel if not managed properly would make all efforts insensitive. In a country like South Africa the threat to life is very important as it is played by host of diseases. such a gap is found existent which has been instrumental in making worse the image problem. The transformation of potential policyholders to the actual policyholders is a difficult task that depends upon the professional excellence of the personnel. The front-line staff and the branch managers also are found not assigning due weight-age to the degeneration process. 3.offered is bridged over. Even if the policy makers make 42 . In a majority of the service generating organizations. reinsurance companies as well as registration are all incorporated into the cost of installments and premium sum and forms the integral part of the pricing strategy • Interest: The rate of interest is one of the major factors which determines people's willingness to invest in insurance. lack professionalism. and ii) Locating a branch. commission to agents. People would not be willing to put their funds to invest in insurance business if the interest rates provided by the banks or other financial instruments are much greater than the perceived returns from the insurance premiums.• Mortality (deaths in a particular area): When deciding upon the pricing strategy the average rate of mortality is one of the main considerations.
Another important dimension to the Place Mix is related to the location of the insurance branches. It is essential to have both personal and impersonal promotion strategies. 4. In promoting insurance business. They are required to be given adequate incentives to show their excellence. Advertising and Publicity. In addition to the agents. This is essential to make the work place conducive. Thus the place management of insurance branch offices needs a new vision.provision for the quality upgrading the promised services hardly reach to the end users. the agents and the rural career agents play an important role. parking facilities and interior office decoration should be given proper attention. distinct approach and an innovative style. the branch managers need to prefer local persons and provide them training and conduct seminars. It is also essential that they have rural orientation and are well aware of the lifestyles of the prospects or users. such as smooth accessibility. organisation of conferences and seminars. incentive to policyholders are impersonal communication. the front-line staff also needs an intensive training program to focus mainly on behavioral management. the rate of illiteracy is very high and the rural economy has dominance in the national economy. Promotion: The insurance services depend on effective promotional measures. civic amenities and facilities. Arranging Kirtans. availability of infrastructural facilities and the management of branch offices and premises. the branch manager needs to consider a number of factors. While locating branches. attractive and proactive for the generation of efficiency among employees. While recruiting agents. They also have to be given proper training in order to create impulse buying. 43 . The branch managers need professional excellence to make place decisions productive. In addition it is also significant to provide safety measures and also factors like office furnishing. exhibitions. In a country like India. Due attention should be given in selecting the promotional tools for agents and rural career agents and even for the branch managers and front line staff.
development and strong relationships with intermediaries are the key areas to be kept under consideration. People: Understanding the customer better allows to design appropriate products. The use of data warehousing management and mining will help to find out the profitability and potential of various customers product segments. 6.participation in fairs and festivals. Training the employees. IT & Data Warehousing will smoothen the process flow. The speed and accuracy of payment is of great importance. Installment schemes should be streamlined to cater to the ever growing demands of the customers. both at the staff and agent level. IT will help in servicing large no. It can also help to improve customer service levels. 7. Training. rural wall paintings and publicity drive through the mobile publicity van units would be effective in creating the impulse buying and the rural prospects would be easily transformed into actual policyholders. If the insurers are willing to take 44 . Being a service industry which involves a high level of people interaction. Technology can either complement or supplement the channels of distribution cost effectively. it is very important to use this resource efficiently in order to satisfy customers. The processing method should be easy and convenient to the customers. 5. use of IT for efficiency. is one of the important areas to look into. of customers efficiently and bring down overheads. Process: The process should be customer friendly in insurance industry. the nationalized insurers have a large reach and presence in India. Physical Distribution: Distribution is a key determinant of success for all insurance companies. Building a distribution network is very expensive and time consuming. Today.
in UK. This increases the likelihood of insurance sales. Buyers prefer a face-to-face interaction and they place a high premium on brand names and reliability. the product becomes simpler and they become off-the-shelf commodity products. It relied on telephone sales and low pricing. It is anticipated that rather than formal ownership arrangements. insurance for consumer items like fridge and TV can be offered at the point of sale. Another innovative distribution channel that could be used are the non-financial organisations. For example. bring down overheads and increase profitability. financial services firms provide an entire range of products including bank accounts. In India also. The financial services industries have successfully used remote distribution channels such as telephone or internet so as to reach more customers. motor. not necessarily insurance companies. 9. Finance companies and banks can emerge as an attractive distribution channel for insurance in India. In France. avoid intermediaries. As the awareness increases. A good example is UK insurer Direct Line. home and life insurance and pensions. banks hope to maximize expensive existing networks by selling a range of products. various intermediaries. For an example. are selling insurance. Today.advantage of India's large population and reach a profitable mass of customers. popularly known as bancassurance. it is one of the largest motor insurance operator. half of the life insurance sales are made through banks. Today. then new distribution avenues and alliances will be necessary. Alliances with manufacturers or retailers of consumer goods will be possible and insurance can be one of the various incentives offered. Technology will not replace a distribution network though it will offer advantages like better customer service. In Netherlands. a loose network of alliance between insurers and banks will emerge. retailer like Marks & Spencer sells insurance products. SWOT ANALYSIS: 45 . Initially insurance was looked upon as a complex product with a high advice and service component.
46 .Weaknesses:-unable to conveince the people about the products.There are not much advisors for the insurance companies 3. 2.Threats:-growing competation from larger MNC's. 10.The SWOT analysis of Insurance sector is as follows:1. LIST OF INSURANCE COMPANIES IN INDIA: Following is the list of all LIFE & GENERAL INSURANCE COMPANIES granted permission by IRDA.Oppourtunities:-Untapped rural sector and small towns 4.Strength-Very good policies of life coverage.
com www. Aviva Life Insurance Co.com www. SBI Life Insurance Company Limited TATA AIG Life Insurance Company Limited AMP Sanmar Assurance Company Limited Dabur CGU Life Insurance Co.com www.reliancelife.com www.LIFE INSURERS Public Sector Life Insurance Corporation of India Private Sector Allianz Bajaj Life Insurance Company Limited Birla Sun-Life Insurance Company Limited HDFC Standard Life Insurance Co.avivaindia.canarahsbclife.in www. Limited Websites www.metlife. Ltd.allianzbajaj.omkotakmahnidra.co. Canara HSBC Oriental Bank of Commerce Life Insurance Co.in www.com www.iciciprulife.shriramlife. Ltd. Ltd.dlfpramerica.com www.com www.in www.com www. IDBI Fortis Life Insurance Company Ltd.saharalife.com www.com www.sbilife.bharti-axalife.com www. Limited MetLife Insurance Company Limited Om Kotak Mahindra Life Insurance Co.com 47 .com www.maxnewyorklife. India Pvt.sudlife.com www.hdfcinsurance.com www.com www.birlasunlife.avivaindia.ingvysayalife. Ltd.licindia. Bharti AXA Life Insurance Company Ltd Future Generali Life Insurance Company Ltd.tata-aig. Ltd www. Pvt. Ltd AEGON Religare Life Insurance Company Limited Star Union Dai-ichi Life Insurance Comp.com www.com Reliance Life Insurance Company Limited. Limited ICICI Prudential Life Insurance Co. Limited ING Vysya Life Insurance Company Limited Max New York Life Insurance Co.aegonreligare.co. Shriram Life Insurance Co.futuregenerli. Ltd.com www. DLF Pramerica Life Insurance Co.idbifortis.in www.ampsanmar.com www. Sahara India Life Insurance Co.
Limited Royal Sundaram Alliance Insurance Co.ril. Ltd.in www.bajajallianz.com www.cholainsurance.ecgcindia.com www.com www. IFFCO-Tokio General Insurance Co.com www.GENERAL INSURERS Public Sector National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited Private Sector Bajaj Allianz General Insurance Co. Limited Cholamandalam General Insurance Co. TATA AIG General Insurance Co. Ltd.orientalinsurance.icicilombard. Limited ICICI Lombard General Insurance Co.royalsun.com www.nationalinsuranceindia. Ltd.in www.com www. BIBILOGRAPHY: www.itgi.com www. Ltd.in www. Export Credit Guarantee Corporation HDFC Chubb General Insurance Co. REINSURER General Insurance Corporation of India www.gicindia. Ltd.co.nic.uiic.com www. Reliance General Insurance Co.irdaindia.co.co.org 48 .com www.niacl.tata-aig.in 11.
in www.org www.insuranceguru.com www.com 49 .com www.docstoc.com www.answers.google.wikipedia.scribd.www.answers.com www.licindia.wiki.com www.
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