EMIS Insights - India Insurance Sector Report 2020 - 2024

COVID-19 UPDATE
INDIA
INSURANCE
SECTOR 2020/2024
An EMIS Insights Industry Report
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ABBREVIATIONS
AI Artificial Intelligence
Bn Billion
CAGR Compound Annual Growth Rate
COVID-19 Novel Coronavirus Disease 2019
CPI Consumer Price Index
FDI Foreign Direct Investment
FY Fiscal Year
GDP Gross Domestic Product
GNI Gross National Income
INR Indian Rupees
IRDAI Insurance Regulatory and Development Authority of India
LIC Life Insurance Corporation
MGNREGA Mahatma Gandhi National Rural Employment Generation Act
No. Number
OOP Out-Of-Pocket Payments
RBC Risk Based Capital
RBI Reserve Bank of India
Tn Trillion
US United States
USD/ US$ US Dollars
YoY or y/y Year on Year


FOREWORD p.5
CONTENTS 01 EXECUTIVE SUMMARY
Sector in Numbers
Sector Overview
p.6
Sector Snapshot
Driving Forces
Restraining Forces
02 SECTOR OUTLOOK p.13

Macroeconomic Outlook
Economic Sentiment
Life Insurance
General Insurance
03 SECTOR IN FOCUS p.19

Main Economic Indicators
Main Sector Indicators
Population and Life Expectancy
Healthcare Expenditure
Vehicle Sales
Inflation
Interest Rates
Capital Adequacy
Employment and Wages
Global Positioning
04 COMPETITIVE LANDSCAPE p.30

Industry Timeline
Highlights
Top Companies
M&A Deals
M&A Activities

05 COMPANIES IN FOCUS p.38
CONTENTS ICICI Lombard General Insurance Co. Ltd.
Bajaj Allianz General Insurance Co. Ltd.
HDFC ERGO General Insurance Co. Ltd.
ICICI Prudential Life Insurance Co. Ltd.
HDFC Life Insurance Co. Ltd.
06 REGULATORY ENVIRONMENT p.49

Government Policy
07 LIFE INSURANCE p.52

Highlights
Main Events
Focus Point - Zone-Wise Distribution of Life
Insurance Agents
Market Size
New Business
Claims
08 GENERAL INSURANCE p.62

Highlights
Main Events
Focus Point - Distribution of Gross Direct
Premiums by Region
Market Size
Risk Retention
Performance
09 REINSURANCE p.69
Highlights
Main Events
10 RETAIL CHANNELS p.72

Brokerage
Agency
Bancassurance
Direct Selling

INDIA INSURANCE SECTOR 2020/2024
Foreword
Leveraging technology to provide customized products and services is on

the way to becoming the new normal in the Indian insurance sector.
India’s insurance sector has witnessed a complete transformation from being under absolute
government control to allowing private domestic and foreign players, increasing FDI limits and
embracing cutting-edge technology today. The insurance industry has entered the phase of
customized and customer friendly products and services using artificial intelligence, big data
analytics and bots, among others.
However, headwinds including natural disasters, cyber attacks, health hazards and relatively stringent
norms pose a great risk for insurance companies in India despite positive factors such as the very low
penetration of insurance, the dynamic and progressive policies of the government, favourable
demographics and comparatively strong economic fundamentals. Other support factors include the
increasing dynamism of companies, which has been making the future of the insurance industry look
quite promising in the country.
The structure of the insurance market in India has changed quite a lot since the economic
liberalization of the 1990s. Many domestic and foreign firms have raised the bar of competition with
the introduction of region-specific affordable products. However, the sector is still largely dominated
by public sector companies, which new and existing private players find it very difficult to compete
with.
As with other countries, India has not been spared the severe impact of COVID-19 on its economy. The
effect of COVID-19 in the short run has been quite negative for insurance companies in the country
due to decreased offline distribution and declining automobile sales, amongst others. On the other
hand, widespread panic caused by the virus has increased the government’s focus on extending the
insurance coverage of citizens and has simultaneously increased the awareness among people
regarding the importance and necessity of health and life insurance. This is expected to drive the
demand for insurance for the next two-to-three years at the least. Given the rapid spread of COVID-19
in the country, and despite the measures the government adopted to contain the spread of the virus,
the actual net effect on the insurance industry will be only revealed after time.
Kritika Bhasin,
Research Analyst,
Asia


An EMIS Insights Industry Report CONTENTS
01
EXECUTIVE
SUMMARY

Copyright © 2020 EMIS, all rights reserved. 6
01 EXECUTIVE SUMMARY CONTENTS
SECTOR IN NUMBERS
INR INR
3.3 tn 142.8 tn 333.3 mn
Life Insurance
Total Life Insurance Life Insurance Sum
Policies In Force
Benefits and Assured in Force
Claims Paid
INR INR INR

2.1 tn 39.1 tn 1.7 tn
New Business Total Assets in Life Total General
Premiums in Life and General Insurance Gross
Insurance Insurance Direct Premiums
Funds
59.8% 89.2% 30.1%

Overall General
Insurance Risk General Insurance General Insurance
Retention Ratio Loss Ratio Expense Ratio
Unless otherwise stated, data for FY2019.

Source: IRDAI
INDIA INSURANCE SECTOR 2020/2024 7

Sector Overview
The insurance sector of India has a deep-rooted history. Life insurance emerged in the country in 1818
with the establishment of the Oriental Life Insurance Company which failed in 1834. General insurance
arrived in the country with the establishment of Triton Insurance Company Ltd in 1850. In 1999, the
IRDAI was set up as an autonomous body to regulate and develop the insurance industry in India. As
of FY2019, India’s insurance industry comprises 24 life insurers and 46 general insurers and reinsurers
operating 11,279 life insurance and 11,578 general insurance branch offices.
Entry Modes
India’s insurance legislation provides the IRDAI with full flexibility to frame regulations for the sector.
In December 2014, the government approved increasing the FDI limit in the insurance sector from 26%
to 49%. Entry barriers have been eased over the years and regulatory requirements have been relaxed.
In 2017, the IRDAI allowed private equity funds to invest in insurance companies through special
purpose vehicles (SPVs), with a lock-in period of five years. Most recently, India adopted the Indian
Insurance Companies (Foreign Investment) Amendment Rules, 2019, which removed the 49% foreign
cap entry for insurance intermediaries, essentially making the sector open to 100% FDI under the
automatic route.
Segment Opportunities
Although the government’s continuous efforts and policy reforms have resulted in higher insurance
penetration in the country, penetration remains comparatively low. Given this low penetration and
other factors, such as favorable demographics increasing awareness, and extensive government
support, the future of the insurance sector in India looks promising for all the sub-sectors. Although
the LIC dominates the life insurance sector in India, the number of private players increased from just
four in FY2002 to 24 in FY2019. The general insurance segment has also been witnessing increased
competition involving innovative products at competitive prices. With the increased focus of the
government on improving healthcare in the country, the demand for health insurance is expected to
witness massive growth in the coming years.
Government Policy
Insurance products in India come under the “exempt, exempt, exempt” (EEE) method of taxation,
which provides a tax benefit on insurance investments. In 2015, the government introduced several
programmes supporting the penetration of insurance, including health insurance, in the country. The
government increased FDI limits for insurance companies to 49% from 26% in 2014. As of FY2019 this is
unchanged, but the government allowed 100% FDI for insurance intermediaries in February 2019.
Source: Economic Times, The Hindu, Livemint

Sector Snapshot
India Insurance
Sector
DOMESTIC MARKET
INR 6,775.5 bn INR 4,288 bn
Total Premiums Total Insurance
Benefits
LIFE GENERAL
INSURANCE INSURANCE
INR 2,146.8 bn INR 1,694.5 bn
Total Premiums Gross Direct Premiums
from New Business INR 1,010.5 bn
INR 3,277.1 bn Net Claims Incurred
Total Benefits Paid
KEY DATA
24 Life Insurers, 46 General Insurers and Reinsurers
11,279 Branch Offices (Life), 11,578 (General)
2.7% Insurance Penetration (Life), 1.0% (General)
KEY PLAYER FINANCIAL ASSETS KEY PLAYER NET PREMIUMS

1. Life Insurance Corporation of India: 1. Life Insurance Corporation of India:
INR 30,556.1 bn INR 3,375.1 bn
2. ICICI Prudential Life Insurance Co. Ltd: 2. ICICI Prudential Life Insurance Co. Ltd:
INR 1,594.2 bn INR 309.2 bn
3. SBI Life Insurance Co. Ltd: 3. SBI Life Insurance Co. Ltd: INR 329.8 bn
INR 1,430.0 bn 4. HDFC Life Insurance Co. Ltd: INR 291.8 bn
4. HDFC Life Insurance Co. Ltd: 5. Max Life Insurance Co. Ltd: INR 145.7 bn
INR 1,248.8 bn
KEY PLAYER NET PREMIUMS

1. Life Insurance Corporation of India: INR 3,375.1 bn
2. ICICI Prudential Life Insurance Co. Ltd: INR 309.2 bn
3. SBI Life Insurance Co. Ltd: INR 329.8 bn
4. HDFC Life Insurance Co. Ltd: INR 291.8 bn
5. Max Life Insurance Co. Ltd: INR 145.7 bn
Note: Data for 2019.
Source: IRDAI

Sector Snapshot
India Insurance
Life insurance penetration in India stood at 2.74% in FY2019, which has not changed much during the
past five years. In FY2019, there were 24 life insurance companies in India, with 11,279 offices, 2.2mn
agents, and 866 corporate agents. Though the sector is dominated by one public sector company, the
Life Insurance Corporation of India (LIC), competition has been increasing along with the growing
number of private insurance companies in the country. The net premium written in the life insurance
market increased to INR 5.3tn in FY2019 as compared to INR 3.3tn in FY2015, posting a CAGR of 11.5%
over the period. The total sum insured increased at a CAGR of 17.3% over the years FY2015 to FY2019,
reaching INR 142.8tn in FY2019, with the maximum increase witnessed in the non-linked life segment.
The Indian life insurance sector issued 28.6mn policies in FY2019, as compared to 26mn policies issued
in FY2015. The new business premium has recorded growth of 10.7% y/y in FY2019, posting a CAGR of
17.4% over the period FY2015 to FY2019. The reasons for this increase can be attributed to growing
margin gains, distribution network expansion and robust premium inflow. The life insurance sector
has witnessed the launch of innovative products such as Unit Linked Insurance Plans (ULIPs). The
COVID-19 related lockdown in the country has disrupted the distribution channels of life insurance
companies. Agent networks and bancassurance partnerships have been substantially impacted. As a
result, life insurance players witnessed a fall in nearly all financial metrics such as sums assured, first
year premiums, policies issued, and lives covered in March 2020.
The general insurance penetration in India stood at 20.97% in FY2019, a relatively stable share over the
past five years. In FY2019, there were 46 life insurance companies (including foreign reinsurers'
branches) in India, with 11,578 branch offices. The gross direct premium in the general insurance
market increased to INR 1.7tn in FY2019 as compared to INR 0.8tn in FY2015, posting a CAGR of 20.7%
over the period. The Indian general insurance sector issued a total of 18.3mn policies in FY2019
(excluding standalone health insurers), as compared to 12mn policies issued in FY2015. The general
insurance market in India is expected to grow on the grounds of the burgeoning middle class, rising
awareness regarding the need for insurance protection, a favourable regulatory landscape, increasing
use of technology, and artificial intelligence-based solutions/services, among others. According to the
CARE Ratings Agency, the COVID-19 epidemic in India, and the resultant lockdown and its extensions,
will cause the insurance business in the country to record subdued growth in the first quarter of
FY2021. At the same time, the virus could lead to an increased interest in the health insurance
segment in the short-to-medium term.
Source: IRDAI, Economic Times, Livemint, The Hindu

Driving Forces
The Indian insurance sector has a huge potential to grow and enjoys a promising future ahead. Low
penetration of insurance among the Indian population offers a massive opportunity for insurance
companies to grow. The favorable demographics, sector dynamics and progressive policies of the
government, alongside the strong economic fundamentals compared to India’s peer economies,
among other factors, are strong attractors of foreign investment in the insurance sector of the
country. Apart from these, the dynamic and innovative product launches by companies along with the
inclusion of technology and digitization have been encouraging the development of the insurance
sector in India.
External
The growth of the insurance sector has been supported by government policy and reform. The lifting of
FDI caps for insurance intermediaries is expected to help foster sector growth and attract foreign
investment. In 2015, the Reserve Bank of India (the central bank) allowed lenders to act as insurance
brokers, thereby removing the restriction on the number of tie-ups that a bank can have with insurers.
Further, the growth of the insurance sector is stimulated by favourable demographic factors, such as
India’s large young population, growing middle class, and increasing per capita income, among others.
Given that much of India's large population is still not insured or is under-insured, the sector has vast
potential to grow. In addition, the widespread panic caused by the COVID-19 pandemic has increased
the government’s focus on extending insurance coverage and has simultaneously increased public
awareness regarding the necessity of health insurance and life coverage. This will drive the demand
for insurance for at least next two-three years.
Internal
Companies in India’s insurance sector have been focusing on increasing profitably by taking
aggressive steps towards customer retention, friendly branch structures, a customer-centric approach,
and direct dealing with customers, thereby reducing the number and role of intermediaries. Other
drivers include the implementation of big data analytics and the launching of dynamic and innovative
products at competitive pricing, among others. This will not only increase the companies’ visibility
and coverage but will also boost customer confidence and demand for insurance products. The
companies are rapidly adopting and increasing digitization by investing in internet-driven solutions.
This will have a dual positive effect on the growth of insurance as it will result in an increase in
efficiency, along with attracting young internet-driven segments of the population. Moreover,
insurance companies are partnering with e-commerce majors to offer mobile insurance. In response to
COVID-19, many companies are planning innovative and more affordable insurance products to
increase the penetration of insurance in the country.
Source: IBEF, Business Today

Restraining Forces
Despite the significant growth in the insurance sector in India, the sector is not in sync with the
country’s improving economic conditions and favourable demographic factors. This indicates that the
sector is still grappling with many challenges. Non-affordability is one such challenge, along with the
lack of products catering to various regional needs, traditional norms and ways of thinking. Further,
COVID-19 has reduced the profitability of insurance companies by generating fewer sales through the
offline mode. This has decreased new business premiums and therefore had a negative impact on the
growth of the life insurance sector. In addition, COVID-19 has also decreased the demand for
automobiles in India, thereby reducing growth in the motor insurance segment.
External
Healthcare and health insurance are not universally affordable in India. The government’s health
insurance programmes have also not done much to reduce the burden borne by poor families. It has
been found that the government's health insurance programmes have not resulted in any decrease in
out-of-pocket personal expenses of the beneficiaries. The government report (conducted between July
2017 and June 2018) showed that few Indians, or some 14.1% in rural areas and 19.1% in urban areas,
had any form of health coverage. The insurance sector has been hit due to the lockdown induced by
COVD-19, as sales through Bancassurance and agency channels have been disrupted. Premiums from
new business forms an important section of the life insurance market and due to the lockdown
restrictions, subdued growth of new business is having a negative impact on the life insurance
market. It is expected that the first quarter of FY2021 (to end June 2020) will be seasonally weak for
the insurance sector.
Internal
Generally, insurance companies engage in two types of activity. One is underwriting activity, which
consists of collecting premiums and paying claims, and the other is investment activity, where
companies invest in various investment classes to earn interest, dividends and capital gains.
Therefore, insurance companies are highly dependent on fluctuations in interest rates, financial
markets and economic growth. The spread of COVID-19 has had a negative effect on stock markets
across the world. Financial markets in India have been recording similar trends as a result of global
market uncertainties. Further, in India customer segmentation is highly diverse and therefore needs a
wide variety of insurance products. Insurance companies are not able to create a valid distinction
between an insurance product and a financial instrument, and therefore insurance lacks wide
acceptance, especially in the backward regions of the country.
Source: The Quint, India Spend, Livemint, Outlookindia, Business Standard

02
SECTOR
FORECAST

02 SECTOR OUTLOOK CONTENTS
Macroeconomic Outlook
Comments
The IMF retained its FY2019 real GDP growth forecast for India at 6.1% but assessed risks to be on the
downside. The July projections for FY2020 had put the growth expectation at 7% but the January 2020
edition of the IMF’s World Economic Outlook considerably reduced the forecast figures to 4.8% for the
current fiscal year, followed by acceleration to 5.8% and 6.5% for FY2021 and FY2022, respectively.
Other economic institutions are even less enthusiastic about their forecasts for the Indian economy.
The RBI cut its GDP growth outlook by more than a percentage point in December 2019, estimating
2019–20 GDP growth at 5%. According to the central bank, both domestic and external demand
conditions remained weak in the second half of the fiscal year. Projections for the first half of FY2021
are in the range of 5.9%–6.3%. The consensus forecast from FocusEconomics puts economic growth at
5.7% for FY2020 and 6.4% for FY2021. This assessment is underpinned by projections for weak private
and government consumption growth. High-frequency indicators, such as passenger car sales, two-
wheeler sales, tractor sales, core sector growth and exports, which are used as a barometer of
economic activity, reflect a considerable slowdown of growth compared with one year ago. Therefore,
the short-term macroeconomic outlook remains bleak.
Real GDP, y/y change Consumption, Investment, and Public

Spending, y/y change
9.4%
7.1% 8.4% 8.5% 8.5%
6.7% 6.9% 8.4%
6.4% 6.9% 7.1%
6.8%
5.7% 6.8% 7.1%
6.6% 6.6%
6.1%
5.0%
4.2%
FY2019f FY2020f FY2021f FY2022f FY2023f
FY2019f FY2020f FY2021f FY2022f FY2023f Private Consumption Fixed Investment

Public Spending
Source: IMF, FocusEconomics, CEIC

Macroeconomic Outlook (cont’d)
Total Exports and Imports, y/y change
11.9%
11.0% 10.9%
10.4% 9.8%
9.4%
5.1%
4.6%
2.5%
0.9%

Exports Imports
Current Account Consumer Price Index, y/y change

0 0.0%
4.3%
-10
-20 -50.0% 4.2%
-52.4
-61.6
-30 4.1%
-70.4
-79.9
-40 -100.0%
-91.2
-50
3.9%
-60 -150.0%
-70 -177.1%
-192.4% -199.8% 3.8%
-80 -206.9% -214.1% -200.0%
-90
-100 -250.0%
Current Account, USD bn

Current Account, % of GDP
Source: FocusEconomics, CEIC

Economic Sentiment
Comments
Consumer confidence – as measured by the future expectations index of RBI’s consumer confidence
survey for the period November 2017 to November 2019 – peaked at 133.4 in March 2019 and fell
thereafter, reaching 114.5, its lowest value since March 2014. The most obvious reasons for the drop in
performance are the overall slowdown of the Indian economy and the rise of wholesale prices,
affecting private consumption growth. Other contributory factors, according to the RBI’s Financial
Stability Report published in December 2019, are trade tensions, fears of a global recession and
uncertainties on the global oil market. Private consumption is likely to experience a slow revival in
2020 according to Oxford Economics’ country forecast. The Q2 2020 projections reveal an uptick in both
car and two-wheeler sales. It is also expected that the flow of credit towards Indian consumers will
increase and thus give an additional boost to the consumption recovery. In the meantime, India’s
business expectations index has followed a similar pattern – peaking in March 2019 at 116.2 only to
drop dramatically to 102.2 in December 2019 – its lowest value since the global financial crisis of 2007-
09. This performance indicates that companies in India’s manufacturing sector assess the business
climate to be particularly bad.
Consumer Confidence Survey (Future Business Expectation Index

Expectations Index)
135 120
130
115
125
110
120
105
115
100
110
105 95
11/2017
01/2018
03/2018
05/2018
07/2018
09/2018
11/2018
01/2019
03/2019
05/2019
07/2019
09/2019
11/2019
12/2016
03/2017
06/2017
09/2017
12/2017
03/2018
06/2018
09/2018
12/2018
03/2019
06/2019
09/2019
12/2019
Source: Reserve Bank of India, CEIC, Oxford Economics

Life Insurance
Comments
The life insurance premium in India is expected to grow over the next five years, but at a declining
rate with each successive year. The premium is expected to grow at the CAGR of 4.7% over the period
FY2020-FY2024, a sharp decline from a CAGR of 12% over FY2015-FY2019. Life insurance is significantly
influenced by the economic wellbeing of the middle class in India which in turn depends upon the
overall economic situation of the country. With the rapid spread of COVID-19 and the resultant
lockdown of the country, the income of the middle class has been severely impaired. In addition,
many international and national agencies are forecasting that India’s GDP growth will contract this
year. The government has announced measures to support households and businesses during the
COIVD-19 pandemic, such as providing a moratorium on EMI loans for six months and relaxation of
regulations, among others. However, these are short-term, temporary measures and as they come to
an end it is expected that the non-performing assets of banks will rise sharply, affecting the overall
economy adversely. On the other hand, the impact of the COVID-19 pandemic has increased the
fundamental necessity of life insurance in every household, thus supporting the insurance market.
Total Net Written Premiums, INR tn Market Share of Premiums
5.8%
5.5%
5.2%
4.9%
4.7% 33.9% 34.2% 34.4% 34.7% 34.9%
6.3 6.5
5.7 6.0
5.4
66.1% 65.8% 65.6% 65.3% 65.1%
FY2020f FY2021f FY2022f FY2023f FY2024f FY2020f FY2021f FY2022f FY2023f FY2024f
Total Net Written Premiums, INR tn y/y Change LIC Private Insurers
Source: EMIS Insights, The Hindu, RBI

General Insurance
Gross Direct Premiums by Line, INR bn Overall Loss Ratio
2,291.7
2,172.2
2,052.8 526.4 90.2%
1,933.4 499.5
1,813.9 472.6
445.7 90.0%
418.8
680.7
646.2
611.7 89.8%
577.3
542.8
89.6%
793.1 842.4 891.7
694.5 743.8
89.4%
33.6 34.8 36.0 37.2 38.4
124.2 131.8 139.3 146.9 154.5
Others Health
Motor Marine
Fire Total Gross Direct Premiums FY2020f FY2021f FY2022f FY2023f FY2024f
Comments
COVID-19 has severely impaired the non-life insurance segment in India with respect to various factors
such as a fall in premium, a rise in claims, a decline in income from investment and the overall
economic slowdown of the country. Apart from this, the extended lockdown which started on March
25, 2020, has forced some promoters of insurance companies in India to consider exiting their
insurance business by selling their stakes to those who are willing to buy. This process is expected to
accelerate if recovery in the economy does not happen or start to happen soon. Against this
background, the total gross direct premium is expected to grow at the reduced CAGR of 6% over the
period FY2020-FY2024, down from 21% CAGR over FY2015-FY2019. This effect of COVID-19 on non-life
insurance has arrived at a time when the motor insurance sector is already on a potential downturn
due to subdued growth in the automotive sector in India. Further, a high or increasing loss ratio
indicates that the business is in financial distress as the loss ratio measures the profitability and
health of insurance companies. The loss ratio of the Indian general insurance market is expected to
witness a constant upward trend, thus showing the implicit risk of the COVID-19 pandemic.
Source: EMIS Insights, Outlook India

03
SECTOR
IN FOCUS

03 SECTOR IN FOCUS CONTENTS
Main Economic Indicators
FY2015 FY2016 FY2017 FY2018 FY2019
Total Population, mn 1,267.0 1,283.0 1,299.0 1,316.0 1,332.0
Life Expectancy at Birth, years 68.3 68.6 68.8 n/a n/a
GDP, Current Prices, INR tn 124.7 137.7 153.6 171.0 190.1
GDP, Constant Prices, y/y Change 7.4% 8.0% 8.2% 7.2% 6.8%
GDP per Capita, Current Prices, INR 98,405 107,341 118,263 129,901 142,719
BoI Repo Rate, financial year-end 7.50% 6.75% 6.25% 6.00% 6.25%
Unemployment Rate, calendar year-end 2.8% 2.7% 2.6% 2.6% n/a
Consumer Price Index, financial year

5.9% 4.9% 4.5% 3.6% 3.4%
average, y/y Change
Total Healthcare Expenditure, Current

3.9 4.6 5.3 6.5 n/a
Prices, INR tn
Total Healthcare Expenditure, % of GDP 3.1% 3.3% 3.5% 3.8% n/a
Total Vehicle Sales, thou 23,297.7 24,112.8 25,344.0 29,024.2 30,896.8
Total Vehicle Sales, y/y Change 8.2% 3.5% 5.1% 14.5% 6.5%
Source: CEIC, CSO, RBI, SIAM, World Bank

Main Sector Indicators
FY2015 FY2016 FY2017 FY2018 FY2019
No. of Registered Life Insurers, financial

24 24 24 24 24
year-end
No. of Registered General Insurers, financial

28 24 23 27 27
year-end
Total Direct Premiums, INR tn 4.1 4.6 5.5 6.1 6.8
Total Net Written Premiums Per Capita, Life

2,589.6 2,860.0 3,221.5 3,486.4 3,829.2
Insurance, INR
Total Gross Direct Premiums per Capita,

668.4 751.2 986.4 1,144.8 1,276.9
General Insurance, INR
Total Insurance Benefit Payments, INR tn 2.6 2.7 3.2 3.6 4.3
Percentage of Insurance Benefit Payments to

80.5% 75.9% 74.4% 76.3% 76.4%
Life, %
Percentage of Insurance Benefit Payments to

19.5% 24.1% 25.6% 23.7% 23.6%
General, %
Total Insurance Fund Assets, INR tn 24.9 27.0 31.7 35.1 39.1
Percentage of Insurance Fund Assets (Life),

97.4% 97.2% 96.7% 96.5% 96.2%
%
Percentage of Insurance Fund Assets

2.6% 2.8% 3.3% 3.5% 3.8%
(General), %
Total Life Insurance Policies in Force, mn 326.3 327.1 328.4 331.5 333.3
Total Sum Insured - Life, INR tn 75.5 84.9 97.9 125.2 142.8
Total Net Written Premiums - Life, INR tn 3.3 3.7 4.2 4.6 5.1
Total Gross Direct Premiums - General, INR

0.8 1.0 1.3 1.5 1.7
tn
Source: IRDAI

Population and Life Expectancy
Comments
The population in India has been on an increasing trend, reaching 1,341mn in FY2020. India is the
second most populous country in the world, with the population increasing at a CAGR of 1.1% over the
period FY2016-FY2020. With the improvement in the standard of living, housing facilities, sanitation
and literacy levels, India has been witnessing an increasing trend in life expectancy for both males
and females.
In India, a significant portion of the population remains uninsured or under-insured. This increases the
potential for growth of the insurance sector in the country. Besides, favourable demographic factors
such as a growing young population and a strengthening middle class among others, is expected to
support the insurance industry. Moreover, the increasing awareness of insurance protection and
retirement planning has been contributing to the sector’s development. The rapid spread of COVID-19
in the world, severely affecting more than 210 countries, has increased the awareness of the need for
health insurance products. With COVID-19 still looming over India as of June 2020, insurance
companies are coming up with new products to increase insurance penetration in the country.
Total Population, mn Life Expectancy at Birth, years
1.3% 1.2% 70.4

70.2
1.2% 69.9
1.1% 69.6
1.0% 69.2 69.2
68.6
68.3
68.0 68.0
67.7
1,341
67.1
1,327
66.9
66.6
1,314
66.4
1,299
1,283
FY2016 FY2017 FY2018 FY2019 FY2020 2013 2014 2015 2016 2017
Total Population, mn y/y Change Male Female Overall
Source: CEIC, World Bank, Economic Times

Healthcare Expenditure
Total Healthcare Expenditure Healthcare Expenditure by Source, INR

bn, FY2018
Private (OOP and Others); 5,370; 76.2%

3.71%
3.57%
3.48%
3.31%
7.1
6.1
3.14%
5.3
4.6
3.9
FY2015 FY2016 FY2017 FY2018 FY2019

Government;
Total Healthcare Expenditure, INR tn 1,681;
Total Healthcare Expenditure, % of GDP 23.8%
Comments
Total healthcare expenditure in India stands at INR 7.1tn in FY2019, which is around 3.7% of GDP.
Healthcare expenditure has increased at a CAGR of 16% over the years FY2015-FY2019. However,
despite the continuous increase in healthcare expenditure, its share of GDP is still very low compared
with the developed world. Over the next decade, around 15% of the population in India will be turning
40 years old, thereby driving growth in healthcare expenditure. Healthcare in the country is becoming
expensive, with private sector operators dominating over government-owned ones in terms of both
number of establishments and quality of service. While private hospitals provide world-class
amenities, treatment costs there are much higher compared to the level at government hospitals.
Therefore, most of private healthcare in India is inaccessible to most of the population. The
government launched a new National Health Policy in 2017, replacing the 2002 version. The policy is
aimed at offering universal free drugs, and diagnostic and emergency services through public
hospitals, as well as improving primary and preventive care. In addition, the outbreak of COVID-19
worldwide and its rapid spread in India have been pushing the government to raise healthcare and
insurance provision, along with calling for changes in policies for the pharmaceutical sector.
Source: Economic Times, The Print

Vehicle Sales
Comments
The automotive sector is the backbone of the Indian economy with mainstream domestic and
international original equipment manufacturers and a well-developed market in terms of both
domestic demand and exports.
Vehicles sales in India have been experiencing a prolonged slowdown, with some positive changes at
the festival times. This slowdown was the result of an abrupt roll-out of the FAME II scheme (Faster
Adoption and Manufacturing of Electric Vehicles in India), reducing the purchase price of hybrid and
electric vehicles along with the general dip in consumer demand and confidence amid the subdued
global economic environment.
Due to the COVID-19 lockdown in India, almost all manufacturing units except the essential ones, were
closed. The lockdown was announced from March 24, 2020 to May 31, 2020, although some relaxation
in the form of opening of selected economic activities was granted on April 20, 2020 in a phased
manner. Automotive sales declined in April 2020 and major Original Equipment Manufacturers (OEMs)
such as Hero MotoCorp, Bajaj Auto, TVS Motor and Maruti Suzuki reported zero domestic sales during
the lockdown period.
Monthly Vehicle Sales, thou

3,000
2,800
2,600
2,400
2,200
2,000
1,800
1,600
1,400
1,200
1,000
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
Oct-17
Apr-18
Oct-18
Apr-19
Oct-19
Jul-12
Jul-13
Jul-14
Jul-15
Jul-16
Jul-17
Jul-18
Jul-19
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
Source: Business Standard, CEIC, Economic Times, Financial Express, Livemint, SIAM

Inflation
Comments Consumer Price Indices

The CPI measures retail inflation in India by
164
revealing changes in the prices of a basket of
goods and services. Food is a major component
of CPI inflation and therefore the CPI in India 154
significantly depends upon weather conditions

and supply side factors. CPI inflation reached 144
7.6% in January 2020, which was the highest rate
since May 2014. The reason for this spike was 134
the increase in food prices, such as vegetables
and cereals etc. The core inflation rate (headline
124
inflation excluding food and fuel inflation) also
increased to 4.2% in the same month. However,
114
due to the impact of COVID-19, the activities of
statisticians collecting the prices were
suspended and therefore the CPI for April 2020 104
was not released on the official date.
Furthermore, medical inflation in India has been 94
increasing at almost twice the rate of overall
Jul-12
Jul-13
Jul-14
Jul-15
Jul-16
Jul-17
Jul-18
Jul-19
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
inflation along with the increase in the cost of Jan-20
treatment, especially modern technology Headline CPI CPI, Health
treatments.
Overall Inflation Health Inflation
7.1%
4.9% 4.8% 6.2%
4.5%
5.4%
3.6% 3.4% 4.6% 4.4%
146.3
149.3
139.6
140.5
131.1
125.6
135.0
120.1
130.3
124.7
FY2016 FY2017 FY2018 FY2019 FY2020 FY2016 FY2017 FY2018 FY2019 FY2020
Headline CPI, yearly average Overall Inflation Rate CPI, Health, yearly average Health Inflation Rate
Source: BloombergQuint, CEIC, CSO, LIVE Mint

Interest Rates
RBI Repo Rate
9%
8%
7%
6%
5%
4%
3%
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
Oct-17
Apr-18
Oct-18
Apr-19
Oct-19
Apr-20
Jul-12
Jul-13
Jul-14
Jul-15
Jul-16
Jul-17
Jul-18
Jul-19
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
Comments
The repo rate is the rate at which the RBI (central bank) lends money to the commercial banks. This
rate is a tool to monitor liquidity and inflation in the economy. The RBI sets the repo rate and reverse
repo rate with the aim of achieving the medium-term target for consumer price index (CPI) inflation of
4% within a band of +/- 2%, while supporting economic growth. Since January 2012, the RBI, at many of
its monetary policy meetings has decreased the repo rate, lowering it from 8.5% in January 2012 to
4.0% by May 2020, though it has also increased it a few times, in September and October 2013, January
2014 and June 2018. The increases have been mainly motivated by robust economic and investment
activity, among other reasons. Due to COVID-19 and the resultant lockdown of the country, the RBI
decreased the benchmark rate by 75 basis points to 4.4% in March 2020, from 5.15%, and then again
reduced it to 4% in May 2020, alongside adopting other liquidity and regulatory measures. These
measures have been taken to provide adequate liquidity and bring down the cost of capital for
businesses. The lower cost of capital and increased liquidity will help businesses to meet their day-to-
day liquidity requirements and combat the effects of COVID-19.
Source: CEIC, Economic Times, RBI

Capital Adequacy
Comments
The capital adequacy ratio is also called the solvency ratio, especially when referring to the insurance
sector. The solvency ratio measures a company’s ability to meet its debt obligations and in insurance
terms it measures the risk of claims relative to the size of capital. India currently follows a capital
regime based on a solvency approach, while most countries in Asia have started following a more
risk-based approach to capital requirements. In January 2018, the IRDAI indicated its intention to
introduce the Risk Based Capital (RBC) regime in India and called for expressions of interest from
consultancies, agencies and institutions for its implementation. According to the current regime,
companies are required to maintain their assets at 1.5 times or 150% of liabilities. However, under the
RBC regime, companies will have to hold capital in the proportion of the business. Initially, the RBC
was to be implemented from April 1, 2019. The date has been since shifted to April 1, 2021 but
insurance companies in India want it to be pushed further forward to April 2022.
Solvency Ratios, Life Insurance

4%
3%
2%
1%
0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019
LIC Median Private
Solvency Ratios, General Insurance

14%
12%
10%
8%
6%
4%
2%
0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019
Median Public Median Private Standalone Health Insurers AIC ECGC
Source: IRDAI, Moneycontrol, Economic Times

Employment and Wages
Comments GNI Per Capita, USD

India has been recording a continuously
increasing trend in its GNI per capita since 1993, 14.3%
with a whopping growth rate since 2002. The
reasons for this are attributable to strong
economic growth, an increasing employment rate,
a growing middle income class and extensive 8.4%
7.8%
government support. The government has taken
2,121
2,023
1,997
1,747
steps to reduce the unemployment rate in the
1,622
1,591
4.8%
country by launching specific policy schemes.
India has experienced a shift from agriculture
1.9%
being the largest employment generator to the 1.3%
dominance of the manufacturing and services

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
sectors. This is a positive trend because there is
huge disguised unemployment in the agriculture GNI Per Capita, USD y/y Change
sector.
Unemployment Rate Labour Force, mn
2.82%
1.7%
1.7%
2.78%
2.77% 1.5%
2.73% 1.4% 1.4%
519.5
512.3
505.3
497.7
2.56% 2.55% 2.55%

489.5
2015 2016 2017 2018 2019
2013 2014 2015 2016 2017 2018 2019 Labour Force, mn y/y Change
Source: CEIC, World Bank, Financial Express

Global Positioning
Insurance Density, Premiums Per Insurance Penetration, Premiums as % of

Capita, 2018, USD GDP, 2018
Taiwan 20.9
Hong Kong 8,863
Switzerland 6,934 Hong Kong 18.2
Taiwan 5,161
South Africa 12.9
Singapore 4,958
South Korea 11.2

United Kingdom 4,503
United States 4,481 United Kingdom 10.6
France 3,667
France 8.9
Japan 3,466
Japan 8.9
South Korea 3,465
Switzerland 8.4
Australia 3,160
Germany 2,908 Singapore 7.8
South Africa 840

United States 7.1
Malaysia 518
Germany 6.0
PR China 406
India 3.7
Russia 164
India 74 Russia 1.5
Source: Swiss Re

04
COMPETITIVE
LANDSCAPE

04 COMPETITIVE LANDSCAPE CONTENTS
Timeline India 1956 Market Players
Insurance Sector
The Life Insurance Corporation of India is
established, amalgamating hundreds of privately-
owned life insurers and becoming the state-
owned life insurance monopoly for decades.
1999 Development Milestones
The Insurance Regulatory and Development 2000 Market Players

Authority Act is passed, establishing the IRDAI as
the regulator of the insurance sector. The General Insurance Corporation of India,
previously the state-owned monopoly for the
general insurance sub-sector, is reorganised as
India's sole domestic reinsurer.

The State Bank of India announces a joint
Privatisation of the insurance sector begins venture partnership with Cardif SA, marking the
with the IRDAI inviting registration first time in India that a bank becomes
applications from qualified private insurers. involved in the insurance sector.

2010 Market Players
Introduction of new regulations around the ICICI Prudential Life Insurance commences its
protection of policyholders’ interests; digitalisation journey with the aim of enabling a
licensing of corporate agents. single digital platform to provide ease and
simplicity to customers.
2016 Market Players

HDFC ERGO General Insurance merges with
L&T General Insurance, marking the first
The Insurance Laws (Amendment) Act 2015 is
consolidation in the Indian general insurance
passed which paves the way for the registration
sub-sector.
of Indian branches of foreign reinsurers, as well
as raising the FDI cap on the insurance sector
Issuance of policies in electronic form;
from 25% to 49%. The registration of corporate
initiation of open architecture for
agents also starts to take place.
Bancassurance; management of expenses.
Development Milestones
2018 Development Milestones Market Players
The government first proposes the merger of public Bajaj Allianz repositions its brand as “Caringly
general insurers National Insurer, United India Yours” with an ambition to focus its offerings on
Insurance and Oriental India Insurance into a single addressing customers’ worries, thus hopefully
entity; the Hon’ble Supreme Court made long-term transforming insurance from a push to a pull
third-party insurance compulsory for new four- product.
wheelers and two-wheelers from September 1, 2018.
2019 Market Players 2020 Development Milestones
Many insurers start entering the e- The Ministry of Finance notifies that the renewal
commerce space through a tie-up with e- dates of health and motor insurance policies which
commerce companies, with the aim of fall in the period from March 25, 2020, to April 14,
selling new-age products. 2020, are extended until April 21, 2020 due to the
COVID-19 lockdown.
Source:

Highlights
Overview
Through liberalization and massive structural changes, the insurance sector in India has been
converted from a monopolistic to a competitive one. Before the formation of the IRDAI in 1999, there
were only two insurance companies in India, the Life Insurance Corporation of India and General
Insurance Corporation of India, which were both government-owned and highly regulated. The
situation changed when the sector was opened for FDI. This resulted in an increase in foreign
participation in the sector and a growing number of domestic companies. As of the end of FY2019,
there were 24 life insurers, 46 general insurers and reinsurers (including specialised insurers,
standalone health insurers and foreign reinsurers’ branches) in India. Competition in the sector has
been continuously increasing with the market players devising innovative products based on artificial
intelligence/machine learning and big data analytics, among others.
Market Structure
While the insurance sector in India has witnessed an increasing number of foreign and domestic
players entering the market, resulting in an enhanced competition, the insurance market is still
dominated by public sector companies. Although out of 24 life insurance companies, only one is a
public sector entity, it is undeniable the LIC’s market leadership is very difficult for new and existing
private players to compete with. Similarly, in the general insurance sector, out of 21 general insurance
companies, 4 are public and 17 are private players. Further, there are two specialised insurers, both of
which are public, seven private standalone health insurers and two re-insurers, of which one is public
and one is a private player.
Main Players
In the life insurance sector, the main players are LIC of India (public), SBI Life, HDFC Life, ICICI
Prudential Life and Max Life. These are the top five companies according to their first-year premium
in FY2019. On the other hand, The New India Assurance, United India Insurance, National Insurance
Company, The Oriental Insurance and ICICI Lombard General Insurance are the top five players in the
general insurance sector. Out of these, four are public-sector companies. Other private players in the
general insurance sector are Bajaj Allianz, HDFC Ergo and IFFCO Tokio, among others. Standalone
private health insurance companies include Aditya Birla, Apollo Munich and Max BUPA. Agriculture
Insurance Company of India and Export Credit Guarantee Corporation of India are specialized insurers,
while General Insurance Corporation of India and ITI Reinsurance are reinsurers in the country.
Source: IBEF, IRDAI

Top Companies
Top 10 Life Insurers in India by First-Year Premium in 2019
1. LIC of India
INR 1,370.3bn
2. SBI Life 3. HDFC Life

INR 127.9bn INR 122.8bn
4. ICICI Prudential Life

INR 81.7bn
5. Max Life
INR 36.9bn
7. Kotak Mahindra Life

6. Bajaj Allianz Life INR 35.0bn
INR 36.6bn
9. Tata AIA Life

INR 21.7bn
8. Aditya Birla Sun Life
INR 25.2bn
10. India First Life
INR 12.8bn
Source: IRDAI

Top Companies (cont’d)
Top 10 General Insurers in India by Gross Direct Premiums in 2020
1. The New India Assurance Company

Limited
INR 267.0bn
2. United India Insurance 3. National Insurance Company

Company Limited Limited
INR 175.0bn INR 151.8bn
4. The Oriental Insurance

Company Limited 5. ICICI Lombard
INR 136.6bn General Insurance
Company Limited
INR 133.1bn
7. HDFC Ergo General

insurance Company
Limited
6. Bajaj Allianz General INR 93.1bn
Insurance Company Limited
INR 127.8bn
9. Reliance General Insurance

Company Limited
8. IFFCO Tokio General INR 74.7bn
Insurance Company Limited
INR 79.6bn 10. Tata AIG General
Insurance Company
Limited
INR 73.9bn
Source: IRDAI

M&A Deals
M&A Deals during Jan 2018 – April 2020
Deal Value, Stake,
Date Target Company Deal Type Buyer Country of Buyer
USD mn %
18-Aug-18 Star Health & Allied Insurance Co Ltd Acquisition Safecrop Holdings Pvt Ltd India 952 (EMIS est.) 100%
Open market
30-Oct-19 HDFC Life Insurance Company Ltd. Capital Group; Undisclosed buyer United States 810 (Official) 5%
purchase
Open market CA Emerald Investments; The Carlyle
1-Mar-19 SBI Life Insurance Company Limited United States 669 (Official) 9%
purchase Group LP; Buyer(s) unknown
11-Mar-19 HDFC Life Insurance Company Ltd. SPO Retail Investors; Non-Retail Investors India 507.32 (Official) 5%
Open market Capital World Growth and Income
14-Aug-19 HDFC Life Insurance Company Ltd. United States 453 (Official) 3%
purchase Fund; Buyer(s) unknown
United States;
17-Oct-19 SBI General Insurance Co Ltd Minority stake Warburg Pincus LLC; Premji Invest 432.38 (Official) 26%
India
Open market Buyer(s) unknown; Canada Pension
29-Mar-19 SBI Life Insurance Company Limited Canada 423.35 (Official) 5%
purchase Plan Investment Board (CPPIB)
Open market
19-Nov-19 SBI Life Insurance Company Limited Buyer(s) unknown Undisclosed 392 (Official) 3%
purchase
Open market Buyer(s) unknown; SBI Mutual Fund;
26-Sep-19 ICICI Lombard General Insurance Co Ltd India 362 (Official) 5%
purchase L&T Mutual Fund
Norges Bank Investment
Open market Management; Fidelity Investments Inc Norway; United
27-Mar-20 HDFC Life Insurance Company Ltd. 292.39 (Official) 3%
purchase ; Key Square Capital Management States
LLC; Buyer(s) unknown
CDPQ Private Equity Asia Pte Ltd;
Canada;
5-Mar-19 ECL Finance Ltd Minority stake Caisse de Depot et Placement du 250 (Official) n.a.
Singapore
Quebec (CDPQ)
Institutional investor(s); Retail
26-Jun-19 SBI Life Insurance Company Limited SPO India 233 (Official) 3%
Investors; Non-Institutional Investors
Open market
27-Jun-19 ICICI Lombard General Insurance Co Ltd Buyer(s) unknown Undisclosed 231 (Official) 3%
purchase
14-Nov-18 Royal Sundaram General Insurance Co Ltd Minority stake Ageas Group Belgium 210 (Official) 40%
Apollo Munich Health Insurance Company Housing Development Finance Corp
19-Jun-19 Acquisition India 203.13 (Official) 51%
Ltd Ltd
Open market
13-Sep-19 ICICI Lombard General Insurance Co Ltd Buyer(s) unknown Undisclosed 194.5 (Official) 3%
purchase
Open market SBI Mutual Fund; Tata Mutual Fund;
30-Nov-18 ICICI Lombard General Insurance Co Ltd India 163.51 (Official) 3%
purchase Kotak Equity Fund; Buyer(s) unknown
25-Mar-19 ICICI Prudential Life Insurance Co Ltd SPO Non-Retail Investors; Retail Investors India 162.04 (Official) 3%
31-May-18 IndiaFirst Life Insurance Co Ltd Minority stake Warburg Pincus LLC United States 105 (Market est.) 26%
Faering Capital; A91 Partners; TVS India; United
21-Jan-20 Go Digit General Insurance Ltd Minority stake 80 (Market est.) 0%
Capital Funds Ltd States
Open market
30-Oct-19 SBI Life Insurance Company Limited Buyer(s) unknown Undisclosed 75 (Official) 1%
purchase
Open market
24-Jul-19 SBI Life Insurance Company Limited Buyer(s) unknown Undisclosed 73 (Official) 1%
purchase
26-Feb-19 Max Bupa Health Insurance Ltd Acquisition True North Management Group LLC United States 72 (Official) 51%
Source: EMIS DealWatch

M&A Deals (cont’d)

M&A Deals during Jan 2018 – April 2020
Axis New Opportunities AIF; Axis
26-Sep-18 SBI General Insurance Co Ltd Minority stake Asset Management Company Ltd; India 66.2 (Official) 4%
Premji Invest
Binny Bansal - private investor;
13-Mar-19 Acko General Insurance Ltd Minority stake RPS Ventures; Accel; Amazon.com United States; India 65 (Official) 22%
Inc; Existing and new shareholders
Open market
13-Dec-18 Max Financial Services Ltd New York Life Insurance Co United States 30 (Official) 2%
purchase
Nexus Venture Partners; Sequoia
25 (Market
16-Jan-19 Invictus Insurance Broking Pvt Ltd Minority stake Capital India Pvt Ltd; Blume India n.a.
est.)
Ventures Advisors
24-Jan-18 Shriram Automall India Limited Acquisition MXC Solutions India Pvt Ltd India 24.49 (Official) 51%
Lok Capital Group; IIFL Asset 19 (Market

2-Jul-19 D2C Insurance Broking Pvt Ltd Minority stake India n.a.
Management Ltd; Amicus Capital est.)
16 (Market
29-Nov-19 Acko General Insurance Ltd Minority stake Ascent Capital Advisors India n.a.
est.)
14 (Market
10-Jan-20 Dhfl General Insurance Ltd Acquisition Sachin Bansal - private investor India 100%
est.)
Catamaran Ventures; Amazon.com
12 (Market
28-May-18 Acko General Insurance Ltd Minority stake Inc; Ashish Dhawan - private India; United States n.a.
est.)
investor
Quona Capital Management Ltd; United States; India;
11-Dec-19 Sunday Ins Co Ltd Minority stake 11 (Official) n.a.
Vertex Ventures SEA and India Singapore
25-Feb-19 Sunday Ins Co Ltd Minority stake Vertex Ventures SEA and India India; Singapore 10 (Official) n.a.
28-Nov-18 Invictus Insurance Broking Pvt Ltd Minority stake Sequoia Capital India Pvt Ltd India 6 (Market est.) n.a.
Kalaari Capital Advisors Pvt Ltd;

5.5 (Market
18-Dec-19 Toffcover Core Technologies Pvt Ltd Minority stake Omidyar Network; Accion Venture United States; India n.a.
est.)
Lab; Flourish Venture
2.51 (EMIS
4-Mar-19 Kisan Rural Finance Ltd Minority stake ICICI Bank Ltd India 10%
est.)
Kalaari Capital Advisors Pvt Ltd;
1.5 (Market
29-May-18 Toffcover Core Technologies Pvt Ltd Minority stake Omidyar Network; Accion Venture United States; India n.a.
est.)
Lab
1.3 (Market
13-Jul-18 Heartbeat Insurance Brokers Pvt Ltd Minority stake Buyer(s) unknown Undisclosed n.a.
est.)
Venture Catalysts; Nitesh Prakash-
private investor; Atul Jain - private
12-Apr-18 Ideal Insurance Brokers Pvt Ltd Minority stake India 1 (Market est.) n.a.
investor; Siddharth Pansari - private
investor
18-Nov-19 Altura Financial Services Ltd Acquisition Centrum Microcredit Ltd India N/A (Official) 100%
JLT Independent Insurance Brokers Pvt Marsh India Insurance Brokers Pvt N/A (Market
16-Oct-19 Acquisition India 100%
Ltd Ltd est.)
21-May-19 Edelweiss Insurance Brokers Ltd Minority stake Arthur J. Gallagher & Co United States N/A(Official) n.a.

M&A Activity
Number and Value of Deals Number of Deals by Deal Value (USD)
10
9
50.1-100mn
14.0% 100.1-500mn
34.9%
5
2,186
4 4 4
1,742
3 3
Undisclosed
1,102
1,020
1 7.0%
> 1000mn
667
120
410
386
0.0%
25
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 500.1-
1000mn
2018 2019 2020 9.3%
0-50mn
34.9%
Value of Deals, USD mn Number of Deals
Calendar year quarters
Number of Deals by Deal Type, % Number of Deals by Region of Investors,

%
United States
Open Market 27.8%
Purchase
30.2% Singapore
5.6%
SPO 7.0%
Undisclosed
11.1%
Acquisition Belgium
16.3% 1.9%
Canada 3.7%
India 48.1%
Minority Norway 1.9%
Stake 46.5%

05
COMPANIES
IN FOCUS

05 COMPANIES IN FOCUS CONTENTS
ICICI Lombard General

Insurance Co Ltd
Highlights Income Statement, Consolidated, INR mn

ICICI Lombard General Insurance Co Ltd was
founded in 2001. The company’s ownership 12.6% 12.5% 12.5%
structure is divided between a 55.9% share owned 11.4%
10.5%
by the company founders and 44.1% in public
shareholdings. The company’s business structure
includes four parts: Corporate Solutions Group
83,753
(Insurance solutions: Fire, Marine, Engineering,
69,117
61,636
Liability, Group Health and Personal Accident
48,216
etc.); Government Business Group (Insurance

42,353
10,492
8,618
7,019
solutions: Crop, Cattle, Mass Health and Personal
5,356
5,074
4,600
4,059
3,092
2,275
1,780
Accident etc.); Retail group (Insurance solutions:

Health, Home, Motor, Travel, Cyber and Personal
FY2015 FY2016 FY2017 FY2018 FY2019
Accident etc.); and Shared Services (Services:
Net Earned Premiums Net Investment Income
Underwriting and Claims, Customer Relationship, Net Profit Net Profit Margin
Technology, Operations, Reinsurance, Finance and
Accounts, Human Resources, Legal and
Compliance, Actuarial, Marketing, Business Balance Sheet, Consolidated, INR mn
Analytics, Administration and Fraud Control). ICICI
Lombard has 265 branches, 910 virtual offices, 81.3% 81.5%
10,197 employees, 7,800 network garages and 80.4%
5,025 network hospitals as of end-FY2019.
In FY2019, the company’s gross direct premium

76.9%
increased by 17.2% to INR 144.9 billion from INR
123.6 billion in FY2018. ICICI Lombard issued
149,505
149,136
75.3%
136,418
115,625
26,484,078 policies and settled 1,567,596 cases in

181,927
195,112
107,256
101,997
90,754
87,900
100,714
216,228
172,550
79,885
76,596
FY2019. The company held the title of being the

fourth largest player in the general insurance
sector as of March 31, 2019 and continued to lead FY2015 FY2016 FY2017 FY2018 FY2019
the private players in the general insurance Insurance Liabilities Financial Assets
sector. Insurance Float Loss Ratio
Source: Company Data

ICICI Lombard General

Insurance Co Ltd (cont’d)
Gross Direct Premiums by Line of Business, INR mn
144,882
13,039
123,569
16,048 24,630
107,252
12,792
80,907 23,711 27,528
21,509
66,778 10,316 4,346
18,488
5,925 10,142
11,530 16,676 3,662
0 13,843 3,411 9,165
13,178 2,998 7,446
2,464 6,327
5,447
34,158 41,498 45,418 52,495 65,197
FY2015 FY2016 FY2017 FY2018 FY2019
Motor Fire Marine Health Crop/Weather* Others Total Gross Direct Premiums
Annual Results, INR mn, FY Ended March 31
Indicator FY2015 FY2016 FY2017 FY2018 FY2019
Net Earned Premiums 42,353 48,216 61,636 69,117 83,753
Net Benefits and Claims Paid 34,434 39,282 49,543 53,147 63,081
Other Operating Expenses 13,871 17,112 19,820 21,119 19,897
Net Profit 5,356 5,074 7,019 8,618 10,492
Expense Ratio 32.7% 35.5% 32.2% 30.6% 23.8%
Loss Ratio 81.3% 81.5% 80.4% 76.9% 75.3%
Combined Operating Ratio 114.1% 117.0% 112.5% 107.4% 99.1%
Net Profit Margin 12.6% 10.5% 11.4% 12.5% 12.5%
Basic EPS, INR 11.9 11.3 15.6 19.0 23.1

Bajaj Allianz General

Insurance Co Ltd

Bajaj Allianz General Insurance Co Ltd (Bajaj 15.2%
14.7% 14.7%
Allianz) is a joint venture between Allianz SE and
13.4%
Bajaj Finserv Limited. The company offers
products such as motor insurance for private 11.1%
cars, two-wheelers and commercial vehicles;
health insurance; travel insurance; home
70,100
insurance; commercial insurance products for
60,586
property, marine, liability, energy and employee
49,370
42,236
38,319
benefits; financial lines insurance products for
9,212
7,798
7,278
5,642
5,623
directors and officers, international insurance

2,752
2,721
2,166
1,916
1,578
programmes, employment practices liability,

prospectus liability and commercial professional
FY2015 FY2016 FY2017 FY2018 FY2019
indemnity, among others.
Net Profit Net Profit Margin
The company operates across 1,400-plus locations
in India through its virtual sales office, selling
more than 2mn policies through this digital Balance Sheet, Consolidated, INR mn
distribution platform. In FY2019, the company
issued over 20mn policies and settled close to 72.3%
3mn claims. 71.9%
70.4%
Bajaj Allianz focus on the insurance retail
business, where it has strengths in distribution
139,907
68.6%
and claims handling capabilities. The major focus
areas include motor and retail health insurance.
167,863
125,769
66.7%
102,728
100,765
Retail channels like agency, motor and

89,346
107,220
76,553
70,069
88,175
67,579
bancassurance continue to be the mainstay of

62,326
59,610
51,198
44,272
the company’s channel mix.
During FY2019, Bajaj Allianz tied up with 33 new FY2015 FY2016 FY2017 FY2018 FY2019
corporate agents and entered the e-commerce Insurance Liabilities Financial Assets
space through a partnership with e-tailer Flipkart. Insurance Float Loss Ratio

Bajaj Allianz General

110,594
13,073
94,452
14,616
10,019
76,333
18,353 23,368
8,569
58,321
52,298 14,498 14,967 1,506
7,302
10,263 10,857 1,376 9,461
3,680
0 1,347 8,210
8,388
7,311
1,415 5,387
1,231
4,763
4,310
29,184 32,773 35,674 41,527 48,570
FY2015 FY2016 FY2017 FY2018 FY2019

Net Profit 5,623 5,642 7,278 9,212 7,798
Expense Ratio 24.6% 27.0% 27.6% 23.2% 25.8%
Loss Ratio 71.9% 72.3% 70.4% 66.7% 68.6%
Basic EPS, INR 51.0 51.2 66.0 83.6 70.8

HDFC ERGO General

Insurance Co Ltd

HDFC ERGO General Insurance Co Ltd is a joint
venture between India’s Housing Development
13.5%
Finance Corporation Ltd, primarily a provider of 12.6%
financing for the purchase or construction of
residential homes, and Germany’s ERGO 10.1%
8.9%
International AG, a subsidiary of global reinsurer
38,100
Munich Re. Today’s HDFC ERGO is formed out of
6.2%
29,945
the merger between the erstwhile HDFC General
Insurance Co Ltd with the former L&T General
17,085
16,741
4,037
3,830
Insurance Co Ltd in August 2017 – the first such
1,538
1,530
1,514
1,244
1,040
9,891
994
886
amalgamation in India’s general insurance sub- 599

sector.
FY2015 FY2016 FY2017 FY2018 FY2019
The company offers a complete range of general Net Earned Premiums Net Investment Income
insurance products ranging from Motor, Health,
Travel, Home and Personal Accident in the retail
space and customized products like Property, Balance Sheet, Consolidated, INR mn
Marine and Liability Insurance in the corporate
space.
78.7% 77.8% 76.4%
The company is the third-largest general 74.4%
insurance company in India’s private sector, with

a market share of 5.1% as of March 2019. HDFC
24,132
41,131
33,252
ERGO issued more than 8.5mn policies and served

91,040
81,588
2.1mn claims in FY2019. The company has a pan-

74,528
69,323
66,712
63,752
59,340
India presence, with 122 branches in 106 cities. It

53,974
50,703
37,667
employs more than 3,300 professionals. 16.7%

30,153
22,794
FY2015 FY2016 FY2017 FY2018 FY2019

Insurance Liabilities Financial Assets
Insurance Float Loss Ratio

HDFC ERGO General

86,129
12,751
72,900
10,249 20,994
22,013
0 0 2,496 12,787
10,943 10,462 2,313 1,801
33,795 9,925
31,822 8,182 1,446
5,549 6,329 7,196
22,242 6,200
1,067 1,044 397
3,747 4,217 1,602
10,517 11,743 7,252 23,066 30,600
FY2015 FY2016 FY2017 FY2018 FY2019

Net Profit 1,040 1,514 1,244 4,037 3,830
Expense Ratio 37.2% 44.8% 47.0% 35.2% 29.7%
Loss Ratio 78.7% 16.7% 77.8% 74.4% 76.4%
Basic EPS, INR 1.9 2.8 2.1 6.7 6.3

ICICI Prudential Life

Insurance Co Ltd

ICICI Prudential Life Insurance Co Ltd has been
established by ICICI Bank and Prudential 10.8%
Corporation Holdings Limited. The company
started its operations in 2001 and is one of the 8.7%
leading private sector life insurance companies in 7.6%
305,790
India. The company aims to grow its absolute 6.0%
Value of New Business (VNB) through the 4P
221,552
levers (Premium Growth, Protection Focus,
268,107
3.7%
189,987
187,244
Persistency Improvement and Productivity

151,604
149,769
112,615
102,140
16,822
16,505
16,343
16,198
Enhancement) targeted at improving cost ratios.
12,084
11,406
The key products offered by ICICI Prudential Life
Insurance include Protection Plans, Group Term
FY2015 FY2016 FY2017 FY2018 FY2019
Plans, Insurance-linked Savings Plans, Non-Linked
Insurance Savings plans, Pension Plans and Net Profit Net Profit Margin
Annuity Plans.
The company commenced digitalisation in 2010 Balance Sheet, Consolidated, INR mn

with the aim of establishing a single digital
platform to service its customers.
81.5%
The financial position of the company remained
66.0% 68.3%
strong with a solvency margin of 214.9% at March 65.2%
31, 2019 which compares with the minimum
regulatory requirement of 150%. 47.6%
1,385,401.2
1,590,084.0
1,294,097
1,215,859.7
1,284,946
1,504,607
1,494,970
ICICI Prudential Life Insurance recorded an

1,132,144
1,130,471
1,030,270.8
994,922.6
960,958
955,495
925,794
920,340
increase in gross premium of 14.3% from INR

270bn in FY2018 to INR 309bn in FY2019, due to an
increase in retail renewal collection and group
business.
FY2015 FY2016 FY2017 FY2018 FY2019
Insurance Liabilities Financial Assets
Insurance Float Claims Ratio

ICICI Prudential Life

309,298
270,690
223,540
191,640 227,181
203,880
153,066
166,370
143,830
111,644
47,210
24,639 31,210 34,730
26,050
21,760 25,960 32,080 34,906
16,784
FY2015 FY2016 FY2017 FY2018 FY2019
Participating Non-Participating Linked Total Gross Premiums
Annual Results, INR mn, FY Ended March

Net Earned Premiums 151.6 190.0 221.6 268.1 305.8
Net Benefits and Claims Paid 123.5 125.4 151.4 174.9 145.6
Other Operating Expenses 16.5 18.9 23.6 20.3 26.1
Net Profit 16.3 16.5 16.8 16.2 11.4
Expense Ratio 10.9% 9.9% 10.6% 7.6% 8.5%
Claims Ratio 81.5% 66.0% 68.3% 65.2% 47.6%
Investment Income Ratio 123.5% 6.4% 67.6% 42.0% 33.4%
Basic EPS, INR 11.4 11.5 11.7 11.3 8.0

HDFC Life Insurance

Co Ltd

HDFC Life Insurance Company Limited (formerly
HDFC Standard Life Insurance Company Limited) 5.3%
5.0%
is a joint venture between HDFC Ltd, India, and 4.7%
4.6%
Standard Life Aberdeen. As of March 31, 2019, the 4.4%
founders - HDFC Ltd and Standard Life (Mauritius

Holdings) 2006 Limited - held 51.5% and 24.7%
124,502
113,675
291,860
respectively in HDFC Life, with the balance of
94,350
88,749
235,644
equity held by public shareholders.
194,455
163,130
148,299
The company was established in 2000. HDFC Life

19,594
12,767
11,090
8,921
8,184
7,855
is a leading long-term life insurance solutions

provider in India. The Company offers a range of
individual and group insurance solutions that FY2015 FY2016 FY2017 FY2018 FY2019
meet various customer needs including Pensions, Net Earned Premiums Net Investment Income
Savings, Investments, Annuities, and Health. The
company has 38 individual and 11 group products
in its portfolio, along with eight optional rider Balance Sheet, Consolidated, INR mn
benefits, catering to a diverse range of customer
needs, as of March 31, 2019. 55.0% 54.7%
HDFC Life Insurance Company Limited has a wide
reach with 412 branches and additional
50.6%
1,255,515.0
50.1%
distribution outlets through several new tie-ups
and partnerships of 266 partners, comprising
1,066,028.6
NBFCs, MFIs, and SFBs. The company has a strong

917,376.0
261,412
46.0%
192,792
742,300.4
base of financial consultants.

207,995
244,006
670,250.3
536,945
536,347
424,965
423,193
323,819
332,047
In FY2018, the company had begun multiple

initiatives under the umbrella of “reimagining
insurance” using new-age technology tools and FY2015 FY2016 FY2017 FY2018 FY2019
data science, primarily to simplify customer Insurance Liabilities Financial Assets
experience. Insurance Float Claims Ratio

HDFC Life Insurance

Co Ltd (cont’d)
291,860
235,644 113,216
194,455
102,679
163,130
148,299 90,881
86,084 120,313
83,270
74,268
53,274
33,386
28,164
43,659 50,300 58,698 58,329
36,865
FY2015 FY2016 FY2017 FY2018 FY2019

Participating Non-Participating Linked Total Gross Premiums

Net Earned Premiums 148.3 163.1 194.5 235.6 291.9
Net Benefits and Claims Paid 81.6 81.8 98.4 128.9 134.1
Other Operating Expenses 14.9 18.7 23.9 31.6 38.1
Net Profit 7.9 8.2 8.9 11.1 12.8
Expense Ratio 10.0% 11.5% 12.3% 13.4% 13.1%
Claims Ratio 55.0% 50.1% 50.6% 54.7% 46.0%
Investment Income Ratio 84.0% 12.0% 58.5% 37.7% 32.3%
Basic EPS, INR 3.9 4.1 4.5 5.5 6.3

06
REGULATORY
ENVIRONMENT

06 REGULATORY ENVIRONMENT CONTENTS
Government Policy
Liberalisation/ Entry of private players

In 1956, the government of India amalgamated 154 Indian insurers, 16 non-Indian insurers operating in
the country and 75 provident societies into a government-owned, autonomous entity called the Life
Insurance Corporation of India (LIC) in a process of nationalisation of life insurance. It was carried out
with the objective of increasing the penetration of life insurance in the country, especially in the rural
areas, at a reasonable cost. However, this did not produce the desired results and low insurance
penetration and density persist in the country to date. Therefore, in 1993 the government set up the
Malhotra Committee to evaluate the insurance sector in terms of structure, strengths and
weaknesses, and suggest reforms. The recommendations of the Malhotra Committee paved the way
to the entry of private players. The Insurance Regulatory Development Authority of India (IRDAI) was
set up in 2000 to regulate India’s insurance sector, which by that time also included private players.
Governing Body- IRDAI and its regulations

The IRDAI was set up as a statutory body with the Insurance Regulatory and Development Authority
Act, 1999 (IRDAI Act 1999) and was put in charge of supervising and developing the insurance sector in
India. The powers and functions of the IRDAI are laid down in the IRDAI Act, 1999. Another law still in
force is the Insurance Act, 1938. The IRDAI protects the interests of policy holders and ensures their
fair treatment. It also oversees growth of the insurance industry in India by assuming a supervisory
role and adopting a prudential approach. Insurance companies in India are required to submit to the
IRDAI various returns including financial statements on an annual basis, solvency reports on a
quarterly basis, and year-wise projected cash flows of both assets and liabilities, among others.
RBC Regime
As a solution to the problems of insurers regarding solvency, the IRDAI has announced plans to move
from the present solvency capital regime to a Risk-Based Capital (RBC) regime. To this end, the IRDAI
formed a committee in June 2016 on the RBC Approach and Market Consistent Valuation of Liabilities
of Indian Insurance Business. The committee submitted two reports in November 2016 and August
2017. Following this, the IRDAI set up a steering committee in September 2017 to implement the RBC
regime and make sure the change is completed by March 2021. For implementation of the RBC regime,
an expert panel suggested a “Twin Peak” approach, according to which the current structure should
continue in parallel to the new system, for a minimum of two years. The current solvency capital
method is based on the reserves of an insurer and the sum at risk. However, it does not adequately
assess the risks that are inherent in the insurance business.
Source: Ministry of Finance, ICICI Lombard

06 REGULATORY ENVIRONMENT CONTENTS
Government Policy
(cont’d)
Increase in FDI limits

The Insurance Laws (Amendment) Bill, 2015, was passed by the Lok Sabha (lower house of parliament)
and Rajya Sabha (upper house) in March 2015. The bill brought in major amendments to the Insurance
Act, 1938, the General Insurance Business Act, 1972, and the Insurance Regulatory and Development
Authority Act, 1999. It also provided for аn increase in the foreign investment cap applying to an
Indian insurance company from 26% to 49% with the safeguard of Indian ownership and control. In
March 2016, the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2016, were
adopted to enable FDI through an automatic route. This removed the requirement of going through
the government for foreign investment beyond 26% and up to 49%. In February 2020, the government
further amended its FDI policy and allowed 100% FDI for insurance intermediaries (insurance broking,
insurance companies, third party administrators, surveyors and loss assessors).
Government Schemes and Programmes

The government of India has continuously worked towards providing quality healthcare and health
coverage for its citizens. The government regularly conducts activities such as creating awareness,
ensuring infrastructure and promoting health insurance in the country, especially in rural and
backward areas. The major insurance related schemes or initiatives of the government include
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY); Pradhan Mantri Suraksha Bima Yojana (PMSBY);
Life Cover under Pradhan Mantri Jan Dhan Yojana (PMJDY); Varishtha Pension Bima Yojana; Pradhan
Mantri Fasal Bima Yojana (PMFBY); Pradhan Mantri Vaya Vandana Yojana (PMVVY); and the
Restructured Weather Based Crop Insurance Scheme (RWBCIS), among others.
Government Intervention during COVID-19

To mitigate the impact caused by COVID-19, the government of India announced a slew of measures
during the period of March to May 2020, providing several stimulus packages. They included an INR
5mn insurance coverage per person for frontline health workers involved in managing the COVID-19
outbreak, announced on March 26, 2020. This insurance scheme was provided over and above any
other insurance cover received by the beneficiary. Moreover, on April 16, 2020, the government allowed
extensions to the health and motor (third-party) insurance policyholders to make premium payments
which were due for renewal during the COVID-19 lockdown.
Source: Economic Times, Ministry of Finance, Livemint

07
LIFE INSURANCE

07 LIFE INSURANCE CONTENTS
Highlights
Overview
The life insurance penetration in India stands at 2.74% in FY2019, which has not changed much during
the past five years, while insurance density has increased to USD 55 in FY2019 as compared to USD 41
in FY2014. The net premium written in the life insurance market rose to INR 5.3tn in FY2019 from INR
3.3tn in FY2015, increasing at a CAGR of 11.5%. Life insurance in India has huge growth potential and it
is estimated to account for 35% of India’s total savings by the end of 2020. Over the years, several
innovative life insurance products have been launched, such as Unit Linked Insurance Plans (ULIPs).
The Indian life insurance sector issued 28.6mn policies in FY2019, as compared to 26mn policies issued
in FY2015. Although India has witnessed an increase in the awareness regarding life insurance policies
along with rising per capita income and an increasingly numerous middle class, a significant portion
of the population in the country still does not have any life insurance cover.
Market Structure
The life insurance market in India is dominated by a single public sector company whose dominance
it is very hard for new and existing private players to beat. Besides, many Indian life insurance
companies are introducing innovative, comprehensive and customized products attracting various
segments of society, thereby increasing the level of competition in the market. Companies are putting
special focus on increasing the life insurance penetration in rural India and with increasing rural
incomes and improving infrastructure, the growth of the life insurance market in rural India is
expected to accelerate. Further, life insurance companies are currently partnering with bancassurance
players which enables them to obtain critical customer profile information at the issuance stage for
ensuring efficient and speedy work.
Market Players
In FY2019, there were 24 life insurance companies in India, with 11,279 offices, 2.194 mn agents, and 866
corporate agents. However, the sector is dominated by one public sector company, the Life Insurance
Corporation of India. Over the years, the sector has been experiencing increasing competition. The
share of the private sector in the life insurance market has increased substantially from around 2% in
FY2003 to 33.8% in FY2019. The top private sector companies include SBI Life, HDFC Life and ICICI
Prudential Life.
Source: IRDAI, Deloitte, IBEF

Main Events
 Due to the COVID-19 lockdown of the country, the distribution channels of life insurance have been
disrupted. Agent networks and bancassurance partnerships have been significantly affected. As a
result, life insurance players witnessed a fall in nearly all financial metrics such as the sums
assured, first year premiums, policies issued, and lives covered in March 2020.
 The IRDAI may soon allow life insurers to sell indemnity-based health insurance plans in the
country. The regulator formed a committee to study the feasibility of allowing life insurers to offer
indemnity-based health insurance policies in the future, in an order issued in February 2020. The
committee comprises representatives of general, life, and standalone health insurance companies.
Currently, life insurers can offer fixed benefit health plans to customers, in which the insured is
offered a lump sum amount of the claim irrespective of the actual expenditure incurred during
hospitalization. However, in the indemnity-based plan, the insured will be reimbursed the actual
expense incurred during hospitalisation up to the total sum insured under the plan.
 In May 2020, the IRDAI allowed the Union Bank of India to retain its 30% holding in IndiaFirst Life
Insurance. However, this has been permitted with the condition that the bank will have no control
in the management of the insurer. Earlier, the bank was expected to divest either the entire stake
in IndiaFirst Life Insurance, or a sizable part of it, because lenders are prohibited from owning
more than 10% in two insurance companies, as per the IRDAI guidelines. The bank already had a
25.1% stake in Star Union Dai-Chi Life, but after its mega merger with Andhra Bank and Corporation
Bank, Union Bank also received a stake in IndiaFirst Life Insurance.
 In 2019, life insurance companies offered or launched a variety of new products into the market.
Aegon Life Insurance revamped its flagship term plan—iTerm. This new plan offers a monthly
income option to life assured clients after the age of 60. Moreover, ICICI Prudential Life launched
Precious Life, a pure risk term policy that extends cover to those who have been denied coverage
earlier due to medical history of diabetes, high blood pressure, cholesterol and obesity, etc.
 In July 2019, the IRDAI released the final product regulations covering term, endowment, unit-linked
insurance and pension plans. Life insurers were supposed to launch their modified products after
withdrawing their old products by December 1, 2019. However, in November 2019, the IRDAI
extended this deadline by two months, to February 1, 2020.
Source: Economic Times, asiainsurancepost, Financial Express

FOCUS POINT
Zone-Wise Distribution of Life Insurance Agents, FY2019, thou
North
441
Northeastern
79
Central
119
Eastern
430
Western
491
Union
Territories
South 86
549
Source: IRDAI

Market Size
Comments Total Sum Assured, INR tn

The total sum assured increased at a CAGR of
17.3% over the years FY2015 to FY2019, reaching
0.1 0.1
INR 142.8tn in FY2019, with the maximum 0.2 0.2
9.8
0.2 8.6 142.8
increase witnessed in the non-linked life 7.4 125.2
7.0 0.5 11.2
segment. Non-linked life segments are viewed 0.4 0.8
0.2 97.9 1.1
as the best product for risk-averse people. The 75.5
84.9
0.9
1.1
0.7 1.1
market size of life insurance has increased due 0.6 113.3
76.3 87.8 128.6
to the introduction of customised insurance 67.5
products, along with increasing awareness 0.0 0.0 0.5 0.5 0.6
among people, a growing middle class, young FY2015 FY2016 FY2017 FY2018 FY2019
population and rising rural incomes. The life Linked Health

Linked Business
insurance industry recorded a premium income Non-Linked Health
of INR 5.1tn during FY2019, up by 10.8% y/y. The Non Linked General Annuity and Pension
Non-Linked Life
private sector posted 21% growth and the LIC Total Sum Assured
reported 6% growth over the same period. Others
Total Net Written Premiums, INR tn No. of Policies in Force, mn
1.0 0.8 333.3

0.0 0.0
14.0% 0.3 0.3
0.4 0.3 0.3
331.5 0.2
22.0 19.7
11.8% 18.2
24.6 17.9
10.8% 328.4 1.0 1.1
9.6% 327.1
326.3 0.8
3.9
0.7 3.2 3.5
0.6
2.8 2.9
297.9 301.1 303.5 307.6 309.9

4.4%
FY2015 FY2016 FY2017 FY2018 FY2019
3.3 3.7 4.2 4.6 5.1 Others

Linked Health
Linked Business
FY2015 FY2016 FY2017 FY2018 FY2019
Non-Linked Health
Non-linked General Annuity and Pension
Total Net Written Premiums, INR tn y/y Change Non-Linked Life
Source: Business Today, IRDAI, Towers Watson

Market Size (cont’d)
Total Life Insurer Assets, INR tn Share of Net Written Premiums, INR bn,
FY2019
ICICI Prudential; 309; SBI Life; 330;
37.6 6.1%
33.9 6.5%
4.5
30.7
4.0 HDFC
26.3 0.5
4.1 Standard;
24.2 3.8 0.3
1.1 292; 5.7%
3.9 0.4
0.5 1.0
0.7 1.0
1.1 31.5
1.0 28.5
25.1
18.6 20.9
Max Life;
146; 2.9%
FY2015 FY2016 FY2017 FY2018 FY2019 Life
Insurance
Corporation Others;
Investments Loans of India; 629.5; 12.4%
Cash and Deposits Others 3,375 ;
66.4%
Total Assets
Share of Sums Assured in Force, INR bn, Share of Life Insurer Assets, INR bn,
FY2019 FY2019
SBI Life; 11,832; ICICI ICICI Prudential;
8.3% Prudential; 1,594 ; SBI Life;
9,807; 4.2% 1,430 ;
6.9% 3.8%
HDFC HDFC
Standard; Standard;
7,944; 5.6% 1,249 ; 3.3%
Max Life;
Max Life;
Life 5,691; 4.0% Life 636 ; 1.7%
Insurance Insurance
Corporation Corporation
of India; Others; of India;
90,909; 16,616.8; Others; 2,697
29,994 ;
63.7% 11.6% ; 7.2%
79.8%
Source: IRDAI

New Business
Total New Business Premiums, INR bn No. of Lives Covered, mn
2,146.8 253.2
1,939.4
1,750.8 216.7
198.8 206.3
1,169.9
1,387.5 1,018.1
973.5 148.8
1,131.8 224.6
804.3 179.8 188.5
172.0
577.9
122.9
921.3 976.9
777.3
554.0 583.2
25.9 26.7 26.5 28.2 28.6
Group Individual Total New Business Premiums Individual Group Total People Covered
Comments
New business premiums grew by 10.7% y/y in FY2019 and by a CAGR of 17.4% over the period FY2015 to
FY2019. The reasons for this increase can be attributed to growing margin gains in protection
business, an expanding distribution network and robust premium. Generally, the December business
quarter remains the period of strongest gain for life insurers as agents attempt to complete their
year-end targets, along with increased demand by salaried employees for tax-saving purposes.
Moreover, the e‐commerce medium is helping insurers increase their online distribution capabilities,
attract younger and diverse demographics and thereby increase new business premium. The
Consumer Protection Act, 2019, implemented by the IRDAI to increase transparency and prevent mis-
selling, is pushing many players in the market to make aggressive sales in the months preceding the
deadline. Further, given the low penetration of life insurance in the country and the increasing
number of comprehensive products launched by companies as well as their expanding distribution
networks complemented by increasing e-commerce use, the life insurance business has huge growth
potential in India.
Source: BloombergQuint, BMI Research, Forbes India, IRDAI, Livemint, Moneycontrol

New Business (cont’d)
Share of New Individual Life Policies by Share of New Individual Life Policy
Distribution Channel, mn, FY2019 Premiums by Distribution Channel, INR
bn, FY2018
Bancassurance;
Bancassurance;
264.1;
Individual 3.4;
27.0%
Agents; 22.5; 11.8%
78.6%
Other
Other Corporate
Corporate Agents; 13.9;
Agents; 0.5; 1.4%
1.6%
Brokerage;
Brokerage; 13.9; 1.4%
0.3; 1.0%
Direct Sales; Direct Sales;
Individual
0.8; 2.7% 62.7; 6.4%
Agents;
608.2;
Others; 0.9; Online; 0.3; 62.3% Others; 3.1; Online; 11.1;
3.1% 1.1% 0.3% 1.1%
Share of Lives Covered Through Group Share of New Group Life Policy Premiums
Policies by Distribution Channel, mn, by Distribution Channel, INR bn, FY2019
FY2019
Direct Sales; Direct Sales; Microinsurance
138.4; 61.6% 1062.1; Agents; 1.2;
90.8% 0.1%
Microinsurance
Brokerage;
Agents; 4.7; Others; 0.0;
21.2; 9.4%
2.1% 0.0%
Others; 0.0;
0.0%
Individual Individual
Other Brokerage; Agents; 22.2;
Agents; 5.6;
Corporate 11.1; 1.0% 1.9%
2.5%
Agents; 12.7;
5.6% Bancassurance; 42.1; Other Corporate Agents; 23.9; Bancassurance; 49.4;
18.7% 2.0% 4.2%
Source: IRDAI

Claims
Comments Benefits (Net) Paid, INR bn

Life insurance companies pay benefits either 18.8%
when a policy is surrendered or when it reaches 17.5%
maturity. The benefits paid by life insurance 15.5%
companies reached INR 3.3tn in FY2019. The

benefits paid constitute 64.9% of the gross
premium underwritten in FY2019.
3277.53
2,759.2
Year FY2019 recorded a 19% y/y growth rate – the
2,349.2
2,109.2
2,033.7
highest in five years. The claim settlement ratio
of private players and the LIC declined marginally
in FY2019 compared with the previous year. -2.5%
-3.6%
FY2015 FY2016 FY2017 FY2018 FY2019

Total Benefits Paid by Life Insurers, INR bn
y/y Change
No. of Individual Death Claims Submitted, No. of Group Policy Death Claims
thou Submitted, thou
33.1%
2.2%
0.4%
868.6
0.0%
-0.4%
763.9
17.3%
873.5
869.6
13.7%
706.4
869.3
862.0
10.0%
530.9
843.8
8.1%
452.6
-3.4%
No. of Policies, thou y/y Change No. of Lives, thou y/y Change
Source: IRDAI, Money Control

Claims (cont’d)
Amount of Individual Death Claims Amount of Group Policy Death Claims

Submitted, INR bn Submitted, INR bn
18.4% 36.3%
29.3%
27.5%
22.3%
144.8
154.1
133.9
182.4
8.5%
98.7
8.2%
6.9% 13.1%
77.4
6.4%
63.3
125.2
48.9
35.9
Amount of Individual Death Claims Submitted, INR bn Amount of Group Policy Death Claims Submitted, INR bn
y/y Change y/y Change
Amount of Individual Death Claims Amount of Group Policy Death Claims per
Submitted per Policy, INR thou Life, INR thou
15.9%
16.2%
13.1%
12.2%
10.1%
9.0%
113.6
79.3
211.5
101.3
7.7%
92.1
6.9%
182.6
89.5
2.8%
144.0
165.8
153.9
-2.8%
Average Individual Claim Submitted per Policy, INR thou Average Group Policy Death Claim Submitted per Life, INR
y/y Change thou
Source: IRDAI

08
GENERAL INSURANCE

08 GENERAL INSURANCE CONTENTS
Highlights
Overview
The general insurance penetration in India stands at 20.97% in FY2019, which has not changed much
during the past five years, while insurance density increased to USD 19 in FY2019 as compared to USD
11 in FY2014. Market penetration in India is very low compared with developed countries like the US
(4.3%) and even emerging countries like Brazil (1.8%). On the other hand, the gross direct premiums in
the general insurance market increased to INR 1.7tn in FY2019 from INR 0.8tn in FY2015, growing at a
CAGR of 20.7% over the period. The Indian general insurance sector issued 18.3mn policies in FY2019
(excluding standalone health insurers), compared with 12 million policies issued in FY2015. The general
insurance market in India is expected to grow on the grounds of the country’s growing middle class,
rising awareness regarding the necessity of insurance and a favourable regulatory landscape.
Market Structure
In FY2019, there were 46 life insurance companies (including foreign reinsurers' branches) in India,
with 11,578 branch offices. The sector is divided into private sector players, public sector players,
standalone health private players, specialised insurers and reinsurers. Over the years, the sector has
been experiencing increasing competition, with ICICI Lombard being the largest private sector general
insurance company. India’s non-life insurance market is segmented by product into motor insurance,
health insurance, fire insurance, marine insurance and others.
Main Players
The top players in the private sector of the general insurance market are ICICI Lombard General
Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, HDFC Ergo General
insurance Company Limited and IFFCO Tokio General Insurance Company Limited. However, according
to gross direct premium written, public sector companies The New India Assurance Company Limited,
United India Insurance Company Limited, National Insurance Company Limited, and The Oriental
Insurance Company Limited occupied the top positions in FY2020. Standalone health private insurance
companies include Aditya Birla Health Insurance, Apollo Munich Health Insurance Company, and Max
BUPA Health Insurance Company. There are two specialised insurers, the Agriculture Insurance
Company of India Ltd and Export Credit Guarantee Corporation of India.
Source: IRDAI, Livemint

Main Events
 An Artificial Intelligence (AI) based break-in inspection service has been adopted by ICICI Lombard
General Insurance Company. As part of this service, customers can take photos of their vehicle and
then cloud-based AI algorithms decide on whether to accept the claim or refer it for further
verification. The decision is made according to the damage assessed by the algorithm. Customer
benefits include a 24/7 service and speedy resolutions of motor policy claims.
 The Insurance Development and Regulatory Authority of India (IRDAI) issued guidelines on May 22,
2020, to life and general insurance companies for faster settlement of claims arising out of
damages caused by natural calamity. This has been done to offer respite to individuals and
enterprises hit by the super cyclone Amphan. The cyclone hit the coastal districts of the eastern
part of the country.
 According to the CARE Ratings Agency, due to the COVID-19 impact on India and the resultant
lockdown, the insurance business is expected to record subdued growth in the first quarter of
FY2021. However, COVID-19 could lead to an increased interest in the health insurance segment and
there may be fewer claims because of the lockdown. This will have a lower impact on the combined
ratio of non-life insurance companies.
 On April 15, 2020, the government extended the renewal dates of health and motor insurance
coverage that fall between March 25, 2020, and May 3, 2020. This was necessitated by the COVID-19
lockdown. The measure applied to customers with third-party only policy and was not applicable
for comprehensive motor insurance policies.
 On September 27, 2020, the IRDAI issued Guidelines on Standardisation of Exclusions in Health
Insurance Contracts to rationalise and standardise the exclusions in health Insurance contracts
that every insurer must comply with. According to the guidelines, no health insurance policy should
incorporate the exclusions, such as diseases contracted after signing up for the health insurance
policy, except under certain specified conditions; injury or illness associated with hazardous
activities; and impairment of a persons’ intellectual faculties by usage of drugs, stimulants or
depressants as prescribed by a medical practitioner, among others.
Source: Financial Express, Insurance Journal, The Hindu Business Line, The New Indian Express

FOCUS POINT
Distribution of Gross Direct Premiums by Region, FY2019, INR bn
North
173.5
Northeastern
19.2
Central
105.4
Eastern
105
Western
398
Union
Territories
South 69.5
314.5
Source: IRDAI

Market Size
Comments
The general insurance market of India, measured in terms of gross direct premiums, increased to INR
1.7tn in FY2019 from 0.8tn in FY2015, thus posting a CAGR of 21%. However, the market declined y/y for
the second consecutive year, dropping by 12% y/y in FY2019, against 18% y/y in FY2018. According to
IRDAI, the private sector performed way better than the public sector in FY2019. Compared with
FY2018, the public sector recorded a y/y decline and two out of four public sector companies expanded
their business in FY2019 with an increase in their respective premium collections over the previous
year. On the segment front, motor insurance remained the dominant sector with a share of 38%,
followed by the health segment with a share of 29% in FY2019. The general insurance market in the
country is driven by the favourable trend of regulations such as the 2018 regulation mandating the
sale of three- and five-year third-party insurance policies on new cars and two-wheelers, and the new
Motor Vehicles (Amendment) Bill 2019, which stipulated a penalty for drivers not having a motor
insurance policy. In addition, trends such as the increasing use of technology, artificial intelligence-
based solutions/services and the use of drones for assessing crop insurance, among others, has
positively affected market development over the past years.
Gross Direct Premiums by Line of Total Assets of General Insurance Funds,

Business, INR bn INR bn
1,495.8
1,694.5 264.0
1,506.6 391.9 1,247.0
1,281.3 357.6 1,060.1 230.6 27.0
963.8 309.0 188.2
846.9 508.3 746.7 36.8
149.1 419.8
135.9 653.4 21.2
345.3
274.6 592.5 645.2 106.4
226.4 88.4 1,204.8
502.5 20.6
373.8 423.0 28.9 32.4 979.7
34.9 850.7
30.2 29.8 29.2
619.7
530.2
80.6 87.3 95.4 107.8 116.7
FY2015 FY2016 FY2017 FY2018 FY2019
Others Health FY2015 FY2016 FY2017 FY2018 FY2019
Motor Vehicle Marine
Fire Total Gross Direct Premiums Investments Cash Others Total Assets
Source: Economic Times, IRDAI

Risk Retention
Comments Overall Retention Ratio

The retention ratio measures how much of the
premium the company receives is retained rather
than passed on. The retention ratio for the
general insurance market in India witnessed a
sharp dip in FY2019 to 59.87% from 90.4% in
FY2018. In India, typically general insurers focus
on increasing their premium collections or 89.6% 87.7% 90.4%
83.2%
investment incomes to drive profitability rather
59.8%
than retaining significantly more risks. In every
business line, FY2019 saw a fall in the retention
ratio, with the maximum dip in others and the
marine cargo segment.
FY2015 FY2016 FY2017 FY2018 FY2019
Retention Ratio by Line of Business

99.7%
99.2%
99.0%
97.0%
91.0%
88.6%
88.1%
85.2%
84.3%
82.1%
81.6%
81.0%
78.8%
74.7%
71.8%
68.3%
67.2%
65.2%
64.5%
63.0%
57.1%
57.0%
56.8%
47.8%
47.8%
44.5%
39.0%
38.9%
37.2%
35.5%
34.8%
27.9%
27.2%
21.0%
20.0%
FY2015 FY2016 FY2017 FY2018 FY2019
Fire Marine Cargo Marine Hull Motor Vehicle Engineering Aviation Other
Source: IRDAI, Moneycontrol

Performance
Comments Combined Ratio of General Insurers

The combined ratio measures the profitability of
the insurer and gauges the daily performance of
the company. It is calculated as the sum of the
loss ratio and expense ratio. A ratio of more than 121.1% 119.2%
118.2%
114.1%
100% indicates that the insurer is paying out 110.2%
30.2% 30.1%
more money than it is receiving, while a ratio of 33.1% 28.8%
28.5%
less than 100% indicates that the insurer is
making underwriting profit. The Indian general
insurance combined ratio has been above 100% in
all the years reflected in the graph. While the
ratio dipped in FY2018, it increased again in
FY2019. The public sector companies recorded a
90.9% 89.2%
worsening combined ratio due to claim reserves 81.7% 85.1% 85.3%
and management expenses, noting that lower-

than-adequate premium levels affected insurers'
claim ratios along with deteriorating automobile
sector growth. However, the New Motor Vehicle
Act is expected to improve the situation a little FY2015 FY2016 FY2017 FY2018 FY2019
bit as it imposes a high penalty on those who Loss Ratio Expense Ratio Combined Ratio
drive without a license or insurance.
Loss Ratio by Line of Business

96.9% 98.5% 101.1% 92.2% 89.3%
81.2% 88.2% 83.5% 90.5%
77.1%
84.5%
73.8% 74.4% 84.4% 82.4%
90.6%
72.0% 75.0% 78.9%
67.4%
82.9%
75.9% 81.9%
73.9% 65.3%
FY2015 FY2016 FY2017 FY2018 FY2019

Fire Marine Motor Health Others
Source: Market Intelligence, IRDAI,

09
REINSURANCE

09 REINSURANCE CONTENTS
Highlights
Overview
The IRDAI governs reinsurance companies in India. Previously the General Insurance Corporation of
India, the national reinsurer, had a monopoly position in the Indian reinsurance market, though the
situation changed with the setting up of ITI Reinsurance Limited, a private reinsurer, in 2017. However,
in May 2019, the IRDAI cancelled the registration certificate of the company. Furthermore, the IRDAI
brought out final regulations for the registration and operations of branch offices of foreign
reinsurers in December 2018. The regulations specified that the foreign re-insurer should be in the
reinsurance business for at least 10 years and put in a minimum capital of INR 10bn in the branch
office. Foreign reinsurers were permitted following the passage of the Insurance Amendment Bill,
2015.
Market Structure
The General Insurance Corporation of India is the national reinsurer (public-sector) and provides
reinsurance to the direct general insurance companies in India. The company started operations in
FY2002. The objectives of the reinsurance programme of the company is to optimize retention, ensure
adequate coverage for exposure and develop adequate capacities within India. Some of the branches
of foreign reinsurers include AXA France Vie, Munich Re, and Swiss Re, among others.
Main Players
There is one reinsurance company, the General Insurance Corporation of India (GIC Re) in the public
sector as well as 11 reinsurers including foreign reinsurers’ branches and Lloyd’s India in the private
sector. The net written premium of GIC Re stood at INR 390bn in FY2019, up from INR 376bn in FY2018.
The net written premium of branches of foreign reinsurers totalled INR 70.6bn in FY2019, rising from
INR 39.7bn in FY2018. Over the past few years, a relatively relaxed regulatory landscape has led to the
entry of many global insurers and reinsurers in India. Most of the market entries have been via
partnerships with local players or through the establishment of branches.
Source: reinsurancene.ws, IRDAI

09 REINSURANCE CONTENTS
Main Events
 The IRDAI (Re-insurance) Regulations 2018 were adopted in 2018 and came into effect on January 1,
2019. They repealed earlier regulations on general insurance (2016) and life insurance (2013) and
consolidated the existing regulations into a more uniform regulatory framework for the Indian
reinsurance business. The new regulations have maintained GIC Re’s privileged position in the
reinsurance business, i.e. GIC Re has the right of first refusal for any risks ceded to them. However,
to promote greater competition within the reinsurance industry, insurers can then place their risks
with other Indian reinsurers or with FRBs, i.e. FRBs have been moved up in the order of priority to
rank equally with other Indian reinsurers. Under the new regulations, insurers must simultaneously
request quotations from at least four FRBs.
 The IRDAI provided a certificate of registration (CoR) to ITI Reinsurance Limited, a private reinsurer,
in FY2017. The certificate of registration was cancelled on May 8, 2019.
 The Insurance Regulatory and Development Authority of India (IRDAI) granted special approval to
10 cross-border reinsurance companies for FY2020. The recently approved companies include
Republican Unitary Enterprise – Belarusian National Reinsurance Organisation; Nepal Re; East
Africa Re; CICA Re; Ingosstrakh Joint Stock Insurance Co.; PICC Re; Zep Re; Joint Stock Company
Russian National Reinsurance Com; Bao Viet Insurance Company; and Indonesia Re.
 A wholly-owned subsidiary of India’s General Insurance Corporation (GIC Re), named as GIC
Perestrakhovanie LLC, Russia, received a reinsurance licence from the Central Bank of Russia in
February 2020. GIC Re is the first reinsurance firm in more than 10 years to be granted this licence.
This will provide India’s General Insurance Corporation with diversification benefits and an
expanded geographical footprint.
Source: Mondaq, reinsurancene.ws

10
RETAIL CHANNELS

10 RETAIL CHANNELS CONTENTS
Brokerage
Comments
Brokers are typically the key players in both life and general insurance. Small insurance companies
cannot afford to operate a direct selling channel and thus rely on brokerage for distribution.
Generally, brokers specialise in a segment of the market. This makes customers feel more confident
that the broker will understand their risks better and advise an appropriate insurer to provide
coverage. The brokerage distribution channel is more popular in the general insurance segment than
it is in life insurance, where direct selling is more prevalent. In terms of total new business premium
in the life insurance segment, brokers account for a 1.16% share, contributing INR 13.9bn in individual
new business premium and INR 11.1bn in group new business premium in FY2019. In the general
insurance market segment, brokerages held a 25.6% share in gross direct premium income generated
in FY2019. The gross direct premium generated by brokers increased at a CAGR of 20% over the period
FY2015 to FY2019.
Total New Business Premiums in Life General Insurance Premium Income

Insurance Subsector, INR bn Distributed by Brokers, INR bn
39.7
25.0
6.1
37.3
21.3 37.7
2.6 100.2
3.2
17.6 30.3
11.1 96.6 200.8
14.5 14.4 9.5 27.5 0.6 87.1
4.3 7.9 2.0 64.2 153.9
5.1 136.6
46.1
13.9 101.8
11.8 85.0
10.2 9.3 9.7 14.6
10.3 11.1 11.6 12.0
21.1 23.9 28.4 32.0 42.5
Individual Group Total Fire Marine and Aviation Motor Vehicle Health Crop Others
Source: Business Standard, IRDAI

Agency
Comments Total General Insurance Premiums

Distributed by Agents by Line, INR bn
Similar to the brokerage distribution channel,

agency is the traditional and most typical
23.6
distribution channel for insurance. The total 22.9
number of licensed life insurance agents
increased at a CAGR of 1.5% over the period 22.3 117.8 139.2
FY2015 to FY2019 and posted y/y growth of 5.4% 23.0
in FY2019. Agency is the largest distribution 96.3 9.0 n/a
40.1
channel of most life insurance companies. This 80.3
5.5
channel targets various customer segments 62.2 5.1
through a large force of agents. The channel 4.3
operates an aggressive expansion strategy. 271.4 273.0
However, with the upcoming trend of multiple 206.6
226.6
177.1
distribution channels and the rapid emergence
of the online distribution channel, the
popularity of agency distribution is expected to 6.8 7.1 7.0 7.4 8.6
decline marginally. Moreover, the rivalry within 16.2 17.5 18.7 19.0 20.5
the agency network remains one of the top FY2015 FY2016 FY2017 FY2018 FY2019
reasons for attrition in the number of agents in Fire Marine and Aviation Motor Vehicle
India. Personal Accident Health Others
Life Insurance New Business Premiums Total Licensed Life Insurance Agents,
Distributed by Agents, INR bn thou
5.4%
617.1 630.4
549.8 3.6%
10.0 22.2
2,067.9
412.5 411.8 15.2

16.8 13.6 -0.3%
2,194.7
534.7 607.1 608.2 -2.5%

2,088.5
2,082.7
395.7 398.2
2,016.6
-5.5%
FY2015 FY2016 FY2017 FY2018 FY2019

FY2015 FY2016 FY2017 FY2018 FY2019
Individual Group Total Total Licensed Life Insurance Agents, thou y/y Change
Source: IRDAI, Shodgganga

Bancassurance
Comments General Insurance Premiums Distributed

by Bancassurance by Line, INR bn
Bancassurance is a relatively newer channel in
India compared to the other insurance
distribution channels. This concept originated in
France and has proved to be an effective
distribution channel in Europe, Latin America
and Australia. Bancassurance is a type of
arrangement where a bank sells the insurance 39.3
policies of a particular insurer. In 2002, an IRDAI 9.7

31.4
regulation paved the way for banks to act as
corporate agents in a move upheld by the RBI, 27.1 26.3
India’s central bank. 29.5
15.5
The share of bancassurance in India has 23.1
16.5
witnessed an increase because of the country’s 13.4 24.0
well-developed banking sector. 19.4
14.2 18.2
13.9 0.1
However, due to the COVID-19 lockdown sales 0.2
0.3 0.3 0.2
through this channel have recently been 17.3 19.9
13.3 14.8 14.4
severely impaired.
FY2015 FY2016 FY2017 FY2018 FY2019*
Fire Marine and Aviation Motor Vehicle Health Others
Life Insurance New Business Premiums General Insurance Premiums Distributed

Distributed by Bancassurance, INR bn by Bancassurance, INR bn
31.4% 19.1% 20.2%

27.7%
128.3
9.9% 12.0%
22.5%
80.2
18.9%
90.2
75.0
256.0
13.3%
63.0
313.51
56.2
200.5
152.5
-11.1%
FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019*
Total Life Insurance Distributed via Bancassurance, INR bn Total General Insurance Distributed via Bancassurance, INR bn
y/y Change y/y Change
*Does not include personal accident insurance
Source: Business Standard, IRDAI, Live Mint

Direct Selling
Comments General Insurance Premiums Distributed

by Direct Selling by Line, INR bn
Direct selling has been a dominant channel of
distribution for group business of life insurers,
with a share of 91% of premiums during FY2019. In
the general insurance market segment, the direct
sales channel has been on the rise and is set to
beat the traditional dominance of brokers and
228.4
agents. The gross direct premiums through direct
223.9
sales have been increasing at a CAGR of 19% over 197.6
the period FY2015 to FY2019. The reason for this
can be attributed to the more numerous online
purchase options, including social media and 40.1 60.6
mobile-based payment applications. The

70.8 76.5 89.7 109.6 156.4
insurance companies in India are leveraging
online sales and technology to increase the
contribution of the direct channel. This has been 74.3 67.3 66.2 46.9
36.6
supported by growing smartphone and internet 16.9 15.8 14.6 13.0 14.2
penetration, along with the greater use of 28.9 29.0 31.7 35.6
29.5
artificial intelligence-based customer interface FY2015 FY2016 FY2017 FY2018 FY2019
solutions by the companies.
Fire Marine and Aviation Motor Vehicle Health Others
Life Insurance New Business Premiums General Insurance Premiums Distributed

Distributed by Direct Selling, INR bn by Direct Selling, INR bn
40.5%
1,124.8
60.5%
1,012.5
249.2
231.1
22.1%
789.7
465.1
429.0
399.9
562.2
11.1%
964.5
5.0%
-2.2% 11.5%
5.8% 7.8% 7.3%
Total General Insurance Directly Distributed, INR bn
Total Life Insurance Directly Distributed, INR bn
y/y Change
y/y Change
Source: Insurance Business Asia

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CAGR Compound Annual Growth Rate

COVID-19 Novel Coronavirus Disease 2019

CPI Consumer Price Index

FDI Foreign Direct Investment

GDP Gross Domestic Product

GNI Gross National Income

INR Indian Rupees

IRDAI Insurance Regulatory and Development Authority of India

LIC Life Insurance Corporation

MGNREGA Mahatma Gandhi National Rural Employment Generation Act

OOP Out-Of-Pocket Payments

RBC Risk Based Capital

RBI Reserve Bank of India

USD/ US$ US Dollars

YoY or y/y Year on Year

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02 SECTOR OUTLOOK p.13

03 SECTOR IN FOCUS p.19

04 COMPETITIVE LANDSCAPE p.30

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06 REGULATORY ENVIRONMENT p.49

07 LIFE INSURANCE p.52

08 GENERAL INSURANCE p.62

10 RETAIL CHANNELS p.72

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INR INR INR

59.8% 89.2% 30.1%

Unless otherwise stated, data for FY2019.

INDIA INSURANCE SECTOR 2020/2024 7

Source: Economic Times, The Hindu, Livemint

INDIA INSURANCE SECTOR 2020/2024 8

KEY PLAYER FINANCIAL ASSETS KEY PLAYER NET PREMIUMS

KEY PLAYER NET PREMIUMS

INDIA INSURANCE SECTOR 2020/2024 9

Source: IRDAI, Economic Times, Livemint, The Hindu

INDIA INSURANCE SECTOR 2020/2024 10

Source: IBEF, Business Today

INDIA INSURANCE SECTOR 2020/2024 11

Source: The Quint, India Spend, Livemint, Outlookindia, Business Standard

INDIA INSURANCE SECTOR 2020/2024 12

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Real GDP, y/y change Consumption, Investment, and Public

FY2019f FY2020f FY2021f FY2022f FY2023f

FY2019f FY2020f FY2021f FY2022f FY2023f Private Consumption Fixed Investment

Source: IMF, FocusEconomics, CEIC

INDIA INSURANCE SECTOR 2020/2024 14

Macroeconomic Outlook (cont’d)

Total Exports and Imports, y/y change

FY2019f FY2020f FY2021f FY2022f FY2023f

Current Account Consumer Price Index, y/y change

Current Account, USD bn

Source: FocusEconomics, CEIC

INDIA INSURANCE SECTOR 2020/2024 15

Consumer Confidence Survey (Future Business Expectation Index

Source: Reserve Bank of India, CEIC, Oxford Economics