Indian Insurance Sector

Presented by,
Remya Daniel
Sindhu N. M.
Smitha M. Philip
Sreela Chandran

Subin Sunny
December 8, 2021 Sunita S. 1
 Indian Insurance Industry
• A flourishing industry, with several national
and international players competing and
growing at rapid rates.
• The total number of insurance companies
operating in India is currently 22.
• 12 private life insurance companies and 9
private general insurance companies.

December 8, 2021 2
 Indian Insurance Industry
• Considering public sector insurance companies
there are presently 13 insurance companies in
the life side and 13 companies functioning in
general insurance business.
• General Insurance Corporation (GIC) has been
approved as the "Indian reinsurer" for
underwriting only reinsurance business.

December 8, 2021 3
 Major Players
• Life Insurers :
• Public Sector :

1. Life Insurance Corporation of India

• Private Sector :

1. Allianz Bajaj Life Insurance Company Limited

1. Birla Sun-Life Insurance Company Limited

1. HDFC Standard Life Insurance Co. Limited

December 8, 2021 4
 Major Players
• Life Insurers :
• Private Sector :

4. ICICI Prudential Life Insurance Co. Limited

5. ING Vysya Life Insurance Company Limited

6. Max New York Life Insurance Co. Limited

4. MetLife Insurance Company Limited

4. Kotak Mahindra Life Insurance Co. Ltd.

December 8, 2021 5
 Major Players
• Life Insurers :
• Private Sector :
9. SBI Life Insurance Company Limited
9. TATA AIG Life Insurance Company Limited
9. AMP Sanmar Assurance Company Limited
9. Dabur CGU Life Insurance Co. Pvt. Limited

December 8, 2021 6
 Major Players
• General Insurers :
• Public Sector :

1. National Insurance Company Limited

1. New India Assurance Company Limited

1. Oriental Insurance Company Limited

1. United India Insurance Company Limited

December 8, 2021 7
 Major Players
• General Insurers :
• Private Sector :

1. Bajaj Allianz General Insurance Co. Limited

1. ICICI Lombard General Insurance Co. Ltd.

3. IFFCO-Tokio General Insurance Co. Ltd.

3. Reliance General Insurance Co. Limited

3. Royal Sundaram Alliance Insurance Co. Ltd.

3. TATA AIG General Insurance Co. Limited

December 8, 2021 8
 Major Players
• General Insurers :
• Private Sector :
7. Cholamandalam General Insurance Co. Ltd.
7. Export Credit Guarantee Corporation
7. HDFC Chubb General Insurance Co. Ltd.

• Reinsurer :
1. General Insurance Corporation of India
December 8, 2021 9
 Types
• Indian insurance companies offer a
comprehensive range of insurance plans.
• The most common types include:
• Term Life Policies
• Endowment Policies
• Joint Life Policies
• Whole Life Policies
December 8, 2021 10
 Types
• The most common types include:
• Loan Cover Term Assurance Policies

• Unit-linked Insurance Plans

• Group Insurance Policies

• Pension Plans

• Annuities

December 8, 2021 11
 Types
• General insurance plans are :
• Motor Insurance

• Home Insurance

• Travel Insurance

• Health Insurance

December 8, 2021 12
 Life Insurance
• Indian life insurance industry is worth US$ 41-
billion.
• Considered as the 5th largest life insurance
market, growing at a rapid pace of 32 - 34 %
annually.
• Contributes to about 7% of the GDP of the
country.

December 8, 2021 13
 Life Insurance
• According to IRDA, insurers sold 10.55
million new policies in 2009 - 2010 with LIC
selling 8.52 million and private companies
2.03 million policies.
• At the end of March 2010, LIC held 65 %
market share in terms of new business income
collection with the private sector contributing
the remaining 35 % share in 2009 - 2010.
December 8, 2021 14
 LIC
• The Life Insurance Corporation (LIC) of India
founded in 1956 is the largest life insurance
company in India owned solely by the
Government of India.
• It registered an 83 % increase in new business
income in March 2010, while private players
posted a 47 % growth in new business
premium.
December 8, 2021 15
 LIC

December 8, 2021 16
 ICICI Prudential
• A joint venture between Industrial Credit and
Investment Corporation of India (ICICI) Bank
and Prudential - a leading international
financial services group headquartered in the
United Kingdom.
• No. 1 private life player in India, with the
highest paid up capital deposited in IRDA, in
comparison to all players.

December 8, 2021 17
 ICICI Prudential

December 8, 2021 18
 Comparison - Pricing
• LIC :
• Has a large product portfolio and claim settlement
is easier to get.
• Has the advantage of its own as the government
guarantee is accompanied with it.

December 8, 2021 19
 Comparison - Pricing
• ICICI Prudential :
• Very huge premiums of policies as compared to
others.
• Minimum premium is 19,000.(Tax saving policy
only 10,000).
• Target upper class people only.
• Policy charges are very high.

December 8, 2021 20
 Comparison - Pricing

December 8, 2021 21
 Current Scenario

December 8, 2021 22
 Comparison - Marketing
• LIC :
• The consumer relations activities of LIC
concentrate on the customer public and building
relations with prospective customer.
• The corporation tries to achieve its objective
through a number of means :
• Oral Communication
• Employee-Consumer Communication
December 8, 2021 23
 Comparison - Marketing
• LIC :
• Marketing Means :
• Press Conferences

• Audio-Visual Communication

• Trans-slides

• Printed Communication: Press Release , Journals and

Publications, Financial Results, Booklets, Brochures
and Pamphlets, Posters and Hoardings, Website
December 8, 2021 24
 Comparison - Marketing
• LIC :
• Marketing Means :
• Information Kiosks

• Customer Contact Programme

• Financial Relations

• Community Relations

December 8, 2021 25
 Comparison - Marketing
• ICICI Prudential :
• The Creative execution :
• Through television channels

• Press

• Other programs includes direct mail, PR of

communications campaign in press and TV, website
marketing and database generation through
Bancassurance channels and alliances with telecom
companies, as well as companies like BPCL and
Dominos.
December 8, 2021 26
 Comparison - Monitoring
• LIC Vs ICICI Prudential :
• LIC has a relatively hassle free claim process and
the insurance is not subject to endless number of
terms and conditions.
• For instance, in the recent terror attacks in Mumbai
LIC paid the entire amount claimed to the victims’
families without any conditions unlike private
players who refused compensation.

December 8, 2021 27
 Comparison - Monitoring
• LIC Vs ICICI Prudential :
• Previously LIC didn’t have surrender charges for
premature surrender of ULIP plans unlike ICICI
Prudential but now forced to introduce it due to
recent IRDA regulations.

December 8, 2021 28
 Comparison - Risk Sharing
• LIC :
• Prior to the opening up of the insurance sector one
rarely heard the reinsurance concept in association
with LIC’s policies, as the question of LIC not
paying never arouse in the mind of the customer.
• But LIC claims that it always reinsured its high-
value policies.

December 8, 2021 29
 Comparison - Risk Sharing
• ICICI Prudential :
• ICICI Prudential reinsures their policies above a
certain cut-off with Swiss Re, a reinsurance global
giant.
• It is vital for private players to reinsure the large
claims as they have a relatively lower capital base.

December 8, 2021 30
 Comparison - Investing
• LIC :
• Pumped over Rs 61,000 crore into the capital
market during 2009-10, 50 % more than what it
invested in the previous fiscal.
• During the year, the gross investment, including
bonds and government securities, touched Rs
1,91,737 crore compared to about Rs 1,65,000
crore in the previous fiscal.

December 8, 2021 31
 Comparison - Investing
• LIC :
• Among the largest investments are those in NTPC's
follow-on public offer and Rural Electrification
Corporation.

• ICICI Prudential :
• Invested Rs 2,000 crore in the first quarter of FY09.

• Has £290 billion of assets under management and it

is one of the best capitalised insurers in the world.
December 8, 2021 32
 Comparison - Delivering
• LIC :
• Has a strong and very well developed distribution
network.
• Its aim is to spread Life Insurance widely and in
particular to the rural areas and to the socially and
economically backward classes with a view to
reaching all insurable persons in the country and
providing them adequate financial cover against
death at a reasonable cost.
December 8, 2021 33
 Comparison - Delivering
• LIC :
• Presently has 7 Zonal Offices and 100 Divisional
Offices situated all around the country.
• In addition to an even distribution of 2048
branches located in different towns and cities of
India, LIC also has a network of around one
million agents who solicit life insurance policies to
the public.

December 8, 2021 34
 Comparison - Delivering
• ICICI Prudential :
• Has one of the largest distribution networks
amongst private life insurers in India.
• Today, its nation-wide team comprises of over
1,900 branches (inclusive of 1,074 micro-offices)
and over 2,10,000 advisors.

December 8, 2021 35
 Comparison - Delivering
• ICICI Prudential :
• The company has 7 bancassurance partners having
tie-ups with ICICI Bank, Ratanagiri District
Central Co-op Bank, Ballia Kshetriya Co-operative
Bank, Renuka Nagrik Sahakari Bank, Bhandara
Urban Co-operative Bank, Balasinor Nagarik
Sahakari Bank Limited, Arvind Co-op Bank.

December 8, 2021 36
 Financial Inclusion
• Nearly 80% of the Indian population is without
life, health and non-life insurance coverage.
• Life insurance penetration : 4%
• Non-life insurance penetration : 0.6%
• The per capita spend on life and non-life insurance
is just about Rs2,000 and Rs300, respectively,
compared with a global average of at least
Rs18,000 and Rs13,000
December 8, 2021 37
 Initiatives By
Finance Ministry
• De-tariffing of General Insurance Sector
• Creation of the Motor Pool
• Micro Insurance
• Guidelines on Anti-Money Laundering
Programme
• Protection of Policyholders' Interests

December 8, 2021 38
 Initiatives by LIC
• Jeevan Madhur :
• Micro-insurance policy, launched by LIC in 2006.

• Gives death risk cover but also maturity benefit.

• The sum assured ranges from Rs. 5,000 to a maximum

of Rs. 30,000 for a duration of five years up to 15
years.
• Targeted to cover the low-income group and
especially those who have no fixed and stable income.
December 8, 2021 39
 Initiatives by LIC
• Jeevan Madhur
• Minimum premium is Rs. 25 per week, Rs. 50 per
fortnight, Rs.100 per month.
• Available to both males and females without any
medical examination.
• Is a simple saving related life insurance plan
covering individuals in the age group of 18 to 60
years.
December 8, 2021 40
 Initiatives by SBI Life
Insurance
• Grameen Shakti :
• Life Insurance product for Self Help Groups (SHGs)
members.
• Life Insurance cover varies from Rs. 5,000 to Rs. 50,
000 and annual premium varies from Rs. 60 to Rs.
601.
• There is a provision for refund of 50% of Premium
for a term of 5 years and 100% premium for term of
10 years.
December 8, 2021 41
 Initiatives by ICICI Prudential
• Micro Insurance :
• Its provision of micro-insurance services has promoted
financial security among the rural poor and increased
their comfort to avail credit facilities (micro-credit) for
undertaking income-generating activities.
• ICICI Lombard provides a range of non-life insurance
products, including health, weather and cattle insurance
to help mitigate the impact of other contingencies such
as illness and crop failure.

December 8, 2021 42
 Initiatives by ICICI Prudential
• Government Welfare Schemes :
• The benefit for the Government has been the transfer of
risk to ICICI Lombard, greater accountability,
transparency and reporting as well as removal of leakage
in the process.
• In acknowledgment of ICICI Lombard's learnings in this
area, the Government's recently launched National
Health Insurance Scheme (Rashtriya Swasthya Bima
Yojana) was designed with key inputs from ICICI
Lombard.
December 8, 2021 43
 Initiatives by Bajaj Allianz
• Swayam Shakti Suraksha :
• A low premium micro insurance product launched
by SKS microfinance in association with Bajaj
Allianz in April 2008.
• Allows to get an insurance cover of minimum Rs.
5,000.

December 8, 2021 44
 Regulatory Authority
• Insurance is a federal subject in India.
• Indian insurance
service sector is
regulated by
Insurance Regulatory
and Development
Authority (IRDA).

December 8, 2021 45
 Timeline of Events
• The Insurance Act, 1938
• Setting up of Controller of Insurance to act as
strong and powerful supervisory and regulatory
authority for insurance business.

• Post – nationalized era

• Role of Controller of Insurance diminished since
insurance sector was opened to private companies.

December 8, 2021 46
 Timeline of Events
• Post – nationalized era
• There was a need for a strong, independent and
autonomous Insurance Regulatory Authority.
• Since legislation would have taken time,
government constituted through a resolution,
Interim Insurance Regulatory Authority, pending
the enactment of a comprehensive legislation.

December 8, 2021 47
 Timeline of Events
• Tariff Advisory Committee (TAC)
• Statutory Body under Insurance Act, 1938.

• It controls and regulates the rates, advantages,

terms and conditions that may be offered by
insurers in respect of General Insurance Business
relating to Fire, Marine (Hull), Motor, Engineering
and Workmen Compensation.

December 8, 2021 48
 Timeline of Events
• Tariff Advisory Committee (TAC)
• In July 22nd 1998, the TAC Board was
reconstituted with seven members representing the
present General Insurance Industry and eight
members from government and Industry.
• The Controller of Insurance cum Chairman IRDA
(currently, Mr. J. Hari Narayan) is the Chairman of
TAC.

December 8, 2021 49
 Timeline of Events
• Insurance Regulatory Authority Act (IRDA), 1999
• Provides for the establishment of an Authority to
protect the interests of insurance policy holders, to
regulate, promote and ensure orderly growth of
insurance industry and for matters connected therewith
or incidental thereto.
• Amends the Insurance Act, 1938, the Life Insurance
Corporation Act, 1956 and the General Insurance
Business (Nationalization) Act, 1972 in order to end
the monopoly of LIC and GIC.
December 8, 2021 50
 Composition of IRDA
• IRDA was constituted under Section 4 of
IRDA Act, 1999.
• It is a 10 member team consisting of
• A Chairman

• 5 whole – time members

• 4 part – time members

all appointed by the Government of India.

December 8, 2021 51
 Mission of IRDA
• To protect the interests of the policyholders, to
regulate, promote and ensure orderly growth
of the insurance industry and for matters
connected therewith or incidental thereto
(Under Section 14 of the IRDA Act).

December 8, 2021 52
 Powers and Functions of
IRDA
• Defined in sub – section 1 of Section 14 of IRDA
Act.
• Issuance of certificate of registration, or to renew,
modify, withdraw, suspend or cancel such registration.
• Protection of policy holders in matters concerning
assigning of policy, nomination by policy holders,
insurable interest, settlement of insurance claim,
surrender value of policy and other terms and
conditions in insurance contracts.

December 8, 2021 53
 Powers and Functions of
IRDA
• Specifying requisite qualifications, code
of conduct and practical training for
insurance intermediaries and agents.
• Specifying code of conduct for surveyors
and loss assessors.
• Promoting efficiency in the conduct of
insurance business.

December 8, 2021 54
 Powers and Functions of
IRDA
• Levying fees and other charges for carrying out the
purposes of IRDA Act.
• Regulating investment of funds by insurance
companies.
• Regulating maintenance of margin of solvency.
• Supervising the functioning of the TAC.

• Adjudication of disputes between insurers and

intermediaries or insurance intermediaries.
December 8, 2021 55
 Powers and Functions of
IRDA
• Calling for information from, undertaking
inspection of, conducting enquiries and
investigations including audit of the insurers,
intermediaries, insurance intermediaries and other
organizations connected with the insurance
business.
• Control and regulation of the rates, advantages,
terms and conditions that may be offered by insurers
in respect of general insurance business not so
controlled and regulated by the TAC.
December 8, 2021 56
 Powers and Functions of
IRDA
• Specifying the form and manner in which books of
account shall be maintained and statement of
accounts shall be rendered by insurers and other
insurance intermediaries.

• Specifying the percentage of premium income of

the insurer to finance schemes for promoting and
regulating professional organizations.

December 8, 2021 57
 Powers and Functions of
IRDA
• Specifying the percentage of life insurance business
and general insurance business to be undertaken by
the insurer in the rural or social sector.
• Promoting and regulating professional organizations
connected with the insurance and re-insurance
business namely, Indian Institute Of Insurance
Surveyors and Loss Assessors (IIISLA), Actuarial
Society Of India (ASI) and Insurance Brokers
Association of India (IBAI).

December 8, 2021 58
 Impact of IRDA
• The creation of IRDA has brought about
revolutionary changes in the Insurance sector.
• In last 10 years of its establishment the
insurance sector has seen tremendous growth.
• The IRDA still successfully deals with any
discrepancy in the insurance sector.

December 8, 2021 59
 Impact of IRDA
• When IRDA came into
being, the only players in
the insurance industry were
Life Insurance Corporation
of India (LIC) and General
Insurance Corporation of
India (GIC), however in the
last decade 23 new players
have emerged in the field of
insurance.
December 8, 2021 60
 Latest Updates
• Future Generali, Aviva and Bajaj Allianz
launch new ULIP products. (2nd September)
• Budget Airline IndiGo partners with TATA
AIG. (7th September)
• IRDA proposes a composite package of
standard insurance product for rural and social
sectors. (10th September)

December 8, 2021 61
 Latest Updates
• IDBI Federal Life Insurance launches
Loansurance Group Life Plan. (14th September)
• Following the new IRDA regulations on
ULIPs, some life insurers start levying fund
switching charges in their new ULIPs. (15th
September)
• Private sector life insurers go slow on unit –
linked pension plans. (16th September)
December 8, 2021 62
 Latest Updates
• LIC launches Endowment Plus, a ULIP plan.
(21st September)
• ULIPs turn costly with insurers launching
products with higher annual premium. (3rd
October)

December 8, 2021 63
 Latest Updates
• Oriental Insurance, New India Assurance,
National Insurance and United India Insurance
decides to come together and jointly float a
Third Party Administrator (TPA) to control
fraudulent claims. (7th October)
• Reliance Life makes foray into health
insurance. It expects to break even in 2010. (8th
October)

December 8, 2021 64
 Latest Updates
• Stake Dilution: IRDA can’t meddle in local –
foreign Promoters’ deal, say experts. (13 th
October)
• MetLife Starts Online Tem Insurance. (15 th
October)
• Insurance Policies to be available at Post
Offices. (18th October)

December 8, 2021 65
 Latest Updates
• Life Insurance Industry posts 60% growth in
new business in First Half of 2010 – 2011.
(20th October)
• IRDA bans sale of Universal Life Insurance
Policies. (22th October)
• ING Life looking to offer Health Product. (29 th
October)

December 8, 2021 66
 Latest Updates
• Aviva plans cost cuts. (3rd November)
• IRDA examines Merger And Acquisition of
two non – Life Insurance Companies. (10th
November)
• SBI Life Insurance launches SMS – Based
Service. (10th November)
• IRDA slaps Rs. 10 la kh fine on Reliance
Life. (17th November)
December 8, 2021 67
 Latest Updates
• MR. Chirag Jain appointed as CEO of Canara
HSBC Oriental Life Insurance Company. (17th
November)
• Shriram General Insurance Compnay posted a
net profit of Rs. 4.05 crore for the second
quarter as against Rs. 4.03 for the same period
the previous year.(19th November)

December 8, 2021 68
 Latest Updates
• Circular soon on IPO Norms for Life Insurers:
IRDA. (20th November)
• ICICI Prudential Life and Institute of Insurance
and Risk Management (IIRM) extend
association. (20th November)
• Bharti AXA General Insurance to launch
Travel and Retirement Products. (20th
November)
December 8, 2021 69
 Latest Updates
• IRDA slaps Rs. 5 lakh penalty on TATA AIG
Life. (26th November)

December 8, 2021 70
 References
• Financial Services – Dr. S.
Guruswamy
• www.irda.gov.in
• The Hindu Business Line
• The Hindu
• The Economic Times

December 8, 2021 71
 Thank You!!!

December 8, 2021 72