You are on page 1of 39

€ € € € € € € € € € € €

What is Insurance? Evolution Types of Insurance Insurance Sector Reforms Global Players ² Indian Mergers LIC Global Growth Sub Prime Indian Scenario Interview Careers Conclusion

€

Insurance is a form of contract or agreement under one party agrees in return of a consideration to pay an agreed amount of money to another party to make goods for a loss, damage, injury to something of value Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice

€

€

€

€

viz.1818 . 1928 . The first General Insurance Company established in the year 1850 in Calcutta by the British.Oriental Life Insurance Company ± 1st Insurance Company. LIC formed by an Act of Parliament. with a capital contribution of Rs. 1938: Earlier legislation consolidated & amended the Insurance Act with the objective of protecting the interests of the insuring public.The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life & non-life insurance businesses. 5 crore from the Government of India. 1956. 1956: 245 Indian & foreign insurers & provident societies are taken over by the central government & nationalized. LIC Act. .The Indian Life Assurance Companies Act enacted the 1st Law to Regulate the Life Insurance Business.Bombay Mutual Life Assurance Society ± 1st Life Insurance Company. 1912 . 1870 .

Purchase insurance) € .€ € LIFE INSURANCE NON.Private aircraft insurance) Marine (eg.LIFE INSURANCE € € € € € Property (eg.Builders risk insurance) Aviation(eg. Marine hull insurance) Miscellaneous (eg.

Objective .      . Malhotra Committee .Structure: ± a.headed by former Finance Secretary & RBI Governor R.€ € € In 1993.N. No Company should deal in both life and general insurance through a single entity. Key recommendations of the reform.to create more efficient & competitive financial system.1bn should be allowed to enter the sector. 1. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. government stake 50% in insurance companies.Competition: Private Companies with a minimum paid up capital of Rs. 2. Malhotra.

Customer Service: ‡  ‡ LIC should pay interest on delay on payment beyond 30 days. ‡ . GIC and its subsidiaries are not to hold more than 5% in any company. Regulatory Body: ‡ ‡ ‡ The insurance act should be changed. An insurance regulatory body should be set up. Insurance companies must be encouraged to set up unit link pension plans. Controller of insurance-a part of the Finance Ministry ² should be made independent. Investments :  ‡ Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%.

(AIG) Prudential PLC . Inc.THE GLOBAL PLAYERS in Life insurance AVIVA American International Group.

They are among the leading providers of life & pensions products in Europe. ‡ ‡ ‡ . Aviva has a 35 million-customer base worldwide and more than £332 billion of assets under management. The mission of Aviva is: ´to provide prosperity and peace of mind for our customersµ.‡ Aviva is the fifth-largest insurance group of the world & the biggest in the UK.

Aviva products are available in 392 towns & cities across India.‡ Aviva was the first foreign insurance company in India to set up its representative office in 1995. Aviva has 112 Branches in India. In India Aviva has a joint venture with Dabur. ‡ ‡ ‡ ‡ . Annual sales turnover is over Rs.12 billion.

[eg.whole life insurance(life long)] ‡Good products to offer. ‡ It has been among the 1st to introduce the more modern Unit Linked Products in the market. .‡ Provides value for money ‡ Flexibility ‡ Transparency.

AIG companies are the largest underwriters. AIG companies are the largest underwriters of commercial & industrial insurance. A major focus of AIG's insurance business model is the concept of an underwriting profit.‡ AIG is the world's leading international insurance & financial services org. AIG American General is a top-ranked life insurer. ‡ ‡ ‡ ‡ . In the United States.S. with operations in more than 130 countries & jurisdictions. retirement savings.AIG also has one of the largest U.

Inc The Tata AIG General Insurance company·s offers a complete range of insurance solutions The Tata AIG ¶s product innovation The rural difference The enhancement of distribution channels ‡ ‡ ‡ ‡ .‡ Tata AIG General Insurance company is a joint venture between the Tata Group & American International Group.

‡ Reaching out to the customer through a number of distribution and communications channels ‡ Providing advice to the customer . ‡ Increasing Awareness Levels of Consumers ‡ Enhanced Service Standards. ‡ Customer-Centric Products.‡ Innovative Offers.

insurance. ‡ ‡ ‡ € . to institutional fund management and property investments . In the UK Prudential is a leading life & pensions provider with around 7 million customers.‡ Prudential PLC is an international financial services company. pensions and retail investments. It is Asia·s leading European life insurer with life and fund management operations in 12 countries serving some seven million customers. It has a product range of personal banking.

000 advisors. For the past four years. ICICI Prudential has retained its position as the No. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000.‡ ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank & Prudential PLC. as well as 7 banc assurance and 150 corporate agent tie-ups. ‡ ‡ € ‡ . 1 private life insurer in the country. The company has a network of about 56.

Reasons for Growth Lucrative offers High standard service Customer-centric products Good communication techniques Use of customer feedback in improvement of offers € € € € € .

To spread life insurance much more widely and in particularly in rural area. . € Before the formation of LIC there where 245 Indian and foreign insurers in India. OBJECTIVES: € € To maximize mobilization of peoples savings by making insurance linked saving adequately attractive. providing them with insurance at reasonable price and adequate finance cover. of India and has the sole mandate of conducting life insurance business in India.FORMATION: € Insurance corporation LIC was formed in September 1956 by an act of parliament € LIC was formed with the capital contribution of 5 crores from the govt.

. Mauritius. € € € € . In 1997. 2048 branches(1370cities). 7 Zonal offices and 1 Central office.K. LIC had spread to the farthest corners of the country with an extensive network of over 8 lakh agents.5 billion The rural India accounting for around 40% of the business. In U. 100 Divisional office. & Fiji. 3.78 billion of new business in 1957 to Rs 555. LIC has branch offices in U.K.€ LIC has come a long way since its nationalization in 1956 over 40 years later in 1997 LIC had grown from Rs.

LIC·s Game Plan: ³LIC IS TO BE IDENTIFIED AS AN EPITOME OF CUSTOMER CARE AND CONCERN IN THE ENTIRE SERVICE INDUSTRY´ -Chairman G N BAJPAI The IT initiative € The company. including that of the railways . That will make it the biggest network in the whole country. has invested over Rs. € LIC now plans to increase the MAN to 33 more Cities by the end of the year so that they have 4 I cities on the WAN. 400 crore in technology up gradation.

IIM Ahmedabad for fine-tuning its investment skills & IIM Bangalore for polishing its IT skills. Derive 60% of its new business from rural areas The corporation will soon go in for restructuring and is talking with leading management institutes such as the IIM of Lucknow for brushing up its marketing skills.€ € € € Premium payment facility through internet. € . smart card. credit card Tie up with banks for payment of premium through ATM¶S Market focus initiative Launching schemes for the rural areas designed to meet their requirement.

North America was the most important region with premium income of $1.7% reached $3.6 billion during the first half of 2007.5 %.) The United States & Japan alone accounted for a half of world insurance premiums.2 billion.198 billion) & Japan (at $492 billion. Followed by the EU (at $1. to $30.217 billion in 2006.3 trillion by 2006. or 5.    . The profits of property and casualty insurance industry actually rose by $3.  Global insurance premiums grew by 9.

 The volume of UK insurance business totaled $295 billion or 9. The ISO results indicate a growth rate in net written premiums of just 0.1 % increase in premium growth. The 0.1% of global premiums by 2006. if maintained through 2007.7 % increase during calendar year 2006. Emerging markets accounted for over 85% of the world¶s population but generated only 10% of premium.1 % during the first half of 2007. would represent the lowest growth rates for the during the past 40 years.  € € . down substantially from the 2.

€ The property/casualty and life insurance industry will not be materially affected by credit market developments. A small number of P/C insurers provide insurance on the creditworthiness on mortgage-backed securities. The loss ratios for the credit insurance products of these companies are likely to rise due to increased delinquencies and defaults. insurers generally limit themselves to the low-risk end of the investing universe. Because both by law and by the nature of their business. € € € .

these developments do not appear poised to adversely affect the insurance industry¶s ability to pay its claims and continue to have financially successful operations. Of course some companies will be affected more than others. € € € . so that the experience of this line of business is.€ At least half of these companies are parts of larger financial services groups. a small part of their overall operations. But for now. it is much too early to estimate the dimensions of the claims experience that may emerge from the recent credit market developments. for them. and the depth and length of the credit market ³challenges´ might be more adverse than many experts currently foresee . As such.

.

00 .00 Max New York Life Tata AIG Aviva 39.00 90.00 124.] ICICI Prudential Bajaj Allianz SBI Life HDFC Standard 70.00 271.Cr.00 48.€ € € € € € € € € Insurers Premium[Rs.00 Reliance Life 33.00 69.

72 .00 19.00 y Kotak Mahindra Old Mutual y ING Vysya y Met Life y Shriram Life y Sahara Life y Bharti Axa Life 26.y Birla Sunlife 28.70 0.00 22.50 1.00 4.

97 % of the market.premium income rising 84. ICICI Lombard .4.new premium 36 % to Rs 448 crore .€ € € € € ICICI Prudential .28 % € ICICI Lombard .the second-largest non-life insurance player.3 % growth in business at Rs 407 crore & 12.collected Rs 124 crore .15 % market share. United India . € € Oriental Insurance premium collection at Rs 413 crore & a market of 13. .16 %.5 % to Rs 271 crore 9.16 % general insurance industry grew 16 % in April. retained its number one slot by cornering 20.a market share of 14.72 % of market share. New India . Bajaj Allianz .With 8 % growth in premium collection at Rs 651 crore. in business .08% market share.

the largest number of life insurance policies in force. 450 billion (US$10 billion). € € .€ € € € The potential of the Indian insurance industry is huge. It has an annual growth rate of 15-20% & «.. Total value of the Indian insurance market (2004-05) is at Rs. Insurance & Banking Services¶ contribution to the country's gross domestic product (GDP) is 7% The funds available with the state-owned Life Insurance Corporation (LIC) for investments are 8% of GDP.. HOW??? «.

€ The year 1999 saw a revolution in the Indian insurance sector------the ending of government monopoly -----the passage of the Insurance Regulatory and Development Authority (IRDA) Bill ³A foreign partner can hold 26% equity in an insurance company. 8. € € . but there was a proposal to increase this limit to 49%.7 billion have poured into the Indian market & 21 private companies have been granted licenses. Foreign investments of Rs.

LIC Growth ² 21.87% PLAYERS PRIVATE Growth ² 129% Earned ² Rs.07% 75% Earned ² Rs.86 billion[04-05] Sold ² 2.4 billion policies Market share ² 87.55.57 billion[04-05] Against Rs.29 billion [03-04] Market share ² 13% 22% 24% .197.04% 78.24.

€ € € € .India's insurance sector to see 500 per cent growth by 2010: Study € India's insurance sector .¶ said Assocham president Anil K Agarwal He said the study had revealed that rural & semi-urban India would contribute 35 billion dollars to the Indian insurance industry by 2010.life insurance 10 billion dollars. the study by the Associated Chambers of Commerce and Industry (Assocham) said. 'A large part of rural India is still untapped due to poor distribution. life insurance 15 billion and non. The study added that the urban sector insurance was estimated to reach 25 billion dollars by 2010. large distances & high costs relative to returns.500 % growth over the next three years 60 billion-dollar industry by 2010 India's more than one billion people are uninsured.

.

€ € € € € € When was LIC formed? What are the objectives of LIC? How does LIC functions? What mission and vision do you practice? How do you address to customers grievances? Any significant achievement you would like to mention? .

Jobs in insurance involve helping individuals and business manage risk to protect themselves from catastrophic losses and to anticipate potential risk problems. € € Insurance brokers and agents Claims handlers [are responsible for investigating incidents and paying claims. They decide the extent and validity of the claim] Underwriters [assess risks and decide whether to accept applications for insurance cover .and on what terms] € .

Insurance can be summed up as ´Praying for the best « «being PREPARED for the WROSTµ. .

? .