1. 2 3 4 a good time to look back 5 total premium (inr bn) penetration (as a % to gdp) new business...
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A good time to look backA good time to look back
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Total premium (INR Bn)
Penetration (as a % to GDP)
New business premium1 (INR Bn)
Number of players
FY2014
24
454
3,141
FY2002
12
116
501
2.1%
28.7%
26.1%
Source: IRDA, Public disclosures, Life insurance council, Company estimates
IndiaIndia life insurance growth life insurance growth
storystory
Assets under management (INR Bn)
20,0692,304 24.3%
1. Retail weighted premium
FY2008
18
527
2,014
8,477
-2.4%
7.7%
15.4%
4.0% 2.8%
Sum Assured to GDP continues to be less than 50%
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Agency channel
Multi product portfolio: ULIP, Traditional, Health etc.
A transformative periodA transformative period
Multi channel distribution:Bancassurance, brokers, online & proprietary sales
Traditional products
Service delivery through Branches or Agents only
Technology driven service delivery: Call centers, e-mail, SMS, website and smart phone
FY
2000
FY
2014
Physical, document heavy process
Smoother, digitized process with reduced paper work
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Leading to a more holistic appreciation of Leading to a more holistic appreciation of
insuranceinsurance
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Rise in all perceived benefits of Rise in all perceived benefits of
insurance insurance
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Protect my family in case of my untimely death For my child's FutureFor my old ageRegular savings Good returns
Safety of my money
Another avenue of savings
Save tax
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Have we sold the concept of Human Have we sold the concept of Human
Life Value?Life Value?
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Have we focused adequately on Have we focused adequately on
Pensions?Pensions?
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Need for a robust pension systemNeed for a robust pension system
71% of India’s working population does not have access to a reliable post-retirement financial
support system
NSS RoundTotal
employement% age of formal sector workers
% age of informal sector workers
55th round (1999-00) 396.8 13.66% 86.34%
61st round (2004-05) 457.5 13.66% 86.34%
66th round (2009-10) 459.0 26.71% 73.29%
68th round (2011-12) 472.9 28.86% 71.14%
Numbers in million
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Large potential for pension market in Large potential for pension market in
India India
90.95 88.68
72.6766.97 64.66
9.78 7.95.18 4.57
0
10
20
30
40
50
60
70
80
90
100
Australia UK US Chile Canada India Spain Germany Italy
1. Source: OECD statistics, autonomous funds as % of GDP, 2010
Retirement assets as % of GDP
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Pension market size: Organised Pension market size: Organised
sectorsector
Assets in Provident Funds 1 INR 5,000 bn
Gratuity / Superannuation Funds 2 INR 860 bn
Annuities/ pension fund with insurers 3 INR 1,900 bn
NPS – government sector 4 INR 210 bn
NPS – All citizens4 INR 7 bn
1. including EPFO, exempt PFs and PPF; Source: EPFO Annual report 2010-11, market intelligence2. Source: LIC data & internal estimates3. Source: IRDA Annual report 2010-11 * Not including unit linked pension funds4. National Pension Scheme - Source: September 2012
Organised sector pension assets are over INR 8,000 bn
Have we sold right?Have we sold right?
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What a customer seeksWhat a customer seeks
TransparencyTransparency
FlexibilityFlexibility
Simple ProductSimple Product
Comfort of protectionComfort of protection
• Payment flexibility• Liquidity options
• What do I pay and what do I get?
• Protection of financial risk• Protection of mortality risk
• A product that can be understood
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• X% returns*…..(* of your Sum Assured)
How the industry soldHow the industry sold
TransparencyTransparency
FlexibilityFlexibility
Simple ProductSimple Product
Comfort of protectionComfort of protection
• Pay only for 3 years• Withdraw your money after 3 years
• Minimum life cover• Projection of past fund returns
• Terminal Bonus, Vested Bonus, Reversionary bonus, Simple bonus, Compound bonus…
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The result: When the economy had The result: When the economy had
a downturn…..a downturn…..
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The industry bore the The industry bore the
brunt…..brunt…..
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And leading to insurance not being seen as And leading to insurance not being seen as
a long-term producta long-term product
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1313thth month persistency: Lower than Asian month persistency: Lower than Asian
peerspeers
Source: IRDA data on industry 13th month persistency
“The 13th month persistency of Indian insurers is much lower compared to their Asian peers”
HSBC Global research report24
Taking stockTaking stock
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A good time to look backA good time to look back
……in order to see aheadin order to see ahead
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Key trends that are shaping our Key trends that are shaping our
futurefuture
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How will these trends How will these trends
shape our industry?shape our industry?
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……Or can we use these trends to Or can we use these trends to
engender more trust amongst our engender more trust amongst our
customers?customers?
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Looking aheadLooking ahead
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Products
Distribution
Risk assessme
nt
Customer engageme
nt
Processes
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Looking aheadLooking ahead
Products
Risk assessme
nt
Customer engageme
nt
Processes
• Flexible structure
• Yet easy to understand
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Distribution
Products
Risk assessme
nt
Customer engageme
nt
Processes
• Leverage information across ecosystem
• Segmented underwriting
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Distribution
Products
Risk assessme
nt
Customer engageme
nt
Processes
• Increasing use of Social Media platforms
• Usage of analytics to anticipate customer requirements
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Distribution
Products
Risk assessme
nt
Customer engageme
nt
Processes
• Less physical, more digital
• Distributor as mobile branch
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Distribution
Products
Risk assessme
nt
Customer engageme
nt
Processes
• Choice of channel with customer
• Smart identification of prospects using Data analytics
• Use of technology to sell effectively
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Distribution
Products
Risk assessme
nt
Customer engageme
nt
Processes
Implication?
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Distribution
More InnovationMore Trust
More consumers
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Looking aheadLooking ahead
Net Insurance inflow
Gross financial savings
Nominal GDP
FY 2020E*
4.62
27.16
262.65
15% CAGR
FY 2014
2.00
113.55
11.74
Amounts in INR trillion
15% CAGR
15% CAGR
Source: RBI, CSO*Company estimates
Assets under management
Penetration (as a % to GDP)
61.7920.07
21% CAGR
4.0%2.8%
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Looking aheadLooking ahead
Net Insurance inflow
Gross financial savings
Nominal GDP
FY 2020E*
4.62
27.16
262.65
15% CAGR
FY 2014
2.00
113.55
11.74
Amounts in INR trillion
15% CAGR
15% CAGR
Source: RBI, CSO*Company estimates
Assets under management
Penetration (as a % to GDP)
61.7920.07
21% CAGR
4.0%2.8%Amongst the Top 7 insurance markets globally
by 2020
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Along the way we encountered a few
bumps
Along the way we encountered a few
bumps
Keeping the Customer at the core…
Keeping the Customer at the core…
We are ready to switch gears
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