3 insurance industry nov 2011
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Submitted byReeturaj Borgohain 168
INDIAN INSURANCE INDUSTRY :
AN OVERVIEW
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Evolution
Services
SWOT Analysis
Insurance companies
The road ahead
OUR AGENDA
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EVOLUTION of
insurance industry
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www.themegallery.com
Oriental Life Insurance Company started functioning
LIC formed by an Act of Parliament, viz. LIC Act
Bombay Mutual Life Assurance Society started its business.
The Indian Life Assurance Companies Act enacted
1818 1870 1912 1956
HISTORY
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www.themegallery.com
The Insurance Act improved for regulating investments
government opened up the insurance sector
The General Insurance Business (Nationalization) Act.
RN Malhotra Committee appointed
1968 1972 1993 1999
HISTORY
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SERVICES
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Insurance
Life Insurance
Term Life Insurance
Permanent Life Insurance
General Insurance
Fire Insurance
Marine Insurance
Mediclaim
Accidental
Motor Vehicle
SERVICES IN INSURANCE SECTOR
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GENERAL
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•Primary Functions1• Secondary Functions2• other Functions3
BASIC FUNCTIONS OF INSURANCE
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Providing
protection
Collective risk bearing
Evaluating risk
Provide Certainty
PRIMARY FUNCTIONS
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Preventing losses
Covering larger risks with small capital
Helps in the
development of larger
industries
SECONDARY FUNCTIONS
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savings and investment tool
Medium of earning foreign exchange
Risk Free trade
indemnity or reimbursement
OTHER FUNCTIONS
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INTE
RNA
L FA
CTO
RSIN
TERN
AL
FACT
ORS
EXTE
RNAL
FAC
TORS
EXTE
RNAL
FAC
TORS
STRENGTHSSTRENGTHS WEAKNESSESWEAKNESSESSW
O
1.large population 2. increase in its per capita income3. middle income is rapidly increasing 4. new products had been launched
1.India’s improving economic fundamentals2. Strong growth can be sustained for 30–40 years 3. there is plenty of room for growth
HARMFULTo achieving the objectives
HARMFULTo achieving the objectives
HELPFULTo achieving the objectives
HELPFULTo achieving the objectives
1.the lowest-spending nations in Asia2. the public sector Domination3. Share of foreign investment low
T1.Natural catastrophes2. Floods3.Storm4. Earthquake
OPPORTUNITIESOPPORTUNITIES THREATSTHREATS
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84%
number of lives covered under group single premium
LICreliance lifesbi lifetata aigHDFCICICIKotak Mahindramax newyorkshriram lifebajaj
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63%
Individual single premium
LICICICISBI lifeHDFCRelianceBajaj allianzothers
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245 companies
Rs. 5 crores
1956
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19565 crores
1993 200 crores
20101,83,233 crores
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2010Rs.867,935 crores
2009Rs.717,002 crores
Total value of its investments from policy holders funds
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LIC has clocked arobust 72.53 % jump in fresh premium collection in January 2009
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LIC
SBI L
ife
ICICI Pru
dential
Bajaj A
llianz
HDFC St
andard
0
10000
20000
30000
40000
50000
60000
70000
80000
2008-092009-2010
TOP 5 INSURANCE PLAYERS IN NEW BUSINESS
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Sovereign Guarantee
Distribution network
Other factors
LIC DOMINATION IN INSURANCE INDUSTRY
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3rd most attractive FDI destination
Presently FDI has 26% share
The proposal to hike that figure to 49%
FDI IN INSURANCE
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The road ahead
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Life insurance covers
only 3% of the Indian population
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Indian insurance market is the
19th largest globally and ranks
5th in Asia
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In the next 3 years, health insurance is poised to become the second largest business for non-life insurers after motor insurance
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Home insurance sector is likely to
achieve a 100% growth
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Regulations
• Investment regulation• Less invasive regulations
pricing• Risk differentiated pricing
structure• Price liberalization
Untapped Market• Private pension market• Foreign reinsurance
SUGGESTIONS
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Thank you