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INSURANCENovember 2010

2
Contents
INSURANCE November 2010
Advantage India
Market overview
Policy and regulatory framework
Opportunities
Industry associations

3
Advantage India
Advantage
India
Young consumer segment
with increasing
disposable income
India is among the world's youngest nations, with a median age of 25 years as compared to 43 in Japan and 36 in the US. This,
coupled with the increasing disposable income and growing demand for personal financial security indicate a promising future for
the insurance industry.
Mode of
infrastructural
development
In 200809, the total investments by
the insurance industry in
infrastructure have grown to
US$202.9 billion as against US$170.5
billion in 200708. Investments by
life and non-life insurers increased by
20.2 per cent and 4.6 per cent
respectively.
Mode of
employment
The life insurance sector employed 0.3 million people directly and 2.9 million people as individual agents in 200809.
Risk management
for strategic
advantage
The transition from Solvency I
norms to Solvency II norms by
2012 is going to improve risk
management capabilities of
insurance companies.
Rising
contribution to
GDP
Premium income as a
percentage of GDP has
increased from 3.3 per cent in
200203 to 7.6 per cent in
200809.
Sources: Other Business Figures -2009, Life Insurance Council website, www.lifeinscouncil.org, accessed 25 November 2010;
Indian Insurance Sector: Stepping into the next decade of growth, EY CBK, September 2010, via RAD
Wide range of
insurance
products
available
Insurance companies are
providing a wide range of
products to meet the diverse
requirements of the Indian
population. Insurance
companies are coming up with
~300 different types of
products each year.
ADVANTAGE INDIA
Insurance November 2010
http://www.lifeinscouncil.org/

4
Advantage India
Market overview
Policy and regulatory framework
Opportunities
Industry associations
INSURANCE November 2010
Contents

5
Market overview
The insurance industry in India is at an early stage with low penetration and high potential.
The total premium of the insurance industry has grown at a compound annual growth rate (CAGR) of 24.6 per cent from 200203 to 200809 to reach US$52.6 billion in 200809.
As on November 2010, the number of insurance players has increased to 23 and 25 in life and non-life sectors, respectively, from 4 and 8, respectively, in 2000.
Source: Annual reports FY0809, Insurance Regulatory and Development Authority website, www.irdaindia.org, accessed 25 November 2010
2.4 3.2 3.7 4.3 5.2 5.8 6.411.6 13.8
17.322.1
32.541.9
46.2
14.0%
21.7%22.7%
25.8%
43.3%
26.6%
10.1%
0%
10%
20%
30%
40%
50%
0
10
20
30
40
50
60
2003 2004 2005 2006 2007 2008 2009
y-0-y gro
wth
Non-life insurance premium Life insurance premium Growth rate
US$
bill
ion
MARKET OVERVIEW
Growth in total insurance premium
http://www.irdaindia.org/

6
Public (1 player)Private (22
players)Public (7 players)
Private (18
players)
Ministry of Finance
(Government of India)
The entry of
private sector
players has added
diversity to the
product portfolio
of the life insurance
industry.
Life Insurance
Corporation of India
(LIC) is the only
public sector life
insurance company.
The company held
about 71 per cent of
the life insurance
market share in
200809.
Most players have
experienced
growth by
formulating
aggressive growth
strategies and
capitalising on their
distribution
network to target
the retail segment.
Private sector non-
life insurance
players outperform
their public sector
counterparts in
service quality.
Life insurance (23 players) Non-life insurance (25 players)
Market structure
Insurance Regulatory and
Development Authority (IRDA)
MARKET OVERVIEW
Source: Insurance Regulatory and Development Authority website, www.irdaindia.org, accessed 25 November 2010

7
Overview of the life insurance segment (1/2)
Sources: Annual report FY08-09, Insurance Regulatory and Development Authority website, www.irdaindia.org, accessed 25 November 2010;
Life Insurance Council website, www.lifeinscouncil.org, accessed November 2010
Premium income has grown at a CAGR of 25.8 per cent between 200203 and 200809.
The number of policies issued grew at a CAGR of 12.3 per cent between 200203 and 200809.
There are 23 players, 1 from the public sector and 22 from the private sector, as of November 2010.
There is increased insurance penetration due to a growing consumer class, rising insurance awareness and increasing domestic savings and investments.
0.2 0.7 1.6 3.1 5.910.7 13.411.4 13.2
15.718.9
26.6
31.232.8
11.3%
18.9%25.0%
27.8%
47.4%
29.0%
10.2%
0%
10%
20%
30%
40%
50%
0
10
20
30
40
50
2003 2004 2005 2006 2007 2008 2009
y-o-y gro
wth
Gross premium of life insurance sector
Private sector Public sector Growth rate
MARKET OVERVIEW
US$
bill
ion
http://www.irdaindia.org/http://www.lifeinscouncil.org/

8
Sources: Annual report FY08-09, Insurance Regulatory and
Development Authority website, www.irdaindia.org, accessed 25
November 2010
Currently, a wide range of Group insurance products life insurance products and Individual insurance products are available.
Amongst private players ICICI Prudential, Bajaj Allianz and SBI Life are the top players. LIC is the only public company. DLF Pramerica, AEGON Religare and IndiaFirst Life Insurance Company are amongst the new players.
70.9%
6.9%4.9%
3.3%
2.5%2.1%2.2%
1.7%
5.6%
LIC
ICICI Prudential
Bajaj Allianz
SBI Life
HDFC Standard Life
Birla Sunlife
Reliance Life
Max New York
Others
MARKET OVERVIEW
Overview of the life insurance segment (2/2)
Market share (200809)

9
Overview of the non-life insurance segment (1/2)
Premium income grew at a CAGR of 17 per cent between 200203 and 20092010.
As of November 2010, there are 25 players, out of which 7 are public sector players (including one reinsurer) and 18 private sector players.
Segments covered include auto, health, fire, marine and engineering.
0.2 0.5 0.71.1 1.8
2.3 2.6 3.02.22.8 2.9
3.13.4
3.53.8
4.329.4%
35.0%
12.7%16.2%
22.4%
11.3% 10.0%13.5%
0%
10%
20%
30%
40%
0
1
2
3
4
5
6
7
8
2003 2004 2005 2006 2007 2008 2009 2010
y-o-y gro
wth
Gross premiums of non-life insurance sector
Private sector Public sector Growth rate
Sources: Annual report FY08-09, Insurance Regulatory and Development Authority website, www.irdaindia.org, accessed 25 November 2010;
General Insurance Council website, www.gicouncil.in, accessed November 2010
MARKET OVERVIEW
US$
bill
ion
http://www.irdaindia.org/http://www.gicouncil.in/

10
Overview of the non-life insurance segment (2/2)
Product trends:
Auto insurance had the largest share in the non-life insurance segment in 20092010 (43.5 per cent).
Health segment recorded a share of 20.8 per cent in 20092010, having grown at a CAGR of 33.6 per cent over 200506.
Public sector companies have a dominant share in the marine insurance segment.
5.2%
4.3%
8.6%
6.6%
15.8%
12.1%
13.6%
12.4%
21.6%
Reliance General
IFFCO-Tokio
ICICI-lombard
Bajaj Allianz
New India
National
United India
Oriental
Others
Sources: Annual report FY08-09, Insurance Regulatory and Development Authority website, www.irdaindia.org, accessed 25 November 2010
MARKET OVERVIEW
Market share (20092010)

11
Growth drivers (1/5)
Source: Insurance industry: amidst interesting time and the way
forward, EY CBK, September 2009, via RAD
398450
507
572630 676
381 502720
1,028
1,449
2,098
0
500
1,000
1,500
2,000
2,500
0
100
200
300
400
500
600
700
2001 2006 2011 2016 2021 2026
2560 (in million) Projected GDP per capita
There is a high demand for insurance products
due to a growing middle class, increasing
working population, rising household saving

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