INSURANCE
SECTOR
INRODUCTION
INSURANCE=Collective bearing of Risk.
Equitable transfer of a potential loss in exchange for a
premium.
Basic Human trait is to be averse to the idea of risk taking.
provides people with a reasonable degree of security and
assurance.
Insurance rate- determine the premium.
Risk management-appraising & controlling RISK.
ORIGIN AND GROWTH OF INSURANCE
Originated in the Mediterranean during 13th century.
Marine insurance -oldest form followed by life
insurance and fire insurance .
History of life insurance in India dates back to 1818
conceived as a means to provide for English Widows.
A higher premium was charged for Indian lives than
the non-Indian lives.
TYPES OF INSURANCE
Life Insurance
Non-Life Insurance(General Insurance)
→Property([Link] risk insurance)
→Aviation([Link] aircraft insurance)
→Marine([Link] hull insurance)
→Miscellaneous([Link] insurance)
Life Insurers: .
ICICI Prudential Life Insurance [Link].
Birla Sun Life Insurance [Link].
HDFC Standard Life insurance [Link].
Life Insurance Corporation of [Link]..
Non-Life Insurers:
Bajaj Allianz General Insurance [Link].
ICICI lombard General Insurance [Link].
New India Assurance [Link]…
LIFE INSURANCE CORPORATION
FORMATION:
formed in SEPTEMBER 1956.
with a capital of 5 crores.
before there were 245 Indian and Foreign insurers in India.
OBJECTIVES:
maximize mobilization of people’s savings.
spread life insurance widely and particularly in rural areas.
Reasons for Growth
LIC’s Game Plan:
“LIC IS TO BE INDENTIFIED
AS AN EPITOME OF CUSTOMER CARE AND
CONCERN IN THE ENTIRE SERVICE INDUSTRY ”
The Customer Focus Initiative
Premium payment facility – internet,smart card,credit card.
Tie-ups with banks
Market focus initiative.
Launching schemes for the rural areas.
IIM lucknow - brushing up marketing skills.
IIM Ahmedabad - fine-tuning investment skills.
IIM Bangalore – polishing IT skills.
CONTRIBUTION TO GROWTH:
the insurance sector size is estimated at Rs.500 billion.
private insurers lowering the market share of State owned insurance co.s(GIC,LIC etc.)
from 97% to 70%.
private insurance players offering ROR to its policy holders at about 35% as against
20% of domestic insurance co.s
LIC & GIC-limited number of offers.
Private insurance co.s – many policies
-much competitve premium amount & maturity period
-started exploring the rural markets,where the state owned
co.s had the monopoly.
• India’s life insurance premium ,as a percentage of GDP is 1.8%.
FUTURE OF THE SECTOR :
Indian insurance sector is likely to register unprecedented growth of
500% and attain a size of 60 billion-dollar industry by 2012.
According to Assocham, India’s <one billion people-uninsured.
Large part of rural India is untapped due to-poor distribution,large
distances & high cost relative to returns.
Rural & semi-urban India -contribute 35 billion dollars by 2012.
A private sector insurance business will achieve a growth rate of 140%
as a result of aggressive marketing technique being adopted by them
against 35-40% growth rate of state owned insurance companies.
INSURANCE SECTOR- EMERGING AREAS:
Demand For Pension plans
Bancassurance
Role of IT
Using POSTAL Network
Creating INSURANCE Awareness
INNOVATIVE Products
RECCOMENDATION
STRUCTURE
Govt. should takeover the holdings of GIC & its subsidiaries.
Greater freedom to operate.
COMPETITION
Allow Private Co.s with paid up capital of Rs.1bn.
No single entity for both Life & General insurance.
Allow Postal life insurance in the rural market.
Allow only ONE State level life insurance company in each state.
Contd…
REGULATORY BODY
Insurance act should be changed.
Reduction of mandatory investment of LIC life fund in govt. securities from 75% to 50%
GIC & its subsidiaries not to hold more than 5% in any company
CUSTOMER SERVICE
Payment of interest on delays beyond 30 days
Set up of unit linked pension plan
Better computerization of operations & updating of technology
BIBLIOGRAPHY
[Link]
[Link]
Reference Books
[Link],TMH Publications
Majumdar.P.I & M.G Diwan,Principles of
Insurance
SUBMITTED BY
SIPRA KAMAL-mba/1066/09
.
THANK YOU