Ppt of Insurance 2

8/4/2019 Ppt of Insurance 2

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Introduction:

Insurance = Collective bearing of Risk. Basic Human trait is to be averse to the idea

of risk taking.

Insurance, whether life or non-life, providespeople with a reasonable degree of security

and assurance that they will be protected in

the event of a calamity or failure of any sort.


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Factorsaffecting

service

sector

Five environmental variables that affect all

industries-

Customers

Competitors

Government

Technology and

Globalization -are forcing rapid changes in theservice sector.

In addition, there are four factors of particular

importance to service providers-

change in how quality is perceived

cost control

customer services and

the new definitions of the customer.


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DIVISION OF INSURANCE SECTOR

INSURANCE

GENERAL INSURANCE

FIREINSURANCE

MARINEINSURANCE

MEDICLAIMMOTORVEHICAL

LIFEINSURANCE


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Till end of FY 1999-2000, two state-run insurance

companies, namely, Life Insurance Corporation (LIC)

and General Insurance Corporation (GIC) were the

monopoly insurance providers in India. Under GIC there were four subsidiaries

National Insurance Company Ltd.

Oriental Insurance Company Ltd.

New India Assurance Company Ltd.

United India Assurance Company Ltd.

ORIGINANDGROWTHOFINSURANCESECTOR:


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In fiscal 2000-01, the Indian federal governmentlifted all entry restrictions for private sector

investors.

Foreign investment insurance market was also

allowed with 26 percent cap.

GIC was converted into India's national reinsure

from December, 2000

All the subsidiaries working under the GICumbrella were restructured as independent

insurance companies.

ORIGINANDGROWTHOFINSURANCESECTOR:


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Milestones in GIC

107 insurers amalgamated and grouped intofour companies viz.:

The National Insurance Company Ltd. The New India Assurance Company Ltd.

The Oriental Insurance Company Ltd.

The United India Insurance Company Ltd. GIC incorporated as a company.


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Contributors

Life Insurers:

Allianz Bajaj Life Insurance Co. Ltd.

AMP Sanmar Assurance Co. Ltd.

Birla Sun Life Insurance Co. Ltd. Dabur CGU Life Insurance Company Pvt. Ltd.

HDFC Standard Life Insurance Co. Ltd.

ICICI Prudential Life Insurance Co. Ltd.

ING Vysya Life Insurance Co. Pvt. Ltd. Life Insurance Corporation of India.

Max New York Life Insurance Co. Ltd.

Metlife India Insurance Co. Pvt. Ltd.

Om Kotak Mahindra Life Insurance Co. Ltd.

SBI Life Insurance Co. Ltd.

Tata AIG Life Insurance Co. Ltd.


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Contributors

Non-Life Insurers:

Bajaj Allianz General Insurance Co. Ltd.

ICICI Lombard General Insurance Co. Ltd.

IFFCO Tokyo General Insurance Co. Ltd.

National Insurance Co. Ltd.

New India Assurance Co. Ltd.

Oriental Insurance Co. Ltd. Reliance General Insurance Co. Ltd.

Royal Sundaram Alliance Insurance Co. Ltd.

Tata AIG Life Insurance Co. Ltd.

United India Insurance Co. Ltd

Reinsurers:

General Insurance Corporation of India.


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Contribution to growth:

Currently, the insurance sector size is estimated

at Rs.500 billion.

On account of intense marketing strategiesadopted by private insurance players, the

market share of state owned insurancecompanies like GIC, LIC and others have comedown to 70% in last 4-5 years from over 97%.

The private insurance players despite the sector

is still regulated has been offering rate of return(RoR) to its policy holders which is estimated atabout 35% as against 20% of domestic insurancecompanies.


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Contribution to growth:

LIC and GIC have limited number of policies to

offer to their subscribers

Private insurance companies offer many policiesand the premium amount as well as the

maturity period is much competitive as againstthose of government insurance companies.

The private sector insurance players havestarted exploring the rural markets in which

until recently, the state owned companies hadthe monopoly.

Indias life insurance premium, as a percentageof GDP is 1.8%


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Future of the Sector:

Indian insurance sector is likely to register

unprecedented growth of 200% and attain a size ofRs. 2000 billion by 2009-10

A private sector insurance business will achieve agrowth rate of 140% as a result of aggressivemarketing technique being adopted by them

against 35-40% growth rate of state ownedinsurance companies.

In rural markets, the share of private insuranceplayers would increase substantially as these have

been able to generate a faith among their ruralconsumers.


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Insurance Sector - Emerging

Areas: Demand for Pension Plans

Two relatively modern trends affect life insurancebusiness in India significantly:

Joint Family System and

elderly are increasingly having to fend for

themselves Separateness of Banking and Insurance

Bancassurance

Role of Information Techno-logy

Using Postal Network Creating Insurance awareness

Innovative Products


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CHANGE IN TRENDS

FROM PRICE POINT OF VIEW

DIFFERENT COMPANIES ARE PROVIDING POLICES OF

INSURANCE AT COMPETETIVE PRICES

EVEN THE ALLOCATION CHARGES UNDER POLICIES IS

ALSO DECREASED THE INSURANCE AGENT COMISSION IS ALSO FIXED

AAND REDUCED SO THAT THE CUSTOMER CAN GET THE

BEST.


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FROM CUSTOMER AND SERVICE

POINT OF VIEW

Globalization - "The Dynamic Force"

MNCs - "The New Path Maker"

More customer oriented Mostly better service oriented

More competitive

Better satisfaction More value addition

Strategic development


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FROM PROMOTION POINT OF VIEW

Computerization

Internet

Electronic Clearance Service (ECS) Call Centres and SMS services


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INDIAN INSURANCE IN 21ST CENTURY

2000: IRDA starts giving licenses to private insurers: ICICI prudential and

HDFC Standard Life insurance first private insurers to sell a policy 2001: Royal Sundaram Alliance first non life insurer to sell a policy

2002: Banks allowed selling insurance plans. As TPAs enter the scene,insurers start setting non-life claims in the cashless mode

2007: First Online Insurance portal, https:/// set up by an Indian InsuranceBroker, Bonsai Insurance Broking Pvt Ltd.

The Government of India liberalized the insurance sector in March 2000with the passage of the Insurance Regulatory and Development Authority(IRDA) Bill, lifting all entry restrictions for private players and allowingforeign players to enter the market with some limits on direct foreignownership.

Minimum capital requirement for direct life and Non-life Insurance

company is INR1000 million and that for reinsurance company is INR 2000million. In the 2004-05 budgets, the Government proposed for increasingthe foreign equity stake to 49%, this is yet to be effected. Under thecurrent guidelines, there is a 26 percent equity cap for foreign partners indirect insurance and reinsurance Company


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