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MEANING Insurance, in general terms refers to the practice of guaranteeing a sum of money to the owner or possessor of a valuable asset for a limited period of time, to cover the cost of any damage to that asset arising out of any contingency. In the process of insurance there must necessarily be two parties Insurer Insured
REGULATORY ACTS
The Insurance sector is Governed by a number of Acts The Insurance Act, 1938 The Life Insurance Corporation Act, 1956 The General Insurance Business (Nationalization) Act, 1972 The Insurance Regulatory and Development Authority Act, 1999
HISTORY
Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. 1907: The Indian Mercantile Insurance Ltd. set up, the firstcompany to transact all classes of general insurance business . The General Insurance Business (Nationalisation) Act, 1972 nationalised the general insurance business in India with effect from January 1, 1973. The 107 private insurance companies were amalgamated and grouped into four companies: 1 -National Insurance Company, 2 -New India Assurance Company, 3 -Oriental Insurance Company and 4 -United India Insurance Company.
GROSS DOMESTIC PROUCT life insurance account to 2.5% and General insurance account to 0.65% of India's GDP in term of premiums Insurance penetration of insurance in India The life insurance penetration in India increased from 1.77 per cent in 2000 to 4.10 per cent in 06-07, before declining to 4.0 per cent in 07-08. The general insurance penetration increased from 0.55 per cent in 2000 to 0.60 per cent in 06-07 and remained at the same level in 07-08. Life insurance premium per capita in India The life insurance density which is premium per capita in US$ terms stood at US$ 40.4 in 07-08 as against US$ 33.2 in 2006-07 The general insurance density was, however, lower at US$ 6.2 in 07-08 as against (US$ 5.20 in 06-07 ).
1- key players in Life Insurance market Public Sector: 1- Life Insurance Corporation (LIC) of India, Private Sector: 1- Bajaj Allianz, 2- SBI Life, 3- Tata AIG Life, 4- HDFC Standard, 5- ICICI Prudential Life Insurance, 6- Birla Sunlife, 7- Aviva Life Insurance, 8- Kotak Mahindra Old Mutual 9- Max New York Life 10- Met Life. 11- DLF Pramerica Life Insurance Co. Ltd 12- IDBI Fortis Life Insurance Company Ltd. 13- Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd. 14-.Aegon Religare Life Insurance Company Ltd 15- Shriram Life Insurance Company Ltd 16- Bharti Axa Life Insurance Company 17- Future Generali India Life Insurance Company Ltd.
Public Sector 1-National Insurance Co. Ltd, 2-Oriental Insurance Ltd, 3-New India Assurance Co. Ltd 4-United India Insurance Co. Ltd.
Private Sector 1-Bajaj Allianz 2-Cholamandalam 3-Future Generlai 4-HDFC Ergo 5-ICICI Lombard 6-IFFCO-TOKIO 7-Reliance 8-Royal Sundaram 9-Tata AIG 10-Bharti AXA General Insurance Co. ltd 11-Shriram General Insurance Co. Ltd 12-Apollo DKV Insurance Co. Ltd 13-Star Health & Allied Insurance Co. Ltd 14-Universal Sompo
1- Market share of various Life Insurance Companies in India at the end of FY2008
2- Market share of Non- Life Insurance Companies in India at the end of FY2008 Public Sector 60.5% Private Sector 39.5 %
a. Term Life Policy b. Whole Life Policy c. Endowment Policy d. Money-back Policy e. Unit Linked Insurance Plan f. Pension Plan or Annuities
2- There are various types of Non life Insurance Policy India -Segment wise
1 Liability only motor policy 2 Package motor policy 1-Fire Insurance - Standard fire policy 2-Motor Insurance
1 Catastrophic health insurance 2 Short-term health insurance 3 A Preferred Provider Organization (PPO) 4 Health Maintenance Organizations (HMOs) 3-Health Insurance 5 Full-service health insurance
4-Travel Insurance
2 Annual Travel Insurance/Multi Trip Travel Insurance 3 Long Stay Travel Insurance 4 Medical Travel Insurance 5 Cruise Travel Insurance 6 Group Travel Insurance 7 Business Travel Insurance 1 Machinery Breakdown Insurance
5-Engineering Insurance
2 Electronic Equipment Insurance 3 Contractors Plant & Machinery Insurance (CP&M 4 Contractors All Risk Insurance (CAR)5 Boiler and Pressure Vessel Insurance 6 Erection All Risk Insurance (EAR ]-
6-Marine Insurance
1- Marine Cargo Insurance Policy 2-Marine Hull 3-Marine Inland Transit Insurance Policy 4-Marine Export Transit Insurance Policy 5-Marine Import Transit Insurance Policy
7-Home Insurance
Home insurance policy available in the market covers broadly two things: 1- Building structure 2- Contents inside the home
8-Rural Insurance
1-Poultry policy 2-Cattle policy 3-KISAN AGRICULTURAL PUMPSET INSURANCE
INSURER PUBLIC LI C PRIVATE Aviva Bajaj Allianz Bharti Axa Birla Sunlife Future Generali HDFC Std ICICI Pru IDBI Fortis ING Vysya Kotak Mahindra
2008-07
2007-06
2006-05
149789.99
127822.84
90792.22
1891.88 9725.31 118.41 3272.19 2.49 4858.56 13561.06 11.90 1158.87 1691.14
600.27 3133.58
1259.68
2855.87 7912.99
1569.91 4261.05
707.20 971.51
425.38 621.85
Met Life Max New York Reliance Life Sahara SBI Life Shriram Tata AIG [Private ] Total [ LIC+Private ] Total
Total gross premium collected by the general insurance industry up to July was Rs 11,682.61 crore in 08-09 against Rs 10,938 crore in the corresponding period in 07-08 total premium by public general insurers up to July was Rs 6920.64 crore in 08-09 against Rs 6367.70 crore in the corresponding period in in 07-08 private insurers collected Rs 4761.97 crore up to July in 08-09 against Rs 4570.76 crore in 07-08
INSURER PUBLIC LI C PRIVATE Aviva Bajaj Allianz Bharti Axa Birla Sunlife Future Generali HDFC Std ICICI Pru IDBI Fortis ING Vysya Kotak Mahindra
2008-07
2007-06
2006-05
2522
2301
2220
110 567 01 97
448 583
150 175
183 75
68 46
Met Life Max New York Reliance Life Sahara SBI Life Shriram Tata AIG [Private ] Total [ LIC+Private ] Total
INSURER PUBLIC LI C PRIVATE Aviva Bajaj Allianz Bharti Axa Birla Sunlife Future Generali HDFC Std ICICI Pru IDBI Fortis ING Vysya Kotak Mahindra
2008-07
2007-06
2006-05
5.00
5.00
5.00
1004.50 150.71 366.11 1274.50 185.00 1271.00 1401.11 200.00 790.00 480.27
801.26 1312.30
620.00 1185.00
690.00 330.35
490.00 244.58
INSURER PRIVATE
2008-07
2007-06
2006-05
Met Life Max New York Reliance Life Sahara SBI Life Shriram Tata AIG [Private ] Total [ LIC+Private ] Total
12296.42
8124.41
5892.05
NON-LIFE INSURER PRIVATE Bajaj Allianz Cholamandalam Future Generlai HDFC Ergo ICICI Lombard IFFCO-TOKIO Reliance Royal Sundaram Tata AIG Universal Sompo Total (Private Sector)
2008-07
2007-06
2006-05
110.23 141.96 150 150.00 377.36 220.00 107.15 170.00 225.00 150.00 1801.70
110.13 141.96
110.05 141.96
1400.87
1279.01
NON-LIFE INSURER PUBLIC National New India The Oriental United India Total (Public Sector)
2008-07
2007-06
2006-05
Total (Non-Life)
2351.70
1950.87
1779.01
INSURER PUBLIC LI C PRIVATE Aviva Bajaj Allianz Bharti Axa Birla Sunlife Future Generali HDFC Std ICICI Pru IDBI Fortis ING Vysya Kotak Mahindra
2008-07
2007-06
2006-05
1.52
1.50
1.30
4.29 2.34 2.73 2.37 2.94 2.38 1.74 3.45 2.36 2.41
2.80 2.80
2.00
2.05 1.53
2.90 1.60
2.87 1.64
2.30 1.80
INSURER PRIVATE Met Life Max New York Reliance Life Sahara SBI Life Shriram Tata AIG
2008-07
2007-06
2006-05
NON-LIFE INSURER PRIVATE Bajaj Allianz Cholamandalam Future Generlai HDFC Ergo ICICI Lombard IFFCO-TOKIO Reliance Royal Sundaram Tata AIG Universal Sompo
2008-07
2007-06
2006-05
1.55 1.89 2.61 2.02 2.03 1.51 1.64 1.59 1.91 4.63
1.56 2.63
1.22 2.51
NON-LIFE INSURER
2008-07
2007-06
2006-05
PUBLIC National New India The Oriental United India 1.80 4.00 1.91 3.24 1.76 3.57 2.17 3.00 1.08 3.09 1.97 2.23
Bancassurance Bancassurance simply means selling of insurance products by banks. It also sometimes known as Bank Insurance Model [BIM]. Commercial insurance It provide safety against any kind of internal or external hazard. Commercial insurance companies in India offer products which suit the business and corporate needs and provide the commercial avenues all kind of safety and security. Wedding insurance Wedding insurance policies are designed specifically to offer financial protection to couples planning a wedding against losses resulting from unforeseen circumstances This policy covers losses resulting due to: Site Weather: Sickness or Injury No Show of Service Providers
Student insurance It policy covers a person studying in a school or a college against expenses arising from ill health, accident and travel, among other things. There are several types of student insurance1-Student health insurance 2-Student renters insurance 3-Student car insurance 4-Student travel insurance Dental insurance Indian dental insurance plan, the costs incurred due to dental care would be paid for by the insurer . Unlike most western countries, specific dental insurance plans are not common in India. In India, oral health is normally integrated with the general health insurance schemes Indian dental insurance plans are mainly of two types: 1-Stand alone dental insurance plan 2-Dental insurance cover as part of general health insurance plan
Flood insurance An insurance policy that covers property damage due to natural flooding. Flood insurance is often purchased to supplement a homeowner's policy in the event that flooding damage occurs. The National Flood Insurance Act was originally adopted in 1968, Types of coverage available under a Flood Insurance policy 1-Building Property Coverage 2-Personal Property Coverage
Reinsurance It is a means by which an insurance co. can protect itself against the risk of losses with other insurance companies. Individuals and corporations obtain insurance policies to provide protection for various risks (hurricanes, earthquakes, lawsuits, collisions, sickness and death, etc.). Reinsurers, in turn, provide insurance to insurance companies
Credit insurance It covers businesses and an individuals family members against losses resulting from the inability to repay a loan. A credit insurance policy usually provides a security cover for a specific reason for which a borrower defaults. credit insurance can be of two types 1-Trade Credit Insurance 2-Credit Life Insurance
PEST Analysis
It stand for Political , Economic , Social & Technological Factors Political Factors - Increased service tax on premium - Hike in FDI limit - Favorable regulation for rural insurance - Removal of all pricing controls on general insurance Economic Factors - Increase in Gross Domestic Savings - Increase in premium per capita , - Interest rate - Inflation rate
Social Factors - Population - Educational level - Level of earning - Low Insurance penetration
Technological Factors - E-business insurance in India - Business Process Monitoring - Increase in CRM solutions - Impact on distribution channels
SWOT ANALYSIS
Strengths Government Deregulations Variety of products Aggressive marketing & distribution strategies Weakness Shortage of trained insurance professionals & Technician Lack of awareness Falling premium income
Threat Natural calamities Creates threat among rival firms itself. Changing consumers perception
FINDINGS
Monopoly Popularity Financial growth Investment
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