This project is related to life insurance business in India. This study is mainly related to privatization of life insurance sector. LIC was monopoly in insurance sector till 2000. The decision by IRDA to grant licences to private pledgers in life and non-life sector is expected to increase the insurance business in India. This is bound to board to force existing player to become more competitive thus the buyer can now expect better deals form its insurance agents.

1. PRIVATISATION OF LIFE
INSURANCE SECTOR IN
INDIA
PROJECT GUIDE
Mr. Manish Bansal
HOD-Management

2. SUBMIT
TED BY
Sunil
Kumar
REGD.
5109102
49

3. INTRODUCTION
• This project is related to life insurance business in
India. This study is mainly related to privatization
of life insurance sector. LIC was monopoly in
insurance sector till 2000.
• The decision by IRDA to grant licences to private
pledgers in life and non-life sector is expected to
increase the insurance business in India. This is
bound to board to force existing player to
become more competitive thus the buyer can
now expect better deals form its insurance
agents.

4. DEFINITION OF
INSURANCE
“ Insurance is a plan by themselves which
large number of people associate and
transfer to the shoulders of all, risk that
attach to individuals.”
According To John Merge

5. TYPES OF INSURANCE
• Marine Insurance
• Life Insurance in India
• Fire Insurance
• Miscellaneous Insurance

6. Life Insurance in India
• The British companies started life insurance
business in India, by issuing policies exclusively on
the lives of European soldiers and civilians.
• Different insurance companies like Bombay
Insurance Company Ltd. (1793) and Oriental Life
Assurance Company (1818) was formed to issue
life assurances policies in India. Gradually, the
first Indian Company named as Bombay Mutual
Life Insurance Society Ltd.

7. • The act was amended in 1950 resulting in far
reaching changes in the insurance sector . By
1956, 154 Indian insurers 16 foreign insurers
and 75 provident society were carrying on life
insurance business in India then it was taken
over by central govt. life insurance corporation
(LIC) was formed in sept. 1956 by an act of
parliament with a capital contribution of Rs.
50 mn.

8. BENEFITS OF LIFE INSURANCE
• Superior To Any Other Savings Plan
• Encourages And Forces Thrift
• Easy Settlement And Protection Against Creditors
• Administering The Legacy For Beneficiaries
• Ready Marketability And Suitability For Quick
Borrowing
• Disability Benefits
• Tax Relief

9. RESEARCH
METHODOLOGY
• Statement of the problem
• Research objectives
• Research Methodology
– Type of study
– Data collection
– Sampling
– Tools & techniques
• Scope of study
• Limitations

10. • Defining Research Problem
• Problem definition is the first & foremost part of the
research process, without this research cannot be
completed until and unless there is a problem or
objective, the research cannot be initiated. Problem
definition refers to the objective on which research has
to be done, so problem definition in my project work is
Privatization of insurance sector, its impact & its scope
in India.
•

11. Objectives
• To study the scope of privatization in Indian life
insurance sector.
• To study the impact of privatization.
• To study the current performance of private insurance
players.
• To study awareness level of customers towards private
insurance companies.
• To study the expectations of customers from private
sector.

12. • Research Methodology :- Research refers to search for
knowledge. In other words research is defined as a careful
investigation or inquiry especially through for new facts in
any branch of knowledge.
• Type of Study: Study is empirical in nature as it’s based
upon the facts and figures.
1)Data Collection
2)Source of Data
• Two types of data sources will be taken into consideration
– Primary Data
– Secondary Data

13. • Scope of Study :
• This study is mainly confined to the customer
of Malout & near villages. The size of sample
is 100 respondents.

14. • Limitations of the Study:
– Time for the completion of the project was too
short to do an in-depth study.
– Respondents were not willing to give the
response.
– Most of question in the questionnaire was close
ended which reduced the scope for people to give
free opinion.
– The sample size was not enough to reach on any
exact conclusion.

15. INTRODUCTION TO
PRIVATISATION
• The world privatization appeared in directly in
1983 and defines narrowly as “ to make
private especially to change from public to
private control or ownership”.
• Privatization is act of reducing the role of govt.
or increasing the role of private sector in
activities.

16. NEED FOR PRIVATIZATION
• Insurance companies create products and go out to find customer.
• Monopolistic situation
• Insurance awareness among the general public is low.
• Returns from Insurance sector products are low.
• Most agents and development officers are interested only in
producing new business servicing existing customers satisfactorily.
• Lack of any competitive pressure on government owned insurance
firm.
• Delay in settlement of claims.
• High premium rates.
• Discourteous behavior of insurance officials.
• Small and ineffective distribution networks.

17. Opportunities and challenges
• The threat of new players taking over the market has been
overplayed.
• Nationalized players will continue to hold strong market
share positions, but there will be enough business for new
entrants to be profitable.
• Opening up the sector will certainly mean new products,
better packaging and improved customer service.
• A middle-market approach tapping segments and niches
that are currently under-served will prove profitable for
new entrants.
• New companies often overestimate the need for insurance
expertise.

18. • CHALLENGES :-
• Selection of right type of distribution channels
among with prudent & efficient management.
• An effective CRM system, which would create
a sustainable and long lasting relationship.
• Should increase the customer base in semi
urban and rural areas, which offer huge
potential.

19. •MAJOR PLAYERS IN
INSURANCE INDUSTRY
IN INDIA

20. • Till 01.04.2000, Insurance industry in
India comprised mainly of only two state
insurers namely:-
• Life Insurers
• General Insurers

21. • Life Insurers:
Life Insurance Corporation of India (LIC)
• General Insurers:
• General Insurance Corporation of India (GIC) (with
effect from December, 2000, it has been made
a National Reinsurer) GIC had four subsidiary
companies, namely: -
• The Oriental Insurance Company Limited
• The New India Assurance Company Limited,
• National Insurance Company Limited
• United India Insurance Company Limited.

22. INSURANCE INDUSTRY – SWOT
ANALYSIS
Strengths:
• Huge potential market
• Insurable population of 300 millions
• Absence of specialized product range of
established players.
Weaknesses:
• Players have to build their own distribution
network.
• Huge investment is required.

23. Opportunities:
• Existing players are slow and burucratic in nature.
• Companies can concentrate on niche market
ensuring better returns.
Threats:
• Repartriation of benefits not allowed
• Joint venture in insurance industry have a history
of following apart
• Market may not accept new products.

24. POLICIES
• TERM PLAN
• Free add-on insurance
• ENDOWMENT PLANS
• Without-profit plans
• With-profit plans
• Money-Back Plan
• WHOLE-LIFE PLAN
• UNIT-LINKED INSURANCE PLANS
• PENSION PLAN