2. What is Insurance ?
• Insurance is a contract, in which a policyholder receives financial
protection or reimbursement against losses from an insurance company.
• An entity which provides insurance is known as an insurer, insurance
company, insurance carrier. A person or entity who buys insurance is
known as a policyholder, while a person or entity covered under the
policy is called an insured.
• The amount of money charged by the insurer to the policyholder for the
coverage set forth in the insurance policy is called the premium.
3. What are the DifferentTypes of Insurance Available ?
1. General Insurance
• Health Insurance
• Motor Insurance
• Travel Insurance
• Property Insurance
• Commercial Insurance
• Asset Insurance Policy
• Pet Insurance
• Bite-Sized Insurance
2. Life Insurance
• Term Insurance
• Whole Life Insurance
• Endowment Policy
• Money Back Policy
• Pension Plan
• Unit Linked Insurance Plans
• Child Plans
4. Business Model of Insurance Companies.
• Insurance companies base their business models around assuming and diversifying risk. The
essential insurance model involves pooling risk from individual payers and redistributing it
across a larger portfolio.
• Most insurance companies generate revenue in two ways: Charging premiums in exchange
for insurance coverage, then reinvesting those premiums into other interest-generating assets.
Like all private businesses, insurance companies try to market effectively and
minimize administrative costs.
• Few Aspects are as follows
• Pricing and Assuming Risk
• Interest Earnings and Revenue
• Reinsurance
• Evaluating Insurers
5. INDIAN INSURANCE SECTOR KEY PLAYERS
& THEIR MARKET SHARE
• India is the fifth largest life insurance market in the world's emerging insurance markets,
growing at a rate of 32-34% each year
• The insurance industry of India has 57 insurance companies - 24 are in the life insurance
business, while 34 are General insurers.
Some major insurer in India are as follows
LIFE INSURANCE
1. Life Insurance Corporation of India (LIC)
2. HDFC Standard Life Insurance
3. ICICI Prudential Life Insurance Co. Ltd.
4. SBI Life Insurance Co. Ltd.
5. Bajaj Allianz Life Insurance Co. Ltd.
6. Tata AIG Life Insurance Co. Ltd
GENERAL INSURANCE
1. General Insurance Corporation of India
2. ICICI Lombard
3. Agriculture Insurance Company of India Ltd
4. Bajaj Allianz General Insurance
5. National Insurance Co. Ltd
6. United India Insurance
7. HDFC ERGO
6. • Market Share of Insurance Industry in India ( Company
wise)
As of 2022, the top 5 general insurance
companies in India based on market share are:
• New India Assurance - 14.56%
• United India Insurance - 13.38%
• ICICI Lombard General Insurance - 10.87%
• National Insurance - 9.86%
• Bajaj Allianz General Insurance - 8.78%
8. Profit Growth of Life Insurance
• Profits of life insurance industry declined by 10.50 per cent in 2021-22 with profit after tax
(PAT) of ₹7,751 crore as against ₹8,661 crore in 2020-21.
• Out of the 24 life insurers in operation during 2021-22, 15 companies reported profits.
• LIC reported increase in profits by 39.39 per cent while private insurers together reported a
loss of 35.62 per cent in 2021-22.
Returns to Shareholders of Life Insurers
• Three private life insurers viz. Bajaj Allianz Life Insurance Co. Ltd., SBI Life Insurance Co. Ltd. and
Shriram Life Insurance Co. Ltd. paid interim dividend of ₹137.15 crore, ₹200.07 crore and ₹44.31 crore
respectively for the FY 2021-22.
• LIC has not proposed to pay dividend to shareholder i.e. Government of India for the year 2021-22.
9. App-based policy comparison and purchase
platform
FY’22 Revenue : 1,425 Cr
Digital first insurance platform
FY’22 Revenue : 1,344 Cr
Fast growing insurer with strong technology
capabilities
FY’22 Revenue : 3,751 Cr
India has 3 Insurtech Unicorns :
11. Recent developments in the sector:
• Strategic Deals: HDFC ERGO General Insurance Co. acquired Apollo Munich Health
Insurance (Reported valuation: Rs 1495.71 Cr)
• Financial investors: A consortium of private equity firms- Westbridge Capital, Rakesh
Jhunjhunwala and Madison Capital acquired over 90% stake in Star Health and Allied Insurance.
(Estimated deal size: Rs 656 Cr)
• Initiatives by non-sector players: Indian e-commerce giant Flipkart has tied
up with Bajaj Allianz General Insurance to provide customized insurance products for mobile
phones sold on Flipkart.
• New product offerings: HDFC ERGO launched a new product called “E@Secure”
a cyber insurance policy to protect individuals and families from cyber-attacks.
12. Future outlook and Growth drivers:
The insurance industry in India is expected to register healthy, consistent growth
based on the following drivers:
• Low insurance penetration in India: 1% (2022), compared to 4% globally (2022)
• Government programs to increase insurance cover: Pradhan Mantri Suraksha Bima
Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Ayushman Bharat etc
• Strong growth in the automotive industry is expected to boost motor insurance
• Increasing interest in buying insurance; rising internet usage has contributed to this
increasing interest
• Innovative products like Unit Linked Insurance Plans (ULIPs) have contributed to
the growth of insurance cover
• New distribution channels such as bancassurance, online distribution and NBFCs are
contributing to the growth in insurance cover
13. Government Initiatives / Policies
• Foreign Direct Investment (FDI) limit for the insurance sector increased from 26% to 49%.
• Life insurance companies operational for 10+ years are now allowed to go public by IRDA
• Government plans to divest a significant stake in PSU general insurance companies in order to
execute the steep disinvestment target
• Several flagship schemes have been launched by the government to boost the insurance sector.
Pradhan Mantri Jan Suraksha Bima Yojana: This scheme focuses on providing affordable insurance to people below the poverty
line, in rural areas
Pradhan Mantri Jeevan Jyoti Bima Yojana: This initiative provides life insurance for people employed in the unorganized sector
Atal Pension Yojana: This guarantees pension Coverage to all citizens in the unorganized sector who join the National Pension
System (NPS)
Ayushman Bharat Yojana: Each beneficiary family will receive medical insurance cover of INR 5 lakh, which they can use to get
treatment at public or private hospitals
