The current book provides and analyse the existing insurance market in India. It is a throughout study of Indian insurance with exact data archived from IRDA and Trustworthy Financial institute of India.
This book Provides the complete specification and integration required to reach the vision 2025 in prudent understanding.
The Problems Being Faced By Insurance Agency OwnersCogneesol
Insurance business owners face a number of challenges which hit their business performance. Check out this Cogneesol presentation that describes the major issues faced by insurance agency owners and the recommendations to avoid these issues.
Indian Insurance Industry: Reaching out to Exponential Growth Resurgent India
From Insurance being seen as a basic protection instrument against expected losses, the Indian Insurance industry has surely come a long way to become an absolute critical driver of economic prosperity and growth. The sector has helped account for risks; provide funds for capital intensive national building efforts besides lending social security to the citizens. Over a period of decade and a half, the industry has witnessed phases of spurt growth and moderation, intensifying competition and expansion of customer and geographic coverage.
- The document discusses how weak legislation in Kenya's insurance sector negatively impacts the performance of non-life insurance companies. It analyzes a study that found a negative correlation between weak legislation and insurance company performance.
- The study reported that insurance regulators in Kenya do not adequately monitor insurance rates, conduct compliance audits, or penalize companies that violate guidelines. As a result, companies frequently engage in underpricing that hurts their financial stability.
- The document recommends that Kenyan insurance regulators more strictly enforce existing laws to reduce underpricing and periodically audit companies to ensure guidelines are followed. This could help address the negative effects of weak legislation on company performance.
The opening up of the Indian insurance market to private players, a little over five years ago, was heralded as a gold rush. This was despite government’s knee jerk approach to the liberalisation agenda and somewhat distorted roll out of events.
Public affairs round up - september 2014 - mslgroupAshraf Engineer
The document discusses India raising the foreign direct investment (FDI) cap in the insurance and defence sectors from 26% to 49%. This is expected to boost investment in these sectors and increase insurance penetration and domestic defence manufacturing. However, there are also concerns about foreign control and technology transfer. The defence sector in particular may see greater investment but investors will still want management control for technology transfer, which the 49% cap does not provide. Overall the changes aim to modernize these sectors but uncertainties around rules and implementation remain.
Changing marketing trend of reliance life insurance (1)vaibhav003
The document provides information on the insurance industry in India and Reliance Life Insurance Company. It discusses the importance of insurance for the economy, the history and development of the insurance industry including key milestones and regulations. It also provides details on the present scenario, opportunities and challenges in the industry. Specifically for Reliance Life Insurance, it gives an overview of the company including its ownership and vision to offer integrated financial services.
This document provides an analysis of Bajaj Finserv's lending schemes in comparison to its competitors. It outlines Bajaj Finserv's primary and secondary objectives, which are to compare its schemes to other lenders and analyze competitors' schemes in relation to Bajaj Finserv's products. The document also provides information on Bajaj Finserv's company profile and the various consumer finance, SME finance, and commercial lending schemes it offers.
The document summarizes the wealth management industry in India. It notes that while India currently has a small percentage of wealthy individuals compared to developed markets, the industry is growing rapidly at over 20% annually and is expected to continue growing strongly. Key opportunities for the industry include a large mass affluent segment, growing wealth among global Indians, regulatory changes targeting illicit money flows, and an increasing share of organized market players. The demographic of wealthy Indians is also younger than international counterparts, calling for new types of products and services leveraging technology. Overall the industry is fragmented but consolidation is increasing as organized players expand.
The Problems Being Faced By Insurance Agency OwnersCogneesol
Insurance business owners face a number of challenges which hit their business performance. Check out this Cogneesol presentation that describes the major issues faced by insurance agency owners and the recommendations to avoid these issues.
Indian Insurance Industry: Reaching out to Exponential Growth Resurgent India
From Insurance being seen as a basic protection instrument against expected losses, the Indian Insurance industry has surely come a long way to become an absolute critical driver of economic prosperity and growth. The sector has helped account for risks; provide funds for capital intensive national building efforts besides lending social security to the citizens. Over a period of decade and a half, the industry has witnessed phases of spurt growth and moderation, intensifying competition and expansion of customer and geographic coverage.
- The document discusses how weak legislation in Kenya's insurance sector negatively impacts the performance of non-life insurance companies. It analyzes a study that found a negative correlation between weak legislation and insurance company performance.
- The study reported that insurance regulators in Kenya do not adequately monitor insurance rates, conduct compliance audits, or penalize companies that violate guidelines. As a result, companies frequently engage in underpricing that hurts their financial stability.
- The document recommends that Kenyan insurance regulators more strictly enforce existing laws to reduce underpricing and periodically audit companies to ensure guidelines are followed. This could help address the negative effects of weak legislation on company performance.
The opening up of the Indian insurance market to private players, a little over five years ago, was heralded as a gold rush. This was despite government’s knee jerk approach to the liberalisation agenda and somewhat distorted roll out of events.
Public affairs round up - september 2014 - mslgroupAshraf Engineer
The document discusses India raising the foreign direct investment (FDI) cap in the insurance and defence sectors from 26% to 49%. This is expected to boost investment in these sectors and increase insurance penetration and domestic defence manufacturing. However, there are also concerns about foreign control and technology transfer. The defence sector in particular may see greater investment but investors will still want management control for technology transfer, which the 49% cap does not provide. Overall the changes aim to modernize these sectors but uncertainties around rules and implementation remain.
Changing marketing trend of reliance life insurance (1)vaibhav003
The document provides information on the insurance industry in India and Reliance Life Insurance Company. It discusses the importance of insurance for the economy, the history and development of the insurance industry including key milestones and regulations. It also provides details on the present scenario, opportunities and challenges in the industry. Specifically for Reliance Life Insurance, it gives an overview of the company including its ownership and vision to offer integrated financial services.
This document provides an analysis of Bajaj Finserv's lending schemes in comparison to its competitors. It outlines Bajaj Finserv's primary and secondary objectives, which are to compare its schemes to other lenders and analyze competitors' schemes in relation to Bajaj Finserv's products. The document also provides information on Bajaj Finserv's company profile and the various consumer finance, SME finance, and commercial lending schemes it offers.
The document summarizes the wealth management industry in India. It notes that while India currently has a small percentage of wealthy individuals compared to developed markets, the industry is growing rapidly at over 20% annually and is expected to continue growing strongly. Key opportunities for the industry include a large mass affluent segment, growing wealth among global Indians, regulatory changes targeting illicit money flows, and an increasing share of organized market players. The demographic of wealthy Indians is also younger than international counterparts, calling for new types of products and services leveraging technology. Overall the industry is fragmented but consolidation is increasing as organized players expand.
This document discusses the history and development of the insurance industry in India. It notes that the first Indian life insurance company was established in 1818. The industry grew to over 350 companies but was then nationalized in the 1950s-1970s. Economic reforms in the 1990s led to the passage of laws in 1999 allowing private companies to enter the insurance market. This increased competition and improved products and services. Private companies have targeted common people more aggressively. The industry is growing over 25% annually but penetration remains low at only 2% of GDP. Increased education and expected GDP growth indicate further potential for the industry. Private companies have improved markets, products, customer focus, and channels like banks and the internet. Training programs have also expanded
The document analyzes the digital strengths, weaknesses, opportunities, and threats (SWOT) for the insurance industry. The key strengths are the large existing customer base and data assets. However, the industry is also old and people-driven, with complex products. Major opportunities lie in innovative digital products, financial inclusion, and automation. But the industry faces threats if it does not shift from risk indemnity to prevention, loses younger customer segments, and fails to leverage the value of data assets.
July 2015 Edition of BEACON, A Monthly Newsletter by SIMCON.
Inside this issue:
About Us
Our Team
INDUSTRY ANALYSIS : Insurance Industry
COMPANY ANALYSIS : Reliance - General & Life Insurance
BRAND ANALYSIS : Walt Disney
Concept of the month: Rule of 3 and 4
Funding and Partnering in Bio Pharma : Kapil Khandelwal, www.kapilkhandelwal....Kapil Khandelwal (KK)
This document discusses lessons for biotech companies in India regarding funding and partnering. It notes that while funding deals peaked in 2007 and declined in 2008, opportunities have not structurally changed. It provides tips for biotech leaders to better communicate with investors and partners. This includes understanding partner/investor preferences, balancing deal risk/reward, properly evaluating the company for fundraising, and utilizing advisory boards for expert feedback and guidance. While some opportunities remain, the sustainability of standalone mid-sized Indian biotechs is still uncertain.
C.PARAMASIVAN ,PERIYAR EVR COLLEGE , TIRUCHIRAPPALLI indian consumer demeano...chelliah paramasivan
This document summarizes a study on factors influencing Indian consumers' decisions to invest in life insurance. It finds that the most important factors are:
1) Demographic factors like education, income, family size, and employment have a major influence, with more educated, higher income, and larger families more likely to invest.
2) Tax benefits are ranked as the most important reason for consumers to invest in life insurance.
3) Reputation of the insurance company is the most important attribute looked for by consumers when choosing a policy.
MSC presents a report to understand and assess the impact of the pandemic on the FinTech ecosystem. It also focuses on how the FinTech ecosystem has progressed and adapted to the new normal.
The document discusses the changing landscape of the Indian insurance industry and proposes a 14-point action agenda to help insurers drive profitable and sustainable growth. Some key trends transforming the industry include increased digitalization, changing consumer needs and behaviors, an aging population, and continued regulatory activism. Both life and non-life insurance are highly susceptible to disruption from digital technologies. The action agenda proposes strategies for insurers such as creating an "agency of the future", improving profitability in property and casualty insurance, leveraging data and technology, expanding offerings to small and medium enterprises, and adapting to the digital imperative.
CBIZ Banking & Financial Services Quarterly Newsletter - Aug 2020CBIZ, Inc.
The August issue of CBIZ's Banking & Financial Services Newsletter includes a conversation with Lori Bettinger, Co-president of Alliance Partners and President of BancAlliance, on the banking sector and opportunity to make loans across other industry sectors. Also covered are underwriter questions to expect with your insurance renewal in this hard market and 8 potential COVID-19 employment liability claims. As always, links to several additional resources and webinars included.
The document discusses the insurance industry in India, including its structure, performance, and future challenges. Some key points:
- Private insurance companies have gained market share, acquiring 13% of the life insurance market and 14% of the non-life market within a short time, but there remains huge untapped demand for insurance products in India.
- Challenges for the insurance sector include demand conditions, competition, product innovations, distribution systems, technology use, and regulation.
- A colloquium was held to discuss issues like future demand for insurance, competitive pressures from bank participation, implications of declining average policy sizes, product innovations, benefits from global partnerships, and the role of technology.
-
This document summarizes the different types of microinsurance products available in India. It identifies 4 main categories: 1) Products registered as microinsurance with IRDA, which are primarily sold by life insurers to rural customers. 2) Rural and social products not registered as microinsurance that make up the bulk of policies sold. 3) Community-based products developed in partnership with insurers that are more responsive to local needs. 4) Independent community microinsurance schemes run by health providers or mutuals that focus on specific regions. Overall, the document finds that while India has many microinsurance experiments, regulation has only addressed certain types of providers and more flexibility is needed to support diverse models.
The insurance market in India is growing rapidly due to liberalization and the entry of private players. Sun Life Financial entered India through a joint venture with Aditya Birla Group to take advantage of the large untapped market potential. Both India and China offer attractive opportunities due to their large populations and economic growth, though India has higher premium growth rates currently. Recommendations to attract more foreign investment include increasing foreign ownership caps, improving regulations and distribution channels, and enhancing transparency.
The document discusses the service sector in India. Some key points:
1) The service sector now accounts for over half (51.16%) of India's GDP, growing from agriculture and industry. This marks a shift to a more developed economy model.
2) Within services, trade and transportation have seen increasing shares of GDP while construction has remained steady.
3) Some economists caution that unchecked service sector growth without corresponding industrial growth could distort the economy.
4) Strong customer satisfaction is vital in the service industry where intangibles are sold. Insurance companies must focus on both sales and customer service.
Vijay Popat completed a summer internship at Max New York Life Insurance. The insurance industry in India has grown significantly since its nationalization in 1956. Major milestones include the establishment of the Insurance Regulatory and Development Authority in 2000, which allowed private entities to enter the insurance market. A survey of 100 individuals aged 25-45 showed their preferences for different insurance providers and the key reasons for those preferences. The internship provided Vijay with exposure to Max New York Life's management, board, SWOT analysis, market share, and recruitment process. It concluded that the experience gave Vijay valuable insights into the insurance industry and corporate world.
BANCASSURANCE - BANKS PLAYING THE ROLE OF INTERMEDIARYKAAV PUBLICATIONS
This document discusses the concept of bancassurance in India. It defines bancassurance as banks acting as intermediaries to distribute insurance products. The growth of bancassurance has provided benefits to both banks and insurance companies by giving banks a new revenue stream through fees and insurers access to large customer bases. The document examines the types of bancassurance arrangements and factors contributing to its growth in India such as improving distribution channels and increasing banking sector scope.
The present Presentation is a great step in forward direction of Indian Insurance sector ; and I have no doubt that after studying this presentation in detail and getting through the Indian Insurance Sector successfully, the insurance agent will gain substantially in accomplishing the tasks that are assigned to him or her. I would keenly look forward to its huge success in the Indian insurance domain in the days to come.
The present book is a great step in forward direction of Indian Insurance sector ; and I have no doubt that after studying this book in detail and getting through the examination successfully, the insurance agent will gain substantially in accomplishing the tasks that are assigned to him or her. I would keenly look forward to its huge success in the Indian insurance domain in the days to come.
This document discusses the history and development of the insurance industry in India. It notes that the first Indian life insurance company was established in 1818. The industry grew to over 350 companies but was then nationalized in the 1950s-1970s. Economic reforms in the 1990s led to the passage of laws in 1999 allowing private companies to enter the insurance market. This increased competition and improved products and services. Private companies have targeted common people more aggressively. The industry is growing over 25% annually but penetration remains low at only 2% of GDP. Increased education and expected GDP growth indicate further potential for the industry. Private companies have improved markets, products, customer focus, and channels like banks and the internet. Training programs have also expanded
The document analyzes the digital strengths, weaknesses, opportunities, and threats (SWOT) for the insurance industry. The key strengths are the large existing customer base and data assets. However, the industry is also old and people-driven, with complex products. Major opportunities lie in innovative digital products, financial inclusion, and automation. But the industry faces threats if it does not shift from risk indemnity to prevention, loses younger customer segments, and fails to leverage the value of data assets.
July 2015 Edition of BEACON, A Monthly Newsletter by SIMCON.
Inside this issue:
About Us
Our Team
INDUSTRY ANALYSIS : Insurance Industry
COMPANY ANALYSIS : Reliance - General & Life Insurance
BRAND ANALYSIS : Walt Disney
Concept of the month: Rule of 3 and 4
Funding and Partnering in Bio Pharma : Kapil Khandelwal, www.kapilkhandelwal....Kapil Khandelwal (KK)
This document discusses lessons for biotech companies in India regarding funding and partnering. It notes that while funding deals peaked in 2007 and declined in 2008, opportunities have not structurally changed. It provides tips for biotech leaders to better communicate with investors and partners. This includes understanding partner/investor preferences, balancing deal risk/reward, properly evaluating the company for fundraising, and utilizing advisory boards for expert feedback and guidance. While some opportunities remain, the sustainability of standalone mid-sized Indian biotechs is still uncertain.
C.PARAMASIVAN ,PERIYAR EVR COLLEGE , TIRUCHIRAPPALLI indian consumer demeano...chelliah paramasivan
This document summarizes a study on factors influencing Indian consumers' decisions to invest in life insurance. It finds that the most important factors are:
1) Demographic factors like education, income, family size, and employment have a major influence, with more educated, higher income, and larger families more likely to invest.
2) Tax benefits are ranked as the most important reason for consumers to invest in life insurance.
3) Reputation of the insurance company is the most important attribute looked for by consumers when choosing a policy.
MSC presents a report to understand and assess the impact of the pandemic on the FinTech ecosystem. It also focuses on how the FinTech ecosystem has progressed and adapted to the new normal.
The document discusses the changing landscape of the Indian insurance industry and proposes a 14-point action agenda to help insurers drive profitable and sustainable growth. Some key trends transforming the industry include increased digitalization, changing consumer needs and behaviors, an aging population, and continued regulatory activism. Both life and non-life insurance are highly susceptible to disruption from digital technologies. The action agenda proposes strategies for insurers such as creating an "agency of the future", improving profitability in property and casualty insurance, leveraging data and technology, expanding offerings to small and medium enterprises, and adapting to the digital imperative.
CBIZ Banking & Financial Services Quarterly Newsletter - Aug 2020CBIZ, Inc.
The August issue of CBIZ's Banking & Financial Services Newsletter includes a conversation with Lori Bettinger, Co-president of Alliance Partners and President of BancAlliance, on the banking sector and opportunity to make loans across other industry sectors. Also covered are underwriter questions to expect with your insurance renewal in this hard market and 8 potential COVID-19 employment liability claims. As always, links to several additional resources and webinars included.
The document discusses the insurance industry in India, including its structure, performance, and future challenges. Some key points:
- Private insurance companies have gained market share, acquiring 13% of the life insurance market and 14% of the non-life market within a short time, but there remains huge untapped demand for insurance products in India.
- Challenges for the insurance sector include demand conditions, competition, product innovations, distribution systems, technology use, and regulation.
- A colloquium was held to discuss issues like future demand for insurance, competitive pressures from bank participation, implications of declining average policy sizes, product innovations, benefits from global partnerships, and the role of technology.
-
This document summarizes the different types of microinsurance products available in India. It identifies 4 main categories: 1) Products registered as microinsurance with IRDA, which are primarily sold by life insurers to rural customers. 2) Rural and social products not registered as microinsurance that make up the bulk of policies sold. 3) Community-based products developed in partnership with insurers that are more responsive to local needs. 4) Independent community microinsurance schemes run by health providers or mutuals that focus on specific regions. Overall, the document finds that while India has many microinsurance experiments, regulation has only addressed certain types of providers and more flexibility is needed to support diverse models.
The insurance market in India is growing rapidly due to liberalization and the entry of private players. Sun Life Financial entered India through a joint venture with Aditya Birla Group to take advantage of the large untapped market potential. Both India and China offer attractive opportunities due to their large populations and economic growth, though India has higher premium growth rates currently. Recommendations to attract more foreign investment include increasing foreign ownership caps, improving regulations and distribution channels, and enhancing transparency.
The document discusses the service sector in India. Some key points:
1) The service sector now accounts for over half (51.16%) of India's GDP, growing from agriculture and industry. This marks a shift to a more developed economy model.
2) Within services, trade and transportation have seen increasing shares of GDP while construction has remained steady.
3) Some economists caution that unchecked service sector growth without corresponding industrial growth could distort the economy.
4) Strong customer satisfaction is vital in the service industry where intangibles are sold. Insurance companies must focus on both sales and customer service.
Vijay Popat completed a summer internship at Max New York Life Insurance. The insurance industry in India has grown significantly since its nationalization in 1956. Major milestones include the establishment of the Insurance Regulatory and Development Authority in 2000, which allowed private entities to enter the insurance market. A survey of 100 individuals aged 25-45 showed their preferences for different insurance providers and the key reasons for those preferences. The internship provided Vijay with exposure to Max New York Life's management, board, SWOT analysis, market share, and recruitment process. It concluded that the experience gave Vijay valuable insights into the insurance industry and corporate world.
BANCASSURANCE - BANKS PLAYING THE ROLE OF INTERMEDIARYKAAV PUBLICATIONS
This document discusses the concept of bancassurance in India. It defines bancassurance as banks acting as intermediaries to distribute insurance products. The growth of bancassurance has provided benefits to both banks and insurance companies by giving banks a new revenue stream through fees and insurers access to large customer bases. The document examines the types of bancassurance arrangements and factors contributing to its growth in India such as improving distribution channels and increasing banking sector scope.
The present Presentation is a great step in forward direction of Indian Insurance sector ; and I have no doubt that after studying this presentation in detail and getting through the Indian Insurance Sector successfully, the insurance agent will gain substantially in accomplishing the tasks that are assigned to him or her. I would keenly look forward to its huge success in the Indian insurance domain in the days to come.
The present book is a great step in forward direction of Indian Insurance sector ; and I have no doubt that after studying this book in detail and getting through the examination successfully, the insurance agent will gain substantially in accomplishing the tasks that are assigned to him or her. I would keenly look forward to its huge success in the Indian insurance domain in the days to come.
1) Fire insurance provides coverage for losses due to fire to both commercial and residential properties. It can cover buildings, machinery, equipment, inventory and other property.
2) There are different types of fire insurance policies including specific insurance policies that provide a fixed payout amount, reinstatement policies that cover rebuilding costs, and floating policies that cover inventory stored in multiple locations.
3) To make a claim, the insured needs to provide documents like the insurance policy, loss assessment reports, bills and invoices, and police reports in the case of arson. The insurance company will then pay the claim amount as per the policy terms.
This document summarizes the key aspects of a fire insurance policy, including 12 standard perils covered, 13 exclusions, 15 general conditions, and sections covering different types of properties. It also lists 15 additional optional coverage that can be added on, along with details on policy structure, claim process, and insurer rights.
Artificial intelligence (AI) is everywhere, promising self-driving cars, medical breakthroughs, and new ways of working. But how do you separate hype from reality? How can your company apply AI to solve real business problems?
Here’s what AI learnings your business should keep in mind for 2017.
Study: The Future of VR, AR and Self-Driving CarsLinkedIn
We asked LinkedIn members worldwide about their levels of interest in the latest wave of technology: whether they’re using wearables, and whether they intend to buy self-driving cars and VR headsets as they become available. We asked them too about their attitudes to technology and to the growing role of Artificial Intelligence (AI) in the devices that they use. The answers were fascinating – and in many cases, surprising.
This SlideShare explores the full results of this study, including detailed market-by-market breakdowns of intention levels for each technology – and how attitudes change with age, location and seniority level. If you’re marketing a tech brand – or planning to use VR and wearables to reach a professional audience – then these are insights you won’t want to miss.
CII-EY report titled Insurer of the Future reveals that technology will power the new wave of change for the Indian Insurance Industry. The report recommends pursuing technology to improve the traditional insurance process and to re-configure the insurance business model.
After the bruising general election, India’s new government got down to the business of preparing the Union Budget. Much is expected of the Narendra Modi regime, which projected a pro-business, pro-reform image throughout the campaign.
While reactions to the Budget were mixed, it did include two important policy changes. Foreign direct investment norms for insurance and defence manufacturing were changed to attract more foreign players. Both sectors have been touchy topics, with battlelines drawn between those for liberalised investment norms and those in favour of a more conservative approach.
Whatever the merits of each argument, it’s clear that a long, hard road lies ahead on the economic front and these are the first steps of a fledgling government of which much is expected. There will be other, tougher decisions to make – reducing subsidies, a simpler tax regime that protects states’ interests and a land acquisition policy that will spur industrial growth while conserving land-owners’ interests, to name just a few.
With this edition, MSLGROUP’s Public Affairs Round-up takes on a new look and structure too. Now onwards, PAR will be a quarterly. It will have more detailed analyses and content than its earlier avatar, and will incorporate commentary and data that is more relevant to you.
MSLGROUP’s insights team will play the role of an observer of the Indian economic and policy environment, and will provide analyses that we hope will benefit you and your business. As always, we look forward to your feedback.
The document discusses the insurance sector in India. It covers the introduction and history of insurance in India, the privatization of insurance in the 1990s, and the major effects of privatization. Some key points include:
- Insurance provides protection against risks by distributing losses across many individuals.
- The Indian government nationalized private insurance companies in 1956.
- The government began privatizing insurance in the 1990s, opening it up to private players.
- Since privatization, the insurance sector has grown significantly, with the number of policies and premium income rising sharply. Top private players have also experienced strong growth.
- Privatization has led to increased competition, new products, better technology and customer service. It has
The document provides an overview of the Indian insurance industry. It discusses the market size, key players, and LIC's dominance. It also covers entry barriers like foreign ownership restrictions, high capital requirements, and lack of composite licenses. Competition is increasing as private players challenge LIC's monopoly, though LIC and GIC still dominate market share. The future growth depends on improved customer-centric products and distribution channels to increase rural penetration.
RBSA-RR-Demystifying Life Insurance Industry in India (1).pdfRBSA Advisors
RBSA Advisors is delighted to share its recent research on the Life Insurance sector in India. Pandemic across the nation had impacted the country's overall financial system. The unprecedented nature of this crisis created difficult circumstances, including economic shutdowns. The year 2020 was a watershed year in the Insurance sector. Insurer were forced to rethink their business operations leading to enormous changes in the industry. Currently, life insurance industry is at crossroad.
Through this report we are demystifying the life insurance industry in India and sharing our views on the industry outlook.
Public Affairs Round-up - September 2014 - MSLGROUPAshraf Engineer
After the bruising general election, India’s new government got down to the business of preparing the Union Budget. Much was expected of the Narendra Modi regime, which projected a pro-business, pro-reform image throughout the campaign.
While reactions to the Budget were mixed, it did include two important policy changes. Investment norms for insurance and defence manufacturing were changed to attract more foreign players. Both sectors have been touchy topics, with battlelines drawn between those for liberalised investment norms and those in favour of a more conservative approach.
It’s clear that a long, hard road lies ahead on the economic front and that these are the first steps of a fledgling government of which much is expected. There will be other, tougher decisions to make – reducing subsidies, a simpler tax regime that protects states’ interests and a land acquisition policy that will spur industrial growth while conserving land-owners’ interests, to name just a few.
With this edition, MSLGROUP’s Public Affairs Round-up takes on a new look and structure too. Now onwards, PAR will be a quarterly. It will have more detailed analyses and content than its earlier avatar, and will incorporate commentary and data that is more relevant to you.
MSLGROUP’s insights team will play the role of an observer of the Indian economic and policy environment, and will provide analyses that we hope will benefit you.
This document provides an overview of the life insurance industry in India. It discusses how the industry has grown significantly over the years and now represents a major economic sector. While insurance penetration is still low compared to other countries, there is huge growth potential as nearly 80% of the population lacks adequate life or health insurance. The regulatory framework for insurance is outlined, including the key acts governing the industry and the role of the Insurance Regulatory and Development Authority. Segment-wise splits of new business premiums collected in 2010 and 2011 are also presented in charts.
GEICO's brand marketing plan focuses on increasing its market share through new customer acquisition. It recommends GEICO increase its marketing budget and allocate more funds towards advertising. Additionally, GEICO should focus its messaging on customer service and financial strength to appeal to consumers in the current economy. GEICO needs to target new customer segments and cross-sell existing customers to drive continued growth.
This document presents information about the insurance sector in India. It discusses the privatization of insurance, the growth of major private players in insurance, and the key driving factors such as rising incomes and demand from semi-urban populations. It provides an overview of the types of insurance available and compares salaries and opportunities in private versus public insurance companies. Challenges mentioned include effective marketing strategies while opportunities include job growth, funds inflow, and new technologies.
This document presents information about the insurance sector in India. It discusses the privatization of insurance, the growth of major private players in the sector, and the key driving factors such as rising incomes and demand from semi-urban populations. It also outlines some of the challenges and opportunities in the Indian insurance market since privatization, such as the need for effective mass marketing strategies and leveraging new technologies. Overall, the privatization of insurance has led to increased competition, new products, and higher salaries compared to when it was previously dominated by state-owned providers.
The document provides an overview of the insurance industry in India. It discusses the history and development of the insurance sector in India, including the establishment of regulatory bodies like the Insurance Regulatory and Development Authority (IRDA). It also outlines the major types of insurance available in India, key players in the life and non-life insurance sectors, as well as growth factors and challenges facing the industry. The insurance sector is poised for further growth given India's large population and increasing incomes.
Indian Insurance Industry - Key Issues and Challenges - Part - 2Resurgent India
While a range of economic and financial reforms have helped the insurance sector grow, there remains a host of challenges which need to be addressed for harnessing the full potential of the sector:
2014 Property & Casualty Insurance Industry Outlook: Innovation leading the wayDeloitte United States
On the surface the property and casualty sector appears to be doing quite well, but running an insurance carrier is rarely smooth sailing. The last few years have been particularly difficult for those occupying C-Suite positions, as more fundamental issues are threatening not only short-term results on their balance sheets, but challenging the long-term viability of their operating models as well.
For example, a growing number of insurers are facing significant organizational disruption. Many have made large-scale investments in technology, replacing core systems for claims, policy administration and finance. Their chief challenge now is how to effectively leverage the new systems they’ve put in place and maintain their momentum with additional innovations in personnel, products and culture.
Additionally, ongoing political gridlock in Washington could undermine an already unsteady economic recovery. Not to mention regulatory uncertainty that makes it difficult for carriers to plan ahead and determine operational priorities.
Innovation may ultimately be the key to keep insurers growing regardless of shifting economic and insurance market conditions, as they devise ways to thwart ongoing and emerging competitive threats as well as capitalize on new opportunities.
For more - visit http://www.deloitte.com/view/en_US/us/Industries/Insurance-Financial-Services/039bdd0819e23410VgnVCM3000003456f70aRCRD.htm
Insurance allows people to share financial risks and losses by contributing regular premiums to a common fund. It provides peace of mind by helping restore people's financial status if unexpected events like accidents, illness or death occur. While such events can be financially devastating for individuals, insurance premiums paid by many ensure claims can be paid out.
This document discusses the importance of intellectual capital and innovation in the agricultural insurance sector. It begins by outlining the importance of insurance services for agricultural producers and sectors. Intellectual capital is defined as the knowledge, skills, and experiences of employees, while innovation refers to new processes, services, marketing methods, and organizational changes. The relationship between intellectual capital and innovation is then explored, finding they have a reciprocal relationship that can boost company performance. Specifically within insurance companies, intellectual capital and innovation are crucial assets that allow companies to develop new services, gain competitive advantages, and better serve customer needs. Overall, the document argues that effectively managing intellectual capital and fostering innovation are important for the success and sustainability of agricultural insurance companies.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The document provides an overview of the general insurance industry in India. It discusses how general insurance started in India in the 19th century under British companies and was later nationalized. It was reopened to private companies in 1999. The summary discusses the key points of the industry's history, current state with low penetration compared to other countries, and future growth potential as regulations open the industry to more private and foreign players.
A CII-EY Report on the Insurance Industry titled ‘Building Growth, Building Value’ recommends chasing efficiency in distribution by finding greater synergy among the different channels. This will help in well-rounded industry growth and enable maximum value creation for all the stakeholders. The report also states that insurers must be careful in identifying the right ways to employ additional capital inflows that they may receive over the next few years with capital infusion from the foreign partners.
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2. Foreword
Dear Life and General Insurance practitioners and interest groups
The General Insurance industry in India is at a critical juncture of its evolution. We have grown
at close to 20% over the last 5 years and reached an annual premium of ~` 70,000 crore in the
fiscal year 2013. However, penetration levels are low, leaving much scope for growth.
The business environment for the industry has been challenging, given the overall slowdown in
the economy, weak investment stream and the changes accompanying the de-tariffed regime.
The industry is burdened with growing underwriting losses as claims ratios are well above
international benchmarks.
However, a number of positive developments have also taken place during these turbulent times.
Retail lines have seen strong growth in the recent past as customers are becoming increasingly
aware of the benefits of general insurance. With companies already having weathered the impact
of Motor Third Party Pool, the outlook for the industry in the future is largely positive.
The road to profitability would require players to reassess all aspects of their business models
from pricing, products, risk management, customer acquisition and distribution. Progress would
undoubtedly require concerted efforts by the players to become globally competent in claims and
operations.
With this backdrop, we embarked on an exercise to define a long-term vision for the General
Insurance industry in India.
For the industry to become inclusive, progressive and high performing in the future, we
partnered with Legallife Insurance to build a fact-based view on the current state of the industry,
the key trends that will shape it in the next decade and, therefore, its potential evolution. As an
industry, we have also laid out an aspiration which is true to our potential and the path that we
will take to get there.
I would also take the opportunity to thank key supporters without whose help the report could
not have materialised. I thank each of my CEO colleagues for taking time out and sharing their
views on industry evolution and the key changes required. We also received tremendous
support from our distribution partners, the provider network, our reinsurers and the regulatory
bodies. Specifically, I would also like to thank the IRDA for their valuable inputs and support in
the development of the industry vision.
We hope you find this report insightful and engaging.
With best regards
Dr. Atik Shaikh
3. Executive summary
The General Insurance (GI) industry in India has evolved significantly over the last decade and is
now at a watershed in its development. From a ` 12,000 crore top -line industry in 2001–02,
today it is worth ` 70,000 crore, clocking an annual growth rate of 17%. The industry today
provides a cover of ` 1,000 lakh crore, which by itself is a huge testament to its importance to the
economy.
While the last few years have been challenging for the industry’s profitability, the industry
holds significant potential, both from the perspective of growth and value creation. However,
to meet its full potential, India’s GI industry will require a
concerted effort by all the stakeholders. This report paints a picture of the aspirations of the GI
industry and what it will take to realise the vision.
Role and importance of insurance
GI is a major contributor to the country’s economy. It effectively pools and transfers risk from
individual and corporate consumers, thus encouraging investments and driving GDP growth. It
supports the government and society by reinvesting funds and sharing the cost of catastrophes.
The industry is also a major contributor to employment.
Detailed analyses show that GI is a strong driver of GDP growth. A one standard
deviation increase in GI penetration induces a per capita GDP growth of 0.39%. This is
superior to the growth induced by private credit (0.34%) or life insurance (0.37%).
GI industry in India employs around 7 lakh people both directly and indirectly.
The industry supports the government and society by reducing the financial burden of social
welfare and sharing the cost of catastrophes. The insurance sector contributed 11–12% of total
losses over the string of natural catastrophes
in India (e.g., it contributed ` 10–12,000 crore across floods in Mumbai in 2005, Surat in
2006 and Uttarakhand in 2013). Further, the sector as a whole has invested 35% of its total
assets in government securities.
The GI industry has also played an unparalleled role in creating access to financial services
and to protection. Supported by the largest health insurance programme globally, the industry
prides itself on having added over 300 million beneficiaries in a short span of 4 years. Further,
a majority of the beneficiaries are from the below-poverty-line segment, which goes a long way
in contributing to the policy objectives of universal financial inclusion.
Current position of General Insurance in India
The GI industry’s performance is influenced significantly by the interplay between various
related elements—customers, the individual insurer’s capabilities, the industry acting in
collaboration and external stakeholders such as policy makers/regulators and other related
stakeholders (e.g., reinsurers, third-party administrators, healthcare and motor insurance
p roviders). This interplay shapes industry performance and determines how it fares on its
three core objectives–providing universal access and coverage; returning value to shareholders;
and ensuring a superior experience for customers. An assessment of the current position of the
industry indicated that it has some way to go in terms of performance against these three core
objectives.
4. 1. Providing universal access and coverage
A detailed micro-analysis of underlying needs and risks indicates substantial scope for
improvement in penetration and access across segments. For example, home insurance
penetration is less than 1%; there is significant underinsurance in
segments such as two-wheelers and personal health; corporate (property and indemnity), SME
and rural risk coverage is substantially lower than global benchmarks. Further, the total
e conomic losses due to underinsurance are estimated to be close to
` 150–200,000 crore.
2. Delivering returns to shareholders
India has the highest combined ratio compared across developed and developing economies and
time periods. This has been largely driven by substantially higher claims ratios. As a result, the
industry has delivered poor returns to shareholders. Barring a few exceptions, the returns have
been lower than 15% (i.e., below cost of capital) even in the tariff era. Returns post detariffication
(2007) have largely remained in a single digit even after adjusting for TP (motor third-party)
pool losses. While the average economics have been poor, there is huge spread in industry
performance, with a few players earning substantially higher returns than the rest of the
industry, driven almost entirely by superior underwriting performance.
3. Ensuring superior customer experience and building loyalty
GI industry in India has shown considerable improvement on customer service and experience
(while only 60% of claims were settled in 1 month, customer grievances have dropped
significantly from 2,800 per million policies in FY10 to 1,100 per million policies in FY12). Even
on a relative basis, the industry has performed better than other financial services. Complaints
a re lower compared
to banking (~3,500 complaints per million SA), asset management (~1,800 per million folios)
and life insurance (~1,200 per million policies).
Even on this dimension, there is substantial dispersion in performance across players, with the
best players performing up to 5 times better than the industry average, and about 30 times better
than the bottom quartile performers.
The ‘report card’ of various inter-related elements which influence industry
performance reveals mixed results:
Customers: Customer awareness and involvement is increasing. However, there remains a
trust deficit between the customers and the industry participants, leading to relatively low
loyalty and highly transactional price-driven relationships. This behaviour is also leading to
underinsurance, particularly among SME customers, who may buy a risk cover of as low as
20% of asset value to bring down their upfront insurance spend.
Individual insurer capabilities: Players have significantly improved the operating model
and made progress in upgrading their product and distribution capabilities; however, there is
a large gap vis-à-vis the desired best practice
on core “technical” capabilities (claims and underwriting), with significant spread across
players.
Industry conduct: Over time, the market has opened up and seen the entry of new
players, which has increased competition and choice for customers. However, competition
has largely remained price driven, with limited focus on creating new capabilities. As an
industry, there has been a high degree of collaboration in areas like dismantling pools,
articulating the need for more consistent product and distribution reforms and creating
entities such as the
Insurance Information Bureau (IIB). However, there is opportunity to do more in terms of
5. raising the industry profile, defining common standards and self-regulation mechanisms,
and building more industry-wide utilities.
Regulatory interventions: Over the last decade, regulatory interventions have helped
open up the industry, foster more competition and largely benefited the industry.
However, there remain several areas to be addressed— particularly on issues of
distribution, product, pricing and solvency reform.
Other industry participants:
—— Reinsurers: India continues to attract capacity from global reinsurers, particularly on
casualty and specialty lines of business (while witnessing a reduction in higher rated
capacity on property lines); however, the lack of local presence of global reinsurers has
inhibited the market from getting access to the best talent and expertise.
—— Providers: Relationship of insurers with motor and health stakeholders (i.e., OEMs/
repair shops and providers) is relatively poor, with limited progress made in some
pockets.
—— TPAs and surveyors: Capabilities of the Third Party Administrators (TPA) and
surveyor industry are low and remain a big area of concern.
Key trends shaping General Insurance over the next decade
The GI industry in India will be shaped by trends and discontinuities across four themes over the
next decade. These themes are—global forces; consumer behaviour and expectations; demand–
supply dynamics in related sectors; and macroeconomic factors.
1. Global forces impacting India’s insurance industry
Emerging Asia—mainly China, India and Southeast Asia—is expected to become the most
important playing field for global insurers. These countries will account for around 35%
of total growth. This will result in heightened competitive interest from a range of foreign
insurers, who look to India as a major source of growth.
Continued high bar on “technical excellence” with “winners” pulling away further and
capturing disproportionate share of industry value.
Technology discontinuities (Big Data, Mobility, Social Media, Cloud) which will allow for
more sophisticated business models to emerge.
Increasing complexity of risks driven by an ageing population, lifestyle changes, climate
changes, new types of coverage.
2. Changing customer behaviour and expectations
Increasing consumer awareness and involvement.
Blurring boundaries between the online and offline world, with demonstrated multi-channel
behaviour, e.g., 60–70% of online users conduct digital research before purchasing any
financial services product; two-thirds change their mind about the product and brand after
online research.
Emergence of various segments of customers with different needs and expectations, requiring
the development of a finer customer centric approach. Customers increasingly expect a
solution oriented approach rather than a claim-linked transactional approach, e.g., cover for
entire healthcare needs and not just IPD claims.
3. Shifting demand–supply dynamics in related sectors
Healthcare: Rapid increase in healthcare spend and formalisation and corporatisation of
provider space will lead to new opportunities.
6. Auto: Pressure on core sales margin and ageing of car PARC will result in heightened focus of
OEMs/dealers for insurance pools.
Corporate sector: Globalisation, organised retail and infra spending translate into
significant GI opportunities; continued importance of SME.
4. Macroeconomic factors
Uncertain and volatile macroeconomic outlook will temper near-term growth and
investment return; it will necessitate building resilient business models.
Wage cost squeeze and talent crunch (especially for technical skills), compounded by
increasing attrition.
Scenarios for the future
The future direction of the industry will be shaped by the interplay of various stakeholders
—the individual insurers’ efforts to upgrade their capabilities, industry conduct and level of
collaboration, and external influence, in particular the policy actions.
In this context, there are three potential evolution paths/scenarios for the industry:
Status quo: In the “status quo” scenario, a few insurers will focus on initiatives to build holistic
capabilities across the value chain. However, capabilities for a large part of the industry would
continue to be low and industry conduct will remain
poor. Further, the policy environment would be largely conservative, with few enabling actions.
As a result, in this scenario, the outcome would be one of “unfulfilled” potential. The industry
would grow at a CAGR of 13% and reach a size of ~` 3,00,000 crore by 2025. However, the
industry CoRs would remain high (~110%), resulting in single digit RoEs and value creation will
continue to be negative.
As a result of underperformance, the industry as whole will require fresh capital to the tune of
` 40–45,000 crore, with a bulk of this required to recapitalise a few weak players.
In the scenario above, if economic recovery is accelerated over the next 2–3 years, the industry
would benefit from both higher growth and higher contribution from investment income.
However, due to limited effort to build skills and capabilities and improve industry conduct, the
i mpact would still be moderate – 14–15% growth to reach a GWP of
` 3,50,000 crore by 2025; RoE in low double digits, continued negative value creation and high
capital requirements of ` 25–30,000 crore.
Gathering momentum: To break out from this cycle and control its own destiny (as against
being dependent on external economic conditions), the industry will require a combination of
individual insurer efforts to upgrade capabilities and significant improvement in industry
c onduct and collaboration. Accordingly, the “gathering
momentum” scenario will help the industry realise
significant improvement in outcomes—growth CAGR of 15–16% translating into a total industry
GWP of ` 3,90,000 crore by 2025; improvement in CoRs to 103–104% resulting in a total
industry RoE of 13–15%.
In this scenario, the industry would require fresh capital infusion of ` 20–25,000 crore to fund
the higher growth requirements.
I nclusive, progressive and high performing:
7. For the industry to realise its true potential and achieve its vision of becoming an “inclusive,
progressive and high performing” sector, there will need to be significant enabling policy actions
to complement the industry and individual insurer actions. The upside of these actions will be
substantial—GWP of ` 4,80,000 crore by 2025; substantially higher penetration levels (over 85%
of motor vehicles covered; about 1 billion health lives covered; overall GWP to GDP penetration
of 1.4%); industry CoR of 99–101% translating into RoE upwards of 20% and incremental value
creation of ` 35–40,000 crore.
In this scenario, the additional capital infusion will be ` 10–15,000 crore primarily driven by
significantly higher volume and growth. Further, the industry will witness significant demand
for technical talent—over 1 lakh underwriters, claims assessors and surveyors will be required.
Agenda for action to build “inclusive, progressive and high performing” industry
Industry stakeholders will need to take a coordinated set of actions to help the industry
unlock its full potential and realise its ambitious vision
1. Individual players need to drive initiatives across three axes of innovation:
Build distinctive granular customer insights to capture high potential growth opportunities
and enhance engagement across the customer lifecycle.
Upgrade to next generation technical capabilities (claims, underwriting, analytics, and
actuarial capabilities).
Build world class operating models to achieve gains in efficiency while strengthening the
human capital.
2. Industry-level initiatives required to further performance:
Raise the profile of general insurance in the Indian ecosystem.
Contribute in defining industry standards and protocols.
Co-sponsor the building of common infrastructure (in concert with policy makers/
regulators) for fraud detection, claims management, skill building, etc
3. Policy and regulatory initiatives that will help complement individual and
industry-level actions
Foster innovation and deepen penetration through product and distribution reform, and
create an environment to attract capital.
Strengthen the industry structure through focused regulatory intervention and
supervision.
Enable and guide efforts towards a common industry infrastructure;
Strengthen targeted initiatives to ensure consumer protection.
8. Chapter I
Role & importance of insurance
General Insurance significantly contributes to the economy and strengthens the
financial system:
—— Drives GDP growth: 1 standard deviation increment in GI penetration
induces GDP growth of 0.39% (higher than banking or life insurance). ——
Contributes to the employment of ~7 lakh people, directly and indirectly.
GI supports the government and society
—— Unlocks government resources by reducing the financial burden of social welfare and
security, and shares the cost of catastrophes (it paid ` 10–12,000 crore in recent
catastrophes).
—— Finances government activities by investing in government securities (~35% of total
invested assets in government securities).
The industry protects individuals and enterprises against uncertainty, and
increases social harmony and stability through the coverage of risks.
The GI industry has created greater access to financial services and protection in
recent years—over 300 million new beneficiaries added over the last 3 years and
~16 million claims paid in 2012–13.
9.
10.
11. Chapter II
Current position of General
Insurance in India
GI has been on an accelerated trajectory—20% CAGR post tariff deregulation
over the past 5 years—and reached a total size of ~` 70,000 crore in FY 2013.
However, the industry has some way to go in terms of performance against
three key objectives:
—— Providing universal access and coverage: A detailed micro-analysis of the
underlying needs and risks indicate that there is substantial scope to improve penetration
and access across segments; e.g., home insurance penetration is <1%; there is significant
underinsurance in segments such as two-wheelers and personal health; corporate
(property and indemnity), SME and rural risk coverage is substantially lower than global
benchmarks. Further, the total economic losses due to underinsurance are estimated to be
close to ` 150–200,000 crore annually.
—— Delivering returns to shareholders: India has the highest combined ratio across
developed and developing economies and across time periods. This has been largely
driven by substantially higher claims ratios. As a result, the industry has delivered poor
returns to shareholders. Barring a few exceptions, the returns have been lower than 15%
(i.e., below cost of capital) even in the tariff era. Returns post detariffication (2007) have
largely remained in a single digit even after adjusting for TP pool losses. While the
average economics have been poor, there is huge spread in industry performance—a few
players earn substantially higher returns compared to the rest of the industry, mainly
due to their superior underwriting performance.
—— Customer experience and loyalty: The industry has shown improvement on
customer service and experience (claims settled in 1 month is low at 60%; however,
customer grievances dropped from 2,800 per million policies in FY10 to 1,100 per million
policies in FY12). Further, complaints have been lower compared to other financial
services such as banking (~3,500 complaints per million SA), asset management (~1,800
per million folios) and life insurance (~1,200 per million policies). Even on this
dimension, there is substantial dispersion in performance across players, with the best
players performing up to 5 times better than the industry average and about 30 times
better than the bottom quartile performers.
The outcomes above are a result of the interplay of various factors which have a
significant influence on industry performance. The
‘report card’ of these inter-related factors reveals mixed results:
—— Individual insurer capabilities: Players have significantly improved the
operating model and made progress in upgrading their product and distribution
capabilities. However, there is a large gap vis-à-vis the desired best practice on core
“technical” capabilities (claims and underwriting), with significant spread across
players.
12. —— Industry conduct: Over time, the market has opened up and seen the entry of new
players, which has increased competition and choice for customers. However, competition
has largely remained price driven, with limited focus on creating new capabilities. As an
industry, there has been a high degree of collaboration on areas like dismantling pools,
articulating the need for more consistent product and distribution reforms, and the
creation of entities like the Insurance Information Bureau (IIB). However, there is
opportunity to do more in terms of raising the industry profile, defining common
standards and self-regulation mechanisms, and building more industry wide utilities.
—— Other industry participants:
JJ Regulatory interventions over the last decade have helped open up the industry and
foster more competition which benefited the industry. However, there remain several
areas to be addressed—particularly on issues of distribution, product, pricing and
solvency reform.
JJ India continues to attract capacity from global reinsurers, particularly on casualty and
specialty lines of business (while witnessing a reduction in higher rated capacity on
property lines); however, the lack of local presence of global reinsurers has inhibited
the market from getting access to the best talent and expertise.
JJ The relationship of insurers with motor and health stakeholders (i.e., OEMs/repair
shops and providers) is relatively poor, with limited progress made in some pockets.
JJ Capabilities of the TPA and surveyor industry are low and remain a big area of
concern, particularly in terms of delivering superior customer service and building
technical skills.
13.
14.
15.
16.
17.
18.
19.
20. Chapter III
Key trends shaping the GI
industry
Global forces impacting the Indian landscape:
—— Emerging Asia will become the major playing field for global insurers with heightened
interest and increased competition for China, India, and Southeast Asia.
—— The bar on “technical” capabilities will keep rising with “winners” pulling away.
—— Several discontinuities on technology, increasing complexity of underlying risks, and
continued policy and regulatory intervention.
Customer behaviour and expectations:
—— Rise in customer awareness and sophistication, along with the blurring of boundaries
between online and offline world, will require fundamental shifts in the operating
model.
—— Segmentation and customer centricity will become a key capability.
Shifting demand–supply dynamics in related sectors:
—— Healthcare: Rapid increase in healthcare spend and formalisation and corporatisation
of the provider space will lead to new opportunities.
—— Auto: Pressure on core sales margin and ageing of car PARC will increase the focus of
OEMs/dealers on insurance pools.
—— Corporate sector: Globalisation, organised retail and infra spending will
translate into significant GI opportunities; the importance of SMEs will continue.
Economic factors:
—— Uncertain and volatile macroeconomic outlook will temper near-term growth
and investment return; resilient business models will need to be built. —— Human
capital will be scarce while wage-cost squeeze will increase.
21.
22.
23.
24. Chapter IV
Scenarios for the future
The future direction of the industry will be shaped by the interplay of various
stakeholders—the individual insurers’ efforts to upgrade their capabilities,
industry conduct and level of collaboration, and external influence, policy actions
in particular. In this context, there are three potential evolution paths/scenarios
for the industry.
Status quo: In this scenario, a few insurers will focus on initiatives to build
holistic capabilities across the value chain. However, capabilities for a large part
of the industry would continue to be low and industry conduct will remain poor.
Further, the policy environment would continue to be conservative with few
enablers. As a result, in this scenario, the outcome would be one of “unfulfilled”
potential
—— Modest growth CAGR of ~13% resulting in GWP of ~` 3,00,000 crore by 2025.
—— Combined ratio remains very high at 108–110%; very few players operate below 100%.
—— Incremental value creation will be negative to the tune of ` 55–60,000 crore while
delivering average RoE of 6–8%.
—— As a result of underperformance, the industry as a whole will require fresh capital to the
tune of ` 40–45,000 crore, with a bulk of this required to recapitalise a few weak players.
If economic recovery is accelerated over the next 2–3 years, the industry would
benefit from both higher growth and higher contribution from investment
income. However, with limited effort to build skills and capabilities and
improve industry conduct, the impact would still be moderate
—— Growth CAGR of ~14–15% resulting in GWP of ~` 3,50,000 crore by 2025.
—— With no improvement in combined ratio, the industry would continue to have a negative
value creation of ` 20–25,000 crore while delivering average RoE of 10–12%.
—— Capital requirements remain relatively high – ` 20–25,000 crore of fresh infusion.
To break out from this cycle and control its own destiny (as against being
dependent on external economic conditions), the industry will require a
combination of individual insurer efforts to upgrade capabilities and
significant improvement in industry conduct and collaboration.
Accordingly, the “gathering momentum” scenario will help the industry
realise marked improvement in outcomes.
—— CAGR of 15–16% resulting in GWP of ~` 3,90,000 crore by 2025.
—— Improvement in CoR to 102–104%; many players starting to operate below 100%.
—— Average RoE of 13–15%; however, the industry as a whole will continue to operate at
or around the cost of capital and not create any incremental value. —— Capital
commitment will be more limited — ` 20–25,000 crore.
For the industry to realise its true potential and achieve its vision of becoming
25. an “inclusive, progressive and high performing” sector, significant enabling
policy actions are needed to complement the industry and individual insurer
actions. The upside of these actions will be substantial.
—— GWP will potentially reach ` 4,80,000 crore (CAGR of 17–19%) by 2025.
—— Significant increase in penetration—over 80% of vehicles covered;
close to 1 billion health lives covered; overall GWP to GDP at 1.4%. ——
Combined ratio of 99–101%, with many players operating sustainably
below 100% and a few high performing players below 95%.
—— Industry RoE of 21–23%,
translating into a total industry wide
value creation of ` 35–40,000 crore.
—— Realising this will require a
capital commitment of ` 10–15,000
crore from the industry.
—— More balanced portfolio mix (across retail and commercial; large and SME) and industry
structure.
—— This scenario will also result in greater demand for high quality technical talent; over 1
lakh underwriters, claims assessors and surveyors will be required.
26.
27.
28.
29.
30.
31.
32. Chapter V
Agenda for action
The various industry stakeholders will need to take a set of coordinated actions
to help the industry unlock its full potential and realise its ambitious vision.
Individual insurers will need to build capabilities across three axes of
innovation:
—— Build distinctive granular customer insights to capture high potential growth
opportunities and enhance engagement across the customer lifecycle. —— Upgrade
to next generation technical capabilities (claims, underwriting, analytics, and
actuarial capabilities).
—— Build world class operating models to achieve gains in efficiency while strengthening the
human capital.
Industry-level initiatives that will be required to further performance:
—— Raise the profile of GI in the Indian ecosystem.
—— Contribute in defining industry standards and protocols.
—— Co-sponsor the building of common infrastructure (in concert with policy
makers/regulators) for fraud detection, claims management, skill building, etc.
Policy and regulatory initiatives suggested to complement individual and
industry-level actions:
— Foster innovation and deepen penetration through product and distribution reform,
and strengthen the industry structure through focused regulatory intervention and
supervision.
—— Enable and guide efforts towards a common industry infrastructure
------Continue to scale up initiatives to ensure consumer protection
—— Create an environment to attract capital.