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Insurance broking opportunities and exploring new dimensions

The document discusses the insurance broking sector in India. It provides information on: - Who insurance brokers are and how they differ from agents in representing the client's interests over the insurer. - The roles and services provided by brokers globally including risk analysis, product recommendations, claims assistance and more. However, brokers play a smaller role in India with only 30% market share compared to over 70% in developed countries. - The Insurance Regulatory and Development Authority of India (IRDAI) regulates insurance brokers by licensing different types including direct, reinsurance and composite brokers.

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INSURANCE BROKING OPPORTUNITIES AND EXPLORING NEW DIMENSIONS
Who Are Insurance Brokers ?  Insurance Brokers are representative of the client's interest in the insurance contract and not the insurer, an agent or bank is seen as the representative of the insurer.  Though there are many insurance brokers, in India, insurance brokers are very often misunderstood as a glorified insurance agent
Insurance Brokers, India & Global Scenario  Insurance brokers are seen as intermediaries who ensure that both the parties to a contract obtain what they require and a third party who ensures that both the parties to the contract jointly benefit.  Insurance brokers in India, are granted license by Insurance Regulatory & Development Authority of India (IRDAI), Insurance regulator in India formed by IRDA Act 1999, In exercise of powers conferred by sub-section (1) of section 42D of insurance Act 1938.
Insurance Brokers, India & Global Scenario - Continued  Global insurance broker has a wider set of duties, in countries where the insurance industry is more matured and developed.  Starting with risk analysis/audit, recommending Risk Management Program and then suggesting risk mitigation products if available with insurer or otherwise design the product, set rates, process and actual settlement of the claims.  In many, countries the insurance broker is far larger than the insurance companies which predominantly limit itself as an underwriter.
Insurance Brokers, India & Global Scenario - Continued  Online insurance penetration is abysmally low in India, though it has shown immense potential in the past two years, with rapid evolution and exponential growth happening in this space.  With the meteoric rise of ecommerce and quick adoption of internet based transactions in India, the online insurance industry is definitely finding favour among the urban consumer. This has opened the market for insurance broking in direct, reinsurance and composite segments.  Globally, direct brokers help their client plan their insurance needs, identify insurance companies, negotiate prices and place business. They also provide post-sales services like changes in policies, negotiation with insurers in case of claims, policy renewal support etc. Risk management is another significant area where insurance brokers look at the businesses in totality and identify risks, plan out remedial steps and recommend suitable ideas for handling contingencies. Insurance constitutes only a part of overall planning and is best suited for large
Insurance Brokers, India & Global Scenario - Continued  In most developed nations, Insurance brokers market share is over 70% of the total insurance industry. However, in India this figure stands at just 30% for the general insurance industry and less than 1% for the life insurance industry.  The field of insurance broking is being positively looked at by the Indian government as well, which is considering allowing 100 per cent foreign direct investment in insurance broking with a view to giving a boost to the sector and attracting more funds. At present, the FDI policy allows for at present, allows 49 per cent foreign investment in the insurance sector that encompasses insurance broking, insurance companies, third-party administrators, surveyors and loss assessors. The removal of foreign investment limit will encourage more players in the market with high technology, and also increase insurance penetration in
Service Offerings by Insurance Brokers To Customers Risk placement ► Structuring ► Price discovery ► Application processing ► Servicing Risk management ► Risk valuation, control and mitigation ► Business continuity management Advisory ► Benefits and HR consulting Customized services and administration ► Claims assistance To Insurers Cat Modeling and Valuation/Surveyor
Services by insurance brokers Across major markets in the world, the nature of services provided by brokers revolves around the following:  Understand client’s business and risk management philosophy  Provide risk management and insurance consulting  Highlight market knowledge and insights to customers including insurance  covers and terms  Provide underwriting information and other services such as modelling to  insurers  Help customers in deciding among quotes and policies  Help customers during servicing and claims stage  Assist customers and insurers through various value added services
Types of Brokers (Licensed by IRDAI) • Direct Broker Carried out the Functions as specified under Regulation 3 either in the field of Life Insurance or General Insurance or both on behalf of the clients. • Reinsurance Broker Arranges reinsurance for direct Insurers with Insurance and Reinsurance Companies. • Composite Broker Arranges Insurance for its Clients with Insurance Companies and /Or Reinsurance for Its Clients (Insurers)
Few Important Requirements- Insurance Brokers Type 1. Individual 2. Company 3. Co-operative Society 4. Any other approved by Authority Examination Brokers Syllabus/National Insurance Academy Pune Capital Paid-up Cap Rs 75 Lakhs Direct Broker Rs 4 Crores Reinsurance Broker Rs 5 Crores Composite Broker Remuneration 1. Life as per table depending upon type of product & premium paying term - Max 30% 2. General- Max 17.5%Qualification Graduate
SUMMARY OF INDIAN LIFE INSURANCE SECTOR PARTICULARS Unit 2013-14 2014-15 2015-16 2016-17 No of companies As on 31st March Nos. 24 24 24 24 No of life offices As on 31st March Nos. 11032 11033 11071 10954 Insurance penetration# In per cent 3.1 2.6 2.72 2.72 Insurance density# US $ 41 44 43.2 46.5 # Source: Swiss Re-sigma reports BUSINESS FIGURES Number of new policies issued FY In Lakhs 408.72 259.08 267.38 264.56 First year premium (Including single premium) FY In Crore 120325 113330 138766 175203 Total Premium FY In Crore 314302 328102 366943 418477 Market share of LIC (based on Total Premium) FY In per cent 75.39 73.05 72.61 71.81 Individual Business in Force (Number of policies) FY In Thousands 33802.2 326297 327065 328442 Individual Business in Force (Sum Assured) FY In Crore 6646516 7553045 8494502 9845204 INTERMEDIARIES No of individual agents As on 31st March Nos. 2188500 2067907 2016565 2088522 No of corporate agents As on 31st March Nos. 689 503 416 456 Commission paid FY In Lakhs 2084637 1946068 2026669 2211715 Operating Expenses related to Insurance Business FY In Lakhs 3746541 3685916 3877789 4613888 POLICYHOLDERS' SERVICES No. of claims submitted (Individual-death) FY No. of policies 873094 869332 869619 873462 No of claims submitted (Group-death) FY No of Lives 411647 452625 530949 706431 Amount Claimed (Individual) FY In Crore 11533.3 12516.94 13386.39 14479.45 Amount Claimed (Group) FY In Crore 3174.12 3588.61 4891.9 6326.09 Total Benefits Paid FY In Crore 216396 210915 204454 236340 Channel-wise New Business - Amount of Premium (Individual plus Group) Individual agents FY In Crore 48831.5 41246.70 41175.78 54983.81 Corporate agents-Banks FY In Crore 11327.2 12830.52 15253.83 20049.29 Corporate agents-Others FY In Crore 1252.36 1421.01 1582.02 1335.6 Brokers FY In Crore 1267.42 1451.03 1441.65 1757.9 Direct selling FY In Crore 57477.6 56218.38 78970.87 96451.74 MI Agents FY In Crore 17.19 21.26 20.22 Common Service Centres(CSCs) FY In Crore 0.32 1 1.54 Web-aggregators FY In Crore 0.03 46.36 IMF FY In Crore 0.03 14.52
SUMMARY OF INDIAN LIFE INSURANCE SECTOR (Continued.) PARTICULARS Unit 2013-14 2014-15 2015-16 2016-17 On-line FY In Crore 302.83 418.06 Point of sale FY In Crore others if any FY In Crore -1.13 -1.12 Total FY In Crore 120156 113185 138748 175078 Referrals FY In Crore 19.64 7.98 14.61 25.83 Channel Wise-New Business - No. of Lives Covered (Individual plus Group) Individual agents FY In Lakhs 484.37 285.89 248.01 237.03 Corporate agents-Banks FY In Lakhs 56.10 69.00 85.16 57.77 Corporate agents-Others FY In Lakhs 53.23 344.16 288.74 69.96 Brokers FY In Lakhs 41.09 57.94 87.62 141.36 Direct selling FY In Lakhs 713.68 725.22 1270.20 1546.75 Common Service Centres(CSCs) FY In Lakhs 0.02 0.08 0.06 MI Agents FY In Lakhs 5.08 5.49 6.86 Web Aggregators FY in Lakhs 0.00 0.19 IMF FY in Lakhs 0.00 0.03 Online FY in Lakhs 2.05 2.60 others if any FY in Lakhs 0.01 0.00 Total FY In Lakhs 1348.47 1487.31 1987.36 2062.61 Referrals FY In Lakhs 0.13 0.09 0.11 0.15 Region Wise distribution of Offices Metro As on 31st March Nos. 1048 1083 1667 2425 Urban As on 31st March Nos. 2543 2489 3525 3136 Semi-urban As on 31st March Nos. 5381 4803 Rural As on 31st March Nos. 498 590 Unclassified As on 31st March Nos. 7441 7461 Total As on 31st March Nos. 11032 11033 11071 10954 Assets Under Management Life Fund As on 31st March In Crore 1288225 1495309 1697453 1907953 Pension & General Annuity & Group fund As on 31st March In Crore 337579 389473 464203 566399 Unit ULIP Fund As on 31st March In Crore 331661 362740 340412 379841 Total Fund As on 31st March In Crore 1957466 2247522 2502068 2854193 Profit /Loss after tax As on 31st March In Lakhs 758783 761131 741543 772789 Equity Capital As on 31st March In Crore 25938.5 26239.6 26691.5 26956.94 REDRESSEL OF CONSUMER GRIEVANCES No of grievances reported during the year FY Nos. 374620 278992 204701 120847 No. of complaints reported with the Ombudsmen at difference centres FY Nos. 17512 14339 17257 16744
SUMMARY OF INDIAN GENERAL (Non Life) INSURANCE SECTOR PARTICULARS Remarks Unit 2013-14 2014-15 2015-16 2016-17 PROFILE No of General Insurance companies (including reinsurers) As on 31st March 29 29 30 31 No. of foreign reinsurers branches including Lloyd's India As on 31st March 7 No. of branch offices As on 31st March Nos. 9872 10407 10803 11141 Insurance penetration In percent 0.80 0.70 0.72 0.77 Insurance density US $ 11 11 11.50 13.20 BUSINESS FIGURES Number of new policies issued excluding Standalone health Insurers FY In Lakhs 1048.23 1202.24 1257.61 1525.33 Gross Direct Premium (Within & Outside India) FY In Crore 79934 87151 99333 130971 Market share of PSUs - Gen.Ins.Cos. Including specialised (GDP within India) In Percent 55.83 55.09 54.50 53.44 Segment Wise Gross Direct Premium (Within India ) Fire FY In Crore 7362.63 8056.54 8731.46 9538.01 Marine FY In Crore 3161.8 3020.06 2984.38 2917.47 Motor FY In Crore 33822.75 37379.32 42300.86 50250.53 Health FY In Crore 19634.3 22636.57 27457.30 34526.61 Others FY In Crore 13572.34 13593.24 14905.37 30895.72 Total FY In Crore 77553.81 84685.73 96379.37 128128.34 Net Retentions of General Insurers (including indian reinsurers) Fire FY In Percent 69.24 64.54 63.01 57.03 Marine Cargo FY In Percent 85.99 81.59 81.01 85.19 Marine Hull FY In Percent 31.94 35.47 44.51 20.03 Motor FY In Percent 100.00 99.67 99.20 97.02 Engineering FY In Percent 71.07 71.80 67.23 68.25 Aviation FY In Percent 1.00 38.91 27.15 27.85 Other miscellaneous FY In Percent 89.43 88.14 84.28 78.83 Total- All Segments FY In Percent 90.32 89.57 87.72 83.17 Incurred Claims Ratio Fire FY In Percent 76.54 73.78 74.44 84.38 Marine FY In Percent 63.37 67.44 72.05 74.98 Motor FY In Percent 79.50 77.14 81.18 88.17 Health FY In Percent 97.05 96.93 98.46 101.05 Others FY In Percent 72.96 73.91 75.91 81.91 Total- All Segments FY In Percent 81.98 81.70 85.06 90.91 Underwriting Experience FY In Crore -7640.81 -10576 -14959 -18840.41 Assets Under Management As on 31st March 149536 172144 188126 222344 Equity Share Capital As on 31st March 10240.21 11504.31 12603.39 13127.82 Assigned capital of branches of foreign re-insurers As on 31st March In Crore 1117.81 Commission expenses FY In Lakhs 462369 521200 578649 660166 Operating expenses related to Insurance business FY In Crore 16250.67 20206.37 23245 25594.35 Income from investments FY In Crore 14319 16607 19077.82 21730.28 Profit after tax FY In Lakhs 464906 463913 323849 84538 REDRESSEL OF CONSUMER GRIEVANCES No of grievances reported during the year 63335 60688 59083 52104 No. of complaints reported with the Ombudsmen at difference centres 8803 7145 8920 10883
Individual New Business Performance of Life Insurers - Brokers Premium in Crores INDIVIDUAL NEW BUSINESS PERFORMANCE OF LIFE INSURERS Particulars Number of Policies Issued Amount of Premium 2013-14 2014-15 2015-16 2016-17 2013-14 2014-15 2015-16 2016-17 Brokers 315765 256740 246421 227614 948.43 1019.93 934.18 972.08 0.77 0.99 0.92 0.86 1.55 1.84 1.6 1.25 Total 40835064 25869356 26702452 26419617 60956.86 55398.95 58320.11 77725.68
Group New Business Performance of Life Insurers - Brokers GROUP NEW BUSINESS PERFORMANCE OF LIFE INSURERS Particulars Number of Schemes NUMBER OF LIVES COVERED 2013-14 2014-15 2015-16 2016-17 2013-14 2014-15 2015-16 2016-17 Brokers 1739 1943 1976 2462 3793588 5537280 8516066 13908119 4.7 4.97 5.51 6.95 4.04 4.51 4.95 7.73 Total 37033 39069 35875 35412 94011968 122861373 172033724 179841286 Amount of Premium 2013-14 2014-15 2015-16 2016-17 318.89 431.1 507.47 785.82 0.54 0.75 0.63 0.81 59199.17 57786 80428.06 97352.24
New Business Performance of General/Non Life Insurers - Brokers Premium in Crores GROSS DIRECT PREMIUM INCOME - Non Life/GENERAL INSURANCE Insurance Brokers Total Percentage Share of Brokers Segment 2013-14 2014-15 2015-16 2016-17 2013-14 2014-15 2015-16 2016-17 2016-2017 Fire 1818.62 2107.99 2393 2844.93 7407.1 8054.69 8701 9537.43 29.83 Marine (Cargo) 741.48 794.58 868 929.71 2027.53 2063.41 2127 2125.24 43.75 Marine (Hull) 151.36 132.33 153 134.39 1127.11 956.3 863 792.33 16.96 Aviation 119.56 104.75 84 94.85 447.64 419.01 447 428.53 22.13 Engineering 901.58 909.39 855 838.84 2495.64 2339.28 2372 2294.37 36.56 Motor Own Damage 4917.26 5451.17 6231 9031.29 17768 18019.14 21325 23728.09 38.06 Motor Third Party 2713.42 3052.77 3945 4632.37 15873.4 19547.21 20989 26522.52 17.47 Liability 604.27 673.25 776 945.33 1253.47 1353.72 1562 1892.61 49.95 Personal Accident 289.19 316.07 390 476.67 1822.53 2163.34 2613 3645.74 13.07 Health Insurance 3978.81 4610.39 6423 8711.99 17204.1 19800.17 24372 30329.75 28.72 Overseas Medical Insurance 76.59 113.34 138 148.33 434.76 489.85 530 586.83 25.28 Crop Insurance 48.24 201.35 59 319.58 4610.75 6247.74 5551 20097.29 1.59 Credit Insurance 87.46 116.11 148 142.21 1429.32 1494.09 1512 1442.74 9.86 Miscellaneous 581.34 608.42 720 1220.96 3501.58 1736.92 3414 4705 25.95 Grand Total 17029.21 19201.92 23184 30471.5 77402.9 84684.87 96379 128128.4 23.78
Few Existing Challenges  The insurance sector is being impacted due to weak distribution networks, generating the need to strengthen the distribution network to support the sector as a whole. The industry is also marred by issues faced by the consumer such as complicated policies, policies being ‘mis-sold’, and hassles with claims. It could be due to information asymmetry between the insurance players and the customers. Traditional channels (agents) have been unable to resolve this, and have sometimes, unwittingly, even added to the problem. Through technology powering the buying of insurance products across insurers in a simple, quick and personal manner for the user, these issues can be addressed in a seamless manner.
Insurance Industry - The Way Forward  The insurance industry is set to undergo a massive change, moving from a seller’s market to a buyer’s market, with insurance broking being the only channel to represent the customer. Though broking registered the highest CAGR of 27.7% between FY10 and FY15 among the major channels in non-life insurance, the channel is still evolving and needs to meet risk management requirements of customers comprehensively. Besides some concerns about regulations, most brokers are optimistic about their growth in the coming years.
Insurance Industry – India  The insurance industry of India consists of 57 insurance companies of which 24 are in life insurance business and 33 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. Apart from that, among the non-life insurers there are six public sector insurers. In addition to these, there is sole national re-insurer, namely, General Insurance Corporation of India (GIC Re). Other stakeholders in Indian Insurance market include agents (individual and corporate), brokers, surveyors and third party administrators servicing health insurance claims.  Out of 33 non-life insurance companies, five private sector insurers are registered to underwrite policies exclusively in health, personal accident and travel insurance segments. They are Star Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance Company Ltd, Max Bupa Health Insurance Company Ltd, Religare Health Insurance Company Ltd and Cigna TTK Health Insurance Company Ltd. There are two more specialised insurers belonging to public sector, namely, Export Credit Guarantee Corporation of India for Credit Insurance and Agriculture Insurance Company Ltd for crop insurance.
Insurance Industry – India Continued Market Size  Government's policy of insuring the uninsured has gradually pushed insurance penetration in the country and proliferation of insurance schemes are expected to catapult this key ratio beyond 4 per cent mark by the end of this year, reveals the ASSOCHAM latest paper.  The number of lives covered under Health Insurance policies during 2015-16 was 36 crore which is approximately 30 per cent of India's total population. The number has seen an increase every subsequent year as 28.80 crore people had the policy in the previous fiscal.  Premium income of the life insurance segment had increased 14.04 per cent in FY17 to Rs 4.18 trillion (US$ 64.92 billion). In August 2017, the Life Insurance industry reported a 24 per cent growth in overall annualised premium equivalent with the help of both private players and Life Insurance Corporation.
Insurance Industry – India Continued Market Size  Post liberalisation, the insurance industry in India has recorded significant growth.  The Indian insurance industry is expected to grow to US$ 280 billion by FY2020, owing to the solid economic growth and higher personal disposable incomes in the country.  Premium income of the life insurance segment had increased 14.04 per cent in FY17 to Rs 4.18 trillion (US$ 64.92 billion). The total insurance market expanded from US$ 23 billion in FY05 to US$ 84.72 billion in FY17.
Broking Regulations  Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations, 2018
OverView – One of the Regulations for Insurance Broker  IRDAI opened Indian market to Insurance brokers in 2003 and slowly Insurance brokers in India are taking baby step towards becoming at par with global insurance brokers. Of late IRDAI has started permitting insurance brokers in India to give consultation to settle claims up to Rs 1 Crore against a fee. As the process of getting the insurance broker license in India is very tough, many times more tough than many foreign countries, we believe that IRDAI is laying foundation to a strong insurance brokerage industry and going forward would allow lot of additional role to the insurance broker in India, which would be beneficial to the clients.
Government Schemes  Karnataka Buildings Construction Welfare Board  Karnataka Labour Welfare Board  Karnataka Government Insurance Department  Niramaya Scheme  Pradhan Mantri Fasal Bima Yojana  National Health Insurance Scheme (Aayushman Bharat)  Other Various Social Security Schemes
References  www.bimagenie.com/content/insurance-brokers-india-global- scenario  bwdisrupt.businessworld.in/article/Insurance-Broking  IC 14 Regulations of Insurance Business Book of Insurance Institute of India Mumbai  www.ibef.org/ insurance report  IRDAI Hand Book on Indian Insurance Statistics 2016-2017
Thank You

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Insurance broking opportunities and exploring new dimensions

  • 1.
    INSURANCE BROKING OPPORTUNITIES ANDEXPLORING NEW DIMENSIONS
  • 2.
    Who Are InsuranceBrokers ?  Insurance Brokers are representative of the client's interest in the insurance contract and not the insurer, an agent or bank is seen as the representative of the insurer.  Though there are many insurance brokers, in India, insurance brokers are very often misunderstood as a glorified insurance agent
  • 3.
    Insurance Brokers, India& Global Scenario  Insurance brokers are seen as intermediaries who ensure that both the parties to a contract obtain what they require and a third party who ensures that both the parties to the contract jointly benefit.  Insurance brokers in India, are granted license by Insurance Regulatory & Development Authority of India (IRDAI), Insurance regulator in India formed by IRDA Act 1999, In exercise of powers conferred by sub-section (1) of section 42D of insurance Act 1938.
  • 4.
    Insurance Brokers, India& Global Scenario - Continued  Global insurance broker has a wider set of duties, in countries where the insurance industry is more matured and developed.  Starting with risk analysis/audit, recommending Risk Management Program and then suggesting risk mitigation products if available with insurer or otherwise design the product, set rates, process and actual settlement of the claims.  In many, countries the insurance broker is far larger than the insurance companies which predominantly limit itself as an underwriter.
  • 5.
    Insurance Brokers, India& Global Scenario - Continued  Online insurance penetration is abysmally low in India, though it has shown immense potential in the past two years, with rapid evolution and exponential growth happening in this space.  With the meteoric rise of ecommerce and quick adoption of internet based transactions in India, the online insurance industry is definitely finding favour among the urban consumer. This has opened the market for insurance broking in direct, reinsurance and composite segments.  Globally, direct brokers help their client plan their insurance needs, identify insurance companies, negotiate prices and place business. They also provide post-sales services like changes in policies, negotiation with insurers in case of claims, policy renewal support etc. Risk management is another significant area where insurance brokers look at the businesses in totality and identify risks, plan out remedial steps and recommend suitable ideas for handling contingencies. Insurance constitutes only a part of overall planning and is best suited for large
  • 6.
    Insurance Brokers, India& Global Scenario - Continued  In most developed nations, Insurance brokers market share is over 70% of the total insurance industry. However, in India this figure stands at just 30% for the general insurance industry and less than 1% for the life insurance industry.  The field of insurance broking is being positively looked at by the Indian government as well, which is considering allowing 100 per cent foreign direct investment in insurance broking with a view to giving a boost to the sector and attracting more funds. At present, the FDI policy allows for at present, allows 49 per cent foreign investment in the insurance sector that encompasses insurance broking, insurance companies, third-party administrators, surveyors and loss assessors. The removal of foreign investment limit will encourage more players in the market with high technology, and also increase insurance penetration in
  • 7.
    Service Offerings byInsurance Brokers To Customers Risk placement ► Structuring ► Price discovery ► Application processing ► Servicing Risk management ► Risk valuation, control and mitigation ► Business continuity management Advisory ► Benefits and HR consulting Customized services and administration ► Claims assistance To Insurers Cat Modeling and Valuation/Surveyor
  • 8.
    Services by insurancebrokers Across major markets in the world, the nature of services provided by brokers revolves around the following:  Understand client’s business and risk management philosophy  Provide risk management and insurance consulting  Highlight market knowledge and insights to customers including insurance  covers and terms  Provide underwriting information and other services such as modelling to  insurers  Help customers in deciding among quotes and policies  Help customers during servicing and claims stage  Assist customers and insurers through various value added services
  • 9.
    Types of Brokers(Licensed by IRDAI) • Direct Broker Carried out the Functions as specified under Regulation 3 either in the field of Life Insurance or General Insurance or both on behalf of the clients. • Reinsurance Broker Arranges reinsurance for direct Insurers with Insurance and Reinsurance Companies. • Composite Broker Arranges Insurance for its Clients with Insurance Companies and /Or Reinsurance for Its Clients (Insurers)
  • 10.
    Few Important Requirements- InsuranceBrokers Type 1. Individual 2. Company 3. Co-operative Society 4. Any other approved by Authority Examination Brokers Syllabus/National Insurance Academy Pune Capital Paid-up Cap Rs 75 Lakhs Direct Broker Rs 4 Crores Reinsurance Broker Rs 5 Crores Composite Broker Remuneration 1. Life as per table depending upon type of product & premium paying term - Max 30% 2. General- Max 17.5%Qualification Graduate
  • 11.
    SUMMARY OF INDIANLIFE INSURANCE SECTOR PARTICULARS Unit 2013-14 2014-15 2015-16 2016-17 No of companies As on 31st March Nos. 24 24 24 24 No of life offices As on 31st March Nos. 11032 11033 11071 10954 Insurance penetration# In per cent 3.1 2.6 2.72 2.72 Insurance density# US $ 41 44 43.2 46.5 # Source: Swiss Re-sigma reports BUSINESS FIGURES Number of new policies issued FY In Lakhs 408.72 259.08 267.38 264.56 First year premium (Including single premium) FY In Crore 120325 113330 138766 175203 Total Premium FY In Crore 314302 328102 366943 418477 Market share of LIC (based on Total Premium) FY In per cent 75.39 73.05 72.61 71.81 Individual Business in Force (Number of policies) FY In Thousands 33802.2 326297 327065 328442 Individual Business in Force (Sum Assured) FY In Crore 6646516 7553045 8494502 9845204 INTERMEDIARIES No of individual agents As on 31st March Nos. 2188500 2067907 2016565 2088522 No of corporate agents As on 31st March Nos. 689 503 416 456 Commission paid FY In Lakhs 2084637 1946068 2026669 2211715 Operating Expenses related to Insurance Business FY In Lakhs 3746541 3685916 3877789 4613888 POLICYHOLDERS' SERVICES No. of claims submitted (Individual-death) FY No. of policies 873094 869332 869619 873462 No of claims submitted (Group-death) FY No of Lives 411647 452625 530949 706431 Amount Claimed (Individual) FY In Crore 11533.3 12516.94 13386.39 14479.45 Amount Claimed (Group) FY In Crore 3174.12 3588.61 4891.9 6326.09 Total Benefits Paid FY In Crore 216396 210915 204454 236340 Channel-wise New Business - Amount of Premium (Individual plus Group) Individual agents FY In Crore 48831.5 41246.70 41175.78 54983.81 Corporate agents-Banks FY In Crore 11327.2 12830.52 15253.83 20049.29 Corporate agents-Others FY In Crore 1252.36 1421.01 1582.02 1335.6 Brokers FY In Crore 1267.42 1451.03 1441.65 1757.9 Direct selling FY In Crore 57477.6 56218.38 78970.87 96451.74 MI Agents FY In Crore 17.19 21.26 20.22 Common Service Centres(CSCs) FY In Crore 0.32 1 1.54 Web-aggregators FY In Crore 0.03 46.36 IMF FY In Crore 0.03 14.52
  • 12.
    SUMMARY OF INDIANLIFE INSURANCE SECTOR (Continued.) PARTICULARS Unit 2013-14 2014-15 2015-16 2016-17 On-line FY In Crore 302.83 418.06 Point of sale FY In Crore others if any FY In Crore -1.13 -1.12 Total FY In Crore 120156 113185 138748 175078 Referrals FY In Crore 19.64 7.98 14.61 25.83 Channel Wise-New Business - No. of Lives Covered (Individual plus Group) Individual agents FY In Lakhs 484.37 285.89 248.01 237.03 Corporate agents-Banks FY In Lakhs 56.10 69.00 85.16 57.77 Corporate agents-Others FY In Lakhs 53.23 344.16 288.74 69.96 Brokers FY In Lakhs 41.09 57.94 87.62 141.36 Direct selling FY In Lakhs 713.68 725.22 1270.20 1546.75 Common Service Centres(CSCs) FY In Lakhs 0.02 0.08 0.06 MI Agents FY In Lakhs 5.08 5.49 6.86 Web Aggregators FY in Lakhs 0.00 0.19 IMF FY in Lakhs 0.00 0.03 Online FY in Lakhs 2.05 2.60 others if any FY in Lakhs 0.01 0.00 Total FY In Lakhs 1348.47 1487.31 1987.36 2062.61 Referrals FY In Lakhs 0.13 0.09 0.11 0.15 Region Wise distribution of Offices Metro As on 31st March Nos. 1048 1083 1667 2425 Urban As on 31st March Nos. 2543 2489 3525 3136 Semi-urban As on 31st March Nos. 5381 4803 Rural As on 31st March Nos. 498 590 Unclassified As on 31st March Nos. 7441 7461 Total As on 31st March Nos. 11032 11033 11071 10954 Assets Under Management Life Fund As on 31st March In Crore 1288225 1495309 1697453 1907953 Pension & General Annuity & Group fund As on 31st March In Crore 337579 389473 464203 566399 Unit ULIP Fund As on 31st March In Crore 331661 362740 340412 379841 Total Fund As on 31st March In Crore 1957466 2247522 2502068 2854193 Profit /Loss after tax As on 31st March In Lakhs 758783 761131 741543 772789 Equity Capital As on 31st March In Crore 25938.5 26239.6 26691.5 26956.94 REDRESSEL OF CONSUMER GRIEVANCES No of grievances reported during the year FY Nos. 374620 278992 204701 120847 No. of complaints reported with the Ombudsmen at difference centres FY Nos. 17512 14339 17257 16744
  • 13.
    SUMMARY OF INDIANGENERAL (Non Life) INSURANCE SECTOR PARTICULARS Remarks Unit 2013-14 2014-15 2015-16 2016-17 PROFILE No of General Insurance companies (including reinsurers) As on 31st March 29 29 30 31 No. of foreign reinsurers branches including Lloyd's India As on 31st March 7 No. of branch offices As on 31st March Nos. 9872 10407 10803 11141 Insurance penetration In percent 0.80 0.70 0.72 0.77 Insurance density US $ 11 11 11.50 13.20 BUSINESS FIGURES Number of new policies issued excluding Standalone health Insurers FY In Lakhs 1048.23 1202.24 1257.61 1525.33 Gross Direct Premium (Within & Outside India) FY In Crore 79934 87151 99333 130971 Market share of PSUs - Gen.Ins.Cos. Including specialised (GDP within India) In Percent 55.83 55.09 54.50 53.44 Segment Wise Gross Direct Premium (Within India ) Fire FY In Crore 7362.63 8056.54 8731.46 9538.01 Marine FY In Crore 3161.8 3020.06 2984.38 2917.47 Motor FY In Crore 33822.75 37379.32 42300.86 50250.53 Health FY In Crore 19634.3 22636.57 27457.30 34526.61 Others FY In Crore 13572.34 13593.24 14905.37 30895.72 Total FY In Crore 77553.81 84685.73 96379.37 128128.34 Net Retentions of General Insurers (including indian reinsurers) Fire FY In Percent 69.24 64.54 63.01 57.03 Marine Cargo FY In Percent 85.99 81.59 81.01 85.19 Marine Hull FY In Percent 31.94 35.47 44.51 20.03 Motor FY In Percent 100.00 99.67 99.20 97.02 Engineering FY In Percent 71.07 71.80 67.23 68.25 Aviation FY In Percent 1.00 38.91 27.15 27.85 Other miscellaneous FY In Percent 89.43 88.14 84.28 78.83 Total- All Segments FY In Percent 90.32 89.57 87.72 83.17 Incurred Claims Ratio Fire FY In Percent 76.54 73.78 74.44 84.38 Marine FY In Percent 63.37 67.44 72.05 74.98 Motor FY In Percent 79.50 77.14 81.18 88.17 Health FY In Percent 97.05 96.93 98.46 101.05 Others FY In Percent 72.96 73.91 75.91 81.91 Total- All Segments FY In Percent 81.98 81.70 85.06 90.91 Underwriting Experience FY In Crore -7640.81 -10576 -14959 -18840.41 Assets Under Management As on 31st March 149536 172144 188126 222344 Equity Share Capital As on 31st March 10240.21 11504.31 12603.39 13127.82 Assigned capital of branches of foreign re-insurers As on 31st March In Crore 1117.81 Commission expenses FY In Lakhs 462369 521200 578649 660166 Operating expenses related to Insurance business FY In Crore 16250.67 20206.37 23245 25594.35 Income from investments FY In Crore 14319 16607 19077.82 21730.28 Profit after tax FY In Lakhs 464906 463913 323849 84538 REDRESSEL OF CONSUMER GRIEVANCES No of grievances reported during the year 63335 60688 59083 52104 No. of complaints reported with the Ombudsmen at difference centres 8803 7145 8920 10883
  • 14.
    Individual New Business Performanceof Life Insurers - Brokers Premium in Crores INDIVIDUAL NEW BUSINESS PERFORMANCE OF LIFE INSURERS Particulars Number of Policies Issued Amount of Premium 2013-14 2014-15 2015-16 2016-17 2013-14 2014-15 2015-16 2016-17 Brokers 315765 256740 246421 227614 948.43 1019.93 934.18 972.08 0.77 0.99 0.92 0.86 1.55 1.84 1.6 1.25 Total 40835064 25869356 26702452 26419617 60956.86 55398.95 58320.11 77725.68
  • 15.
    Group New Business Performanceof Life Insurers - Brokers GROUP NEW BUSINESS PERFORMANCE OF LIFE INSURERS Particulars Number of Schemes NUMBER OF LIVES COVERED 2013-14 2014-15 2015-16 2016-17 2013-14 2014-15 2015-16 2016-17 Brokers 1739 1943 1976 2462 3793588 5537280 8516066 13908119 4.7 4.97 5.51 6.95 4.04 4.51 4.95 7.73 Total 37033 39069 35875 35412 94011968 122861373 172033724 179841286 Amount of Premium 2013-14 2014-15 2015-16 2016-17 318.89 431.1 507.47 785.82 0.54 0.75 0.63 0.81 59199.17 57786 80428.06 97352.24
  • 16.
    New Business Performanceof General/Non Life Insurers - Brokers Premium in Crores GROSS DIRECT PREMIUM INCOME - Non Life/GENERAL INSURANCE Insurance Brokers Total Percentage Share of Brokers Segment 2013-14 2014-15 2015-16 2016-17 2013-14 2014-15 2015-16 2016-17 2016-2017 Fire 1818.62 2107.99 2393 2844.93 7407.1 8054.69 8701 9537.43 29.83 Marine (Cargo) 741.48 794.58 868 929.71 2027.53 2063.41 2127 2125.24 43.75 Marine (Hull) 151.36 132.33 153 134.39 1127.11 956.3 863 792.33 16.96 Aviation 119.56 104.75 84 94.85 447.64 419.01 447 428.53 22.13 Engineering 901.58 909.39 855 838.84 2495.64 2339.28 2372 2294.37 36.56 Motor Own Damage 4917.26 5451.17 6231 9031.29 17768 18019.14 21325 23728.09 38.06 Motor Third Party 2713.42 3052.77 3945 4632.37 15873.4 19547.21 20989 26522.52 17.47 Liability 604.27 673.25 776 945.33 1253.47 1353.72 1562 1892.61 49.95 Personal Accident 289.19 316.07 390 476.67 1822.53 2163.34 2613 3645.74 13.07 Health Insurance 3978.81 4610.39 6423 8711.99 17204.1 19800.17 24372 30329.75 28.72 Overseas Medical Insurance 76.59 113.34 138 148.33 434.76 489.85 530 586.83 25.28 Crop Insurance 48.24 201.35 59 319.58 4610.75 6247.74 5551 20097.29 1.59 Credit Insurance 87.46 116.11 148 142.21 1429.32 1494.09 1512 1442.74 9.86 Miscellaneous 581.34 608.42 720 1220.96 3501.58 1736.92 3414 4705 25.95 Grand Total 17029.21 19201.92 23184 30471.5 77402.9 84684.87 96379 128128.4 23.78
  • 17.
    Few Existing Challenges The insurance sector is being impacted due to weak distribution networks, generating the need to strengthen the distribution network to support the sector as a whole. The industry is also marred by issues faced by the consumer such as complicated policies, policies being ‘mis-sold’, and hassles with claims. It could be due to information asymmetry between the insurance players and the customers. Traditional channels (agents) have been unable to resolve this, and have sometimes, unwittingly, even added to the problem. Through technology powering the buying of insurance products across insurers in a simple, quick and personal manner for the user, these issues can be addressed in a seamless manner.
  • 18.
    Insurance Industry -The Way Forward  The insurance industry is set to undergo a massive change, moving from a seller’s market to a buyer’s market, with insurance broking being the only channel to represent the customer. Though broking registered the highest CAGR of 27.7% between FY10 and FY15 among the major channels in non-life insurance, the channel is still evolving and needs to meet risk management requirements of customers comprehensively. Besides some concerns about regulations, most brokers are optimistic about their growth in the coming years.
  • 19.
    Insurance Industry –India  The insurance industry of India consists of 57 insurance companies of which 24 are in life insurance business and 33 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. Apart from that, among the non-life insurers there are six public sector insurers. In addition to these, there is sole national re-insurer, namely, General Insurance Corporation of India (GIC Re). Other stakeholders in Indian Insurance market include agents (individual and corporate), brokers, surveyors and third party administrators servicing health insurance claims.  Out of 33 non-life insurance companies, five private sector insurers are registered to underwrite policies exclusively in health, personal accident and travel insurance segments. They are Star Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance Company Ltd, Max Bupa Health Insurance Company Ltd, Religare Health Insurance Company Ltd and Cigna TTK Health Insurance Company Ltd. There are two more specialised insurers belonging to public sector, namely, Export Credit Guarantee Corporation of India for Credit Insurance and Agriculture Insurance Company Ltd for crop insurance.
  • 20.
    Insurance Industry –India Continued Market Size  Government's policy of insuring the uninsured has gradually pushed insurance penetration in the country and proliferation of insurance schemes are expected to catapult this key ratio beyond 4 per cent mark by the end of this year, reveals the ASSOCHAM latest paper.  The number of lives covered under Health Insurance policies during 2015-16 was 36 crore which is approximately 30 per cent of India's total population. The number has seen an increase every subsequent year as 28.80 crore people had the policy in the previous fiscal.  Premium income of the life insurance segment had increased 14.04 per cent in FY17 to Rs 4.18 trillion (US$ 64.92 billion). In August 2017, the Life Insurance industry reported a 24 per cent growth in overall annualised premium equivalent with the help of both private players and Life Insurance Corporation.
  • 21.
    Insurance Industry –India Continued Market Size  Post liberalisation, the insurance industry in India has recorded significant growth.  The Indian insurance industry is expected to grow to US$ 280 billion by FY2020, owing to the solid economic growth and higher personal disposable incomes in the country.  Premium income of the life insurance segment had increased 14.04 per cent in FY17 to Rs 4.18 trillion (US$ 64.92 billion). The total insurance market expanded from US$ 23 billion in FY05 to US$ 84.72 billion in FY17.
  • 22.
    Broking Regulations  InsuranceRegulatory and Development Authority of India (Insurance Brokers) Regulations, 2018
  • 23.
    OverView – Oneof the Regulations for Insurance Broker  IRDAI opened Indian market to Insurance brokers in 2003 and slowly Insurance brokers in India are taking baby step towards becoming at par with global insurance brokers. Of late IRDAI has started permitting insurance brokers in India to give consultation to settle claims up to Rs 1 Crore against a fee. As the process of getting the insurance broker license in India is very tough, many times more tough than many foreign countries, we believe that IRDAI is laying foundation to a strong insurance brokerage industry and going forward would allow lot of additional role to the insurance broker in India, which would be beneficial to the clients.
  • 24.
    Government Schemes  KarnatakaBuildings Construction Welfare Board  Karnataka Labour Welfare Board  Karnataka Government Insurance Department  Niramaya Scheme  Pradhan Mantri Fasal Bima Yojana  National Health Insurance Scheme (Aayushman Bharat)  Other Various Social Security Schemes
  • 25.
    References  www.bimagenie.com/content/insurance-brokers-india-global- scenario  bwdisrupt.businessworld.in/article/Insurance-Broking IC 14 Regulations of Insurance Business Book of Insurance Institute of India Mumbai  www.ibef.org/ insurance report  IRDAI Hand Book on Indian Insurance Statistics 2016-2017
  • 26.