The document summarizes the insurance sector in India. It discusses the evolution of the sector from being a public sector monopoly to allowing private players. It provides an overview of life and general insurance services and major public and private players. It notes that while LIC remains the largest insurer, private players have grown their market share in recent years. The insurance sector contributes significantly to the Indian economy through long-term savings and funding for development.

1. Submitted to: Prof. Anoop R.
Saneem Nazim, Sreeji J.R.
Ringu Sujith, Jacob John Panicker
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2. Overview
The actual agenda of this presentation is to discus…
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Insurance
Services in Insurance sector
Evolution of Insurance sector
Major players in Public & Private sector
Current scenario
Contribution to Indian economy
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3. What is Insurance?
Insurance is concerned with protection of
economic value of assets. Tangible assets are human
beings, house, furniture, motor cycle etc. Intangible
assets are liabilities…
Need For Insurance
Tax benefit + Tax free cash on maturity
Help during retirement – act as a pensions
Savings Instrument
Improves credit rating- considered as a financial asset
Contribution towards sustaining a standard of living when one contributing
partner dies.
Cover against risk
Financial Planning
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4. Services in Insurance Sector
Term Life
Insurance
Life Insurance
Permanent
Life Insurance
Fire
Insurance
Insurance
Marine
Insurance
General
Insurance
Mediclaim
Accidental
Motor
Vehicle
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5. Life Insurance
It is a written contract between the insured and the insurer.
• Term Life: the insured is covered while the policy is in effect,
usually 10–20 years.
• Whole Life: similar to term life, but allows the policyholder to
borrow against the policies cash value. When the term of policy
expires, the insured can get the cash value of the policy.
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6. General Insurance
• It is a non life insurance policies, including automobile and
homeowners policies, provides payments depending on the
loss from a particular financial events.
• General insurance typically comprises any insurance that is not
determined to be life insurance.
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7. Types of General Insurance
Health insurance: Just like one looks to safeguard ones wealth, these
policies ensure guarding the insurer's health against any calamities that may
cause long term harm to ones life and even hamper ones earning ability for a
lifetime.
Business insurance: Risks of loss of profits/business, goods, plant and
machinery are most profound in case of business.
Automobile insurance: Auto Policy is required to be taken to cover the
risks that arise to the owner, vehicle and third party.
Fire insurance: This policy is required to be taken to prevent any loss of
profits / property from incidental fire.
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8. Evolution of Insurance Sector
 1818: Oriental Life Insurance Company, the first life insurance
company on Indian soil started functioning.
 1870: Bombay Mutual Life Assurance Society, the first Indian life
insurance company started its business.
 1912: The Indian Life Assurance Companies Act enacted as the first
statute to regulate the life insurance business.
 1938: Earlier legislation consolidated and amended to by the
Insurance Act with the objective of protecting the interests of the
insuring public.
 1956: 245 Indian and foreign insurers and provident societies are
taken over by the central government and nationalized. LIC formed
by an Act of Parliament, viz. LIC Act, 1956, with a capital
contribution of Rs 5 core from the Government of India.
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9.  Similarly, in 1972, 107 general insurers were nationalized through
the passing of General Insurance Business (Nationalization) Act,
1972.
 The existing 107 insurers were amalgamated and grouped into Five
companies, viz., National Insurance Company (NIC), New India
Assurance Company (NIAC), Oriental Insurance Company (OIC),
United India Insurance Company (UIIC), and General Insurance
Corporation (GIC).
 Then insurance industry transformed into monopoly
Oligopolistic state or public sector insurance industry in India.
Source: http://en.wikipedia.org/wiki/Insurance_in_India
and
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10. History of LIC
• The Parliament of India passed the Life Insurance Corporation
Act on the 19th of June 1956, and the Life Insurance
Corporation of India was created on 1st September, 1956, with
the objective of spreading life insurance much more widely
and in particular to the rural areas with a view to reach all
insurable persons in the country, providing them adequate
financial cover at a reasonable cost.
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11. Presently the LIC has a network of seven zones; 100 divisions and
2,048 branches, personnel exceed seven lakhs employees and over
six lakhs agents.
Vision: A trans-nationally competitive financial conglomerate of
significance to societies and Pride of India.
Mission: To explore and enhance the quality of the life of people
through financial security by providing products and services of
aspired attributes with competitive returns and by rendering
resources for economic development.
Values: Caring and Courtesy, Initiatives and Innovation, Integrity and
Transparency, Quality and Returns, Participation and Relationship,
and Trustworthiness and Reliability
Culture:
Agility
(quickness),
Adaptability,
Collaboration,
Commitment, Discipline, Empowerment, Sensitivity, and
Excellence.
Source: www.licindia.com/
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12. General Insurance Corporation (GIC)
• Prior nationalization there were 68 Indian insurers (including LIC) and 45
non-Indian insurers did the business.
• In Nov. 1972, the general insurance business was nationalized by the
General Insurance Business (Nationalized), Act 1972 (GIBNA) and vested
in the hand of the GIC and its four subsidiaries viz.
1. National Insurance Co. Ltd.,
2. New India Assurance Co. Ltd.,
3. Oriental Fire and General Insurance Co. Ltd., and
4. United India Insurance Co. Ltd.
• GIC was incorporated as a holding company in 1992.
• General Insurance Business is completely owned by the government.
• The paid up capital of GIC was fully subscribed by the Government and of
four subsidiaries.
• It was controlled by a single organization with four subsidiaries
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13. • GIC’s four subsidiaries:
1. National Insurance Co. Ltd.,
2. New India Assurance Co. Ltd.,
3. Oriental Fire and General Insurance Co. Ltd., and
4. United India Insurance Co. Ltd.
• The Govt of India took over Control, supervision, and policy
making is with GIC.
• The premium income for GIC comes mainly through the
obligatory reinsurance premium on a quota share basis from
subsidiaries on their direct business in India (almost 20% of
subsidiaries business come to GIC).
Source: www.gicindia.com
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14. Regulatory Body
Insurance Regulatory & Development Authority (IRDA)
is the controlling and regulatory apex body in the country for
insurance sector and its chairman and members are appointed
by Government of India. IRDA’s HQ is located at Hyderabad.
It was constituted as a body to regulate and develop the
insurance industry in 1999, and was incorporated as a statutory
body in April, 2000.
The Key objectives of IRDA is promotion of competition
to satisfy customer choice with lower premiums. The IRDA
opened up market in August 2000.
Foreign companies were allowed ownership up to 26%.
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15. Role of IRDA :
 Protecting the interest of policyholders.
 Establishing guidelines for the operations of insurers, and
brokers.
 Specifying the code of conduct, qualifications, and
training for insurance intermediaries and agents.
 Promoting efficiency in the conduct of insurance
business.
 Regulating the investment of funds by insurance
companies.
Source: http://www.irda.gov.in/ADMINCMS/cms/frmGeneral_NoYearList.aspx?DF=AR&mid=11.1
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16. Private Sector v/s Public Sector
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Public owned corporation
Main objective of earning profit
Formation involves a long process
Capital contributed by owner and
investor
More freedom of operations
Managed and control by board of
directors selected by shareholders
Not directly accountable to general
public
Performance evolution on basis of
economic gains
• State-owned enterprises
• Main motive of providing
service to public
• Formed in short time just by
government decision
• Capital contributed by
government
• Less freedom of operations
• Managed and control by board
of directors selected by
government
• Accountable to general public on
performance discus in
parliament
• Performance evolution on basis
of economic and non- economic
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gain

17. LIC
PRIVATE PLAYERS
Growth – 21.87%
Growth – 129%
Earned – Rs.197.86 billion[04-05]
Earned – Rs.55.57
billion[04-05]
Against Rs.24.29 billion
[03-04]
Market share –
2010 2011
2012
13% 22%
24%
Sold – 2.4 billion policies
Market share –
2010
2011
2012
87.04% 78.07% 75%
Source: www.rncos.com
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18. The 15 private players together saw their business grow 32 % to
Rs 848 crore with a market share of 28.44 %.
Insurers
Premium[Rs.Cr.]
• Birla Sunlife
• ICICI Prudential
28.00
271.00
• Bajaj Allianz
124.00
• SBI Life
• Kotak Mahindra Old
90.00
26.00
• ING Vysya
• HDFC Standard
Mutual
22.00
• Met Life
19.00
70.00
• Max New York Life
69.00
• Tata AIG
48.00
• Shriram Life
4.50
• Aviva
39.00
• Sahara Life
1.70
• Reliance Life
33.00
• Bharti Axa Life
0.72
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19. Major Players
 Players in Life Insurance Companies
1.Bajaj Allianz Life Insurance Company Ltd
2.Birla Sun Life Insurance Company Ltd
3.HDFC Standard Life Insurance Company Ltd
4.ICICI Prudential Life Insurance Company Ltd
5.Max New York Life Insurance Company Ltd
6.SBI Life Insurance Company Ltd
7.Tata AIG Life Insurance Company Ltd
8.Reliance Life Insurance Company Ltd, etc.
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20.  Players in General Insurance Companies
1.Bajaj Allianz General Insurance Company Ltd
2.Icici Lombard General Insurance Company Ltd
3.Reliance General Insurance Company Ltd
4.Bharti AXA General Insurance Company ltd
5.SBI General Insurance Company Ltd
6.L & T General Insurance Company Ltd
7.Tata AIG General Insurance Company Ltd
8.Agriculture Insurance Company Of India Ltd, etc.
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21. Current Scenario
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Growing at the rate of 15-20% annually
75% population has no insurance
Adds 7% to country’s GDP
Annuity or pension product have over 33% of market
Unity linked insurance scheme have monopoly
Until 1999, there were no private insurance companies in
India. The government then introduced the Insurance
Regulatory and Development Authority Act in 1999, thereby
de-regulating the insurance sector and allowing private
companies. Furthermore, foreign investment was also
allowed and capped at 51% holding in the Indian insurance
companies.
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22. Contribution to Indian Economy
• Life Insurance is the only sector which garners long term
savings
• Spread of financial services in rural areas and amongst socially
less privileged
• Long term funds for infrastructure
• Strong positive correlation between development of capital
markets and insurance /pension sector
• Employment generation
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23. Conclusion
Insurance is a subject listed in the Union list in the
Seventh Schedule to the Constitution of India where only
centre can legislate. The insurance sector has gone through a
number of phases by allowing private companies to solicit
insurance and also allowing foreign direct investment of up to
26%, the insurance sector has been a booming market.
However, the largest life-insurance company in India is still
owned by the government.
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24. Ask me about the topic if you want…
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25. Thanks
Prepared by: Saneem Nazim, Sreeji J.R.,
Ringu Sujith, Jacob John Panicker
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