Presented To,

Pro. Abhishek Parikh Presented By,

Bhaumik Dhruva (48)

Poojan Doshi (49)
Hemal Nagori (64)
Naishal Shah (82)
Content
 Insurance Introduction
 Privatization in Insurance
 Types of Insurance
 Growing up of Insurance Sector
 Major driving factord
 Top players of Insurance sector
 Insurance and Salary
 Challenges and Opportunity
 Causes
Insurance- Introduction
Insurance = Protection against Risk

 Insurance is a co-operative device of distributing losses, falling on an

individual or family over a large number of persons, each bearing a
nominal expenditure & feeling secured against heavy loss.
 Insurance business has emerged as one of the prominent financial
services during recent times, particularly in developing countries
where it could not grow before globalization. But it is very difficult to
trace exactlywheninsuranceoriginated.
Contd…
 Insurance has always been a politically sensitive subject in India.
Within less than 10 years of independence, the Indian
government nationalized private insurance companies 
in 1956 to bring this vital sector under government control
to raise much needed development funds.

 Since then, state-owned insurance companies have grown into

monoliths, lumbering and often inefficient but the only alternative.
They have been criticized for their huge bureaucracies, but still
have millions of policy holders as there is no alternative.
Privatization in insurance
The Narasimha Rao government (1991-96) which unleashed liberal changes
in India's rigid economic structure could not handle this political hot potato.
Ironically, it is the coalition government in power today which has declared
its intention of opening up insurance to the private sector. Ironical because
this government is at the mercy of support from the left groups which have
been the most vociferous opponents of any such move.

All segments of the financial sector had been opened to private players with
better product, services & social objective

International players are eyeing the vast

potential of the Indian market and are
already making plans to come in.
Types of Insurance
 Privatization has brought in lot of surprises for insurance
sector. In India, insurance sector is at the booming stage as
only 40% of the population is insured. Private organizations
are striving hard and hard to develop the sector.
 Government is also supporting the insurance sector to
increase the Gross Domestic Product ratio from the sector
which is now about 1.4% only.

accidental medical auto

insurance insurance insurance
diabetes
medi-
insurance
claims
family- Other various
health Dental-
types of
insurance insurance
insurance
polices
Grown up insurance sector
The insurance industry has grown by 83 per cent since the
opening up of the sector.
- C S Rao, chairman (IRDA)

• Insurance premium income has risen to Rs 82,415 crore in 2003-04, against

45,000 crore in 2000-01.
• premium income in the life insurance sector to rise further by 15-16 per cent
and non-life insurance premium by 14 per cent in 2005-06.
• The health insurance sector is expected to grow by 10-15 per cent.
• foreign direct investment is increased to 49 per cent from the current 26 per
cent, the industry can expect greater entry of players.
Cont…….
 Indian insurance sector is likely to register unprecedented
growth of 200% and attain a size of Rs. 2000 billion by 2009-
10, in which a private sector insurance business will achieve a
growth rate of 140% as a result of aggressive marketing
technique being adopted by them against 35-40% growth rate
of state owned insurance companies.
 On account of intense marketing strategies adopted by private
insurance players, the market share of state owned insurance
companies like GIC, LIC and others have come down to 70%
in last 4-5 years from over 97%.
Cont……
 The private insurance players despite the sector is still
regulated has been offering rate of return (RoR) to its policy
holders which is estimated at about 35% as against 20% of
domestic insurance companies.
 LIC and GIC have limited number of policies to offer to their
subscribers while in case of private insurance companies, their
policy numbers are many more and the premium amount as
well as the maturity period is much competitive as against
those of government insurance companies.
 The Chamber has projected that in rural markets, the share of
private insurance players would increase substantially as these
have been able to generate a faith among their rural
consumers.
 Growth of top 10 private insurance
companies of India:
 ICICI Prudential Life Insurance Co Ltd is the biggest private life
insurance company in India. It experienced growth of 58%.

 Bajaj Allianz Life Insurance Co Ltd has reported a growth of 52%

and its market share went up to 6.98% in 2007-08 form 5.66% in
2006-07.

 SBI Life Insurance Co Ltd in terms of new number of policies

sold, the company ranked 6th in 2007-08. its growth is 87% over

last year.
Cont…….
 Reliance Life Insurance Co Ltd Total collected was Rs 2,792.76
crore and its market share went up to 2.96% from 1.23% a year
back.

 HDFC Standard Life Insurance Co Ltd with an income of Rs 2,680

crore in FY2007-08, registering a year-on-year growth of 64%.

 Birla Sun Life Insurance Co Ltd market share of the company

increased from 1.22% to 2.11% in 2007-08. The company moved
to the 7th position in 2007-08.
Cont……..

 Max New York Life Insurance Co Ltd has reported growth of 73%
in 2007-08. Total new business generated was Rs 641.83 crore as
against Rs 387.51 crore.

 Kotak Mahindra Old Mutual Life Insurance Ltd the fiscal 2007-08,
the company reported growth of 80%, moving from the 11th
position to 9th. It captured a market share of 1.19% in 2007-08.
 Aviva Life Insurance Company India Ltd ranking dropped to 10th
in 2007-08 from 9th last year. It has presence in more than 3,000
locations across India via 221 branches and close to 40
bancassurance partnerships.
Major Driving Factor
 Growing Demand from Semi-Urban Population.
 Rising demand for retirement provision in the ageing
population.
 The opening of the pension sector and the establishment
of the new pension regulator.
 Rising per capita incomes among the strong middle class,
and spreading affluence.
 Public private partnerships infrastructure development.
 Growing consumer class and increase in spending &
saving capacity.
Top Players of Insurance Sector
 Following are the top players of the insurance sector
offering most competitive packages to their employees:
 Life Insurance Corporation
 New York Life
 Prudential
 Met Life
 Birla Insurance
 Kotak Mahindra
 ICICI
 HDFC
Insurance and Salary
Due to privatization in
insurance sector growth
options have been changed.

From basic salary with

small incentives,
compensation systems have
been grown to increased
salaries, incentives, perks,
allowances,
accommodations, etc.

The average salary

increase for the year 2006
was 17.1%.
Insurance due to privatization Current Scenario

 process of privatization will  Entry of privatization

lead to `green field' area of  Competition
activity.  New product & technology
 The banks and capital markets  Distribution work
were integrated with insurance,
which, in turn, was vital to
 Customer services
sustain and grow the economy  CRM policy increases sales
 Trade and finance had no force
geographical limits and, hence,  Modern marketing approach
the need to align with the
international scenario in this
aspect.
 Risk coverage & security.
Challenges & Opportunities
 Mass Marketing
 Job Opportunities
 Inflow of Funds
 Reinsurance
 Marketing Strategies
 Banc assurance
 Information technology
causes
 Ineffective distribution and marketing strategies
adopted by LIC
 Limited advertising initiatives
References
  www.irdaindia.org 
 Privatisation of Insurance Industry, by V. R. Krishna Iyer and K.
K. Narendran © 1994 Economic and Political Weekly.
 http://www.123eng.com/forum/viewtopic.php?p=111861
 http://www.thehindubusinessline.com/2000/08/17/stories/171708k
9.htm
 http://www.business-standard.com/india/news/insurance-sector-
grew-83-after-privatisation/208147/
 http://www.ieo.org/sid002.html
 http://payroll.naukrihub.com/compensation/indian-
industry/insurance-sector/
Thank You