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INTRODUCTION
Insurance may be defined as: It is a contract between two parties where by one party undertakes to
compensate the party for the loss arising due to an uncertain events for
which the another party agrees to pay a certain amount regularly.
In India, insurance has a deep-rooted history. Insurance in India has evolved
over time heavily drawing from other countries, England in particular. The
insurance sector in India has come a full circle from being an open
competitive market to nationalization and back to a liberalized market
again. The business of life insurance in India in its existing form started in
India in the year 1818 with the establishment of the Oriental Life Insurance
Company in Calcutta.
The Insurance Act, 1938 was the first legislation governing all forms of
insurance to provide strict state control over insurance business.

The insurance sector is a colossal one and is growing at a speedy rate of 15

20%.Together with banking services, insurance services add about 7% to
the country GDP. A well-developed and evolved insurance sector is a boon
for economic development as it provides long-term funds for infrastructure
development at the same time strengthening the risk taking abilityof the
country.
India is about 200 million middle class household shows a huge untapped
potential for players in the insurance industry. Saturation of markets in
many developed economies has made the Indian market even more
attractive for global insurance majors. The insurance sector in India has
come to a position of very high potential and competitiveness in market.
The main objective of the researcher through this study is to understand the
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market scenario by studying different companies and their strategies, their

objectives and management
What is Insurance:
System whereby individual and companies concerned about potential
hazards pay premium to an insurance company. Which reimburses (in
whole or part) them in the event of loss. The insurer profits by investing the
premiums it receives. Some common forms of insurance cover business
risk, automobiles, homes, boats workers compensation and health life
insurance guarantees payment to the beneficiaries when the insurance
person dies. In a board economic sense, insurance transfer risk from
individual to a larger group which is better able to pay for losses.

The Importance of Insurance:

When you hear the word insurance, the words boring and mundane
probably enter your mind. It is realized that insurance is not a fun topic to
discuss or think about, yet it is important and serves to protect your
financial future. It is comforting to think that nothing will ever happen to
you and that you are invincible. But odds are that you are likely to get into a
car accident or have some type of health problem at some point in your life,
and when that happens, you will want to have insurance. So when you
question whether you need insurance, the answer is a resounding yes, you
definitely need insurance. It may seem like insurance is a waste of
resources- spending money on something that may or may not happen.
Since you cannot predict the future, it is important to protect yourself and
your possessions against damage and harm. Insurance is all about
protection- it protects you against an unfortunate incident such as a car
accident, a robbery, or an illness. The moment an unexpected ill-fated event
happens, you will be so glad you have insurance. Medical bills from a
minor accident can deplete your savings and force you into bankruptcy.
Insurance is not a rip off, but rather an essential financial service.

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DEFINITION
General definition:
In the words of John Magee, Insurance is a plan by which large number of
people associate themselves and transfer to the shoulders of all, risks that
attach to individuals.
Fundamental definition:
In the words of D.S. Hansel, Insurance may be defined as a social
device providing financial compensation for the effects of misfortune, the
payment being made from the accumulated contributions of all parties
participating in the scheme.
Contractual definition:
In the words of justice Tindal, Insurance is a contract in which a sum of
money is paid to the assured as consideration of insurers incurring the risk
of paying a large sum upon a given contingency.

INSURANCE SECTOR IN INDIA

Insurance sector in INDIA is booming up but not to level comparative with
the developed economies such as Japan, Singapore etc. Also with the
opening of the insurance sector to the private players have provided stiff
competition resulting into quality products. Also there is a need to
restructure the Indian Government owned Life insurance Corporation of
India so as to maximize revenue and in turn profits. IRDA regulations and
norms for the allocation of funds need to have a comprehensive look. In the
phase of declining interest rates and rising inflation the funds need to be
applied in productive areas so as to generate high returns. Also in terms of
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clients servicing areas such as premium payments, after sales service,

policy dispatch, redressal of grievances has to be amended. In the current
scenario, LIC has to provide flexible products suited to the customers
requirements. Also a proper and systematic risk management strategy needs
to be adopted. After the increase in terrorism and destructive events around
the global world such as September 11 attack on World Trade Centre, US
Taliban war, US Iraq war etc.. An alternative to reinsurance such as asset
backed securities is emerging out in the developed economies. Catastrophe
bonds are one of the alternatives for reinsurance. Finally some policies such
as pure term and pension schemes needs to be addressed massively at both
the urban and the rural segments as to generate high premium income which
will help in the development and growth of the economy.

HISTORICAL BACKGROUND
Oriental insurance co. Was the first British insurance company to start its
business in 1818.
Bombay mutual life assurance society was the first insurance company in
India (1870).
Life insurance business was nationalised in 1956.
General insurance was nationalised in 1971.

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The insurance sector is divided in two parts life and general or non-life.
Life
Non-life/General
LIFE INSURANCE
In 1870 two British life insurance companies entered in India and attempted to do life
insurance business on Indian lives.After that many Indian & foreign companies started
business in India and by the year 1955 there were 255 insurance companies operating in
India and transacting the business to the extent of Rs 200 crores. Due to the following
reasons the Government decided to nationalize the life insurance industry w.e.f 1/7/1956.
1. No full guarantee to the Policyholders (who are insured).
2. The concept of trusteeship (confidence) was lacking.
3. Many insurance companies went into liquidation (bankrupt).
4. There was malpractice in the business.
5. Non-Spreading of life insurance.
6. No insurance in rural areas.
7. No group insurance
8. No social security

To overcome the above mentioned problems the life insurance business was nationalized
and formed Life Insurance
Corporation with following features:
1. The Central Govt. guaranteed the Policyholders through the LIC.
2. Being a Corporation formed under Special Act Passed by the Parliament therefore the
public can trust.
3. The LIC cannot be liquidated without the order of the Central Govt.
4. Under the LIC Act, all day-to-day functions of the Corporation and the method of
Investment in Govt. Securities were defined. Therefore, the malpractices were
eliminated.

1.3 GENERAL INSURANCE

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Prior to nationalization of the General Insurance Business in 1972 by enactment of the

General Insurance Business Nationalization Act 1972 (GIBNA 1972) there were 55
Indian Companies and 52 non-Indian Companies carrying of the
business of General Insurance in India.The primary objective of nationalization of
general Insurance was to make it meaningful to the common man, to carry its
message to the remotest corner of the country and to give it its rightful place in the
economy of the country. When it was in the private sector it was a mere handmaid
to trade and industry and served to cater to the interests of a limited clientele.
Worse still it functioned in a manner favoring the interests of a few at the expense
of, needless to say, the majority. There were allegations of malpractices on a big
scale.
It was the objective of nationalization to remove these malpractices and usher in an era
of Insurance run on sound business principles and functioning on healthy and egalitarian
lines. The emphasis should be on spreading the message of Insurance as widely as
possible and on ensuring that it gives the right weightage to the weaker sections of the
society. The principle of competition must have its useful role to play, but
not at the expense of unhealthy rivalry. General Insurance is a service and proper and
efficient service is due to the policyholder as a matter of right. The Corporation
exists for the benefit of the policyholder. Business must cease to work under purely
mercenary motives. Whenever, one feels the need for protection against an
unpredictable contingency, a suitable Insurance cover should be available. No excuse
should be given that a particular cover is not conventionally given or that other markets
of the world do not give it. Healthy employer-employees relationship is of vital
importance to achieve the main objectives of nationalization.

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Recent trends in insurance sector

CHANGING TRENDS IN LIFE INSURANCE POLICY:
Along with the other objectives of insurance like financial security, tax
benefits etc. one of the major objectives is saving and investment.
Traditional life insurance policies like endowment were becoming
unattractive and not meeting the aspirations of the policyholders as the
policyholder found that the sum assured guaranteed on maturity had really
depreciated in real value because of the depreciation in the value of money.
The investor was no longer content with the so called security of capital
provided under a policy of life insurance and started showing a preference
for higher rate of return on his investments as also for capital appreciation.
It was, therefore found necessary for the insurance companies to think of a
method whereby the expectation of the policyholders could be satisfied.
The objective of providing a hedge against the inflation through a contract
of insurance pushed insurer to link the insurance policy with market and
thus the industry observed the beginning of Unit linked insurance policy
(ULIP).

Current trends of the general insurance market

The recent development in the general insurance sector is the activities by the insurance regulator. The IRDA has been very
stringent and has been keeping a close-watch on the functioning of all the insurance companies. The latest regulation from
IRDA is on health insurance portability. In the future, general insurance industry will be very much in the limelight than any
other industry facing recession now.
Online selling of insurance policies to discerning customers, who access the Internet will gain momentum. Typically motor,
travel and health policies will be sold more online. Many insurers have already realised this and are creating separate verticals
to exploit this segment. The interplay of technology & telecom solutions will be a major factor determining the growth of the
industry in the future.
Till recently, micro-insurance on the lines of micro-finance, is thought to be a magic word and insurers planned to bring retail
products to suit this segment.

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One major problem affecting the industry, like in all developing economies is the shortage of trained insurance professionals
and technicians at all levels. So companies that are able to recruit and grow talent that continue to provide innovative
insurance solutions for the underserved Indian market will be the ones that will rise and shine in the general insurance
industry. The market is large and set for rapid growth but the ones that take the required calculated risks, have the right
technical expertise, do not blindly go after market share and are customer-centric in their approach to the market will be the
ones to benefit from this growth and become one of the biggest and best run insurance companies in the world.

OBJECTIVE OF TRENDS
Government of India initiated certion changes through its new economic
policy in 1991. This policy attempted some of the following objectives of
trends
Reform in industrial policy and indusrial licencing.
Developing and partial convertibility of rupee.
Reform in trade policy.
Reduction of fiscal policy.
Simplification of bureaucratic control and procedures.
Simplification of foreign investment norms.
Reduction of inflationary pressures.
Reducing control of investment norms.
Change in enactment like FERA ( FOREIGN EXCHANGE
REGULATORY AUTHORITY) and MRTP ( MONOPOLIES AND
RESTRICTIVE TRADE PRACTICE )
Opening up of insurance to the private sector will substially help in
enhancing saving mobilization offering anew range of insurance products,
covering a large population and increasing the average per capita insurance
premium.

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POLICIES OF TRENDS

These policies are in 5 parts:

A)The general policies of developing nongovernmental sectors and
preventing the government section to become larger.
B )The general policies of cooperative sections.
C)The general policies of developing nongovernmental sectors via
assigning activities of the government sector and their donation.
D).The general policies of privatization.
E).The general policies and government practices to avoid monopoly.

Policies And Measures To Develop Insurance Market

The Authority has taken a pro-active role in the establishment of a vibrant Insurance
market in the country by taking the following steps:
i) The market regulation by prudential norms,
ii) The registration of players who have the necessary financial strength to withstand the
demands of a growing and nascent market,
iii) The necessity to have fit and proper person in-charge of businesses,
4 The implementation of a solvency regime that ensures continuous financial stability,
and above all,
v) The presence of an adequate number of insurance companies to provide competition
and choice to customers all these steps lead to the establishment of a regime
committed to an overall development of the market in normal times.
vi) Prescribed rural and social sector norms in respect of Insurance business being
underwritten by the companies.
vii) The companies have also been asked to devise insurance policy to specific sector in
the economically weak population.
Research and Development Activities Undertaken by the Insurance companies
The insurers have been conducting market research either in-house or through
professional agencies
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i) to introduce tailor-made products targeted at specific segments of the population so that

Insurance can become more meaningful and affordable.
ii) Risk assessment studies are being carried out for measuring accumulation of risk of a
particular place at any one point of time.
iii) Consumer awareness campaigns are being encouraged to improve insurance literacy
levels by conducting workshops, distributing literature etc.
Protection of Interests of Policyholders
To protect the interests of holders of Insurance policies and to regulate, promote and
ensure orderly growth of the Insurance industry the Authority has taken the following
steps:
i) a leading consumer activist has been inducted into the Insurance Advisory Committee.
ii) In addition to this member, this committee has drawn representation form the industry,
Insurance agents, womens organizations and other interest groups.
iii) While the Government has taken steps to strengthen the Boards of the State-run
companies by inducting representatives from consumer organization and policyholder,
iv) the Authority, on it part, was careful to ensure that all the new private companies
registered have a director representing consumer interests on their Boards.
v) In addition to this measure all insurers have been advised to streamline their grievance
redressal machinery and set benchmarks for efficient and effective service.
vi) All insurance companies are adhering to the Insurance Ombudsman scheme
formulated by the Government and complaints against insurance companies are being
referred to them by the aggrieved policyholders from time to time.
vii) The Authority is conscious of the fact that the fine print should not take away what
the bold print promises and in this regard has come out with the Insurance Advertisement
and Disclosure Regulations which ensure that the Insurance companies adhere to fair
trade practices and transparent disclosure norms while addressing the policyholders or the
prospects.
viii) All Insurance intermediaries, before obtaining a licence,or at the time of renewal of
licence, are required to undergo compulsory training to ensure that they can service the
policyholders better by being well trained and informed.
ix) Guidelines have been issued to insurers to file their existing and new products with
the Authority. In case of new products insurers are required to submit details of
premium rating,
policy conditions,
proposal form,
claim form,
underwriting manual and
the system in vogue to review the rates, terms and conditions in future.
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In addition to this, they are required to furnish certificates from advocates and actuaries
that the statements made are true and accurate and are not in violation of any law and
that the policy wordings are simple and easily understandable to a policyholder.
STRATEGIES FOR BETTERMENT AFTER trends in insurance
sector
Maximising customer satisfaction.
Introducing new technologies.
Improving promotional mix.
Updating research and development.
Strategic approach to fund management.
Diversification.
Minimum government interference.

OPPORTUNITIES
Mass Marketing:
India is a highly populated country and would continue to be so in the near
future.New players may tend to favour the "creamy" layer of the urban
population. But, in doing so, they may well miss a large chunk of the
insurable population. A strong case in point is the current business
composition of the dominant market leader -the Life Insurance Corporation
of India. The lion's share of its new business comes from the rural and semirural markets. In a country of 1 billion people, mass marketing is always a

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profitable and cost-effective option for gaining market share.The rural

sector is a perfect case for mass marketing.

Job Opportunities:
Job opportunities are likely to increase manifold. The liberalization of the
insurance sector promises several new job opportunities for those who are
equipped with degrees in finance. Finance professionals who had witnessed
a slump in the job market would be much relieved. There will be demand
for marketing specialists, finance experts and human resource professionals.
Reinsurance:
Huge capacity is likely to be created in the area of reinsurance. Apart from
pure reinsurance activities, which involve providing insurance protection,
there will be a revolution in service-related fields like training, seminars,
workshops, know-how transfer regarding risk assessment and rating, risk
inspections, risk management and devising new policy covers, etc.

Marketing Strategies:
Also, with more players in the market, there will be significant increase in
advertising, brand building, and this will benefit whole lot of ancillary
industries.A substantial shift is likely to take place in the distribution of
insurance in India. Many of these changes will echo international trends.
Worldwide, insurance products move along a continuum from pure service
products to pure commodity products. Initially, insurance is seen as a
complex product with a high advice and service component. Buyers prefer a
face-to-face interaction and place a high premium on brand names and
reliability.

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Bancassurance:
In other markets, notably Europe, this has resulted in bank assurance: banks
entering the insurance business. The Netherlands led with financial services
firms providing an entire range of products including bank accounts, motor,
home and life insurance, and pensions. Other European markets have
followed suit. In France, over half of all life insurance sales are made
through banks. In the UK, almost 95% of banks and building societies are
distributing insurance products today.In India too, banks hope to maximize
expensive existing networks by selling a range of products.
Information Technology
Worldwide interest in E-commerce and India's predominant position in
Information Technology and software development are also likely to be
major factors in the marketing of insurance products in the immediate
future. The number of Internet account is increasing and the trend has
already been set by some of the leading insurers and insurance brokers
worldwide.
CHALLENGES
1)Technology:
In today's highly competitive financial services environment, effective
organizations will employ technology in a strategic way so to achieve a
competitive edge. Technology will play an increasing role in aiding design
and administering of products, as well in efforts to build life-long customer
relationships. At the same time, investment in technology will only help as
long as firms find the right people: people with the right attitude, values,
and ethics, commitment to excellence, and focus on customer service.

Competition:
Thus, apart from the normal issues facing any new company, many new
Indian private insurance players will need to cope with the challenges of
working with a joint venture partner. They will be competing with large and
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well-entrenched government-owned players. They have to overcome

regulatory hurdles, change the attitude of new recruits and satisfy some
very high customer expectations. Also, the players will have to consider the
Indian market as a long-term investment, and maintain clear-cut objectives
and constant monitoring at all levels.
List of Private Insurance Companies in India
Following is a list of leading private non life insurers in India and their
gross premium statistics
Company

Figure for
June 2015 in
INR crores

Figure for
June 2014 in
INR crores

Royal Sundaram

64.78

77.46

Tata AIG

47.14

36.50

Reliance General
Insurance

80.45

79.03

IFFCO Tokio

36.55

58.23

ICICI Lombard

348.98

423.54

Bajaj Allianz

136.20

109.84

HDFC Ergo

143.86

123.40

Cholamandalam

87.21

51.71

Future Generali

32.29

37.30

Universal Sompo

17.57

12.22

Bharti AXA

66.30

39.33

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SBI

1.99

1.45

L&T

3.94

0.10

Star Health &

Allied Insurance

176.90

406.13

Apollo Munich

97.31

67.73

Max Bupa

36.39

14.13

ALLIANZ BAJAJ LIFE INSURANCE

COMPANY LTD
Bajaj Allianz Life Insurance
Co. Ltd. is a joint venture
between Allianz SE, one of the
world's
largest
insurance
companies, and Bajaj Finserv.
Allianz SE is a leading
insurance corporation globally
and one of the largest asset managers in the world, that manage assets worth
over a Trillion. With over 115 years of financial experience, Allianz SE is
present in over 70 countries around the world. Bajaj Allianz is into both life
insurance and general insurance. Today, Bajaj Allianz is one of India's
leading and fastest growing insurance companies. Currently, it has presence
in more than 550 locations with over 60,000 Insurance Consultants. In June
2008, Bajaj Allianz entered into partnership with Thomas Cook India to
provide travel finance. Bajaj Allianz Life Insurance ensures excellent
insurance and investment solutions by offering customized products,
supported by the best technology.
Contact Address
Bajaj Allianz Life Insurance Co. Ltd.
GE Plaza, Airport Road
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Yerawada, Pune - 411006

Website: www.bajajallianzlife.co.in
ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD.

ICICI Prudential Life Insurance Company is a

joint venture between ICICI Bank, which is one of India's foremost
financial services companies, and Prudential plc, which is a leading
international financial services group headquartered in the United Kingdom.
ICICI Prudential began the operations in December 2000. Today, this
company has over 2100 branches, which include 1,116 micro-offices, over
290,000 advisors and 18 banc assurance partners. ICICI Prudential Life
Insurance Company is the first life insurer in India that received a National
Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. ICICI
Prudential has been voted as India's Most Trusted Private Life Insurer for
three consecutive years. ICICI Prudential Life Insurance Company has
various insurance plans that have been designed for different individuals, as
every individual has different insurance needs.
Contact Address
ICICI Pru Life Towers
1089 Appasaheb Marathe Marg
Prabhadevi, Mumbai - 400025
Website: www.iciciprulife.com

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CONCLUSION
Privatization is a widely applied economic policy. It has, incontestably,
produced substantial economic benefits by raising profitability and
efficiency in firms, by providing financial resources to strapped
governments, and by signaling to creditors, investors and donors the
seriousness and credibility of a governments shift in economic regime. In
developing countries, privatization has most successfully been applied in
commercial, industrial, manufacturing and service firms operating in
competitive markets. This form of privatization has generally proven its
worth: Consumers appreciate improvements in terms of quality and quantity
of good or services producedeven when prices increase, which is far from
the general case. In most countries, complaints about this sort of
privatization have been relatively muted and short-lived. Citizenries may
not like the job losses or the foreign ownership of breweries, banks, mines
and hotels, but the matter rarely reaches the level of street demonstrations.
The more important issue, economically and politically, is that of
infrastructure privatization.

Life Insurance in India, Key Trends and Opportunities to 2015

Indias insurance sector is expected to grow even faster than the countrys overall
economic growth, opening up new business avenues across the industry. With a
large number of insurance providers already operating in the country, the Indian
insurance industry has shown early signs of entering a consolidation phase, and an
improved distribution infrastructure, the adoption of new channels and
differentiated product offerings will continue to change the competitive landscape
significantly.
Indias low life insurance penetration rate and the rising awareness of the need for
insurance will be key growth factors in the Indian insurance industry. Favorable
foreign investment policies and increased capital-raising options will also create an
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environment for collaborations and joint ventures. Indias reinsurance market is

also expected to continue growing, driven mainly by growth in non-life and
accident and health insurance.
The report provides top-level market analysis, information and insights of the
Indian life insurance industry, including:
- The Indian life insurance industrys growth prospects by product category and
customer segment
- The various distribution channels in the Indian life insurance industry
- The competitive landscape in the life insurance industry
- A description of the life reinsurance market in India
This report provides a comprehensive analysis of the life insurance market in
India:
- It provides historical values for Indias life insurance industry for the reports
20062010 review period and forecast figures for the 20112015 forecast period
- It offers a detailed analysis of the key sub-segments in Indias life insurance
industry, along with market forecasts until 2015
- It covers an exhaustive list of parameters, including written premium, incurred
loss, loss ratio, commissions and expenses, combined ratio, frauds and crimes, total
assets, total investment income and retentions
- It analyses the various distribution channels for life insurance products in India
- Using Porters industry-standard Five Forces analysis, it details the competitive
landscape in India for the life insurance business
- It provides a detailed analysis of the reinsurance market in India and its growth
prospects
- It profiles the top life insurance companies in India, and outlines the key
regulations affecting them
Reasons to Buy:
- Make strategic business decisions using top-level historic and forecast market
data related to the Indian life insurance industry and each sector within it
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TRENDS IN INSURANCE SECTOR

- Understand the demand-side dynamics, key market trends and growth

opportunities within the Indian life insurance industry
- Assess the competitive dynamics in the life insurance industry, along with the
reinsurance segment
- Identify the growth opportunities and industry dynamics within seven key
product categories
- Gain insights into key regulations governing the Indian insurance industry and its
impact on companies and the industry's future
Key Highlights
- The significant growth in the Indian life insurance market in the review period
can be attributed to key growth drivers such as population growth, robust economic
growth, lucrative tax benefits, the rising disposable income of Indias middle-class
population, and increased awareness of the need for insurance, especially among
younger people
- India is the worlds twelfth-largest life insurance market, and the fourth-largest in
the Asia-Pacific region
- By 2015, it is expected to surpass South Korea to emerge as the third-largest life
insurance Asia-Pacific market after China and Japan
- In 2010, the individual life insurance segment accounted for 74.8% of the total
Indian life insurance industry, whereas the group life insurance market had a
considerably lower market share of 25.2%
- Indian customers are increasingly demanding insurance products that offer
assured income through annuities
- Distribution channels such as bancassurance have gained significant market share
in the review period

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