Majore Player in Industry

8/8/2019 Majore Player in Industry

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Insurance is defined as the equitable transfer ofthe risk of a loss, from one entity to another

An insurer is a company selling the insurance;an insured or policyholder is the person orentity buying the insurance policy



Life Insurance - Insurance guaranteeing aspecific sum of money to a designatedbeneficiary upon the death of the insured, or to

the insured if he or she lives beyond a certainage.

Health Insurance - Insurance against expensesincurred through illness of the insured.

Liability Insurance - This insures property suchas automobiles, property andprofessional/business mishaps.



Life insurance is a contract between the insurerand policy owner Insurer is agreed to pay anamount to the person insured or his nominee

either at the date or maturity or a periodicintervals or unfortunate death of the policyowner. Policy owner has to pay a fixed amountcalled premium in periodic intervals. This canbe monthly, quarterly, half yearly or yearly.Policy owner is allowed to choose the type ofpayment and payment cycle. There are manylife insurance schemes availability today inIndia.



Life Insurance provides protection to yourfamily - your family gets a specified sum ina lump sum when they need it the most i.e.

when you are not around. While the emotionalloss cannot be mitigated, the lump sumreceived from an insurance company can helptake care of your family·s financial future. Life

Insurance policies also offer tax benefits.



Life insurance in India was nationalized in 1956 byincorporating Life Insurance Corporation of Indiaand all private life insurance companies weretaken over by LIC

In 2000 Govt. of India passed a new insurance billInsurance Regulatory and Development Authority Actand appointed a new insurance regulator ²Insurance Regulatory and Development Authorityto issue license to private insurance companies

This again opened door to private players andmajor Indian financial companies tied up withglobal insurance giants to get more share in Indianlife insurance market.



Life Insurance is the fastest growing sector inIndia since 2000 as Government allowedPrivate players and FDI up to 26%. Life

Insurance in India was nationalised byincorporating Life Insurance Corporation (LIC)in 1956. All private life insurance companies atthat time were taken over by LIC

The life insurance sector of India has added upto 4.1% of the GDP in 2009

The contribution in FDI by the life insurancesegment was recorded at US $ 1.3 billion



life insurance industry witnessed a steady growth in2009-10 financial year, with an 18% increase in totalpremium received during the year to Rs 2,61,025 croreover the previous fiscal.

The US$ 41-billion Indian life insurance industry isconsidered the fifth largest life insurance market, andgrowing at a rapid pace of 32-34 per cent annually

India's life insurance industry is expected to grow byaround 10 per cent in 2010 over the previous year

Considering the above factors, life insurance industryhas become one of the main contributors towards the

country's long-term infrastructure growth.



Company Indian promoter Foreign

partner

Market share

(In percent)LIC Government of India None 70.92

ICICI Prudential ICICI Bank Ltd Prudential, UK 6.92

Bajaj Allianz Bajaj Auto Allianz,Germany

4.79

SBI Life SBI BNP Paribas,France

3.25

HDFC Standard Life HDFC Standard Life,UK

2.51

Birla Sun Life Aditya Birla Group Sunlife, Canada 2.06

Reliance Reliance Group None 2.22



Life insurance Corporation of India continues to bethe dominant life insurer in India with 2048 fullycomputerized branches, 100 divisional offices and

7 zonal offices. All divisional offices areinterconnected with Metro Area Network and LIChas tied up with some banks to offer onlinepremium collection in selected cities

In private sector ICICI Prudential Life Insurance isthe no.1 player. It is a joint venture between ICICIBank, India·s no.1 private bank and Prudential.



In today·s Indian life insurance market, thechallenge to insurers and intermediaries is twopronged:

Building faith about the company in themind of the clients.

Intermediaries being able to build personal

credibility with the clients.



Life insurance as "Investment":

Life insurance as "Risk cover

Life insurance as "Tax planning



1. Threat new entrants

The Indian market is highly brand oriented, itis difficult to introduce new brand.

The acceptability of new brand is also very low.

Tax exemption structure makes the industryattractive



Now a day competition is increasing in theeach and every sector, and as a competition inthe market increase the bargaining power of

the buyer will get increase. So buyersbargaining power is high

Market is highly segmented

Buyers in this industry are very return orientedand it switches easily.



Policy designer tend to have less leverage tobargain over premium and other terms of salewhen the company they are supplying a major

customer.



Life insurance sector can be featured in threefactors. They are saving, risk and tax benefit

SAVING:

Term deposits in bank

Investment in government securities

Money market investment

RISK COVERAGE For risk coverage, there is no close substitute of

the products. The risk protection is providedby this sector only.



TAX BENEFIT There are various substitute ofthis feature of life insurance. Some of thesubstitute which provides tax benefit is«

PPF

NSE

POST OFFICE SECURITIES.

INVESTMENT IN THE MUTUAL FUND. OTHER TAX SAVING INSTRUMENT



There is cut- thought competitions amongrivals in life insurance industry

There are mainly 23 private organizations and

one public organization in life insurancecompetition.

All the insurance companies deal in identical

policies, as service levels offered are similar.Hence, there is no product differentiation.



Opportunities

Today·s human life becomes full uncertain, sothey prefer protection against the risk.

Therefore they prefer life insurance. This is theopportunity for the life insurance sector.

To enter into rural market where customerawareness about insurance is low by effectiveand efficient marketing strategies.

To sell insurance products through electronicMedias



Interest rate of P.F and bank saving createthreat to insurance sector. All other saving isobviously the threat for life insurance sector



Indian Life Insurance Segment is growing at arapid rate due to more liberal approach fromGovt. of India and due to the upward trends in

Indian economy and share market. Morefinancial groups and banks including globalplayers are eyeing the Indian Life InsuranceMarket

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Majore Player in Industry