INS I - Session 1

8/2/2019 INS I - Session 1

1/20

Insurance IDF - 303

Session 1

Introduction to Insurance

An Overview of Insurance Market in India

The Global Scenario

The Current Indian Scenario

Total Volume of Business

IRDA - The RegulatorPlayers in the Public and Private Sector, Their Market Shares,

Insurance Penetration and Density


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Global Scenario

The global financial system is still in a period of significant

uncertainty (Report published by IMF)

Spillover effect onto the banking sector, the resultant impact is in

terms of shrinking credit.

Challenges posed by a slower than expected level of recovery.

Global insurance premium for calendar year 2009 was USD 4066

billion, which is 1.1 per cent (inflation adjusted) lower than USD

4220 billion reported during 2008.(World Insurance Report by Swiss Re)

The share of life business: 57% in total premium collection.

While life insurance business collected USD 2331 billion as

premium, the same for non-life business was USD 1735 billion.


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The Indian Economy

Registered an impressive growth of 7.4 per cent in 2009-

10 following 6.7per cent in 2008-09.

Major source of worry - inflationary conditions (surged to

11 % towards the end of 2009-10, aggravated by the spurt

in prices of food items.

Financial markets during 2009-10 showed signs of

volatility with signs of rising activity. A favorable trend from the downturn observed in the wake

of the financial crisis.


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Indian Insurance Industry;The Current Scenario (1/2)

Number of participants in the industry has gone up from 6 in the

year 2000 to 48 insurers operating in the life, non-life and

reinsurance segments.

36 private insurers are operating in collaboration withestablished foreign insurers from across the globe.

FYP, a measure of new business secured, by the life insurers

during 2009-10 was Rs.1,09,894 crore as compared to

Rs.87,331 crore in 08-09 registering a growth of 25.84 % againstnegative growth rate of 6.81 % during previous year. Total premium of life insurers in 2009-10 was Rs.2,65,450 crore

as against Rs.2,21,785 crore in 2008-09 exhibiting a growth of

19.69 % (10.15 % in 2008-09).


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Indian Insurance Industry;The Current Scenario (2/2)

The non-life insurers (excluding specialised institutions

like ECGC and AIC and the standalone health insurers)

underwrote premium of Rs.35,816 crore in 09-10, as

against Rs.31,428 crore in 08-09 registering a growth of13.44 %.

The three health insurers had a premium of Rs.1,072

crore in 09-10, twice of their collective premium of

Rs.535 crore in 08-09.


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Growth IndicatorsLife Insurance Business

Parameter FY 99-00 FY 06-07 FY 07-08 FY 08-09 (Apr-Dec 2009)

Q3

Number of players 1 16 18 22 23

Capital Deployed

(Rs. Cr)

5 9,485 16,692 24,988 27,620

Branches 2,048 5,373 8,913 11,815 11,931

(12018 on

31.03.10)

Employees

(in Lacs)

1.23 1.87 2.54 2.85 2.70

Individual Agents

(in Lacs)

7.14 19.93 25.20 29.37 29.84


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Growth IndicatorsLife Insurance Business

Parameters FY 99-00 FY 06-07 FY 07-08 FY 08-09 (Apr-Dec09)

Q3

Increase from

FY 00 to FY 09

New Business

Premium (Rs.Cr)8,299 75,649 93,713 87,006 67,438 +10 times

Renewal premiums(Rs. Cr)

17,951 80,427 1,07,639 1,34,785 96,917 +7 times

Total Premium

(Rs. Cr)

26,250 1,56,076 2,01,351 2,21,791 1,64,355 +8 times

Mngmt. Expenses

Commission (Rs.Cr)

3,171 12,259 14,704 15,533 10,552 +5 times

Mngmt. Expenses

Operating

expenses (Rs.Cr)

3,756 13,585 20,299 25,724 16,671 +6 times


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.

Indian Insurance IndustryGlobal Position

Life Industry Non-life Industry

Indias rank globally 9th 26th

Share in globalmarket

2.45 % (2009)

1.98 % (2008)

0.46 % (2009)

Insurance Growth inIndia

10.1 per cent

(inflation adjusted)

1.6 per cent

(inflation adjusted)

Growth in GlobalMarket

Contracted by 2 percent

Contracted by 0.1 percent


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The Regulator


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The Regulator

Constituted by IRDA Act' 1999

Duties, powers and functions include -

issue/ renew certificate of registration to insurers

protection of the interests of the policy holders specifying requisite qualifications, code of conduct and practical

training for insurance intermediaries

specifying the code of conduct for surveyors and loss assessors

promoting efficiency in the conduct of insurance business

regulating investment of funds by insurance companies

adjudication of disputes between insurers and intermediaries or

insurance intermediaries


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.

Indian Insurance IndustryNo. of Players

Public Private

Life Insurance 1 22

Non-life Insurance 6

(including 2 specialisedinsurers; ECGC and

AIC)

18

(including 3 standalonehealth insurers; Star,

Apollo and Max Bupa)

Reinsurance 1 0

Total (as on 17.01.10) 8 40


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List of Life Insurers

1. HDFC Standard Life Insurance

2. Max New York Life Insurance

3. ICICI-Prudential Life Insurance

4. Om Kotak Life Insurance

5. Birla Sun Life Insurance

6. Tata-AIG Life Insurance7. SBI Life Insurance

8. ING Vysya Life Insurance

9. Allianz Bajaj Life Insurance

10. Metlife India Insurance

11. Reliance Life Insurance(EarlierAMP Sanmar Life InsuranceCompany from 3.1.02 to 29.9.05)

12. AVIVA

13. Sahara Life Insurance

14. Shriram Life Insurance

15. Bharti AXA Life Insurance

16. Future Generali India Life

Insurance17. IDBI Fortis Life Insurance

Company

18. Canara HSBC OBC LifeInsurance

19. Aegon Religare Life Insurance

20. DLF Pramerica Life Insurance21. Star Union Daiichi

22. India First

23. Life Insurance Corporation ofIndia


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.

Indian Life Insurance IndustryMarket Shares: 09-10 (Public vs. Private)

Premium Income in Rs. Cr. Market Share in %


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PVT

INSURERS

LIC

.

Indian Life Insurance IndustryMARKET SHARES (30.11.10)

Total FYPas on

30.11.10

(in Rs. Cr.)

MarketShare

(in %)

Private

Insurers

21477 27.9

LIC 55513 72.1

Total 76990 100.0


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.

Indian Life Insurance IndustryFYP of PVT LIFE INSURERS (30.11.10)

0

1000

2000

3000

4000

5000

Tata

SBILife

Reliance

MetLifeMax

ICICIPru

HD

FC

B

irla

Bharti

Bajaj

A

viva

Others

B i P f f N lif


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.

Business Performance of Non-life

Insurers(Source: IRDA Annual Report, 2009-10)


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Insurance Penetration

The potential and performance of the insurance sector is universally

assessed with reference to IP and ID

Insurance Penetration (the ratio of premium underwritten in agiven year to the GDP)

Insurance Penetration increased from 1.9% (life = 1.41 and

non-life = 0.49) in 2000 to 5.2% (life = 4.6 and non-life = 0.6) in

2010

Countries with the highest IP are Taiwan, UK, S Africa, Hong

Kong, France, Japan, Switzerland and US

1

2

3

4

5

6

Non-life

Life


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Insurance Density

Insurance Density is the ratio of premium underwritten in a given year

to the total population measured in USD for convenience of

comparison)

Life ID increased from 7.6 USD (2000) to 47.7 USD (2009)

Non-life ID increased from 2.3 USD (2000) to 6.7 USD (2009)

Countries with the highest ID are Switzerland, UK, France, Japan, US,

Hong Kong and Germany

INSURANCE DENSITY (in USD)

0

10

20

30

40

50

60

Year 2000 Year 2009

Non-life

Life


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Insurance Penetration & Density in IndiaDuring Post-IRDA Period


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Questions,if any

INS I - Session 1

Documents

Transcript of INS I - Session 1