e-ISSN : 2347 - 9671Impact Factor : 0.998p- ISSN : 2349 - 0187www . epratrust.comDecember 2014 Vol - 2 Issue- 12EVOLUTIONARY MARKET TRENDS IN MICRO INSURANCE IN INDIALimna .M1 & Dr. P. V. Basheer Ahammed21.Junior Research Fellow, P. S. M. O. College, Tirurangadi, University of Calicut, Kerala, India 2.Associate Professor (Retd.) & Research Guide, P. S. M. O. College, Tirurangadi, University of Calicut, Kerala, India.ABSTRACT nsurance in worldwide, is one of the most potent financial sector. The risks are inevitable being an indispensable part of human life and cannot be thrown out of life; hence therisk management and risk transfer become one of the basic requirements. The insurance is theonly answer to the solution. Micro insurance is one of the key elements in the financial servicepackage introduced by the Government of India for the upliftment of rural people under thefinancial inclusion scheme. Regulations on micro insurance were officially gazetted by theInsurance regulatory and development Authority (IRDA) on 30th November 2005. These regulationsimpose obligation on insurers towards the rural population. After micro insurance regulation,there are some clear trends emerging in the way of micro insurance business. Micro insuranceis recognized as a useful tool in socio- economic development of weaker sections. In this contextit is very important to identify the evolutionary market trends in the micro insurance sector inIndia. The study is based on secondary data and it is revealed that the market trend of microinsurance is growing positively in India though at a slow pace.KEYWORDS: Micro insurance, Market Trends, Market Leader, PlayersIwww.epratrust.comDecember 2014 Vol - 2 Issue- 1257INTRODUCTIONEPRA International Journal of Economic and Business Review Risk is pervasive in the lives of poor andlow- income groups. Uninsured risk leavesmany poor households more vulnerable tolosses from negative shocks. So regulations onmicro insurance were officially gazetted byIRDA on 30 November 2005. Micro insurancehas drawn attention of policy makers, insurers,business leaders and others in recent years. LICof India vision 2020 is to have a policy in everypocket. The regulation impose obligation oninsurers towards the rural population. So manycompanies are launching micro insuranceproduct to fulfill their social obligation. Microinsurance has been seen as one of the majorrisk managing tools for the poor and lowincome groups and as a potential market forbusiness it leads to the socio- economicdevelopment of weaker sections. After microinsurance regulation, there are some cleartrends emerging in the way of micro insurancebusiness. In this context it is very important tounderstand and analyse the evolution of markettrends in micro insurance.DEFINITION OF MICRO INSURANCE A simple definition of micro insuranceoffered by Churchill (2006) is that it is aninsurance that (i) operates by risk pooling (ii)financed through regular premiums and (iii)tailored to the poor who would otherwise notbe able to take out insurance. Micro insurancecover to the vulnerable groups could be usefulto protect them against common risks such asillness, injury or death and supplement theirrisk managing capacity. Micro insurance agent is anintermediary between the beneficiaries and theinsurance company. In case of micro insuranceagent need not have to pass the test to becomea certified agent. This change is designed toprovide a much needed fillip to the distributionchannels in rural India for marketing low valueproducts which till date was an area of concern,since getting agents in rural areas has been aperennial problem. The micro insurance agentwould also perform functions like collectionofproposal forms, remittance of premium towww.epratrust.comthe insurance company, help in settlement ofclaims, administration of policies; etc. TheMicro insurance Regulation of IRDA (2005)proposed specialized distribution channel formicro insurance through the Micro InsuranceAgents (MIA). This intermediary role has beenplayed mainly by Micro Finance Institutions (MFIs) Non- Governmental Organizations (NGOs) Self-Help Groups (SHGs) Co- operative societies Other community benefit institutionsDecember 2014 Vol - 2 Issue- 1258e- ISSN : 2347 - 9671 p - ISSN : 2349 - 0187Limna .M & Dr. P. V. Basheer AhammedNumber10.11.12.13.14.15.16.17. InsurerING VysyaPNB MetLifeSaharSBI LifeShriramStar UnionTata AIALife InsuranceCorporation of IndiaOBJECTIVES1. To understand and analyze the market trends of new business and collection of premium of micro life insurance in India.2. Identify and analyze the trends in agents and offices of micro insurance in India.METHODOLOGYNumber1.2.3.4.5.6.7.8.9.The Major Micro Life Insurance Players in India Insurer Aviva Bajaj Allianz Birla Sun LifeCanara HSBC OBCDLF Pramerica Edelweiss Tokio HDFC Standard IDBI FederalICICI PrudentialANALYSIS AND DISCUSSION The study is based on secondary data.Data have been extracted from Annual Reportsof IRDA, websites, journals etc. Percentageanalysis was done for analyzing the data. Tablesand charts are used for presenting the collecteddata. The study relates to previous six years i.e.from 2007- 08 to 2012- 2013. Year2007- 082008 -092009- 102010- 112011- 122012- 13Private 0.08 0.61 0.99 0.69 0.79 0.69 After micro insurance regulation, thereare some positive trends emerging in microinsurance business in India. Table 1 and Chart1 show trends in number of micro insurancepolicies in India. According to the IRDA AnnualReport, 2012-13, 5.03 million micro insurancepolicies were sold in India. So a positive growthin micro insurance policies from 0.93 millionin 2007- 08 to 5.03 million in 2012- 13 isexperienced. Apparently, LIC has gained itsmarket share with 4.34 million numbers ofpolicies.Table 1: Trends in number of new Life Micro Insurance Policies in IndiaLIC0.851.541.982.953.824.34Total0.932.152.983.654.625.03Note: Figures in Millionwww.epratrust.comDecember 2014 Vol - 2 Issue- 1259EPRA International Journal of Economic and Business ReviewChart 1: Trends in number of new Life Micro Insurance Policies in IndiaNote: Figures in Percentage Companies have actually registeredMIAs in last 7 years. Chart 2 shows that growthof agents in public and private micro lifeinsurance sector in India. Micro insurancebusiness is generated through 15,228 Micro Year2008- 092009- 102010- 112011- 122012- 13Private 603 770 758 1251 1824Insurance Agents (MIA) in LIC and 1824 inprivate players. LIC has steady growth in caseof agents growth. The trend revealed that someprivate players are low in their number of MIAsin comparison to public playersLIC 44.25 7906 9724 11546 15228Percentage 59.55 18.94 22.99 18.73 31.88Table 2: Agents Growth Rate of Public and Private Life InsurersPercentage 44.25 27.69 -1.55 65.03 45.8Note: Figures in PercentageChart 2: Evolutionary Trends in Life Micro Insurance AgentsNote: Figures in Percentagewww.epratrust.comDecember 2014 Vol - 2 Issue- 1260e- ISSN : 2347 - 9671 p - ISSN : 2349 - 0187Limna .M & Dr. P. V. Basheer Ahammed All players showed a positive growthwith 10285 offices in India. The private lifeinsurer is the market leader with 6759 officesin India. The trend of industry has been goodin case of new business, premium, agents andoffices under micro insurance portfolio. Theperformance of LIC is better in this respect, thanthat of private life insurers. Chart 3 and 4 revealed that LIC isfocusing on individual micro insurancepolicies, whereas the private playersincreasingly prefer group portfolios. The publiclife insurer is the market leader with a premiumcollection of Rs.3.09 billion in 2012- 13. So thereis growth in micro insurance premium from2.19 billion in 2007- 08 to 3.28 billion in 2012-13. The cumulative premium collected frommicro insurance was Rs.3.28 billion. Year2008- 092009- 102010- 112011- 122012- 13Private537.81839.78735.09964.22Table 3: Life Micro Insurance Premium- Individual CategoryPercentage 156.41 56.14-12.4631.175.63 LIC3118.7414982.5112305.7610603.499949.05Percentage 93.3 380.4-17.86-13.83-6.17Note: Figures in Percentage1018.54Chart 3: Trends in Life Micro Insurance Premium in Individual CategoryNote: Figures in PercentageTable 4: Life Micro Insurance Premium- Group CategoryYear2008- 092009- 102010- 112011- 122012- 13Private3326.801472.091719.141150.67756.89Percentage281.85-55.7516.78-33.06-34.22LIC17268.5422869.7213803.679831.6321045.76Percentage-10.32 32.43-39.64-28.77114.06Note: Figures in Percentagewww.epratrust.comDecember 2014 Vol - 2 Issue- 1261EPRA International Journal of Economic and Business ReviewChart 4: Trends in Life Micro Insurance Premium in Group CategoryNote: Figures in PercentageTable 5: Number of Life Insurance Offices in India (As on 31st March)Year200820092010201120122013Private 6391 8785 8768 8175 7712 6759LIC252230303250337134553526Chart 4: Number of Life Insurance Offices in India: Trend lines (As on 31st March)Note: Figures in Numberwww.epratrust.comDecember 2014 Vol - 2 Issue- 1262e- ISSN : 2347 - 9671 p - ISSN : 2349 - 0187CONCLUSION Micro insurance is the need of the hourand a proper implementation will benefiteveryone in the society. It is evident that thissector influenced by the rural and urban areasof weaker sections obligations. The microinsurance figures show that there is a positivetrend in its business. During the period of the REFERENCESstudy there is a positive growth of micro life 1. Nidhi Choudhari, (Aug.2013), Micro Insurance-insurance in India. So it clarifies that the micro Concept, Performance & Challenges, The Indianinsurance holds much hope for extension of Banker, vol VIII No.8protection to millions of resource-poor in India. 2. Mr. Hemant Bhargava ED (MI), AffordableThe market trend of LIC is better in this respect, Insurance- The Micro Way,than that of private insurers except in the case 3. Shahid Husain (Dec. 2010), Growth of LIC of Indiaof number life insurance offices. So all over during post privatization period, vol.VI, no. 2.public life insurance is the market leader in 4. Annual Reports of IRDA (2007-08 to 2012-13)the industry. LIC is highly concentrated on 5. www.irda.gov.inindividual micro insurance policies, in that case 6. www.licindia.comgroup based policies, and alternative 7. www.microsave.orgmicroinsurance products have to be more 8. www.google.comspecifically brought under micro insurance 9. www.microinsuranceacademy.comsector by LIC to protect and accelerate the 10. www.microinsurancenetwork.org/growth of micro insurance in India. After theintroduction of IRDA (Insurance Regulatory &Development Authority), all insurers havebecome more conscious for their products. Thestudy revealed the fact that there is no doubtthe market trend of micro insurance is growingpositively in India though at a slow pace.Limna .M & Dr. P. V. Basheer Ahammedwww.epratrust.comDecember 2014 Vol - 2 Issue- 1263