Aby T Manimala – BA LL.

B (06)
Arun Bharati – BA LL.B (27)
 Introduction:
• Insurance = Collective bearing of Risk.
• Basic Human trait is to be averse to the idea
of risk taking.
• Insurance, whether life or non-life, provides
people with a reasonable degree of security
and assurance that they will be protected in
the event of a calamity or failure of any sort.
DIVISION OF INSURANCE SECTOR

INSURANCE

LIFE
GENERAL INSURANCE
INSURANCE

FIRE MARINE MOTOR

MEDICLAIM
INSURANCE INSURANCE VEHICLE
LIFE INSURANCE
• Life Insurance is an Insurance of a person’s life.
• If the person dies, his/her family would receive an
amount of money called as Sum of money Assured,
which would help the insured person’s family to take
care of the financial problems which had arisen from
the sudden death of the income earning person.
• To get this benefit, he has to pay a certain amount of
money called Life Insurance Premium to the
Insurance Company every year/every month as per
the contract.
• Life insurance policies pay a lump sum amount to the
beneficiaries of the policyholder upon his death.
GENERAL INSURANCE

• General Insurance is an Insurance which is on

the assets.
• This type of insurance typically covers losses
caused by theft or damage.
• Every asset have its own value and it helps the
owner by giving him some returns.
• So if the asset is damaged due to certain
unexpected situations, then owner of the asset
faces some financial loss.
• To protect the owner from a financial loss
because of the asset, the insurance policy is
done by the owner.
Comparison Table

LIFE INSURANCE GENERAL INSURANCE

Life Insurance brings financial General Insurance brings financial
security to the life. security to the asset.
Comparison Table

Duration:
LIFE INSURANCE GENERAL INSURANCE

A life insurance plan is a long-term A general insurance plan is typically a

investment. one-year contract. But there are
exceptions.
Comparison Table

Premium payment:
LIFE INSURANCE GENERAL INSURANCE

A Life insurance premium is usually General insurance policy plans

paid over many consecutive years. require you to pay the premium in
one-time basis. This usually happens
at the start of the policy.
Comparison Table

Savings:
LIFE INSURANCE GENERAL INSURANCE

Many life insurance plans also have A General insurance policy has no
an element of savings. savings component.
Comparison Table

Maturity:
LIFE INSURANCE GENERAL INSURANCE

The life insurance policyholder Even though the policy holder do not
receives a maturity benefit after the make a claim, he cannot get back any
maturity date of the policy. part of the premium he paid.
Comparison Table

Purpose:
LIFE INSURANCE GENERAL INSURANCE

The purpose of life insurance is to The purpose of general insurance is

give an amount of cash at the death more direct. A payout takes place
of the policyholder. Some plans also only at the time of unexpected loss,
give payouts at regular intervals like an accident or a theft.
after the maturity of the policy.
 Life Insurers:
 Allianz Bajaj Life Insurance Co. Ltd.
 AMP Sanmar Assurance Co. Ltd.
 Birla Sun Life Insurance Co. Ltd.
 Dabur CGU Life Insurance Company Pvt. Ltd.
Contributors

 HDFC Standard Life Insurance Co. Ltd.

 ICICI Prudential Life Insurance Co. Ltd.
 ING Vysya Life Insurance Co. Pvt. Ltd.
 Life Insurance Corporation of India.
 Max New York Life Insurance Co. Ltd.
 Metlife India Insurance Co. Pvt. Ltd.
 Om Kotak Mahindra Life Insurance Co. Ltd.
 SBI Life Insurance Co. Ltd.
 Tata AIG Life Insurance Co. Ltd.
 Non-Life Insurers:
• Bajaj Allianz General Insurance Co. Ltd.
• ICICI Lombard General Insurance Co. Ltd.
• IFFCO Tokyo General Insurance Co. Ltd.
• National Insurance Co. Ltd.
Contributors

• New India Assurance Co. Ltd.

• Oriental Insurance Co. Ltd.
• Reliance General Insurance Co. Ltd.
• Royal Sundaram Alliance Insurance Co. Ltd.
• Tata AIG Life Insurance Co. Ltd.
• United India Insurance Co. Ltd
Reinsurers:
• General Insurance Corporation of India.
ORIGIN AND GROWTH OF INSURANCE SECTOR:

• Till end of FY 1999-2000, two state-run insurance

companies, namely, Life Insurance Corporation (LIC)
and General Insurance Corporation (GIC) were the
monopoly insurance providers in India.
• Under GIC there were four subsidiaries
– National Insurance Company Ltd.
– Oriental Insurance Company Ltd.
– New India Assurance Company Ltd.
– United India Assurance Company Ltd.
ORIGIN AND GROWTH OF INSURANCE SECTOR:
• In fiscal 2000-01, the Indian federal government
lifted all entry restrictions for private sector
investors.
• Foreign investment insurance market was also
allowed with 26 percent cap.
• GIC was converted into India's national reinsure
from December, 2000
• All the subsidiaries working under the GIC
umbrella were restructured as independent
insurance companies.
 Contribution to growth:
• LIC and GIC have limited number of policies to
offer to their subscribers
• Private insurance companies offer many policies
and the premium amount as well as the
maturity period is much competitive as against
those of government insurance companies.
• The private sector insurance players have
started exploring the rural markets in which
until recently, the state owned companies had
the monopoly.
• India’s life insurance premium, as a percentage
of GDP is 1.8%
 Future of the Sector:
 Indian insurance sector is likely to register
unprecedented growth of 200% and attain a size of
Rs. 2000 billion by 2009-10
 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.
 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.
 Insurance Sector - Emerging
Areas:
• Demand for Pension Plans
Two relatively modern trends affect life insurance
business in India significantly:
– Joint Family System and
– elderly are increasingly having to fend for
themselves
• Separateness of Banking and Insurance
– Bancassurance
• Role of Information Techno-logy
• Using Postal Network
• Creating Insurance awareness
• Innovative Products
 FROM CUSTOMER AND SERVICE
POINT OF VIEW
• Globalization - "The Dynamic Force"
• MNCs - "The New Path Maker"
• More customer oriented
• Mostly better service oriented
• More competitive
• Better satisfaction
• More value addition
• Strategic development
 FROM PROMOTION POINT OF VIEW

• Computerization
• Internet
• Electronic Clearance Service (ECS)
• Call Centres and SMS services
INDIAN INSURANCE IN 21ST CENTURY
• 2000: IRDA starts giving licenses to private insurers: ICICI prudential and
HDFC Standard Life insurance first private insurers to sell a policy
• 2001: Royal Sundaram Alliance first non life insurer to sell a policy
• 2002: Banks allowed selling insurance plans. As TPAs enter the scene,
insurers start setting non-life claims in the cashless mode
• 2007: First Online Insurance portal, https:/// set up by an Indian Insurance
Broker, Bonsai Insurance Broking Pvt Ltd.
• The Government of India liberalized the insurance sector in March 2000
with the passage of the Insurance Regulatory and Development Authority
(IRDA) Bill, lifting all entry restrictions for private players and allowing
foreign players to enter the market with some limits on direct foreign
ownership.
• Minimum capital requirement for direct life and Non-life Insurance
company is INR1000 million and that for reinsurance company is INR 2000
million. In the 2004-05 budgets, the Government proposed for increasing
the foreign equity stake to 49%, this is yet to be effected. Under the
current guidelines, there is a 26 percent equity cap for foreign partners in
direct insurance and reinsurance Company
THANK YOU