3. LIFE INSURANCE
Life insurance is a contract between an Insurance Policy holder and an
insurer, where the insurer promises to pay a designated beneficiary a sum
of money (the "benefits") upon the death of the insured person. Depending
on the contract, other events such as terminal illness or critical illness may
also trigger payment. The policy holder typically pays a premium, either
regularly or as a lump sum.
The advantage for the policy owner is "peace of mind", in knowing that the
death of the insured person will not result in financial hardship for loved
ones.
LIC is the largest insurance company and accounted for the market share
of 70 per cent in FY11
Share of private sector has been increasing over the years; it increased
from around 2 per cent in FY03 to around 30 per cent in FY11 3
4. Non-Life Insurance/(General Insurance)
A form of insurance mainly concerned with protecting
the policy holder from loss or damage caused by
specific risks
The non life insurance market has grown from
USD2.6 billion in FY02 to USD9.1 billion in FY11 .
Over FY03-11, non life insurance premiums have
increased at a CAGR of 14.5 per cent
4
5. 2000
onwards
1993-99
1956-1972 •Post
Malhotra liberalization, the
Committee insurance industry
recommended has recorded
opening up the significant growth
insurance sector and the number of
to private private players
•All life insurance players.
companies were increased to 41 in
Before 2011*
nationalised to form
1956 LIC in 1956 to •IRDA, LIC and Customers are
increase penetration GIC Acts were more conscious of
and protect policy passed in 1999, the benefits of
•The life holders from making IRDA insurance and its
mismanagement. the statutory
insurance
regulatory body importance.
sector was •The non life for insurance
made up of 154
domestic life
insurance business and ending the
insurers, 16 was nationalised to monopoly of LIC 5
foreign life form GIC in 1972 and GIC
insurers and 75
provident
funds
6. ADVANTAGE INDIA
Strong demand Policy support
Growing interest towards •Tax incentives on insurance
products.
insurance among people.
•Passing of Insurance Bill gives
IRDA flexibility to frame
Innovative products and regulations
distribution channels
Advantage
India
Increasing investments Attractive
•Growing participation of the private
opportunities
sector with market share of 30 per •Life insurance in low-income urban
cent in FY11 as against 2 per cent in areas.
FY01.
2015E – Expected Market size: 6
Government’s proposed increase in USD139 billion for 2015; estimate
FDI limit to 49 per cent from 26 per according to BMI;
cent will further fuel investments.
8. INSURANCE COMPANIES IN INDIA
HDFC Standard Life Insurance Co. Ltd.
Max New York Life Insurance Co. Ltd.
ING Vysya Life Insurance Co. Pvt. Ltd.
Life Insurance Corporation of India.
ICICI Prudential Life Insurance Co. Ltd.
Kotak Mahindra Life Insurance Co. Ltd.
Iffco Tokyo General Insurance Co. Ltd.
Metlife India Insurance Co. Pvt. Ltd.
Oriental Insurance Co. Ltd.
SBI Life Insurance Co. Ltd.
National Insurance Co. Ltd.
Reliance General Insurance Co. Ltd.
8
9. IRDA GOVERNS THE INDIAN INSURANCE SECTOR
Public(1)
Life
Insurance
(24 players)
Private (23)
Public(6)
Insurance Non-Life
Ministry of
Finance Regulatory and Insurance
Development
(Government of Authority (24 players)
India) (IRDA)
Private (18)
Re-insurance
(1 player) Public (1) 9
10. INSURANCE REGULATORY &
DEVELOPMENT AUTHORITY (IRDA)
The regulator for insurance business in India is
IRDA.
IRDA was established in 2000
IRDA’s functions:
To regulate, promote and ensure orderly growth of
the insurance business and reinsurance business in
India
To protect the interests of policy holders
10
11. CONCLUSION
Share of private sector players has increased to 30
per cent from 2 per cent over FY03-11.
Enormous opportunities available.
Penetration rate of Life Insurance has increased to
4.4 per cent in FY11 from 2.2 per cent in FY02 (i.e.
Above Global avg. of 4.0 percent)
11
