Presentation on

Insurance Sector
Mentor : Ms Priyanka Chaudhary
Presented By: Ajay Kumar (06) Ajit Kumar (07) Amandeep Kaur (08) Anant Sharma (09)
MBA 2nd Sem. Delhi School of Management Delhi Technological University, Delhi , India
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Agenda
Introduction Origin & growth Reforms in India Modern SWOT Future Emerging areas Career Opportunities

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Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.
Also defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment.

Delhi School of Management Delhi Technological University ,Delhi , India

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.
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5 environmental variables that affect all industries

Customers Competitors Government Technology and Globalization -are forcing rapid changes in the service sector.

In addition, there are 4 factors of particular importance to service providers : change in how quality is perceived cost control customer services and the new definitions of the customer.
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ORIGIN AND GROWTH OF INSURANCE SECTOR:

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi ), Yagnavalkya (Dharmasastra ) and Kautilya ( Arthasastra ). The writings talk in terms of pooling of resources that could be redistributed in times of calamities such as fire, floods, epidemics and famine. Insurance in modern form originated in the Mediterranean during the 13th century. (The earliest references to insurance- found in Babylonia, the Greeks and the Romans). Marine insurance is the oldest form of insurance followed by life insurance and fire insurance.
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Contd:

Oriental life Insurance Company at Calcutta in 1818, Bombay Life Assurance Company in 1823 Triton Insurance Company for General Insurance in 1850. 176 insurance companies by 1938. Insurance regulation formally began in India through the passing of two acts
the Life Insurance companies Act of 1912 and the Provident Fund Act of 1912.
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Contd:

The business of India Insurance grew at a faster pace as competition amongst the Indian companies intensified. The decision of nationalization of life insurance business took place in 1956 when 245 Indian and foreign insurance provident societies were first merged and then nationalized.

It paved the way towards the establishment of one nationalized monopoly corporation called Life Insurance Corporation (LIC)
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Contd:

Nationalization was justified on the grounds that it would create the much needed funds for rapid industrialization and self-reliance in heavy industries.
General Insurance followed suit and 1968; The Insurance Act was amended to allow for social control over the general insurance business.
Subsequently in 1973, non-life insurance business was nationalized and the General Insurance Business (Nationalization) Act, 1972 was promulgated. Delhi School of Management
Delhi Technological University ,Delhi , India

Reforms in the insurance sector:

1993, Malhotra Committee, led by former Governor of RBI Objective: to complement the reforms initiated in the financial sector

Recommendations (1994) :
Private sector be permitted to enter the insurance industry. Foreign companies be allowed to enter by floating Indian companies, preferably a joint venture with Indian partners.
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Today:

24 general insurance 23 life insurance companies The insurance sector colossal one (US$41 billion) World's fifth largest life insurance market with Growth rate of 15-20%. Together with banking services, insurance services add about 7% to the countrys GDP.

A well-developed and evolved insurance sector : A boon for economic development as it provides longterm funds for infrastructure development at the same time strengthening the risk taking ability of the country.

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Authorities

IAI (for actuaries) III (for agents, brokers 3rd party administrators) IIISLA (for surveyors and loss assessors). TAC (sole data repository for non-life industry) IBAI (voice for brokers) GI Council & LI Council (platforms for insurers) AIGIEA, AIIEA, AIIEF, AILICEF, AILIEA, FLICOA, GIEAIA, GIEU and NFIFWI
cater to the employees of the insurers.
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SWOT Analysis - Insurance sector

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Contributors:
Life Insurers Allianz Bajaj Life Insurance Co. Ltd. Birla Sun Life Insurance Co. Ltd. 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. 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. New India Assurance Co. Ltd. Oriental Insurance Co. Ltd. Reliance General Insurance Co. Ltd. Tata AIG Life Insurance Co. Ltd. United India Insurance Co. Ltd

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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. 2010 - 2015 projected to be the 'Golden Age' for the Indian insurance industry.
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Career Prospects:

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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
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References:

Insurance Sector in India: Towards the 2020 Vision by Tapen Sinha, Swiss Re Visiting Professor, IIRM

http://www.irda.gov.in

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Thank You..!!!!!!

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