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Insurance Industry Size, Players &

Employees
Size
With 36 crore policies, India's life insurance sector is the biggest in the world. The sector consists of
52 insurance companies, of which 24 are in life insurance business and 28 in non-life.
The total market size of the insurance sector in India was US$ 66.4 billion in FY 13. It is projected to
touch US$ 350-400 billion by 2020.
Major Players




Employees
5 million plus employees are employed in this sector directly or indirectly
Key Drivers of change
Key
changes
Impact
of the
changes
IRDA bill
cleared
Liberalization
of the sector
and formation
of
independent
regulator
1999 2001 2002 2006
2011
&
2012
2007 2014
IRDA TPAs
Regulation &
foreign players
allowed (FDI
26%)
TPAs specially
focused on
health
insurance
business &
Entry of Foreign
players brings
capital, strong
technical
expertise
IRDA
insurance
brokers &
corporate
agent
regulation
Rapid
insurance
distribution
through
corporate
intermediaries
Entry of
stand alone
health
insurance
players
allowed
Entry of stand
alone health
insurance
players
Price
detariffication
Significant
change in the
premium
rates for the
commercial
line
Merger &
Acquisition
guidelines &
TP
premium
increase
Enabled
consolidation
,inorganic
transaction in
the industry &
Improvement
in overall
profitability.
FDI
raised
from
26% to
49%
More
capital
will be
invested
&
Domestic
players
may lose
their
shares
Life Insurance Corporation of India (LIC) was formed in September 1956 by an Act
of Parliament, LIC Act 1956 with a contribution of Rs. 50 million.
Presently the LIC has a network of seven zones; 100 divisions and 2,048 branches,
personnel exceed seven lakhs employees and over six lakhs agents.
Vision: A trans-nationally competitive financial conglomerate of significance to
societies and Pride of India.
Mission: To explore and enhance the quality of the life of people through financial
security by providing products and services of aspired attributes with competitive
returns and by rendering resources for economic development.
Objectives
Spread Life Insurance widely and in particular to the rural areas.
Maximize mobilization of peoples savings by making insurance-linked savings
adequately attractive.

Opportunities & threats for LIC
1) LIC
2) ICICI
3) HDFC
Inflow of global managerial & financial
expertise

Liberalization results to wider choices

Introduce global innovations and practices
Threats

Neck to Neck competition

New Entrants(FDI)

customers switching to other company
Strength & Weakness of resources
of LIC
Strengths
Strong capital and reserve
Technically Skilled Manpower
Innovative product for different
demography

Weakness
High administration & management
expenses
Vertical organizational structure
Lower Reliability on Pvt. Players


Growing at the rate of 15-20% annually
75% population has no insurance
Adds 7% to countrys GDP
LIC market share come down to 75% and
private insurers increased over 24%
Annuity or pension product have over 33%
of market
Unity linked insurance scheme have
monopoly

Current Scenario
Strategic Business Unit(SBU) LIC
Three no of SBUs are their for LIC
1. International operation
2. Pension & Group business
3. Real estate
Differentiation based policy is used by LIC
The differentiate their service
Variety of policies
Direction of Strategic Development
LIC lies in high-high status in the GE-matrix
LIC lies in the STAR of BCG matrix
LIC lies in the diversification column in the product-
market matrix.

Identification of Markets
Assessment of Risks
Penetration and exploitation of markets
control over investment and operating costs
Finding best prospects
Newer Marketing Strategies
Strategic Policies