SPECIAL THANKS TO PROF.

CHADDHA

BY ANIL MALVANKAR ROLL NO: 36

Introduction
Insurance = Collective bearing of Risk. Insurance is a co-operative device to the spread

the loss caused by a particular risk over a number of person who are expose to it and who agree to insure themselves against the risk.
Insurance is a contract in which a some of money

paid to the assured as consideration of insurers incurring the risk of paying a large sum upon a given contingency.

 Five environmental variables that affect all

Factors affecting service sector

industries Customers Competitors

Government
Technology and Globalization -are forcing rapid changes in the

service sector.

In addition, there are four factors of

particular importance to service providers change in how quality is perceived

cost control
customer services and the new definitions of the customer.

DIVISION OF INSURANCE SECTOR

INSURANCE

GENERAL INSURANCE

LIFE INSURANCE

FIRE INSURANCE

MARINE INSURANCE

MEDICLAIM

MOTOR VEHICAL

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.

LIFE INSURANCE

Contributors

GENERAL INSURANCE

Contributors

MAJOR PLAYERS IN LIFE INSURANCE IN INDIA

PRODUCTS
Children Plan

Endowments Assurance Plan

Money Back Plans Whole Life Plans

Term Assurance Plans

Joint Life Plans Pension Plans

Unit Linked Plans

LIC

PRIVATE PLAYERS

Growth 21.87% Earned Rs.197.86 billion Sold 2.4 billion policies Market share 87.04% 78.07% 75%

Growth 129% Earned Rs.55.57 billion Against Rs.24.29 billion Market share 13% 22%

24%

Source: www.rncos.com

Contribution to growth:
Currently, the insurance sector size is estimated at

Rs.500 billion. On account of intense marketing strategies adopted by private insurance players, the market share of state owned insurance companies like GIC, LIC and others have come down to 70% in last 4-5 years from over 97%. The private insurance players despite the sector is still regulated has been offering rate of return (RoR) to its policy holders which is estimated at about 35% as against 20% of domestic 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. Indias 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

CHANGE IN TRENDS
FROM PRICE POINT OF VIEW
DIFFERENT

COMPANIES ARE PROVIDING POLICES OF INSURANCE AT COMPETETIVE PRICES EVEN THE ALLOCATION CHARGES UNDER POLICIES IS ALSO DECREASED THE INSURANCE AGENT COMISSION IS ALSO FIXED AAND REDUCED SO THAT THE CUSTOMER CAN GET THE BEST.

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.

Are these MNC Closing/Reducing/Filling any gap which was existing...

YES!!