EFFECTS OF GLOBALIZATION ON INDIAN INSURANCE SECTOR ----- Presented by THE STARTERS
EFFECTS OF GLOBALIZATION ON INDIAN INSURANCE
SECTOR -----Presented by THE STARTERS
Globalization defined…..
•“…processes whereby social relations acquire relatively distance-less or border-less qualities, so that human lives are increasingly played out in the world as a single place.” (Jan Aart Scholte)
•“…technological, political, economic, and cultural dimensions that connect individuals, governments, and firms across national borders.” (Rosa Gomez Dierks)
Purpose of Globalization:1.Clarification of the notion of Globalization applied to the world Economy.
2.Evaluate the potential benefit and potential cost dangers streaming from Globalization.
3.Find out cost or Danger streaming from Globalization.
Indian Insurance Sector Before Globalization
.
G.I. is a British Legacy in India.General insurance started with Triton Insurance Company in Kolkata in 1850.Few landmark years are 1907, 1957, 1968, 1972.GIC started operations in 1973 with four subsidiaries.Life insurance started with Oriental life Insurance in 1818 in Kolkata.Few Landmark years are 1912, 1928, 1938, 1956. LIC started with 243 companies.
Year No. of Indian offices No. of Non- Indian offices
1928 97 138
1929 108 149
1938 200 143
1941 197 80
1945 234 81
Before nationalization of LIC, non Indian insurers were there too.They made business of about Rs 160 crores.Post war (1946- 1955) the Indian companies took over the market.Non Indian companies were 16 then.
Competitors then..
Changing course..• Over the post war period the foreign companies took
backseat.• Suffered of the Indian Insurance Act, 1938.• Revenues and their earnings declined.
1945 1955
No. of policies
Insured amount
Premium income
No. of policies
Insured amount
Premium income
Indian life offices
577000 12278 673 749000 22085 1139
Non Indian life offices
22000 1260 74 22000 1744 100
Total 599000 13538 747 771000 23829 1239
% of Non Indian to total
3.7 9.3 9.9 2.9 7.0 8.0
Still a long way to go..• The average amount of money for a new policy increased.
• Insurance companies were touching few urbans only, many of them went in liquidation, so nationalization started and bill was passed in 1956.
Year Average amount of money for a new policy in India (in Rs)
1946 2205
1947 2177
1948 2306
1949 2341
1950 2471
1951 2575
1952 2526
1953 2569
1954 3123
1955 2950
Important milestones in the life insurance business in India
•
1912: The Indian Life Assurance Companies Act enacted.
• 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.
• 1938: Earlier legislation consolidated and amended to by the Insurance Act .
• 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalised companies.
• 1956 - The Life Insurance Company was nationalized
• 1972 - The general insurance business was nationalized
• 1999 - Private insurance companies came into existence
• 2000 - Insurance Regulatory and Development Authority bill was passed
• ∏LIC market share has decreased from 95%(2002-03) to 81% (2004-05)
•NAME OF THE PLAYER MARKET SHARE (%)
•LIC 82.3ICICI PRUDENTIAL 5.63BIRLA SUN LIFE 2.56BAJA ALLIANZ 2.03SBI LIFE 1.80HDFC STANDARD 1.36TATA AIG 1.29MAX NEW YORK 0.90AVIVA 0.79OM KOTAK MAHINDRA 0.51ING VYASA 0.37AMP SANMAR 0.26METLIFE 0.21
LICICICI BIRLABAJAJSBIHDFCTATAMAX NEWYORK AVIVAMAHINDRA INGVYASASANRARMETLIFE
Insurance today
The Malhotra Committee - For initiating reform in insurance
sector.
Set up of IRDA
Current scenario in life insuran
ce sector
Present scenario of Insurance sector
Competitions between the
public and
private sector
companies
Growth of the
private players in India insurance market
Impact of globalization on Insurance Sector
End of
fear factor
Coming up
of private and foreig
n insura
nce companies
Name of the playe
r mark
et share(%)
opportunity• New customer have much
more option to choose• Job opportunity• It will cover large area.• Better customer service• Coming of domestic and
foreign companies.
Challenges before the industry
Threat for public sector companies
Increasing awareness leading to large number of legal cases
Essentials to meet the challenges
•Understand the customer•Selection of right type of distribution channel•Very efficient CRM system•Should Focus on semi urban and rural areas.•Promoting Health Insurance..
Indian Insurance Sector ready to tap rural India
Indian Insurance sector will reach US$ 60 Billion in the coming 4 years
Semi urban and rural areasShare: US $35 Billion
Urban areasShare: US $25 Billion
Life Insurance Share: US $20 Billion
Non Life InsuranceShare: US $ 15 Billion
Life InsuranceShare : US $15 Billion
Non Life Insurance Share :US $ 10 Billion
FUTURE
THANK YOU
The Starters…Arindam Dey Abirlal MukherjeeChandan HaikelMonoj DevMurli Dhar choudhury Sourav Dey Supriyo paul Prakash SharmaSamrat SarkarPriyotosh Das.