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INDIAN INSURANCE INDUSTRY

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Title: INDIAN INSURANCE INDUSTRY


1
INDIAN INSURANCE INDUSTRY CAREER PROSPECTS
2
ORIGIN AND HISTORY OF INSURANCE


3
ESSENCE OF INSURANCE
  • The Egyptian ruler or Pharoah dreams of seven fat
    and glossy cows, coming out of the river Nile,
    followed by seven lean and hungry cows, with the
    latter devouring the former.
  • The seven fat cows represented seven years of
    good crops and the seven lean and hungry cows
    forebode seven years of famine.
  • He was advised by Prophet Joseph or Yusuf to
    collect one fifth of the crop of each prosperous
    year as a levy or tax to be used in the years of
    famine.

4
LOMBARDS
  • Around the 13th Century, the earliest practice of
    insurance of ships called marine insurance is
    associated with the merchants of the cities of
    Lombardy, Italy.
  • The Lombards also established themselves in
    London and other cities.
  • Lombards brought with them the practices of
    marine insurance, banking and money lending.
  • The earliest known policy issued in London was
    written in Italian and was dated 20th Sept. 1547.

5
LLOYDS
  • In 1688, Edward Lloyd, proprieter of Lloyds
    Coffee House in London, encouraged a clientele of
    ships captains, merchants, ship owners and the
    like.
  • He gained an enviable reputation for trustworthy
    shipping
  • news. He even published Lloyds News, one of
    the very first newspapers which contained
    shipping news.
  • Lloyds Coffee House, became the recognised place
    for
  • obtaining marine insurance.
  • Lloyd himself did no insurance business. He
    merely
  • provided congenial surroundings for his
    patrons till his death in 1713.

6
HISTORY OF INSURANCE IN INDIA
  • 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
    re-distributed in times of calamities such as
    fire, floods, epidemics and famine.
  • DURING VEDIC PERIOD YOGAKSHEMA, A SANSKRIT
    TERM MENTIONED IN THE RIGVEDA, A FORM OF
    INSURANCE WAS PRACTISED BY THE ARYANS,3000 YEARS
    AGO.

7
  • The Codes of Manu refer to one another practice,
    i.e. if
  • the cargo (good and merchandise carried in the
    ship) was
  • Lost due to the negligence of the crew, the loss
    was to be
  • Shared by all its members but when the loss was
    caused
  • by an act of God, the members of the crew were
    not held
  • responsible.
  • IN MOGHUL DAYS THE PRACTICE OF INSURANCE TOOK
  • FIRM ROOTS.THERE ARE EVEN REFERENCES TO
  • INSURANCE AGAINST THE RISKS OF WAR.
  • Insurance in India has evolved over time heavily
    drawing
  • from other countries, England in particular.

8
  • IN 1810 PERMISSION WAS GIVEN TO ANY RESIDENT OF
    GREAT BRITAIN TO INSURE ANY PROPERTY IN ANY
    TERRITORY OF GREAT BRITAIN,WITH THE ENGLISH
    INSURANCE COMPANIES.
  • LOCAL OFFICES OF 7 INSURANCE COMPANIES STARTED IN
    CALCUTTA.
  • THE BUSINESS OF LIFE INSURANCE IN INDIA IN ITS
    EXISTING FORM STARTED IN THE YEAR 1818 WITH THE
    ESTABLISHMENT OF THE ORIENTAL LIFE INSURANCE
    COMPANY IN CALCUTTA.

9
LIFE INSURANCE BUSINESS 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 Insurance Act amended earlier legislation
    for
  • protecting the interests of the
    insuring public.
  • 1956 245 Indian and foreign insurers and
    provident
  • societies taken over by the central
    government and
  • nationalised to form LIC by an Act of
    Parliament, viz.
  • LIC Act,1956, with a capital
    contribution of Rs.5
  • crore from the Government of India.

10
GENERAL INSURANCE BUSINESS IN INDIA
  • 1850 Triton Insurance Company Ltd., the first
    company established in Calcutta by the British.
  • 1907 The Indian Mercantile Insurance Ltd., the
    first Indian company set up to transact all
    classes of general insurance business.
  • 1968 The Insurance Act amended to regulate
    investments and set minimum solvency margins and
    the Tariff Advisory Committee set up.
  • 1972 107 general insurance companies
    nationalised through the General Insurance
    Business (Nationalisation) Act, 1972 with effect
    from 1st January 1973.

11
  • INSURANCE
  • SECTOR
  • REFORMS

12
  • In 1993, Malhotra Committee, headed by former
    Finance Secretary and RBI Governor R.N. Malhotra,
    was formed to evaluate the Indian insurance
    industry and recommend its future direction.
  • The Malhotra committee was set up with the
    objective of complementing the reforms initiated
    in the financial sector.
  • The reforms were aimed at creating a more
    efficient and competitive financial system
    suitable for the requirements of the economy
    keeping in mind the structural changes currently
    underway and recognising that insurance is an
    important part of the overall financial system
    where it was necessary to address the need for
    similar reforms

13
  • The Insurance Regulatory and Development
    Authority,IRDA
  • Reforms in the Insurance sector were
    initiated with the passage of the IRDA Bill in
    Parliament in December 1999.
  • The IRDA since its incorporation as a statutory
    body in April 2000 has fastidiously stuck to its
    schedule of framing regulations and registering
    the public private sector insurance companies.

14
WORLD INSURANCE MARKET OVERVIEW
Source- Swiss Re Sigma
15
COUNTRIES MARKET SHARE
LIFE
NON LIFE
  • US, JAPAN, UK, GERMANY, FRANCE
  • 5 LEADING INSURANCE MARKETS

Source- Swiss Re Sigma
16
COUNTRIES INSURANCE BUSINESS SHARE IN WORLD
MARKET
Source- Swiss Re Sigma
17
WORLD NON-LIFE INSURANCE PREMIUM MARKET SHARE

Source- Swiss Re Sigma
18
LIFE INSURANCE SHARE IN WORLD MARKET 2007
Source- Swiss Re Sigma
19
INDIAN INSURANCE COMPANIES
  • LIFE INSURERS
  • 1. LIFE INSURANCE CORPORATION
  • 2. HDFC STANDARD LIFE INSURANCE CO.
  • 3. MAX NEW YORK LIFE INSURANCE CO.
  • 4. ICICI PRUDENTIAL LIFE INSURANCE CO.
  • 5. KOTAK MAHINDRA OLD MUTUAL LIFE
  • 6. BIRLA SUN LIFE INSURANCE CO.
  • 7. TATA AIG LIFE INSURANCE CO.
  • 8. SBI LIFE INSURANCE CO.
  • 9. ING VYSYA LIFE INSURANCE CO.
  • 10. BAJAJ ALLIANZ LIFE INSURANCE CO.
  • 11. METLIFE INDIA INSURANCE CO.
  • 12. RELIANCE LIFE INSRUANCE CO.

20
  • 13. AVIVA LIFE INSURANCE CO.
  • 14. SAHARA INDIA INSURANCE CO.
  • 15. SHRIRAM LIFE INSURANCE CO.
  • 16. BHARTI AXA LIFE INSURANCE COMPANY LTD.
  • 17. FUTURE GENERALI INDIA LIFE INSURANCE
  • COMPANY LIMITED
  • 18. IDBI FORTIS LIFE INSURANCE COMPANY LTD.,
  • 19. CANARA HSBC ORIENTAL BANK OF COMMERCE
  • LIFE INSURANCE COMP. LTD.
  • 20. AEGON RELIGARE LIFE INSURANCE COMPANY
  • LIMITED.
  • 21. DLF PRAMERICA LIFE INSURANCE COMPANY
  • LIMITED
  • 22. STAR UNION DAI - ICHI LIFE INSURANCE CO. LTD.
  • 23. INDIAFIRST LIFE INSURANCE COMPANY LTD.
  • 24. EDELWEISS TOKIO LIFE INSURANCE CO. LTD.

21
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22
  • GENERAL INSURERS
  • NEW INDIA ASSURANCE CO.
  • NATIONAL INSURANCE CO.
  • 3. ORIENTAL INSURANCE CO.
  • 4. UNITED INDIA INSURANCE CO.
  • 5. ROYAL SUNDARAM ALLIANCE INS. CO.
  • 6. RELIANCE GENERAL INSURANCE CO.
  • 7. IFFCO TOKIO GENERAL INSURANCE CO.
  • 8. TATA AIG GENERAL INSURANCE CO.
  • 9. BAJAJ ALLIANZ GENERAL INS. CO.
  • 10. ICICI LOMBARD GENERAL INS. CO.
  • 11. CHOLAMANDALAM GENERAL INS.CO.
  • EXPORT CREDIT GUARANTEE CORP.
  • HDFC ERGO GENERAL INSURANCE CO.

23
14. AGRICULTURAL INSURANCE COMPANY15. STAR
HEALTH AND ALLIED INS.CO. LTD.16. APOLLO DKV
INSURANCE CO. LTD.17. FUTURE GENERALI INDIA
INS.CO.LTD. 18. UNIVERSAL SOMPO GENERAL
INS.CO. LTD.19. SHRIRAM GENERAL INSURANCE CO.
LTD.20. BHARTI AXA GENERAL INS.CO.LTD.21.
RAHEJA QBE GENERAL INS.CO.LTD.22. SBI GENERAL
INSURANCE CO. LTD.23. MAX BUPA HEALTH INSURANCE
CO.LTD.24. L T GENERAL INSURANCE CO. LTD.25.
RELIGARE HEALTH INSURANCE CO. LTD.26. MAGMA
HDI GENERAL INSURANCE CO. LTD.27. LIBERTY
VIDEACON GENERAL INS. CO. LTD.
24
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25
PREMIUM INCOME IN INDIA2011-2012 PUBLIC SECTOR
COMPANIES (NON LIFE)?
Fig. in Rs. Crs.
26
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27
CHANGES IN THE INSURANCE ACT 1938 AND IRDA
ACT 1999
  • REVISE THE FDI FROM THE PRESENT 26 TO 49.
  • CLUBBING BOTH THE ACTS AND MAKING IT INTO ONE ACT
    OF INSURANCE.
  • DOWNSIZING THE PAID UP CAPITAL TO 50 CRORES FOR
    HEALTH INSURANCE SECTOR.

28
  • The insurance sector in India has
    come a full circle from being an open competitive
    market to nationalisation and back to a
    liberalised market again.
  • Tracing the developments in the Indian
    insurance sector reveals the 360 degree turn
    witnessed over a period of almost two centuries.

29
THANK YOU
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