DECLARATION

I hereby declare that this submission is my own work & to the best of my knowledge & belief, it contains no material previously published or written by another person nor material which to a substantial extent has been accepted for the award of any other degree or diploma of the university or other institute of higher learning except where due acknowledge has been made in the text.

ACKNOWLEDGEMENT

I would sincerely like to thank my project guide Prof. for enabling me to successfully carry out the project work through his constant guidance, for endless support and continuous involvement in the project. It was really worthwhile to receive help from who in person was always present to help me out anytime i felt his need. Without his constant support this project would not have been acknowledged as it is now. Finally, I owe a great deal of sincere thanks to the faculty members who have been of great support from time to time along with my friends, who kept encouraging me all along.

INDEX

INTRODUCTION

The Confederation of Indian Industry states that the insurance sector of the country has been witnessing a consistent growth rate of late and its present worth is 41 billion US dollars. The industry has of late achieved a yearly growth rate within 32 and 34 percent and this makes it the 5th best among emerging economies around the world. The various entities of the industry are also bringing out newer products on a regular basis to attract their customers. As per rules, the upper limit of foreign direct investment permitted in this sector is 26 percent. However, this has to be done through the automatic route and the investor needs a license from Insurance Regulatory and Development Authority (IRDA). At present there are 22 life insurers in India. The IRDA has recently taken away the tariffs of the interest rates and this has provided insurers greater independence when it comes to deciding the price of their insurance policies. The insurance industry has also become more competitive as a result. Yet another important factor affecting this sector has been the recent financial meltdown. India insurance is a flourishing industry, with several national and international players competing and growing at rapid rates. Thanks to reforms and the easing of policy regulations, the Indian insurance sector been allowed to flourish, and as Indians become more familiar with different insurance products, this growth can only increase, with the period from 2010 - 2015 projected to be the 'Golden Age' for the Indian insurance industry.

INDIA INSURANCE -: HISTORY Insurance in its current form has its history dating back until 1818, when Oriental Life Insurance Company was started by Anita Bhavsar in Kolkata to cater to the needs of European community. The pre-independence era in India saw discrimination between the lives of foreigners (English) and Indians with higher premiums being charged for the latter. In 1870, Bombay Mutual Life Assurance Society became the first Indian insurer. At the dawn of the twentieth century, many insurance companies were founded. In the year 1912, the Life Insurance Companies Act and the Provident Fund Act were passed to regulate the insurance business. The Life Insurance Companies Act, 1912 made it necessary that the premium-rate tables and periodical valuations of companies should be certified by an actuary. However, the disparity still existed as discrimination between Indian and foreign companies. The oldest existing insurance company in India is the National Insurance Company Ltd., which was founded in 1906. It is in business. The Government of India issued an Ordinance on 19 January 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The Life Insurance Corporation (LIC) absorbed 154 Indian, 16 nonIndian insurers as also 75 provident societies245 Indian and foreign insurers in all. In 1972 with the General Insurance Business (Nationalization) Act was passed by the Indian Parliament, and consequently, General Insurance business was nationalized with effect from 1 January 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1, 1973. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. Before that, the industry consisted of only two state insurers: Life Insurers (Life Insurance Corporation of India, LIC) and General Insurers (General Insurance Corporation of India, GIC). GIC had four subsidiary companies. With effect from December 2000, these subsidiaries have been de-linked from the parent company and were set up as independent insurance companies: Oriental

Insurance Company Limited, New India Assurance Company Limited, National Insurance Company Limited and United India Insurance Company Limited. The history of the Indian insurance sector dates back to 1818, when the Oriental Life Insurance Company was formed in Kolkata. A new era began in the India insurance sector, with the passing of the Life Insurance Act of 1912. The Indian Insurance Companies Act was passed in 1928. This act empowered the government of India to gather necessary information about the life insurance and non-life insurance organizations operating in the Indian financial markets. The Triton Insurance Company Ltd formed in 1850 and was the first of its kind in the general insurance sector in India. Established in 1907, Indian Mercantile Insurance Limited was the first company to handle all forms of India insurance. ACTS The insurance sector went through a full circle of phases from being unregulated to completely regulated and then currently being partly deregulated. It is governed by a number of acts. The Insurance Act of 1938[1] was the first legislation governing all forms of insurance to provide strict state control over insurance business. Life insurance in India was completely nationalized on January 19, 1956, through the Life Insurance Corporation Act. All 245 insurance companies operating then in the country were merged into one entity, the Life Insurance Corporation of India. The General Insurance Business Act of 1972 was enacted to nationalise the about 100 general insurance companies then and subsequently merging them into four companies. All the companies were amalgamated into National Insurance, New India Assurance, Oriental Insurance and United India Insurance, which were headquartered in each of the four metropolitan cities. Until 1999, there were no private insurance companies in India. The government then introduced the Insurance Regulatory and Development Authority Act in 1999, thereby de-regulating the insurance sector and allowing private companies. Furthermore, foreign investment was also allowed and capped at 51% holding in the Indian insurance companies. In 2006, the Actuaries Act was passed by parliament to give the profession statutory status on par with Chartered Accountants, Notaries, Cost & Works Accountants, Advocates, Architects and Company Secretaries. A minimum capital of US$80 million(Rs.400 Crore) is required by legislation to set up an insurance business.

Indian Insurance: Sector Reform

The formation of the Malhotra Committee in 1993 initiated reforms in the Indian insurance sector. The aim of the Malhotra Committee was to assess the functionality of the Indian insurance sector. This committee was also in charge of recommending the future path of insurance in India. The Malhotra Committee attempted to improve various aspects of the insurance sector, making them more appropriate and effective for the Indian market. The recommendations of the committee put stress on offering operational autonomy to the insurance service providers and also suggested forming an independent regulatory body. The Insurance Regulatory and Development Authority Act of 1999 brought about several crucial policy changes in the insurance sector of India. It led to the formation of the Insurance Regulatory and Development Authority (IRDA) in 2000. The goals of the IRDA are to safeguard the interests of insurance policyholders, as well as to initiate different policy measures to help sustain growth in the Indian insurance sector. The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Reinsurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc. Applications were invited by the Authority with effect from 15th August, 2000 for issue of the Certificate of Registration to both life and non-life insurers. The Authority has its Head Quarter at Hyderabad.

India insurance industry growth in last few years

The life insurance companies have performed the best when it comes to growth with an increase of almost 70% in new premium that has been collected in the initial 5 months of 2012. As per IRDA data, in April-August 2010 the insurance companies earned $11.73 billion in new premium - in the corresponding period in the previous year the amount stood at 6.9 billion dollars.

LIC, a state held insurer, had been the biggest profit maker at that time with an addition of 88% to their existing business. The privately owned insurers together had seen a leap of 34% to their policy sales. ICICI Prudential earned 576.60 million dollars at that time. During April-August 2009 SBI Life had earned $379.20 million in sales of new policies and that figure went up to $531.87 million in the corresponding period in 2010 making it an increase of 40%. HDFC Standard Life also experienced a good growth of 54% in new sales. IRDA data shows that between April and October 2010 the general insurance industry experienced a year-on-year growth of 22.76% with regards to underwritten gross premium. The total value of that premium was 5.29 billion dollars while the same figure stood at $4.31 billion in April-October 2009. For the public sector companies the year-on-year growth rate was 21.09 percent between April-October 2010 and April-October 2009. In the same period the privately held insurers saw an increase of 25.19 percent in terms of premium collected. Among the publicly owned entities, New India Insurance was one of the better performers with a premium income of 916.77 million dollars in April-October 2010. At the same period in 2009 they had earned 770.25 million dollars which implies a growth rate of 19.04%. The IRDA Summary Report of Motor Data of Public and Private Sector Insurers 2009-10 states that in the same period almost 28.4 million policies were sold and the aggregate worth of premium collected was $2.31 billion. The health insurance sector, according to the RNCOS' research report named "Booming Health Insurance in India" posted unprecedented growth rates in 200809 and 2009-10. The report also estimates that between the 2009-10 and 2013-14 the sector would see a compound annual growth rate (CAGR) of at least 25%.

India insurance industry - some key findings

Following are some important findings from World Bank regarding the condition of insurance industry in India: Between 2005 and 2010 the yearly GDP growth was approximately 8.56% At the same time, the ratio of gross savings to GDP was 33% Middle class saw the quickest growth The life expectancy rate of people went up and urban development happened at almost 54%. In 2010 rate of premium growth came down to 4.2% and compared to global standards the premium share was pretty low Major operational issues for insurers were expenditure control, claims settlement procedures, improving investment yields, and capital requirements In the 2010-11 fiscal the life insurance industry grew by 4.20% while the general insurance industry increased by 8.10%. During that time the paid-up capital (private total) for the life insurance sector was INR 236.57 billion while the paid-up capital (industry total) was INR 236.63 billion. In 2010-11 the paid-up capital (private total) for the general insurance sector was INR 39.56 billion while the paid-up capital (industry total) was INR 67.06 billion. In 2010-11 the operating costs of privately owned life insurers was INR 159.62 billion while the total life insurance industry expense was INR 329.42 billion. In the same time the privately owned general insurers spent INR 39.32 billion from an industry total of INR 106.20 billion.

In 2010-11 the privately held life insurers paid benefits and claims worth INR 312.51 billion while the industry aggregate was INR 1425.24 billion. At the same time the private general insurers paid benefits and claims worth INR 99.37 billion while the industry total was INR 295.36 billion.

India insurance industry contribution to GDP

Experts are of the opinion that around the world the insurance industry contributes around 4.5% to national GDPs. They have questioned the logicality of opinions that in India the contribution can be higher saying that there are other important sectors like education, defense, and health that cannot be undermined in this context. They have ruled out possibilities that the sector can contribute 10% to India's GDP. The Chairman of IRDA, Hari Narayan has ruled out any such possibility asking if India's GDP growth will be that much in the next few years ahead. The IRDA states that in India land and gold are more preferred as forms of investment. Narayan feels that if the insurance sector is to do well in terms of contribution to GDP then more people should be convinced about its capability to provide good ROI (return on investment).

Why are more people taking insurance policies?

One of the major reasons for an increasing number of people availing insurance policies in India is the growing level of awareness. People nowadays value their lives, their health, and their families even more than before given the tough economic circumstances and so want to make sure that everything is fine even if they are not there. Yet another reason for the growing popularity of insurance policies is the benefit of tax exemption that is provided to family oriented and individual plans. Majority of the private insurers also provide lucrative returns and are now being availed by a section of the Indian society with greater disposable earnings. There is an aspect of psychological comfort attached to the insurance policies as well - whenever an insurance is availed the policyholder can be more or less assured of a safe future for that particular part of his or her life.

Industry structure
Currently India is a US$41 billion industry. Currently, in India only two million people (0.2% of the total population of 1 billion) are covered under Mediclaim, whereas in developed nations like USA about 75% of the total population are covered under some insurance scheme. With more and more private companies in the sector, the situation may change soon.

Some of the important milestones in the life insurance business in India are: 1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 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 with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.

Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

As, I gave the history of insurance in India, the Indian economy has tremendous growth after the emergence of insurance in Indian market. Following are the two insurance companies who emerge in Indian market 1. Life Insurance Corporation of India

2. United India Insurance Company Limited

1.Life Insurance Corporation of India Life Insurance Corporation of India (LIC) (Hindi: ) is the largest insurance group and investment company in India. Its a state-owned where Government of India has 100%stake. LIC also funds close to 24.6% of the Indian Government's expenses. It has assets estimated of 13.25 trillion (US$241.15 billion). It was founded in 1956 with the merger of 243 insurance companies and provident societies. Headquartered in Mumbai, financial and commercial capital of India, the Life Insurance Corporation of India currently has 8 zonal Offices and 113 divisional offices located in different parts of India, around 3500 servicing offices including 2048 branches, 54 Customer Zones, 25 Metro Area Service Hubs and a number of Satellite Offices located in different cities and towns of India and has a network of 13,37,064 individual agents, 242 Corporate Agents, 79 Referral Agents, 98 Brokers and 42 Banks (as on 31.3.2011) for soliciting life insurance business from the public. The slogan of LIC is "Yogakshemam Vahamyaham" which translates from Sanskrit to "Your welfare is our responsibility". The slogan is derived from the Ancient Hindu text, the Bhagavad Gita's 8th Chapter, 22nd verse. The literal translation from Sanskrit to English is "I carry what you require". The slogan can be seen in the logo, written in Devanagiri script.

HISTORY The Oriental Life Insurance Company, the first corporate entity in India offering life insurance coverage, was established in Calcutta in 1818 by Bipin Behari Dasgupta and others. Europeans in India were its primary target market, and it charged Indians heftier premiums. The Bombay Mutual Life Assurance Society, formed in 1870, was the first native insurance provider. Other insurance companies established in the pre-independence era included

Bharat Insurance Company (1956) United India (1906) National Indian (1906) National Insurance (1906) Co-operative Assurance (1906) Hindustan Co-operatives (1907) Indian Mercantile General Assurance Swadeshi Life (later Bombay Life) Sahyadri Insurance (Merged into LIC, 1956)

The first 150 years were marked mostly by turbulent economic conditions. It witnessed, India's First War of Independence, adverse effects of the World War I and World War II on the economy of India, and in between them the period of world wide economic crises triggered by the Great depression. The first half of the 20th century also saw a heightened struggle for India's independence. The aggregate effect of these events led to a high rate of bankruptcies and liquidation of life insurance companies in India. This had adversely affected the faith of the general public in the utility of obtaining life cover.

Nationalization
In 1955, parliamentarian Amol Barate raised the matter of insurance fraud by owners of private insurance companies. In the ensuing investigations, one of India's wealthiest businessmen, Ram Kishan Dalmia, owner of the Times of India newspaper, was sent to prison for two years. Eventually, the Parliament of India passed the Life Insurance of India Act on 1956-06-19, and the Life Insurance Corporation of India was created on 1956-09-01, by consolidating the life insurance business of 245 private life insurers and other entities offering life insurance services. Nationalization of the life insurance business in India was a result of the Industrial Policy Resolution of 1956, which had created a policy

framework for extending state control over at least seventeen sectors of the economy, including the life insurance Emergence of Life Insurance Corporation of India The Indian insurance sector at present is showing immense growth potential. A great proportion of the Indian population, especially urban population, these days is getting covered under different insurance policies. The Insurance Companies in India have grown manifold. Since opening up of Indian insurance sector for private participation, India has reported increase in both insurance penetration and density and the increase has been almost entirely contributed by the life insurance sector. The insurance density stood at USD 54.3 in 2009 (Life USD 47.7 and Non-life USD 6.7) from USD 9.9 in 2000 (Life USD 7.6 and Non-life USD 2.3) and the insurance penetration was 2.32 per cent (Life 1.77 per cent and Non life 0.55 per cent) in the year 2000 when the sector was opened up for private sector. It had increased to 5.20 per cent in 2009 (Life: 4.60 per cent and Non-life: 0.6 per cent). On the basis of total premium income, from the position of having control on the entire life insurance market, the share of LIC declined marginally from 70.92 per cent in 2008-09 to 70.10 per cent in 2009-10. Accordingly, the market share of private insurers had gone up marginally from 29.08 per cent in 2008-09 to 29.90 per cent in 2009-10. Geographical spread of the insurers is indicated by the number of branch offices opened by the insurers. While there were 2199 offices of the life insurance companies by March 2001, the number has increased to 11815 by the end of 200809. During the period, while the number of offices of LIC has increased from 2186 to 3030, the offices of the private sector players increased from a mere 13 in 2001 to 8785 in 2009. During the year 2009, there was a major jump in the number of life insurance offices in India. While private insurers have added 2394 new offices, the public sector LIC has established 508 new offices. With this, the number of offices of life insurers has gone up from 8913 as on 31st March 2008 to 11815 as on 31st March 2009. Over the last 5 years, the number of offices of private insurers has almost doubled every year. However, during 2008-09, the number has gone up only by 37 per cent.

New business acquired by the insurer which is indicated by the growth in the first year premium of both LIC and private companies is another parameter for growth of life insurance business. The immense growth in first year premium of LIC from Rs.9700.98 crore in 2000-01 to Rs. 71521.90 crore in 2009-10 is commendable and so is the growth of the same for private companies from a meager Rs.6.45 crore in 2000-01 to Rs.38372.12 crore in 2009-10 which totaled to Rs.109928.51 crore for the industry in 2009-10. During 2009-10, life insurers had issued 532 lakh new policies, out of which, LIC issued 389 lakh policies (73.02 per cent of total policies issued) and the private life insurers issued 144 lakh policies (26.98 per cent). While LIC reported an increase of 8.21 per cent (-4.52 per cent in 2008-09) in the number of policies issued over the previous year, the private sector insurers reported a decline of 4.32 per cent (13.19 per cent increase in 2008-09) in the number of new policies issued. Overall, the industry witnessed a 4.52 per cent increase (0.10 per cent in 2008-09) in the number of new policies issued. Out of the 23 life insurers in operations during 2009-10, 8 companies have reported profits viz. LIC, ICICI Prudential, Kotak Mahindra, SBI, MetLife, Bajaj Allianz, Sahara India and Aegon Religare. Life Insurance Corporation of India had reported net profit of Rs.1,061 crore i.e., an increase of 10.80 per cent over Rs.957 crore in 2008-09. The cumulative losses of the life insurance industry as at 31st March, 2010 stood at Rs.20,143 crore, as against Rs.17,304 crore as at 31st March, 2009. During 2009-10, out of the 22 private life companies, seven revealed profit after tax as compared to four in the previous two years. Out of the seven companies which reported profit in 2009-10, three companies showed profits continuously for the last two years. These figures reaffirm the fact that both public as well as private insurers are doing very good business in the life insurance market at the national level on the basis of various aspects covered in the study.

LIC scores best in claims settlement during 2010-11 At a time when customer service and satisfaction is becoming the key to success for life insurance companies, the claim repudiation ratio (in case of death claims) has improved over the last financial year. According to data from company sources, the Life Insurance Corporation of India (LIC) still remains the benchmark when it comes to settling death claims. However, major private players are also fast catching up. A repudation ratio is a measure of claims rejected. During 2010-11, LIC improved its repudiation ratio for death claims to 1.09 per cent from 1.21 per cent in the previous year. In the same period, the public sector insurance behemoth settled 97.5 per cent of death claims, whereas claims pending stood at 1.47 per cent. Overall, we have settled 99.6 per cent of the total claims in the last financial year . And 95 per cent of the death claims were settled within 15 days of intimation, said a senior LIC official. In total, during the 2010-11, LIC has settled around 18.3 million claims amounting to Rs 53,000 crore, which includes survival benefits, maturity and death claims. Of this, Rs 6,000 crore accounted for 721,000 death claims. Among the private players, ICICI Prudential Life was the best performer in terms of claims repudiation ratio, whereas HDFC Lifes claims settlement ratio was the highest, respectively. ICICI Prudentials claims repudiation ratio stood at 2.8 per cent, whereas for HDFC Life it was at 3.97 per cent. During the same time, HDFC Life settled 96.03 per cent of the total death claims, while ICICI Prudential settled 94.4 per cent of claims. Claims pending for HDFC Life and ICICI Prudential stood at 0.61 per cent and 2.6 per cent, respectively. Among the established players, the repudiation ratio for SBI Life and Max New York Life worsened to 16.74 and 14.85, respectively. For the smaller or relatively new private life insurance players, the ratio still remains on the higher side. For instance, India First Life, which began operation in

2009, had a repudiation ratio at 9.4 per cent, whereas for IDBI Federal Life which started in 2007, it was 21 per cent.

Settlement of any insurance claim involves interpretation of a lot of technical conditions generally used by insurers to reject the claims. However, non-early death claims (claims after two years of the issue of the policy) do not mandate any investigation. Hence, the settlement procedure is faster and easier.

Life Insurance premium collection dips by 2.5 percent in July 2011 New business premium of life insurance companies have collectively declined by 2.5% for the month of July 2011 as compared to that in July 2010. Out of the 23 life insurance companies in India, only 7 of them have shown a positive growth. These companies are Life Insurance Corporation of India (LIC), SBI Life Insurance, Max New York Insurance, Aviva Life Insurance, Kotak Life Insurance, Met Life Insurance and ING Vysya Life. Aviva Life Insurance has taken the highest jump of 94% by collecting premiums of Rs 116.61 crore in July this year over Rs 60 crore in July 2010. Aviva Life Insurance Company has introduced some really great child plans and an online term plan called Aviva Life which is also one of the cheapest term plans available in the markets. Term plans are very popular with families in India as it is a no frills policy offering a high sum assured for a low premium. LIC has collected Rs 6064.71 crore in July this year, which is a 6.6% growth over its collections of Rs 5690.31 in July last year. Reliance Life Insurance, Bharti Axa Life Insurance and ICICI Prudential Life Insurance Companies premium collections have taken a steep plunge. Among the private life insurers, SBI Life Insurance Company has done the highest business which is evident by its premium collections of Rs 710.11 crore. Incidentally last year, same time, ICICI Prudentials collections were higher than SBI Life. While SBI Life has raised the bar this year by registering a 26.1% growth, ICICI Prudential has recorded a negative growth.

Current status LIC Zonal Office, at Connaught Place, New Delhi, designed by Charles Correa, 1986. Over its existence of around 50 years, Life Insurance Corporation of India, which commanded a monopoly of soliciting and selling life insurance in India, created huge surpluses, and contributed around 7% of India's GDP in 200. The Corporation, which started its business with around 300 offices, 5.7 million policies and a corpus of INR 459 million (US$ 92 million as per the 1959 exchange rate of roughly Rs. 5 for a US $, has grown to 25000 servicing around 350 million policies and a corpus of over 8 trillion (US$145.6 billion). Awards and recognition The Economic Times Brand Equity Survey 2010 rated LIC as the No. 5Service Brand of the Country. Though in the year 2010 is ranked at 4, the organization is consistently among the top rated service company of the India. From the year 2006, LIC is continuously winning the Readers' Digest Trusted brand award. According to The Brand Trust Report 2012, LIC is the 8th most trusted brand of India.

Life Insurance Corporation of India turns 56

The Life Insurance Corporation of India (LIC), the nation's largest insurance group, completed 56 years of operations this weekend, and considering the record number of policies it sold in recent months, things are as robust for the company today as they were half a century ago. In 2011-12, 357 lakh policies were sold by the company, commanding more than 80 per cent of the total market share of new policies issued. Its total first year premium income was pegged at more than Rs 81,514.49 crore including Rs 38,955.06 crore of premium through pension and group schemes i.e. 71.36 per cent of the market share. LIC offers life insurance under group policies to various groups. It also offers insurance coverage to people below the poverty line under social security group schemes like 'Janashree Bima Yojana' and 'Aam Aadmi Bima Yojana'. In its 56th year, LIC has just introduced a new micro insurance product 'Jeevan Deep'. This is an endowment assurance with an added feature of guaranteed additions along with provision of loyalty additions. An immediate annuity product is available for 'on-line buy'.

United India Insurance Company Limited

United India Insurance Company Limited (UIIC) is the one among the 4 public General Insurance Companies of India and a leading General Insurance player including public and private sector. With the networth of Rs 4,587 crore as on September 30, 2011, The Company has more than three decades of experience in Non-life Insurance business. It was formed by the merger of 22 companies, consequent to the nationalization of General Insurance companies in India. Its Head Quarters is at 24, Whites Road, Chennai, India.

About the company

United India Insurance Company Limited was incorporated as a Company on 18 February 1938. General Insurance Business in India was nationalized in 1972. 12 Indian Insurance Companies, 4 Cooperative Insurance Societies and Indian operations of 5 Foreign Insurers, besides General Insurance operations of southern region of Life Insurance Corporation of India were merged with United India Insurance Company Limited. After nationalization United India has grown by leaps and bounds and has 18300 work force spread across 1340 offices providing insurance cover to more than 1 Crore policy holders. The Company has variety of insurance products to provide insurance cover from bullock carts to satellites. United India has been in the forefront of designing and implementing complex covers to large customers, as in cases of ONGC Ltd, GMR- Hyderabad

International Airport Ltd, Mumbai International Airport Ltd Tirumala-Tirupati Devasthanam etc. It has been also the pioneer in taking Insurance to rural masses with large level implementation of Universal Health Insurance Programme of Government of India & Vijaya Raji Janani Kalyan Yojana ( covering 45 lakhs women in the state of Madhya Pradesh), Tsunami Jan Bima Yojana (in 4 states covering 4.59 lakhs of families), National Livestock Insurance and many such schemes. It has also made its presence in more than 200 tier II & II towns and villages through its innovative Micro Offices.

Recent Developments
In November 2007, at Hyderabad, company's top management launched an enterprised level transformation project named UNISERGE, under this historic intiative, company identified and set up 6 themes in order to remain a leader in Indian General Insurance market and also stressed on the effective use of IT. In Addition, it has been also decided to Create incentive system and link to rigorous performance management system for the Enhancement of organizational accountability and to strengthen HR structure of the company. Recently, on January 11, 2012, The Company (often abberiviated as UIIC), has been entrusted by The Govt. of Tamil Nadu for implementing the new Comprehensive Health Insurance Scheme. This scheme would cover 1.34crore families of Tamil Nadu State and has an annual outlay of Rs. 750crore. Tamil Nadu Chief Minister, on the launch, handed over first quarterly insurance premium installment of Rs. 183.64crore to Mr. G. Srinivasan, CMD of the United India Insurance.

Profit and Performance

The United India Insurance reported over 50% jump in its profit after tax at Rs 341.07crore for the first 6 months of the financial year 2011-12. The Chennaibased insurer had reported a Rs 218crore profit during the same period last year. Declaring the half-yearly results, United India Insurance Chairman and Managing Director G Srinivasan told reporters the company's growth has exceeded that of the industry. "We grew by 27 per cent over the industry's growth of 23 per cent ... our market share also increased," he said. During the half-year period ended September 30, 2011, the company collected a total premium of Rs 4,033 crore, up by 27 per cent from Rs 3,178 crore in the yearago period. "We have set a target premium of Rs 8,000 crore this year," he said. On plans for the year 2011-12, he said the company would focus on retail, micro-small and medium enterprises and rural insurance segments. "We will focus on agency channel and bancassurance. Agency channel contributed 40 per cent and bancassurance 7 per cent (in the first half of the year). We expect it to increase in the years to come," he said. Replying to a question, he said the company would bid for the Tamil Nadu government's health insurance scheme. The investment income of the company for the first-half of the year stood at over Rs 803 crore as of September 30, 2011. A steep reduction in management expenses(to 25% from 37%) claims outgo and an increase in premium income across segments has enabled the company to post 57 percent growth in net profit for the first half of the current fiscal. United India earned Rs.803 crore from its investments during the first six months of the 201112. The market value of the company's investments at the end of second quarter stood at Rs.15,803 crore

Future Plans
Logging an average business growth of 27 percent in 2011-12, India's leading nonlife insurer United India Insurance Company Ltd declared that it is targeting a gross premium of Rs.8,000 crore and sizeable reduction in underwriting losses premium less claims outgo - to Rs.900 crore from last year's figure of Rs.1,760 crore. The company would focus the retail, and small and medium enterprises (SME) segments for growth. It is in the process of adding further to its 48,000 agents and also to open around 100 one-man offices across the country. Currently, there are 400 such micro-offices bringing in around Rs.275 crore premium. Company is waiting for approval from the insurance regulator IRDA to introduce three products under the health portfolio.

Awards and recognitions

United India gets Skoch award 2010: United India Insurance Company has won the award for successful implementation of the financial inclusion initiatives. The company has impleted the Rashtriya Swasthya Bima Yojana in Kerala. Skoch awards, distributed by Skoch Consultancy Services, are meant to honour extraordinary achievements in governance, capacity building, empowerment, inclusive growth, citizen services delivery, technology, academics and change management. http://www.thehindu.com/todays-paper/tp-business/article1151356.ece United India Insurance Company has been selected as one among the top three General Insurance companies in Asia by Asia Insurance Review at the 14th Asia Insurance Industry Awards held in Bali, Indonesia. United India Insurance Co. Ltd. has been awarded the Best Non-Life Insurance Company by NDTV Profit-Business Leadership Awards 2010. United India Insurance Co. Ltd. has been awarded 'iAAA rating for its claims paying ability by ICRA (Investment Information and Credit Rating Agency) for the third successive year. This rating indicates company's

highest claims paying ability, its strong fundamental and its overall financial strength for meeting the policy holders obligations.

PCQuest, one of India's premier IT magazines has selected MPLS VPN project of UIIC as one of the best implemented IT projects in the year 2007. The details of the same are published in the June 2007 issue of the PCQuest magazine. MPLS VPN project of UIIC was selected after a rigorous screening process in which 250 IT projects of various companies in the country were evaluated. Subsequently, a jury of eminent personalities selected the top 21 IT projects implemented in 2007, in which the MPLS project of UIIC figures prominently.

Personal Policies

Householder Personal Accident Mediclaim Unimedicare Bhavishya Arogya

Commercial Policies

Fire Insurance Marine Insurance Motor Insurance (vehicle insurance) Industrial Insurance Liability Insurance

United India Insurance to Implement Core Insurance Solutions within a Year Public sector general insurer United India Insurance Company is planning to complete implementation of Core Insurance Solutions within a year.

The Core Insurance Solutions will connect companys all 1,465 offices spread across the country. It will provide anytime and anywhere access to its customers that means its policyholders can see their policy details online. And it will also ensure delivery of better service as it will enhance the management information system.

By the end of the third quarter of current fiscal company has garnered a premium of Rs 5,872 crore which is the rise of 27%. And by the end of current fiscal company is expecting to cross the business of Rs 8,000 crore.

General Insurance Companies register a positive growth in July 2011 Insurance Regulatory and Development Authority (IRDA) has released the business figures of all general or non-life insurance companies in India. For the month July 2011, these companies have collectively recorded an 18.5% growth over their premium collections in July 2010. New India Assurance, the countrys largest non-life insurer, has collected Rs 707.15 crore for the month of July this year, with a growth of 18.2% over its collections in July last year. The other 3 public sector insurance companies United India Insurance, National Insurance and Oriental Insurance have also registered a double digit growth. Among the private insurance companies, ICICI Lombard has collected the highest premia of Rs 398 crore, followed by Bajaj Allianz General Insurance, Iffco Tokio, Tata AIG, HDFC Ergo and others. Star Health Insurance and Universal Sompo are the only two insurance companies to have registered a dip in their collections over that in July 2010. There are 3 standalone health insurance companies in India Star Health Insurance, Max Bupa Health Insurance and Apollo Munich Health Insurance. Max Bupa, whose premiums are comparatively on the higher side, has collected only Rs 5.34 crore whereas Apollo Munich Health Insurance has collected Rs 30.24 crore. SBI General Insurance has collected Rs 22.16 crore in July this year, which is a 4fold jump over its collections of Rs 5.04 crore in July last year.

United India Insurance's FY12 profit jumps nearly 200% State-run United India Insurance announced nearly 200 per cent jump in its profit after tax for the year ending March 31, 2012. The Chennai-based insurance provider clocked a PAT of Rs. 387 crore for the period ending March 31, 2012 up by 196.4 per cent from Rs. 130.54 crore registered during the previous year, United India Insurance CMD G Srinivasan said. During the year, the company's total business grew by 28.2 per cent to Rs. 8,179 crore as against Rs. 6,377 crore in the previous year, he said announcing the results. "The industry is on a growth path. Last year, the industry grew by 23 per cent so we expect there will be 20 per cent plus growth in current year also. There is a lot of awareness also. The industry has taken off well. We are very optimistic, he told reporters. He said the company declared a dividend of 52 per cent for the year and added they would surpass Rs. 10,000 crore premium this fiscal. "In terms of premium income we will cross Rs. 10,000 crore. Our focus will be on motor, personal line," he said, adding they would soon come out with a insurance product targeting the small and medium enterprise sector.

United India Insurance net jumps 56% in first-half United India Insurance Company Ltd has reported 56 per cent growth in net profit during the first half of the current year ending September 30 as compared with the corresponding period last year. Profit after tax in the first half was Rs 341 crore, which is more than twice the net profit of Rs 131 crore the company reported for the whole of last year. Growth drivers Addressing media persons on the company's performance, Mr G. Srinivasan, Chairman and Managing Director, United India Insurance, said the focus on retail, MSME (micro small and medium enterprises) and rural insurance segments, efforts to bring down underwriting losses and management expenses have contributed to the performance. The company hopes to continue to concentrate on its focus areas to sustain the growth in the current year. Areas of concern But some of the areas of concern are the slowdown in automobile sales and new projects being put off, both of which could have an impact on growth rate, he said. Premiums from engineering (Rs 251 crore), health (Rs 1,168 crore) and motor insurance (Rs 1,351 crore) have contributed to a major share of the company's gross premium income of Rs 4,033 crore, with all the three segments growing around 35 per cent. Fire insurance grew by about 13 per cent to Rs 508 crore and marine insurance by 9 per cent to Rs 293 crore. Underwriting losses have been brought down to Rs 406 crore (Rs 605 crore).

United India Insurance Q3 profit up 24% United India Insurance Company has reduced the claims ratio to 81.45 per cent for the nine-month period ended December 31, 2011, which resulted in the combined ratio (a measure of the profitability of insurance operations), dropping to 114.69 per cent from 127.64 per cent during the corresponding period of the previous year. The investment income of the company for the period stands at over Rs 1,106 crore. The market value of the company's total investment portfolio at the end of the third quarter was at Rs 15,603 crore. Business growth The net worth of the company stood at a robust Rs 4,660 crore as at December 31, 2011. For the period under consideration, its business grew at 27 per cent to Rs 5,872 crore, with an accretion of Rs 1,239 crore over the same period last year. It reported a net profit of Rs 414,41 crore, a growth 24 per cent over Rs 333.25 crore posted during the corresponding previous year period. A press release from the company says that it will continue its thrust on the retail, MSME (micro, small and medium enterprises) and rural sectors. During the third quarter of the current financial year, it secured the mandate to implement the Tamil Nadu Chief Minister's comprehensive health insurance scheme for 1.34 crore BPL families in the State.

CONCLUSION

Insurance sector in India is one of the booming sectors of the economy and is growing at the rate of 15-20 per cent annum. One of the key service industries in India would be health and education Insurance sector in India grew at a faster pace after independence. In 1956, Government of India brought together 245 Indian and foreign insurers and providen t societies under one nationaliz ed monopoly corporation and formed Life Insurance Corporation (LIC) by an Act of Parliament, viz. LIC Act,1956, with a capital contribution of Rs.5 crore. The (non-life) insurance business/general insurance remained with the private sector till 1972. There were 107 private companies involved in the business of general operations and their operations were restricted to organized trade and industry in large cities. The insurance sector in India has come to a position of very high potential and competitiveness in the marke t. Indians, have always seen life insurance as a tax saving device.

SUGGESTIONS

REFERENCES Annual Reports of IRDA (from 2000 2009) Ashraf, Syed Husain, and Abdullah Faiz Indias Insurance Sector in Post Privatization Period: Emerging Financial Issues, The Journal, July-December 2008, pp. 74-77 Cummins, J. David, and Bertrand Venard (2007), Business & Economics, pp. 646648 Insurance Principles and Practice by M.N. Mishra S Chand Publishers 2008 Edition. Paul Starr, (1989), The meaning of Privatization, in Alfred Kahn and Sheila Kamerman, Privatization and the Welfare State, Princeton University Press. RTI from IRDA and LIC Sinha, T, An Analysis of the Evolution of Insurance in India, CRIS Discussion Paper Series 2005 (III) http://censusindia.gov.in/2011-prov-results/prov_data_products_utt.html www.assocham.org/events/recent/showevent.php?id www.irda.gov.in/.../frmGeneral_Layout.aspx?...%3E%3EActs www.livemint.com/.../Insurance-sector-to-grow-to-Rs.html