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.

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 2008-09 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 - market share of leading companies

The following table shows the market share of top insurers in India in the period till April 2011:

Company Approximate market share

LIC 50%

ICICI 10%

SBI 5%

Bajaj 4%

Reliance 5%

HDFC 6%

Birla 4%

Max New York 3%

Tata 2%

Met Life 1%

Kotak 2%

Others 8%

In terms of policies sold following are the top insurers in India:

Company Policies sold till December 2011 (approximate figure)

LIC 20404281

Future Generali Life 100143

ICICI Prudential 785938

Met Life 98904

Reliance Life 698109

Star Union Dai-ichi 82037

Bajaj Allianz 640483

 Shriram Life 73490

Birla Sunlife 589855

Bharti AXA Life 69151

SBI Life 491927

Aegon Religare 47332

Max New York 405662

IDBI Federal 45833

HDFC Standard 397408

Canara HSBC OBC Life 44899

Tata AIG 199275

DLF Pramerica 43299

Kotak Life Insurance 199614

IndiaFirst 38498

Aviva 100216

Sahara Life 36228

Edelweiss Tokio 1968

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 composition
As per IRDA, the composition of the Indian insurance industry by March 2011 could be mentioned as such:

General insurance

Category Number of organizations

publicly owned general insurers 4

private insurers completely owned by an Indian business organization 1

specialized general insurers 2

private insurers' JV with international insurers 14

Specialized health insurers 3

Life insurance

Category Number of organizations

publicly owned life insurers 1

private insurers' JV with international insurers 21

private insurers completely owned by an Indian business organization 2

India insurance product composition

Following is an approximate representation of the product composition of India's insurance industry:

General insurance

Product Percentage
Engineering 4

Motor OD 27.63

Motor TP 14.94
 Health 22.58

Aviation 1.08

Liability 2.40

Personal accident 2.63

Fire 10.91

Marine 5.97

Others 7.37

Life insurance

Product Percentage
Non linked life individual 21.70

Non linked gen annuity group 4.33

Non linked gen annuity individual 0.85

Non linked pension group 4.22

Non linked pension individual 0.25

Non linked health 0.09

Linked insurance 55.01

Riders 0.01

Linked life group 13.54

India insurance industry major problems

Following are some of the major problems plaguing the insurance industry in India:

Focus on actuarial pricing

Regulatory misunderstanding
Investment regulations
Solvency regulation
Claims settlement procedures
Data clarity
Distribution channel issues

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.

Top Insurance Policies

Following are the featured insurance policies of various insurers in India:

Company Product

LIC Jeevan Vaibhav

ICICI Prudential ICICI Pru iCare

Reliance General Insurance Reliance Private Car Insurance Reliance Travel Care for Students

Bajaj Allianz CashRich

Family Floater Health Guard Plan
Car Insurance

HDFC Life Click2Protect

HDFC LIFE SMART WOMAN PLAN

Tata AIG Insurance Tata AIG Motor Insurance

Tata AIG Travel Insurance
Tata AIG Wellsurance Family

Kotak Life Insurance Kotak Assured Protection Plan

Kotak Assured Income Plan
Kotak Assured Investment Plan

Aviva Aviva Health Secure

Aviva i-Life
Future Generali Future Generali Smart Life
Future Generali Health Suraksha

MetLife Retirement Plans

Met Monthly Income Plan

Star Union Dai-ichi Life Insurance Suraksha Kavach

Shriram Life Insurance ShriLife

Wealth Plus
Money Back
Shriram Ujjwal Life SP

Bharti AXA Bharti AXA Life eProtect

Aegon Religare iTerm

IDBI Federal Termsurance

Wealthsurance
Childsurance
Lifesurance
Healthsurance
Incomesurance
Loansurance
Homesurance
Bondsurance
Microsurance

Canara HSBC OBC Life Insurance Dream Smart Plan

Grow Smart Plan
Future Smart Plan
Secure Smart Plan
Smart Sanchay Plan

DLF Pramerica Life Insurance Income Rakshak

DLF Pramerica Family Income
DLF Pramerica Family First
DLF Pramerica U-Protect

IndiaFirst Life Insurance IndiaFirst Maha Jeevan Plan

Sahara Life Insurance Sahara Vatsalya-Jeevan Bima

Apollo Munich Health Insurance OptimaRESTORE

Star Health Insurance Family Health Optima

Star Unique Health
Senior Citizen Health Insurance

IFFCO TOKIO General Insurance Auto Protector Policy

Individual Medishield Policy

New India Assurance Householder's Policy

Motor Insurance Policy
 Overseas Mediclaim Policy
Fire & Machinery Policy
Industrial All Risk Policy
Shopkeeper's Policy

Oriental Insurance Oriental's Motor Insurance Policy

Happy Family Floater Scheme

National Insurance Car Insurance

Cholamandalam MS General Insurance Chola MS Private Car

Chola MS Student Travel
Chola MS Family Healthline

HDFC Ergo Travel Insurance

HDFC Ergo Health Suraksha

Universal Sompo General Insurance Householder's Insurance Policy

Shopkeeper's Insurance Policy
Motor Insurance Policy
Individual Health Bills

L&T Insurance my:health Medisure Prime Insurance

Last Updated on 08/07/2011

The insurance industry is highly competitive as individual agents and companies compete with
one another for a larger portion of the market share. The Bureau of Labor Statistics expects
average growth in the insurance industry in terms of the number of new jobs that will be created
between 2008 and 2018. With minimal growth to look forward to, insurance agents and
companies will have to differentiate themselves in the marketplace by meeting a number of
critical success factors.

Using the Internet

One critical success factor for the insurance industry as a whole and particularly for individual
insurance companies, is the need to update the way that business is conducted. The Bureau of
Labor Statistics (BLS) notes that growing use of the Internet will eliminate some jobs within the
industry and increase employment in others. While it may adversely affect the employment of
sales agents, for example, by allowing people to obtain instant quotes online, its power as a
marketing tool will provide the industry with an undeniable ability to continue to grow and
increase revenue by reaching people quickly.

Sound Business Strategy

The Industrial Alliance Insurance and Financial Services Inc.notes that size of an insurance
company is incidental to its success if it has a sound business strategy in place. A sound business
strategy can provide an insurance agency or company with the stability it needs to withstand the
ebb and tide of the market and its fluctuations. According to the alliance, a sound business
strategy consists of focusing on excelling in one functional skill like selling. Secondly, it
involves focusing on one specific market within the industry such as life insurance. That market
should be one where the company can establish its niche. In other words, it is necessary to focus
on one sub-market within the larger market. It also means planning for changes in the industry
and learning to exploit them to your advantage.

Financial Strength
In the aftermath of the recession that started in 2007, it is critical for insurance companies to
exhibit financial strength in an increasingly tough economic climate. Financial strength assures
consumers that they are making financially responsible investment decisions. Financial strength
entails having strong quality assets, the ability to raise long-term capital, adequate money
reserves, a proven risk-management strategy and high ratings given by companies or
organizations that assess financial strength.