SR. NO.

CONTENTS
2.0 Introduction
2.1 Review of the Studies
2.2 Conceptual Background in Insurance
2.3 Exclusions under Pension Insurance Policy
2.4 Conclusion

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2.0
INTRODUCTION:
Insurance studies have been an important of theme of research among
academicians and practioners. This is evident from the number of studies published
in International and national journals. As a part of the research work the list
of past studies in this sector has been made from different journals. In the present
chapter we review most of the studies to understand the issues addressed.

2.1 REVIEW OF THE

STUDIES:

Dr. S. A. Senthil Kumar (2013) studied on ‘Pension Insurance Market in

India
: The Way Forward’, the main objectives of the study about pension insurance
market, various pension insurance products available and the growth of
pension insurance market. They conclude on the basis of secondary data that the
government to provide universal access to free / low cost pension care insurance
can be an important means of mobilizing resources, providing risk protection
and perhaps, improved pension outcomes.

Dr. G. kasirajan (2012) studied on ‘Pension Insurance – An Empirical

study of Consumer Behaviour in Tuticorin District’. This study aims at
evaluating the awareness of pension insurance in two blocks from Tuticorin
district viz, Pudar and Kayathar. The primary data was collected with the help
of interview schedule. 216 respondents were selected from two blocks by
using Simple Random Sampling Method. The data relates to the month of
Jan. 2012. For analyzing data chi-square test, Cramer’s V test was used. The
outcomes of the study was when asked about the benefit of pension insurance, 60
percent of the respondents stated that it would reduce the out-of-pocket
expenditure and other group opined that it would help in case of emerging
medical situations.

Prasanna N. and Ramajayam V. (2010) in their paper ‘ Prospects of

pension insurance in India’ reported that in an environment of fiscal constraint the

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already low public spending on pension has only marginally increased from 1.3
percent of GDP in
1990 to 2 percent in 2010. According to OECD (2009) 81 percent of
pensioncare is paid for through private funds rather than public, closely
followed by Viet-Nam at
76.3 percent. As a consequence, lower – income groups have less access to
pension services in Indian than in 15 Asian economics (an average of 55.8 percent
of private expenditure on pension) or in 30 OCED countries (only 2.4 percent).

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 Brainard D. L. (2008) studied on ‘What is the role of insurance in
Economic Development? Similar to economies in the developed nations,
the success and development of pension insurance plans in developing nations
depend upon the mix of pension service providers (public or private) and the
governments overseeing them. On the other hand there is one major difference in
developing nations, where households have a strong tendency to pay for the
pension services from their own pockets. This tendency leads to low investment
in the pension insurance sector and results in poor pension scenario. Thus,
such developing economies provide an ideal scenario for growth of pension
insurance. Countries like Mexico and Colombia have gone under such reforms
and have got promising results.

The institution of pension insurance is greatly affected by a county’s

political situation, government regulations, and religious inclinations. It has been
observed that countries with majority of the population following Islam have
lower insurance consumption level. In addition to these factors the study has
emphasized that demographics play a key role. For instance the share of
population which is approaching the retirement age and the level of education are
directly related to the growth of insurance. Moreover unlike the pension perception
that urbanization would lead to growth in insurance, it was observed that it
did not act as a major driver. Comparison were also drawn between social and
private pension insurance, they were not found to be acting as substitutes rather
their growth was parallel when the pension income level of a country rose.
Public/social pension insurance services usually provide coverage to a very small
percentage of the society and are restricted to civil servants, army, police etc.

Lofgren (2008), in a study conducted in Vietnam it was found that

willingness to pay for pension care services was directly proportional to the
level of income, education, size of family and the number of lingering diseases in
a household. It was concluded that the demand for private pension insurance is on
the rise in the rural areas of the country because awareness about pension is
increasing. Due to this, the pension care financing from one’s own pocket has been
on a decline.

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 According to Shehzad (2005) financing of pension care has been a critical
issue when talking about improving the quality of pension sector in developed and
emerging economies. Developed nations have been able to devise robust plans with
the help of tax collections, private funding and social insurance. On the other
hand developing

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nations are still striving to come up with a feasible system to enact. In such
countries, there is a wide chasm between the pension care facilities provided to
lower and higher income groups. There is a dire need to implement plans
which would increase the efficiency of existing pension care infrastructure
and would utilize the resources already at hand. It is important that while
devising such plans; convenience and participation of the target population is
kept in mind. Moreover it should be made sure that such a venture into pension care
financing is financial feasible and sustainable.

Bhattacharya (2005) in his analytical study on ‘Challenges before

Life Insurance Industry’ advocated that bancassurance provided the best
opportunities to tap the large potential in rural and semi urban areas as banks have a
strong network of more than 40000 branches in these areas. He suggested that the
insurers should focus on Single Premium policies, Unit Linked Insurance,
Pension Market and Pension Insurance.

Gayathri Iyer (2010) in her article “Evolution of pension insurance

in India towards pensiony pension insurance” explains that pension
insurance can play an invaluable role in improving the overall pensioncare
system. The insurable population in India has been assessed at 250 million and this
number will increase rapidly in the coming two decades. The efforts of the
government authorities should be supplemented by innovative insurance
products and programs by insurers with adequate reinsurance backup.

Altaf Ahmad Dar (2011) studied on ‘Awareness of Life Insurance : A

Study of Jammu and Kashmir State’, tried to found the awareness of life insurance
in the population of J and K state, a community – based cross sectional study was
carried out. A total number of 242 respondents from 242 households were
interviewed by using a pretested questionnaire. The awareness of life insurance
was found to be 64 per cent. Around 45 per cent of the respondents came to know
about life insurance from the media which played an important role in the
dissemination of information. The middle and low socio – economic groups
favored government life insurance compared to private life insurance as they
have more faith on Government Company. The findings indicate that

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government should came out with a policy, where the public can also be made
to contribute to a life insurance scheme to ensure unnecessary event and also better
utilization of life insurance facilities.

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 Ashok Vikhe Patil (2002) studied on ‘Current Pension Scenario in
Rural India’. Major conclusions of the study was to improve the prevailing
situation, the problem of rural pension was to be addressed both at the macro
(national and state) and micro level (district and regional), non-communicable
diseases such as cancer, blindness, mental illness, hypertension, diabetes,
HIV/AIDS, accidental and injuries are on the rise.

T. Hymavathi Kumari (2013), studied on ‘Performance Evaluation of

Indian Life Insurance Industry in Post Liberalization’. They came out with
the valuable findings as the private sector offices were only 13 in the year
2001and they were increased by 8768 during the ten year period. The total
premium income of the industry had increased from Rs. 500094.46 crores in
2001-02 to Rs. 265450.37 in
2009-10. The size of life insurance market increased on the strength of growth in
the economy and concomitant increase in per capita income. Analysis of hypothesis
based on the secondary data analysis, it had been proved that Liberalization had a
significant impact on the growth of Indian life insurance business.

Dr. Sonika Chaudhary and Priti Kiran (2011) studied on ‘Life

Insurance Industry in India: Current Scenario’. They studied resent life insurance
scenario. The study based on secondary data, period of the study covered 2006-07
to 2010-11. With the help of collected data and analysis they concluded that
life insurance industry expanded tremendously from 2000. Private life insurers
used the new business channels of marketing to a great extent when compared
with LIC. Investment pattern of LIC and Private Insurers also showed some
differences. Solvency ratio of private life insurers was much better than LIC.

M. Venkatesh (2013) studied on ‘Trend Analysis in Insurance Sector

in India’, main objectives of the study were to understand the world insurance
density, relate it with India density, and the study of premium trend analysis for
understanding improvement of insurance in India. To study the decided objective,
researcher used data from 2002 to 2012. This study concludes that Indian insurance
sector is having increasing growth rate. From the studied trend analysis it could be
observed that trend percentages were increasing, so they conclude it was

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improving year to year. They also concluded that many Indian were illiterate so
they don’t know about insurance benefits and they don’t know what were the
existing insurance policies which giving more benefit.

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 S. Krishnamurthy and all (2005) colloquium on ‘Insurance Industry
in Japan: Structure, Performance and Future Challenges’. The major
issues of colloquium were what types of innovative strategies of insurance
education and awareness required, product market scenario, demand for insurance,
etc. The outcome from this discussion as the availability of insurance can mitigate
the impact of risk by providing products which help organizations and
individuals to minimize the consequences of risk has a positive effect on
industrial growth as entrepreneurs are able to cover their risks. The future growth
depends on how service oriented insurance are going to be. On the demand
side, the rise in income will trigger the growth of physical and financial
assets, with the growth of infrastructure projects, the demand for insurance to
cover the project and the risk during operations will increase. The new age
insurance agent is trained to be an advisor to the customer instead of being a mere
seller of policy. Some key benefit of technology have been reduction in
turnaround time as well as multiple interaction with the customer through
emails, facsimile, websites and ATM’s which have resulted in improved disclosure
to policy holders. Pension insurance is a complex business both in terms of its
fundamentals and operating practices.

A key feature of the pension insurance marketing is its skewed

structure in terms of rates and terms, more than 60 percent of business controlled
by a centrally administrated known as “Tariff”. The pension insurance sector
has shown mixed performance perhaps due to the inherent nature of the business,
Most families in India may not have adequate insurance. Indian insurers have
relied a lot on their foreign partners for initiating business and developing
important policies and procedures. The key to market growth is through an
integrated approach which includes creating awareness about insurance,
enhancing reach through cost effective distribution and meeting customer needs
through product innovation. It is a challenge of any insurer to

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attract qualified and capable person to join and work with them to sell insurance in
the competitive environment.

Ramesh Bhat, Elan Benjamin Reuben (2002) in their analytical

and empirical study on ‘Management of Claims and Reimbursements: The
case of Pension Insurance Policy.’ The objectives of the study was to study
empirical findings about the claim and reimbursement made under the
Pension insurance policy offered by one of the GIC – run companies in
Ahmadabad city. To analyse the objectives mostly secondary data were
collected. Major findings of the study were Pension scheme had experienced
and impressive growth after 1996. Because of new introduced policy, the
number of customers were increased by 50 percent during the year 1997-988 to
1998-99, the number of claim increased by 93 percent, also claim amount
increased by 63 percent.

Lella Ram Newar (2013), studied on ‘Understanding Reforms in the

Life Insurance Sector of India’, the conclusion of the study was shown that overall
growth in insurance industry had been positive. Foreign partners had exited on
interest in the huge market that India offers.

Sakthivel Selvaraj and Anup K. Karan (2012) studied ‘Why

Publicly- Financed Pension Insurance Schemes are Ineffective in Providing
Financial Risk Protection’. Improving pension out-comes, enhance access and
availability of essential pension care services, was the main objectives of the study.
The present study examines financial risk protection in India’s pension sector, with
reference to the implications of various publicly financed pension insurance
schemes. The period of the study was
2004-05 to 2009-10. It is argued that competition in insurance market brings down
the prices. But actually study proved that premiums had only increased and were
likely to rise in the next coming year.

Ernst Spaan and all (2012) studied on ‘The Impact of Pension Insurance
in Africa and Asia: a Systematic review’. The main objectives of this present study
were to evaluate the impact of pension insurance on resource mobilization,

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financial protection, service utilization, quality of care, social inclusion and
community empowerment in low and lower-middle income countries in Africa and
Asia. Major findings of the study were most African studies reported on
community based pension insurance (CBHI) and were of relatively high quality,
Social Pension Insurance (SHI)

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studies were mostly Asian and of medium quality. Conclusion of the study was
pension insurance offers same protection against the detrimental effects of
user fees and a promising avenue towards universal pension care coverage.

Katherine Swartz (2009) tried to find out ‘Pension Care for the
Poor: For Whom, What Care, and Whose Responsibility?’ the study concludes that
the united states should move to a national system of pension insurance so
everyone regardless of income would have a minimum set of medical services that
are covered, much like Medicare covers a minimum set of services. A national
insurance system would achieve three other objectives; first, it would
eliminate the current inequities in eligibility criteria for Medicaid and SCHIP,
and states, ability to fund assistance programs for the poor. Second, it would
provide a mechanism for slowing the rate of growth in pension care spending.
Finally, a national system of pension insurance would effectively and quickly
redistribute income to poor people when they get sick.

Analytical study conducted by Channarith Meng, Wade Donald

Pfau (2010) on ‘The Role of Pension Funds in Capital Market
Development.’ The main objectives of the study were to find out the impact of
stock market on pension fund. To explain the objective they studied both stock
market and bond market. They considered only private bond market.
Secondary data from 32 developed and emerging market in country during
2003-2007. They conclude study with the result that pension fund investments were
expected to increase the availability of long term funds and the positive
relationship between pension fund size and capital market development.

The study on ‘Pension Insurance in India: Rajiv Aarogyasri Pension

Insurance Scheme in Andhra Pradesh’ is done by J. Yellaiah (2013). The main
objective of this study was to discuss the coverage and features of major pension
insurance schemes in India, to examine the role of A. P. state pension insurance
scheme. Secondary data were used to understand and examine the objectives.
The conclusion of the study was RACHIS established in 2007. The scheme
covered 198.25 laks families (87 percent families covered) residing in 27138
villages. The majority of beneficiaries utilizing the scheme was illiterate and had a

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rural address. A total patient screened under the scheme was 6575227, and
registered under scheme was 6539949.

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 Simone Stellen (2011) in her analytical study on ‘Extending Coverage of
the New Pension Scheme in India Analysis of Market Forces and Policy Options’,
used survey method to collect the data. The study area of National Pension schemes
(NPS) launched by Government of India in May 2009. The study concludes that
after two years of implementation of NPS had attracted only few voluntary
subscribers. She concluded four reasons for low coverage. First, there were no
returns and no real early withdrawals. Second, PFRDA had challenged the truth of
the population in the long term political stability of NPS. Third, private sector
institutions are the major distribution channels those have low trust and
fourth PFRDA had not developed a targeted pull-market strategy, which is
necessary to explain the rational of a pension schemes to the population.

Dr. Bawa and Miss. Ruchita (2011), in their study on ‘Efficiencies of

Pension Insurance Business in India: An Application of DEA’, study covered a
period of 8 years from 2002-03 to 2009-10. The companies which were
providing pension insurance since 2002 were farming a part of the study. In this
study DEA framework had applied for the evaluation of efficiencies of pension
insurance business of pension insurance companies in India. Present study observed
that overall pension insurance carrying pension insurance business at on overage
technical efficiency of 73 percent, pure technical efficiency of 92 percent and scale
efficiency of 78 percent. Sector wise performance analysis had indicated that
technical efficiency of the private companies was 77 percent, which was 10 percent
more than that of public sector companies.

Hussels, Ward and Zurbruegg (2000), investigates the relationship

between economic development and the insurance market for the period of 1961-
1996 in their research title ‘Stimulating the Demand for Insurance’, with the
use of real GDP of online OECD countries as a measure of economic activity
and total premium as a measure of insurance activity. There research shows
that insurance industry affect economic growth in two countries, Canada and
Japan. While in case of Italy, there is a bidirectional link between insurance and
economic growth. The researcher concludes that the impact of insurance on
economic growth depends on a number of circumstances specific to

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particular country such as cultural, regulatory and legal environment,
development of financial intermediation and the impact of moral hazard in
insurance.

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 Philip Dalinjong and Alexander Laar (2012) studied on ‘the national
Pension Insurance Scheme: Perceptions and Experiences of Pension Care Providers
and Clients in Two Districts of Ghana’. The study takes place in Bolgatanga
(urban) and Builsa (rural) district in Ghana in December 2009 to February 2010.
Survey method used to collect data of 200 respondents, 15 interviews with pension
care providers and pension insurance managers and 8 groups discussions. In this
study it was found that most of the insured perceived and experienced long
waiting times, verbal abuse, not being physical examined and discrimination
in favor of the affluent and uninsured. Also found that the service providers
not making immediate payment for services. The study concludes increased
utilization of pension care services by the insured leading to increased workloads
for providers influenced their behaviour towards the insured.

Ralf Sulzer (2008) in his study on ‘Social Security in India: A System in

the Making’ studied social security of unorganized workers, and Below
Poverty Line households. They conducted survey of 1356 samples households in
the state of Orissa, Madhya Pradesh and Karnataka. He stated that India
Extended social protection measures to workers in the organized sector only. This
was about 7 percent of total workforce. Also concluded that social security was a
neglected area in terms of policy up-gradation until Ninth Plan. Because of the
decreasing productivity in agriculture and depleting livelihood options, its leads
on increasing inequality in standard of leaving.

Jordan Kjosevski (2011) in his analytical study on ‘Impact of insurance on

Economic Growth: The case of Republic of Macedonia’ examine that they used
data for the period 1995-2010. To measure insurance development they used
three variables-life insurance, non-life insurance and total insurance
penetration. To examine data they used Im, pesaran and shin, panel (IPS)
unit-root test. The conclusion of the study was insurance has positive impact and
has significant role in the growth of their GDP.

Sarwar Aamir, Qureshi Ahmad (2013) the research focused on

‘awareness and Willingness to Buy Private Pension Insurance and A Look into its
Future Prospects in Pakistan’. The major objectives of the study were to

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explain the awareness of people regarding private pension insurance, examine
the willingness to buy private pension insurance and their subsequent
preferences for features and to explain the factors acting as barrier to private
pension insurance. Questionnaire method had used to

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collect data. Sample size of 380 respondents was randomly selected from the
pension public in Pakistan. Cronobach Alpha Reliability Analysis was preferred to
check the internal consistency of the scale. Chi square test was preferred to
find relationship between sets of categorical variables. Major conclusions of this
study were awareness created by mostly friends and insurance agents and other
were supportive instruments. Majority of respondents were ready to pay Rs. 5000/-
as a premium.

Anil Gumber (2002) studied about ‘Pension Insurance for the Informal
Sector: Problems and prospects’. He studied that the pension insurance coverage is
very low. Only nine per cent of the Indian workforce was covered by some
form of pension insurance. Reason behind the low level of pension insurance
coverage was due to the fact that the government policies had been to provide free
pension services through the public hospitals / dispensaries / clinics. Present
research suggested that there was much potential and scope to enhance the
coverage of pension insurance in pension and more specifically to the poor.

Gumber and Kulkarni (2000), discussed some findings emerged from

the pilot survey undertaken in Gujarat. The objectives of the were to review the
existing pension insurance schemes both in India and few developing countries
with respect to efficacy and equity, to examine the pension seeking behaviour,
pension expenditure, and morbidity pattern of households protected under
different pension insurance environment, to estimate the demand for pension
insurance. The study was based on a primary household survey undertaken in
Ahmadabad district of Gujarat during 1999. Survey included about 1200
households in rural and urban areas classified into four categories according to
their pension status. About 360 households belonged to contributory plan
known as Employees State Insurance Scheme (ESIS) for Industrial workers.
Another 120 households subscribed to a voluntary Pension plan and 360
households were members of the community financing scheme, run by an NGO
called SEWA. The remaining 360 households were non-insured and were
purchasing pension care services directly from the market.

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 Ghag M. C. (2001), in his article ‘A new paradigm in Indian
Insurance’ explained and commented on privatization and development of
Indian insurance segment. He compares LIC with new emerging insurance to
compete in current market situation. Life Insurance Company is a big settled
competitor ready to prove

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its dominance to other. He also suggested that with the help of banking, postal wing
is most important and useful to grow enormous business.

Sangale G. T. (1993), studied on ‘Marketing of Services of Life

Insurance Corporation of India with special reference to Satara Division’. He
studied period from 1984-85 to 1991- 92. He had explained various
promotional activities to promote Life Insurance policies and focused on
increased number of sales. He also focused on improvement in services given by
Life Insurance Corporation to customer.

Pujari Dinkar D. (2002), studied on ‘An Evolution of Life Insurance

Corporation of India of Satara division’. He focused on growth and development of
LIC and studied different schemes offered by LIC. He collected primary data using
questionnaire and stratified random sampling method used, data collected from
Satara and Sangli districts. Sample size was selected on the basis of policies in
force as on
31st March 2000. He selected 8 branches from two districts and only in force
policyholders considered as a sample. His study for 1990-91 to 1999-2000
period. With the help of 682 respondents and collected data analyzed using chi-
square test.

He draws some important suggestions like development of insurance

products, increase knowledge of agents and relativity of performance. He also
pointed on service provided by LIC. As per his views 32 percent respondents were
perches life insurance policy for encouragement to thrift and remaining for tax
benefits and for against home loan. It also stated that once policy sold only few
agents meet customers frequently and other remaining agents forget their
policyholders forever. Some views he mentioned towards the opinion of
respondents for privatization of insurance sector so it was found that more that
75.5 percent respondents were against of the privatization. With the help of this
study he also suggested that insurer should focus on rural areas to increase
business.

Chougule M. D. (2012), in his ‘Investment Management with

Special Reference to Life Insurance Schemes: A Customer Point of View’

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studied on investment focus of customers and returns of invested amount with
satisfaction level. Study duration from 2000 to 2010 and studied in Kolhapur
district. He had selected LIC and leading nine private life insurers as a study area
and from each organization he had selected 10 respondents. It means that sample
size is 100 respondents from 10 insurance organizations.

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 He concluded his study with the important suggestions that
educated respondents were preferred to invest money in private life insurance
companies but uneducated or less educated persons were least interested to
invest their money in private companies and also they opposed to be
insurance as a private sector. They were satisfied with dominant insurance
Organization. He also stated that insurance agent is a major source of
information. As per his study, he stated that private players are more prompt to
amend new rules and regulations amended by IRDA. But LIC was lacking behind
for this point of view. For long term investment respondents were chosen
LIC and for short term immediate returns, they chosen private players.

K. Spandana (May 2003) in its point of views on ‘The Potential of Rural

Life Insurance in India: Problems and Prospects’, this research work on
specifically focused on the commercial viability of doing insurance business
in rural sector in India clearly indicated that the rural sector is a vibrant market
and still it is uncovered, and that it holds tremendous potential for the growth
and fastest development of insurance business in India. He also stated that the
penetration of insurance in rural India remains pitifully low. This study aimed
at exploring the potential of life insurance in rural segment in India with all its
problems, complexities and variables, and suggesting the means and ways of
meeting the challenge of developing the rural insurance business in tandem with
its potential of economic growth. In short the above study is specifically
focused on rural market and its problem and potential to grow as an immerging
insurance segment.

Grossman (1972) and Muurinen (1982), in their analytical study on

‘The role of education in decision-making to buy life Insurance’ stated that an
educated person is pensionly always behind to acquire informed about both
the insurance services available in the market and the benefits of joining in
insurance. Age has always impacted to have insurance or to take decision
about having positive and significant impact on the probability of having
insurance cover in many studies. Another important factor found is gender makes
difference to take decision, and also plays an important role in the insurance

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decision through its effect on expected medical consumption. This study only
measures the effect of education on insurance consumption.

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 Mala Srivastava and Yogeshwari Phatak (May 2005), ‘A Study of
Risk Perception of Indian Insurers Towards Private Life Insurers’, in this
study they discussed that the deregulation of the Indian Insurance market,
current market situation and under-penetration, and the anticipated potential of the
Indian insurance industry makes it an attractive opportunity for private entrants
because still there is a vast uncovered area is available and it’s a good
opportunity for new entered organizations to develop their business. The extent of
this opportunity is likely be a function of several factors, not the least of which is
whether customers are satisfied with the current traditional insurer, loyalty
level, and the ease and propensity to switch insurance providers. In India life
insurance is regarded as more than a mere risk cover and is considered an
important avenue of investment.

Indian insurers therefore should evaluate the past track record and risk
potential of an Insurer before taking a policy and investment decision. Current
study focused on mainly to study the extent to which risk perception of the insurer
affects the decision of an insure in selection of an insurance company and another
is that the extent to which Indian insurers perceive private insurers to offer
better services namely traditional and dominant market player in life insurance
companies i.e. Life Insurance Company.

The study was conducted with the help of a close ended questionnaire which
was administered on 150 potential life insurers. Necessary statistical tools were
used for the purpose of data analysis and comparison. The study revealed that
although a number of private insurance companies have entered the Indian life
insurance market, Life Insurance Corporation of India still seems to be the first
choice for the Indian insurer due to the perceived safety that is associated with it. It
is clearly shows that still LIC has dominance in insurance market thou there are
various competitors are available in the market.

Mrs. Ranjan J. Sabhaya (2014), her analysis on ‘Comparative study of

major Insurance players in Gujarat with special reference to Life, Pension
and Vehicle Insurance’. She focuses on to Study and Analyze different

40 40
aspects of Insurance Industry, Comparative analysis of the major Insurance
Players’ performance by considering the different components of Profit & loss
account and Balance sheet for last five year, the factor affecting the buying
decision and renewing decision of Insurance Policy, people attitude toward
the life insurance, pension insurance and vehicle insurance. Target Population
will be Individual Insurance Investors or key decision takers for insurance
investment and using Non-probability convenience Sample for collecting data.
She studied sample size 300 respondents from each group and Structured
Questionnaire – to be filled up by Individual Investors. Testing of null Hypothesis
using Chi-Square Analysis and Mann Whitney U Test.

Current study examines recent trends in the Indian Insurance sector

and provides information on the state of Indian insurance sector in pension and
Gujarat and mentioned cities’ insurance sector in particular. It details the major
factors that have influenced the industry in recent era including the emergence of
new distribution channels to market insurance products, rapidly developing
technology and changing industry laws & regulation.

Rohit Kumar (2011), views on ‘Pension Insurance in India: Strategies

for Synergy among Insurers and Providers’, the objectives of this research were
derived from the existing problems and gaps in the literature. One of the key
objectives was to develop strategies for synergy among insurers and providers.
The objectives were achieved through a series of activities that was guided by the
research framework. His major objectives are study the trends in Indian pension
insurance market, find out the relationship between hospitalization cost paid
by the insurer, components of hospitalization cost and the risk covered by the
insurers in the India.

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 Ramesh Lal and Neelima Dhonda (2006) on their analytical study on
‘Insurance Penetration – study of Selected Countries’ have highlighted the extent of
Insurance penetration in selected countries which represented 63 percent of
World population and 74 per cent of Gobal GDP. The countries were selected from
different continents. Insurance penetration along with Insurance density for
life Insurance, several insurance and overall insurance has been calculated for the
selected countries for a period of 5 years from 1998-99 to 2003-04.

As per their studies Life Insurance penetration ranges from 013 per cent and
14.41 per cent while non-insurance penetration varied for the selected
countries during the same period 0.59 per cent to 4.68 per cent.

Non life insurance penetration is much less as compared to life

Insurance. United States of America could enjoy non life insurance penetration
above 4 per cent. The density of non life insurance is much less as compared
to density for life insurance business. Life insurance density has been the lowest
for Nigeria and highest for Japan. Population does not have much important on life
insurance coverage. But income level of the economy affects the insurance
coverage.

Chandnanai L. R. (1996) in his study ‘an Insurance service in

Developed Countries’ brings the changed scenario of Insurance in developed
countries. He had explained various new technique of selling insurance like
Banc assurance, captive insurance, etc. in these countries. In developed
countries premiums are collected through Banks. Further, he has explained the
various method of settlement of claims.

According to H. O. Sonig (2000), member life, IRDA, in his article

‘Big Scope for Pension Policies’ in Industrial Economists stated that Provident
fund and Pension fund were contributed to about 20 per cent and Insurance to 11.44
per cent of saving. So, new entrants have evinced a keen interest in developing this
market. He envisaged that in addition to the life Insurance Market, the pension
market is bound to grow very fast. He felt that a good thing that was happened
during 2000 was the VRS, which lend for investment into pension fund. He further

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added that country have not even touched 1.5 per cent of total potential market
whereas near about 20 per cent tapped by life insurance. Thus the pension market
in India had larger potential than the life insurance business.

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 Salati Y. Abid (2010) study on ‘A Comparative Study of Marketing
and Marketing Strategies Adopted by Service Providers in Life Insurance
Sector in Southern Maharashtra’, focused on evaluation of different strategies
adopted by the leading service providers for their range of products in the product
mix and studied on service quality using SERQUAL instrument. He made
comparative study between Kolhapur, Sangali and Satara and using lottery
method for selecting area of collecting samples and systematic sampling
technique for selecting 300 respondents. Mostly primary data was collected with
the help of three different questionnaire specifically prepared to Managers,
Customers and insurance agents.

In his study it is found that internet is not source for business generation or
for the concept selling. Managers are mostly preferred to meet customers
face to face. Companies offer certain amount to run different kinds of promotional
activities. All managers had agreed upon the need of training to sales force. Some
managers thought that their advisors need to improve level of knowledge as per
market condition. He also found that some companies’ managers were taken
responsibility about Social Corporate responsibility activities to build
companies brand and improve market position.

He provided an important suggestion that includes decentralization of

the responsibility of branch activity and manager should be taken responsibility
for the same. Product offered to the customers should be mentioned and as
per customers need. Arrange promotional local based activities to increase
awareness. Recruitment process of insurance advisor should be strict and used
various parameters to examine candidate to judge their market potential. He
also stated that private life insurers should focus on increase marketing of
long term policies and do claim settlement process more transparent.

Aamir Hasan (2015) studied on ‘Impact Analysis of FDI on Insurance

Sector in India’ mentioned that Insurance in India is a flourishing industry in India
with both national and international players competing and growing at rapid rate.
Together with banking and real estate it constitutes 12.9% of GDP in India.

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However the penetration of insurance coverage for both life and non life insurance
is still very less and was
3.9% in 2013. The present paper focuses on the overview of the Indian
insurance sector along with the opportunities due to expansion of FDI in insurance
in India and

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the major challenges that it faces. He concluded his paper with the
fundamental regulatory changes in the insurance sector would be significant for the
future growth and would have huge impact on various sectors of
economy. Active foreign participation is crucial for the sector as it would
bring the best know how and implementing the best practices. India is one of the
fastest growing insurance markets and it is expected that Indian insurance industry
can grow up to 125 % in the next decade. However there is also a risk that
unless given the management control the foreign insurers would be reluctant to
invest in India.

Bondia Abhishek (2015) is studied on ‘Achieving Universal Pension

Insurance through the private sector participation’, and study concludes as
Universal pension insurance in an environment where universal food security
is absent, is certainly a very difficult task. However, it is possible; beyond the
scope of this essay there are challenges around intermediary training & education,
availability of capital and many others. Experts among many other measures
argue for opening up of the sector to greater foreign investment to attract
better capital, technology and knowhow. However, the first step towards this
journey is getting the appropriate mindset. There is no alternative to a private
pension insurance model. In our model, we have recommended the role of the
Government to be limited to only a Payer and leave the rest to the Private hands,
letting free-market evolve.

Sahu, B.K (2015), focused on ‘Affordable Pension care for all in India’. As
per his views mentioned that economic Times in its Hyderabad edition dated
05.12.2014 has carried a news that India ranks third among the top three
medical tourism destinations in Asia due to low cost treatment, quality pension
care infrastructure and availability of highly skilled doctors in our country. In fact
as per the report published by FICCI, Medical Tourism is emerging as one of the
largest sectors from economic financial point of view in India.

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 An Analysis of factual situation as described above brings out the
importance of strengthening primary pension care which is affordable and
reachable by the 70% of our population who presently stand deprived of such
minimum pension care and other social security protection in contingencies of
sickness, accident or death etc. Through this article, an attempt has been made
to ignite necessary debate and discussion to

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realize a strong secured satisfying work force and citizens in totality to achieve the
goal of “Make in India” Concept of our Honorable Prime Minister to a
reality by
2020.

Zietz (2003) has reviewed the efforts of researchers to explain

consumer behaviour concerning the purchase of life insurance for almost 50 years.
The review of earlier studies concludes that bulk of the empirical studies
undertaken finds a positive association between increase in savings behaviour,
financial services industry and demand for life insurance. Taking this forward, our
first issue is to see whether or not per capita gross domestic savings and
financial depth influences life insurance consumption. GDP and Per-capita
GDP are often highly correlated with the proxy variables measuring insurance
demand- density and penetration. We therefore ignore these two variables and
assume that as income grows, it will add to insurance demand via rise in the
savings component i.e., GDS.

Yadav Pravin (2015) in his article on ‘Achieving economy of Scale

for sustainability in Pension Insurance’ stated for insurers that this is a right time to
save their unwanted expenditure and save valuable money. Increasing cost of
premium and covered possible lost is a wrong practice, so insurance companies
should reduce the cost of premium and provide much freedom for their
policyholders. The study was done as are prospective analysis of underwriting &
claims behavior for the western region i.e. Gujarat, Maharashtra including
Mumbai for the financial year 2012-13. Gujarat & Maharashtra constitutes
approximately 30% - 40% of all India retail pension policyholders. Data Analysis
was done using Microsoft Excel. The main objective of study is Data Analysis for
FY 2012-13 for Regions: Gujarat, Maharashtra including Mumbai.
At the end of the conclusion stated that As in the western countries,
pension insurance should develop influence and capacity as bulk purchaser of
medical and hospital services to impact quality and cost; provide greater

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understanding about Indian pension and illness behaviors , patterns of
utilization of care and intra family priorities for accessing medical care.

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 Inamdar Sharad N. (2012) studied on ‘Management of problems
and prospects of Pension insurance companies in Public Sector in Pune
Region for the period 2000-2008’. He focused on customer’s awareness about
public sector pension insurance companies, and understands marketing
strategies, etc. He conducted research in Pune region and study duration taken
from 2000 to 2008. With the help of questionnaire he collected primary data and
chosen 450 samples from four different groups as student, professional,
Businessman and salaried. He used non probability Quota sampling method
and also used chi-square test to analyzed proposed hypothesis. In his
research he concludes that majority of respondent perches policy for two
wheelers and other preferred pension insurance. Respondents gave preference for
house hold equipments rather than pension insurance. He also concludes that only
17 per cent respondents were aware about the terms and conditions of
insurance policy.

The analytical study by Chennappa, D. (2015) studied on

‘Differential Premium Pricing in Pension Insurance’. In his study he explains
about previous and current market condition of pension insurance. As a result
of growing number of companies, penetration has grown from 0.69 per cent
million in 2001-02 to 2,048 million in 2013-14, which is only 0.16 per cent
of the total population. The pension insurance density has gone up from USD 13
in 2004 to USD 146 in 2014. Similarly non life insurance density has surged from
USD 3.5 in 2004 to USD 10.5 in 2013.

With the help of the analysis he covers some suggestions that balancing the
metro and non metro cost, Insurer should reduce that their marginal cost, E-
Repository information should be used to cut the premium cost. He also
suggested that empanelled hospitals should bring the transference in diagnosis and
billing. He conclude his study with private pension insurance schemes are
marked products and open to everybody which may target mainly high
income people even though insurance companies are claiming it as social
security schemes.

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 Kainth Jyoti (2014) focused on ‘Indian Insurance Sector: A Research on
the feasible Alternatives for Raising Capital’. Her main objectives of the study are
based on the need of the Indian Insurance sector for raising funds. Research
Methodology adopted for on the basis of secondary data required statistical tool
used. In this study she found that new upcoming innovative decisions taken by
current government is a good source of raise investments in insurance sector.

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2.2 CONCEPTUAL BACKGROUND IN
INSURANCE:

PENSION: pension means fund which is given to policy holder after retirement

SUM INSURED: The Sum Insured offered may be on an individual basis

or on floater basis for the family as a whole.

CASHLESS FACILITY: Insurance companies have tie-up arrangements with

a network of hospitals in the country. If policyholder takes treatment in any of the
net work hospitals, there is no need for the insured person to pay hospital
bills. The Insurance Company, through its Third Party Administrator (TPA) will
arrange direct payment to the Hospital. Expenses beyond sub limits prescribed by
the policy or items not covered under the policy have to be settled by the insured
direct to the Hospital. The insured can take treatment in a non-listed hospital in
which case he has to pay the bills first and then seek reimbursement from Insurance
Co. There will be no cashless facility applicable here.

ACCELERATION CLAUSE3 The part of a contract that says when a loan may
be declared due and payable.

ACCIDENTAL DEATH BENEFIT: In a life insurance policy, benefit in

addition to the death benefit paid to the beneficiary, should death occur due
to an accident. There can be certain exclusions as well as time and age limits.

ACTUARY: A specialist in the mathematics of insurance who calculates

rates, reserves, dividends and other statistics. (Americanism: In most other
countries the individual is known as "mathematician.")

AGENT: individual who sells and services insurance policies in either of

two classifications:

1. Independent agent represents at least two insurance companies and (at

least in theory) services clients by searching the market for the most
advantageous price for the most coverage. The agent's commission is a
percentage of each premium paid and includes a fee for servicing the insured's
policy.

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 2. Direct or career agent represents only one company and sells only its
policies.
This agent is paid on a commission basis in much the same manner as
the independent agent.

ANNUAL ADMINISTRATIVE FEE: Charge for expenses associated

with administering a group employee benefit plan.

ANNUITY: An agreement by an insurer to make periodic payments that

continues during the survival of the annuitant(s) or for a specified period.

INDEMNITY: Restoration to the victim of a loss by payment, repair or

replacement.

INSURABLE INTEREST: Interest in property such that loss or destruction of the

property could cause a financial loss.

LIABILITY: Broadly, any legally enforceable obligation. The term is

most commonly used in a pecuniary sense.

MORTALITY AND EXPENSE RISK FEES: A charge that covers such

annuity contract guarantees as death benefits.

POLICY : The written contract effecting insurance, or the certificate thereof,

by whatever name called, and including all clause, riders, endorsements, and
papers attached thereto and made a part thereof.

PREMIUM: The price of insurance protection for a specified risk for a

specified period of time.

PROFIT: A measure of the competence and ability of management to provide

viable insurance products at competitive prices and maintain a financially strong
company for both policyholders and stockholders.

REINSURANCE: In effect, insurance that an insurance company buys for its

own protection.

SOLVENCY: Having sufficient assets--capital, surplus, reserves--and being able

to satisfy financial requirements--investments, annual reports, examinations--
to be eligible to transact insurance business and meet liabilities.

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SUBROGATION: The right of an insurer who has taken over another's loss also to
take over the other person's right to pursue remedies against a third party.

SURPLUS: The amount by which assets exceed

liabilities.

SURRENDER CHARGE: Fee charged to a policyholder when a life

insurance policy or annuity is surrendered for its cash value. This fee reflects
expenses the insurance company incurs by placing the policy on its books,
and subsequent administrative expenses.

UNDERWRITER: The individual trained in evaluating risks and determining

rates and coverage for them.

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UNDERWRITING: The process of selecting risks for insurance and classifying
them according to their degrees of insurability so that the appropriate rates
may be assigned. The process also includes rejection of those risks that do not
qualify.

WAIVER OF PREMIUM: A provision in some insurance contracts which

enables an insurance company to waive the collection of premiums while keeping
the policy in force if the policyholder becomes unable to work because of an
accident or injury. The waiver of premium for disability remains in effect as
long as the insured is disabled.

PREMIUM: The price of insurance protection for a specified risk for a

specified period of time.

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 The actual exclusions may vary from product to product and company
to company. In group policies, it may possible to waive / delete the
exclusions on payment of extra premium.

2.4 CONCLUSION:

The review of the articles on insurance sector clearly reveals that the trends
and dynamics in the sector are an important theme of research. Almost all the
research studies highlights that the awareness of insurance is still very low in our
country. The entry of private players has made the sector very competitive.
But still people are minded towards the state sponsored companies.

Researcher conducted studies on pension policies linked with insurance

and Pension insurance policies with the help of national and international articles
published in various sources but it found that Pension insurance and Pension policy
segment is still uncovered. The population of India is going to be older and after
few years India would be one of countries in the world which would have a plenty
of old people rather young ones. The researcher had decided to fulfil research gap
and conducted study to focus on some important issues related pension and pension
policy concerning Western Maharashtra, so it helps to understand the need of
pension and pension requirement and the awareness about pension and pension in
society.

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