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Presented by:

Akash Pandey(D25)
Amity Business School

The Meaning of Insurance

The meaning of Insurance is important for understand for
anybody that is considering buying an insurance policy or
simply understanding the basics of finance.
Insurance is a Hedging Instrument used as precautionary
measure against future contingent losses. This
instrument is used for managing the possible risks of the
In the words of justice Tindall, Insurance is a contract
in which a sum of money is paid to the assured as
consideration of insurers incurring the risk of paying a
large sum upon a given contingency.
History of Insurance in India
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Phases Period Industry

Phase 1
a.Life Insurance 1818 to 1956 Many (245) private sector companies only.
( about 138 yrs)

b. General Insurance 1850 to 1972 Many (107) Private sector companies only.
(about 122 yrs)

Phase 2
a.Life Insurance 1956 to 2000 Nationalization, public sector or state monopoly,
(about 44 yrs) only one company.

b. General Insurance 1972 to 2000 Nationalization. Public sector monopoly, only 1

(about 28 yrs) company.

Phase 3 Opened to the entry of private domestic and

Life Insurance and After 2000 foreign companies, mixed sector of public and
General Insurance private sector units.
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History of Insurance in India contd

1818 First life Insurance company Oriental Life Insurance

company (in Calcutta).
1850 First general insurance company Tritan Insurance
Company (in Calcutta).
Till 1956/1972 life and general insurance industry grown in
terms of number of companies (life 245 and general 107 with
complete private sector ownership), the volume of premium,
investible resources, and so on.
The insurance was regulated through the Insurance Act, 1938.
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History of Insurance in India contd

In 1956, 245 Indian and foreign life insurers and provident societies
were nationalized, and new single entity namely LIC was
established by passing the LIC Act, 1956.
Similarly, in 1972, 107 general insurers were nationalized through
the passing of general insurance Business Act, 1972.
The existing 107 insurers were amalgamated and grouped into 5
companies, viz., National Insurance company (NIC), New India
Assurance Company (NIAC), Oriental Insurance Company (OIC),
United India Insurance company, and General Insurance Corporation.
Then insurance industry transformed into monopoly and
oligopolistic state or public sector insurance industry in India.
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1.Stimulating the need for insurance.
2.Under insurance
3. Financial Independence
4. Insurance is a Long Term Savings
5. Trust & Transparency
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Comparison Between public & private sector

only endowment and money back policies were popular among
focused on providing customized products, products that contain
innovative features to the customers created favorable demands for
other type of policies like tern insurance, child plan, pension plans and
unit linked insurance policies.
In oct.2000, IRDA issued license paper to three companies, which are
HDFC Life Standard, Sundaram Royal Alliance Insurance Company
and Reliance General Insurance.
At the same time Principal approval was given to Max New York
Life, ICICI Prudential Life Insurance Company and IFFCO Tokio
General Insurance Company.
Today total 22 life insurance companies including one public sector are
successfully operating in India.
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With the opening of insurance sector in India, the share of private insurer was
very less.
Total share of private insurer was just 2% in 2001-02. It was because of any
reason which includes credibility on private players.

Insurance 2001- 2002-03 2003-04 2004-05 2005-06 2006- 2007-08

sector 02 07
Public 98 94 87 78 73.66 65.28 59.65
Private 2 6 13 22 26.34 34.72 40.35
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It is because of innovative & customized products, novel distribution

channels, aggressive marketing etc.
Private players gave a tough competition to public sector company (LIC).
Gradually, the market share of private insurer went up and till financial
year 2007-08, total share of private insurer reached as high as 40.35%.
The market share of LIC decreases after the entry of private insurer but it
doesnt mean that the growth of LIC got down. LIC continue its growth
even after a cut throat competion from the private players.
Total revenue generated in 2007-08 by LIC is 149783.99 crore against just
Rs.51561.42 crore, generated by all 21 private players.
It shows that even after opening of insurance industry and heavy
competition from the new entrant, LIC observed a continuous growth in its
revenue generation.
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A key catalyst in the Indian insurance market growth has been the entry of
private players in2000-01.
With the entrance of private players and foreign collaborations, penetration
of insurance sector in India has gone up from 1.02% in 1999-00 to 4 % of
GDP in 2007-08.
Life insurance business in India grew by 14.2 per cent in US Dollar terms
in 2007-08.
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The research examined the effect of advertising on profitability of insurance

companies. This was because of the low return reported by insurance companies as
a result of low service awareness by the clients.
The study also realized that the major role of advertising is to restore customer
awareness for the services provided by insurance companies in order to increase
revenue. From the study, it was recommended that insurance companies should set
advertising objectives and classify them as whether they are going to inform,
persuade or remind. In this area the choice depends on the current market situation.
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Overview of Insurance Sector advertising in

Print during FY 08 -09
Print Advertising of 'Insurance Sector' has seen growth of 3% during the FY
2008-09 compared to FY 2005-06.
'Life Insurance' sector gathered 70% share of overall 'Insurance Sector' Print ad
pie during FY 2008-09.
'LIC' leads in Print advertising of 'Insurance Sector' during the current fiscal
'LIC Jeevan Varsha' topped the list of new brands of 'Insurance Sector'
advertised in Print during current fiscal year.
More than half of the 'Insurance Sector' advertising on 'Non Metro'
Newspapers during FY 2008-09.
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Volumes Growth of Insurance Sector

in Print during FY 2008-09

During FY 2008-09, 2% decline in Print ad volumes of 'Insurance

Sector' compared to FY 2007-08.
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Contribution by the Sub Sectors of Insurance

Sector in Print during FY 2008-09
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During FY 2008-09, advertising of 'Life Insurance'

and 'Non Life Insurance' sector was in the ratio of

'General Health/Accidents Insurance' contributed

the highest (58%) of overall 'Non Life Insurance'
sector advertising in Print followed by 'General
Insurance' and 'General Agriculture Insurance' with
30% and 5% share respectively during the current
fiscal year.
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Top Advertisers of Insurance Sector in Print

during FY 2008-09
Awareness Campaign of IRDA Amity Business School

'Bima Bemisaal' is the brand name for IRDA's insurance awareness


It is a consumer education initiative and has the tagline "Promoting

Insurance. Protecting Insured

Bima Bemisaal educates policyholders about their rights and obligations and
informs them about the complaints resolution methods available to them. It
also creates awareness about insurance among the general public.

The Bima Bemisaal campaign uses various media like print, radio and
television. This website is also part of the Bima Bemisaal initiative.
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Conclusion Amity Business School

Insurance companies must advertise just like any other company with a product
on the market. This increases the awareness of the insurance company's brand
and makes it more recognizable to potential customers. Insurance is not a
tangible item; it is more of a concept and a promise to pay in the event of a

Because of this, it makes advertising for insurance more difficult. Advertising for
insurance is more about making a personality for the company that clients can
relate to, or by portraying the feeling of having a claim paid or feeling safe and
protected. Also, insurance advertising can turn insurance into a commodity and
portray the insurance company's brand as being the most cost-effective.
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