INDIAN

INSURANCE
INDUSTRY &
CAREER PROSPECTS

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 ORIGIN AND
HISTORY OF
INSURANCE

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

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 LOMBARDS
• Around the 13th Century, the earliest practice
of insurance of ships called marine insurance is
associated with the merchants of the cities of
Lombardy, Italy.
• The Lombards also established themselves in
London and other cities.
• Lombards brought with them the practices of
marine insurance, banking and money lending.
• The earliest known policy issued in London was
written in Italian and was dated 20th Sept. 1547.
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 LLOYD’S
• In 1688, Edward Lloyd, proprieter of Lloyd’s Coffee
House in London, encouraged a clientele of ships’
captains, merchants, ship owners and the like.
• He gained an enviable reputation for trustworthy
shipping
news. He even published Lloyd’s News, one of the very
first newspapers which contained shipping news.
• Lloyds Coffee House, became the recognised place for
obtaining marine insurance.
• Lloyd himself did no insurance business. He merely
provided congenial surroundings for his patrons till his
death in 1713.
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HISTORY OF INSURANCE IN INDIA
In India, insurance has a deep-rooted history. It
finds mention in the writings of Manu
(Manusmrithi ) , Yagnavalkya ( Dharmasastra )
and Kautilya ( Arthasastra ). The writings talk
in terms of pooling of resources that could be
re-distributed in times of calamities such as fire,
floods, epidemics and famine.
DURING VEDIC PERIOD YOGAKSHEMA, A SANSKRIT TERM
MENTIONED IN THE RIGVEDA, A FORM OF INSURANCE WAS
PRACTISED BY THE ARYANS,3000 YEARS AGO.

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The Codes of Manu refer to one another practice, i.e. if
the cargo (good and merchandise carried in the ship) was
Lost due to the negligence of the crew, the loss was to be
Shared by all its members but when the loss was caused
by an act of God, the members of the crew were not held
responsible.

IN MOGHUL DAYS THE PRACTICE OF INSURANCE TOOK

FIRM ROOTS.THERE ARE EVEN REFERENCES TO
INSURANCE AGAINST THE RISKS OF WAR.

Insurance in India has evolved over time heavily drawing

from other countries, England in particular.

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 IN 1810 PERMISSION WAS GIVEN TO ANY
RESIDENT OF GREAT BRITAIN TO INSURE
ANY PROPERTY IN ANY TERRITORY OF
GREAT BRITAIN,WITH THE ENGLISH
INSURANCE COMPANIES.

LOCAL OFFICES OF 7 INSURANCE

COMPANIES STARTED IN CALCUTTA.

 THE BUSINESS OF LIFE INSURANCE IN INDIA IN

IT’S EXISTING FORM STARTED IN THE YEAR
1818 WITH THE ESTABLISHMENT OF THE
ORIENTAL LIFE INSURANCE COMPANY IN
CALCUTTA.
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 LIFE INSURANCE BUSINESS INDIA
1912: The Indian Life Assurance Companies Act enacted.
1928: The Indian Insurance Companies Act enacted to
enable the government to collect statistical
information about both life and non-life insurance
businesses.
1938: Insurance Act amended earlier legislation for
protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident
societies taken over by the central government and
nationalised to form LIC by an Act of Parliament, viz.
LIC Act,1956, with a capital contribution of Rs.5
crore from the Government of India.
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 GENERAL INSURANCE BUSINESS IN
INDIA
• 1850: Triton Insurance Company Ltd., the first
company established in Calcutta by the British.
• 1907: The Indian Mercantile Insurance Ltd., the first
Indian company set up to transact all classes of general
insurance business.
• 1968: The Insurance Act amended to regulate
investments and set minimum solvency margins and
the Tariff Advisory Committee set up.
• 1972: 107 general insurance companies nationalised
through the General Insurance Business
(Nationalisation) Act, 1972 with effect from 1st
January 1973.
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INSURANCE
SECTOR

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

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 The Insurance Regulatory and
Development Authority,IRDA

• Reforms in the Insurance sector were

initiated with the passage of the IRDA Bill in
Parliament in December 1999.
• The IRDA since its incorporation as a statutory
body in April 2000 has fastidiously stuck to its
schedule of framing regulations and registering
the public & private sector insurance companies.
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 WORLD INSURANCE MARKET OVERVIEW

LIFE
NON LIFE

LIFE US$ 2393 Bln

NON – LIFE US$ 1668 Bln
TOTAL US$ 4061Bln 14
Source:- Swiss Re – Sigma
 COUNTRIES MARKET SHARE

LIFE 35% Industrialised

65% Non Industrialised

NON LIFE 36% Industrialised

64% Non Industrialised

• US, JAPAN, UK, GERMANY, FRANCE
• 5 LEADING INSURANCE MARKETS
15
Source:- Swiss Re – Sigma
 COUNTRIES INSURANCE BUSINESS
SHARE IN WORLD MARKET

2.28%
1.53% U.S.A.
1.34% Canada
2.88%
U.K.
10.46%
30.28%
Germany

France

Japan
6.62%
S.Korea
5.49% India
2.47%
11.42%
Australia

China

Source:- Swiss Re – Sigma 16

 WORLD NON-LIFE INSURANCE PREMIUM
MARKET SHARE
USA

Canada

2.03% 5.65% 0.43%

Germany
4.91%
U.K.
6.83%
France

China
39.05%
7.22% Japan
3.29%
India

17
Source:- Swiss Re – Sigma
 LIFE INSURANCE SHARE IN WORLD MARKET 2007

1.97%
U.S.
2.45%
Canada
3.40%
U.K.
24.17%
13.82% France

Germany
Italy
Japan
3.69%
1.91% S.Korea
4.28% 7.81% 14.61% China
India

18
Source:- Swiss Re – Sigma
INDIAN INSURANCE
COMPANIES
LIFE INSURERS:
1. LIFE INSURANCE CORPORATION
2. HDFC STANDARD LIFE INSURANCE CO.
3. MAX NEW YORK LIFE INSURANCE CO.
4. ICICI PRUDENTIAL LIFE INSURANCE CO.
5. KOTAK MAHINDRA OLD MUTUAL LIFE
6. BIRLA SUN LIFE INSURANCE CO.
7. TATA AIG LIFE INSURANCE CO.
8. SBI LIFE INSURANCE CO.
9. ING VYSYA LIFE INSURANCE CO.
10. BAJAJ ALLIANZ LIFE INSURANCE CO.
11. METLIFE INDIA INSURANCE CO.
12. RELIANCE LIFE INSRUANCE CO.
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13. AVIVA LIFE INSURANCE CO.
14. SAHARA INDIA INSURANCE CO.
15. SHRIRAM LIFE INSURANCE CO.
16. BHARTI AXA LIFE INSURANCE COMPANY LTD.
17. FUTURE GENERALI INDIA LIFE INSURANCE
COMPANY LIMITED
18. IDBI FORTIS LIFE INSURANCE COMPANY LTD.,
19. CANARA HSBC ORIENTAL BANK OF COMMERCE
LIFE INSURANCE COMP. LTD.
20. AEGON RELIGARE LIFE INSURANCE COMPANY
LIMITED.
21. DLF PRAMERICA LIFE INSURANCE COMPANY
LIMITED
22. STAR UNION DAI - ICHI LIFE INSURANCE CO. LTD.
23. INDIAFIRST LIFE INSURANCE COMPANY LTD.
24. EDELWEISS TOKIO LIFE INSURANCE CO. LTD.
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 PREMIUM INCOME SHARE IN INDIA
(2011-2012)
OF LIFE INSURANSE COMPANIES

BAJAJ ALLIANZ

2.384% 1.58% 5.71% RELIANCE

3.36% SBI LIFE
4.45%
HDFC STD 34.61%
1.69%
ICICI PRU
71.35% 1.672% BIRLA SUN
MAX NEY YORK
LIC

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

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14. AGRICULTURAL INSURANCE COMPANY
15. STAR HEALTH AND ALLIED INS.CO. LTD.
16. APOLLO DKV INSURANCE CO. LTD.
17. FUTURE GENERALI INDIA INS.CO.LTD.
18. UNIVERSAL SOMPO GENERAL INS.CO. LTD.
19. SHRIRAM GENERAL INSURANCE CO. LTD.
20. BHARTI AXA GENERAL INS.CO.LTD.
21. RAHEJA QBE GENERAL INS.CO.LTD.
22. SBI GENERAL INSURANCE CO. LTD.
23. MAX BUPA HEALTH INSURANCE CO.LTD.
24. L & T GENERAL INSURANCE CO. LTD.
25. RELIGARE HEALTH INSURANCE CO. LTD.
26. MAGMA HDI GENERAL INSURANCE CO. LTD.
27. LIBERTY VIDEACON GENERAL INS. CO. LTD.
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 PREMIUM INCOME SHARE IN INDIA
2011-2012
NON LIFE INSURANCE COMPANIES

NEW INDIA

4.42% UNITED

5.71% 3.44% 14.62% ORIENTAL

8.83% NATIONAL
ICICI LOM

13.34% 13.99% BAJAJ

10.36%
AIC
IFCO-TOKYO

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 PREMIUM INCOME IN INDIA
2011-2012
PUBLIC SECTOR COMPANIES (NON LIFE)
Fig. in Rs. Crs.

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 MARKET STANDING IN INDIA
2011-2012 NON LIFE INSURANCE COMPANIES
90 00 8535.682
8167.05
7784.91 Fig . in Rs. Crs.
80 00

70 00
6043.97
60 00 5150.14

50 00

40 00 3333.47

2577.07
30 00
2008.46
1712.55 1873.14
20 00 1697.45
1490.79 1344.02
1136.74 1266.45
1005.11
10 00

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 CHANGES IN THE INSURANCE
ACT 1938 AND IRDA ACT 1999
• REVISE THE FDI FROM THE PRESENT
26% TO 49%.
• CLUBBING BOTH THE ACTS AND
MAKING IT INTO ONE ACT OF
INSURANCE.
• DOWNSIZING THE PAID UP CAPITAL
TO 50 CRORES FOR HEALTH
INSURANCE SECTOR.

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

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