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http://www.scribd.com/doc/22891759/Role-of-LIC http://www.scribd.com/doc/10154200/Insurance-Sector-of-India

INDIAN INSURANCE: MODERN MARKETING APPROACH The Insurance sector plays a vital role in the economic development of our nation. It acts as a mobiliser of savings, financial intermediary, promoter of investment activities, stabiliser of financial markets and a risk manager. India is still an under-insured country in the world. It is at the 18th position among Life Insurance markets and 8th in !on-Life Insurance markets in the world. This indicates that there is a huge potential, yet to be e"plored. HISTORY OF INSURANCE IN INDIA The business of life insurance in India in its e"isting form started in India in the year 1818 with the establishment of the #riental Life Insurance $ompany in %olkatta. Some of the important milestones in the Life Insurance Business in India are: 1&1 ' The Indian (ssurance $ompanies (ct enacted as the first statue to regulate the Life Insurance business. 1& 8 ' The Indian $ompanies (ct enacted to enable the government to collect statistical information about Life Insurance. 1&)8 ' *arlier legislation consolidated and amended to by the Insurance (ct with the ob+ect of protecting the interest of the insuring public. 1&,-' ., Indian and /oreign Insurers and provident societies taken over by the $entral 0overnment and !ationalised. LI$ formed by an (ct of 1arliament vi2. LI$ (ct, 1&,- with a capital contribution of 3s., crore from the 0overnment of India. The 0eneral Insurance 4usiness in India, on the other hand, can trace its roots to the Triton Insurance $ompany Ltd., the first 0eneral Insurance $ompany established in the year 18,5 in

%olkatta by the 4ritish. Some of the important milestones in the General Insurance Business in India are: 1&56 ' The Indian 7ercantile Insurance Ltd., set up, the first company to transact all classes of general insurance business. 1&,6 ' 0eneral Insurance $ouncil, a wing of the Insurance (ssociation of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1&-8 ' The Insurance (ct amended to regulate investments and set minimum solvency margins and the Tariff (dvisory $ommittee set up. 1&6 ' The 0eneral Insurance 4usiness 8!ationlisation9 (ct, 1&6 nationlaised the general insurance business in India with effect from 1st :anuary 1&6). 156 insurers amalgamated and grouped into four companies vi2. the !ational Insurance $ompany Ltd., the !ew India (ssurance $ompany Ltd., the #riental Insurance $ompany Ltd., and the ;nited India Insurance $ompany Ltd. 0I$ incorporated as a company. The funds generated by LI$ and 1ublic <ector 0eneral insurers are invested in the avenues that benefit the society. They solely acted as public undertaking insurers and catered the life cover and general risk cover of the public till the enactment of Insurance 3egulatory and =evelopment (uthority 8I3=(9 (ct, 1&&&.

http://www.google.co.in/search? hl en!" #iberalisation$of$the$insurance$sector$in$India$and$strategies$adopted$b%$#I&$a nd$pri'ate$life$insurance$pla%ers$in$the$liberalised$era!start 10!sa ( http://www.fl%highonline.com/fl%high/fl%high/contentlin)s/drmurth%1.php

http://www.scribd.com/doc/14*51*0*/+-&omparati'e-+nal%sis-between-#I&-and,ri'ate-Insurance-&ompanies http://www.scribd.com/doc/10154200/Insurance-Sector-of-India -his.millennium.has.seen.insurance.come.a.full.circle.in.a./ourne%.e0tending.to.nearl%. 200.%ears..-he.process.of.re-opening of the sector had.begun.in.the.earl%.1110s.and.the. last.decade.and.more.has.seen.it.been.opened.up.substantiall%.. . 2ollowing . the . recommendations . of . the . 3alhotra . &ommittee . report4 . in . 11114 . the. Insurance . 5egulator% . and . 6e'elopment . +uthorit% . 7I56+8 . was . constituted . as . an. autonomous . bod% . to . regulate . and . de'elop . the . insurance . industr%. . -he . I56+ . was. incorporated.as.a.statutor%.bod%.in.+pril4.2000..-he.)e%.ob/ecti'es.of.the.I56+.include. promotion . of . competition . so . as . to . enhance . customer . satisfaction . through . increased.

consumer . choice . and . lower . premiums4 . while . ensuring . the . financial . securit% . of . the. insurance.mar)et.. . -he.I56+.opened.up.the.mar)et.in.+ugust.2000.with.the.in'itation.for.application.for. registrations..2oreign.companies.were.allowed.ownership.of.up.to.2*9..-he.+uthorit%. has.the.power.to.frame.regulations.under.Section.114+.of.the.Insurance.+ct4.11:;.and. has . from . 2000 . onwards . framed . 'arious . regulations . ranging . from . registration . of. companies.for.carr%ing.on.insurance.business.to.protection.of.polic%holders<.interests.. In.6ecember4.20004.the.subsidiaries.of.the.=eneral.Insurance.&orporation.of.India.were. restructured.as.independent.companies.and.at.the.same.time.=I&.was.con'erted.into.a. national.re-insurer..,arliament.passed.a.bill.de-lin)ing.the.four.subsidiaries.from.=I&.in. >ul%4.2002.. . -he .insurance . sector . is . a . colossal one. and . is . growing . at . a . speed% . rate . of . 15-209.. -ogether.with.ban)ing.ser'ices4.insurance.ser'ices.add.about.?9.to.the.countr%<s.=6,.. +.well-de'eloped.and.e'ol'ed.insurance.sector.is.a.boon.for.economic.de'elopment.as.it. pro'ides.long-.term.funds.for.infrastructure.de'elopment.at.the.same.time.strengthening. the.ris).ta)ing.abilit%.of.the.countr%. !istoric"l #erspecti$e. -he.histor%.of.life.insurance.in.India.dates.bac).to.1;1;.when.it.was.concei'ed.as.a. means.to.pro'ide.for.@nglish.Aidows..Interestingl%.in.those.da%s.a.higher.premium.was. charged.for.Indian.li'es.than.the.non-Indian.li'es.as.Indian.li'es.were.considered.more. ris)ier.for.co'erage.. -he.Bomba%.3utual.#ife.Insurance.Societ%.started.its.business.in.1;?0..It.was.the.first. compan%.to.charge.same.premium.for.both.Indian.and.non-Indian.li'es..-he.Criental. +ssurance.&ompan%.was.established.in.1;;0..-he.=eneral.insurance.business.in.India4. on.the.other.hand4.can.trace.its.roots.to.the.-riton.7-ital8.Insurance.&ompan%.#imited4.the. first.general.insurance.compan%.established.in.the.%ear.1;50.in.&alcutta.b%.the.British.. -ill.the.end.of.nineteenth.centur%.insurance.business.was.almost.entirel%.in.the.hands.of. o'erseas.companies.. Insurance . regulation . formall% . began . in . India . with . the . passing . of . the . #ife . Insurance. &ompanies.+ct.of.1112.and.the.pro'ident.fund.+ct.of.1112..Se'eral.frauds.during.20Ds. and . :0Ds . sullied . insurance . business . in . India. . B% . 11:; . there . were . 1?* . insurance. companies..-he.first.comprehensi'e.legislation.was.introduced.with.the.Insurance.+ct.of. 11:;.that.pro'ided.strict.State.&ontrol.o'er.insurance.business..-he.insurance.business. grew.at.a.faster.pace.after.independence..Indian.companies.strengthened.their.hold.on. this.business.but.despite.the.growth.that.was.witnessed4.insurance.remained.an.urban. phenomenon..

-he.=o'ernment.of.India.in.115*4.brought.together.o'er.240.pri'ate.life.insurers.and. pro'ident . societies . under . one . nationaliEed . monopol% . corporation . and . #ife . Insurance. &orporation.7#I&8.was.born..(ationaliEation.was./ustified.on.the.grounds.that.it.would. create.much.needed.funds.for.rapid.industrialiEation..-his.was.in.conformit%.with.the. =o'ernmentDs.chosen.path.of.State.lead.planning.and.de'elopment.. -he.7non-life8.insurance.business.continued.to.thri'e.with.the.pri'ate.sector.till.11?2.. -heir . operations . were . restricted . to . organiEed . trade . and . industr% . in . large . cities. . -he. general.insurance.industr%.was.nationaliEed.in.11?2..Aith.this4.nearl%.10?.insurers.were. amalgamated.and.grouped.into.four.companies-.(ational.Insurance.&ompan%4.(ew.India. +ssurance.&ompan%4.Criental.Insurance.&ompan%.and.Fnited.India.Insurance.&ompan%.. -hese.were.subsidiaries.of.the.=eneral.Insurance.&ompan%.7=I&8.. Indian . federal . go'ernment . considers . insurance . as . one . of . ma/or . sources . of . funds . for. infrastructure.de'elopment..-he.go'ernment.has.identified.the.following.as.ma/or.thrust. areas:. G.-imel%.and.reliable.statistical.data.and.information.about.policies.and.mar)ets.to.instill. a . degree . of . credibilit%H . G.+.code.of.good.practices.based.on.international.best.practices.to.raise.the.standard.of. Indian . insurance . sectorH . G . Strengthening . of . super'ision . and . regulationH . G . 3ar)et . participation . in . decision-ma)ingH . G.Iigh.sol'enc%.standardD.and.6e'eloping.alternati'e.channels.. -ill . end . of . 1111-2000 . fiscal . %ears4 . two . state-run . insurance . companies4 . namel%4 . #ife. Insurance . &orporation . 7#I&8 . and . =eneral . Insurance . &orporation . 7=I&8 . were . the. monopol%.insurance.7both.life.and.non-life8.pro'iders.in.India..Fnder.=I&.there.were. four.subsidiaries--.(ational.Insurance.&ompan%.#td4.Criental.Insurance.&ompan%.#td4. (ew.India.+ssurance.&ompan%.#td4.and.Fnited.India.+ssurance.&ompan%.#td..In.fiscal. 2000-014 . the . Indian . federal . go'ernment . lifted . all . entr% . restrictions . for . pri'ate . sector. in'estors..2oreign.in'estment.insurance.mar)et.was.also.allowed.with.2*.percent.cap.. =I& .was.con'erted . into.IndiaDs . national . reinsure . from . 6ecember4 . 2000 . and . all . the. subsidiaries.wor)ing.under.the.=I&.umbrella.were.restructured.as.independent.insurance. companies.. Indian.,arliament.has.cleared.a.Bill.on.>ul%.:04.2002.de-lin)ing.the.four.subsidiaries. from . =I&. . + . separate . Bill . has . been . appro'ed . b% . ,arliament . to . allow.bro)ers4. cooperati'es . and . intermediaries . in . the . sector. . &urrentl% . insurance . companies- . both. pri'ate.and.public--.ha'e.to.cede.20.percent.of.its.reinsurance.with.=I&..=I&.is.planning. to.increase.re-insurance.premium.b%.20.percent.which.wor)s.out.at.5s.:000.cr..=I&.is. acti'el%.considering.entr%.into.o'erseas.mar)ets.including.Aest.+sia4.South-east.+sia. and.S++5&.region.. Ins%r"nce &ector Reforms In.111:4.3alhotra.&ommittee-.headed.b%.former.2inance.Secretar%.and.5BI.=o'ernor. 5.(..3alhotra-.was.formed.to.e'aluate.the.Indian.insurance.industr%.and.recommend.its. future . direction. . -he . 3alhotra . committee . was . set . up . with . the . ob/ecti'e . of. complementing.the.reforms.initiated.in.the.financial.sector..-he.reforms.were.aimed.at. creating.a.more.efficient.and.competiti'e.financial.s%stem.suitable.for.the.re"uirements.

of . the . econom% . )eeping . in . mind . the . structural . changes . currentl% . underwa% . and. recogniEing.that.insurance.is.an.important.part.of.the.o'erall.financial.s%stem.where.it. was.necessar%.to.address.the.need.for.similar.reforms..In.11144.the.committee.submitted. the.report.and.some.of.the.)e%.recommendations.included:. i8.Structure. =o'ernment . should . ta)e . o'er . the . holdings . of . =I& . and . its . subsidiaries . so . that . these. subsidiaries.can.act.as.independent.corporations..+ll.the.insurance.companies.should.be. gi'en.greater.freedom.to.operate.. ii8.&ompetition. ,ri'ate.&ompanies.with.a.minimum.paid.up.capital.of.5s.1bn.should.be.allowed.to.enter. the.sector..(o.&ompan%.should.deal.in.both.#ife.and.=eneral.Insurance.through.a.single. entit%..2oreign.companies.ma%.be.allowed.to.enter.the.industr%.in.collaboration.with.the. domestic.companies.. ,ostal.#ife.Insurance.should.be.allowed.to.operate.in.the.rural.mar)et..Cnl%.one.State. #e'el.#ife.Insurance.&ompan%.should.be.allowed.to.operate.in.each.state.. iii8.5egulator%.Bod%. -he.Insurance.+ct.should.be.changed..+n.Insurance.5egulator%.bod%.should.be.set.up.. &ontroller.of.Insurance-.a.part.of.the.2inance.3inistr%-.should.be.made.independent. i'8.In'estments. 3andator%.In'estments.of.#I&.#ife.2und.in.go'ernment.securities.to.be.reduced.from. ?59.to.509..=I&.and.its.subsidiaries.are.not.to.hold.more.than.59.in.an%.compan%. 7there.current.holdings.to.be.brought.down.to.this.le'el.o'er.a.period.of.time8. '8.&ustomer.Ser'ice. #I&.should.pa%.interest.on.dela%s .in.pa%ments.be%ond.:0.da%s..Insurance.companies. must.be.encouraged.to.set.up.unit.lin)ed.pension.plans..&omputeriEation.of.operations. and.updating.of.technolog%.to.be.carried.out.in.the.insurance.industr%. -he.committee.emphasiEed.that.in.order.to.impro'e.the.customer.ser'ices.and.increase. the.co'erage.of.insurance.policies4.industr%.should.be.opened.up.to.competition..But.at. the.same.time4.the.committee.felt.the.need.to.e0ercise.caution.as.an%.failure.on.the.part.of. new.pla%ers.could.ruin.the.public.confidence.in.the.industr%.. -he.committee.felt.the.need.to.pro'ide.greater.autonom%.to.insurance.companies.in.order. to.impro'e .their.performance .and.enable.them.to.act.as.independent .companies .with. economic.moti'es..2or.this.purpose4.it.had.proposed.setting.up.an.independent.regulator%. bod%-.-he.Insurance.5egulator%.and.6e'elopment.+uthorit%.. 5eforms .in.the.Insurance.sector.were.initiated .with.the.passage.of.the.I56+.Bill.in. ,arliament.in.6ecember.1111..-he.I56+.since.its.incorporation.as.a.statutor%.bod%.in. +pril.2000.has.fastidiousl%.stuc).to.its.schedule.of.framing.regulations.and.registering. the.pri'ate.sector.insurance.companies..Since.being.set.up.as.an.independent.statutor%. bod%.the.I56+.has.put.in.a.framewor).of.globall%.compatible.regulations..-he.other. decision.ta)en.simultaneousl%.to.pro'ide.the.supporting.s%stems.to.the.insurance.sector. and.in.particular.the.life.insurance.companies.was.the.launch.of.the.I56+.online.ser'ice. for.issue.and.renewal.of.licenses.to.agents..-he.appro'al.of.institutions.for.imparting. training.to.agents.has.also.ensured.that.the.insurance.companies.would.ha'e.a.trained. wor)force.of.insurance.agents.in.place.to.sell.their.products..

'on-Life Ins%r"nce ("r)et. In . 6ecember . 20004 . the . =I& . subsidiaries . were . restructured . as . independent . insurance. companies..+t.the.same.time4.=I&.was.con'erted.into.a.national.re-insurer..In.>ul%.20024. ,arliament.passed.a.bill4.de-lin)ing.the.four.subsidiaries.from.=I&.. ,resentl%.there.are.12.general.insurance.companies.with.4.public.sector.companies.and.;. pri'ate . insurers. . +lthough . the . public . sector . companies . still . dominate . the . general. insurance . business4 . the . pri'ate . pla%ers . are . slowl% . gaining . a . foothold. . +ccording . to. estimates4.pri'ate.insurance.companies.ha'e.a.10.percent.share.of.the.mar)et4.up.from.4. percent.in.2001..In.the.first.half.of.20024.the.pri'ate.companies.boo)ed.premiums.worth. 5s . *.:4 . billion. . 3ost . of . the . new . entrants . reported . losses . in . the . first . %ear . of . their. operation.in.2001.. Insurance4.li)e.pro/ect.finance4.is.e0tended.b%.a.consortium..(ormall%.one.insurer.ta)es. the . lead4 . shouldering . about . 40-50 . per . cent . of . the . ris) . and . recei'ing . a . proportionate. percentage.of.the.premium..-he.other.companies.share.the.remaining.ris).and.premium.. -he.policies.are.renewed.usuall%.on.an.annual.basis.through.the.in'itation.of.bids.. Cf.late4.with.I,,.pro/ects.fiEEling.out4.the.insurance.companies.are.turning.once.again.to. old.hands.such.as.(-,&4.(I,&.and.BS@S.for.business.. Re-ins%r"nce b%siness. -he.balance.ris).is.re-insured.with.other.insurers..In.effect4.therefore4.re-insurance.is. insurerDs.insurance..It.forms.the.bac)bone.of.the.insurance.business..It.helps.to.pro'ide.a. better.spread.of.ris).in.the.international.mar)et4.allows.primar%.insurers.to.accept.ris)s. be%ond.their.capacit%.settle.accumulated.losses.arising.from.catastrophic.e'ents.and.still. maintain.their.financial.stabilit%.. Insurance.in.modern.form.originated.in.the.3editerranean.during.the.JIII.centur%..-he. earliest . references . to . insurance . ha'e . been . found . in . Bab%lonia4 . the . =ree)s . and . the. 5omans..3arine.insurance.is.the.oldest.form.of.insurance.followed.b%.life.insurance.and. fire.insurance. .#ife.insurance.acti'it%.in.its .modern .form.started .in.India.in.1;1;.to. pro'ide.for.@nglish.widows.when.the.Criental.#ife.Insurance.&ompan%.was.incorporated. at . &alcutta4 . followed . b% . the . Bomba% . #ife . +ssurance . &ompan% . in . 1;2: . and . -ritron. Insurance.&ompan%.for.=eneral.Insurance.in.1;50..Insurance.regulation.formall%.began. in.India.through.the.passing.of.two.acts4.the.#ife.Insurance.&ompanies.+ct.of.1112.and. the . ,ro'ident . 2und . +ct . of . 1112. . Iowe'er4 . the . first . comprehensi'e . legislation . was. introduced . with . the . Insurance . +ct . of . 11:; . that . pro'ided . strict . state . control . o'er. insurance.business.in.the.countr%. +fter . independence4 . the . business . of . Insurance . in . India . grew . at . a . faster . pace . as. competition.amongst.the.Indian.companies.intensified..-he.decision.of.nationalisation.of.

life . insurance . business . too) . place . in . 115* . when . 245 . Indian . and . foreign . insurance. pro'iding.societies.were.first.merged.and.then.nationalised..It.pa'ed.the.wa%.towards.the. establishment.of.#ife.Insurance.&orporation.of.India..=eneral.Insurance.followed.suit. and.in.11*;4.the.Insurance.+ct.was.amended.to.allow.for.social.control.o'er.the.general. insurance.business..Subse"uentl%.in.11?:4.non-life.insurance.business.was.nationalised. with.the.promulgation.of.the.=eneral.Insurance.Business.7(ationalisation8.+ct4.11?2. Some.of.the.milestones.in.the.life.insurance.business.in.India.are:. 1112.112;.11:;.115*.-he.Indian.#ife.+ssurance.&ompanies.+ct.enacted.as.the.first.statute.to. regulate.the.life.insurance.business. -he . Indian . Insurance . &ompanies . +ct . enacted . to . collect . statistical. information.about.both.life.and.non-life.insurance.businesses. @arlier.legislations.consolidated.and.amended.to.b%.the.Insurance.+ct.with. the.ob/ecti'e.of.protecting.the.interests.of.the.insuring.public. 245.Indian.and.foreign.insurers.and.pro'ident.societies.ta)en.o'er.b%.the. central.go'ernment.and.nationalised..#I&.was.formed.b%.the.#I&.+ct4.115*4. with.a.capital.contribution.of.5s..5.crore.from.the.=o'ernment. 3he45eneral4ins*rance4+*siness4in4'ndia64on4the4other4hand64can4trace4its4roots4to4 the 4 3riton 4 'ns*rance 4 (ompan 4 &td.6 4 the 4 #irst 4 general 4 ins*rance 4 compan 4 esta+lished4in4the4 ear478894in4(alc*tta4+ 4the4:ritish. Some4o#4the4milestones4in4the4general4ins*rance4+*siness4in4'ndia4are:4 79904) 79804) 79<84) 3he 4 'ndian 4 ;ercantile 4 'ns*rance 4 &td. 4 set 4 *p6 4 the 4 #irst 4 compan 4 to4 transact4all4classes4o#4general4ins*rance4+*siness.4 5eneral4'ns*rance4(o*ncil64a4wing4o#4the4'ns*rance4,ssociation4o#4 'ndia64#rames4a4code4o#4cond*ct4#or4so*nd4+*siness4practices. 3he 4 'ns*rance 4 ,ct 4 amended 4 to 4 reg*late 4 investments 4 and 4 set4 minim*m4 solvenc 4margins4and4the 43ari##4,dvisor 4(ommittee4set4 790=4) *p.4 3he 4 5eneral 4 'ns*rance 4 :*siness 4 >?ationalisation@ 4 ,ct6 4 790=4 nationalised4the4general4ins*rance4+*siness4in4'ndia4with4e##ect4#rom4 7st4 Jan*ar 4790A.47904ins*rers4amalgamated4and4gro*ped4into4#o*r4

companies64viB.4the4?ational4'ns*rance4(ompan 4&td.64the4?ew4'ndia4 ,ss*rance4(ompan 4&td.64the4Criental4'ns*rance4(ompan 4&td.4and4 the 4 United 4 'ndia 4 'ns*rance 4 (ompan 4 &td. 4 5'( 4 incorporated 4 as 4 a4 compan . Liberalisation of Insurance Sector: 3he4e1perience4a#ter4independence4in4ins*rance4sector4showed4that4the4*ltimate4 o+Dective4o#4nationalisation4o#4ins*rance4+*siness4remained4largel 4*n#*l#illed4d*e4 to4the4relativel 4low4spread4o#4ins*rance4in4the4co*ntr 4and4the4vast4*ntapped4 potential 4 #or 4 mo+ilising 4 long)term 4 #inancial 4 reso*rces 4 to 4 #inance 4 the 4 growth 4 o#4 in#rastr*ct*re.43here#ore64the4government4constit*ted4a4(ommittee4in4,pril64799A4 *nder4the4chairmanship4o#4".4?.4;alhotra64to4s*ggest4re#orms4in4the4ins*rance4 sector 4 incl*ding 4 improvements 4 in 4 the 4 #*nctioning 4 o# 4 the 4 &'(6 4 5'( 4 and4 strengthening4the4reg*lator 4s stem.43he4committee4s*+mitted4its4report4to4*nion4 #inance 4 minister 4 on 4 0 4 Jan*ar 4 799E6 4 recommending 4 a 4 phased 4 program 4 o#4 li+eralisation4and4called4#or4a4private4sector4entr 4and4restr*ct*ring4o#4&'(4and4 5'(. 3he 4 government 4 moved 4 an 4 ins*rance 4 +ill 4 +*t 4 it 4 was 4 not 4 passed6 4 the 4 ne1t4 government4moved4on4ins*rance4+ill4again4in4799864which4was4re#erred4+acF4to4a4 select 4 committee 4 o# 4 parliament. 4 3herea#ter6 4 the 4 government 4 introd*ced 4 the4 'ns*rance4"eg*lator 42evelopment4,*thorit 4>'"2,@4:ill4in4parliament4with4some4 changes4in4the4original4str*ct*re.4 3o4serve4the4pop*lation4o#4more4than47994crore4'ndians64'ndian4ins*rance4marFet4 o##ers4tremendo*s4opport*nities4to4private4ins*rers.4Gith4the4increase4in4the4li#e4 e1pectanc 4o#4individ*als4and4disintegration4o#4Joint4H4#amil 4s stem64each4individ*al4
now 4 has 4 arranged 4 cover 4 #or 4 himsel# 4 and 4 #or 4 his 4 #amil . 4 3here#ore6 4 coverage 4 o#4 ins*rers4has4to4grow4ver 4#ast. 3he4ins*rance4ind*str 4has4+een4growing4+etween4784and4=94percent64+*t4it4lags4#ar4 +ehind4its4glo+al4co*nterparts.43his4was4d*e4to4the4#ollowing4reasons:

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Since 4 late 4 79996 4 the 4 'ndian 4 ins*rance 4 marFet 4 has 4 *ndergone 4 maDor 4 str*ct*ral4 changes. 4 3he 4 government 4 monopol 4 was 4 dissolved6 4 private 4 companies 4 were4 permitted4to4operate64and4+roFers4s*ddenl 4had4a4role4to4pla .4'n4this4co*ntr 4o#4one4 +illion 4 people6 4 the 4 *ntapped 4 potential 4 #or 4 ins*rance 4 and 4 reins*rance 4 +*siness 4 is4 enormo*s.4?evertheless64impediments4to4an4open4and4competitive4marFet4still4e1ist4 in4the4#orm4o#4restrictions4on4#oreign4investments64comp*lsor 4tari##s4and4mandator 4 reins*rance4cessions. Major Foreign Insurance Companies in India: ;an 4o#4the4#oreign4companies4are4also4coming4to4'ndia.45lo+al4giants4s*ch4as4?ew4 LorF4&i#e643oF o4;arine64UM4+ased4pr*dential4have4#ormed4Doint4vent*res4with4man 4 'ndian 4 companies. 4 Some 4 o# 4 the 4 maDor 4 Doint 4 vent*re 4 companies 4 are 4 :aDaD 4 ,llianB64 -2K(4Standard64,viva4&i#e4'ns*rance64:irla4S*nli#e64;et4&i#e64"o al4S*ndaram4etc.

-hough.the.focus.of.this.mar)et.research.report.is.on.the.potential.growth.on.the.Indian. Insurance . Sector4 . it . also . tal)s . about . the . mar)et . siEe4 . mar)et . segmentation4 . and . )e%. de'elopments.in.the.mar)et.after.1111..-he.report.gi'es.an.instant.o'er'iew.of.the.Indian. non-life.insurance.mar)et4.and.co'ers.fire4.marine4.and.other.non-life.insurance..-he.data. is.supplied.in.both.graphical.and.tabular.format.for.ease.of.interpretation.and.anal%sis.. -his.report.also.pro'ides.compan%.profiles.of.the.ma/or.pri'ate.insurance.companies.
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#R*&*'+ &C*',RI- -. I'&/R,'C* I'0/&+R1 ..... ......&onsumers.remain.the.most.important.centre.of.the.insurance.sector..+fter.the.entr%. of . the . foreign . pla%ers . the . industr% . is . seeing . a . lot . of . competition . and . thus. impro'ement . of . the . customer . ser'ice . in . the . industr%. . &omputerisation . of. operations . and . updating . of . technolog% . has . become . imperati'e . in . the . current. scenario..2oreign.pla%ers .are.bringing.in.international.best.practices.in.ser'ice. through.use.of.latest.technologies ....-he.insurance.agents.still.remain.the.main.source.through.which.insurance.products. are . sold. . -he . concept . is . 'er% . well . established . in . the . countr%. li)e . India . but . still . the. increasing.use.of.other.sources.is.imperati'e..+t.present.the.distribution.channels.that.are. a'ailable.in.the.mar)et.are.listed.below. 6irect.selling &orporate.agents =roup.selling Bro)ers.and.cooperati'e.societies Bancassurance . ..... &ustomers.ha'e.tremendous.choice.from.a.large.'ariet%.of.products.from.pure.term. 7ris)8 . insurance . to . unit-lin)ed . in'estment . products. . &ustomers . are . offered. unbundled.products.with.a.'ariet%.of.benefits.as.riders.from.which.the%.can.choose.. 3ore.customers.are.bu%ing.products.and.ser'ices.based.on.their.true.needs.and.not. /ust.traditional.mone%-bac).policies4.which.is.not.considered.'er%.appropriate.for. long-term.protection.and.sa'ings..-here.is.lots.of.sa'ing.and.in'estment.plans.in. the.mar)et..Iowe'er4.there.are.still.some.)e%.new.products.%et.to.be.introduced.-. e.g..health.products.

...... -he . rural . consumer . is . now . e0hibiting . an . increasing . propensit% . for . insurance. products..+.research.conducted.e0hibited.that.the.rural.consumers.are.willing.to. dole.out.an%thing.between.5s.:4500.and.5s.24100.as.premium.each.%ear..In.the. insurance.the.awareness.le'el.for.life.insurance.is.the.highest.in.rural.India4.but.the. consumers.are.also.aware.about.motor4.accidents.and.cattle.insurance..In.a.stud%. conducted.b%.3+5-.the.results.showed.that.nearl%.one.third.said.that.the%.had. purchased.some.)ind.of.insurance.with.the.ma0imum.penetration.s)ewed.in.fa'or. of.life.insurance..-he.stud%.also.pointed.out.the.pri'ate.companies.ha'e.huge.tas). to . pla% . in . creating . awareness . and . credibilit% . among . the . rural . populace. . -he. percei'ed.benefits.of.bu%ing.a.life.polic%.range.from.securit%.of.income.bul).return. in.future4.daughterDs.marriage4.childrenDs.education.and.good.return.on.sa'ings4.in. that.order4.the.stud%.adds. ,##LIC,+I-' -. I'.-R(,+I-' +*C!'-L-21 I' I'&/R,'C* &*C+-R
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III..Import"nce of the &t%d3: Aith.liberaliEation.and.globalisation4.the.insurance.sector.has.been.e0periencing.a. number.of.changes..Aith.the.pri'atiEation4.a.number.of.pri'ate.insurance.companies. with.foreign.e"uit%.participation.ha'e.entered.the.field..-his.has.compelled.the.#I&.to. change.its.strateg%.from.business.orientation.to.customer.orientation..Its.biggest.asset. is.its.past.legac%.and.strong.foundation.in.terms.of.fundamentals..Iowe'er4.the.fact. remains.that.the.#I&.is.still.a.state.owned.corporation4.functioning.purel%.on.social. considerations . in . a . rigid . wa%. . Cn . the . other . hand4 . pri'ate . companies . are . more. di'ersified . and . customer . focused . operating . with . a . basic . moti'e . of. ma)ing . profit. through .customer .satisfaction. .+gainst.this .bac)ground4 .the .present .stud%.aims .at. criticall%.re'iewing.the.functioning.of.#ife.Insurance.&orporation.and.pri'ate.life. insurance.companies4.both."uantitati'el%.as.well.as."ualitati'el%.on.the.basis.of.their. performance . indicators . and . responses . generated . from . the . polic% . holders . about. ser'ices.and.products.offered.b%.

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