Insurance Sector In India Presented By: The Wits Group T.Y.BMS Wilson College
NAME:
ROLL NO:
ERROL D’ SOUZA
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FARHAD COOPER
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SUFIYAN SIDDIQUI
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MALCOLM HOMAVAZIR
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MOHAMMAD HUSAIN
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SHWETA SINGH
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TOPICS FOR DISCUSSION 1) Definition of Insurance 2) Characteristics of Insurance 3) Role of Insurance Sector 4) PEST Analysis 5) Marketing Mix 6) Market Segmentation 7) Developments Till Date Insurance Sector In India
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TOPICS FOR DISCUSSION
8) Products Offered 9) Top 10 Players 10) Emerging Challenges & Problems Faced 11) Future of Insurance Sector 12) Application of IT in Insurance Sector Insurance Sector In India
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DEFINITION
Insurance “Insurance is a contract between 2 parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party happening of a certain event”
Life Insurance “An agreement that guarantees the payment of a stated amount of monetary benefits to designated beneficiary upon the death of the Insurance Sector In India The Wits Group 18-08-2010 / 5 insured”
POLITICAL - LEGAL FORCES • IRDA (The Insurance Regulatory and Development Authority) ( sets out guidelines for insurance companies in India. •
The minimum capital requirement for life and general insurance has been retained at Rs 100 crore ($23.02 million).
• The aggregate foreign holding in an Indian insurance company shall not exceed 26 per cent of the paid-up equity. • In the event of insurers failing to fulfill the social sector obligations dictated by the IRDA, a fine of Rs. 25 lakh ($0.06 million) would be imposed the first time. Subsequent failures would result in cancellation of licenses. Insurance Sector In India
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ECONOMIC CONDITIONS • Raised standard of living
• Increased discretionary income
• Increasing rate of literacy
• Competition
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SOCIAL FORCES • Increase in awareness about insurance.
• Social values
• Attitude change - Change of attitude from family protection to tax benefits.
• Customer education and service Insurance Sector In India
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TECHNOLOGY • Advances in Information Technology • Online-payment of policies • Intra-net for integrating office operations • Online reminder for payment of premiums • Viewing policies online over mobile phones
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MARKETING MIX (8 P’s)
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PROMOTION
• With the advent of private players in the insurance, companies resort to rampant promotion. •
It includes: Advertising Publicity Sales Promotion Personal Selling Word-of-Mouth Telemarketing
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PROCESS
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PROCESS
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PRODUCT
• Product is like a stage on which the entire drama of successful marketing is acted. It is like an engine that pulls the rest of the marketing programmes. • It is well known that the key objectives of insurance business are mobilization of savings and channelization of investments. • Formulating the product mix, it is essential that the insurance organizations promote innovation • Designing a package on the basis of the needs and requirements of the concerned segment is the challenge.
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PRODUCT
PRODUCT The Flower of Service
Info. Agents
CLAIM
SECURING FUTURE
Tax Benefits
PREMIUM
CONSULTATION
SCHEMES UNDER WRITING
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PRICE
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PLACE
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PEOPLE
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PHYSICAL EVIDENCE
• Physical evidence is defined as the environment in which the service is delivered and where the firm & customers interact. • Physical evidence includes design of the building, facility design, equipment, décor, furniture, signage, employee dress, tangibles, reports & statements. • Eg. Of Tangibles: Insurance companies give their customers & agents various tangible items like pens, letter pad, Insurance scheme pamphlets calendars etc. Insurance Sector In India
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PRODUCTIVITY & QUALITY MANAGEMENT Tangibl es
Reliabili ty
Empathy
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MARKET SEGMENTATION
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DEVELOPMENTS TILL DATE Insurance in India has its history dating back until 1818, when Oriental Life Insurance Company was started by Anita Bhavsar in Kolkata to cater to the needs of European community. The pre-independence era in India saw discrimination between the lives of foreigners (English) and Indians with higher premiums being charged for the latter.
In 1870, Bombay Mutual Life Assurance Society became the first Indian insurer
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Important Milestones In The Indian life Insurance Business 1912: The Indian Life Assurance Companies Act came into force for regulating the life insurance business. 1928: The Indian Insurance Companies Act was enacted for enabling the government to collect statistical information on both life and non-life insurance businesses. 1938: The earlier legislation consolidated the Insurance Act with the aim of safeguarding the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies were taken over by the central government and they got nationalized. LIC was formed by an Act of Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and that too from the Government of India. The history of general insurance business in India can be traced back to Triton Insurance Company Ltd. (the first general insurance company) which was formed in the year 1850 in Kolkata by the British.
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Important Milestones In The Indian Life Insurance Business 1957: General Insurance Council, an arm of the Insurance Association of India, framed a code of conduct for guaranteeing fair conduct and sound business patterns. 1968: The Insurance Act improved for regulating investments and set minimal solvency levels and the Tariff Advisory Committee was set up. 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India. It was with effect from 1st January 1973 107 insurers integrated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC was incorporated as a company.
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TOP 10 PLAYERS (LIFE INSURERS) 64% 10.93 %
6.98%
2.88 % 2.72 % 2.86 % 5.46 % 1.90 % 1.08 % 1.19 % Insurance Sector In India
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TOP 10 PLAYERS (NON - LIFE INSURERS) 21.41 % 19.71 % 17.11 % 17.02 % 8.04 % 6.15 % 4.00 % 3.42 % 3.14 % Insurance Sector In India
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PROBLEMS FACED
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FUTURE OF INSURANCE SECTOR
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APPLICATION OF IT IN INSURANCE SECTOR • • • • • •
Online Availability of Policy Information Online Policy Selection Online Premium Payment PowerPoint Presentations given by agents Online statements giving information about the policy Total information about the customer is kept with the company • Computers also increase the efficiency of Insurance industries by reducing the potential of humans and also decreasing the risk of making incorrect calculations.