Insurance Industry in India

Insurance industry consists primarily of two aspects - life insurance and non-life (general) insurance.
Following the opening up of the insurance sector in 2000, the industry has grown tremendously with
Life Insurance growing at an annual rate of about 18.4% while the non-life sector has grown at a
CAGR of about 17%p.a.
According to FICCI, going ahead the life insurance sector is expected to grow at a rate of 12% p.a
while the non-Life sector is expected to grow at a rate of over 15% p.a through 2020 to roughly $160 $175 billion and $80 billion, respectively.

Key timelines:

Apart from the insurance players themselves, the Authority controls and manages various
intermediaries such as Web Aggregators, Insurance Marketing Firms, Agents, Corporate Agents,
Insurance Repositories, Brokers, Third Party Administrators and Loss Surveyors etc.

India v/s other countries

Life --> India is ranked 11th amongst 88 countries and has a 2% share in the global life insurance
market. In the overall market, LIC accounts for about 75% of the total premiums written, while the rest
is shared between the other private players.
st

Non-Life --> Among 88 countries listed by Swiss Re, Indian Non-Life insurance holds the 21 position
and a meagre 0.67% of the global market share. off the total premiums collected, Govt owned players
collected more than 57% of it while the rest were collected by private players.
Type

Description

Fire Insurance

Covers assets against loss of damage due to fire

Marine Cargo

Insures import and export shipments including goods in transit

Marine Hull

Insures hull, machinery, materials and financial interests

Aviation Insurance

Covers aircrafts & their fleets

Automobile

Covers private and commercial vehicles

Personal accident insurance

Includes health and overseas medical insurance

Crop Insurance

Insurance against loss to agricultural crop due to natural conditions

Insurance Indicators:
Insurance Density
Insurance Density is measured in USD and it is the ratio of total insurance premium written in a
country in USD to the total population of the country
Insurance Penetration
Insurance Penetration is measured in percentages and it is the ratio of total insurance premium
written in country in USD to the gross domestic product of the country in USD
Below are the Insurance indicators for India for the period of 2013-14
Indicators

Insurance Density (USD)

Insurance Penetration (%)

Life

41.0

3.1

Non-Life

11.0

0.8

Insurance value chain:

Stage

Primary Function

Product
Development

Designing new products to be sold to consumers on Mortality/damage rates etc. as

well as getting regulatory approvals for the products

Marketing

Market research analysis, channel development as well as channel support through

commissions

Distribution

Push their products through various channels and try to generate leads for future
sales

Underwriting

Sign and accept liability and guarantee payment on loss

Customer Mgmt. &

Service

Following the underwriting, the policy is issued as well as other customer oriented
features such as adjustment etc.

Claim Mgmt.

Once the claim has been made by the customer, the insurance company then engage
in various parties before payment is made

Re-insurers

The process of providing Insurance for insurance companies is re-insuring

Trends in Global insurance:

Data analytics and Cloud

Digital service
Usage based insurance & Telematics
Social media aided underwriting
Social insurance services - Friendsurance and Guevara