INDIAN INSURANCE INDUSTRY

1
Agenda

Overview

Key Indicators of Indian Life Insurance Industry

Inclusive Growth of Life Insurance

Investment by Life Insurance Companies

Current trends in Life insurance Industry in India

22
Overview

India’s Demographics

 Current Population is 128.28 M.

Current GDP is $ 2.0 trillion (approx.Rs. 125 lakh M)

 Male to female population is 52 :48 ( 651 Mn male : 601 Mn female)

 72 % of the total population resides in semi -urban and rural areas.

3
Source: UN population Division
Overview
 Projected change in age structure of Indian population in (%) is shown below -

Age Group (Yrs) 1970 2000 2005 2015 2025 2050

To 14 40.9 35 33.1 28.7 24.7 18.2

15 to 59 53.6 58.3 59.9 62.6 64.2 62.2

60 and above 5.5 6.7 7.0 8.7 11.1 19.6

100
Age to 14
Age

50
15 to 59
0 60 and above
1970 2015 2025 2050
Year

4
Source: UN population Division
Overview
Current Employment Scenario

 Out of total population of 128. 28 cr around 44 cr is employed workforce.

Working population Population % of Pension/ retirement

(Cr) Employed benefits
workforce

Salaried employees 6.7 16

 Government 1.5 23 Yes (Govt.funded)
Non-Government 3.3 49 Yes(EPF/ PPF)
Others 1.9 28 Voluntary

Self employed 23.7 53 Voluntary

Casual / Contractual workforce 13.6 31 Voluntary

 Around 4% ( 4.8 M) of the total population is eligible for Pension related benefits.

5
Source: Indian workforce survey and UN population Division
Overview- Financial Savings Pattern
Gross Savings of Household sector

In 2013-14 Gross Domestic Saving rate as a % of GDP was 30.1 %

 Out of this the share of Gross Savings in Household sector in % terms is as below:
Type of Savings FY 10-11 FY 11-12 FY 12-13 FY 13-14

Bank and other deposits 49.9 59.1 56.6 58.8

Insurance 20.0 21.2 17.3 17.0

Provident and Pension 13.4 10.3 11.7 11.6

fund
Shares and debentures 0.4 -0.3 4.1 2.9

Currency and others 16.3 9.7 10.3 9.7

6
Source: RBI
Overview- Financial Savings Pattern
% share of Life Insurance within household
Type of Savings FY 11-12 FY 12-13 FY 13-14 savings

21.2%
Bank and other 59.1 56.6 58.8
deposits
17.3% 17.0%

Insurance 21.2 17.3 17.0

Provident and 10.3 11.7 11.6

Pension fund

Shares and -0.3 4.1 2.9

debentures

Currency and 9.7 10.3 9.7

others 2011-12 2012-13 2013-14
Life Insurance Premium Projection - In Newer Orbit

Projection of Life insurance Premium considering GDP growth rate of 6 % (Penetration)

Parameters Actual as of Projection

2015 2015-16 2020-21 2023-24 2024-25

GDP (Trillion USD) 2.0 2.10 2.81 2.65 3.55

Premium (Billion USD) 57 --- --- --- ---

( 3.27 lakh M)
Gross Premium underwritten
as % of GDP( Penetration)
(Billion USD) :-
(a) 3% --- 63 85 101 107
(b) 4% --- 84 113 134 142

(c) 5.5% --- 126 169 202 214

 1USD = INR 58
8
Overview

Parameter FY 99-00 FY 11-12 FY 12-13 FY 13-14 FY 14-15

(provisional)

India’s share of world 0.50% 2.30 % 2.03% 2.20 % 2.1 %

premium (Life)
Penetration as % of GDP 1.77 3.4 3.2 3.17 3.10

New Business Policies 1.69 4.41 4.41 4.08 2.59

Indiviual (In Cr)

In force Policies (In Cr) 10.14 33.52 33.61 33.54 32.75

The industry services largest number of life insurance policies in the world

9
Source: IRDA, Life Insurance Council (FY 14-15 data is provisional)
Overview
Global Comparison

Life Insurance Penetration

10
% of Premium to GDP

8
6
4
2
0
USA UK Germany Japan India Russia Brazil China

Countries

10
Key Indicators of Indian Life Insurance Industry

11
Key Indicators of Indian Life Insurance Industry

Life Insurance Industry completed 15 years of opening up of

sector.

Currently there are 24 players in the Life Insurance Industry.

All the major International players are present in the Indian

Insurance market.

 The insurable population in India is 60 M.

India has the largest in-force policies in the world 32.75 M

12
12
Key Indicators of Indian Life Insurance Industry……….contd
Parameters FY 99-00 FY 11-12 FY 12-13 FY 13-14 FY 14-15

Number of players 1 24 24 24 24

Capital Deployed (Rs. Cr) 5 33,633 34,200 35,021 35,680

Branches 2,048 11,082 10,253 11,013 11,030

Employees 1,20,000 2,42,682 2,48,703 2,44,522 2,49,221

Individual Agents 7,10,000 26,08,820 23,45,601 22,09,894 20,67,856

13
Source: IRDA, Life Insurance Council (FY 14-15 data is provisional)
Key Indicators of Indian Life Insurance Industry ….contd
New Business Premium (Individual) Rs. M
Category 2006-07 2010-11 2011-12 2012-13 2013-14

Life 40,459 61,368 61,887 59,807 57,948

Annuity 14 1,457 1,161 1,446 1,719

Pension 20,853 19,257 1,148 522 750

Health 28 211 238 188 144

Total Indl. NB 61,354 82,294 64,434 61,963 60,561

premium

% of Pension to 33.98 % 23 .40% 1.78 % 0.84 % 1.24%

Total NB

Source: IRDA 14
Key Indicators of Indian Life Insurance Industry ……..contd
Benefits Paid to Policyholders

Parameter FY 11-12 FY 12-13 FY 13-14 FY 14-15

Total Death Benefit paid(Rs. Cr) 10,790 12,017 13,716 14,981

Total Benefits paid(Rs. Cr) 1,53,133 1,92,493 2,18,137 2,13,325

15
Source: IRDA, Life Insurance Council (FY 14-15 data is provisional)
Inclusive growth of Life Insurance Sector
Life Insurance Industry contribution towards economic growth of the country (Rs. M)

7,25,000
1,32,000
16,000
3,500
750
180

1956-57 to 1966-67 to 1976-77 to 1986-87 to 1996-97 to 2006-07 to

1960-61 1970-71 1980-81 1990-91 2000-01 2010-11
Inclusive Growth of Life Insurance

17
 -
Inclusive Growth of Life Insurance Sector

Rural & Social Sector Obligation

 Companies have to mandatorily sell

– 18% of new policies in rural areas.
– Cover 25,000 lives in social sector every year.

 Approximately 1 M rural policies were sold by companies in 2014-15.

 3.04 M lives covered in social sector in 2014-15.

Source: IRDA, Life Insurance Council 18

Agenda

Investment by Life Insurance Companies

19
19
AUM of Life Insurance Companies
Category of Investments 2000-01 ` Cr. (%) 2012-13 ` Cr. (%) 2013-14 ` Cr. (%)

Traditional Products

Central Govt. Securities 47,513 (24.48%) 5,11,248 (36.55%) 6,04,651 (37.19%)

State Govt. Securities 52,524 (27.07%) 2,66,003 (19.02%) 3,33,951 (20.54%)
Infrastructure 1,16,645 (8.34%) 1,55,026 (9.54%)
24,887 (12.80%)
Investments
Approved Investments 50,502 (26.03%) 4,45,611 (31.86%) 5,03,059 (30.94%)
Other than Approved 59,161 (4.23%) 29,118 (1.79%)
18,584 (9.58%)
Investments
ULIP

Approved Investments -- 3,25,281 (94.97%) 3,22,456 (97.22%)

Other Investments -- 17,226 (5.03%) 9,205 (2.78%)
Total 1,94,010 (100%) 17,41,175 (100%) 19,57,466 (100%)

Investments have been targeted towards established funds that helped in infrastructure growth of the country

Source:IRDA
Thank You

21