Media Meet Presentation 20th February 2014 Hyderabad

8/11/2019 Media Meet Presentation 20th February 2014 Hyderabad

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LIFE INSURANCE COUNCIL

PRESS MEETON

OVERVIEW OF INDIAN LIFE INSURANCE INDUSTRY:TRENDS & OPPORTUNITIES

20

TH

FEBRUARY, 2014HYDERABAD


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Indian life insurance industry has grown over the years

No. of Players

Capital (`Cr)

No. of Branches

Employees

(in Lakh)

Individual

Agents

(in Lakh)

Source: IRDA Annual Report & Council MIS Report

1

2.85 2.42 2.45

22 23 24

1.23

5 18,253 23,662 25,519

2,048 11,815 11,546 10,285

7.14 29.38 26.39 21.22

FY99-00 FY08-09 FY10-11 FY12-13 Dec 2013

(Provisional)

2.41

24

34,922

10,903

21.98

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Sr.

No.State

No. of

Branches*1 Maharasthra 1051

2 Uttar Pradesh 1029

3 Andhra Pradesh 928

4 Tamil Nadu 853

5 Gujarat 626

6 Kerala 621

7 West Bengal 642

8 Karnataka 600

9 Rajasthan 494

10 Madhya Pradesh 518

11 Punjab 418

12 Bihar 38713 Haryana 317

14 Orissa 339

15 Delhi 249

16 Assam 237

17 Jharkhand 232

18 Chhattisgarh 166

19 Uttrakhand 137

20 Himachal Pradesh 114

21 Jammu & Kashmir 94

22 Goa 52

23 Chandigarh 42

24 Tripura 3125 Meghalaya 22

26 Puducherry 24

27 Arunachal Pradesh 12

28 Sikkim 12

29 Nagaland 11

30 Manipur 10

31 Mizoram 8

32Andaman & Nicobar

Islands4

33 Dadra & Nagra Haveli 3

34 Daman & Diu 2

35 Lakshadweep 0Total 10,285

1

2

3

4

5

6

7

8

9

10

Top 10 states in terms of no.of branches

10,903

No. of branches

as on

31stDecember

2013

*As on 31stMarch 2013

by touching the lives of people across the country

Source: IRDA Annual Report

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and has made a significant contribution to the Indian

economy

Infrastructure

Development

Investment in Infrastructure to the tune of `1,43,192 Cr.

Major contributor to every 5 year plan

Provide stability to

Capital Markets

Employment

Generation

Direct employment 2.41 lakh

Employment to more than 21.98 lakh individual agents

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Contribution to

Nation BuildingActivities

Investment in Central Govt. Securities and State Govt.

Securities - `8,51, 914 Cr. upto December 2013

Life Insurance companies have invested approximately

`60,000 Cr. in the equity markets in 2012-13


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The industry has witnessed a moderate growth in Renewal Premium

over the last few years

126,399 113,942 107,358

165,240 173,129 179,831

118,81686,269

123,000

2010-11 2011-12 2012-13

2,87,071

2,87,1894

,10,455

3,73,341

4,10,189

`Crore

2,91,639


6

New Business Premium Renewal Premium Total Premium Total

Revenue


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There has been a steady increase in Assets Under Management

Category of Investments2000-01 ` Cr.

(%)

2011-12 ` Cr.

(%)

2012-13 `Cr.

(%)

September 2013 `Cr.

(%)

Traditional Products

Central Govt. Securities47,513

(24.48%)

4,68,082

(38.64%)

5,11,248

(36.55%)

5,63,285

(37.29%)

State Govt. Securities52,524

(27.07%)

2,14,515

(17.71%)

2,66,003

(19.02%)

2,88,629

(19.11%)

Infrastructure Investments24,887

(12.80%)

97,320

(8.03%)

1,16,645

(8.34%)

1,43,192

(9.48%)

Approved Investments50,502

(26.03%)

3,85,107

(31.79%)

4,45,611

(31.86%)

4,90,193

(32.45%)

Other than Approved Investments18,584

(9.58%)

46,262

(3.82%)

59,161

(4.23%)

25,002

(1.65%)

ULIP

Approved Investments - -3,46,340

(93.61%)

3,25,281

(94.97%)

3,03,667

(95.58%)

Other Investments - -23,632

(6.39%)

17,226

(5.03%)

14,032

(4.41%)

Total1,94,010

(100%)

15,81,259

(100%)

17,41,175

(100%)

18,28,001

(100%)



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Industry has increased its focus on Customer Centricity


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Customer Grievance Redressal through Integrated Grievance

Management System (IGMS) has been successful

YearNo. of In-force

policies

No. of

Grievances

reported

No. of

Grievances

attended

No. of

Grievances

pending

2011-12 33.52 Cr. 3,09,613 3,08,331

(99.59%)

1282

(0.41%)

2012-13 35.87 Cr. 3,42,294 3,41,070

(99.64%)

1224

(0.36%)


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Total benefits* paid to customers by Life Insurers


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Total Benefits Paid (` Cr.)

1,41,8061,53,133

1,91,336

2010-11 2011-12 2012-13

* Total Benefits paid include Death claim, Maturity claim & Surrender payouts.


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Consistent improvement in Death Claims Settled by Life Insurers

- By No. of Policies

28,463

26,459

27,927

2010-11 2011-12 2012-13

Claims Pending2.1%

1.9% 2%

24,073

20,104 19,938

2010-11 2011-12 2012-13

Claims Repudiated

1.8% 1.4% 1%12,97,395

13,52,79013,48,026

2010-11 2011-12 2012-13

Claims Paid

96% 97% 97%

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Driving Growth in Life Insurance Industry in India


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63

69

74

2000 2010 2020

Age in years

Life Expectancy

127

60

30

0

20

40

60

80

100

120

140

Total Insurable Insured

Population in Cr.

Insurable Population

Indian demography is favourable to the growth of Life Insurance

Insurable population is expected to grow to 75 Cr. by FY 2020

A mere 10%

penetration in

the increased

insurablepopulation has

the potential to

give additional

new business of

>Rs. 1 lakh Cr.

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However, Household Financial Savings as a % of GDP have dropped

in recent past, resulting in shrinking share of insurance within

financial savings

Gross householdfinancial savings asa % of GDP

10.3%

7.5% 7.7%

FY 11 FY 12 FY 13

Share of gross household financial savings within GDP has declined

% Share of Grosshousehold financial

savings

19.4% 19.9% 16.4%

51.2%57.4% 56.2%

FY 11 FY 12 FY 13

Life Insurance Funds Deposits

Within household financial savings, insurance has lost some

sheen... Life InsuranceFunds as a %

of GDP*

2.69%

2.12%1.79%

FY 11 FY 12 FY 13

... as a result, share of life insurance within GDP has declined

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New Products with enhanced features launched from January 1, 2014

367 new products launched

Benefits for customers with higher insurance covers

Pioneers in the globe to grant license to e-repositories

5 Repositories authorized to open e-Insurance Accounts.

Distribution related initiatives

Expand distribution reachInsurers are poised to increase number of agents to more

than 3 million in the next 5 years

Utilize CSCs to expand reach

1,00,000 CSCs each serving a cluster of 6-7 villages,covering ~6.5 lakh villages across India

Open ArchitectureBanks to become brokers

Proposed Alternate Distribution Channel for Intermediaries

Multiple actions taken will bring back growth in

the life insurance industry

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Projections

The Penetration level of Life insurance industry is expected to grow from3.2% to 5% by year 2020

Expected CAGR of Life Insurance industry will be 12-15% in the next 3-5 years

Life insurance segment has the potential to grow 2-2.5 times its current size by

2020.

The net Household Financial savings could reach around 30% in the next 3 years

from the present level of 23.1% (FY 11-12); Life Insurance being the second

most preferred financial instrument will benefit from this.

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Life Insurance sector will continue to contribute to nation

building

Life Insurance employment potential till FY 2020 5 Lakh employees

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Increase in FDI up to 10 billion US $ will increase customer coverage in rural andsemi urban areas from 72% to 80% and fuel employment growth in the country

and contribute to increase in GDP of the country.

Life insurance industry contribution to Infrastructure projects Rs. 3.5 Lakh Cr.

by FY 2020


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Thank You

Documents

Media Meet Presentation 20th February 2014 Hyderabad