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In India, insurance has a deep-rooted history. The advent of life insurance industry in India happened with the
establishment of Oriental Life Insurance Company in Kolkata in 1818m which failed in 1834. In 1870, the British
Insurance Act was enacted and Indian companies such as Bombay Mutual, Oriental, and Empire of India came up.
However, these Indian companies faced stiff competition from their foreign counterparts such as Albert Life
Assurance, Royal Insurance, Liverpool and London Globe Insurance.
• The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life insurance
industry in India.
• In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical
information about both life and non-life business transacted in India by Indian and foreign insurers including
provident insurance societies.
• In order to protect the interest of the public, the earlier legislation was consolidated and amended by the
Insurance Act, 1938 with comprehensive controls over the activities of the insurers.
Nationalisation: In 1950s, the number of insurance companies continued to grow exponentially, which led to
increased competition and unfair trade practices. Thus, the government decided to nationalize the insurance sector
by combining about 250 Indian and foreign life insurance companies to form a single firm, the Life Insurance
Corporation (LIC) of India. This nationalization allowed channelling more resources towards various national
development programmes and give insurance market penetration a boost to protect the interests of the policy
holders from mismanagement. This however, resulted in the transformation of competitive segment to highly
regulated monopoly. The nationalization also led to more effective mobilization of funds to enable capital to be
allocated to various development projects.
LIC remained a monopoly in the life insurance sector until the government opened this industry to private players. In
1993, a committee under the chairmanship of RN Malhotra, former Governor of RBI, proposed recommendations for
reforms in the insurance sector. The committee recommended that the private sector be permitted to enter the
insurance industry and that foreign companies be allowed to enter by floating Indian companies, preferably a joint
venture with Indian partners.
IRDAI came into existence: In 1999, under the IRDA Act, the Insurance Regulatory and Development Authority was
established, which was responsible for regulating, promoting and ensuring orderly growth of insurance and re-
insurance industries in India.
Post liberalisation, the industry saw massive growth, with premiums growing from less than 200 billion INR in 2002
to nearly 900 billion by 2009. This intense competition has also forced the different life insurance players to improve
their underwriting and risk management abilities, which greatly benefitted policy holders in terms of structured
retirement plans and options for long-term fund management.
• The insurance industry in India is expected to reach around US$ 280 billion by 2020 and the life insurance
industry is expected to grow by 12-15% annually for the next 3-5 years.
• Gross Premiums written in India reached Rs. 5.53 trillion in FY18 with Rs. 4.58 trillion coming from the life
insurance industry, owing to growing interest of Indians in insurance with innovative products and numerous
distribution channels aiding this growth. Growing use of Internet has also greatly pushed this demand.
• Moreover, the investments in the insurance sector has also increased with companies raising around Rs.
434.4 billion through public issues in 2017.
• The Government has intensely supported the insurance sector through its tax incentives and with its
repeated attempts to make the industry lucrative for foreign players. The Insurance Bill gives IRDAI the full
responsibility to frame regulations for the sector and insurance IPOs have led to increased liquidity in the
insurance industry. Companies will be able to raise capital if they have embedded value of twice the paid up
equity capital. SBI Life has already raised funds through its IPO.
• India was ranked 41st in the world in terms of insurance penetration with life insurance penetration at
2.76%.This shows that the life insurance industry in India has a huge potential for growth and a huge
undeserved market.
By 2020, Life Insurance is expected to account for 35% of India’s total savings.
• In the life insurance segment, the private players have achieved a market share of 33.74% in FY 19 as
compared to 2% in FY03. Currently, there are 24 private players with HDFC Standard Life Insurance leading
the baton with 7.07% of the new premiums market.
• The life insurance industry has seen the advent of innovative products such as ULIPs and mass customisatio
to meet customer’s needs perfectly.
• Increased focus on Embedded Value: The Embedded Value of a life insurance company is the present value
of future profits plus adjusted net asset value. EV measures the value of the insurer by adding today's value
of the existing business (i.e. future profits) to the market value of net assets (i.e. accumulated past profits).
Large insurers have shifted focus to cost rationalisation and aligning business models to realise their EV.
• Group Insurance has become a major driver of insurance growth in the country. Private Insurance companies
have covered around 36.2 million people, recording a YoY growth of 27.48%.
IDBI Federal Life Insurance company is one of the fastest growing life insurance companies of India. The company is a
joint venture of IDBI, India’s premier development and commercial bank and Federal Bank, one of India’s leading
private sector banks and Ageas, a multinational insurance giant based out of Europe. The company received its
license from IRDAI in December 2007.
Company Timeline:
The company’s innovation and growth strategy helped it scale great heights in the country only in 5 years within its
commencement in 2008. The company boasts of a good portfolio of offering its customers with wealth
management, protection and retirement solutions.
Through a nationwide network of 2,964 branches of IDBI Bank and Federal Bank, and a sizeable network of advisors
and partners, IDBI Federal Life Insurance has achieved presence across the length and breadth of the country. As on
March 31, 2017, the company has issued nearly 10.29 lakh policies with a sum assured of over Rs. 58,653.76 crore.
IDBI Federal Life Insurance has total assets under management of 6,090 crore and a robust capital base of over 800
crores, as on March 31, 2017.
• Tax benefits under under 80(C ) and 10(10D) of the Income Tax Act, 1961.
• Rebates on high sum assured
• Special discounts for female lives
• Simple, quick and hassle-free claim process through its ‘8-day claim guarantee initiative
Mission Statement - Reaching out to customers, through empowered & engaged employees and distributors
facilitated by cutting edge technology, right selling & seamless service to meet their ever evolving needs.
Values –
• Passion
• Integrity
• Execution
• Ambition
• Transparency
The company provides the best-in-class investment options and financial protection through its life insurance
policies.
Term Plans:
iSurance Online Term Plan: iSurance online term plan pays out a lump sum amount to the beneficiary on the
account of death of the policyholder. This plan offers a minimum life cover of Rs. 50 lakhs and a maximum of 30
crore. The minimum policy term can be 10 years and maximum can be 25 years. The plan offers special discounts to
women and the premium rates are low as compared to what is offered to men.
Termsurance Life Protection Insurance plan: A plan that ensures that a family’s dreams are protected, no matter
what. Termsurance Life Protection Insurance plan by IDBI Federal offers two options-
a. Pure protection cover, which offers the beneficiary with the death benefit on the account of the death of the
insurer.
b. Return of premium, a type of plan that returns all the premiums, in case one survives the term of the policy. The
plan offers attractive premium rates for women and also offers rebates on high sum assured.
Termsurance Group Protection Insurance Plan: Helps the insurer secure the future of family members of his
employees, Termsurance Group Protection Insurance Plan secures the employees. With this plan, one can also opt
for additional riders like accidental death rider, critical illness and terminal illness cover.
Termsurance Sampoorna Surakhsa Micro-Insurance Plan: This term insurance plan offers financial security at low
premium rates. No medical tests are required for availing this plan and one can also opt for 5 or 10 year policy term.
This is a pure term insurance plan, having no maturity benefit. Sum assured can be minimum Rs. 5000 and maximum
Rs. 50,000. One also has a choice of single or regular premium payment option.
Childsurance Savings Plan: Helps secure a child's future, this plan offers guaranteed annual pay-outs to fund
important milestones in a child’s life. In case of death, the plan waives of all the future premiums and also offers
immediate pay-out at the same time. To boost savings, bonus is provided right from the first year.
Wealthsurance Future Star Insurance Plan: Understanding the need of building a financially healthy future for a
child, this plan by IDBI Federal offers life cover with triple benefits. First, the sum assured is paid out as death
benefit, second, all the future premiums are waived off and third, the policy continues and maturity benefit is paid at
the end of the policy term. Guaranteed loyalty benefits are paid to boost savings and one can also enjoy tax benefits
under 80(C ) and 10(10D) of the Income Tax Act, 1961.
ULIPs : Unit Linked Insurance Plans
IDBI Federal Wealthsurance Growth Insurance Plan: A unit-linked plan that offers the freedom to invest in over 9
fund offerings and also provides life cover benefit, thereby ensuring financial security. This is a smart investment
plan that lets one design their investments their way. It gives one the flexibility to decide what they want to invest in
and for how long they want to invest. Loyalty additions are provided to boost the investment.
IDBI Federal Wealthsurance Growth Insurance Plan Single Premium: This plan requires paying one-time premium
and also get a life cover to protect the needs of one’s family. The customers are offered a bouquet of 9 funds and
have the ability to switch between them. With this plan, they are also eligible for partial withdrawals and bonus.
IDBI Federal Life Insurance Wealth Gain Plan: This is a comprehensive plan that helps one build wealth and also
provides life cover to ensure that their families stay protected all throughout the term of the policy. The plan offers 8
fund offerings and gives one the freedom to invest in one or more funds. Premium is waived off in case of
permanent disability of the policyholder.
IDBI Federal Group Microsurance Plan: This plan provides affordable life insurance cover to groups and is beneficial
for micro finance institutions, self-help groups and NGOs. The plan can also be used in providing loan protection to
the group members’ families. No medical tests are required for availing this plan.
IDBI Federal Life Insurance POS Guaranteed Income Plan: A savings plan that offers guaranteed returns and life
protection for 10 years. Pay premium for 5 years and one can enjoy life protection throughout the term of the policy.
The insurer has the option to choose pay-outs in lump sum amount or as regular income. The plan has a yearly
premium payment mode and has maximum entry age of 50 years.
IDBI Federal Life Insurance POS Guaranteed Plan: This allows the insurer to make one-time payment and get a life
cover and lump sum payment after 7 years. The minimum entry age for this plan is 11 years and maximum is 43
years. The plan offers guaranteed benefit irrespective of market conditions.
IDBI Lifesurance Savings Plan: A plan that provides twin benefits of long-term savings and life-cover. It helps one
build a strong financial corpus to ensure a stress-free future for their family. Guaranteed additions and bonus is
provided to enhance savings. The plan offers rebates on high sum assured and also offers premium discounts to
females. Lump sum benefit is paid on maturity.
IDBI Federal Life Insurance Incomesurance 6 Pay: A plan that requires one to pay for the first 6 years and then enjoy
the benefits for the next 6 years. The policyholder gets a life cover and critical illness cover for an entire policy term
of 13 years. Guaranteed annual returns are provided from 8th to 13th year of the policy.
Summary of Life Insurance Industry
2017-2018 2017-2018 2017 2018 2017 2018 2017 2018 (At the end of the Quarter)
INSURER
March 2017 June 2017 Sep 2017 Dec 2017 March 2018
Aditya Birla Sunlife 2662.80 5903.00 82048 91720 37 33 1901.21 1901.21 2.00 2.04 2.02 2.09 2.14
Aegon 147.05 531.21 5814 5739 7 8 1429.85 1442.62 2.08 1.74 1.69 2.06 2.32
Aviva 325.57 1344.22 13648 16431 3 6 2004.90 2004.90 3.46 3.36 3.09 3.03 2.94
Bajaj Allianz 4291.14 7578.37 77097 70763 41 44 150.70 150.70 5.82 5.99 6.07 6.01 5.92
Bharti AXA 730.86 1684.39 18535 28638 6 13 2406.20 2406.20 1.82 1.63 2.03 1.95 1.79
Canara HSBC 1227.74 2781.06 0 0 5 7 950.00 950.00 4.01 3.73 3.85 3.79 3.82
DHFL Pramerica 1455.68 1844.46 7889 12318 6 12 374.06 374.06 7.68 7.13 6.76 6.11 5.52
Edelweiss Tokio 342.46 638.26 21449 31031 2 2 261.59 312.62 2.20 2.28 2.24 2.22 2.19
Exide Life 759.90 2531.89 56034 46126 29 41 1750.00 1750.00 2.52 2.27 2.11 2.01 2.07
Future Generali 582.35 992.29 8755 11890 9 14 1507.45 1737.82 1.61 2.03 2.38 1.71 2.09
HDFC Standard 11349.61 23564.41 54516 77048 57 81 1998.48 2011.74 1.92 1.98 2.01 1.91 1.92
ICICI Prudential 9211.75 27068.77 136114 151563 23 36 1435.35 1435.35 2.81 2.89 2.76 2.52 2.52
IDBI Federal 833.03 1783.24 7915 10763 2 3 800.00 800.00 3.52 3.55 3.69 3.78 3.71
IndiaFirst 1496.97 2309.01 2910 1660 10 11 625.00 625.00 1.84 1.83 1.73 1.68 2.07
Kotak Mahindra 3404.21 6598.67 96729 94688 34 47 510.29 510.29 3.00 3.04 3.08 3.08 3.05
Max Life 4348.59 12500.89 54283 56968 23 22 1918.81 1918.81 3.09 2.95 2.95 2.80 2.75
PNB Metlife 1427.08 3953.51 6248 6452 13 11 2012.88 2012.88 2.03 2.04 2.09 2.06 2.02
Sahara 4.17 112.03 10402 10480 4 2 232.00 232.00 8.20 7.80 7.95 8.35 9.02
SBI Life 10966.14 25354.19 95355 108261 77 76 1000.00 1000.00 2.04 2.11 2.09 2.06 2.06
Shriram Life 810.33 1497.04 4508 4498 5 5 179.38 179.38 2.03 2.20 2.30 2.11 2.03
Star Union Dai-ichi 700.72 1783.01 9112 4757 7 7 258.96 258.96 2.78 2.60 2.60 2.65 2.78
Tata AIA 1488.42 4162.95 25704 26963 4 8 1953.50 1953.50 3.15 3.05 2.98 2.95 2.93
Private Total 59482.21 140586.23 957341 933856 426 519 26856.94 27164.37
LIC 134671.70 318223.21 1131181 1148811 107 104 100.00 100.00 1.58 1.53 1.51 1.51 1.58
Industry Total 194153.90 458809.44 2088522 2082667 533 623 26956.94 27264.37
(10.82) (9.64)
Note: 1) Figures in the brackets represent the growth over the previous year in percent.
(As on 31st March)
NUMBER OF INDIVIDUAL NEW LIFE INSURANCE POLICIES ISSUED
(In Lakhs)
INSURER 2016-17 2017-18
201.32 213.38
LIC
(-2.02) (5.99)
63.24 68.59
Private Sector
(2.13) (8.47)
Total 264.56 281.97
(-1.05) (6.58)
Note: Figures in brackets indicates the growth over the previous year in percent.
236381 1182.14
Brokers (0.84) (1.28)
785516 5163.31
Direct Selling (2.79) (5.60)
619183 18.88
MI Agents (2.20) (0.02)
28162617 92134.73
TOTAL (100.00) (100.00)
3219 3.75
Referrals (0.01) (0.004)
* Any entity other than banks but licensed as a corporate agent. # Does not include its overseas
new business premium
Note: 1) New business premium includes first year premium and single premium.
2) Figures in bracket show percentage to total individual new business procured through
respective channels.
3) The leads obtained through referral arrangements have been included in the respective
channels.
Number of Group Life Insurance Policies Sold and Total Premium Sold
0 0.00
*Any entity other than banks but licensed as a corporate agent.
Note:1) The leads obtained through referral arrangements have been included in the respective channels.
2) New business premium includes first year premium and single premium.
3) Figures in bracket show percentage to total group new business procured through respective channels.
Status of Grievances with Life Insurers
2017-18
Insurer Reported
O/S at the start Resolved
during the
of the year during the year
year
Aditya Birla Sun Life 10 6793 6786
Aegon Religare 0 1764 1764
Aviva 0 2282 2282
Bajaj Allianz 0 3439 3421
Bharti AXA 8 4148 4156
Canara HSBC 0 665 663
DHFL Pramerica 1 1592 1589
Edelweiss Tokio 0 329 329
Exide Life 0 4201 4201
Future Generali 15 4447 4462
HDFC Standard 10 7257 7256
ICICI Prudential 3 7700 7701
IDBI Federal 0 742 742
IndiaFirst 19 3219 3201
Kotak Mahindra 105 3400 3480
Max Life 0 5544 5544
PNB Met Life 70 4228 4226
Reliance 0 1615 1614
Sahara 3 82 74
SBI Life 2 7640 7642
Shriram 1 406 406
Star Union Dai-Ichi 0 2556 2556
TATA AIA 0 3134 3134
Private Total 247 77183 77229
LIC 0 77184 77184
Total 247 154367 154413
SWOT Analysis of the Life Insurance Industry