LIFE INSURANCE COUNCIL

PRESS MEET
ON

OVERVIEW OF INDIAN LIFE INSURANCE INDUSTRY:
TRENDS & OPPORTUNITIES

20
TH
FEBRUARY, 2014
HYDERABAD
Overview of Indian Life Insurance Industry
Globally Largest retail financial service provider- 36 Cr. In-force policies

Population of 200/203 countries in the world is less than the total number of
Indian life insurance customers

High capital intensive industry `34,922 Cr. deployed upto December, 2013
` 6,046 Cr. FDI by International Joint Venture Partners
Major contributor to every 5 Year Plan for Nation Building Activities.
AUM of Life Insurers is ` 19.40 lakh Cr. as on December, 2013
>10,000 offices across the country 72% in semi-urban & rural areas
*As on 31
st
March 2013
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
3
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 387
13 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 31
25 Meghalaya 22
26 Puducherry 24
27 Arunachal Pradesh 12
28 Sikkim 12
29 Nagaland 11
30 Manipur 10
31 Mizoram 8
32
Andaman & Nicobar
Islands
4
33 Dadra & Nagra Haveli 3
34 Daman & Diu 2
35 Lakshadweep 0
Total 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
31
st
December
2013
*As on 31
st
March 2013
by touching the lives of people across the country
Source: IRDA Annual Report
4
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
5
Contribution to
Nation Building
Activities
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

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
118,816
86,269
123,000
2010-11 2011-12 2012-13
2
,
8
7
,
0
7
1

2
,
8
7
,
1
8
9

4
,
1
0
,
4
5
5

3
,
7
3
,
3
4
1

4
,
1
0
,
1
8
9

` Crore
2
,
9
1
,
6
3
9

Source: IRDA Annual Report
6
New Business Premium Renewal Premium Total Premium Total
Revenue
There has been a steady increase in Assets Under Management
Category of Investments
2000-01 ` Cr.
(%)
2011-12 ` Cr.
(%)
2012-13 ` Cr.
(%)
September 2013 ` Cr.
(%)
Traditional Products
Central Govt. Securities
47,513
(24.48%)
4,68,082
(38.64%)
5,11,248
(36.55%)
5,63,285
(37.29%)
State Govt. Securities
52,524
(27.07%)
2,14,515
(17.71%)
2,66,003
(19.02%)
2,88,629
(19.11%)
Infrastructure Investments
24,887
(12.80%)
97,320
(8.03%)
1,16,645
(8.34%)
1,43,192
(9.48%)
Approved Investments
50,502
(26.03%)
3,85,107
(31.79%)
4,45,611
(31.86%)
4,90,193
(32.45%)
Other than Approved Investments
18,584
(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%)
Total
1,94,010
(100%)
15,81,259
(100%)
17,41,175
(100%)
18,28,001
(100%)
Source: IRDA Annual Report
Industry has increased its focus on Customer Centricity
Customer Grievance Redressal through Integrated Grievance
Management System (IGMS) has been successful
Year
No. 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%)

Source: IRDA Annual Report
9
Total benefits* paid to customers by Life Insurers
Source: IRDA Annual Report
10
Total Benefits Paid (` Cr.)
1,41,806
1,53,133
1,91,336
2010-11 2011-12 2012-13
* Total Benefits paid include Death claim, Maturity claim & Surrender payouts.
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 Pending
2.1%
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
13,52,790
13,48,026
2010-11 2011-12 2012-13
Claims Paid
96% 97% 97%
11
Driving Growth in Life Insurance Industry in India
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
insurable
population has
the potential to
give additional
new business of
>Rs. 1 lakh Cr.
13
However, Household Financial Savings as a % of GDP have dropped
in recent past, resulting in shrinking share of insurance within
financial savings
Gross household
financial savings as
a % 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 Gross
household 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 Insurance
Funds 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
14

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 reach Insurers 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 Architecture Banks to become brokers
Proposed Alternate Distribution Channel for Intermediaries

Multiple actions taken will bring back growth in
the life insurance industry

15
Projections
The Penetration level of Life insurance industry is expected to grow from
3.2% 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.
16
Life Insurance sector will continue to contribute to nation
building
Life Insurance employment potential till FY 2020 5 Lakh employees
17
Increase in FDI up to 10 billion US $ will increase customer coverage in rural and
semi 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
Thank You