EFFECTS OF

GLOBALIZATION ON
INDIAN INSURANCE
SECTOR
-----Presented
by THE STARTERS
 Globalization defined…..
• “ … p ro ce sse s w h e re b y so cia lre la tio n s
a cq u ire
re la tive ly d ista n ce -le ss o r b o rd e r- le ss
q u a litie s, so th a t h u m a n live s a re
in cre a sin g ly p la ye d o u t in th e w o rld a s a
sin g le p la ce .” (Jan Aart Scholte)

• “ … te ch n o lo g ica l, p o litica l, e co n o m ic , a n d
cu ltu ra l
d im e n sio n s th a t co n n e ct in d ivid u a ls,
Purpose of Globalization:
1.Clarification of the notion of
Globalization applied to the world
Economy.

2.Evaluate the potential benefit and

potential cost dangers streaming from
Globalization.

3.Find out cost or Danger streaming from

Globalization.
 Indian Insurance Sector Before
Globalization
Ø .

ØG.I. is a British Legacy in India .

Ø General insurance started with
Triton Insurance Company in
Kolkata in 1850 .
Ø Few landmark years are 1907 , 1957 ,
1968 , 1972 .
Ø GIC started operations in 1973
with four subsidiaries .
Ø Life insurance started with
Oriental life Insurance in 1818 in
Kolkata .
 Competitors then..
ØBefore nationalization of LIC, non Indian insurers were there
too.
ØThey made business of about Rs 160 crores.
ØPost war (1946- 1955) the Indian companies took over the
market.
ØNon Indian companies were 16 then.
Ø
Ø
Year No. of Indian offices No. of Non- Indian
1928 97 offices
138
1929 108 149

1938 200 143

1941 197 80

1945 234 81
 Changing course..
• Over the post war period the foreign
companies took backseat.
• Suffered of the Indian Insurance Act, 1938.
• Revenues and their earnings declined.
1945 1955

No. of Insured Premium No. of Insured Premium

policies amount income policies amount income
Indian life 577000 12278 673 749000 22085 1139
offices
Non Indian 22000 1260 74 22000 1744 100
life offices
Total 599000 13538 747 771000 23829 1239
% of Non 3.7 9.3 9.9 2.9 7.0 8.0
Indian to
total
 Still a long way to go..
• The average amount of money for a new policy
increased.
Year Average amount of money for a new policy in
•1946 India (in Rs)
2205
1947 2177
•1948 2306
•1949 2341
1950 2471
•1951 2575
•1952 2526
1953 2569
•1954 3123
1955 2950
•
•
•
 Important milestones in the
life insurance business in
•
India
1912: The Indian Life Assurance Companies Act
enacted.

•
• 1928: The Indian Insurance Companies Act enacted
to enable the government to collect
statistical information about both life and
non-life insurance businesses.

•
• 1938: Earlier legislation consolidated and
• 1956 - The Life Insurance Company was
nationalized
•
• 1972 - The general insurance business was
nationalized
•
• 1999 - Private insurance companies came into
existence
•
• 2000 - Insurance Regulatory and Development
Authority bill was passed
•
• ∏LIC market share has decreased from
95%(2002-03) to 81% (2004-05)
•NAME OF THE PLAYER MARKET SHARE
(%)
•LIC 82.3
ICICI PRUDENTIAL 5.63
BIRLA SUN LIFE 2.56
BAJA ALLIANZ 2.03
SBI LIFE 1.80
HDFC STANDARD 1.36
TATA AIG 1.29
MAX NEW YORK 0.90
AVIVA 0.79
OM KOTAK MAHINDRA 0.51
ING VYASA 0.37
AMP SANMAR 0.26
METLIFE 0.21
Insurance today
Present scenario of Insurance
sector
Impact of globalization on
Insurance Sector
 opportunity
•New customer have much more
option to choose
•Job opportunity
•It will cover large area.
•Better customer service
•Coming of domestic and foreign
companies.
Challenges before the industry
 Essentials to meet the
challenges

•Understand the customer

•Selection of right type of
distribution channel
•Very efficient CRM system
•Should Focus on semi urban and
rural areas.
•Promoting Health Insurance..
ian Insurance Sector ready to tap rural India
dian Insurance sector will reach US$ 60 Billion in the comin

FUTURE

Semi urban and rural areas Urban areas

Share : US $35 Billion Share : US $25
Billion

Life Non Life Insurance

Insuran Share : US $ 15 Billion
ce
Share : Life Insurance Non Life
US $20 Insurance
Share : US $15 Billion
Share : US $
Billion 10
Billion
THANK YOU
The Starters…
vArindam Dey
vAbirlal Mukherjee
vChandan Haikel
vMonoj Dev
vMurli Dhar choudhury
vSourav Dey
vSupriyo paul
vPrakash Sharma
vSamrat Sarkar
vPriyotosh Das.