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Did
you know?
Foreign
investment and access to foreign capital by domestic companies has been
progressively liberalised in India.
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Overview
Indian
insurance market size is presently estimated at US$ 66-70 million.
By 2005, it is expected to grow five-fold to US$ 377 million. In
2000-01 fiscal year, total premiums stood at US$ 9933 million which is
0.41 percent of total global premiums of US$ 2443.6 billion. Total premiums
of Indian insurance industry in 2000-01 fiscal was 2.32 percent
of country's GDP. Per capita premium stood at US$ 9.9. Indian insurance
market potential could be gauged by the fact that currently about
40-42 million people have been brought under insurance whereas the potential
is estimated at 200-250 million. Insurance companies could tap only 5
percent of Indian middle class segment.
In India, insurance is generally considered as a tax-saving device instead
of its other implied long term financial benefits. Indian people are
prone to investing in properties and gold followed by bank deposits. They
selectively invest in shares also but the percentage is very small--4-5%.
Even to this day, Life Insurance Corporation of India dominates Indian
insurance sector. With the entry of private sector players backed
by foreign expertise, Indian insurance market has become more vibrant.
Indian federal government considers insurance as one of major sources
of funds for infrastructure development. The government has identified
the following as major thrust areas:
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Timely
and reliable statistical data and information about policies and markets
to instill a degree of credibility;
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A
code of good practices based on international best practices
to raise the standard of Indian insurance sector;
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Strengthening
of supervision and regulation;
-
Market
participation in decision-making;
-
High
solvency standard' and Developing alternative channels.
Till
end of 1999-2000 fiscal year, two state-run insurance companies, namely,
Life Insurance Corporation (LIC) and General Insurance Corporation (GIC)
were the monopoly insurance (both life and non-life) providers in
India. Under GIC there were four subsidiaries -- National Insurance Company
Ltd, Oriental Insurance Company Ltd, New India Assurance Company Ltd,
United India Assurance Company Ltd. In fiscal 2000-01, the Indian federal
government lifted all entry restrictions for private sector investors.
Foreign investment insurance market was also allowed with 26 percent cap.
GIC
was converted into India's national reinsurer from December,
2000 and all the subsidiaries working under the GIC umbrella were restructured
as independent insurance companies.
Indian
Parliament has cleared a Bill on July 30,2002 delinking the four subsidiaries
from GIC. A separate Bill has been approved by Parliament to allow brokers, cooperatives and intermediaries in the sector.
Currently
insurance companies- both private and public-- has to cede 20 percent
of its reinsurance with GIC.
GIC
is planning to increase re-insurance premium by 20 percent which works
out at Rs 3000 cr.
GIC
is actively considering entry into overseas markets including West Asia,
South-east Asia and SAARC region.
To
regulate, promote and ensure orderly growth of the insurance business
and re-insurance business, a regulatory authority -- Insurance
Regulatory and Development Authority (IRDA) -- was set up under IRDA
Act, 1999. IRDA is composed of a chairman, five wholetime members and
four part-time members. There are four types of Indian insurance business
: Life, Fire, Marine, and Miscellaneous. In life insurance more
than 80 percent business relates to Endowment Assurance (Participating)
and Money Back (participating). Motor Vehicles insurance is compulsory
in India.
Indian insurance industry has Ombudsmen
in 12 cities empowered to reduce customers grievances in respect of insurance
contracts on personal lives where the insured amount is less than Rs 20
lakhs.
In the first
year of insurance market liberalisation (April 2-December 31, 2001) as
much as 16 private sector companies including joint ventures with
leading foreign insurance companies have entered the Indian insurance
sector. Of this, 10 were under the life insurance category and six under
general insurance. Since then, till June, 2002 two more joined the life
insurance sector. Thus in all there are 18 players
(12 life insurance and 6 general insurance) in the Indian insurance
industry till date.
Upto
end 2001, 16 insurance players had made a total investment of Rs 1910.95
crore including investments made from policyholders' funds. In life
category Allianz Bajaj topped the list with Rs 147.01 crore closely followed
by Om Kotak's Rs 146.25 crore and ICICI Prudential's Rs 134.64 crore.
In non-life segment, Tata AIG General led the list with Rs 161.68 crore
followed by Reliance General's Rs 121.86 crore and Royal Sundaram's Rs
111.86 crore.
Foreign
equity in broking firms is capped at 26 percent.
Brokers have been divided into four categories: Direct general insurance
broker (category I); Direct life insurance broker (category II); Reinsurance
broker (category III); and Composite broker ( category IV).
Categorywise networth for insurance brokers is : Rs 25 lakhs
for category I and category II; Rs 2 crore for category III and Rs 3 crore
for category IV.
For insurance consultants, networth is Rs 10 lakhs.
In India, motor vehicle insurance premium is 2.5 percent of the
vehicle cost against international standard of 6 percent.
The
Indian insurance regulatory authorities has asked the insurance companies
operating in the country to take into account the investment income earned
on the funds earmarked for outstanding claims, unreported claims and unexpired
risks while calculating the underwriting margins. These funds are
called technical funds belonging to the policyholders. Hence the income
earned on such funds should be considered as contributions from the policyholders
of the concerned insurance companies.
| Insurance
Regulatory and Development Authority (IRDA) |
Pasisrama Bhavanam
5-9-58/B Basheer Bagh
Hyderabad - 500 004
Phone: +91 (040) 6820964
Fax: +91 (040) 6823334
Life
Insurance Corporation of India
Yogakshema
Jeevan Bima Marg
Post Box No: 19953
Mumbai - 400 021
Phone: +91 (022) 2021383/2022151
Fax: +91 (022) 2824386
SBI Life Insurance Co. Ltd
2nd Floor, APEEJAY House
3, Dinsha Vachha Road
Churchgate
Mumbai – 400 020
Phone: +91 (022) 2351000-07
Fax: +91 (022) 2351009
Allianz Bajaj Life Insurance
Co. Ltd.
GE Plaza
Airport Road
Yerawada
Pune - 411 006
Phone: +91 (020) 4026666
Fax: +91 (202) 4026667
Om Kotak Mahindra Life Insurance Co. Ltd.
Peninsula Chambers, Peninsula Corporate Park
6th floor, Ganpatrao Kadam Marg, Lower Parel
Mumbai - 400 013
Phone: +91 (022) 56635000
Fax: +91 (022) 56635111
ICICI Prudential Life Insurance
Co. Ltd.
ICICI Prulife Towers
1089, Appasaheb Marathe Marg
Prabhadevi
Mumbai – 400 025
Phone: +91 (022) 462 1600
Fax: +91 (022) 437 6638
HDFC Standard Life Insurance Co. Ltd
5th Floor, IL&FS Financial Centre, Plot C-22
“G” Block, Bandra-Kurla Complex
Bandra (E)
Mumbai – 400 051
Phone: +91 (022) 6533666
Fax: +91 (022) 6533661
Birla Sunlife Insurance Co. Ltd
1st Floor, Ahura Centre, ‘B’ Wing
Mahakali Caves Road
Andheri (E)
Mumbai - 400 093
Phone: +91 (022) 6928300
Fax: +91 (022) 6928301
ING Vysya Life Insurance Co. Ltd
14, Sankey Road
Sadashivanag
Bangalore – 560 006
Phone: +91 (080) 3318300-312
Fax: +91 (080) 3318305
Tata-AIG Life Insurance Co.Ltd
4th Floor, Ahura Centre
82 Mahakali Caves Road
Andheri (E)
Mumbai - 400 093
Phone: +91 (022) 6930000
Fax: +91 (022) 6938265
Metlife India Insurance Co. Pvt. Ltd
Brigade Seshamahal, No. 5
Vani Vilas Road
Basavanagudi
Bangalore – 560 004
Phone: +91 (080) 6678617/18
Fax: +91 (080) 652 1970
AMP Sanmar Assurance Co. Ltd
9, Cathedral Road
Chennai - 600 086
Phone: +91 (044) 811 8411
Fax: +91 (044) 811 7669
Dabur CGU Life Insurance Co. Pvt. Ltd
5th Floor, JMD Regent Square
Mehrauli Road
Gurgaon - 122 001
Phone: +91 (0124) 680 4141
Fax: +91 (0124) 680 4151
Max New York Life Insurance Co. Ltd
11th Floor, DLF Square
Jacaranda Marg
DLF City, Phase-II
Gurgaon - 122 002
Phone: +91 (0124) 6561717
Fax: +91 (0124) 6561764
National
Insurance Co. Ltd
3 Middleton Street
Kolkata - 700 071
Phone: +91 (033) 2472130/2401634
Fax: +91 (033) 2402369/2408744
New Indian Assurance Co. Ltd
New Indian assurance Bldg.
87 MG Road, Fort
Mumbai - 400 001
Phone: +91 (022) 2674617-22
Fax: +91 (022) 2672286
Oriental Insurance Co. Ltd
A-25/27, Asaf Ali Rd
New Delhi - 110 002
Phone: +91 (011) 3279221-25
Fax: +91 (011) 3287192/7193
United India Insurance Co.
Ltd
24 Whites Road
Chennai - 600 014
Phone: +91 (044) 8520161
Fax: +91 (044) 8524227
Tata AIG General Insurance
Co. Ltd
Ahura Centre
4th Floor, 82 Mahakali Caves Road
Andheri (East)
Mumbai - 400 093
Phone: +91 (022) 6930000
Fax: +91 (022) 8305888
Bajaj Allianz General
Insurance Co. Ltd
GE Plaza
Airport Road, Yerawada
Pune - 411 006
Phone: +91 (020) 4026666
Fax: +91 (020) 4026667
IFFCO Tokio General Insurance Co. Ltd
Palm Court, 4th Floor, Plot No. 20/4
Sukhrali, Chowk, Mehrauli-Gurgaon Road
Gurgaon - 122 001
Phone: +91 (0124) 6220889/6220893
Fax: +91 (0124) 6220887
ICICI Lombard General Insurance Co. Ltd
ICICI Towers, Bandra-Kurla Complex
Bandra (East)
Mumbai - 400 051
Phone: +91 (022) 6531414
Fax: +91 (022) 6531111
Reliance General Insurance Co. Ltd
909, 9th Floor, Regent Chambers
Nariman Point
Mumbai - 400 021
Phone: +91 (022) 2886587/2888195
Fax: +91 (022) 2819558
Royal Sundaram Alliance Insurance Co. Ltd
46 Whites Road
Royapetah
Chennai - 600 014
Phone: +91 (044) 8517387
Fax: +91 (044) 6517384
General
Insurance Corporation of India
Suraksha
170 J Tata Road
Churchgate
Mumbai - 400 020
Phone: +91 (022) 2833046
Telex: +91 (011) 83833
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