IndiaOneStop.com

India's Insurance Sector

Did you know?

Foreign investment and access to foreign capital by domestic companies has been progressively liberalised in India.

                                                                                                                                                   
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:

• Timely and reliable statistical data and information about policies and markets to instill a degree of credibility;

• A code of good practices based on international best practices  to raise the standard of Indian insurance sector;

• 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.

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
2^nd 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
5^th 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
1^st 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
4^th 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
5^th 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
11^th 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
4^th 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, 4^th 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, 9^th 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