Explore the growth and impact of the Indian life insurance industry, covering key statistics, such as the number of players, capital deployed, branches, and employees. Learn about the industry's expansion into rural areas and its contribution to inclusive growth through mandatory rural business requirements. Discover the significance of life insurance in India and its notable achievements in reaching diverse populations across the country.
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Presentation Transcript
Media meet on Looking ahead in Life Insurance 19 SEPTEMBER 2013 MUMBAI
Overview of Indian Life Insurance Industry The largest retail financial service business with around 36 crore in-force policies [Largest in the world] 1 2 High capital intensive industry `25,519 crore deployed 3 `6,046 crore FDI by international joint venture partners 4 AUM of Life Insurers is `17.41 lakh crore 5 Major contributor to every 5 Year Plan 6 >10,000 offices across the country 72% in semi-urban & rural areas Population of 200/203 countries in the world is less than the total number of Indian life insurance customers 7 *As on 31st March 2013 2 Looking ahead in Life insurance
Indian life insurance industry has grown over the years June 2013 (Provisional) FY12-13 (Provisional) FY99-00 FY08-09 FY10-11 Parameters No. of Players 24 24 23 1 22 Capital (`Cr) 23,662 18,253 5 25,519 34,074 No. of Branches 11,815 2,048 10,253 11,546 10,587 Employees (in Lakh) 2.85 2.42 2.45 2.41 1.23 Individual Agents (in Lakh) 26.39 7.14 29.38 21.25 21.31 Source: IRDA Annual Report &Council MIS Report 3 Looking ahead in Life insurance
by touching the lives of people across the country Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 No. of Branches* 1149 1123 1056 State 10,587 Maharasthra Uttar Pradesh Andhra Pradesh Tamil Nadu Gujarat Kerala West Bengal Karnataka Rajasthan Madhya Pradesh Punjab Bihar Haryana Orissa Delhi Assam Jharkhand Chhattisgarh Uttrakhand Himachal Pradesh Jammu & Kashmir Goa Chandigarh Tripura Meghalaya Puducherry Arunachal Pradesh Sikkim Nagaland Manipur Mizoram Andaman & Nicobar Islands Dadra & Nagra Haveli Daman & Diu Lakshadweep Total 875 724 689 687 628 575 528 516 398 383 345 267 242 238 162 141 126 97 50 37 30 21 19 13 12 11 No. of branches as on 30th June 2013 9 2 10 5 7 1 3 8 9 8 4 3 1 0 6 4 11,167 Top 10 states in terms of no. of branches *As on 31st March 2012 4 Looking ahead in Life insurance
The industry has expanded rural footprint for inclusive growth Companies are statutorily required to do rural business and cover lives from social sector - rural, un-organized and socially underprivileged from their first year of operation Companies have to mandatorily sell 18% of new policies in rural areas (1.14 crore policies in 2012-13) Cover 25,000 lives in social sector every year (1.84 crore policies in 2012-13) 72% of the total 10,253 branches of insurance companies are in semi-urban & rural areas No such obligations for other products under financial services Source: IRDA, Life Insurance Council, Data for FY 2012-13 5 Looking ahead in Life insurance
Assets Under Management (AUM) of life insurers has also witnessed steady growth Category of Investments 2000-01 ` Cr. (%) 2011-12 ` Cr . (%) 2012-13 ` Cr. (%) Traditional Products 4,68,082 (38.64%) 5,11,248 (36.55%) Central Govt. Securities 47,513 (24.48%) 52,524 (27.07%) 2,14,515 (17.71%) 2,66,003 (19.02%) State Govt. Securities 97,320 (8.03%) 1,16,645 (8.34%) Infrastructure Investments 24,887 (12.80%) 3,85,107 (31.79%) 4,45,611 (31.86%) Approved Investments 50,502 (26.03%) 59,161 (4.23%) Other than Approved Investments 18,584 (9.58%) 46,262 (3.82%) ULIP 3,46,340 (93.61%)3,25,281 (94.97%) Approved Investments - - 17,226 (5.03%) Other Investments - - 23,632 (6.39%) Total 1,94,010 (100%) 15,81,259 (100%) 17,41,175 (100%) Investments have been targeted towards established funds that helped in infrastructure growth of the country Source: IRDA Annual Report Looking ahead in Life Insurance 8
Life Insurance industry has continued to contribute significantly towards the economic growth of the country ` Crore 7,25,000 1,32,000 16,000 3,500 750 180 1956-57 to 1960-61 1966-67 to 1970-71 1976-77 to 1980-81 1986-87 to 1990-91 1996-97 to 2000-01 2006-07 to 2010-11 Life insurance sector has provided long-term funds for infrastructure development through five-year plan 9 Looking ahead in Life insurance
Life Insurance - one of the most preferred financial savings instrument % share of Life Insurance within net household Details FY09-10 FY10-11 FY11-12 Total Savings as a % of GDP 33.7 34.0 30.8 Of which, Net Household Financial Savings as % of Total Savings 35.6 30.6 26.0 Out of Net Household Financial Savings Fixed Deposits 51.7 59.4 64.1 Life Insurance 26.2 22.3 23.1 Provident & Pension Funds 13.1 14.0 15.6 Shares & Mutual Funds 4.5 0.2 -0.7 Others 4.5 4.1 -2.1 Total 100 100 100 * Life Insurance Council projections Looking ahead in Life Insurance 10
Indian Life Insurance market has huge growth potential when compared with other countries Size of the Market (US $ Billion) Life Insurance Penetration (Premium/GDP) % Life Insurance Density (Premium per capita US $) Asia: 958 World: 2,621 Asia: 4.1% World: 3.7% Asia: 230 World: 373 Note: * FY13 in case of India; Source: Swiss Re World Insurance in 2012 By FY 2020 life insurance penetration expected to grow to 5% of GDP; industry size expected to touch 700 billion US $. Council is of the view that the industry size has the potential to touch 1 Trillion US $ by 2020. Looking ahead in Life Insurance 11
Indian demography is favourable to the growth of Life Insurance Age in years 74 69 63 2000 2010 2020 Insurable Population Life Expectancy Insurable population is expected to grow to 75cr. by FY 2020 Looking ahead in Life Insurance 12
Customer Centricity Insurance Awareness Policy Issuance Service to Customers Claim Settlement Looking ahead in Life Insurance 14
Ombudsman A grievance redressal mechanism established There are 11 ombudsman Centre's in India which provides quick disposal of the grievances of the policy-holders at nominal cost. Policy document should clearly mention inter-alia the grievance redressal mechanism, name and address of grievance officer, ombudsman to whom complaint can be registered. Total No. of Complaints Complaints disposed Complaints pending Year % of disposal % of pending 2011-12 28,361 21,185 75% 7176 25% 2012-13 18,557 14,673 79% 3884 21% Source: IRDA Annual Report Looking ahead in Life Insurance 15
Customer Grievance Redressal through Integrated Grievance Management System (IGMS) has been successful No. of In-force policies No. of Grievances reported No. of Grievances attended No. of Grievances pending Year 3,08,331 1282 2011-12 33.52 Cr. 3,09,613 (99.59%) (0.41%) 3,41,070 1224 2012-13 35.87 Cr. 3,42,294 (99.64%) (0.36%) Source: IRDA Annual Report Looking ahead in Life Insurance 16
Total benefits* paid to customers by life insurers ` Crore Total Benefits Paid (` Cr.) * Total Benefits paid include Death claim, Maturity claim & Surrender payouts. Source: IRDA Annual Report Looking ahead in Life Insurance 18
Customer Centric initiatives taken by life insurers Customer Education Audio visuals, contributory articles, newsletters, consumer awareness workshops, direct service for customers 1 Need Based Pre-Issuance verification, Post-Issuance Welcome calling, Communication calendar for ongoing communication on policy related information 2 Providing Clear Information Policy information portal, Benefit illustration, Key feature document, Simplified Policy Kit 3 Grievance redressal Defined service timelines, self-service modes to customers for ease and convenience, which include its website, interactive voice response system (IVRS) in multiple languages, website for mobile phones, SMS-based services 4 Claims Processing Claim guarantee, 24x7 Claim Care centre, dedicated claims officer, interest payment on delay in claims payment 5 Looking ahead in Life Insurance 21
Steps taken to tackle mis-selling Regulatory Initiatives Standard Proposal Form has been made mandatory for each individual life proposed w.e.f. 1st April 2014 Before making any recommendation, product suitability matrix to be measured Benefit illustration compulsory for all products Life Insurers Initiatives Welcome calling before issuing the policy Mystery shopping to check selling practices Regular customer satisfaction survey on various aspects of pre and post sales processes Looking ahead in Life Insurance 22
Multiple actions will bring back growth in the life insurance industry Pioneers in the globe to grant license to e-repositories 5 Repositories authorized to open e-Insurance Accounts. Increase in FDI in Insurance sector to 49% Enhancement of dollar inflows in the country immediately and in future on a recurring basis Arrival of domain capital in the area of products, technology and risk management techniques to ensure steady growth of the industry Flowing of up to 10 billion US $ in the country 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 - One lakh CSCs each serving a cluster of 6-7 villages, covering ~6.5 lakh villages across India Improve market conduct and raise trust levels with customer Awareness building initiatives Increase grievance cells and customer contact centres Looking ahead in Life Insurance 24
Projections: 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 1 The Penetration level of Life insurance industry is expected to grow from 3.2% to 5% by year 2020 2 3 Expected CAGR of Life Insurance industry will be 12-15% in the next 3-5 years Looking ahead in Life Insurance 26
Life Insurance sector will continue to contribute to nation building Life Insurance employment potential till FY 2020 5 Lakh employees 1 Life insurance industry contribution to Infrastructure projects Rs. 3.5 Lakh cr. by FY 2020 2 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. 3 Looking ahead in Life Insurance 27
