LIFE INSURANCE COUNCIL
PRESS MEET
ON
OVERVIEW OF INDIAN LIFE INSURANCE INDUSTRY:
TRENDS & OPPORTUNITIES
20TH 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
AUM of Life Insurers is ` 19.40 lakh Cr. as on December, 2013
Major contributor to every 5 Year Plan for Nation Building Activities.
>10,000 offices across the country – 72% in semi-urban & rural areas
*As on 31st March 2013
Indian life insurance industry has grown over the years…
3
FY99-00
FY08-09
FY10-11
FY12-13
23
24
24
25,519
34,922
No. of Players
1
22
Capital (`Cr)
5
18,253
23,662
Dec 2013
(Provisional)
No. of Branches
2,048
11,815
11,546
Employees
(in Lakh)
1.23
2.85
2.42
2.45
2.41
Individual
Agents
(in Lakh)
7.14
29.38
26.39
21.22
21.98
Source: IRDA Annual Report & Council MIS Report
10,285
10,903
…by touching the lives of people across the country
4
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
State
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
Source: IRDA Annual Report
No. of
Branches*
1051
1029
928
853
626
621
642
600
494
518
418
387
317
339
249
237
232
166
137
114
94
52
42
31
22
24
12
12
11
10
8
4
3
2
0
10,285
*As on 31st March 2013
10,903
9
No. of branches
as on
st
31 December
2013
2
10
5
7
1
3
8
6
Top 10 states in terms of no.
of branches
4
…and has made a significant contribution to the Indian
economy
5
Provide stability to
Capital Markets
• Life Insurance companies have invested approximately
`60,000 Cr. in the equity markets in 2012-13
Contribution to
Nation Building
Activities
• Investment in Central Govt. Securities and State Govt.
Securities - `8,51, 914 Cr. upto December 2013
Infrastructure
Development
• Investment in Infrastructure to the tune of `1,43,192 Cr.
• Major contributor to every 5 year plan
Employment
Generation
• Direct employment 2.41 lakh
• Employment to more than 21.98 lakh individual agents
The industry has witnessed a moderate growth in Renewal Premium
over the last few years
6
` Crore
118,816
179,831
2,87,189
3,73,341
173,129
2,87,071
4,10,455
2,91,639
165,240
126,399
113,942
107,358
2010-11
2011-12
2012-13
New Business Premium
Source: IRDA Annual Report
Renewal Premium
Total Premium
Total Revenue
4,10,189
123,000
86,269
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%)
1,94,010
(100%)
15,81,259
(100%)
17,41,175
(100%)
18,28,001
(100%)
Total
Source: IRDA Annual Report
Industry has increased its focus on Customer Centricity
Customer Grievance Redressal through Integrated Grievance
Management System (IGMS) has been successful
9
Year
2011-12
2012-13
Source: IRDA Annual Report
No. of In-force
policies
No. of
Grievances
reported
No. of
Grievances
attended
No. of
Grievances
pending
33.52 Cr.
3,09,613
3,08,331
1282
(99.59%)
(0.41%)
3,41,070
1224
(99.64%)
(0.36%)
35.87 Cr.
3,42,294
Total benefits* paid to customers by Life Insurers
10
Total Benefits Paid (` Cr.)
1,91,336
1,41,806
2010-11
1,53,133
2011-12
2012-13
* Total Benefits paid include Death claim, Maturity claim & Surrender payouts.
Source: IRDA Annual Report
Consistent improvement in Death Claims Settled by Life Insurers
- By No. of Policies
11
Claims Pending
Claims Paid
2.1%
96%
97%
13,52,790
97%
28,463
13,48,026
1.9%
2%
27,927
26,459
2010-11
2011-12
2012-13
Claims Repudiated
12,97,395
2010-11
1.8%
24,073
2011-12
1.4%
1%
20,104
19,938
2011-12
2012-13
2012-13
2010-11
Driving Growth in Life Insurance Industry in India
Indian demography is favourable to the growth of Life Insurance
13
140
127
120
Population in Cr.
74
60
100
80
30
60
40
20
0
Total
Insurable
Age in years
A mere 10%
penetration in
the increased
insurable
population has
the potential to
give additional
new business of
>Rs. 1 lakh Cr.
69
63
Insured
2000
Insurable Population
2010
2020
Life Expectancy
Insurable population is expected to grow to 75 Cr. by FY 2020
However, Household Financial Savings as a % of GDP have dropped
in recent past, resulting in shrinking share of insurance within
financial savings
14
Share of gross household financial savings within GDP has declined
10.3%
FY 11
Within household financial savings, insurance has lost some sheen...
% Share of Gross
household financial
savings
Life Insurance Funds
FY 11
7.7%
FY 12
FY 13
Gross household
financial savings as
a % of GDP
... as a result, share of life insurance within GDP has declined
2.69%
2.12%
57.4%
51.2%
19.4%
Deposits
7.5%
19.9%
FY 12
56.2%
Life Insurance
Funds as a %
of GDP*
1.79%
16.4%
FY 13
FY 11
FY 12
FY 13
Multiple actions taken will bring back growth in
the life insurance industry
15
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
Projections
16
Life insurance segment has the potential to grow 2-2.5 times its current size by
2020.
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
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.
Life Insurance sector will continue to contribute to nation
building
17
Life Insurance employment potential till FY 2020 –
5 Lakh employees
Life insurance industry contribution to Infrastructure projects –
by FY 2020
Rs. 3.5 Lakh Cr.
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.
Thank You