Dissertation Project Report on a Comparative Analysis

8/14/2019 Dissertation Project Report on a Comparative Analysis

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work on this project. I am also grateful, for her support and guidance throughoutthisproject with valuable information and giving me a better insight of the things,withoutwhich the successful culmination of this project would not have been possible. Notonly didshe inspired me throughout the progress of the project, but, also motivated me toget an

insight into the field of my work.I would also like to extent my immense gratitude to Prof. A. K. Agrawal, andrespectedDean Prof. Deepak Barman, Faculty of Management Studies, BHU who allowed me tochoose the topic for my Dissertation.Shashank Tripathi3CHAPTER 1INTRODUCTION41. CONCEPT OF INSURANCE :

Life has alwa ys been an uncertain thing. To be secure against unpleasantpossibilities,alwa ys requires the utmost resourcefulness and foresight on the part of man. Topra yor to pay for protection is the spirit of the humanity. Man has bee n accustomedtopray God for protection and security from time immemorial. In modern daysInsurance Companies want him to pay for protection and security. The insurance mansays "God helps those who help themselves"; probably he is correct.Too many people in this countr y are not in employme nt; and work for too many nolonger gua ra ntees income security. Several millions are part-time, self employedandlow-earning workers living under pitiable circumstances where there is no security

cover against risk. Further the inherent changing employment risks, the prospectofcontinual change in the work place with its attendant threats of unemployment andlow pa y especially after the ad option of New Economic Polic y and the imminentlifecyc le r isks - a new source of insecurity which inc ludes the cha nging demandsoffamily life, sepa ration, divorce and elderly dependents are tormenting thesociety.Risk has become central to one's life. It is within this background life insurancepolic yhas been introduced by the insurance companies covering risks at various levels.Life

insurance coverage is aga inst disableme nt or in the event of death of theinsured,economic support for the dependents. It is a measure of social security tolivelihoodfor the insured or dependents. This is to make the right to life meaningful, worthliving and right to livelihood a me ans for sustenance. Therefore, it goes withoutsaying that an appropriate life insurance policy within the paying capacity andmeansof the insured to pay premium is one of the social security measures envisagedunderthe India n Constitution. Hence, right to social security, protection of the


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family,economic empowerment to the poor and disadvantaged are integral part of the righttolife and dignity of the person gua ranteed in the constitu tion.Man finds his security in income (money) which enables him to buy food, clothing,shelter and other necessities of life. A person has to earn income not only forhim selfbut also for his dependents, viz., wife and children. He has to provide le gally

for hisfamily needs, and so he has to keep aside something regularly for a rainy day andforhis old age. This fundamental need for security for self and depende nts proved tobethe mother of invention of the institution of life insurance.5What is Insurance:The business of insurance is related to the protection of the economic values ofassets. Everyasset has a value. T he asset would have been created through the efforts of the

owner. Theasset is valuable to the owner, because he expects to get some benefit from it.The benefitma y be an income or some thing else. It is a benefit be cause it meets some ofhis needs. In thecase of a factory or a cow, the product generated by is sold and incomegenerated. In the caseof a motor car, it provides comfort and convenienc e in transportation. There isno directincome.Every a sset is expec ted to last for a certain period of time during which itwill perform. Afterthat, the benefit may not be available. There is a life-time for a machine in a

factory or a cowor a motor car. None of them will la st for ever. The owner is aware of this andhe can somanage his affairs that by the end of that period or life-time, a substitute is made ava ilable.Thus, he makes sure that the value or income is not lost. However, the asset ma yget lostearlier. An accident or some other unfortunate event may destroy it or make itnon-functional.In that case, the owner and those deriving benefits from there, would be deprivedof thebenefit and the planned substitute would not have been ready. There is an adverseor

unpleasant situation. Insurance is a mechanism that helps to reduce the effect ofsuch adversesituations.Insurance, in law and economics, is a form of risk management primarily use d tohedgeagainst the risk of a contingent loss. Insurance is de fined as the equitabletransfer of the riskof a potential loss, fro m one entity to another, in exc hange for a premium.Insurer, ineconomics, is the company that sells the insuranc e. Insurance rate is a factorused to


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determine the amou nt, called the premium, to be charged for a certain amount ofinsurancecoverage. Risk management, the practice of appraising and controlling risk, hasevolved as adiscrete field of study and practice.Origin of InsurancePRACTICE OF INSURANCE IN INDIA: 1818-1956It is claimed that insurance was practiced in India even in Vedic times in one

form or theother. The Sanskrit term "Yogakshema " in the Rigveda me ant some kind ofinsurance, whichwas practiced by the Aryans in India nearly 3000 years ago. During the Mughalperiodinsuranc e took firm roots. There are eve n references to the cover a gainst warrisks. Lossesdue to the passage of ro ya l troops through farms were compensated b y the Sta teas a gestureof goodwill.The ye ar 1818 is an epoch -making year in the histo ry of our country. The firstLife InsuranceCompany on India soil appe ars to have been started in this ye ar. A group of

Europeanspioneered the establishment of the Oriental Life Insurance Society to affordrelief to thedistressed relatives of European. The venture was not quite successful but thecompany wasreformed in 1829.The renewed Company also got into trouble in 1833 when Agency Houseof Calcutta, partners of the same, fell.6Prince Dwarkanath Tagore was the only solvent partner & the sole responsibilityfor carryingon the institution developed on him. Meanwhile, e arly in Janury1834, the

Government madeup its mind to establish a Public Insurance Company & a Committee was set up forthispurpose .A number of foreign Insurance Companies then operating in the countryviewed thismove with alarm. The y set up Committees of the ir own enquire into theirindividual affairs.Dwarkanath Tagore, too, had a Committee appointed to look into the affairs of theOriental.As a result, another company was born out of the previous one in the name of "NewOrientalCompany"In the reorganization of the "Oriental" in the year 1834, two other gentlemen were

associated.One was Ramta nu Lahiri and the other Rustamjee Cowasjee. The latter was anotherprominent figure of the business world. Rustamjee entered insurance business in1828, hewas already known to the community and the Government as a we althy Parsi merchant.Rustamjee's connection with insurance also started with "Laudable Societies", buthe waslater on associated with Companies like "Sun Life Office (1834) ", New Orienta l(1835),Universal Life (1835) , New Laudable (1840) , and Indian Laud able (1841) .He was


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also on the Committee of the Union Insurance Company which was formed b y a groupoffive persons. This Company was issuing policies covering river-risks only. He wasintimatelyconnected with the Committee of Insurance Offices in Ca lcutta. Rusta mjeeCowasjee &Dwarkanath Tagore was probably the first Indians to join in partnership businesswith the

Europeans & in the field of insurance the y were pioneers on this side of thecountry.Apart from Calcutta, several enterprising people in Bombay started in 1823 the"BombayLife" Assurance Company. The company went into liquidation soon and could notrevive. In1829, the "Madras Equitable "was formed. It fina lly ceased to function in 1921due tofinancial difficulties after the First World War.The effort to set up a public insurance company at the government level also wentin vain,mainly from objection of private operators. Majority of the early attempts to forminsurance

offices were in the province of Bengal. This was due to its political & economicimportanceat that time.The contribution of Raja Ram Mohan Roy, one of the greatest social reformers ofIndia, tothe development of life insurance is very great. He was deeply concerned about thesad plightof de sperate widows and helple ss orphans.OVERSEAS INSURERSInitially, when Life Offices were established in large numbers in Britain, some ofthemventured to issue sterling policies to the British residents in India. Premiumscollected here

were credited to England largely for British beneficiaries. Business seems tohave been briskand profitable and was usually under short term policie s. Insurance mortalitytables andinsufficient mortality data of Englishmen in India made the premiums heavy-heavier than athome. Insurance was denied to the "natives" even if they wa nted it- for theirlives werealways considered risky and sometimes valueless. When Indian lives were acceptedas a veryspecial case, the extras charged were still hea vier.Promine nt amongst the companies which came to India around this period was the"Med ical

Inva lid and General" incorporated in London in 1841. As more areas were annexedand the7ruling power, with vested interests in developing trade, took charge , the"Medical" extendedits area of operation, established large connections, absorbed the" Agra Life" andin 1835,took over the "New Oriental". P.M. Tate, the then manager of the "Medical", was akeenbusinessman, widely liked, influential a nd shrewd. With W.F. Ferguson, who was


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themanager of the "New Oriental" before amalgamation, he commenced very activeoperationswhich were temporarily affected by the 1857 "Mutiny".The Universal Life Insurance Company established in England in 1836 opened itsIndianBranch in 1840 and enjoyed a long period of successful operations until it wastaken over b y

the "North British" in May 1901. Insurance exceeding Rs. 10 crores were issued inIndiaduring this period. Another English Company ope rating in India at that time wasthe Colonia lLife Assurance Company. It was established in 1846 under the auspices of theStandard LifeAssurance Company. The original prospectus of this company declared its purpose as"extending to the Colonies of Great Britain and to Indian the full benefit of LifeAssurance".It appointed agents with local boards whic h were first established on Calcutta,Bombay,Madras and Colombo. Later on this company was taken over by the "Standard Life"and

made valuable contribution to investigations into the mortality experience ofassured lives inIndia. Eventually it ceased its operations in India in 1938.It is difficult to say which was the oldest Life Policy in India, but the oldestknown appears tobe one sold by the Royal Insurance (which commenced business in India in 1845) onthe lifewas to Cursetjee Furdonjee on 6th January 1848, no reference to any earlier policy beingavailable. In the year 1853, the Liver pool and London and Globe Insurance Companyestablished in England in 1836, commenced business in India. Sir Charles Forbeswas its first

agent, succeeded by M/s. Forbes, Forbes and Campbell. It a ccepted only Europeanlive s andcommenced insuring Indian lives only after 1929.This too, was mainly to obligegood agentsof the Company for classes other than life business. The North British andMercantile was thenext company to appear on the Indian scene.It started fire insurance business in the year 1861 and life business 1864. TheLondonAssurance started life business in 1864, limited principally to European lives andcloseddown its life department when the Life Assurance Companies Act 1912 madesubmission of

returns compulsory.On 3rd December, 1870, seven earnest men of Bomba y with just se ven rupees forinitia lexpenses gave shape to a plan of offering insurance to the public without therisk of ruin andthe "Bombay Mutual Life Assurance Society" came into existence. This was followedby theOrie ntal Life Assurance Company in1874, the Bharat in 1896 and the Empire ofIndia in1897.THE BIRTH OF INDIAN INSURERS


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With the advent of the 20th century, the glorious renaissanc e of swadeshi daysdawned. Atthe same time, well- to do Indians realized the potentiality of Indian Insurancebusiness. TheSwadeshi movement of 1905-1907 gave rise to more insurance companies. The UnitedIndiain Madras, National Indian and Nationa l Insurance in Calcutta and the Co-operative

Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operativeInsuranceCompany took its birth in one of the rooms of the Jorasanko House of the greatpoetRabindranath Tagore, in Calcutta. The Indian Mercantile (1907) was started inBombay,8General Assurance (1908) at Ajmer and the Swadeshi Life (Later Bombay Life) inBombayin 1908.The end of the First World War (1914-18) witnessed a n influx of insurancecompanies in

India. Famous Indian business houses started new insurance companies. IndustrialandPrudential Bombay, Western India, Satara, were floated before the war, but by1919,companies like Jupiter General, New India, Vulcan Insurance Company etc. cameinto being.Pandit K.Santhanam with blessing of Lala Lajpat Rai and Pa ndit Motilal Nehrustarted LaxmiInsurance Co. Similarly, Andhra Insurance was started in M asulipatnam, with theinitiative ofstalwarts like Dr. Pattabhi Sitaramaiah. From political platforms also, nationalleaderssupported this cause. It is duty to every Indian to support only Indian

Insurance. The keynoteof our Swaraj is in placing a ll our insurance with our Indian companies", saidMahatmaGandhi in his m essage. "I hope Indians will realize the importance of patriotismonly throughIndian insurance institution", stated Pandit Jawaharlal Nehru. Thus, the cause ofIndianinsuranc e became a national issue. The pursuit to boost Indian insurancerepresented acrusade to extricate the Indian economy from foreign domination.PROGRESS IN INSURANCE BUSINESSThe growth of Life Insurance in concrete terms could be said to being during thefirst two

decades of twentieth century when most of the major companies were founded. Theygrew interms of rise in the number of companies, in terms of number of polic ies and sumassured aswell as total life fund. Indian Insurance Year Book, published for the first timein 1914, givesthe figure of the total business-in -force as 22.44 crore whic h grew to Rs. 298crore in 1938.In 1914, there were only 44companies tra nsacting insuranc e business in India,and during thenext 25 years their number rose to 176. The total progress on all the primary


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heads, viz. lifefund (Rs. 50.50 crore), premium income (Rs. 10.50 crore) and new business (Rs.43.30 crore)indicate that Indian Insurance Business had been ma king a definite headway duringthisyears. The inter-war -years thus saw rapid growth life insurance in India.The promotion of new life insurance companies continued to be almost a craze andinsurance

companies mushroomed. In this period, 176 insurance companies were formed and manyofthem failed. Thus unhealthy growth was harmful to the interest of the polic yholde rs andinsuranc e business in India. Feeling concerned about it, the All India LifeAssurance Offices'Association urged upon the Governme nt in 1932 to undertake the insurancelegislation to(a) Compulsorily register all Life Insurance companies.(b) Secure a deposit of Rs.2 lakh from all Life Insurance companies.(c) Compe l foreign companies doing business in India to keep sufficient funds in

India securities to meet their liabilities under all polic ie s issue d in India.9INSURANCE ACT, 1938The Insurance Act, 1938, was the first comprehensive legislation gove rning notonly life butalso non- life bra nche s of insurance to provide strict state control overinsurance business. Insub- sections to dealt with provide nt companies, mutual offices a nd co-operativesocieties aswell.The silent features of the Act were as follows:

(A) Constitution of a Department of Insurance under a superintendent ve sted withwide powers of supervision and control over all kinds of insurance companie s.(B) Regulation for the compulsory registration of insurance companies and forfilingof returns of investme nt and financ ia l conditions.(C) Provisions for deposit, to prevent insurers of inadequ ate financial resourcesofspe culative concerns for commencing business.(D) Provisions that 55% of the net life fund of an Indian or non- Indian insurershould

invested in Indian Government and approved securities with at least 25% in IndianGovernment Rupee securities.. All other companie s, i.e., foreign companies mustinvest 100% of their Indian liabilitie s in Indian Government and approvedsecurities,with at least 33.3% Indian Government securities.(E) Prohibition of rebating, restriction of commission, lice nsing of agents etc.Maximum rates of commission were fixed at 40% of the first premiums and 5% of therenewal premium in respect of life assurance business. The agent must be licensed,to


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improve the status of the profession.(F) Periodical valuation of Indian Insura nce business of foreign companies andthebusiness of Indian companies.(G) Provision for polic yholders' directors, making it possible for the representatives of

policyholders to be on the Board of directors.(H) Standardization of policy conditions required all companies to file standardformsand tables of premium approved by an Actuary. Under this requirement, the initia ldeposit for life insurance business was raised from Rs. 25000 in Governmentsecuritie s to Rs. 50000 in cash approved securities, which was subsequently to beraised by installments to Rs. 2 lakh within a specified time limit.10GROWTH OF LIFE BUSINESS IN INDIA: 1914-1948Sr1914 1930 1940 1945 1948

no1No of insurers 44 68 195 215 209200189(a) India n 44 68 179(91.79)(93.02)(90.43)(b) Non-India n - - 16 15 20Total No. of2-

748997 1628381 2714000 3016000policies In force137196323760002791000(a) India n - 513925(68.61)(84.25)(87.55)(90.15)(b) Non-India n - 220703 181247 261000 234000(c) India n outsideIndia - 14369 75171 77000 202000

Total business in3force 22.44 258.42 304.03 573.07 712.76225.51459.43566.38(a) India n (Rs. Crore) 22.44 84.89(32.85)(74.17)(80.17)(79.46)


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(b) Non-India n - 69.76 60.12 91.85 101.08(c) India n outsideIndia - 3.77 18.4 21.79 45.3Total life funds4(Rs. Crore) 6.36 20.53 62.41 107.4 150.39Note : Figures in brackets show percentage of the total.11

NationalizationTHE LIFE INSURANCE CORPORATION OF INDIA: 1956This was the first step taken towards the nationalization of life insurancebusiness in India.On 20th January, 1956 all life insurance companies were taken over by 43 nominatedcustodians. The custodians were experienced senior executives of private insurancecompanies, reporting directly to the Finance Ministry. From the word go, thecomplex task ofrunning the industr y on a permanent basis and c ontinuing the services to polic yholderswithout interruption were their major concerns. The actual work of integration hadto await

le gislation. The custodians managed the insurance companie s till 1-09-1956, whenLifeInsurance Corpora tion was established under the genera l direction and control ofthe Ministryof Finance.The Ordinance provide d for the transfer of the control of 154 Indian insurers, 16non Indianinsurers and 75 provident societies. These arrangements were designed to ensurethat noinconvenience whatsoever was caused to the policy holders. With the Governmenttake overthe ma nagement aimed towards the evolution of a common uniform premium rate,policy

conditions and service and working procedures and above all to help promote teamspirit.The corporation, a body corporate shall consist of not more than 15 membersappointed b ythe Central Government, one of them being appointe d by the government aschairman.The capital of the corporation was at Rs 5 crore provided by the ce ntralgovernment.INSURANCE SECTOR REFORMSIn 1993, Malhotra Committee, headed by former Finance Secretary and RBI GovernorR.N.Malhotra was formed to evaluate the Indian Insurance industry and re commended itsfuture

direction.The Malhotra committee was set up with the objective of complementing the reformsinitiated in the financial sector.The reforms were aimed at "creating a more efficient a nd c ompetitive financ ialsystemsuitable for the requirements of the economy keeping in mind the structural changes currentlyunderway and recognizing that insurance is an important part of the over allfinancial systemwhere it was necessary to address the need for similar reforms...".In 1994, the committee submitted the report and some of the key recommendations


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included:(1) STRUCTUREGovernment stake in the Insurance Companies to be brought down to 50%.Government should take over the holdings of GIC and its subsidiaries so that thesesubsidiaries can act as independent corporations.All the insurance companies should be given greater freedom to operate

12(2) COMPETETIONPrivate Companies with minimum paid up capital of Rs.1 bn should be allowed toenter the industry.No Company should deal in both Life and General Insurance through a single entr y.Foreign Companies may be allowed to enter the industry in collaboration with thedomestic companies.Postal Life Insurance should be allowed to operate in the rural market.

Only one State Leve l Life Insurance Company should be allowed to operate in eachstate.(3) REGULATORY BODYThe Insurance Act should be cha ngedAn Insurance Regulatory Body should be set up.Controller of Insurance (Currently a part from the Fina nce Ministry)should bemadeindependent

(4) INVESMENTSMandatory Investments of LIC Life Fund in government securities to be reduced from75% to 50%.GIC and its subsidiaries are not to hold more than 5% in any company (Therecurrentholdings to be brought down to this leve l over a period of time).(5) CUSTOMER SERVICELIC should pay interest on d elays on payments beyond 30 days.Insurance Companies must be encouraged to set up unit linked pension plans

Computerization of operations and updating of technology to be carried out in theinsurance industry.The committee emphasized that in order to improve the customer service andincrease thecoverage of insurance industry should opened up to competition. But at the sametime, thecommittee felt the need to exercise caution as any failure on the part of newplayers couldruin the public confidence in the industr y.Hence, it was decided to allow competition in a limited way by stipulating the


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overseas offic es by sharing the reinsurance risks picked up by the GIC. A recentproposal ha s been put forward to increase foreign direct investment to 49percent.In addition, global companies are pushing for the right to establish branc hofficesin India. These changes are likely to substantially increase the presence ofinternational insurers, reinsurers, and brokers in India.The IRDA Insurance Brokers Act in India 2002 permitted overseas insurance and

reinsurance brokers to enter the market, but with the same equity cap as thatgoverning the operations of foreign insurers and reinsurers. Thus, foreign brokersmust also form a joint venture with an Indian partner in order to establish anIndianbroking house.The 2002 IRDA legislation established four broker categories, one of whichbrokers must select when applying for a license:1. Category 1A : Direct General Insurance Broker2. Category 1B : Direct Life Insurance Broker3. Category 2 : Reinsurance Broker4. Category 3: Composite Broker5. Category4: Others, for example Insurance Consultants a nd RiskManagement Consultants.

Each category has different solvenc y mar gins and capital adequacy ratios, andallcategories need to carry professional indemnity insurance at different minimumlevels.In the years since market libe ralization wa s initiated, the insurance sector haswitnessed some impressive changes. The needs of insurance and reinsurancebuyers have grown; the market is introducing new products to address these needs;and the services of brokers are now seen as critic al to making informed insuranceand reinsurance decisions.OVERVIEW OF THE CURRENT INSURANCE MARKETIn the years since the IRDA Act initiated market reforms, the insurance sector hasexperie nced some remarkable cha nges.The entry of a large number of Indian a nd Foreign private companies in life

insurance business has to lead greater choice in terms of products and services.Incre ased consumer awareness of the be nefits a nd importance of insura nce andreinsurance has generated many more buyers; and new distribution channels_among them brokers, bank assurance, the Internet, and corporate agents_ haveprovided additional wa ys of getting products and services to customers.15Private insurance companies have to date written a small percentage of businessinthis secto r during the last three years, but they have ushered in a competitiveenvironment that has accelerated market growth.State owned insurers still write the bulk of insurance business, and they have thenet worth required to underwrite large corporate risks without depending almost

entirely on reinsurance support. However, their focus on re structuring isbeginningto put them at a disadvantage against private competitors.Over the next few years, the share of the market held by the public insurers isexpected to drop substantially, with private companie s assuming a growingpercentage of the business written.At present there are 15 private insurers with two standalone private players andremaining private-foreign joint ve nture.Purpose and Need of Insurance :Assets are insured, because they are likely to be destroyed through accidentaloccurrences.


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Such possible occurrences are called perils. Fire, floods, breakdowns, lightening,earthquakes, etc, are perils. If such perils can cause damage to the asset, wesay that the assetis exposed to that risk. Perils are the events. Risks are the consequential lossesor damages.The risk to a owner of a building, because of the peril of an earthquake, may be afew lakhsor a few crores of rupees, depending on the cost of the building and the contents

in it.The risk only means that there is a possibility of loss or damage. The damage mayor may nothappen. Insurance is done against the contingenc y that it may happen. There hasto be anuncertainty about the risk. Insurance is relevant only if there are uncertainties.If there is nouncertainty about the occurrence of an eve nt, it cannot be insured against. Inthe case ofhuman being, death is certain, but the time of death is uncertain. In the case ofperson who isterminally ill, the time of death is not uncertain, though not exactly known. He cannot be

insured.Insured does not protect the asset. It does not prevent its loss due to peril.The peril cannot beavoide d through insurance. The peril can sometimes be avoided through bette rsafety anddamage control management. Insurance only tries to reduce the impact of the riskon theowner of the asset and those who depend on that asset. It only compensates thelosses andthat too, not fully.Only economic consequences can be insured. If the loss is not financial, insurancema y not bepossible. Example of non-economic losses are love a nd affe ction of parents,

leadership ofmanagers, sentimenta l attachme nts to family heirlooms, innovative a nd creativeabilities, etc.16How Insurance Works?The mechanism of insurance is very simple. People who are exposed to the samerisks cometogether and agree that, if any one of them suffers a loss, the others will sharethe loss andmake good to the person who lost. All people who send goods by ship are exposed tothesame risks, whic h are related to water damage, ship sinking, piracy, etc. Those

owningfactories are not exposed to these risks, but they are exposed to different kindsof risks like,fire, hailstorms, earthquake, lightning, burglary, etc. Like this, different kindsof risks can beidentified and separate groups made, including those exposed to such risks. Bythis method,the heavy loss that any one of them may suffer (all of them may not suffer suchlosses at thesame time) is divided into bearable small losses by all. In other words, the riskis spread


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among the community and the likely big impact on one is reduced to smallermanageableimpacts on all.If a Jumbo Jet with more than 350 passengers cra shes, the loss would run intoseveral croresof rupees. No airline would be able to bear such a loss. It is unlikely that manyJumbo Jetswill crash at same time. If 100 airline companies flying Jumbo Jets, come together

into aninsuranc e pool, whenever one of the Jumbo Jets in the pool crashes, the loss tobe borne b yeach airline would come down to a few la khs of rupees. T hus, insurance is abusiness ofsharing .There are certain principles, which make it possible for insurance to remain afairarrangement. The first is that it is difficult for any one individual to bear theconsequences ofthe risks that he is exposed to. It will become bearable whe n the communityshares theburden. The second is that the perils should occur in an acc idental manner.

Nobody should bein a position to make the risk happen. In other words, none in the group shouldset fire to hisassets and ask others to share the costs of damage. This would be taking unfairadvantage ofan arrangement put into place to protect people from risks they are exposed to.Theoccurrence has to be random, accidenta l, and not the deliberate cre ation of theinsured pe rson.The ma nner in which the loss is to be shared can be determined before-hand. Itma y beproportional to the risk that each person is e xposed to. This would be indicativeof the benefit

he would receive if the peril befe ll him. The share could be collected from themembers afterthe loss has occurred or the likely shares ma y be collected in advance, at thetime ofadmission to the group. Insurance companies collect in advance and create a fundfrom whichthe losses are paid.The collection to be made from each person in advance is determined onassumptions. Whileit may not be possible to tell beforehand, which person will suffer, it ma y bepossible to tell,on the basis of past experiences, how many persons, on an avera ge, ma y sufferlosses. The

following two examples explain the abo ve concept of insurance:17Example 1In a villa ge, there are 400 houses, each valued at Rs. 20000. Each ye ar, on theaverage, 4houses get burnt, resulting into a total loss of Rs. 80000. If all the 400 ownerscome togetherand contribute Rs. 200 each, the common fund would be Rs. 80000. this is enoughto pay Rs.20000 to each of the 4 owners whose houses got burnt. Thus, the risk of 4 owners


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is spreadover 400 house-owners of the village.Example 2There are 1000 persons who are all aged 50 and are healthy. It is expected that ofthese, 10persons may die during the year. If the economic value of the loss suffered by thefamily ofeach dying person is taken to b e Rs. 20000, the total loss would work out to Rs.

200000. Ifeach person in a group contributed Rs. 200 a year, the common fund would be Rs.200000.This would be enough to pa r Rs. 20000 to the family of each of the ten personswho die.Thus, the risks in the case of 10 persons, are shared by 1000 persons.Insurance of Human AssetA human being is an income generating asset. One s manual labour, professionalskills andbusiness acumen are the assets. This asset also can be lost through unexpectedlyearly deathor through sickness and disabilities caused by accidents. Accidents may or may nothappen.

Death will happen, but the timing is uncertain. If it happe ns aro und the time ofone sretirement, when it could be expe cted that the income will normally cease, thepersonconcerned could have made some other arrangements to meet the continuing needs.But if ithappens much earlier when the alternate arrangements are not in place, there canbe losses tothe person and dependents. Insurance is necessary to help those dependent on theincome.A person, who may have made arrangements for his needs after his retireme nt, alsowouldneed insurance. This is because the arrangements would have been made on the basis

of someexpectations like, likely to live for a nother 15 years, or that childre n willlook after him. Ifany of these expectations do not become true, the original arrangement wouldbecomeinadequate and there could be difficulties. Living too long can be as much aproblem as dyingtoo young. Both are risks, which need to be safeguarded against. Insurance takescare.18Insurance of Intangibles :The concept of insurance has been exte nded beyond the coverage of tangible

assets.Exporters run risk of losses if the importers in the other country default in payments or incollecting the goods. They will also suffer heavily du e to sudden changes incurrencyexchange rates, economic policies or political disturbances in the other country.These risksare insured. Doctors run the risk of being c harged with negligence and subsequentliabilityfor damages. The amounts in question can be fairly large, beyond the capacity ofindividuals


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to be ar. These are insured. Thus, insurance is e xtended to intangibles. In somecountries, thevoice of a singer or the legs of a dancer may be insured.Types of Insurance :Any risk that ca n be quantified c an potentially be insured. Specific kinds ofrisk that ma ygive rise to claims are known as "perils". An insurance polic y will set ou t indetail which

perils are covered by the policy and which are not.Below is a (non-exhaustive) list of the many different types of insurance that exist. A singlepolicy ma y cover risks in one or more of the categories set forth below. For example, autoinsuranc e would typica lly cover both property risk (covering the risk of theftor damage tothe car) and liability risk (covering legal claims from causing an accident). Ahomeowner'sinsuranc e policy in the U.S. typically includes property insurance coveringdamage to thehome and the owner's belongings, liability insurance covering certain legal claimsagainst the

owner, and even a small amount of health insurance for medical expenses of guestswho areinjured on the owner's property. Automobile insuranc e known in the UK as motor insurance, is pr obably the mostcommonform of insurance and ma y cover both legal liability claims aga inst the driver and loss of ordamage to the insured's vehicle itself. Throughout most of the United States anauto insurancepolicy is required to le gally op erate a motor vehicle on public roads. In somejurisdictions,bodily injury compensation for automobile accident victims has been changed to ano-fault

system, which re duces or eliminate s the ability to sue for compensation butprovidesautomatic eligibility for benefits. Aviation insurance insures against hull, spares, deductible, hull war andliability risks. Boiler insurance (also known as boiler and machiner y insurance or equipmentbreakdowninsuranc e) insures against acc idental physical damage to equipment or machinery. Builder's risk insurance insures against the risk of physical loss or damage topropertyduring construction. Builder's risk insurance is typica lly written on an "allrisk" basis

covering damage due to any cause (including the negligence of the insure d) nototherwiseexpressly excluded.19Business insurance can be any kind of insurance that protects businesses againstrisks. Someprincipal subtypes of business insurance are (a) the various kinds of professionalliabilityinsurance, also called professional indemnity insurance, which are discussed below


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under thatname; and (b) the business owners polic y (BOP), which bundles into one policy many of thekinds of coverage that a business owner needs, in a way a nalogous to howhomeownersinsuranc e bundles the coverage that a homeowner needs. Casualty insurance insure s against accidents, not necessarily tied to anyspecific property.

Credit insurance repays some or all of a loan back when certa in things happento theborrower such as unemployment, disability, or death. Mortga ge insurance (whichsee below)is a form of credit insurance, although the name credit insurance more often isused to refer topolicies that cover other kinds of debt. Crime insurance insures the policyholder against losses arising from thecriminal acts ofthird parties. For example, a company can ob tain crime insurance to cover lossesarising fromtheft or embezzlement. Crop insura nce "Farmers use crop insurance to reduce or mana ge various risks

associatedwith growing crops. Such risks include crop loss or damage caused b y weather,hail, drought,frost damage, insects, or disease, for insta nce." Defense Base Act Workers' compensation or DBA Insurance provides coverage forcivilianworkers hired by the government to perform contracts outside the US and Canada.DBA isrequired for all US citizens, US residents, US Green Card holders, and allemployees orsubcontractors hired on overseas government contracts. Depending on the countr y,ForeignNationals must also be covered under DBA. This coverage typically inc ludes

expensesrelated to medical treatment and loss of wages, as well as disability and deathbenefits. Directors and officers liability insurance protects an organization (usually acorporation)from costs associated with litigation resulting from mistakes incurred b ydirectors andofficers for which they are liable. In the industry, it is usually called "D&O"for short. Disability insurance policies provide financial suppo rt in the event the policyholder isunable to work because of disabling illness or injury. It provides monthly supportto help pa y

such obligations as mortgages and credit cards.o Total permanent disability insurance provides benefits when a person ispermanentlydisabled and can no longer work in their profession, often taken as an adjunct tolifeinsurance. Errors and omissions insurance : See "Professional liability insurance" under"Liabilityinsurance". Expatriate insurance provides individuals and organizations operating outsideof their home


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country with protection for automobiles, property, health, liability and businesspursuits. Financ ial loss insurance protects individuals and companies a gainst variousfinancial risks.For example, a business might purchase cover to protect it from loss of sales if afire in afactory prevented it from carrying out its business for a time. Insurance mightalso cover the

failure of a creditor to pay money it owes to the insured. This type of insuranceis frequently20referred to as "business interruption insuranc e." Fidelity bonds and surety bondsare inc ludedin this categor y, although these products provide a benefit to a third party (the"obligee") inthe event the insured party (usually referred to as the "obligor") fa ils toperform itsobligations under a contract with the oblige. Health insurance policies will often cover the cost of private medicaltreatments if the

National Health Service in the UK (NHS) or other publicly-funded health programsdo notpa y for them. It will often result in quicker health care where better facilitiesare available. Home insurance or homeowners insurance: See "Property insurance". Liability insurance is a very broad superset that covers legal claims againstthe insured.Many types of insurance include an aspect of liability coverage. For example, ahomeowner'sinsurance policy will normally include liability coverage which protects theinsured in theevent of a claim brought by someone who slips and falls on the property;automobile

insuranc e also includes an aspect of liability insurance that indemnifies againstthe harm thata crashing car can cause to others' lives, health, or property. The protectionoffered by aliability insurance polic y is twofold: a legal defense in the event of a lawsuitcommencedagainst the polic yho lder and indemnific ation (payment on behalf of the insured)with respectto a settlement or court verdict. Liability policies typically cover only the negligence of theinsured, and will not apply to results of willful or intentional acts by theinsured.o Environmenta l liability insurance protects the insured from bodily injur y,

property damageand cleanup costs as a result of the dispersal, release or escape of pollutants.o Professional liability insurance a lso called professional indemnity insurance,protectsprofessional practitioners such as architects, lawyers, doctors, and accountantsaga instpotential negligence claims made by their patients/clients. Professional liabilityinsuranc emay take on different names depending on the profession. For example,professional liabilityinsuranc e in refere nce to the medical profession may be called malpractice


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insurance.Notaries public may take out errors and omissions insurance (E &O). Other potential E&Opolicyholders include, for example, real estate brokers, home inspectors,appraisers, andwebsite developers. Life insurance provides a monetar y benefit to a decedent's family or otherdesignated

beneficiary, and may specifically provide for burial, funeral and other finalexpenses. Lifeinsuranc e policie s often allow the option of having the proceeds paid to thebenefic iar y eitherin a lump sum cash payme nt or an annuity.o Annuities provide a stream of payments and are generally cla ssified asinsurance be causethe y are issued b y insurance companies and regulated as insurance a nd requirethe same kindsof actuarial a nd inve stment management expertise that life insura nce requires.Annuities andpensions that pay a benefit for life are sometimes regard ed as insurance againstthe possibility

that a retiree will outlive his or her financia l resources. In that sense, theyare the complementof life insurance a nd, from an underwriting perspective, are the mirror image oflifeinsurance. Locked funds insurance is a little-known hybrid insurance policy jointly issuedbygovernments and b anks. It is used to protect public funds from tamper b yunauthorizedparties. In special cases, a government may authorize its use in protecting semi-private funds21

which are liable to tamper. The terms of this type of insurance are usually verystrict.Therefore it is used only in extre me cases where maximum security of funds isrequired. Marine insurance and marine cargo insurance cover the loss or da mage of shipsat sea or oninla nd waterways, and of the cargo that may be on them. When the owner of thecargo andthe carrier are separate corporations, marine cargo insurance typicallycompensates the ownerof cargo for losses sustained from fire, shipwreck, etc., but excludes losses thatcan berecovered from the carrier or the carrier's insurance. Many marine insurance

underwriters willinclude "time element" coverage in suc h policies, which extends the indemnity tocover lossof profit and other business expenses attributable to the delay caused b y acovere d loss. Mortgage insurance insures the lender against default by the borrower. National Insurance is the UK's version of social insurance (which see below). No-fault insurance is a type of insura nce policy (typically automobileinsurance) whereinsurers are indemnified by their own insurer regardless of fault in the incident. Nuclear incident insurance covers damages resulting from an incident involving


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radio activematerials and is generally arranged at the national level. (For the UnitedStates, see the Price-Anderson Nuclear Industries Indemnity Act.) Pet insurance insures pe ts aga inst accide nts and illnesses - some companiescoverroutine/wellness care and burial, as well. Political risk insurance can be ta ken out b y businesse s with operations in

countries in whichthere is a risk that revolution or other political conditions will result in aloss. Pollution Insurance A first-party coverage for contamination of insuredproperty either b yexternal or on-site sources. Coverage for liability to third parties arising fromcontaminationof air, water or land due to the sudden and accidental release of hazardousmaterials from theinsured site. The policy usually covers the costs of cleanup a nd may includecoverage forreleases from underground storage tanks. Intentional acts are spe cifically excluded

Property insurance provides protection against risks to property, such as fire,theft orweather damage. This includes specialized forms of insurance such as fire insurance, floodinsuranc e, earthquake insurance, home insurance, inland marine insurance orboilerinsurance. Purchase insurance is aimed at providing protection on the products peoplepurchase.Purchase insurance can cover individual purchase protection, warranties, guarantees, careplans and even mobile phone insurance. Such insurance is normally very limitedin the scope

of problems that are covered by the polic y. Retrospectively Rated Insurance is a method of establishing a premium on largecommercialaccounts. The fina l premium is based on the insured's actual loss experienceduring the policyterm, sometimes subject to a minimum and maximum premium, with the final premiumdetermined by a formula. Under this plan, the current year's premium is basedpartially (orwholly) on the current year's losses, although the premium adjustments ma y takemonths oryears beyond the current year's expiration date. The rating formula is guaranteedin theinsurance contrac t. Formula: retrospective premium = converted loss + basic

premium taxmultiplier. Numerous variations of this formula ha ve be en developed and are inuse. Social insurance can be many things to many pe ople in many countries. But asummary of22its essence is that it is a collection of insurance coverage (including componentsof lifeinsuranc e, disability income insurance, unemplo yme nt insurance, healthinsurance, and


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others), plus retirement savings, that mandates participation by a ll citizens. Byforcingeveryone in society to be a policyholder and pay premiums, it ensures thateveryone canbecome a claimant when or if he/she needs to. Along the way this inevitablybecomes relatedto other concepts such a s the justice system a nd the we lfare state. This is alarge, complicated

topic that engenders tremendous debate, which can be further studied in thefollowing articles(and others):o Social welfare provisiono Social securityo Social safety neto National Insuranceo Social Security (United States)o Social Security debate (United States) Terrorism insurance provides protection against any loss or damage caused byterroristact ivit ies. Title insurance provides a gua rantee that title to real property is vested in

the purchaserand/or mortgagee, free and clear of liens or encumbrances. It is usually issuedin conjunctionwith a search of the public records performed at the time of a real estatetransaction. Travel insurance is an insurance cover taken by those who travel abroad, whichcoverscertain losses such as medica l expenses, lost of personal belongings, travel delay, personalliabilities, etc. Workers' compensation insuranc e replaces all or part of a worker's wage s lostandaccompanying medical expense incurred because of a job-related injur y.

Advantage s of Life Insur ance :Life insurance ha s no competition from any other bu siness. Many people thinkthat lifeinsuranc e is an investment or a means of saving. This is not a correct view. Whena personsaves, the amount of funds available at any time is equal to the amount of moneyset aside inthe past, plus interest. This is so in a fixed deposit in the bank, in nationalsavings certificates,in mutual funds and all other savings instruments. If the money is invested inbuying sharesand stocks, there is the risk of the money being lost in the fluctuations of thestock market.

Even if there is no loss, the available money at any time is the amou nt investedplusappreciation. In life insuranc e, however, the fund available is not the total ofthe savingsalready made (pre miums paid), but the amount one wished to have at the end of thesavingsperiod (which is the next 20 or 30 years). The final fund is secured from the verybeginning.23One is paying for it later, out of the savings. One has to pay for it only as long


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as one lives orfor a lesser period if so chosen. There is no other scheme which provides thiskind of benefit.Therefore life insurance has no substitute.Even so, a comparison with other forms of savings will show that life insurancehas thefollowing adva ntages. In the event of death, the settlement is easy. The heirs can collect the mone

ys quicker,because of the facility of nomination and assignme nt. The fac ility of nominationis nowavailable for some bank accounts. There is a certain amount of compulsion to go though the plan of savings. Inother forms, ifone changes the original plan of savings, there is no loss. In insurance, there isa loss. Certain c annot claim the life insurance moneys. They can be protected againstattachme ntsby courts. There are tax benefits, both in income tax and in capita l gains. M arketability and liquidity are better. A life insurance polic y is property

and can betransferred or mortgaged. Loans can be raised aga inst the policy.The following tenets he lp agents to believe in the benefits of life insurance.Such faith willenhanc e their determination to sell and their perseverance. Life insurance is not only the best possible wa y for family protection. Thereis no otherway. Insurance is the only way to safeguard against the unpredictable risks of thefuture. It isunavoidable. The terms of life are hard. The terms of insurance are easy. The value of human life is far greater than the value of prope rty. Only

insurance canpreserveit. Life insurance is not surpassed by many other savings or investmentinstrument, in terms ofsecurity, marketability, stability of value or liquidity. Insurance, including life insurance, is essentia l for the conservation of manybu sinesses, justas it is in the preservation of homes. Life insurance enhances the existing standards of living. Life insurance helps people live financ ia lly solvent live s. Life insurance perpetuates life, libe rty and the persu it of happiness. Life insurance is a wa y of life.

24The Business of Insurance :Insurance companie s are called insurers. The business of insurance is to (a)bring togetherpersons with common insurance interests (sharing the same risks), (b) collect theshare orcontribution (called premium) from all of them, and (c) pay out compensation(called c la ims)to those who suffer. The premium is determined on the same lines as indicated inthe


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settlements haveto be done with great care.25Criticism of Insurance Companies :Some people believe that modern insurance companie s are mone y-making businesseswhichhave little interest in insurance. They argue that the purpose of insurance is to

spread risk sothe reluctance of insurance companies to take on high-risk cases (e.g. houses inareas subjectto flooding, or young drivers) runs counter to the princ iple of insurance.Other criticism s include: Insuranc e polic ies contain too many exclusion clauses. For example, somehouse insuranc epolicies do not cover damage to garden walls. Most insurance compa nies now use call centre and staff atte mpt to answerquestions b yreading from a script. It is difficult to speak to anybod y with expe rtknowledge.Role of Insurance in Economic Development :

For economic develop ment, investments are necessary. Investments are made out ofsavings.A life insurance company is a major instrument for the mobilization of savings ofpeople,particularly from the middle and lower income groups. These savings are channeledintoinvestments for economic growth.As on 31.3.2002, the total investments of the LIC exceeded Rs. 245000 crores, ofwhich morethan Rs. 130000 crores were directly in Government (both State and Centre) relatedsecuritie s, more than Rs. 12000 crores in the State Electricity Boards, nearlyRs. 20000 croresin housing loa ns and Rs. 4000 crores in water supply and sewerage systems. Other

investments included road transport, setting up industrial estates and directlyfinancingindustr y. Inve stments in the corporate sector (shares, debentures and termloans) exceededRs. 30000 crores. These directly affect the lives of the people and their economicwell-being.A life insurance company will have large funds. These amounts are collected by wayofpremiums. Every premium represents a risk that is covered by that premium. Ineffect,therefore, these vast amounts represent pooling of risks. The funds are colle ctedand held intru st for the benefit of the polic yholders. The ma nageme nt of life insurance

companies arerequired to keep this aspects in mind and make all its decisions in ways thatbenefit thecommunity. This applies also to its investments. That is why successful insurancecompanieswould not be found investing in speculative ventures. Their investments, as in thecase of theLIC, benefit the society at large.Apart from investments, business and trade benefit through insurance. Withoutinsurance,trade and commerce will find it difficult to face the impact to major perils like


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fire,earthquake, floods, etc. Financiers, like banks, collapse if the factory, financed by it, isreduces to ashes by terrible fire. Insurers cover also the loss to financ iers, iftheir debtorsdefault.26

2. GLOBAL INSURANCE INDUSTRY :The global insurance industry is one of the largest sectors of finance. It rangesfromconsumer to corporate and industrial insurance, and even reinsurance, or insuranceofinsurance.The major insurance markets of the world are obviously the US, Europe, Japan, andSouthKorea. Emerging markets are found throughout Asia, specifically in India andChina, and arealso in Latin America.With the internet a nd other forms of high-spee d communication, companies andindividuals

are now able to purchase insurance and related financial products from almostanywhere inthe world. Increasing affluence, especially in developing countries, and a risingunde rstanding of the need to protect wealth and human capita l has led tosignificant growth inthe insurance industry.Given the evolving and growing socio-economic conditions worldwide, insurancecompaniesare increasingly reaching out across borders and are offering more competitive andcustomized products than ever before.Over the past ten years, global insurance premiums have risen by more than 50%,withannual growth rates ranging between 2 and 10%.In 2004, global insurance premiums

amounted to $3.3 trillion.The majority of insurance comes from developed nations such as most of Europe, theUS,and Japan. In 2004, premiums in North American amounted to $1,217 billion, whiletheEuropean Union generated $1,198 billion, and Ja pan produced $492 billion. The UKamounted to $295 billion.The four biggest generators of insurance premiums comprised almost two-thirds ofpremiumsfor 2004, the US and Japan amount to half, while they only ma ke up 7% of theworld spopulation.In contrast, the emerging markets that make up 85% of the world s population

produced only10% of the premiums.The leading global insurance companies are:Zurich Financial Services,AXABerkshire Hathawa y/ Berkshire Hathawa y ReAllianz


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A vivaING GroupMunich RE GroupAmerican International Group (AIG)

Nippon Life InsuranceAssicurazioni Generali27GLOBAL LIFE INSURANCE DENSITY :Cont i n en t /Cou nt ry 2 0 0 1 * *2 0 0 2 ** 2 0 0 3 **20 0 4 * * 2 0 0 5 **2 0 0 6* *Nor t h A m e ri ca 1 5 0 8. 61 5 6 3 . 8 15 65 . 7

1 6 17 . 2 16 8 6 .31 7 3 1 .8Uni t e d S t a t es 1 6 0216 6 2 .6 16 57 . 51 6 92 . 5 17 5 3 .21 7 8 9 .5C a na da 6 75 .9 6 5 7 .37 2 2 .9 9 2 6 .110 7 1 .9 1 2 0 4 .1La t i n Am e ri ca 2 6 .32 9 .1 3 03 7 . 2 4 2 .0

5 1 .3Bra z i l10 . 8 2 7 .23 5. 8 45 . 95 6 . 8 7 2 .5Me x ic o 53 .2 5 9 .24 1. 3 50 . 24 9 . 9 6 2 .9Uru gua y 21 . 51 7 .8 1 5 . 4N /A 1 5 .516 . 6

Arge nt i na 6 8 . 81 9 .7 2 4 . 23 4 . 5 3 5 .443 . 8Pa na m a 39 .3 4 4 .64 2. 4 50 . 64 7 . 2 5 1 .2C hi le 12 2 .1 1 0 3 .51 3 8 .3 1 6 4 .5


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1 7 4 .9 1 7 6C olom bi a 1 1 . 51 2 .5 1 2. 414 . 3 1 6 . 82 0 .5Eu rope 5 7 3 .2 6 2 0 .47 2 6 .9 8 4 8 .1

9 1 1 .8 1 1 1 9 .6Uni t e d kin gdom 2 5 67 . 926 7 9 .4 26 17 . 13 19 0 . 4 32 8 7 .15 1 3 9 .6S wi t z er la nd 2 7 15 . 730 9 9 .7 34 31 . 83 2 75 . 1 30 7 8 .13 1 1 1 .8Ne t he rl a nds 1 3 4512 9 6 . 1 1 5 6 1 .71 9 36 . 5 19 5 4 .22 0 7 1 .6

Fra nc e 1 2 68. 2 13 4 9 .517 67 . 9 2 1 50 . 224 7 4 .6 2 9 2 2 .5Be l giu m 1 1 5513 2 3 . 6 20 04 . 82 2 91 . 2 29 8 8 .72 4 2 7 .7S we de n 1 3 561 2 3 2 . 2 16 02 . 31 76 4 . 3 21 0 5 .22 2 1 4 .6De nm a rk 1 3 64 . 4

15 7 4 .9 20 37 . 52 31 0 . 5 24 8 9 .92 8 4 0 .8Ge rm a ny 6 7 4 .37 3 6 .7 9 3 0 .41 0 21 . 3 10 4 2 .11 1 3 6 .1I ta l y7 2 0 .8 9 0 4 .912 38 . 3 1 4 17 . 214 4 9 .8 1 4 9 2 .8Au st ri a 6 32 6 4 8 .7

8 1 1 9 5 5 .31 09 5 . 1 11 0 4 .6Port u gal 3 0 2 .9 4 1 8 .66 1 1 .4 7 6 8 .111 1 3 .7 1 1 3 1 .5S pa in 49 1 5 8 84 8 8 .6 5 7 1 .96 1 5 .86 51 . 0


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Pol a nd 4 8 .7 5 0 .75 9. 9 73 . 31 0 1 .91 50 . 5Ru ssi a 33 .2 2 3 .13 3. 9 24 . 8

6 .3 4. 0C roa t ia 25. 3 3 3 .24 6. 3 58 . 77 0 . 9 8 1 .8Hu nga ry 59 . 37 6 .7 9 9. 11 1 7 .3 1 4 8 .21 92 . 3Gre e ce 1 0 8.9 1 1 61 5 2 .1 1 7 7 .92 1 3 .1

2 56 . 7Bu lga ri a 59 .9 5 .58 .2 1 1 . 11 3 .2Ukra i ne 0 .10. 1 0 .30 .6 1 .31 .9Tu rke y 5 .56. 5 8 .41 2 1 2 .71 3 .1

As ia1 2 5 1 2 8 .11 4 0 .1 1 4 7 .21 4 9 .61 54 . 6S out h Kore a 7 6 3 .48 2 1 .9 8 7 3 .61 0 06 . 8 12 1 0 .61 4 8 0 .0Ja p a n 2 806 . 4 27 8 3 .930 02 . 9 30 4 42 9 5 6 .3 2 8 2 9 .3

Ti wa n 7 6 0.9 9 2 5. 110 50 . 1 1 49 4 . 616 9 9 .1 1 8 0 0 .0Ho ngkong 1 24 9 .71 2 3 7 . 9 14 83 . 918 8 4 . 3 2 2 1 3 .22 4 5 6I sra e l 52 5 .2 4 5 9 .34 6 0 .8 4 6 7 .4


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S a udi a A ra bia 0 .61. 7 1 .72 .1 0 .70. 8Afri c a 22. 4 2 1 .52 6. 1 30 . 33 0 . 7 3 8 .3

S out h A f ri ca 3 7 7 .23 6 0 .5 4 7 6 .55 4 5 .5 5 5 8 .36 95 . 6Ma ur it i us 9 5 .31 03 .7 1 19 .11 33 . 1 1 3 6 .1N /AZ imba bw e 1 2 .47 .82 1 .4 N/AN /AN /A

Moroc c o 9 .41 2 .2 1 21 0 . 6 1 1 .71 4 .7Ke nya 2 .9 33 .4 3 . 74 .5 5 .3Ni ge ri a0 .5 0. 50 .6 0 .70 .5 0. 8Egyp t

2 .7 2 .42 .7 3 .14 4 .7Al ge ria0 .4 0. 50 .5 0 .80 .9 1 . 2Oc e an i a 6 97 .5 6 6 8 .77 5 0 .7 8 5 18 8 5 8 96 . 3Au st ra li a 1 040 . 3 10 1 0 .4

11 29 . 3 1 28 5 . 113 6 6 .7 1 3 8 9Ne w Z e a la nd 1 9 8 .42 1 1 .1 2 7 23 1 8 2 1 9 .721 5Wo rl d 2 35 2 4 7 .32 6 7 .1 2 9 1 .52 9 9 .5 3 30 . 6S o urc e : S w i ss R e , S i gm a vo l um e s


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* I ns ura n ce d en sit y i s m e a s ure d as ra t i o of p re m iu m t o tota l po pul a t ion** D a t a re la t e s t o ca l en de rye ar sFig ure in US$www.in diain s ur anc er es ear ch.c om28

3. PERFORMANCE OF INDIAN INSURANCE INDUSTRY :Performance up to October 2006The performance growth rate that was 22.8 percent as at September 2006 has mo vedup to 23.3 percent at the end of October 2006, an improvement of significance. Thetotal premium at the end of October is Rs.14,628 crore as against Rs.11,855 crore.The established players have added Rs.807 crore at a growth rate of 8.3 percentwiththe new players adding Rs.1966 crore at a growth rate of 62 percent. Here a gain,ICICI Lombard has achieved a n accretion of Rs.887 crore; whereas the totalaccretionof all the established players is Rs 807 crores, a truly impressive record. NewIndia

with Rs.286 crore, closely followed by Oriental with Rs.277 crore are the majorcontributors for the established players. Re liance, a late starter in the raceforpremium acquisition has recorded an accretion of Rs.357 crore as against a meagerlast year renewal of Rs.89 crore. The growth path is now led by several players:witheight out of the twelve pla yers ha ving ac hieved accretions in exc ess of Rs.100croreand more at the end of October 2006. With the im minent detariffing aro und thecornerin January 2007, the next two months should witness even more fierce battles forsupremacy of the market turf. A few of the new players are inching towardsbreaking

into the big league premium players of yesteryears and this may happen sooner thanone thought. Interesting and cha llenging times are certainly ahead for all thepla yers.Premiums Rise 163.68% over October, 2006Individual premium:The life insurance industry underwrote Individual Single Premium of Rs.1336610.10lakh for the period ended October, 2006 of which the private insurers garneredRs.118242.78 lakh a nd LIC garnered Rs.1218367.32 lakh. The correspondingnumbers for the previous year were Rs.443296.40 lakh for the industry, withprivateinsurers underwriting Rs.64530.68 lakh and LIC Rs.378765.72 la kh. The IndividualNon-Single Premium underwritten during April-Oc tober, 2006 was Rs.1771903.71lakh of which the private insurers underwrote Rs.536863.16 lakh and LIC

Rs.1235040.55 lakh. The corresponding numbers for the previous year wereRs.743586.24 lakh, Rs.260432.63 lakh and Rs.483153.61 lakh respectively.Group premium:The industry underwrote Group Single Premium of Rs.467348.58 lakh of which theprivate insurers underwrote Rs.30147.74 lakh and LIC Rs.437200.84 lakh. The livescovered being 7678192, 456696 and 7221496 respectively. The correspondingnumbers for the previous year were Rs.171382.70 lakh with private insurersunderwriting Rs.17261.98 lakh and LIC Rs.154120.72 lakh and the lives coveredbeing 8547743, 397721 and 8150022 respective ly. The Group Non-Single Premiumunderwritten during April-October, 2006 was Rs.53221.05 lakh which wasunderwritten entirely by the private insurers, covering 2366084 lives. The


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corresponding numbers for the previous year were Rs. 18031.15 lakh and covering1277400 lives.29Segment-wise segregation:A further segregation of the premium underwritten during the period indicates thatLife, Annuity, Pension and Hea lth contributed Rs.2329869.52 lakh (64.24%),Rs.74006.48 lakh (2.04%), Rs.1221904.91 lakh (33.69%) and Rs.897.90 lakh (0.02%)

respectively. In respect of LIC, the bre ak up of life, annuity a nd pensioncategorieswas Rs.1677831.45 lakh (58.04%), Rs.69437.82 la kh (2.40%) and Rs.1143339.44lakh (39.55%) respectively. In case of the private insurers, Rs.652038.07 lakh(88.58%), Rs.4568.66 lakh (0.62%), Rs.78565.47 lakh (10.67%) and Rs.897.90 lakh(0.12%) respectively was underwritten in the four segments.Unit linked and conventional premium:Analysis of the statistics in terms of linked and non-linked premium indicatesthat49.46% of the business was underwritten in the non-linked category, and 50.54% inthe linked category, i.e., Rs.1793702.35 lakh and Rs.1832976.45 la kh respectively. Incase of LIC, the linked and non-linked premium was 41.38% and 58.62%

respectively, as against whic h for the private insurers taken together this stoodat86.53% and 13.47% respectively. During the corresponding period of the previousyear, linked and non- linked premium indicates that 54.74% of the busine ss wasunderwritten in the non-linked category, and 45.26% in the linked category, i.e.,Rs.752509.54 lakh and Rs.622185.30 lakh respective ly. In case of LIC, the linkedandnon-linked premium was 33.96% and 66.04% respectively, as a gainst which for theprivate insurers taken together this stood at 77.02% and 22.98% respe ctively.Growth momentum continues in October 2006 with 25.3 percentAll-round growth :The month of October 2006 has been the month of extraordinar y growth for the non-life insurers with the growth rate high at 25.3 percent. This ac hie ved rate is

onlyslightly below that of September of 25.8 percent. As against the monthly renewalsofRs.1772 crore in Octobe r last year, the premium income scaled in 2006 isRs.2220crore. The established players have recorded an accretion of Rs.151 crore at agrowthrate of 11.3 percent. The new players have had an accretion of Rs.297 crore at agrowth rate of 63 percent. Among the former, New India leads with an accretion ofRs.60 crore followed by Orie ntal with Rs.56 crore. But the stellar performancesinthe month have come from ICICI Lombard that has p roduced a massive accretion ofRs.167 crore with Reliance adding Rs.56 crore to its meager renewal premium of

Rs.12 crore.The new pla yers ha ve continued to maintain a strong grip on the ir market sharethatstands at 35 percent. Two points of interest to the market have emerged. One isthatthe monthly accretion of ICICI Lombard at Rs.167 crore is higher than the combinedaccretion achieved by a ll the established players of Rs.151 crore. Thisperformanceshould stand out as of interest to the market. The second point of market interestisthat for the first time, the October monthly premium of ICICI Lombard at Rs.310


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crore has exceeded the monthly premium performances of National Insurance andUIIC that have accomplished premiums of Rs.305 crores and Rs.257 crorerespective ly. The established players do seem to be coming under increasingpressureby the new pla yers with their re lentless high growth rates and premiumproductions.30

41 per cent growth in life insurance industry in 2006 :New Delhi: Life insurance sector grew by 41 per cent in 2005-06 due to betterperformance of countr y's largest life insurer, LIC, and private players like Bajaj Allianzand ICICI Prudential.The 15 life insurance companies together collected Rs 35,898 crore in the fisc alendedMarch this year, compared to Rs 25,343 crore in the previous fiscal, according todatacompiled by regulator IRDA.Life Insurance Corporation's premium income rose more than 28 per cent to Rs25,645crore after it sold 3 .16 crore policies as against Rs 19,972 crore collected a

year a go.However, LIC's market share dipped by 6.63 per cent to 71.44 per cent from 78.07percent in the year ago period due to stiff competition and aggressive marketing ofprivatelife insurers.The 14 private pla yers were able to steadily increase their market share from21.93 percent to 28.56 per cent in a year's time by collecting Rs 10,252 crore during thepe riodunder review.Private sector life insurance business jumps 90% :In a tough battle to expand market shares the private sector life insurance

industryconsisting 14 life insurance companies at 26% have lost 3% of market share to thestateowned Life Insurance Corporation (LIC) in the domestic life insurance industry in2006-07.According to the figures released by Insurance Regulatory & Development Authoritythetotal premium these 14 companies have shot up b y 90% to Rs 19,471.83 crore in2006-07from Rs 10, 252 crore.LIC with a total pr emium mobilization of Rs 55,934 crore has been able retain amarket

sha re of 74.26 % during the reporting period. In total the life insuranceindustry in firstyear premium has grown by 110% to Rs 75, 406 crore during 2006-07. The 2006-07performance has thrown a few surprises in the ranking among the private sectorlifeinsurance companies. New entrants like Re liance Life a nd SBI Life had shown ahugegrowth of over 381% and 210% respectively during the year. Reliance Life which hasbecome one of the top five companies ended the year with a premium of Rs 930 croreduring the year.Though ICICI Prude ntial Life Insurance remained as the No 1 private se ctor life


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insurance company during the year Bajaj Allia nz overtook ICICI Prudentia l interms ofmonthly market share in March, for the first time ever. Bajaj's market share amongprivate players in non-single premium for March stood at 29.1% vs. ICICIPrudential's23.8%. Bajaj ga ined 4.6 percentage point market share among private sectorplayers forFY07.

Among other private pla yers, SBI Life and Re liance Life continued to do well,eachgaining 4% market share in FY07. SBI Life's growth was driven by increasingcontribution from ULIP premiums. Another notable development of the 2006-07performance has been the expansion of reta il markets by the life insurancecomapnies.Bajaj Allianz Life insurance has added 20 lakh policies while ICICI Pru dentialhasexpanded over 19 lakh policies during the year.31Building a Vibrant Insurance Mar ket in India :India's insurance industry is a n example of the positive effects of competition

and newinvestors in the ma rketplace. As we know, India opened its insurance market totheprivate sector in 1999 when parliament passed a new law establishing an independentregulatory body to oversee the insurance market. The law opened the door forparticipation of private insura nce companies and a limited participation offoreigninsurance companies through joint ventures with Indian companies. The law alsochargedinsurance companies to ma ke available insurance products and services to the hugesegment of the population that are vulnerable and not necessarily part of theformal

economy.The results of the liberalization are there for everyone to see. The insurancemarkets --both life and non-life -- have grown impressively. IRDA is working on a regulatoryframework that helps level the pla ying fie ld for all type s of insurancecompanies,irrespective of their ownership. Since 1999, IRDA has licensed 22 new privateIndianinsurance companies, an overwhe lming number of which have globa l insurancecompanies as their partners. To date, the industry has attracted foreign directinvestmentof $235 million.

In 2006, Indian insuranc e companies mobiliz ed over $29 billion, nearly fourtimes asmuch as in 1999 ($8 billion). In other countries, this kind of capitalmobilization providescrucial resources for investment in infrastructure, corporate businesses, long-term bonds,and municipal projects. Once India does more to free insurance companies to investinsuch important sectors, it too can gain benefit from this long-term financialresource.Other improvements are occurring as we ll. New insurance products such as product


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FDI will bothenha nce the growth of the insurance indu stry and improve global confidence inIndia as abusiness and investment destination.The cap should be raised above 50 percent within a short period so that fore igninvestorswould have manageme nt control commensurate with their investment and the flow ofFDI

to the sector will increa se. Leading foreign companies bring more than capital totheinsurance industry. They also bring generations of successful experience in managing andgrowing the industry.The benefit of the long-term capital that the insurance industry mobilizes is alsobeinglost as a source of long-term capital. In India, ove r 60 percent of the insuranceindustry'sfinanc ial a ssets are locked in government securities. Investment guide lines forinsurancecompanies prescribed b y the regulator must be changed to allow and promoteaccess to

insurance funds by the corporate sector and infrastructure projects.There is also a strong case for raising the FDI cap for reinsurance and auxiliaryinsuranceservices, such as brokerage and actuarial services.Major lines of non-life insurance business such as fire and car continue to begoverned b ya pricing re gime that is administered and not risk-based. This distorts themarket andmakes it inefficient. It has prevented the emergence of a culture of underwritingininsurance companies. The IRDA needs to dismantle this regime to make these segmentsof the market truly competitive.

The IRDA should also seek to create a regulatory regime that promotes the mostefficientuse of capital, eliminates avoidable micro-manageme nt of business practices,allowscompanies to price their products prudentia lly, and levels the playing fie ldbetweenprivate and state-owned insurance companie s. When mar kets are competitive andresponsive to consumer demand and preference, it is the consumer that benefits intermsof lower cost and incre ased ability to manage r isks.Hea lth is an area that is underserved by the insurance industry. India as aneconomy hashigh health spending but poor health outcomes. With no pooled risk sha ring from

insurance policies and a health care system that is primarily private, the cost toindividuals becomes a major economic bu rden. For this rea son, many microfinanceinstitutions are finding that a primary use of micro loans to the poor is to paymedicalbills.The current minimum capital requirement of $22 million capital for setting up ahealthinsurance company is a significant barrier to entry, particularly when FDI isrestricted to26 percent. The lack of data from both health providers and from e xisting claimsmakes


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risk-based pricing of hea lth insurance products difficult. The absenc e of anappropriateregulatory framework that enforces a minimum level of service and hygienestandards is33an important reason the health insurance market in India is so underdeveloped. Itis not

surprising that not a single health insurance company is among the 22 new privateinsurance companies lice nsed since 1999. Clearly, the IRDA a nd the Ministr y ofHealthneed to work in tandem to solve these problems.Another area where the insurance industry is not doing its job is he lpingmitigate the risksfor personal and business loss from natural catastrophes. In the past decade,India andChina a ccounted for one-fourth of the global economic losses from naturaldisasters.Insurance availability in India for natura l catastrophes is almost ne gligible.As we haveseen with the Indian Ocean tsunami, the absence of a "safety net" for property

lost in adisaster has led to substantial personal loss and slowed economic recovery.Insurance Sector Reforms in India: Challenges and Opportunities :Insurance in India starte d without any regulations in the nineteenth ce ntury. Itwas atypical story of a colonial era: a few British insurance companies dominating themarketserving mostly large urban centers. After the independence, the Life InsuranceCompanywas nationalized in 1956, and then the general insurance business was nationalizedin1972. Only in 1999 private insurance compa nies were allowed back into thebusiness of

insurance with a ma ximum of 26 per cent of foreign holding (World Bank EconomicReview 2000). The entr y of the State Bank of India with its proposal of bankassurancebrings a new dynamics in the game. On July 14, 2000 Insurance Regulatory andDevelopment Authority bill was passed to protect the interest of the policyholdersfromprivate and fore ign players. The following companies are entitled to do insurancebusiness in India.The private insuranc e joint ventures have collected the premium of Rs.1019.09crore withthe investment of just Rs.3,000 crore in three ye ars of liberalization. Theprivateinsurance pla yers have significantly improving their market share when compared

to 50years Old Corporation (i.e. LIC). As per the figures compiled by IRDA, the LifeInsurance Industry recorded a total premium underwritten of Rs. 10,707.96 crorefor theperiod under review. Of this, private players contributed to Rs.1, 019.09 crore,accountingfor 10 percent. Life Insurance Corporation of India (LIC), the public sectorgiant,continued to lead with a premium collection of Rs.9,688.87 crore, translating intoamarket share of 90 pe r cent. In terms of number of policie s and scheme s sold,


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privatesector accounted for only 3.77per cent as compared to 96.23 per cent share of LIC(TheEconomic Times, 21March 04).he ICICI Prudential topped among the private playe rs in terms of premiumcollection. Itrecorded a premium of Rs. 364.9 crore and a market share of 25 per cent, followedb y

Birla Sun Life with a premium underwritten Rs.170 crore and a market share of 15percent, HDFC Standard with 132.7 crore and Max New York Life with Rs.76.8 crorewith a market share of approximately 15 per cent each. Unlike their counterpart inthe lifeinsurance business, private non-life insurance companies have not yet startedaddressingthe retail market. All is set to change in the coming years. Like in the bankingsector, non-life insurance companies will soon ha ve no choice but to focus on individual buyers.The latest series of bomb attacks, attack on parliament, attack on Ayodhya,attacks of theMaoists, nature calamities like tsunami, floods and drought, ragging are prevailed

in thecountry and need not to sa y about the farmer who has been insecure about rains,seeds,crops and suitable price for his crop. In developed countrie s, the owners haveinsured34even pet dogs. Whereas in India about 80 percent of human beings a nd majornaturalresources have not been insured in globalization er a.It is, therefore , an urgent need to explore the challenges and opportunitiesfaced b y theinsurance sector in India.

Indias Insurance Industry Likely To Jump By 500% In 2010:ASSOCHAM :The Associated Chambers of Commerce and Industry of India (ASSOCHAM) hasprojected about 500% hike in the size of domestic insurance business which willgrow toUS$ 60 billion b y 2010 from the current size of around US$ 10 billion as thegrowingcompetitive age is developing a larger appetite among people for wider insurancecoverage.The projections of the Chamber are based on fee dback that it received from itsvariousconstituents, engaged in the insurance business, highlighting that India s lifeinsurance

premium as a percentage of GDP is currently estimated at 1.8% against 5. 2% in US,6.5%in UK and about 8% in South Korea.Releasing the analysis, ASSOCHAM President, Mr. Venugopal N. Dhoot said that ruraland semi-urban India will contribute US $35 billion to the Indian insuranceindustry b y2010, inc luding US $20 billion by way of life insurance and the rest US $15billionthrough non-life insurance schemes. A large part of rural India is still untapped due to poor distribution, largedista nces and


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high costs relative to returns. Urban sector insurance is estimated to reach US$25 billionby 2010, life insurance US $15 billion and non- life insurance US $10 billion ,added Mr.Dhoot.ASSOCHAM findings reveals that in the coming years the corporate segment, as awholewill not be a big growth area for insurance companies. This is because pe

netration isalready good and c ompanies receive good services. In both volumes a ndprofitabilitytherefore, the scope for expansion is modest.ASSOCHAM has suggested that insurer s strategy should be to stimulate demand inareasthat are currently not served at all. Insurance companies mostly focus onmanufacturingsector; however, the services sector is taking a large a nd growing share of Indias GDP.This offers immense opportunities for expansion opportunities.To understand the prospects for insurance companies in rural India, it is veryimportant to

understand the requirements of India's villa gers, their daily lives, theirpeculiar needs andtheir occupational structures. There are farmers, craftsme n, milkmen, wea vers,casua llabours, construction workers and shopkeepers and so on. More often than not, theyareinto more than one profession.The rural market offers tremendous growth opportunities for insurance companiesandinsurers should develop viable and cost-effective distribution channels; buildconsumerawareness and c onfidence. The Paper found that there are a total 124 millionrural

households. Nearly 20% of all farmers in rural India own a Kissa n Credit cards.The 25million credit cards used till date offer a huge data base and opportunity forinsurancecompanies. An extensive rural age nt network for sale of insurance products couldbe35established. The agent can play a major role in creating awarene ss, motivatingpurchaseand rendering insurance services.There should be nothing to stop insurance companies from trying to pursue theirown

unique policies and target whatever needs that they want to target in ruralIndia.ASSOCHAM suggests that insurance needs to be pa ckaged in such a form that itappearsas an acceptable investment to the rural people. In the near future, when we llsee moreinnovations in agriculture in the form of corporatization or a more professiona lapproachfrom the farmers side, insurance will definitely be one option that the ruralIndian isgoing to accept.


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ASSOCHAM believes that insurers should enter into tie-ups or understandings withgovernme nt age ncies to ensure the success of the insurance schemes. The ne ed ofthehour is to have innovative policie s that have explicit benefits for the peopleto observe,understand and measure.Indian Insurance Industry: New Avenues for Growth 2012 :Description: With an annua l growth rate of 15-20% and the largest number of life

insurance policies in force, the potential of the Indian insurance industry ishuge. Totalvalue of the Indian insurance market (2004-05) was estimated at Rs. 450 billion(US$10billion). According to government sources, the insurance and banking services contribution to the country's gross domestic product (GDP) is 7% out of whic h thegrosspremium collection forms a significant part. The funds availab le with the state-ownedLife Insurance Corporation (LIC) for investme nts are 8% of GDP. Till date, only20% ofthe total insurable population of India is covered under various life insuranceschemes,

the penetration ra tes of health a nd other non-life insurances in India is alsowell below theinternational level. These facts indicate the of im mense growth potential of theinsurancesector.The year 1999 saw a revolution in the Indian insurance sector, as major structuralchangestook place with the ending of government monopoly and the passage of the InsuranceRegulator y and Develop ment Au thority (IRDA) Bill, lifting all entryrestrictions forprivate pla yers and allowing foreign players to enter the market with some limitson directforeign ownership. Though, the existing rule says that a foreign partner can hold

26%equity in a n insurance company, a proposal to inc rease this limit to 49% ispending withthe governme nt. Since opening up of the insurance sector in 1999, foreigninvestments ofRs. 8.7 billion have poured into the Indian market and 21 private companies havebeengranted licenses.Innovative products, smart marketing, and aggressive distribution ha ve e nabledfledglingprivate insurance companies to sign up Indian c ustomers faster than anyoneexpected.Indians, who had a lways seen life insurance as a tax saving device, are now

suddenlyturning to the private sector and snapping up the new innovative products onoffer.The life insurance industry in India grew b y an impressive 36%, with premiumincomefrom new business at Rs. 253.43 billion during the fiscal year 2004-2005, bravingstiffcompetition from private insurers. This report, Indian Insurance Industry: NewAvenuesfor Growth 2012 , finds that the market share of the state behemoth, LIC, hasclocked


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21.87% growth in business at Rs.197.86 billion by selling 2.4 billion new policies in362004-05. But this was still not enough to arrest the fall in its market share, asprivateplayers grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billionin

2003-04. Though the total volume of LIC's bu siness increased in the last fiscalyear(2004-2005) compared to the previous one, its market share came down from 87.04 to78.07%. The 14 private insurers increased their market share from about 13% toabout22% in a ye ar's time. The figures for the first two months of the fiscal year2005-06 alsospeak of the growing share of the private insurers. The share of LIC for thisperiod hasfurther come down to 75 percent, while the private players have grabbed over 24percent.There are presently 12 general insurance companies with four public sectorcompanies

and eight private insurers. According to estimates, private insurance companiescollectively have a 10% share of the non-life insurance market. Though the focusof thismarket researc h re port is on the pote ntial growth on the Indian InsuranceSector, it alsotalks about the market size, market segme ntation, and key de velopments in themarketafter 1999.37CHAPTER 2RESEARCH METHODOLOGY38

RESEARCH OBJECTIVES:1. To compare the performance of LIC and private insurance companies in India.2. To find out the performances of LIC and private insurance companies in eachcategory (size. growth, productivity a nd efficie ncy)3. To compare grievance management of LIC and private insurance companies.RESEARCH DESIGN :a. Type of research design : Analytical Researchb. Data collection :Secondary Sourcesc. Statistica l T ools : Ratio Ana lysisBar GraphRESEARCH PROCESS

In this research my research objective was to compa re the pe rformance of LIC andPrivateinsuranc e companies. For this purpose I decided the four broad categories underwhich I havecompared the LIC and Private insurance companies. These are:1. Size2. Growth3. Productivity4. Grie vance HandlingUnder these Broad Categories I have analyzed 13 factors which are:1. Size


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Total PremiumTotal IncomeSize of Balance SheetTotal number of Policies

Total number of Branches2. GrowthGrowth in PremiumGrowth in Income39Growth in number of PoliciesGrowth in Market share

3. Produ ctivityBusiness per BranchIncome per BranchNew Premium per Branch4. Grie vance HandlingI have used the Se condary data of last five financial years. I ha ve collecteddata from thevarious balance sheet of LIC and other private insurance companies, web sites andin somecases I personally met some emplo yees of some insurance companies. I tr

Dissertation Project Report on a Comparative Analysis

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