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INSURANCE
PRODUCTS DISTRIBUTION |
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With
the opening of the market six years ago, Indian
insurance business, which remained under developed
with low levels of insurance penetration and insurance
density has shown signs of improvement. Opened
up of private sector participation with provision
for limited foreign equity exposure, has made
the industry extremely competitive and aggressive.
Foreign majors have entered the country and announced
joint ventures in both life and non-life areas.
Major foreign players include New York Life, Aviva,
Tokio Marine, Allianz, Standard Life, Lombard
General, AIG, AMP and Sun Life among others. With
competition, the erstwhile state sector companies
have become aggressive in terms of product offerings,
marketing and distribution. |
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The
foreign and private Indian players have been focused
on converting untapped market potential into opportunities
by providing tailor-made products. The presence
of a host of new players in the sector has resulted
in a shift in approach and the launch of innovative
products, services and value-added benefits. |
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The
Insurance Regulatory and Development Authority
(IRDA) have played a proactive role as a regulator
and a facilitator in the sector’s development.
The size of the market presents immense opportunities
to new players with only 20 per cent of the Country’s
insurable population currently insured. |
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There
were four public sector and nine private sector
insurance companies operating in general/ non-life
insurance business with a premium income of over
US$ 2.58 billion in 2003. The insurance penetration
i.e. premia as percentage of GDP was 2.32% in
2000. The insurance density i.e. premium per capita
was USD 9.90 in 2000. |
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The
life insurance industry underwrote Individual
Single Premium of Rs.10,99,898.97 Lacs during
2005-06, of which private insurers garnered Rs.2,24,590.09
Lacs and LIC garnered Rs.8,75,308.88 Lacs. The
corresponding figures for the previous year were
Rs.590461.13 Lacs for the industry with private
insurers underwriting Rs.101578.32 Lacs and LIC
Rs.488882.81 Lacs. The Individual Non-Single Premium
underwritten during the year ended 31st March
2006 was Rs.19,88,904.29 Lacs, of which the private
insurers underwrote Rs.6,94,322.40 Lacs and LIC
Rs.12,94,581.89 Lacs. The corresponding figures
for the previous year were Rs.1524582.74 Lacs
of which the private insurers underwrote Rs.386512.42
Lacs and LIC Rs.1138070.32 Lacs. |
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Group
Premium: |
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The
industry underwrote Group Single Premium of Rs.4,40,624.12
Lacs of which the private insurers underwrote
Rs.45,996.35 Lacs and LIC Rs.3,9 4,627.77 Lacs:
the lives covered being 1,23,29,399; 8,61,391
and 1,14,68,008 respectively. The corresponding
figures for the previous year were Rs.401397.94
with private insurers underwriting Rs.31,125.55
Lacs and LIC Rs.3,70,272.39 Lacs; and the lives
covered being 8707628; 5,65,254 and 81,42,374
respectively. The Group Non-Single Premium underwritten
during the year ended 31st March 2006 was Rs.60,368.13
Lacs and was underwritten entirely by the private
insurers, covering 28,51,686 lives. The corresponding
figures for the previous year were Rs.36,523.30.07
Lacs covering 22,45,355 lives. |
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Segment-wise
Segregation: |
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A
further segregation of the premium underwritten
during the year indicates that Life, Annuity,
Pension and Health contributed Rs.26,38,529.36
Lacs (73.57% ), Rs.1,54,382.34 Lacs (4.30%), Rs.7,92,852.43
Lacs (22.11% ) and Rs.736.56 Lacs ( 0.02%) respectively
to the total premium. In respect of LIC, the break
up of life, annuity and pension categories was
Rs.16,95,656.80 Lacs (66.12%), Rs.1,40,275.38
Lacs (5.47%) and Rs.7,28,586 Lacs (28.41% ) respectively.
In case of the private insurers, Rs.9,42,872.56
Lacs (92.26%),
Rs.14,106.96 Lacs (1.38%), Rs.64,266.06 Lacs (6.29%)
and Rs.736.56 Lacs (0.07%) respectively was underwritten
in the four segments.
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Unit
Linked and conventional premium: |
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Analysis
of the statistics in terms of linked and non-linked
premium indicates that 55.22% of the business
was underwritten in the non-linked category, and
44.78% in the linked category, i.e. Rs.19,80,433.27
Lacs and Rs.16,06,067.42 respectively. In case
of LIC, the linked and non-linked premium was
29.76% and 70.24% respectively; as against which
for the private insurers taken together, this
stood at 82.48% and 17.52% respectively.
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(Source:
IRDA Journal May 2006) |
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Therefore
there is huge potential to penetrate the insurance
markets and reach the untapped population. AGSL
can seize this opportunity and increase its revenue
through the distribution of Insurance products.
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