Project Report on

INSURANCE INDUSTRY

Submitted for the partial fulfillment of the requirement

for the award of the Degree of

B.COM(H)

In

School Of Commerce

BY

SURAJ BISHT

Semester VI

Enrollment no.

Under the Supervision of

Name

Deg

GRAPHIC ERA HILL UNIVERSITY

DEHRADUN, UTTARAKHAND, INDIA

MAY, 2020

DECLARATION
This is to certify that the Project Report on “INSURANCE INDUSTRY” in partial fulfillment
of the requirement for the award of the Degree of Honors in Commerce submitted to Graphic
Era Hill University Dehradun Uttarakhand India, is an authentic record of bonafide work
carried out by me under the supervision of Dr.

The matter embodied in this Project has not been submitted for the award of any other degree or
diploma to any University.

Signature

Name of candidate-

Enrollment no.-

Date:

Place: Dehradun
 CERTIFICATE

This is to certify that the Project Report on ’’INSURANCE INDUSTRY ” in partial fulfillment
of the requirement for the award of the Degree of Honors in Commerce submitted to the
Graphic Era Hill University Dehradun Uttarakhand India, is an authentic record of bonafide
work carried out by Mr. SURJ BISHT. Enrollment no. under my supervision.

Name of Supervision

Date:

Place: Dehradun
 LIST OF TABLES AND FIGURES

S.No. Details of Tables or Figures Page No.

 CONTENTS

Name of Chapter Page. NO.

CHAPTER ONE

INTRODUCTION
 INTRODUCTION

What Is Insurance?
Insurance is a contract, represented by a policy, in which an individual or entity receives
financial protection or reimbursement against losses from an insurance company. The company
pools clients' risks to make payments more affordable for the insured.

Insurance policies are used to hedge against the risk of financial losses, both big and small, that
may result from damage to the insured or her property, or from liability for damage or injury
caused to a third party.

How Insurance Works

There is a multitude of different types of insurance policies available, and virtually any
individual or business can find an insurance company willing to insure them—for a price. The
most common types of personal insurance policies are auto, health, homeowners, and life. Most
individuals in the United States have at least one of these types of insurance, and car insurance is
required by law.

Businesses require special types of insurance policies that insure against specific types of risks
faced by a particular business. For example, a fast-food restaurant needs a policy that covers
damage or injury that occurs as a result of cooking with a deep fryer. An auto dealer is not
subject to this type of risk but does require coverage for damage or injury that could occur during
test drives.

There are also insurance policies available for very specific needs, such as kidnap and ransom
(K&R), medical malpractice, and professional liability insurance, also known as errors and
omissions insurance.

Insurance Policy Components

When choosing a policy, it is important to understand how insurance works.

A firm understanding of these concepts goes a long way in helping you choose the policy that
best suits your needs. There are three components (premium, policy limit, and deductible) to
most insurance policies that are crucial.
Premium
A policy's premium is its price, typically expressed as a monthly cost. The premium is
determined by the insurer based on your or your business's risk profile, which may include
creditworthiness.

For example, if you own several expensive automobiles and have a history of reckless driving,
you will likely pay more for an auto policy than someone with a single mid-range sedan and a
perfect driving record. However, different insurers may charge different premiums for similar
policies. So finding the price that is right for you requires some legwork.

Policy Limit
The policy limit is the maximum amount an insurer will pay under a policy for a covered loss.
Maximums may be set per period (e.g., annual or policy term), per loss or injury, or over the life
of the policy, also known as the lifetime maximum. Typically, higher limits carry higher
premiums. For a general life insurance policy, the maximum amount the insurer will pay is
referred to as the face value, which is the amount paid to a beneficiary upon the death of the
insured.

Deductible
The deductible is a specific amount the policy-holder must pay out-of-pocket before the insurer
pays a claim. Deductibles serve as deterrents to large volumes of small and insignificant claims.
Deductibles can apply per-policy or per-claim depending on the insurer and the type of policy.
Policies with very high deductibles are typically less expensive because the high out-of-pocket
expense generally results in fewer small claims.

Different types of insurance policies

1. Life Insurance
Life Insurance refers to a policy or cover whereby the policyholder can ensure financial freedom
for his/her family members after death. Suppose you are the sole earning member in your family,
supporting your spouse and children. In such an event, your death would financially devastate
the whole family. Life insurance policies ensure that such a thing does not happen by providing
financial assistance to your family in the event of your passing.

Types of Life Insurance Policies

There are primarily seven different types of insurance policies when it comes to life insurance.
These are:
  Term Plan - The death benefit from a term plan is only available for a specified
period, for instance, 40 years from the date of policy purchase.
 Endowment Plan - Endowment plans are life insurance policies where a portion of
your premiums go toward the death benefit, while the remaining is invested by the
insurance provider. Maturity benefits, death benefit and periodic bonuses are some types
of assistance from endowment policies.
 Unit Linked Insurance Plans or ULIPs - Similar to endowment plans, a part of
your insurance premiums go toward mutual fund investments, while the remaining goes
toward the death benefit.
 Whole Life Insurance - As the name suggests, such policies offer life cover for the
whole life of an individual, instead of a specified term. Some insurers may restrict the
whole life insurance tenure to 100 years.
 Child’s Plan - Investment cum insurance policy, which provides financial aid for your
children throughout their lives. The death benefit is available as a lump-sum payment
after the death of parents.
 Money-Back - Such policies pay a certain percentage of the plan’s sum assured after
regular intervals. This is known as survival benefit.
 Retirement Plan - Also known as pension plans, these policies are a fusion of
investment and insurance. A portion of the premiums goes toward creating a retirement
corpus for the policyholder. This is available as a lump-sum or monthly payment after the
policyholder retires.

Benefits of Life Insurance

If you possess a life insurance plan, the following advantages from the policy are.

 Tax Benefits - If you pay life insurance premiums, you are eligible for tax benefits in
India, under Section 80(C) and 10(10D) of the Income Tax Act. Thus, you can save a
substantial sum of money as taxes by opting for a life insurance plan.
 Encourages Saving Habit - Since you need to pay policy premiums, buying such an
insurance policy promotes the habit of saving money.
 Secures Family’s Financial Future - The policy ensures your family’s financial
independence is maintained even after your demise.
 Helps Plan Your Retirement - Certain life insurance policies also act as
investment options. For instance, pension plans offers a lump-sum payout as soon as you
retire, helping you to fund your retirement.

2. Motor Insurance
Motor insurance refers to policies that offer financial assistance in the event of accidents
involving your car or bike. Motor insurance can be availed for three categories of motorized
vehicles, including:

 Car Insurance - Personally owned four-wheeler vehicles are covered under such a
policy.
 Two-wheeler Insurance - Personally owned two-wheeler vehicles, including bikes
and scooters, are covered under these plans.
 Commercial Vehicle Insurance - If you own a vehicle that is used commercially,
you need to avail insurance for the same. These policies ensure that your business
automobiles stay in the best of shapes, reducing losses significantly.

Types of Motor Insurance Policies

Based on the extent of cover or protection offered, motor insurance policies are of three types,
namely:

 Third-Party Liability - This is the most basic type of motor insurance cover in
India. It is the minimum mandatory requirement for all motorized vehicle owners, as per
the Motor Vehicles Act of 1988. Due to the limited financial assistance, premiums for
such policies also tend to be low. These insurance plans only pay the financial liability to
the third-party affected in the said mishap, ensuring that you do not face legal hassle due
to the accident. They, however, do not offer any financial assistance to repair the
policyholder’s vehicle after accidents.
 Comprehensive Cover - Compared to the third-party liability option, comprehensive
insurance plans offer better protection and security. Apart from covering third party
liabilities, these plans also cover the expenses incurred for repairing the damages to the
policyholder’s own vehicle due to an accident. Additionally, comprehensive plans also
offer a payout in case your vehicle sustains damage due to fire, man-made and natural
calamities, riots and others such instances. Lastly, you can recover your bike’s cost if it
gets stolen, when you have a comprehensive cover in place. One can also opt for several
add-ons with their comprehensive motor insurance policy that can make it better-
rounded. Some of these add-ons include zero depreciation cover, engine and gear-box
protection cover, consumable cover, breakdown assistance, etc.
 Own Damage Cover - This is a specialized form of motor insurance, which
insurance companies offer to consumers. Further, you are eligible to avail such a plan
only if you purchased the two-wheeler or car after September 2018. The vehicle must be
brand new and not a second-hand one. You should also remember that you can avail this
standalone own damage cover only if you already have a third party liability motor
insurance policy in place. With own damage cover, you basically receive the same
benefits as a comprehensive policy without the third-party liability portion of the policy.
Benefits of Motor Insurance Policies
Cars and bikes are increasingly more expensive with each passing day. At such a time, staying
without proper insurance can lead to severe monetary losses for the owner. Listed below are
some advantages of purchasing such a plan.

 Prevents Legal Hassle - Helps you avoid any traffic fines and other legalities that
you would otherwise need to bear.
 Meets All Third-Party Liability - If you injure a person or damage someone’s
property during a vehicular accident, the insurance policy helps you meet the monetary
losses, effectively.
 Financial Assistance to Repair your own Vehicle - After accidents, you need
to spend considerable sums on repairing your own vehicle. Insurance plans limit such out
of pocket expenses, allowing you to undertake repairs immediately.
 Theft/loss covers - If your vehicle is stolen, your insurance policy will help you
reclaim a portion of the car/bike’s on-road price. You can expect similar assistance if
your vehicle is damaged beyond repair due to accidents.

3. Health Insurance
Health insurance refers to a type of general insurance, which provides financial assistance to
policyholders when they are admitted to hospitals for treatment. Additionally, some plans also
cover the cost of treatment undertaken at home, prior to a hospitalization or after discharge from
the same. With the rising medical inflation in India, buying health insurance has become a
necessity. However, before proceeding with your purchase, consider the various types of health
insurance plans available in India.

Types of Health Insurance policies

There are eight main types of health insurance policies available in India. They are:

 Individual Health Insurance - These are healthcare plans that offer medical cover
to just one policyholder.
 Family Floater Insurance - These policies allow you to avail health insurance for
your entire family without needing to buy separate plans for each member. Generally,
husband, wife and two of their children are allowed health cover under one such family
floater policy.
 Critical Illness Cover - These are specialized health plans that provide extensive
financial assistance when the policyholder is diagnosed with specific, chronic illnesses.
These plans provide a lump-sum payout after such a diagnosis, unlike typical health
insurance policies.
  Senior Citizen Health Insurance - These policies specifically cater to individuals
aged 60 years and beyond.
 Group Health Insurance - Such policies are generally offered to employees of an
organization or company. They are designed in such a way that older beneficiaries can be
removed, and fresh beneficiaries can be added, as per the company’s employee retention
capability.
 Maternity Health Insurance - These policies cover medical expenses during pre-
natal, post-natal and delivery stages. It covers both the mother as well as her newborn.
 Personal Accident Insurance - These medical insurance policies only cover
financial liability from injuries, disability or death arising due to accidents.
 Preventive Healthcare Plan - Such policies cover the cost of treatment concerned
with preventing a severe disease or condition.

Benefits of Health Insurance

 Medical Cover - The primary benefit of such insurance is that it offers financial
coverage against medical expenditure.
 Cashless Claim - If you seek treatment at one of the hospitals that have tie-ups with
your insurance provider, you can avail cashless claim benefit. This feature ensures that all
medical bills are directly settled between your insurer and hospital.
 Tax Benefits - Those who pay health insurance premiums can enjoy income tax
benefits. Under Section 80D of the Income Tax Act one can avail a tax benefit of up to
Rs.1 Lakh on the premium payment of their health insurance policies.

4. Travel Insurance
When talking about the different types of insurance policies, one must not forget to learn more
about travel insurance plans. Such policies ensure the financial safety of a traveller during a trip.
Therefore, when compared to other insurance policies, travel insurance is a short-term cover.

Depending on the provider you choose, travel insurance may offer financial aid at various times,
such as during loss of baggage, trip cancellation and much more. Here is a look at some of the
different types of travel insurance plans available in the country:

 Domestic Travel Insurance - This is the kind of travel insurance policy that
safeguards your finances during travels within India. However, if you plan to step outside
the country for a vacation, such a policy would not offer any aid.
 International Travel Insurance - If you are stepping out of the country, ensure
you pick an international travel insurance plan. It allows you to cover the unforeseen
expenses that can arise during your trip like medical emergencies, baggage loss, loss of
passport, etc.
  Home Holiday Insurance - When you are travelling with family, your home
remains unguarded and unprotected. Chances of burglary are always significant, which
may lead to significant losses. Thankfully, with home holiday insurance plans, which are
often included within travel policies, you are financially protected from such events as
well.

Benefits of Travel Insurance

The following aspects are covered under travel insurance plans:

 Cover Flight Delay - Flight delays or cancellations can lead to significant losses for
the passenger. If you buy travel insurance, you can claim such financial losses from the
insurer.
 Baggage Loss/Delay - Travel insurance lets you claim monetary assistance if there is
a delay or you happen to lose your luggage during the trip. With this amount, you can
purchase some of the necessary items.
 Reclaim Lost Travel Documents - Visa and passport are essential documents
during an international trip. Opting for international travel insurance ensures that you
have the necessary financial backing to reapply for interim or replacement documents as
and when necessary.
 Trip Cancellation Cover - A sudden death in the family or a medical emergency
may play spoilsport with your travel arrangements. Thankfully, international travel
insurance plans support trip cancellations in such events. You can claim financial
assistance to pay penalties and cancellation charges for flights, hotels, etc.

5. Property Insurance
Any building or immovable structure can be insured through property insurance plans. This can
be either your residence or commercial space. If any damage befalls such a property, you can
claim financial assistance from the insurance provider. Keep in mind that such a plan also
financially safeguards the content inside the property.

Types of Property Insurance in India

Here are some types of property insurance policies available in India:

 Home Insurance - With such a policy, you remain free from all financial liabilities
that may arise from damage to your home or contents inside due to fires, burglaries,
storms, earthquakes, explosions and other events.
  Shop Insurance - If you own a shop, which acts as a source of income for you, it is
integral to protect yourself from financial liability arising from the same. Whether the
liability occurs due to natural calamities or due to accidents, with these plans, you can
immediately undertake repairs to the shop.
 Office Insurance - Another type of property insurance policy, office insurance
ensures that the office building and all the equipment inside are significantly protected in
the event of unforeseen events. Generally, office spaces include expensive equipment,
such as computers, servers and much more. Thus, availing these plans is essential.
 Building Insurance - If you own a complete building, opting for home insurance
may not be sufficient. Instead, you can purchase building insurance to cover the entire
premises.

Benefits of Property Insurance

 Protection against Fires - While the insurance policy cannot prevent fires, it can
prevent financial liabilities from such an event.
 Burglaries - If your property exists in an area prone to theft and burglaries, such a
policy is vital to ensure financial security.
 Floods - In certain parts of India, floods are common. These floods can ravage your
property leading to substantial losses. Property insurance also protects against such
events.
 Natural Calamities - The plan also offers financial aid against damage arising from
earthquakes, storms and more.

Rebuilding or renovation of a property is immensely expensive. Thus, property insurance

policies are the best option to ensure long-term financial health.

6. Mobile Insurance
Owing to the rising price of mobile phones and their several applications today, it has become
imperative to insure the device. Mobile insurance allows you to reclaim money that you spend on
repairing your phone in the event of accidental damage.

Further, you can also claim the same in case of phone theft, making it easier to replace the
handset with a new phone.

Benefits of Mobile Insurance

Mobile insurance policies are extremely beneficial, especially for those who own a premium
smartphone.
  Comprehensive protection for new devices - The value of phones tend to
decline with time. Thus, when the handset is new, phone insurance can help safeguard its
significant value.
 Coverage against Damage to Screen - If you accidentally damage the
smartphone screen, which is one of the most important parts of such devices, your
insurance plan will pay for the repair expenses.
 Theft or Robbery of Smartphone - Nothing is worse than buying your dream
smartphone and losing it due to theft or burglary. Well, phone insurance will help you
afford a replacement handset if such an unfortunate thing happens.

Some insurers may not allow you to buy insurance for the smartphone after a month or two
passes from the purchase of the handset.

7. Cycle Insurance
Bicycles are valuable properties in India as some people rely on these vehicles for their daily
commute. A cycle insurance policy ensures that you have access to necessary funds should your
bicycle undergo accidental damage or theft. It saves your out of pocket expenses, while also
ensuring immediate repairs to the vehicle.

Benefits of Cycle Insurance

The advantages of availing such an insurance policy are:

 Worldwide Coverage - Depending on the insurance provider, cycle insurance

policies provide financial assistance regardless of where bicycle undergoes damage. Even
if you meet with a cycling accident in a different country, such a plan will offer aid.
 Protection against Fires and Riots - If bicycle sustains damage due to accidental
fires and/or rioting, insurance policies will provide the necessary financial assistance to
repair or undo the damage.
 Accidental Death Benefit - If you pass away due to bicycle accidents, the insurance
policy for the cycle would offer a lump-sum payout to your surviving family members.

8. Bite-Size Insurance
Bite-sized insurance policies refer to sachet insurance plans that minimise your financial liability
for a very limited tenure, generally up to a year.

These insurance plans allow you to protect your finances against specific damage or threats.
For instance, particular bite-sized insurance may offer accidental cover of Rs. 1 Lakh for a year.
You can choose this policy when you think you might be particularly susceptible to accidental
injuries.

Another example is insurance cover for specific diseases. For instance, if your area is prone to
water-borne diseases, such as cholera, you can pick a policy that covers cholera treatment and all
associated costs for a 1-year period.

Benefits of Bite-sized Insurance

The primary benefit of bite-size insurance policies is that it allows you to avail financial
protection at very limited prices.

The premiums are so low that it hardly makes any impact on your overall monthly expenditures.
In comparison, the sum insured is significant.

Historical development and growth of Indian Insurance sector-

Since the mankind, every individual were ready for some type of sacrifice to avoid the evil
consequences of flood and fire. The same instinct is now in today’s businessmen to secure
themselves against loss and disaster. This instinct was the main reason for the birth of
Insurance. Beginning date of Insurance is almost 6000 years back but it largely developed in
the past few centuries, particularly after the industrial era.

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu (
Manusmrithi ), Yagnavalkya ( Dharmasastra ) and Kautilya ( Arthasastra ). The writings
talk in terms of pooling of resources that could be re-distributed in times of calamities such
as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day
insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of
marine trade loans and carriers’ contracts. Insurance in India has evolved over time heavily
drawing from other countries, England in particular.

India insurance is a flourishing industry, with several national and international players
competing and growing at rapid rates. Thanks to reforms and the easing of policy
regulations, the Indian insurance sector been allowed to flourish, and as Indians become
more familiar with different insurance products, this growth can only increase, with the
period from 2010 - 2015 projected to be the 'Golden Age' for the Indian insurance industry.
2
Overview of Indian Insurance Sector
INDIA is the 5th largest market in Asia by premium following Japan, Korea, China and
Taiwan. The US$ 30 billion insurance business in India is expected to grow 17 per cent in
fiscal 2009-103 if the country’s economy clocks 7.6 percent GDP. In fiscal 2008-09 life
insurers grew their business by 23.3 percent to Rs.930 billion while general insurers posted
growth of about 14 percent in premium income to Rs 298 billion. Presently the total number
of insurers registered with the Insurance Regulatory and Development Authority (IRDA)
stands at 42 : 21 in life insurance and 21 in general insurance segments. Some joint ventures
include Tata AIG, Bajaj Allianz, ICICI Prudential, SBI Life, HDFC Standard Life, Birla
Sunlife, Max New York Life and Bharti AXA Life.

India is the fifth-largest country in Asia in terms of total insurance premium. The premium
income in the country increased to 4.7 percent of GDP in fiscal 2006-07 from 3.3 percent in
the fiscal 2002-03.Total premium in the insurance industry grew at a CAGR of 28.1 percent
during the same period. The life insurance sector grew at a CAGR of 29.3 percent
outsmarting the general insurance sector’s CAGR of 21.3 percent.

The Indian insurance sector has a turnover of around Rs 26,287 crore. The current FDI in
this sector stands at around Rs 2500 crore and market experts expects FDI to zoom by about
2.5 times once the FDI cap is raised by another 23 percent to 49 percent.

The terror Pool, set up after 9/11 attacks, and being funded by the insurers currently has a
corpus of Rs 1000 crore. The settlement of the claims for Taj, trindent and Oberoi
amounting to Rs 500 crore could be well taken care of. The urrent coverage is till March 31,
2009. It is expected with renewals for next fiscal year, the Terror Pool fund will increase
substantially. General Insurance Corporation (GIC), the Indian reinsurer, is planning to rise
terrorism insurance cover to Rs 1000 crore from Rs 750 crore. Currently any claim beyond
Rs 750 crore is covered by international insurers.
Meanwhile, on the expected line of foreign investors, the Congress(I)-led UPA government
in New Delhi has introduced the Insurance Laws (Amendment) Bill 2008 in the upper
house of Indian Parliament on December 22, 2008 that seeks to raise the Foreign Direct
Invest (FDI) cap in the insurance sector from existing 26 percent to 49 percent. The
government move is seen as the UPA government’s most significant and biggest reform
measure in the financial sector since the then Finance minister P. Chidambaram in his
Budget speech announced plan to hike FDI in insurance to 49 percent.

The Bill, once through in both houses of Parliament, will allow companies, exclusively into
the business of health insurance, to operate with a minimum paid up capital of Rs 50 crore
against the current minimum paid up capital of Rs 100 crore for any insurance business-Life
or General. For re-insurance business the minimum paid-up capital will be Rs 200 crore.
The Bill when translated into an Act would enable all the state-run general insurance
companies- Oriental Insurance, New India Assurance, United India Insurance and National
Insurance – to enter the capital market to mop up funds.

The Bill also seeks to allow Lloyd’s of London to enter Indian insurance market as a
foreign company in joint venture partnership with local companies. The insurance
regulatory body- IRDA, would chart the terms and conditions for cancellation of
registration. Business without registration will invite fine up to Rs 25 crore. For not meeting
the obligations for rural or social sector or third party insurance of motor vehicles, fine up to
Rs 25 crore will be slapped.

According to the Bill, no insurance policy can be challenged after a gap of five years. It will
protect the interest of policy holders against any possible litigation.

Besides Insurance Law (Amendment) Bill 2008, the government has also introduced
another Bill namely, Life Insurance Corporation (Amendment) Bill to raise its capital
from existing Rs 5 crore to Rs 100 crore. This would enable LIC comply with IRDA
norms. The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has
projected that foreign direct investment (FDIs) will increase in insurance sector by $ 0.46
billion in next 2 years and likely to touch $ 0.96 billion as it is still regulated. A Paper on
FDI’s Prospects in Insurance Sector brought out by the ASSOCHAM says that currently the
total insurance market in India is about $ 30 billion, in which the element of FDI’s is $ 0.5
billion. This is 1.6 percent of total insurance business in India.

Despite, insurance being a highly regulated sector, however, in the first five months of
current calendar, i.e. between January to May, it could attract FDI’s of $ 217.97 million
which by any standard is not too insignificant. If the insurance sector is opened up to an
extent of 49 percent for FDI’s, in next 2 years, i.e. by 2010, the FDI’s contribution to
insurance business would touch nearly $ 2 billion. Currently, only 26 percent of FDI’s are
permitted in insurance sector, the chamber expects. It is pointed out that the domestic
insurance sector has been growing at an average speed of nearly 200 percent and that is why
the chamber is of the view that by 2012, the total insurance business would touch $ 60
billion size.
In the life insurance sector particularly on FDI’s front, the growth that has taken between
2006 and 2007 is estimated to be around 270 percent. This itself speaks the significance and
importance, investors are attaching to both life insurance and non-life insurance sector.

India’s insurance market lags behind other economies in the baseline measure of insurance
penetration. At only 3.1 percent, India is well behind the 12.5 percent for the UK, 10.5
percent for Japan, 10.3 percent for Korea and 9.2 percent for the US. Currently, FDI
represents only Rs.827 core of the Rs.3179 crore capitalizations of private life insurance
companies. FDI in insurance would increase the penetration of insurance in India, where the
penetration of insurance is abysmally low with insurance premium at about 3 percent of
GDP against about 8 percent global average. This would be better through marketing effort
by MNCs, better product innovation, consumer education etc.

The chamber President Sajjan Jindal maintains that insurance sector in India has the
capability of raising long term capital from the market as it is the only avenue where people
put in money for as long as 30 years even more. An increase in FDI in insurance would
indirectly be a boon for the Indian economy, the investments not withstanding but by
making more people invest in long term funds to fuel the growth of the Indian economy, he
feels.

Since end of 2000 when insurance was privatized, life insurance company promoters
pumped in Rs 21,000 crore so far. The distribution network also expanded significantly. In
the second quarter of fiscal 2008-09 1480 branches were added including 1293 branches set
up by private sector life insurers. During this period the life industry added 53332
employees to their payrolls. The number of pay-roll employees now crossing over 300,000.
Of the total 10,037 branches of life insurance companies around 7,000 are in semi urban
and rural areas. By the end of 1st quarter of current fiscal (2008-09) the total assets of the
life insurance companies stood at Rs 857,500 crore. Of this, Unit Linked Policies ( ULIP)
accounts for Rs 140,000 crore. The total premium of all insurance companies taken together
aggregated to Rs 86,500 crore in the first half of current fiscal.

Yet another highly prospective business segment is health insurance. According to a CII-
E&Y study report, the health insurance premium income is likely to touch Rs 30,000 crore
in 2015 from the existing Rs 4,000 crore. The premium was Rs 670 crore in fiscal 2001-02.
It is expected that the hike in FDI for the insurance sector from 26 percent to 49 percent will
boost the healthcare business.

The immense business potential in health sector is reflected in the fact that only about 1
percent of the country’s population is presently covered under health insurance policies.
The fillip to the health insurance segment will also come when the Insurance Regulatory
and Development Authority’s (IRDA) recommendation to bring down capital requirements
for stand-alone health insurance companies from Rs 100 crore to Rs 50 crore. In fact, the
Insurance Laws (Amendment) Bill 2008 makes provision to allow companies, exclusively
into the business of health insurance, to operate with a minimum paid up capital of Rs 50
crore against the current minimum paid up capital of Rs 100 crore for any insurance
business- Life or General. This is expected to prompt entry of more health insurance
companies into the country.

Micro insurance is yet another which is yet to be explored optimally. The CII-E&Y report
says that micro health insurance schemes in India have achieved good enrolment levels
among their target populations including poor. Out of the total insurance premium of Rs
100,000 crore collected in fiscal 2007-08, micro-insurance accounted for a meager Rs 125
crore.

The CII-E&Y recommendations include introduction of risk-based capital in the life

insurance segment, institutionalization of underwriting and marketing skills in the general
insurance segment, articulation of proper reforms and industry compliance for health
insurance and regulatory and industry endeavor to promote deepening of markets for micro
insurance.

The health expenditure across the country was Rs 180,000 crore in 2007. With healthcare
costs escalation, rising demand for healthcare services and limited access of the low-income
group to quality healthcare, health insurance is emerging as an alternative mechanism for
financing healthcare. And with merely 12 percent of the population being covered,
companies are looking at the health insurance space as a lucrative segment.

The state-owned companies constitute nearly 70 percent of the health insurance market and
private companies account for the remaining 30 percent As the out-of-pocket expenditure
on healthcare is pegged at more than 70%, private insurers are treating this as an important
target market. ICICI Prudential has started a division catering to health insurance, while
Bupa-Max is awaiting the IRDA’s approval to launch health insurance schemes. LIC
recently unveiled its health insurance scheme to compete with players such as Apollo, Star
and Bajaj Allianz.

Commenting on the prospect of the general insurance industry in India a Moody’s-ICRA

report on Indian General Insurance Industry Outlook said: “The outlook for the general
insurance industry in India is stable based on Moody’s expectations for steady fundamental
credit conditions in the sector over the next 12-18 months. With the Indian economy
forecast to grow at 7.5% in 2008 and given rising income levels and higher risk awareness
among insureds, the country’s insurers are optimistic about demand for their products.
However, intense competition from new entrants, deregulation and a moderation in returns
from the equities market will pressure pricing and ultimately short-term profitability.”

“At the same time, despite rising inflation and a severe correction in the stock market (the
key Sensex index fell 26% in 1Q2008), the prevailing view in Asia is that while China and
India are not insulated from the credit crisis afflicting the US and EU, domestic demand is
strong enough to support GDP growth1. Being less export dependent, India is also less
vulnerable than some of its neighbors”, the Report pointed out.

According to Moody’s-ICRA report published in April 2008, “Rising income levels, low
penetration for most consumer products, availability of financing and changes in lifestyles/
aspirations are likely to sustain consumer demand over the next few years. In the short term,
the focus on infrastructure development will keep the economy going, even if the tightening
in credit leads to a slowdown in consumer spending.”

“Furthermore, over the medium and long term, India’s insurance market will continue to
experience major changes as its operating environment increasingly deregulates. On the one
hand, a mix of new products, new delivery systems and a greater awareness of risk will
generate growth. On the other hand, competition will remain intense as private sector
insurers and those about to enter India seek to win market share from the more established
public sector entities,” the report indicated.

Some of the important milestones in the life insurance business in India are:

 1818: Oriental Life Insurance Company, the first life insurance company on Indian
soil started functioning.
 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance
company started its business.
 1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
 1928: The Indian Insurance Companies Act enacted to enable the government to
collect statistical information about both life and non-life insurance businesses.

 1938: Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
 1956: 245 Indian and foreign insurers and provident societies are taken over by the
central government and nationalized. LIC formed by an Act of Parliament, viz. LIC
Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

Indian Insurance Sector Reforms

The formation of the Malhotra Committee in 1993 initiated reforms in the Indian insurance
sector. The aim of the Malhotra Committee was to assess the functionality of the Indian
insurance sector. This committee was also in charge of recommending the future path of
insurance in India.

The Malhotra Committee attempted to improve various aspects of the insurance sector,
making them more appropriate and effective for the Indian market.

The recommendations of the committee put stress on offering operational autonomy to the
insurance service providers and also suggested forming an independent regulatory body.
The Insurance Regulatory and Development Authority Act of 1999 brought about several
crucial policy changes in the insurance sector of India. It led to the formation of the
Insurance Regulatory and Development Authority (IRDA) in 2000.

The goals of the IRDA are to safeguard the interests of insurance policyholders, as well as to
initiate different policy measures to help sustain growth in the Indian insurance sector.

The Authority has notified 27 Regulations on various issues which include Registration of
Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of
Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of
policy holders' interest etc. Applications were invited by the Authority with effect from 15th
August, 2000 for issue of the Certificate of Registration to both life and non-life insurers.
The Authority has its Head Quarter at Hyderabad.

Indian insurance companies offer a comprehensive range of insurance plans, a range that is
growing as the economy matures and the wealth of the middle classes increases. The most
common types include: term life policies, endowment policies, joint life policies, whole life
policies, loan cover term assurance policies, unit-linked insurance plans, group insurance
policies, pension plans, and annuities. General insurance plans are also available to cover
motor insurance, home insurance, travel insurance and health insurance.

Due to the growing demand for insurance, more and more insurance companies are now
emerging in the Indian insurance sector. With the opening up of the economy, several
international leaders in the insurance sector are trying to venture into the Indian Insurance
Industry.

1.2 Insurance Regulatory & Development Authority (IRDA)

Composition of Authority under IRDA Act, 1999

As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development
Authority (IRDA, which was constituted by an act of parliament) specify the
composition of Authority

The Authority is a ten member team consisting of

(a) a Chairman;

(b) five whole-time members;

(c) four part-time members,

(all appointed by the Government of India)

Duties,Powers and Functions of IRDA

Section 14 of IRDA Act, 1999 laysdown the duties,powers and functions of IRDA..

Subject to the provisions of this Act and any other law for the time being in force, the
Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance
business and re-insurance business.
Without prejudice to the generality of the provisions contained in sub-section (1), the powers
and functions of the Authority shall include, - a. Issue to the applicant a certificate of
registration, renew, modify, withdraw, suspend or cancel such registration; b. Protection of
the interests of the policy holders in matters concerning assigning of policy, nomination by
policy holders, insurable interest, settlement of insurance claim, surrender value of policy
and other terms and conditions of contracts of insurance;

c. Specifying requisite qualifications, code of conduct and practical training for intermediary
or insurance intermediaries and agents;

d. Specifying the code of conduct for surveyors and loss assessors;

e. Promoting efficiency in the conduct of insurance business;

f. Promoting and regulating professional organisations connected with the insurance and re-
insurance business;

g. Levying fees and other charges for carrying out the purposes of this Act;

h. Calling for information from, undertaking inspection of, conducting enquiries and
investigations including audit of the insurers, intermediaries, insurance intermediaries and
other organisations connected with the insurance business;
i. Control and regulation of the rates, advantages, terms and conditions that may be offered
by insurers in respect of general insurance business not so controlled and regulated by the
Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938);

j Specifying the form and manner in which books of account shall be maintained and
statement of accounts shall be rendered by insurers and other insurance intermediaries;

k. regulating investment of funds by insurance companies;

l. Regulating maintenance of margin of solvency;

m. Adjudication of disputes between insurers and intermediaries or insurance intermediaries;

n. Supervising the functioning of the Tariff Advisory Committee;

o. Specifying the percentage of premium income of the insurer to finance schemes for
promoting and regulating professional organisations referred to in clause (f);

p. Specifying the percentage of life insurance business and general insurance business to be
undertaken by the insurer in the rural or social sector; and

q. Exercising such other powers as may be prescribed

Protection of Interest of Policy Holders

IRDA has the responsibility of protecting the interest of insurance policyholders. Towards
achieving this objective, the Authority has taken the following steps:

IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide for:
policy proposal documents in easily understandable language; claims procedure in both life
and non-life; setting up of grievance redressal machinery; speedy settlement of claims; and
policyholders' servicing. The Regulation also provides for payment of interest by insurers for
the delay in settlement of claim.

The insurers are required to maintain solvency margins so that they are in a position to meet
their obligations towards policyholders with regard to payment of claims. It is obligatory on
the part of the insurance companies to disclose clearly the benefits, terms and conditions
under the policy. The advertisements issued by the insurers should not mislead the insuring
public.

All insurers are required to set up proper grievance redress machinery in their head office
and at their other offices.
The Authority takes up with the insurers any complaint received from the policyholders in
connection with services provided by them under the insurance contract.

1.3 Components of Insurance Sector.

Insurance provides financial protection against a loss arising out of happening of an
uncertain event. A person can avail this protection by paying premium to an insurance
company. A pool is created through contributions made by persons seeking to protect
themselves from common risk. Premium is collected by insurance companies which also act
as trustee to the pool. Any loss to the insured in case of happening of an uncertain event is
paid out of this pool.

Insurance works on the basic principle of risk-sharing. A great advantage of insurance is that
it spreads the risk of a few people over a large group of people exposed to risk of similar
type.

Definition of Insurance

Insurance is a contract between two parties whereby one party agrees to undertake the risk
of another in exchange for consideration known as premium and promises to pay a fixed
sum of money to the other party on happening of an uncertain event (death) or after the
expiry of a certain period in case of life insurance or to indemnify the other party on
happening of an uncertain event in case of general insurance.
The party bearing the risk is known as the 'insurer' or 'assurer' and the party whose risk is
covered is known as the 'insured' or 'assured'.

Definition of Insurer

Insurance company that issues a particular insurance policy to an insured. In case of a very
large risk, several insurance companies may combine to issue one policy.

Definition of Insured

The person, group, or property for which an insurance policy is issued.

1.4 Indian Life Insurance Industry

1818 saw the advent of life insurance business in India with the establishment of the
Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829,
the Madras Equitable had begun transacting life insurance business in the Madras
Presidency. 1870 saw the enactment of the British Insurance Act and in the last three
decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire
of India (1897) were started in the Bombay Residency. This era, however, was dominated by
foreign insurance offices which did good business in India, namely Albert Life Assurance,
Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for
hard competition from the foreign companies. In 1914, the Government of India started
publishing returns of Insurance Companies in India. The Indian Life Assurance Companies
Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian
Insurance Companies Act was enacted to enable the Government to collect statistical
information about both life and non-life business transacted in India by Indian and foreign
insurers including provident insurance societies. In 1938, with a view to protecting the
interest of the Insurance public, the earlier legislation was consolidated and amended by
the Insurance Act, 1938 with comprehensive provisions for effective control over the
activities of insurers.
The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a
large number of insurance companies and the level of competition was high. There were
also allegations of unfair trade practices. The Government of India, therefore, decided to
nationalize insurance business.

th
An Ordinance was issued on 19 January, 1956 nationalizing the Life Insurance sector and
Life Insurance Corporation came into existence in the same year. The LIC absorbed 154
Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian and foreign
insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was
reopened to the private sector.

The history of general insurance dates back to the Industrial Revolution in the west and the
th
consequent growth of sea-faring trade and commerce in the 17 century. It came to India
as a legacy of British occupation. General Insurance in India has its roots in the
establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British.
In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first company to
transact all classes of general insurance business. 1957 saw the formation of the General
Insurance Council, a wing of the Insurance Associaton of India. The General Insurance
Council framed a code of conduct for ensuring fair conduct and sound business practices.

In 1968, the Insurance Act was amended to regulate investments and set minimum solvency
margins. The Tariff Advisory Committee was also set up then.

In 1972 with the passing of the General Insurance Business (Nationalization) Act, general
st
insurance business was nationalized with effect from 1 January, 1973. 107 insurers were
amalgamated and grouped into four companies, namely National Insurance Company Ltd.,
the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United
India Insurance Company Ltd. The General Insurance Corporation of India was incorporated
as a company in 1971 and it commence business on January 1sst 1973.

This millennium has seen insurance come a full circle in a journey extending to nearly 200
years. The process of re-opening of the sector had begun in the early 1990s and the last
decade and more has seen it been opened up substantially. In 1993, the Government set up
a committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose
recommendations for reforms in the insurance sector. The objective was to complement
the reforms initiated in the financial sector. The committee submitted its report in 1994
wherein, among other things, it recommended that the private sector be permitted to enter
the insurance industry. They stated that foreign companies be allowed to enter by floating
Indian companies, preferably a joint venture with Indian partners.

Following the recommendations of the Malhotra Committee report, in 1999, the Insurance
Regulatory and Development Authority (IRDA) was constituted as an autonomous body to
regulate and develop the insurance industry. The IRDA was incorporated as a statutory
body in April, 2000. The key objectives of the IRDA include promotion of competition so as
to enhance customer satisfaction through increased consumer choice and lower premiums,
while ensuring the financial security of the insurance market.

The IRDA opened up the market in August 2000 with the invitation for application for
registrations. Foreign companies were allowed ownership of up to 26%. The Authority has
the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from
2000 onwards framed various regulations ranging from registration of companies for
carrying on insurance business to protection of policyholders’ interests.

1.4.1 Major Life Insurance Plans

Whole Life Insurance or Whole of Life Assurance

Whole Life Insurance is a life insurance policy that remains in force for the insured's whole
life and requires (in most cases) premiums to be paid every year into the policy.

There are several types of whole life insurance policies. New York State defines six
traditional forms: non-participating (aka "non par"), participating, indeterminate premium,
economic, limited pay, and single premium. A newer type is known generally as interest
sensitive whole life. Other jurisdictions may classify them differently, and not all companies
offer all types. There are as many types of insurance policies as can be written in their
contracts while staying within the law's guidelines.
Non-Participating

All values related to the policy (death benefits, cash surrender values, premiums) are
usually determined at policy issue, for the life of the contract, and usually cannot be altered
after issue.

This means that the insurance company assumes all risk of future performance versus the
actuaries' estimates. If future claims are underestimated, the insurance company makes up
the difference. On the other hand, if the actuaries' estimates on future death claims are
high, the insurance company will retain the difference.

Participating

In a participating policy (also par in the USA, and known as a with-profits policy in the
Commonwealth), the insurance company shares the excess profits (variously called
dividends or refunds in the USA, bonus in the Commonwealth) with the policyholder.
Typically these refunds are not taxable because they are considered an overcharge of
premium. The greater the overcharge by the company, the greater the refund/dividend. For
a mutual life insurance company, participation also implies a degree of ownership of the
mutuality.

Indeterminate Premium

Similar to non-participating, except that the premium may vary year to year. However, the
premium will never exceed the maximum premium guaranteed in the policy.

Economic

A blending of participating and term life insurance, wherein a part of the dividends is used
to purchase additional term insurance. This can generally yield a higher death benefit, at a
cost to long term cash value. In some policy years the dividends may be below projections,
causing the death benefit in those years to decrease.
Limited Pay

Similar to a participating policy, but instead of paying annual premiums for life, they are only
due for a certain number of years, such as 20. The policy may also be set up to be fully paid up
at a certain age, such as 65 or 80 the policy itself continues for the life of the insured. These
policies would typically cost more up front, since the insurance company needs to build up
sufficient cash value within the policy during the payment years to fund the policy for the
remainder of the insured's life.

Single Premium

A form of limited pay, where the pay period is a single large payment up front. These
policies typically have fees during early policy years should the policyholder cash it in.

Interest Sensitive

This type is fairly new, and is also known as either excess interest or current assumption
whole life. The policies are a mixture of traditional whole life and universal life. Instead of
using dividends to augment guaranteed cash value accumulation, the interest on the
policy's cash value varies with current market conditions. Like whole life, death benefit
remains constant for life. Like universal life, the premium payment might vary, but not
above the maximum premium guaranteed within the policy.

Term life insurance or term assurance

Term life insurance is life insurance which provides coverage at a fixed rate of payments for
a limited period of time, the relevant term. After that period expires coverage at the
previous rate of premiums is no longer guaranteed and the client must either forgo
coverage or potentially obtain further coverage with different payments and/or conditions.
If the insured dies during the term, the death benefit will be paid to the beneficiary. Term
insurance is the least expensive way to purchase a substantial death benefit on a coverage
amount per premium dollar basis over a specific period of time.

Term life insurance is the original form of life insurance and can be contrasted to
permanent life insurance such as whole life, universal life, and variable universal life, which
guarantee coverage at fixed premiums for the lifetime of the covered individual. Term
insurance is not generally used for estate planning needs or charitable giving strategies but
for pure income replacement needs for an individual. Many permanent life insurance
products also build predetermined cash value over the life of the contract, available for
later withdrawal by the client under specific conditions. However, on most cash value
policies like Whole Life insurance, the only way to receive the cash value is to cash out the
policy. The beneficiaries receive the face value of the insurance but NEVER the cash value
with Whole Life policies. Financial advisers generally advise buying term life insurance and
investing the difference elsewhere to those who still qualify to contribute to other tax-
deferred investment growth such as IRA's or 401k's.

Term insurance functions in a manner similar to most other types of insurance in that it
satisfies claims against what is insured if the premiums are up to date and the contract has
not expired, and does not expect a return of Premium dollars if no claims are filed. As an
example, auto insurance will satisfy claims against the insured in the event of an accident
and a home owner policy will satisfy claims against the home if it is damaged or destroyed
by, for example, a fire. Whether or not these events will occur is uncertain, and if the policy
holder discontinues coverage because he has sold the insured car or home the insurance
company will not refund the premium. This is purely risk protection.

1.4.2 The key players of the Indian Life Insurance Industry

Following are the registered insurance Players in India:

In Public Sector:

Life Insurance: Life Insurance Corporation (LIC) of India,

In Private Sector:

Bajaj Allianz Life Insurance Company Limited

Birla Sun Life Insurance Co. Ltd
HDFC Standard life Insurance Co. Ltd
ICICI Prudential Life Insurance Co. Ltd.
ING Vysya Life Insurance Company Ltd.
Life Insurance Corporation of India
Max New York Life Insurance Co. Ltd
Met Life India Insurance Company Ltd.
Kotak Mahindra Old Mutual Life Insurance Limited
SBI Life Insurance Co. Ltd
Tata AIG Life Insurance Company Limited
Reliance Life Insurance Company Limited.
Aviva Life Insurance Co. India Pvt. Ltd.
Shriram Life Insurance Co, Ltd.
Sahara India Life Insurance
Bharti AXA Life Insurance
Future Generali Life Insurance
IDBI Fortis Life Insurance
Canara HSBC Oriental Bank of Commerce Life Insurance
Religare Life Insurance
DLF Pramerica Life Insurance
Star Union Dai-ichi Life Insurance

Major Life Insurance Players

Following are major life insurance players, selected for the study on the basis of numbers of
policy issued in the market, market share and premium collected form the insurance policy
holders.

1. LIC – Life Insurance Corporation of India.

Life Insurance in its modern form came to India from England in the year 1818. Oriental Life
Insurance Company started by Europeans in Calcutta was the first life insurance company
on Indian Soil. The Parliament of India passed the Life Insurance Corporation Act on the
19th of June 1956, and the Life Insurance Corporation of India was created on 1st
September, 1956, with the objective of spreading life insurance much more widely and in
particular to the rural areas with a view to reach all insurable persons in the country,
providing them adequate financial cover at a reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate
office in the year 1956. Since life insurance contracts are long term contracts and during the
currency of the policy it requires a variety of services need was felt in the later years to
expand the operations and place a branch office at each district headquarter. Re-
organization of LIC took place and large numbers of new branch offices were opened. As a
result of re-organization servicing functions were transferred to the branches, and branches
were made accounting units. It worked wonders with the performance of the corporation. It
may be seen that from about 200.00 crores of New Business in 1957 the corporation
crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to
cross 2000.00 crore mark of new business. But with re-organization happening in the early
eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 109 divisional offices, 8
zonal offices, 992 satellite offices and the corporate office. LIC’s Wide Area Network covers
109 divisional offices and connects all the branches through a Metro Area Network. LIC has
tied up with some Banks and Service providers to offer on-line premium collection facility in
selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centers have been commissioned at
Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many
other cities. With a vision of providing easy access to its policyholders, LIC has launched its
SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate anywhere servicing
and many other conveniences in the future.

LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC
has issued over one crore policies during the current year. It has crossed the milestone of
issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67%
over the corresponding period of the previous year.

From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same motives which
inspired our forefathers to bring insurance into existence in this country inspire us at LIC to
take this message of protection to light the lamps of security in as many homes as possible
and to help the people in providing security to their families.

2. ICICI Prudential
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of
India's foremost financial services companies-and Prudential plc - a leading international
financial services group headquartered in the United Kingdom. Total capital infusion stands
at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%.

We began our operations in December 2000 after receiving approval from Insurance
Regulatory Development Authority (IRDA). Today, our nation-wide reach includes over
1,900 branches (inclusive of 1,074 micro-offices), over 210,000 advisors; and 7
bancassurance partners.

For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private Life
Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As
we grow our distribution, product range and customer base, we continue to tirelessly
uphold our commitment to deliver world-class financial solutions to customers all over
India.

3. Bajaj Allianz Life Insurance Co. Ltd.

Bajaj Allianz Life Insurance Co Ltd is a unique joint venture among the global giants Allianz
Group (AG) and Bajaj Auto. Allianz AG's world ranking establishes it among the top
insurance companies in the world. Bajaj is the biggest two and three wheeler manufacturer
in the world. Bajaj Allianz Life Insurance Company boasts of a nationwide presence with
876 offices and over 4 million satisfied customers. Both of the names are known for their
strength, expertise and stability in the insurance sector. While Bajaj Finserv Limited holds
the 74% of the paid up capital of Rs. 110 crore, Allianz SE holds the remaining 26%. It can
be added here that Bajaj Finserv Limited has very recently demerged from Bajaj Auto
Limited.

Bajaj Allianz Insurance started its journey on May 2, 2001 when it received the certificate of
Registration from Insurance Regulatory and Development Authority (IRDA) for conducting
General Insurance business in India including Health Insurance. As on the end of March
2009, the income of Bajaj Allianz Insurance went up to Rs. 2,866 crore with a growth of 11%
over the previous year. It also registered a net profit of Rs. 95 crore, highest by any private
insurer, in the last financial year.

Bajaj Allianz India offers convenient premium payment and receipt options. The payments
can be direct through cheques, DD's or directly from your accounts or through credit card.
The premiums can also be paid online. The insurance policy holders who also have an
account with Standard Chartered Bank can avail the direct debit mandate facility.

The Bajaj Allianz Life Insurance website offers human life value estimator, child education
cost calculator, retirement solutions and required pension estimator and premium
calculator online. The Bajaj Allianz insurance agents will guide you about the general life
insurance policies best suited to your needs. The insurance agent also briefs you about the
insurance quote and the terms on the policy quotes.

4. HDFC Standard Life

HDFC Standard Life Insurance Company Limited., being one of the key players in the
insurance sector in India, offers a host of individual and group insurance solutions, suiting
customer requirements. It happens to be a joint venture between Housing Development
Finance Corporation Limited (HDFC Limited), and a Group Company of the Standard Life Plc,
UK. It was per the data on February 28, 2009 that HDFC Ltd. held 72.43% and Standard Life
(Mauritius Holding) 2006, Ltd. held 26.00% of equity in the JV. The remaining stake is held
by others

HDFC Standard Life’s product portfolio comprises solutions, which meet various customer
needs such as Protection, Pension, Savings, Investment and Health. Customers have the
added advantage of customizing the plans, by adding optional benefits called riders, at a
nominal price. The company currently has 32 retail and 4 group products in its portfolio,
along with five optional rider benefits catering to the savings, investment, protection and
retirement needs of customers.

HDFC Standard Life continues to have one of the widest reaches among new insurance
companies with 568 branches servicing customer needs in over 700 cities and towns. The
company has a strong presence in its existing markets with a base of 2,00,000 Financial
Consultants.

5. TATA AIG Life Insurance

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed
by Tata Sons and AIA Group Limited (AIA). Tata AIG Life combines Tata’s pre-eminent
leadership position in India and AIA’s presence as the largest, independent listed pan-Asia
life insurance group in the world spanning 15 markets in Asia Pacific. Tata Sons holds a
majority stake (74%) in the company and AIA holds 26% through an AIA Group company.
Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and
started operations on April 1, 2001.
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