...Q1) How is the insurance market in India changing? Why is india an attractive market for investment Before 2000 the Life Insurance Corporation (LIC) had monopoly in India. The next big company was General Insurers (General Insurance Corporation of India, GIC). GIC had four subsidiary companies. The insurance sector went through a lot of phases from being unregulated to completely regulate and then currently being partly deregulated. It is governed by a number of acts. The Insurance Act of 1938 was the first legislation, and then was the General Insurance Business Act of 1972. The government then introduced the Insurance Regulatory and Development Authority Act in 1999, thereby de-regulating the insurance sector and allowing private companies. With effect from December 2000, these subsidiaries have been de-linked from the parent company and were set up as independent insurance companies: Oriental Insurance Company Limited, New India Assurance Company Limited, National Insurance Company Limited and United India Insurance Company Limited. Indian insurance industry has witnessed an interesting decade when it was open to foreign players for the first time (with a cap of 26%). Prudential, Allianz, Standard Life, New York, AIG and SunLife were some of the earliest entrants, followed by New York Life, Metlife, Aviva, AXA, etc.By 2012 Indian Insurance is a US$41 billion industry. However, only two million people (0.2% of the total population of 1 billion) are covered under Mediclaim...
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...Insurance, Risk and Market Associations 2010 Contents Introduction 3 Insurance 3 General Introduction 3 The principles of Insurance: 4 Task 1 The Irish Insurance Federation (IIF) 4 About the Irish Insurance Industry (Market) 5 The Chartered Insurance Institute (CII) and Irish Insurance Federation (IIF) 6 The Dublin International Financial Services Centre (DIFSC) 7 The Irish Brokers Association (IBA) 8 The Financial Regulator 8 Task 2 Graphs 10 Shop lifting 10 Burglary 11 Storm and High winds 11 Act of God 12 Flood 12 Fire 13 Suggested changes to reduce the theft risk 14 Conclusion 14 Bibliography 15 Introduction Insurance Insurance plays a very important role in today’s economy. Insurance is designed to protect the financial well-being of every individual and business. Without insurance we couldn’t drive cars, own our homes, run our business-because of the possible risks. General Introduction Insurance is a risk transfer mechanism which in return for a fee (‘premium’) will insure individuals or business against the risk specified. Aim of insurance is to compensate (‘indemnify’) the loss individuals or business may suffer through the occurrence of an unexpected incident, the loss that either may or may not happen. ‘Modern insurance low’ author John Birds, wrote that the beginning of insurance was developed by a commercial world in 14th century. The origins of the modern insurance contract was found...
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...Assessment of the Current Health Insurance Market Health insurance, whether it is private, public or commercial, is a system that distributes the financial burden of medical care among insured members (Austin and Hungerford). To explain how health insurance works, insurance companies first collect premiums from their members and use the funds collected to pay for members’ medical expenses. On one hand, some members may be sick and incur a significant amount of medical expenses. On the other hand, most members will remain relatively healthy and have a small amount of medical expenses. Even though, insurance companies will not know which members will become sick, they are able to calculate the average cost of medical expenses among a large group of members. Insurance companies use the premiums collected from members who are healthy to pay for those who become sick. Before the Patient Protection and Affordable Care Act, having a health insurance was optional for all Americans. It was mainly the risk-averse consumers who bought health insurance, and these individuals wanted to avoid the financial risks of unpredictable health care expenses by paying a known amount of premium. However, since 2014, people have been penalized for not having health insurance and the fee for not having insurance coverage will be higher every year. Resulting from the healthcare law change, individuals who did not have the health insurance will have more incentives to buy insurance since they will be fined for...
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...Health Insurance Needs, Awareness and Assessment in the Bahraich District, Uttar Pradesh JANUARY 2008 This publication was produced for review by the United States Agency for International Development. It was prepared by Constella Futures, New Delhi ITAP is a three-year project funded by United States Agency for International Development under Contract No. GPO-1-01-0400015-00 beginning April 1, 2005_ The project is being implemented by Constella Futures in partnership with Bearing Point, Sibley International, Johns Hopkins University, QED, Urban Institute and Association of Reproductive Health Professionals (ARHP). For further information contact: Constella Futures 1 D-11, Parkwood Estates Rao Tula RamMarg New Delhi 1100 022 Health Insurance Needs, Awareness and Assessment in the Bahraich District, Uttar Pradesh JANUARY 2008 The authors' views expreseed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government Contents List of Tables List of Figures List of Abbreviations Executive Summary Chapter 1: Background and Methodology .......................................................... 1.1 Introduction... 1.2 Objectives of the Study ................................. 1.3 Study Design and Methodology ....................................................................... 1.3.1 Sampling and Sample 1.3.2 Study techniques ..............................................
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...ECON1116 Asymmetry in Health Insurance: Adverse Selection, Welfare Loss, and the Key to Vanquishing Market Distortion In today’s society, even more than ever before, information is key. With the introduction of such modern marvels as Twitter, mobile notification alerts, and around the clock news coverage, the next generation can be defined as though who want information accessible at all times. Most believe that this accessibility of information is much more efficient, and leads to better outcomes and greater utility for the individual. On the contrary, in the colonial times, information was scarce and often times inaccurate. This caused more frustration, less utility, and poorer outcomes. The accessibility issue of general information has undergone vast improvement over time, but in health insurance markets, information asymmetry has continued to plague the system. This asymmetry causes what is known as adverse selection, in which the market suffers from the “adverse” outcome of only having high risk, costly individuals in the market, as opposed to the lower-risk individuals who could also benefit from insurance. Adverse selection strongly decreases consumer welfare, and leads to an inefficient outcome in which market failure persists in what is known as the adverse selection death spiral. However, in order to solve adversely selected markets, it is imperative that the system allows for the collection of better information (and revert to market equilibrium conditions) to...
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...Financial Markets, Insurance and Entrepreneurship in the countries of the Middle East and North Africa (MENA) region Draft not to be cited February 27, 2013 1. Introduction The goal of the paper is to focus on the countries of the Middle East and North Africa (MENA) region and particularly those of the of the South of the Mediterranean, and examine the relationship between insurance – defined as the capability of covering the cost of future harmful events-and entrepreneurship broadly defined as the capability to start independent businesses activities and possibly introduce new combinations of productive factors. The analysis is based on the distinction between uncertainty and risk that Knight unveiled (Knight, 2012) arguing that risk involves situations where a decision maker face unknown outcomes but known ex-ante probability distributions, while uncertainty is characterized by situations in which the probability distribution of a random outcome is unknown. Consequently, while risk can be covered by insurance, uncertainty normally is not. The other pillar of this research is the role of entrepreneurship; a factor that the economic literature has not considered for long time and that in the last 20 years has become the center of any strategy for economic growth in emerging and advanced economies. The discovery of the role of entrepreneurs dates back to Schumpeter (Schumpeter, 1982a) who regards entrepreneurs as the engine of economic growth. Schumpeter (Schumpeter...
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...the deregulation of insurance industry in India since 1999, private players have got an opportunity to enter in an insurance markets. Prior to its deregulation, the life insurance business was dominated by the public sector company is life insurance Corporation of India. While liberalization of insurance sector, as many as twelve new private life insurance companies were entered with the help of foreign equity up to 26 per cent in the life insurance business apart from the HDFC standard life, which has stand foreign equity only 18.6% in the beginning of insurance business, in the present time there are entire 22 private life insurance companies operating business in India. They play a vital role in life insurance business with motive for exist and prospective customers to provide better facilities in lives saving scheme, future security, investment plan, funds investment etc. Consequently, the public-sector company has been face towards countering the challenges posed by the entered new players in the same business. The Foreign Private players have been striving to build confidence in customers and get a foothold in the markets. In competitive markets, life insurance companies come out with innovative and attractive life insurance products, and they are trying to reach customers through various techniques. The opening of Life insurance companies also witnessed major changes in the insurance products being offered by life insurance companies and insurance covers opted for the...
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...The Indian Insurance Industry Traditionally Indian Insurance market had had a fair share of competition. An Ordinance was issued on 19th 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 thus had an absolute monopoly till the late 90s when the Insurance sector was reopened to the private sector. Today there are 23 life insurance companies operating in the country In this paper we will study the advent of the private players into the insurance market and the change in the insurance market from monopoly to an oligopolistic one. For the sake of simplicity in taking forward our discussion on this change let’s assume the current insurance market being dominated by two players: 1. LIC – Nationalized Insurer 2. Rest of the insurers (ROI) - All 22 private insurers excluding LIC Both the insurers are providing the identical products i.e. life insurance policies. Further let’s assume that they incur ‘Zero’ marginal costs. Thus the various costs incurred by them being only the fixed costs. The duopoly market is thus constructed for the insurance market as illustrated below. Cournot solution D Q 0 P* Q* P1 P2 Q1 Q2 Q* L K C E F MR LIC MR ROI Before the nationalization of the life insurance sector, LIC was the only seller in the market. The demand for...
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...INCREASING INSURANCE PENETRATION IN INDIA Insurance penetration is the ratio of the percentage of total insurance premiums to gross domestic product. It tells us the level to which a market is being tapped. Thus insurance penetration is a tool to understand and identify the reasons of the success or failure and the degree of presence of insurance in the economy of a country. Indian 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, with a period 2010-2015 projected to be the ‘Golden Age’ for the Indian insurance industry. With a huge population base and large untapped market, insurance industry is a big opportunity area in India for national as well as foreign investors. India is the fifth largest life insurance market in the emerging insurance economies globally and is growing at 32-34% annually. This impressive growth in the market has been driven by liberalization, with new players significantly enhancing product awareness and promoting consumer education and information. Indian Insurance Market – History Insurance has a long history in India. Life Insurance in its current form was introduced in 1818 when Oriental Life Insurance Company began its operations in India. General Insurance was however a comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata...
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...The Progressive insurance organization began business in 1937. The Progressive Corporation, an insurance holding company formed in 1965, currently has 54 subsidiaries and 1 mutual insurance company affiliate. These insurance subsidiaries and affiliate provide personal and commercial automobile insurance and other specialty property-casualty insurance and related services. Our property-casualty insurance products protect our customers against losses due to collision and physical damage to their motor vehicles and uninsured and underinsured bodily injury, and liability to others for personal injury or property damage arising out of the use of those vehicles. Our non-insurance subsidiaries generally support our insurance and investment operations. We operate our businesses throughout the United States and sell personal auto insurance in Australia. Organization Auto insurance differs greatly by community because legal requirements and decisions vary by state and because, among other factors, traffic, law enforcement, cultural attitudes, insurance agents, medical services, and auto repair services vary by community. To respond to these local differences, we are organized as follows: • Our Personal Lines products are comprised of insurance for personal autos and special lines products (e.g., motorcycles, ATVs, RVs, mobile homes, watercraft, snowmobiles, and similar items): • We currently write personal auto insurance in all 50 of the United States and...
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...Indian Life Insurance Industry with special reference to LIC of India – Prospects and Challenges Presentation of Pilot Survey To Research Development Committee Kadi Sarva Vishva Vidyalaya Gandhinagar J D Chandrapal 10E0244 - Management Scholar enrolled in PhD program Kadi Sarva Vishva Vidyalaya - Gandhinagar Prof. Dr. A.C. Brahmbhatt – (Guide) Institute of Management - Nirma University, Ahmedabad 382 481, India Mailing Address 7, Krishna flats Opp. Lalbhai Apartment Kiranpark, Nava Vadaj Ahmedabad -380013 Contact Info 9825070933 jdchandrapal@yahoo.com Key words: Life insurance, liberalization, globalization, Competition, Economic Reforms, LIC of India Changing Face of LIC of India in Response to Liberalization Abstract The purpose of this paper is to facilitate the attempts of mapping the change in LIC of India because of liberalization of Indian insurance sector. The insurance sector in India has experienced a 360-degree journey over a period of more than a hundred years. Its transition from an open competitive sector to nationalization and then back to a liberalized market characterizes this phenomenon. Economic reforms have revolutionized insurance sector. The economic reforms started, it leads to liberalization. Liberalization has sparkled a flame of globalization and privatization (LPG). The economic reforms i.e. Liberalization has posed some challenges to LIC of India. In the post liberalization period life insurance business felt...
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...of FDI in Insurance Sector! Even after the liberalisation of the insurance sector, the public sector insurance companies have continued to dominate the insurance market, enjoying over 90 per cent of the market share. FDI is the process whereby residents of one country acquire ownership of assets for the purpose of controlling the production, distribution and other activities of a firm in another country. A major role played by the insurance sector is to mobilize national savings and channelize them into investments in different sectors of the economy. FDI in insurance would increase the penetration of insurance in India; FDI can meet India’s long term capital requirements to fund the building of infrastructures. Insurance sector has the capability of raising long-term capital from the masses, 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 insurance sector has also been fast developing with substantial revenue growth in the non-life insurance market. Over the years, FDI inflow in the country is increasing. However, India has tremendous potential for absorbing greater flow of FDI in the coming years. The role of Foreign Direct Investment in the present world is noteworthy. It acts as the lifeblood in the growth of the developing nations. The wave of liberalisation and globalization sweeping across the world has opened many national markets for international...
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...by deregulation in many key markets. It was virtually non-existent in 2000, but has risen in importance since to account for a significant share of distribution. The main business model has also diversified from simple distribution agreement to joint ventures and integrated financial services provisions. There is no doubt that bancassurance has been a great success in Asia over the past decade. However, from the perspective of an industry practitioner, I would like to draw on three important yet inter-related issues regarding the future of bancassurance. First, the economics of bancassurance to insurance companies.Second, the prospects of non-life distribution through banks.Third, the role bancassurance in closing the region's protection gap. Let me cover the first issue. In many markets, particularly emerging Asian markets like China and India, insurers have successfully leveraged of bancassurance to maintain or expand their market share in the early phase of market liberalization and deregulation. It is, on the other hand, well-known that insurers complaint all the time about the high distribution commission associated with bank channels. There are other constraints like higher lapse ratio and difficulties in selling complicated (higher-margin) products. As a result, we are already see in some cases insurers reverting to focus on traditional agents. In any case, we observed that insurers in many regional markets are shifting their focus from market share to profitability. This...
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...8160 Research Paper Economics Insurance Sector in India: Challenges and Opportunities Dr. NARESH RAMDAS MADHAVI ABSTRACT Associate Professor and Head Department of Economics Mahatma Phule A. S. C. College, Panvel, Dist. - Raigad Insurance sector in India is one of the growing sectors of the economy. India’s growing consumer class, rising insurance awareness, increasing domestic savings and investments are among the most critical factors that have positively driven the market penetration of the insurance product among its consumer segments. Both the life and non-life insurance in India, which were nationalized in the 1950s and 1960s respectively, which were liberalized in 1990s. Since the formation of IRDA and the opening of the insurance sector to private players in 2000, the Indian insurance sector has witnessed rapid growth. The opening up of the insurance sector has led to rapid growth of the sector. The total premium of the insurance industry has increased at a CAGR of 24.6 percent to reach INR 2,523.9 billion in 2009 KEYWORDS : Life Insurance, LIC, IRDA, Private Insurance Companies Introduction: The economic reforms initiated in the early 90s paved the way for the growth and opening up of the financial sector, which led to a sustained period of economic growth. The insurance industry was opened up for private players in 2000, and has seen tremendous growth over the past decade with the entry of global insurance majors. India is fast emerging as one of...
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...PHOENIX INSURANCE COMPANY LIMITED AN ASSIGNMENT ON Phoenix Insurance Company Limited SUBMITTED TO: Md. Alamgir Hossen Course Instructor Risk Management & Insurance SUBMITTED BY: Md. Awlad Hossain Rayhan Ahmed Md. Shakhawat Ullah 20th BATCH ID- 815 ID- 820 ID- 825 DATE OF SUBMISSION September 06, 2014 INSTITUTE OF BUSINESS ADMINISTRATION JAHANGIRNAGAR UNIVERSITY Letter of transmittal September 06, 2014 Course instructor Risk Management and Insurance Institute of Business Administration, Jahangirnagar University, Savar, Dhaka- 1342 Dear Sir, Here is the term paper on the topic ‘Phoenix Insurance Company Limited’ that you asked us to conduct. We have tried our best to find the real and absolute scenario of insurance business and its real condition in Bangladesh. The market situation and how it reflects with different situations was our best concerns. During preparing this report we tried to introduce ourselves with the insurance industry of Bangladesh. We tried to match our academic knowledge with our findings. We are pleased to be granted this vital opportunity and grateful for your versatile assistance while preparing this term paper. We hope that our work will please you. If you have any inquiry regarding the term paper, we will be available for further information. Sincerely, _______________________ Md. Awlad Hossain (ID- 815) Rayhan Ahmed (ID-820) Md. Shakhawat Ullah (ID-825) 20th Batch, BBA. Executive Summery From this study we will...
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