A

 
SYNOPSIS
 
ON
 
Analysis on growth of general insurance industry in India 
 
SUBMITTED BY
 
Mr. YASH RANGLANI 
Roll No.363
 
SUBMITTED TO
 
SONALI BAGADE 
Batch - 2018-20
 
 
 
 
Dr. D. Y. PatilUnitech Society’s
DR. D.Y. PATIL INSTITUTE OF MANAGEMENT AND RESEARCH,
SantTukaram Nagar, Pimpri, Pune – 411018, Maharashtra, India
 
 
INTRODUCTION

 Man has always been in search of security and protection from the
beginning of civilization. At the same time “Risk” is inevitable in life and
any business activity. Again risk is closely connected with “ownership”. It
is the owners who want to save themselves from risk and it is out of this
desire, the concept of insurance has originated. The aim and objective of
insurance is to protect the owner from financial losses that he suffers for
the risks that he has taken. The basis of insurance is sharing of losses of
a few amongst many. Insurance provides financial stability and security
to both individuals and organizations by this distribution of losses of a
few among many by building up a fund over a period of time.
  In short, insurance is an important aid to minimize the effect of
uncertainties of life as well as property. With the increasing complexities
in our personal and professional life, the range of risks that the
insurance companies accept has also expended substantially. The
broadest classification of insurance is in terms of Life Insurance and non-
Life Insurance (General insurance).
 A non-life insurance contract is different from a life insurance contract. A
life insurance contract is a long term contract, while general insurance
contract is a one-year renewable contract. The risk namely 'death' is
certain in life insurance. The only uncertainty is as to when it will take
place, whereas in general insurance, the insured event may or may not
take place. It is difficult to determine the economic value of life, whereas
the financial value of any asset to be insured under a general insurance
policy can be determined. Because of these peculiar features, a non life
insurance contract is different from a life insurance contract. In this
lesson we will learn in detail the treatment of each type of non-life
insurance.
 Section 2(6B) of the Insurance Act 1938, defines general insurance
business. According to this general insurance business means fire,
marine, or miscellaneous insurance whether carried separately or in
combination. General Insurance Corporation of India (GIC) was set up
with exclusive privilege for transacting General Insurance business. After
the passage of IRDA Act 1999, GIC has been delinked from its
subsidiaries and has been assigned the role of Indian reinsurer.
 Meaning & Importance of General Insurance 
 Non-life insurance refers to the property and liability insurance. Fire
insurance covers stationary property. Marine insurance covers mobile
property. Bonding is a special coverage that guarantees the performance of
the contract by one party to another. Casualty coverage includes accident
and health insurance besides the above mentioned categories.
Miscellaneous Insurance business means all other general insurance
contracts including therein motor insurance.
  The role of insurance is twofold. Insurance achieves both risk transfer and
risk reduction. The insurer collects the premium from a group of business
firms who wants to protect their property against the damage caused by
fire. Insurer will then indemnify the firm that suffers a loss to property due
to fire out of the premium so collected. So the collective contributions of
this entire group of the insured have been utilized to pay for the losses of
the unfortunate few who sustain losses.
  Insurance also acts as a risk reduction mechanism in various senses.
Firstly, the individual risks have been shifted to the insurance company by
way of pooling. Secondly, firm's risk exposure is well spread out because
insurer has an access to the reinsurance market making possible a further
spread of risk. If an aircraft is destroyed, the airline company will have a big
hole in its financials. If the aircraft is insured, the loss would be spread out
among a large number of insurance companies throughout the world.
 HISTORY OF GENERAL INSURANCE
Globally, the history of general insurance can be traced back to the early
civilization. As the incidence of losses increased with the advancement of
civilization, slowly the idea and concept of loss pool and loss sharing
started taking roots. Historical facts show that the Aryans through their
cooperatives practiced the loss of profits insurances. The Mediterranean
merchants also practised insurances from as early as the 4th century BC
through the issue of bottomry bonds, which is an advance of money in a
ship during the period of voyage, repayable on the arrival of the ship. The
Code of Manu also indicates the practice of marine insurance by Indian with
their counter parts in SriLanka, Egypt and Greece. Marine insurance is the
oldest type of insurance originating in England, as early as in the 12th
century. The earliest transaction of insurance as practised today can be
traced back to the 14th century AD in Italy. General insurance as a whole,
developed with the industrial revolution in the West and with the
consequent growth of seafaring trade and commerce in the seventh
century.
 TYPES OF GENERAL INSURANCE

 Almost everything is insurable. However, General Insurance in India is bifurcated

as Fire, Engineering, Marine and Miscellaneous Insurance. Let us look at them as
per the use and general acceptability. Following are the different types of General
Insurances in India:
 Health Insurance
 Travel Insurance
 Motor Insurance
 Marine Insurance
 Home Insurance
 Commercial Insurance
 Health Insurance
 The Health Insurance cover from Digit offers protection for the medical expenses incurred due to hospitalization
caused because of an accident or illnesses. Although every policy is different, based on who it's being purchased for,
it mainly covers:
 Accidental Hospitalization (pre & post)
 Accidental illness and hospitalization
 Daycare procedures
 Psychiatric Support
 Annual Health Checkups
 Daily Hospital Cash

The cover can be extended to cover the following with some predefined conditions:
 Maternity benefit with Infertility benefit
 Critical Illness
 Organ Donation
 AYUSH (Alternate Treatment)

The premium for the health insurance is charged on the basis of:
 Age
 Pre-existing illness
 Lifestyle Habits
 Type of coverage
 Your family health history
 Travel Insurance
 Travel Insurance covers your financial liability, if any, when you travel within or beyond the
Indian boundaries. The financial liability may arise due to medical or non-medical emergencies.
 The duration of the travel for one time can be 180 days at the maximum. The policyholder can
take more than one trip in a year. Your Travel Insurance will cover:
 Loss of Baggage
 Loss of Passport
 Hijacking
 Medical Emergencies
 Delayed Flights
 Accidental Deaths
 Adventure Sports

Digit’s Travel cover comes with worldwide support and special features like:
 Zero Deductibles.
 Smart phone enabled claim process.
 Customized Travel Plan Cover.
 Missed call claim facilitation.
 MOTOR INSURANCE
 A Motor Insurance Policy is mandatory to be able to drive legally in India. Broadly there
are two types a) Third-Party Liability b) Comprehensive Package Policy.
 A Third-Party Policy covers for losses faced in a situation where your vehicle damages
any third-party such as a public property, person or third-party vehicle. The same is the
minimum requirement to be able to drive legally in India, as stated by the Motor
Vehicles Act.
 A Comprehensive Package Policy covers both third-party damages and liabilities and
damages/losses caused to you and your own vehicle. The losses may arise due to an
accident, theft, fire, natural calamities, and others.
 Digit Insurance provides some add-ons under its Comprehensive Package Policies
for Cars and Bikes that act as additional shields to your vehicle, such as:
 Tyre Protect Cover
 Zero Depreciation Cover
 Return to Invoice
 Engine and Gearbox Protection
 Breakdown Assistance Cover
 Home Insurance
 You build your home with your toil and hard earned money. Everything you buy is a
priceless possession for you and hence it needs to be protected. A Home Insurance
Policy protects your valuable and other assets. It is a comprehensive package policy
that covers all valuables.
 Digit Insurance gives protection for Home against Burglary, Loss/Damage of Jewelry,
Fire and Natural Disasters.

Commercial Lines
 The lines of insurance that affects the business operations in the real terms are
categorized under the Commercial Lines of Insurance. Type of the insurance covers
that one can buy may include:
 Property Insurance
 Engineering Insurance
 Liability Insurance
 Marine Insurance
 Employees Benefit Insurance
 Business Interruption
 LITRATURE REVIEW

 Bashir Ahmad Joo (2013) made a study entitled, “Analysis of Financial Stability of Indian
Non Life Insurance Companies”, reports that World over after liberalization insurance
sector has undergone significant transformation. This is also true with Indian insurance
market, where insurance penetration and density is very low compared to other countries.
Therefore, many foreign insurance companies were lured to make entry in Indian insurance
in order to insulate positive spread from large untapped insurance market, mainly by
entering into joint venture with local partners.
 Bindiya Kunal Soni and Jigna Trivedi, (2013) “Crop Insurance: An Empirical Study on
Awareness and Perceptions”, universally agriculture is perceived to be synonymous with
risk and uncertainty. Crop insurance is one alternative to manage risk in yield loss by the
farmers. It helps in stabilization of farm production and income of the farming community.
As such it is a risk management alternative where production risk is transferred to another
party at a cost called premium. The ongoing National Agricultural Insurance Scheme is a
good step forward to insure risk of millions of farmers whose livelihood depends on the
pattern and distribution of monsoon rain in India.
 OBJECTIVES

 To analyse growth of general insurance for last five years.

 To compare and analyse the product wise growth of general insurance.
 To compare and analyse the financial performance of private sector life insurance
companies and general Insurance Corporation of India.
 To compare the cost efficiency of life insurance companies in India.
 Factors affecting growth of the general insurance.
 SCOPE OF THE STUDY

 Detailed analyses on general insurance sector in india and growth of last

five years.
 To find out the Procedure of Claims
 To know what are the trends in General Insurance.
 RESEARCH METHODOLOGY

SR, NO. PARAMETERS DESCRIPTION

1. Nature Of Research Quantitative and Analytical

2. Source Of Data Collection Primary and Secondary Data

3. Primary Data

4. Secondary Data Blogs, Research Paper And

internet
 PLAN OF DATA ANLYSIS

 The data will be analyzed on the basis of analysis of general insurance industry in India.
 It will be study in the absence of various graphs, tables and charts.
 We will prepare data analysis and interpretation of various general insurance industry in
India.
 STRONG GROWTH IN NON-LIFE INSURANCE MARKET

Gross Direct Premiums of Non-Life Insurers (US$ billion) Number of Non-Life Insurance Policies (million)

200 CAGR 10.8%

25.00 CAGR 16.65%
180
23.38

182.8
160
20.00

161.17
19.89 140
17.05 120
15.00

126.48
126.06
14.95

116.68
100

109.5
13.14

100.29
12.03
80

91.65
10.00

88.49
11.05
9.28 60

67.06
65.55
5.00 40

20

0.00 0
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19* FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

 Gross direct premiums of non-life insurers in India reached Rs 1.51 trillion (US$ 23.38 billion) in
FY18. In FY19 (up to December 2018), gross
direct premiums reached Rs 1.23 trillion (US$ 17.05 billion), showing a year-on-year growth rate of
13.14 per cent.
 Over FY12-18, non-life insurance premiums (in Rs) increased at a CAGR of 16.65 per cent.
 The number of policies issued increased from 65.55 million in FY08 to 182.8 million in FY18, at a
CAGR of 10.8 per cent.
 SHARES IN NON-LIFE INSURANCE MARKET: MOTOR INSURANCE LEADS

 Non-Life insurers include general insurers, Non-Life Insurance Gross Direct Premiums (Apr-Dec 2018)

standalone health insurers and specialised

insurers.
 Motor insurance accounted for 38.2 per cent Motor

of non-life insurance premiums earned in

7% 2%
India in Apr-Dec 2018, followed by 25.9 per Health
cent share by health insurance and 16.94 per 17%
38%
cent by crop insurance.
Crop
 Private players accounted for a share of
around 54.32 per cent in the gross direct
26%
premiums generated in non-life insurance Fire
sector while public sector companies and
specialised insurers garnered around 45.68
Marine
per cent share between Apr-Dec 2018.
 Major private players are ICICI Lombard,
Bajaj Allianz, IFFCO Tokio, HDFC Ergo,
Tata-AIG, Reliance, Cholamandalam, Royal
Sundaram and other regional insurers
 HIGHER PRIVATE SECTOR PARTICIPATION IN NON- LIFE SEGMENT

Growing share of private sector Non-life insurance premium of private sector (US$ billion)

12
FY04 Apr-Nov 2018

15% 10.89
10
54.3%
9.25 9.26
8

6 6.3
5.7 5.9
45.7% 5.1
4 4.7
75% 3.8

2.7 2.7 2.9

2

FY08

FY09

FY10

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19*
FY11
Public sector Private sector

 The market share of private sector companies in non-life insurance segment rose from 15 per cent in
FY04 to 46.6 per cent in FY18.
 The Gross Direct Premium of private companies increased at 15 per cent CAGR between FY08-18 to
reach Rs 70,178 crore (US$ 10.89 billion ) in FY18. Between Apr-Dec 2018, it reached Rs 668.27
billion (US$ 9.26 billion).
 KEY PLAYERS IN THE NON-LIFE INSURANCE SEGMENT

 There were 33 non-life insurers in India in FY18. Market share of major companies in terms of Gross Direct
Visakhapatnam
Premiumport traffic (million
collected (FY18) tonnes)
 Public sector insurers lead the non-life insurance
market in India with New India Assurance,
United India Insurance having market shares of New India Assurance
14.7 per cent, 9.3 per cent, respectively in FY18.
United India Insurance
 In the private sector, ICICI-Lombard was the
14.7%
leader in FY18 with a market share of 8.9 per
National Insurance
cent, followed by Bajaj Allianz at 6.2 per cent. 9.3% Company
44.5% Total size:
 The public sector companies accounted for a US$ 23.38
8.6%
ICICI-Lombard
billion
cumulative share of about 45.32 per cent of the
8.9%
total Gross Direct Premium in the non-life Oriental Insurance
6.2% 7.8% Company
insurance segment FY18.
Bajaj Allianz

Others
 CONTENTS

1. Executive summary
2. Introduction
3. Objectives and scope
4. Review of literature
5. Research methodology
6. Data analysis
7. Findings
8. Suggestions
9. Conclusions
10. Bibliography
11. Annexure