Insurance : The changing context

Presented By:
Ravinder Singh Chawla
Sep 1st, 2013

Objectives of this session
 Understanding change : the only constant

 The progress of Indian Insurance Industry
 The Financial Services Landscape:The changes

we have seen
 The way forward
 Summary and close

Change: The only constant
 We are living in a dynamic world where

nothing is constant
 Let us discuss the changes we have seen over the last 10-15 years
 Every change brings with it new opportunity
 In today’s module we shall be discussing about the changes we have seen in the Insurance market and the entire financial landscape

Indian Insurance History
 1912: 380 Insurance Companies in India
 In 1920/1930’s many frauds sullied

insurance industry in India
 Insurance Act 1938 provided for strict control of insurance business-176 companies by 1938
 Indian companies strengthened hold but it still was an urban phenomenon

Nationalization
 In 1956, Government brought together 240

private life insurers and Nationalised the same to a monopoly.
 LIC was born with 5 cr. capital
 Non-Life continued to thrive in private sector till 1973 ,when it was also nationalised, with
GIBN Act, 1973
 107 companies merged into four.
 NIC,NIAC,OIC & UIIC came into being
 GIC became the holding company

Reforms commenced in
1992….
 1993-Malhotra committee gave it’s

recommendations to create competition and better efficiency
 Govt. bring down holding to 50 %
 Pvt companies to start with Rs. 1 billion
(100 cr.) capital
 Separate life & Non-life companies
 Foreign cos. to have 26 % stake

Reforms……
 IRDA to be set up
 Insurance sector to be opened up
 Investment of LIC in Govt securities to be

reduced from 75% to 50%
 LIC to pay interest for delay beyond 30 days  Encourage market linked policies
 Computerization of branches

Changes in the Indian Life
Insurance Market: Different Era
 Pre-2000 OR Pre-Regulatory phase
