A Startegic Analysis of Life Insurance Industry

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Strategic Analysis of Indian Life Insurance Industry

A
MANAGEMENT
RESEARCH PROJECT
ON
INSURANCE INDUSTRY

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Strategic Analysis of Indian Life Insurance Industry

Objectives and scope of the project

The insurance industry is one of the basic service industries in Indian economy, whose prospect is reflective of the economic resilience of the economy. With the globalisation of the economy, India has become the playground of major global insurance players.

As whole insurance industry is a very large field for research we have chosen life insurance industry of the booming segment of insurance industry, for research purpose.
The major objectives of the study are as below:
To find out how political, economical, socio-cultural, technological factors affecting this industry by PEST analysis.
To find out how the market condition and what level of competition is there by five force analysis.
To analyse driving forces and key success factors of the industry To analyze various threats and opportunities for the industry To focus on current trends and future of the industry.

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Strategic Analysis of Indian Life Insurance Industry

Research methodology

We have done exploratory research and for that purpose we had used secondary data.
We had collected this secondary data from various published materials like newspapers, magazines, books etc and from Internet web sites. From these various information and data we had done qualitative and quantitative analysis to find out impact of various forces, effect of macro environmental factors, major trends and future of the industry.

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Strategic Analysis of Indian Life Insurance Industry

Insurance at a Glance

What is Insurance and How Insurance Work?
According to the U.S. Life Office Management Association Inc. (LOMA), life insurance is defined as follows: “Life insurance provides a some of money if the person who is insured dies whilst the policy is in effect”. Anybody who has knowledge about life insurance will be tempted to say “yes BUT…” In other words, surly this is far too brief an explanation for a financial service that provides a very sophisticated range of savings and investment products, as well as mere compensation for death.

‘Insurance’ is basically a sharing device. The losses to assets resulting from natural calamities like fire, flood, earthquake; accidents, etc. are mate out of the common pool contributed by large number of person who is exposed to similar risks. This contribution of many is used to pay the losses suffered by unfortunate few. However the basic principle is that loss should occur as a result of natural calamities or unexpected events, which are beyond the human control. Secondly insured person should not make any gain out of insurance.

It is natural think of insurance of physical assets such as motor car insurance or fire insurance but often we forget that creator of all these assets in the human being whose efforts have gone a long way in building up the assets. In that sense, human life is a unique image-generating asset. Unlike the physical assets, which decrease in value with passage of time, the individual becomes more experienced and more matured as he advances in age. This raises his earning capacity and the purpose of life insurance is to protect the income in the event of his premature death. The individual himself also needs financial security for the old age or on his becoming permanently disabled when his income will stop. Insurance also has an element of savings in certain cases.

Suppose there are 1000 persons all aged 35 years and healthy lives. They are insured for one year against the risk of the death. Each person is insured for Rs. 50,000. If the past experience indicates that 4 out of 1,000 persons, at this age are

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Strategic Analysis of Indian Life Insurance Industry

expected to die during the year, expected amount of death claim to be paid to the family of four persons would come to Rs....
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