Project Report

(Submitted for the Degree of B.Com. Honours in Accounting & Finance under the
University of Calcutta)

Title of the Project

An Analysis to Insurance Industry

Special reference to Life Insurance

Submitted by
Name of the Candidate: ARNAB SAHA
CU Registration No.: 144-1111-0094-17
CU Roll No.: 171144-21-0044
College Roll No.: 62
Name of the College: Bangabasi Morning College

Supervised by

Name of the Supervisor: Dr. Priyanka Saha (Assistant Professor)

Name of the College: Bangabasi Morning College

Month & Year of Submission

SEPTEMBER, 2020
Annexure- I

Supervisor's Certificate
This is to certify that Mr. ARNAB SAHA a student of B.Com. Honours in Accounting &
Finance of BANGABASI MORNING COLLEGE under the University of Calcutta has
worked under my supervision and guidance for his/her Project Work and prepared a Project
Report with the title AN ANALYSIS TO INSURANCE INDUSTRY-(SPECIAL
REFERENCE TO LIFE INSURANCE) which he/she is submitting, is his/her genuine and
original work to the best of my knowledge.

Signature:
Place: KOLKATA
Name: Dr. PRIYANKA SAHA
nd
Date: 22 SEPTEMBER, 2020 Designation: Assistant Professor
Name of the College: BANGABASI
MORNING COLLEGE

(i)
Annexure- II
Student's Declaration
I hereby declare that the Project Work AN ANALYSIS TO INSURANCE INDUSTRY-
(SPECIAL REFERENCE TO LIFE INSURANCE) submitted by me for the partial fulfilment
of the degree of B.Com. Honours in Accounting & Finance under the University of
Calcutta is my original work and has not been submitted earlier to any other University
/Institution for the fulfilment of the requirement for any other course of study.
I also declare that no chapter of this manuscript in whole or in part has been incorporated in
this report from any earlier work done by others or by me. However, extracts of any literature
which has been used for this report has been duly acknowledged providing details of such
literature in the references.

Signature:
Name: ARNAB SAHA
Address: 5th floor, flat no.13,
85, Elliot Road,
Kolkata - 700016

Registration No.: 144-1111-0094-17

C.U Roll No.: 171144-21-0044
College Roll No.: 62
Place: KOLKATA

Date: 22nd SEPTEMBER, 2020

(ii)
 ACKNOWLEDGEMENT
The success and final outcome of this project required a lot of guidance and assistance
from many people and I am extremely privileged to have got this all along the
completion of my project. All that I have done is only due to such supervision and
assistance and I would not forget to thank them.

I respect and thank my supervisor Dr. Priyanka Saha (Assitant professor) for providing
me an opportunity to do the project work and giving me all support and guidance which
made me complete the project duly. I am extremely thankful to her for providing such a
nice support and guidance, although she had busy schedule managing the university
and college work.

Also I am thankful and fortunate enough to get constant encouragement, support and
guidance from all Teaching staffs of Commerce Department which helped me in
successfully completing my project work.

Last but not the least I would also like to thank my parents and friends who directly or
indirectly supported me during my project work, without the help of whom this project
would not have been possible.

(iii)
 Table of Content

Chapter name Pages

CHAPTER 1: INTRODUCTION
1.1: Background of the study 01
1.2: Objectives of the study 02
1.3: Research methodology 02
1.4: Review of the Literature on the Insurance Industry of India 03
1.5: Limitations of the study 04
1.6: Chapter Planning 04

CHAPTER 2: CONCEPTUAL FRAMEWORK

2.1: National Scenario of Life Insurance Industry 05
2.2: Life Insurance Industry in Global Scenario 06

CHAPTER 3: PRESENTATION OF DATA ANALYSIS AND FINDINGS

3.1: Market Share of Life Insurance Companies 07
3.2: Study of Private Insurers Vs LIC of India (in terms of Premium) 10
3.3: Performance of LIC of India - 2018 Vs 2019 12
3.4: Role of Agents in Life Insurance Industry 13
3.5: Claim settlement in the Life Insurance industry 15
3.6: Flagship schemes of Govt. of India for insuring the lives of Indians 16
3.7: Findings 17

CHAPTER 4: CONCLUSION
4.1: Conclusion 18
4.2: Recommendation and suggestion 19

(iv)
 CHAPTER 1
INTRODUCTION

1.1: Background of the study:

The insurance industry is critical for any country’s economical development. A well-
developed insurance sector boosts risk-taking in the economy, as it provides some
security in the event of an unforeseen, loss causing incident. It also provides much-
needed support to family members in the case of loss of life or health as well as for an
entity it provides financial protection or reimbursement against losses from an insurance
company.
In India, the insurance sector operates under the aegis of the Ministry of Finance and is
regulated by the Insurance Regulatory and Development Authority of India (IRDAI). The
insurance sector plays a critical role in country’s economic development. It acts as a
mobilizer of savings, a financial intermediary, a promoter of investment activities, a
stabilizer of financial markets and a risk manager.
The Indian insurance industry, valued at Rs 7.31 trillion (US$ 94.7 billion) in FY20.
Globally, India ranks 10th in terms of life insurance in terms of premium. Indian
insurance sector is open to private participation from foreign players as well as under
the Foreign Direct Investment (FDI). The Government has approved an ordinance to
increase Foreign Direct Investment (FDI) limit in the Insurance sector from 26 per cent
to 49 per cent, which would further help attract investment in the sector. As per Union
Budget 2019-20, 100 per cent FDI was permitted for insurance intermediaries.
The insurance industry in India has also grown along with the country’s economy.
Several insurance companies in the country are expanding their operations, across both
the public and the private sector. At present, there are 24 life insurance companies of
which Life Insurance Corporation of India (LICI) is the only Public sector insurance
company and rest 23 are Private insurance companies.

Page | 1
1.2: Objectives of the study:

Below mentioned are some of the objectives of the study:-

 To understand the national and international scenario of the insurance industry.
 To understand the competitiveness in life insurance industry with the help of
comparative study.
 To know the recent market structure and size of both public and private
insurance sector.
 To understand the different types of premium for life insurance industry.
 To understand the importance of agency in life insurance industry.
 To understand the claim settlement in the life insurance industry.
 To know the flagship schemes launched by the government.
 To know the recent developments in the insurance sector.
 To know the government initiatives / policies taken for the betterment of the life
insurance industry.

1.3: Research Methodology:

The study on the Life Insurance Industry of India was done on the basis of
SECONDARY DATA. Secondary data has contributed in a significant way to
understand the scope as well as it helped in developing the conceptual framework.
Chapter 3 has been devoted to secondary data analysis.
Basically the analysis of data is done through comparative study between the public and
private life insurance sector, on the basis of market share, in terms different types of
premium, performance, role of the insurance agents, claim settlement and flagship
schemes launched by the Government of India.
For this study some secondary data sources are collected from publications of IRDAI
and LIC, annual reports, journals and articles regarding to the Indian life insurance
sector.

Page | 2
1.4: Review of the Literature on the Insurance Industry of India

1. Global Index Insurance Facility (2016) in its report “When and How Should
Agricultural Insurance be Subsidized? Issues And Good Practices”
discussed how to avoid the problems regarding agriculture, any insurance
subsidy needs to be carefully designed to be “smart”, in the sense that it is cost
effective in achieving its underlying purpose, minimizes disincentive problems,
and does not become a growing financial burden on the government. At the end
they have proposed some best practice guidelines for the design and
implementation of subsidized agricultural insurance.
(Source: World Bank Group)

2. Indian Chamber of Commerce (ICC) and Pricewaterhouse Coopers (PwC)

(2017) in its report “India insurance perspective” stated that India’s robust
economy is expected to keep pace with the growth in insurance premiums
written. Higher personal disposable incomes will result in higher household
savings that will be channeled into different financial savings instruments like
insurance and pension policies.
(Source: India Insurance Perspective - PwC)
3. Rudra P. Pradhan, Mak B. Arvin, Mahendhiran Nair, John H. Hall, Atul
Gupta (2017) in their article “Is there a link between economic growth and
insurance and banking sector activities in the G-20 countries?” discussed
about by using the vector auto-regression model and the Granger causality test,
the study shows that in the long run, developments in the banking sector and
insurance industry have had a significant impact on the economic growth of the
G-20 countries. In the short term, the inter-relationships between the three
factors prove to be more complex in that they differ by countries in different
stages of development.
(Source: Review of Financial Economics)
4. Prasanna Rajesh (2019) in his book “Valuation of Indian Life Insurance
Companies” bridges the gap between the accounting and the actuarial sides of
Indian life insurance companies, by exploring the relationships between the
embedded value calculated by actuaries and the revenue account and balance
sheet prepared by the accountants.
(Source: Orilley)

5. J. D. Chandrapal (2019) in his article “Impact of liberalisation on Indian life

insurance industry: A truly multivariate approach” discussed that with the
passage of the Insurance Regulatory and Development Authority (IRDA) Bill, The
Government of India has liberalized the insurance sector in March 2000. Thus
entry restrictions lifted and foreign players were allowed to enter in the Indian
insurance industry with their domestic partners with FDI Capital of 26 per cent.
Deregulation and liberalization has revolutionized insurance sector in India.
(Source: IIMB Management report)

Page | 3
1.5: Limitations of the study:

Below mentioned are some of the limitations of the study:-

 Lack of detailed study on the sector due to secondary source perspective.
 Some of the data analysis on life insurance industries are encrypted and
therefore presenting of data makes it difficult.
 Lack of initiatives from the Private insurance companies in terms of flagship
schemes for poor peoples.
 Many company has low percentage of Claim settlement.
 Lack of data available on website.
 Preparation of such detailed project work within limited pages.
 Preparation of such detailed project within short span of time.

1.6: Chapter Planning:

 Chapter 1| Introduction
 Chapter 2| Conceptual Framework
 Chapter 3| Presentation of Data, Analysis and Findings
 Chapter 4| Conclusion and Recommendation

Page | 4
 CHAPTER 2
Conceptual Framework

2.1: National Scenario of Life Insurance Industry:

The life insurance industry in India is regulated by the Insurance Regulatory and
Development Authority (IRDA). Twenty four Life Insurance companies are licensed to
do Insurance Business in India. Out of these companies, Life Insurance Corporation of
India (LIC of India) is the only public sector company.
Steady Growth Rate: India’s life insurance industry has been growing at a steady
pace. Over a period of 6 years from the financial year 2012 to 2018, the new business
premium has grown at a CAGR (Compounded Annual Growth Rate) of 14.44%.
Low Insurance Penetration: Despite the steady growth rate, life insurance penetration
(Premium as % of GDP) in India still remains low, at 2.76 % as of 2017. Combined
insurance penetration of life and non-life is 3.69 % as of 2017.
Increasing Private sector contribution: The market share of private insurance
companies were 2.00% in 2003 but has grown to 33.76% in terms of premium on the
financial year 2019.
Government Support:
(A) Tax incentives for insurance products with the exempt model of taxation.
(B) IRDA provides a robust and reliable regulatory platform for the insurance industry.
© IRDA recently allowed life insurance companies that have completed 10 years of
operations to raise capital through Initial Public Offerings (IPOs). Companies will be
able to raise capital if they have embedded value of twice the paid-up equity capital.
LIC of India Continues to dominate the market: Since opening up of the market and
constitution of IRDA in 1999, the number of private players has increased with time and
has reached 24 as of 2019. But Still LIC of India the only public sector insurer is
dominating the market with 66.24% of market share in premium.

Page | 5
2.2: Life Insurance Industry in Global Scenario:

India’s share in global insurance market was 1.92 % during 2018. However, during
2018, the total insurance premium in India increased by 9.3 % (inflation adjusted)
whereas global total insurance premium increased by 1.5 % (inflation adjusted).
Globally, the share of life insurance business in total premium was 54.30% during 2018.
However, the share of life insurance business for India was very high at 73.85 %.
In life insurance business, India is ranked 10th among the 88 countries, for which data is
published by Swiss Re. India’s share in global life insurance market was 2.61 % during
2018.
However, during 2018, the life insurance premium in India increased by 7.7 % (inflation
adjusted) when global life insurance premium increased by 0.2 % (inflation adjusted).
.

Total premium growth rate

Page | 6
 CHAPTER 3
Presentation of Data Analysis and Findings

3.1: Market Share of Life Insurance Companies:

From the past 2 decades Privatisaton in the Insurance sector took place and till now this
sector continuously increasing its market share in terms of both premium and no. of
policies at a steady pace. Apart from LIC which is still holding the top position in terms
of market share on both the aspects.
We have taken some top performing Public and Private companies providing Life
Insurance facilities to the people and made a comparative study by analyzing the
Market share of Premium and No. of policies made during the year.

Public Sector:

1. LIC of India: Life Insurance Corporation of India (LICI) is a statutory corporation

established in 1956. It came into existence on 1st September, 1956 with the
objectives of spreading life insurance 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.

Private Sector:

1. HDFC Life: It is a joint venture between Housing Development Finance

Corporation Ltd (HDFC) and Standard Life Aberdeen of United Kingdom. HDFC
Life was established in 2000 becoming the first private sector life insurance
company in India.

2. SBI Life: SBI Life Insurance is a joint venture life insurance company between
State Bank of India (SBI), the largest state-owned banking and financial services
company in India, and BNP Paribas Cardif a French multinational bank and
financial services.

3. ICICI Prudential Life Insurance: ICICI Prudential Life Insurance Company

Limited (ICICI Prudential Life) is promoted by ICICI Bank Limited and Prudential
Corporation Holdings Limited. ICICI Prudential Life began its operations in fiscal
year 2001 and has consistently been amongst the top players in the Indian life
insurance sector. The first insurance company in India to be listed on NSE and
BSE.

Page | 7
The data helps to study about the Market share of Insurance companies in terms of
Market share of: (a) Insurance premium and, (b) No. of policies, and to compare it
between the Private and Public Insurance companies.

Market Share of Insurance Companies 2018-19

Market Share
Sl. No. Companies
Premium No. of Policies

1 LICI 66.20% 74.70%

2 HDFC Life 7% 3.40%

3 ICICI Prudential 4.80% 3.12%

4 SBI Life 6.40% 5.30%

5 Others 15.60% 13.50%

MARKET SHARE OF INSURANCE PREMIUM

5 Others, 15.60%
4 SBI Life, 6.40%

3 ICICI Prudential,
4.80%

2 HDFC Life, 7%

1 LICI, 66.20%

(Source: IRDAI Annual Report 2018-19)

Interpretation:
Here the market share in terms of insurance premium for the year 2018-19 shows that
Life Insurance Corporation of India (LICI) the only Public Sector Company leads the
market with 66.24% share in terms of premium, whereas in private sector HDFC Life
leads the market with 7% share in terms of premium, SBI Life comes after that with
6.40%, ICICI Prudential with 4.80% and others standing with 15.60%.

Page | 8
 MARKET SHARE OF NO. OF POLICIES
5 Others, 13.50%
4 SBI Life, 5.30%

3 ICICI Prudential,
3.12%

2 HDFC Life, 3.40%

1 LICI, 74.70%

(Source: IRDAI Annual Report 2018-19)

Interpretation:
Here the market share in terms of number of policy for the year 2018-19 shows that Life
Insurance Corporation of India (LICI) the only Public Sector Company leads the market
with 74.70% share in terms of number of policy, whereas in private sector SBI Life leads
the market with 5.30% share in terms of policy, HDFC Life comes after that with 3.40%,
ICICI Prudential with 3.12% and others standing with 13.50%.

Life Insurance Corporation of India (LICI) leads the market in terms of both insurance
premium collected with 66.20% and in terms of number of policies with 74.70% during
the year 2018-19. The reason behind this is the vast number of agent working under
and providing insurance facilities not only to the urban or sub-urban people but also to
the rural people where other private sectors could not reached till date.
Unlike privates insurance companies LICI have 8 Zonal Offices and number of
divisional, branch, mini and satellite offices across India insuring lives and people face
less difficulty in paying premiums or submission of any grievances.
Another aspect is that as it is a public sector company, therefore people have more trust
as their savings are in safer hands and will surely get their maturity benefits.

Page | 9
3.2: Study of Private Insurers Vs LIC of India (in terms of Premium):

Insurance premium is a specified amount stipulated by the insurance company, which

the insured individual should periodically pay to maintain the actual coverage of
insurance.
Insurance companies offer policyholders a number of options when it comes to paying
insurance premium. Policyholders can generally pay the insurance premium in
installments, for example monthly or semi-annual payments, or they can even pay the
entire amount upfront before coverage starts.
Here, the insurance premiums are categorized in the following 5 groups:
1. Individual Single Premium: An individual single premium policy is a type of life
insurance policy wherein a lump sum is paid as premium by an individual instead
of the yearly, quarterly or monthly form of premium payment.

2. Individual Non-Single Premium: An individual non-single premium policy also

known as Regular premium policy is a type of life insurance policy wherein
premium is paid by an individual either yearly, quarterly or monthly.

3. Group Single Premium: The Single Premium Group Insurance Plan is a non-
participating, non-linked, single premium payment, term insurance policy that is
especially catered towards employees of an organization or members of an
affinity/homogenous group.

4. Group Non-Single Premium: Group non-single premium or commonly known

as Group regular premium life insurance is a type of life insurance in which a
single contract covers an entire group of people wherein premium is paid by an
individual either yearly, quarterly or monthly. Typically, the policy owner is an
employer or an entity such as a labor organization, and the policy covers the
employees or members of the group.

5. Group Yearly Renewable Premium: Group term life is typically provided in the
form of yearly renewable term insurance. When group term insurance is provided
through employer, the employer usually pays for most (and in some cases all) of
the premiums. The amount of coverage is typically equal to one or two times of
annual salary.

Page | 10
The data provides the Study of Private Insurers Vs LIC of India (in terms of Premium):

Private Vs LIC of India

Individual Individual Group Non- Group Yearly
Categories Single Non-Single Group Single Single Renewable
Premium Premium Premium Premium Premium
Private
7273.76 39397.27 21881.31 399.48 3529.35
Total
LIC of
24393.55 26618.63 86527.42 3464.98 1187.12
India

Private Vs LIC of India

90000

80000

70000
Premium in Crores

60000

50000

40000

30000

20000

10000

0
Individual Indiviual Group Single Group Non- Group
Single Non-Single Premium Single Yearly
Premium Premium Premium Renawable
Premium
Private Total 7273.76 39397.27 21881.31 399.48 3529.35
LIC of India 24393.55 26618.63 86527.42 3464.98 1187.12

Private Total LIC of India

(Source: IRDAI Annual Report 2018-19)

Interpretation:
LIC of India is leading in three categories namely Individual Single Premium, Group
Single Premium, and Group Non-Single premium. On the other hand, Private total is
higher in Individual Non-Single premium and Group-Yearly-Renewable premium.

Page | 11
3.3: Performance of LIC of India - 2018 Vs 2019:

Life Insurance Corporation of India (LICI) is a Public sector giant in terms of market
share of insurance premium. Therefore, a comparative study has been made for LIC of
India in terms of premium for the year ended 2018 Vs 2019.

Premium Comparision of LIC of India 2018 Vs 2019

100000
Premium in Crores

80000
60000
40000
2019

Year
20000
2018
0
Individual Individual Group Group Group
Single Non-Single Single Non-Single Yearly
Premium Premium Premium Premium Renewable
Premium
2018 26602.24 25141.61 79850.99 2083.37 873.47
2019 24393.55 26618.61 86527.42 3464.98 1187.12
Rs. in Crores

2018 2019

(Source: IRDAI Annual Report 2018-19)

Interpretation:

The total premium collected by LIC of India increased by 5.68 % in 2019 compared to
the previous year. LIC of India collected a premium of 142191.69 crores in 2019
whereas the premium collection for the year 2018 was 13455.68 crores.

Changes of premium in percentage as compared to 2018:

 Individual Single Premium reduced by -8.30% in 2019.

 Individual Non-Single Premium increased by 5.87% in 2019.
 Group Single Premium increased by 8.36% in 2019.
 Group Non-Single Premium increased by a whopping 66.32% in 2019.
 Group Yearly Renewable Premium increased by 35.90% in 2019.

Page | 12
3.4: Role of Agents in Life Insurance Industry:

An agent is a primary source for procurement of insurance business and as such his
role is the corner stone for building a solid edifice of any life insurance organization.
Insurance Agents are responsible for identifying sales opportunities for insurance plans
and overseeing a portfolio of clients. Also known as Insurance Sales Agents, these
professionals are responsible for identifying risk management strategies, handling policy
renewals, and tracking claims.
Role of life insurance agents:
 In viewpoint of Insurance companies:
An agent in law is one who acts for another and insurance agent is one who works for
an insurer. His job is to bring in customers for the insurance company and is
remunerated in the form of commission expressed as a percentage of the premium
payable on the business introduced. The rates of commission payable to an agent
would normally depend on market competition and the volume and profitability of
business procured by the agent concerned. In India, the rates of commission payable
are stipulated under the insurance law and no commission is payable for insurance of
firms having paid up capital in excess of the amount stipulated.
 In viewpoint of policyholder:
An insurance agent is a trained professional whose job is to sell insurance policies. Life
insurance agents specialize in selling policies that pay beneficiaries when a policyholder
dies. An agent has to sell himself before selling his product of life insurance. This is due
to the intangible nature of the products and its long-term commitment. So, trust and
belief in the customer is to be created for buying this product, which also needs to be
sustained and continued in future too.

Contributions of agents in Life Insurance Corporation (the Giant insurance co. in

India):

In India, life insurance is generally considered as a tax-saving device instead of its other
implied long term financial benefits. Indian people are prone to investing in properties
and gold followed by bank deposits. They selectively invest in shares also but the
percentage is very small. Even to this day, Life Insurance Corporation of India
dominates Indian insurance sector.

What is it that takes this performance forward?

One reason undoubtedly is the large network of agents on rolls in LIC. The tremendous
success is of course on account of constant and tireless efforts of LIC agents who bring
new business to the corporation with increasing growth rate. This record will become
the benchmark for future evolution of the efforts of agents.

Page | 13
With the help of this data, a comparative study has been shown between LIC of India Vs
Private Insurance (Total) and total number of agents working under this industry:

Details of Individual Agents of Life Insurers 2018-19

As on 31st As on 31st
Insurer Additions Deletions
March, 2018 March,2019

Private Total 933856 381851 300189 1015518

LIC 1148811 263894 233476 1179229
Industry Total 2082667 645745 533665 2194747

Details of Individual Agents of Life Insurers 2018-19

2194747
As on 31st March,2019 1179229
1015518

533665
Deletions 233476
300189

645745
Additions 263894
381851

2082667
As on 31st March, 2018 1148811
933856

0 500000 1000000 1500000 2000000 2500000

Industry Total LIC Private Total

(Source: IRDAI Annual Report 2018-19)

Interpretation:
The number of individual agents as at 31st March, 2019 were 21.95 lakhs as against
20.83 lakhs as on 31st March 2018. Private insurers stands with 10.16 lakh agents,
whereas LIC of India stands with 11.79 lakh agents as at 31st March, 2019.
During the year 2018-19, the total number of agents appointed in life insurance industry
were 6.46 lakhs and the number of agents terminated were 5.34 lakhs. While private
insurers appointed 3.82 lakh and terminated 3.00 lakh agents, LIC of India appointed
2.64 lakh agents and terminated 2.33 lakh agents.

Page | 14
3.5: Claims settlement in the Life Insurance industry:

Selection of a proper life insurance policy is a basic requirement of individual’s risk

management policy. At the same time proper claim settlement is also an important part
of the risk management system. A claim is the payment made by the insurer to the
insured or claimant on the occurrence of the event specified in the contract, in return for
the premiums paid for the insured. The easy and timely settlement of a valid claim is an
important function of an insurance company.
With the help of the following data Claims settlement in the Life insurance industry have
been shown for the Financial Year 2017-18:

Top 10 best Life Insurance Companies as per Claim

Settlement 2017-18

100.00% 98.33%
96.95% 96.80% 96.20%
98.00% 95.31% 95.02%
96.00% 93.82% 93.39%
92.99%
94.00% 91.30%
92.00%
90.00%
88.00%
86.00%

Percentage of Claim settlement

(Source: IRDAI Annual Report 2017-18)

Interpretation:
Among the Private life insurance companies and in the whole life insurance sector MAX
Life provides the highest claim settlement with 98.33%, whereas Aditya Birla Sunlife
provides 91.30% of the claim settlement, which stands lowest among the top 10 life
insurance companies.
On the other hand, Life Insurance Corporation of India (LICI), stands second position in
the terms of claim settlement with 96.95%, being the one and only public life insurance
company and the giant life insurance company in India.

Page | 15
3.6: Flagship schemes of Govt. of India for insuring the lives of Indians:

The Central Government launched two landmark insurance schemes, namely, Pradhan
Mantri Jeevan Jyoti Bima Yojna (PMJJBY) and Pradhan Mantri Suraksha Bima Yojna
(PMSBY) as a part of financial inclusion on 9th may, 2015. The purpose of these
schemes is to provide insurance protection to account holders of the Banks at a very
reasonable cost.
The PMJJBY is available to people in the age group of 18 to 50 years having a bank
account who give their consent to join / enable auto-debit. The life cover of Rs. 2 lakhs
shall be for the one year period stretching from 1st June to 31st May and will be
renewable. Risk coverage under this scheme is for Rs. 2 Lakh in case of death of the
insured, due to any reason. The premium is Rs. 330 per annum which is to be auto-
debited in one installment from the subscriber’s bank account on or before 31st May of
each annual coverage period under the scheme.
The scheme is being offered by Life Insurance Corporation and all other life insurers
who are willing to offer the product on similar terms with necessary approvals and tie up
with banks for this purpose.
A small data analysis has been shown on the gross enrollment reported by the banks as
on 1st February, 2018 (recent available data updated data on website):

Gross Enrollment Reported by Banks (Amt. In Rs. Crores)

Addn./Redn.
during the month
Addn./Redn. over
Parameters As on. 01.02.2018 As on. 01.01.2018 previous to that
the month
(01.01.2018 -
01.12.2017)
Gross enrolment
reported by Banks
subject to
verification of 5.2714 5.2297 0.0417 0.0144
eligibility, etc.
(Amt. in Rs.
Crores)
Total No. of claims
92053 89216 2837 4455
recd.
Total No. of claims
83274 79373 3901 1553
disbursed
[Source: Open Government Data (OGD) platform India]
Interpretation: PMJJBY Enrollment as on 1st February, 2018 is Rs. 5.28 Crores with an
addition of Rs. 4.17 Lakhs. Total number of claims received is 92,053 and total number
of claims disbursed is 83,274.

Page | 16
3.7: Findings:

1. The market share in terms of Life Insurance Premium for the year 2018-19
shows that Life Insurance Corporation of India (LICI) leads the market with
66.24%, whereas in Private sector HDFC Life leads with 7% share in terms of
premium, SBI Life comes after that with 6.40%, ICICI Prudential with 4.80% and
others standing with 15.60%.
2. The market share in terms of Number of Policy for the year 2018-19 shows that
Life Insurance Corporation of India (LICI) leads the market with 74.70%, whereas
in Private sector SBI Life leads the market with 5.30% share in terms of policy,
HDFC Life comes after that with 3.40%, ICICI Prudential with 3.12% and others
standing with 13.50%.
3. LIC of India is leading in three categories of premium namely Individual Single
Premium, Group Single Premium and Group Non-Single premium. On the other
hand, Private total is higher in Individual Non-Single premium and Group-Yearly-
Renewable premium.
4. The total premium collected by LIC of India increased by 5.68 % in 2019
compared to the previous year. LIC of India collected a premium of
Rs.142191.69 crores in 2019 whereas the premium collection for the year 2018
was Rs.13455.68 crores.
5. The number of individual agents as at 31st March, 2019 were 21.95 lakhs as
against 20.83 lakhs as on 31st March 2018. Private insurers stands with 10.16
lakh agents, whereas LIC of India stands with 11.79 lakh agents as at 31 st March,
2019.
During the year 2018-19, the total number of agents appointed in life insurance
industry were 6.46 lakhs and the number of agents terminated were 5.34 lakhs.
While private insurers appointed 3.82 lakh and terminated 3.00 lakh agents, LIC
of India appointed 2.64 lakh agents and terminated 2.33 lakh agents.
6. Among the Private life insurance companies and in the whole life insurance
sector MAX Life provides the highest Claim settlement with 98.33%, whereas
Aditya Birla Sunlife provides 91.30% of the claim settlement, which stands lowest
among the top 10 life insurance companies.
On the other hand, Life Insurance Corporation of India (LICI), stands second
position in the terms of claim settlement with 96.95%.
7. PMJJBY Enrollment as on 1st February, 2018 is Rs. 5.28 Crores with an addition
of Rs. 4.17 Lakhs. Total number of claims received is 92,053 and total number of
claims disbursed is 83,274.

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 CHAPTER 4
CONCLUSION
4.1: Conclusion:

After the reforms in insurance sector, life insurance industries have seen a remarkable
growth moreover; the policies measures provided a favorable environment for insurance
companies to flourish in the country.
Till 2019 there were 24 life insurance companies operating in India of which 23 are
private insurers and 1 public insurer that is LIC of India. LIC has been successfully able
to create value for its customers or policy holders, showing a respectable growth in its
business. There is enormous potential for life insurance and no doubt that LIC still
enjoys immense goodwill in our country.

Government of India tries to promote the insurance sector by giving Deductions under
Section 80C of Chapter VIA of the Income Tax Act, 1961 and there are number of
peoples who invest in life insurance for attaining Tax saving benefits. Also, flagship
schemes like Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) helps in insuring
lives for those who are of lower income groups and are unable to purchase policies.
The future looks promising for the life insurance industry with several changes in
regulatory framework which will lead to further change in the way the industry conducts
its business and engages with its customers. The overall insurance industry is expected
to reach US$ 280 billion by 2020. Life insurance industry in the country is expected
grow by 12-15 per cent annually for the next three to five years.

Demographic factors such as growing middle class, young insurable population and
growing awareness of the need for protection and retirement planning will support the
growth of Indian life insurance.

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4.2: Recommendations and Suggestions:

The life insurance industry plays an important role in improving national economy and
for developing this sector certain changes and improvements are to be made. Some of
these are:
a) Due to the intense competition in the life insurance market, the life
insurance companies have to adopt better strategies to attract more
customers. Insurers will need to increase efforts to design new products
that are suitable for the market and make use of innovative distribution
channels to reach a broader range of the population.

b) Life insurance products are taken mainly by middle and higher income
groups. Hence, they should be regarded as main targeted income groups.
Apart from them a large number of lower income groups lives in the
country, therefore, life insurance products which are suitable for lower
income group should also be released so that the market share increases.

c) There are people living in the society who prefers to invest their savings in
purchasing gold ornaments rather than investing in insurance especially
life insurance. Life insurance companies should educate importance and
benefits of insurance to general public through the agent and corporate
social responsibility activity.

d) LIC has to made more efforts to enhance its business in terms of

technology distribution network, technological innovations, client
relationship and quality.

e) Procedure of claim should be made hassle-free and comfortable for the

policyholder or the beneficiaries, as there are lot of guidelines which have
to be followed for making the claim and many of the policyholder gets
irritated as they have to approach from one department to the other.

f) There are also a lot of fake claims which the insurers must take care of it.
They must develop a simple guideline in which they could identify whether
the claim is genuine or not, as it would be applied to all the policyholders.
Thus, it would make the claim easy for both the insurers and
policyholders.

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 BIBLIOGRAPHY

References and links:

Annual Reports:
1. IRDAI Annual Report
2. LIC of India Annual Report

Journals:
1. Competing in a new age of Insurance - PwC
2. Role of agents in competitive regimes

Websites and weblinks:

1. www.ibef.org
2. www.investindia.gov.in
3. www.licindia.in
4. www.irdai.gov.in.
5. https://data.gov.in/
6. https://economictimes.indiatimes.com/

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