1. Developments in Indian Life Insurance Industry
02nd September 2011, Jaipur

2. Agenda Key Indicators of Indian Life Insurance Industry
Inclusive Growth of Life Insurance Sector
Investment by Life Insurance Companies
Expenses of Life Insurance Companies
Protection of Policyholders Interest
Insurance as a Career 2

3. Key Indicators of Indian Life Insurance Industry
Life Insurance Industry completes a decade of opening up.
Currently there are 24 players in the Life Insurance Industry.
21 Insurance companies have JV’s with foreign partners.
All the major international players are present in the Indian Insurance market.
A high capital intensive industry-Rs. 31,557 Cr deployed.
(As of 30th June 2011)
Foreign partners have brought in capital of Rs.5053 Crs as FDI.
(As of 31st March 2010)
India has the largest in-force policies in the world. 3

4. Key Indicators of Indian Life Insurance Industry……….contd
Parameters
FY 99-00
FY 08-09
FY 09-10
FY 10-11
(provisional)
Till 30th June 2011
Number of players 1 22 23 24
Capital Deployed (Rs. Cr) 5
24,988
28,943
31,437
31,557
Branches
2,048
11,815
12,018
11,465
11,446
Employees (in Lacs)
1.23
2.85
2.67
2.42
2.41
Individual Agents (in Lacs)
7.14
29.37
29.78
26.47
24.27
Source: IRDA, Life Insurance Council (FY and June 11 data is provisional)

5. Key Indicators of Indian Life Insurance Industry ……....contd
Parameters
FY 99-00
FY 08-09
FY 09-10
FY 10-11
(provisional)
Till 30th June 2011
New Business Policies (In Cr)
1.69
5.09
5.32
4.81
0.71
In force Policies (In Cr)
10.14
29.60
30.40
32.54
32.55
New Business Premium (Rs.Cr)
8,299
87,331
1,09,894
1,25,800
18,302
Renewal premiums
(Rs. Cr)
17,951
1,34,454
1,55,556
1,60,700
37221
Total Premium (Rs. Cr)
26,250
2,21,785
2,65,450
2,86,500
55,523
Source: IRDA, Life Insurance Council (FY and June 11 data is provisional)

6. Key Indicators of Indian Life Insurance Industry ……..contd
Benefits Paid
Parameter
FY 08-09
FY 09-10
FY 10-11
(provisional)
Till 30th June 2011
Total Death Benefit paid(Rs.Cr)
6,125
8,385
10,270
2,459
Total Benefits paid (Rs.Cr)
58,527
95,883
1,41,806
36,800
Source: IRDA, Life Insurance Council (FY data is provisional)

7. Key Indicators of Indian Life Insurance Industry ……....contd
Rajasthan Specific Data
Parameter
FY 06-07
FY 07-08
FY 08-09
FY 09-10
Individual New Business Premium (In Cr)
3,238
3,397
2,694
3,372
Individual New Business Policies
21,12,791
20,77,792
21,21,980
26,12,195
Branches
256
544
686
709
Number of Agents
90,770
1,16,467
1,34,268
1,40,545
Source: IRDA

8. Inclusive Growth of Life Insurance Sector
Agenda
Inclusive Growth of Life Insurance Sector 8

9. - Inclusive growth of Life Insurance Sector
Companies are statutorily required to do rural business and cover lives from social sector -rural, un-organized and socially underprivileged from there first year of operation.
Companies have to mandatorily sell
18% of new policies in rural areas.
(1.55 Crore policies in and 1.26 Crore policies in )
Cover 25,000 lives in social sector every year.
(1.43 Crore in and 1.93 Crore in )
72% of the total 11,446 branches of insurance companies are in semi-urban or rural areas (33% in rural areas).
No such obligations for Mutual Funds.
Source: IRDA, Life Insurance Council

10. Investment by Life Insurance Companies
Agenda
Investment by Life Insurance Companies 10

11. Investment by Life Insurance Companies
Rs. Crs
Parameter
FY 00-01
FY 07-08
FY 08-09
FY 09-10
Central Government Securities
47,512
2,96,687
3,16,010
3,61,520
State Government and other approved securities
5012
85,198
1,07,190
1,36,998
Investment in Infrastructure Sector
24,887
91,283
1,15,369
1,39,710
In FY life insurers invested 4,98,518 crores in Central government, state government and other approved securities.
Source: IRDA, Life Insurance Council

12. Investment by Life Insurance Companies……..contd
Pattern of investment
Rs. Crs
Instruments FY FY
Till 30th June 2011
(provisional)
Equity
4,46,881
5,06,895
4,96,330
Fixed Income (Debt)
8,10,904
9,52,993
9,77,895
Others
32,161
20,425
30,404
Total
12,89,946
14,80,313
15,04,629
Source: IRDA, Life Insurance Council (FY and June 11 data is provisional)

13. Investment by Life Insurance Companies……..contd
Nett Investment in equities by Life companies and FII’s
Rs. Crs
Instruments FY FY FY
Investment by Life Insurance Companies in Equity
55,308
61,125
36,684
Investment by FII’s in Equity
(46,701)
1,17,648
1,10,521
Source: IRDA, Life Insurance Council (FY data is provisional)

14. Expenses of Life Insurance Companies
Agenda
Expenses of Life Insurance Companies 14

15. Expenses of Life Insurance Companies
Insurance is a long term contract with average tenure of 15 years.
Comparatively high start-up cost to be related to a long tenure.
Under Section 40 B of Insurance Act 1938, there is a capping on expenses of management.
- Exemption is granted to companies in first 5 years of operation.
- Any non-compliance later is viewed adversely by IRDA.
Maximum Commission payable to agents under various product heads is prescribed in the Insurance Act (section 40 A).
Longer the term of the policy, lower is the premium and therefore percent commission is higher. For shorter term policies the percent commission is lower as premium is higher. This ensures that the absolute commission is reasonable.
In last five years (i.e. from FY to FY 10-11) more than Rs.2,18,000 crores of premium was collected at a commission of less than 2.0%
Source: IRDA, Life Insurance Council (FY data is provisional)

16. Protection of Policyholders Interest
Agenda
Protection of Policyholders Interest 16

17. Protection of Policy holders interest
Prevention of Mis-selling
All advertisements are to be filed with the regulator & must satisfy fairness criteria.
It is mandatory to explicitly give information on the definitions of all the applicable
charges, method of appropriation of these charges and the quantum of all the charges
during the entire term of the policy.
All ULIP sales illustration should highlight the rate of return calculated at 6% and 10% to enable comparison across various products. The illustration is to be signed by the policy-holders.
It is compulsory to mention on top each ULIP policy document “In this policy, the investment risk in investment portfolio is borne by policy holder.
Disclosure of Commission to the prospect.
Under regulation 6(1)Policy holders are given a 15 day free-look period from the date of receipt of policy document, where in the policy holder can review the terms and condition of the policy and opt to return the policy and claim refund

18. Protection of Policy holders interest…………..…….Contd
Fair return to policy-holders
U/s 17d of Insurance Act 1938, there is a overall capping on expenses of management.
Post 01st September 2010 the reduction in nett yield for all ULIP policies with term of:-
10 years or more not more than 300 bps at maturity.
More than 15 years not more than 225 bps at maturity.
This will cap the expenses under each products offered by life companies.
Lock in period increased to 5 years
Even spread of charges during the lock in period
Cap on surrender charges / discontinuance . Annual charges are also capped for
various maturities.
Interest is paid even on discontinuance fund which is on par with saving bank account.
Guarantee of return at maturity for ULIP Pension / Annuity Plans (4.5%)

19. Protection of Policy holders interest…………..…….Contd
Grievance Redressal
Policy document should clearly mention inter-alia the grievance redressal mechanism,
name and address of grievance officer, ombudsman to whom complaint can be
registered.
IRDA has set up an Integrated Grievances Redressal system where the complaint is
escalated to higher authorities.
There are 12 ombudsman Centre's in India which provides resolution to policy-holders
at nominal cost.
The companies cannot challenge the decision of the ombudsman.

20. Protection of Policy holders interest…………..…….Contd
Insurance a “unique product”
Offers savings and protection in a tax efficient way. .
Minimum life insurance cover should be 110% of Single Premium for age at entry of 45 years and above and 125 % for age at entry below 45 years.
Customizable solution, where the customer can choose his -
Protection level
Investment horizon
Additional Benefits (Riders)
Option to allocate assets as per need

21. Protection of Policy holders interest…………….Contd
Transparency and Corporate Governance
Public Disclosures
Companies are required to disclose detailed financial & statistical information on quarterly /half yearly and yearly basis on their website.
Companies are required to publish audited half yearly and annual financial statement in newspapers along with critical ratios.
Corporate Governance
Companies are required to follow Corporate Governance guidelines which are followed by all listed companies in India.

22. Life Insurance as a Career
Agenda
Life Insurance as a Career 22

23. Life insurance – industry with unlimited scope
Right country, right industry and right time
Right country
India poised to continue on high economic growth trajectory
Growing insurable / working age(20-60 years) population
Increasing middle class with higher disposable income
Right industry
Low life insurance coverage
No government sponsored social security provides huge potential for growth
Professional with domain knowledge from international experts
Right time
Potential to build career with flexibility
Consistent performers have potential to grow
Growing awareness for financial security

24. Agent advisors – a viable career option
Flexibility, unlimited potential and contribution to society
Flexibility
Be your own boss
Low start up investment
Flexible working hours
No retirement age
Unlimited potential
Unlimited earning potential
Enjoy renewal income benefits
Contribution to society
Help secure dignity of the family
Help fulfill life stage goals

25. Thank You