1. Mr.S.B. Mathur 1

2. Life Insurance Industry
Life Insurance Industry was liberalized in the year
Currently there are 22 players in the Life Insurance Industry.
19 Insurance companies have JV’s with foreign partners.
LIC, Reliance Life Insurance and Sahara Life Insurance company are the three companies who do not have JV’s.
All the major international players are present in the Indian Insurance market.
India has the largest in-force policies in the world. 2

3. Growth Indicators
Parameter
FY 99-00
FY 06-07
FY 07-08
FY 08-09
(Mar-Jun 09) Q1
Number of players 1 16 18 22
Capital Deployed (Rs. Cr) 5
9,485
16,235
24,838
25,625
Branches
2,048
5,373
8,913
11,720
11,789
Employees (in Lacs)
1.23
1.87
2.54
2.85
2.68
Individual Agents (in Lacs)
7.14
19.93
25.20
29.06
29.07
FDI (Rs.Cr)
During the year NA
1809
2821
Source: IRDA, Life Insurance Council (FY 09 data is provisional)

4. Growth Indicators
Parameter
FY 99-00
FY 06-07
FY 07-08
FY 08-09
(Mar-Jun 09) Q1
New Business Premium (Rs.Cr)
8,299
75,649
93,713
86,866
14,418
Renewal premiums (Rs. Cr)
17,951
80,427
1,07,638
1,33,318
32,750
Total Premium (Rs. Cr)
26,250
1,56,076
2,01,351
2,20,184
47,168
Expenses of management – Commission (Rs.Cr)
3,171
12,283
14,670
15,337
2,992
Expenses of Management-operating expenses (Rs.Cr)
3,756
13,585
20,341
23,014
5,303
Source: IRDA, Life Insurance Council (FY and Q1 data is provisional)

5. Growth Indicators Rural Policies (In Cr) 1.26 1.54 1.69 4.61 5.08 5.09
Parameter
FY 99-00
FY 06-07
FY 07-08
FY 08-09
New Business Policies (In Cr)
1.69
4.61
5.08
5.09
In force Policies (In Cr)
10.14
22.70
25.93
29.6
Rural Policies (In Cr) -
1.26
1.54
As per regulations Life Insurance Companies have to sell 18% policies in rural area.
India has largest number of in-force policies in the world (IRDA Annual report).
Source: IRDA, Life Insurance Council (FY and Q1 data is provisional)

6. Benefits Paid
Parameter
FY 06-07
FY 07-08
FY 08-09
Total Surrenders paid(Rs. Cr)
17,757
21,925
13,710
Total Maturity claim paid(Rs. Cr)
34,356
34,543
37,806
Total Death Benefit paid(Rs.Cr)
4,794
5,868
6,938
Total Benefits paid (Rs.Cr)
56,887
62,364
58,551
Source: Life Insurance Council

7. Global Indicators
Parameter
FY 99-00
FY 06-07
FY 07-08
FY 08-09
India’s share of world premium
0.50%
1.6%
2.0% -
Penetration as % of GDP
1.39%
4.1%
4.0%
The industry services the largest number of life insurance policies in the world
* Inflation adjusted
Source: IRDA, Swiss Re

8. Global Indicators
Source: IRDA report , Life Insurance Council

9. Industry Contribution / Support to the economic development in FY 2008-09
A. New Offices
Life Insurance companies in India have opened 2,807 new offices.
Total number branches of Life Insurance companies -11,720.
39% of the total offices are located in Class “C” location
31% of the total offices are located in less than Class “C” location.
B. Employment Generation
Have provided direct employment to 30,333 people.
Part time employment to more than 3.8 lacs individual agents during the year.
C. Improved Persistency
Increase in renewal premium collection by 24 % (Rs.1,07,638 Cr to Rs.1,33,318 Cr)
Increase in unit linked renewal premium collection by 106 % (Rs.22,380 Cr to Rs 46,239 Cr)
Decrease in surrender value payment
Increase in Total Premium collection by 10% (Rs.2,01,351 Cr to Rs.2,20,184 Cr)
Source: IRDA, Life Insurance Council (FY 09 data is provisional)

10. Industry Contribution / Support to the economic development in FY 2008-09
Investment by Indian Insurance Companies
Insurance companies have invested approximately Rs.51,562 Cr in the Equity market.
FII pulled out approximately Rs.47,345 Cr from the domestic stock market.
Mutual funds invested approximately Rs.7,000Cr in the domestic stock market.
Increase in Infrastructure Investment by 25%(Rs.91,283 Cr to Rs.1,13,717 Cr)
“Insurance industry was the saving grace for the domestic equity market”- Hindu Business Line
Source: IRDA, Life Insurance Council (FY 09 data is provisional)

11. Industry Contribution / Support to the economic development in FY 2008-09
Investment in the infrastructure sector amounts to Rs.1,13,717 Crores as on March 31,2009.(Last Year-91,283 Cr)
Investments
Instruments Rupees in Crores
Equity ,99,666
Fixed Income (Debt) ,08,622
Others ,742
Total: ,34,030
Prudent asset management strategies aligned to regulations adopted by the industry have provided consumers healthy returns over long-term
Source: IRDA, Reports and internal estimates

12. Expenses of Life Insurance Companies
Rule 17D of Insurance Act 1938, there is a capping on expenses of management.
Exemption is granted to companies in first 5 years of operation.
Maximum Commission payable to agents under various product heads is prescribed in the Insurance Act.
Percent Commission is lower on high premium policy and vice-versa.
Parameter
FY 00-01
FY 06-07
FY 07-08
FY 08-09
(Mar-Jun 09) Q1
Commission as % of total premium
12.07
7.85
7.30
6.97
6.34
Competition will further drive down cost of commission.
Source: Life Insurance Council

13. Commission paid by Life Insurance Industry
Parameter
FY 06-07
FY 07-08
New Commission paid on Regular Premium (Rs.Cr)
(16.59%)
(16.25%)
New Commission paid on Single Premium (Rs. Cr)
(1.51%)
(1.43%)
Total Commission paid on First Year (Rs.Cr)
(10.55%)
(10.11%)
Commission paid on Renewal Premium (Rs.Cr)
(5.32%)
(4.86%)
Commission paid on Total Premium(Rs.Cr)
(7.85%)
(7.30%)
Source: IRDA, Life Insurance Council (FY 09 data is provisional)

14. Commission paid by Life Insurance Industry
For the FY
Total premium of the Industry - Rs.2,20,184 Cr
Commission paid to intermediaries Rs.15,337 Cr
Percentage of Commission as a percentage of total premium – 6.97
Insurance is a long term contract with average tenure of 15 years.
Comparatively high start-up cost to be related to a long tenure. 14

15. Commission paid by Life Insurance Industry
Rate of Commission paid on Single Premium policy is % which is mandated in the Insurance Act
In case of Group (Non-Single) policies business is obtained directly
at less than 2% of commission.
In case of differed annuity the commission rate is 2%.
Commission rate on renewal premium is approximately 5% or below. 15

16. Commission paid by Life Insurance Industry
In last 2 years 42% of total premium is collected at a commission rate of % (with no trail commission) FY Rs.24,734 crores
In last four years more than Rs.1,25,000 crores of single premium is been collected at a commission of %
Under certain plans maximum commission payable to intermediaries is 35%.Incase of new companies the maximum commission payable is 40%.
Generally the commission paid is dependent on the term of the policy.

17. - Inclusive growth of Life Insurance Sector
Companies are statutorily required to do rural business from there first year of operation.
Companies which are in operation for 6 years or more have to mandatorily sell 18% of new policies in rural areas.
Companies are supposed to cover 25,000 lives in agriculture and unorganized sector.
2.8 crs rural policies were sold by companies in last two years.
(1.26 Crore policies in and 1.54 Crore policies in )
Companies are to open branches in non-city areas to do some priority sector lending.
No such obligations for Mutual Funds which operate only in 16 cities.
70% of the total 11,720 branches of insurance companies are in semi-urban or rural areas.

18. Grievance Redressal Mechanism
Note:-There are 12 ombudsman Centres in India.
Register a Complaint with the Toll free number / helpline of the Company
Complaint to the Grievance officer of the company
Complaint to Ombudsman /IRDA / Council

19. Ombudsman Ombudsman Centre O/S as on 31.3.07 Received during the year
Total
Total complaints Disposed
Total complaints Pending
Ahmedabad 26
131
157
146 11
Bhopal 02
555
557
544 13
Bubneswar
140
201
341
204
137
Chandigarh 46
515
561
500 61
Chennai 07
705
712
707 5
Delhi
127
108
235
212 23
Guwahati
155
178
162 16
Hyderabad
524
537
530 7
Kochi 28
263
247
Kolkata 87
726
813
749 64
Lucknow 52
970
1022
1006
Mumbai
740
792
771 21
603
5565
6168
5778
390
Source: IRDA

20. - Issues faced by Life Insurance Sector
As of now there is no separate provision for long term savings instrument including Life Insurance since the current provisions provides for deduction for investments in both short term and long term savings.
Currently short term savings also includes the home loan repayments along with plethora of other savings instruments life mutual funds , bank deposits etc.
To address the long term savings , investment in long term products can be incentivised through a separate deduction for such investments.

21. - Issues faced by Life Insurance Sector
Disparity in service tax for similar financial products.
High incidence of Taxation
Double Taxation
Life Insurance companies are required to maintain high capital solvency requirements.
Life Insurance companies are also required to adhere to the the social obligation norms of IRDA to open offices in rural and cater to the rural market which increases the costs of the companies to a greater level.

22. Thank You