Current Market Trends in Life Insurance Industry in India &

1. Current Market Trends in Life Insurance Industry in India & Strategy for Promotion of PLI and RPLI 17th Feb, 2017, New Delhi V. MANICKAM, Secretary

2. Topics - • Key Parameters for Indian Life Insurance Industry • Overview of Indian Life Insurance Industry • Current Market Trends in Life Insurance Industry • Snapshot of Postal Life Insurance & Life Insurance Industry • Strategies for Promotion of PLI and RPLI

3. Key Parameters for Indian Life Insurance Industry

4. Key Parameters for Indian Life Insurance Industry - Overview of India’s Demographics • India’s Current Population is approximately 134 Crore * • Insurable Population is about 90 Crore. • Mobile Phone Connection is about 93 Crore. • Male to female population is 52 :48 (690 Mn male : 647 Mn female). • 72 % of the total population resides in semi-urban and rural areas. • Global Overview • Out of total world population aged above 80, 6 countries account for about 50 % of population in • 2015 (China 23 Mn, USA 12 Mn ,India and Japan 9 Mn each ,Germany and Russia 4 Mn each). • In 2015, in the world total of aged people above 60 stood at 901 Mn (in India around 100 Mn). • Globally, 40 % of elders aged 60 years & above live independently or with spouse. This • trend is increasing steadily. • By 2050, it is estimated that India will have 330 Mn people aged 60 & above and 45 Mn people aged • 80 or above. Source: UN population Division * - Intl. Inst. For Popln. Sciences (IIPS)

5. Key Parameters for Indian Life Insurance Industry - Change in Trend of age structure of Indian population and Projection thereof (%) Age Year Source: UN population Division

6. Key Parameters for Indian Life Insurance Industry - Current Population of Workforce • Out of total population of 134 crore * (approximately), only 42.7 crore is employed • workforce (2015) • Around 4% ( 5.4 crore) of the total population is eligible for Pension related benefits. Source: Indian workforce survey and UN population Division * - Intl. Inst. For Popln. Sciences (IIPS)

7. Key Parameters for Indian Life Insurance Industry - Financial Savings of Household sector (In % of GNDI*) * GNDI – Gross National Disposable Income Source: IRDAI

8. - Overview of Indian Life Insurance Industry

9. Overview of Indian Life Insurance Industry – Key Indicators * - Provisional Source: IRDAI, Life Insurance Council

10. Overview of Indian Life Insurance Industry – Business Performance Indicators * - Provisional Source: IRDAI, Life Insurance Council

11. Overview of Indian Life Insurance Industry – Key Indicators Segment Wise (Individual) N.B Performance of Life Insurance Industry for the last 5 Yrs (Rs. In Cr) Source: L.I. Council

12. Overview of Indian Life Insurance Industry – Payouts to Policy Holders a * - Provisional, NA – Not Available Source: IRDAI, Life Insurance Council (Up to Nov-16 data is provisional)

13. Overview of Indian Life Insurance Industry – Key Indicators Total Investments of Life Insurers: Category-Wise (Rs. In Cr) Source:IRDAI

14. Overview of Indian Life Insurance Industry – Key Indicators - Growth of Life Insurance Sector – Rural Social Sector 3.37 Crorelives covered to social sector in 2015-16 69 lakh policies sold in rural areas in 2015-16 Statutory Requirements Companies have to mandatorily sell - 20% of new policies in rural areas and 5% of total business procured in the preceding Financial Year in social areas 53% of 11,071 branches are in semi-urban and rural areas Source: Life Insurance Council; IRDA;

15. Current Market Trends in Life Insurance Industry

16. Current Market trends in Life Insurance Industry • Digitization – the buzzword in the industry • Online policies picking up in a big way – Term policies are becoming popular. • Web Aggregators use online space, providing comparable quotes and • generating leads for insurers. • Usage of Tablets for demonstrating customers with ease under various scenarios – with • various returns and charge structures become very easy. • Form filling has become a less painful exercise and anywhere any time insurance • through mobile applications has also become popular. • Comparing products of various Insurers has become easy and faster. • Premium payments made online – • Instant Payment through online portals have revolutionized the premium collection process. • IVRS, online mobile applications etc. have also become popular premium payment methods 16

17. Current Market trends in Life Insurance Industry • E-Insurance Account – a Revolution • First of its kind in the world – holding all insurance policies in electronic form by opening • a single e-insurance account with an Insurance repository. • Free for the customer and the charges are paid by the Insurance company. • Loss of insurance policies and issue of duplicate policies have become history with the introduction of e-insurance account – facilitates faster settlement of claims. • Single KYC done for e-insurance account instead of each policy – reduces the paper work. • E-insurance account completes the paperless insurance policy system and makes the insurance purchase seamless. • A customer buying policy online, pays insurance premium online, gets receipt online and also gets credit of insurance policy account online and • Finally the claims are settled by direct transfer of funds to the account of the nominee/Policyholder. 17

18. Current Market trends in Life Insurance Industry • Evolution of Alternative channels of Distribution. • Individual agency channel was the only mode of distribution in LIC days(currently 20 • lakh). Direct Marketing is a popular channel for reaching customers and generating • leads or selling through a telephone. • Corporate Agency system introduced in 2002 with IRDAI framing regulations • allowing Corporate form of Agencies (currently 428). • This was followed by the Insurance Broking model which allowed the entity to be a • distributor for multiple insurers (currently 370) • Micro Insurance Agent channel to procure New Business from rural and remote rural • areas. (currently 27,041) 18

19. Current Market trends in Life Insurance Industry • Evolution of Alternative channels of Distribution. ……contd • Web Aggregators are online operators who provide choice of products to customers • online (currently 16). • Insurance Marketing Firms (IMF) – Encourage Entrepreneurship – Ability to sell other • financial products. (currently 81) • Common Service Centers (CSC) – Encourage Rural Entrepreneurship to take insurance to • the remote areas through Village Level Entrepreneurs (VLE). (currently 5373) 19

20. - Snapshot of Postal Life Insurance (PLI & RPLI) & Life Insurance Industry

21. Snapshot of PLI/RPLI vis-à-vis Life Insurance Industry Statistical Data – No: of Policies In-force Policies in Lakh Year Source: PLI/RPLI, IRDAI & Life Insurance Council

22. Snapshot of PLI/RPLI vis-à-vis Life Insurance Industry Statistical Data – Corpus Fund (Rs. In Cr) Rs.Cr Year Source: PLI/RPLI, IRDAI & Life Insurance Council

23. - Strategies for Promotion of PLI and RPLI

24. Strategies for Promotion of PLI and RPLI of the Industry • Following Strategies are suggested for promoting PLI and RPLI:- • Modernize Offices in Phased Manner - To attract New Generation Customers, and to change the outlook of Offices through modernization with an aim to solicit more customers. • Adopt RTM Strategy (Recruit, Training and Motivate) • RTM - Recruit • Recruit more no. of Direct Agents – Conduct Special Recruitment drive periodically every year and enhance the number of Direct Agents. • To empower women, conduct Special Recruitment drive to recruit Women Direct Agents in large number. • Incorporate both of the above in business plan every year. 24

25. Strategies for Promotion of PLI and RPLI contd… the ry • RTM – Training • Attach top priority to update the knowledgeofinsurance to all Direct Agents through refresher programme in dedicated training centres/through online portals. • The training should encompass among other things, product knowledge, selling technique, USP of each product of PLI/RPLI and comparative analysis of similar products of competitors. This should be a continuous agenda every yearpreferably in the 1st half year and 2nd half year must be used for business solicitation etc., • Because “Knowledge is Strength”. • RTM– Motivation • Motivation through Marketing Supervisors – Marketing Supervisors should visit houses/ workplaces and policy service centres of Direct Agents periodically, interact with them about NB performance, ascertain feedback and motivate them suitably for soliciting more New Business. 25

26. Strategies for Promotion of PLI and RPLI contd… of the Industry • While visiting the houses of Direct Agents, Marketing Supervisors should interact with family members of Direct Agents to ensure congenial working atmosphere for Direct Agents which will in-turn boost the morale for better NB performance. • Create multiple tier incentive system through Club Membership (Diamond, Platinum, Gold, Silver, Bronze, etc.). On the basis of performance of Direct Agents, organize periodic foreign trip/ exotic locations in India/abroad and motivate them/spouse appropriately. • Float Sale competition for Direct Agents to encourage them to sell more policies. Competition should be floated at every festive and special occasions and the award/prize should be distributed without any delay to keep their morale high. • Distribute Congratulatory Plaque with photograph along with Honour Certificates to Direct Agents periodically on the basis of key Milestone on monthly/quarterly basis and publish in the in-house magazine. • All of the above suggestions are aimed to encourage the Direct Agents to inculcate in them a sense of belonging to the organization. 26

27. Strategies for Promotion of PLI and RPLI contd… of the Industry • 3 Flank Strategy (PGS) – Policy servicing, Grievance Redressal and Solicitation of New Business • Service Camp to be set up at multiple locations every month for facilitating the 3 Flank Strategy effectively. • Utilize the IT effectively and integrate the premium collection and servicing of policies. • Grievance Redressal Mechanism – Integrate the Grievance Redressal Mechanism to resolve the grievances of policyholders. • Increase age at entry – In view of increasing longevity of Indians, it is suggested to increase the age at entry for PLI/RPLI. • Increase Sum Assured (SA) – On account of increasing income earning capacity and health consciousness of Indians, increase the ticket size of policies in terms of Premium and SA from the current level, which will enhance the corpus fund of PLI/RPLI. • Offer Riders – As an add on to the existing products wherever necessary. 27

28. Strategies for Promotion of PLI and RPLI contd… of the Industry • Premium Payment Facility – To enlarge presence of PLI/RPLI, it is suggested to utilize premium payment through online mode, which is also in line with Hon. Prime Ministers’ vision of Digital India and thereby enhance Cashless transactions. • Conduct workshops at all Central / State / District Government offices, Central and State Public Sector Undertakings, Universities, Government aided Educational institutions, Nationalized Banks, Local bodies, autonomous bodies, JVs of Govt./PSUs, credit co-operative Societies, local police stations, railway stations, bus stands, hospitals and other civic bodies such as local Panchayat offices, Primary Health Care Centres, Anganwadi etc. • The above being your specific turfs, promote insurance awareness to have maximum reach and insurance penetration. 28

29. Strategies for Promotion of PLI and RPLI contd… of the Industry • Utilize the Services of GraminDakSewaks (GDS) – To cover the length and breadth of our vast Nation, utilize your foot soldiers (GDS) extensively for campaigning about the various products/benefits of PLI/RPLI by incentivizing them suitably. For this purpose, wherever necessary make suitable amendments to the service rules. • To conduct Nukkad, Natak, Skit plays and Sales Promotion Seminars periodically followed by advt. campaigns on television, radio and billboards etc., highlighting about highest rate of bonus paid for the Products of PLI/RPLI. • Setup Wi-Fi enabled kiosks at every postal office so as to enable the policyholder to access information on insurance, its benefits and thereby solicit more new business and increase the insurance density. • PLI/RPLI may engage reputed PR agencies wherever necessary to execute the Insurance Awareness Campaign. 29

30. Thank You