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INDIAN INSURANCE INDUSTRY & CAREER PROSPECTS

Explore the historical journey of insurance in India, tracing its origins, key milestones, and evolution into a vital sector.

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INDIAN INSURANCE INDUSTRY & CAREER PROSPECTS

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  1. INDIAN INSURANCE INDUSTRY & CAREER PROSPECTS JOURNEY OF INSURANCE:MW

  2. ORIGIN AND HISTORY OF INSURANCE JOURNEY OF INSURANCE:MW

  3. ESSENCE OF INSURANCE • The Egyptian ruler or Pharoah dreams of seven fat and glossy cows, coming out of the river Nile, followed by seven lean and hungry cows, with the latter devouring the former. • The seven fat cows represented seven years of good crops and the seven lean and hungry cows forebode seven years of famine. • He was advised by Prophet Joseph or Yusuf to collect one fifth of the crop of each prosperous year as a levy or tax to be used in the years of famine. JOURNEY OF INSURANCE:MW

  4. LOMBARDS • Around the 13th Century, the earliest practice of insurance of ships called marine insurance is associated with the merchants of the cities of Lombardy, Italy. • The Lombards also established themselves in London and other cities. • Lombards brought with them the practices of marine insurance, banking and money lending. • The earliest known policy issued in London was written in Italian and was dated 20th Sept. 1547. JOURNEY OF INSURANCE:MW

  5. LLOYD’S • In 1688, Edward Lloyd, proprieter of Lloyd’s Coffee House in London, encouraged a clientele of ships’ captains, merchants, ship owners and the like. • He gained an enviable reputation for trustworthy shipping news. He even published Lloyd’s News, one of the very first newspapers which contained shipping news. • Lloyds Coffee House, became the recognised place for obtaining marine insurance. • Lloyd himself did no insurance business. He merely provided congenial surroundings for his patrons till his death in 1713. JOURNEY OF INSURANCE:MW

  6. HISTORY OF INSURANCE IN INDIA In India, insurance has a deep-rooted history. It finds mention in the writings of Manu (Manusmrithi ) , Yagnavalkya ( Dharmasastra ) and Kautilya ( Arthasastra ). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. DURING VEDIC PERIOD YOGAKSHEMA, A SANSKRIT TERM MENTIONED IN THE RIGVEDA, A FORM OF INSURANCE WAS PRACTISED BY THE ARYANS,3000 YEARS AGO. JOURNEY OF INSURANCE:MW

  7. The Codes of Manu refer to one another practice, i.e. if the cargo (good and merchandise carried in the ship) was Lost due to the negligence of the crew, the loss was to be Shared by all its members but when the loss was caused by an act of God, the members of the crew were not held responsible. IN MOGHUL DAYS THE PRACTICE OF INSURANCE TOOK FIRM ROOTS.THERE ARE EVEN REFERENCES TO INSURANCE AGAINST THE RISKS OF WAR. Insurance in India has evolved over time heavily drawing from other countries, England in particular. JOURNEY OF INSURANCE:MW

  8. IN 1810 PERMISSION WAS GIVEN TO ANY RESIDENT OF GREAT BRITAIN TO INSURE ANY PROPERTY IN ANY TERRITORY OF GREAT BRITAIN,WITH THE ENGLISH INSURANCE COMPANIES. • LOCAL OFFICES OF 7 INSURANCE COMPANIES STARTED IN CALCUTTA. • THE BUSINESS OF LIFE INSURANCE IN INDIA IN IT’S EXISTING FORM STARTED IN THE YEAR 1818 WITH THE ESTABLISHMENT OF THE ORIENTAL LIFE INSURANCE COMPANY IN CALCUTTA. JOURNEY OF INSURANCE:MW

  9. LIFE INSURANCE BUSINESS INDIA 1912: The Indian Life Assurance Companies Act enacted. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Insurance Act amended earlier legislation for protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalised to form LIC by an Act of Parliament, viz. LIC Act,1956, with a capital contribution of Rs.5 crore from the Government of India. JOURNEY OF INSURANCE:MW

  10. GENERAL INSURANCE BUSINESS IN INDIA • 1850: Triton Insurance Company Ltd., the first company established in Calcutta by the British. • 1907: The Indian Mercantile Insurance Ltd., the first Indian company set up to transact all classes of general insurance business. • 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. • 1972: 107 general insurance companies nationalised through the General Insurance Business (Nationalisation) Act, 1972 with effect from 1st January 1973. JOURNEY OF INSURANCE:MW

  11. INSURANCE SECTOR REFORMS JOURNEY OF INSURANCE:MW

  12. In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. • The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. • The reforms were aimed at “creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognising that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms…” JOURNEY OF INSURANCE:MW

  13. The Insurance Regulatory and Development Authority,IRDA • Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. • The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the public & private sector insurance companies. JOURNEY OF INSURANCE:MW

  14. LIFE US$ 2393 Bln NON – LIFE US$ 1668 Bln TOTAL US$ 4061Bln WORLD INSURANCE MARKET OVERVIEW Source:- Swiss Re – Sigma

  15. COUNTRIES MARKET SHARE LIFE • US, JAPAN, UK, GERMANY, FRANCE • 5 LEADING INSURANCE MARKETS NON LIFE Source:- Swiss Re – Sigma

  16. COUNTRIES INSURANCE BUSINESS SHARE IN WORLD MARKET Source:- Swiss Re – Sigma

  17. WORLD NON-LIFE INSURANCE PREMIUM MARKET SHARE Source:- Swiss Re – Sigma

  18. LIFE INSURANCE SHARE IN WORLD MARKET 2007 Source:- Swiss Re – Sigma

  19. INDIAN INSURANCE COMPANIES LIFE INSURERS: 1. LIFE INSURANCE CORPORATION 2. HDFC STANDARD LIFE INSURANCE CO. 3. MAX NEW YORK LIFE INSURANCE CO. 4. ICICI PRUDENTIAL LIFE INSURANCE CO. 5. KOTAK MAHINDRA OLD MUTUAL LIFE 6. BIRLA SUN LIFE INSURANCE CO. 7. TATA AIG LIFE INSURANCE CO. 8. SBI LIFE INSURANCE CO. 9. ING VYSYA LIFE INSURANCE CO. 10. BAJAJ ALLIANZ LIFE INSURANCE CO. 11. METLIFE INDIA INSURANCE CO. 12. RELIANCE LIFE INSRUANCE CO. JOURNEY OF INSURANCE:MW

  20. 13. AVIVA LIFE INSURANCE CO. 14. SAHARA INDIA INSURANCE CO. 15. SHRIRAM LIFE INSURANCE CO. 16. BHARTI AXA LIFE INSURANCE COMPANY LTD. 17. FUTURE GENERALI INDIA LIFE INSURANCE COMPANY LIMITED 18. IDBI FORTIS LIFE INSURANCE COMPANY LTD., 19. CANARA HSBC ORIENTAL BANK OF COMMERCE LIFE INSURANCE COMP. LTD. 20. AEGON RELIGARE LIFE INSURANCE COMPANY LIMITED. 21. DLF PRAMERICA LIFE INSURANCE COMPANY LIMITED 22. STAR UNION DAI - ICHI LIFE INSURANCE CO. LTD. 23. INDIAFIRST LIFE INSURANCE COMPANY LTD. 24. EDELWEISS TOKIO LIFE INSURANCE CO. LTD. JOURNEY OF INSURANCE:MW

  21. HISTORY OF INSURANCE:MW

  22. GENERAL INSURERS: • NEW INDIA ASSURANCE CO. • NATIONAL INSURANCE CO. 3. ORIENTAL INSURANCE CO. 4. UNITED INDIA INSURANCE CO. 5. ROYAL SUNDARAM ALLIANCE INS. CO. 6. RELIANCE GENERAL INSURANCE CO. 7. IFFCO TOKIO GENERAL INSURANCE CO. 8. TATA AIG GENERAL INSURANCE CO. 9. BAJAJ ALLIANZ GENERAL INS. CO. 10. ICICI LOMBARD GENERAL INS. CO. 11. CHOLAMANDALAM GENERAL INS.CO. • EXPORT CREDIT GUARANTEE CORP. • HDFC ERGO GENERAL INSURANCE CO. JOURNEY OF INSURANCE:MW

  23. 14. AGRICULTURAL INSURANCE COMPANY15. STAR HEALTH AND ALLIED INS.CO. LTD.16. APOLLO DKV INSURANCE CO. LTD.17. FUTURE GENERALI INDIA INS.CO.LTD. 18. UNIVERSAL SOMPO GENERAL INS.CO. LTD.19. SHRIRAM GENERAL INSURANCE CO. LTD.20. BHARTI AXA GENERAL INS.CO.LTD.21. RAHEJA QBE GENERAL INS.CO.LTD.22. SBI GENERAL INSURANCE CO. LTD.23. MAX BUPA HEALTH INSURANCE CO.LTD.24. L & T GENERAL INSURANCE CO. LTD.25. RELIGARE HEALTH INSURANCE CO. LTD.26. MAGMA HDI GENERAL INSURANCE CO. LTD.27. LIBERTY VIDEACON GENERAL INS. CO. LTD. JOURNEY OF INSURANCE:MW

  24. HISTORY OF INSURANCE:MW

  25. PREMIUM INCOME IN INDIA2011-2012PUBLIC SECTOR COMPANIES (NON LIFE)‏ Fig. in Rs. Crs. HISTORY OF INSURANCE:MW

  26. HISTORY OF INSURANCE:MW

  27. CHANGES IN THE INSURANCE ACT 1938 AND IRDA ACT 1999 • REVISE THE FDI FROM THE PRESENT 26% TO 49%. • CLUBBING BOTH THE ACTS AND MAKING IT INTO ONE ACT OF INSURANCE. • DOWNSIZING THE PAID UP CAPITAL TO 50 CRORES FOR HEALTH INSURANCE SECTOR. JOURNEY OF INSURANCE:MW

  28. The insurance sector in India has come a full circle from being an open competitive market to nationalisation and back to a liberalised market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. JOURNEY OF INSURANCE:MW

  29. THANK YOU HISTORY OF INSURANCE:MW

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