Page 21 - The Insurance Times October 2021

industrial projects. In Taiwan, life insurers have been able to create sufficient greater choices of products. But,
insurance awareness in the masses and people prefer to buy retirement solutions their presence is felt more in the
from the insurers even when they have many years of service left in the companies biggest cities of the country
they are working in. India's life insurance industry too, contributes significantly characterised by affluent people.
for the infrastructure, housing and other major industries. But, it has the They are in fact comfortable with
potential to contribute much more. selling life insurance in metro cities
and some Tier-I cities where
According to the IRDAI Report, Indian life insurance industry contributes just insurance of big ticket-size can be
about 2.61% of total life insurance business of the world at the moment. India sold with the help of banks they
being a home to about 18% people of the world and fifth largest economy in are promoted by. They are thus
terms of the size of GDP, Indian life insurance market is certainly under-penetrated grabbing good market share in the
by any standard. places where there is a high
proportion of economically better-
Some people say that "Sum Assured in Force" and "No. of people covered" are off people.
better indicators of progress of this industry.Let us take a look at these figures in
Y From Table-3, it can be calculated
respect of the top life insurers in that year (2017-18). that 88% of the in-force policies
are LIC policies. So, even though
Table-3: Sum Assured and No. of Policies in Force for the private players have got about
Top Insurers 30% market share of the new
policies sold every year now, there
Name of the Sum Assured No of Policies Average Sum share in total in-force policies is
Insurer in Force in Force Assured only 12%. After all, life insurance
(in crores of Rs.) (in thousands) Per Policy policies are of little value if the
LIC of India 8434828.13 291167.90 2,89,690 policies lie in lapsed conditions or
are surrendered prematurely.
SBI Life 985910.25 6786.40 14,52,774
Although private insurers joined
Max Life 424247.14 4080.41 10,39,717 the industry much later than LIC,
ICICI Prudential 780914.94 4834.35 16,15,347 they should have shown up much
HDFC Life 631473.28 5615.93 11,24,433 higher proportion of in-force
policies as on 31.03.2019.
TATA AIA 158420.45 1350.86 11,72,738
Kotak Mahindra 127156.55 1567.52 8,11,196 Y ICICI Prudential has got the
highest sum assured per in-force
Private Total 4133114.76 40317.19 10,25,150
policy at Rs. 16,15,347. That's a
Industry Total 12567942.89 331485.09 3,79,141 great achievement on the part of
Source: IRDAI Handbook 2017-18 the insurer. But, as we shall see in
a subsequent table, ICICI
We need to understand a lot about the data of Table-3.Let us Prudential earns 73.45% of its
premium income through Unit
jot down these points as under:
Linked policies, which are, strictly
Y Indian life insurance market has two clear segments. These are urban and speaking, more investment plans
rural. Historically, LIC was born with the idea of spreading life insurance to than life insurance plans and can
every corner of the country. That was 1956. LIC has become a household be withdrawn any time by the
name everywhere, mostly in rural areas. So, its marketing efforts are customers without little surrender
oriented more towards insuring maximum number of people, for historical charges.
reasons. It has a mandate to sell more of low cost insurance plans, Micro
Y Top private companies get their
Insurance plans etc. That explains why average sum assured under LIC business primarily through the
policies is comparatively low. But, all said and done, the insurer has to make private banks (except SBI Life),
people adequately insured, at least to those people who can afford that. which operate mostly in large

Y The insurance sector was opened up in the year 2000. The private insurers cities and metro areas as well.
were supposed to spread the message of insurance further and offer people These banks are ICICI Bank, HDFC

The Insurance Times, October 2021 21