Analysis of Life Insurance
Analysis of Life Insurance Sector (Life Insurance
Presented by Ashish Chandra (29041) C. Sudhir (29044) Parvati Singh (29055) Sharat Jha (29065)
Institute of Rural Management, Anand
Demographic environment
India has, according to 2001 census, 65.38% literacy rate. The literacy rate varies across rural (59.4%) and urban (80.3%) India. These contrasts in literacy levels are significant and have important implications for insurers. Literacy and education increases employability of the person in higher earning jobs and also brings about a change in perception about need for insurance. The median age in country was
.
Education level
Political and legal environment
IRDA Act 1999 The Bill allowed for up to 26% foreign equity participation in the insurance sector. The minimum paid up equity capital, excluding required deposits with the RBI and any preliminary expenses in the formation of the country, requirement of an insurer would be Rs 100 crore to carry on life insurance business Insurance business in Rural Sector: After the commencement of the IRDA Act, 1999, (Malhotra committee) every insurer would have to undertake such percentage of life insurance business in the rural sector as may be specified by the IRDA in this behalf. It is mandatory for the new companies to meet the obligations relating to the rural and
Economic environment
Inflation rate: Inflation can also be one of the causes to change the scenario of the insurance sector. High inflation for instance, would tend to reduce the insurance business, particularly life, because the real value of the money paid back to the policyholder on maturity of the policy would go down and would, therefore, lose its attraction for the investor. Impact of income on insurance: Income level significantly affects the demand for life insurance. Life insurance becomes more affordable when income increases((Rubayah and Zaidi (2000)).
Socio-Cultural and technological environment
Decline
Presented by Ashish Chandra (29041) C. Sudhir (29044) Parvati Singh (29055) Sharat Jha (29065)
Institute of Rural Management, Anand
Demographic environment
India has, according to 2001 census, 65.38% literacy rate. The literacy rate varies across rural (59.4%) and urban (80.3%) India. These contrasts in literacy levels are significant and have important implications for insurers. Literacy and education increases employability of the person in higher earning jobs and also brings about a change in perception about need for insurance. The median age in country was
.
Education level
Political and legal environment
IRDA Act 1999 The Bill allowed for up to 26% foreign equity participation in the insurance sector. The minimum paid up equity capital, excluding required deposits with the RBI and any preliminary expenses in the formation of the country, requirement of an insurer would be Rs 100 crore to carry on life insurance business Insurance business in Rural Sector: After the commencement of the IRDA Act, 1999, (Malhotra committee) every insurer would have to undertake such percentage of life insurance business in the rural sector as may be specified by the IRDA in this behalf. It is mandatory for the new companies to meet the obligations relating to the rural and
Economic environment
Inflation rate: Inflation can also be one of the causes to change the scenario of the insurance sector. High inflation for instance, would tend to reduce the insurance business, particularly life, because the real value of the money paid back to the policyholder on maturity of the policy would go down and would, therefore, lose its attraction for the investor. Impact of income on insurance: Income level significantly affects the demand for life insurance. Life insurance becomes more affordable when income increases((Rubayah and Zaidi (2000)).
Socio-Cultural and technological environment
Decline
References: www.irdaindia.org http://www.mouthshut.com/review/Life_Insurance_Corporation-129119www.licindia.com The Marketing Whitebook 2009-2010 Marketing Management – 13th Edition, Kotler, Keller, Koshy & Jha Life Insurance in India : Emerging Issues (Indira Gandhi Institute of Development Research) http://www.financialexpress.com/news/lic-to-hike-advertising-spend-to-t http://www.business-standard.com/india/news/insurers-miss-outrural-so http://www.financialexpress.com/news/pvt-players-snuffing-life-out-of-m http://www.rediff.com/money/2005/dec/19guest1.htm http://en.wikipedia.org/wiki/Tertiary_education_in_India http://www.licindia.com/objectives.htm http://www.icmrindia.org/casestudies/catalogue/business%20strategy5/ http://www.topnews.in/lic-invest-rs-4000-cr-stock-markets-march-2009- THANKYOU!!