Post on 30-May-2018
8/9/2019 Major Challenges and Policies in Insurance Sector
1/17
Major Challenges and Policies inMajor Challenges and Policies in
Insurance sectorInsurance sector
Submitted To:
Prof. Abhishek Parikh
Subject:
Insurance Management
Submitted by: Ricky Mehta(61)
Heta Shah(80)
Hardik Thakor(91)
8/9/2019 Major Challenges and Policies in Insurance Sector
2/17
Major Challenges of Insurance sectorMajor Challenges of Insurance sector
1. Industry Challenges(i) Commoditization in personal line products.
(ii) Shifting consumer requirements( everyone wantsproducts tailored to them, customization)
(iii) Heightened competition.
(iv) Global economic meltdown.
2. Business ChallengesMost of the insurers is to reduce the turnaround time andimprove their speed to market their products.
Distribution Channel pressures and emerging consumerdemands for mass customization and hybrid products aremoving rapid product development from beinga competitive advantage to a necessity.
Challeng
es
of
Insura
nce
secto
r
8/9/2019 Major Challenges and Policies in Insurance Sector
3/17
Cont
3. Process ChallengesLack of stream lined processes, change management, automated
processes, central repository.Solutions
1. New approaches and technology are needed to manage anddevelop insurance products which reduces the cost and timeto market.
2. Speed, quality, efficiency and capacity are differentdimensions to counter the above challenges.
4. Product ChallengesSame type of products are available in the market.
Solutions
1. Deliver new products/product customizations efficiently,quickly and in a flexible manner.
2. Making change to existing products quickly.
3. Meeting demand for combination products i.e developingproducts that encompass multiple features in todays products.
8/9/2019 Major Challenges and Policies in Insurance Sector
4/17
8/9/2019 Major Challenges and Policies in Insurance Sector
5/17
Cont3. Preparing for mergers and acquisitions: Todays insurance market
is highly fragmented. Coming year that insurance companies evaluateM&A as part of a strategy to restructure and survive.
4. Leveraging new opportunities: As a result of the recession,companies simplified product portfolios, increased pricing and avoidedrisky market segments.
Many withdrew from some of their geographic markets andscaled back on some lines of business.
This has given rise to new opportunities for companies still inthe business.
4. Handling Regulatory reform: Rule 151a which requires registrationfor equity-linked annuity products is expected to take effect in twoyears time.
Rule 151a is aimed at determining who runs the risk ofmaking the investments underlying these products and dealingwith how these products are marketed.
This new rule will result in new compliance requirements asregistrations become mandatory.
In a larger context, the governments plans for a federal
Insurance office will bring in greater federal oversight andultimately lead to a dual regulatory system.
8/9/2019 Major Challenges and Policies in Insurance Sector
6/17
ConclusionConclusion
Players with a superior understanding of their risk
will be in a better position to leverage potential
opportunities, in 2010-2011.
Insurance companies must carefully consider how
best to tackle these challenges.
They can either resort to the wait-and-watch
approach or look at the challenges as an opportunity
to bring about far-reaching changes.
8/9/2019 Major Challenges and Policies in Insurance Sector
7/17
Eyes of Porters 5 Forces.Eyes of Porters 5 Forces.
Threat of New Entrants:The insurance industry has been
budding with new entrants every other day. Therefore thecompanies should carve out niche areas such that the threat ofnew entrants might not be a hindrance. There is also a chance
that the big players might squeeze the small new entrants.
Power of Suppliers:
Those who are supplying the capital arenot that big a threat. For instance, if someone as a very talented
insurance underwriter is presently working for a smallinsurance company, there exists a chance that any big playerwilling to enter the insurance industry might entice that personoff.
8/9/2019 Major Challenges and Policies in Insurance Sector
8/17
Cont
Power of Buyers:No individual is a big threat to the insuranceindustry and big corporate houses have a lot more negotiatingcapability with the insurance companies. Big corporate clientslike airlines and pharmaceutical companies pay millions ofdollars every year in premiums.
Availability of Substitutes:
There exist a lot of substitutes in theinsurance industry. Majority, the large insurance companies
provide similar kinds of services be it auto, home, commercial,
health or life insurance.
8/9/2019 Major Challenges and Policies in Insurance Sector
9/17
Major Policies of Insurance sectorMajor Policies of Insurance sector
Insurance
Life Insurance
1. Term Assurance Policy
1. Whole Life Policy
1. Endowment Assurance Plan
1. Money Back Policy
1. Unit Linked Insurance Policies
(ULIPS)
6. Annuity (Pension) Plans
General Insurance
1. Fire Policies
1. Marine Policy
1. Motor VehiclePolicy
4. Health Insurance
5. Rural InsurancePolicy
Policie
s
of
Insura
nce
secto
r
8/9/2019 Major Challenges and Policies in Insurance Sector
10/17
1. Term Assurance Policy
Provides death cover only during policy period
Premium is low
No refund of premium
Sum assured paid on death
2. Whole Life Policy
Death Cover only Period is not specified
Premium is low and paid during life time
No refund of Premium
Sum assured paid on death
Life Insurance Policies:Life Insurance Policies:
8/9/2019 Major Challenges and Policies in Insurance Sector
11/17
3. Endowment Assurance Plan
Covers death and survival benefits
Sum assured paid on death or on maturity of
policy
Period of policy at the option of proposer
Most Common Plan
4. Money Back Policy
Available for different periods
Covers death and survival benefits
Lump sum paid periodically
Full sum assured paid on death
Cont
8/9/2019 Major Challenges and Policies in Insurance Sector
12/17
8/9/2019 Major Challenges and Policies in Insurance Sector
13/17
1. Fire PolicyFor Building or Flat, Furniture, Fixtures and Other
Contents
Policy which cover loss on account of fire
The competition is maximum in this segment
2. Marine Policy
Marine Cargo Policy:
Policy insures physical loss or damage to the
goods in transits by road, rail, air, water caused due
to accident, fire etc.
Marine Hull Policy:
Policy insures marine ships, steamers etc.
General Insurance Policies:General Insurance Policies:
8/9/2019 Major Challenges and Policies in Insurance Sector
14/17
3. Motor Vehicle Policy
Liability only motor policy:
Mandatory motor vehicle policy
Package motor policy:
Motor policy insures loss and damage of the motor vehicle due
to theft and accident along with third Party risk.
4. Health Insurance Medi claim policy
Overseas medi claim policy
Videh yatra mitra policy
Corporate frequent travelers policy
Employment and study policy
Group medi claim policy
Cancer policy
Cont
8/9/2019 Major Challenges and Policies in Insurance Sector
15/17
5. Rural Insurance Policy Cattle policy
Poultry policy
Agricultural pump set policy
Crop insurance
Cont
8/9/2019 Major Challenges and Policies in Insurance Sector
16/17
ThankYo
u
8/9/2019 Major Challenges and Policies in Insurance Sector
17/17
Bibliography
www.wns.com/Insights/Blogs/tabid/44163/en
http://www.docstoc.com/docs/3740019/Intro
http://www.wns.com/Insights/Blogs/tabid/44163/entryid/97/default.aspx%20dated%20on%20March%202http://www.docstoc.com/docs/3740019/Introduction-to-Insurance-Sectorhttp://www.docstoc.com/docs/3740019/Introduction-to-Insurance-Sectorhttp://www.wns.com/Insights/Blogs/tabid/44163/entryid/97/default.aspx%20dated%20on%20March%202