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Transcript of 1. 2 3 4 A good time to look back 5 Total premium (INR Bn) Penetration (as a % to GDP) New business...
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A good time to look backA good time to look back
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Total premium (INR Bn)
Penetration (as a % to GDP)
New business premium1 (INR Bn)
Number of players
FY2014
24
454
3,141
FY2002
12
116
501
2.1%
28.7%
26.1%
Source: IRDA, Public disclosures, Life insurance council, Company estimates
IndiaIndia life insurance growth life insurance growth
storystory
Assets under management (INR Bn)
20,0692,304 24.3%
1. Retail weighted premium
FY2008
18
527
2,014
8,477
-2.4%
7.7%
15.4%
4.0% 2.8%
Sum Assured to GDP continues to be less than 50%
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Agency channel
Multi product portfolio: ULIP, Traditional, Health etc.
A transformative periodA transformative period
Multi channel distribution:Bancassurance, brokers, online & proprietary sales
Traditional products
Service delivery through Branches or Agents only
Technology driven service delivery: Call centers, e-mail, SMS, website and smart phone
FY
2000
FY
2014
Physical, document heavy process
Smoother, digitized process with reduced paper work
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Leading to a more holistic appreciation of Leading to a more holistic appreciation of
insuranceinsurance
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Rise in all perceived benefits of Rise in all perceived benefits of
insurance insurance
10Source: Nielsen Life studies
Protect my family in case of my untimely death For my child's FutureFor my old ageRegular savings Good returns
Safety of my money
Another avenue of savings
Save tax
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Have we sold the concept of Human Have we sold the concept of Human
Life Value?Life Value?
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Have we focused adequately on Have we focused adequately on
Pensions?Pensions?
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Need for a robust pension systemNeed for a robust pension system
71% of India’s working population does not have access to a reliable post-retirement financial
support system
NSS RoundTotal
employement% age of formal sector workers
% age of informal sector workers
55th round (1999-00) 396.8 13.66% 86.34%
61st round (2004-05) 457.5 13.66% 86.34%
66th round (2009-10) 459.0 26.71% 73.29%
68th round (2011-12) 472.9 28.86% 71.14%
Numbers in million
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Large potential for pension market in Large potential for pension market in
India India
90.95 88.68
72.6766.97 64.66
9.78 7.95.18 4.57
0
10
20
30
40
50
60
70
80
90
100
Australia UK US Chile Canada India Spain Germany Italy
1. Source: OECD statistics, autonomous funds as % of GDP, 2010
Retirement assets as % of GDP
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Pension market size: Organised Pension market size: Organised
sectorsector
Assets in Provident Funds 1 INR 5,000 bn
Gratuity / Superannuation Funds 2 INR 860 bn
Annuities/ pension fund with insurers 3 INR 1,900 bn
NPS – government sector 4 INR 210 bn
NPS – All citizens4 INR 7 bn
1. including EPFO, exempt PFs and PPF; Source: EPFO Annual report 2010-11, market intelligence2. Source: LIC data & internal estimates3. Source: IRDA Annual report 2010-11 * Not including unit linked pension funds4. National Pension Scheme - Source: September 2012
Organised sector pension assets are over INR 8,000 bn
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Have we sold right?Have we sold right?
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What a customer seeksWhat a customer seeks
TransparencyTransparency
FlexibilityFlexibility
Simple ProductSimple Product
Comfort of protectionComfort of protection
• Payment flexibility• Liquidity options
• What do I pay and what do I get?
• Protection of financial risk• Protection of mortality risk
• A product that can be understood
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• X% returns*…..(* of your Sum Assured)
How the industry soldHow the industry sold
TransparencyTransparency
FlexibilityFlexibility
Simple ProductSimple Product
Comfort of protectionComfort of protection
• Pay only for 3 years• Withdraw your money after 3 years
• Minimum life cover• Projection of past fund returns
• Terminal Bonus, Vested Bonus, Reversionary bonus, Simple bonus, Compound bonus…
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The result: When the economy had The result: When the economy had
a downturn…..a downturn…..
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The industry bore the The industry bore the
brunt…..brunt…..
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And leading to insurance not being seen as And leading to insurance not being seen as
a long-term producta long-term product
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1313thth month persistency: Lower than Asian month persistency: Lower than Asian
peerspeers
Source: IRDA data on industry 13th month persistency
“The 13th month persistency of Indian insurers is much lower compared to their Asian peers”
HSBC Global research report24
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Taking stockTaking stock
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A good time to look backA good time to look back
……in order to see aheadin order to see ahead
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Key trends that are shaping our Key trends that are shaping our
futurefuture
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How will these trends How will these trends
shape our industry?shape our industry?
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……Or can we use these trends to Or can we use these trends to
engender more trust amongst our engender more trust amongst our
customers?customers?
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Looking aheadLooking ahead
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Products
Distribution
Risk assessme
nt
Customer engageme
nt
Processes
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Looking aheadLooking ahead
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Products
Risk assessme
nt
Customer engageme
nt
Processes
• Flexible structure
• Yet easy to understand
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Distribution
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Products
Risk assessme
nt
Customer engageme
nt
Processes
• Leverage information across ecosystem
• Segmented underwriting
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Distribution
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Products
Risk assessme
nt
Customer engageme
nt
Processes
• Increasing use of Social Media platforms
• Usage of analytics to anticipate customer requirements
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Distribution
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Products
Risk assessme
nt
Customer engageme
nt
Processes
• Less physical, more digital
• Distributor as mobile branch
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Distribution
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Products
Risk assessme
nt
Customer engageme
nt
Processes
• Choice of channel with customer
• Smart identification of prospects using Data analytics
• Use of technology to sell effectively
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Distribution
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Products
Risk assessme
nt
Customer engageme
nt
Processes
Implication?
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Distribution
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More InnovationMore Trust
More consumers
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Looking aheadLooking ahead
Net Insurance inflow
Gross financial savings
Nominal GDP
FY 2020E*
4.62
27.16
262.65
15% CAGR
FY 2014
2.00
113.55
11.74
Amounts in INR trillion
15% CAGR
15% CAGR
Source: RBI, CSO*Company estimates
Assets under management
Penetration (as a % to GDP)
61.7920.07
21% CAGR
4.0%2.8%
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Looking aheadLooking ahead
Net Insurance inflow
Gross financial savings
Nominal GDP
FY 2020E*
4.62
27.16
262.65
15% CAGR
FY 2014
2.00
113.55
11.74
Amounts in INR trillion
15% CAGR
15% CAGR
Source: RBI, CSO*Company estimates
Assets under management
Penetration (as a % to GDP)
61.7920.07
21% CAGR
4.0%2.8%Amongst the Top 7 insurance markets globally
by 2020
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Along the way we encountered a few
bumps
Along the way we encountered a few
bumps
Keeping the Customer at the core…
Keeping the Customer at the core…
We are ready to switch gears
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