Syed Rehan Jabbar Presentation on Indian General Insurance, Exercises of Market economy

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GENERAL INSURANCE

INDUSTRY

IN INDIA

BY-

SYED REHAN JABBAR

INTRODUCTION

INSURANCE IS A MEANS OF PROTECTION FROM FINANCIAL LOSS. IT IS A FORM OF RISK MANAGEMENT, PRIMARILY USED TO HEDGE AGAINST THE RISK OF A CONTINGENT OR UNCERTAIN LOSS. INDIA CONSISTS OF 53 INS CO. OF WHICH 24 ARE IN LIFE INSURANCE BUSINESS AND 29 ARE NON-LIFE INSURERS. LIC IS THE SOLE PUBLIC SECTOR COMPANY IN LIFE INSURER. AMONG NON LIFE INSURERS THERE ARE 6 PUBLIC SECTOR INSURERS.

TOP 5 GENERAL INSURANCE COMPANIES

IN INDIA

1. NEW INDIA ASSURANCE COMPANY LIMITED
2. NATIONAL INSURANCE COMPANY LIMITED
3. ORIENTAL INSURANCE COMPANY LIMITED
4. BAJAJ ALLIANZ GENERAL INSURANCE COMPANY
5. UNITED INDIA INSURANCE COMPANY LIMITED

MARKETING STRATEGIES USED BY TOP GENERAL

INSURANCE COMPANY

1. NEW INDIA ASSURANCE CO. LTD

STRATEGY

• (^) IT FOCUSED ON RETAIL BUSINESS AS A KEY GROWTH DRIVER FOR THE INDUSTRY.
• (^) PLANNED TO INCREASE THE CONTRIBUTION OF INTERNATIONAL OPERATIONS FROM 18 TO 25% IN NEXT 5 YRS. BY STRENGTHENING ITS EXISTING OPERATIONS.
• (^) PLANNED TO INTRODUCED NEW PRODUCTS ACROSS

RECOMMENDATION

• (^) COMPANIES SHOULD ALSO CONTINUE THEIR OFFLINE SERVICES AS MANY PEOPLE IN INDIA STILL DO NOT HAVE ACCESS TO MOBILE PHONES, FOR EG- ILLITERATE PEOPLE, SENIOR CITIZENS, RURAL PEOPLE.
• (^) WHEN THEY ARE CONTEMPLATING ON EXPANDING TO INTERNATIONAL MARKETS THEY SHOULD APPROPRIATELY

3. ORIENTAL INSURANCE COMPANY

LIMITED

STRATEGY

• (^) BY OFFERING THE LATEST, MOST UP-TO-DATE MARKETING STRATEGIES.
• (^) BY WORKING WITH CONSUMERS TO DEVELOP THE TACTICS AND STRATEGIES THAT WILL HAVE A LONG- LASTING POSITIVE GROWTH IMPACT ON YOUR BUSINESS. IT OPTIMIZE ALL PROCESSES ALONG THE WAY, AND REPORT

RECOMMENDATION

• (^) IT SHOULD DO LOT OF ADVERTISING AND ALSO PUBLICITY OF THEIR FEATURES. SO, THAT CUSTOMER WILL HAVE AN IDEA ABOUT THEIR OFFERING
• (^) ORIENTAL INSURANCE COMPANY LIMITED SHOULD GO DIGITALIZATION IN A LARGER SCALE. SO, THAT IT CAN ATTRACT THE YOUNG

4. BAJAJ ALLIANZ GENERAL INSURANCE

COMPANY

STRATEGY

• DIGITALIZATION FOR INSURANCE RENEWAL
• (^) USE OF SOCIAL MEDIA IN WHICH CUSTOMERS HAVING BAJAJ CAR INSURANCE WILL REFLECT IT TO THEIR FRIENDS WHICH WHICH HAVE A NETWORK EFFECT ON THEM.
• (^) CREATION OF BAJAJ ALLIANZ APPLICATION TO ACCESS FROM MOBILE PHONES.
• (^) WITH THE HELP OF DIGITIZATION PEOPLE CAN RENEW INSURANCE POLICIES

RECOMMENDATION

• (^) APART FROM GOING DIGITAL INSURANCE COMPANIES SHOULD ALSO CONTINUE THEIR OFFLINE SERVICES AS MANY PEOPLE IN INDIA STILL DO NOT HAVE ACCESS TO MOBILE PHONES, FOR EG- ILLITERATE PEOPLE, SENIOR CITIZENS, RURAL PEOPLE. FOR THEM IT MAY BE COMFORTABLE TO ACCESS INSURANCE SERVICES OFFLINE.
• (^) SOCIAL MEDIA STRATEGY MAY NOT BE SUCCESSFUL AS MANY PEOPLE MAY NOT BE IN SOCIAL MEDIA.

INDIAN INSURANCE ANALYSIS AND MARKET SHARE

Source https://www.ibef.org/industry/in surance-presentation

CHALLENGES FOR INSURANCE INDUSTRY

IN INDIA

• (^) THE TRANSITION OF THE INSURANCE INDUSTRY FROM A PUBLIC MONOPOLY TO A COMPETITIVE ENVIRONMENT NOW PRESENTS VERY INTERESTING CHALLENGES, BOTH TO THE NEW PLAYERS AND TO THE CUSTOMER.
• (^) CURRENTLY THE PRODUCT-MARKET RELATIONSHIP IS DOMINATED BY PERSONALIZED SELLING RENDERED BY TIED AGENTS. SO THE AGENTS SHOULD BE ABLE TO UNDERSTAND THE COMPLEXITY TO ASSESS THE REQUIREMENT OF THE PEOPLE AND THEN ONLY ADVICE ON THE APPROPRIATE POLICY.
• (^) COMPANIES WILL HAVE TO TRANSFORM CUSTOMER RELATIONSHIP MANAGEMENT TO THE VALUE-BASED CLIENT RELATIONSHIP. THE CRM CHALLENGE WILL HAVE THE PYRAMID OF THREE SUB-CHALLENGES I.E. PRODUCT DEVELOPMENT, PRICING MECHANISM, AND TECHNOLOGY MANAGEMENT.
• (^) INSURANCE BUSINESS IS BASED ON AVERAGES AND SPREADING OF RISKS. SO, A FLEXIBLE PRICING STRUCTURE FOR SUSTAINING CUSTOMER CONFIDENCE AND INTEREST WILL BE A CHALLENGING TASK BEFORE INDIAN ISSUERS.
• (^) THERE IS A HUGE UNTAPPED POTENTIAL IN INDIA, WHICH NEEDS TO BE TARGETED. THE DISTRIBUTION CHANNEL IS A MEDIUM TO REACH THE MASSES IN URBAN, SEMI-URBAN AND RURAL AREAS. SO, THE INSURANCE COMPANY SHOULD FOCUS ON PRICING, DISTRIBUTION, RISK MANAGEMENT AND INVESTMENT DECISION-MAKING.

FUTURE OF THE INDUSTRY

• (^) THE FUTURE LOOKS PROMISING FOR THE GENERAL INSURANCE INDUSTRY WITH SEVERAL CHANGES IN REGULATORY FRAMEWORK WHICH WILL LEAD TO FURTHER CHANGE IN THE WAY THE INDUSTRY CONDUCTS ITS BUSINESS AND ENGAGES WITH ITS CUSTOMERS.
• (^) THE OVERALL INSURANCE INDUSTRY IS EXPECTED TO REACH US$ 280 BILLION BY 2020. GENERAL INSURANCE INDUSTRY IN THE COUNTRY IS EXPECTED GROW BY 12-15 PER CENT ANNUALLY FOR THE NEXT THREE TO FIVE YEARS.
• (^) THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA (IRDAI) PLANS TO ISSUE REDESIGNED INITIAL PUBLIC OFFERING (IPO) GUIDELINES FOR INSURANCE COMPANIES IN INDIA, WHICH ARE TO LOOKING TO DIVEST EQUITY THROUGH THE IPO ROUTE.

CONCLUSION

• (^) MOST OF THE PRIVATE INSURANCE COMPANIES HAVE FORMED JOINT VENTURE WITH RECOGNISED FOREIGN PLAYERS ACROSS THE GLOBE. TO ACHIEVE SUCCESS IN THE MARKETING OF THE INSURANCE PRODUCTS, THE ENTIRE BUSINESS ENVIRONMENT IS REQUIRED TO BE CONSIDERED.
• (^) THE STRATEGIES ARE TO BE ADOPTED BASED ON THE DYNAMICS OF THE MARKET TRENDS. TO BE SUCCESSFUL, A COMPANY MUST HAVE QUALITY PEOPLE, INNOVATIVE MANAGEMENT, BE ABLE TO EMPLOY TECHNOLOGY EFFECTIVELY, BESIDES HAVING THE RIGHT PRODUCTS AND DISTRIBUTION CHANNELS.
• (^) HENCE, COMPETITION HAS ALREADY SET IN AND PUBLIC SECTOR AND PRIVATE SECTOR PLAYERS SHOULD TAKE STEPS TO RECAPTURE THE MARKET BY CHANGING THEIR STRATEGY IN THE ABOVE LINES.
• (^) THE FUTURE GROWTH OF INSURANCE ALSO DEPENDS ON HOW SERVICE ORIENTED INSURERS ARE GOING TO BE. ON THE DEMAND SIDE, THE RISE IN INCOMES WILL TRIGGER THE GROWTH OF PHYSICAL AND FINANCIAL ASSETS. WITH THE GROWTH OF INFRASTRUCTURE PROJECTS, THE DEMAND FOR GENERAL INSURANCE TO COVER THE PROJECT AND THE RISKS DURING OPERATIONS WILL INCREASE.
• (^) HOWEVER, SERVICING OF THE LARGE DOMESTIC MARKET IN INDIA IS A REAL CHALLENGE. SOME OF THESE CHALLENGES PERTAIN TO THE DEMAND CONDITIONS, COMPETITION IN THE SECTOR, PRODUCT INNOVATIONS, DELIVERY AND DISTRIBUTION SYSTEMS, USE OF TECHNOLOGY, AND REGULATION.