INSURANCE For updated information, please visit January 2019

Similar documents
INSURANCE For updated information, please visit June 2018

INSURANCE For updated information, please visit May 2018

INSURANCE For updated information, please visit April 2018

For updated information, please visit January 2018

For updated information, please visit November 2017

Insurance MARCH For updated information, please visit

Insurance AUGUST 2012 AUGUST For updated information, please visit

INSURANCE. MAY 2017 (As of 3 May 2017) For updated information, please visit

Among top insurance markets. Rapidly growing insurance segments. Increasing private sector contribution

For updated information, please visit January 2019

INDIA FELLOWSHIP SEMINAR 01/06/18-02/06/18

Insurance and Location Intelligence

For updated information, please visit November 2018

For updated information, please visit September 2018

For updated information, please visit July 2018

General Insurance Corporation of India Ltd.

High gross domestic savings. India s HNWI population to double by Phenomenal growth in NBFC finance. Robust AUM growth

Banking NOVEMBER For updated information, please visit

For updated information, please visit May 2018

For updated information, please visit February 2018

For updated information, please visit September 2017

Microinsurance in India

For updated information, please visit November 2017

High Gross Domestic Savings. India s HNWI population to double by Phenomenal growth in NBFC finance. Robust AUM growth

A COMPARATIVE STUDY OF PUBLIC AND PRIVATE NON- LIFE INSURANCE COMPANIES IN INDIA

Insurance Data & Trends Data Team

General Insurance Industry in India

FINANCIAL SERVICES FEBRUARY For updated information, please visit

Indian General Insurance Industry

For updated information, please visit July 2017

Real Estate NOVEMBER For updated information, please visit

Personal Accident and Health Insurance in India, Key Trends and Opportunities to 2018

General Insurance Corporation of India

Growing Mix of Life & Non-Life Insurance in Indian Insurance Industry

Presentation By Dr. Rajesh Kumar Attri, Deputy General Manager National Insurance Company Ltd. Pune Regional Office 4 th May, 2012

Role of Insurance Regulatory and Development Authority in Indian Insurance Sector: A Study

Taking the Lead Market Stimulation through Government Involvement INDIA

For updated information, please visit September 2017

SALIENT FEATURES OF INDIAN INSURANCE SECTOR: AN OVERVIEW

Succeeding in the rapidly changing Personal Lines Asian markets Agenda

For updated information, please visit June 2018

For updated information, please visit January 2019

Leadership in life insurance. April 2008

The New India Assurance Company Ltd

Higher standards...making a difference for you TABLE OF CONTENTS 1. INTRODUCTION 2 2. STATUES AND REGULATORY BODIES 3 3.

For updated information, please visit January 2018

General Insurance Corporation of India (GIC Re)

For updated information, please visit May 2018

Performance Analysis of Public Sector General Insurance Companies Operating in India

CLSA Investor forum. September 14, 2017

FINANCIAL INCLUSION. Insurance Services

Crop Insurance.

SURVEY ON COMPANY AND SECTOR WISE SHARE (%) OF NON-LIFE INSURERS IN INDIA

4.1 INSURANCE SECTOR IN INDIA BRIEF HISTORY 4.2 GROWTH OF INSURANCE INDUSTRY 4.6 NEW DEVELOPMENTS/ PRODUCT LAUNCHES

Fresh issue: Rs bn OFS: Rs bn Face Value Rs. 5 Price Band Retail & Employee discount. Rs Rs. 912 per share

Alternative Investments Introduction To Real Estate Investments

RURAL INSURANCE-GOVERNMENT INITIATIVES

The New India Assurance Co Ltd

Understanding of Financial Statement of General Insurance

Common Services Center

Leadership in life insurance. November 2015

Risk Transfer mechanisms. Dr Pavan Kumar Singh Senior Research Officer National Disaster Management Authority Govt of India

CHAPTER 7 SUMMARY AND CONCLUSION

Indian insurance sector

VAKRANGEE LTD Upgrade

STOCK IDEA- VAKRANGEE LTD. Buy 19/09/16 Stock Price: Rs.227

SUBSCRIBE. ICICI Lombard General Insurance Co Ltd. Issue Open: Sept 15, 2017 Issue Close: Sept 19, IPO Note Insurance

Mobile Technology In Live stock Insurance. HDFC ERGO General Insurance Company Limited

International Journal of Arts and Science Research Journal home page:

India Market. Non-Life Insurance Update. Introduction. In this issue. Industry statistics. Market update. Regulatory update. Distribution.

PROFITABILITY ANALYSIS OF THE PUBLIC AND PRIVATE SECTORS IN GENERAL INSURANCE

PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)

Edelweiss Conference India 2025: Another Tryst with Destiny Indian Banking at Inflection Topical Themes

Performance Review: FY2007. April 28, 2007

Climate Risk Insurance Models from India

Micro-Insurance Policies with Special Reference to - Life and Health Insurance in India

AN ENQUIRY INTO THE STATUS OF COMPLAINTS IN INSURANCE SECTOR IN INDIA

TATA AIG GENERAL INSURANCE COMPANY LIMITED PRODUCT LIST

Bundling Insurance Products to meet the needs of low income Households. By Anuj Tyagi Head Corporate & Rural & Agri Business

Life insurance industry in India

Investor Presentation. November 2016

Shakthii Academy 1 Increasing Confidence ; Reaching Goals

FY2018 Performance Review. April 25, 2018

An Analysis of the Performance of General Insurance Companies in India

PwC s Insurance Insights. Analysis of regulatory changes and impact assessment for March 2018

India Market. Non-Life Insurance Update. Introduction. In this issue. Industry statistics. Market update. Regulatory update. Distribution.

MICROINSURANCE IN INDIA- AN OVERVIEW. Key words: Microinsurance in India, Type of Microinsurance, Microinsurance products.

9M2018 Performance Review. January 16, 2018

Health Financing. Health Insurance (Part 1) Health Financing. Health Financing. Catastrophic Health Expenditure. Catastrophic Health Expenditure

Sales EBIDTA Margins%

HDFC Bank Ltd. BUY. Investment Rationale. July 2, Volume No.. 1 Issue No. 28

A Premier Public Sector Bank

1. When did insurance begin in Babylon? A BC B BC C BC D BC. Answer: A

Press Release

H12018 Performance Review. October 17, 2017

BANKING DECEMBER For updated information, please visit

IIFL INDIA GROWTH FUND. (An open ended equity Scheme)

Greetings from India. GIC Re, the Indian Reinsurer, on its path to be a leading global reinsurer

Q1 FY2019 Performance Review. July 17, 2018

A. Background of evaluation of Crop Insurance in India.

Transcription:

INSURANCE January 2019

Table of Content Executive Summary...3 Advantage India......4 Market Overview....6 Trends and Strategies.......23 Growth Drivers...21 Opportunities....... 26 Useful Information.......31

EXECUTIVE SUMMARY Rapidly growing insurance segments The insurance industry in India is expected to reach US$ 280 billion by 2020. Life insurance industry in the country is expected grow by 12-15 per cent annually for the next three to five years. Gross premiums written in India reached Rs 5.53 trillion (US$ 94.48 billion) in FY18, with Rs 4.58 trillion (US$ 71.1 billion) from life insurance and Rs 1.51 trillion (US$ 23.38 billion) from non-life insurance. Overall insurance penetration (premiums as % of GDP) in India reached 3.69 per cent in 2017 from 2.71 per cent in 2001. Increasing private sector contribution The market share of private sector companies in the non-life insurance market rose from 13.12 per cent in FY03 to 50.70 per cent in FY19 (up to November 2018). In life insurance segment, private players had a market share of 33.51 per cent in new business in FY19 (up to December 2018). Crop, health and motor insurance to drive growth Crop insurance segment contributed 17 per cent to gross direct premiums of non-life insurance companies in FY19 (up to November 2018), growing 17 per cent year-on-year. Enrolments under the Pradhan Mantri Suraksha Bima Yojana (PMSBY) reached 130.41 million in 2017-18. Strong growth in the automotive industry over the next decade to be a key driver of motor insurance. Note: Updated data for insurance penetration is expected after June 2019 Source: Swiss-Re, IRDAI, General Council, Life Council, Economic Survey 2017-18 3

ADVANTAGE INDIA

ADVANTAGE INDIA Growing interest in insurance among people; innovative products and distribution channels aiding growth. Over FY12 18, new business premiums of life insurers in India have increased at a 14.44 per cent CAGR, while premiums for non-life insurers increased have increased at 16.65 per cent CAGR in the same period. Growing use of internet has pushed the demand. sector companies in India raised around Rs 434.3 billion (US$ 6.7 billion) through public issues in 2017. Increase in FDI limit to 49 per cent from 26 per cent, approved in 2016, will further fuel investments. ADVANTAGE INDIA reach is still low in India. Overall insurance penetration (premiums as % of GDP) in India was 3.69 per cent in 2017, providing a huge underserved market. Life insurance in low-income urban areas. Health insurance, pension segment. Strong growth potential for micro insurance, especially from rural areas Tax incentives on insurance products Bill gives the Regulatory and Development Authority (IRDAI) full flexibility to frame regulations for the sector. Clarity on rules for insurance IPOs would infuse liquidity in the industry. Repeated attempts to make the sector more lucrative for foreign participants. Note: Updated data for insurance penetration is expected after June 2019 Source:, IRDA - Regulatory and Development Authority, Motilal Oswal Research, Aranca Research 5

MARKET OVERVIEW

EVOLUTION OF THE INDIAN INSURANCE SECTOR All life insurance companies were nationalised to form LIC in 1956 to increase penetration and protect policy holders from mismanagement The non-life insurance business was nationalised to form GIC in 1972 Post liberalisation, the insurance industry recorded significant growth; the number of private players increased to 46 in 2017 In December 2014, Government approved the ordinance increasing FDI limit in sector from 26 per cent to 49 per cent. This would likely to attract investment of US$ 7-8 billion National Health Protection Scheme will be launched under Ayushman Bharat, as per Union Budget 2018-19. companies raised more than US$ 6 billion from public issues in 2017. 1956-72 1993-99 2000-14 2015 2017 onwards Malhotra Committee recommended opening up the insurance sector to private players IRDA, LIC and GIC Acts were passed in 1999, making IRDA the statutory regulatory body for insurance and ending the monopoly of LIC and GIC. In 2015, Government introduced Pradhan Mantri Suraksha Bima Yojna and Pradhan Mantri Jeevan Jyoti Bima Yojana Government introduced Atal Pension Yojana and Health insurance in 2015. Notes: LIC - Life Corporation of India, GIC - General Corporation of India, IRDA - Regulatory and Development Authority Source: IRDA 7

IRDA GOVERNS THE INDIAN INSURANCE SECTOR Regulatory and Development Authority (IRDA) Established in 1999 under the IRDA Act Responsible for regulating, promoting and ensuring orderly growth of the insurance and re-insurance business in India Ministry of Finance Government of India) Regulatory and Development Authority (IRDA) Life insurance (24 players) General insurance (21 players) Specialised Insurers (2 players) Standalone Health (6 player) Re-insurance (2 players) Foreign Reinsurers branches Public (1) Public (4) Public (2) Private (6) Public (1) Private (7) Private (23) Private (17) Private (1) Source: IRDA 8

INCREASING PENETRATION AND DENSITY OF INSURANCE OVER THE YEARS Penetration (Premiums as % of GDP) Density (Premiums Per Capita) (US$) 4 3.5 3 2.5 2 3.3 0.7 2.6 3.44 3.49 3.69 0.93 0.72 0.77 2.72 2.72 2.76 80 70 60 50 40 55 54.7 11 11.5 44 43.2 59.7 13.2 46.5 73 18 55 1.5 30 1 20 0.5 10 0 2014 2015 2016 2017 0 2014 2015 2016 2017 Life Non-Life Life Non-Life At 3.69 per cent, India was ranked 41st in 2017 in terms of insurance penetration with life insurance penetration 2.76 per cent and non-life insurance penetration at 0.93 per cent. In terms of insurance density India was ranked 73 rd in 2017 with overall density at US$ 73. Note: Updated data expected after June 2019 Source: Swiss Re Institute 9

8.6 13.4 17.7 18.6 17.6 21.5 19.6 26.3 27.3 27.2 30.1 30.1 33.3 35.3 37.7 41.0 VIBRANT LIFE INSURANCE MARKET Life Premiums (US$ billion) Gross Premiums Written in India (US$billion) 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 49.0 56.0 60.7 64.0 71.8 84.7 94.5 0.0 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19* New Business Premium Renewal Premium 10.0 0.0 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Life insurance in India has a huge growth potential. By 2020, it is expected to account for 35 per cent of India s total savings. Gross premium collected by life insurance companies in India increased from Rs 2.56 trillion (US$ 39.7 billion) in FY12 to Rs 4.58 trillion (US$ 71.1 billion) in FY18. Over FY12 18, premium from new business of life insurance companies in India have increased at a 14.44 per cent CAGR to reach Rs 1.94 trillion (US$ 30.1 billion). In FY19 (up to December 2018), premium from new life insurance business increased 2.41 per cent year-on-year to Rs 1.42 trillion (US$ 19.62 billion). Note: * New business premium is up to December 2018 and Renewal premium is up to June 2018 Source: Regulatory and Development Authority, Deloitte Redefining 10

INCREASING PRIVATE SECTOR ACTIVITY IN LIFE INSURANCE SEGMENT Share of public and private sector in life insurance segment (%) FY03 Share of public and private sector in life insurance segment (%) FY19 (up to December 2018) 2.00% 33.5% Public sector Private sector 66.5% Public sector Private sector 98.00% Over the years, share of private sector in life insurance segment has grown from around 2 per cent in FY03 to 33.51 per cent in FY19 (up to December 2018). Note: Figures are as per latest data available, share based on new business premium collection Source: IRDA, Life Council 11

LIC CONTINUES TO DOMINATE LIFE INSURANCE SEGMENT As of FY19 (up to November 2018), life insurance sector had 23 private players in comparison to only four in FY02. Market Share in First Year Life Premiums (Apr-Dec 2018) Visakhapatnam port traffic (million tonnes) With a 66.49 per cent share new business market share in FY19 (up to December 2018), Life Corporation of India, the only public sector life insurer in the country, continues to be the market leader As of December 2018, in the private sector, HDFC Standard Life is leading with a share of 7.02 per cent in new business premium, followed by SBI Life at 6.69 per cent and ICICI Prudential Life at 4.82 per cent. 14.98% 4.82% 6.69% 7.02% 66.49% LIC HDFC Standard Life SBI Life ICICI Prudential Life Others Source: Life Council, IRDAI 12

65.55 67.06 88.49 91.65 100.29 109.5 116.68 126.06 126.48 161.17 182.8 STRONG GROWTH IN NON-LIFE INSURANCE MARKET Gross Direct Premiums of Non-Life Insurers (US$ billion) Number of Non-Life Policies (million) 25.00 CAGR 16.65% 200 CAGR 10.8% 20.00 19.89 23.38 180 160 140 15.00 10.00 11.05 12.03 13.14 14.95 15.07 120 100 80 9.28 60 5.00 40 20 0.00 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19* 0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Gross direct premiums of non-life insurers in India reached Rs 1.51 trillion (US$ 23.38 billion) in FY18. In FY19 (up to November 2018), gross direct premiums reached Rs 1.09 trillion (US$ 15.07 billion), showing a year-on-year growth rate of 13.14 per cent. Over FY12-18, non-life insurance premiums (in Rs) increased at a CAGR of 16.65 per cent. The number of policies issued increased from 65.55 million in FY08 to 182.8 million in FY18, at a CAGR of 10.8 per cent. Note: * up to October 2018, CAGR is up to FY18 Source: IRDAI, General Council 13

SHARES IN NON-LIFE INSURANCE MARKET: MOTOR INSURANCE LEADS Non-Life insurers include general insurers, standalone health insurers and specialised insurers. Non-Life Gross Direct Premiums (Apr-Nov 2018) Motor insurance accounted for 38.2 per cent of non-life insurance premiums earned in India in Apr-Nov 2018, followed by 25.7 per cent share by health insurance and 17 per cent by crop insurance. Motor Private players accounted for a share of around 50.7 per cent in the gross direct premiums generated in non-life insurance sector while public sector companies and specialised insurers garnered around 49.3 per cent share between Apr-Nov 2018. Major private players are ICICI Lombard, Bajaj Allianz, IFFCO Tokio, HDFC Ergo, Tata-AIG, Reliance, Cholamandalam, Royal Sundaram and other regional insurers 2.00% 27.20% 6.90% 38.20% Health Fire 25.70% Marine Others Source: General Council, IRDAI 14

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19* HIGHER PRIVATE SECTOR PARTICIPATION IN NON- LIFE SEGMENT Growing share of private sector Non-life insurance premium of private sector (US$ billion) FY04 Apr-Nov 2018 12 15% 50.7% 10 10.89 8 9.25 7.64 75% 49.3% 6 4 3.8 4.7 5.1 5.7 6.3 5.9 2 2.7 2.7 2.9 0 Public sector Private sector The market share of private sector companies in non-life insurance segment rose from 15 per cent in FY04 to 46.6 per cent in FY18. The Gross Direct Premium of private companies increased at 15 per cent CAGR between FY08-18 to reach Rs 70,178 crore (US$ 10.89 billion ) in FY18. Between Apr-Nov 2018, it reached Rs 551.21 billion (US$ 7.64 billion). Note: * up to November 2018 Source: General Council, IRDAI 15

KEY PLAYERS IN THE NON-LIFE INSURANCE SEGMENT There were 33 non-life insurers in India in FY18. Public sector insurers lead the non-life insurance market in India with New India Assurance, United India and National insurance Company having market shares of 15.1 per cent, 11.5 per cent and 10.9 per cent, respectively in FY18. Market share of major companies in terms of Gross Direct Visakhapatnam Premium port collected traffic (million (FY18) tonnes) New India Assurance In the private sector, ICICI-Lombard was the leader in FY18 with a market share of 8.2 per cent, followed by Bajaj Allianz at 6.3 per cent. The public sector companies accounted for a cumulative share of about 53.39 per cent of the total Gross Direct Premium in the non-life insurance segment FY18. 40.5% Total size: US$ 23.38 billion 15.1% 11.5% 10.9% United India National Company ICICI-Lombard 6.3% 7.6% 8.2% Oriental Company Bajaj Allianz Others Source: General Council 16

17% 15% 12% 13% 13% 14% 24% 37% 41% 42% 76% 83% 85% 88% 87% 87% 86% 59% 58% 63% SHIFT TOWARDS NON-LINKED INSURANCE PLANS The industry is witnessing a shift towards the traditional non-linked insurance plans. The share of non-linked insurance increased from 59.1 per cent in FY09 to 85.4 per cent in FY18. 100% Share Visakhapatnam of linked and port non-linked traffic (million insurance tonnes) premium 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Linked Premium Non linked Premium Notes: *Growth rate in INR terms Source: IRDA Annual Report, Life Council 17

NOTABLE TRENDS AND STRATEGIES

NOTABLE TRENDS New distribution channels like bancassurance, online distribution and NBFCs have widened the reach and reduced costs Firms have tied up with local NGOs to target lucrative rural markets Emergence of new distribution channels In October 2018, Indian e-commerce major Flipkart entered the insurance space in partnership with Bajaj Allianz to offer mobile insurance. Amazon India is also expected to enter the insurance market as an agent. In September 2018, India Post Payments Bank (IPPB) also partnered with Bajaj Allianz to distribute their products. Growing market share of private players Over the years, share of private sector in life insurance segment has grown from around 2 per cent in FY03 to 31.8 per cent in FY19 (up to September 2018). In the non-life insurance segment, share of private sector increased to 46.6 per cent in FY18 from 14.5 per cent in FY04 Launch of innovative products The life insurance sector has witnessed the launch of innovative products such as Unit Linked Plans (ULIPs) Other traditional products have also been customised to meet specific needs of Indian consumers In September 2018, HDFC Ergo launched E@Secure a cyber insurance policy for individuals. Mounting focus on EV over profitability Large insurers continue to expand, focusing on cost rationalisation and aligning business models to realise reported Embedded Value (EV), and generate value from future business rather than focus on present profits Source: IRDAI, General Council, Life Council. News sources 19

STRATEGIES ADOPTED Cost optimisation Players in industry are investing in Information Technology to automate various processes and cut costs without affecting service delivery. It is estimated that digitisation will reduce 15-20 per cent of total cost for life insurance and 20-30 per cent for non-life insurance From October 2016, IRDAI has mandated having an E-insurance (electronic insurance) account to purchase insurance policies Differentiation Companies are trying to differentiate themselves by providing wide range of products with unique features. For example, New India Assurance launched Farmers Package to covering farmer s house, assets, cattle etc. United India launched Workmen Medicare Policy to cover hospitalisation expenses arising out of accidents during and in the course of employment In March 2017, HDFC Life in collaboration with Haptik, has announced the launch of the country s first life insurance chatbot which will help the customer as a financial guide to aid them to choose the most suitable plans befitting their needs. Focus Focus on providing one kind of service help insurance companies in differentiation. For example, SBI is concentrating on individual regular premium products as against single premium and group products Source: Aranca Research 20

GROWTH DRIVERS

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1,482 1,486 1,610 1,639 1,749 1,983 2,135 2,334 2,539 2,762 3,007 3,274 GROWTH DRIVERS FOR INSURANCE IN INDIA (1/2) India s robust economy is expected to sustain the growth in insurance premiums written. Higher personal disposable incomes would result in higher household savings that will be channelled into different financial savings instruments like insurance and pension policies. Per capita GDP of India is expected to reach US$ 3,274 in 2023 from US$ 2,135 in 2018. 3,500 3,000 2,500 Visakhapatnam GDP Per Capita port at Current traffic (million Prices* tonnes) (US$) 2,000 1,500 1,000 500 0 Notes: * estimates after 2013 Source: International Monetary Fund, World Economic Outlook Database, April 2018 22

GROWTH DRIVERS FOR INSURANCE IN INDIA (2/2) Growth in Financial Industry Overall growth in the financial industry; increasing working population with higher disposable income. Increasing awareness about financial products including insurance Innovation and Efficiency Increase in potential insurance customers individuals and companies across different industries, small and medium enterprises, multinational companies. Expansion due of insurance universe due to professionalization of companies Competition Increasing number of insurance providers with various sophisticated products at competitive prices. Regulations which are conducive for growth of the industry. Growth in specific segments Increase in micro insurance due to increased focus of government on financial inclusion. Increase in demand of motor insurance as a by-product of rapidly expanding auto industry. Increase in health insurance due to focus on improvement in healthcare. Group insurance has also been a big driver of insurance growth in the country. Number of lives covered under private life insurance companies reached 36.20 million up to June 2018, showing year-on-year growth rate of 27.48 per cent. Source: EY - industry - Challenges, reforms and realignment 23

FAVOURABLE POLICY MEASURES AID THE SECTOR Tax incentives products are covered under the exempt, exempt, exempt (EEE) method of taxation. This translates to an effective tax benefit of approximately 30 per cent on select investments (including life insurance premiums) every financial year In 2015, Tax deduction under Health Scheme has been increased to US$409.43 from US$245.66 and for senior citizens tax deduction has been increased to US$491.32 Union Budget 2018-19 The government will merge three of the public sector insurance companies - The Oriental Co. Ltd, National Co. Ltd and United India Co. Ltd and list the merged entity. The merger is expected to be finalised by FY21. In September 2018, National Health Protection Scheme was launched under Ayushman Bharat to provide coverage of up to Rs 500,000 (US$ 7,723) to more than 100 million vulnerable families. The scheme is expected to increase penetration of health insurance in India from 34 per cent to 50 per cent, according to a report by Crisil. Life insurance companies allowed to go public IRDAI recently allowed life insurance companies that have completed 10 years of operations to raise capital through Initial Public Offerings (IPOs). Companies will be able to raise capital if they have embedded value of twice the paid up equity capital SBI Life has already raised funds through its IPO. Approval of increase in FDI limit and revival package Revival package by government will help companies get faster product clearances, tax incentives and ease in investment norms. FDI limit for insurance company has been raised from 26 per cent to 49 per cent, providing safeguard and ownership control to Indian owners. Source: Crisil 24

RISING PRIVATE SECTOR INVESTMENT IN INSURANCE In January 2019, online insurance distribution platform, Turtlemint raised US$ 25 million in funding. Major Deals in Sector in 2018 As of November 2018, HDFC Ergo is in advanced talks to acquire Apollo Munich Health at a valuation of around Rs 2,600 crore (US$ 370.05 million). In August 2018, a consortium of WestBridge Capital, billionaire investor Mr Rakesh Jhunjunwala announced that it would acquire India s largest health insurer Star Health and Allied in a deal estimated at around US$ 1 billion. In June 2018, Warburg Pincus invested US$ 104 million as growth capital in IndiaFirst Life. In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth US$ 903 million. In December 2017, the Regulatory and Development Authority of India (IRDAI) allowed private equity investors to become promoters in unlisted insurance companies. The move is expected to enhance PE investments in the sector. In 2015, Bill was passed that will raise the stake of foreign investors in the insurance sector to 49 per cent, fuelling the participation of private sector investment in the insurance sector in the country Most of the existing players are tying up with banks to expand their distribution network. Company Star Health and Allied Co Ltd ICICI Lombard General Company Ltd Star Health and Allied Co Ltd Investor Madison India, Westbridge Capital Deal Size (US$ million) 1,000 Warburg Pincus 282 Motilal Oswal, Apis Growth, Sequoia & Others 745 Source: Towers Watson; Assorted news articles, EY 25

OPPORTUNITIES

INDIA S INSURANCE MARKET OFFERS A HOST OF OPPORTUNITIES ACROSS BUSINESS LINES Low-income urban and pension markets Crop insurance Motor insurance markets Opportunities for Indian insurance market Micro-insurance Health insurance markets 27

NON-LIFE INSURERS: MOTOR INSURANCE MARKETS Breakup of non-life insurance market in India FY18 Automobile Sales in India (million units) 30.00 1.90% 26.3% 39.40% Motor Health Fire Marine Others 25.00 20.00 15.00 17.79 18.42 19.72 20.47 21.86 24.97 7.20% 10.00 25.20% 5.00 0.00 FY13 FY14 FY15 FY16 FY17 FY18 Strong growth in the automotive industry over the next decade will be a key driver of motor insurance. Automobiles sales in India increased at 7.01 per cent CAGR between FY13-18 to reach 24.97 million vehicles. Proposed IRDA draft envisages a 10 80 per cent rise in premium rates for the erstwhile loss-making third party motor insurance. In FY18, Motor insurance constituted 39.40 per cent of the non-life insurance market in India Note: E -estimates, CAGR - Compound Annual Growth Rate, ACMA - Automotive Component Manufacturers Association of India, Source: IRDA, ACMA, SIAM, Aranca Research 28

NON-LIFE INSURERS: HEALTH INSURANCE MARKETS Only 1.5 2 per cent of total healthcare expenditure in India is currently covered by insurance providers. Only 18 per cent of people in urban areas and 14.1 per cent in rural areas are covered under any kind of health insurance scheme.. Gross direct premium from health insurance reached Rs 378.97 billion (US$ 5.88 billion) in FY18 and contributed 25.2 per cent to the gross direct premiums of non-life insurance companies in India. Absence of a government-funded health insurance makes the market attractive for private players. In August 2018, coverage of mental illness under health policies was also mandated by the URDAI. Introduction of health insurance portability expected to boost the orderly growth of the health insurance sector. In July 2016, IRDA issued Health Regulations, 2016. These regulations replace the Health Regulations, 2013. As per these new norms, companies will provide better data disclosure, pilot products, coverage in younger years, etc. Private insurance coverage is estimated to grow by nearly 15 per cent annually till 2020. Government-sponsored programmes expected to provide coverage to nearly 380 million people by 2020, driven by initiatives such as RSBY and ESIC. RSBY is a centrally sponsored scheme to provide health insurance to Below Poverty Line (BPL) families and eleven other defined categories of unorganised workers, namely building and other construction workers, licensed railway porters, street vendors, MGNREGA workers, etc. Note: RSBY - Rashtriya Swasthya Bima Yojana, ESIC Employees State Corporation, MREGA Mahatma Gandhi National Rural Employment Guarantee Act., NSSO 29

STRONG POTENTIAL IN CROP INSURANCE Awareness about crop insurance in India is 38.8 per cent and still crop insurance market in India is the largest in the world. Over 47.9 million famers were benefitted under Pradhan Mantri Fasal Bima Yojana (PMFBY) in 2017-18. 50.00 45.00 Farmers Insured Under PMFBY To provide crop insurance to farmers, Government has launched various schemes like National Agriculture Scheme (NAIS), Modified National Agriculture Scheme (MNAIS) and Weather-based Crop Scheme (WBCIS) In September 2018, Government of India increased the number of risks to be covered in the Pradhan Mantri Fasal Bima Yojana (PMFBY) to empower farmers in a better way. From now, farmers will be protected against hailstorms, crop fires, damage from animals, landslides and rainstorms. 40.00 35.00 30.00 25.00 20.00 15.00 43.70 34.91 10.00 13.79 13.00 5.00 0.00 2016-17 2017-18 Loanee Non-Loanee Note: Figures are as per latest available data Source: Agricultural Company of India Annual Report, Department of Agriculture and Cooperation, IRDA, Livemint, PTI 30

USEFUL INFORMATION

INDUSTRY ORGANISATIONS Regulatory and Development Authority (IRDA) General Council 3rd Floor, Parisrama Bhavan, Basheer Bagh, Hyderabad 500 004 Phone: 91-040-23381100 Fax: 91-040-66823334 E-mail: irda@irda.gov.in 5th Floor, Royal Building, 14, Jamshedji TATA Road, Churchgate, Mumbai 400020 Phone: 91-22-22817511, 22817512 Fax: 91-22-22817515 E-mail: gicouncil@gicouncil.in Life Council 4th Floor, Jeevan Seva Annexe Bldg. S. V. Road, Santacruz (W), Mumbai 400054 Phone: 91-22-26103303, 26103306 E-mail: ninad.narwilkar@lifeinscouncil.org 32

GLOSSARY CAGR: Compound Annual Growth Rate IRDA: Regulatory and Development Authority IPO: Initial Public Offering FDI: Foreign Direct Investment LIC: Life Corporation of India GIC: General Corporation of India NBFC: Non-Banking Financial Company NGO: Non-Governmental Organisation RSBY: Rashtriya Swasthya Bima Yojana PFRDA: Pension Fund Regulatory and Development Authority GDP: Gross Domestic Product ESIC: Employees State Corporation FY: Indian Financial Year (April to March) So, FY12 implies April 2011 to March 2012 GOI: Government of India INR: Indian Rupee US$ : US Dollar Where applicable, numbers have been rounded off to the nearest whole number 33

ANNEXURE (2/2) - EXCHANGE RATES Exchange Rates (Fiscal Year) Year INR INR Equivalent of one US$ 2004 05 44.95 2005 06 44.28 2006 07 45.29 2007 08 40.24 2008 09 45.91 2009 10 47.42 2010 11 45.58 2011 12 47.95 2012 13 54.45 2013 14 60.50 2014-15 61.15 2015-16 65.46 2016-17 67.09 2017-18 64.45 Q1 2018-19 67.04 Q2 2018-19 70.18 Exchange Rates (Calendar Year) Year INR Equivalent of one US$ 2005 44.11 2006 45.33 2007 41.29 2008 43.42 2009 48.35 2010 45.74 2011 46.67 2012 53.49 2013 58.63 2014 61.03 2015 64.15 2016 67.21 2017 65.12 Source: Reserve Bank of India, Average for the year 34

DISCLAIMER India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of Aranca and IBEF s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation. 35