LIFE INSURANCE INDUSTRY OVERVIEW

INDUSTRY OVERVIEW• The Indian insurance industry has undergone transformational

changes since 2000 when the industry was liberalised.• The industry has moved from a 1 player-market to 24 players

in last 13 years.• It has witnessed phases of rapid growth in the earlier decade,

with a phase of low growth in the recent years.

0.00

50000.00

100000.00

150000.00

200000.00

250000.00

300000.00

350000.00Industry Growth(Based on Total Premium)

FLAT GROWTH

In Crore

CAGR :17%

Source: IRDA

INDUSTRY GROWTH RATE

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-07

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

-10.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

43.5

11.3

19.624.3

27.8

47.4

29.0

10.1

19.7

9.9

-1.6 0.0

9.4

Industry Growth(%)In %

*Based on total premiumSource: IRDA

TOTAL LIFE INSURANCE PREMIUM

98%

2%

2002-03

86%

14%2005-06

70%

30%2009-10

75%

25%2013-14

Source: IRDA

Industry Total : Rs 55,747 Crore Industry Total: Rs 1,05,875 Crore

Industry Total: Rs 2,65,447 CroreIndustry Total: Rs 3,14,283 Crore

LIC

PRIVATE COMPANIES

TOTAL PREMIUM: PRIVATE PLAYERS

OUT OF THE TOP 10 COMPANIES - ICICI PRUDENTIAL, HDFC STANDARD, SBI LIFE ACCOUNT FOR ALMOST 50% OF THE TOTAL PREMIUM COLLECTION FOR THE YEAR 2013-14

Industry Total: Rs 50,260 Crore

21%

13%

12%

11%

7%

7%

6%

4%

4%15%

2013-14ICICI PRUDENTIALSBI LIFEBAJAJ ALLIANZHDFC STANDARDMAX LIFEBIRLA SUNLIFERELIANCETATA AIAKOTAK MAHINDRAOTHERS

Source: IRDA

0.00%

100.00%

200.00%

300.00%

400.00%

500.00%

600.00%

Series1; 130.38%

90.92%

126.98%

204.60%

165.20%

68.59%

237.74%

94.15%

501.36%

351.27%

120.92%

33.81% 33.81%

180.71%159.21%

206.10%

128.95%106.67%

126.17%

225.07%

76.39%

CAGR OF LIFE INSURANCE PLAYERS(BASED ON TOTAL PREMIUM) 2000-2010

Industry Average 243%

Source: IRDA

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

Series1LIC

CAGR OF LIFE INSURANCE PLAYERS(BASED ON TOTAL PREMIUM) 2011-2013

Industry average 1.8%

Source: IRDA

AUM GROWTH OF LIFE INSURANCE COMPANIES

2003-04

2004-05

2005-06

2006-07

2007-07

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

0

5

10

15

20

25

30

19.2

8.5

17.2

28.5

6.9

14.315.2 15.9

14.9 15.0

%

(In %)

Source: IRDA

TOTAL AUM MARKET SHARE

99%

1%2003-04

97%

3%2006-07

LIC

PRIVATE COMPANIES

94%

6%2011-12

Industry Total: 3,07,210 Crore

Industry Total: 12,88,225 Crore

Industry Total: 4,65,439 Crore

Industry Total: 9,74,620 Crore

2013-14

92%

8%

Source: IRDA

AUM MARKET SHARE- PRIVATE PLAYERS

15%

13%

13%

12%12%

7%

7%

4%

4%

4%

11%

2013-14ICICI PRUDENTIALBAJAJ ALLIANZMAX LIFEHDFC STANDARDSBI LIFETATA AIARELIANCEPNB METLIFEEXIDE LIFEKOTAK MAHINDRAOTHERS

Industry Total: Rs 393382 CroreTHE TOP 4 COMPANIES (ICICI PRUDENTIAL, BAJAJ ALLIANZ, MAX LIFE AND HDFC STD) ACCOUNT FOR 50% OF THE AUM GROWTH FOR THE FY 2013-14

Source: IRDA

0%

10%

20%

30%

40%

50%

60%

Series1; 35%

28%

46%

18%

32%

24%

33%

49%

36%

40%

33%

40%

35%

44%

38%

52%

17%

37%

21%

38%

37%

13%

CAGR OF LIFE INSURANCE PLAYERS(BASED ON AUM)-: 2004-2014

Industry average 14%

Source: IRDA

88%

12%2005-06

83%

17%2008-09

LIC

PRIVATE COMPANIES

74%

26%

2012-13

84%

16%2009-10

NO. OF POLICIES & MARKET SHARE Industry Total: 18887 policies Industry Total: 21310 policies

Industry Total: 19348 policies Industry Total: 18852 policies

Source: IRDA

2005-06 2006-07 2007-07 2008-09 2009-10 2010-11 2011-12 2012-130.0

2.0

4.0

6.0

8.0

10.0

12.0

11.0

6.3

2.3

10.2

8.0

8.17.5

6.7

INDUSTRY GROWTH RATEIn %

*Based on Total No of policiesSource: IRDA

0%

10%

20%

30%

40%

50%

60%

Series1; 24%

28%

14%

41%

5%

35%

55%

8%

22%

24%

30%

25%

16%

12%

18%

CAGR OF LIFE INSURANCE COMPANIES(BASED ON NO. OF POLICIES): 2004-2012

Series1

Industry Average: 10.2%

Source: IRDA

CLAIMS SETTLEMENT RATIO

• Claim Settlement Ratio refers to the total number of death claims settled by an insurance company.

Calculation: No of claims settled * 100 Total No of claims registered

• Ex: if a life insurance company receives 1000 death claims and settles 980, the claim settlement ratio of that company would be (980/1000)*100 = 98%

• The higher the claim settlement ratio of the company, the more favourable it is for the policy holders

Source: IRDA

CLAIM SETTLEMENT RATIOS OF INSURANCE COMPANIES

INSURER 2009-10 2010-11 2011-12 2012-13 2013-14

LIC 96 97 98 98 98HDFC STANDARD 90 95 97 96 95

FUTURE GENERALI 91 95 96 96 94MAX LIFE 66 78 89 94 93STAR UNION DAI-ICHI 58 81 86 90 92BAJAJ ALLIANZ 88 89 91 89 91

KOTAK MAHINDRA 87 89 92 92 91SBI LIFE 83 82 95 95 91ICICI PRUDENTIAL 49 65 67 80 90PNB METLIFE 83 85 81 84 90

BEST INSURERS AS PER CLAIM SETTLEMENT RATIO

BASIS: Ranking based on claim settlement ratio For FY 2013-14

* The industry has shown an improvement in the claim settlement ratios over a period of time

Improved Settlement Ratio

Source: IRDA

INSURER 2009-10 2010-11 2011-12 2012-13 2013-14

SAHARA 63 53 78 85 89

TATA AIA 78 82 83 85 89

BHARTI AXA 78 87 88 90 88

BIRLA SUNLIFE 89 95 91 83 87

CANARA HSBC 39 71 81 88 86

AVIVA 87 84 90 88 84

INDIA FIRST 89 91 89 84 83

RELIANCE 89 81 85 86 82

AEGON RELIGARE 48 52 66 67 81

EXIDE LIFE 39 51 68 71 75

CLAIM SETTLEMENT RATIOS OF INSURANCE COMPANIES

Source: IRDA

INSURER 2009-10 2010-11 2011-12 2012-13 2013-14

SHRIRAM LIFE 40 56 65 67 68

EDELWEISS TOKIO 10 45 60

DHFL PRAMERICA 40 51 24 27 22

CLAIM SETTLEMENT RATIOS OF INSURANCE COMPANIES

• Although there has been a growth in their claim settlement ratio, SHRIRAM LIFE, EDELWEISS TOKIO and DHPL PRAMERICA have the lowest ratio.

Source: IRDA