Human beings not only think about their present but also about their future, so it is significant to do something that will at least give them financial security and help them in growing their wealth. None of us is aware of our future, so instead of sitting quietly and doing nothing, it is better to invest in something that can at least play the role of an umbrella for us during a rainy day.
Life Insurance Corporation of India also known as LIC is the biggest life insurance company in the country. If you live in India, there is no way, you haven’t heard about LIC. This life insurance company has captured 70% of the market share and is under the Government of India. In this, we are going to talk about LIC IPO, what it exactly is and what are the things we need to know before investing in them. So, let’s get right into it.
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” —Robert Kiyosaki
LIC IPO is LIC’s Initial Public Offering where they are offering shares of LIC as the Government has decided to sell some of its stakes. Recently LIC made headlines after submitting Draft Red Herring Prospectus (DRHP).
The Government of India has decided to sell 5% of its stake, therefore 95% stake of the company will remain under the Government. Among the public offering, 35% will be booked for the retail investors, the other 5% for the employees of LIC and 10% will be reserved for the policyholders.
Things You Need to Know Before Investing In LIC IPO
Investing in something is a very important decision that one has to take; you have been very clear and careful before doing anything related to this as it is about the financial security of your future.
As per the information, LIC policyholders who got their policy on or before the 13th of February, 2022 are eligible to invest in the 10% of public offerings that is reserved for the policyholders.
If anyone wants to be eligible in the quota for the policyholders, their PAN has to be linked with their policyholders. Those who have already linked their policyholders with their PAN on or before the 28thof February 2022 are eligible for the 10% quota.
Policyholders who have their Demat account are eligible for the 10% quota.
As 35% are reserved for retail investors, it means anyone who is not a LIC employee or a policyholder can apply to this quota. Policyholders, as well as employees of LIC, can also apply to this quota.
A retail investor is allowed to invest max to max INR 2 Lakhs, not more than that in their quota of LIC IPO.
LIC policyholders are allowed to invest INR 2 Lakhs under their quota of IPO.
LIC Employees are also eligible to invest a maximum of INR 2 Lakhs under their quota of IPO.
A policyholder who is not a LIC employee can invest a total of INR 4 Lakhs that is INR 2 Lakhs in the quota of retail category and INR 2 Lakhs in the policyholder category.
A LIC employee can invest up to INR 6 Lakhs if they are also a LIC Policyholder. It means INR 2 Lakhs under the quota of retail category, INR 2 Lakhs under the quota of policyholder category and another INR 2 Lakhs under the quota of LIC employee category.
If policyholder wants to avoid getting their application rejected under the policyholder quota, then they must ensure that they are primary Demat account holder.
If there are joint policyholders then they can apply under the policyholder’s quota, if only they have separate Demat accounts.
LIC IPO will be open to the public in the month of April 2022. The total offering is 31.6 Crore shares. It is also said that LIC employees and policyholders are eligible to get discounts on the floor price as well.
Conclusion
LIC is one of the biggest insurance companies in India founded in 1956 and is completely owned by the government. It is one of the most awaited IPOs since the launch of Zomato, Nykaa and Paytm IPO. It is expected to be one of the biggest IPO launches. People are eagerly waiting for LIC IPO so that they can invest in it.
FAQs
Who are the shareholders of LIC?
The government of India is the major shareholder and will remain the majority shareholder of LIC, only 10% is being sold to policyholders.
When will LIC IPO launch?
The LIC IPO will be open to the public on March 11, 2022.
How can I buy LIC shares?
If you’re a retail investor you can buy LIC shares using your UPI id.
With the advent of digitalization, the rise in threats of cyber-attacks comes in. We have reported large figures in cases relating to cyber-attacks both in the corporate sector and among individuals as well.
Cyber-attacks have played a major role in bringing cyber insurance to the core. Cases of rising cyber fraud are not only limited to companies but also individuals. Therefore, cyber insurance is a considerable option.
An immense rise in the cyber insurance market has been seen globally. The figures are estimated to reach USD 20 billion by 2025. Indian base for cyber insurance is around Rs. 500-700 crores.
Several cyber insurance providers cyber insurance to cover individuals and companies as well. A few cybercrimes coverage included in the cyber insurance policy are social media liability, cyberstalking, IT theft loss, cyber extortion, and many others.
A majority of cases reported globally and in India are related to e-mail based attacks, malware or ransomware, and phishing attacks.
The term cyber insurance is synonymous with cyber risk insurance and cyber liability insurance coverage. A cyber insurance policy helps an organization to continue to run even in case of a security breach. It acts as a friend in disguise that offers a helping hand in times of crisis.
Cyber insurance acts as a helping hand to mitigate the exposure of risk by offsetting the costs involved as it consists of various policies of recovery in case of a breach regarding cyber security.
Why is Cyber Insurance a Must for Every Company?
The reports of Ponemon Institute’s Cost of a Data Breach says that data breach costs $3.9 million on average. It includes remediation, continuity costs, fees, etc.
Cyber insurance comes into light as a friend in disguise that assures an organization needs not to bear all these costs alone. Cyber insurance helps to get prepared to respond effectively in case of a data breach.
The 2019 survey report by Marsh and Microsoft mentions that about 47% of businesses have cyber insurance cover. Apart from this, 89% of businesses are in confidence that their cyber insurance policies cover the costs of any cyber event that might occur. These stats depict an increasing number of organizations buying cyber risk insurance.
Cyber risk insurance is important for risk mitigation. A single cyber-attack on an unprepared company can put it totally out of business. Therefore, the implementation of a cyber risk management program is a must for all small and big organizations. The program must include at least the following three things:
Notices the risks to which an organization might be exposed to
Helps a company prevent breaches
Helps the company to recover from a possible breach
Following are a few reasons that make cyber insurance a must-have:
Not only the big businesses but also the small companies are targeted by hackers. Small businesses are at a greater risk instead, as they do not have proper financial resources to bounce back after a cyber attack or data breach.
Data is a critical business asset that must be protected. The value of data is as important as the device in which it is stored. A cyber policy offers coverage for data restoration in the event of a breach of data.
The organization might face harsh penalties in case of loss of credit card data. According to stats, credit card crime is a $7.5 billion industry worldwide and growing. Even the smallest retailers are exposed to this risk.
A ransomware attack, a computer virus, or an untrustworthy employee may shut systems down; a cyber insurance policy can cover your losses including the compromise with the data or the device in which it is stored.
Cyber insurance also covers costly claims such as defamation, breach of information, copyright infringement, etc.
Cyber Insurance policy offered by the companies ensures public trust and a reason to the customers to remain connected and save a large number of future sales resulting from customers that the company might lose to its competitors.
To ensure financial safety against any kind of cyber fraud, as any kind of breach ultimately leads to a lot of expense. Insurance companies offer cyber insurance policies that also cover any sort of monetary loss.
Any business venture that stores data online or in any way use technology is at risk of a cyber-attack. The outcomes can be shattering. Stats mention that the average cost to resolve a data breach issue is about $7 million.
Cyber insurance helps the company recuperate after a data breach. It is an essential option that includes costs of business interruptions, legal fees, revenue loss, public relations expenses, equipment damages, and legal costs. Cyber insurance plays a vital role in shielding the organization in the long run before a breach occurs.
With Indian businesses getting online, cyber insurance in India is the need of the hour with the proliferating cases of online breaches. Cyber frauds have taken a higher jump during the Covid-19. It has experienced a rise with the increase in digital payments.
Cybercrime is the world’s fastest-growing crime, cyber insurance is the solution.
FAQs
What is cyber insurance?
Cyber insurance is insurance that covers your liability and protects your company from Internet-based risks.
What are the benefits of cyber insurance?
Cyber insurance provides Data breach coverage, Legal support, and protects you from phishing, email spoofing.
What do cyber insurance policies cover?
Most cyber insurance covers any data that has been lost, damaged, stolen or corrupted due to the security breach.
Reliance Industries Limited (RIL) is a private Indian multinational conglomerate business based in Mumbai. Regarding market capitalization and sales, Reliance Industries is India’s most profitable corporation and the country’s largest publicly traded firm. It is India’s tenth largest employer, employing over 236,000 people. RIL has a market capitalization of US$243 billion as of October 2021. The company is ranked 155th on Fortune’s Global 500 list of the world’s largest firms in 2021.
Reliance is responsible for over 5% of the entire customs and excise tax income collected by the Indian government. It is also the private sector’s top income tax payer in India.
RIL has improved its dominant position in various more minor fashion and lifestyle industry markets. The corporation has recorded a twofold increase in income from small-town retailers. JioMart is currently connected with over 400 retailers, with daily orders increasing by over 2x quarter-on-quarter. Lets get a glance at some of the Reliance projects that failed in market.
The petrochemicals division, which only a few quarters ago became RIL’s largest EBIT (earnings before interest and taxes)-generating vertical, has grown by 42.9 per cent to Rs 8,221 crore in EBIT. In comparison, refining’s EBIT declined 18% to Rs 5,055 crore. Revenues from the refining and petrochem verticals also climbed under the 10.4% increase in the average Brent oil price in the third quarter. In a news release, Chairman Mukesh Ambani mentioned “heightened volatility” in the oil price as one of the issues.
The benchmark Singapore complex margin averaged $4.3 per barrel in the third quarter, down from $6.1 in the second quarter and $7.2 in the third quarter of 2017-18. ” Singapore margins were driven down by a fall in light distillate cracks, despite advances in fuel oil and intermediate distillate cracks “, In a statement, RIL said. OPEC’s increased crude oil output also negatively impacts crude oil benchmarks.
Another concern for the corporation is oil and gas exploration and production (E&P). The segment’s revenue decreased by 27.5% to Rs 1,182 crore. However, the company’s EBIT loss remained at Rs 185 crore. The loss during the second quarter was Rs 480 crore. RIL has invested Rs 40,000 crore in its Krishna Godavari blocks with its partner BP Plc to revive E&P activity, but it has failed to persuade investors.
Biyani, known as the “Father of Indian Organized Retail,” employed aggressive pricing to lure middle-class customers to his outlets, including Big Bazaar, Central, and Brand Factory, and built a retail behemoth. However, his enterprises were saddled with net debt of Rs 12,989 crores, with the promoters’ total equity committed to lenders.
“We required a holistic solution rather than a solution in a certain format because our businesses were so interwoven.” As a result, this was probably a reaction to our presence.” On a turnover of Rs 3,860.4 crore, Reliance Fresh Ltd lost Rs 273.8 crore.”
Reliance Jewels
Reliance Jewels – Reliance Failed Project
Reliance Retail, India’s big fish, maybe exit the jewellery business. The corporation run by business mogul Mukesh Ambani is up against stiff competition from regional rivals, which might force it to shut down its jewellery retail operation. It now conducts its retail jewels business under the ‘Reliance Jewels’ brand from over 50 locations around the country.
Reliance Retail, the retail arm of Reliance Industries, has closed roughly ten Reliance Jewels stores, including several of the brand’s flagship locations on Hughes’s Road near Ambani’s 27-story mansion Antilia in South Mumbai and Park Street, Kolkata’s historic high street.
According to people close to the stores, Reliance Jewels have not impacted the domestic jewellery industry, which requires a brand to remain dedicated for years. Meanwhile, regional players began to expand rapidly. Reliance Retail continues to close more jewellery stores, which may be the end of their narrative in this category. A message was submitted to the Reliance Retail representative by a well-known newspaper. However, it received no answer. The Indian jewellery market is one of the country’s fastest-growing sectors since it is the world’s top importer and consumer of gold.
Reliance Trends
Reliance Trends – Reliance Failed Project
However, in Reliance Trends’s market wishes to enter, competition is fierce. Retailers such as Landmark Group’s Max and hypermarkets such as Big Bazaar and More sell value items in the mid-market. Cantabil Retail, a recently listed company, is likewise pursuing a similar strategy of accessing tier-II towns and attracting middle-class customers. In the current fiscal year, it expects to open 180 outlets.
On a sales of Rs 489 crore, Reliance Trends, which operates apparel boutiques, lost Rs 11.35 crore on a turnover of Rs 1,234 crore.
Reliance Time Out
Reliance TimeOut – Reliance failed Project
Shops that offer books, music CDs, and stationery find it challenging to come up with new ideas as online shopping becomes more popular. Due to fierce competition from online shopping portals and a drop in client base, Reliance TimeOut, a one-stop store for books, music, toys, and stationery has halted operations and is forced to close down.
Reliance Health Insurance
Reliance Health Insurance- Reliance failed Project
Reliance Health Insurance, Reliance Capital’s separate health insurance unit, has been ordered by India’s Insurance Regulatory and Development Authority (Irdai) to transfer its entire portfolio to Reliance General Insurance and has been barred from selling new plans.
Reliance Health Insurance was reported to have a solvency margin of 106 per cent in the June quarter (Q1FY20), significantly below the statutory threshold.
One hundred fifty per cent, according to Irdai. Since then, the solvency margin has fallen even more, to 77% in August and 63% in Q2FY20.
With effect from November 15, the regulator has also instructed Reliance Health Insurance, which began operations in October 2018, to transfer all policyholder investments and its financial assets to Reliance General.
Threats develop when situations in the external environment jeopardize the organization’s business’s dependability and profitability. These external influences might have a significant impact on the company’s performance. Still, Reliance has impacted the economy and may lose clients as a possibility due to the current scenarios and the current trajectory of Reliance. But, Reliance is known to bring customers mainly due to the inexpensive costs it offers. One such example is the market response to removing free services—but Reliance Jio won the market and is now linked to a slew of freebies. There may be a decline in sales for the firm if these are eliminated.
FAQs
What are the failed products of Reliance?
Some of the failed products of Reliance are:
Petrochemicals
Reliance Fresh
Reliance Jewels
Reliance Trends
Reliance Time Out
Reliance Health Insurance
What is the main business of Reliance Industries?
The core business of Reliance industries is petrochemical, refining, oil and gas-related operations.
What are the products of Reliance Industries?
Some of the core products of Relince Industries are:
In this world of clashing industries, we must come across the name of the Bajaj group. Proudly calling itself an indigenous company, Bajaj Group is a multi-industry (also known as a conglomerate). This industry is one of the most well-known in our country. It is also one of the oldest of its kind. Here we will talk about its business model and its secret to strive and perform well.
Bajaj Group of companies, being India’s one of proudly indigenous companies, was founded in 1926. Its founder was Mr Jamnalal Bajaj. It set up its first headquarters in Mumbai. It boasts of being one of the oldest multi-business companies in our country. It serves worldwide, so it’s also multinational. Having achieved the ‘ First in the industry’ status with all plants certified and several other international awards with its excellent automobile production, Bajaj stands high in business standards.
Areas of operation
The Bajaj groups started operating first in India and, with the flow of time, placed themselves in the list of oldest conglomerates of India. With about 40 companies and nine subsidiaries of the Bajaj Group, the company exports mainly to Sri Lanka, Colombia, Indonesia, Netherlands, and Bangladesh. And its soon wanting to expand its exports to Russia. Not just this, the business of Bajaj Group is expanding worldwide nearly to every corner of the world.
Key products and services
Being a multi-business company, Bajaj deals in automobiles, insurance, financial services, electrical devices, consumer care, alloy and steel, and finally in sports. A single company provides all these services. Here is a quick list of services offered by the Bajaj Group:
1. Automobile: Being one of the largest producers and exporters of automobiles in India, the Bajaj group exports up to 50-52℅ of its automobile production. Bajaj auto holdings limited as an investment company, Bajaj Auto international holdings BV, Maharashtra scooters Limited, PT Bajaj Auto Indonesia are all under Bajaj Group.
2. Insurance: Bajaj groups is also known widely for its insurance providing services. Bajaj Allianz General Insurance Company Limited, Bajaj Allianz Life Insurance is essential to assistance provided by the company.
3. Finance services: In the field of finance, we have Bajaj finance Limited and Bajaj Finserv Limited, and these deal with financial assistance and distribution of products along with hiring and leasing.
4. Consumer care: Mostly, cosmetics and hair care products form a part of this. Various oils, face wash, soaps, scrubs, face masks, facial creams are products it deals with.
5. Electrical Device: Various electrical devices, primarily fans, air conditioners, poles, lattice closed towers, and high masts, form a part of the electrical devices Bajaj Groups deal with.
6. Alloy and steel: Mukand International Limited is the part which deals with the trading of metals, alloys, and steel along with alloys of iron. Hospet Steel Limited Plant is the iron-making division, and also in steelmaking and rolling mill. 7. Electrical components: Electrical devices such as GLS lamps, fluorescent lamps, electrically operated fans, lights, and various miniature lamps are part of Bajaj Group’s productions.
8. Sports: Various sporting equipment and gym equipment are products of Bajaj. Equipment relating to various sports and also cycles are a part of it.
Target audience
Bajaj provides many different services in many other fields. It caters to the needs of everyone. Without any distinction in gender, age, or irrespective of the sex of a person, Bajaj groups provide their services. Being a multi-business company, it is a conglomerate in its truest sense. Its services attract an array of audiences, from a retired individual to a homemaker to a sportsperson.
Business Model Of Bajaj Group
Bajaj Group
Bajaj Group showcases an extraordinary business model for others to follow irrespective of what industry they are dealing with. A multi-business company isn’t set on its own; it requires strategy and all pooled into its business model. It has a diversified business structure and mainly focuses on three things – acquiring many customers irrespective of their age and sex. The second is providing a great variety of services that can cater to the needs of all its consumers. The third one is the expansion of its exports and services into different other countries.
Its business model helps it to get a maximum amount of profit. Its revenue means include exports, shares, selling within the country, sponsoring, and manufacturing much-needed materials.
What is unique in the Business Model of Bajaj Group?
As already discussed, Bajaj groups believe in catering to the needs of their large and diversified customers. It’s not easy to adopt these well-crafted strategies, but they made Bajaj Group’s business model inspiring every industry. These include:
1. High exports: Exports form an essential part of the business model of Bajaj groups. It mainly exports its two-wheelers to several countries. Also, the team which handles it is very experienced.
2. Meeting the needs of customers: The prices are reasonable for an Indian household. Also, online marketing and easy EMI options are available to those who want to buy the products
3. A complex and unique distribution network: A highly managed and efficient distribution web that eases the setting up of business both in and outside our country. It has many warehouses and storerooms with its products—a group of trustworthy dealers.
Providing several services and proudly being the most prominent bikes and scooters in our country, nearly 50-52 percent of its sales are exported. Some of its essential strategies in the business model also include promoting its new launch, giveaway and lucky draws, Internet marketing, easy EMI options on various goods. Other methods include different social media accounts which post about the product, providing a great versatility of products, and letting customers decide and review their products.
The wisely crafted business model helps Bajaj groups to extract profit efficiently. First, the services provided by it caters to a large and diverse audience who use its services frequently. The company gains profit from as many national and international consumers as possible. Almost 50 percent of its automobiles are exported. Also, there are numerous ways to make money in its own country.
Bajaj Group makes its money by exports. Bajaj Auto, which is a part of the bajaj Group, manufactures a large number of two and three-wheeled vehicles. These are in great demand in foreign countries. Over more than seventy countries have gotten these vehicles imported from India. It helps in adding to the revenue of bajaj groups. Selling and buying of shares also add to its revenue.
Bajaj is a well-known brand of electronics in India; people buy electronics from this brand in many ways. Indians trust this brand, and because of its excellent performance, its demand is very high in the country. It helps the company to get more money. By using the method of recycling, the company makes its iron and steel. These, when sold this generates a large amount of profit. As steel and iron are used in every place, its sales help the company a lot.
Bajaj has sponsored many events and even supported the Indian teams in some international events, these sponsorship helps get income. Because of the increase in the number of factories at various places, more production is the result. More production means more sales. Also, the taste of people is being taken into consideration to increase the amount of profit.
Conclusion
Bajaj groups which started as small businesses soon grew into a vast business empire. The founder, along with his family, all worked together in making Bajaj one of India’s most profitable brands. Not only does it provides us with a variety of products, but it also engages itself in several welfare activities. This company has won the hearts of both Indians and the people of another country. It is due to its efficiency and diversity of products.
FAQs
What is the revenue of Bajaj group?
Bajaj group has a revenue of more than 50,000 crores in Indian currency.
Who is the MD of Bajaj group?
Rahul Bajaj is the MD of Bajaj groups.
Who are the CEO of Bajaj Group?
Rajiv Bajaj, Sanjiv Bajaj, and Lalit Jalan are the CEO of Bajaj Group.
How many companies are there in Bajaj Group?
There are 34 companies under Bajaj Group of companies.
Having insurance for anything that goes wrong ensures that you are shielded. The insurance will pay you back the money. Looking in the times we are, having industry in place is a must. Insurance is available for everything. Ranging from insurance for your car to one for your home or even your wedding.
Planning a wedding is no joke, and people involved in the wedding business will tell you about it. Behind the scenes of a single wedding day requires months or even a year of planning in advance. Besides, you want everything to be perfect and dreamy as per your wishes.
For so long, the industry that has been dealing with weddings has been a completely different sphere. It includes:
Dressing
Cakes
Decorators
Food
Booking
Music
Venue
And you know, the list does not end here. You need to constantly be on the look-out for everything.
But what if your dream day turns into a complete nightmare?
You can plan everything, but at times some things are beyond our control. But still, at times, not everything works out according to what you plan, and there goes the months of planning and taking every minute detail of planning right in the bin.
Weather
The last thing you want is a snowstorm to hit and not being able to do anything about it. Now, the climate is something that is natural, and you can’t help it.
Fireworks gone wrong
All the while, you are walking and your guests are holding sparklers to make your entrance memorable. Your dress accidentally catches your wedding dress on fire.
Health issues
What if your other half faces an emergency health problem right on your wedding day. Or someone from your immediate family.
Why get a Wedding Insurance?
Insurances act as a shield when something goes wrong. Planning every tad tidbit. Covering all the minor and major factors that go into the planning and arranging of your wedding day. Walking down the aisle when everything is just perfect. Because you do not want a scandal while having the day that you dream of coming to life.
Now, this policy will pay you back if your wedding is canceled over some of the reasons like the following:
The bride or the groom needs to be immediately deployed to the military.
If any extreme weather does not allow you or most of your guests to attend the event.
If either person from the couple could be facing any serious emergency health issues or someone from their immediate family.
Just in case if you need to reschedule, the policy may also help you reimburse your money if you already have paid for the venue and the caterers under unforeseen circumstances.
Which also includes:
Wedding gifts, photographs, videos that are lost or damaged.
If your photographer does not show a refund.
Repair or replacement costs for your wedding attire and rings.
Event liability insurance
Majorly limited to a 24-28 hours period. It helps if you are planning on a rehearsal. It protects:
The rehearsal dinner
Wedding ceremony and reception
The set-up and removal within 24 hours of the event.
It also covers the cost if you are legally accused of injuring someone at your wedding or causing damage to the venue.
How Wedding Insurance is Emerging as a new Business Model?
Need of the hour
The pandemic caused much chaos in our lives. Delayed the reopening of our schools, colleges, restaurants, parks, and some of the most important days planned by many. It prolonged many people’s weddings.
Establishing trust with the customers
Providing people with that peace of mind. The segment of the market that is booking halls for their weddings are also trusting. These wedding insurance companies, that they will protect their investments if anything goes wrong during these uncertain times.
Specifically tailored policies
The couples have the policy to choose from which suits them according to their wants. With the flexibility to also add some packages along with either event cancelation coverage policy and the freedom to add some specific package to the policy if needed.
Search Engine Marketing
The wedding insurance industry is leveraging platforms like Google Ads to increase their organic search results (SERPs). So, for example, if someone is looking for a company, it will use the keywords like “wedding insurance” and organize your websites by topic. So that it increases the probability of coming up in the search results.
Using pay-per-click (PPC) allows you to pay a fee to have your website on the search engine result page when people are looking for specific keywords or phrases in the search engine.
Social media marketing
Reaching out to young couples looking to plan a wedding on social media. Especially the brides who look for the options directly on social media when researching for what they are looking for.
These companies use Pinterest as it is the go-to place to plan anything and everything.
Ranging from ideas for DIYS; indoor decor to planning your weddings. They expand their boards using seasonal photos, and optimize the boards in a way so they gain visibility on Pinterest.
Referrals and Digital marketing
There is no one better advocate for your business than a satisfied customer. Wedding insurance companies now have their own websites. To make their presence visible online in the digital world.
Sharply pairing up the space with a section of reviews from satisfied customers with the service, that in turn act as referrals.
They also use E-mail marketing appropriately for their wedding business and getting into the right directories for digital marketing.
Insurance industry in India is not a recent development. It has its route extended even in the writings of Kautilya, Manu, Yagnavalkya etc. Insurance is in fact a very reasonable move to diminish the risk of loss by transferring it from one unit to another in exchange for payment.
Various insurance companies guarantee to provide a person with compensation for listed losses and damages in return for the payment of a predetermined premium.
As is explicitly understood, insurance is a method of risk management to protect people and assets from uncertain losses. It pools funds from various insured entities to pay for the losses incurred. However not all kinds of risks are protected through insurance. For a risk to be ensured it should meet certain characteristics.
The insurance sector has divided insurances into two parts, namely life insurance and General insurance. Life insurances engage with human lives while General Insurance or Non Life Insurance deals with things other than human life. The duration for the insurance can be short-term or long-term.
Life Insurance
Life insurance is in fact an agreement between an insurance policy holder and an insurer where the latter guarantees to pay a sum of money to the designated beneficiary in exchange for a premium after the death of the insured person. These policies are lawful agreements and they also list the restrictions that are in place for the insured Events.
General Insurance
General Insurance policies on the other hand guarantees payments which are dependent on the laws that a particular financial event incurs. Any insurances that are not determined as Life Insurances are called General or Non Life Insurance. Automobile policies, home owners policies etc. are a few examples. They are also known as property and casualty insurance.
Insurance Industry Before Independence
Insurance is considered to be having deep-rooted history. As mentioned earlier there are mentions of insurance in ancient scriptures, especially the ones written by Kautilya and Manu. However, reliable and concrete evidence of the beginning of the insurance industry in India can be traced back to 1818.
In that year Oriental Life Insurance, a British company was set up in Kolkata to become the first insurance firm in India. They were started to cater to the needs of the European Community in India during that time. These insurance companies however treated Indians and foreigners differently.
Indians were always charged with higher premiums to distance them from taking up insurances. Followed by that in 1823 a company named Bombay Mutual Life Assurance Society and in 1829 Madras Equitable Life Insurance Society was formed.
It was in 1914 that the Government of India started issuing returns of insurance companies. It was preceded by the Indian Life Insurance Companies act, 1912. It was known as the first ever initiative to control life insurance dealings.
Life Insurance Companies Act made it mandatory for the insurance companies to issue the tables of premiums and their periodical valuations to be counter checked by an actuary.
In 1928 the Indian Insurance Companies act was enacted. It gave power to the government to keep an account of the statistical information regarding Life and Non Life Insurance that are being transacted in India by both Indians and foreigners.
The insurance act of 1938 had comprehensive provisions that ensured efficient controlling of the activities of insurers to protect the interest of the people.
Number of Registered Private Insurance companies across India
Growth of Insurance Industry – Post Independence
The provisions of insurance were extremely advantageous for the economic activity of the nation. It also created a sense of social security amidst the people. Needless to say the insurance industry in India thrived post independence.
When the insurance industry was taking its form in India, there were absolutely no regulations. This was in the 19th century. In 1956 the Government of India took over the Life Insurance Company. Followed by that in 1972 the government took over the General Insurance Business of the country.
Life insurance Corporation or the LIC had a monopoly over the insurance industry. It consolidated 154 Indian, 16 non-Indian insurers and also 75 provident societies—245 Indian and foreign insurers in total.
In the late 1990s LIC was privatised and the insurance industry was open to the private sector. Foreign Investment Promotion Board or FIPB was formed to assess the promotion of Foreign Direct Investment in India and also to be the sole agent to handle matters related to FDI.
The board is chaired by the Secretary of the Department of Industrial Policy and Promotion known as DIPP that is within the office of the Prime Minister. It aims to promote FDI in India where they promote investments both domestically and internationally by providing investment in the nation through international companies, foreign investors or NRIs.
Insurance Industry post 2000
The insurance industry in India has grown phenomenally from 2000 as the government allowed private sector investment in the industry up to 26%. Until then all private life insurance companies were taken over by LIC. Followed by privatisation, private players in the industry are increasing and the role of LIC in the market is seeing a steady decline.
One of the main reasons for the continued growth of the insurance industry is because the insurance industry in India is not a high capital cost industry unlike telecommunications or oil.
Being a developing country most of the employment in India is in the informal sector. Because of this government’s continue to make insurance compulsory in the formal sector which will limit the opportunities to cross subsidise the informal sector.
Similarly the state has also taken initiatives to offer insurance on a voluntary basis to the informal sector workers since most of the poor in India work here. The government has constantly been looking for reducing large-scale out-of-pocket expenditure, to provide universal healthcare coverage, improve the standards of living and better utilisation of health services.
All these things being absolutely necessary can be solved to a great extent by providing insurance to all. The IRDAI or the Insurance Regulatory and Development Authority of India regulates and promotes the industry in India. It is formed to protect the interest of the policy holders and to ensure that their rights are protected.
Future of Insurance Industry in India
Considering the current market scenario there is an increase in the General or Non Life Insurance Sector compared to the Life Insurance sector. It is predicted that the former will soon start to compete with Life insurance companies in the future.
However there is absolutely no doubt that the new insurance companies that are going to be set up in the near future will surely experience a positive growth and expansion in the Life and General Insurance sectors.
The fact that incomes are rising, lifestyles are changing constantly, newer trends are emerging in the industry are excellent signs for the sector to strive for better product innovation, efficient claims management, multi distribution and many other regulatory trends.
The growth of the insurance sector has also assured in the light of various insurances with which the Indian government had come up. Some of them are
Pradhan Mantri Suraksha Bima Yojana (PMSBY)
Rashtriya Swasthya Bima Yojana (RSBY)
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
Both the government and companies are committed to protect their employees, especially the ones in the lower and lower middle income divisions. In the future we can expect the growth of more insurance policies with lower premiums. This will augment the economic stature of the nation significantly.
FAQ
What is the market size of the insurance industry in India?
The overall market size of the insurance industry in India is expected to grow over US$ 280 billion in 2020.
Which is the biggest insurance company in India?
Life Insurance Corporation of India (LIC) is the biggest and oldest insurance company in India.
How many insurance companies are there in India in 2020?
There are 68 insurance companies operating in India as of 2020.
Bajaj group is one of the oldest, largest and one of the most renowned Indian conglomerate company. Bajaj group was founded in 1926 by Jamnalal Bajaj during India’s movement towards independence.
The journey of Bajaj group started ninety years back with establishing a sugar factory in Lakhimpur Kheri, Uttar Pradesh. Now the company is amongst the top ten business houses of India.
The chairman of Bajaj Group is Rahul Bajaj and has its headquarters based in Mumbai, Maharashtra. The company comprises of 40 companies as it has its footprint in many different industries such as spanning automobile, home appliances, lightning, iron & steel, insurance, travel and finance. The Bajaj group aims to cater the diverse needs of their consumers and add value with their innovation and vision.
The Bajaj group has become so successful for more than 10 decades because of its subsidiaries like Bajaj Auto, Bajaj Finserv Ltd, Hercules Hoists Ltd, Bajaj Electricals, Mukand Ltd, Bajaj Hindusthan Ltd And Bajaj Holding & Investment Ltd, Etc.
Bajaj Auto is currently ranked as the fourth largest two and three wheeler manufacturer in the world. Bajaj is popular brand in countries of Latin America, Africa, Middle East and South East Asia.
The company has so far helped in the growth of many industries and upliftment of millions across the country. Under the guidance of Rahul Bajaj, the Bajaj Auto went from being Rs 72 million company to a Rs 120 billion company. Currently, the Bajaj Group has 90 plus years of experience with a market capitalization of Rs. 3.9 trillion as of 2018 and over 36,000 plus employees worldwide.
The Bajaj Group of companies was founded by Jamnalal Bajaj in 1926 during the freedom struggle of India. Jamnalal Bajaj was also a known freedom fighter during the Indian independence and also a close confident of Mahatma Gandhi. In 1931 Jamnalal started a sugar factory in Lakhimpur Kheri of Uttar Pradesh which later becomes a flagship company of Bajaj group (renamed as Bajaj Hindustan Ltd in 1988).
In 1954 the eldest son of Kamalnayan Bajaj took over the management of Bajaj Group, after completing his education in University of Cambridge. Kamalnayan Bajaj is responsible for expanding the business into the sectors of scooters, two and three wheeler, cement, steel and electrical appliances. The Bajaj Auto earlier known as Bachraj Trading Corp was founded in 1945.
The history of Bajaj Group
By 1948, Bajaj Auto has started its sales in the country by importing two and three wheelers. After the death of Kamalnayan Bajaj, his younger brother Ramkrishna Bajaj. Ramkrishna’s concentrated more towards social service and social welfare programmes of Bajaj Group. By 1965, Rahul Bajaj took over the business as the chairman and managing director of Bajaj Group.
At that time, were many rules and regulation in India which is why the company was restricted to only producing 20,000 units a year. This created a gap between the demand and supply, Rahul Bajaj ignored the restrictions to increase its productions, reduce its cost in order to create what we now know as a beloved Indian brand.
Under his leadership the company got into many selective international markets, and launched products that redefined entire categories in the market. In the 2000s, the company witnessed split’s as Rahul’s brother Shishir Bajaj, as they went their separate ways with Bajaj Hindustan and Bajaj Consumer Care. Bajaj group has revenue of more than Rs. 50,000 crore and is comprised of 40 companies all of them are managed independently by family members.
Bajaj Auto Limited is an Indian multinational two and three wheeler manufacturing company that has its headquarters in Pune, Maharashtra. The company is known to be the third largest manufacturer of motorcycles in the world and the second largest in India. Bajaj Auto is now a global behemoth thanks to the efforts of Rajiv Bajaj who steeped to become its Managing director in 2005.
Bajaj Auto is popular for its motorcycles, scooters, auto rickshaws and a pioneer for introducing the first ever Quadricycle, Qute in India. The automobile company has manufacturing plants in Chakan in Maharashtra, Waluj and Pantnagar in Uttarakhand. In 2020, Bajaj Auto reached a market capitalization of $13.6 billion, making it the most valuable two wheeler company in the world.
Bajaj Auto popular three wheeler
The most well-known vehicle of the Bajaj Auto is the Pulsar range of bikes which revolutionized the two wheeler market in the country as it was affordable and reliable. In 2007, Bajaj Auto went on to acquire KTM an Austrian company, which became the fastest growing motorcycle brand of the country in 2018 because of its Duke range of bikes. Bajaj Auto exports to 70 plus countries and has a significant share of revenue come from exports.
Export share for Bajaj Auto FY 2020 by region
Currently, the company offers a total of 18 bikes including 17 new bikes in India alone, out of which 3 are cruiser bikes, 10 commuter bikes, 3 sports bikes and 1 scooter. By 2021, Bajaj has got a total of 660 dealerships spread across 408 cities of India. In the year of 2018 to 2019, the company sold five million vehicles with the highest ever 1st turnover of Rs. 31,899 crores and over 2 million sales unit to over 79 countries.
Mukand Limited is a Bajaj subsidiary that manufactures stainless steel and iron products, steel castings, steel structures, alloy steel and stainless steel billets and also an exporter of hot rolled bars.
The company also manufactures Electrical Overhead Travelling (EOT), port equipment, process plant equipment for ferrous and non-ferrous industries and other cranes such as the country largest crane which has a capacity of 80 tons.
about Mukand Limited
The company was established by Seth Mukand Lal in 1929 in Lahore. It wasn’t until 1989 that it was acquired by Bajaj Group. Mukand Ltd has a steel manufacturing and rolling capacity of more than 500,000 metric tons per year.
It also produces over 400 different products that are specially engineered for clients across the world. The company is a leader of steel technology in India because of its use of advanced technology, sustainable in house research and development.
Mukand is a pioneer in the industry because it was the first in India to successfully adopt the vacuum oxygen technology for manufacturing of stainless steel and also the fourth in the world to introduce the continuous cooling system for wire rods.
In 2013 and 2018, the company formed joint ventures with Sumitomo Corporation of Japan. Mukand Sumi Special Steel Limited and Mukand Sumi Metal Processing Ltd are the two joint ventures between the two companies.
Bajaj Electricals Limited
Bajaj Electricals is an Indian consumer electrical equipment manufacturing company. This company that has its headquarters Mumbai, Maharashtra and is among the most trusted and well respected company with an experience of more than eight decades.
The company is a leader in the industry of electronic consumer products and is known for its products in lighting (lamps, tubes and bulbs), luminaries, appliances, fans and LPG based generators.
Bajaj electrical home appliances
It also has a strong presence in home appliance and cookware segments with brands like Morphy Richards and Nirlep. Bajaj Electricals also offer services in engineering and these projects usually include transmission line towers, telecommunication towers, high mast, poles, projects in wind and solar energy. This company has 19 branch offices, with more than 1000 distributors and 4000 authorized dealers across the country.
It also has its products in over 400,000 retail outlets and 282 Customer Care centers. So far its highest turnover was Rs 6,744 crore in the FY 2018 to 2019. Bajaj Electricals has set up its offices in countries of Africa, Middle East and China and is also continuously expanding its global footprint.
Bajaj Finserv Limited is an Indian financial services company that provides services like lending, asset management, wealth management and even insurance. The company has more than 20,154 employees that are working in more than 1,409 locations and focuses on consumer finance business, life insurance and general insurance.
According to the Economic Times, Bajaj Finserv is ranked 119 in the Economic times 500 list of 2014. The company is also listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Apart from providing financial services the company also is also known for its services in the wind energy generation with a capacity of 65.2 MW.
Bajaj Finserv was earlier the financial wing of the Bajaj Auto, but the company demerged from Bajaj Auto in 2007. The company offers a wide variety of financial services for multiple needs, Investment and saving options, asset protection through general insurance, family protection and income protection provided under the life, health insurance, retirement and savings solutions.
analysis of the companies of Bajaj Group
Bajaj Hindusthan Sugar Limited
Bajaj Hindusthan Sugar Ltd is another major subsidiary of Bajaj Group. The company is known for being the number one sugar and ethanol manufacturing company which is headquartered in Mumbai, Maharashtra. It is also the largest sugar producer of the country. Bajaj Hindusthan is the country’s largest ethanol producer as it produces more than 38 million liters of ethanol per year.
The company’s main sugar manufacturing plants in Gola Gokarannath and Palia Kalan in the Terai region of Uttar Pradesh which is rich in producing sugarcane. The Chairman of Bajaj Hindusthan Ltd is Kushagra Bajaj. BHSL is one of the first companies that was established by Jamnalal Bajaj in 1931, which was renamed in 1988 to Bajaj Hindusthan Sugar Limited.
The company so far has over 14 manufacturing plants Golagokarannath, PaliaKalan, Khambarkhera, Barkhera, Kinauni, Gangnauli, Thanabhavan, Budhana, Bilai, Maqsoodapur, Pratappur, Rudauli, Kundarkhi and Utraula all in the state of Uttar Pradesh. The sugarcane crushing capacity of all these plants is 136,000 tons per day and a distillery capacity to produce 800,000 Lt of alcohol per day.
Another Bajaj Group subsidiaries which is a leader in an industry is Hercules Hoists known for the hoisting technologies. The company provides services such as Lifting, moving, storing which include Mechanical hoists, electric chain hoists, wire rope hoists, EOT/HOT cranes, light rail crane, ergonomic handling solutions, and floor operated stackers among others.
So whether it is mechanical or electrical, the company will help their clients with hoisting and premium products. Hercules Hoists became a part of Bajaj group in 1962 and was made in collaboration with Heinrich de Fries from Germany. The company has so far also helped develop other brands such as INDEF, Stier, iCRANE, iSTACKER in order to support the market for specialized products.
Hercules Hoists has its corporate offices in Belapur, Khalapur and Chakan and sales office in Pune, Delhi, Kolkata and Chennai. The company also has a vast outreach with 50 Authorized Business Partners and close to 100 Authorized Retailers in the country.
Frequently Asked Questions
What does Bajaj group do?
Bajaj Group is an Indian multinational conglomerate that provides services in sectors of Automobile, Financial services, Home appliance, Electrical appliances, Insurance, Manufactures iron and steel products, etc.
What are the subsidiaries of Bajaj group?
The subsidiaries of Bajaj group are Bajaj Auto Limited, Mukand Limited, Bajaj Electricals Limited, Bajaj Finserv Limited, Bajaj Hindusthan Sugar Limited and Hercules Hoists among others.
Who is the chairman of the bajaj group?
The chairman of the Bajaj group is Rahul Bajaj.
Where is the headquarters of Bajaj Group?
The headquarters of Bajaj Group is in Mumbai, Maharashtra.
Conclusion
Bajaj group is one of the largest, oldest and respected conglomerate in India, with a market capitalization of Rs 3.9 trillion. The company started more than 9 decades and is a leader in the sectors of Automobile, Financial services, Home appliance, Electrical appliances, Insurance, Manufacturing iron and steel products. With the success of every individual subsidiary under it the company is sure to grow bigger.
Financial services franchises including insurance businesses are ideal for people interested in the franchise industry. There has been a constant rise in insurance companies and their services. Insurance franchises offer opportunities for small business owners with previous sales or finance experience. With the variety of financial franchising opportunities available, you can be sure to find one that fits your lifestyle and not the other way around. There are many insurance franchise business which is profitable and It also allows you, as the franchise owner to be your boss which can mean working from home if you choose and setting your hours.
Benefits of buying life insurance:
Financial security
Child’s future planning
Disciplined investments
Corpus creation over the long term
Retirement planning
Tax savings
Car insurance is a primary focus of all the companies on this list, and as a segment within the insurance industry, collected $287 billion in premiums in 2018 (up from $267 billion in 2017).You will get a lot of advantageous opportunities from the top insurance franchises of 2020, which provide support in franchisee training, help from experts, field assistance, marketing & advertising, proven business model.
Max Life Insurance ranked 24th as India’s Best Companies To Work For 2020. Max Life Insurance, constantly try to create solutions to make life insurance plans easy, affordable, and suitable for every stage of your life. Max Life envisions to be the most admired life insurance company in India by securing the financial future of our customers. They serve customers through Long-Term Savings, Protection and Retirement Solutions, delivered by high-quality Agency and Multi-Channel Distribution Partners. They provide strong social relevance and contribute to society by supporting causes in health and well-being.
Founded in
2001
Franchising since
2001
Franchise units
100-200
Initial Investment
From Rs 2 Lakhs
Royalty Fees
20%
Aviva India
Aviva India is an Indian life assurance company, and a joint venture between Aviva plc, a British assurance company, and Dabur Group, an Indian conglomerate. Aviva India is one of India’s leading life insurance companies, offering a range of individual and group insurance solutions that meet various life stage needs of customers.
Trust India General Insurance Services is a professional insurance adviser dedicated to giving you secure peace of mind. People at Trust India recognize the importance of finding a means to secure the quality of life. They do their job with all the care, warmth, and clarity you seek in a consultant who is responsible for providing the best insurance for you, your family, or your business.
They are a general insurer for the following risks: Auto Insurance, Accident Insurance, Health Insurance. Liability risks are covered by our various forms of liability insurance.
Founded in
2007
Franchising since
2007
Franchise units
Less than 10
Initial Investment
From Rs 0.1 Lakhs
Surakshi Financial Services Private Limited
Surakshit Financial Services Private Limited is a Non-govt company, incorporated on 31 Mar 1995. It’s a private unlisted company and is classified as ‘company limited by shares’. Surakshit Financial Services Private Limited is majorly in the Business Services business for the last 25 years and currently, company operations are active. They are the corporate agent of SBI Life and dealing with General Insurance, Mutual Fund, Fixed Deposit, and online share terminals. To expand the business, they are offering branches/franchises all over India.
Founded in
2009
Franchising since
2010
Franchise units
Less than 10
Initial Investment
From Rs 0.1 Lakhs
Royalty Fees
5%
Zaidi Corporation
Zaidi Corporation was founded by Mr. Kazim Raza, a visionary & pioneer in the insurance training industry with a mission to impart Insurance Knowledge to maximum people in the Insurance Marketing Field force, helping them to grow in their own business & to scale greater heights. They offer a wide range of courses for all levels of insurance advisors starting from beginners to intermediate and advanced level advisors. Zaidi Corporation brings an opportunity to start your own insurance training company.
Akcm Group is the premier company engaged in its chosen area of operation i.e. Valuations, Inspections, and all allied services to Entrepreneurs, Corporate, Insurers, Banks, Financial Institutions, Government Entities, Small & Midsize Companies. The Company’s vision is to provide quality, professional, and trustworthy services to all its clients. With a core competence in providing technical services, we specialize in the pre-inspection of vehicles during break-in-insurance.
Founded in
2007
Franchising since
2007
Franchise units
10-20
Initial Investment
From Rs 0.1 Lakhs
Royalty Fees
20%
Proline Management Services Private Limited
Proline Management Services Private Limited is a Private incorporated on 18 November 2009. It is classified as a non-govt company and is registered at Registrar of Companies, Coimbatore. It is involved in Legal, accounting, book-keeping and auditing activities; tax consultancy; market research and public opinion polling; business and management consultancy.
Founded in
2009
Franchising since
2015
Franchise units
10-20
Initial Investment
From Rs 10 Lakhs
Royalty Fees
12%
Insurance Life 360 Limited
International Life 360 is an online portal for consumers to purchase term life insurance in US$, from almost every country in the world. The product is underwritten and issued by an insurance company with headquarters in the USA. International Life 360 Limited enables access to insurance for international clients. International Life 360 Limited has been appointed to distribute GBG products online and is pleased to help you access life cover with no medicals or blood tests (for life insurance up to $US 500,000).
Insurance is the trading style name of First Insurance World Broking Services P. Ltd, an independent insurance broking firm authorized and regulated by IRDA since 2004, well-positioned to respond to changes in an increasingly demanding market.
Founded in
2003
Franchising since
2010
Initial Investment
From Rs 0.1 Lakhs
Royalty Fees
None
Cost Advantage Wealth Management
Cost Advantage Wealth Management is to optimize the long-term performance of sa client’s financial assets through proper Financial Planning. They adopt a structured and disciplined advisory approach and provide clients portfolio solutions to meet their desired financial goals and milestones.
Founded in
2012
Franchising since
2013
Franchise units
5
Initial Investment
From Rs 0.5 Lakhs
Royalty Fees
7.5 Lakhs
DHFL General Insurance Company Ltd
COCO by DHFL General Insurance is changing the way customers look at insurance. COCO is combination of “Connected” and “Cover”, signifying an always open and insurance protection swathe. COCO is a Digital platform that is changing general insurance by making process easy, relevant, 24/7 accessible and fun for consumers. They have integrated evolved algorithm, AI and experience.
Frequently Asked Questions
How much does an insurance Industry Franchise?
You can get Insurance franchise with an investment from 0.5 Lakh to 20 Lakh. Max Life Insurance franchise needs investment above ₹2 Lakhs with royalty fees and initial investment. International Life 360 Limited and Proline Management Services Private Limited and requires investment less than ₹10 Lakhs.
Does life/health insurance companies make more money than home/auto insurance companies?
Both Life/health and home/auto insurance make good profit. Comparing them is like comparing apple to an orange. Life/ health insurance company makes it money is when an insured person decides to no longer pay his premiums for any number of reasons. All the premium he has paid over the years is then forfeited. If he dies the next year, his estate gets nothing. Property and causality involves home and car insurance. P and C takes a lot of efforts to keep market share and keep your customers. It is labor intensive. There is a lot of paperwork and convincing is involved. P and C is very profitable but not loyal, in a sense that people shop new rates and you lose your customers.
The insurance industry in India is a pool of insurance companies hedging insurance seekers against risk through the means of insurance contracts. The contract is an agreement between the insurer and the insured in which the payment of the former guarantee for an uncertain event against a premium paid by the insured regularly. The premium is mentioned in the contract.
Insurance is a method of risk management to protect people and assets from uncertain losses. Life Insurance is precisely planned to protect your legatee financially in case something unfortunate happens to you. For investors, insurance is seen as the slow-growing, safe sector when compared to other financial sectors.
However, there are 58 insurance companies in total among which 24 are life insurance companies. Most of them have international ties.
Under the life insurer segment, LIC is the sole public sector company while there are six public sector companies in the no-life insurer vertical. GIC is the sole national re-insurer in the industry. The chain has many players such as brokers, surveyors and third party administrators serving health insurance claims.
Market Share of Top Companies in terms of Gross Direct Premium
The government has always pushed for insurance penetration in the economy. As per the data from sectoral regulator IRDAI, gross direct premiums of non-life insurers in India grew nearly 7% to Rs 14,809.27 crore in June this year while the 34 non-life insurance companies in the country had reported gross direct premium of Rs 13,842.27 crore in June 2020.
Of these, the 25 general insurance companies registered a 4.9% rise in gross direct premium during the month at Rs 13,041.51 crore as against Rs 12,435.71 crore in the year-ago period.
The five standalone private-sector health insurers witnessed a 46.6% jump in gross direct premium at Rs 1,556.89 crore from Rs 1,061.94 crore in June 2020.
Two specialised PSU insurers– Agricultural Insurance Company of India and ECGC Ltd — reported a decline of 38.8% in combined gross direct premium during the month at Rs 210.87 crore from Rs 344.62 crore a year ago.
Cumulatively, the premium written by all the players during April-June 2021-22 was up 13.8% to Rs 44,434.96 crore as against Rs 39,054.82 crore in the same period of 2020-21.
Using data to improve offerings and customer experience is not new for the insurance industry. But doing this well and consistently is a challenge. To use data for better customer experience companies need to leverage digital insurance solutions. The use of an agile cloud system and data analytics can help companies meet customer demands. Chatbots, mobile applications, and AI-generated quotes could be the best solution possible now.
2. Commoditization
Insurers are consistently trying to get new customers while retaining their present ones. Providing lower rates than their competitor is the best way to do that. But along with this modern consumer decides to purchase insurance based on how they are treated by the insurance company working with them.
Commoditization is the process of treating someone as if they are a mere commodity. The “commoditization” of insurance that has received so much press is a misnomer. Insurance is not a commodity but a complex good.
This challenge can be overcome with the help of Artificial Intelligence and automated process which can provide a personalized yet fast customer experience. Digital insurance technologies also help to create unique products quickly.
3. Digitizing small businesses
Small businesses are the most profitable market in the insurance industry. Even though big insurance companies are aggressively trying to move into this market. But this can cause loss to companies who are already serving small commercials.
To maintain their customer base and expand the insurance companies serving small commercials should provide digital interactions and digitize underwriting and claims. Investing in employees and new talent can help them expand their existing business and acquire new customers.
The Government of India has taken several initiatives to boost the insurance industry. Some of them are as follows:
The government has announced an increase in the Foreign Direct Investment (FDI) limit in insurance from 49% to 74% in the union budget of 2021-22.
The government has also taken an initiative to provide for 100 million poor and vulnerable families under the National Health Protection Scheme that was launched in September 2018.
To boost the safety of farmers’ crops and ensure the maximum benefit of crop insurance reaches farmers, the government of India has allocated Rs 16000 crores for Pradhan Mantri Fasal Bima Yojana (PMFBY) for the fiscal year 2021-22.
The Insurance Regulatory and Development Authority of India (IRDAI) plans to issue re-designed initial public offering (IPO) guidelines for insurance companies in India that are looking to divest equity through the IPO route. IRDAI has allowed insurers to invest up to 10% in additional tier 1 (AT1) bonds that are issued by banks to augment their tier 1 capital; this will help expand the pool of eligible investors for the banks.
The future looks promising for the life insurance industry in India. Several changes in the regulatory framework have been proposed which may transform the way the industry conducts its business and engages with customers.
As per the data from sectoral regulator IRDAI, the gross direct premiums of non-life insurers in India grew nearly 7% to Rs 14,809.27 crore in June this year. The general insurance industry is expected to increase by 7-9% in terms of gross direct premium income in FY22, backed by healthy growth from the health and motor segments.
Demographic factors such as the growing middle class, young insurable population and retirement planning will support the growth of the Indian life insurance segment.
FAQs
What does the insurance industry do?
The insurance industry sells the financial product as a method of risk management to protect people and assets from uncertain losses. It pools funds from various insured entities to pay for the losses incurred. However, not all kinds of risks are protected through insurance. For a risk to be ensured it should meet certain characteristics.
What type of industry is insurance?
Insurance is a financial service industry.
What are the 4 types of insurance?
The 4 types of insurance include:
Motor insurance
Health insurance
Travel insurance
Home insurance
How large is the insurance industry?
As per the data from sectoral regulator IRDAI, the gross direct premiums of non-life insurers in India grew nearly 7% to Rs 14,809.27 crore in June this year. The general insurance industry is expected to increase by 7-9% in terms of gross direct premium income in FY22, backed by healthy growth from the health and motor segments.
Which is the biggest insurance company in India?
Life Insurance Corporation of India (LIC) is the biggest and oldest insurance company in India.
How many insurance companies are there in India?
There are 58 insurance companies in total among which 24 are life insurance companies and the other 34 are non-life insurance companies.
Microfinance – also called microcredit- is a way to provide small business owners and entrepreneurs access to capital. Small and individual businesses don’t have access to traditional financial resources from major institutions. It is harder to access loans, insurance, and investments that will grow their businesses. This sector has been instrumental in creating opportunities for low-income households by providing credit access to 64 million unique live borrowers who were previously beyond the reach of traditional financial services. Additionally, the microfinance sector has its own set of challenges, ranging from lack of formal credit history, absence of collateral, laborious customer acquisition process, and low digital and financial literacy. There are various microfinance models in India many of these models are indeed ‘formalized‘ versions of informal financial systems.
Some of the significant features of microfinance are as follows:
The borrowers are generally from low-income backgrounds
Loans availed under microfinance are usually of a small amount, i.e., microloans
The loan tenure is short
Microfinance loans do not require any collateral
These loans are usually repaid at higher frequencies
The purpose of most microfinance loans is income generation
Market share of financial institutions in outstanding portfolio
Government initiatives play a significant role in channeling the credit flow to underserved sectors through priority sector lending, Micro Units Development, and Refinance Agency Ltd. (MUDRA) Yojana, loan co-origination, and private sector investments. In the last couple of years, the microfinance sector has seen promising growth on the back of the rapidly growing Indian economy.
Microfinance in India
Small and medium enterprises (MSMEs), thereby increasing the contribution of these segments to India’s overall GDP. In FY19, the microfinance sector displayed 40 % growth in terms of the loan portfolio. INR 10 billion funds have been released by the Small Industries Development Bank of India (SIDBI) to boost the microfinance sector. SIDBI has tied up with non-profit organizations and social ventures to channel funds at below-market rates to facilitate affordable borrowing.
In recent years, the microfinance sector has faced new challenges such as:
Limited access to low-cost funding for Microfinance Institutions (MFIs)
Low financial and digital literacy among targeted Borrowers
Over-borrowing
The demand for more innovative
Customer-centric products
Reserve Bank of India (RBI) has played a significant role in enabling the microfinance sector to reach out to new geographies. Recently, the Government of India has also increased the microlending limit of borrowers to INR 1.25 lakh to expand the reach of the microfinance sector.
The target community forms an ‘association’ through which various microfinance (and other) activities are initiated. Such activities may include savings. These associations or groups can form of a youth, women. It is also formed around political/religious/cultural issues. It can create support for microenterprises and other work-based issues.
According to NABARD, SHG-BLP is the world’s largest microfinance program in the world.
Bank Guarantees Model
A Bank guarantee is used to obtain a loan from a commercial bank. This guarantee may be arranged externally ( through donor/donation, government agency, etc. ) or internally (using member savings). The loans obtained may be given to an individual or they may be given to the self-formed group. It is a form of capital guarantee scheme. Guaranteed funds may be used for various purposes, including loan recovery and insurance claims. The guaranteed funds can be used for various purposes such as loan recovery or insurance claims.
Bellwether Microfinance Funds (India) is one such example.
Community Banking Model
In India, community banking looks very different. Self Help Groups (SHG) are often instituted in which members of the local community join together and pool capital resources for lending to members. They value transparency in their practices and utilizing their savings for their purposes of lending.
A successful example is the Royal Bank of Scotland (RBS) Foundation India, which has various microfinancing programs to help the poorest communities across India.
Challenges in accessing credit from the formal sector
Cooperatives Model
A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-owned enterprise. The members are the shareholders and have their share in equity capital. They also share the profit.
Co-operative Development Forum Hyderabad is a successful example of this model. It has built a network of women’s thrift groups and men’s thrift groups.
Credit Unions Model
This model is based on a member-driven credit union, a self-help financial institution. A union of members is formed. These members form the common community. They agree to save together and give loans to each other at a nominal rate of interest. A credit union’s membership is open to all who belong to the group, regardless of race, religion, color, or creed.
It promotes credit as a human right and is based on the premise that the skills of the poor are underutilized. The Grameen Bank (GB) is based on the voluntary formation of slight groups of five people to provide mutual, morally necessary group guarantees instead of the collateral required by conventional banks.
The whole center is jointly responsible for the repayment. Grameen model is being followed by Sarv Seva Abhiyan (ASSEFA), Activities for Social Alternatives.
Intermediary Model
This model positions a third party between the lending institutions and the borrowers. The intermediary plays a critical role in generating credit awareness and education among the borrowers. Intermediaries could be individual lenders, NGOs, microenterprise/microcredit programs, and commercial banks (for government-financed programs). The intermediaries are incentivized in monetary and non-monetary forms.
Individual Banking Model
This is a straight forward credit lending model where microloans are given directly to the borrower. The individual banking model is a shift from the group-based model. The MFI gives loans to an individual based on his or her creditworthiness. It also assists in skill development and outreach programs. Co-operative banks, Commercial banks, and Regional Rural Banks mostly adopt this model to give loans to the farming and non-farming unorganized sector.
Self-employment women’s association in India s one such example to have adopted this model. The members own and govern the group.
NGO Model
NGOs are one of the key players in the field of micro-financing. They help the cause of micro-financing by playing the intermediary in multiple dimensions. Non-governmental Organizations (NGOs) played a vital role in rural reconstruction, agricultural development, and rural development even during a pre-independent era in our country. NGOs became a supplementary agency for the developmental activities of the government and in some cases, they become alternatives to the government.
Non-governmental Organizations are committed to the upliftment of poor, marginalized, underprivileged, impoverished, and downtrodden and they are close and accessible to their target groups.
Various NGOs are helping the cause of micro-financing. For example, MYRADA in Karnataka, SHARE in Andhra Pradesh, RDO (Rural Development Organization) in Manipur, RUDSOVAT (Rural Development Society for Vocational Training) in Rajasthan, and ADITHI in Bihar.
ROSCA Model Or Chit Funds
Rotating Savings and Credit Associations or ROSCAs, are essentially a group of individuals who come together and make regular cyclical contributions to a common fund, which is then given as a lump sum to one member in each cycle. At the end of a cycle, the total fund collected goes to any one member. Rotating Savings and Credit Associations are a means to save and borrow simultaneously. There are lakhs of ROSCA functioning in India today.
It is closely related to the community banking and the Group model, this is the community-based saving and credit model. A group of 25-50 people gets together to enhance their income through self-employment activities. They get their first loan from the implementing agency, which helps them form the community credit enterprise.
Small Business Model
This model places a big responsibility on small and medium enterprises. This has been changing, as more and more importance is placed on small and medium enterprises (SMEs) – for generating employment, for increasing income, and providing services that are lacking.
Future of Microfinance in India
Affordable borrowing for one and all: Easy access to microcredit
Reaching the doorstep of every unbanked customer
The road ahead for a digital microfinance
Leveraging women empowerment and mobilizing the entrepreneurial landscape
India aims to become a USD 5 trillion economy by 2025 and the microfinance industry will play a leading role in uplifting the lives of millions of low-income households and enabling them to contribute to the country’s economic growth.
Harshit Verma
