PRESENT SCENARIO IN THE INSURANCE SECTOR

Insurance agents are the main intermediaries in the Indian insurance

market, but with liberalization brokers will be an additional channel for selling insurance products.

Brokers are likely to play a major role in ensuring clients get insurance
covers tailor made to suit their requirements at good terms.

Fast growing middle class of 300 million who can afford insurance.
Increasing financial strength of middle class with disposable income.

Narrowing gap between rural and urban populace in terms of access to

information and services.

More and more entrepreneurs in traditional and modern business areas. Increase in number of double income families leading to lifestyles and
attitude changes.

Growth of rural market is at 4 times of urban markets. Insurance market is set to touch 25 billion by 2010 in India. (It was only 7.2
billion in 98-99 survey. At that time Indias rank in annual premium was 23rd for Life insurance and contribution in GDP was merely 1.4%). Presently it is still lower then develops economy but increased to 2.61% of GDP in 2002.So immense opportunity cant be ignoring

New product launch

Some of the recent product launches in the Indian life insurance market are listed below:

1. AEGON Reliance life has launched a participating endowment product aim at the education of children, the Educare plan. The plan offers guaranteed payout during last four policy years. In case of the policy holder in addition to the sum assured, accrued bonus and guaranteed payout, an option to receive 10 percent of the sum assured each year till the end of the premium period is also available. 2. The LIC has launched a single premium endowment plan, Jeevan Ankur, with profit child plan. In case of the death of the policy holder the benefit payable to the nominee under the plan equal the basic sum assured together income benefit equal to 10 percent of the sum assured each policy anniversary thereafter till the end of the policy term. On maturity, sum assured plus loyalty addition are payable.

3. The LIC has launched a single premium endowment plan, Jeevan Vridhi. In case of the death of the policy holder the basic sum assured equal to five times single premium is payable. On maturity the guaranteed sum assured along with any loyalty addition shall be payable to the policy holder. The policy term under this plan is fixed at 10 years. 4. Max New York life has introduced an endowment plan, premium return term plan . The plan provides maturity benefit wherein the policy holder is entitled to receive 100 percent of the paid premium. In case of the death of the policy holder the basic sum assured payable while in case of

death of the accident, an additional 50 percent of the basic sum assured is paid to the nominee.

5. Met life insurance has launched regular premium unit-linked children saving plan, Met smart Child. The plan provides maturity benefit of fund value and loyalty addition. In case of the assured or 105 percent of regular premium paid is payable and future premium are waived off. The policy holder can choose the listed unit link funds. 6. Bajaj Alliannz life has launched a single premium unit linked plan, guaranteed maturity insurance plan targeted at rural markets. The plan guaranteed a maturity benefit of at least double the single premium in addition to the life covrage throughout the term 10 years product.

7. Bharti AXA Life has launched eproduct, its first online term insurance plan. The minimum sum assured under the policy is Rs 2.5 million. The plan offer special rate offer for non smoker if the sum assured chosen exceeds 5 miliion. In case of the death of the policy holder , Rs 100000 from the sum assured is paid to the nominee as Family Care Benefit within 48 hours of the recipt of the relevant documents subject to condition. 8. HDFC Life has entered in online distribution channel with the launch of an online term assurance product click 2 protect. The minimum sum assured under the plan is Rs 1 million and the minimum premium payable is Rs 2,000 per annum.

9. ING Vysya Life has launched an endowment assurance plan ING Star Life. The guaranteed death benefit under the plan is five times annual premium paid and the sum assured plus guaranteed additions are paid out during the last three policy years. 10. Reliance Life has launched Guaranteed Money back plan, where

by the policyholder receives money back benefit in the last five years. In addition to death cover and guaranteed loyalty and maturity additions rider option.

Present Issues of Life Insurance Industry

Top Insurance Industry Issues in 2012 describes in detail the challenges insurers are facing and the strategies they can use to cope with change, manage risk, enhance their operations, and grow.

In 2011, life insurers started to feel meaningful effects from the low interest
rate environment, including declining sales, revenue, profitability, and company valuations. If interest rates continue to stay low - and it appears likely that they will for at least another two years - then life insurers financial pain will be broader and deeper.

In a volatile market, analysts' lack of confidence in prevailing disclosure

standards can only heighten investor uncertainty. This makes it even more important for insurers to provide stakeholders clear and informative financial information.

Expansion remains a challenge for many insurers. The M&A environment

has been muted in recent years, and growth beyond stagnant developed markets into more dynamic emerging ones presents both opportunity and risk. A key consideration for all companies is that one size does not fit all when determining M&A strategy and/or how to expand into new geographic markets.

Technology, including mobile devices and sensors, offers insurers great

promise for developing a competitive edge, but only if they can effectively analyze the huge amount of data that is now available. If they can meet this challenge, then they will be able to reduce costs, improve efficiencies, and enhance their ongoing attempts to move from productfocused to customer oriented operating models.

 Current claims, policy administration and billings systems replacements

have reached their practical limits, and modern and flexible platforms have become "table stakes" for any successful carrier. Quite simply, the cost of establishing a common view through superior IT execution and pricing segmentation could prove to be the cost of staying in business.

Regulatory compliance continues to be a major concern for insurers, and the

industry is anticipating potential impacts of Dodd-Frank legislation, including on the systemically important financial institution (SIFI) designation and the Federal Insurance Office's (FIO) pending report to Congress on the state of US insurance regulation. Moreover, the issue of unclaimed property has become a concern for insurers as public officials are now focusing much more on the issue than they did in the past.

There have been major tax compliance developments in the past several
months that strongly affect insurers, notably SSAP 101 and FATCA. The latter has the potential to have an especially big impact on compliance functions both in the US and globally.