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Case Studies and Management Resources
Asia's Most Popular Collection of Management Case Studies |
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They opined that entry of private players would lead to job cuts by the nationalized players in order to compete with them. There were a host of other arguments against these reforms. The government sought to address them by restricting foreign stake in insurance companies to only 26%, which was well below 51% needed for the managing the company in the Insurance Bill. Though one of LIC's basic objectives was to 'provide insurance cover to all Indians,' insurance penetration in India was considered to be very low. According to reports, only 65 million people were covered by insurance. R N Jha, LIC's former Executive Director commented in his book, 'Insurance in India,' "Insurance coverage has been extended only to about 25% of the insurable population in 40 years," indicating the huge uncovered market potential in the country.
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It was reported that per capita insurance premium1 in developed countries was much higher as compared to India. In 1999, per capita insurance premium in India was only $8 while it was $4,800 in Japan, $1000 in Republic of Korea, $887 in Singapore, $823 in Hong Kong and $144 in Malaysia. |
Attracted by the huge untapped potential, many private players entered the market after the Insurance bill was passed in late 2000. A majority of these were collaborations between an Indian company and a leading MNC insurance/financial services company (Refer Table I).
Life Insurance Marketing in India (A) The Changing Advertising & Promotion Norms - Next Page >>>
1] Total Insurance Premium of a country divided by its total population.
2] GDP is defined as the value, at current market prices, of the total final output produced inside a country during a
given year.
Case Code : MKTG026
Themes: Advertising and Promotion
Case Length : 11 Pages
Period : 2000-2002
Organization : ICICI Prudential, Max New York Life, ETC
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Insurance
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