Swot Analysis Of Insurance Industry

5.2 INDUSTRY ANALYSIS

The Indian insurance industry consists a total of 53 insurance companies out of which 24 are in life insurance business and 29 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. Apart from that, among the non-life insurers there are six public sector insurers. In addition to these, there is sole national re-insurer, namely, General Insurance Corporation of India (GIC Re). Out of 29 non-life insurance companies, five private sector insurers are registered to underwrite policies exclusively in health, personal accident and travel insurance segments. They are Star Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance Company Ltd, Max Bupa

SWOT analysis of insurance sector is as follows:

Strength

• New product: A range of new products had been launched to cater to different segments of the market, while traditional agents were supplemented by other channels including the internet and bank branches.

• Business Growth: These developments were instrumental in propelling business growth, in real terms, of 19% in life premiums and 11.1% in non-life premiums between 1999 and 2003.

• Rise in per capita Income: India has a large population with an increase in its per capita income.

• Emerging Middle Income Group: India’s middle income group is rapidly increasing and would be emerging as a profitable market.

Weakness

• Low investment: India is among the lowest-spending nations in Asia in respect of purchasing insurance

• Dominance of Public sector: Even after the liberalization of the insurance sector, the public sector Insurance companies have continued to dominate the insurance market.

• Promotion as a Barrier: In the long run, other forms of non-price competition like aggressive advertisement wars are likely to lead increasing costs, eventually harming the interests of the

Insurance company with low cost structure, better efficiency and greater customer service can have an advantage. To attract more customer companies provide higher investment returns and variety of products. . In the long run, we 're likely to see more consolidation in the insurance industry. Established companies prefer take overs or mergers with other companies to capture a greater market.

Threats of substitutes

Most of the insurance companies provide similar product and services, so there are many substitutes available in the insurance industry. Whether it is auto, home, commercial, health or life insurance, chances are there are competitors that can offer similar services. To have a competitive advantage company focus on niche areas, but this depends on the size of niche market and entry barrier.

Threat of new