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Book part
Publication date: 18 July 2022

Samridhi Tanwar and Surbhi Bhardwaj

Introduction: Foreign direct investment (FDI) is a deciding factor in the insurance industry’s growth in any nation. Besides, similar socioeconomic conditions, some…

Abstract

Introduction: Foreign direct investment (FDI) is a deciding factor in the insurance industry’s growth in any nation. Besides, similar socioeconomic conditions, some countries tend to attract more FDI inflows. This chapter focuses on exploring the FDI in the insurance industry in Brazil, Russia, India, China, and South Africa (BRICS).

Purpose: The chapter aims to explore the current situation of FDI in the insurance industry in BRICS member nations and uncover the factors that have led to higher foreign investments in some countries.

Methodology: Using descriptive and comparative approaches, this chapter explains the FDI scenario in the insurance sector of BRICS nations.

Findings: Based on a comparative analysis, the authors observed that deregulation, increased foreign engagement, and adoption of innovative technology and distribution methods are some avenues that could be worked upon to improve FDIs in the Indian insurance sector.

Details

Big Data Analytics in the Insurance Market
Type: Book
ISBN: 978-1-80262-638-4

Keywords

Book part
Publication date: 19 July 2022

Nitin Thapar, Taranjit Singh Vij, Rajeev Kumar and Jyotsna Sharma

Introduction: The Indian insurance sector has a large number of insurance companies. More than 20 companies are in the life insurance business, and nearly 35 are non-life…

Abstract

Introduction: The Indian insurance sector has a large number of insurance companies. More than 20 companies are in the life insurance business, and nearly 35 are non-life insurers – only one public sector company among the life insurers (Life Insurance Corporation (LIC)). However, there are six public sector insurers in the property insurance division. The government policies have recently increased the foreign direct investment (FDI) share from 49% to 74%.

Purpose: The purpose of the study is based on the latest decision by the Government of India (GOI) to increase the FDI in the insurance sector, which was earlier 49% and now increased to 74%. The study will have objectives that impact change in FDI and its effect on customers’ decisions.

Methodology: This chapter is based on secondary information collected from the Insurance Regulatory and Development Authority and Articles from various journals for objectives 1 and 2. Qualitative analysis is done with the use of NVIVO software. There are primary two objectives taken under consideration in this chapter: objective 1: regulatory framework of insurance sector post-FDI change in limits by GOI and objective 2: customer awareness regarding changed limits of FDI in the insurance sector and its various factors. Fifty-four interviews were conducted, out of which a total of 40 responses have been considered for final analysis. An incomplete and unclear answer has been excluded from the study.

Findings: In the study’s findings, it was found that in accordance with the first objective, GOI changes policies according to time to time. Foreign Direct Investment (FDI) in the insurance sector recently increased by GOI Earlier, it increased in the year 2015 and recently this year, it increased by 49% again to 74%. In the second objective findings, the awareness about changes in FDI in the insurance sector respondent’s sentiments is positive and constructive. A maximum of respondents has said that they are aware of the insurance sector and the participation of various foreign international players in the insurance industry.

Details

Big Data: A Game Changer for Insurance Industry
Type: Book
ISBN: 978-1-80262-606-3

Keywords

Open Access
Article
Publication date: 30 November 2020

Madan Mohan Dutta

Health insurance is one of the major contributors of growth of general insurance industry in India. It alone accounts for around 29% of total general insurance premium…

22009

Abstract

Purpose

Health insurance is one of the major contributors of growth of general insurance industry in India. It alone accounts for around 29% of total general insurance premium income earned in India. The growth of this sector is important from the perspective of overall growth of general insurance Industry. At the same time, problems in this sector are also many which are affecting its performance.

Design/methodology/approach

The paper provides an understanding on performance of health insurance sector in India. This study attempts to find out how much claims and commission and management expenses it has to incur to earn certain amount of premium. Methodology used for the study is regression analysis to establish relationship between dependent variable (Profit/Loss) and independent variable (Health Insurance Premium earned).

Findings

Findings of the study indicate that there is significant relationship between earned premium and underwriting loss. There has been increase of premium earnings which instead of increasing profit for the sector in fact has increased underwriting loss over the years. The earnings of the sector is growing at compounded annual growth rate of 27% still it is unable to earn underwriting profit.

Originality/value

This study is self-driven based on secondary data obtained from insurance regulatory and development authority site.

Details

Vilakshan - XIMB Journal of Management, vol. 17 no. 1/2
Type: Research Article
ISSN: 0973-1954

Keywords

Article
Publication date: 9 May 2008

Haemala Thanasegaran and Bala Shanmugam

Owing to the vital role played by the insurance sector in the economic growth of a country, the purpose of this paper is to highlight the serious threat posed by money…

2435

Abstract

Purpose

Owing to the vital role played by the insurance sector in the economic growth of a country, the purpose of this paper is to highlight the serious threat posed by money laundering activities in exploiting the insurance industry, from the Malaysian perspective.

Design/methodology/approach

Provides a description of the risks posed by money laundering in the insurance sector, along with some useful case examples as illustration. Highlights the measures developed and adopted to control money laundering in the Malaysian insurance sector, with some thoughts on the importance of staying vigilant, as it is the only way in which to effectively counter the menace of money laundering in the sector.

Findings

Research shows that two‐thirds of the cases worldwide associated with money laundering in the insurance sector, related to life insurance products, with general insurance accounting for most of the remaining third of the cases reported. Apart from this, insurance intermediaries like agents and brokers, who are an important direct distribution channel for the sector, are easily subject to exploitation by money launderers.

Practical implications

The practical implication of this paper is to stress the importance of detecting signs of money laundering activities, as early prevention is the best alternative for insurance companies in countering money laundering in the industry.

Originality/value

The formal reporting measures put in place by the Anti‐Money Laundering Act 2001 are a step in the right direction by the Malaysian Government. However, this paper serves as a reminder that in spite of such measures, the insurance sector is particularly vulnerable to money laundering activities, owing to the sector's rapid growth in offering innovative and sophisticated products and services worldwide. Thus, this paper makes for a useful read for practitioners, academics, policymakers and students alike.

Details

Journal of Money Laundering Control, vol. 11 no. 2
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 3 April 2018

Shrutikeerti Kaushal and Amlan Ghosh

Understanding the role of financial intermediaries towards financial development and thereby the growth of an economy, this study aims to examine the long-run relationship…

Abstract

Purpose

Understanding the role of financial intermediaries towards financial development and thereby the growth of an economy, this study aims to examine the long-run relationship between the development of banking and insurance sector and economic growth in India by covering different regimes including the regulated and the liberalized period.

Design/methodology/approach

For examining the long-run relationship between these sectors, the study uses VAR-VECM technique. Further, Granger causality test is used to check if there is the presence of any causal link among these sectors.

Findings

The findings clearly indicate long-run relationship between economic growth and the development of banking and insurance sector, while the causality results show demand following relationship in the complete period where there is bi-directional causality in the post-liberalized period from insurance to economic growth.

Research limitations/implications

As banking development is not found to support economic growth, this raises serious concerns towards the complex role of banks as against theory and demands further analysis to understand their role in an economy.

Practical implications

As causality pattern has changed from demand following to bi-directional causality, it is vital to understand the importance of liberalization towards the economic growth of the country as well as the contribution of insurance sector towards economic growth in the liberalized environment.

Originality/value

This is the first effort to empirically explore the relationship between economic growth and the development of banking and insurance sector in India by covering the complete period (regulated and liberalized).

Details

Journal of Financial Economic Policy, vol. 10 no. 1
Type: Research Article
ISSN: 1757-6385

Keywords

Article
Publication date: 19 June 2018

Thomas Gehrig and Maria Chiara Iannino

This paper aims to analyze systemic risk in and the effect of capital regulation on the European insurance sector. In particular, the evolution of an exposure measure…

Abstract

Purpose

This paper aims to analyze systemic risk in and the effect of capital regulation on the European insurance sector. In particular, the evolution of an exposure measure (SRISK) and a contribution measure (Delta CoVaR) are analyzed from 1985 to 2016.

Design/methodology/approach

With the help of multivariate regressions, the main drivers of systemic risk are identified.

Findings

The paper finds an increasing degree of interconnectedness between banks and insurance that correlates with systemic risk exposure. Interconnectedness peaks during periods of crisis but has a long-term influence also during normal times. Moreover, the paper finds that the insurance sector was greatly affected by spillovers from the process of capital regulation in banking. While European insurance companies initially at the start of the Basel process of capital regulation were well capitalized according to the SRISK measure, they started to become capital deficient after the implementation of the model-based approach in banking with increasing speed thereafter.

Practical implications

These findings are highly relevant for the ongoing global process of capital regulation in the insurance sector and potential reforms of Solvency II. Systemic risk is a leading threat to the stability of the global financial system and keeping it under control is a main challenge for policymakers and supervisors.

Originality/value

This paper provides novel tools for supervisors to monitor risk exposures in the insurance sector while taking into account systemic feedback from the financial system and the banking sector in particular. These tools also allow an evidence-based policy evaluation of regulatory measures such as Solvency II.

Content available
Book part
Publication date: 18 July 2022

Abstract

Details

Big Data Analytics in the Insurance Market
Type: Book
ISBN: 978-1-80262-638-4

Book part
Publication date: 28 March 2022

Kiran Sood, Navneet Seth and Simon Grima

Purpose: In addition to the liberalisation policy, big data has revolutionised the level of awareness among customers about the quality and prices of insurance products

Abstract

Purpose: In addition to the liberalisation policy, big data has revolutionised the level of awareness among customers about the quality and prices of insurance products. The rationale behind this study is to underline the issues in managing product portfolios in a disruptive environment, where a sudden and unexpected situation like COVID-19 pandemic is going to challenge the traditional models and insurance covers of organisations as well as individuals.

Methodology: The study is based on secondary data. The scope of the study will only be confined to the top two general insurance companies in India based on year of registration and market share to compare their product portfolios during pre- and post-liberalisation periods ranging from 1985–1986 to 2000–2001 and 2001–2002 to 2018–2019, respectively.

Findings: There is a lack of a balanced product portfolio for fulfilling the varying needs of customers. The insurance companies needed to set up different portfolios and should provide separate covers for natural catastrophes such as floods, earthquakes, landslides, tsunami, and the occurrence of new pandemics like COVID-19.

Significance: The study highlights that the outbreak of COVID-19 and similar pandemics or global emergencies need special preparation from the insurance sector.

Details

Managing Risk and Decision Making in Times of Economic Distress, Part B
Type: Book
ISBN: 978-1-80262-971-2

Keywords

Article
Publication date: 16 December 2021

Aparna Bhatia and Megha Mahendru

The purpose of this article is to evaluate revenue efficiency performance of life insurance companies in India. The study also compares if private or public insurance

Abstract

Purpose

The purpose of this article is to evaluate revenue efficiency performance of life insurance companies in India. The study also compares if private or public insurance sector is more “revenue efficient”. Furthermore, the study determines the nature of return to scale (RTS) and identifies the leaders and laggards amongst insurance companies operating in India.

Design/methodology/approach

Revenue efficiency is calculated by employing data envelopment analysis – a non-parametric approach, on a data set of 24 insurance companies over the period 2013–2014 to 2017–2018.

Findings

The empirical results suggest that life insurance companies in India could generate only 34.4% of revenue, which is very less than what these are expected to generate from the same inputs. Majority of life insurance companies operating in India are operating at decreasing return to scale (DRS). There is a reduction in leaders and the highest proportion of companies is falling in the category of laggards.

Originality/value

As per the best knowledge of researchers, no empirical work has been carried out with respect to measuring the revenue efficiency of Indian insurance companies. The current study appropriately fills the gap by not only calculating the revenue efficiency scores of insurance companies in India but also provides insights into the causes of revenue inefficiencies. It also gives implications for efficient and effective management of insurance companies.

Details

Benchmarking: An International Journal, vol. 29 no. 10
Type: Research Article
ISSN: 1463-5771

Keywords

Expert briefing
Publication date: 22 December 2016

Myanmar insurance sector prospects.

Details

DOI: 10.1108/OXAN-DB216888

ISSN: 2633-304X

Keywords

Geographic
Topical
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