India Market Life Insurance Update

India Market Life Insurance Update India Issue 54 March 2014 Introduction We are pleased to release our 54th quarterly newsletter on the life insurance industry in India, covering developments during December 2013 to February 2014. As per data released by the Insurance Regulatory and Development Authority (IRDA), the life insurance industry witnessed a growth of 9.5% in weighted new business premium collections in the first three quarters of FY2013-14, largely owing to the increase of nearly 15% reported by the state owned Life Insurance Corporation of India (LIC), driven primarily by sales of group insurance products. As a result, LIC s overall market share increased by nearly 3% to 66% over the reporting period. Based on a survey conducted by Towers Watson on the overall industry outlook, the general market sentiment appears to have become more optimistic with expectations of robust medium term and long term growth by life insurers. On the mergers and acquisition front, DLF Pramerica Life has been renamed as DHFL Pramerica Life Insurance after Dewan Housing Finance acquired 74% stake in the insurer. Future Retail Limited, owned by Future Group and formerly known as Pantaloon Retails, has sold a 22.5% stake in Future Generali Life to Industrial Investment Trust Limited, a Mumbaibased non-banking finance company operating as insurance broker. The IRDA is now focusing on distribution related reforms and released regulations for web aggregators and brokers. The current quarter also saw a significant churn in the product portfolios of life insurers following the deadline for compliance with new product guidelines becoming effective from 1 January 2014. In this issue Industry statistics Weighted new business premium income earned by life insurers - April to December 2013 Insights from the Towers Watson survey Growth prospects of the Indian life insurance industry Market update Mergers and acquisitions Company news Appointments Capital injections Regulatory update Proposed distribution guidelines and reforms Clarifications on investment guidelines Amendments to micro-insurance regulations Other regulatory developments Distribution update Products update Contact details We provide an overview on these and other market developments in this edition of the newsletter. We hope you continue to find the newsletter interesting and informative and look forward to receiving your feedback. Towers Watson - Risk Consulting, India Copyright 2014 Towers Watson. All rights reserved. towerswatson.com

Industry statistics Private life insurers recorded a marginal 0.5% year-on-year growth in weighted new premiums in the period April to December 2013, down from the 1.6% growth in the first half of FY2013-14 however still in the positive terrain after the contraction recorded in two consecutive financial years ended March 2013. The LIC, targeting double-digit new premium growth this financial year, pulled up aggregate industry growth to nearly 10% in the same period, with significant uplift in sales from group business. Weighted new business premium income earned by life insurers - April to December 2013 Weighted new business premium collections of private life insurers - April to December 2013 and April to December 2012 (in Rs billion) ICICI Prudential Life Source: IRDA Reliance Life Bajaj Allianz Life Birla Sun Life PNB MetLife Canara HSBC OBC Life Total private players SBI Life HDFC Life Max Life Kotak Life Others 0 5 10 15 20 25 30 April to December 2012 April to December 2013 LIC 7.1%, Private 1.2% Year-on-year growth in individual weighted premium LIC 60.0%, Private -2.0% Year-on-year growth in group weighted premium Weighted new business premium collections in April to December 2013 and April to December 2012 (in Rs billion) LIC As per statistics released by the Insurance Regulatory and Development Authority (IRDA), the life insurance industry collected weighted new business premiums of INR412 billion in the first three quarters of FY2013-14, representing a growth of 9.5% as compared to the corresponding period in FY2012-13. The state-owned LIC witnessed an increase of nearly 15% in its weighted new business premium collections year-on-year owing to significant growth in group business, together with moderate increase in the individual new business sales as well. New business performance by LIC in group business has cannibalised market share from private life insurers, who saw a negative growth of 2% year-on-year, relative to LIC s impressive 60% year-on-year growth in terms of weighted new business premiums for group business. Consequently, LIC s overall market share in terms of total weighted new business premium income has increased by approximately 3% to nearly 66% during the quarter. Meanwhile, private life insurers on the whole witnessed a marginal growth of 0.5% in weighted new business premium collections during the same period. However, experience of individual firms varied with ICICI Prudential Life and HDFC Life witnessing the sharpest declines in year-on-year new business volumes amongst the top private players. ICICI Prudential Life remained the market leader for the first nine months of FY2013-14 among private life insurers, despite its market share decreasing from 7.2% to 5.5% as compared to the corresponding period in FY2012-13. Meanwhile, SBI Life reported a double digit growth of 16% in weighted new business premium collection in the first three quarters of FY2013-14. Amongst the remaining three of the top five private life insurers, Reliance Life posted a significant growth of 68% in weighted new premiums, driven predominantly by increase in group business while Bajaj Allianz Life reported a contraction in its weighted new business premium collections in the first nine months of FY2013-14. Source: IRDA 0 50 100 150 200 250 300 April to December 2012 April to December 2013 Other private insurers witnessed a marginal growth in the weighted new business premium income as a group, although individual results varied significantly with Star Union Dai-ichi Life, Bharti Axa Life and Edelweiss Tokio Life reporting impressive growth for the period whilst others such as Aviva Life and Tata AIA Life witnessing contraction in new business volumes. Copyright 2014 Towers Watson. All rights reserved. towerswatson.com

Outlook: Life insurance sector poised for growth The overall market sentiment has become perceptibly optimistic with expectations of medium and long term growth, as corroborated by Towers Watson s survey on the industry outlook. Insurers appear to have begun looking past the relative slump witnessed over the prior years and expect macro-economic fundamentals and improved distribution models to drive future growth Following a decade of frantic growth in excess of 15-20% per annum, the life insurance industry in India has been through a testing period with negative or flat growth in new business volumes over the past two to three years. The overall CAGR over the four year period since FY2009-10 for annual weighted new business premium income by private life insurers has been close to negative 11%. Nevertheless, more recent developments in the market suggest a sense that the industry has seen its worst and a return to growth is imminent. A number of life insurers have made statements over the previous quarter expressing optimism for the industry as well as own prospects. AEGON Religare Life has expressed expectations of a healthy growth in its premium collections of 15% to 20% for FY2013-14 and also reckons that the industry would grow around 12% to 18% over the year. In a similar vein, Max Life is reportedly targeting an overall new business premium growth of 12% to 15% for FY2013-14 having recorded about 15% growth already in the first three quarters. Such expectations are also reflected in the results of Towers Watson survey on the industry outlook for the upcoming year as well as over the medium and the long term. Set out below are the key conclusions from our survey: Life Insurers expect robust long term growth with cautious optimism over the short term All respondents were unanimous in the view that the long term fundamentals for the industry remain intact and generally expect a gradual recovery for the sector with the growth picking up over the short to medium term. However, there is some caution to the winds with nearly 40% of the respondents suggesting a flat or negative growth over the next year and the growth momentum picking up thereafter. Expected new business premium growth for private life insurance industry in India: Over the next one year 5% 5% 50% 36% 5% Over the next 4 to 5 years 9% 50% 36% 5% Over the next 10 years 18% 46% 36% Heady growth as seen in the naught-ties (>15%) Steady growth (8-12%) Moderate growth (3-8%) Flat growth (0-3%) Further decline (<0%) Part responsibility for the decline in recent years lies within the industry itself Almost a quarter of the industry executives surveyed introspected and felt that the recent slump was principally due to questionable market and business conduct practices of life insurance companies and distributors. The majority however, felt that regulatory changes were the biggest driver with the general economic downturn also contributing. Others pointed out a combination of factors, with the conduct of the industry itself leading to the need for regulatory changes. Macroeconomic factors & improved distribution to drive future growth Nearly half the respondents pointed towards increase in wealth with rising middle class leading to greater demand for insurance products as the most important driver for future growth of life insurance in India, indicating the overall macroeconomic fundamentals remain strong in the industry. A third of the respondents expected reforms in distribution and emergence of alternative channels (such as online) to be key whilst a small proportion felt government actions with more favourable legislative changes were needed to drive growth. About the Towers Watson survey The survey was designed to capture moods and trends within the life insurance industry in India and solicited responses from the senior management (Chief Executive Officers, Appointed Actuaries, Chief Risk Officers and other senior executives). The survey was conducted online in which 22 executives representing 18 life insurance companies from India participated. Copyright 2014 Towers Watson. All rights reserved. towerswatson.com 3

Market update The previous quarter saw some activity in the mergers and acquisitions space with one exit and another shareholding change. The period was also marked by fresh capital injections by shareholders of a few life insurance companies. Largely however, the focus of life insurers continues to be on maintaining persistency and renewal premium growth. Mergers and acquisitions Dewan Housing Finance Corporation Limited (DHFL), India s second largest private housing finance company, has acquired DLF s 74% stake in DLF Pramerica Life. The insurer has now been renamed as DHFL Pramerica Life Insurance Company Limited. DHFL directly holds 50% stake in the company, in compliance with the National Housing Bank conditions, while its two promoter entities have acquired 12% each. DLF has reportedly been divesting its non-core businesses to reduce its overall debt and this transaction is part of such strategy. Press reports suggest the deal value to lie between INR2.5 billion to INR3 billion which give a price-tocapital ratio of approximately 104% to 124% for the deal. Future Retail Limited, owned by Future Group and formerly known as Pantaloon Retails, has sold a 22.5% stake in Future Generali Life to Industrial Investment Trust Limited (IITL). IITL is a Mumbai-based non-banking finance company operating as insurance broker. Post completion of the deal, Future Group will continue to hold a controlling stake of 52%. However, it has reportedly divested the said stake as part of a strategy to exit non-core business to reduce debt and fund various growth plans. The deal is rumored to be pegged between INR3 billion to INR3.5 billion implying the price-tocapital ratio to be around 92% to 107%. HSBC has decided not to exit Canara HSBC OBC Life in which it holds 26% stake keeping the purely bancasurrance led insurance joint venture intact. Press reports suggest that the amount of INR10 billion quoted by HSBC to sell its stake appeared unviable to the bidders which included Shriram Group and Canada s Manulife, among others. Company news Life insurers are reportedly now aiming at a higher investment exposure to sectors like information technology and oil and gas which are expected to perform well due to depreciation of the Indian rupee and the recovery of the US economy. Such a move by the insurers comes after the IRDA recently relaxed the investment ceiling in a particular sector from 15% to 20%. Reliance Life has recorded new business premium growth of 56%, highest in the industry, for the first nine months of FY2013-14 and also reported a profit of INR2.19 billion for the first three quarters, a healthy rise as compared to INR0.9 billion in the same period of FY2012-13. Bajaj Allianz Life, Canara HSBC OBC Life and Tata AIA Life have also joined the ranks of Aviva Life, the LIC, PNB MetLife and Reliance Life which recently launched campaigns to enable policyholders to revive the lapsed policies (as reported in the previous issue of our newsletter). Insurers are targeting better persistency and growth in renewal premiums through such initiatives. During the current reporting period, Bajaj Allianz Life launched a Special Revival Campaign under which lapsed policies meeting the insurer s prescribed criteria would be reinstated through incentives like 50% waiver of interest on traditional policies, simplified health declaration form and waiver of medical examination of policyholders aged up to 55 years. Canara HSBC OBC Life has launched an online portal providing the policyholders with such facility. Tata AIA Life also unveiled Revive, a special drive to revive the lapsed policies whose premium due date fell between 1 April 2012 and 31 December 2013, without any interest penalty and requirement to submit health declaration. Capital injections As per the public disclosures by the insurers as at 31 December 2013, there were a few companies which made capital injections during the third quarter of FY2013-14. Among the significant ones, Bharti AXA Life injected total capital amounting to around INR455 million, followed by AEGON Religare Life of INR350 million, and DHFL Pramerica Life of INR112 million Appointments K S Gopalakrishnan has been promoted to the position of the Chief Executive Officer (CEO) and Managing Director (MD) of Aegon Religare Life. He has over twenty five years of experience in life insurance industries spanning India, Canada and Hong Kong. Prior to this appointment, he was the Executive Director of the company and had also served as its Appointed Actuary and the Chief Financial Officer, previously. Anoop Pabby has been appointed as the CEO and MD of DHFL Pramerica Life succeeding Pavan Dhamija, effective February 2014. Future Generali Life has appointed Munish Sharda as its MD and CEO. He joins from Aviva Life where he held the position of Director Sales and Distribution for the past five years, and has over a decade of experience with Citibank India. Copyright 2014 Towers Watson. All rights reserved. towerswatson.com 4

Regulatory update Following reforms to the product design of insurers, the IRDA appears to have shifted focus on distribution related reforms and has undertaken a number of initiatives as well as released guidelines to promote alternative distribution channels. Amongst such initiatives are regulations for web aggregators and brokers; initiatives to improve customer services and address grievances of both agents and customers; and setting up of Working Group on insurance marketing firm to provide a framework for an alternative distribution channel in the country. IRDA (Web Aggregators) Regulations, 2013 Owing to the increasing role of web aggregators, the IRDA issued guidelines setting the eligibility criteria, role, duties, remuneration, renewal and other related issues of the web aggregators. The key features include: The web aggregators will display information of the products and enable comparisons between different products. Product information displayed by the web aggregators must be authentic and solely based on the information received from the insurers. They shall not display ratings, rankings, endorsements or bestsellers of insurance products on their websites. The web aggregators can share particulars of the website visitors with a maximum of three insurers. The visitors will get a chance to choose the insurers. The agreement between insurers and web aggregators will be valid for a period of three years. IRDA (Insurance brokers) Regulations, 2013 The IRDA released the regulations on insurance brokers that pertain to direct broker (life and non-life), reinsurance broker and composite broker. The highlights include: Brokers have been made responsible for keeping detailed information and to familiarise themselves with client business. They must also maintain proper records of claims and must provide services related to insurance consulting and risk management. Minimum capital requirement of INR5 million, INR20 million and INR25 million will apply for a broker, reinsurance broker and composite broker respectively. Brokers may sell products online by entering into an agreement with the insurers and also use tele-marketing modes but will have to abide by the guidelines of distance marketing of insurance products. Brokers will not be paid amounts exceeding the limits as specified by the Authority. For reinsurance business the remuneration will be as per the market practices from time to time. Guidelines for products under Common Service Centres (CSC) distribution channel Following the guidelines issued by the IRDA on the distribution of insurance policies (both life and non-life) through the CSCs across the country as a part of the national e-governance plan (covered in December 2013 newsletter), the IRDA released guidelines to be followed for the filing of life insurance products under the CSC distribution. The key features of the guidelines are: All the products marketed by the CSC distribution must be prefixed by CSC to clearly distinguish them as exclusive CSC products. The insurers can offer non-participating non-linked variable insurance products with regular premium payment or pure term insurance products with regular premium payment under the CSC distribution. The guidelines also specify the standard features that the products sold through CSCs must have such as policy term, sum assured, premium payment mode, types of benefits along with the others. The CSCs will be allowed to print the policy documents on behalf of the insurer as a proof of valid policy for such products. The maximum commission in the first year shall not be more than five per-cent of the premiums paid in the first year, further there shall be no commission payable from second year onwards. Other initiatives of the IRDA Committee for customer service: It is reported that the IRDA has set up a committee to look into the various ways in which customer services provided by the insurers can be improved. The committee consists of members from life and general insurers and life and general insurance councils. Grievance redress system for agents: It is reported that the IRDA plans to set up a grievance redress system for agents. The Authority proposes to set up a separate system to handle complaints made by the agents. Not more than 50% of the premiums can be emanated from one client in a financial year. Brokers are required to submit to the Authority halfyearly disclosures including financials statements. Copyright 2014 Towers Watson. All rights reserved. towerswatson.com 5

Clarifications on investment regulations Following a number of clarifications issued on the investment regulations (detailed in the December 2013 edition) the IRDA has released further set of circulars and draft guidelines related to investments. Listed below are the highlights: Draft regulations for micro-insurance The IRDA has issued draft regulations with modifications to the IRDA (Micro-Insurance) Regulations, 2005. The key points included in the draft regulation are: The IRDA issued a circular approving the investments in L&T Infra Debt Ltd. to be treated as investments in infrastructure. The firm is reportedly planning to issue INR5 billion worth of secured, redeemable and nonconvertible debentures. As per the draft guidelines on Investment in Equity Exchange Traded Fund (ETF), the IRDA shall allow insurance companies to invest in equity ETF which meet the following conditions : Should have schemes of Mutual Funds who are registered with SEBI and listed in at least two Exchanges having nationwide terminals. Should not hold more than 15% of the Fund in a single company. Should not exceed total exposure of 30% of fund to a particular sector. Should not have overseas investments. Should have a maximum of overall expense ratio of 0.40% of daily net assets. With the migration of banks to Basel III capital adequacy norms and a subsequent need to raise additional capital by banks, the IRDA issued a circular permitting the investment in additional instruments (Debt Capital Instrument, Redeemable Non-cumulative and cumulative Preference Shares) of Tier II Capital issued by Domestic Banks. The investments must not be rated less than AA by a rating agency registered under SEBI. In addition to one life and one general insurance company, a micro-insurance agent may also work with Agriculture Insurance Company for distributing micro crop insurance products and with one of the standalone life insurance companies registered as distributor of health insurance products of the respective standalone health insurance company. All micro-insurance products will have a lock-in period of five years during which surrenders would not be allowed, but partial withdrawals from the second policy year may be permitted. Regional rural banks, micro-finance institutions, district cooperative banks, non-governmental organisations, self-help groups, urban cooperative banks, banking correspondents and individual owners of kirana stores, public call offices, fuel stations, fair price shops and medical shops in rural areas may be permitted to distribute micro-insurance products. An insurer may enter into a deed of agreement with a person or entity whose micro-insurance agency agreement was terminated only after the expiry of three months from the date of termination. However, no insurer shall re-appoint a micro-insurance agent who was terminated on grounds of fraud or misconduct. The IRDA has issued a circular on submission of investment returns through Business Analytical Project (BAP) Investment Module. Further details are in the table with circulars on disclosures issued by the IRDA below. Copyright 2014 Towers Watson. All rights reserved. towerswatson.com 6

Other regulatory developments Circulars issued by the IRDA related to the submissions to the Authority mandatory for all insurance companies Circular on preparation of financial statements and filing returns Circular on submission of investment returns through Business Analytical Project (BAP) investment module Circular on reporting norms for persistency and renewal rate Circular on disclosure unclaimed amount Circular on standard format for filing of policy documents Circular on implementation of standard proposal form for life insurance This circular consolidates all previous circulars and guidelines issued by the Authority in connection with the preparation and presentation of balance sheet, profit and loss account, separate account of receipts and payments and revenue account. It covers compliance with the requirements of the Accounting Standards (AS) and preparation of other statement/reports like auditor s report, statement of Expenses of Management, statement of payment of commission, compliance with Corporate Governance Guidelines and summary of the financial statement for the last five years along with standardized analytical ratios. The master circular shall be effective from 1 April 2014. The IRDA has set up BAP which allows the insurers to file all mandatory quarterly returns except Form 2 (Part B & C), Form 3A (Part E) and Form 7 into the investment module. The circular sets the timelines for the various quarterly returns starting from the quarter ending 30 June 2013 to be submitted along with the digital signatures. Owing to the low persistency rates, the IRDA released a circular that mandates the life insurers to submit a Report on Persistency along with the Appointed Actuary s Annual Report. The circular describes the uniform systematic methodology that needs to be followed by all insurers for the calculation of the persistency rates. The life insurers must submit board approved Report on Persistency by 30 June of every year in respect of all types of products offered by the insurer. Highlighting the in industry-wide unclaimed amount in recent years, the IRDA released a circular mandating the life insurers to disclose the details of the unclaimed amounts by the policyholders. The insurers are required to report the payouts made in each quarter along with the comparisons of unclaimed amounts with previous quarter and steps taken to reduce the unclaimed amounts. Further, the insurers are now required to report the name and address of the insured along with the reasons on their website in case a claim is not made beyond six months of due date of settlement. The IRDA released a circular mandating the insurers to follow a standard procedure for filing of policy documents with the Authority. According to the regulator, the standard format will help make it convenient and help enable it in speedy clearance of the products in product approval process. The circular takes effect from 1 February 2014 for all new product approvals henceforth. In addition, insurers have been advised to submit standard sections of the policy documents for each product category, which are expected to remain unchanged for an individual product within the category in the specified format by 31 March 2014 and refer to the same for subsequent product approvals. It is not required for micro-insurance and CSC products. The date for the implementation of the Standard Proposal Form for Life Insurance has been deferred by the IRDA until further notice. Earlier, the date for the same was set to 1 April 2014. Committes/working group set up by the IRDA Working Group on insurance marketing firm/ insurance distribution company Constitution of a committee to look into issues relating to Foreign Direct Investment in insurance intermediaries and TPA Committee for implementation of Non- Legislative Recommendations (NLR) In September 2007, the IRDA had set up a committee to study the manner in which the distribution channels- agency, corporate agency, bancassurance, referrals, direct sales etc. worked and make recommendations on them for improvement in functioning, cost effectiveness and efficiency. The authority, on 20 January 2014, released a circular stating the formation of a working group to look into these recommendations and explore the possibility of Insurance Marketing Firm (IMF). The group constitutes ten members having five members each from life and non-life companies and will recommend to the Authority on issues of proposed IMF model such as requirement of capital, distribution costs, geographical spread in which IMF can operate, process of sales and other relevant issues. The IRDA has set up a ten member committee to examine the course of action for the increase in FDI in insurance intermediaries and TPAs from the existing 26%. The committee will repost on whether the FDI limit should be increased, if yes, to what extent, its implications and issues related to it. IRDA has set up a nine member committee to review the 14 NLR of Financial Sector Legislative Reforms Commission (FSLRC) and examine the extant legislative and regulatory framework, identify and recommend changes to framework in compliance with 14 NLR Copyright 2014 Towers Watson. All rights reserved. towerswatson.com 7

Distribution update Tata AIA Life has entered into a bancassurance agreement with Citigroup to use their branches to sell their products. Prior to this, Citibank had its tie-up with Birla Sun Life in India. The deal, reported to be over USD1 billion, is part of a regional tie-up between Citibank and AIA to distribute products in 11 countries including India. Bajaj Allianz Life has recently launched an initiative, Service on Wheels in Pune in which a mobile van will act as a mini office and will offer services such as collecting renewal premium, registering policy servicing requests, giving acknowledgements and receipts. The company plans to provide this service in other cities soon. Reliance Life has established three propriety channels, Life Plaza, Face-to-Face and Career Agency and expects to utilize these to expand its penetration in small towns and nonurban areas. SBI Life plans to open regional offices at locations where its parent State Bank of India (SBI) and its associate banks already have a circle office to leverage the wide network of SBI and achieve cost synergies. The company has also introduced a number of other initiatives to increase efficiency: elife version 2 : This is a mobile application that enables the customers to buy policies electronically with ease. Max Life plans to provide agents with an innovative mobile application, New Works System for their tablets that will help enable them to sell policies more efficiently and in a more transparent manner. The initiative is expected to boost new business premium, control the attrition of agents in the company and help curb mis-selling. Products update Express Lane : Under this initiative the company issue policies quicker by optimising the submission of documents along with the application. Express 50 : An initiative that will help in hassle-free buying and selling of products through simpler underwriting norms. Following the cut-off of 1 January 2014 for insurer to comply with the new product guidelines, there has been significant churn in the product portfolios of companies this quarter with more than 130 plans being withdrawn and more than 45 plans being launched, with more in the pipeline. A high level over-view of the current product portfolios of insurance companies is provided below, followed by a table summarising briefly product descriptions of the newly launched products during the reporting period The chart below illustrates the current product portfolio of life insurance companies in India, in particular with respect of relative compositions of unit-linked and traditional products offered by insurers. There appears to be a clear shift away from erstwhile popular unit-linked plans to a product portfolio weighted more towards traditional non-linked products. Four insurers, including state-owned LIC do not have any unit-linked product open to new business currently, others being Bharti AXA Life, Tata AIA Life and DHFL Pramerica Life. This reflects a sweeping change from the scenario some years ago when linked products dominated the overall new business weighted premium of life insurers in India. Product Portfolio of Indian Insurance Companies as at end of February 2014 Non-Linked Copyright 2014 Towers Watson. All rights reserved. towerswatson.com 8

New product launches by life insurers in India over the period December 2013 to February 2014 Company name Product name Product description AEGON Religare Life [3] Aviva Life Bajaj Allianz Life Bharti AXA Life Birla Sun Life DHFL Pramerica Life Edelweiss Tokio Life Future Generali Life HDFC Life ICICI Prudential Life IDBI Federal Life India First Life ING Life Kotak Life LIC [4] [5] [4] [3] Guaranteed Income Advantage Flexi Money Back Advantage Flexi Money Back Plus i-growth Life Long Assure e-aajeevan Sampathi+ Vision Endowment* Roz Sanchay Pension Plan Bima Advantage Plus* Dhan Vridhi Assure plus* Saral Bima Super Income icare II* Wealth Builder II* Elite Wealth II* Elite Life II* Guaranteed Wealth Protector Wealthsurance Suvidha Growth Young India* Prospering Life Plus* Life Time Income* Assured Income* e-premier Endowment e-lifetime Income Anmol Jeevan II* Amulya Jeevan II* Traditional; participating endowment. Provides guaranteed annual benefits up to age of 85 starting from one year after the end of the premium payment term. Traditional; participating endowment. Provides guaranteed pay-outs at regular intervals and life cover beyond premium payment term. Traditional; participating anticipated endowment. Provides guaranteed pay-outs at regular intervals and life cover beyond premium payment term. ; It provides life cover without medical examination and loyalty additions in the last three policy years. Traditional; whole life participating endowment. Provides guaranteed pay-outs starting from the end of premium payment term. Life cover is available up to the age of 100 years. Traditional; whole life participating endowment. Provides guaranteed pay-outs starting from the end of premium payment term up to the age of 85 or 100 years. Traditional; participating endowment. Traditional; non-participating endowment. Death benefit increases by fixed 5% of base sum assured at the end of each year. Traditional; participating pension plan. Provides compounded reversionary bonuses and guaranteed additions. There is also an option to choose the vesting age. ; combination of savings and protection product. ; limited premium payment plan. Traditional; participating endowment Traditional; non-participating endowment Traditional; participating anticipated endowment. Provides minimum guaranteed regular income after premium payment term with insurance coverage. Traditional; non-participating term assurance, exclusively marketed online ; Provides loyalty additions after 6 years. ; Provides guaranteed loyalty addition after 10th policy year and every 5 years thereafter. Traditional; immediate annuity Traditional; anticipated endowment assurance Traditional; participating endowment. Provides guaranteed additions for the first 5 years and earns bonus from 6 th year onwards and marketed online. Traditional; immediate annuity plan. Provides guaranteed annuity rates for lifetime and may also be gifted, marketed online. Traditional; term assurance Traditional; term assurance New Jeevan Mangal* Traditional; micro-term assurance with return of premium on maturity Copyright 2014 Towers Watson. All rights reserved. towerswatson.com 9

Company name Product name Product description Max Life PNB Met Life Reliance Life Shriram Life SBI Life [2] [3] [2] [2] Star Union Dai-ichi Life [2] Tata AIA Life [3] Premium Return Protection Fast Track Super Unit Linked Employee Benefits Child Plan* Endowment (Regular Premium)* Super Endowment* Secure Investment Wealth Plus* Retire Smart Smart Wealth Builder Dhan Suraksha Plus* Wealth Builder Maha-Raksha Supreme* MahaLife Gold* Traditional; term assurance with return of premiums on maturity. Also provides an in-built accidental death benefit. ; option for single pay, limited pay or regular pay. It has guaranteed loyalty additions starting from 11 th policy year and an option for partial withdrawal. Group plan; Provides gratuity and leave encashment management solution to employers Traditional; participating child plan Traditional; participating endowment assurance Traditional; limited pay non-participating endowment Traditional; single premium endowment assurance. ; non-participating pension plan. It provides guaranteed additions starting from 15 th policy year and at end of every year thereafter. Provides a minimum guaranteed maturity benefit. ; Provides guaranteed additions proportional to the policy term which start from 10th policy year onwards. ; only single premium payment option available Traditional; term assurance with terminal illness benefit Traditional; deferred participating annuity MahaLife Gold Plus Traditional; It has a life cover till age 85 and a maturity benefit. There is an option for increasing death benefit. It provides guaranteed annual coupons from 10 th to 30 th policy year and non-guaranteed cash dividends from 6 th policy year. Note: 1. Source: IRDA products list, company websites and press reports 2. * denotes a re-launched product 3. The numbers in [ ] represent the total number of products launched over the reporting period as per information sourced from company websites and press reports. Copyright 2014 Towers Watson. All rights reserved. towerswatson.com 10

Contact details Towers Watson's Risk Consulting team covers the length and breadth of India with associates based in Mumbai and Gurgaon. Vivek Jalan Director, Risk Consulting, India vivek.jalan@towerswatson.com Dilip Chakraborty Senior Adviser, Towers Watson, India dilip.chakraborty@towerswatson.com Kshitij Sharma Senior Consultant, Risk Consulting, India kshitij.sharma@towerswatson.com Kunj Behari Maheshwari Consultant, Risk Consulting, India kunj.maheshwari@towerswatson.com Mumbai 511/512, Solitaire Corporate Park Andheri-Kurla Road, Andheri East Mumbai 400 093 Tel: 91 (22) 4232 9900 Fax: 91 (22) 2837 0700 Gurgaon Unitech Business Park, Tower B, 2 nd Floor South City 1, Sector-41 Gurgaon 122 002 Tel: 91 (124) 432 2800 Fax: 91 (124) 432 2801 The India Market Life Insurance Update has been prepared by Towers Watson for general information purposes only and does not constitute professional advice. The information, opinions and projections contained in this Newsletter are derived from various sources and have not been independently verified by Towers Watson. If you require professional advice or require any further information please contact any of the above named individuals. ABOUT TOWERS WATSON Towers Watson is a leading global professional services company that helps organisations improve performance through effective people, risk, and financial management. With 14,000 associates around the world, we offer solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson covers the length and breadth of India and operates from offices in four cities, covering all geographical regions of the country. For more information, please visit towerswatson.com Copyright 2014 Towers Watson. All rights reserved. towerswatson.com 11