Banking & Insurance Overview

8/6/2019 Banking & Insurance Overview

1/28

The Indian Economy and The Financial Sector

(Banking and Insurance) Opportunity


2/28

Current Scenario

Drivers of Growth

Challenges

Summary


3/28

Size and Distribution of Savings

Sources: RBI

Share of Financial Savings

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1993-94

1995-96

1997-98

1999-00

2001-02

Mutual Fund Life Insurance Government Small Savings

Currency & Deposit PF & Govt Pension

0

100,000

200,000

300,000

400,000

500,000

600,000

1993-94

1995-96

1997-98

1999-00

2001-02

5 Year 11.6%

HH Savings

(Rs Mn)

Financial Savings

Gross Physical Savings5 Year 20.2%


4/28

Opportunities in life insurance

Life insurance pre iu as of G P

UK Japan Korea Austrlia U ala sia n ia C ina


5/28

Opportunities in non life insurance

Non life insurance pre iu as of

ustralia orea apan ala sia ina n ia


6/28

Retail credit opportunity

o n u e r lo a n /

o r e a a iwa n a la y ia a i la n d n d ia

Net retail NPA levels are low at about 1.6% for the Indian

banking sector as a whole and even lower for many of

the leading players


7/28

Opportunities in asset management

ota ssets as o

ustra ia ra i orea n ia


8/28

Opportunities in redit ard


9/28

Current Scenario

Drivers of Growth

Challenges

Summary


10/28

T in ro th Drivers

Demographic Transition

Economic Development


11/28


12/28

leading to gro th in Household Financial Savings

Reducing dependency could trigger a self reinforcing savings gro th dynamic in the

next decade

Expected demographic trends suggest,in light of experience elsewhere, in thenext decade Indias national savings

could rise to 30% or more

Bulk of the savings contributed byHouseholds

Decline in share of financial savings anegative however expected to

increase with development of financialsystem and higher awareness


13/28

Source:Based on NCAER & Govt Of India estimates

CAGR ( )

..

' ' ' ' ( )

o. ofHH (M)

< k

k k

> k

.

.

Income

Rising Income levels Increases Target Market

.

Income range based on 1998-1999 prices


14/28

T in Gro th Drivers

Demographic Transition

Economic Development


15/28

Services sector driving momentum Established leadership in information technology Successful forays across knowledge-based sectors

Renewed industrial growth

Operational efficiency and quality focus Supported by financial restructuring

Progress in infrastructure development Significant achievements in telecom and roads Focus on power sector

Drivers of development


16/28

Services sector driving momentum

Leveraging rich pool of human capital

Quality educational institutions Large English speaking population

Globally-positioned IT sector Software exports of US$ 12.2 bn in FY2004 and US$ 7.1 bn in

H1-2005

International services hub Commenced with IT-enabled services : voice & data Expanded to all knowledge sectors: pharmaceuticals,

biotechnology, engineering design

Growth in financial services, travel & hospitality


17/28

Impact of the Development

Sectoral shareofGD ( )

Sector

.Agriculture

.Industry

.Services

Gro thFY ( )

.

.

.

GD .

Source: NAS

One of the fastest growing economies in the world with

7.0% growth rate in H1-2005


18/28

Rene ed industrial gro th

After a prolonged period of restructuring and repositioning

growing competitiveness Increasing deployment of technology

Deleveraging and organic capital generation

Constantly improving quality standards

Emergence of Indian multinationals Setting up production capacities overseas Setting up international distribution Consolidating supply chain

Indias emergence as a global manufacturing hubSecond-most favoured destination for FDI in manufacturing


19/28

India has just started on the journey

ur e or in o e ro th in sia

ears ro start o re or s

er

a

ita

in

$

o ur e: or an tan ey

India

hi i ines

hina

ha i and

a a ysi a

oreaai an

in a or

on on

a an


20/28

Current Scenario

Drivers of Growth

Challenges

Summary


21/28

Challenges of Intermediation in India

Size of the country and dispersed affluent population

Lack of Data specially the area of Health

Attracting the Talent Pool

Evolving Regulatory Environment


22/28


23/28

Challenges from lack of Data

No single customer identification number like social

security number

Single Mortality table usedNo cuts available by geography or customer segment

Health records not availableHealth incidence data or morbidity tables notdevelopedNo consolidated medical individual history available

No standard definition of conditions & surgeries


24/28

Attracting the Talent ool

Increasing attrition levelsPoaching within & across industriesAttrition at frontline sales level around 20%

Pay hikesSalary increases grossly out pace inflationProjected increases to continue at a minimum 10-12%


25/28

Evolving Regulatory Environment

Multiple Regulators

Pension reforms on the anvil

Tax rules in fluxCreates distortions in incentives to invest in variousfinancial instruments

Regulations still evolving as regulators gain maturity


26/28


27/28

Summary

Strong growth prospects for the Indian Economy

Demographic transition should lead to a positivesavings growth spiral fuelling growth of financialsavings

Changing structure of savings could lead to increase inallocation to Insurance & Banking instruments

Need to manage unique intermediation challenges of

operating in India


28/28

Thank you

Date post:	08-Apr-2018
Category:	Documents
Upload:	bharat
View:	221 times
Download:	0 times

Banking & Insurance Overview

Documents