University of Richmond UR Scholarship Repository
Robins School of Business White Paper Series, 1980-2011 Robins School of Business
2010
Markel International: Entry into India
Roger R. Schnorbus University of Richmond, [email protected]
Littleton M. Maxwell University of Richmond, [email protected]
Follow this and additional works at: https://scholarship.richmond.edu/robins-white-papers
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Recommended Citation Schnorbus, Roger R. and Littleton M. Maxwell. 2010. "Markel International: Entry into India." E.C.R.S.B. Robins School of Business White Paper Series. University of Richmond, Richmond, Virginia.
This White Paper is brought to you for free and open access by the Robins School of Business at UR Scholarship Repository. It has been accepted for inclusion in Robins School of Business White Paper Series, 1980-2011 by an authorized administrator of UR Scholarship Repository. For more information, please contact [email protected]. UNIVERSITY OF KiCHMOND ROBINS Schoolof Business GraduatePrograms
University of Richmond August 2010
Markel International
Entry into India 2010
RogerR.Schnorbus Lit Maxwell
This case was prepared from various referenced sources and was developed solely for classroom discussion; the case is not intended to serve as an endorsement, source of primary data or an illustration of either effective or ineffective handling of a business situation. The authors gratefully acknowledge information and insights provided by Bruce Kay, Vice President of Investor Relations, Markel Corporation.
Roger R. Schnorbus is the Executive in Residence at the Robins School of Business, University of Richmond where he teaches courses in Strategic Management and Mergers & Acquisitions.
Littleton M. Maxwell is Business Librarian of the University of Richmond. He has been a member of the faculty of the Robins School of Business since 1971. He has graduate degrees from the University of Kentucky (MS in LS'68) and the University of Richmond (MBA '84).
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Works Cited ...... 24 24 ...... Cited Works
General Insurance Distribution Channels ...... 23 23 ...... Channels Distribution Insurance General - Exhibit 10 10 Exhibit
General Insurance Product Breakout ...... 22 22 ...... Breakout Product Insurance General - Exhibit 9 9 Exhibit
Breakout of General Insurance Segment ...... 21 21 ...... Segment Insurance General of Breakout - Exhibit 8 8 Exhibit
Life Insurance Companies in lndia ...... 20 20 ...... lndia in Companies Insurance Life - Exhibit 7 7 Exhibit
Indian Insurance Industry Breakout ...... 19 19 ...... Breakout Industry Insurance Indian - Exhibit 6 6 Exhibit
Key Macro Economic lndicators ...... 18 18 ...... lndicators Economic Macro Key - Exhibit 5 5 Exhibit
London Insurance Market Segment ...... 17 17 ...... Segment Market Insurance London - Markel International International Markel - Exhibit 4 4 Exhibit
Markel American Specialty Personal and Commercial...... 16 16 ...... Commercial. and Personal Specialty American Markel - Exhibit 38 38 Exhibit
Exhibit 3A- Markel Specialty Unit ...... 16 16 ...... Unit Specialty Markel 3A- Exhibit
Specialty Admitted Segment ...... 15 15 ...... Segment Admitted Specialty - Exhibit 3 3 Exhibit
Excess and Surplus Line Segment ...... 14 14 ...... Segment Line Surplus and Excess - Exhibit 2 2 Exhibit
Markel Corporation Operating Segments ...... 13 13 ...... Segments Operating Corporation Markel 1- Exhibit Exhibit
List of Exhibits Exhibits of List
Markel's Entry into lndia ...... 12 12 ...... lndia into Entry Markel's
Recent General Insurance Joint Ventures ...... 12 12 ...... Ventures Joint Insurance General Recent
ICICI Lombard General Insurance Company Ltd ...... 11 11 ...... Ltd Company Insurance General Lombard ICICI
Future Opportunities/ Threats ...... 11 11 ...... Threats Opportunities/ Future
Removal of Tariffs ...... 10 10 ...... Tariffs of Removal
Channels of Distribution ...... 10 10 ...... Distribution of Channels
Segments ...... 10 10 ...... Segments
General lnsurance ...... 9 9 ...... lnsurance General
Life Insurance Segment Trends ...... 9 9 ...... Trends Segment Insurance Life
Life Insurance Segment ...... 9 9 ...... Segment Insurance Life
Past/ Projected Financial Growth ...... 9 9 ...... Growth Financial Projected Past/
Structure ...... 8 8 ...... Structure
Overview/ History ...... 8 8 ...... History Overview/
Insurance Industry in India India in Industry Insurance
Economy ...... 7 7 ...... Economy
Government ...... 7 7 ...... Government
Overview ...... 7 7 ...... Overview
India India
Operating Divisions ...... 5 5 ...... Divisions Operating
Overview ...... 5 5 ...... Overview
Markel International International Markel
Specialty Admitted ...... 4 4 ...... Admitted Specialty
Excess and Surplus ...... 3 3 ...... Surplus and Excess
Underwriting Segments ...... 3 3 ...... Segments Underwriting
Specialty lnsurance ...... 2 2 ...... lnsurance Specialty
Business Model ...... 2 2 ...... Model Business
Overview ...... 2 2 ...... Overview
Markel Corporation Corporation Markel
lntroduction ...... 2 2 ...... lntroduction Table of Contents Contents of Table
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securities (bonds) to cover any claims. Since underwriting is done at a profit, Markel typically has has typically Markel profit, a at done is underwriting Since claims. any cover to (bonds) securities
From its underwriting operations, Markel targets more than sufficient capital in fixed income income fixed in capital sufficient than more targets Markel operations, underwriting its From
margin. The ability to make a profit is key in this model, not the size of the market. market. the of size the not model, this in key is profit a make to ability The margin.
underserved, niche markets where insurance products can be designed and sold at a profitable profitable a at sold and designed be can products insurance where markets niche underserved,
most insurance companies underwrite classes of business, Markel is a risk underwriter, focusing on on focusing underwriter, risk a is Markel business, of classes underwrite companies insurance most
Unlike traditional insurers of life, auto and homeowner policies, Markel is a specialty insurer. While While insurer. specialty a is Markel policies, homeowner and auto life, of insurers traditional Unlike
investments such as bonds and less in long term equities. equities. term long in less and bonds as such investments
cover expected claims on the underwriting side, most insurers invest more proceeds in safe safe in proceeds more invest insurers most side, underwriting the on claims expected cover
capital. The value of a company's portfolio determines how much insurance it can underwrite. To To underwrite. can it insurance much how determines portfolio company's a of value The capital.
Insurance is a two part business, underwriting (generating premiums/capital) and investing the the investing and premiums/capital) (generating underwriting business, part two a is Insurance
B. Business Model Model Business B.
9.8%. Book value rose 27% from $222 to $283 per share in 2009. 2009. in share per $283 to $222 from 27% rose value Book 9.8%.
produced a total portfolio return of 13.2% with equity returns of 25.7% and fixed income returns of of returns income fixed and 25.7% of returns equity with 13.2% of return portfolio total a produced
demand, weakening overall economy and governmental actions. However, investing operations operations investing However, actions. governmental and economy overall weakening demand,
decline of 14% from 2008. Factors for the decline included lower insurance market prices, depressed depressed prices, market insurance lower included decline the for Factors 2008. from 14% of decline
In fiscal 2009, Markel's insurance operations produced total gross premiums of $1.9 billion, a a billion, $1.9 of premiums gross total produced operations insurance Markel's 2009, fiscal In
VA and internationally headquartered in London. London. in headquartered internationally and VA
and energy related activities. The company has operations in the US, headquartered in Richmond, Richmond, in headquartered US, the in operations has company The activities. related energy and
specialized professionals, horse mortality, personal watercrafts, high-valued motorcycles, aviation aviation motorcycles, high-valued watercrafts, personal mortality, horse professionals, specialized
markets such as: wind and earthquake exposed commercial properties, liability coverage for highly highly for coverage liability properties, commercial exposed earthquake and wind as: such markets
underwrites specialty insurance products and programs to various niche markets. It mainly serves serves mainly It markets. niche various to programs and products insurance specialty underwrites
Markel (MKL- NYSE) is an international property and casualty insurance holding company, which which company, holding insurance casualty and property international an is NYSE) (MKL- Markel
A. Overview Overview A.
Markel Corporation Corporation Markel
the partner. partner. the
including selecting a joint venture Indian partner (required in India) and determining a strategic fit with with fit strategic a determining and India) in (required partner Indian venture joint a selecting including
The challenge for MKLI was to develop an entry strategy into India. Many questions had to be answered answered be to had questions Many India. into strategy entry an develop to was MKLI for challenge The
industry from a public to a private sector composition and the rapid growth of foreign direct investment. investment. direct foreign of growth rapid the and composition sector private a to public a from industry
growing middle class. However India seemed to present a greater opportunity given the shift of an an of shift the given opportunity greater a present to seemed India However class. middle growing
countries. Both areas were attractive because of an underdeveloped insurance industry and a rapidly rapidly a and industry insurance underdeveloped an of because attractive were areas Both countries.
In 2010, Stovin and his staff were exploring entry opportunities into India and the old Soviet Bloc Bloc Soviet old the and India into opportunities entry exploring were staff his and Stovin 2010, In
Canada, Singapore, and the U.K. U.K. the and Singapore, Canada,
of $52 million in fiscal 2009. This growth had come from expanding operations into Sweden, Spain, Spain, Sweden, into operations expanding from come had growth This 2009. fiscal in million $52 of
Corporation in 2000, MKLI had written gross premiums of $641 million and produced operating profits profits operating produced and million $641 of premiums gross written had MKLI 2000, in Corporation
with the rapid growth of his company. Since its acquisition and formation as a subsidiary of the Markel Markel the of subsidiary a as formation and acquisition its Since company. his of growth rapid the with
William Stovin, the President and Chief Operating Officer of Markel International (MKLI) was pleased pleased was (MKLI) International Markel of Officer Operating Chief and President the Stovin, William INTRODUCTION INTRODUCTION excess premium revenues which can be invested in long term equities. The overall goal is to compound book value at a high rate of return.
C. Specialty Insurance
In the standard insurance market, rates and forms are highly regulated, products and coverages are uniform and companies tend to compete with customers on price. The specialty market provides coverage for hard to place risks and tends to focus less on price and more on value. Most accounts are considered on an individual basis and tailored solutions are offered.
D. Underwriting Segments
Exhibit 1 contains a breakout (percent of gross premium value) of the three operating segments of Markel, Excessand Surplus, Specialty Admitted, and the London Market (Markel International).
1. Excessand Surplus Segment - this segment reported gross premiums of $1 billion and underwriting profits of $36.2 million in 2009. Business is written through two distribution channels, professional surplus lines general agents and wholesale brokers. In the US, Markel has six underwriting offices located in New Jersey, Virginia, Illinois, Texas, California and Arizona.
For this segment, Markel has established a product line leadership group that has responsibility for developing underwriting and pricing guidelines. The group also delegates underwriting authority to the regional underwriters to ensure that the products needed by customers are available through the regional offices.
Exhibit 2 contains a breakout (percent of gross premium value) of the product line groups in the Excessand Surplus segment, which include
Professional and Products Liability - offers unique solutions for highly specialized professions; third party protection to manufacturers, distributors, importers and re packagers of manufactured products; employment practices liability, not-for-profit directors' and officers' liability. This group also offers claims-made medical malpractice coverage for individual or groups of doctors, dentists, and other medical professionals. Property and Casualty - offers a variety of liability coverages on light-to-medium casualty exposures such as restaurants and bars, child and adult care facilities, vacant properties, general or artisan contractors, office buildings and light manufacturing operations. Environmental - targets small to mid-sized environmental contractors and offers a complete array of coverages, including consultant's professional liability, contractor's pollution liability and site specific environmental impairment liability. Excessand Umbrella - offers products that are written on both a primary and excess basis over approved underlying insurance carriers, primarily for commercial business. Targeted classes include commercial and residential construction contractors and subcontractors, manufacturers, wholesalers, retailers, service providers, municipalities and school districts. Transportation - offers physical damage coverages for high-value automobiles such as race cars and antique vehicles, as well as specialty commercial vehicles including dump trucks,
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standard homeowner's coverage. coverage. homeowner's standard
Property - provides coverage for mobile homes and dwellings that do not qualify for for qualify not do that dwellings and homes mobile for coverage provides - Property
Recreational Vehicle - provides coverage for motorcycles, snowmobiles and ATVs. ATVs. and snowmobiles motorcycles, for coverage provides - Vehicle Recreational
moderately priced yachts and newer watercraft up to 26 feet. feet. 26 to up watercraft newer and yachts priced moderately
Marine - offers personal lines coverage for older boats, high performance boats, boats, performance high boats, older for coverage lines personal offers - Marine
personal line coverages. It has the following divisions (see Exhibit 3B): 3B): Exhibit (see divisions following the has It coverages. line personal
markets and focuses its underwriting on marine, recreational vehicle, property and other other and property vehicle, recreational marine, on underwriting its focuses and markets
B. Markel American Specialty Personal and Commercial Unit offers insurance products in niche niche in products insurance offers Unit Commercial and Personal Specialty American Markel B.
from our wholesale operation. operation. wholesale our from
producers. We are going to great lengths to differentiate our Specialty Unit as being distinct distinct being as Unit Specialty our differentiate to lengths great to going are We producers.
programs are also marketed directly to consumers or through large retail specialist specialist retail large through or consumers to directly marketed also are programs •Nholesale •Nholesale
controls agency business through regular audits and pre-approvals. Certain products and and products Certain pre-approvals. and audits regular through business agency controls
Management grants very limited underwriting authority to a few carefully selected agents and and agents selected carefully few a to authority underwriting limited very grants Management
The majority of the Markel Specialty business is produced by retail insurance agents. agents. insurance retail by produced is business Specialty Markel the of majority The
single source admitted and non-admitted programs for a specific class or line of business. business. of line or class specific a for programs non-admitted and admitted source single
General Agent Programs - develops partnerships with managing general agents to offer offer to agents general managing with partnerships develops - Programs Agent General
stores and used car dealers. dealers. car used and stores
Garage - provides commercial coverages for auto repair garages, gas stations, convenience convenience stations, gas garages, repair auto for coverages commercial provides - Garage
private schools, short-term medical insurance, and pet health insurance. insurance. health pet and insurance, medical short-term schools, private
organizations, accident and medical insurance for colleges, universities, public schools and and schools public universities, colleges, for insurance medical and accident organizations,
Accident and Health - writes liability and accident insurance for amateur sports sports amateur for insurance accident and liability writes - Health and Accident
Horse and Farm - specializes in insurance coverages for horse-related risks. risks. horse-related for coverages insurance in specializes - Farm and Horse
performing arts organizations, and bed and breakfast inns. inns. breakfast and bed and organizations, arts performing
writes commercial coverages for social service organizations, museums and historic homes, homes, historic and museums organizations, service social for coverages commercial writes
organizations, such as children's camps, YMCAs, and child care centers. This division also also division This centers. care child and YMCAs, camps, children's as such organizations,
Property and Casualty - writes commercial coverages for youth and recreation recreation and youth for coverages commercial writes - Casualty and Property
following product areas/divisions (see Exhibit 3A): 3A): Exhibit (see areas/divisions product following
complete coverage difficult to obtain from a single insurer. The unit is organized into the the into organized is unit The insurer. single a from obtain to difficult coverage complete
in highly specialized activities that do not fit the risk profiles of standard insurers and make make and insurers standard of profiles risk the fit not do that activities specialized highly in
A. Markel Specialty Unit - focuses on providing total insurance programs for businesses engaged engaged businesses for programs insurance total providing on focuses - Unit Specialty Markel A.
Commercial (see Exhibit 3). 3). Exhibit (see Commercial
and has two operating units; Markel Specialty and Markel American Specialty Personal and and Personal Specialty American Markel and Specialty Markel units; operating two has and
2. Specialty Admitted Segment - this segment reported gross premiums of $302 million in 2009 2009 in million $302 of premiums gross reported segment this - Segment Admitted Specialty 2.
property and cargo for many marine-related classes. classes. marine-related many for cargo and property
Ocean Marine - offers a variety of coverages including general liability, professional liability, liability, professional liability, general including coverages of variety a offers - Marine Ocean
warehouseman's legal liability and contractors' equipment. equipment. contractors' and liability legal warehouseman's
Inland Marine - offers specialty coverages for risks such as motor truck cargo, cargo, truck motor as such risks for coverages specialty offers - Marine Inland
group include used car and truck dealers, motorcycle dealers, and repair shops. shops. repair and dealers, motorcycle dealers, truck and car used include group coal haulers, bloodmobiles, and house moving vehicles. Targeted classes in this product line line product this in classes Targeted vehicles. moving house and bloodmobiles, haulers, coal
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war account covers the hulls of ships and aircraft, and other related interests, against war war against interests, related other and aircraft, and ships of hulls the covers account war
coverage for a broad range of energy liabilities, as well as traditional marine exposures. The The exposures. marine traditional as well as liabilities, energy of range broad a for coverage
hull account covers physical damage to ocean-going vessels. The liability account provides provides account liability The vessels. ocean-going to damage physical covers account hull
many types of cargo. The energy account includes all aspects of oil and gas activities. The The activities. gas and oil of aspects all includes account energy The cargo. of types many
war and specie risks. The cargo account is an international transit-based book covering covering book transit-based international an is account cargo The risks. specie and war
Marine and Energy - underwrites a portfolio of coverages for cargo, energy, hull, liability, liability, hull, energy, cargo, for coverages of portfolio a underwrites - Energy and Marine
Exhibit 4}: 4}: Exhibit
B. Operating Divisions - Markel International has the following underwriting units/divisions (see (see units/divisions underwriting following the has International Markel - Divisions Operating B.
gross premium, including $9 million of premiums for Markel International. International. Markel for premiums of million $9 including premium, gross
commercial liability and property coverages. In 2009, ESR produced approximately $90 million of of million $90 approximately produced ESR 2009, In coverages. property and liability commercial
services to insurers. ESR was acquired for approximately $70 million and specializes in niche niche in specializes and million $70 approximately for acquired was ESR insurers. to services
Canadian managing general agent that provides insurance underwriting and administrative administrative and underwriting insurance provides that agent general managing Canadian
Effective October 1, 2009, this segment included the results of Elliott Special Risks (ESR}, a a (ESR}, Risks Special Elliott of results the included segment this 2009, 1, October Effective
therefore is able to write insurance and reinsurance business worldwide. worldwide. business reinsurance and insurance write to able is therefore
countries around the world. Markel Syndicate 3000 benefits from Lloyd's global licenses and and licenses global Lloyd's from benefits 3000 Syndicate Markel world. the around countries
MIICL also writes insurance in a number of other overseas territories and reinsurance in most most in reinsurance and territories overseas other of number a in insurance writes also MIICL
Is an Accredited Reinsurer in 47 US States plus District of Columbia Columbia of District plus States US 47 in Reinsurer Accredited an Is
& & US Virgin Islands Islands Virgin US Has a surplus lines license in 47 US States plus District of Columbia Columbia of District plus States US 47 in license lines surplus a Has
For insurance in all EU countries countries EU all in insurance For
MIICL is licensed: licensed: is MIICL
Markel Syndicate 3000, a 100% owned Lloyd's corporate syndicate. syndicate. corporate Lloyd's owned 100% a 3000, Syndicate Markel
company; and and company;
Markel International Insurance Company Limited (MIICL}, its London based insurance insurance based London its (MIICL}, Limited Company Insurance International Markel
Markel International operates in the UK through two commercial entities: entities: commercial two through UK the in operates International Markel
million. million.
Markel International reported gross premiums of $641 million and operating profits of $52 $52 of profits operating and million $641 of premiums gross reported International Markel
worldwide with approximately 24% of writings coming from the United States. In fiscal 2009, 2009, fiscal In States. United the from coming writings of 24% approximately with worldwide
professional liability and marine insurance on a direct and reinsurance basis. Business is written written is Business basis. reinsurance and direct a on insurance marine and liability professional
Spain, Singapore, Sweden, and Canada. Markel International writes specialty property, casualty, casualty, property, specialty writes International Markel Canada. and Sweden, Singapore, Spain,
In addition to seven branch offices in the United Kingdom, Markel International has offices in in offices has International Markel Kingdom, United the in offices branch seven to addition In
A. Overview Overview A.
3. Markel International / London Insurance Market Segment Segment Market Insurance London / International Markel 3.
to the consumer using direct mail, internet and telephone promotions. promotions. telephone and internet mail, direct using consumer the to
wholesale or specialty retail producers. The recreational vehicle program is marketed directly directly marketed is program vehicle recreational The producers. retail specialty or wholesale
emerging markets. The unit distributes its marine, property and other products through through products other and property marine, its distributes unit The markets. emerging
numbers of transactions, low average premiums and creative solutions for under-served and and under-served for solutions creative and premiums average low transactions, of numbers Markel American Specialty Personal and Commercial Line products are characterized by high high by characterized are products Line Commercial and Personal Specialty American Markel and associated perils. The specie account includes coverage for fine art on exhibit and in private collections, securities, bullion, precious metals, cash in transit and jewelry. Non-Marine Property - writes property and liability business for a wide range of coverage ranging from fire to catastrophe perils such as earthquake and windstorm. Business is written in either the open market or delegated authority accounts. Professional and Financial Risks -underwrites professional indemnity, directors' and officers' liability, intellectual property, some miscellaneous defense costs, incidental commercial crime and general liability coverages. Retail - offers a full range of professional liability products, including professional indemnity, directors' and officers' liability and employment practices liability. In addition, coverage is provided for small to medium-sized commercial property risks on both a stand-alone and package basis. Equine - writes bloodstock, livestock and aquaculture related products. The bloodstock account provides coverage for risks of mortality, theft, infertility and specified perils. The livestock account provides coverage for farms, zoos, animal theme parks and safari parks. The aquaculture account provides comprehensive coverage for fish at onshore and offshore farms.
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poverty by half in 2009-2014. 2009-2014. in half by poverty
urgent that authorities find ways to help the poor. The government's goal is to cut the incidence of of incidence the cut to is goal government's The poor. the help to ways find authorities that urgent
the electorate subsists on less than US$1 a day. As the middle class prospers, it becomes more more becomes it prospers, class middle the As day. a US$1 than less on subsists electorate the
Income inequality is on the rise as the economy expands. The government estimates that a third of of third a that estimates government The expands. economy the as rise the on is inequality Income
period. period.
around 9% of GDP by 2014. Infrastructure investments will total around US$320 billion over this this over billion US$320 around total will investments Infrastructure 2014. by GDP of 9% around
reduce growth of GDP by about 1% per year. India plans to boost total spending on infrastructure to to infrastructure on spending total boost to plans India year. per 1% about by GDP of growth reduce
The country's infrastructure needs are acute. Analysts calculate that inadequate infrastructure will will infrastructure inadequate that calculate Analysts acute. are needs infrastructure country's The
current account deficit was 2.2% of GDP in 2009 and will rise to 2.5% in 2010. 2010. in 2.5% to rise will and 2009 in GDP of 2.2% was deficit account current
Analysts expect that India's share of world trade will continue to rise over the next decade. The The decade. next the over rise to continue will trade world of share India's that expect Analysts
Trade barriers have been reduced since the country joined the WTO but import tariffs are still high. high. still are tariffs import but WTO the joined country the since reduced been have barriers Trade
the USA, Japan, China and the UK. UK. the and China Japan, USA, the
consumer market could match that of Italy's in absolute terms and by 2025 it will trail only those of of those only trail will it 2025 by and terms absolute in Italy's of that match could market consumer
equivalent to that of Brazil with a population only a sixth the size of India's. By 2015, India's India's 2015, By India's. of size the sixth a only population a with Brazil of that to equivalent
lih lih largest consumer market, roughly roughly market, consumer largest US$28 billion per year. Currently, India is the world's world's the is India Currently, year. per billion US$28
Around six million of the country's households are considered to be 'rich' and spend more than than more spend and 'rich' be to considered are households country's the of million six Around
could crowd out private investment as the recovery gains momentum. momentum. gains recovery the as investment private out crowd could
but created financial imbalances. The fiscal deficit is expected to reach 10% of GDP in 2010 and and 2010 in GDP of 10% reach to expected is deficit fiscal The imbalances. financial created but
The economy is being driven mainly by public spending, which has bolstered business confidence confidence business bolstered has which spending, public by mainly driven being is economy The
remain near that level through 2014. See Exhibit 5. 5. Exhibit See 2014. through level that near remain
also slumped badly when world commodity prices fell. GDP is projected to grow by 8% in 2010 and and 2010 in 8% by grow to projected is GDP fell. prices commodity world when badly slumped also
the pace slipped to 6.8% in 2009 when capital imports and exports declined. Growth in farm output output farm in Growth declined. exports and imports capital when 2009 in 6.8% to slipped pace the
The economy grew at an average rate of more than 8% (GDP) per year between 2000 and 2007 but but 2007 and 2000 between year per (GDP) 8% than more of rate average an at grew economy The
Economy Economy C. C.
presidential election scheduled in 2012, the government is considered to be very stable. stable. very be to considered is government the 2012, in scheduled election presidential
{National Congress) holding majority control of both houses of Parliament. With the next next the With Parliament. of houses both of control majority holding Congress) {National
basis of election results. The current president, Pratibha Patil, was elected in 2007, with her party party her with 2007, in elected was Patil, Pratibha president, current The results. election of basis
The president of India holds all executive power and appoints the Prime Minister and Cabinet on the the on Cabinet and Minister Prime the appoints and power executive all holds India of president The
B. Government Government B.
United States and India are the world's largest democracies. democracies. largest world's the are India and States United
encompassing a large number of ethnic groups, the largest being Hindu {84% of population). The The population). of {84% Hindu being largest the groups, ethnic of number large a encompassing
people being less than 29 years of age. India is a federation of 28 states and 7 union territories, territories, union 7 and states 28 of federation a is India age. of years 29 than less being people
country in less than 20 years. It has one of the youngest populations with approximately 700 million million 700 approximately with populations youngest the of one has It years. 20 than less in country
India has a population of 1.2 billion and is projected to overtake China as the world's most populous populous most world's the as China overtake to projected is and billion 1.2 of population a has India A. Overview/ 2010 2010 Overview/ A. Inflation is a serious issue in India, averaging 4-5% in 2009, driven primarily by rising food prices. If the government addresses the food issue, inflation in 2010 and beyond may continue at 4%, however if oil prices go up, inflation could rise to 5-6%
In summarizing the future of the Indian economy, Rajesh Chakrabarti, of the Indian School of Business states the following: "Overall, in 2010 and beyond, the economy will continue to be strong on the domestic front. The driver of growth will continue to be internal consumption, the aspirations of a large middle class and the spread of the income base across different segments of the economy. We are now seeing the emergence of a much larger and far more powerful middle class with more buying power than ever before. The growth in the automobile sector, for instance, shows that the middle class has been sitting on a certain amount of surplus money which it is now ready to deploy. India is a very peculiar economy where the middle class has a long way to go in building a good quality of life in keeping with its aspirations. This, in itself is a big driver of growth. The dampener to the economy, however, could come from the supply side. Food prices are a major concern. Within this, the issue is not just of poor monsoons and poor food supply but also of food management."
INSURANCE INDUSTRY IN INDIA
A. Overview/History
From 1970-1999, the industry was essentially a monopoly, with the General Insurance Corporation of India (GIC} being the only player. GIC had four subsidiaries which were headquartered in the big Metro Cities of India.
In 1999, the Insurance Regulatory and Development Authority Act was passed which removed the exclusive privilege of GIC to conduct business in India. The four subsidiaries of GIC became independent public insurance companies. The act also triggered the startup and rapid growth of private insurance companies in India. These companies were the product of joint ventures between foreign insurance firms and an Indian partner such as a bank or manufacturer.
B. Structure
In 2009, the Indian insurance industry was estimated at over $50 billion (US) in annual premiums. The industry consists of two segments, Life Insurance ($44.5 billion) and General Insurance (non-life, $6.3 billion). There are 23 companies competing in Life, 22 of which are private; in the General segment, 15 are private and 6 public. Exhibit 6 contains a breakout of the structure and the rapid growth of new private players in the industry, caused by deregulation.
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partner such as a bank, healthcare or manufacturing company. The maximum percent ownership in in ownership percent maximum The company. manufacturing or healthcare bank, a as such partner
Almost all of the private companies are joint ventures between foreign insurance firms and an Indian Indian an and firms insurance foreign between ventures joint are companies private the of all Almost
and enjoy technology advantages. advantages. technology enjoy and
2005. This trend is expected to continue in the future because the private companies are better funded funded better are companies private the because future the in continue to expected is trend This 2005.
percent {41%) of premiums in 2009 were written by private companies, compared to only 20% in fiscal fiscal in 20% only to compared companies, private by written were 2009 in premiums of {41%) percent
Exhibit 8 contains a breakout of the segment in 2009 from a public to private perspective. Forty one one Forty perspective. private to public a from 2009 in segment the of breakout a contains 8 Exhibit
General Insurance Segment Segment Insurance General
4. Enhanced customer service via new distribution channels will be an absolute must. must. absolute an be will channels distribution new via service customer Enhanced 4.
edge is forecasted for private firms here. here. firms private for forecasted is edge
3. Technology (data collection and usage) will be a key competitive advantage for firms. A big big A firms. for advantage competitive key a be will usage) and collection (data Technology 3.
2. Rising competition will trigger a fall out of underperforming firms. firms. underperforming of out fall a trigger will competition Rising 2.
downside to such products is the tie in to capital markets. markets. capital to in tie the is products such to downside
investors the option to put a part of their premium in various investment portfolios. The The portfolios. investment various in premium their of part a put to option the investors
Unit-linked insurance plans will be the key products offered to consumers. Such plans give give plans Such consumers. to offered products key the be will plans insurance Unit-linked 1. 1.
Several future trends are projected in the Life segment: segment: Life the in projected are trends future Several
A. Life Insurance Segment Trends Trends Segment Insurance Life A.
7 contains a breakout of the players in the Life Insurance segment. segment. Insurance Life the in players the of breakout a contains 7
and Prudential (UK) had a market share of approximately 7%, the largest private sector company. Exhibit Exhibit company. sector private largest the 7%, approximately of share market a had (UK) Prudential and
the total premiums ($44 b) written in 2009. ICICI Prudential, a joint venture between ICICI Bank of India India of Bank ICICI between venture joint a Prudential, ICICI 2009. in written b) ($44 premiums total the
The one public life insurer {LIC) dominated this segment with a market share of approximately 75% of of 75% approximately of share market a with segment this dominated {LIC) insurer life public one The
Life Insurance Segment Segment Insurance Life
population growth are key factors. factors. key are growth population
compared to a world average of 3.1%. Also, the strong emergence of the middle class and young young and class middle the of emergence strong the Also, 3.1%. of average world a to compared
here is the very underdeveloped General insurance industry, i.e. 0.7% penetration rate per GDP GDP per rate penetration 0.7% i.e. industry, insurance General underdeveloped very the is here
short term followed by stronger growth (>10% per annum) in the mid and long term. The key driver driver key The term. long and mid the in annum) per (>10% growth stronger by followed term short
downturn in capital markets. Projections for 2010 and beyond call for modest {5%) growth in the the in growth {5%) modest for call beyond and 2010 for Projections markets. capital in downturn
Growth in the General segment slowed to 12% in 2008 and 9% in 2009, again caused by the the by caused again 2009, in 9% and 2008 in 12% to slowed segment General the in Growth
rate per GDP is expected to grow from 4 to 5%. 5%. to 4 from grow to expected is GDP per rate
increasing per capita incomes, rising affluence and increasing life expectancy. Also the penetration penetration the Also expectancy. life increasing and affluence rising incomes, capita per increasing
products. From 2010-2014, Life is projected to grow by 4% per annum. Key drivers in this growth are are growth this in drivers Key annum. per 4% by grow to projected is Life 2010-2014, From products.
2009. The bulk of this decline occurred with private insurers who offered a myriad of linked linked of myriad a offered who insurers private with occurred decline this of bulk The 2009.
With the downturn in capital markets, the Life segment witnessed a 6% decline in premiums in in premiums in decline 6% a witnessed segment Life the markets, capital in downturn the With
at a compound annual growth rate of 25.8%. 25.8%. of rate growth annual compound a at
firms entering the industry. From fiscal 2001 to 2007, total premiums in both Life and General grew grew General and Life both in premiums total 2007, to 2001 fiscal From industry. the entering firms
However, it enjoyed tremendous growth from 2000 to 2008 as the result of the many new private private new many the of result the as 2008 to 2000 from growth tremendous enjoyed it However,
In 2009, India was the fifth largest insurance market in Asia, trailing China, South Korea, and Taiwan. Taiwan. and Korea, South China, trailing Asia, in market insurance largest fifth the was India 2009, In
Past and Projected Financial Growth Growth Financial Projected and Past C. C. these joint ventures by the foreign firm was limited to 26% in 2009; however, it is expected that the limit will be raised to 49% in the near future.
ICICILam bard and Bajai Allianz are the leading private firms. They have experienced strong growth by concentrating on the personal/retail product segment and building a huge distribution network. During the last two years (2007-2009), several specialty firms have entered this industry including ECGC,Star Health & Allied, Apollo DKV and Agricultural Insurance.
A. General Insurance - Composition
Exhibit 9 contains a percent breakout of the General Insurance segments in 2009, with motor insurance being the largest. Products are sold to two primary distribution channels, Commercial Business and Personal/Retail. Growth in the latter channel will increase because of higher income levels and improving lifestyles.
Some trends that are occurring within these segments include:
1. Private firms have avoided motor insurance due to low pricing and high claim payouts. 2. Fire insurance and marine insurance are dominated by the six public companies. 3. Health insurance is showing the highest growth representing approximately 20% of total premiums written compared to 15% in 2007.
B. Channels of Distribution
Exhibit 10 contains a breakout of how insurance companies sell their products in India, with individual agents being the prime source. Since distribution through segments requires a long term commitment and investment, private firms prefer other options such as corporate agent banks, brokers/corporate agents and internet/mobile.
Banks acting as corporate agents have been a major source of distribution for private firms. Also brokers and other corporate agents are emerging with over 250 direct brokers in the industry. Global insurance brokers such as Aon, Marsh, Willis and Howden have entered the Indian market.
C. Removal of Tariffs (Detariffing)
In 2007, the Indian insurance industry was allowed to restructure pricing options for its consumers. Insurers were permitted to raise premium rates but were not allowed to vary coverage, terms and conditions. This allowed a migration to risk based pricing.
In 2009, insurers were allowed to file variations in deductibles and coverage. This allowed flexibility in breadth of coverage. However, detariffing has led to a virtual price war in products such as fire and motor resulting in lower profitability.
The impact of detariffing on a short term basis will result in negative profitability in certain products but will present long term opportunities for firms with scientific risk based pricing and strong underwriting capabilities. Private firms seem to be best positioned for these opportunities.
D. Future Opportunities/Threats [10]
[11] [11]
a focus on India's 6 major cities. cities. major 6 India's on focus a
Finance. Max Bupa's entry strategy was to provide health care solutions in untapped markets with with markets untapped in solutions care health provide to was strategy entry Bupa's Max Finance.
business Indian Corporation (Max India Ltd) and a U.K.-based health insurance group, Bupa Bupa group, insurance health U.K.-based a and Ltd) India (Max Corporation Indian business
Max Bupa Health Insurance Co. Ltd was a 74%-26% health insurance joint venture between a multi a between venture joint insurance health 74%-26% a was Ltd Co. Insurance Health Bupa Max
During 2009, the following joint ventures took place in India, India, in place took ventures joint following the 2009, During
Recent General Insurance Joint Ventures Ventures Joint Insurance General Recent
Motor Insurance Insurance Motor Two Wheeler and Four Wheeler. Wheeler. Four and Wheeler Two -
Overseas Travel, and Pravasi Bhartiya Bima Yojana. Yojana. Bima Bhartiya Pravasi and Travel, Overseas
Travel Insurance Insurance Travel Domestic Travel, Individual Overseas Travel, Student Overseas Travel, Corporate Corporate Travel, Overseas Student Travel, Overseas Individual Travel, Domestic -
Personal Solutions Solutions Personal Health Insurance, Personal Accident, Group Personal Accident, and Group Health. Health. Group and Accident, Personal Group Accident, Personal Insurance, Health -
Rural Solutions Solutions Rural -Weather Insurance, Janata Personal Accident, Tractor, and Farmer's Package. Package. Farmer's and Tractor, Accident, Personal Janata Insurance, -Weather
Export Solutions Solutions Export Export Import Transit and Export Credit. Credit. Export and Transit Import Export -
Compensation, and Professional Indemnity. Indemnity. Professional and Compensation,
Liability Solutions Solutions Liability Directors & Officers Liability, Event Insurance, Product liability, Workmen's Workmen's liability, Product Insurance, Event Liability, Officers & Directors -
Performance Guarantee. Guarantee. Performance
Project Solutions Solutions Project Contractors' All Risk, Contractors' Plant & Machinery, Erection All Risk and and Risk All Erection Machinery, & Plant Contractors' Risk, All Contractors' -
Insurance, Electronic Equipment Insurance, Fidelity Insurance, Marine export import, and Machinery. Machinery. and import, export Marine Insurance, Fidelity Insurance, Equipment Electronic Insurance,
Business Solutions Solutions Business Burglary Insurance, Industrial All Risk, All Risk Insurance, Consequential Loss (Fire) (Fire) Loss Consequential Insurance, Risk All Risk, All Industrial Insurance, Burglary -
effective channels of distribution. Its products include: include: products Its distribution. of channels effective
The key to the success of this company was its ability to offer a wide range of products and establish establish and products of range wide a offer to ability its was company this of success the to key The
end of 2009, the company had 285 offices in more than 110 cities. cities. 110 than more in offices 285 had company the 2009, of end
company to break-even within one year of its commencement of the business in this industry. At the the At industry. this in business the of commencement its of year one within break-even to company
insurance claims management and investment management. The company is the first private sector sector private first the is company The management. investment and management claims insurance
Fairfax Financial Holdings is a diversified financial corporate engaged in general insurance, reinsurance, reinsurance, insurance, general in engaged corporate financial diversified a is Holdings Financial Fairfax
the Canada-based Fairfax Financial Holdings Limited. ICICI Bank is India's second largest bank, and and bank, largest second India's is Bank ICICI Limited. Holdings Financial Fairfax Canada-based the
company in the General Insurance segment. It is a 74-26% joint venture between ICICI Bank Limited and and Limited Bank ICICI between venture joint 74-26% a is It segment. Insurance General the in company
This company entered the general insurance industry in India in 2001 and is the number one private private one number the is and 2001 in India in industry insurance general the entered company This
ICICI Lombard General Insurance Company Ltd Ltd Company Insurance General Lombard ICICI
shakeout dominated by large players. players. large by dominated shakeout
a solution for small companies to both enter and grow their business. This may result in an industry industry an in result may This business. their grow and enter both to companies small for solution a
Also fringe players will have to rethink their entry plans. Consolidation with established firms may be be may firms established with Consolidation plans. entry their rethink to have will players fringe Also
Threats include the short term effect of detariffication and a slow recover of global capital markets. markets. capital global of recover slow a and detariffication of effect term short the include Threats
risks and adequate training of underwriters and sales force. force. sales and underwriters of training adequate and risks
customization for consumers. Also firms must develop systems that will insure accurate pricing of of pricing accurate insure will that systems develop must firms Also consumers. for customization
Opportunities for new and existing entrants will be product innovation and higher levels of of levels higher and innovation product be will entrants existing and new for Opportunities
penetration as a% of GDP, higher disposable income and increasing urbanization. urbanization. increasing and income disposable higher GDP, of a% as penetration The General Insurance Industry is projected to grow beyond 2010 because of the low insurance insurance low the of because 2010 beyond grow to projected is Industry Insurance General The
[12] [12]
questions needed quick resolution. resolution. quick needed questions
Stovin wanted to make a recommendation to Markel's board by September, 2010. Therefore the above above the Therefore 2010. September, by board Markel's to recommendation a make to wanted Stovin
7. What investment will be necessary and what return expected? expected? return what and necessary be will investment What 7.
6. What resources do we need to establish an effective presence and gain competitive advantage? advantage? competitive gain and presence effective an establish to need we do resources What 6.
5. What does Markel bring to India; what does our company have to offer; i.e. an entry strategy? strategy? entry an i.e. offer; to have company our does what India; to bring Markel does What 5.
4. Do we understand the distribution complexities in the market? market? the in complexities distribution the understand we Do 4.
should we pursue? pursue? we should
3. Do we have sufficient knowledge of the Indian insurance market; what segment and products products and segment what market; insurance Indian the of knowledge sufficient have we Do 3.
2. If yes, who should our joint venture partner be? be? partner venture joint our should who yes, If 2.
1. Should we enter the Indian Insurance Industry? Industry? Insurance Indian the enter we Should 1.
however numerous questions existed which needed resolution, namely: namely: resolution, needed which existed questions numerous however
William Stovin knew that India represented a huge opportunity to grow Markel' s international business; business; international s Markel' grow to opportunity huge a represented India that knew Stovin William
Markel's Entry Into India India Into Entry Markel's
venture will be funded using IAG's internal resources. resources. internal IAG's using funded be will venture
network and brand and will target small and midsized businesses as well as the retail segment. The The segment. retail the as well as businesses midsized and small target will and brand and network
to enter the general insurance industry. The venture will have exclusive access to SBl's distribution distribution SBl's to access exclusive have will venture The industry. insurance general the enter to Insurance Australia Group (IAG) and the State Bank of India (SBI) formed a 26%-74% joint venture venture joint 26%-74% a formed (SBI) India of Bank State the and (IAG) Group Australia Insurance
[13] [13]
16% 16%
Percent Breakout By Segment - $1.9 billion Gross Premium Value Value Premium Gross billion $1.9 - Segment By Breakout Percent
Markel Corporation - Operating Segments/ 2009 2009 Segments/ Operating - Corporation Markel Exhibit 1 1 Exhibit
(14] (14]
Marine Marine Inland Inland
Marine Marine Ocean Ocean / / ~ ~ Transportation Transportation l<, l<,
30· 30· 3~.,;, 3~.,;, ✓-
4% 4% Umbrella Umbrella
5% 5% arnL- Excess Excess
.5'%, .5'%, - - Environmental Environmental
23%, 23%,
27% 27%
Percent Breakout of Product Lines Groups - $1.0 billion Gross Premium Value Value Premium Gross billion $1.0 - Groups Lines Product of Breakout Percent
Excess and Surplus Lines Segment/ 2009 2009 Segment/ Lines Surplus and Excess Exhibit 2 2 Exhibit
[15] [15]
Markel Global Global Markel
Gross Premium Value ($302 million) million) ($302 Value Premium Gross
Operating Units/ 2009 2009 Units/ Operating - Specialty Admitted Segment Segment Admitted Specialty Exhibit 3 3 Exhibit
[16] [16]
($90 million Gross Premium Value) Value) Premium Gross million ($90
Percentage Breakout by Product Area Area Product by Breakout Percentage
Markel American Specialty Personal and Commercial Lines Unit Unit Lines Commercial and Personal Specialty American Markel
Exhibit 3B 3B Exhibit
5% 5%
9% 9%
General Agent Agent General
($210 million Gross Premium Value) Value) Premium Gross million ($210
Percentage Breakout by Product Area Area Product by Breakout Percentage
Markel Specialty Unit Unit Specialty Markel Exhibit 3A 3A Exhibit
[17] [17]
13%, 13%,
16% 16%
25% 25%
Premium Value Value Premium
by by Operating Units/Divisions - $641 million Gross Gross million $641 - Units/Divisions Operating Percentage Breakout Breakout Percentage
Markel International - London Insurance Market Segment/ 2009 2009 Segment/ Market Insurance London - International Markel Exhibit 4 4 Exhibit
[18] [18]
period) period)
end of of end
(LCU/US$, (LCU/US$,
Rate Rate
43.77 44.14 44.48 44.48 44.14 43.77
39.42 48.46 44.68 44.67 44.05 44.05 44.67 44.68 48.46 39.42 44.24 44.24 Exchange Exchange
Change) Change)
{% {%
Price Index Index Price
4.4 4.3 4.3 4.4
5.1 5.1
10.9 8.5 5.8 5.8 8.5 10.9 8.4 8.4 6.4 6.4 5.8 5.8 Consumer Consumer
bil.) bil.)
GDP (US$ (US$ GDP
1,940.6 2,180.7 2,425.4 2,425.4 2,180.7 1,940.6
1,142.3 1,223.2 1,221.2 1,496.8 1,698.9 1,698.9 1,496.8 1,221.2 1,223.2 1,142.3 911.4 911.4 Nominal Nominal
{% {% change) change)
7.5 7.4 7.4 7.5
7.8 7.8
7.9 7.9 6.8 8.0 8.0 6.8 9.1 6.1 6.1 9.1 9.7 9.7 Real GDP GDP Real
2012 2013 2014 2014 2013 2012 2007 2008 2009 2010 2011 2011 2010 2009 2008 2007 2006 2006
Projected Projected Actual Actual
Projected - 2010-2014 2010-2014 - Projected
India; Actual - 2006-2009 2006-2009 - Actual India;
Key Macro Economic Indicators Indicators Economic Macro Key Exhibit 5 5 Exhibit
[19] [19]
1 1 1 1
1 1 1 1 Reinsurer Reinsurer
15 15
8 8 6 6 3 3 Private Private
6 6 6 6 4 4 4 4 Public Public
Number of Firms Firms of Number
Indian Insurance/ Growth of Firms {2000 to 2009) 2009) to {2000 Firms of Growth Insurance/ Indian
-15 firms firms -15 -6 firms firms -6 -22 firms firms -22 -1 firm firm -1
Private Private
Public Public
Private Private Public Public
I I I I I I I I
I I I I
$6.3 billion billion $6.3 $44.5 billion billion $44.5
Marine, Motor, Health, other other Health, Motor, Marine, Premium, Pensions Pensions Premium,
General Insurance - Fire, Fire, - Insurance General
Life Insurance - Term, Single Single Term, - Insurance Life
I I
I I I I
Development Authority (IRDA) (IRDA) Authority Development
Insurance Regulatory and and Regulatory Insurance
I I
{Government of India) India) of {Government
Ministry of Finance Finance of Ministry
By Segment- Public vs. Private Private vs. Public Segment- By
Indian Insurance Industry Breakout 2009 2009 Breakout Industry Insurance Indian Exhibit 6 6 Exhibit Exhibit 7
Life Insurance Companies in India - Market Share 2009 $44 billion Gross Premium Value
LIC* Government of India None NIL 74.39 ICICI Prudential ICICI Bank Ltd Prudential, UK 26.0 6.74 Bajaj Allianz Bajaj Auto Allianz, Germany 26.0 4.83 SBI Life SBI BNP Paribas, France 26.0 2.79 HDFC Standard HDFC Standard Life, UK 18.6 2.41 Birla Sun Life Aditya Birla Group Sunlife, Canada 26.0 1.63 Reliance Reliance Group None NIL 1.60 Max New York Max, India New York Life, USA 26.0 1.35 Tata AIG Tata Group AIG, USA 26.0 1.02 Aviva Dabur CGU Life, UK 26.0 0.94 OM Kotak Life Kotak Mahindra Bank Old Mutual, South Africa 26.0 0.84 Metlife Jammu & Kashmir Bank, Shapoorji Pallonji, Max Metlife, USA 26.0 0.58 ING Vysya Gujarat Ambuja, Enam, Exide ING Insurance, Netherlands 26.0 0.58 Shriram Life Shriram Group Sanlam, South Africa 26.0 0.18 Sahara Sahara Group None NIL 0.07 Bharti AXA Bharti Group AXA Insurance, France 26.0 0.06 IDBI Fortis Life IDBI, Federal Bank Fortis, UK 26.0 0.01 Future Generali Future Group Generali Group, Italy 26.0 0.00 Canara HSBCOBC Canara Bank, OBC HSBC,Asia Pacific 26.0 0.00 AEGON Religare Religare AEGON, USA 26.0 0.00 Star Union Dai-ichi Bank of India, Union Bank of India Dai-ichi, Japan 26.0 0.00 DLF Pramerica DLF Pramerica, USA 26.0 0.00 * LIC - one public company; others private
[20]
[21] [21]
6,313 100% 100% 6,313 Grand Total Total Grand
3,719 59% 59% 3,719 Public Total Total Public
13% 13% 817 817 Oriental Oriental
14% 14% 882 882 United India India United
882 14% 14% 882 National National
1,138 18% 18% 1,138 New India India New
Public Public
2,593 41% 41% 2,593 Private Total Total Private
0% 0% 6 6 Bharti AXA General General AXA Bharti
6 0% 0% 6 Universal Sompo Sompo Universal
0% 0% 23 23 Shriram General General Shriram
1% 1% 40 40 Future Generali Generali Future
1% 1% 70 70 HDFC ERGO General General ERGO HDFC
2% 2% 141 141 Cholamandalam Cholamandalam
3% 3% 166 166 Royal Sundaram Sundaram Royal
3% 3% 182 182 Tata -AIG -AIG Tata
5% 5% 313 313 IFFCO -Tokio -Tokio IFFCO
6% 6% 395 395 Reliance General General Reliance
9% 9% 545 545 Bajaj Allianz Allianz Bajaj
705 11% 11% 705 ICICI - Lombard Lombard - ICICI
Private Private
2008-09 2008-09
millions) millions) ($ ($
Share Share
Premiums Premiums
Insurer Insurer
Market Market
Gross Written Written Gross
$6.3 billion Gross Premium Value Value Premium Gross billion $6.3
Percent Market Share - Private vs. Public Public vs. Private - Share Market Percent
Breakout of General Insurance Segment Segment Insurance General of Breakout Exhibit 8 8 Exhibit
[22] [22]
Engineering, 5.1% 5.1% Engineering,
1 1 __ __ 2.6%_. 2.6%_. Accidents, Accidents,
Personal Personal
Liability, 2.4% 2.4% Liability,
$6.3 billion Gross Premium Value Value Premium Gross billion $6.3
Percentage Breakout by Product Product by Breakout Percentage
General Insurance/ 2009 2009 Insurance/ General Exhibit 9 9 Exhibit
(23] (23]
Others Others - Banks Banks - Agents Agents
Direct Selling Selling Direct Brokers Brokers Individual Corporate Agent Corporate Agent Agent Corporate Agent Corporate Individual
0% 0%
10% 10%
20% 20%
30% 30%
40% 40%
50% 50%
60% 60%
General Insurance Distribution Channels - 2009 2009 - Channels Distribution Insurance General Exhibit 10 10 Exhibit
[24] [24]
22} McKinsey Quarterly-A Richer Future for India -January 2009 2009 -January India for Future Richer Quarterly-A McKinsey 22}
21} Business Monitor- India Insurance Report - January 2009 2009 January - Report Insurance India Monitor- Business 21}
20} Standard & Poors - Global Insurance Surveys - February 2007 2007 February - Surveys Insurance Global - Poors & Standard 20}
19} RBC Capital Markets - Markel Corp - February 2010 2010 February - Corp Markel - Markets Capital RBC 19}
18} One Source - Markel Corp - December 2009 2009 December - Corp Markel - Source One 18}
17} Country Watch - India 2010 Country Review-January 2010 2010 Review-January Country 2010 India - Watch Country 17}
16} IHS Global Insight - India - March 2010 2010 March - India - Insight Global IHS 16}
15) IBIS World Company Report - Markel Corp - December 2009 2009 December - Corp Markel - Report Company World IBIS 15)
14} Data Monitor- Markel Corp Company Profile - November 2009 2009 November - Profile Company Corp Markel Monitor- Data 14}
13} Mergent Online - Markel Corp Business Summary- February 2010 2010 February Summary- Business Corp Markel - Online Mergent 13}
12) EuroMonitor International - India Country Pulse - February 2010 2010 February - Pulse Country India - International EuroMonitor 12)
11) EuroMonitor International - India Country Profile - January 2010 2010 January - Profile Country India - International EuroMonitor 11)
10} Markel Internal Document - Markel for Investors - June 2009 2009 June - Investors for Markel - Document Internal Markel 10}
9} India Knowledge at Wharton - The Indian Economy in the Next Decade - January 2010 2010 January - Decade Next the in Economy Indian The - Wharton at Knowledge India 9}
8) Value Line - Markel Corporation -June, 2009 2009 -June, Corporation Markel - Line Value 8)
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6) One Source Global Business Browser - Markel International Services, Ltd - March 2010 2010 March - Ltd Services, International Markel - Browser Business Global Source One 6)
5} Business Monitor International - India Insurance Report - Ql, 2010 2010 Ql, - Report Insurance India - International Monitor Business 5}
4} PRS Group, Inc. - India Country Report - June 2009 2009 June - Report Country India - Inc. Group, PRS 4}
3} Markel Company- Form l0Q - Fiscal 2009 2009 Fiscal - l0Q Form Company- Markel 3}
2} Markel Company- Form l0K - Fiscal 2009 2009 Fiscal - l0K Form Company- Markel 2}
1} Markel Company -Annual report - Fiscal 2009 2009 Fiscal - report -Annual Company Markel 1} Works Cited Cited Works