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Mail Business and its Needs. 7-9-2013. Global Scenario. World economy grew at GDP growth rate of 5.1% in 2010 and at 4% in 2011. Fall in growth rate in US at 1.5% in 2011 (3% in 2010), Japan negative growth (-0.5%) in 2011 due to after effects of earth quake and Tsunami (grew at 4% in 2010).

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global scenario
Global Scenario
  • World economy grew at GDP growth rate of 5.1% in 2010 and at 4% in 2011.
  • Fall in growth rate in US at 1.5% in 2011 (3% in 2010), Japan negative growth (-0.5%) in 2011 due to after effects of earth quake and Tsunami (grew at 4% in 2010).
  • Emerging economies saw high inflationary pressure, growth decline – growth estimated at 6.4% in 2011.

Without a strong recovery in America or Japan, or a revival in Euro area, the world economy is unlikely to grow much faster than today’s 3%

  • Emerging markets slowing down
  • Emerging markets now account for 50% (PPP) of the world output (from 38%)
  • Great deceleration as booming emerging markets can no longer make for weaknesses of rich countries
  • Collectively emerging markets around 5%
  • China lucky if it manages 7.5% growth in 2013
  • India around 5%
  • Brazil and Russia 2.5%

N11 includes Bangladesh, Mexico, Nigeria, Turkey, Indonesia, Malaysia,etc

  • Small economies cannot have same impact as BRICS
the next 10 years
The next 10 years..
  • Recent study by McKinsey: Indian economy will grow fivefold in the next 20 years.
  • Household savings more than those in other emerging markets such as China and Brazil, constituting 23.5% of India's GDP in 2009-10, as compared with 5% in Brazil and 15% in China.
  • Population dividend: As per UN population division projections, India's population by 2015 will constitute of 30% individuals under age 14 and a whopping 60% in the age group of 15 to 59 years
  • Research by Morgan Stanley: India’s working-age population will increase by 136 million by 2020 (China’s working-age population, by comparison, will grow by 23 million.)
  • Large young population, low rate of life insurance penetration/density, high rate of personal savings, imply huge potential for the Indian insurance market in the coming decade.
  • Report by BRIC data, market size of Indian life insurance industry expected to almost double by 2015: to Rs 5,81,880 crin 2015 from Rs 3,45,800 cr in 2011
  • India would be the third-largest market for life insurance in the world by 2015, only after China and Japan.
  • Premium income expected to grow to Rs. 10,70,000 Cr. by 2020.
mail volume 2008
Mail Volume -- 2008
  • U.S. 19250 crore
  • Japan 2410 crore
  • Germany 2260 crore
  • Britain 1920 crore
  • France 1670 crore
  • Positive Correlation between economic growth and mail volume handled, despite substitution effect
survival and growth
Survival and Growth ?
      • BANKING
        • DOMESTICL
social commitment and financial inclusion schemes
Social Commitment and Financial Inclusion Schemes

Payment to the MNREGA beneficiaries

  • MGNREGA wages are being disbursed through Post Offices in 19 Postal Circles.

Social Security Payments

  • The Department is also disbursing pension under the Old-age Pension scheme.

Unique Identification Authority:

  • Department has an ongoing project on National Address Database Management Project with focus on standardizing addresses.
  • DOP shall be a Registrar of UIDAI by which public can apply for UID through Selected Post Offices.
  • Booking, transmission & delivery of UID number Aadhar letters through Speed Post in every nook and corner of the country.


    • Point of presence for the New Pension Scheme beneficiaries in all the 808 Head Post Offices.

Consumer Price Index (Rural)

  • Data for Rural Consumer Price Index is being collected through 1181 villages on a monthly basis,
major sources of revenue receipts
Major sources of Revenue Receipts

figures in crores of Rs.( one billion = 100 crores )

remmitances domestic international
  • Money Order system
  • Large Scale migration within and also international with economic growth
  • Rise to challenge, otherwise both formal and informal challenge
  • Rise of Western Union, using DOP
  • Use Technology, such as mobile money transfer- ex. Kenya Italy India (started )- how it operates
  • Use banking services for money remittances (Internet, ATM)
banking in postal administrations
Banking – In Postal Administrations
  • Post largest network in the world
  • 662,000 Pos ( out of which 155,000 in India)
  • 1.6 billion accounts
  • Only 523,000 bank branches and ATMs
  • Globally 3 out of 4 postal operators offer financial services
  • PO second largest contributor after banks towards financial inclusion

Key success factors for Pos are their network, cash, logistics,

  • Trust, and a deep understanding of client’s needs because of its physical and locational proximity to the client
  • Interested in financial inclusion– all countries
  • Setting up of Post Bank one of the best models for financial inclusion

For sustenance in the long run, Post Banks need to generate adequate revenue and be competitive in the market

  • Minimum capital requirement may vary, but may be 20m USD
  • Time frame for viability 5 years
  • Need to hire skilled managers from the banking sector
  • Train postal staff in banking operations

Before setting up bank need to have proper risk assessment and a strategy to overcome obstacles created by Banking lobby

  • Keep financial products simple so as to win customers from the less educated strata of society who have so far remained outside the formal banking services
  • Develop banking network in more populated areas without losing track of the rural network
  • Post Maroc in Morocco – slogans “ For all Moroccans” and “proximity and accessibility”
  • Hire consultant, now second largest distributor of bank cards in Morocco
  • Helped in setting up bank in Gabon
  • According to UPU, it has become a model for the developing countries
international comparison of insurance penetration life
International Comparison of Insurance Penetration (Life)*

*Insurance Penetration is measured as ratio (in %) of Premium (in US$) to GDP( in US$)

Source: Swiss Re, Sigma various volumes as reproduced in Handbook on Indian Insurance Statistics 2007-08 brought by IRDA 2009, Annual Reports IRDA.

insurance as revenue earner
Insurance as Revenue Earner
  • Postal Administrations looking at Life Insurance Business for generating revenue.
  • Comparative advantages
            • Trust
            • Presence - Unmatched network
            • Low cost
japan post insurance
Japan Post Insurance
  • Japan Post Postal Life Insurance created in 1916

- Providing basic coverage for the people of Japan with insurance using simple procedures

-Japan’s most familiar and trusted insurance company.

  • New policies in 2009-10 - 2.05 Million
  • Net income Net income of ¥70.1 billion ( 0.85 b USD)
  • Insurance premiums amounted to ¥7,505.6 billion ( 90.70 b USD)
china post life insurance co ltd
China Post Life Insurance Co. Ltd
  • China Post Life formed by China Post in August 2009, with registered capital of 500 million yuan (US$73 million)
  • Rural individual life microinsurance model
  • To increase the insurance coverage with "low-priced and convenience and speedy" insurance services to rural residents
  • Using networks of 57,000 post offices
  • At the end of 2009, China Post Life had total cumulative original premium income of more than 5.11 million yuan(0 .78 m USD)
life insurance in participating countries
Life Insurance in participating countries
  • Laos
      • Shareholding of government in one company.
      • Other companies are Allianz General, Toko Assurance etc.
  • Afghanistan
      • Run by government.
  • Mauritius
      • Government shareholding in one company.
      • Other companies are LIC, Mauritius Insurance Company, British America Cooperation etc.
  • Yemen
      • Yemen Insurance Company, Aman Insurance Company, United Insurance Company, Saba Yemen Insurance Company, Mareb Yemen Insurance Company etc.


      • Run by government.
      • Other companies are Adic Insurance, Aiico Insurance Plc, Acen Insurance Company etc.
  • Madagascar
      • ARO Insurance Company, NY-HACANA.
      • No government insurance company.

Long Term survival-- Need for Mail Business

  • Core Competency
  • How to get more business
  • Market Exists
  • So many players
  • Quality of Service
  • Customized Products
  • Bulk Mailers
  • Printers