Page 1 of 12
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 04
April 2019
Available online: https://ejbss.org/ P a g e | 2411
Insurance Industry in India: Present Scenario and
Developments
Meena Kumari1 and Dr. Shakti Singh2
1Research Scholar (Ph.D.), 2Assistant Professor
Department of Commerce, Maharishi Dayanand University, Rohtak
Abstract
The concept of Insurance was brought to India by England in the year 1818 with the
formation of Oriental Life Insurance Company set up by Europeans in Calcutta. The
Insurance Act was passed in the year 1938. Insurance sector in India plays an important role
in the economy of the country. It provides for various saving avenues for the individuals and
protects their future by mitigating the risks of various kinds by forming a pool of funds. It
also contributes to the infrastructure development of the country as well as in the capital
market in the form of investments. At present various kinds of Insurance is prevalent in the
market such as vehicle insurance, life insurance, health insurance, marine insurance, fire
insurance, travel insurance, etc. Globalization and liberalization have opened up the doors to
private players as well as foreign players in the Insurance Industry. At present there are 60
insurance companies in existence in India, out of which 24 are life insurers, 34 are non-life
insurers and 2 reinsurance companies. There is the only public sector reinsurance company in
India i.e. General Insurance Corporation of India (GIC Re). In the last decade, the insurance
industry has seen various reforms and developments. The present study aims at analyzing the
current Scenario and recent developments in the Insurance Industry in India.
Keywords: Life Insurance, GIC, Health Insurance
Introduction
Insurance is a contract that generally comes up with a policy, wherein an individual or an entity
gets some financial protection or compensation to meet up the losses from an insurer. It is an
important way of mitigating the risks. So, when insurance is bought, the cost of any potential loss
is transferred to the insurer against fee called premium. Insurance companies invest the funds so
arise, in a prudent and secured way so that it fetches the equitable return which can be utilized for
Page 2 of 12
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 04
April 2019
Available online: https://ejbss.org/ P a g e | 2412
claim payout at anytime without any hassle. The insurance sector is the fast growing sector in
India which fosters a positive market sentiment. The government is taking strong initiatives to
push this sector towards a robust future. The Insurance sector in India is governed by Insurance
Act, 1938, the Life Insurance Corporation Act, 1956, General Insurance Business
(Nationalization) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act,
1999 and other related Acts. The insurance sector has witnessed major growth in the last
decade with the introduction of large number of advanced insurance products and policies. It
has led to tough and fair enough competition which resulted in positive and healthy outcome.
The insurance sector plays a significant role in the wellbeing and growth of the Indian
economy. It substantially created the saving opportunities for individuals along with
safeguarding their future. Insurance sector gathers a massive pool of funds. These funds are
contributed by the insurance sector majorly to the capital markets and catering the large
infrastructure development projects in India. The Indian Insurance Sector is majorly divided
into two categories – Life Insurance and Non-life Insurance. The Non-life Insurance sector is
also called as General Insurance. Both the Life Insurance and the Non-life Insurance sectors
are regulated by the IRDA (Insurance Regulatory and Development Authority of India).
IRDA is a government organization which monitors and governs the entire insurance sector
in India as well as plays the role of a custodian of insurance consumer rights. All the insurers
have to abide by the rules and regulations of the IRDAI. In life insurance history, LIC was
the only life insurance provider till the last few decades; on the other hand, National
Insurance, United India Insurance, Oriental Insurance, and New India Assurance were non- life insurance providers. However, now a day many private players have entered the
insurance market. Life insurance companies provide the risk coverage for the lives of the
individuals, whereas the general insurance companies provide coverage for miscellaneous
risks except life cover, such as travel insurance, health insurance, motor insurance, and fire
insurance etc. Apart from this, the general insurance companies offer risk coverage for
industrial equipment, Crop insurance for farmers, gadget insurance for mobiles, pet
insurance, etc. The life insurance companies have captured an investment prospectus in
recent time by providing insurance along with a growth of savings. But, the general insurance
companies remain reluctant and offer pure risk cover to the individuals.
Objectives
Page 3 of 12
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 04
April 2019
Available online: https://ejbss.org/ P a g e | 2413
The objective of the study is to analyze the present market Scenario and Recent developments
in the Insurance Sector in India.
Research Methodology
The study is based on Secondary Source of data which is taken from various journals,
articles, websites and other sources from the Internet.
The present scenario of the Insurance Market in India
The insurance sector in India gained momentum in the year 2000 with the introduction of
new private sector insurance companies. Currently, it consists of a total of 60 insurance
companies out of which 24 companies are the life insurance providers, 34 are non-life
insurers and 2 reinsurance companies. Among the 60 insurers only eight are public sector
companies and others are private sector players. From the inception of insurance in India,
LIC, New India, National Insurance, United insurance, and Oriental are the government
owned entities which stand on the top of the market share as well as insurance sector
contribution. However, there are many insurers waiting for IRDAI approvals to start life
insurance as well as non-life insurance business in India. In general insurance, there are two
specialized insurers for agriculture and export in India which are government owned. One is
the Agriculture Insurance Company Ltd which provides Crop Insurance and the other is
Export Credit Guarantee of India providing credit insurance for exporters. Whereas, the other
companies are private insurers (both life and general) which formed joint venture with
foreign collaborations to enter insurance businesses in India. General Insurance Corporation
is the only public sector reinsurance company in India which is owned by the government.
Table 1 – Registered Insurers in India
Type of business Public Sector Private Sector Total
Life Insurance 1 23 24
Non-Life Insurance 6 28 34
Reinsurance 1 1 2
Total 8 52 60
