Indian Insurance Industry: An Industry Competitive Analysis
Indian Insurance Industry: An Industry Competitive Analysis
By
Anubha Shekhar Sinha ([email protected])
1.0 Introduction and Evolution of Indian General Insurance Industry
Insurance is the backbone of a country’s risk management system. The Insurance providers offer a variety of products to businesses and individuals in order to provide protection from risk and to ensure financial security. They are important component of financial intermediation chain of a country and are a source of long-term project capital. Their participation in financial markets evens out fluctuations. Mitigation of risk and its impact helps organization and individuals to become entrepreneurs and has a positive effect on growth. The benefit of insurance as a financial intermediary is thus to provide liquidity in the market by reducing the cost of capital through mitigating risk. Thus, a strong Insurance culture of a country can be said to be an indicator of its development and growth potential. The Insurance Business is broadly divided into life, health and non-life insurance.
Indian Insurance can be said to have undergone three phases of its evolution viz. Pre Nationalization, Nationalization and Privatization era. Triton Insurance Company Ltd promoted by British was the first general insurance company in Calcutta in 1850. Non-life insurance was finally regulated in 1938 through the passing of the Insurance Act, which continues till date to be the definitive piece of legislation on insurance and controls both life insurance and general insurance. The general insurance business was nationalized with effect from January 1, 1973, through the introduction of the General Insurance Business Act, 1972. Prior to 1973, there were 107 companies, i ...
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