The Insurance Sector in India
The insurance sector in India has been traditionally dominated by state owned Life Insurance Corporation and General Insurance Corporation and its four subsidiaries. The government of India allows FDI in the insurance sector up to 26%. As a result, a number of new joint venture private companies have entered into life and general insurance sectors and their share in the insurance market in rising. Insurance Development and Regulatory Authority (IRDA) is the regulatory authority in the insurance sector under the Insurance Development and Regulatory Authority Act, 1999.
The post-liberalized insurance industry in India is also witnessing dramatic changes in terms of new channels of distribution, greater use of information technology as a service facilitator, innovative marketing of insurance products etc. There is also the phenomenon of noticeable shifts in consumer preferences impacting the product mix being offered by insurers. The market structure, which is a combination of a few stabilized public sector players and the 'new' players in the market, is in a state of flux.
In addition, there are rising trends of convergence of financial services, especially in the areas like wealth management and evolution of newer risk management tools, particularly in the context of reinsurance management. Greater attention is also being bestowed on the areas like Agricultural Insurance and risk coverage of export-import trade. There is also the impact of visible socio-economic changes like greater urbanization, greater job mobility, growth of the services industry, weakening of traditional family structure, impact of globalization etc. All this makes for an interesting period for the ins ...