Life Insurance
IJMBs Vol. 1, Issue 3, septeMBer 2011
I S S N : 2 3 3 0 - 9 5 1 9 (O n l i n e ) | I S S N : 2 2 3 1-2463 ( P r in t)
Life Insurance Industry in India - Current Scenario
1
Dr. Sonika Chaudhary, 2Priti Kiran
1,2
RGI, Mohali, Punjab, India
Abstract When life insurance companies started operating in the middle of 20th century in the country, the evil play natural to all business had its sway. There was a lot of cut throat competition as well as profiteering. As a result Life Insurance Corporation of India (LIC) came into existence on 1st September, 1956 after nationalization of all the 245 companies engaged in life insurance business. However, Government made a paradigm shift in the economic policy by adopting the process of liberalization, privatization and globalization at the end of previous decade. Consequently, Insurance Regulatory and Development Authority (IRDA) has been established under IRDA Act, 1999 to regulate the insurance business in the country. As a result, private sector has been allowed entry both in general and life insurance sector in India. Life insurance industry expanded tremendously from 2000 onwards in terms of number of offices, number of agents, new business policies, premium income etc. Further, many new products (like ULIPs, pension plans etc.) and riders were provided by the life insurers to suit the requirements of various customers. Keywords Riders; Life Insurance New Business; Business Policies Underwritten; Lapse Ratio; and Maturity and Survival Benefits Claims. I. Introduction The insurance is primarily a social device adopted by civilized society for mitigating the incidence of loss of income to families by unforeseen contingencies. In India, when life insurance companies started operating in the middle of 20th century the evil play natural to all business had its sway. There was a lot of cut throat competition as well as profiteering. The avowed social objective of insurance had been totally relegated to
I S S N : 2 3 3 0 - 9 5 1 9 (O n l i n e ) | I S S N : 2 2 3 1-2463 ( P r in t)
Life Insurance Industry in India - Current Scenario
1
Dr. Sonika Chaudhary, 2Priti Kiran
1,2
RGI, Mohali, Punjab, India
Abstract When life insurance companies started operating in the middle of 20th century in the country, the evil play natural to all business had its sway. There was a lot of cut throat competition as well as profiteering. As a result Life Insurance Corporation of India (LIC) came into existence on 1st September, 1956 after nationalization of all the 245 companies engaged in life insurance business. However, Government made a paradigm shift in the economic policy by adopting the process of liberalization, privatization and globalization at the end of previous decade. Consequently, Insurance Regulatory and Development Authority (IRDA) has been established under IRDA Act, 1999 to regulate the insurance business in the country. As a result, private sector has been allowed entry both in general and life insurance sector in India. Life insurance industry expanded tremendously from 2000 onwards in terms of number of offices, number of agents, new business policies, premium income etc. Further, many new products (like ULIPs, pension plans etc.) and riders were provided by the life insurers to suit the requirements of various customers. Keywords Riders; Life Insurance New Business; Business Policies Underwritten; Lapse Ratio; and Maturity and Survival Benefits Claims. I. Introduction The insurance is primarily a social device adopted by civilized society for mitigating the incidence of loss of income to families by unforeseen contingencies. In India, when life insurance companies started operating in the middle of 20th century the evil play natural to all business had its sway. There was a lot of cut throat competition as well as profiteering. The avowed social objective of insurance had been totally relegated to
References: [1] Arora, R.S.. “Financial Reforms and Service Sector–A Study of Life Insurance Industry in India”, In B.B. Tandon and A.K. Vashisht (Eds.), Financial Sector Reforms–An Unpublished Agenda for Economic Development: 259-270, New Delhi: Deep & Deep, 2002. [2] Bhattacharya, Anbil.. “Challenges before Life Insurance Industry”, Life Insurance Today, 1 ( 8): 3-6, 2005. [3] Chakraborty, Joy. “Private Life Insurance Companies in India – Growing Prospects and Challenges”, Insurance Chronicle: 29-39, 2007. [4] John, Jimmy. “The War for Market Share – A View from India”, Insurance Chronicle: 37-39, 2008. [5] Kulshresth, Laxmi R., Kulshresth, Anuja. 2006. “Liberalization and Rural Insurance Prospects and Challenges”, Life Insurance Today, 1(10): 9-13. [6] Kumar, Jogendra. “Insurance: Industry on Growth Path”, Life Insurance Today, 1 (9): 6-10, 2005. [7] Verma, Vinay,“New Trends in Product Design: An Overview of Life Insurance Products”, The Insurance Times, 23 (6): 16-28, 2003. [8] Taneja, Aruna, Kumar Narendera. “Insurance in India – Challenges and Opportunities”, The Insurance Times, 24 (11): 34-37, 2004. [9] IRDA Annual Reports, “Insurance Regulatory and Development Authority”, Mumbai, 2001 to 2007. [10] IRDA Journal, Various Issues (2000-01 to 2009-10). [11] Life Insurance Today, Various Issues (2000-01 to 200910) [12] [Online] Available : www.irdaindia.org [13] [Online] Available : www.irdajournal@irda.gov.in DR.SONIKA CHAUDHARY is HRM professional advisor, Professor,Faculty of management studies,Chandigarh Group of Colleges,Mohali, PUNJAB. She has over 10 years of experience in academics. She is the member of AIIMA, CMA, NHRD and some other reputed professional bodies also. Her current research is Contemporary issues in HRM. She is having more than fifteen research papers in her credit. She has attended various National and International Conferences, Seminar and workshops. Ms. Priti Kiran is Marketing Lecturer, Faculty of management studies, Rattan Professional Educational College, Mohali, Punjab. She is pursuing Doctorate of Philosophy in management under the guidance of Dr. Shahnaz Mirza from Magadh University, Bodhgaya. She has over 4 years of industry experience and one in academics. She is having three research papers in her credit. She has attended various National a nd International Conferences and Seminars 150 InternatIonal Journal of ManageMent & BusIness studIes w w w. i j m b s. c o m