Well, India is connected with most of the resources that people heard of today or some of the resources that foreign country introduces from their side. But sooner, the whole world know that particular resources belong to India from years ago, talking about insurance policy then India has rich culture about this service and we get references from Manu (Manusmriti), Yajnavalkya (Theology), and Kautilya (Economics). The “history of Indian insurance industry” is quite vast.
If we pay attention to his writings, then we come to know that, in writing talks about storing resources that can be redistributed during calamities like fire, flood, epidemic, and famine. This was probably a foreshadowing of modern-day insurance, and perhaps this is the reason why we consider the land of India to be a haven for every resource. Years ago some people knew this thing, a person will need a service like insurance after a time because perhaps they had known the truth of time, when you do not need anything, you will have it and when If you need that thing, you will not get it.
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History of Indian insurance industry
The History of Indian insurance industry started in the early 19th century. Oriental Life Insurance Company, the first insurance company in India was incorporated in 1818 by Europeans in Kolkata to exclusively serve their community. The company charged premiums to Indians unfairly high categorizing their age unevenly. Indian policyholders of similar profiles are compelled to pay a reasonably high premium than their European counterparts. Due to this colonial disparity, the absence of an Indian insurance company was being realized by Indian policy seekers. Finally, in 1870, Bombay Mutual Life Assurance Society, the first Indian insurance company was established to cover Indian lives. And, in 1850, Triton Insurance Company Ltd was formed to provide general insurance solutions. Slowly but steadily, the Indian insurance sector fledged into a huge sector contributing remarkable contributions to the Indian economy.
Amendment in Insurance Act
The year 1914 The Indian government started publishing the returns of insurance companies in India, for the first time under the Indian Life Insurance Companies Act, 1912; a rule was made to regulate the life business in a statutory manner.
With increasing time, the challenges also increased, and to overcome these shortcomings, in the year 1928, the Insurance Companies Act of India was brought into force to provide for life and non-life insurance companies in India by Indian and foreign insurance companies including Government Provident Insurance Societies. Collect statistical information about both types of business. The introduction of this regulation meant that “the government wanted transparent and at the same time its own data”.
In the year 1938, once again the rules of insurance were revised and this time the rules were amended keeping in view the safety of the general public, with a view to providing protection to the interests of the insurance public, the insurance of insurers by the Insurance Act, 1938. The earlier law was consolidated and amended with comprehensive provisions for effective control over the activities.
In the early years of the 20th century, new companies started mushrooming in India. In order to regulate these insurance companies, Life Insurance Companies Act and Provident Fund Act were passed in 1912. The evolution of the insurance industry has undergone three phases, Pre-Nationalisation, Nationalisation, and Privatisation. Nationalization of the insurance industry happened after the passing of the Life Insurance Corporation Act – 1956.
There were over 2,000 Indian and European insurance companies.
Public sector insurance companies, even after the nationalization, were loss-making ventures; and the need for privatization was being felt as an effective solution for distribution issues and implementation of marketing strategies. Since the Indian insurance market was opened for private players in 2000, the industry almost changed overnight. In order to tap the market potential, competition among the companies started that forced providers to do campaigns and organize different insurance awareness programs. As a result, policyholders are being offered varieties of insurance products at competitive premium rates.
The privatization of the Indian insurance sector has helped to increase the efficiency of the insurance business. Many new private companies came up with attractive products. Some of the big names in the Indian private insurance players are ICICI Prudential, HDFC Life, Bajaj Allianz Life Insurance, Tata AIG Life, Kotak Life Insurance, Reliance Life, Aviva Life, HDFC ERGO Health, Religare, etc.
With the advent of computers and the growing reach of the internet via different appliances such as laptops, smartphones, tablets,s, etc. insurance businesses getting a boost along with the other e-commerce businesses. The internet has brought insurance comparison, buying at a fingertip. It has enabled the insurance business to become more accessible and user-friendly. It helps you buy an insurance product on the go without any hassle. By using an insurance comparison engine, you can compare the prices and features of a variety of insurance products offered by different insurance companies. Online option for buying insurance products is also economical. The premium charged for an online insurance policy is much lesser than the premium charged for an offline policy of similar features and sum assured.
Although the Indian insurance sector is still under-penetrated, the scenario has totally changed after the private players entered the sector. Now, as the Insurance (Amendment) Bill that approves FDI (foreign direct investment) limit in the Indian insurance sector up to 49%, got Parliamentary nod, a huge capital inflow is expected in the sector. But with the time insurance sector will rise and it’s still going on.