Insurance Sector in India: Challenges and Opportunities
...INSURANCE SECTOR IN INDIA : OPPORTUNITIES AND CHALLENGES Abstract: Insurance sector in India is one of the booming sectors of the economy and is growing at the rate of 15-20 percent per annum. Together with banking services, it contributes to about 7 per cent to the country's GDP. 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 or liberalized in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill. This allowed foreign players to enter the market with some limits on direct foreign ownership. There is a 26 percent equity cap for foreign partners in an insurance company and now it has increase limit to 49 percent. The opening up of the insurance sector has led to rapid growth of the sector. The potential for growth of insurance industry in India is immense as nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be well below international standards. The insurance sector in India has come up with a full circle from being an open competitive market to......
Words: 6227 - Pages: 25
Effect of Fdi in Insurance Sector of India
...iosrjournals.org Contribution of Insurance Sector to Growth and Development of the Indian Economy 1 1 2 Dr. M.Subba Rao, 2R. Srinivasulu M.Com, M.Phil, Ph.D Principal Sri Balaji P.G College (MBA) Anantapur – 515002 Andhra Pradesh - India M.Com, M.B.A Research Scholar Department of Commerce S.K University – Anantapur Andhra Pradesh India Abstract: For economic development, investment are necessary, investments are made out of savings. Insurance Company is a major instrument for the mobilization of savings of people particularly from the middle and lower income groups. These savings are channelized into investment for economic growth. Insurance serves a number of valuable economic functions that are largely distinct from other types of financial intermediaries. According to the official estimates, Indian economy is expected to grow at 7.6% (+/- 0.25%) in the fiscal year 2012–2013. However, leading financial organizations and economic think-tanks expect Indian economy to grow slower than official projections. The economy of India is the tenth-largest in the world by nominal GDP and the third largest by purchasing power parity (PPP). The country is one of the G-20 major economies and a member of BRICS. On a per capita income basis, India ranked 140th by nominal GDP and 129th by GDP (PPP) in 2011, according to the IMF. Fortunately, in the past few years, several interesting lines of research have begun to map the specific contributions of insurance to the economic......
Words: 5988 - Pages: 24
Privatisation of Insurance Sector in India
...modified structures that allow them to grow much taller and spread out their foliage, such as thicker stems that are composed of specialized cells that add structural strength and durability. They are long-lived perennial plants that can increase their size each year by producing woody stems. They differ from shrubs, which are also woody plants, by usually growing larger and having a single main stem; but the distinction between a small tree and a large shrub is not always clear, made more confusing by the fact that trees may be reduced in size under harsher environmental conditions such as on mountains and subarctic areas. The tree form has evolved separately in unrelated classes of plants in response to similar environmental challenges, making it a classic example of parallel evolution. With an estimated 100,000 species, the number of trees worldwide might total twenty-five percent of all living plant species. Their greatest number grow in tropical regions and many of these areas have not yet been fully surveyed by botanists, making tree diversity and ranges poorly known. Trees exist in two different groups of vascular or higher plants, the gymnosperms and the angiosperms. Both groups are seed plants. The gymnosperm trees include conifers, cycads, ginkgophytes and gnetales. Angiosperm trees are also known as broad-leaved trees. Most angiosperm trees are eudicots, the "true dicotyledons", so named because the seeds contain two cotyledons or seed leaves. A......
Words: 7782 - Pages: 32
Privatization of Insurance Sector in India Essay
...THE UNIVERSITY OF NOTTINGHAM Centre for Risk & Insurance Studies Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj Tapen Sinha CRIS Discussion Paper Series – 2002.X Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj by Tapen Sinha, Ph.D. ING Comercial America Chair Professor Instituto Tecnológico Autónomo de México Mexico City, Mexico and Professor, School of Business University of Nottingham, UK firstname.lastname@example.org, email@example.com Abstract We examine the institution of insurance in India. Over the past century, Indian insurance industry has gone through big changes. It started as a fully private system with no restriction on foreign participation. After the independence, the industry went to the other extreme. It became a state-owned monopoly. In 1991, when rapid changes took place in many parts of the Indian economy, nothing happened to the institutional structure of insurance: it remained a monopoly. Only in 1999, a new legislation came into effect signaling a change in the insurance industry structure. We examine what might happen in the future when the domestic private insurance companies are allowed to compete with some foreign participation. Because of the time dependence of insurance contracts, it is highly unlikely that these erstwhile monopolies are going to disappear. Acknowledgement: I would like to thank Rebecca Benedict and Samik Dasgupta for their input......
Words: 6374 - Pages: 26
Insurance Sector in India
...banks wherein entities both from private and public sector shall be eligible to set up a bank through a wholly owned non operative financial holding company (NOFHC). The NOFHC shall be wholly owned by promoter/promoter group . The NOFHC shall hold the bank as well as all other financial services entities of the group. Entities /groups should have past record of sound credentials and integrity be financially sound and successful track record of 10 years . Criteria for applying license A business group which keen for applying for license should have a minimum paid up capital of Rs 500 crore. At the start of the banking operation, NOFHC should hold a minimum of 40% of equity for lock in period of 5 years .later it has to be brought down to 15% within 12 year from that onwards. The NOFHC will be registered as Non - banking finance company with RBI while the bank will be governed by the prudential regulations by RBI. NOFHC and bank shall not have any exposure to the promoter group. The bank shall not invest in the equity /debt capital instrument of any financial entities held by the NOFHC. However RBI put a stricter condition of having 25% of its branches in unbanked rural area. with population upto 9999 . New banks should achieve priority sector lending target of 40%. Foreign share holding in the new bank does not exceed 49% for the first five years after which it can be extended as per policy norms. In India 60% of population is away from banking......
Words: 328 - Pages: 2
Privatisation of Insurance Sector in India
...of Advanced System and Social Engineering Research ISSN 2278-6031, Vol 3, Issue 1, 2013, pp18-22 http://www.bipublication.com ADVANTAGES AND DISADVANTAGES OF PRIVATISATION IN INDIA Anant Kousadikar and Trivender Kumar Singh* *Jatan Swaroop PostGraduate College, Kayasthwada,Sikandrabad(U.P.), Distt: Bulandshar [Received-05/12/2012, Published-17/01/2013] ABSTRACT Privatization in generic terms refers to the process of transfer of ownership, can be of both permanent or long term lease in nature, of a once upon a time state-owned or public owned property to individuals or groups that intend to utilize it for private benefits and run the entity with the aim of profit maximization. In other words, it is a route from public or state ownership to private players or a group. From the other point of view, it is a strategy that provides advantages to a few at the price of many. However, this is always subjected to the circumstances involved. In this paper, the aim is to understand the major advantages and disadvantages of privatization in this country. Index Terms: Privatisation, advantages, Public administration. I. INTRODUCTION Privatization is a managerial approach that has attracted the interest of many categories of peopleacademicians, politicians, government employees, players of the private sector, and public on the whole. As per the opinion by the subject experts, privatization can be advantageous in terms of the higher flexibility and scope of innovation it offers......
Words: 2546 - Pages: 11
Insurance Sector in India
...Vol.2 Issue 7, July 2012, ISSN 2249 8826 Online available at http://zenithresearch.org.in/ ROLE OF INSURANCE IN ECONOMIC DEVELOPMENT OF INDIA MONALISA GHOSAL* ABSTRACT The economic development of India was dominated by socialist –influenced policies, stateowner sector, and red tape and extensive regulations, collectively known as ‘License Raj’. The Indian economic development got a boost through its Economic reforms in 1991 and again through its renewal in the 2000. Insurance serves a number of valuable economic functions that are largely distinct from other types of financial intermediaries. Insurance contribution materially to economic growth by improving the investment climate and promoting a more efficient mix of activities then would be undertaken, in the absence of risk management instrument. Insurance sector in India is one of the most booming sectors of the economy and is growing at the rate of 15-20 percent per annum. In India, insurance is a flourishing industry, with several national and international players competing with each others and growing at rapid rates. Indian insurance companies offer a comprehensive range of insurance plans, a range that is growing as the economy matures and the wealth of the middle classes increases. Due to the growing demand for insurance, more and more companies are now emerging in the Indian insurance sector. The economy of India is the eleventh largest in the world by nominal GDP and the forth largest by Purchasing Power......
Words: 3208 - Pages: 13
Effect of Fdi in the Insurance Sector in India
...new ocean unless he has courage to lose sight of the shore”- Andre Gilde I take this opportunity to extend my sincere thanks to NMIMS School of Law offering a unique platform to garner knowledge in the subject of Jurisprudence. I wish to extend my sincere and heartfelt gratitude to my subject guide Professor Nanda Pardhey who guided, supported and encouraged me during the entire tenure of the project. I would also like to offer my thanks for her valuable advices throughout the course of my project. Also I would like to take this opportunity to thank all the faculty members present in the library. I am glad that I can say it with conviction that I have immensely benefited from the allotment of this topic. Contents S. No. Topic Page 1. Abbreviations 2. Table of Cases 3. Table of Statutes 4. Research Methodology 5. Introduction 6. Jurisprudential Study 7. Analysis on Indian Legal Provisions 8. Comparative Study 9. Conclusion 10. Suggestions 11. Bibliography Table of Abbreviations Sr.No Keyword Meaning 1 SC Supreme Court 2 HC High Court 3 IPC Indian Penal Code 4 Sec Section 5 v versus 6 www World wide web 7 i.e That is 8 etc Etcetera Table of Cases and Statutes Case Laws 1) Naz Foundation v Government of NCT of Delhi 2) Smt. Sarla v Mahendra Kumar 3) K.A. Abbas v Union of India 4) Aruna Shanbaug v Union of India 5) Ram Chandra Bhagat v State of Jharkhand 6) D. Veluswamy v......
Words: 5875 - Pages: 24
Challenges and Opportunities in Life Insurance Sector
...Comparative study of LIC of India & private Life Insurance companies in India. Introduction: The Indian life insurance industry has its own origin and history, since its inception. It has passed through many obstacles, hindrances to attain the present status. Insurance owes its existence to 17th century England. In fact, it took shape in 1688 at a rather interesting place called Lloyd's Coffee House in London, where merchants, ship-owners and underwriters met to discuss and transact business. The first stock companies to get into the business of insurance were chartered in England in 1720. The year 1735 saw the birth of the first insurance company in the American colonies in Charleston. In 1759, the Presbyterian Synod of Philadelphia sponsored the first life insurance corporation in America for the benefit of ministers and their dependents. Life insurance in its modern form came to India from England in 1818 with the formation of Oriental Life Insurance Company (OLIC) in Kolkata mainly by Europeans to help widows of their kin. Later, due to persuasion by one of its directors (Shri Babu Muttyal Seal), Indians were also covered by the company. However, it was after 1840 that life insurance really took off in a big way. By1868, 285 companies were doing business of insurance in India. Earlier these companies were governed by Indian company Act 1866. By 1870, 174 companies ceased to exist, when British Parliament enacted Insurance Act 1870. These companies however,......
Words: 2190 - Pages: 9
...ADAMJEE INSURANCE Analysis of Insurance Sector Research Report Table of Contents Introduction .................................................................................................................................................. 3 Insurance sector at a glance ......................................................................................................................... 4 Major Players in the Market ..................................................................................................................... 6 Global Insurance Industry Overview ............................................................................................................. 7 Non-life growth is still weak in the industrialized countries, but strong in Asia ...................................... 8 Non-life insurance premium growth ........................................................................................................ 8 SWOT Analysis of Pakistan Insurance Industry ............................................................................................ 9 Analysis of Leading Insurance Companies in Pakistan (of first quarter 2011) ............................................ 10 Drivers of Insurance Coverage .................................................................................................................... 11 Competition between insurance and banking ...................................................................................
Words: 6957 - Pages: 28
China and India Opportunities and Challenges
...6-4: China and India: Opportunities and Challenges Overtime, China and India have developed some capabilities, which have affected developed nations like U.S, Germany, Japan and so on. The rising capability that the two countries possess is as a result of their ability to assign their available resources (factor conditions) to specific productive areas to yield viable outcome. Rarely has the economic ascent of two still relatively poor nations been watched with such a mixture of awe, opportunism, and trepidation. The postwar era witnessed economic miracles in Japan and South Korea. But neither was populous enough to power worldwide growth or change the game in a complete spectrum of industries. China and India, by contrast, possess the weight and dynamism to transform the 21st century global economy. Never has the world seen the simultaneous, sustained takeoffs of two nations that together account for one-third of the planet’s population. For the past two decades, China has been growing at an astounding 9.5% a year, and India by 6%. Given their young populations, high savings, and the sheer amount of catching they still have to do, most economist figure China and India possess the fundamentals to keep growing in the 7% to 8% ranges for decades. (Cravens, 2013) Barring cataclysm, within three decades India should have vaulted over Germany as the world’s third-biggest economy. By mid-century, China should have overtaken the U.S as No. 1. By then, China and India could account......
Words: 1168 - Pages: 5
E-Government in India: Opportunities and Challenges
...(2008). E-government in India: Opportunities and challenges, JOAAG, Vol. 3. No. 2 E-government in India: Opportunities and challenges Anil Monga1 Abstract Public administration, governed by bureaucratic structures built on rationale principles, that dominated the twentieth century, has failed to respond to the changing requirements of the present times. E-governance, which is a paradigm shift over the traditional approaches in public administration, means rendering of government services and information to the public using electronic means. This new paradigm has brought about a revolution in the quality of service delivered to the citizens. It has ushered in transparency in the governing process; saving of time due to provision of services through single window; simplification of procedures; better office and record management; reduction in corruption; and improved attitude, behavior and job handling capacity of the dealing personnel. The present study substantiates these theoretical assumptions about e-governance by analyzing some experiences at the local, state and federal levels of government in India. Keywords: E-Government, India, Public Administration 1 Panjab University, Chandigarh, India. Email: firstname.lastname@example.org 52 Monga, A. (2008). E-government in India: Opportunities and challenges, JOAAG, Vol. 3. No. 2 Introduction In the past, service delivery mechanisms of the government departments left much to be desired in India. Cramped spaces;......
Words: 4699 - Pages: 19
Insurance Sector in India
...com/blogs Insurance Digest for LIC AAO 2016 Exam Dear readers, This Insurance Digest is complete Information of important terms and plan & Policies and history. The Insurance Digest is important and relevant for all Insurance exams like - LIC AAO 2016 Exam, NICL, NIACL, Insurance and other Insurance Exams. What is Insurance? - Insurance is defined as a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party called insured a fixed amount of money after happening of a certain event. According to the Indian Contract Act 1872, “A Contract may be defined as an agreement between two or more parties to do or to abstain from doing an act, with an intention to create a legally binding relationship.” Benefits of Insurance – It safeguards your money. It ensures growth of money. Life insurance policies are broadly categorized into 2 types – Traditional Plans and Unit Linked Insurance Plans (ULIPs). History-of-Life-Insurance-Corporation (LIC) - Life Insurance Corporation (India) (LIC) is an Indian state-owned insurance group and investment company headquartered in Mumbai. The Life Insurance Corporation of India was founded in 1956 when the Parliament of India passed the Life Insurance of India Act that nationalized the private insurance industry in India. Over 245 insurance companies and provident societies were merged to create the state owned Life Insurance Corporation. The Life Insurance......
Words: 3163 - Pages: 13
Insurance Sector in India
...INTRODUCTION INSURANCE SECTOR IN INDIA The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per cent to the country's GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation "Malhotra Committee" was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to......
Words: 1784 - Pages: 8
Life Insurance in India : Challenges and Opportunities in the Post-Liberalised Era
...LIFE INSURANCE IN INDIA : CHALLENGES AND OPPORTUNITIES IN THE POST-LIBERALISED ERA BY Dr. S.C. BANSAL Associate Professor Indian Institute of Management Lucknow (India) e-mail: email@example.com Ph: 0091 522 2736637 & Dr. Y.P.SINGH Professor, Department of Commerce Delhi School of Economics, University of Delhi New Delhi(India) e-mail: firstname.lastname@example.org Ph: 0091 951202456948 & Sneh Lohia1 Research Scholar, Department of Commerce Delhi School of Economics, University of Delhi New Delhi(India) e-mail: email@example.com Ph: 0091 011 25219820 1 Corresponding Author ABSTRACT The objective of this paper is to identify the challenges and opportunities in the life insurance sector in India after liberalization of the economy. It fills a research gap: many studies based on secondary data and examining the investment systems, operations, principles and practices of Life Insurance Corporation of India (LICI) have been reported; the works exploring the impact of liberalization on the quality of plans and services offered, and opportunities for growth in this area are limited in number. The data were gathered with the help of a detailed questionnaire from 560 individuals belonging to Delhi, Noida, Gurgaon, Faridabad, Mumbai, Pune, Surat, Kolkota, Chennai, Bangalore, Varanasi, Gorakhpur and other cities in India. It has been observed that the companies have added new features in the life insurance products to meet the...
Words: 5603 - Pages: 23
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 insurance sector in India.
Over the next two decades India is likely to witness high growth in the insurance sector for three reasons. Financial deregulation always speeds up the development of the insurance sector. Growth in income also helps the insurance business to grow. In addition, increased longevity and an aging population will also spur growth in health and pension segments.
Ð²Ð‚Ñž US$30 billion industry in India
Ð²Ð‚Ñž Life Insurance - US$25 billion industry with US$14 billion accounting for First Year Premium (inclusive of Single Premium) Non-Life insurance - US$4.8 billion industry; Motor and Health segments account for 54% of total business
Ð²Ð‚Ñž Indian Insurance market was opened to private & foreign investment in 1999-2000
Ð²Ð‚Ñž The Indian Insurance industry consists of a total of 31 players
Ð²Ð‚Ñž Life: 1 Public sector player; 15 private players
Ð²Ð‚Ñž Non-Life: 6 public sector players; 9 private players
Ð²Ð‚Ñž Major international players like AIG, Aviva, MetLife, New York Life, Prudential, Allianz, Sun Life, Standard Life and Lombard are already present with minority stakes in joint ventures with Indian companies for both Life and Non-life segments
Ð²Ð‚Ñž Life Insurance market is still dominated by Life Insurance Corporation