The Development of the General Insurance Industry in India

The insurance sector in India is growing at a steady rate of 15-20% annually. Together with banking, insurance services add about 7% to the country's GDP.

- By Amitava Banik, Assistant Vice President - Commercial Underwriting, Reliance General Insurance Co Ltd, Kolkata

A well-developed and evolved insurance sector is a boon for economic development as it provides long-term funds for infrastructure development at the same time strengthening the risk-taking ability of the country.

The Insurance Act in India was passed in 1938. The Life Insurance Corporation & General Insurance Council were established in 1956. In 1972, General Insurance Industry nationalized. From nationalization of the insurance industry in 1972 to the present day, in this span of about 50 years, the insurance industry in India has come a full circle. The insurance industry was liberalized in 2000. At the end of March 2019, there are 70 insurers operating in India; of which 24 are life insurers, 27 are general insurers, 7 are standalone health insurers and 12 are re-insurers including foreign reinsurer's branches and Lloyd's India. Conventionally, the insurance companies play a big role in the economic development of the nations. The insurance penetration of a country which is the premium underwritten as percentage of GDP is a measure of the maturity of insurance markets across the world. India together has almost 20 per cent of the world population and an underserved insurance market, has a huge growth potential in this sector. This article is intended to study the development of insurance industry in India and where it stands at present.

Introduction