The concept of pooling resources is as old as the hills for Indians. The writings of Dharmashastra, Manusmrithi and Arthashastra speak about importance of pooling resources to face calamities like floods, fire, epidemics and famine. The modern day Insurance is conceived from this mythological archetype.
The insurance industry is the backbone of country’s Risk Management. The beginning of the Indian insurance industry dates back to the nineteenth century. In 1818, Europeans started Oriental Life Insurance Company in Kolkata (Calcutta) to exclusively serve their community. Colonial masters with racial prejudice unfairly characterised the age and premium for Indians. The Indian policy holders paid more premium than European counterparts. Indians desperately wished for Indian insurance companies to set foot in the market. Bombay Mutual Life Assurance Society started in 1870 was the first Indian insurance company to cover the lives of the Indians at normal rates. Triton Insurance Company Ltd in the year 1850 is the first general insurance company. Gradually insurance business fledged into a huge sector boosting the economy of India.
Only during the early years of twentieth 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. Evolution of insurance industry has undergone three phases, Pre-Nationalisation, Nationalisation and Privatisation. The Insurance industry was nationalised only after passing Life Insurance Corporation Act of 1956. There were more than two hundred insurance companies of both Indian and European origin.
Even after the nationalisation, government Insurance companies were not making profit. Privatisation was a preferable solution for effective distribution and implementation of marketing strategies. With privatisation insurance industry almost changed overnight. Competition forced providers to advertise their products effectively. Once the gates were thrown open to the private players insurance industry improved remarkably. Along with safeguarding lives and property, insurance companies also offered enormous job opportunities. The privatization helped to increase efficiency of insurance business. Many new private companies came up with attractive products. Some of the major private players in the Indian market are ICICI Prudential, Bajaj Allainz Life Insurance, Tata AIG life, Kotak Life Insurance, HDFC Standard Life, Reliance Life, ICICI Lombard etc.
This millennium marked drastic changes in Insurance administration with the introduction of Computers. The internet has enabled the insurance business to become more accessible and user- friendly. Now you can buy the policy of your choice sitting at home. The greatest benefit buying online is you can compare life insurance policies offered by different companies in a single website. E India Insurance is a combination of internet and insurance revolution in India. Juxtaposing modern day with colonial era, we notice rapid growth prospects of the insurance industry. According to Insurance Regulatory and Development Authority ( IRDA ), Indian insurance industry registered a impressive growth rate of 120% in the year 2008. Economic experts anticipate that Indian domestic insurance would touch US $ 60.5 Billion by 2010.