The 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 premium to Indians unfairly high categorizing their age unevenly. Indian policyholders of similar profile compelled to pay 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 contribution to the Indian economy.
In 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. Evolution of insurance industry has undergone three phases, Pre-Nationalisation, Nationalisation and Privatisation. Nationalisation of insurance industry was happened after the passing of 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 of privatization were 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 potentially, a competition among the companies started that forced providers to do campaign and organize different insurance awareness programmes. As a result, policyholders are being offered varieties of insurance products at competitive premium rates.
The privatization of Indian insurance sector has helped to increase efficiency of 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 Allainz Life Insurance, Tata AIG life, Kotak Life Insurance, Reliance Life, Aviva Life, HDFC ERGO Health, Religare etc.
With the advent of computers and growing reach of internet via different appliances such as laptops, smartphones, tablet etc. insurance business getting a boost along with the other e-commerce businesses. The internet has brought the 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 insurance comparison engine, you can compare prices and features of variety of insurance products offered by different insurance companies. Online option of buying insurance products is also economical. 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 inflows is expected in the sector.