INTRODUCTION TO INDIAN INSURANCE INDUSTRY
Insurance may be described as a social device to reduce or eliminate risk of life andproperty. Under the plan of insurance, a large number of people associate themselves bysharing risk, attached to individual.The risk, which can be insured against include fire, the peril of sea, death, incident, &burglary. Any risk contingent upon these may be insured against at a premiumcommensurate with the risk involved.Insurance is actually a contract between 2 parties whereby one party called insurerundertakes in exchange for a fixed sum called premium to pay the other party happeningof a certain event.Insurance is a contract whereby, in return for the payment of premium by the insured, theinsurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events.With the help of Insurance, large number of people exposed to a similar risk makecontributions to a common fund out of which the losses suffered by the unfortunate few,due to accidental events, are made good.
The domestic insurance industry in India is estimated to be around US$ 60.5 billion by 2010,of which US$ 35 billion will come from rural and semi-urban areas. While the life insurancemarket is expected to grow to US$ 35 billion, non-life insurance market will touch anestimated US$ 25 billion.
With the largest number of life insurance policies in force in the world, India‘s insurance
sector accounted for 4.1 per cent of GDP in 2006-07, up from 1.2 per cent in 1999-2000,far ahead of China where insurance accounts for just 1.7 per cent of the GDP and eventhe US where insurance penetration stands at 4 per cent of the GDP. One area that