A STUDY ON IMPACT OF NEW ECONOMIC

POLICY OF 1991 ON PRIVATE INSURANCE

SECTOR

IN INDIA.

A PROJECT SUBMITTED TO

UNIVERSITY OF MUMBAI FOR PARTIAL

COMPLETION OF THE

DEGREE OF MASTER IN COMMERCE

UNDER THE FACULTY OF COMMERCE

BY

SAMIULLAH JAHAN

Roll No:45

Semester: III

UNDER THE GUIDANCE OF

Dr. AMIT PRAJAPATI

KISHINCHAND CHELLARAM COLLEGE,

CHURCHGATE, DINSHAW VACHA ROAD, MUMBAI-
400020

NOVEMBER, 2019

Kishinchand Chellaram CollegeVidyasagar Principal K.M.

Kundnani Chowk

124, Dinshaw Wachha Road,Churchgate, Mumbai - 400 020.

CERTIFICATE

This is to certify that SAMIULLAH JAHAN has worked and duly

completed his Project Work for the degree of Master in Commerce
under the faculty of Commerce in the subject of Project work and his
project is entitled, “A STUDY ON IMPACT OF NEW ECONOMIC
POLICY OF 1991 ON PRIVATE INSURANCE SECTOR IN INDIA”
under my supervision.

I further certify that the entire work has been done by the learner
under my guidance and that no part of it has been submitted
previously for any Degree or Diploma of any University.

It is his own work and facts reported by his personal findings and
investigations.

Name and Signature of

Guiding Teacher

(Dr. Amit Prajapati)

Date of Submission: November 2019

 DECLARATION BY LEARNER

I the undersigned SAMIULLAH JAHAN here by, declare that the

work embodied in this project work titled “A STUDY ON IMPACT
OF NEW ECONOMIC POLICY OF 1991 ON PRIVATE INSURANCE
SECTOR IN INDIA” forms my own contribution to the research
work carried out under the guidance of Dr. Amit Prajapati is a
result of my own research work and has not been previously
submitted to any other University for any other Degree/diploma to
this or any other University.

Whenever reference has been made to previous works of others, it

has been clearly indicated as such and included in the bibliography.

I hereby further declare that all information of this document has

been obtained and presented in accordance with academic rules
and ethical conduct.

(SAMIULLAH JAHAN)

Name and Signature of the

Learner

Certified by
Name and Signature of the Guide

(Dr. Amit Prajapati)

ACKNOWLEDGEMENT

To list who all have helped me in difficult because they are so

numerous and the depth is so enormous.

I would like to acknowledge the following as being idealistic

channels and fresh dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving

me chance to do this project.

I would like to thank my Principal, Dr. Hemlata Bagla for providing

the necessary facilities required for completion of this project.

I would also like to thank Shri Smarajit Padhi Vice-Principal and co-
ordinator for fruitful suggestion to prepare project report.

I would like to express my sincere gratitude towards my project

guide
Dr. Amit Prajapati who guidance and care made the project
successful.
I would like to thank my College Library, for having provided various
reference books and magazines related to my project.

Lastly I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially to
my Parents and Peers who support me throughout my project.

INDEX

Sr. Particulars Page

No. No.

Chapter 1: Introduction
1

1.1 Insurance sector in India: History 3

1.2 Reforms in Insurance Sector in India: A beginning 5

1.3 Malhotra committee report 6

1.4 Insurance Regulatory and Development Authority of 8

India (IRDAI)

1.5 Micro Insurance 13

1.6 The Insurance (Laws) Amendment Act(2015):Phase-II 14

of the reforms

1.7 Investment pattern of Insurance Sector In India 16

Unit-linked insurance plan 17

1.8 Indian Insurance Industry in the Post LPG Era 19

1.9 Scope and Structure of Study 20

1.9.1 Structure of the Research 20

1.9.2 Contribution of the Study 21

Chapter 2: Literature Review

22

2.1 Available Literature between 1990- 2000 23

2.2 Studies related to impact of reforms in insurance 24

sector in India

2.3 Studies related to Investment Pattern and regulation 37

of Insurance Companies

2.4 Conclusion 40

Chapter 3: Research Methodology

41

3.1 Statement of the problem 42

3.2 Objectives of the Study 43

3.3 Hypothesis 43

3.4 Scope and Significance of the Study 43

3.5 Methodology 44

3.6 Source of Data Collection 44

Chapter 4: Data Analysis, Interpretation And Presentation

45

4.1 Insurance Penetration and Density in India 46

4.1.2 Insurance penetration & density – India vis-à-vis rest 48

of the world

4.2. Impact of reforms in Life Insurance Sector 49

4.2.1 Premium underwritten by Life Insurance Companies in 49
India

4.2.2 Growth in number of Life Insurance Offices in India 51

4.2.3 Increasing Private Sector Activity in Life Insurance 52

Segment after reforms

4.2.4 LIC continues to dominate Life Insurance Segment 52

4.2.5 Growth in Private Life Insurances companies 55

4.2.5a SBI Life Insurance Company 55

4.2.5b Tata AIA Life Insurance Company Limited (Tata AIA 56

Life)

4.2.6 Expenses of Life Insurance Companies in India after 57

reforms

4.3 Impact of Reforms in Non-Life Insurance Sector 58

4.3.1 Premium Underwritten by Non-Life Insurance 58

Companies in India

4.3.2 Expenses of Non-Life Insurance Companies in India 60

after reforms

4.3.3 Higher private sector participation in Non –life 62

segment

3.4 Key players in the non –life insurance segment 62

4.3.5 Fiscal 2018 –Non Life Insurance Sector 63

4.4 Growth and Trends of Investments of the Insurance 64

Sector in India during Post Privatization

4.4.1 Total Investment of Insurance Sector in India 65

4.4.2 Investments of Life Insurers 66

4.4.3 Investment of life insurance companies: UNIT linked 68

Fund

4.4.4 Investments of Non-Life Insurers 69

4.5 Government Initiatives – Progress Report 71

4.6 Conclusion 72

4.7 Primary Survey report on awareness of insurance 73

 sector

Chapter 5: Findings, Conclusion And Suggestions 80

5.1 Findings of study 81

5.2 Conclusions of study 83

5.3 Suggestions 85

5.4 Direction for Future Research 86

 Bibliography 87

 Glossary 88

 Appendix 89

LIST OF TABLES AND CHARTS

Sr. Topic Page

No. No.

Chapter 1: Introduction

1.1a Types of Insurance 4

1.1b Registered Insurers Including Foreign Re-insurers’

4
Branches in India

1.4a IRADI :Organization (CHART) 9

1.4b Milestones in Post Reform Period 11

1.8 Growth drivers for Insurance (CHART) 19

Chapter 4: Data Analysis, Interpretation And Presentation

4.1 Insurance Penetration and Density in India 47

4.1.2 Insurance penetration & density – India vis-à-vis rest

48
of the world

4.2.1 Premium underwritten by Life Insurance Companies in

49
India

2.2 Number of Life Insurance Offices in India 51

4.2.4a New Business (Individual Assurance): LIC 53

4.2.4b Total Business of Individual Assurance in force: LIC 54

4.2.5a SBI Life Insurance Company 55

4.2.5b Tata AIA Life Insurance Company Limited 56

4.2.6 Expenses of Life Insurance Companies in India after

57
reforms

4.3.1 Premium Underwritten by Non-Life Insurance

59
Companies in India

4.3.2 Expenses of Non-Life Insurance Companies in India

60
after reforms:

4.3.5a Non-life insurance Market Share - PSU Vs. Pvt. 63

4.3.5b Non-life insurance Market Share –Segment wise - PSU

63
Vs. Pvt.

4.4.1 Total Investment of Insurance Sector in India 65

4.4.2 Investments of Life Insurers: Life Fund 67

4.4.3 Investment of life insurance companies: UNIT linked

68
Fund

4.4.4 Investment pattern of non- life insurance companies 70

4.5 Government Initiatives – Progress Report (CHART) 71

Chapter 5: Findings, Conclusion And Suggestions

5.1 Indian Insurance Fact Sheet 83

LIST OF GRAPHS

Sr. Topic Page

No. No.

Chapter 4: Data Analysis, Interpretation And Presentation

4.1a Insurance Penetration in India 47

4.1b Insurance Density in India 47

4.1.2 Insurance penetration & density – India vis-à-vis 48

rest of the world

4.2.1 Year wise Premium of Different Life Insurance 50

Companies in India

4.2.2 Number of Life Insurance Offices in India 51

4.2.3 Increasing Private Sector Activity in Life Insurance 52

Segment

4.2.4 Market share of major companies 52

4.2.4a New Business (Individual Assurance): LIC 53

4.2.4b Total Business of Individual Assurance in force: LIC 54

4.2.5a SBI Life Insurance Company 55

4.2.5b Tata AIA Life Insurance Company Limited 56

4.2.6a Expenses of Life Insurance Companies in India 58

(Commission)

4.2.6b Expenses of Life Insurance Companies in India 58

(Operating)

4.3.1 Premium Underwritten by Non-Life Insurance 60

 Companies in India

4.3.2a Expenses of Non-Life Insurance Companies in India 61

Commission)

4.3.2b Expenses of Non-Life Insurance Companies in India 61

(Operating)

4.3.3 Growing share of private sector 62

4.3.4 Market share of major companies in terms of Gross 62

Direct Premium collected (FY 18*)

4.3.5a Non-life insurance Market Share - PSU Vs. Pvt. 64

4.3.5b Non-life Insurance Line wise Market Share - PSU Vs. 64

Pvt.

4.4.1 Life and Non-Life Investment as Percentage of Total 66

Investment

4.4.2 Investments of Life Insurers: Life Fund 67

4.4.3 Investment of life insurance companies: UNIT linked 69

Fund

4.4.4 Investment pattern of non- life insurance 70

companies

4.7 Primary survey report on awareness of reforms in 73

insurance sector

A STUDY ON IMPACT OF NEW ECONOMIC POLICY OF

1991 ON PRIVATE INSURANCE SECTOR IN INDIA.

“ THE DIFFICULTY LIES NOT SO MUCH IN DEVELOPING

NEW IDEAS AS IN ESCAPING FROM THE OLD ONES.”

John Maynard Keynes

(SAMIULLAH JAHAN)

K.C. College, Mumbai

M.Com (Sem-III)

Roll No. 45

(NOVEMBER, 2019)