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The Domain of Insurance Market in India

As per the findings of a survey carried out in 2003-04, the Indian insurance market ranked 5th in the Asian continent after Japan, South Korea, China & Taiwan, and 19th
largest globally. In India, the process of liberalization and opening of insurance sector to private and foreign players started taking shape as part of the series of financial and economic reforms brought in by the Government in the late 1990s, in accordance with the recommendations made by R. N. Malhotra Committee constituted by the Government in April 1993. By amending the relevant provisions of the Insurance Act, 1938, and passing the IRDA Act, 1999, by an Act of Parliament, Insurance Regulatory and Development Authority (IRDA) was established in the year 2000, which marked the opening act of the insurance sector to private participation and foreign investment.

GDP & Insurance

Though potentially insurance is more than Rs. 500 Billion business in India, and together with banking, it adds slightly more than 7.5% to the GDP, of the country, the gross premium collection has been hardly 2% of the GDP, not withstanding its growth between 15-20% annually, during the decade preceding the opening up of insurance market for private and foreign players in the year 2000. As the insurance premium database of various developed and developing countries for the year 1999 indicates, the per capita premium of India was just around $ 8 as against the same having been very high in the developed countries. In other words, and in terms of percentage of GDP, it was 14% for Japan, 12% for Korea and 9% for UK as against the same staggering below 2% for India for the fiscal year 2000-2001.

Conclusion

Insurance after globalization has brighter future. The economic status of people is changing. So many new government policies and economic reforms are impetus for insurance sector. The firmament of economic growth is vast and never ending but the insurance as a bird have to fly. No doubt insurance market after globalization is "A flying bird"!

Concluded.

Prof. Sanjit Kumar Dash is currently Academic Head at Magnus School of Business, Bhubaneswar. He has done MBA from Institute of Business & Computer Studies (IBCS), Bhubaneswar with specialization in Marketing & Systems, and M.Phil. (Business Administration) from Annamalai University, Tamilnadu. He is also doing his Ph.D. in Business Administration from Utkal University, Bhubaneswar at present.