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Insurence Chronicle Magazine:
Privatization of Insurance Industry in India : The Growth
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The entry of private players helps in spreading and deepening the operations in the Indian insurance sector which in turn results in restructuring and revitalizing of public sector companies. The article looks at the business strategies of private insurance companies and the future expectations of the insurance industry.

 
 
 

The Government of India liberalized the insurance sector in March 2000, which lifted the entry restrictions for private insurance players, allowing foreign players to enter into the Indian market and start their operations in India. Each foreign company needs to have a 26% equity capital to enter into the Indian insurance market. Many foreign companies have joined their hands with the Indian companies and started their operations in early 2001. Now there is a proposal to increase the equity capital to 49%.

Currently, 15 life insurance and 11 non-life insurance companies are operating in the private sector. However, overall private insurance companies have three times more products than the public companies.

Previously, insurance was considered as a savings instrument in India rather than a product which offers protection and security to the person who is insured. According to a LIC survey in 1996, more than 40% of the insurance buyers felt that insurance is a means of savings. Risk coverage is only a secondary objective.

 
 
 

Insurance Chronicle Magazine, Privatization of Insurance Industry in India, Indian Insurance Sector, Business Strategies, Insurance Sector, Indian Insurance Market, Indian Markets, Indian Life Insurance Industry, Life Insurance Policy, General Insurance Industry, Insurance Regulatory Development and Authority, IRDA, Innovative Products, Telemarketing, Insurance Sector.