Acquiring insurance involves extreme
planning and consideration of many factors like finances,
one's future, and the use of the insurance policies. These
days, according to customers' needs, all kind of insurance
are available. Insurance companies have designed not only
life insurance, motor insurance, or health insurance, but
also marriage insurance to secure one's marriage. Moreover,
it is not centered in urban areas or around high income
groups. Due to liberalization, both private and public
players have been targeting people of every income group,
offering them attractive flexi plans, according to their
needs, thanks to the economic growth, with consumers of
sophisticated differential needs. The market for insurance
products in low income communities, especially in suburban
areas, has an immense potential. No doubt, there is a need
for, may be a bank, an insurance company, a development
agency, or the government, to explore how the poor households
are exposed to risks and shocks, and how, through insurance
initiatives, they may be more able to manage these risks
better. Keeping in mind the need for the insurance sector,
an attempt has been made in this paper, to find out the
potential for insurance companies in suburban areas of
Delhi and NCR regions. For convenience, the study has been
restricted to Palwal and Ballabgarh, small towns in Faridabad
district.
Life is very valuable, but it is also
very unpredictable. That is why, every individual wants
to secure himself/herself against the odds of life and
take some insurance policy. The term insurance is not a
new one. Rather, it has prospered since its conception,
way back to ancient Babylon's trading and financial system.
Since that time, life insurance practices exist. But, as
time passed, monetary and trading systems improved, and
the world became more industrialized. In mid-1700s and
early 1800, insurance companies credited the first ever
recorded established business insurance in London. The
first ever group insurance company was by Edward Lloyd,
who was actually the owner of a coffee shop. It is very
interesting to think how he got such an idea—that
of owing an insurance company. Actually, well-known businessmen,
bankers and merchants used to meet in his coffee shop for
business meets, and they used to sign some contracts in
exchange of a certain amount of money, for their safety.
Getting the idea from there, Lloyd, the owner of the coffee
shop, formed a group and started the insurance process.
Since then, it has been used as a tool to hedge risk. In
India, the insurance sector has a lot of potential, as
80% of the people are without insurance. Since the last
six years, it has been observed that the life insurance
sector is booming and new business premium is growing at
the rate of 40% per year. According to The Associated Chambers
of Commerce and Industry of India (ASSOCHAM), the Indian
insurance business will reach $60 bn by 2010. And, most
of the contribution will come from rural and semi-urban
insurance, as rural and semi-urban people also want to
ensure themselves better futures, and there is no doubt
that their rising purchasing power will motivate them to
move towards the insurance sector. It is an irony that,
though more than 60% of the Indian population is in villages,
the larger part is untapped because of poor distribution,
large distances and high costs relative to returns, when
compared with the urban sector. Keeping in mind the survey
of ASSOCHAM, this paper explores the potential for the
insurance sector in suburban areas and finds out a lot
of interesting facts about the insurance sector.
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