In the post-liberalization era, insurance industry is gaining momentum and is all set to play a crucial role in the economy. To realize this, the regulator has a lengthy agenda to work on.

If insurance penetration in India is poor at 2% of GDP, we may curse our past but it's a big potential for our generation-next. Indian economy is 0.16% of US economy but insurance density of India is 0.004% of US. One can either be confounded by the number of zeroes after the decimal or try to discover a big future potential. Even within India's decimalized economy, insurance has lagged by a denominator of forty. Purely for equilibrating with its own economy the insurance sector has not only got the onus to grow with the economy but to bridge the lag factor. This challenge offers the greatest opportunity to the regulator, insurers, reinsurers and intermediaries apart from the statesmen of the country.

The regulator can immortalize his tenure by facilitating this harvest. Insurer can harness the opportunity by short-term action plans and strategic survival plans. The reinsurer can create opportunity for itself by catalyzing the change of Indian economic order from a relief-minded finance system of loss to an ex ante premium-driven reinsurance. Once the objectives are clear in the minds of the main actors, every challenge will look like big opportunities.

India successfully entered the liberalization of Insurance Era in 1999. Apparently, the Indian insurance market is very important to the global community. In addition, India has one of the top growth rates in either the life or general insurance industries in the world. India, with a population of more than one billion is potentially going to be the largest insurance market in the world may be next to China. The Indian insurance industry has been underdeveloped throughout recent history. There were only 6 insurance companies in India in the beginning of 2000. More importantly, regulation of the insurance industry has not been able to keep pace with the rapid growth of Indian insurance market and new products in the current market-driven economy. As for example where are the specific regulations in areas such as crop insurance, credit insurance, health insurance and return-linked general insurance business. It is an important task for Indian authorities to develop a well-functioning insurance market, which will not only provide security for Indian people and their corporations, but will also enhance the development of the Indian economy.

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