This article examines the recent trends in the global insurance industry and the major influential factors like the emergence of new distribution channels to market insurance products; consolidation and globalization of insurance companies worldwide; rapidly developing technology; and changing industry laws and regulations. The article also examines the negative impact of the US terrorist attacks in 2001 on the industry.
Insurance is essentially a social device to reduce
or eliminate the risk of loss to life and property.
The risks which can be insured against include death,
fire, perils of the sea, accidents and burglary. Any
risk contingent upon these may be insured against
at a premium commensurate with the risk involved.
The
insurance business is divided into life insurance
and non-life (general) insurance, which includes fire,
marine, social, and various other forms of insurance.
The life insurance industry across the world has evolved
over many decades; it is based on the principle of
insurance being a collective bearing of risk, which
offers individuals an opportunity to protect themselves.
A large number of people form an association that
shares the risks faced by individuals.
According
to a survey conducted by Swiss Re,1 during
1992-2001, total global insurance premiums increased
by 64.3%, and in the same period, the life insurance
business grew by 87.3%. In 2001, life insurance accounted
for 59.76% of the total worldwide premiums, while
general insurance accounted for the rest. The total
premiums paid worldwide in 2001 were $2,408.25 bn
(Refer Table I).
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