INTRODUCTIONInsurance may be described as a social device to reduce or eliminate risk oflife and property. Under the plan of insurance, a large number of peopleassociate themselves by sharing risk, attached to individual.The risk, which can be insured against include fire, the peril of sea, death,incident, & burglary. Any risk contingent upon these may be insured againstat a premium commensurate with the risk involved.Insurance is actually a contract between 2 parties whereby one party calledinsurer undertakes in exchange for a fixed sum called premium to pay theother party happening of a certain event.Insurance is a contract whereby, in return for the payment of premium by theinsured, the insurers pay the financial losses suffered by the insured as a resultof the occurrence of unforeseen events.With the help of Insurance, large number of people exposed to a similar riskmakes contributions to a common fund out of which the losses suffered by theunfortunate few, due to accidental events, are made good.INSURANCE IN INDIAThe insurance sector in India has come a full circle from being an open competitive marketto nationalization and back to a liberalized market again.The business of life insurance in India in its existing form started in India in the year 1818with the establishment of the Oriental Life Insurance Company in Calcutta., when it wasintroduced for English Widows. Even till the end of the nineteenth century, InsuranceCompanies in India were mainly the overseas companies investing in the insurance worksin India. An interesting fact here was that higher premiums were charged for Indian lives,as they were considered riskier for insurance cover.Insurance is mainly of 2 types: LIFE INSURANCE: GENERAL INSURANCEUnder life insurance the life of an individual is covered whereby an individual or his familyis assured a particular amount. Life insurance covers only the financial losses and not theemotional losses.India General Insurance covers almost everything related to property, vehicle, cash,household goods, health and also one's liability towards others. The basic difference ofgeneral insurance with the life insurance policy is that it offers protection againstcontingencies.Some of the important milestones in the life insurance business in India are:1912 - The Indian Life Assurance Companies Act enacted as the first statute toregulate the life insurance business.1928 - The Indian Insurance Companies Act enacted to enable the government tocollect statistical information about both life and non-life insurance businesses.1938 - Earlier legislation consolidated and amended to by the Insurance Act withthe objective of protecting the interests of the insuring public.1956 - 245 Indian and foreign insurers and provident societies taken over by thecentral government and nationalized. LIC formed by an Act of Parliament, viz.LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government ofIndia.Some of the important milestones in the general insurance business in India are:1907 - The Indian Mercantile Insurance Ltd. set up, the first company to transactall classes of general insurance business.1957 - General Insurance Council, a wing of the Insurance Association of India,frames a code of conduct for ensuring fair conduct and sound business practices.1968 - The Insurance Act amended to regulate investments and set minimumsolvency margins and the Tariff Advisory Committee set up.1972 - The General Insurance Business (Nationalization) Act, 1972 nationalized thegeneral insurance business in India with effect from 1st January 1973.107 insurers amalgamated and grouped into four companies viz. the NationalInsurance Company Ltd., the New India Assurance Company Ltd., the OrientalInsurance Company Ltd. and the United India Insurance Company Ltd. GICincorporated as a company.Today Insurance Companies in India have grown manifold. The insurance sector in Indiahas shown immense growth potential. Even today a giant share of Indian population nearly80% is not under life insurance coverage, let alone health and non-life insurance policies.This clearly indicates the potential for insurance companies to grow their market in India.In 1999, various reforms were suggested in the insurance industry in India. This haschanged a lot of things for the insurance companies in India. These reforms were:oBringing down of the governments stake holding to 50%oOnly the private companies with a minimum capital of Rs.100 crores should beallowed to enter the insurance sector.oNo insurance company can deal in both life and non-life insurance under the samebusiness entity.oForeign Insurance Companies can enter India only in collaboration with domesticinsurance companiesoInterest should be paid on delays of payments by the insurance companies in case ofnon settlement of insurance claims.oAnd many more to bring greater freedom and a well-planned regulation to theinsurance companies in India.Though, the existing rule says that a foreign partner can hold 26% equity in an insurancecompany, a proposal to increase this limit to 49% is pending with the government. Sinceopening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion havepoured into the Indian market and 22 private companies have been granted licenses.The various fields covered by insurance companies in India include:

oLife Insurance: For students, children, family, individual etc.oHealth insurance: For self, for family, accidental insurance premium, medical claim policiesetc.Non-life insurance: Home or House Insurance and other property insurance, Auto Insurance (forcars, motorcycle and other two-wheelers, commercial vehicles), Infrastructure Projects Insurance,Travel Insurance, real estate insurance, mobile insurance etc.Innovative products, smart marketing, and aggressive distribution have enabled fledglingprivate insurance companies to sign up Indian customers faster than anyone expected.Indians, who had always seen life insurance as a tax saving device, are now suddenlyturning to the private sector and snapping up the new innovative products on offer.With the largest number of life insurance policies in force in the world, Indias insurancesector accounted for 4.1 per cent of GDP in 2006-07, up from 1.2 per cent in 1999-2000, farahead of China where insurance accounts for just 1.7 per cent of the GDP and even the USwhere insurance penetration stands at 4 per cent of the GDP. One area that continues tocause concern is the number of customer grievances in insurance, especially in a fewspecific classes. This calls for more transparency in designing the contract wording and oninsisting that the applicant is sufficiently informed about the coverage and moreparticularly the exclusions. In addition, the legislation itself requires to be transformed tomeet the needs of the emerging markets.The demand for health insurance covers has seen a healthy increase, and today the sector isthe fastest growing segment in the non-life insurance industry in India, which grew at over40% last year. It is also emerging as an increasingly significant line of business for lifeinsurance companies.While this rate of growth appears to be very healthy, it is on a lowbase, and health insurance penetration in the country continues to be low. Only about 25million persons are presently covered for health through commercial insurance, in acountry of over 1.1 billion people. Overall, the Indian health sector is still characterized bythe near absence of any significant risk protection against major health-related expenditure GROWTH OF INSURANCE SECTOR IN INDIAIndia's insurance sector is zooming to show an unprecedented progressive growth of morethan 200% by the period of 2009-12. The Associated Chambers of Commerce and Industry of India has clocked out the fact that during this period, private players in the industry willsee a growth of about 140 per cent, owing to the adoption of the aggressive marketingtechniques in comparison of the growth rate of 35 per cent-40 per cent achieved by thestate owned insurance companies. The chamber is expected to poise the business ofinsurance to reach at Rs.2000 billions in coming 2 years from the present level of Rs. 500billion. With the result of adoption of the intense marketing strategies by the privateplayers, the declination has been witnessed in respect of the share of the state ownedinsurance companies captured in the market. The market share fallout has been noticed incontext of such companies like GIC, LIC, which have come down to nearly 70 per cent inthe past 4-5 years from the 97 per cent. The experts have fore casted the more severecompetition in the insurance sector likely to be occurred in the near future. Till recently,insurance sector was majority driven by the government sector players but now manyprivate sector multinational players have come into the picture. Like HDFC, ICICI, Kotak,Mahindra and Birla Sunlife. Insurance sector has been characterized as the booming sectorof the Indian arena, which has shown the growth rate of more than 15 per cent to 20 percent. Insurance in India is put under the federal subject and is governed by the InsuranceAct, 1938, the Life Insurance Corporation Act, 1956 and General InsuranceBusiness(Nationalization) Act, 1972, Insurance Regulatory and DevelopmentAuthority(IRDA) Act, 1999 and by various other actINSURANCE COMPANIES IN INDIA1 Life Insurance Corporation of India2. Bajaj Allianz Life Insurance Company Limited3. Birla Sun Life Insurance Co. Ltd4. HDFC Standard life Insurance Co. Ltd5. ICICI Prudential Life Insurance Co. Ltd.6. ING Vysya Life Insurance Company Ltd.7. Max New York Life Insurance Co. Ltd8. Met Life India Insurance Company Ltd.9. Kotak Mahindra Old Mutual Life Insurance Limited10.SBI Life Insurance Co. Ltd11.Tata AIG Life Insurance Company Limited12.Reliance Life Insurance Company Limited.13.Aviva Life Insurance Co. India Pvt. Ltd.14.Sahara India Life Insurance Co, Ltd.15.Shriram Life Insurance Co, Ltd.16.Bharti AXA Life Insurance Company Ltd.17.Future Generali Life Insurance Company Ltd.18.IDBI Fortis Life Insurance Company Ltd.19.Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd20.AEGON Religare Life Insurance Company Limited.21.DLF Pramerica Life Insurance Co. Ltd.22.Star Union Dai-ichi Life Insurance Comp. Ltd.23.National Insurance Company Ltd.

MARKET SHARE OF INSURANCE COMPANIES