The insurance sector contributes majorly to the growth of any country’s economy. The insurance sector offers protection and security against unforeseen events.
It does not only help countries’ economies in risk-taking. It also helps families and individuals in terms of health, life and other areas of livelihood.
With insurance, you safeguard your future and help the economy by assisting them to boost the funds. With the funds of the insurance, the sector economy can invest money in development projects.
The insurance sector of India has grown immensely, and it has contributed a lot to asset management in both the public and private sector.
In this article, we will be discussing the brief condition of the Insurance sector in India and what is its future.
Brief Introduction of India’s Insurance Sector
The Insurance sector of India is mainly bifurcated into two categories: life insurance and general insurance.
These insurances are regulated by India’s insurance regulatory and development authority (IRDAI), established in 1999.
With the establishment of this organisation, the Indian Insurance sector was opened up for foreign companies for investment.
IRDAI monitors all the rules and regulations of the Insurance sector in India.
There are 57 insurance companies in India, from which 33 companies offer general insurance policies, whereas the rest of them are related to life insurance.
With time the Insurance sector expanded its horizons and started to provide insurance for a vehicle, travelling, crop, pets, gadgets, etc.
In the modern time, life insurance companies work on giving help and support in the exchange of the asset, but they also immensely help people in the growth of their savings.
Current State of Insurance Sector in India
In the current scenario of the Insurance sector in India, majorly the government-regulated insurance companies are on the top in terms of their share in the market and their contribution to the economy.
Recently, a lot of new developments have happened in the Insurance sector under which many foreign insurance companies are trying to invest with the private insurance companies in India.
With the foreign investment in the Insurance sector of India can grow a lot and immensely boost the economy.
IRDAI made an amendment act in 2015 that states that foreign companies can invest in Indian insurance companies with a limit of 49% so that the Indian ownership remains safe.
Future Vision of Insurance Sector
Life insurance companies mainly dominate the Insurance sector of India. Many new companies are jumping into the industry that will lead to avoid expansion for both sectors.
When the purchasing power of people is increasing, savings are also growing, due to which the Insurance sector in India is looking forward to introducing new trends for managing the Indian market efficiently.
The Indian government is also trying its best to help insurance people who cannot afford a better livelihood.
In the past few years, the government has launched many schemes like Pradhan Mantri Suraksha Bima Yojana and others.
In the future, these schemes will help the households with lower income and help them in their upliftment to a much larger scale.
Other significant factors like people getting aware of insurance policies nowadays and retirement plans will also be helpful in the growth of India’s Insurance sector.
The automotive industry is also increasing fast, which will lead to the enhancement in vehicle insurance and ultimately leading to the boost of the Insurance sector.
The Insurance sector of India has a significant vision for the future. It was believed that by 2020 India would have an excellent education level, a higher rate of technological innovation, faster communication and globalisation.
There is no doubt that India has developed a lot with increased automotive industry and technological advancement.
The insurance sector plays an invaluable role in the overall development of the economy. No doubt that the Insurance sector might be at a critical stage right now.
Still, it is believed that India will see a higher growth rate in the Insurance sector in the next few years.
The government is also boosting and creating more employment opportunities that will eventually lead to the growth of the insurance business.
The future of the Insurance sector of India is quite bright, and we would be able to see that in the next two decades.