Life Insurance Market In India

When did life insurance start in India?

Life insurance started in India in the year 1818. It was started to provide solace to the English widows. Interestingly, Indians were asked to pay a higher premium compared to the non-Indians as Indian lives were considered more risky.

The Government of India, in 1956 amalgamated over 240 private life insurers and provident fund societies to create one nationalized monopoly corporation, the Life Insurance Corporation (LIC) of India.

Till the end of the fiscal year (financial year) 1999-2000, two state-run insurance companies, namely, LIC and General Insurance Corporation (GIC) were the monopoly insurance players (for both life and non-life) in India.

When did the Government of India allow private companies to enter the life insurance market?

It was only in fiscal 2000-01, that the Indian Federal government lifted all entry restrictions for the private sector investors. Foreign investment in the insurance sector was also allowed with a 26% cap. As of March 2010, there are a total of 22 private life insurance players in the market. Most of the private insurance companies are joint ventures with recognized foreign players across the globe, similar to us.