Everyone understands the value of life insurance today; it is an important financial asset that secures one’s family in the unfortunate event. But did you know that the history of insurance is as old as the history of most civilizations?
History Of Life Insurance
Different ancient civilizations covered different forms of risk. In fact, insurance has its origins in the Babylonian empire, Medieval craftsmen skilling guilds, the Great Fire of London, and early sea trades. Europe’s history of insurance records the first life insurance policies in 1706 in London, issued by the Amicable Society for a Perpetual Assurance Office.
Life Insurance Evolution In India
In India, Life insurance dates to the Vedic period, around 600 BC when the concept of “Yogakshema” emerged i.e., the security of people. In fact, the Manusmrithi, Dharmasastra and Arthasastra mention the importance of pooling financial resources for distribution in case of natural calamities and other distressing situations.
Here is a timeline of more recent times:
1818 - The Oriental Life Insurance Company in Calcutta introduces life insurance in India but fails in 1834
1829 – The Madras Equitable commences transacting life insurance in the Madras Presidency
1870 - The British Insurance Act is introduced and Bombay Mutual Life Assurance Society, the first Indian life insurance company starts business
1870 to 1900 - The Bombay Mutual (1871), Oriental (1874), and Empire of India (1897) begin in the Bombay Residency but receive stiff competition from bullish foreign insurance offices like the Albert Life Assurance, London Globe Insurance, and Royal Insurance
1912 to 1938 - The Indian Life Assurance Companies Act, 1912 is introduced to regulate the life insurance business in India
1938 - 1956 – The opening of new insurance companies and therefore, increasing competition, results in certain defaulting business activities, leading the Indian Government to nationalise the insurance business sector by introducing the Life Insurance Corporation of India (LIC) in 1956
1990s - Private players come into existence
2000 - The Insurance Regulatory and Development Authority of India (IRDAI) is incorporated as a statutory body to regulate and develop the insurance industry
The 20th Century’s Impact On Insurance
Here are a few milestones of insurance in the 20th century:
Nationalization: The formation of LIC in 1956 consolidated the industry and ensured wider coverage.
Coverage expansion: LIC played a pivotal role by reaching rural and urban areas to promote insurance awareness and offer various policies catering to diverse demographics.
Diversified product range: Unit-linked insurance plans (ULIPs), term insurance, endowment plans, whole life plans, and pension plans fulfill different financial needs.
Regulatory changes: IRDAI ushered in fair practices and transparency to protect policyholders’ interests.
Global players: The government allowed foreign direct investment (FDI) in the insurance sector, which welcomed international insurance giants and introduced a new level of expertise, innovation, and improved products and services.
Competition: Private players and global giants created competition, leading to innovation, better service offerings, and competitive pricing.
Customer-centricity: Improved customer service, grievance redressal mechanisms, and personalized products found new consumers.
The Influence Of Technology On Life Insurance
Here are some ways in which technology has influenced life insurance in India:
1) Online systems and digital databases have streamlined operations, making policy issuance, premium payment and claim settlements more cost-effective and efficient.
2) With insurance underwriting automation, life insurers have significantly reduced processing time from weeks to a few minutes by assessing risks in real-time.
3) Chatbots, mobile apps, and social media have improved customer service and engagement.
4) Innovative products such as micro-insurance or customizable policies are tailored to specific customer needs.
5) Digital platforms and partnerships with fintech companies enable a broader customer base, especially in remote areas.
6) AI and ML help reduce risk assessment, fraud detection, and improve the overall efficiency of insurance operations.
At IndiaFirst Life, we have meticulously outline the features and benefits of various life insurance policies, offering clear distinctions between categories. Utilize our online premium calculators to read, compare, and calculate premiums, empowering you to choose the ideal product that aligns with your financial needs. Our comprehensive life insurance options extend beyond coverage, providing savings and investment benefits.
All these changes are transforming the future of the life insurance industry, making it more accessible, diverse, and responsive to the evolving needs. Insurers who adapt, innovate, and prioritize customer needs while leveraging technology will thrive in this evolving landscape.
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