A study on Growth and Development of Insurance in India- An Empirical Study

Abstract

The present paper aims to analyse the growth, density and penetration trends of Insurance both in India and Other Asian Countries. The study was conducted using secondary data available in various journals and magazines published by authorised institutes such as Insurance Institute of India (III), Insurance Regulatory and Development Authority of India (IRDA), Institute for Global Insurance Education (IGIE) and National Insurance Academy (NIA). The study results revealed that growth of insurance in Non-life was found to be significant (12.55 %) which was highest among south Asian countries, conversely in case of Life insurance India has registered negatively at second position (-4.65 %) next to Hong Kong which was highest with negative growth -9.0 %. In case of Total insurance the growth in total insurance was positive and significant (1.67 per cent) in the Japan country, which in case of other country was founded to negative (Hong Kong, Japan and Taiwan) and non-significant (India and South Korea) countries. Further, the study also focused to study the Insurance Density (Insurance Density is calculated as the ratio of premium to population) over a period of 13 years, results revealed that the density of insurance over a period time was found to be increasing from 11.5 USD to 55 USD. This figure is self explanatory which reveals the positive and increasing growth in insurance density in India. However, since from 2010 the density for Life was found to be decreasing with declining trend, whereas Non-Life insurance density was found to be positive and increasing trend. The study also assess the growth of Insurance industry in India, the results revealed that, giant player of insurance in India, LIC has also shown negative growth of -41.55 per cent in 2014-15 where compared to 2013-14 which was only -6.17 per cent. Hence the study suggests that policies should re-formulate / restructure to ensure better security among insurance industry and its stoker holders.This kind of change not only secures individuals during risk situation but also helps greater population to cover under appropriate risk policies and other risk mitigating measure for both Life and Non-Life Insurance policy holders. All these changes can boost the economy by increasing Foreign Direct Investment (FDI) channels so that insurance sector can contribute better to improve the countries income.