Financial Growth Assessment of Private Life Insurers in India: An Aggregative Study

Abstract

Presently, Indian insurance industry has 57 insurance companies, out of which 24 are in the life insurance sector. Among all the life insurers, only LIC is the public insurer and the remaining 23 companies are private insurers. The entire route of allowing private insurance companies in India had begun in the early 1990s. A well-developed insurance sector with participation from both private and public players is the key to economic development as it delivers a source of long-term funds for infrastructure development. In this background, the study aims to examine the trend growth rates and the differences in growth rates of earnings and financial health indicators during the period 2010-11 to 2019-20. The findings of the study show mixed results with respect to earnings and financial health performance of private life insurers in India. To arrive at a meaningful conclusion, overall earnings and financial health indicators are measured. The overall results show that there has been no change in the overall earnings and financial health indicators as revealed by Chow test during the period under study. On the whole, it may be stated that in spite of significant positive growth in FDIR, the private life insurers have not shown satisfactory performance (i.e., no significant impact due to FDI hike) with respect to earnings and financial health indicators during the study period.