Business Aspects in Banking and Insuarance

Present Scenario of restitution in byplay The liberalization, privatization and globalization policies of the nation a tenacious with the revolution in the field of In arrive atation technology and communication name been advantageous for the damages welkin in India. ? Entry of rear endstage gamblingers and foreign collaborations It was on the recommendation of the Malhotra Committee that private players were every(prenominal)owed to enter into the indemnity commercialise. Today at that place ar al intimately 22 players who gull entered the Indian indemnification commercialise besides the giant Life redress stilt of India (LIC).A nonher study development that has taken in the field of general indemnity is the de-linking of the 4 subsidiaries of the General policy tummy of India (viz. Oriental redress Company Ltd. , New India Assurance Company Ltd. , National restitution Company Ltd. and unify India Insurance Company Ltd) from the p arnt company. ? Marketin g strategies and approaches The inlet of private players and their foreign partners has slide byn domestic players a tough time, because the opening up of the sector has not brought in wholly foreign players, hardly as well as professional techniques and technologies.The present scene in India is much(prenominal) that every atomic number 53 is trying to put in the best efforts. unitary mountain compute strategies being more than for survival than evolution. But the close important gift of privatization is the demonstration of node-oriented service of processs. issue care is being taken to maximize customer satisf fill. Insurance Sector Today Opportunities and Challenges Opportunities As compared to the Western countries, where they have already reached a stage of saturation, India female genital organ exploit some golden opportunities in the fol kickoffing fields. 1. Mass MarketingIndia is a highly populated boorish and would continue to be so in the near future. New players whitethorn tend to favour the creamy layer of the urban macrocosm. But, in doing so, they may well miss a large-scale chunk of the verify population. A strong case in point is the received railway line composition of the dominant market leader the Life Insurance Corporation of India. The lions section of its unfermented business comes from the rural and semi-rural markets. In a country of 1 billion peck, mass marketing is al modes a profitable and cost-effective option for gaining market share.The rural sector is a perfect case for mass marketing. Competition in rural battlefields tends to be kinder and gentler than that in urban areas, which can easily be termed cutthroat. Identifying the right agents to harness the adequate potential of the vibrant and dynamic rural markets go away be imperative. Rural insurance policy should be noteed upon as an opportunity and not an obligation. A smaller stack of innovative products in sync with rural necessitate a nd perceptions, and an efficient delivery system are the two aspects that have to be developed in order to penetrate the rural markets. 2. Job OpportunitiesJob opportunities are be standardised to increase mingled. The liberalization of the insurance sector promises several unsanded job opportunities for those who are equipped with degrees in finance. Finance professionals who had witnessed a slump in the job market would be much relieved. There result be demand for marketing specialists, finance experts and human resource professionals. Apart from this, at that place pull up stakes be high demand for professionals in streams resembling underwriting and takes management, and actuarial sciences. 3. Inflow of Funds There could be a coarse inflow of funds into the country.Given the applications huge waitment of start-up smashing, the initial years after opening up are bound to see a strong inflow of foreign capital. A rise in the equity share of foreign partners to 49 per cent testament act as a emanation to them. 4. Reinsurance Huge capacity is likely to be created in the area of reinsurance. Apart from pure reinsurance activities, which involves providing insurance security system, there will be a revolution in service-related fields like t precipitate, seminars, workshops, know-how transfer regarding risk opinion and rating, risk inspections, risk management and devising new constitution overs, etc. 5. Marketing Strategies Also, with more players in the market, there will be significant increase in advertising, brand building, and this will benefit unscathed lot of ancillary industries. A substantial shift is likely to take place in the statistical scattering of insurance in India. Many of these changes will echo inter home(a) trends. Worldwide, insurance products move along a continuum from pure service products to pure commodity products. Initially, insurance is seen as a building complex product with a high advice and service component. Buyers prefer a boldness-to-face interaction and place a high superior on brand names and reliability. As products become simpler and awareness increases, they become off-the-shelf, commodity products. Sellers move to come forwardside channels much(prenominal) as the telephone or direct mail. Various intermediaries, not necessarily insurance companies, sell insurance. In some countries like Netherlands and Japan, insurance is marketed using the Post Offices distri thation channels. At this point, buyers look for low price.Brand loyalty could shift from the insurer to the seller. 6. Banc self-assertion In other markets, notably Europe, this has resulted in bank assurance banks entering the insurance business. The Netherlands led with financial services firms providing an entire range of products including bank accounts, motor, home and vitality insurance, and pensions. Other European markets have followed suit. In France, over half of all vivification insurance gross sales ar e made through banks. In the UK, almost 95% of banks and building societies are distributing insurance products today.In India too, banks entrust to maximize expensive existing networks by selling a range of products. Many bankers have sh avouch an inclination to enter the insurance market by leveraging their strengths in the areas of brand image, distribution network, face to face contact with the clients and telemarketing coupled with advanced information technology systems. Insurers in India should in any case explore distribution through non-financial organizations. For example, insurance for consumer items such as refrigerators can be offered at the point of sale. 7. Information TechnologyWorldwide liaison in E-commerce and Indias predominant position in Information Technology and software development are to a fault likely to be major factors in the marketing of insurance products in the immediate future. The number of earnings account is increase and the trend has already been set by some of the leading insurers and insurance brokers worldwide. Challenges If one has opportunities, one has to face challenges it is like two sides of the same coin. No doubt India has a lot of opportunities access her way, but there are a few challenges and threats as well.The cardinal main challenges facing the sedulousness are product innovation, distribution, customer service, and enthronements. Unit-linked soulal insurance products might find greater askability with insurrection customer awareness intimately customized, psychealized and flexible products. Flexible products and new technology will play a crucial role in reducing the cost and, therefore, the price of insurance products. Finding inlet markets, having the right product mix through add-on benefits and riders, effective branding of products and services and product specialism will be some of the challenges faced by new companies. . Technology In todays highly warring financial services environ ment, effective organizations will employ technology in a strategic way so to achieve a competitive edge. Technology will play an increasing role in aiding design and administering of products, as well in efforts to build emotional state-long customer relationships. At the same time, investment in technology will only sustain as long as firms find the right people people with the right attitude, values, and ethics, commitment to excellence, and focus on customer service.The critical success factor is a top-down emphasis on exceeding customer expectations with quality people, excellent products, and legendary service. As has been seen in other financial services, the entry of private players ensures that the customer will be the beneficiary in the long run. It will to a fault result in enlarging the market and extending the reach of insurance across the country. 2. Competition Thus, isolated from the normal issues facing any new company, many new Indian private insurance players will need to cope with the challenges of works with a joint venture partner.They will be competing with large and well-entrenched government-owned players. They have to overcome regulatory hurdles, change the attitude of new recruits and pander some very high customer expectations. Also, the players will have to consider the Indian market as a long-term investment, and maintain exonerated objectives and constant observeing at all levels. Conclusion ? Nationalized players will continue to hold strong market share positions Over the past three years, around 40 companies have expressed fill in entering the sector and many foreign and Indian companies have arranged anticipatory alliances.The threat of new players winning over the market has been overplayed. As is witnessed in other countries where liberalization took place in new-fangled years, we can safely conclude that nationalized players will continue to hold strong market share positions, but there will be enough business fo r entry to be profitable. ? Recognizing the potential market open up the sector will certainly mean(a) new products, better packaging and improved customer service. Both new and existing players will have to explore new distribution and marketing channels.Potential buyers for most of this insurance lie in the middle class. New insurers essential segment the market carefully to number along at appropriate products and pricing. Recognizing the potential, in the past three years, the nationalized insurers have already begun to target niches like pensions, women or children. ? Facing competition and challenges Competition will surely cause the market to vex beyond current rates, create a enceinteger pie, and offer additional consumer choices through the introduction of new products, services, and price options.Yet, at the same time, public and private sector companies will be working together to ensure rosy-cheeked produce and development of the sector. Challenges such as devel oping a common exertion code of conduct, bestow to a common catastrophe reserve fund, and chalking out agreements mingled with insurers to settle claims to the benefit of the consumer will require concerted effort from both sectors. Objectives of Insurance 1. Risk Sharing insurance is mechanism adopted to share the needinesses that might occur to an individual or his family on the occurrence of a specified lawsuit.The event may be death of earning member of the family in case of vitality insurance, oceanic perils in marine insurance and other certain events in miscellaneous insurance. The termination arised from thee events if insured are shared by all the insured in the form of premium. Thus, risk is transferred from one individual to a group. 2. Co-operative Device Insurance is a cooperative pull under which a group of persons who agree to share the financial loss may be brought together voluntarily or through publicity or through allure of the agents.An insurer would be unable to compensate all the losses from his own capital. Therefore, by insuring a large number of persons, he is able to pay the essence of loss. Like all other cooperative devices there is no compulsion on anybody to purchase the insurance policy. 3. Saving Insurance is a saving device, oddly the life insurance. The claim is certain in case of life insurance, while it is not certain in general insurance. Therefore, life insurance is considered as saving because the insured party gets the sum assured increase bonus at time of maturity.Therefore, life insurance is considered as a savings device. 4. Economic warranter Insurance provides economic security for such losses arising out of happening of insured event such as personal accident. Insurance is a protection against uncertainties of life. It provides monetary compensation for losses suffered due to happening of uncertain events, insured under the policy of insurance. Insurance is a shelter against financial losses arising o ut of occurrence of an anticipated accident. Thus, it provides economic security to the family of insured person or his situation. 5.Economic Development One of the most important factors contributing to the process of economic development is the capital formation. The relation ship between capital formation and insurance services in both the developed and developing economies of the world has been quite swelled and noteworthy. The savings from the household sector constitute the major paritys of the total savings in the country. The household savings constitute physical and financial. The insurance is a financial savings. As the parsimony progresses and attains maturity, progressively larger relation of savings is invested in the financial assets like insurance. . Capital formation Capital formation is the increase in capital stock of a country consisting of plant, machinery, equipments, tools, factory buildings, raw materials etc. Capital has always been regarded as a means o f increasing production, in the economy and thereby contributing to the future stream of income to the economy as a whole.The process of capital formation envisages real savings, channelising savings and the act of investment. Insurance service acts as a tool to mobilize savings and indulge in direct investment. Principles of Insurance ) Utmost Good Faith It means a haughty duty to disclose accurately and fully all the facts material to the risk being proposed, whether requested or not. Every circumstance is material whish would knead the judgement of a prudent insurer in fixing the premium or find out to accept the risk. The breach of utmost good faith arises due to misrepresentation or non-disclosure. Insurance is a contract, and each party can examine the item or service, which is the subject matter of the contract. Therefore, the proposer (the one taking the policy) should disclose accurate information as asked by the insurance company, e. . facts relating to age, health, habi ts, and personal history. If any information is considered to be fraudulent, then the contract is null and void. Under Sec 45 of the Insurance Act, 1938, the insurance company can cancel a policy up until 2 years, but not after after the policy is signed on the grounds of inaccurate or false statement. 2) Insurable Interest Insurable refer is the legal right of the insurer, arising out of a financial relationship recognized under law between the insured and the subject matter of insurance.The interest in the subject matter of a contract of insurance provides the insured person with the right to enforce the contract. All risks are not insured. In order to be insurable, the risk must be capable of financial measurement. Insurable interest is said to exist when the person insuring stands to lose, if the event insured against occurs. E. g. a person has insurable interest in his own life. Husband and married woman have an insurable interest in each other. The main objective of insurabl e interest is to hold open people from wagering or gambling on the lives of the others. An insurance company cannot issue a policy without insurable interest.In case of non-life insurance, the existence of insurable interest is- a) Ownership of a property or asset like a car, flat, etc. haply establishes insurable interest in the property. b) An employer has an insurable interest in the employees working with him in good health. c) A bank has an insurable interest in the loyalty and integrity of its cashiers and managers. d) A businessman has an insurable interest in the stock of goods, vehicles, furniture and machinery. e) A vehicle owner has an insurable interest even in an unknown third party, who may be potentially injured in any accident involved with the vehicle. ) Indemnity The basic purpose of insurance is to compensate loss and not to allow profit from insurance contract. The insurance company pays compensation to the insured party only in case of loss due to some perils. If there is no such loss, no compensation is to be paid. According to the principle of indemnity, the actual loss incurred by the insured party is to be compensated by the insurance company, as per the terms and conditions laid down in the policy. For this purpose, the insured has to make a claim to the insurance company within a specified period after the occurrence of certain event.The insured party should not make a profit from any insurance contract. The object of insurance is to cook the financial position of the insured. 4) Subrogation Subrogation means the automatic transfer of rights and remedies of the insured to the insurer upon the insured having received the benefits of insurance. For example, a company has insured a car. If the car meets with an accident which damages the car beyond repair, and the company pays full value of insurance to the person for the car, the company has full right to take away the damaged car. The person has no rights left on the car.The princi ple of subrogation arises from the basic principle of indemnity. When the insurer indemnifies the insured to the extent to his loss and not more than that, the salvaged property goes towards reducing the loss of the insurer. 5) Contribution The principle of component part applies when the insured has taken more than one insurance policy for the same risk from more than one insurance company. In case of loss or damage is incurred and if the insured gets benefits from all the insurance companies, the insured will get more profit than his actual loss.The principle on indemnity will not be followed in such a case and it will be against the law of insurance. Therefore, insurance contracts include the principle of contribution expressly. The principle of contribution works in a manner where each insurer pays only that correspondence of the risk, as is represented by proportion off the sum assured to the overall sums assured by the different insurers. Whenever, the principle of contribut ion applies, the insurers make the insured responsible to file the claims in the correct proportion with the insurers. E. g. , A person takes a policy for Rs. 0000, Rs. speed of light000, and Rs. 150000 for the same thing. He will claim the insurance in the ration of 1/6, 1/3, and ? respectively. 6)Nature of contract-It is the fundamental principle of insurance required for a valid contract. A contract of insurance comes into existence when therte is an offer or proposal acceptance of the same by other. It has to satisfy all essential elements of a simple contract. To insurance contract to be valid one must be competent enough with sound listen. Premium is yhe contemplation that must be given for the inception of insurance contract.The object of the contrct should be lawful. 7) Risk must attach-It is essential for a valid contract of insurance. A contract of insurance can be enforced only if the risk is being attached. Premium is the consideration of the risk by the insurance companies. If there is no risk in the subject matter there should be no premium. 8)Mitigation of loss-It is applied in valid insurance contract. In the event of some mishap to the insured property ,the insured must make necessary effort to safeguard his upholding property minimize the loss as much as possible. ) Terms of policy- An insurance policy is for a specific period or time often the nature of risk against which insurance is sought determines the period or the life of the policy. a contract of fire insurance is normally for a period of one year. The first functions of insurance include the following Provide Protection The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others.Collective bearing of risk Insurance is a device to share th e financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured nominate the premiums towards a fund and out of which the persons exposed to a particular risk is paid. Assessment of risk Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also Provide Certainty Insurance is a device, which helps to change from uncertainty to certainty.Insurance is device whereby the uncertain risks may be made more certain. The secondary functions of insurance include the following legal profession of Losses Insurance cautions individuals and businessmen to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions installation of automatic sparkler or alarm systems, etc. barroom of losses cause lesser payment to the assured by the insurer and this will encourage for more savin gs by way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured.Small capital to pass across larger risks Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. Contributes towards the development of larger industries Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery. The other functions of insurance include the followingMeans of savings and investment Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insureds For the purpose of availing income-tax exemptions also, people invest in insurance. Source of earning foreign exchange Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways. Risk Free trade Insurance grows exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover.IRDA The Insurance Regulatory and Development Authority (IRDA) is a national agency of the Government of India, based in Hyderabad. IRDA is the administrative agency of Government of India for insurance sector supervising and development. It was formed by an act of Indian Parliament known as IRDA Act 1999, which was amended in 2002 to incorporate some emerging requirements. Mission of IRDA as stated in the act is to protect the interests of the policyholders, to regulate, get up and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto. As per the section 4 of IRDA Act 1999, Insurance Regulatory and Development Authority (IRDA, which was constituted by an act of parliament) show the composition of Authority. The Authority is a ten member team consisting of (a) a Chairman (b) five whole-time members (c) four part-time members, They are all appointed by the government of India. picThe law of India has following expectations from IRDA- 1) To protect the interest of and secure fair treatment to policyholders. ) To bring about speedy and orderly growth of the insurance industry (including annuity and superannuation payments), for the benefit of the common man, and to provide long term funds for accelerating growth of the economy. 3) To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates. 4) To ensure that insurance customers receive precise, clear and correct information about products and services and make them aware of their responsibilities and duties in this regard. ) To ensure speedy closing of genuine claims, to prevent insurance frauds and other malprac tices and put in place effective grievance redressal machinery. 6) To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a dependable management information system to enforce high standards of financial soundness amongst market players. 7) To take action where such standards are inadequate or ineffectively enforced. 8) To bring about optimum amount of self-regulation in day to day working of the industry consistent with the requirements of prudential regulation.Slow Growth Of Insurance Business In India 1) Volatile market The people in India who invest their money in the volatile market of India see the upper layer of the insurance industry and say that one can think positive about this sector, but the index chart showing the recent growth figures are having different story to tell. 2) hostage downfall in insurance sector Many in India consider the insurance sector as the secured one but the recent downfall in the premium incom e of private and public life insurance and eneral insurance companies clears this myth. The figures that came out in the light, regarding the premium income of insurance industry clearly show that Insurance in India is not recession proof. Downfall started from the life insurance sector of India where the major and most trusted companies have not recorded much impressive premium income. 3) Mixed results of growth and downfall of insurance business The insurance industry of India is not only witnessing this decline in life insurance sector but is also looking south with its general insurance biz.The recent data shows the slow negative growth of the general insurance industry in India with both public and private companies giving out assorted results. In the first quarter of the current fiscal where the public sector general insurance companies like United India, New India Assurance and Oriental Insurance have recorded the growth of 14%, 7% and 10% respectively, while PSU National Ins urance has resulted in the negative growth of 2%. 4) downhearted cleverness of general insuranceThe penetration of general insurance in India remains low on account of low consumer preference, largely untapped rural markets and constrained distribution channels, one of the biggest constraints facing the general insurance business is the lack of reach beyond the cities. With the privatization of the Indian insurance sector in 2000, competing among the insurance players has increased manifold each insurance player is coming up with innovative channels insurance products to meet the needs of different people. Thus, it is clear that the face of life insurance is changing.But with the changes come a host of challenges it is only the credible player with a long term vision a robust business strategy that will survive. According to the latest figures released by the Insurance Regulatory and Development Authority (IRDA), of the total 22 life insurance companies, only nine companies m anaged to mop up new business premium, most of them being smaller companies. Among major players, only Reliance Life and SBI Life managed to get more business and witnessed a growth of 6. 88 and 0. 89 per cent respectively.At present there are 22 life insurance companies in India, including the State-run Life Insurance Corporation Swiss Re, the largest reinsurance company, has said that insurance in the emerging markets is expected to grow at a slower pace in 2008 and 2009, but its longer term growth prospects remain positive. In India growth of new business in life insurance fell from 145. 7% in 2006 to 9. 6% in 2007. Annual growth is likely to drop from the 2002 to 2007 levels of 11. 4% in life and 10. 6% in non-life to 7-10% in life and 3-8% in non-life between 2008 and 2013, said the company its latest Sigma report.Growth in the life market slowed from 18% to 14% in 2007. Speaking of private general insurance companies, some big players like Reliance General Insurance and Tata A IG General Insurance have witnessed the negative growth. The other players in the same category like Bajaj Allianz General and ICICI Lombard Insurance have reported the southward growth of 13 and 21 percent respectively in the June quarter. Lack of good insurance advisors. Reasons for Slow Growth 1. disregard in the economy and the markets has put the brakes on the high speed growth of private life insurance companies. 2.Life insurance companies have slowed down recruitment due to tardy growth in the new business and focus on cost-cutting 3. Ineffective distribution networks 4. Delay in settlement of claims lengthy procedures 5. hypocrite cases Fraudulent and dishonest claims are a major problem for the insurance industry. An example of life insurance fraud is the John Darwin disappearance case, an ongoing investigation into the faked death of British former teacher and prison house officer John Darwin, who turned up alive in celestial latitude 2007, five years after he was thou ght to have died in a canoeing accident.Darwin was reported as missing after helplessness to report to work following a canoeing trip on March 21, 2002. He reappeared on December 1, 2007, claiming to have no memory of the past five years. Reasons for Slow Growth (contd) 1) Poor marketing strategies India is a developing nation and is new to all these marketing strategies if compared at international standards. Keeping in mind the poor literacy rate of the country, there should be such strategies prepared which not only target the urban areas but also tap and concentrate on the rural areas for basic and vital insurance policies. ) Low consumer awareness Due to lack of awareness, yet, nearly 80% of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This, itself i s an indicant that growth potential for insurance sector is immense, however, it is slow, one reason being lack of awareness.In order to deal awareness, the insurance companies should have differences in approach for rural and urban areas as per the lifestyle, literacy of people. For eg crops insurance, house insurance for people in rural areas and farmers with low sources of income should be made aware of in a less complex manner. 3) Lack of competition public and private insurance companies more or less offer policies with homogeneous terms and conditions. Hence, differentiation lacks which leads to less competition in the insurance sector. ) Government monopoly there are private and public insurance companies in the insurance sector. However, the government provides financial aid and encouragement only to its own public institutions. Evidently, the government will only support and favor its own agencies. There is concentration of top executive and due to this there cant be a n overall and fair development in the insurance sector.5) Inefficiency in management there is a lot of scope and potential for growth in the insurance sector if men, material and money are managed in the best manner. All sections of society should be tackled in an organized anner with suitable strategies so that the objectives of insurance are materialized. 6) Liquidity crunch due to reasons such as recession, liquidity has dried-up in the economy and hence people are hesitant concerning long-term investments such as insurance. Only when the liquidity situation eases, will the people become comfortable with locking in money for insurance as it is a long-term commitment and requires payment at regular intervals on a quarterly or yearly basis. 7) Financial malpractices due to inefficiency and lack of verification there are financial malpractices.For eg car insurance, the insurer may claim more than the actual damage of his car and give other causes for the accident when it is probably his fault. Such practices are illegal. FUTURE PROSPECTS OF INSURANCE IN INDIA With a huge population base and large untapped market, insurance Industry is a big opportunity area in India for national as well as Foreign investors. India is the fifth largest life insurance market in the emerging insurance economies globally and is growing at 32-34% Annually. Life insurance market has propelled the Indian lifeInsurance agents into the top 10 country list in terms of Membership to the Million Dollar Round plank (MDRT) an Exclusive club for the highest performing life insurance Agents. Total life insurance premium in India is projected to grow Rs 1,230,000 Crores by 2010-11. Total non-life insurance premium is expected to increase at a CAGR of 25% for the period spanning from 2008-09 to 2010-11. A major study on the Indian insurance sector by consultancy firm McKinsey & Co says less than a third of the life insurance agents meet minimum raining and sales standards set by their compan ies. It said the life insurance market could easily double to $100 billion in five years Entitled India Insurance 2012 Fortune Favours the Bold, it estimates that higher per capita income will be the key driver of higher demand for insurance products. By 2012, Indian household will be paying premium of up to Rs 4,100 from the current Rs 1,300 Indias ratio of life insurance premium to its gross domestic product is around 4% against 6-9% in the developed world. But, the report claims it could rise to 6. % by 2012, in tandem with the countrys demographic profile By 2012, almost 40% of the urban population is likely to have some form of life insurance cover, while in rural areas too it could touch 35%. Current levels are 30% and 25%, respectively FUTURE PROSPECTS OF INSURANCE IN INDIA (CONTD.. ) Insurance 10 years back in India basically was popular only for Life and to some extent for cover against Fire with only players like LIC,GIC etc. and this was one of the contributing factors fo r the growth of insurance being slow in India.This scenario changed with the entry of private players in the market. With competition came more innovation which ultimately is benefiting this industry in general. Latest 2 examples of innovations are agricultural/crop insurance and wedding Insurance. Bajaj Allianz Insurance has plans for protection against any losses in wedding preparations. The prospect that Insurance industry in India has a bright future can also be believed as not only big corporate houses like Reliance, Tatas and Birlas have stepped in this sector but also big banks like ICICI, SBI, HDFC are a part of it.This is a very positive indication for this sector with also more foreign players trying to come to India. India has an ever increasing population which just increases more and more market for the insurance industry. With more terror attacks and man made calamities and increasing natural calamities like rain deluge, draught, earthquakes etc. there is an increasing feeling of insecurity which is exactly what this industry thrives on. Hence, Insurance has very bright prospects in India. pic