Life Insurance Business in India An Evaluation of Its Growth and Profitability

Abstract

Macroeconomic developments, local regulations and tax laws are shaping the life newlineinsurance environment and performance of insurance industry is corollary to the dynamics of newlinesuch issues. However, potential contributions of such dynamics also pose enormous newlinechallenges which drive the profitability and sustainable growth of insurance industry per se. It newlinehas been sixteen years since privatization of life insurance industry backed by formidable newlineobjectives of creating awareness and improving insurance penetration in India. Indian newlineinsurance has been on the odyssey to reach where it is today although facts documented about newlinethe industry s experience is in a state of dichotomy and exhibit vulnerable growth conditional newlineupon underlying milieu. There has been an increase in number of insurers as well as insurance newlinepenetration owing to several dramatic drifts such as emergence of bancassurance, regulatory newlineactivism and introduction of large government insurance schemes. On the contrary, last few newlineyears from 2008 have been really challenging for life insurance due to changeable consumer newlinebehavior and multiple regulatory changes on products and channel commissions.The key newlinechallenge for life insurance industry is to drive profitable and sustainable growth in an ever newlinechanging world which is transforming rapidly. Some of the trends which have the potential to newlineinfluence insurance business are digitization; changing needs and lifestyles of consumers and newlineincreased awareness and demands of consumers. Further, the ageing population of 21st century newlineleading to the demand for retirement products and economic puzzles stemming from systemic newlinerisks arising out of endogenous and exogenous forces are projecting a tough time for life newlineinsurance industry. A synthesis of industrial performance and growth as well as their exposure newlineto diverse factors is a prerequisite for corporate, policy makers and regulators to cart life newlineinsurance industry on the growth trajectory. newline