Insurance: Challenges and Prospects

• Introduction
• Insurance challenges
• Insurance Possibilities

After globalization, insurance business has emerged as a major financial service in developing countries, but it is very difficult to tell the exact origin of insurance. Insurance originated with marine insurance where life insurance policies used to be for sermen working on ships. This policy used to be for a short period. The first life insurance policy was issued on 18 June 1583 for one year to a person named William Govins.

Insurance business in India is developing at a rapid pace since 2000. India’s domestic insurance business is expected to grow to $60.5 billion by 2010 from $25 billion at present. I . R . D . A . According to the estimates of the new business between April 2006 and February 2007, the premium increased at a rate of 120%. The rapidly developing insurance business has provided various opportunities to the businessmen, before taking proper advantage of these opportunities, it is necessary for the insurance businessmen to deal with the following challenges.

Challenges of Insurance Life Insurance Corporation of India has made steady progress since its inception. Seeing this progress, many private companies were eager to enter this field, ever since the ideology of liberalization, privatization and globalization has been adopted in India, since then many private sector companies have entered the field of life insurance. Since then it has stood as a strong competitor in front of life insurance. A problem has started coming prominently in front of the consumers as to which schemes they should invest in for investment by government and non-government sector companies so that their invested money can be safe. The biggest challenge in front of life insurance From time to time, many attractive schemes are announced by the private sector organizations, due to which it is natural for the general public to be affected. Life Insurance should also start such schemes from time to time to face the challenges of its competitors so that it can face the challenges of the private sector.

1. Challenges–
   • Shortage of human resources – After globalization, various insurance companies have emerged in India, there is a need for skilled human resources for the business operation and implementation of these companies, because in the insurance business, instead of a common product, to sell insurance products to insurance agents such as agents. Specific marketing methods are required because the need for an insurance product is not as immediate and immediate as for other products. It is a business of utmost good faith in which customer satisfaction is absolutely necessary, hence it is a great choice for human resource insurance businesses.
   • Consolidation and Merger – Due to globalization many insurance business companies have come in the country. Due to which company selection is a big problem in front of the customer. After the nationalization of the insurance business and before the era of globalization, in about four and a half decades only government companies were working and the public had faith in them. Various foreign companies have to integrate or merge with Indian reputed companies to do business in India, which is a great challenge.
   • Product innovation – In this era of fierce competition and government interference, there is a great challenge before the companies to constantly create new products to attract the attention of the customers. So that in this era of competition, your product can be sold to the customer.
   • Product Distribution – Efficient The way new companies have entered the insurance business in the year 2000, it has also become a challenge for the companies to distribute their products, because due to the lack of human resources and competition, the insurance businessmen are expanding their reach to the new area. If you will not be able to distribute your product at the right time by creating access, it will not be successful in this era.
   • Customer Service – The law of economics is that when supply is in excess, the customer is the master of the market. In today’s context, the customer is the master of the market for the insurance business. Hence customer satisfaction is an important challenge for the insurance business.
   • Competition – Due to the arrival of new companies, there is fierce competition in the insurance business. In such a situation, maintaining and developing the present form of their business is an important challenge for the companies working in the insurance business.
   • Government intervention – People’s hard earned money is involved in the insurance business and this business is based on utmost good faith. Hence government interference is more in this business. In which companies do not have as much autonomy as in other sectors. Therefore, it is an important challenge to develop while following government intervention.
   • Sustaining Growth – In this era of competition, it is an important challenge for an insurance business company to maintain its current momentum and grow.

India’s consumer market is the largest in the world. As far as insurance is concerned, there is immense potential for development in the insurance sector. In this era of fierce competition, only that individual organization moves forward on the path of development, which makes its plans keeping the consumers in the middle. A successful businessman is considered to be the one who earns profit by satisfying his consumers, that is, who satisfies consumer interests and changing needs. Many private companies have entered in the field of insurance. Therefore, the Life Insurance Corporation should always try to expand its work area while being alert from its competitors so that new dimensions of success can be established. As far as the possibilities of private sector institutions are concerned, the private sector companies are also making the same plans which are being made by the Life Insurance Corporation. But the level of trust in these institutions is low among the consumers. This is the main thing that remains the credibility of the consumers in life insurance plans. Therefore, continuous efforts are being made by life insurance to maintain this level of credibility. This is the base pillar on the basis of which we can measure the possibilities of insurance.

By amending the Indian Insurance Act 1938 on the recommendation of RN Malhotra Committee and IRDA. After the enactment of the Act 1991, the doors of progress have opened for the Indian insurance business. The contribution of the Indian insurance business to the GDP is 75%. And the share of the total premium that comes from the insurance business is only about 2% of the GDP. Including the banking business, the insurance business accounts for 75% of the GDP. Whereas in other countries the share of insurance business in GDP is high. For example, in Japan it is 14% of GDP, while it is 12% in Korea and 9% in Britain. According to an independent survey, the Indian insurance business is ranked 5th in the continent of Asia. Japan is in the first place, South Korea in the second place, China in the third place and Taiwan in the fourth place. The future of Indian insurance market is bright after globalization. People’s standard of living is improving, government policies and reforms are also positive for insurance business. Looking at the rate of economic growth, it seems. That the insurance business which today accounts for 7.15% of GDP will grow to become a major part of it. In today’s context, we will understand the opportunities available for insurance business through the following points!

• Possibilities–
  • Economic Development – India’s economic development is happening at a rapid pace. Due to which the standard of living of the people is improving. With the increase in income, the purchasing power of the people has increased. It is human behavior that man first fulfills his need of bread, clothes and house. Today, when people’s income has increased, their standard of living has improved, their understanding has increased, as well as purchasing power has also increased.Therefore, insurance businessmen can take advantage of this opportunity by making plans to attract customers in times of economic growth.
  • Rural market – Insurance business has reached its peak in developed countries, while Indian insurance business has spread only to cities, while about 65% of the population still lives in villages. Therefore, even today there is a lot of opportunity available for insurance business in the rural market.
  • New emerging areas – After globalization, new areas have been developed. Insurance business has gone beyond the old life insurance, vehicle insurance, marine insurance and entered into new areas like health insurance, micro insurance etc. But even today there is immense opportunity available for insurance business in these areas.
  • Government Policies – Government policies have also brought new opportunities for the insurance business. After globalization, by ending the monopoly of Life Insurance Corporation of India and General Insurance Corporation, private and foreign companies have also been allowed to enter the market, due to which finance and technical knowledge has become accessible for these companies.
  • Postal Insurance – Postal insurance was allowed in India on the basis of the recommendations of the Malhotra Committee. Due to which there is immense opportunity available to spread the insurance business in rural areas.
  • Various public welfare policies – The government has announced various public welfare policies such as Widow Pension Universal Insurance Scheme, NREGA, such schemes can be seen as new opportunities related to insurance.
  • Availability of finance – Due to globalization, foreign investors have been allowed to invest in insurance, due to which the finance required for the growth of insurance business can also be met from foreign sources, which is a great opportunity for insurance business. Now the insurance businessmen will be able to speed up the insurance business with the availability of finance.
  • Increase in employment opportunities – Insurance business has increased employment opportunities. Insurance provides direct and indirect employment to a large group.
  • Extensive marketing – In a country with a population like India, there is still a huge opportunity available for the insurance business. Even today, there are areas left in India which are still far away from the reach of insurance companies. Those who also need insurance product. Therefore, extensive marketing opportunities are available for the insurance business.
  • Reinsurance – Due to globalization, the facility of reinsurance has become easier for the companies working in insurance business. Due to which companies can create new dimensions of development by reducing their risk.
  • Information Technology – The pace at which information technology is developing in India provides many opportunities for expansion of insurance business. With the proper use of information technology, insurers can improve their product marketing process, product Chevio implementation.