Growth of life insurance in the post liberalization era

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Growth of life insurance in the post liberalization era

With the advent of liberalization, privatization and globalization popularly known as IPG, productivity has enhanced. New products are marketed with greater innovation and utilization of technology has become a necessity not only to reduce the cost of production but also the cost of distribution as well.

Liberalization creates a conducive climate for faster economic growth, allows up- gradation of technology, provides economy of scale and market expansion, domestically and internationally.

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The wave of LPG has influenced the insurance market globally. As of now, almost all the countries in the world have opened their insurance sector for the global players.

The greatest advantage of allowing foreign partners is the inflow of direct foreign capital. Expertise of the foreign partner in the highly competitive insurance market in the other countries would definitely be leveraged by Indian partners.

It leads to management efficiency and product innovation. Increased competition, technology-lead services, wide range of products and cost effective operations would finally benefit the customers. In the recent year there has been a slow growth of insurance market in the developed countries.

The Insurance Market in the developed countries is almost saturated. During 2003 global life insurance witnessed a decline of 8% while the life insurance business in emerging markets grew by 6.6%. In the years to come the foreign insurance companies in the developed countries would therefore like to spread their wings to the emerging markets.

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Among emerging economies, India is one of the high growth countries with huge untapped potential, with the rise of middle class, increase in per capita income, rise in literacy rate and growth of service sector, there is certainly a huge scope of insurance penetration in India.

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