India is the Number one democratic country in the world, having second largest population in the world. Further the majority of them – almost to the tune of 85% do not have any kind of life cover. As such there is scope for life insurance business in India.
In the last decade Indian Government has introduced and implemented various Reforms in the Financial Sector, one of them was the opening of the Insurance to the foreign players in this field. Naturally almost all International Large Life Insurance Companies were waiting for the opportunity to enter into such a wide and developing market.
The opening of Indian Insurance Industry for foreigners along with the collaboration and joint ownership with the big Industrial Houses and Public and Private Sector Banks was highly welcomed and proved quite popular.
Almost all Banks like SBI, Indian Bank, ICICI Bank, HDFC Bank and Big Business Houses like Tata, Birla, and Bajaj etc. entered into this new type of business to provide new service to Indian population.
Keeping in mind the peculiarities of Indian Economy, to give it boost, and also set aside evil effects of foreign capital, the Indian Government allowed limited partnership to foreign players and Indian Banks or Business houses were the main contributors in respect of Capital, Manpower, Distribution, Service etc. What was expected was introduction of new products tested worldwide, using experience and expertise of international insurance companies and providing wider option of alternatives to Indian citizens.
After taking review of the present position and advantages of this reform process, it can be said with certainty that almost all the expectations have proved correct. Indian customers have benefited in numerous ways, keeping aside few instances of non-attending complaints, supplying wrong information and false promises to people by some of the players.
Basically the Monopoly of Government owned life Insurance Company- Life Insurance Corporation of India is broken and challenged in the process. Entry of very experienced, intelligent, customer-caring foreign players in the field compelled LIC to change its stance drastically. Foreseeing the immense competition from the foreign players, it had to amend its ways, concentrate on customer service, and improve upon its way of working and delivery system. That was the great advantage to the Indian population of these changed circumstances.
Indian population has responded well to this change. Initially economically top or higher class accepted or welcomed this change, but now these companies are getting penetrated into middle class and are also trying to reach common man. In the years to come there will be great changes manifested in the Indian insurance industry.