The General Insurance Industry in India
In India, general insurance is a term used to mean all non life insurance business. In other countries terms like property, casualty insurance and non life insurance are used.
The history of this industry is characterized by massive reforms though the sector remains heavily regulated. Market liberalization in the industry took place in the year 2001.
The Vast Nature Of The Industry
The industry meets its target market demand with products for marine insurance, automobile (which is compulsory in the country), public liability (also compulsory), homeowners’ policies, travel insurance etc. The sector being highly regulated, the public sector calls the shots in determining the rules of delivering services in the country. Typical companies dominating the industry include;
- United India Insurance company;
- Reliance General Insurance company (provides health insurance, motor insurance, travel insurance, personal accident insurance etc.)and ;
- United India Insurance Company (provides fire, marine, motor, industrial, liability, personal accident, Mediclaim and Unimedicare policies amongst others).
- Adapting To Modern Technology
In general the industry has utilized state of the art information technology facilities in delivering their services to their clients. The sale of insurance policies in rural areas has really gained from IT advancements in the industry. The claim process is also computerized allowing clients to quickly avail their claims to the company.
The assessing of loss incurred in the event of fire, for example, is done by forensic experts assuring the accuracy of calculation of the compensation to the claimant. Other adaptations include the teaming up with other industry stakeholders e.g. universities in providing customized products to the clients.
- The Challenge Of The Twenty First Century
Various reforms characterize the market including the detarrification, and mandatory participation of foreign owned general insurance companies with resident companies. The twenty first century has brought a major challenge in this industry.
One key challenge is the recession that is currently hitting almost all corners of the economy of India. However, the general insurance sector seems to have been hit less by the crisis compared to the life insurance sector. ICICI-Prudential Life Insurance was the hardest hit resulting into closure of some of its branches.
The governing council has however come up with various code of conduct in response to the credit crisis. One particular code of conduct is geared towards the control of these companies’ pricing patterns with the detarrification in place.