INSURANCE INDUSTRY IN INDIA: A REVIEW OF LITERATURE

Abstract

Insurance is a vital financial mechanism that protects policy holders against various risks through the pooling, sharing and management of potential losses. Beyond individual protection, the insurance sector contributes significantly to economic stability, capital formation and growth by mobilizing premium-based funds and investing them in productive activities. Insurance companies assess risks using analytical and actuarial techniques and determine premiums based on the probability of losses, expected costs, administrative expenses and profitability requirements. The present study provides a comprehensive overview of the insurance sector in India, beginning with the concept and significance of insurance and its historical evolution. It examines the major types of insurance services available in India, with particular emphasis on private life insurance companies. The study further identifies the principal factors influencing the growth and development of the Indian insurance industry, including changing market conditions and risk considerations. Porter’s Five Forces framework is also applied to analyse the competitive structure of the sector and the major forces affecting its competitiveness. The study concludes by highlighting key findings and implications.