first non life insurance company in india

Write down a note on origin and growth of non-life insurance in India. (2024)

Origin and Growth of Non-Life Insurance in India

Meaning of Non-Life Insurance

Non-life insurance, also known as general insurance which is not concerned with life. In other words it refers to insurance policies that provide protection against losses or damages to property, assets, or liability risks, other than life is called non-life insurance. It covers financial risks arising from accidents, natural calamities, theft, fire, health issues, and other contingencies for a specified period, usually one year.

First non life insurance company in india

The life business was started in 1818 in Kolkata with the establishment of Oriental Life Insurance Company. The first non-life insurance company was not set up until 32 years later. Its name was Triton Insurance, a company founded by a British organization in Calcutta.

Key Points:

• It provides protection for indemnity (compensation) for losses or damages incurred for the policy taken.
  
• The insurance covers tangible assets like vehicles, homes, goods, and health.
  
• The policyholder pays a premium, and the insurer compensates for the actual loss suffered, subject to policy terms.
  
• So It does not cover life or death risks of being. (those fall under life insurance).

Examples of Non-Life Insurance:

• Motor Insurance
  
• Health Insurance
  
• Fire Insurance
  
• Marine Insurance
  
• Travel Insurance
  
• Liability Insurance

In short:

Non-life insurance protects individual’s property and businesses from financial losses caused by uncertain events which can’t be measured in advance, other than death or survival, by providing compensation for damage or loss to property, health, or liability.

Origin of Non-Life Insurance in India

• Early Beginnings: Non-life insurance in India dates back to the 19th century during British rule. Initially, the market was dominated by foreign insurers mainly from Britain. first non life insurance company in india
  
• First Indian Insurance Company: The first Indian insurance company offering non-life insurance was Oriental Insurance Company, established in 1947.
  
• Regulation Era: Before independence, non-life insurance was largely unorganized with limited reach and awareness among the Indian population. first non life insurance company in india

Development and Growth

Pre-nationalization Period

• Several private and foreign companies operated in non-life insurance.
  
• The sector was fragmented and lacked uniform regulation.
  
• It has Limited penetration and scope as mainly confined to urban and industrial areas.
  

Nationalization of General Insurance (1972)

• The Government of India nationalized the general insurance business through the General Insurance Business (Nationalisation) Act, 1972.
  
• Four major insurance companies were formed:
  
  • National Insurance Company
    
  • New India Assurance Company
    
  • Oriental Insurance Company
    
  • United India Insurance Company
    
• The General Insurance Corporation of India (GIC) was established as the holding company and reinsurer. first non life insurance company in india
• This move aimed at improving penetration, spreading awareness, and making insurance affordable.
  

Post-nationalization Era

• The sector witnessed steady growth in terms of policyholders and products.
  
• Focus was on protecting farmers, rural sectors, and small industries.
  
• Insurance became a tool for social security and risk management for the living being and non-life things.
  

Liberalization and Privatization (From 2000s)

• The Insurance Regulatory and Development Authority (IRDA) Act, 1999 opened the market to private players. first non life insurance company in india
• Entry of private and foreign insurers increased competition, product innovation, and customer service.
  
• Non-life insurance products expanded to cover automobiles, health, property, marine, liability, and specialized insurance.
  
• Technology and digitalization boosted accessibility and convenience. first non life insurance company in india

Current Scenario

• The Indian non-life insurance market is rapidly growing due to business awareness and cost management:
  
  • Increasing awareness and demand for health, motor, and property insurance plays an important role for growing insurance.
    
  • Government schemes like Pradhan Mantri Fasal Bima Yojana also play a crucial role for the growth of Insurance (crop insurance).
    
  • Expansion into rural and semi-urban markets. first non life insurance company in india
• Presence of multiple players including public sector companies, private insurers, and foreign companies.
  
• Increasing use of technology for underwriting, claims, and customer engagement.

Conclusion

Non-life insurance in India has evolved from a fragmented colonial-era market to a regulated, competitive, and growing industry. Nationalization laid the foundation for widespread coverage, while liberalization opened the doors to innovation and efficiency. Today, the sector plays a vital role in risk management for individuals, businesses, and the economy at large. You can check the syllabus of Banking and Insurance on the official Website of Gndu. first non life insurance company in india

Important questions of Banking and Insurance

1. Different types of Insurance policies.