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Life has a lot of uncertainties. The chances of an incident or an event which cause losses are very uncertain. The risks present are
Indian Insurance Sector

It's a fact that the economy of India has been amongst the fastest growing economies of the globe. It is motivated by the better performance of all the three sectors i.e., agriculture, industry and services. With increasing manufacturing and service sector performances, a directly proportional higher insurance penetration is needed. With the start of financial sector reforms, the Indian insurance sector which has been till now under the control of the government has to set open for competition to meet the worlds challenges. The first step took by the government was to launch the IRDA Act with the objective of streamlining the growth process. The Indian insurance market is a huge market and has a large potential. Since the inception of the insurance sector in December 1999 the insurance industry has grown enormously. There are thirteen companies which operate in the life and thirteen in non-life sector. LIC of India has been dominating the life segment for over 40 years but still only 25 per cent of the insurable population has been insured. Since the year 2000 onwards IRDA started giving licenses to private people. Thus general insurance sector has shown remarkable expansion since a few years. The premium income has been recording a development rate of 20 per cent. A department wise analysis shows that in the year 2002-03, 21 per cent of business is gained from fire, 9 per cent from marine insurance, 39 per cent by motor insurance, 8 per cent by health schemes, 5 per cent from re-engineering and the rest 18 per cent from various other insurances. A few of the fastest upcoming companies are the National Insurance, Bajaj Allianz, Tata-AIG and ICICI Lombard. Presently, more than 70 per cent of the business underwritten (fire, marine, motor and engineering) is bound to tariff controls.

death or disability of human life; fire and theft of property; perils of the sea for shipment of commodities and many others. If anything takes place, the individuals and/or, companies may suffer a huge loss, maybe beyond their capacities to bear them. It is to reduce the effect of such uncertainties that we need insurance. Investment in factory buildings or heavy equipments or something else is impossible unless there is arrangement for overcoming the risks, with the help of insurance. Having this in view, people facing common risks get together and make small contributions to a common fund, which helps to spread the damage caused to an individual by a particular risk over a number of persons who are exposed to the same. Insurance is thus a way by which the damage likely to be caused by an accidental event is spread over a number of people who are exposed to it and who prepare to insure themselves against such an event. There is a contract or agreement under which a party agrees in return for a consideration to pay for an agreed amount of loss to another party to make the loss, damage or injury to something of value in which the insured has a financial interest as a result of some accidental event. The agreement/contract will be put in writing and is called as 'policy'. The person who is insured is known as 'insured' and the organization which insures the risk of loss is called as insurer/ assurance underwriter.

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