Because many leading companies in the insurance sector have been spreading the word and promoting insurance, the awareness of insurance is very high. It may surprise you to learn that insurance has evolved over time. Not over the last few years, not over decades. As we will see, insurance in India is not a new concept or an old idea.
Insurance is not just saving money for the rainy day. Its collective vision is what makes it so noble. It’s not an individual or family who is responsible for the future. The entire society is responsible for taking care of an individual and a family in the case of a crisis that requires desperate measures. Policy is simply the pooling of resources to aid those in need during times of adversity.
Evolution of Insurance
Insurance’s Origins: Indian insurance has roots as deep as the diverse cultures and civilizations of India. Manusmriti and Dharmashastra, as well as the famous Arthashastra from Kautilya, have all documented the basic structure of today’s insurance industry. This is especially important in the context large-scale calamities and destruction due to natural disasters. In these cases, resources are pooled and redistributed among those in need. Insurance is the current context.
Current policy in India: Despite its historical roots, Indian insurance has existed since the beginning of the 19th century when the Oriental Life Insurance Company was founded with an eye to helping the British occupy forces in India. Although Indians could be included in the rates and premiums, they were heavily biased towards foreigners. The Oriental Life Insurance Company can be considered the first step toward modern insurance in India. The Bombay Mutual Assurance Society was founded only at the end of 19th century. This was the first insurance company to cater to the Indian needs. Bombay Mutual Assurance Society still exists.
Indian regulation of policy: Although the companies were established in the Indian insurance industry in 19th century, Indian Independence was not the time that Indian insurance was regulated. The Indian Life Insurance Companies Act was the first legislation to regulate policy in India. It was passed in 1912 as the beginning of the 20th century. The 1956 ordinance was passed, and the Indian insurance industry became nationalized. This opened the door to the Life policy Corporation of India, which is now the most prominent brand in Indian insurance. Soon after, the General Insurance in India was nationalized in 1973. This led to consolidation of many policy players in India with the creation of National Policy Company Ltd. and the New India Assurance Company Ltd. as well as the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd.
Privatization and Insurance: The Indian Life Insurance Corporation’s monopoly in the insurance industry was overthrown by a number of private insurers. This happened after the 1990’s privatization of the Indian policy sector. Global partnerships emerged with many foreign players entering the Indian insurance space. This marked a new phase in India’s evolution in insurance.