THE IMPACT OF INSURANCE COMPANIES IN THE DEVELOPMENT OF AN ECONOMY

Insurance is an important part in the financial sector that contributes significantly to the economy of a country. Today India is one of the fastest growing economies of the world. Insurance Industry is a growth-oriented industry. The life insurance sector in India has seen an array of changes in the past. The economic scenario which emerged after globalization, privatization and liberalization has thrown a new challenge before the insurers. The growth of insurance business of private sector companies has been higher than government sector. Insurance market contributes to the economic growth as a financial intermediary and also helps in managing risk more effectively. Since the liberalization of the industry the insurance industry has never looked back and today stands as one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run. After inception the Indian life insurance industry passed through many hurdles and hindrances in order to attain the present status. However, the income earning capacity, eagerness and awareness of the general public are the key determinants of the growth of any insurance industry. According to S&P Global Market Intelligence data, India is the second-largest insurance technology market in Asia-Pacific, accounting for 35% of the US$ 3.66 billion insurtech-focused venture investments made in the country. The future looks promising for the life insurance industry with several changes in regulatory framework which will lead to further change in the way the industry conducts its business and engages with its customers.