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Insurance is an essential driver of the Indian economy, in 2021 it contributed to 4.2% of India’s GDP. This contribution is only projected to rise as insurance penetration in India surges in the years to come.
Insurance is such an important service that everyone should at least have a basic understanding of how it works. With the spirit in mind, we have highlighted the top 7 most noteworthy insurance facts in India.
The modern history of insurance dates back to 1818 when the Oriental Life Insurance Company was incorporated in the Indian city of Kolkata in the year 1818. That being said, this is not where insurance was birthed in India.
It is said that Ancient philosopher and statesman Chanakya introduced the concept of insurance during his governance of the Mauryan Empire. These things can be extensively read in the Arthashastra by Chanakya.
The insurance industry in India is regulated by the IRDA of India. The IRDA was formulated under the IRDA Act, 1999, on recommendations by the Malhotra Committee. It is the task of the IRDA to disburse insurance licenses in India, and ensure that all stakeholders are working fairly and efficiently.
Did you know that Life Insurance Corporation (LIC) of India is actually the largest insurance company in the world when it comes to policy issuance? Yes, LIC had over 290 million policyholders as of 2019, making it the largest insurance company in the world (on account of active policyholders).
With a total of 58 insurance companies in India, the insurance sector is a very large employer to the nation. In fact, according to the IRDA every 1/550 people in India are insurance agents. The bulk of these agents are with the LIC of India.
In 2020, it was also estimated that around 4 lakh people where general insurance agents in India. These numbers are only estimated to rise in the near future. That being said, there may be certain challenges with the advent of AI in the life insurance sector.
The first health insurance policy in India was issued by the General Insurance Corporation of India (GIC) in 1986. At the time, it was a basic mediclaim policy that provided limited protection and coverage in the event of hospitalization of the policyholder.
Today, insurance companies have introduced a host of innovations that has led to the creation of a plethora of different types of health insurance policies that cover also every contingency.
The Ayushman Bharat Scheme was introduced in 2018. This scheme provides insurance coverage up to ₹5 lakhs to over 22 crore Indians as of 2023, making it the largest insurance scheme in the world.
The insurance industry in India still actively follows the bancassurance model, where insurance sales are facilitated by banks. Under this model, the bank employee attempts to educate a customer about the benefits of an insurance policy, and then attempts to close a sale.
This model is still prevalent in India, although it has slowed down with the advent of online insurance brokers and web aggregators. We hope that at the end of this article you were able to learn about some of the unknown facts and aspects of Insurance in India. Stay safe and healthy.
This article is written by Team InsuranceLiya.com, an independent website that writes about insurance, finance, health, and more. Our writers have a wealth of knowledge, experience, and degrees in the fields of insurance, finance, economics, and beyond.