The history of Insurance can be said to be very old as old as the time when human beings came into existence. The same principle of fear exists in todays’ business man just like it existed for the ancient men. They also wanted to keep at bay the evil outcomes of fire and flood and loss of life and were persistent to make some sort of contribution in order to achieve this security. The concept of insurance can be said to be a recent development after civilization, eminently after the industrial age past few centuries, but the concept dates back to 6000 years.Insurance is a means of protection or safeguarding from financial loss.It is a form of risk management Primarily used to tackle against the risk of contingent,uncertain loss.


The concept of Life Insurance in its contemporary/current status came to India from England in the year 1818. Oriental Life Insurance Company which was started by Europeans in Calcutta was the first ever life insurance company in India.The Insurance companies which were set up during that time had the main aim of looking after the needs and purpose of European section and Indian people were not given the advantage of such privilege by these companies. Eventually the efforts of renowned people like Babu Muttylal Seal, Foreign Insurance companies started giving the Indian people Insurances. But, the problem with it was that Indians were not seen as equal or worthy and they were charged with hefty extra premiums. Bombay Mutual Life Assurance Society gave birth to the first Indian life insurance company in the year 1870, which covered Indian people's lives at nominal and reasonable rates.beginning as Indian venture with highly nationalistic motives, insurance companies came into being to carry the sense of insurance and social security via insurances to various fragments and sectors of society. Bharat Insurance Company of 1896 was also a company based on the pillar of Nationalism. The Swadeshi movement of 1905-1907 gave an upsurge to more insurance companies. In 1906, the United India in Madras, the National Indian and National Insurance in Calcutta, and the Co-operative Assurance in Lahore were all established. In 1907, the Hindustan Co-operative Insurance Company was established in Jorasanko, the home of poet Rabindranath Tagore in Calcutta.The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same time.Earlier to 1912 India had no legislation to regulate insurance business, and in 1912 the Life Insurance Companies Act, and the Provident Fund Act were passed.

The first two decades of the twentieth century saw a lot of increase in insurance business.During the spread of insurance companies many unrealistic and not so important issues were also concerning the companies which failed poorly. The Insurance Act 1938 was the first ever codification which governed not only life insurance but also non-life insurance which provided strict control of state over insurance business.The demand for nationalization of the life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it had been much afterward the 19th of January, 1956, that life assurance in India was nationalized. At the time of Nationalization there were about a 154 of Indian Insurance Companies with 16 non Indian Companies and 75 providents. Nationalization was accomplished in two stages; initially the management of the businesses was appropriated by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Life Insurance Corporation of India was established on 1st of September,1956 after the Parliament passed the Life Insurance Corporation Act on 19th June 1956, with the target of spreading life assurance far more widely and especially to the agricultural areas with a view to succeed in all insurable persons within the country, providing them adequate financial cover at a reasonable cost.



Public sector insurance companies are those in which the government has a direct holding of 51% or more.The government can be state or central.So, after Nationalisation and all the legislations which were passed, the government took holdings in Insurance companies.


The Role Of LIC from the time it was established was that of-

  • Spreading life Insurance widely amongst the rural areas and to the socially and economically backwards strata of our society with an aim to reach all insurable people and provide them adequate financial cover against death at reasonable cost.

  • Maximizing the faction of People’s saving by making the insurance linked with savings attractive.

  • Act as trustees to the public who have insured their money in their personal as well as collective sense.

  • Conduct business with full understanding that money belongs to the Insurance policy holders.

  • Meet the various demands of people in lieu of life Insurance which would occur due to the dynamic nature of social and economic Environment.


  • Has to issue insurance policy to people at reasonable rates

  • Invest fund into government Securities to protect the money of people who have invested in LIC

  • Give loans to various national projects which are important for the economic growth

  • Main link for savings and Investment in India

  • Housing loans at reasonable rate


All the entry restrictions by the government of India in the year 2000 & 2001 was lifted for private sector investors in the life insurance market.Foreign investment in the life insurance market was also allowed. Now, the Indian life insurance market currently has 23 private players fighting a rigorous battle for taking the largest possible slice of the growing life insurance market and at the same time maintaining their current hold.

  1. HDFC Standard Life Insurance Company

  2. Max Life Insurance Company Ltd

  3. ICICI Prudential Life Insurance Co. Ltd.

  4. Kotak Mahindra Life Insurance Co. Ltd.

  5. Aditya Birla Sun Life Insurance Co. Ltd.

  6. TATA AIA Life Insurance Co. Ltd.

  7. SBI Life Insurance Co. Ltd.

  8. Exide Life Insurance Co. Ltd.

  9. Bajaj Allianz Life Insurance Co. Ltd.

  10. PNB MetLife India Insurance Co. Ltd.

  11. Reliance Nippon Life Insurance Company

  12. Aviva Life Insurance Company India Ltd.

  13. Sahara India Life Insurance Co. Ltd.

  14. Shriram Life Insurance Co. Ltd.

  15. Bharti AXA Life Insurance Co. Ltd.

  16. Future Generali India Life Insurance Co. Ltd.

  17. IDBI Federal Life Insurance Co. Ltd.

  18. Canara HSBC Oriental Bank of Commerce Life Insurance

  19. Aegon Life Insurance Co. Ltd.

  20. Pramerica Life Insurance Co. Ltd.

  21. Star Union Dai-Ichi Life Insurance Co. Ltd.

  22. indiaFirst Life Insurance Co. Ltd.

  23. Edelweiss Tokio Life Insurance Co. Ltd.


The Government having tried various models for the insurance industry such as privatization with negligible regulation (pre 1956) and nationalization (1956- 2000) and having observed sub optimal performance of the sector, resorted to adopting a hybrid model of both these, resulting in privatization of the sector with an efficient regulatory mechanism (post 2000). This was initiated with the aim of making the industry competitive so that there are more players offering a greater variety of products over a large section of the population. The role of private insurance companies is the same as that of public insurance companies the only difference is that of shareholding.


  • In India, the total market size of the insurance sector is expected to be around 280 Billion Dollars in 2020.

  • Government's intervention in policy of insuring the uninsured has gradually put a pedestal in insurance infiltration in the country and generation of insurance schemes.

  • The total or Gross premium collected by life insurance companies in India retained a hike from 39.7 Billion Dollars in Financial Year 12 to 94.7 Billion Dollars in Financial year 20. During the