Insurance is not a new term for us, as the concept has been around for a long time. It has been documented in some ancient texts, with references dating back to 3000 BC. But, in a modern context, when we think about Insurance in India, it is mostly in the form of Life Insurance policies.
The development of Insurance can be traced back to British rule in India. Initially, ship insurance was designed to protect traders shipping goods from one place to another. Even though this was a small percentage of the population, it helped develop the need for Insurance in people's minds. And with gradual development and changing needs of the people, new provisioning policies were built.
Now, if you are interested in learning the history of Insurance in India, then you are at the right place. In this post, we have shared all the history of Insurance in India that one should know being a citizen of India.
Pre-Independence Insurance in India
There was a lot of British influence when it came to developing Insurance in India. The British East India Company established the first life insurance company in India in 1818. After that, many more Indian and foreign companies started operating. However, most of these schemes were geared towards the British and the elite classes.
The British government provided a lot of financial and fiscal incentives to Ship cargo companies to encourage them to carry Indian goods between different locations. This was required as there were no reliable railways, which were necessary for transporting goods from one place to another. The Oriental Insurance company was the first company in India to offer Insurance to
customers.
Post-Independence Development of Insurance Companies in India
Post-Independence Development of Insurance Companies is vital evidence of adoption and history of Insurance in India. After India's independence, the insurance sector was nationalized, and all private insurers were merged into four public sector companies. These were National Insurance Company, New India Assurance Company, Oriental Insurance Company, and United India Insurance Company.
These state-owned companies continued to dominate the market until the early 1990s when the government began to open up the insurance sector to the private sector. This led to a rapid expansion of the private insurance industry.
Rise of InsurTech Companies in India
Technology has helped in the advancement of each and every sector. It has reached everywhere from managing a large database to delivering the final products to consumers. Insurance is also one of the largest sectors that have leveraged technology for serving a large number of people.
The last few years have seen a sharp rise in InsurTech companies in India. These are companies that use technology to provide innovative insurance products and services. Some of the leading InsurTech companies in India are Acko, PolicyBazaar, Coverfox, and Digit Insurance.
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This has led to a significant rise in competition for the traditional insurance companies looking to adapt to these technological changes. The InsurTech market in India is very attractive and has huge potential; therefore, it would be an interesting space to watch out for in the coming years.
With the technology, the companies are getting a lot more headspace in processing the documents, payments, and claims with automation. When traditional insurance companies still rely on old ways of facilitating insurance policies, InsurTech companies allow you to book, renew, or claim insurance with a few clicks from your convenience places.
Current State of Traditional Insurance Companies in India
Due to a large red-tapism and conventional working criteria, it would be a long journey for the traditional insurance companies to match up to their pace with new-gen players. Although most of these insurance PSUs are sitting on a large market share but soon end up losing their leading spot if not utilize technological ingredients.
In 2022, the traditional insurance companies are looking to move towards InsurTech. The reach of the traditional Insurance companies in the market is very strong. So, adapting to the technology makes a lot of sense for such companies. The big players in the insurance market are looking to upgrade their systems, adapt the digitization technologies, and do many other things, which makes the job easier.
The biggest traditional insurance company, LIC has already started working on digitization with the online applications and premium collections process. The new system is fully based on InsurTech has been working on improvements. InsurTech is being loved by the customers as well, due to its convenience.
Future of InsurTech in India
The InsurTech sector has seen a 22% YoY increase in September 2021. This proves that the consumers are loving the convenience of the InsurTech brands in the market. With the ease of buying insurance, paying premiums, and applying the claims, it’s been one of the most popular choices for insured people.
The InsurTech sector is evolving with the changing technologies, and the year 2022 is promising for the industry.
Take away
Getting insured is the best way to stay safe from natural calamities or things that can't be predicted.
It all started with the insurance business back in the days, and we have a lot of great companies providing Insurance for almost every unpredictable moment in our lives. In this post, we tried our best to share detailed information about the Insurance Companies and the history of insurance in India.
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