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Contribution of Financial Services

Social Factor

Geographic Distribution of Financial Services

Employment Trends in Financial Services Sector

Changing Lifestyles Expectations

Credit Crunch Delaying Retirements

Technological Factors

Growth in eCommerce, despite Economic Crisis

Banks to Invest in IT

INTRODUCTION OF INSURANCE SECTOR

Insurance is basically risk management device. The losses to assets resulting Form natural calamities like fire, flood, earthquake, accident etc. are met out of the common pool contributed by large number of persons who are exposed to Similar risks. This contribution of many is used to pay the losses suffered by unfortunate few. However the basic principle is that losses should occur as a result of natural calamities or unexpected events which are beyond the human control. Secondly insured person should not make any gains out of insurance. Insurance in India can be traced back to the Vedas.

For instance, yogakshema,the name of Life Insurance Corporation of India's corporate headquarters, is derived from the Rig Veda. The term suggests that a form of 'community insurance' was prevalent around 1000 BC and practiced by the Aryans. Burial societies of the kind found in ancient Rome were formed in the Buddhist period to help families build houses, protect widows and children. Bombay Mutual Assurance Society, the first Indian life assurance society, was formed in 1870. Other companies like Oriental, Bharat and Empire of India were also set up in the 1870-90s. It was during the swadeshi movement in the early 20th century that insurance witnessed a big boom in India with several more companies being set up. As these companies grew, the government began to exercise control on them.

The Insurance Act was passed in 1912, followed by a detailed and amended Insurance Act of 1938 that looked into investments, expenditure and management of these companies' funds. By the mid-1950s, there were around 170 insurance companies and 80 provident fund societies in the country's life insurance scene. However, in the absence of regulatory systems, scams and irregularities were almost a way of life at most of these companies. As a result, the government decided nationalizes the life assurance business in India. The Life Insurance Corporation of India was set up in 1956 to take over around 250 life companies. For years thereafter, insurance remained a monopoly of the public sector.

INSURANCE IN INDIA

opening up of the insurance sector to private players -- that the sector was finally opened up to private players in 2001. The Insurance Regulatory & Development Authority, an autonomous insurance regulator set up in 2000, has extensive powers to oversee the insurance business and regulate in a manner that will safeguard the interests of the insured. The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries.

Milestone of indian life insurance industry:-

The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Orien