Life Insurance is the
fastest growing sector in India till 2010. Private companies started
their business after 2000 as Government allowed Private players and FDI up to
26%.The first private company which had entered into this sector was HDFC
Standard Life and now it is known as the HDFC Life. Good insurance companies of
the world enter into the market with the partnership of Indian companies. These
foreign companies entered into India because of the lucrative potential market.
When we see the P/L account of these companies then we get that most of them
regularly faces the loss in last 2-3 years. The Indian companies which have
entered after 2005 want to pump out their money from this sector. As the limit
of FDI investment is 26 %, so foreign companies are not very committed towards
their work and when they feel that the market is not good they leave the market
after selling their share to another company. Increase in FDI limit is
necessary so that foreign companies will enter into the market with their own
past experience & more commitment to get success in the new market. As the
IRDA regularly intervened these companies because it doesn’t want to give lose
to the policy holders.
LIC of India is winner in this
sector and running its business successfully because it is the oldest life
insurance company of this country and as the Indian people believes more on
PSUs. I don’t think that LIC’s plans are better than these private sector
players and it also don’t give better return than these companies. But, I do
agree that Premium allocation charge (initial charge) & policy
administration charge of these private players are more and it should be reduced
to provide customer better return.
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