Privatization and Growth of Non-Life Insurance Sector in India

Abstract

The insurance companies are financial intermediaries as these collect and invest large amount of premiums. They offers great protection to their investors, provides means for accumulating saving channelize these funds to government and other sectors. The General Insurance industry has both social and economic purpose and relevance. It provides security to society and promotes individual welfare and reduces the risk and helps to raise productivity in the economy. While the cash inflows of insurance companies are constant, their payout is deferred and contingency related. But general insurance suffers from under write cycles i.e. wide swings in premiums, profitability and fund availability etc.