Insurance a Ray of Hope: A Study on the Level of Awareness of Private Players in the Insurance Industry

Abstract

Risk and uncertainties are part of everyman life’s great adventure. Risk is a condition in which there is a possibility of an adverse deviation from a desired outcome that is expected or hoped for. There exist several techniques for meeting the problem of risk, of which insurance is the most practical method for handling major risks. Insurance is based on the principle of risk pooling. The principle of insurance works on the concept of large number of people exposed to a similar risk makes a contribution to a common fund and those who suffer losses due to the occurrence of any uncertainties or risk are compensated from this fund. It is the transfer of financial responsibility for the risk at the point of occurrence and conventionally involves the insurer in a commitment to pay, provided the terms and conditions of the policy are met, payment of the premium secures a source of funds in the event of loss. Liberalization of insurance business in India has made a sea change in the insurance industry. The market is opened for private players and the vast potential in the life business is explored steadily. The private insurance industry, with competition hottingup has woken up to ground realities and is in the process of implementing many alternatives like agents, adjustors, asset managers, assurors, actuaries, accountants and administrators.3 (Proverbial seven ‘A’) to capture the highest market share. Realizing the unlimited potential in Indian grounds, private insurance companies  concentrate in strategic deployment of technology for integrating office operations, and gaining customer confidence through improved service, which is the need of the hour. Currently the industry holds 15 private players and the country’s largest insurer Life Insurance Corporation’s (LIC) dominance is under threat as it is steadily holding a market share of 71%  (2005- 2006). However, in terms of lives covered under group schemes, the private sector has grabbed a significant market share of 36.65 per cent while LIC garnered a share of 63.35 per cent. At one end, where ICICI-Prudential maintained to lead the private insurers zone with a market share of 7%, Bajaj Allianz, HDFC Standard Life and Birla Sun Life showed a shaky ground. HDFC Standard Life did not fare well in spite of trying to expertise its strategy and expand its distribution network. With this industry scenario, the researcher felt necessary to know the respondents awareness of these private companies.