Insurance history in India

Indian insurance dates back to the days of ancient India legislation. It was then designed to pool national resources in order to deal with the occurrence of calamities such as fires, floods, famines and epidemics. The first traces of insurance were found in the form of maritime loans and carrier contracts.

Modern insurance is a legacy of the British occupation, with the industrial revolution in the West and mainly in England boosting trade and shipping during the 17^th century. These factors had largely contributed to the rise of the insurance industry in India, a large country producer of raw materials needed by England.

The life business began in 1818 in Calcutta with the establishment of Oriental Life Insurance Company. The first non-life insurance company was not set up until 32 years later. Its name was Triton Insurance, a company founded by some British in Calcutta.

For over a century, the market had been dominated by representation offices and branches of foreign, mostly, British, insurers. Among these entities are Albert Life Assurance, Royal Insurance and Liverpool & London Globe Insurance, companies which had prospered considerably in India, prompting strong competition with other market players.

The marginalization of local companies pushed the Indian government to nationalize life insurance activities in 1956. For its part, non-life insurance was not nationalized until 1972.

Life Insurance Corporation (LIC) was established in 1956, taking over the portfolio of 245 national and foreign companies. LIC had tapped into life operations monopoly from 1956 to the late 1990s and the opening of the insurance sector to private investors.

In the non-life insurance, the portfolios of the 107 companies present on the market in 1972 were pooled up into four large national companies whose head offices are based in the four corners of the country:

• National Insurance Company (Calcutta),
• New India Insurance Company (Mumbai),
• Oriental Insurance Company (Delhi),
• United India Insurance Company (Madras).

These four national companies are overseen by General Insurance Corporation (GIC) whose head office is in Bombay. GIC, created in 1972, intervened on the market as a national reinsurer and shareholder of the four direct companies.

The government will not reopen the doors of the Indian insurance market [5] to the private sector until the early 2000s. The entry into activity in 1999 of the Insurance Regulatory and Development Authority (IRDAI) marked the end of State monopoly and the opening of the market to private and foreign investment.

The highlights of Indian insurance

From 1818 to 1899

• 1818
  Creation of Oriental Life Insurance Company in Calcutta. Endowed with British capital, the company ceased operations in 1834
• 1829
  Creation of Madras Equitable Life Insurance Company
• 1850
  Creation of Triton Insurance Company; the first non-life insurance company set up by the British
• 1870
  Enactment of the British Insurance Act
• 1871
  Creation of Bombay Mutual Life Assurance Society, the first nationally owned insurance company
• 1897
  Creation of Empire of India Life Assurance Company

From 1900 to 1999

• 1907
  Creation of Indian Mercantile Insurance, the first company to market all non life classes of business
• 1912
  Publication of the first Life Insurance Companies Act
• 1914
  First publication of insurance market results
• 1928
  Enactment of the Indian Insurance Companies Act, a law that authorizes the government to collect statistical data on the life, non-life and pension transactions of Indian and foreign insurers
• 1938
  Updating the Insurance Act. Introducing new standards for controlling insurance activities
• 1947
  Creation of Oriental Insurance Company in Mumbai, the first non-life state-owned company. It is currently based in Delhi
• 1950
  Adoption of the decision to nationalize the insurance market
• 1956
  - Nationalisation of the life market
  - Creation of Life Insurance Corporation (LIC), which takes over the portfolios of 154 Indian insurers, 26 foreign insurers and 75 pension companies, that is a total of 245 entities
• 1957
  Creation of the General Insurance Council, a body reporting to the Insurance Association of India, which is responsible for developing a Code of Conduct in non life insurance
• 1968
  Amendment of the Insurance Act: the amendments include investment regulation, minimum solvency margin determination and the creation of a tariff advisory committee
• 1972
  - Nationalization of non life insurance "General Insurance Business Act". The activities of 107 property and casualty insurers are divided into four national entities
  - General Insurance Corporation (GIC) begins
• 1993
  Setting up a committee to reform the insurance sector
• 1994
  Reform Committee report delivered: reform committee calls for market reopening to private sector
• 1999
  Creation of the Insurance Regulatory and Development Authority (IRDAI), an independent body responsible for overseeing the insurance industry

From 2000 to-date

• April 2000
  Change in the status of IRDAI from an independent body to a statutory body
• August 2000
  Opening up the market to foreign investors. The ceiling on foreign direct investment (FDI) is set at 26% of the company's capital
• December 2000
  - Restructuring of General Insurance Corporation (GIC). Insurer's subsidiaries become full-fledged independent companies
  - GIC transforms into a national reinsurance company
• 2015
  Raising the limit of foreign direct investment (FDI) from 26% to 49% of the company's capital
• 2019
  Foreign investors may hold 100% of the share capital of a brokerage company