Liberalization of the insurance market in India gave entry to many private insurers, resulting in drastic changes in respect to people’s choice of companies. With the expansion of the market, insurance penetration and density of the country are getting better, leading to a competition within the companies in terms of policies sold, collection of premium income, settlement of claims and others. Companies are employing different marketing channels, apart from the conventional channel of marketing through individual agents, to stay in the competition. The present paper is thus an attempt to highlight the performance of life insurance market in terms of different parameters, and also to throw light on the different marketing channels employed.

Insurance sector in India was a closed market till year 2000. It was opened up for private participation in August 2000 (Times Group, 2000) as per the recommendation of a 10-member committee constituted by the central government under the chairmanship of R N Malhotra in April 1993. The government had permitted equity up to 26% in the insurance sector that could be held by the foreign investors; and in addition, the foreign insurance company has to necessarily tie up with an Indian insurance company before venturing into the insurance sector. This decision led to the participation of many private companies, including foreign companies, to venture into the insurance sector in India. As of August 31, 2010, there were 23 life insurance companies operating in India, which include one public sector company and 22 private sector companies. On the non-life sector, there were four public sector companies, two specialized insurers,1 15 private sector and two stand-alone health insurers operating in India (Figure 1). In addition, General Insurance Corporation of India is the reinsurer (IRDA Annual Report, 2009-10). As per the recommendation of the Malhotra Committee, the government set up an Insurance Regulatory and Development Authority (IRDA) on April 19, 2000, vesting it with the autonomous authority to develop and regulate the insurance market in India.

Risk And Insurance Journal, Explanation Investment, Insurance Market, Insurance Firms, Insurance Products, Cooperative Investments, Social Welfare, Vertical Differentiation Model, Decision Making Process.