The success of insurance companies to a large extent depends upon the growth and development of new business and LIC is no exception. After the liberalization of the insurance sector in 1999, the new business performance of the LIC came under a cloud. Though LIC retained its leadership, its market share in terms of new business premium income declined to a low of 78.07%. In view of this, an attempt is made in the article to assess the new business performance of LIC.

Life insurance is the greatest blessing that modern times have bestowed upon mankind. It enables men to overcome the barrier of death and also to overcome the grim fear that his loved ones may some day become dependent upon the charity of others. Insurance in modern form originated in the Mediterranean during the 13th century. The earliest references to insurance have been found in Greece and Italy. The use of insurance appeared in the accounts of North Italian Merchant Banks, which dominated the international trade in Europe at that time. Marine insurance is the oldest form of insurance followed by life insurance and fire insurance. The patterns used in England have been followed by other countries in these kinds of insurance.

Life insurance activity in its modern form started in India in 1818 to provide support for English widows when Oriental Life Insurance Company was incorporated in Calcutta. Thereafter, other companies like Bombay Life Assurance Company in 1823 and Tritron Insurance Company for General Insurance in 1850, were incorporated. Foreign insurance companies dominated insurance business in India and enjoyed near monopoly right up to the end of 19th entury. Subsequently, insurance regulations formally began in India through the passing of two Acts, Life Insurance Companies Act of 1912 and the Provident Fund Act of 1912. However, the first comprehensive legislation was introduced with the Insurance Act of 1938 to control the insurance business in India. The main concern was to protect the interests of the insuring public. After Independence, the Indian insurance business witnessed severe competition as a result of which the non-Indian insurers were dislodged by Indian life insurance companies.

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