Indian life insurance business issues and challenges

Till 1999 the Indian insurance business was done by the government companies. So it was under the monopolistic market. Towards the end of 1999 India took the bold step of opening up the insurance sector. Within a short span of time the private life insurance companies captured 29.32% of the market share. The Life Insurance penetration reached its peak at 4.6% in 2009 and Density also increased to the maximum of 55.7 US$ in 2010. But there after there is a Continuous decline. One of the major factors for the decline is the reducing new business (−24.04%in 2012–13) and market share of the Private Life insurance companies. Many of the private companies even closed their offices. The reducing business of private insurance companies not only affected the companies but also the industry as a whole. Today the insurance industry is crippled with many problems and challenges the finding of the study revealed that thhe new business and the number of policy sold are reduced. The high operating cost is another problem. The other findings are shortage of funds, less number of individual agents, dissatisfied customers and wrong selling. Product diversification, appointing more individual agents, reducing expenses, customer delight and good service can revive the market.