Problems galore for the private life insurance companies

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 thereafter 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 down their offices. The reducing business of private insurance companies not only affected the companies but also the industry as a whole. One of the major reasons for the poor growth of private life insurance company is the dependency on one product ULIP. The new business and the number of policies 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.