Introduction
The Indian Insurance Sector is basically divided into two categories i.e. Life Insurance and Non-Life Insurance. The Non-Life Insurance Sector is also known as General Insurance. Both the Life Insurance and the Non-Life Insurance is governed by the IRDAI.
The insurance industry of India consists of 63 insurance companies of which 24 are in life insurance business and 39 are non-life insurers. Among the life insurers, Life Insurance Corporation of India (LICI) is the sole public sector company.
The likelihood of an event or loss may be mathematically calculated or it may be based on the statistical results of experience in order to determine the amount of premiums that would be required to accumulate a common fund or pool, to meet the losses upon their arising.
The roots of the modern Indian life insurance industry originated with the incorporation of the Life Insurance Corporation of India (LICI) in 1956, consolidating together one hundred and fifty-six Indian and sixteen non-Indian insurers.
The LICI was the sole player in the market until the late 1990s when the insurance sector was reopened to the private sector. There are currently twenty-four players in the Indian Life Insurance Industry, the largest of which is the LICI, the only public sector life insurance company.
Literature Review
Ray and Pathak (2006) opined that ever since the privatization of the insurance sector in India in 2000, the industries have been witnessing the birth of numerous private players, mostly joint ventures between foreign insurance giants and Indian diversified conglomerates and each one is trying to make an inroad into the huge untapped market. Goswami (2007) examined that prior to privatization of insurance sector,
Life Insurance Corporation of India was the sole player in the life insurance industry in India. In six years since the entry of private players in the insurance market, LICI has lost 29% market share to the private players, although both, market size and the insurance premium being collected, are on the rise Bhatia and Sharma (2008) highlighted in their study that the India’s insurance sector which was a state monopoly until 1999, went a significant change in the post reform era and the business of private insurance companies increased rapidly overtime.
Bedi and Singh (2011) analysed the overall performance of life insurance industry in India between pre and post economic reform era and revealed that the life insurance industry showed a huge growth in its performance because of Liberalization, Privatization and Globalisation.
Gulhane (2013) discussed that there is significant difference in the growth rate of Fresh Business Premium between Public and Private Life Insurance Companies, there is significant difference in the growth of Number of policies issued by Public and Private Life Insurance Companies and Life Insurance Corporation of India enjoys dominance in Life Insurance Sector.
Long and Li (2017) employ a two-stage DEA model to evaluate operating performance of insurance companies, and their results indicate that proposed method is able to analyze with high accuracy. Ghosh (2020) observed that during post reform period growth of LICI business has grown significantly than private players at early period of reform but from 2014-15 business growth of LICI declines significantly compare to private life insurance companies in India.
Research Gap
After studying the several literatures, a research gap is being observed in the area of efficiency analysis of life insurance companies. In our present study, we have tried our level best to fulfill the gap.
©