Insurance is a fundamental way of protecting people’s lives and livelihoods and resources from different risks.
Life Insurance Corporation of India played a major role in the Indian insurance sector with a monopoly over life insurance for 50 years.
In this article, we are going to discuss the the insurance of India and the first insurance company in India. Check out below to get to know more about it.
What is Insurance?
The word insurance comes from the word “ensurance” that derives assurance. Insurance is the right and specific risk transfer of possible losses of life, property, or goods in exchange for money. Through this, the individual or the insurance company receives partial or all possible risks to the client in return for the premium.
It is a part of risk management to avoid uncertain damage. That means, the payment of a certain amount (premium) in the future against any uncertain loss.
In essence, insurance is a financial transaction agreement, in which, in the event of an accident in the future, the money is accepted for a certain period in installment on the basis of its guarantee. See below to know which is the first insurance company in India.
History of Insurance Companies in India
Insurance has been expounded on in the old texts of
- Yagnavalkya (Dharmasastra)
- Manu (Manusmrithi)
- Kautilya (Arthasastra) where accentuations were laid after the pooling of assets.
At the point when fiasco struck, this pool of assets would get rearranged to help those influenced inside the local area or town the troubled was important for.
Over the long haul, Indians acquired vigorously from different countries to make the advanced symbol of insurance.
A Brief Timeline of The Insurance in India
Let’s know the history of Indian insurance companies in this article below.
1818: Oriental Life Insurance Company
In 1818, the first insurance company in Quite a while was set up in Calcutta (advanced Kolkata), The Oriental Life Insurance Company. Likewise, Bombay (Mumbai) had the Bombay Life Assurance Company and Madras (Chennai) had the Madras Equitable Assurance Company, which were begun in 1823 & 1829 separately.
In the underlying days, Indians needed to pay an amazingly high premium contrasted with the British inhabitants. It was the Bombay Life Assurance Company, which turned into the primary insurance company set up by an Indian that began safeguarding Indians without charging extra expenses.
1912: Indian Life Insurance Companies Act
Throughout the underlying year of this century, the business was profoundly unregulated. It was distinctly in 1912 that the Indian Life Insurance Companies Act, 1912 was passed. This Act organized insurance and made it compulsory for charges and company valuations to be confirmed by a statistician.
1938: Insurance Act
By 1938, there were around 176 insurance organizations in India with the complete business esteeming around Rs. 300 crores. It was around that very time that the Insurance Act of 1938 was passed. This was the principal piece of enactment covering both general insurance and extra security.
1950: Life Insurance Corporation Act
While the interest for nationalization of insurance organizations had been continuing for some time, it was uniquely with the death of the Life Insurance Corporation Act of 1956 that nationalization of insurance was at long last accomplished.
On September 1, 1956, the Life Insurance Corporation of India (LIC of India) was set up with the plan of covering all Indians across the length and expansiveness of the country.
1972: General Insurance Business
In 1972, the General Insurance Business (Nationalization) Act was passed which nationalized all broad insurance organizations in India. The 107 odd organizations existing around the time were completely converged into four organizations:
- New India Assurance Company Ltd.
- National Insurance Company Ltd.
- Oriental Insurance Company Ltd.
- United India Insurance Company Ltd.
1999: Private Sector Was Permitted & IRDA Constituted
According to the proposals made by the Malhotra Committee, 2 things occurred in 1999:
- The private area was allowed to enter the insurance business and,
- The Insurance Regulatory and Development Authority of India (IRDAI) was established.
IRDAI was consolidated in April 2000 and is currently a self-ruling body that pursues developing the insurance industry.
Until this point in time, IRDAI outlines guidelines under Section 114A of the Insurance Act, 1938.
The First National Insurance Company In India:
Source :- coverfox . com
The history of Life Insurance Companies in India began with the establishment of Oriental Life Insurance Company in the year 1818 in Calcutta.
It is the first insurance company in India. It was started by Anita Bhavsar in Kolkata to cater to the needs of the European community. This Company was shut down in the year 1834.
United India Insurance Company Limited
The United India Insurance Company Ltd was established in 1938. The company has 281 workplaces and a representatives limit of 43744 on the 31 of March 2016. Its fundamental design is to serve clients with insurance arrangements. They cover the whole scope of the insurance business.
In an updated report the all-out cash hold accessible in the Company is around 200 crore. The company has administrations taking into account each portion of the insurance business. The company is situated in New Delhi.
It has workplaces in Mumbai Delhi and Hyderabad including Mumbai. The life and insurance company has been cross-country drove in 1938 after the consolidation of United India and Life Insurance Corporation of India.
Oriental Life Insurance Company:
Source :- coverfox . com
Oriental Life Insurance Company is the first life insurance company in India. This insurance company was run by Europeans. In the initial days, Indians had to pay an extremely high premium compared to the British residents.
That’s why the “Madras Equitable Assurance Company” in Madras (Chennai) and “Bombay Life Assurance Company” of Bombay (now Mumbai) were established in 1829 and 1823 respectively.
The insurance companies established during that period were brought up with the purpose of looking after the needs of the European community and Indian natives were not being insured by these companies.
However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them.
This era was dominated by foreign insurance companies which did good business in India. The renown insurance companies are Liverpool and London Globe Insurance, Royal Insurance, Albert Life Assurance.
“Bombay Life Insurance Company” was the first insurance company that was established by Indians. This life insurance corporation had started insuring Indian nationals without charging any additional premiums.
The general insurance business is a monster one and is developing at a rapid pace of 15-20%. Along with banking administrations, insurance administrations add about 7% to the nation’s GDP. A very much created and advanced insurance area is a shelter for monetary improvement as it gives long haul assets to framework advancement simultaneously reinforcing the danger taking capacity of the country.
Q. What was the first insurance company?
A. Oriental Life Insurance Company is the first insurance company in India.
Q. Who is the first largest insurance company?
A. UnitedHealth Group is the first largest insurance company
Q. Which company is best for life insurance in India?
A. There are several companies available for life insurance in India. But to find out the best among those companies you need to check which company fulfills your requirements.
Q. Who is the father of insurance?
A. Solomon Stephen Huebner is known to be the father of Insurance education.
Q. What are the 7 types of insurance?
A. The 7 types of insurance are as follow:
- Life Insurance
- General Insurance
- Auto Insurance
- Health Insurance
- Property Insurance
- Marine Insurance
- Liability Insurance
Q. Who is the richest insurance company?
A. At present, the richest insurance company is the UnitedHealth Group
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