Baca Juga
Indian Life insurance sector has had a very interesting journey. This has been an important sector for mobilizing financial savings and LIC had been doing this job quite efficiently for a long period. When sector opened to private sector, the expectations were really high and to be fair these expectations were not misplaced. After all there was still so much scope for insurance penetration. In the last 15 years insurance industry had its moments and it had its lows as well; and now the sector has yet again reached a level where it has kept wondering investors – where are we going? This blog is an attempt to discuss various aspects of life insurance business and where does Indian industry and players stand.
Having worked in this industry for last 5 years, have helped me build a few perspective. These past 5 years have been especially important because insurance industry went through radical changes. A sector which was growing at break-neck speed suddenly came to halt and began witnessing negative growth for a few years. All of this was mainly influenced by regulatory changes. No other example can better explain the regulatory risk in a business – how drastically economics of a business can change. It was indeed a great learning experience to be part of this industry during this challenging period. Among the most insurance regulators, Indian regulator has been among the most active and this is what makes this industry even more exciting to study.
It is exciting, also because it is complex and intriguing. Unlike other industries, this industry has peculiar revenue recognition practices; internationally some accounting rules have been introduced merely to address the complexity of business; this is probably the only industry to have two P&Ls and cash-flow statement makes very little sense; business has fixed cost for set-up as well as high variable cost for sales and many such unique things.
Having been part of founding team of a company being set-up helped tremendously. Got exposure across roles and function. Have been involved in the setting-up from very beginning (as early as Joint venture forming) so got an opportunity to be part R1, R2 and R3 process of licensing. Through this blog, I wish to share my understanding of the life insurance business with the community at large and also seek to learn from them.
Introduction – Life Insurance Industry in India
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