emoved from the clutches of state-owned PSUs in 2000, the insurance sector has seen marked changes during the last five years. As private players started getting a grip on the market, a new concept started gaining ground. More and more insurance was being bought, not sold - about 30 per cent of newly-issued policies were bought by the consumer, not thrust on them by some agent. "The rationale for liberalisation of the sector was to provide customers a choice," says Antony Jacob, managing director, Royal Sundaram Alliance Insurance. A lot has happened in both the life and non-life insurance market (see table). Communication changed, so did the products.

Between 2000 and 2005, 12 life insurers and eight non-life companies joined LIC (Life Insurance Corporation of India) and the four general insurance PSUs in the battle for the insurance sector. During this period, life insurance penetration increased form 1.7 per cent of GDP (premium income as a proportion of GDP) to 2.6 per cent. Though that figure is still a long way from catching up with the global average of 4.7 per cent, the industry feels it is reachable over the next five years.... more