Innovative Strategies to Catalyse Growth of Indian Life Insurance Sector-An Analytical Review

Abstract

The global economic recession caused by the misdeeds of investment banks such as Lehman Brothers, Goldman Sachs aided and abetted by insurance behemoths such as AIG led to the collapse of the investment banking industry in the US, failure of over 60 banks and financial markets meltdown. Due to the interlinked nature of the global economy and with many central banks and institutions across the world holding securities of the investment banks, the failure of investment banks led to panic across the world and huge losses. The crisis has led to great loss of investor wealth, huge job losses, loss of investor confidence, increased risk of counter party losses, steep decline in demand and exports. Economies across the world face a bleak future in terms of GDP growth rates and trade losses. The Indian insurance industry which has enjoying healthy growth rates and being one of the fastest growing insurance markets in the world is expected to be impacted by the global economic recession. The entry of many private companies has created a paradigm shift in insurance marketing in India in terms of products, tariffs, customer service etc., and has been the prime cause of the upswing in the insurance market. Considering the fact that insurance penetration in the country is abysmally low when compared to other developing countries it is imperative that the growth momentum is sustained. This paper explore the strategies that insurance companies can adopt in order to ensure that they continue to maintain high levels of growth in order to be able to counter the negative impact of the global economic recession.