Life Insurance is the fastest growing sector in India till 2010. Private companies started their business after 2000 as Government allowed Private players and FDI up to 26%.The first private company which had entered into this sector was HDFC Life and now it is known as the HDFC Life. Good insurance companies of the world enter into the market with the partnership of Indian companies. These foreign companies entered into India because of the lucrative potential market. When we see the P/L account of these companies then we get that most of them regularly faces the loss in last 2-3 years. The Indian companies which have entered after 2005 want to pump out their money from this sector. As the limit of FDI investment is 26 %, so foreign companies are not very committed towards their work and when they feel that the market is not good they leave the market after selling their share to another company. Increase in FDI limit is necessary so that foreign companies will enter into the market with their own past experience & more commitment to get success in the new market. As the IRDA regularly intervened these companies because it doesn’t want to give lose to the policy holders.
LIC of India is the winner in this sector and running its business successfully because it is the oldest life insurance company of this country and as the Indian people believes more on PSUs. I don’t think that LIC’s plans are better than these private sector players and it also don’t give better return than these companies. But, I do agree that Premium allocation charge (initial charge) & policy administration charge of these private players are more and it should be reduced to provide customer better return.