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- Title
Evaluation of Financial Soundness of Life Insurance Companies in India.
- Authors
Alamelu, K.
- Abstract
The insurance sector in India was dominated by the state-owned Life Insurance Corporation (LIC) and the General Insurance Corporation (GIC) along with its four subsidiaries. But in 1999, the Insurance Regulatory and Development Authority (IRDA) bill opened it up to private and foreign players whose share in the insurance market has been rising. The IRDA is the regulatory authority of the insurance sector, entrusted with protecting the interests of the insurance policy holders and regulating, promoting and ensuring orderly growth of the insurance industry in India. As financial intermediaries, life insurers tap savings of the public in the form of premium. In order to sustain public confidence, they have to maintain their financial credibility intact. In other words, a strong financial background enables insurance companies to augment their business. The International Monetary Fund (IMF) suggested a number of indicators to diagnose the health of the insurance sector. This paper makes an attempt to analyze the financial soundness of Indian Life Insurance Companies in terms of capital adequacy, asset quality, reinsurance, management soundness, earnings and profitability, liquidity and solvency ratios.
- Subjects
INDIA; LIFE insurance companies; PROFITABILITY; CAPITAL; LIFE Insurance Corp. of India; GENERAL Insurance Corp. of India; INTERNATIONAL Monetary Fund
- Publication
IUP Journal of Risk & Insurance, 2011, Vol 8, Issue 1, p39
- ISSN
0972-933X
- Publication type
Article