Asian Journal of Research in Social Sciences and Humanities
Year : 2013, Volume : 3, Issue : 1
First page : ( 24) Last page : ( 33)
Print ISSN : 0000-0000. Online ISSN : 2249-7315.

Life insuranc sector development & Its role in economic growth of India

Ms. Yadav Babita*, Dr. Rokade Varsha**

*Faculty, Research Scholar, R.D.V.V, Jabalpur.

**Assistant Professor, Department of Humanities, Manit, Bhopal.

Abstract

Insurance plays an important role in an economy and a strong pillar of financial market. A well-developed insurance sector promotes economic growth by encouraging more industrial activites through risk-taking. After liberalization and privatization, insurance industry is able to achieve a double digit growth and the deepening of insurance markets makes a positive contribution to economic growth. Growth in life insurance penetration is strongly associated with rising incomes for the reason that demand for life insurance products will be more at higher income. The contribution of life insurance is also very imperative in rural development, poverty alleviation and welfare of the poor. Life insurance industry has a significant role in socio-economic development of nation and together with banking industry it contributes more than seven percent gdp of an economy and the gross premium collected contributes to about 4 percent of the total gdp of the country. Insurance and economic growth mutually influences each other. The present study was undertaken with an objective to study the developments in life insurance sector and its role in economic growth of india. A secondary data has been used from the period 2001–2002 to 2009–2010. There is no significant difference between growth of life insurance sector and economic growth of india is the main hypothesis of the study. Data has been analyzed by using various statistical tools like student's t-test and karl's pearson correlation method and presented in the form of tables. There is a moderate positive relationship exist between life insurance and economic growth of india, life insurance sector provides huge employment, accelerate the rate of capital formation and boost industrial growth are some of the main findings of the study. The present paper concludes that a sound financial sector is the backbone of healthy economy and the insurance industry as a financial service is considered as one of the important segments in an economy for its growth and development.

Top

Keywords

Economic Growth, Life Insurance Sector Development, GDP, Financial Service Sector, Socio-Economic Development.

Top