www.ijcrt.org © 2020 IJCRT | Volume 8, Issue 8 August 2020 | ISSN: 2320-2882 IJCRT2008310 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org 2744 INTROSPECTION OF INSURANCE SECTOR IN THE SPHERE OF DENSITY AND PENETRATION: EMPIRICAL EVIDENCE FROM INDIA ON LIFE INSURANCE AND NON LIFE INSURANCE Swarup Saha 1 , Raktim Ghosh 2 and Srijita Mandal 3 Faculty of Commerce 1 Ph.D. Scholar of Commerce 2 Faculty of Commerce 3 1 Maharaja Srischandra College 2 University of Gour Banga 3 Maharaja Srischandra College Abstract: Insurance industry provides enormous opportunities to the domestic as well as foreign investors. India has a great potential in this sector. This industry contributes a huge amount to country’s GDP and economic development. This remarkable development in the insurance sec tor attracted foreign investors in India also. This present study considered two important factors insurance density and insurance penetration. For analyzing the data last 15 years’ (2004-2018) insurance density and penetration of life, non-life and industry sector have been considered and different statistical tools have been used to judge the relationship between industry insurance sector with life and non-life insurance sector, significance difference between life and non-life insurance sector, breakpoint during this study period, normality of data, heteroscedasticity and auto-correlation between the 2 models. For this researchers used Multiple Linear Regression Model, ANOVA, Bai-Perron and Residual test. This study also identified the future scope of research and constructive conclusion a feasible recommendation for growth of the industry. Keywords: Economic Development, GDP, Insurance Density, Insurance Penetration, Investors Introduction Insurance is an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. A person or entity entering into a contract with an insurance company for buying insurance is known as an insured or a policyholder. The insurer agrees to compensate the insured in the event of a covered loss in an exchange for a periodical payment of a sum of money called premium. The loss may or may not be financial, but it must be reducible to financial terms, and usually involves something in which the insured has an insurable interest established by ownership, possession, or pre-existing relationship. Insurance affects in the economic development of a country positively. As an economy develops over the years, the insurance business starts making inroads into the various sectors of economic activity in the country. The term ‘insurance’ has both financial and lega l interpretations. The financial interpretation focuses on an arrangement that redistributes the cost of unexpected losses. It is the collection of small premium payments from all the suspected and distribute it to those suffering actual losses. The legal definition focuses on the contractual arrangement whereby one party agrees to compensate the loss of other party. Thus the financial definition provides for the funding of the losses whereas the legal definition provides for the legally enforceable contract that spells out the legal rights, duties and obligations of all the parties to contract. The insurance industry of India has 57 insurance companies - 24 are in the life insurance business, while 33 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. There are six public sector insurers in the non-life insurance segment. In addition to these, there is a sole national re-insurer, namely General Insurance Corporation of India (GIC Re). Other stakeholders in the Indian Insurance market include agents (individual and corporate), brokers, surveyors and third-party administrators servicing health insurance claims. (www.wikipedia.org) Government's policy of insuring the uninsured has gradually pushed insurance penetration in the country and proliferation of insurance schemes. Gross premium collected by life insurance companies in India increased from Rs 2.56 trillion (US$ 39.7 billion) in FY12 to Rs 7.31 trillion (US$ 94.7 billion) in FY20. During FY12–FY20, premium from new business of life insurance companies in India increased at a CAGR of 15 per cent to reach Rs 2.13 trillion (US$ 37 billion) in FY20.