With the passing of Insurance Regulatory and Development Authority (IRDA) Act 1999 Indian insurance sector opened to a healthy competition by entry of new private insurers into insurance business hitherto the area of public sector. Insurance penetration (premium as % of GDP) in India was merely 1.93% showing 0.54% and 1.39% in non- life and life insurance sectors respectively, which is far below from the 16.54%, 13.35%, 11.28% & 11.17% of South Africa, South Korea, Japan & UK respectively (table 1).