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Southern insurance before the LIC

Celebrations of the Golden Jubilee of the Life Insurance Corporation have just begun. But insurance in India had its beginnings nearly 140 years before the LIC with the founding of the Oriental Life Insurance Society in Calcutta in 1818. Insurance in Bombay began with the Bombay Life Assurance Company founded in 1823. And Madras got its first locally established insurance company in 1829 with the founding of the Madras Equitable Assurance Society by Arbuthnot & Co. Its first directors were Sir George Arbuthnot and J. H. Peebles of Arbuthnot &Co., Robert C. Walker of Madras, Sutherland Orr of Orr, David & Brightwell and A Robertson of the National Bank of India. Madras Equitable had a chequered record throughout the nearly 100 years it was in business. Being an Arbuthnot company, that was only to be expected. But also being an Arbuthnot company it had the clout to operate under a separate Act of the Madras Government for years _ and this continued even after the Indian Life Insurance Act of 1912 came into force. Founded to insure the lives of British officers, Madras Equitable had the distinction of being described as "the birthplace of Life Insurance in India," for it was "the first to issue regular life policies." Strangely,

Madras Equitable did not fold up after the Arbuthnot Crash _ whose centenary is this year. It continued to write new policies till 1910. Then, despite difficulties, it struggled on, meeting its commitments till it downed shutters in 1921.

The next insurance company to be started in Madras was the first to be started by an Indian in South India. Started by a young man, Vijendra Rao, in March 1906 _its centenary has been little noted _ the United India Assurance Company was floated by Lingam Brothers (of whom I know little). After Vijendra Rao's early death in 1915, the company struggled, till it was rescued by M.Ct.Muthiah Chettiar in 1924 and developed by his son M.Ct.M.Chidambaram Chettiar.

In 1932 was established Madras' third important insurance company, The South India Cooperative Insurance Society Ltd. It was chaired by that veteran co-operator V. Ramadas Pantulu. P. S. Kumaraswamy Raja, who was to become Chief Minister of Madras, succeeded Pantulu as chairman of a company with a rural focus. Also in the Thirties (1934) was founded the New Guardian of India, a company to be later taken over by United India. Generally acknowledged in the pre-War years as the leading insurance company in the South, United India faced greater competition when Prithvi Insurance Company was established in 1943 with N. Gopalaswami Iyengar as chairman and S. Parthasarathi, son of the well-known lawyer and Congress leader S. Srinivasa Iyengar, as its managing director.

Innovative, to say the least, was the style of Prithvi's functioning. Building houses and selling them to policyholders on the security of life policies was one of its introductions. Another was a non-medical scheme of assurance. And it used to hold conventions of its staff over three or four days in idyllic surroundings, introducing the concept of a retreat.

The company also promoted `Prithivipakkam' near Ambattur, to enable people in the lower income group to own their homes for the rent they paid. New building techniques, like hollow blocks, were used in the development of this garden colony, which still flourishes across from the Godrej factories, east of Ambattur railway station.

Today, these companies are all part of the newcomers, LIC, the golden jubilee celebrants.

S. MUTHIAH

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