Abstract

The World economy is facing the worst financial crisis. The financial crisis that started from mortgage home loan left no industry untouched by its effects. Manufacturing, Banks, Travels and Tourism and even the Insurance Industry was affected by the financial crisis. Insurance industry is considered to be the backbone of an economy. Its strategic importance is incomparable. The financial crisis led the world’s largest Insurance Company “American International Group” (AIG) almost to the verge of bankruptcy. The government had to bail out the largest insurer. This paper has attempted to study the financial crisis vis-a-vis, Insurance industry. It has highlighted the case study of AIG, effects on Insurance Industry and the future course of actions and precautions needed by the Industry.

Key words: Global financial crisis, financial crisis, Insurance industry, World economy