Since 1931, when talkies were first introduced in India, the film industry has produced more than 67,000 films in more than 30 different languages and dialects. In 2001 the industry produced 1,013 films making it the world's largest feature film producer.

If we analyse the development of the Indian Film Industry from its golden age we find that at that time film making was not as costly and risky as it is today. Due to the immense growth in technology and the entrance of Hollywood, now making a film involves a huge sum of money and depends on several contingencies. Huge sets, highly risky stunt scenes, very sensitive equipments, a huge amount of salary paid to the actors and a lot other factors have made Indian Films a very risky business. These factors demand some kind of mechanism through which a producer can be assured that in case of these contingencies he will be indemnified.

To deal with these situations film insurance was introduced in the foreign film industry. Premiums have dropped to as low as 1%, as more and more producers opt for cover.

With 700-800 films being made per year totally across India, the size of the film market in India is estimated at around Rs. 48 million or approximately 1 billion US dollars and even if 50% of these films (Rs. 24 million) are insured at anywhere between 1.0%-5% the total premium will be anywhere between Rs. 0.24 billion to Rs. 1.24 billion - a good start for a nascent industry.

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