The Insurance Industry in India is going through gut wrenching times as policy paralysis,low margins,falling premiums and customer friendly policies of IRDA have hit the sector.The government has failed to increase the FDI cap on insurance investment which means that the companies face a capital crunch.Major industrial groups in India like Bharti, DLF, Relaince which had invested are trying to exit quickly though without much success. The revenues are declining and the margins are abysmal.Insurance Industry is said to have massive potential given the fast growing GDP, increasing wealth and lack of insurance penetration.However this is a cyclical downturn for the insurance industry as it is for the whole economy. The downturn till now has not been pretty.The reasons for the down movement has been The results have been very bad for jobs in the insurance sector with employment in the private sector taking a massive hit.During 2010-11, one out of four people employed in the private life insurance sector lost their jobs in the country. For instance, total number of people employed by the top five life insurance companies as on March 31, 2011 stood at 60,215 as against 81,507 in the corresponding period last year. Also, these life…