The authors challenge the traditional balance sheet concept of the solvency of a general insurance company and put forward an emerging costs concept, which enables the true nature of the assets and liabilities to be taken into account, including their essential variability. Simulation is suggested as a powerful tool for use in examining the financial strength of a company. A simulation model is then used to explore the resilience of a company's financial position to a variety of possible outcomes and to assess the probability that the assets will prove adequate to meet the liabilities with or without an assumption of continuing new business. This suggests the need for an appropriate asset margin assessed individually for each company. The implications for the management and supervision of general insurance companies are explored. The suggestion is made that the effectiveness of supervision based on the balance sheet and a crude solvency margin requirement is limited. More responsibility should be placed on an actuary or other suitably qualified professional individual to report on the overall financial strength of the company, both to management and to the supervisory authorities.
Other services should also be improved. Insurance agent should be well trained. Policy should be issued quickly and with less formality.
. Insurance companies also give preference to whole family Insurance to attract the customers. so that there should be much information give to the people about health insurance. this is not beneficial to them. People are less aware about health insurance. because they think there is no return so that.SUGGESTIONS
Advertising of insurance product should stress on the need of security. Newspaper/Magazines and television are the most effective medium of advertising the life insurance. Insurance products should be more flexible to pay premiums. Insurance should be popularized as the means of securing future rather than saving tax.New entrants should come out with innovative riders.