BRIEF OVERVIEW OF LIFE

INSURANCE INDUSTRY
By Akhila Hebbar
MBA++ 1st Year
What is Insurance ?
 Definition: It is a financial protection against
potential future losses.
 Insurance is a hedging instrument against future
contingent losses.
 Protection of contingent losses is done in exchange
for a payment.
 This payment is called as Premium in the insurance
industry.
Types of insurance
A. Life Insurance
B. Non-life insurance:

1. Marine
2. Fire
3. Miscellaneous
Life insurers transact life insurance business whereas
general insurers transact the rest.
History
 Establishment of Oriental Life Insurance company
in 1818
 The Indian Life Insurance Companies Act, 1912

 Malhotra Committee set up in 1993 initiated

reforms in the Indian insurance sector:

A. Offering operational autonomy to the insurance
sector
B. Formation of IRDA in 2000
Overview of the life insurance segment
Market share of life insurance companies
Types of life insurance
1. Term Plan
2. Whole Life
3. Endowment
4. Money back
5. Annuities and pension
ULIP’S
 A hybrid product that combines insurance and
equity investment.
 A Unit is the component of the Fund in a Unit
Linked Insurance Policy.
 The returns in a ULIP depend upon the
performance of the fund in the capital market.
Charges in ULIP
1. Premium allocation charge
2. Mortality charge
3. Policy administration charge
4. Fund management charge
5. Surrender charge
Underwriting
 Definition: Underwriting is a process that large
financial service provides use to asses the
eligibility of the client to receive their products.
 Importance of underwriting

 Underwriting guidelines

 Classification of applicants:

A. Standard

B. Sub-standard
Reinsurance
 What is Reinsurance?

 Reasons for reinsurance

 The major reinsurers are Munich Re, Swiss Re,

Berkshire Hathway.
Regulation of insurance industry
 Regulation of the industry governed by IRDA

 Section 14 of the IRDA Act, 1999 lays down the

duties, powers and functions of IRDA
Ombudsman
 Definition: A man who investigates complaints and
mediates fair settlements, especially between
aggrieved parties such as consumers or students
and an institution or organization.
 The insurance ombudsman was created by
Government of India notification on 11th
November, 1998
 Functions of Ombudsman.
References
 www.irda.com
 www.policybazar.com
Thank You !!