PREFACE 1. OBJECTIVES: To find out general insurance and which are the companies involved init.

To know what are the trends in General Insurance. To find out the developments in the General Insurance.

To find out the Procedure of Claims.

2. METHODOLOGY:

The study was carried out in Mumbai. Extensive Library Research was carried out. Various Websites were referred. Primary data was collected through interviews. Various books, magazines and newspapers have been referred

EXECUTIVE SUMMARY
Insurance is not the sale of products, but servicing customers. It is a system, by which the losses suffered by a few are spread over many,Exposed to similar risks. Insurance is a protection against financial loss arising:on the happening of an unexpected event. Insurance companies collect premiumsto provide for this protection. A loss is paid out of the premiums collected fromthe insuring public and the Insurance Companies act as trustees to the amountcollected. The very fundamental principle of spreading of the risk is actuallypracticed by the insurance companies by reinsuring the risks that they haveinsured. The opening up of the Insurance Sector to Private Companies, has madeavailable more products and world class service to Indian Customer.This project has been made with an objective to give an insight into various factsof General Insurance sector in India.An attempt has been made to explain the apex body of General Insurance. i.e. General Insurance Corporation of India, its structure, products and subsidiaries.Also the review of latest entrants into insurance sector viz private players likeTATA AIG General Insurance Company, Reliance General Insurance Companylimited, Bajaj Allianz General Insurance Company, IFFCO Tokio GeneralInsurance Company, Royal Sundaram General Insurance Company limited andICICI Lombard General Insurance Company have been described in brief, Due tothe growth in the technological sector of the country, the insurance companieshave started utilizing these technologies to its optimum level. A case study basedon the devastating Mumbai floods on 26 th July 2005 is been prepared and facts of the case are being listed along with the effect of the particular situation on theGeneral Insurance Companies is been justified

INDEX
Serial no. Topic
1 Origin of Insurance 1 2 A brief history of the Insurance sector 2 3 Insurance Sector Reforms 5 4 Insurance Regulatory Authority 7 5 Insurance Industry Classification 8 6 4 Is of Insurance 10 7 General Insurance 12 8 Product levels 15 9 Frequent Terms Used 20 10 Public Sector Subsidiaries 21 11 Private Players 30 12 Market Share 40 13 Insurance Regulatory & Development Authoritarian 42 14 Products

Page no.

45 15 Changing Scenario of General Insurance Market 51 16 Trends 56 17 Claims 59 18 Case Study 62

Origin of Insurance
Whenever there is uncertainty there is risk. We do not have any control over uncertaintieswhich involves financial losses. The risk may be certain events like death, pension,retirement or uncertain events like theft, fire, accident, etc.Insurance is a financial service for collecting the savings of the public and providingthem with risk coverage. It comes under service sector and while marketing this servicedue care is taken in quality product and customer satisfaction. The main function of theInsurance is to provide protection against the possible chances of generating losses.The insurance sector in India has come a full circle from being an open competitivemarket to nationalization and back to a liberalized market again. Tracing thedevelopments in the Indian insurance sector reveals the 360-degree turn witnessed over aperiod of almost two centuries. Brief History of the Insurance Sector The business of life insurance in India in its existing form started in India in the year1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulatethe life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collectstatistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with theobjective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies taken over by the centralgovernment and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956,with a capital contribution of Rs. 5 crore from the Government of India. The Generalinsurance business in India, on the other hand, can trace its roots to the Triton InsuranceCompany Ltd., the first general insurance company established in the year 1850 inCalcutta by the British.Some of the important milestones in the general insurance business in India are:1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact allclasses of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames acode of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvencymargins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized thegeneral insurance business in India with effect from 1st January 1973. 107 insurersamalgamated and grouped into four companies viz. the National Insurance CompanyLtd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. andthe United India Insurance Company Ltd. GIC incorporated as a company.INSURANCE SECTORThe opening up of Insurance sector was a part of the on going liberalization in thefinancial sector of India. The

changing face of the financial sector and the entry of several companies in the field of life and non life Insurance segment are one of the keyresults of these liberalization efforts. Insurance business by way of generating premiumincome adds significantly to be the GDP.Over the past three years, more than thirty companies have expressed interest in doingbusiness in India. The IRDA (Insurance Regulatory Development Authority) is theregulatory authority, which looks over all related aspects of the insurance business. Theprovisions of the IRDA bill acknowledge many issues related to insurance sector.The IRDA bill provides guidance for three levels of players - Insurance Company,Insurance brokers and Insurance agent. Life Insurance sector is one of the key areaswhere enormous business potential exists. In India currently the life insurance premiumas a percentage of GDP is 1.3 % against, 5.2 per cent in the US.General Insurance is another segment, which has been growing at a faster pace. But asper the current comparative statistics, the general insurance premium has been lowerthan life insurance. General Insurance premium as a percentage of GDP was a mere 0.5'per cent in 1996. In the General Insurance Business, General Insurance Corporation(GIC) and its four subsidiaries viz. New India Insurance, Oriental Insurance, NationalInsurance and United India Insurance, are doing major business. The General InsuranceIndustry has been growing at a rate of 19 percent per year.3 The entry of several private insurance companies, particularly international insurancecompanies, through joint ventures, will speed up the process of insurance mobilization.The competition will unleash new schemes and benefits, which will give consumers abetter Chance to save as well as insure. The regulatory system in India is relatively newand takes some more time to make the Insurance sector a perfectly competitive one.Insurance Regulatory Authority of India issued regulations on 15 subjects whichincluded appointed. Actuary, actuarial report, Insurance agents, Solvency margins, re-insurance, registration of Insurers, and obligation of insurers to rural and social sector,investment and accounting procedure. The reform in Insurance in India is guided byfactors like availability of a variety of products at a competitive price, improvement inthe quality of customer services etc. Also the employment opportunities in the Insurancesector wil1 increase as major players set their business plans in India. The policy of thegovernment to open up the financial sector and the Insurance sector is expected to bringgreater FDI inflow into the country. The increase in the investment limit in this vitalsector has generated considerable business interests among the foreign Insurancecompanies" Their entry wil1 certainly change the Insurance sector considerably.

Insurance Sector Reforms:

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI GovernorR.N. Malhotra was formed to evaluate the Indian insurance industry and recommend itsfuture, direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector.In 1994, the committee submitted the report and some of the key recommendationsincluded:Structure:1. Government stake in the insurance Companies to be brought down to 50%. 2.Government should take over the holdings of GlC and its subsidiaries so that thesesubsidiaries can act as independent corporations.3. All the insurance companies should be given greater freedom to operate.Competition:I. Private Companies with a minimum paid up capital of Rs. 1 bn should be allowed toenter the industry.2. No Company should deal in both Life and General Insurance through a single entity.3. Foreign companies may be allowed to enter the industry in collaboration with thedomestic companies.4. Postal Life Insurance should be allowed to operate in the rural market.5. Only one State Level Life Insurance Company should be allowed to operate in eachstate.5 Regulatory Body:1. The Insurance Act should be changed.2. An Insurance Regulatory body should be set up.Controller of Insurance (Currently a part from the Finance Ministry) should be madeindependent.Investment:1. Mandatory Investments of LIC Life Fund in government securities to be reduced from75% to 50%.2. GIC and its subsidiaries are not to hold more than 5% in any company (There currentholdings to be brought down to this level over a period of time.)Customer Service:1. LIC should pay interest on delays in payments beyond 30 days.2. Insurance companies must be encouraged to set up unit linked pension plans.3. Computerization of operations and updating of technology to be carried out in theinsurance industry.The committee emphasized that in order to improve the customerServices and increase the coverage of the insurance industry should open up tocompetition.

But at the same time, the committee felt the need to exercise caution as anyfailure on the part of new players could ruin the public confidence in the industry. Hence,it was decided to allow competition in a limited way by stipulating the minimum capitalrequirement of Rs. 100 crores. The committee felt the need to provide greater autonomyto insurance companies in order to improve.

Insurance Regulatory Authority

On the recommendations of the Malhotra Committee, government has set up an interimInsurance Regulatory Authority (IRA), with a view to activate an insurance regulatoryapparatus essential for proper monitoring and control of the insurance industry. The IRAis headed by a chairman who is also Controller o0f insurance and chairman of TBC. Theother members of the IRA, not exceeding seven in number of whom not more than threeshall serve full time, shall be nominated by the central government.INSURERS:Insurance industry, as on 1.4.2000, comprised mainly two players: the state insurers: Life Insures: Life Insurance Corporation of India (LIC)

General Insurers General Insurance Corporation of India (GIC) (with effect from Dec 2000, anational reinsurer)

SOME PLAYERS IN THE INDUSTRY:

Life Insurance- Life Insurance Corporation of India. ICICI Prudential Life Insurance Ltd. Tata AIG Life Insurance Corporation Ltd. ING Vysya Life Insurance Corporation Ltd. Etc

General Insurance -General Insurance Corporation of India.1. Oriental Insurance Company Ltd.2. New India Assurance Company Ltd.3. National Insurance Company Ltd.4. United India Insurance Company Ltd Bajaj Alliaz General Insurance Company Ltd.

Reliance General Insurance Company Ltd

4 Is of Insurance Service
The 4 Is refers to the different dimensions/ characteristics of any service. Unlikepure product, services have its own characteristics and its related problems. So theservice provider needs to deal with these problems accordingly. The serviceprovider has to design different strategies according the varying feature of theservice. These 4 Is not only represent the characteristics of different services butalso the problems and advantages attached to it.These 4 Is can be broadly classified as: Intangibility Inconsistency Inseparability Inventory Intangibility: Insurance is a guarantee against risk and neither the risk nor the guarantee istangible. Hence, insurance rightly come under services, which are intangible.Efforts have been made by the insurance companies to make insurance tangible tosome extent by including letters and forms

Inconsistency Service quality is often inconsistent. This is because service personnel havedifferent capabilities, which vary in performance from day to day. This problem of inconsistency in service quality can be reduced through standardization, trainingand mechanization. Inseparability Services are produced and consumed simultaneously. Consumers cannot and donot separate the deliverer of the service from the service itself. Interaction betweenconsumer and the service provider varies based on whether consumer must bephysically present to receive the service. Inventory No inventory can be maintained for services. Inventory carrying costs are moresubjective and lead to idle production capacity. When the service is available butthere is no demand, cost rises as, cost of paying the people and overhead remainsconstant even though the people are not required to provide services due to lack of demand.In the insurance sector however, commission is paid to the agents on each policythat they sell. Hence,

not much inventory cost is wasted on idle inventory. As thecost of agents is directly proportionate to the policy sold

GENERAL INSURANCE
With the opening up of the insurance industry to the private sector, the need for a strong,independent and autonomous Insurance Regulatory Authority was felt. As the enacting of legislation would have taken time, the then Government constituted through aGovernment resolution an Interim Insurance Regulatory Authority pending the enactmentof a comprehensive legislation.The Insurance Regulatory and Development Authority Act, 1999 is an act to provide forthe establishment of an Authority to protect the interests of holders of insurance policies,to regulate, promote and ensure orderly growth of the insurance industry and for mattersconnected therewith or incidental thereto and further to amend the Insurance Act, 1938,the Life Insurance Corporation Act, 1956 and the General insurance Business(Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of India (for life insurance business) and General Insurance Corporation and its subsidiaries(for general insurance business).Definition and meaning: 1.INSURANCE: Insurance is the means of managing risk and protection against financial lossarising as a result of contingencies, which may or may not occur.In other words, insurance is the act of providing assurance, against a possible loss,by entering into a contract, with one who is willing to give assurance. Through thiscontract the person willing to give assurance binds himself to make good such loss, if itoccurs. 2.GENERAL INSURANCE: General insurance means managing risk against financial loss arising due to fire,marine or miscellaneous events as a result of contingencies, which may or may not occur.General Insurance means to Cover the risk of the financial loss from any naturalcalamities viz. Flood, Fire, Earthquake, Burglary, etc.. i.e. the events which are beyondthe control of the owner of the goods for the things having insurable interest with theutmost good faith by declaring the facts about the circumstances and the products bypaying the stipulated sum , a premium and not having a motive of making profit from theinsurance contract.Some of the General Rules: 1.Mis-description :The insurance policy shall be void and all the premiums paid by insured may beforfeited by the insurance company in the event of mis-presentation or mis-declaration and/or non-disclosure of any material facts. 2Reasonable care :The insured shall take all reasonable steps to safeguard the property insuredagainst any loss or damage. Insured shall exercise reasonable care that onlycompetent employees are employed and shall take all reasonable precautions toprevent all accidents and shall comply with all statuary or other regulations 3.Fraud :If any claim under the policy may be in any respect fraudulent or if any fraudulentmeans or device are used by the insured or any one acting on the insureds behalf to obtain any benefit under the insurance policy, all the benefits under theinsurance policy may be forfeited..

Few basic principles of general insurance are :

1.Insurable interest 2.Utmost good faith 3.Subrogation 4.Contribution 5.Indemnity 5Risks of loss not covered under general insurance are:

The loss or damage or liability or expenses whether direct or indirect occasion byhappening through or arising from any consequences of war, invasion, act of foreignenemy, hostilities (whether war be declared or not), civil war, rebellion revolution, civilcommotion or loot or pillage in connection therewith and loss or damage caused bydepreciation or wear and tear. However the risk of loss or damage by war can be insuredby payment of additional premium in some cases only.

Product levels:
In this figure there is a nucleus or core in the center, which is supported by series of tangible and intangible features and benefits and these form a cluster around the coreproduct.

The core product of insurance company is insuring life and non life products. People optfor this service as they want to secure their life, people dependent on them and othervaluable things in life.The time factor plays an important role while providing service to the customer. Thecustomer expects that the procedures for settling the claim should be short and not muchtime consuming. They should get the benefits of the service as soon as possible

Today the technology is boosting in each and every field. Insurance is not an exception.Companies have started providing customers facility of online payment of premiumthrough their websites. They also provide online assistant to the customer the policystatus and how to calculate the premium. To calculate the premium they just need thepresent age, the type of police, sum assured, and accident covered if any. By filling in thisinformation you can calculate the amount of premium you have to pay. The customer canpay their premiums by means of credit cards or can also give standing instruction to thebank in order to pay their monthly premiums.The insurance companies also provide loan facilities against their policies. At presentloans are granted on unencumbered polices afollows: Up to 90% of the Surrender Value for policies, where the premium due is fully paid-up, and Up to 85% of the Surrender Value for policies where the premium due is partly paid-up.The minimum amount for which a loan can be granted under a policy is Rs150. The rateof interest charged is 10.5% p.a., payable halfyearly. Loans are not granted for a periodshorter than six months, or on the security of lost policies (the assured must have theduplicate policies) or on policies issued under certain plans. Certain types of policies are,however, without loan facility.

FREQUENT TERMS USED

Agent:An insurance company representative licensed by the state, who solicits,negotiates or effects contracts of insurance, and provides service to the policyholder farthe insurer. Actual Total Loss:It is a loss where the goods are completely lost and become irrecoverable

Additional cover:An insurance policy extended to cover additional risk perils such as strikes. Riotsand Civil commotion etc on payment of extra premium. Agreed value policy:Policy which undertakes to pay a specified amount in case of total loss.Under this case the policy does not take into account the current market value. Assessor:Person who estimates the value of goods for the purpose of apportioning the sumpayable by the underwriters to settle the claims. Also called as Surveyor. Assured:Party indemnified against 19ss by means of insurance. Burglary:It is a theft committed by breaking into or out of the premises. Evidence of breaking In, Is necessary Coverage:The scope of protection provided under a contract of insurance; any of several riskscovered by a policy. Cargo insurance:A generic term used in both inland marine and ocean marine insurance todesignate the types of insurance available to provide coverage for cargo that is beingtransported by truck, rail, air, ship, or boat. Certificate of Insurance:A statement of coverage issued to an individual insured, specifying the insurancebenefits and principal provisions applicable to the member. Claim:The formal request by a policyholder or a claimant for payment of loss under aninsurance policy. Co-insurance:A provision under which an insured who carries less than the stipulatedpercentage of insurance to value, will receive a loss payment that is limited to the sameration which the amount of insurance bears to the amount required; Cover Note:Is the document that is issued provisionary pending issuance of insurance Policy. Indemnity:Legal principle that specifies an insured should not collect more than the actualcash value of a loss but should be restored to approximately the same financial positionas existed before the loss Insurable Interest:A condition in which the person applying for insurance and the person who is toreceive the policy benefit will suffer all emotional or financial loss, if any untouchedevent occurs. Without insurable interest, an insurance contract is invalid, Insurance:Social device for minimizing risk of uncertainty regarding loss by spreading therisk over a large enough number of similar exposures to predict the individual chance of loss. Net Premium:The portion of premium rate which is designed to cover benefits of the policy,excluding expenses, contingencies and profit. Policy:Is the legal document that has the conditions of the insurance contract. Premium:It is the amount paid to secure an insurance policy. Salvage:Recovery made by an insurance company by the sale of property which has beentaken over from that insured as a part of loss settlement. The remains of damaged vehicleor any other property.

Third party:Any person other than the two parties signing an insurance, contract. Underwriting:Underwriting of a risk involves consideration of material, facts on the basis of which a decision will be taken whether to accept the risk and if so at what rate of premium.

Public Sector Subsidiaries I.Oriental Insurance Company.

The Oriental Insurance Company Ltd. (OICL) is one of the leading General Insurancecompanies in India and is a subsidiary of the General Insurance Corporation (GIC) of India. It is one of the oldest Insurance. If companies and was established in the year 1947.The Company transacts all kinds of non-life insurance business ranging from insurancecovers for very big projects to small rural insurance covers.

OICL, is the First to have underwritten the biggest Grass Root Refinery Project, RelianceJamnagar Refinery. First to have issued a Package Policy under mega risk to PSU Oil giants. . First to have issued Advance Loss of Profits policy in India. First to have issued directors & Officers liability policy in India. First to introduce Kidnap & Ransom cover in India. First to have issued Stock Brokers and Stock Exchange custodial services policyin India. First to have issued tailor-made cover for Cellular Communication systems. First to have front office computerization drive in India. First to have a system of in-house loss assessment upto statutory limits. First to have started motor third party conciliatory proceedings

THE PROFILE

The Oriental Insurance Company' Ltd. (OICL) is one of the leading GeneralInsurance companies in India and is a subsidiary of the General Insurance Corporation(GIC) of India. It is one of the oldest Insurance companies and was established in theyear 1947. The Company transacts all kinds of non-life insurance business ranging frominsurance covers for very big projects to small rural insurance covers.OICL has its Head office in New Delhi, the capital of India. The Company has 21Regional Offices, 311 Divisional Offices and 635 Branch offices in various cities of thecountry.Reinsurance connections are spread all over the world. The Company has a veryhigh reputation in the Reinsurance market.OICL specializes in devising special covers for large projects like Power Plants,Petro-chemical, Steel Plants and chemical plants. It has a highly technically qualifiedand competent team of professionals, to render the best customer service. The Companyhas a dedicated project cell at the Head Office as well as major cities of India. A specialR & D team has been dedicated to bring out special innovative covers like Stock-Brokers' Policies, Special Package Policies etc.MISSION o To develop general insurance business in the best interest of the community. o To provide financial security to individuals, trade and commerce by offeringinsurance products and service of high quality at affordable cost.

VALUES
o

Highest priority to customer needs. o High standards of public conduct. o Transparency in operations.

COMMITMENTS TO THE CITIZENS

o

In areas coming within competence of GIC respond to all commercially viablegeneral insurance requirements of the citizens, not hitherto available within threemonths from the date on which such a demand is received. o In areas covered by tariff, appropriate proposals will be submitted to the Tariff Advisory Committee with appropriate comments within two months. o

Continue to provide customized insurance products for weaker sections of thesociety at affordable price within six months of receipt of a request for a specifictype of cover. o Prepare booklets on standard policy covers setting out essential information andmake such booklets readily available for purchase at suitable places. o Promote customer education in general insurance service by holding workshopsin important regional centers. o Make available to a customer, on request to the policy issuing office, the status of his claim and/or claim settlement details within 7 working days. o Endeavor to set up a system of Ombudsman at four metropolitan cities toconciliate disputes on personal line insurance claims

CORPORATE OBJECTIVES:
o

To serve better the insurance needs of the entire community, keepingCUSTOMER as the focus. o To serve better the insurance needs of the entire community, keepingCUSTOMER as the focus. o To manage Business profitably, Manage funds judiciously and deploy investiblefunds for optimum Yield. o To manage Business profitably, Manage funds judiciously and deploy investiblefunds for optimum Yield. o To work towards minimization of losses and develop Risk ManagementTechnologies. o To function as a strong and dynamic non-life insure

PRODUCTS:The various products can be grouped under the following categories:

o Individuals/Family o

Marine o Professionals o Business/Office/Traders o Engineering/Industry o Agriculture/Sericulture/Poultry o Animals/Birds o Aviation o Motor Vehicle Private/Commercial o Health-Mediclaim/Overseas Mediclaim/Personal Accident

Documents requirement for various types of Claims

Different documents are required for settling different types of claims. The mostcommonly required ones are mentioned under each claims type listed below. Yourfull cooperation to surveyor/Investigator appointed by the Company would enableprompt settlement of claims. o Claim due to Fire and/or Explosion. o Claim due to Flood, Storm, Cyclone, Earthquake, and Subsidence/Landslide. o Claim due to Riot, Strike, Malicious Damage and Terrorism (RSMDT). o Marine Inland Transit Loss of cargo/machinery. o Marine Loss of cargo/machinery for export' o

Marine Loss of cargo/machinery during Import o Claim due to Electrical/Mechanical/Electronic Breakdown/mishandling/ o Impact damage to machine. o Claim due to Burglary/Theft of Vehicle o Accidental Death Claim o Permanent Disability/Injury claim due to accident o Temporary Total Disability (TTD) (Weekly compensation) claim due to accident o Mediclaim claim due to hospitalization (disease/accident) o Claim due to Death of Cattle (Non-IRDP)/Permanent Total Disablement.Damage claim to private Vehicle (Car/2Wheeler) due. to accident o Claim of Damage to Commercial Vehicle (Taxi/Bus/Lorry) due to accident.Third Party (T.P.) Claim due to accident
II.

The New India Assurance Company.

Established by Sir Dorab tata in 1919, New India was the first fully Indian ownedinsurance company in India. There were nearly 150 insurance firms in India - includingones from France, the UK and America. These were operated through managing agenciesin India largely held by Indian business houses.New India is a leading global insurancegroup, with offices and branches throughout India and various countries abroad. Thecompany services the Indian subcontinent with a network of 1,130 offices, comprising26 Regional offices, 366 Divisional offices and 738 Branches. With approximately25,000 employees, New India has the largest number of specialist and technicallyqualified personnel at all levels of management, who are empowered to underwrite andsettle claims of high magnitudeNew India has historically been a frontrunner in several diverse fields of business andindustrial activity. New India are lead underwriters of India's Space programn1e havinginsured several INSAT and other, satellites. New India are pioneers in Engineeringinsurance, Financial risks insurance and are now offering customized Risk Managementsolutions to our: corporate clients in the Private and public Sectors in Power, Telecom,Petrochemicals, Steel and Automobile industriesNew India's foreign operations started with the establishment of an office in London in1920. An international presence was built up by New India as a direct

writing Companyin 23 countries spanning 5 continents. It increased its reach and capacity, for reinsurancefacilities for all classes of business.Starting way back in the 1920s, New India's UK operations have now taken deep root.New India is party to one of the oldest reinsurance treaties in the UK market. Throughparticipation in Aviation and Marine Hull underwriting, New India has, over a period of time, strengthened its market presence. In 1980's with the establishment of a full-fledgedbranch to underwrite UK Business, it has extended its UK operations, authorized by theDepartment of Trade and industryThe New India commenced its Japan operations in 1950, and now: operates through 8branches. The Japanese operation covers 35% of the Companys overseas premiumincome
II.

The National Insurance Company

Since incorporation in the year 1906, National Insurance~ Company has beencarrying out general insurance business under private management until 1972, the yearof its nationalization. In the same year 22 foreign and 11 Indian Insurance Companieswere amalgamated with National Insurance Company Limited, as a subsidiary companyof General Insurance Corporation of IndiaHeadquartered in Calcutta it has an organizational network of over 964 officeswith around 20,077 trained workforces. The company also has operations in Hong Kongand Nepal and ranks among the top global business insurers. Later on in 2002, with thepassage of Insurance amendment Bill (2002), National Insurance Company has beendelinked from GlC and. has been functioning as an independent companyIts product range includes motor vehicle insurance; fire insurance on buildingsand other assets; various crime covers like burglary and theft of cash; machinerybreakdown cover for industrial equipment; transit damage cover for imported orexported goods; as well as legal liability cover.Professional indemnity and directors and officers liability covers are some of thenew covers. NICO General Insurance seeks to attract clients and intermediaries andflexibility in claims settlements, and at the same time ensuring that we do not erodeshareholder value. The objective is to add value to the shareholders' funds whilstensuring customer satisfaction? The strength of NGI is in its balance sheet.NICO General Insurance views the future and its prospects as extremely bright,exciting and rewarding for staff, clientele and shareholders alike

IV. United India Insurance Company

United India Insurance is one of the four subsidiaries of the General InsuranceCompany carrying on general insurance business with its head office at Chennai. Lateron in 2002, with the passage of Insurance amendment Bill (2002), United IndiaInsurance has been Del inked from GIC and has been functioning as an independentcompany.UI spans the country with a network of 1123 offices and manpower of Over21,000 employees. The organizational structure comprises 22 regional offices, 327divisional offices.., and 777 branch offices, supported by 21,505 employees. ICRA hasmaintained the iAAA rating, indicating the claims paying ability of United IndiaInsurance (UII) to be of the highest order. The rating takes into consideration thefavorable prospects for the domestic general insurance industry following thederegulation of the sector.UII continues to be a dominant player in the Indian insurance industry, with anoverall market share of 25% and a leadership position in the southern markets. UII is aPioneer of Personal Insurance Products in India who specializes in non-life insuranceproducts including Medical and Accident Insurance. It enjoys a market share of over 25percent of the non-life insurance sector in India

Market Share
As by this time we are well versed with all the General Insurance companies bothPublic and private we know how each company contributes serving the customersand also generating revenue through it. We also know that General Insurancecontributes towards the Gross Domestic Profit, but now let us see how thesecompanies individually contribute towards the Gross Domestic Profit through theway of Market Share of each company both

Private & Public.As we can see in the Pie Charts a comparison of 3 consecutive years have beentaken which are 2003-04, 2004-05 & 2005-06.Public Companies have been dominating the General Insurance Market since along time, the market share of Private companies have been improving in the lastfew years by approximately 6 % each year, but then too Public sector companiescapturing the major market.But also in Public sector companies New India Assurance is been leading the waywhich is been closely followed by the remaining. Among the private players wecan note that ICICI Lombard is leading the way.By considering 2005-06 as the base year, we can note that the market share of Public companies have been deteriorating having 73.43% of the market share from85.54% in the year 2003-04

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITARIAN

Insurance Regulatory and Development Authority Act, 1999, came into beingfrom 19/04/2000.Objects are stated in Act are as follows:"An Act to provide for establishment of Authority to protect interests of holdersof insurance policies to regulate, promote and ensure orderly growth of insuranceindustry and for matters connected there with and further to amend Insurance Act, 1938,Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalization)Act, 1972".Composition:IRDA will consist of a chairperson and not more than Five whole time membersand not more than four part time members.Whole time members shall hold office for 5 years or until age of 62 (65 in case of chair person) whichever is earlier. Part time members shall hold office for not more than5 years. Powers and Function of Authority 1. To regulate, promote and ensure orderly growth of insurance and re- insurancebusiness 2. To issue a certificate of registration, renew, modify, withdraw, suspend or cancel suchregistration of applicant, i.e. insurance company 3. To prepare a code of conduct for agents, surveyors and loss accesses and otherintermediaries who take part in insurance business 4. To exercise all powers and perform all functions of controller of Insurance underInsurance Act, 1938 5. To protect interest of policy holders in matters concerning assignment of policy,settlement of claims, terms and conditions of contract etc. 6. To promote efficiency in conduct of insurance business 7. To promote and regulate professional organizations connected with insurance business 8. To regulate investment of funds of insurance companies 9. To regulate maintenance of margin of solvency 10. To adjudicate disputes between insurers and intermediaries 11. To call for information from" undertake inspection and conduct enquiries andinvestigations including audit of insurers, intermediaries etc. 12. To control and regulate rates', advantages, terms and conditions offered by Insurersin respect of general insurance business riot so controlled by Tariff Advisory committee 13. To prescribe manner and forms in which books of accounts is to be maintained 14. To exercise other powers as such may be prescribed by central government.

Insurance Advisory Committee:

Authority has power to appoint a committee to provide guidance toAuthority and committee is called Insurance Advisory Committee.This committee contains not more than 25 members excluding ex-officio

memberrepresenting interest of commerce, trade industry, agriculture, surveyors, agents,intermediaries etc.Chairperson and members ~f Authority are ex-officio members of InsuranceAdvisory Committee.15)

Code of conduct for insurance agent:

Every insurer agent shall, Identify himself and insurance company of whom he is an agent Disclose his license to prospect on demand Give requisite information in respect of insurance product offered for sale by hisinsurer and into account needs of prospect while recommending a specific 'plan. Disclose scales of commission payable to him if asked by prospect Indicate premium to be charged by insurer on insurance product Explain to prospect nature of information required in proposal from and alsoimportance of disclosure of material information Bring to notice of insurer any adverse habits or income inconsistency of Prospect Inform promptly about acceptance of rejection of proposal by insurer. Render necessary assistance to policyholder or claimant in complying with,requirements of settlement of claims

Products
The different types of General insurance products are listed below. While most policiesare optional that is at the behest of the insured, some are mandatory. The mandatory onesare: 1.Motor Insurance 2.Public liability (for corporate class) Other policies include:

Fire insurance:1.Building or flat 2.Furniture fixtures & other contents 3.Loss of profit that is consequential loss

Miscellaneous insurance
Personal insurance Burglary ,theft Workmens compensation Fidelity guarantee Cancer Mediclaim Comprehensive Package Policy for jewelry, T.V, V.C.R, Furniture etc

Marine Cargo Insurance:Cargo In Transit Cargo Declaration Policy

Marine Hull Insurance:-

Inland vessels ocean going vessels, fishing & sailing vessels, freight at risk, constructionof ships, voyage insurance of various vessels, ship breaking , insurance Awaiting break up, insurance Oil & energy in respect of onshore & offshore risks including constructionrisk.

Non Traditional / Rural:1.Cattle / Hens 2.Crop 3.Water Pump for agriculture 4.Hut 5.Other Livestock

Motor Insurance:-Motor insurance is mandatory for all types of vehicles in India. There are two types
of motor insurance viz 1.Third party, which only insures the party / parties other than the owner in anaccident 2.Comprehensive, which insures the owner as well as the third party involved.46 The premium for motor vehicles is decided on the following factors: Value of the vehicle Location where it is to registered .places having higher claim rates (like Mumbai)are likely to have higher premium

The premium for heavy commercial

Value of the vehicle
Gross laden weight, that is, the carrying capacity of the vehicle .For HCVs

the driver is also insured along with the vehicle. A charge of rs.15/- is madeas premium for the driver. For all sorts of vehicles insured, the policy would not cover theuse on hire , reward or organized racing ,speed

reliability trails and speed testing.There is (NCB) No Claim Bonus applicable for each year an insured person does notclaim .It is accrued as a 5% deduction from the premium amount for the next year,subject to maximum 50%.

Property Insurance:- Property insurance covers land, buildings and the contents of building.There are several
types of Property insurance packages, but the most common are theFire Insurance and burglary Insurance

Fire Insurance Fire insurance is a comprehensive policy, which goes beyond only fire accidents.The policy,
besides covering loss on account of fire, also covers loss on account of thefollowing Earthquake Riots Strikes Malicious Intent Floods Fire insurance only can be taken by the owner of the premises to be insured. A tenantcannot insure rented premises since he does not have insurable interest. But the tenant hasthe option of insuring the contents of the premises. The premium is based on Goodfaith and depends on the value of property being insured.It should be noted that thought fire insurance is not compulsory, in case of corporateavailing of loans, the lending institution may insist on equipment or relevant property tobe insured against fire. This trend is now also being followed by housing financecompanies, some of which are insisting that the premises be insured against fire

Burglary:- Burglary insurance covers all losses arisen out of burglary committed in ones premises.The only
condition for lodging a claim on the insurance party is that there should be aforced entry in to the premises. A forced entry may in the form of physical damage tothe entry area, or to a person or entry gained through coercion. In this case too, the policyhas no limitations and it is the right of the insured to decide upon the value of theinsurance cover

Overseas Mediclaim Policy Travel Insurance

Policies issued in India under Overseas Mediclaim Scheme, as approved byReserve Bank Of Indian residents traveling abroad for any approved visits viz.Business, Study Tour, Specialized training conferences, Employment or higherstudies. Premium on such policies may be collected in rupees but for employment inforeign currency.This policy was originally introduced in 1984, to provide for payment of medicalexpenses in respect of illness suffered or accident sustained by Indian residents duringtheir overseas trips for official or holiday purposes.In. 1998, a new policy known as VIDESH YATRA MITRA, was made availablefor Business and Holiday Travelers. Cover for corporate frequent travelers were alsointroduced. The policy provides for following Sections:-

Medical Cover Repatriation Of Remains Checked Baggage Loss / Baggage Delay Passport Loss Personal Accident Overseas Personal Liability Hijack Relief Benefit The plan available now with various companies are however not the same as eachcompany has introduced. Some variation in the cover to suit the varyingrequirements.Types of overseas Mediclaim insurance policy Individual Overseas Mediclaim insurance policy Student Overseas Mediclaim insurance policy Senior Citizen Mediclaim insurance policy

CHANGING SCENARIO OF GENERALINSURANCE MARKET

'Looks to the future with confidence and optimism'Brief the history of general Insurance.In India General Insurance business started, Marine Insurance started on later part of the17th century. Before nationalization in 1947 we have 147 insurance companies, foreignand Indian both. But during there nationalization, in 1973 we have 107 companies thatmerge into four companies, i.e. taken over by Government.General Insurance Corporation of India (GIC) was set up in 1973 as a holding company,with four subsidiary operating companies - National Insurance co Ltd., New IndiaAssurance Co. Ltd., Oriental Insurance co Ltd., and United India Insurance Co Ltd., with aclear cut mission as set out in the Act.The overall scenario in the insurance market in India after nationalization.GIC and its subsidiaries function through a vast country - wide network of around 4100offices spread across the length and breadth of the country, GIC has taken the benefit of insurance to almost every district, across hilly terrain and often inaccessible areas of thecountry. The customer interface is made easy through a network of agents, developmentofficers and employees at Branch, Divisional and Regional offices as well as at thecorporate level.51 The GIC and its subsidiaries have a workforce of approximately 86,000In 1973 tainted at various levels through in house training institutions. Now the totalnumber of employees went up.The industry has also promoted the National Insurance Academy (NIA), which is thepremier training institute in insurance, catering not only to Indian Nationals but also toselect foreign nationals. The industry issues around 23 million documents and settles 2million claims every year.Country wide computerization in the recently past has made the task of policy- holder'sservicing easier and rapid. At the same time, profitable lines and premium componentsincreases and we became a investment company. Where does Indian Insurance sector stand compared to International InsuranceSector? Technologically, Indian insurance sector is quiet comparable with theinternational sector. Our vast resources of skilled and technical manpower, huge marketpotentiality and technical know-how - all are comparable with the

international market.But lacking in the process of computerization and in pricing (premium rate) is also seen.In product, we have demand in less because lack of awareness for adequate insurancecover in India with insuring public. Our marketing strategy is not very modern. But weare trying to rectify both these (Technology and Marketing) areas.The problems faced by Indian Insurance Sector Today:The main problems are:[Lack of awareness for insurance needs.[Lack of penetration due to inadequate marketing/delivery system.[Total computerization still in the process of implementation.[Sophisticated covers do not have adequate demands because of General attitude toinsurance in India

The Schemes
Recognizing its organizational strengths, the Govt. of India has also entrusted thecorporation with the administration of various schemes for social melioration and publicwelfare. Social security schemes benefiting millions of Citizens below the poverty line.Personal Accident Insurance and Hut Insurance are operated all over the country forwhich the premiums are paid by the Government. The GIC administers on behalf of Government, the crop Insurance scheme for areas and crops notified under the cropInsurance Scheme.Various low cost mass insurance policies have been evolved over a period of time, e.g.'Jan Arogya Bima Policy'. Role General Insurance Industry is playing in the growth of economy of the country: The General Insurance Industry has an enviable track record among public sectorunits. It has a consistent profit and dividend paying record accompanied by a steadygrowth in its financial resources.Through investments in theGovernment sector and: socially - oriented Sectors theIndustry has contributed immensely to the nation's development. The industry isrecognized as one of the largest financial' Institutions in the Country. The venturesinitiated by the industry in the areas of Mutual Fund, Housing Finance have doneexceedingly well in recent years.To protect the country's foreign exchange reserves, the reinsurance arrangement are soorganized that maximum retention is made possible within the country while at the sametime protecting interests of the policy holders. The GIC'S inwards reinsurance wing,called the SWIFT, maximizes the foreign exchange balance by acting as an internationalinsurer-accepting risk from all over the globe. GIC'S International operation:GIC'S international operations span over 31 countries around the globe. The reinsuranceexpertise built over a long period has made the Indian Insurance Industry a globallyacknowledged reinsurer of repute GIC'S risk management skill has been backed byspecialists with a vast insurance experience.Thus, the technical and underwriting skills have been acknowledged in theinternational market. The corporation operates in 17 countries through branches andagencies, whereas in another 14 countries, it has subsidiaries and associatecompanies. The GIC has a subsidiary company known as 'India International Pvt,Ltd.,' operating in Singapore and a joint-venture company, Kenindia Insurance co.Ltd.The impact of liberalization of economy in the activities of GlC.With the liberalization of economy, General Insurance in India is poised for a quantum jump, both in quality and quantity.Vision for the future:It is estimated that the industry will outstrip the present rate of growth and reach apremium value of over Rs. l,20,000 millions by taking advantage of the extralarge mega-risk and social awareness of insurance in general, even as . a developing country turnsinto a developed country.The task before the industry to service the growing number of policy-holders wouldequally see a quantum jump in issuance of documents and settlement of claims. Matchingreserves and consequent investment will be a natural corollary. It is expected that the investment portfolio will touch around Rs. 2,50,000 millions bythe end of the next decade, with the strength built up over the years since nationalization,GIC new looks to the future with confidence and optimism, takes on global chal1engewith its high standard of service, innovative initiative and a compelling socialperspective.GIC's plan - in new business areas:The two new areas that GIC is getting into are the areas of health care and cropinsurance. For the health care business, the corporation has received permission to set upa

separate management services company. GIC has plans to increase the scope of coverin health care, personal accident and crop insurance and will require expertise in pricingthe products.The Research & Development activities:They have just entered these areas and for the coming five years we are investingapproximately 500 crores. GIC'S R & D cell is created backed up market research data.The subsidiaries of GIC are becoming an autonomous body.Privatization in the insurance sector of India - Is it in the right directionIt's purely a government decision and the nationalized sector is ready to face thechallenge. And have taken the challenge to stand in the stiff competition.And now, many private companies have entered the market. These companies are a resultof merger of Indian companies with foreign companies

TRENDS
Trends in any sector basically refers to the up gradations or acquiring new technologieswhich has replaced the conventional methods in any organizationsIn Todays automated and modernized era any organization cannot take a chance by notmaintaining pace with the competition.With the passage of time and taking into consideration todays needs and changingscenario insurance companies should also adopt new technology i.e. it should be trendyenough to meet customer needs and expectations.Trends or use of technology should be such that it is eco friendly enough to be used bycustomers. Today, right from a grocery shop to I.T sector technologies is explored to thefullestE-Business or E-commerce has sown its seeds in every sector of business which is one of the strongest sign of improvement and technology.As we are dealing here with insurance industry let us see the technology involved in theInsurance sector. Technological: Computerization: Initially, in the late 1950s the insurance companies used Unit Record Machines (ElectroMagnetic Machines) to process data punched into cards. Computers were introduces inthe mid 1960s and by the 1980s the Unit Phased Machines were phased out and theentire process was computerized. This brought about greater efficiency and quick servicedelivery.56 Internet: Internet usage has drastically improved in the last decade. There was a tremendousincrease in the use of technology by GIC during the late 1990s. The companiesLaunched its website in the mid 1990s to offer basic services such as modifying policies(change of address, change of nominee, etc) and querying the status of the policy.But today, the internet has completely changed the service delivery process. Internet istoday used to even sell insurance policies. Internet is, in fact, proving to be one of thewidely used distribution networks for selling insurance policies. Also internet is used forsending premium notices to policy holders through e-mails.Also GIC has a special feature on its website. It has a premium calculator whichaccurately displays the amount of premium month wise and the remaining balance. One just has to enter the age, name of the insurance policy, the sum assured and whether thereis an accident cover or not. By keying in this information, the entire premium amountsare shown within no time. This has helped the customer in a way so that he/she doesnthave to travel all the way to the branch to ascertain the amount of premium to be paid. Metropolitan Area Network (MAN) and Wide Area Network (WAN): GIC has commissioned a MAN connecting more than 75 branches in Mumbai. Thisenabled the policy holders to pay their premiums and get their status report, surrendervalue quotations and loan quotation, from any branch in the city. Following the MAN inMumbai, seven MAN centres (Chennai, Bangalore, Delhi, Calcutta, Pune, Hyderabad,and Ahmedabad) became operational.These MAN centres were connected to each other by a WAN network. This WAN wasdesigned for distributed processing without a central database each division

maintaineda database of the policyholders. The central office in Mumbai maintained an index of policy numbers and the corresponding IP addresses of the servers where the details of thepolicy were maintained.57 Electronic Clearance Service (ECS): Almost all the big organizations today provide the ECS facility to its customers. A policyholder having an account in any bank which is a member of the local clearing house canopt for ECS debit to pay premiums. The advantage here is that once the option isexercised, the policy holder need not visit a branch for paying the premium or collectingthe receipts. On the day indicated by the policy holder, the premium amount will bedirectly debited to the bank account of the policyholder and the receipt will be issued bythe designated branch office. Bank ATMs: Many insurance companies have a tie-up with commercial banks so as to enablepolicyholders to use the facility of paying premiums through the bank ATMs. ICICILombard has a tie up with ICICI bank; Bajaj Allianz has a tieup with Corporation bank and UTI Bank. Call Centres and SMS services: Almost all the insurance companies have their own call centres which cater to the phonebased queries of the policyholders. This service is 24x7 and they have the InteractiveVoice Response (IVR) systems at all the branches.Also, LIC and other companies now provide SMS services going with the new trends likeSMS banking in the banking sector

Claims
The Settlement of claims constitutes one of the important functions in an insuranceorganisation.The proper settlement of claims requires a sound knowledge of thee law, principles andpractices governing insurance contracts and in particular a thorough knowledge of theterms and conditions of the standard policies and various extensions and modificationsthere under.The procedure in respect of claim a under various classes of insurance follows a commonpattern and may be considered under 3 broad headings Preliminary procedure It is essential that early notification of the loss is received by insurance undue delay innotification would adversely affect the position of the insurer. However if there is anydelay in notification or not or weather is material will be ultimately decided by the courtsbased on the facts of the individual casesThe notice of loss condition in liability policies provides for two aspectsa.) Notification of the happening of the accident immediately followed byb.) Notification of the receipt of claim or suit filed against the insured.Under certain types of policies (e.g. Burglary) notice is also to be given to policeauthorities. Loss Minimization At common law, there is a duty on the part of the insured to observe good faith .This dutyof good faith means that at all times the insured has to act as if he is uninsured.For E.g., the private car package policy provides , among other things , that the insuredshall take all reasonable steps to safeguard the motor car from loss or damage and

tomaintain it in efficient condition. In the event of any accident or breakdown the motor carshall not be left unattended without proper precautions being taken to prevent furtherdamage or loss.59 Procedural On receipt of intimation of loss or damage insurers check that:a.) the policy is in force on the date of occurrence of the loss or damageb.) The loss or damage is by a peril insured by the policy.c.) Notice of loss received without undue delay.After this check up the loss is allotted a number and entered in the claims register. Claim Forms The contents of the claim form vary with each class of insurance .In general the claim ingeneral the claim form is designed to elicit full information regarding the circumstancesof the loss such as date of loss, time, cause of loss, extent of loss etc claim forms areinvariably sued in fire and miscellaneous insurance. Investigation and Assessment On receipt of the claim form duly completed from the insured the insurers decide aboutthe investigation and assessment of loss if the loss is small the investigation to determinethe cause and extent of loss is done by an officer of the insurers. Some times even thismay be waived and the loss settled he basis of the claim form only.The investigation of larger or complicated claims is entrusted to independent professionalsurveyors who are specialist in their line the appointment of a surveyor is intimated to theclaimant the surveyor is furnished with all relevant claim papers such as claim formpolicy copy etcHowever, many a times surveyor is appointed and survey is carriedimmediately on receipt on notice of loss, that is even before claim form could be issued. Claims documents In addition to the claim form independent survey report certain documents are requiredto be submitted by the insurers to substantiate the claim for example for fire claims forfire claims a report for the fire brigade for motor claims driving license registration copypolice report etc

Arbitration It is distinct from litigation and is a method of settling disputes under contract inaccordance and conciliation act 1996. Settlement The claim is processed on the basis of Claim formIndependent report from Surveyors, legal opinion, medical opinion etc as the case maybe. Various documents furnished by the insured. Any other evidence secured by theinsurersIf the claim is in order settlement is effected by cheque the payment is entered in claimsregister as well as in the relevant process record. Appropriate recoveries are made fromthe insurers if any Case Study 26/7/2005 Mumbai under water Mumbai will never be the same again. And so will the insurance sector in Mumbai afterthe 26/7 floods. Torrential rains which killed thousands and rendered many homeless,also led to loss of business and vehicles. The facts:

As fallout of the torrential rains, the non-life insurance sector was flooded with more than10000 claims totalling over Rs. 2000 crores. However, these did not include the 50000cars that have been damaged in Maharashtra.While the top four private sector general insurance companies, ICICI Lombard GeneralInsurance, Bajaj Allianz General Insurance, Iffco Tokio General Insurance and Tata AIGhave together received claims worth over Rs 1,000 crore; the four state-owned generalinsurance companies New India Insurance, Oriental Insurance, United Insurance andNational Insurance received claims close to Rs 1,500 crore.Private insurer, Bajaj Allianz General Insurance Company Ltd (BAGICL) alone hadreceived claims for at least 10,000 motor vehicles after the recent floods in Mumbai.As several companies temporarily closed down their operations and godown stocks wentmissing, corporate claims were the highest, in terms of value. Next came claims for carsand household goods and from shopkeepers and traders for their warehouses. A majorityof individuals and small and medium entrepreneurs also submitted claims.ONGC's insurance claim is considered to be the largest given its loss of $ 500 millionafter fire gutted the Bombay High rig.62 Insurance firms set up special cells to visit victims and settle claims. In many firms, thespecial teams worked round-the-clock to take stock of the loss and speed up thesettlement process.Bajaj Allianz settled claims worth about Rs 200 crore without any documentation, to thevictims of the recent floods in Mumbai.After the natural calamity, the Finance Minister sought speedy redressal of claims. Hedirected the Chairmen and Managing Directors of the four public sector general insurancecompanies that claims below Rs 50,000, arising out of the recent floods in Maharashtraand Gujarat, should be settled by August 31.Public sector player, National Insurance Company received 3,000 claims for Rs 350 crorefrom its customers in Mumbai for damage to property caused by the recent rains.While some insurers had taken a re-insurance cover, some have not. Mumbai floodsbrought to fore the ill-preparedness both among the mega polis administrative officialsand the insurance sector. While the latter seems to have realized the damages, the formeris still grappling with the situation. As death toll continues to rise, insurance firms haverealized the need to better manage natural calamities. The premium for flood covers mayrise in coming years.63 The effect: Heres a warning to the lakhs of Mumbaikars who are planning to insure their houses inthe wake of the recent deluge. One will have to read the fine print carefully. Public sectorinsurance firms are quietly planning to drop the word flood from the policy.As of now, a household insurance policy is basically a fire insurance policy, which alsoincorporates a flood insurance policy. However, with 10,000 policy-holders filing claimstotalling Rs 1,500 crores, insurance firms are looking at new ways to keep their headsabove water. After the last calamitythe Latur quake of 1993 insurance firms haddropped earthquakes from the household insurance policy.Those wanting to insure their homes against flooding may now have to pay a separatepremium. The insurance sector has suffered losses of about Rs 1,500 crore. Thesecompanies may not get re-insurance for these policies as they had not taken re-insurancefor these small individual polices