INTERIM PROJECT REPORT

A Study on Insurance Business

(Financial Markets, Institutions and Services)

Submitted in partial fulfillment of the requirements for the

Award of the degree of
Post-Graduate Diploma in Management
In
Financial Management

FORE School of Management, Qutub Institutional Area,

New Delhi, Delhi 110016
Submitted By: Submitted To:

FMIS Group 6 Prof. Vinay Kumar Dutta

024031: Pallavi Dureja
024036: Pulkit Dhanava
024042: Ronit Guha Roy
024048: Shubham Gera
 EXECUTIVE SUMMARY

OBJECTIVE:

To study the scope and future of Insurance Business by understanding the working
mechanism and functions of different types of insurance.

OVERVIEW:

The insurance industry of India consists of 57 insurance companies of which 24 are in life
insurance business and 33 are non-life insurers. Apart from that, there is sole national re-
insurer, namely, General Insurance Corporation of India. Other stakeholders in Indian
Insurance market include Individual and corporate agents, brokers, surveyors and third-
party administrators servicing health insurance claims.

The objective of this report is based on the fact that Risk is everywhere: When you drive
your car to work, when you visit a new country, when you ride your bike to a nearby shop,
when there’s a new bug going around in town. Bottomline: You need the security of
insurance.
This report includes two different types of insurance; Life and General and their working
mechanism which is explained with the help of examples of companies.

Types and structure of insurance and regulations of IRDAI are covered in the report.
Furthermore, based on the findings from both primary and secondary sources are
mentioned with conclusion and recommendations.

REVIEW OF LITERATURE:

Importance of Insurance-

Life insurance is generally considered a means of protecting one’s family against the
unforeseeable circumstance of the death of an earning member. However, there are a
number of other benefits that are not apparent. Some benefits accrue to the individuals
and their families, while others assist economic development. For instance, an insurance
company takes the risk of large and uncertain losses in exchange for small premiums.
This gives a sense of confidence and security to the insured individual through the
protection of insurance in the event of an unfortunate incident. In large sized commercial
and industrial organizations, it facilitates operations as many of the risks are transferred
to the insurer.
In many developed countries, citizens are to a certain extent protected by social security
schemes provided by the government. These schemes offer financial aid to citizens who
are eligible on grounds of unemployment, old age, sickness, disability, etc. The social
security scenario in India is quite different, having traditionally been the responsibility of
the family or community. However, with industrialization, urbanization, breakup of the joint
family system and weakening of family bondage, it has become necessary to provide
social security arrangements that are institutionalized and regulated by the state rather
than the society. However, the actual experience has proved otherwise. There is now
almost a lack of employment in the organized sector with increase in the inflow of workers
into the informal sector. The unorganized workforce is characterized by scattered and
fragmented areas of employment, seasonality, lack of job security and low legislative
protection. The government has a few centrally funded social assistance programmes like
National Old Age Schemes and National Family Benefit Schemes; the number of people
covered as well as the benefits is very meager. Furthermore, in a country like India, where
there is no provision for unemployment benefits, the concept of insurance becomes
extremely important.

Types of Insurance-

1. Life Insurance:

Life insurance is a contract that offers financial compensation in case of death or disability

● Term Insurance: It covers for a specific period and lump-sum is given in the case
of death; no money will be paid on survival.
● Whole-Life Insurance: - Certain sum of money is given on death and bonus is paid
that often accrues on such amount.
● Endowment Policy: A lump-sum amount will be paid in the event of death. along
with the maturity proceeds after the term period.
● Money-back Policy: A certain percentage of the sum assured will be paid
periodically throughout the term as survival benefit. After the expiry the balance
amount as maturity proceeds and the entire sum assured is paid in case of death.
● Unit-Linked Insurance Plans: Such products double up as investment tools. A part
of your premium goes towards insurance cover. The remaining amount is invested
in Debt and Equity. A lump-sum amount will be paid to your family in the event of
your death.
● Child Plan: A part of your premium goes towards your insurance cover. The
remaining amount is invested in Debt and Equity. A lump-sum amount will be paid
to your family in the event of your death.
● Pension Plan: - Regular pension amount after retirement.

Company: Life Insurance Corporation of India (LIC) was founded in 1956 and is
India’s largest insurance group and investment company. It is a fully owned
company by Government of India. Its headquarters are based in Mumbai. “Your
welfare is our responsibility” is the slogan of LIC and it has 2048 branches across
India.

2. General Insurance:

A general insurance is a contract that offers financial compensation on any loss

other than death. It insures everything apart from life. A general insurance
 compensates for financial loss due to liabilities related to house, car, bike, health,
travel, etc.
● Health Insurance: This type of general insurance covers the cost of medical care.
It pays for or reimburses the amount towards the treatment of any injury or illness.
It usually covers Hospitalization, Medical bills prior to or post hospitalization, Day
care procedures like Cataract operations etc
● Motor Insurance: It is a general insurance cover that offers financial protection to
your vehicles from loss due to accidents, damage, theft, fire or natural calamities
● Travel Insurance: A travel insurance compensates or pays for any financial
liabilities arising out of medical and non-medical emergencies during travel abroad
or within the country, including Loss of baggage, Loss of passport, Hijacking,
Delayed flights, Accidental death etc.
● Home Insurance: Home insurance is a cover that pays or compensates for damage
to home due to natural calamities, man-made disasters or other threats. It covers
liabilities due to fire, burglary, theft, flood, earthquakes, and sabotage.
● Fire insurance: Fire insurance pays or compensates for the damages caused to
your property or goods due to fire. It covers the replacement, reconstruction or
repair expenses of the insured property as well as the surrounding structures. It
also covers the damages caused to a third-party property due to fire.

Company: Bajaj Allianz General Insurance Company Limited is a joint venture

between the world's foremost insurance company Allianz SE and Bajaj Finserv
Limited, with has an authorized and paid up capital of Rs. 110 crore. Bajaj Finserv
Limited holds 74% and 26% is held by Allianz, SE. They started their operations in
2001 and now with the range of products catering to individual and corporate. It
has received iAAA rating from ICRA for 10th consecutive years.

METHODOLOGY:

Primary Research: Information related to insurance market will be obtained from

experienced professional from the same sector to gain insights on current scenario of
insurance sector in India.
Secondary Research: Data from multiple sources such as books, journals, websites
and magazines will be referred to understand the insurance industry.
CONCLUSION:

The Indian insurance industry is expected to reach a value of approximately INR 220
billion by 2024 based on the following drivers:
● Low insurance penetration in India
● Government programs to increase insurance cover: Pradhan Mantri Suraksha
Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Ayushman Bharat etc
● Strong growth in the automotive industry is expected to boost motor insurance
 ● Increasing interest in buying insurance; rising internet usage has contributed to
this increasing interest
● Innovative products like Unit Linked Insurance Plans (ULIPs) have contributed to
the growth of insurance cover.
● New distribution channels such as bancassurance, online distribution and NBFCs
are contributing to the growth in insurance cover.

REFERENCES:

 Senthilkumar, N., & Selvamani, K. LIFE INSURANCE INDUSTRY IN INDIA-

AN OVERVIEW.

 R.Vijaya Naik "A Study on Structure of Insurance Sector In India

"International Journal of Business and Management Invention (IJBMI) , vol.
07, no. 09, 2018, pp. 01-08

 Suganya, G. (2017). A Study on Assessing Insurance Awareness in India.

International Journal of Humanities and Social Science Invention., 6 (7), 46-
49.

 Mr Sunil Dhingra, LIC Agent, New Delhi

 Mr Saumil Chauhan – Health Insurance Head, Bajaj Allianz General

Insurance
(https://www.linkedin.com/in/saumil-chauhan-liii-73536a20/)

 Mr Sasi Kumar – Chief Technical Officer at Bajaj Allianz General Insurance

Co. Ltd. ( https://www.linkedin.com/in/sasi-kumar-adidamu-88391073/)