A SUMMER TRAINING REPORT

ON

Understanding the General Insurance Business

SUBMITTED IN PARTIAL FULFILMENT FOR THE

DEGREE OF
BACHELOR OF BUSINESS ADMINISTRATION
2017-20

Submitted to: Submitted by:

Dr. Manju Dalal K.V. S. ADITYA
(project guide) BBA (GEN)5th SEM
Roll No. 02421201717

Department of Business Administration

Maharaja Surajmal Institute
Affiliated to Guru Gobind Singh Indraprastha University
Recognized by UGC u/s 2(f) NAAC Accredited
C4, JANKPURI, NEW DELHI –110058

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 STUDENT’S DECLARATION

The project report on “General Insurance industry in India” has been submitted by me in
partial fulfilment of the requirement for the award of degree of BACHELORS OF BUSINESS
ADMINISTRATION(BBA) SESSION 2017-2020. This is an original work done by me, this report
or any part of it has not been submitted for the award of any degree or diploma.

K.V. S. ADITYA

ROLL NO. 02421201717

BBA(GEN)

(2017-2020)

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 ACKNOWLEDGEMENT

It would have not have been possible to complete this study without the kind of support
and help of many individuals and organizations. I would like to exceed my sincere thanks to
all of them. I am highly indebted to my professor in charge Mrs. Manju Dalal, Department of
Business Administration, Maharaja Surajmal Institute for her guidance and constant
supervision as well as for providing necessary information regarding the project.

K.V. S. ADITYA
02421201717

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 TABLE OF CONTENTS

Sl. Topic Page

No. No.
1 INTRODUCTION 6
• Objectives of study
• Introduction to General Insurance
• Industry Overview
2 PROFILE OF THE ORGANISATION 20
• UIIC Profile
• Management Team
• Board of Directors
• Company Performance
• Organizational Structure
• SWOT Analysis

3 ANALYSIS AND INTERPRETATION 25

• Customer Perception Study of Health Insurance

4 CONCLUSION 28

5 Annexures & References 30

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 Introduction

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Summer Training Objective:

To understand the business of general insurance in India and its

relevance to Indian industry and general public and also to
understand public perception with health insurance.

Summer Training Activity Summary:

• Worked at a branch office to learn the concepts of various

general insurance products such as Health, Motor, Marine, Fire,
burglary etc.

• Gained basic understanding of accounting for premium

collection and claim payment processes

• Supported creation / underwriting / renewal of new insurance

policies in the above areas

• Supported creation / updation of customer data base

• Conducted a customer perception survey for health insurance

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 INTRODUCTION TO GENERAL INSURANCE
Life is full of exhilaration and risks at the same time. Some unforeseen situations and
uncertainties can sometimes put you in both financial and emotional stress. If you want to
safeguard your belongings like your car, two-wheeler, home, then, buying a general
insurance policy is a great option to cover the financial loss. Financial loss arising out of
natural calamities, accidents, casualties apart from death, legal actions and thefts, are also
covered under various general insurance policies.

• General Insurance refers to policies other than life insurance and covers
valuables such as home, car and other assets against damage, loss or theft.
• Health insurance is another important component of general insurance which
covers medical expenses in cases of various medical emergencies
• General insurance also plays a critical role in business covering a variety of
business risks such as shipping, marine, commercial etc.

Following are different types of general insurance policies to cover diverse assets/needs:

Health Insurance
• Due to the sedentary lifestyle, buying a health insurance has become
inevitable for everyone. A Mediclaim policy would provide you cover from
hospitalization expenses and also expenses churning out of diagnostic and
screening tests before the medical treatment. Once you have assessed the
inclusions and benefits, coverages and premium and then pick a policy
meeting the requirements and requirements of your family.
• If you want, you can get coverage for every member of your family under one
plan in a pocket friendly manner, with a family floater health insurance plan.
And if you have elderly parents then you can buy health insurance for senior
citizens.
• Moreover, every health insurance company has network hospitals under
their panel. You can avail the best medical treatment without paying any
cash, in a cashless facility, thus saving you from the last-minute financial

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 crisis. You can always pick hospitals which are in your vicinity and within your
access.
• Almost every health insurance providers allow you to renew health insurance
online, provided you do not have any pre-existing medical conditions. A lot of
time and efforts are saved when you do the renewal online.

Motor/Vehicle/Auto Insurance
• The smartest thing to secure your vehicle financially is with a vehicle
insurance policy. It would recompense the expenses in case your car meets
with an accident, or is stolen or is damaged due to any natural calamities
such as floods, earthquake, etc.
• Under the purview of the Motor Vehicles Act of 1988, it is mandatory for all
the vehicles plying on the Indian roads to be secured with a vehicle insurance
policy. Vehicle insurance is of two types Third Party Insurance and
Comprehensive Insurance. Third party cover is essential; however, you can
choose the type of coverage you require based on your requirement.
• There are many benefits of buying a motor insurance policy including risk
cover from accidents, unforeseen damages, theft, and natural disasters. You
get cashless services at registered centres, get free roadside assistance if your
car gets stuck somewhere, towing support and similar services.
• And the best part is, almost all the insurers allow the vehicle insurance
renewal online. It is required to be renewed every year. Suppose, you have
purchased a New India Assurance car policy and get it done online without
wasting much time.

Travel Insurance
• Travel insurance covers your flight delays, baggage loss, hijack distress,
medical emergencies also. You can simply buy online to safeguard any travel
related risks. There is a travel insurance plan for all – be it for international or
domestic travel, travel for family, students or senior citizens. While planning

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 your next vacation, do remember to buy a travel insurance for both leisure
and business travel.

Home Insurance
• It’s easier to secure your home against any man-made or natural
catastrophes with a home insurance policy. You find your home to be the
most peaceful and serene place.
• Under situations like fire, theft, flood, strike, riots, burglary and so on. You
can check out home insurance, primary home insurance, and premium home
insurance and super home insurance.

Commercial Insurance
• To cover business-related risks, businessmen and owners of big enterprise
always prefer to stay secure by buying a commercial insurance policy. It
offers insurance cover to different business-related requirements for
different industries including - aviation, telecom, infrastructure, property,
marine, pharmaceuticals, energy and so on. In events of burglary, machinery
breakdown, housebreaking, risk arising from contractor’s end, the insurer
would bear the financial loss.
• There is an array of other general insurance products such as corporate
insurance, crop insurance for farmers, fire insurance, property insurance and
likewise. You can buy any of them based on your needs and requirements.

FIRE INSURANCE
Fire insurance is a contract under which the insurer in return for a consideration (premium)
agrees to indemnify the insured for the financial loss which the latter may suffer due to
destruction of or damage to property or goods, caused by fire, during a specified period. The
contract specifies the maximum amount, agreed to by the parties at the time of the
contract, which the insured can claim in case of loss. This amount is not, however, the
measure of the loss. The loss can be ascertained only after the fire has occurred. The insurer
is liable to make good the actual amount of loss not exceeding the maximum amount fixed

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under the policy. A fire insurance policy cannot be assigned without the permission of the
insurer because the insured must have insurable interest in the property at the time of
contract as well as at the time of loss. The insurable interest in goods may arise out on
account of (I) ownership, (ii) possession, or (iii) contract. A person with a limited interest in a
property or goods may insure them to cover not only his own interest but also the interest
of others in them.

MARINE INSURANCE
A contract of marine insurance is an agreement whereby the insurer undertakes to
indemnity the assured in a manner and to the extent thereby agreed, against marine Losses
incidental to marine adventure perils of the seas, such as fire, war perils, pirates, rovers,
thieves, captures, Jettisons, barratry and any other perils which are either of the like, kind or
may be designed by the policy.

SOCIAL INSURANCE
Social insurance has been developed to provide economic security to weaker sections of
the society who are unable to pay the premium for adequate insurance. Pension plans,
disability benefits, unemployment benefits, sickness insurance, etc. are the various forms of
social insurance.

MISCELLANEOUS INSURANCE
The process of fast development in the society gave rise to a number of risks or hazards. To
provide security against such hazards, many other types of insurance also have been
developed such as personal accident insurance, burglary insurance, cattle insurance, crop
insurance etc.

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 INDUSTRY OVERVIEW
Unlike life insurance, the general Insurance business in India is dominated by private sector
with a share of ~53% especially post liberalization in 1991.

Following are the leading general insurance companies of India :

• New India Assurance

• United India Assurance
• National Insurance Company
• HDFC Ergo
• ICICI Lombard
• Oriental Insurance Company
• Tata AIG
• Bajaj Allianz

The total market size of general insurance business in India is estimated to be ~ Rs.163,000
crores according to www.investindia.gov.in

The general insurance industry is expected to continue its significant growth in foreseeable
future due to various government initiatives, increasing public awareness, innovative
policies and easy access.

The following graphic shows the Market share of different general insurance companies in
India:

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 Insurance Sector Reforms
In 1993, Malhotra Committee headed by former Finance Secretary and RBI Governor R. N.
Malhotra was formed to evaluate the Indian insurance industry and recommend its future
direction.

The Malhotra committee was set up with the objective of completing the reforms initiated
in the financial sector.

The reforms were aimed at “creating a more efficient and competitive financial system
suitable for the requirements of the economy keeping in mind the structural changes
currently underway and recognizing that insurance is an important part of the overall
financial system where it was necessary to address the need for the similar reforms….”

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In 1994, the committee submitted the report and some of the key recommendations
Included:

i) Structure:
• Government stake in the insurance Companies to be brought down to 50%
• Government should take over the holdings of GIC and its subsidiaries so that
these subsidiaries can act as independent corporations.
• All these insurance companies should be given greater freedom to operate.

ii) Competition

Private Companies with a minimum paid up capital of Rs. 100 crores should be allowed to
enter the industry.

• No company should deal in both Life and General Insurance through a single
entity.
• Foreign companies should be allowed to enter the industry with the
collaboration with the domestic companies.
• Postal Life Insurance should be allowed to operate in the rural market.
• Only one State Level Life Insurance Company should be allowed to operate in
each state

iii) Regulatory Body

• The Insurance Act should be changed.
• An Insurance Regulatory body should be set up.
• Controller of Insurance (Currently a part from the Finance Ministry) should be
made independent.

iv) Investments
• Mandatory Investments of LIC Life Fund in government securities to be reduced
from 75% to 50%.
• GIC and its subsidiaries are not to hold more than 5% in any company. (There
current holdings to be brought down to this level over a period of time)

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v) Customer Service
• LIC should pay interest on delays in payments beyond 30 days.
• Insurance companies must be encouraged to set up unit linked pension plans.
• Computerization of operations and updating of technology to be carried out in
the insurance industry.

The committee emphasized that in order to improve the customer services and increase the
coverage of the insurance industry should be opened up to competition. But at the same
time, the committee felt the need to exercise caution as any failure 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
capital requirement of Rs. 100 crores. The committee felt the need to provide greater
autonomy to insurance companies in order to improve their performance and enable them
act as independent companies with economic motives. For this purpose, it had proposed
setting up an independent regulatory body.

The Insurance Regulatory and Development Authority (IRDA):

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body in April
2000 has fastidiously stuck to its schedule of framing regulations and registering the private
sector insurance companies.

The other decisions taken simultaneously to provide the supporting systems to the
insurance sector and in particular the life insurance companies were the launch of the
IRDA’s online service for issue and renewal of licenses to agents. The approval of institutions
for imparting training to agents has also ensured that the insurance companies would have
a trained workforce of insurance agents in place to sell their products, which are expected
to be introduced by early next year. Since being set up as an independent statutory body
the IRDA has put in a framework of globally compatible regulations.

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 Overview of customer retention and renewal strategies in
general insurance Industry

Retention is all about keeping the customers, proactively nurturing relationships,

addressing issues and ensuring customer adoption is successful which is critical for any
insurance company or service industry.

Customer retention refers to the ability of a company or product to retain its

customers over some specified period. Retention process starts from the moment the deal
is signed all the way through to renewal of contract.

"retention" and "renewal" as interchangeable. The action of getting a customer to sign up

for another fixed term - including the steps the customer goes through and the outputs the
customer receives - do not reflect retention. This is the action of renewal. A renewals
function should be focused on a specific administrative process of contacting a customer
due to renew, introducing changes (price increase, contract term changes), processing the
renewal and updating systems. Renewal is a small part of retention.

Customer Retention in Insurance sector

Just like Formula 1 racing, insurance companies are racing in market to offer most
appreciable deals to their valued customers. It is about customer satisfaction. It is not that
customer get satisfied and becomes loyal instantly, it is with constant research on
information related to customers’ wants and demands and pleasing efforts (promotional
offers, discounts, free or discounted insurance) by insurance companies that such
customers prefer and promote quality product by the company.

They must not only buy the insurance product but feel great about it. Insurance industry
faces challenges like lack of awareness among customers about policies and insurance
products, customer complaint about low service quality, prolonged claim settlement,
tedious and lengthy document filing work, competition and limited share in market. In India,
because of poverty, insurance is more of a luxury than necessity.

To combat this situation, Insurance company must ensure a strong grip on existing
customers because they will bring them business again and again and would also spread

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positive word of mouth leading to more new customers. Success mantra for insurance
companies is none other than “customer retention.”

Customer retention was long undervalued and companies had been fooling themselves by
investing more and more in acquiring new customer leading to decreased ROI. With time,
they realized that tweaking organizational structure a bit and making use of already existing
database and social media, they can work wonders on retaining customers. The customer
today wants to keep the communication short, sweet and simple. Forget those long boring
brochures, emails and phone calls; rather say hello to Facebook, Twitter, WhatsApp for
personalised approach. Make it a happy conversation, generate delight for the customers
and they will be glued to his organization forever.

Customer retention strategies

Personalized Service

Insurance companies can often feel like large, faceless corporations, primarily because
consumers often deal with agents or representatives via the Internet or phone. Companies
can increase retention rates by providing greater degrees of personalized customer service
to existing policyholders. This can mean assigning a single agent to handle the needs of
individual clients, giving customers a point person to connect with if they have questions or
concerns about their policy, coverage or renewal options.
Discounts

Insurance companies can potentially increase retention rates by offering discounts for
clients who have more than one policy with the agency. For example, a client who has
health, life and auto insurance with an agency might be enticed to renew a contract if
offered a more favourable rate on all three policies than a customer who only pays for life
insurance coverage. “Bundling” insurance products help the customer save money, an
effective retention tool in itself, but it also makes it more difficult for them to drop a
provider. The idea of shopping for and reinstituting a number of new policies with a new
insurer can make clients think twice before terminating services.
Prompt Policy Payout and High Payout Ratio

Customers may be motivated to change insurance companies if they have a difficult time
filing and collecting on legitimate claims. Some insurance companies have a reputation for
repeatedly denying claims or refusing policy payouts due to technicalities. A customer who
is denied legitimate coverage or who has to cut through significant red tape to get the
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benefits due to him may be more likely to seek coverage through another agency in the
future. Quickly pay policy proceeds on qualified claims to help maintain a good relationship
with the client.
Transparent explanation of benefits and available options

Insurance jargon can be difficult for clients to fully understand. Take the time to educate
clients about their benefits, rights and responsibilities, and be open to answering questions
at any time, but particularly during policy renewal talks. Keep clients apprised of insurance
industry changes that might impact them, and tell them about rate increases and the
introduction of new products that may be beneficial to them. This personalized level of
service can help create an ongoing relationship a client is unlikely to abandon.

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 Company Profile

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  UIIC is a leading public general / non-life insurance company owned by Govt. of India
 UIIC is headquartered in Chennai and headed by Mr. Radhakrishnan as the Chairman &
Managing Director
 Established in 1938 and nationalized in 1972, UIIC is one of the oldest insurance
companies of India.
 UIIC has a variety of general insurance products such as motor, health travel, personal
accident, house holder’s insurance policies and also customized, innovative policies
even covering satellite launches.
 UIIC has 18300 employees spread across 1340 offices and many micro offices with more
than 1 Crore policy holders.
 UIIC has a market share of ~15% with total premium collection of ~ Rs.17,000 crores
during FY 2018-19.
 UIIC’s mission statement is always “U” before “I” implying commitment to utmost
customer satisfaction

Background

United India Insurance Company Limited was incorporated as a Company on 18th February
1938. General Insurance Business in India was nationalized in 1972 during which period 12
Indian Insurance Companies, 4 Cooperative Insurance Societies and Indian operations of 5
Foreign Insurers, besides General Insurance operations of southern region of Life Insurance
Corporation of India were merged with United India Insurance Company Limited. After
Nationalization United India has grown by leaps and bounds and has 18300 work force
spread across 1340 offices providing insurance cover to more than 1 Crore policy holders.
The Company has variety of insurance products to provide insurance cover from bullock
carts to satellites.

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United India has been in the forefront of designing and implementing complex covers to
large customers, as in cases of ONGC Ltd , GMR- Hyderabad International Airport Ltd,
Mumbai International Airport Ltd Tirumala-Tirupati Devasthanam etc. We have been also
the pioneer in taking Insurance to rural masses with large level implementation of Universal
Health Insurance Programme of Government of India & Vijaya Raji Janani Kalyan Yojana (
covering 45 lakhs women in the state of Madhya Pradesh) , Tsunami Jan Bima Yojana (in 4
states covering 4.59 lakhs of families) , National Livestock Insurance and many such
schemes.

The company has also made it’s presence in more than 200 tier II & III towns and villages
through their innovative Micro Offices.

Vision
• To be the most preferred insurer in India with global footprint & recognition.t
• Trusted brand admired by all stakeholders
• The best-in-class customer service provider leveraging technology & multiple
channels
• The provider of a broad range of innovative products to meet the needs of all
customer segments
• Great place to work with highly motivated and empowered employees
• Recognized for its contribution to the society

Management Team

Sl. No. Name Designation

1 Shri Girish Radhakrishnan Chairman cum Managing Director
2 Smt Susmita Mukherjee General Manager
3 Shri D T V Sastri General Manager
4 Shri B Rajaram General Manager
5 Shri M Shahul Hameed General Manager
6 Smt D Nagalakshmi General Manager
7 Shri Y K Shimray General Manager
8 Ms. Gauri Venkatesan General Manager
9 Shri V. Sundaresan Chief Vigilance Officer
10 Shri Palreddy Vishnuvardhan Appointed Actuary

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Board of Directors

1. Shri Girish Radhakrishnan Chairman cum Managing Director

2. Shri Madnesh Kumar Mishra Director Joint Secretary, DFS,MOF,GOI
3. Ms. Sindhu Pillai, Director, GOI, MOF, DFS
4. Shri Parijat Dutta, Non Official Director
5. Shri R A Sankara Narayanan, Ex-Officio Director MD &CEO, Vijaya Bank

Company Performance

Gross Premium receipts increased from

Profit after tax increased from Rs.130.55
Rs.6376 Cr. To 8179 Cr. (+28%)
Cr. to Rs.366.79 Cr.

Profit Analysis (in Rs. Crores) Premium Analysis (in Rs. Crores)

Organization Structure

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SWOT Analysis

Strengths

• United India Insurance Company Limited has the unique ability to combine the
group’s experience in financial services and service delivery with various innovative
products with government assurance to provide distinctive products backed by
superior customer service
• Wide Network: promises quality treatment at 5420+ leading network hospitals
across the country.
• Ability to innovatively design products that address unmet customer needs and
deliver superior customer service as evidenced by the low grievance rate.

Weakness

• Being a government organization, comes with usual bureaucracy and red tape
• Isn’t offering cashless treatment in all the hospitals
• At times, slow to respond to customer needs

Opportunities

• General Insurance especially health, auto and other businesses is moving towards
booming business with great public awareness.
• General insurers have been consistently gaining market share.
• Recent amendments to legislation have provided recognition to general insurance
and health insurance in particular as a new category of insurers.
• The healthcare sector in India is experiencing significant growth driven by rising
incidence of diseases due to increasing longevity and lifestyle factors, growing
awareness of health issues and easier accessibility of treatment options.

Threats

• Nearly 60% of all healthcare expenditure in India is ‘out-of-pocket’ or self-funded by

consumers.
• Lack of awareness about health insurance among people.
• Increasing competition by other stand-alone health insurance companies.
• Any unwarranted changes in Govt. policies

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 Customer Perception Survey
MEDICLAIM

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RESEARCH METHODOLOGY DATA COLLECTION:

Primary: Through structured Questionnaire

Secondary: Through Internet, Journals, Newspapers, Company website, brochure & Misc.
sources.
Procedure: Survey method
RESEARCH INSTRUMENT: Structured Questionnaire.
SAMPLING PLAN Sample Design: Convenience sampling
Sample size: 100
Sample unit: Random customers of UIIC

Limitations of study
• As the sample size was small, hence exact conclusions cannot be extrapolated.
• Unwillingness and inability of respondents to provide information.
• Due to time constraint in-depth study could not be carried out.

QUESTIONAIRE DESIGN
QUESTIONNAIRE ANALYSIS Respondents =100
Respondents Responded =100
Response Rate =100%
Respondents are random customers of Co.

(1) From how long you are having health insurance policy?

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 Time period
25

20

15

10

0
0-6 months 6-12 months 1-3 years 3-5 years 5-10 years
Time period 23 16 18 21 22

Time period

(2) Health, Fixed Benefit or Travel Insurance?

20%
48%
32%

Health Insurance
Fixed Benefit Insurance
Travel Insurance

(3) Are you aware of all the benefits under your policy?

Yes NO total
62 38 100

(4) Do you have any add on cover in your policy? If Yes, mark those.

 NCB Super
 International Second Opinion
 Everyday Care
 Global Coverage
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  Others

CUSTOMERS
Customers

72
68

41
29

14
NCB SUPER INTERNATIONAL EVERYDAY CARE GLOBAL COVERAGE OTHERS
SECOND OPINION

(5) For what do you prefer United Health Insurance Co. over others.
 Better claim settlement
 Wide network of leading hospital
 Customer service
 Cashless Treatment

 Others
Better claim Wide network of leading hospital Cashless Customer service Others
settlement Treatment

45 38 27 51 63

(6) Do you think Health Insurance is important in today’s world?

Yes No Total
86 14 100

(7) If yes, what according to you should be minimum sum insured?

0-5 lakhs 5-10 lakhs 10-20 lakhs More than 20 lakhs

16 39 27 18

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Name……………………………Age.............................................. Family
members................................Occupation......................................... Mobile
no....................................................... Address..........................................................................

FINDINGS

• People are unaware about complete portfolio of benefits available in their health
insurance product
• Most of people know about only life insurance companies like LIC
• They understand the fact health insurance is important in today’s world

CONCLUSION
• “Mediclaim” has become synonymous with Medical Insurance in India
• United India’s Mediclaim is growing (with growth rate of 33.6%) with growing health
insurance industry in India.
• Many people are aware of importance of health insurance.
• The policy of the company is designed according to the budget and requirements of
the customer.
• Claim settlement is considered easier with UIIC than some of the private insurers
and hence trusted more by people.

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 Annexures
United India Insurance Company’s detailed policy terms for the following
policies:
1. General Insurance Principles applicable to all policies
2. IRDA document
3. Fire insurance
4. Health Insurance
5. Engineering Insurance
6. Marine Cargo Insurance
7. Marine Hull Insurance
8. Crop/ Kissan insurance
9. Sericulture Insurance
10.Personal Accident (Janata) Insurance
11.Any other

References

www.uiic.co.in United India Insurance Company Ltd.’s official website

www.irdai.gov.in Insurance Regulatory Authority of India

http://niapune.org.in/ National Insurance Academy, Pune

https://financialservices.gov.in/ Financial Services Division, Ministry of Finance, Govt.of India

https://www.investindia.gov.in/ National Investment Promotion and Facilitation Agency of

India which acts as the first point of reference for investors
in India

https://www.gicofindia.com General Insurance Corporation of India

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