GENERAL INSURANCE

A project submitted to

MUMBAI UNIVERSITY
University of Mumbai for partial completion of the degree

Of Bachelor of Management studies

Under the faculty of commerce

By
Kautubh Nitin Patil

Under the guidance of

Professor: Yogesh Pawar
Swayam siddhi degree day college,

March 2020-21
 CERTIFICATE

This is to certify that Mrs. Kaustubh Nitin Patil has worked and
duly Completed her project work for the degree of Bachelor of
Management Studies under the faculty of Commerce in the
subject of Marketing and Her project is entitled General
insurance Company under my supervision.
I further certify that the entire work has been done by the learner
Under my guidance and that no part of it has been submitted
previously For any Degree or Diploma of any university It is her
own work and facts reported by her personal findings and
Investigations.
Name and signature of
Guiding Teacher
Date of Submission:
 DECLARATION

I the undersigned Mrs. Kaustubh Nitin Patil here by

declare that the work Embodied in this project work titled
Consumer Behavior TowardsPublic Sector And Private
Sector Banks forms my own contribution to the research
Work carried out under the guidance of pros. Yogesh
Pawar a result of my Own research work and has not been
previously submitted to any other University for any other
Degree/Diploma to this or any other University. Wherever
reference has been made to previous works of others, it has
been Clearly indicated as such and included in
bibliography. I, here by further declare that all information
of this document has been Obtained and presented in
.accordance with academic rules and ethical conduct

Kaustubh Nitin Patil

Certified by
Profs. Yogesh Pawar
 ACKNOWLEDGEMENTS
To list who all have helped me is difficult because they are so
Numerous and the depth is so enormous.
I would like to acknowledge the following as being idealistic
channels And fresh dimension in the completion of this
project. I take this opportunity to thank the University of
Mumbai for giving Chance to do this project. I would like to
thank my Principal professor Mahesh Soni for Providing
the necessary facilities required for completion of this Project.
I would also like to express my sincere gratitude towards my
project Guide Professor Yogesh Pawar whose guidance and
care made the Project successful.
I would like to thank my College Library, for having provided
Various reference books and magazines related to my
project.Lastly, I would like to thank each person who directly
or indirectly Helped me in the completion of the project
especially my parents and Peers who supported me
throughout my project.

Index
Sr. TITLE
No
1 INTRODUCTION
2 TYPES OF GENERAL INSURANCE
3 PROFILE OF GENERAL INSURANCE
4 PRINCIPLES OF INSURANCE
5 RESEARCH DESIGN
6 THE TITLE
7 HYPOTHESES
8 REVIEW OF LITERATURE
9 INSURANCE SECTOR IN INDIA
10 LIFE INSURANCE Vs GENERAL INSURANCE
11 GENERAL CONCLUSIONS
12 SUGGESTIONS
13 REFENCE BOOKS
14 BILIOGHARPHY

1. INTRODUCTION
Insurance:-Insurance is a means of protection from
financial loss. It is a form of risk management primarily
used to hedge against the risk of a contingent or uncertain
loss. An entity which provides insurance is known as an
insurer, insurance company, insurance carrier or
underwriter.
A person or entity who buys insurance is known as an
insured or as a policyholder. The insurance transaction
involves the insured assuming a guaranteed and known
relatively small loss in the form of payment to the insurer
in exchange for the insurer's promise to compensate the
insured in the event of a covered loss.
The loss may or may not be financial, but it must be
reducible to financial terms, and usually involves
something in which the insured has an insurable interest
established by ownership, possession, or pre-existing
relationship.
The insured receives a contract, called the insurance
policy, which details the conditions and circumstances
under which the insurer will compensate the insured.
The amount of money charged by the insurer to the
policyholder for the coverage set forth in the insurance
policy is called premium.
If the insured experiences a loss which is potentially
covered by the insurance policy, the insured submits a
claim to the insurer for processing by a adjuster. The
insurer may hedge its own risk by taking out reinsurance,
whereby another insurance company agrees to carry some
of the risks, especially if the primary insurer deems the
risk too large for it to carry.
Insurance involves pooling funds from many insured
entities (known as exposures) to pay for the losses that
some may incur.
The insured entities are therefore protected from risk for a
fee, with the fee being dependent upon the frequency and
severity of the event occurring.
In order to be an insurable risk, the risk insured against
must meet certain characteristics.

Insurance as a financial intermediary is a commercial

enterprise and a major part of the financial services
industry, but individual entities can also self insurance
through saving money for possible future losses.
Insurance can have various effects on society through the
way that it changes who bears the cost of losses and
damage. On one hand it can increase fraud; on the other it
can help societies and individuals prepare for catastrophes
and mitigate the effects of catastrophes on both
households and societies.
Insurance can influence the probability of losses through
moral , insurance fraud, and preventive steps by the
insurance company. Insurance scholars have typically
used moral fraud to refer to the increased loss due to
unintentional carelessness and insurance fraud to refer to
increased risk due to intentional carelessness or
indifference.
Insurers attempt to address carelessness through
inspections, policy provisions requiring certain types of
maintenance, and possible discounts for loss mitigation
efforts. While in theory insurers could encourage
investment in loss reduction, some commentators have
argued that in practice insurers had historically not
aggressively pursued loss control I us to prevent disaster
losses such as hurricanes—because of concerns over rate
reductions and legal battles.

However, since about 1996 insurers have begun to take a

more active role in loss mitigation, such as through
building codes.
Insurance is just a risk transfer mechanism wherein the
financial burden which may arise due to some fortuitous
event is transferred to a bigger entity called an Insurance
Company by way of paying premiums.

This only reduces the financial burden and not the actual
chances of happening of an event. Insurance is a risk for
both the insurance company and the insured. The
insurance company understands the risk involved and
will perform a risk assessment when writing the policy.

As a result, the premiums may go up if they determine

that the policyholder will file a claim. However,
premiums might reduce if the policyholder commits to a
risk management program as recommended by the
insurer.

It's therefore important that insurers view risk

management as a joint initiative between policyholder
and insurer since a robust risk management plan
minimizes the possibility of a large claim for the insurer
while stabilizing or reducing premiums for the
policyholder.
If a person is financially stable and plans for life's
unexpected events, they may be able to go without
insurance.

However, they must have enough to cover a total and

complete loss of employment and of their possessions.
Some states will accept a surety bond, a government
bond, or even making a cash deposit with the state.
An insurance company may inadvertently find that its
insureds may not be as risk-averse as they might
otherwise be (since, by definition, the insured has
transferred the risk to the insurer), a concept known as
moral hazard.

This 'insulates' many from the true costs of living with

risk, negating measures that can mitigate or adapt to risk
and leading some to describe insurance schemes as
potentially maladaptive.
 2.TYPES OF GENERAL INSURANCE

2.1Life Insurance:-Life Insurance refers to a policy or

cover whereby the policyholder can ensure financial
freedom for his/her family members after death. Suppose
you are the sole earning member in your family,
supporting your spouse and children. In such an event,
your death would financially devastate the whole family.

Life insurance policies ensure that such a thing does not

happen by providing financial assistance to your family
in the event of your passing.
• Term Plan-The death benefit from a term plan is only

available for a specified period, for instance, 40 years

from the date of policy purchase.

• Endowment Plan- Endowment plans are life

insurance policies where a portion of your premiums
go toward the death benefit, while the remaining is
invested by the insurance provider. Maturity benefits,
death benefit and periodic bonuses are some types of
assistance from endowment policies.
• Unit Linked Insurance Plans or ULIPs -Similar to
endowment plans, a part of your insurance premiums
 go toward mutual fund investments, while the
remaining goes toward the death benefit.

• Whole Life Insurance -As the name suggests, such

policies offer life cover for the whole life of an
individual, instead of a specified term. Some insurers
may restrict the whole life insurance tenure to 100
years.

• Child’s Plan -Investment cum insurance policy,

which provides financial aid for your children
throughout their lives. The death benefit is available
as a lump-sum payment after the death of parents.

• Money-Back -Such policies pay a certain percentage

of the plan’s sum assured after regular intervals. This
is known as survival benefit.

• Retirement Plan - Also known as pension plans,these

policies are a fusion of investment and insurance. A
portion of the premiums goes toward creating a
retirement corpus for the policyholder. This is
available as a lump-sum or monthly payment after the
policyholder retires.
2.2 Motor Insurance:-Motor insurance: refers to
policies that offer financial assistance in the event of
accidents involving your car or bike. Motor
insurance can be availed for three categories of
motorized vehicles, including:

• Car insurance - Personally owned four-wheeler

vehicles are covered under such a policy.
• Two-wheeler insurance - Personally owned two
wheeler vehicles, including bikes and scooters, are
covered under these plans.

• Commercial vehicle insurance - If you own a vehicle

that is used commercially, you need to avail
insurance for the same. These policies ensure that
your business automobiles stay in the best of shapes,
reducing losses significantly.

A motor Insurance policy offers coverage to the insured

vehicle against financial losses due to an accident or one
resulting for other damages .Motor insurance is an insurance
policy that covers the policyholder in case of financial losses –
resulting from an accident or other damages – sustained by the
insured vehicle.
 A comprehensive motor insurance policy covers damages to
third-party and third-party property along with compensating for
own losses as well.Yes, it is. According to Sec 146 of the Motor
Vehicles Act, 1988, it is imperative that you purchase motor
insurance prior to taking your vehicle out on the roads.

Should you not want to buy a comprehensive insurance plan,

getting third-party policy coverage is the bare minimum that you
are mandated to acquire for your vehicle to ply.

2.3 Health Insurance:-Health insurance refers to a

type of general insurance, which provides financial
assistance to policyholders when they are admitted
to hospitals for treatment. Additionally, some plans
also cover the cost of treatment undertaken at
home, prior to a hospitalization or after discharge
from the same.
With the rising medical inflation in India, buying health
insurance has become a necessity. However, before
proceeding with your purchase, consider the various types
of health insurance plans available in India.

Health Insurance is a medical coverage that helps you

meet your medical expenses by offering financial
assistance.
 Due to the high cost of hospitalization expenses, it is
important to have a health insurance plan in place. In the
current pandemic situation, health insurance plays a vital
role in safeguarding your finances. You can buy a health
insurance plan for your family and avail the below
mentioned benefits & coverage.

2.4 Travel Insurance:-When talking about the

different types of insurance policies, one must not
forget to learn more about travel insurance plans.
Such policies ensure the financial safety of a traveler
during a trip. Therefore, when compared to other
insurance policies, travel insurance is a short-term
cover.

Depending on the provider you choose, travel insurance

may offer financial aid at various times, such as during
loss of baggage, trip cancellation and much more. Travel
insurance is an Insurance product for covering unforeseen
losses incurred while travelling, either internationally or
domestically. Basic policies generally only cover
emergency medical expenses while overseas, while
comprehensive policies typically include coverage for trip
cancellation, lost lugguage, flight delays, public liability,
and other expenses
2.5 Property Insurance:-Any building or immovable
structure can be insured through property insurance
plans. This can be either your residence or
commercial space.

If any damage befalls such a property, you can claim

financial assistance from the insurance provider.
Keep in mind that such a plan also financially
safeguards the content inside the property.five
reasons why this type
of insurance is important.

Protection Against Property Damage. Property insurance

offers coverage against a lot of natural disasters
including, but not limited to, monsoons and floods, fires,
earthquakes, theft, and other weather-related damages.

2.6 Mobile Insurance:-Owing to the rising price of

mobile phones and their several applications today, it
has become imperative to insure the device. mobile
insuranceyou to reclaim money that you spend on
repairing your phone in the event of accidental
damage. Further, you can also claim the same in
case of phone theft, making it easier to replace the
handset with a new phone.
 A mobile insurance offers coverage for various
kinds of damage to the mobile. ... Replacing or
repairing the lost or damaged phone within 48
hours of reporting the incident. Protection
against accidental damage. Coverage against
liquid damage of the mobile.

2.7 Cycle Insurance:-Bicycles are valuable properties

in India as some people rely on these vehicles for
their daily commute.
A cycle insurance policy ensures that you have access
to necessary funds should your bicycle undergo
accidental damage or theft. It saves your out of
pocket expenses, while also ensuring immediate
repairs to the vehicle.

What is Bike Insurance? Bike insurance policy is

a contract between the insurer & the bike owner
in which the insurance company provides
financial coverage to your bike against any loss
or damages due to an accident.
As per the Motor Vehicle Act 1988, third party
bike insurance is mandatory in India.
 3.PROFILE OF GENERAL INSURANCE

General Insurance:-Insurance contracts that do not

come under the ambit of life insurance are called general
insurance. The different forms of general insurance are
fire, marine, motor, accident and other miscellaneous
nonlife insurance. ... Like life insurance, general insurance
products come at a price in the form of premium.
General insurance or non-life insurance policies, including
automobile and homeowners policies, provide payments
depending on the loss from a particular financial event.
General insurance is typically defined as any insurance
that is not determined to be life insurance.
It is called property and the united states and Canada and
non-life insurance in Continental Europe.

The tangible assets are susceptible to damages and a need

to protect the economic value of the assets is needed. For
this purpose, general insurance products are bought as
they provide protection against unforeseeable
contingencies like damage and loss of the asset. Like life
insurance, general insurance products come at a price in
the form of premium.

plans cover financial losses and compensate you for the

losses that you suffer. As such, general insurance plans
provide you financial security even in the case of
contingencies some cases, general insurance plans are
mandatory by law.

For instance, motor insurance plans are mandatory as per

the Motor Vehicles Act, 1988. Similarly, if you are
travelling to Schengen countries, you mandatorily need a
valid overseas health insurance plan.
When you buy such mandated plans, you fulfil the legal
obligation and save yourself from violation offence
insurance plans help in protecting your savings in
emergency situations.

You can, therefore, use your savings to fulfil your

financial goals
insurance plans, which are a type of general insurance
plan, allow you tax benefits. The premiums paid for such
plans are allowed as a deduction under Section 80D.

This deduction helps in lowering your taxable income

which, in turn, lowers your tax liability and helps you save
tax.

History of General Insurance, Reform in the

sector, General Insurance Products, Non –
Life Insurance companies and IRDA

Insurance probably made a beginning in the ancient land

of Babylonia In the 18th century B.C., Babylonian king
Hammurabi developed a code of law, known as the Code
of Hammurabi, which codified many specific rules
governing the practices of early risk-sharing activities.
 For instance, the code dictated that traders had to repay
merchants who financed trading voyages unless thieves
stole goods in transit, in which case debts would be
cancelled.

History of Insurance Business:-This was similar to

the system of insurance known as bottomry which existed
in Phoenicia in 1200 B.C.In this system, backers loaned
money to merchants to finance voyages. Merchants
offered their ships (the hull was known as the ship’s
‘bottom’) as collateral for such loans. When a trip
succeeded, the merchant would pay the trip’s backer the
original loan plus interest, the equivalent of a premium.

If a ship went down on its voyage, the trip’s backer would

cancel the merchant’s loan. The Greeks and Romans
developed the earliest systems of life insurance. They
formed societies which paid dues that went toward paying
for the burial of members.

Sometimes these societies also paid for the living

expenses of deceased members’ families. During the
Middle Ages (5th to 15th centuries A.D.), workers joined
together in craft. Many guilds, particularly in England and
Italy, provided benefits to workers and their families in
the event of illness or death.
 Insurance as we know it today took its shape in 17th
century England. There was a place called Lloyd’s Coffee
House in London, owned by Edward Lloyd, where
merchants, ship-owners and underwriters met to discuss
and transact business.

The Lloyd’s Act was passed in 1871 incorporating the

members of the association into a single corporate body
with perpetual succession and corporate seal. It extended
from marine insurance to other insurance and guarantee
business.

Today, Lloyd’s has become the world’s best known

insurance brand. It is commonly misunderstood that
Lloyd’s is an insurance company. Actually, it is a society
of members, known as ‘underwriters’, both corporate and
individual, who underwrite in syndicates on whose behalf
professional underwriters accept risk.

Thus, supporting capital is provided by investment

institutions, specialist investors, international insurance
companies and individuals.
2) 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.

Financial sector reforms were initiated and it was felt that

insurance is an important part of the overall financial
system where it was necessary to address the need for
similar reforms. Some of the recommendations of the
Malhotra committee included: Government stake in the
insurance Companies to be brought down.

50%.Government should take over the holdings of GIC

and its subsidiaries so that these subsidiaries can act as
independent corporations. All the insurance companies
should be given greater freedom to operate. Companies
with a minimum paid up capital of Rs.1bn should be
allowed to enter the industry.

3) The Insurance Regulatory and Development

Authority (IRDA):-Reforms were initiated with the
passage of Insurance Regulatory and Development
Authority (IRDA) Bill in 1999. IRDA was set up as an
independent regulatory authority, which has put in place
regulations in line with global norms.
IRDA has been framing regulations and registering the
private sector insurance companies. It launched of the
IRDA online service for issue and renewal of licenses to
agents. So far, there are 13 life insurance companies and
14 general insurance companies.
Premium rates of most general insurance policies come
under the purview of the government appointed Tariff
Advisory Committee.
In financial services sector, general insurance is
considered co be an' important sector. Lilje any other
sector, in this important financial sector also, customer
service plays a significant role. After the nationalization
of general insurance industry in 1972, the entire general
insurance- business was undertaken by four public sector
insurance companies under the supervision of General of
India.
General Insurance business was the monopoly, of these
public sector insurance companies. The customers had no
choice to go any where if they were not satisfied with the
services of these public sector insurance companies.
But in the year 2000, insurance sector has been opened up
for private sector also including foreign insurance
companies with certain limit on equity participation.
As such the present insurance market is not the monopoly
of public sector insurance companies. The insurance
market has become very competitive and the. Customer
service will be very important factor for all general
insurance 1 !' companies.
 4.PRINCIPLES OF INSURANCE

1.insurance interest

The person getting an insurance policy must have an

insurable interest in the property or life Insured. A person
is said to have an insurable interest if he is benefited by its
existence and Be affected by its destruction.
The presence of insurable interest is a legal requirement.
So An insurance contract without the existence of
insurable interest is not legally valid and
Cannot be claimed in a Court.
The intent behind this principle is that the insured must be
in a position to financially suffer if
A loss occurs.
This principle helps in preventing gambling by way of
taking insurance on a Property and waiting for a loss to
occur. In case of life insurance contracts it reduces moral
Hazard whereby a person takes life insurance on another
person and prays for his/ her death For insurance claims.
2.insurance indemnity
The essence of insurance is the principle of indemnity that
the person who suffers a financial Loss is placed in the
same financial position after the loss as before the loss
occurred.
He Neither profits nor is disadvantaged by the loss.
The principle of indemnity is applicable to all types of
insurance policies except life Insurance.
Indemnity means security, protection and compensation
given against damage, Loss or injury. The insurer
promises to help the insured in restoring the financial
position
Before loss has occurred. Whenever there is a loss of
property, the loss is compensated.
The Compensation payable and the loss suffered should be
measurable in term of money. The Insured will be
compensated only up to the amount of loss suffered by
him.
3.subrogention

Subrogation is the right of an insurer to legally pursue a

third party who caused a loss to its Insured. When you file
a claim with the insurance company and another driver or
party is at Fault, the insurance company will generally:
According to the principle of subrogation, when the
insured is compensated for the losses Due to damage to his
insured property, then the ownership right of such property
shifts to the Insurer.
The insurer’s right of subrogation arises only when the
insurer has paid for the loss. If The insured party gets a
compensation for the loss suffered by him, he cannot claim
the same Amount of loss from any other party.
It prevents the insured being indemnified from two
Sources in respect of the same loss.
4.Contribution

Sometimes a property is insured with more than one

company. The insured cannot claim More than the total
loss from all the insurance companies put together.
He cannot claim the Same loss from different insurance
companies. If one insurer pays full compensation then
That insurer can claim proportionate claim from the other
insurers.
A person cannot be Restored to a better position than
before the loss occurred.
The total loss suffered by the Insured will be contributed
by different companies in proportion to the value of
policies Issued by them.
5. principles of losses minimize

The insured must not neglect and behave irresponsibly

during such events just because the
Property is insured. Hence it is a responsibility of the
insured to protect his insured property And avoid further
losses.
John’s house catches fire due to an electric short-circuit. In
this tragic scenario, John must try His level best to stop
fire by all possible means, like first calling nearest fire
department office,
Asking neighbours for emergency fire extinguishers, etc.
He must not remain inactive and Watch his house burning
hoping, “Why should I worry? I’ve insured my house.”
According to the Principle of Loss Minimization, insured
must always try his level best to Minimize the loss of his
insured property, in case of sudden events like fire etc.
The insured Must take all necessary steps to control and
reduce the losses and to save what is left.
This Principle makes the insured more careful in respect of
this insured property, just as any situation.

Prudent person would do in those circumstances.

If he does not do so, the insurer can avoid The payment of
loss attributable to his negligence. But it must be
remembered that though.

The insured is bound to do his best for his insurer, he is,

not bound to do so at the risk.
5. MAKING OF AN INSURANCE POLICY

Sometimes a property is insured with more than one

company. The insured cannot claim
more than the total loss from all the insurance companies
put together.
He cannot claim the same loss from different insurance
companies.
If one insurer pays full compensation then that insurer can
claim proportionate claim from the other insurers.
A person cannot be restored to a better position than
before the loss occurred.
The total loss suffered by the insured will be contributed
by different companies in proportion to the value of
policies
issued by them.
 5.RESEARCH DESIGN

“A research design is the arrangement of conditions for

collection and analysis Of data in a manner that aims to
combine relevance to the research purpose with
Economy in procedure”2Research Design is a logical and
systematic planning of a piece of research Work.
The research design has to be geared on the basis of the
availability of time, Energy and money, the availability of
data to which it desirable or possible to
Impose upon persons or individuals or social units or
institutions which might supply Data.
So a good design is often characterized by adjectives like
flexible, appropriate, Efficient, economical and so on.

According to Bushman “There is no such thing as a single

or correct Research design, a research design represents a
compromise dictated by many practical Considerations
that go in to research.
Thus the research design is not highly specific plan to be
followed without Deviation but rather a series guide point
to be headed.
It is always tentative as theStudy progresses new aspects,
new conditions and new connecting links in the data come
to light and thereby it becomes necessary to change the
plan as circumstances Demand.

In the present study however the research design includes

area of the study, Research tools, procedure of data
collection and classification of data.
According to Laborite and Hagedorn “The most of
research designs are case study; Survey design or
experimental designs”.
The present study “Financial efficiency of General
Insurance Public Sector Companies” is based on
secondary data.
It means researcher has to use facts of Information already
available and analyze these to make an evaluation of
material.
Hence the present research work has to follow two or more
type of research i.e. Case Study, efficiency research etc. It
means this research is a mixture of different research
Design.
 6.THE TITLE

“A COMPARATIVE PERFORMANCE STUDY OF

GENERAL INSURANCE PUBLIC SECTOR

COMPANIES OF INDIA”

1.OBJECTIVES OF THE STUDY

The global environment has thrown the challenge for

public sector companies Especially for finance and
insurance.
After the formation of IRDA private players Started
entering in the general insurance industry in India. The
structure of the Insurance industry has undergone a drastic
change since liberalization.
The number of Private players are coming forward with
competitive operating strategies for the Business.
To use result for profit planning. The main objectives are
as under.
1. To study the overall financial efficiency of general
insurance public sectors Companies of last seven-
years (2001-02 to 2007-08)

2. To examine the profitability in the GIPSC.

3. To examine the financial strength and efficiency of

GIPSC.

4. To document the operational efficiency of GIPSC.

5. To suggest an appropriate strategy for the GIPSC.

6. And to make suggestions for improving profitability.

2.SCOPE OF THE STUDY

The scope of the study is limited to General Insurance

Public Sector Companies of India.
The researcher has selected the four general insurance
Companies, are as under.
1. National Insurance Company Limited

2. New India Insurance Company Limited

3. United India Insurance Company Limited

4. Oriental Insurance Company Limited

3.PERIOD OF THE STUDY

The present study will cover seven years from 2001-02 to

2007-08.
 7.HYPOTHESES

Hypothesis is usually considered as the principal

instrument in research It’s main Function is to suggest new
experiments and observations.
Hypothesis may be defined As a proposition or a set of
proposition set forth as an explanation for the occurrence
Of some specified group of phenomena either asserted
merely as a provisional Conjecture to guide some
investigation of accepted as highly probable in the light of
Established facts.
Hypothesis states what someone looking for and it is a
proposition Which can be put to a test to determine its
validity.3
Basic concept in the context of testing of hypothesis need
to be explained null Hypothesis and alternative hypothesis.
If someone is to compare method A with Method B about
is superiority and if someone proceed on the assumption
that both Methods are equally good, then this assumption
is termed as null hypothesis.
As Against this, someone may think that the method A is
superior or the method B is Inferior, someone then stating
what is termed as alternative hypothesis.
The null Hypothesis is generally symbolized as Ho and the
alternative hypothesis as H1.
Alternative hypothesis is usually the one which wishes to
prove and that null Hypothesis is the one which someone
wishes to disproved.
Thus, and null hypothesis
Represents the hypothesis someone trying to reject and
alternative hypothesis
Represents all other possibilities.

(1) There is no significant difference in operational

efficiency in between the Companies and in
between the years.

(2) There is no significant difference in profitability

trends in between the Company and in between the
years.

(3) There is no significant difference regarding

liquidity trends in between the Companies and in
between the years.
(4) There is no significant difference regarding
investment efficiency in between The companies
and between the years.

(5) There is no significant difference regarding credit

efficiency in between the Companies and in
between the years.

(6) There is no significant regarding overall financial

efficiency in between the Companies and between
the years.

(7) There is significant difference in operational

efficiency in between the Companies and between
the years.

(8) There is significant difference in profitability trends

in between the companiesIn between the years.

(9) There is significant difference regarding liquidity

trends in the companies in Between the years.
(10) There is significant difference regarding investment
efficiency in between the Companies in between the
years.

(11) There is significant difference regarding credit

efficiency in between the Companies in between the
years.

(12) There is significant difference regarding overall

financial efficiency in Between the companies in
between the years.
 (1) Hypothesis Based on “F” test.

When it is believed that two independent factors might

have an effect on the Response variable of interest, two
way classification “F” test is designed to the effect Of the
two factors simultaneously.
A null hypothesis is taken that the variance Appeared is
not significant, while an alternative hypothesis is also
taken that the Variance appeared is significant.
There after, the calculated values of “F” are Compared
with the table values.
If the calculated value of “F” is higher than the table
Value at pre-assigned level of (5%) significance, the null
hypothesis is rejected, Otherwise accept.

(2) Hypothesis Based on chi-square test.

For purpose of establishing casual relationship, regression

line of variable “Y” On variable “X” have been calculated
in the selected General Insurance Public Sector
Companies, because the relationship enables researcher in
prediction and control over
The future course of action.
Thereafter, the chi-square (X2) test has been applied to
find out whether the Difference between the actual
variables and computed variables, on the regression-line
In various selected General Insurance public sector
companies are significant or not.
The statement of null hypothesis is that the variables in
different general insurance Public sector companies under
study are not significant while the statement of Alternative
hypothesis is that the difference between the actual value
and computed Value of respective variables in different
general insurance companies under study are
Significant.
The chi-square test of significance. If the table value of
chi-square is
Greater than the computed value of chi-square (X2) is
shows that the difference Between actual and computed
value will be insignificant and the result will be as per Our
expectations and test holds good and the null hypothesis
will be accepted while
The alternative hypothesis will be rejected.
 8.REVIEW OF LITERATURE

Literature Review on Insurance Sector and penetration

General insurance.
1) Aditya Neath Jha, (2014) studied proper analysis of
various distribution channels in general insurance industry
in India has been done. Before privatization only
individual insurance agent was allowed to sell life
Insurance. But After the IRDA Act, distribution channel
further expanded.
2) Anand Thakur, (2013) studied critical review of
present marketing strategies in health insurance sector
has been availed and useful marketing ideas has been
suggested. Health insurance has vast potential in Indian
insurance market. But at present, there are limited
products and less awareness resulting in poor penetration.
3) Anshuja Tiwari, (2012) evaluated bancassurance
model of distribution of insurance services has been
discussed with reference to lift insurance industry.
Insurance sector was opened up in the year of 2000.
Before that only individual insurance agent was allowed
to sell life insurance products But catering the need of
industry IRDA introduced several other distribution
option like corporate agent, broker, direct selling and ban
assurance.
4) Arvind Kumar Singh, (2014) studied the current
scenario of life insurance sector has been taken up. At
present the market is moving rapidly and aggressively.
There is competition and force to more ahead. The
features of this expansion strategy is hunting for new
business looking up for potential and grabbing it.
5) Arup Mazumdar, (2011) analyzed the broking
system, challenges & opportunities are discussed and new
marketing concept as Relationship Model approach has
been argued. Indian insurance industry is growing fast
after privatization and moving ahead.
6) Arnika Srivastava, (2012) studied the review of life
insurance industry in the country has taken up. Life
insurance is the backbone of economy. LIC i.e. Life
insurance Corporation has monopoly in life insurance
sector. But after the IRDA Act, the sector is opened up for
private Sectors.
7) Bidyadhar Padhi, (2013) emphasized the role and
performance of private insurance companies in Indian
Insurance Sector after opening up of the sector in 1999
has been examined and studied. Before liberazation, LIC
& GIC had monopoly over the Sector. But in the period of
2001 to 2012. 23 private insurance companies in life
insurance sector and 28 private companies in General
insurance sector started the business.
8) Bhagabat Barik, (2014) A general study of general
insurance sector in India has been done. General
insurance is not merely an investment but it is a protective
tool. The protection of human being against calamities
and financial compensation in term of death is the basic
idea of general insurance. Insurance is the fastest growing
industry in the country.
9) B. Muthukrishnan, (2013) accessed health insurance
sector in India has been done. There is very less
penetration of health insurance. Only 3% of the
population has got some what health insurance.
Unfortunately health insurance is purchased only to save
income tax. The reason behind this is very poor level of
awareness about health insurance products.
10) B. S. Bodla, (2012) studied ICICI Prudential Life
Insurance Company is a leading life insurance company
in private sector. A study of this company has been done.
Quality service is the key for growth of any insurance
company. Studied the quality of service is accessed
through following parameters. 1) Reliability 2)
Responsiveness …….
11) B. Charumathi, (2012) reviewed the various factors
which are affecting the profitability of life insurance
companies in India have been studied and discussed.
Indian life insurance industry has been ranked 9th largest
market among 156 countries and 5th fastest growing life
insurance industry in the world.
12) D.Rajasekar, (2014) The SWOT analysis i.e.
strengths, weakness, opportunities and threats for ban
assurance has been studied. Ban assurance is a
distribution model for insurance products. World ban
assurance is a combination of bank insurance. Bank is a
vehicle which selling different types of financial products
like loans, PPF, Money Transfer, Share & debentures,
deposits, etc.
13) G. Karunanithi, (2012) took overall review of
performance and marketing strategies of LIC of India.
Before Privatization LIC has monopoly over the sector.
But after privatization now there 24 insurance companies
in life insurance market. It has eroded LIC share to 71%
of the market. LIC was not able to tap all the market and
more than 80% of the population in India.
 9.INSURANCE SECTOR IN INDIA

The Insurance sector also plays a vital role in the

economic development by providing Various useful
services like mobilizing savings, intermediating in
finance, promoting Investment, stabilizing financial
markets and managing both the social and financial risk.
Realizing the potential of insurance sector in mobilizing
the savings for the productive use And social safety,
Government has taken various steps to improve its
quality, reach and Popularity.
Insurance market in India was opened up for private
sector in 2000 with the Enactment of Insurance
Regulatory and Development Authority of India (IRDAI)
Act.
From
Just five state-owned companies, IRDAI now regulates 24
life insurance and 34 non-life
Insurance company.
Post-liberalization, the insurance industry in India has
recorded significant growth. In FY19,
Gross direct premiums of non-life insurers reached `1.7
trillion showing a year-on-year Growth rate of 12.86
%.The industry has been spurred by product innovation,
vibrant Distribution channels, coupled with targeted
publicity and promotional campaigns by the Insurers.
The market share of private sector companies in the non-
life insurance market Stands at 54.70 % in FY19 where as
in life insurance segment, private players had a market
Share of 33.76 % in new business in FY19.
Together her with banking services, insurance services
add about 7% to the country’s GDP.
A Well-developed and evolved insurance sector is a boon
for economic development as it Provides long-term funds
for infrastructure development at the same time
strengthening the Risk taking ability of the country.
The industry has seen a gradual growth over the last 15
years in terms of product innovation, Vibrant distribution
channels, penetration and density.
Considering its ever growing Population and demographic
dividend, it has a huge unexplored potential yet to be
Explored.

1.Road Ahead
India’s insurable population is anticipated to touch 750
million in 2020, with life expectancy
Reaching 74 years. Furthermore, Life Insurance is
projected to comprise 35% of total savingsBy the end of
this decade, as against 26% in 2009-10.
The future looks promising for the insurance industry
with several changes in regulatory.
Framework which will lead to further change in the way
the industry conducts its business and Engages with its
customers.
Demographic factors such as growing middle class,
young insurable population and growing awareness of the
need for protection and retirement
Planning will support the growth of Indian insurance
industry.
Insurance Regulatory and Development Authority of
India (IRDAI) regulates the Indian
Insurance industry to protect the interests of the
policyholders and work for the orderly Growth of the
industry.
IRDAI’s Mission:
To protect the interests of policyholders, to regulate,
promote and ensure Orderly growth of the insurance
industry and for matters connected therewith or incidental
Thereto.
..Frames regulations for insurance industry in terms of
Section 114A of the Insurance Act 1938
RegulationsProtection of policyholders’ interests
 10.Life insurance 🆚 General insurance

Life insurance is a contract between the policyholder and

the insurance company where the beneficiary is
designated to receive stated monetary benefits in case of
death of the insured person.
General insurance provides cover for risks other than life-
risk. It may ensure your health, car, house, property and
other valuables from accidents and disasters.
Let’s further discuss life insurance vs general insurance.

LIFE INSURANCE AND IT’S WORKING

Life insurance promises specific financial compensation
to the beneficiary in case of the demise of the insured
person.
To avail the insurance benefits, the policyholder is liable
to pay the premium amounts regularly and timely, as per
the policies of the chosen plan.
There are different types of life insurance policies
available in the market based on various requirements:
1. Term life insurance plan:
This type of insurance is the most preferred policy as it is
affordable and offers decent coverage. The policy offers
death benefit in the form of lumpsum sum assured, which
is provided to the beneficiary if the policyholder has a
sudden demise. There is also one more variant of term
insurance that provides maturity benefit along with death
benefit. It is known as Term insurance with Return of
Premium. As compared to the traditional plan, TROP is
much expensive in terms of premium.

2. Endowment plans:
Those seeking investment and insurance benefits in a
single policy choose to invest in endowment plans. Some
part of the premium is used for sum assured, while the
rest amount is used for investments.
In case of policyholder’s death, the nominee receives the
sum assured as a death benefit.
If the policyholder survives, he/she gets both maturity
amount as well as the accumulated bonus.
3. Money Back Plans:
This type of insurance works like an endowment plan, but
the only difference is that Money Back Plans pay a certain
amount at intervals. For instance, if you have purchased a
policy with a term period of 15 years. As per the terms of
the policy, you receive a certain amount at the end of the
5th and 10th year. You get the sum assured and
accumulated bonus at the end of the policy.
4. ULIP (Unit linked insurance plan):
Under ULIPs, the premium you pay is half invested in
insurance coverage, and the rest amount is invested in
market securities.
Based on your risk factor, the insurer diversifies your
fund in equity, debt, or hybrid assets. ULIPs have a lock-
in period of 5 years.
It allows partial withdrawal. It offers the benefit of life
cover and the opportunity to create a significant corpus
for your future.

5. Whole life insurance plan:

As the name suggests, Whole Life Insurance Plan offers
life cover to the policyholder for their entire life until the
premium is paid.
If the insured person passes away, the beneficiary receives
maturity benefit. Those who want to remain insured for
the whole life is an ideal plan.
GENERAL INSURANCE AND IT’S WORKING
General insurance is a general term used for all the
insurance plans that safeguard things other than life, such
as your health and valuables against theft, natural
disasters, accidents, etc.
Timely premiums are to be paid for the value of
protection chosen by you.
The insurance company is then liable to pay you the
assured sum if any damage or theft happens to the insured
entity.

1. Health insurance:
With healthcare costs rising rapidly, a health insurance
cover provides financial assistance by compensating for
the expenses incurred for any medical issue.
You can either buy individual cover or family floater
health insurance or senior citizen health insurance.
In case you think you are at risk of suffering from a life-
threatening disease in the future, you can also opt for
Critical Illness Insurance Policy as a standalone.
2. Home insurance:
This type of insurance protects your home and its
belongings against damages or loss due to man-made or
natural calamities. Some insurance policies also cover
temporary living expenses if your home is undergoing
renovation

3.Travel insurance:
Whether you’re a frequent traveler or love to go on an
international trip once in a year, you should always think
of buying travel insurance. It offers a host of coverage and
benefits such as compensation in case of loss of baggage,
valuables, loss of passport, missed flight, trip cancellation,
medical expenses, etc.
 11.GENERAL CONCLUSIONS

1. The profitability of the general insurance industry has

improved in the years of 2005-06 and 2006-07 of the
study period, because the ROI, which measures

The overall performance of the management and the profitability

of a company,Has improved sub Stanly in almost all the
companies under study.

(1) After the formation of IRDA private sector started entering

in general

Insurance industry in INDIA. The structure of the insurance

industry has Undergone a drastic change since liberalization in
the insurance sector.

(2) After DE tariffing introduced in insurance sector in the

various tariff Departments’ picked up momentum during
the year 2007-08.

To meet the Dynamic demands of the industry underwriters at

various levels of Operations were fully geared up.

A significant change during the year 2007-08 was made by

IRDA in respect file and use guidelines for large.

Risks. The pricing decontrol led to steep fall in premium rates
particularly In Fire and Engineering classes of business of all he
company under study.

(3) Management expenses were increased in most of the years

during the Study period.

(4) Investments in government security, infrastructure and

social sector and in

Other sectors formed by IRDA were not meet the IRDA

guidelines by all

The companies under study.

 12.SUGGESTIONS

With view to enhancing the profitability of all the general

insurance public Sector companies under study, the following
practical suggestions are made.

Regarding Outgo Control and Outgo Reduction:

1. The companies should have to cut the management expenses.

The companyShould have to meet the prescribed norms
formed by IRDA in concern of Management expenses.

2. To increase the productivity of branches, GIPSC should have

to increase Infrastructural facility so that common people can
reach to GIPSC easily. If The productivity starts to improve
the efficiency will improve.

3. GIPSC have to focus on the development of business in rural

areas with Innovative schemes to attract the rural clients. To
make the people of rural Area familiar with non-life insurance
the companies have to display insurance Schemes at various
public places.
4. The proportion of management expenses in all the companies
under study Should be kept within the prescribed norms.

5. To reduce the cost the GIPSC should make the settlements of

legal claims in Allotted timeframe and according to actual
loss or damage.

6. The ratio of expenses should be reduced by decreasing travel

allowance Expenses and the companies have to implement the
paperless office work to Decrease the cost.

7. For correct and exact settlement of lodge claims outgo the

appointment of Surveyors and advocates should be centralize
exclusively at the competent Authority level and there should
be reviewed periodically.

8. The legal case like motor-vehicles and accident related cases,

workers related Cases etc. should be settled in legal
framework and speedy disposal Compromise meeting should
be arranged by GIPSCs, so by that companies can Reduce the
claims outgo.
 13.REFENCE BOOKS

1. A. K. Chaudhary, Encyclopedic Dictionary of Accounting,

Parana Chandra (2007).

2. A. Mukherjee, M. Hani, Tata McGraw Hill Publishing Co.

Ltd., New Delhi (2007).

3. A. Vinayagamoorthy, “Commerce and Information

Technology”, Serials Publications, New Delhi (2007).

4. Ali Sajid, Mohamad, Ahmed Monchique “Insurance in

India” Regal Publications New Delhi (2007)

5. B. B. Tondon, A. K. Vashisth, “Financial Sector” Deep &

Deep Publication Pvt. Ltd. New Delhi (2002)

6. Bharat’s Hand Book of Insurance Bharat Law House Pvt.

Ltd. Ahmedabad (2004-05)
 7. B. S. Bodla M. C. Grog Kinds of Agency System /
Intermediaries (2007)

Insurance Management Principles & Practice, Deep & Deep

Publications

8. C. A. Chokes, “Insurance Principles and Practice” Popular

Prakash an, Seurat (1994-95)

9. C. R. Kothari, “Research Methodology” ,(2004)

10. Claire Selltiz, “Research methods in Social Science”

Holt, Rinehart and Winston (1962)

11. D. C. Sachet, V. K. Kapoor, Statistics Theory method

& Application Sultanchand &Sons, New Delhi.

12. D. R. Patel, “Accounting and Financial Management”

AtalPrakash an, Ahmedabad, 2002.

13. Edson S. Hendriks “Accounting Theory”,Khosla

Publishing House, New Delhi (1984)
14. Erich A. Helfert “Techniques of Financial Analysis”

15. Hingorani, Managing Accounting, Sultanchand, (1973

to 1990).

16. Insurance Compendium (1999-2000)

17. J. H. Patel, P. M. Joshi, N. C. Kasandra “Statistical

Analysis”, C. Jamadars & Co., Ahmedabad, 2004-05.

18. John Dobby, “Insurance Law in a Nutshell” West

Publication, America
 14.Biliogharpy

. REFERENCE BOOKS

. GIC LITERATURE

.JOURNALS AND PERIODICALS

. WEB SITES