COLLEGE OF SCIENCE & ENGINEERING, AMBABAI, JHANSI (U.P.
A Winter Report on “General insurance” Submitted towards the partial fulfillment for the Master Degree of Business Administration 2007 – 2009 Under the valuable guidance of Mr. /Mrs./Ms…
Submitted to : Mr. Ajay Gangele
Submitted by : Megha batra
MEGAHA BATRA 470/30, Mirza compound sipri bazaar Jhansi (u.p)
I here declare that research project report ENTITLED “ROLE OF GENERAL INSURANCE” Submitted towards the partial fulfillment for master degree of business administration . this s my original work and it has not previously fromed the basic for the award of any other degree, diploma, fellowship or other similar titles.
TABLE OF CONTENT
• • • • • • • • • • • • • • • • • •
Preface Acknowledgement Introduction History of general insurance Research methodology Insurance policy in india Definition of general insurance Mission and vision of company Objective of general insurance Scope of general insurance Importance of general insurance Features of general insurance Major players of general insurance Performance of general insurance Finding and analysis Problem Suggestion Conclusion
The academic knowledge that we management student gather until and unless is applied practically is to come useful aspects is of no use. It has been the general phenomena of present business management world. It lays down the stress on the proper implementation of the theoretical knowledge into the real life practical aspects. Keeping in new this trend and to make ourselves aware of real life facts, the student of management institutes “Al-Barkaat Institute of Management Studies.
I found the project very interesting. By working on such a versatile project, I was able to understand the present satisfaction among the employee of Public & Private insurance.
I must especially record my thanks to this entire person with out whose support and motivation this project would have been referred into the present volume.
I would like to extend my heartiest thanks to Mr. Ajay Gangele ( H.O.D., M.B.A. Deptt.) at College of Science & Engineering, Jhansi for providing me an opportunity to work on this project.
I would also like to thank Mr. Nitin Shivhare for his valuable guidance in this project.
I wish to place my special thanks & gratitude to all my faculty members for all their support & co-operation.
A special word of thanks to all the customers who have availed of the facilities and services of general insurance.
Insurance in india started without any regulations in the nineteenth century of british colonial era. After the independence, the life insurance was nationalized in1956, and then
the general insurance business was nationalized in 1972, with 4 insurance business was nationalized in nationalized in1972, with 4 insurance companies operating under the supervision of general insurance corporation of india. It was expected that the subsidiary companies would provide effective competition to each other. For more than two decades,thesubsidiary companies have acquiredconsiderable experience, expertise and financial strength and have also established reasonable standards of coduct of business.
The general insurance corporation (GIC)was incorporated in November 1972 as a holing company with four subsidiaries. but this did not lead to any competition in general insurance as these four companies functioned as a cartel. LIC accounts for almost 10 percent of financial saving of households. It has a huge life fund ( premiums plus interest minus management expenses and claims). It has more than 2000 branch offices and 100 divisional offices. It directly employs around 1,25,000 people and indirectly, their are around 5,25,000 agents. But the lack of competition among other things, in insufficient responsiveness to customer needs, high cost, instability of marketing network, excessive lapsation of life polices, overstaffing, growth of restrictive staff practices and serious lags in technology.
As a result , insurance penetration in India is extremely low. Only about 80 million people have life insurance schemes. This is around 10 percent of the population . total premier for both life and general insurance is ground 2 percent of GDP( gross domestic product) compared to 4 percent of GDP in East Asia. There is no blending between insurance and prudential saving . LIC has also neglected annuities and pension schemes, with considerable potential among the self-employed, and only 100 million people are covered by provident fund or pensions. nor does LIC have low premium policies like term or whole life insurance. Instead, it concentrates on expensive endowment policies.
Where GIC is concerned , it has no urge to tailor policies to specific customer needs. House protection and accident insurance have beeb neglected because it is easier to market high value general insurance have been neglected because it is easier to market high value general insurance product are fire or marine insurance to large firms. As a result, the traditional general insurance products are fire, marine and automobile insurance. In india, premia from retail and personal insurance business has remained stuck at 8-10 percent tototal premia. In developed countries, the figure is 70 percent.
HISTORY OF GENERAL INSURANCE
HISTORY OF GENERAL INSURANCE
The entire general insurance business in India was nationalised by General Insurance Business (Nationalisation) Act, 1972 (GIBNA). The Government of India (GOI), through Nationalisation took over the shares of 55 Indian insurance companies and the undertakings of 52 insurers carrying on general insurance business.
General Insurance Corporation of India (GIC) was formed in pursuance of Section 9(1) of GIBNA. It was incorporated on 22 November 1972 under the Companies Act, 1956 as a private company limited by shares. GIC was formed for the purpose of superintending, controlling and carrying on the business of general insurance.
As soon as GIC was formed, GOI transferred all the shares it held of the general insurance companies to GIC. Simultaneously, the nationalised undertakings were transferred to Indian insurance companies. After a process of mergers among Indian insurance companies, four companies were left as fully owned subsidiary companies of GIC (1) National Insurance Company Limited, (2) The New India Assurance Company Limited, (3) The Oriental Insurance Company Limited, and (4) United India Insurance Company Limited The next landmark happened on 19th April 2000, when the Insurance Regulatory and Development Authority Act, 1999 (IRDAA) came into force. This act also introduced amendment to GIBNA and the Insurance Act, 1938. An amendment to GIBNA removed
the exclusive privilege of GIC and its subsidiaries carrying on general insurance in India.
In November 2000, GIC is renotified as the Indian Reinsurer and through administrative instruction, its supervisory role over subsidiaries was ended.
With the General Insurance Business (Nationalisation) Amendment Act 2002 (40 of 2002) coming into force from March 21, 2003 GIC ceased to be a holding company of its subsidiaries. Their ownership were vested with Government of India
METHODOLOGY This study based on the in-depth analysis of the general insurance of various companies. This study was carried out by studying the entire policies and plans in detail and by interacting with the peoples and were about to invest in them.
RESEARCH TYPE The research used here is the exploratory research, which provide insight into and comprehension of an issue or situation . it should draw definite conclusion only with extreme caution . the aim is to look for the patterns, ideas or hypothesis rather than testing or confirming a hypothesis.
RESEARCH DESING Qualitative research design has been used in this project, involve small no. of respondents and the results are not generalized to whole population.
SAMPLING Convenience type of sampling is used in this project. It is the sampling which is used when thaw selection of unit from the population is based on easy availability of sample size. Sample size of 100 taken for this project.
SOURCE OF DATA Primary data: the primary data is gathered by having a direct interaction with the people who are involved in general insurance or have invested for the same purpose.
Secondary data: the secondary data is gathered through internet, books on financial services of various institution.
DATA ANALSIS All the suggestion in this project have been given keeping in mind the plans and policies of general insurance in various public and private sector companies.
INSURANCE POLICY IN INDIA
INSURANCE POLICY IN INDIA
Insurance Policy India provides the clients with the details required for the coverages in the policy, date of commencement of the policy and their adopting organizations. It plays a important role in the Indian insurance sector.
The Insurance Policy India is regulated by certain acts like the Insurance Act(1938), the Life Insurance Corporation Act(1956), General Insurance Business (Nationalization) Act(1972), Insurance Regulatory and Development Authority (IRDA) Act(1999). The insurance policy determines the covers against risks, sometime opens investment options with insurance companies setting high returns and also informs about the tax benefits like the LIC in India. There are two types of insurance covers: 1. Life insurance 2. General insurance
Life insurance – this sector deals with the risks and the accidents affecting the life of the customer. Alongside, this insurance policy also offers tax planning and investment returns. There are various types of life Insurance Policy India: a. Endowment Policy b. Whole Life Policy c. Term Life Policy d. Money-back Policy e. Joint Life Policy
f. Group Insurance Policy g. Loan Cover Term Assurance Policy h. Pension Plan or Annuities i. Unit Linked Insurance Plan General Insurance – this sector covers almost everything related to property, vehicle, cash, household goods, health and also one's liability towards others. The major segments covered under general Insurance Policy India are:
a. Home Insurance
b. Health Insurance
c. Motor Insurance
d. Travel Insurance
DEFINITION OF GENERAL INSURANCE
DEFINITION OF GENERAL INSURANCE
What is General Insurance?
Insurance other than ‘Life Insurance’ falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary etc, personal insurance such as Accident and Health Insurance, and liability insurance which covers legal liabilities. There are also other covers such as Errors and Omissions insurance for professionals, credit insurance etc.
Non-life insurance companies have products that cover property against Fire and allied perils, flood storm and inundation, earthquake and so on. There are products that cover property against burglary, theft etc. The non-life companies also offer policies covering machinery against breakdown, there are policies that cover the hull of ships and so on. A Marine Cargo policy covers goods in transit including by sea, air and road. Further, insurance of motor vehicles against damages and theft forms a major chunk of non-life insurance business.
In respect of insurance of property, it is important that the cover is taken for the actual value of the property to avoid being imposed a penalty should there be a claim. Where a property is undervalued for the purposes of insurance, the insured will have to bear a ratable proportion of the loss. For instance if the value of a property is Rs.100 and it is
insured for Rs.50/-, in the event of a loss to the extent of say Rs.50/-, the maximum claim amount payable would be Rs.25/- ( 50% of the loss being borne by the insured for underinsuring the property by 50% ). This concept is quite often not understood by most insureds.
Personal insurance covers include policies for Accident, Health etc. Products offering Personal Accident cover are benefit policies. Health insurance covers offered by non-life insurers are mainly hospitalization covers either on reimbursement or cashless basis. The cashless service is offered through Third Party Administrators who have arrangements with various service providers, i.e., hospitals. The Third Party Administrators also provide service for reimbursement claims. Sometimes the insurers themselves process reimbursement claims.
Accident and health insurance policies are available for individuals as well as groups. A group could be a group of employees of an organization or holders of credit cards or deposit holders in a bank etc. Normally when a group is covered, insurers offer group discounts.
Liability insurance covers such as Motor Third Party Liability Insurance, Workmen’s Compensation Policy etc offer cover against legal liabilities that may arise under the respective statutes— Motor Vehicles Act, The Workmen’s Compensation Act etc. Some of the covers such as the foregoing (Motor Third Party and Workmen’s Compensation policy ) are compulsory by statute. Liability Insurance not compulsory by statute is also
gaining popularity these days. Many industries insure against Public liability. There are liability covers available for Products as well.
There are general insurance products that are in the nature of package policies offering a combination of the covers mentioned above. For instance, there are package policies available for householders, shop keepers and also for professionals such as doctors, chartered accountants etc. Apart from offering standard covers, insurers also offer customized or tailor-made ones.
Suitable general Insurance covers are necessary for every family. It is important to protect one’s property, which one might have acquired from one’s hard earned income. A loss or damage to one’s property can leave one shattered. Losses created by catastrophes such as the tsunami, earthquakes, cyclones etc have left many homeless and penniless. Such losses can be devastating but insurance could help mitigate them. Property can be covered, so also the people against Personal Accident. A Health Insurance policy can provide financial relief to a person undergoing medical treatment whether due to a disease or an injury.
Industries also need to protect themselves by obtaining insurance covers to protect their building, machinery, stocks etc. They need to cover their liabilities as well. Financiers insist on insurance. So, most industries or businesses that are financed by banks and other institutions do obtain covers. But are they obtaining the right covers? And are they
insuring adequately are questions that need to be given some thought. Also organizations or industries that are self-financed should ensure that they are protected by insurance.
Most general insurance covers are annual contracts. However, there are few products that are long-term.
It is important for proposers to read and understand the terms and conditions of a policy before they enter into an insurance contract. The proposal form needs to be filled in completely and correctly by a proposer to ensure that the cover is adequate and the right one.
MISSION OR VISION
MISSION OR VISION
VISION “To be a leading global reinsurance and risk solution provider”
MISSION • • • • To achieve our vision by Building long-term mutually beneficial relationship with business partners. Practicing fair business ethics and values. Applying “state –of –art” technology, processes including enterprise risk management and innovative solutions. • • Developing and retaining highly motivated professional team of employees. Enhacing proftabilityand financial strength befitting the globel position.
CORE VALUE • • • • • Trust andmutual respect Professional excellence Integrity and transparency Commitment Responsive service
OBJECTIVE OF GENERAL
OBJECTIVE OF GENERAL INSURANCE
General insurance provide much-needed protection against unforeseen events such as accidents, illness, fire, burglary etc unlike life insurance is not meant to offer returns but is a protection against contingencies. Almost everything that has a financial value in life and has a probability of getting lost, stolen or damaged, can be covered through general insurance policy. Property (both movable and immovable), vehicle, cash, household goods, health, dishonesty and also one’s liability towards other can be covered under general insurance policy. under certain acts of parliament, some types of insurance and public insurance have been made compulsory. Major insurance policies that are covered under general insurance are:-
• • • •
Home insurance Health insurance Motor insurance Travel insurance
General insurance provides much needed protection against unforeseen events such as accidents, illness, fire, burglary etc. unlike life insurance, general insurance is not meant to offer returns but is a protection against contingencies. Almost everything that has a
financial value in life and has aprobability of getting lost, stolen or damaged, can be covered through general insurance.
Property (both movable and immovable), vehicle, cash, household goods, health, dishonesty and also one’s liability towards other can be covered under general insurance policy. Under certain acts of parliament, some types of insurance like motor insurance and public liability insurance have been made compulsory.
SCOPE OF GENERAL INSURANCE
SCOPE OF GENERAL INSURANCE
Fire section:- The Insurance Policy broadly covers losses due to fire, lightning, explosion and implosion, aircraft damage, riot, strike, malicious damage and terrorism, storm, tempest, flood and inundation, impact damage, subsidence and landslide/rockslide, bursting and/or overflowing of water tanks, apparatus and pipes, missile testing, leakage from automatic sprinkler installations and bush fire.
Marine section:- The policy provides cover to cargo against risk of damage when it is exposed to maritime perils during transportation. The policy covers two categories of risk, which are Standard risks of transport and Exceptional risks of transport (war, strike or similar). When these risks occur, they may result in either total loss or partial losses. Partial losses can be of two types • •
Burglary Insurance Signs Insurance
• • • • • • • • •
Fidelity Guarantee Video & Television Insurance Public Liability (Professional Insurance) Insurance of Money Suhana Safar Policy Householder Insurance Jeweler’s Block Insurance Banker’s Indemnity Insurance Sampoorna Suraksha Bima Overseas Mediclaim Policy Mediclaim Policy Group Mediclaim Policy Critical Illness Insurance Policy Universal health Insurance Jan Arogya Bima Policy Personal Accident Insurance NRI Accident Policy Personal Accident Insurance for Student Raj Rajeshwari Mahila Kalyan Yojna Bhagyashree Child Welfare Policy Amartya Shiksha Yojna Policy Traveling Executives Policy Carriers Legal Liability Insurance Directors and Officers Liability Policy Lifts Insurance All Risks Insurance X-Ray Insurance Special Contingency Policy for Pagers/Cellular phones Workmen’s Compensation Insurance Glass Insurance
• • • • • • • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • •
Glass Insurance Special Contingency Policy Yathra Raksha Policy Baggage/Luggage (Travelers) Insurance Shopkeeper’s Insurance L.P.G. Traders Combined Insurance Office Package Policy Policy for Reinsurance/Insurance Brokers Pravasi Bima Yojna Worker’s (Accident) Welfare Policy Engineering Insurance CAR Insurance Erection All Risks Insurance & Storage Cum Errection Insurance Contractor’s Plant & Machinery Insurance Machinery Break Down Insurance Boiler & Pressure Plant Insurance Electronic Equipment Insurance Loss of Profit Insurance following machinery breakdown & following Boiler Explosion Detoriation of stocks (Potatoes) Civil Engineering Completed Risks Insurance Industrial All Risks Insurance
• Rural Insurance Section
• • • • • • Farmers Package Insurance Cattle Insurance Sheep & Goat Insurance Dog Insurance Poultry Insurance Animal Drawn Vehicle Insurance
• • • • • • •
Kisan Agricultural Pumpset Insurance Sericulture (Silk worm) Insurance Honey Bee Insurance Horticulture/Plantation Insurance Janta Personal Accident Gramin Accident Policy Inland fresh water fish Insurance Pig Insurance Scheme Camel Insurance Horse/Pony/Mule/Donkey/Yak Insurance Scheme Elephant Insurance Rabbit Insurance Scheme Duck Insurance Scheme Group Personal Accident Insurance Package Insurance for tribal Cycle Rickshaw Insurance Pedal Cycle Insurance Lift Irrigation/Sprinkler Installation Insurance
• • • • • • • • •
• • • • •
General Regulations Private Car Motorized Two Wheelers Commercial Vehicles Vehicles used for carrying Passengers for Hire or Reward (Class-C)
Particular Average - The term Particular Average refers to physical damage and loss as well as to any loss in weight or quantity suffered by the insured goods during transit. General Average - General Average is a risk specific to marine transport. Therefore, if a vessel is in danger and the only way to prevent the vessel from striking is to throw one persons cargo overboard, then the rest of the cargo owners and the vessel owner will make up the loss to that person in proportion to the value of their goods in relation to the total amount saved. Risks of War,Strike etc.
IMPORTANCE OF GENERAL INSURANCE
IMPORTANCE OF GENERAL INSURANCE
To the extent that general insurance products tend to be contingent in nature, their pricing tends to be unique. This uniqueness arises from the fact that the cost based on past experience . the ingredients of general insurance product pricing are claims cost, business acquisition cost, management experience and reasonable profit. In other words, pricing the general insurance products is fraught with uncertainty. It is in this context that regulation has to be carried out. It is impossible within the scope of this study to make any comprehensive prescriptions about the regulation of general insurance product pricing. But a few general principles can be enunciated. One of these is that , to the extent possible, standardization should be avoided - unlike in life insurance – because it comes in the way of product innovation . of course, it is entirely possible that in the absence of standardization, less than scrupulous companies may offer what is basically the same product with only cosmetic changes. The prevention of this calls for striking a fine balance by regulatory and ,market forces, with the latter depending on land equity.
Although the term competiton policy has become fashionable, no one really has a very precise idea of what it is or ought to be . for one thing, it doesn’t make much sence to talk about the subject as if there can be just one policy for the economy as a whole. The closest one can come to this is by identifying certain minimum requirements, after which
the details for different industries have to befilled in separately. These minimum requirement ought to consist of free entry and exit , non – discrimination and freedom to fix prices. Once these basis conditionare fulfilled, the detailed for different industries would necessarily have to differ in as much as it would be wrong and counter- productive to have the same set of detailed rules for , say, aviation , as for banking or insurance. The telecoms experience shows that, if a dispute arises between a regulator and a service provider, the courts have to intervene. This is not a very happy state of affairs because courts in india ofthen fail to distinguish between equity and efficiency as these apply to large bodies.they end up applying the same principles of equity as they would to individuals to large firms, while failing to applying principles of efficiency in a like manner. The result can be – and indeed have been unpredictable. The government should, therefore, consider constituting a system which is a variation on arbitration. Such a system, during the period transition, can take care of these issues in a superior manner. All that needs to be done is to constitute a body whenever the need arise with a member each from parliament, the ministry in question, the judiciary, the cosumer forums and, of course, an economist whop does not work for the government. Each appointee should be separately recommendation giving full reasons, Justas a court would and the parties to the dispute should agree beforehand that these recommendations will be binding. If at all there is afurther disoute, it can be governed by the usual laws of arbitration. The advantages of such a system are obvious. To startwith ,it would neutralize ideological biases in the dispute settlement body. The need for this in a system in
transistion is critical for otherwise, biases can inadvertently crep in. second, it would be able to dispose off the matter far more quickly than the civil system. Third, it would have the benefit of the mature judgement of experts with very different perspectives. The need for different perspectives can hardly be over-emphasised. Finally , beacauses each appointee would have to be acceptable to each disputant, it would have credibility. This is especially important in a context where so much is at stake. Much depends on how well the underlying institutional principles of a market-basesd economy have been understood by the governmemt and what it intends to do to bring about the necessary institutional changes. So far the evidence on both aspects is scant. In balance, though, it does seem as though the institutional aspect has been neglected. One key institutionalfactor is the ability ti draw up prpper contracts and the capability to enforcement if contracts are either not performed or only partially performed . the lesson is obvious: unless we bring in properly qualified lawyers to draw up contracts, chaos will result even in a developed economy. There is a further problem. Given the way the legal system works here, parties to a contract often have to make a judgment at some point during or afterits exective about whether it will be cheaper to live with part-performance by the other party. This,indeed,is what lies at the heart of the ‘settled-out-of-court’ solutions to disputes. While this may sound fine, it impose an overall economic cost which goes uncounted. worse, it is passed on to persons who were not party to the contract .orissa power will be a good example of how to draw up good contracts is easily solved.
All that india has to do is to open up two importantservice businesses to foreign competiton . one is legal service, the other is accountancy service. This will force Indian legal and accountancy firms to catch up- which they will, indouble – quick time,when the find business slipping away.
FEATURES OF GENERAL INSURANCE
FEATURES OF GENERAL INSURANCE
• • • • Features of india general insurance market Low market penetration. Ever- growing middle class component in population. Growth of consumer movement with an increasing deamand for better insurance products. • • Inadequate application of information technology foe business. Adequate fillip from the governmemt in the from of tax incentives to the insured, etc. • India is one of the least insured countries but thepotential for further growth is phenomenal. • Rates of claim settlement were earlier in india the highest in the world , 70 percent in general. • • • • Insurance, compared to around 40 percent internationally. Non-life premium has a 0.71 percent share of GDP. General insurance (private companies ) have earned around Rs.1000-cr income. Haif of the current demand for come from the corporate segment.
Benfits of general insurance • Insurance is the instrument of security, saving and peace or mind. It provides several benefits by paying a small amount of premium toan insurance company. • • • • • • Safeguards one;s assets. Peace of mind-in case of financial loss. Encourage saving. Tax rebate. Protection from the claim made by creditors. Security against a personal loan, housing loan or other types of loan.
MAJOR PLAYERS IN THE INSURANCE SECTOR
MAJOR PLAYERS IN THE INSURANCE SECTOR
NON –LIFE INSURANCE COMPANIES OPERATING IN INDIA
NAME Agricultural insurance co. Bajaj Allianz general ins.co.ltd Cholamandalam MS general insuranceco. Ltd. Export credit guarantee co. HDFC chubb general insuraneco.ltd. ICICI Lombard general insuranceco.ltd. IFFCO- tokio general insurance co.ltd. National insurance co. ltd New india assurance co. ltd Oriental insurance co. ltd. Reliance general insurance co.ltd. Royal sundaram alliance genaral insurance co. ltd. Tata AIG general insurance co. ltd. United india insurance co.ltd.
SHARE HOLDING bank and public ins co. privately held Privately held public sector privately held privately held privately held public sector public sector Public sector privately held Privately held Privately held public sector
ROLE AND FUTURE OF GENERAL INSURANCE
Role and future of general insurance
The general insurance industry has an enviable track record among public sector units. It has a consistent profit and dividend paying record accompanied by steady growth in its financial resources. Through investments in the government sector and socially-oriented sectors the industry has contributed immensely ti the nation’s development. The industry is recognized as one of the largest financial institution in the country. The ventures initiated by the industry in the areas of mutual fund, housing fiancé has done exceedingly well in recent years. To protect the country’s foreign exchange reserves, the reinsurance arrangememt are so organized that maximum retention is made possible with in the country while at same time protecting interests of the policy holders. The GIC’S inwards reinsurance wing, called the SWIFT, maximizes the foreign exchange balance by acting as an international insurer accepting risks from allover the globe.
India vs. global market
India,s insurance penetration is low at 1.95 percent and ranks 51 in the world. In premium collection the record is better, at 23rd position. The ratio of premium collected to gross domestic product is mere 0.58 percent. Compared with an average of 7.1 percent in most industrialized countries. India is still at a very nascent stage with an $8-9 (Rs.400-500) percapital expenditure on insurance, out of which $2to $2.5(Rs.100-500) will bo on geneal insurance. This was primarily because in india non-life insurance is not considered important and people perceive it as an unnecessary expenditure. Non – life insurance premium at a percentage of GDP is estimated at 2.70 japan, 2.55 for south korea, 1.89 for Malaysia, 1.62 for Singapore, 1.38 for Taiwan, 1.23 for Thailand, 0.86 for the Philippines, 0.68 for china , 0.66 for Indonesia, and 0.51 for Pakistan.
Future of general insurance
the india insurance sector will register a high growth rate in the future years to come, says the report prepared by Fitch Ratings. This will be due to the innovation products, better distribution network, better services coupled with other never-before changes that have taken place in the insurance sector. The report laid stress on branding, customer service and tailor made products that will become vital to bring down costs in the future. Also data warehousing, ensuring effective cross selling will grown in importance to exploit the largely unexploited market.
PERFORMANCE OF INSURANCE ENTERPRISES
PERFORMANCE OF INSURANCE ENTERPRISES Enterprise year of incorporation
• • • • • • Life insurance corporation of india 1956 General insurance corporation of india 1972 National insurance company ltd.1906 New india assurance company ltd. 1919 Oriental insurance co. ltd.1947 United india insurance co. ltd. 1938
General insurance coropation of india
the general insurance corporation india (GIC) was set up as a govt. company under section 9(1) of the general insurance business (nationalization) act, 1972 (GIBNA) for the purpose of super intending, controlling and carrying on the business of general insurance. It was incorporated on22nd nov, 1972 under the companies act, 1956 as a private limited company. After a process of mergers amongst india insurance companies, fourcompanies were left as fully ownedsubsidiary companies of GIC viz. national insurance co. ltd. ( Kolkata), new india insurance co. ltd.(Mumbai), oriental insurance co. ltd.(new delhi) and united india insurance co. ltd.( Chennai). The company was authorized to carry out the general insurance business in the country through its four subsidiaries . GIC mainly underrights aviation insurance business of air india and indian airlines, besides administering the crop insurance. After the insurance regulatory 7 development authority act (1999) came into force w.e.f. 19th april, 2000, necessary amendments were made to GIBNA and insurance act,1938 for removing the exclusive rights of GIC and its
subsidiaries for carrying on general insurance business in india. During nov, 2000, GIC was renotifiedas the Indian reinsurer and its supervisory role over subsidiaries hasended. Moreover, with the notification of general insurance business (nationalization) amendment act,2002 coming force w.e.f. 21-03-2003, the GIC has ceased to be a holding company of itssubsidiaries and the ownership of subsidiaries has vested with govt. of india. GIC as such functions with in the regulations of the following major acts. 1. The companies act, 1956 2. Insurance act, 1938 3. General insurance business (nationalization) act,1972.
ANALYSIS AND FINDINGS
Que: Which type of Insurance are you aware about?
Investm ins ent 4% None of these 0% Marine ins 0% All 4%
General ins 36%
Life ins 56%
Que: What item would you like to get insured?
Que: Which company do you prefer?
Que: General Insurance usually covers?
Que: Why do go for General Insurance?
Que: Do you think people really understand the advantages of General Insurance?
Que: Do you think General Insurance as a service is a having humanistic touch?
Que: Does government pressurize public for general insurance?
Que: how much role the physical evidence has to play in the sales process of general insurance policy?
Que: Do you now where the policy amount of General Insurance has been invested?
Que: can you state about claim settlement mechanism of General Insurance company?
Economic: amt of premium paid by the employees is more which is not affordable by rural area people.
Wide area courerage: it has wide are coverage which makes people confused in choosing the policy
It premium is not paid on time then policy lapse.
People think that it is not compulsory to insure things because they give importance Only to life insurance.
Lack of knowledge: people don’t have enough knowledge about the policies. Procedure to get insured is too tough.
• • • •
Make people aware of general insurance by using various market stratergies. After the expiry of premium sufficient time should be allotted to them . General insurance should be categorized for easy access. Red_ tapism should be reduced.
COLLEGE OF SCIENCE & ENGINEERING, JHANSI (U.P.) SUBJECT: “GENERAL IN SURANCE IN JHANSI REGION” DATE : NAME OF PERSON: DESIGNATION : PHONE NO : E-MAIL ID : QUE. Which type of Insurance are you aware about ? • • • • • • Life insurance General insurance Marine insurance Investment insurance None of these All over ….. ( ( ( ( ( ) ) ) ) )
QUE. What item would you like to get insured? • • • • • Home Vehicle Home appliances Jewellery None of these ( ( ( ( ( ) ) ) ) )
QUE. Which company do you prefer? • • • • • National Insurance Co. General insurance co. Reliance General Insurance co. ICICI Lombard Other …………. ( ( ( ( ) ) ) )
QUE. General insurance usually covers • • • • • Vehicle insurance Fire insurance Theft insurance Flood insurance Others ………. ( ( ( ( ) ) ) )
QUE. • • •
Why do people go for General Insurance ? Self awareness ( ) Imposed restriction by government ( ) For risk cover ( )
QUE.Do you think people really understand the advantages of General Insurance? • Yes ( ) • No ( ) • Can’t say ( ) • QUE. Do you think General Insurance as a service is having humanistic touch ? • • • Yes ( ) No ( ) Can’t say ( )
QUE Does government pressurize public for General insurance ? • • • • Agree ( ) Strongly agree ( ) Disagree ( ) Strongly disagree ( )
QUE.How much role the physical evidence has to play in the sales process of General insurance policy? • • • No role to play ( ) Great role to play ( ) Can’t say……..
QUE .Do you know where the policy amount of general insurance has been invested • • Yes ( ) No ( )
QUE.Can you state about claim settlement mechanism of general insurance co. • • • • Poor Average Good Excellent ( ( ( ( ) ) ) )
General insurance industry grew by 20 per cent in the first five months of 2006-07 due to strong performance by private players. The 12 non-life players collected Rs 10,427 crore in premium during April-August 2006 as compared to Rs 8,668 crore in the corresponding period last year.
Market leader New India's market share has come down from 21.56 per cent a year ago to 20.07 per cent while private player ICICI Lombard's market pie has increased from 8.12 per cent to 12.31 per cent during the same period. At present, the eight private players together have about 35 per cent of the market share.
New India Assurance (NIA) grew business by 11.95 per cent to collect Rs 2,093 crore in premium in April-August this fiscal. NIA was followed by Oriental Insurance Company, which clocked 11.63 per cent growth in business at Rs 1,667 crore and a market share of 15.99 per cent. National Insurance saw a flat growth and collected Rs 1,542 crore in premium and a 14.79 per cent share of the market. United India grew premium income by 7.19 per cent at Rs 1,488 crore and a market pie of 14.27 per cent.
Competition between eight private and four public sector general insurance companies may further intensify after detariffing from January 2007, since insurers would have a free hand in fixing product prices
1. Khan M.Y.; Financial Services. 2. Mishra M.N; Insurance Principal & Practice. 3. L.M. Bhole; Financial Markets and Institutions.
1. www.iciciprulife.com 2. www.financialexpress.com 3. www.insuranceguide.com 4. www.irdaindia.com 5. www. insuremagic.com 6. www.indiacore.com 8. www.researchandmarkets.com 9. www.ingvysyalife.com 10. www.hdfcinsurance.com 11. www.reliancelife.co.in 12. www.metlife.com 13. www.allianzbajaj.co.in 14. www.sbilife.co.in