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Insurance Industry
a financial service for collecting the savings of the
public and providing them
with risk coverage.
The main function of
Insurance is to provide
protection against the possible
chances of generating losses

the marketing of Insurance services with the aim to
create customer and generate profit through
customer satisfaction.
is the combination of marketing activities that an
organisation engages in so as
to best meet the needs of its targeted market.

"contract of insurance" is an agreement

whereby one undertakes for a
consideration to indemnify another
against loss, damage or liability arising
from an unknown or contingent event
Any contingent or unknown event,
whether past or future, which may
indemnify a person having an insurable
interest, or create a liability against
him, may be insured against

Every person has an insurable interest
in the life and health:
(a) Of himself, of his spouse and of his
(b) Of any person on whom he depends
wholly or in part for education or
support, or in whom he has a pecuniary
(c) Of any person under a legal
obligation to him for the payment of
money, or respecting property or
services, of which death or illness might
delay or prevent the performance; and
(d) Of any person upon whose life any
estate or interest vested in him depends.

A policy is either open, valued or

An open policy is one in which the
value of the thing insured is not
agreed upon, but is left to be
ascertained in case of loss.
A valued policy is one which
expresses on its face an agreement
that the thing insured shall be valued
at a specific sum.
A running policy is one which
contemplates successive insurances,
and which provides that the object of

Property and Casualty Products

Automobile coverage for personal injury
(Personal Injury Protection or PIP, un/underinsured motorist bodily injury), automobile
damage sustained by the insured (collision,
comprehensive, un/under-insured motorist
property damage), and liability to third parties
for losses caused by the insured (bodily injury
liability, property damage liability).
Homeowners insurance covers the house and
other structures on the property, as well as
personal possessions inside the house, against a
wide variety of perils including windstorms, fire
and theft. Coverage for flood and earthquake

Workers compensation coverage for benefit payments to

employees for work-related injuries, deaths and diseases,

regardless of fault.
Commercial multiple peril package coverage including
most property and liability coverage except workers
compensation, automobile insurance, and surety bonds.
Professional liability covers physicians, surgeons,
dentists, hospitals, engineers, architects, accountants,
attorneys, directors, and other professionals from liability
arising from error or misconduct in providing or failing to
provide professional service.
Fire and allied lines coverage for fire, windstorm, hail,
and water damage (but not floods).
Inland marine coverage for property that may be
transported from one place to another, as well as bridges,
tunnels and other instrumentalities of transportation.
Ocean marine coverage for ships, cargos, and freight.

Accident and health covers loss by sickness or

accidental bodily injury, including disability income

insurance and accidental death and
dismemberment insurance.
Fidelity insurance protects employers for loss due
to embezzlement or misappropriation of funds by
an employee.
Surety insurance a three-party agreement in which
the insurer agrees to pay a second party or make
complete an obligation in response to the default,
acts, or omissions of an insured.

Calculating return (5 ways)

Total return: good for one-off, immediate &

definite return projects

Compare percent difference between returns

and costs with market interest rate

Payback: useful for comparing similar

investments with similar lifetimes

How long will it take for project to cover costs

and start earning?

What will assets be worth and what will they
earn after the payback period?
Ex: Farm, office building, bus


Calculating return: 5 ways (cont.)

Accounting rate of return
Good for productive investments with regular
returns, analogous to interest rates
Discounted present value of cash flow
For investments with different patterns of

earning over time

The amount of money that would need to be
invested now, at compound interest at current
or expected interest rates, to generate the
future asset or income.


Calculating return: 5 ways (cont.)

Internal rate of return
The rate of compound interest that would yield
the expected return to an investment
Discounts returns in the future because tied-up
capital could be used & earning elsewhere
Can be used to compare alternative
investments; compare expected returns
w/market returns; estimate present value of
future returns