OVERVIEW OF

INSURANCE
OVERVIEW OF
INSURANCE
PRESENTED BY:
(97) MAHARSHI PANCHAL
(105) KHYATI PARMAR
(108) BHAVITA PATEL
(110) HARSH PATEL
(112) KHUSHBOO PATEL
INTRODUCTION
 Insurance = Collective bearing of risk.

 Insurance, whether life or non-life,

provides people with a reasonable
degree of security and assurance that they will be
protected in the event of a calamity or failure of any
sort.

• It is a policy from a large financial institution that

offers a person, company, or other entity
reimbursement or financial protection against possible
future losses or damage.
CONTINUED……..
 Hence ,insurance is a form of risk management in
which the insured transfers the cost of potential
loss to another entity in exchange for monetary
compensation known as the premium.
 Therefore, everyone who wants to protect
themselves or someone else against financial
hardship should consider insurance.
DEFINITION
 Insurance is a contract in which a sum of
money is paid to the assured as consideration
of insurer’s incurring the risk of paying a large
sum upon a given contingency.
ORIGIN AND GROWTH OF
INSURANCE SECTOR
 Till end of FY 1999-2000, two state-run insurance
companies, namely, Life Insurance Corporation (LIC)
and General Insurance Corporation (GIC) were the
monopoly insurance providers in India.

 Under GIC there were four subsidiaries :

− National Insurance Company Ltd.
− Oriental Insurance Company Ltd.
− New India Assurance Company Ltd.
− United India Assurance Company Ltd.
 
CONTINUED……
 In fiscal 2000-01, the Indian federal
government lifted all entry restrictions
for private sector investors.

 Foreign investment insurance market was also

allowed with 26 percent cap GIC was converted into
India's national reinsure from December, 2000 .

 All the subsidiaries working under the

GIC umbrella were restructured as
independent insurance companies.
NATURE OF INSURANCE
 Sharing of risk
 Co-operative device
 Valuation of risk
 Payment made on contingencies
 Insurance is not gambling
 Insurance is not charity
CHARACTERISTICS OF
INSURANCE
 It is a contract of compensating losses.
 Premium is charged for the contract.
 It is contract of mutual benefit.
 Contract of good faith.
 It is a contract of distributing the losses of few
among many .
 It is a personal contract.
 Contract of indemnity.
 These contracts are unilateral.
FUNCTIONS OF INSURANCE
There are 3 basic functions:
− Primary function
− Secondary function
− Other function
 PRIMARY FUNCTIONS:
→ Risk bearing
→ Provision of protection
→ Provision of certainty
of payment at the time of loss
→ Evaluating risk
 SECONDARY FUNCTIONS:
→ Prevention of loss
→ Provision of capital
→ Ensuring welfare of the Society and large
industries
 OTHER FUNCTIONS :
→ Is a savings and investment tool
→ Medium of earning foreign exchange
→ Risk Free trade
FUTURE OF INSURANCE
SECTOR
 Indian insurance sector is likely to register
unprecedented growth of 200% and attain a size of
Rs. 2000 billion by 2009-10 .

 A private sector insurance business will achieve a

growth rate of 140% as a result of aggressive
marketing technique being adopted by them
against 35-40% growth rate of state owned
insurance companies.
 In rural markets, the share of private insurance
players would increase substantially as these have
been able to generate a faith among their rural
consumers.
 Still majority of the people in the developing
countries remains unaware of the functions and
benefits of insurance and it is for this reason that
the insurance sector is still to grow.
LIST OF TYPES OF
INSURANCE
 Auto insurance
 Home insurance
 Accidental/sickness and unemployment insurance
 Fire insurance
 Marine insurance
 Liability insurance
 Property insurance
 Health insurance
CONCLUSION
 Insurance is an integral part of any personal
financial plan. The type of insurance and the
amount of coverage you obtain all depends on your
unique financial and family circumstances, and
must be evaluated carefully.
 What you need to keep in mind is that you do not
want to be underinsured or over insured, which
means you have to do your homework before you
buy. And as with any type of financial product, you
must read the fine print and consult with a
competent advisor before insuring the product.