Basics of Insurance

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Contents:

Life insurance General insurance Insurance market scenario Emerging trends in insurance
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Learning Insurance
What Is Insurance

Insurance is concerned with protection of economic value of assets.Tangible assets are human beings, house, furniture, motor cycle etc.Intangible assets are liabilities
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History of Insurance It started from Lloyd’s coffee house London  First policy issued in England in 1583  In India first policy issued in 1870  4 .

History of Insurance LIC of India formed in 1956 after nationalization of life insurance Business of 245 private insurance companies  General insurance business of 107 insurance companies was nationalized in 1972 & four public sector General Insurance Companies were formed  5 .

Marine insurance 3.Miscellaneous insurance 6 .Fire insurance 2. General insurance General insurance is further classified:1. Life insurance B.Classes of Insurance A.

Motor insurance 2.Engineering insurances etc. 7 .Mediclaim insurance 3.Householders insurance 4.Shopkeepers insurance 5.Miscellaneous Insurances:1.

Means financial interest 2. not applicable in life policies 8 .Insurable interest.Utmost good faith.Indemnity.Actual compensation of loss.Fundamental Principles of Insurance 1.Greater duties of faith on proposer & insurer 3.

Contribution-Sharing of loss by all insurers. 5.Fundamental Principles of Insurance 4. 9 .Subrogation-Transfer of rights of insured to insurer.Not applicable in life policies.Not applicable in life policies.

New India assurance company ltd 3.Market Scenario before Irda Act 1999 Life insurance company 1. LIC of India General insurance companies 1.Oriental insurance company ltd 4.National insurance company ltd 2.United India insurance company ltd 10 .

Privatization & Globalization (Competition between public sector & private sector) 11 .Market Scenario after Irda Act 1999 Stage of Liberalization.

HDFC Standard Life Insurance Company Ltd 4.Max New York Life Insurance Company Ltd 12 .Birla Sun Life Insurance Company Ltd 3.Bajaj Allianz Life Insurance Company Ltd 2.Life Insurance Companies 1.ICICI Prudential Life Insurance Company Ltd 5.ING Vysya Life Insurance Company Ltd 6.

Tata AIG Life Insurance Company Ltd 11.Met Life India Insurance Company Ltd 8.Life Insurance Companies 7.SBI Life Insurance Company Ltd 10.Kotak Mahindra Old Mutual Life Insurance Company Ltd 9.Reliance Life Insurance Company Ltd 13 .

Bharti Axa Life Insurance Company Ltd 16.Sahara India Life Insurance Company Ltd 14.Shriram Life Insurance Company Ltd 15.Aviva Life Insurance Company Ltd 13.Life Insurance Companies 12.Life Insurance Corporation Of India 14 .

IDBI Fortis Life Insurance Company Ltd.Life Insurance Companies 17.Future Generali India Life Insurance Company Ltd. 19. 15 .Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd. 18.

Aegon Religare Life Insurance Company Limited. Ltd. 21. Edelweiss Tokio Life Insurance Co. 24.India First Life Insurance Company Ltd. 22. Ltd. DLF Pramerica Life Insurance Co. Ltd 16 .Life Insurance Companies 20. Star Union Dai-ichi Life Insurance Co. 23.

General Insurance Companies
1.Bajaj Allianz General Insurance Company Ltd 2.Icici Lombard General Insurance Company Ltd 3.Iffco Tokio General Insurance Company Ltd 4.Reliance General Insurance Company Ltd 5.Royal Sundaram Alliance Insurance Company Ltd
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General Insurance Companies
6.Tata AIG General Insurance Company Ltd 7.Cholamandalam Ms General Insurance Company Ltd 8.HDFC-ERGO General Insurance Company Ltd 9.Star Health & Allied Insurance Company Ltd

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General Insurance Companies
10.Export Credit Guarantee Corporation Ltd 11.Agriculture Insurance Company Of India Ltd 12.National Insurance Company Ltd 13.New India Assurance Company Ltd
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United India Insurance Company Ltd 16.Oriental Insurance Company Ltd 15. Apollo Munich Health Insurance Company Ltd 20 .General Insurance Companies 14.

General Insurance Companies 17. 21 .Max Bupa Health Insurance Company Ltd.SBI General Insurance Company Ltd. 21. 19. 23.L & T General Insurance Company Ltd. Ltd.Bharti AXA General Insurance Company ltd. Universal Sompo General Insurance Co.Raheja QBE General Insurance Company Limited 22. 24.Shriram General Insurance Company Limited 20.Future Generali India Insurance Company Ltd 18.

Market Intermediaries Who procure the insurance business: Agents  Corporate agents  Insurance brokers  Banks (Bancassurance) 22 .

Other market Intermediaries Surveyors Who assess the loss in Non-Life Insurance Claims  TPA ( Third Party Administrators) Who provide the claim settlement service in health insurance policies  23 .

Basic Life Insurance Policies Term assurance policy     Provides death cover only during policy period Premium is low No refund of premium Sum assured paid on death 24 .

Whole Life Policy      Death cover only Period is not specified Premium is low & paid during life time No refund of premium Sum assured paid on death 25 .

Endowment Assurance Plan     Covers death & survival benefits Sum assured paid on death or on maturity of policy Period of policy at the option of proposer Most common plan 26 .

Money Back Policy  Available for different periods Covers death & survival benefits Lump sum paid periodically Full sum assured paid on death 27    .

Unit Linked Insurance Policies (ULIP) Each premium split into units and risk premium for life cover  Units are priced as per current market value  Sum assured & current value of units paid on death as per policy condition  Current value of units paid on maturity  28 .

Annuity (Pension) Plans These are pension plans  Immediate annuity or deferred annuity starts at specified age periodically  Single premium paid for immediate annuity  Premium in installments paid for deferred annuity  Life cover simultaneously  29 .

Policies available exclusively for women & children Additional cover for major diseases available Guaranteed bonus policies available 30 .A.Important aspects of Life Insurance Policies      Policies available with bonus or without bonus Death due to accidents can be covered for additional S.

Important aspects of Life Insurance Policies Policies available for limited period premium payment & risk for longer policy period  Premium can be paid in monthly. yearly installments  31 . quarterly. half yearly.

Important aspects of Life Insurance Policies Loans are available on policies  Lapsed policies can be revived  Policy can be surrendered after three years  Nomination & assignment can be done  32 .

General Insurance Policies Fire policies  Marine policies  Motor vehicle policies  Personal line policies  Health insurances  Liability insurances  Rural insurance policies  Engineering insurances  33 .

Industrial & manufacturing risks 34 . shops.Fire Standard fire policy- Policies Common policy for buildings.offices.

FIRE POLICIES-SPECIAL POLICIES Industrial & Manufacturing clients Floater policy  Declaration policy  Floater declaration policy  Reinstatement value policy  Industrial all risk policy  Consequential loss policy  35 .

Marine Hull Policy  Policy insures marine ships. rail. 36 .steamers etc. fire etc.Marine Policy Marine Cargo Policy  Policy insures physical loss or damage to the goods in transit by road. water caused due to accidents. air.

Special Marine Cargo Policies For business. industries. importers and exporters  Annual policy  Special declaration policy  Open cover  Open policy 37 .

38 .Motor Vehicle Policies  Liability only motor policy Mandatory motor vehicle policy  Package motor policy Motor policy additionally insures loss and damage of the motor vehicle due to theft and accidents along with third party risk is called a package motor policy.

Personal Line Insurances House holders policy  Shop keepers policy  Personal accident policy  Group personal accident policy  Fidelity guarantee policy  39 .

Health Insurance Medi claim policy  Overseas medi claim policy  Videsh yatra mitra policy  Corporate frequent travelers policy  Employment & study policy  Group medi claim policy  Cancer policy  40 .

Liability Insurances Compulsory public liability policy  Public liability policy  Products liability policy  Professional indemnity policy  Lift (third party) policy  Director’s liability policy  Employer’s liability policy  41 .

Rural Insurance Policies    Cattle policy Poultry policy Agricultural pump set policy Crop insurance 42  .

Engineering Insurances      Machinery Breakdown Insurance Loss of Profits (Machinery Breakdown) Insurance Electronic Equipment Insurance Erection All Risk Insurance (EAR) Storage cum Erection Insurance (SCE) 43 .

  44 .Engineering Insurances Contractors All Risk Insurance (CAR) Contractors Plant and Machinery Insurance (CPM)  Boiler and Pressure Plant Insurance  Loss of Profits (Boiler Explosion) Insurance  Deterioration of Stocks Insurance.

Insurance Law The Insurance Act 1938 (amended)  Insurance Regulatory & Development Authority Act 1999  45 .

IRDA’s HQ is located at Hyderabad 46 .IRDA  Insurance Regulatory & Development Authority is the controlling and regulatory apex body in the country for insurance sector and its chairman and members are appointed by Government of India.

Insurance Regulations (Regulations issued by IRDA) IRDA Actuarial Report and Abstract 2000  IRDA Registration of Indian Insurance Companies 2000  IRDA Insurance Advertisement and Disclosure 2000  IRDA The IRDA (Meetings) 2000  IRDA Investments (Life and General) 2000  IRDA Statements of Accounts 2000  47 .

and Solvency Margin of Insurers Regulations. 2000  IRDA Appointed Actuary 2000  48 . 2000  IRDA Licensing of Insurance Agents Regulations. Liabilities.Insurance Regulations (Regulations issued by IRDA) IRDA The Insurance Advisory Committee (Meetings) Regulations. 2000  IRDA Assets. 2000  IRDA Obligations of Insurers to Rural Social Sectors Regulations.

Insurance Regulations (Regulations issued by IRDA)      IRDA General Insurance . 2000 IRDA The IRDA (Staff) 2000 IRDA Surveyors and Loss Assessors 2000 IRDA Reinsurance –Life 2000 IRDA Revised Investment Regulations in April 2001 49 .Reinsurance Regulations.

Insurance Regulations  Irda (third party administrators) regulations 2001 Irda (protection of policyholder’s interest ) regulations. 2002   Irda ( licencing of corporate agents) regulations 2002 50 .

Insurance Regulations Irda (manner of receipt of premium) regulation 2002  Irda (licencing of brokers) regulation 2002  Irda (micro-insurance) regulations. 2010  51 . 2010  IRDA (Sharing of Database for Distribution of Insurance Products) Regulations. 2005  IRDA (Treatment of Discontinued Linked Insurance Policies) Regulations.

IRDA/F&A/CIR/025/2009-10 dated 05-08-2009 has issued detailed guidelines to all insurers on corporate governance for the insurance sector for compliance with effect from 01-04-2010 and an Amendment No.1 has been issued vide letter no.IRDA Guidelines on Corporate Governance for the Insurance Sector  IRDA vide letter no.IRDA/F&I/CIR/F&A/014/01/2010 dated 29-012010 52 .

42568 crores from Rs. 34944 of 2009-10 with 21.Growth of Insurance Business Life Insurance Premium was Rs.125826 crores in 2010-11 with 15.  General Insurance Premium was Rs.200 crores in 1972.In 2010-11 it increased to Rs. 109290 crores to Rs.68 % growth. First year life premium of 2009-10 increased from Rs.  53 .13 % growth.400 crores in 1956.

Credit insurance increased to Rs.Growth of Insurance Business  Further in 2010-11 Health insurance increased to Rs.76 % growth. 54 . Agriculture insurance increased to Rs. 1558 crores with 44.84 % growth. 885. 1960 crores with 29 % growth.67 crores with 8.

1.2007 leading to greater price war & new products in future  Banks entering insurance market through joint ventures with foreign finance majors  55 .Emerging Trends Detariffing in General Insurance from 1.

Emerging Trends Increasing Role of  Insurance Brokers  Bancassurance  Corporate Agency  IT intervention & uses 56 .

IT Professionals  For lacs of Insurance Advisors  For Insurance Professionals  For Risk Managers  For Underwriters  For claim Settlements 57 .Emerging Trends Greater Job Opportunities  For thousands of Insurance Managers.

of Insurance companies & Intermediaries  Increasing Awareness about Insurance  Growth in GDP  Increasing No. of Middle Class  58 .Emerging Trends Increasing No.

Emerging Trends Vast No. of uninsured population  Underinsurance  Untapped potential for General Insurance  59 .

Shop.Emerging Trends Increasing awareness about Health Insurance  Increasing awareness about Personal Line Insurance like House. Personal Accident  Market flooded with new insurance products  60 .

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