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Basics of Insurance

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... .HDFC-ERGO General Insurance Company Ltd 9.Star Health & Allied Insurance Company Ltd General Insurance Companies 10.Export Credit Guarantee Corporation ... – PowerPoint PPT presentation

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Title: Basics of Insurance


1
BasicsofInsurance

2
Contents-
  • Life insurance
  • General insurance
  • Insurance market scenario
  • Emerging trends in insurance

3
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

4
History of Insurance
  • It started from Lloyds coffee house London
  • First policy issued in England in 1583
  • In India first policy issued in 1870

5
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

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

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

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

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

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

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

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

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

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

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

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

17
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

18
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

19
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

20
General Insurance Companies
  • 14.Oriental Insurance Company
  • Ltd
  • 15.United India Insurance Company
  • Ltd
  • 16. Apollo Munich Health Insurance Company Ltd

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

22
Market Intermediaries
  • Who procure the
  • insurance business-
  • Agents
  • Corporate agents
  • Insurance brokers
  • Banks (Bancassurance)

23
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

24
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

25
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

26
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

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

28
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

29
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

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

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

32
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

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

34
Fire Policies
  • Standard fire policy-
  • Common policy for buildings, shops,offices,
    Industrial manufacturing risks

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

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

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

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.

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

40
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

41
Liability Insurances
  • Compulsory public liability policy
  • Public liability policy
  • Products liability policy
  • Professional indemnity policy
  • Lift (third party) policy
  • Directors liability policy
  • Employers liability policy

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

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

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.

45
Insurance Law
  • The Insurance Act 1938
  • (amended)
  • Insurance Regulatory Development Authority Act
    1999

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.
    IRDAs HQ is located at Hyderabad

47
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

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

49
Insurance Regulations(Regulations issued by IRDA)
  • IRDA General Insurance - Reinsurance Regulations,
    2000
  • IRDA The IRDA (Staff) 2000
  • IRDA Surveyors and Loss Assessors 2000
  • IRDA Reinsurance Life 2000
  • IRDA Revised Investment Regulations in April 2001

50
Insurance Regulations
  • Irda (third party administrators) regulations
    2001
  • Irda (protection of policyholders interest )
    regulations, 2002
  • Irda ( licencing of corporate agents)
    regulations 2002

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

52
IRDA Guidelines on Corporate Governance for
the Insurance Sector
  • IRDA vide letter no. IRDA/FA/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/FI/CIR/FA/014/01/2010 dated
    29-01-2010

53
Growth of Insurance Business
  • Life Insurance Premium was Rs.400 crores in 1956.
    First year life premium of 2011-12 stood at Rs.
    114232 crores against Rs.125826 crores in 2010-11
  • General Insurance Premium was Rs.200 crores in
    1972.In 2011-12 it increased to Rs. 58357 crores
    from Rs. 47355 of 2010-11.

54
Emerging Trends
  • Detariffing in General Insurance from 1.1.2007
    leading to greater price war new products in
    future
  • Banks entering insurance market through joint
    ventures with foreign finance majors

55
Emerging Trends
  • Increasing Role of
  • Insurance Brokers
  • Bancassurance
  • Corporate Agency
  • IT intervention uses

56
Emerging Trends
  • Greater Job Opportunities
  • For thousands of Insurance
  • Managers, IT Professionals
  • For lacs of Insurance Advisors
  • For Insurance Professionals
  • For Risk Managers
  • For Underwriters
  • For claim Settlements

57
Emerging Trends
  • Increasing No. of Insurance companies
    Intermediaries
  • Increasing Awareness about Insurance
  • Growth in GDP
  • Increasing No. of Middle Class

58
Emerging Trends
  • Vast No. of uninsured population
  • Underinsurance
  • Untapped potential for General Insurance

59
Emerging Trends
  • Increasing awareness about Health Insurance
  • Increasing awareness about Personal Line
    Insurance like House, Shop, Personal Accident
  • Market flooded with new insurance products
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