Insurance service ppt bec bagalkot mba

1. INSURANCE
PRESENTED BY:-
BABASAB PATIL

2. Insurance
Meaning -
It’s Financial service for collecting the savings of the public and
providing them with a risk coverage.
 Risk coverage may be for certain events like death, retirement, pension,
education, marriage etc..
 Risk coverage might also be for uncertain events like theft , accident, fire,
ill-health, marine voyage risk,

3. Parties to an insurance
 Insurer – also called as assurer/underwriter who agrees in consideration of
a sum of money to make good the loss suffered by the insured.
 Insured – also called as assured/beneficiary is the party who wants to
minimize risk and makes an agreement with Insurer
 Subject matter – property which is insured
 Insurable interest – The interest possessed by the insured in the subject
matter of insurance

4. Types of Insurance -
 Life Insurance – specified amount becomes payable on the death of the
insured or upon the expiry of a specified period of time whichever is
earlier.
 General insurance/Non life Insurance – covers losses caused by fire,
accidents, and marine adventures, Health diseases, etc…

5. Need and Importance of life Insurance -
 Life Insurance provides protection to your family, your family gets a
specified sum in a lump sum when they need it the most
 Life Insurance contracts allow an individual to save money in a tax efficient
manner
 Provides funds for education , marriage , along with life risk cover.
 Life insurance products offer high guaranteed returns
 Facilitates provision for retirement and old age

6. Important stats on life insurance
 The US$ 41-billion Indian life insurance industry is considered the fifth
largest life insurance market, and growing at a rapid pace of 32-34 per
cent annually, according to the Life Insurance Council.
 Moreover, according to IRDA, insurers sold 10.55 million new policies in
2009-10 with LIC selling 8.52 million and private companies 2.03 million
policies
 India’s ratio of life insurance premium to its GDP is around 4 per cent
against 6-9 per cent in the developed world, It could rise to 5.1-6.2 by
2012 in.
 India’s life insurance market has grown rapidly over the past six years, with
new business premiums are growing at over 40% per year.
 The premium income of India’s life insurance market is set to double by
2012 on better penetration and higher incomes.
 Insurance penetration in India is currently about 4% of its GDP
 India’s life insurance industry will be double in the next five years from $40
billion to $80-100 billion in 2012.

7. Life Insurance products -
 Term Insurance policy – provides risk cover if the insured dies during
specified period.
 Whole life policy – guarantees death benefit cover throughout the life of
the insured.
 Endowment policy – policy in which claims accrue either by death or by
maturity.
 Annuity policy – involves a series of periodic payments to the insured.
 ULIP – combines the benefits of insurance protection and investment in
managed fund.
 Group insurance – covers a similar homogeneous group of individuals under
a single policy.

8. Life insurance Players -
When the life insurance business was nationalized in 1956, there were
154 Indian life insurance companies. In addition, there were 16 non-Indian
insurance companies and 75 provident societies also issuing life insurance
policies.
Life Insurer in Public Sector
 Life Insurance Corporation of India
Life Insurers in Private Sector
 SBI Life Insurance
 Metlife India Life Insurance
 ICICI Prudential Life Insurance
 Bajaj Allianz Life
 Max New York Life Insurance
 Sahara Life Insurance
 Tata AIG Life
 HDFC Standard Life
 Birla Sunlife

9. Continued…..
 Kotak Life Insurance
 Aviva Life Insurance
 Reliance Life Insurance Company Limited
 ING Vysya Life Insurance
 Shriram Life Insurance
 Bharti AXA Life Insurance Co Ltd
 Future Generali Life Insurance Co Ltd
 IDBI Fortis Life Insurance
 AEGON Religare Life Insurance
 DLF Pramerica Life Insurance
 CANARA HSBC Oriental Bank of Commerce LIFE INSURANCE

10. General Insurance -
 General insurance/Non life Insurance – covers losses caused by fire,
accidents, and marine adventures, Health diseases, etc…
 Re-insurance – insurance of insured Property/person.
 General insurance include the following categories –
6. Marine insurance
7. Accident/Motor insurance
8. Health insurance
9. Liability insurance
10. Fire Insurance
11. Crop insurance

11. Important stats on General Insurance -
 According to data released by IRDA, the general insurance industry
recorded 13.42 per cent growth in gross premium collected during
2009-10.
 The industry collected gross premium of US$ 7.84 billion in 2009-10
compared with US$ 6.91 billion in 2008-09.
 The public sector players posted 13.85 per cent growth in gross premium in
2009-10. At the same time, private players recorded a 12.82 per cent
increase in gross premium
 non-life insurers mopped up US$ 1.59 billion against US$ 1.34 billion in the
previous year, registering an increase of 19 per cent according to IRDA
data.
 India has one of the lowest penetration rates for property and casualty
insurance in Asia in terms of premium as a % of GDP
 Number of private insurers is expected to grow as various foreign
companies have announced intentions to establish joint ventures.

12. Players in General insurance -
 General Insurers:
 General Insurance Corporation of India (GIC)
 Royal Sundaram Alliance Insurance Company Limited
 Reliance General Insurance Company Limited.
 IFFCO Tokio General Insurance Co. Ltd
 TATA AIG General Insurance Company Ltd.
 Bajaj Allianz General Insurance Company Limited
 ICICI Lombard General Insurance Company Limited.
 Cholamandalam General Insurance Company Ltd.
 Export Credit Guarantee Corporation Ltd.
 HDFC-Chubb General Insurance Co. Ltd.

13. Players in General insurance -
 AMZ General Insurance Company Limited.
 The Oriental Insurance Company Limited
 The New India Assurance Company Limited,
 National Insurance Company Limited

United India Insurance Company Limited.

14. Marine Insurance -
It’s a broad Broad type of insurance covering the risk of those
commodities which may be transported by both ocean marine and inland
marine.
 Marine Hull insurance – provides coverage for risks pertaining to physical
damage to vessels.
 Cargo insurance – Provides cover for losses that could occur to goods in
transit on sea, rail road, and air.

15. Motor/Accident insurance -
A form of personal insurance against loss by
accidental bodily injury.
 Motor insurance is statutorily mandatory with respect to the owner of the
vehicle
 Insurance of damage to vehicle is not mandatory.
Types of Policies
5. Third party liability policy – the insurer indemnifies the insured against
all sums which he may become legally liable to any person.
6. Comprehensive losses and act liability policy – covers an entire range of
viz, fire/explosion/self ignition/lightning of vehicle, burglary/theft,
flood, terrorist activity etc…

16. Health/Medical insurance -
Type of insurance covers mainly two types of
benefits viz,
 Reimbursement of medical expenses related to specific diseases
 Hospitalization charges cover.
Types of health insurance policies –
5. Mediclaim policy
6. Bhavishya arogya policy
7. Jan arogya bima policy
8. Cancer insurance
9. Overseas medical cover
The health insurance premium is expected to grow at a
compound annual growth rate (CAGR) of over 25 per cent for the period
spanning from 2009-10 to 2013-14.

17. Players in Health insurance -
 The IRDA (Insurance Regulatory Development Authority has recognized the
following companies in India)
The major health insurance companies in India are the
 National Insurance Company
 New India Assurance
 United India Insurance
 ICICI Lombard
 Tata AIG
 Royal Sundaram
 Star Allied Health Insurance
 Cholamandalam DBS
 Bajaj Allianz Apollo
 AG Health Insurance Company

18. Liability insurance -
Liability insurance covers debts or responsibilities that may arise by a
contract it includes –
 Employee liabilities – related to working conditions, covered under
workmen’s compensations insurance policies, and it mainly covers the
industrial risk.
 Employee state insurance liability – in relation to injury to any employee
while at work.
 Non-industrial risks – relates to non-industrial but mainly commercial
enterprises such as cinemas, restaurants, offices, shopping complexes,
schools, etc…
 Professional liabilities – relate to liabilities that could arise from the practice
of certain profession, ex – medical practitioners, engineers, architects,
directors of the companies
 Product liabilities – liabilities that could arise from the sale of products to
customers and results in damage to customers.

19. Fire insurance
Provides for financial loss to property due to fire and
related hazards.
Property that can be covered under fire insurance policy are –
 Building
 Goods in the open
 Furniture's, fixtures, and fittings
 Electrical installations of a building
 Machinery/equipments etc..

20. Policies in fire insurance -
 Consequential loss policy – cover the loss of profit due to damage to
property by damage
 Replacement value policy – policy in which there is a possiblity of covering
the cost of replacing the damaged property
 Floater policy – covers stocks lying at different locations (warehouse,
godowns, factories etc..) are recovered under one sum assured.
 Industrial all risk policy – This policy is a package cover for the perils like
fire, burglary, machine breakdown, boiler explosion, business interruption

21. Crop insurance -
 Crop insurance is a financial mechanism to minimize the impact of
loss in farm income by factoring in a large number of uncertainties which
affect the crop yields.
 Crop insurance is a means to protecting the cultivators against financial loss
on account of anticipated crop-loss arising out of practically all natural
factors beyond their control such as natural fire, weather, floods, pests,
diseases etc.

22. Crop Insurance Scheme was introduced by GIC in 1979.
The important features of the scheme were:
i. The scheme was based on "Area Approach".
ii. The scheme covered cereals, millets, oilseeds, cotton, potato and
gram.
iii. The scheme was available to farmers only and on voluntary basis.
iv. The risk was shared between General Insurance Corporation of India
and State Governments in the ratio of 2:1.
v. The maximum sum insured was 100 per cent of the crop loan, which
was later increased to 150 per cent.
vi. A 50 per cent subsidy was provided for insurance charges payable by
small and
marginal farmers by the State Government and the Government of India
on 50:50 basis.

23. Products in the market -
Weather based crop insurance schemes -
 Wheat Insurance
 Rabi Weather Insurance
 Varsha Bima (Rainfall Insurance)
Insurance products are also available for plantation crops in specific
geographical areas such as –
 Uttarakhand Seb Bima Yojana (Apple Insurance),
 Grapes Insurance,
 Rainfall Insurance Scheme for Coffee Growers
 Bio-Fuel Tree / Plant Insurance
 Pulpwood Tree Insurance
 Coconut Insurance
 Rubber Insurance
 Mango Insurance