The presentation describes that what is the role of The insurance and derivatives in a capital market

1. UNIVERSITY OF
MYSORE
Futures, Options and Swaps
Topic: Role of insurance and Derivatives
PRESENTING TO,
G.KOTRESHEWAR SIR,
FACULTY ,
DEPARTMENT OF COMMERCE,
MANASA GANGOTRI ,MYSORE.

2. Insurance
Human beings, his family and properties are
always exposed to different kinds of risks. Risk
involve the losses. Insurance is a tool which
reduces the cost of loss or effect of loss caused
by variety of risk. It accumulates funds to meet
individual losses. It is not device to prevent
unwanted event of happening or cause of loss
but protects them against that loss by
compensating which as lost.

3. Role of insurance
 Insurance provides security
 Insurance reduces business risk or losses
 Insurance provides peace of mind
 Life insurance encourages saving
 Insurance accelerates the economic
growth of the country
 Insurance provides credit facilities
 Insurance helps to reduce inflation

4. Derivatives
 Derivatives are financial instruments
whose value depends on the value of
“underlying assets.”
 It is more like a contract of future date in
which two or more parties are involved to
alleviate future risk.
 Usually, derivatives enjoy high leverage.
Its value is affected by the volatility in the
rates of the underlying asset.

5. Role of Derivatives
 Price Discovery
 Risk Management
 They Improve Market Efficiency for the
Underlying Asset
 Derivatives Also Help Reduce Market
Transaction Costs

6. Air India’s insurance contract
up for renewal on October 1 for
an estimated $25 million
Published on 22nd September 2014
The race for getting national carrier Air India's insurance
renewal deal has begun between public and private
sector general insurers. A New India Assurance-led
consortium of public sector insurers has emerged as the
frontrunner, while the private sector has rallied behind a
group led by ICICI Lombard General Insurance.

7. The insurance contract for Air India's 105-strong fleet comes
up for renewal on October 1 at an estimated premium of
about $25 million.
The New India Assurance-led consortium has United India
Insurance, Oriental Insurance and National Insurance as
co-insurers. While, ICICI Lombard General Insurance-led
group has HDFC Ergo and Reliance General as co-insurers.
Following recent rise in aviation mishaps such as a series of
Malaysian Airlines tragedy, premiums have increased,
pushing up the bill for insurers.
Air India's current insurance policy, issued by New India
Assurance, includes a $9.5-billion hull cover and a
combined single liability of $1.5 billion.

8. conclusion
Insurance and derivatives are effective tool to
control or minimize the risk factor. In absence of this
tool there is a possibilities of occurring loss is very
high .and these are very essential in financial
market to managing the Varity risks.

9. Reference
Insurance in risk management/ slide share
Role of insurance / investopedia
Capital market institutions and instruments
Eastern Economic Edition 4TH edition
by,
Frank j.fabozzi and franco
modigliani

10. Presented By,
Mahadeva prasad.m
2nd MFM
DOS in commerce
Manasa gangotri ,
Myose.
Thank you