detail about insurance sector

2. What is insurance?
The definition of insurance can be made from
two points:
1. Functional definition.
2. Contractual definition.
• FUNCTIONAL DEFINITION Insurance is a
co-operative device to spread the loss caused
by a particular risk over a number of persons
who are exposed to it and who agree to insure
themselves against the risk.

3. • Contractual Definition In the words of justice
Tindall, “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.”

4. TYPE OF INSURANCE
• LIFE INSURANCE -
Life insurance is a written contract between the insured
and the insurer, that provides for the payment of the
insured sum on the date of the maturity of the contract
or on the unfortunate death of the insured, whichever
occurs earlier.
• GENERAL INSURANCE-
General insurance or non-life insurance policies,
including automobile and homeowners policies,
provide payments depending on the loss from a
particular financial event. General insurance typically
comprises any insurance that is not determined to be
life insurance

5. TYPES OF GENERAL INSURANCE
1. Health insurance
2. Business insurance
3. Automobile insurance
4. Fire insurance etc.
• HEALTH INSURANCE-
Just like one looks to safeguard ones wealth, these
policies ensure guarding the insurer's health against
any calamities that may cause long term harm to ones
life and even hamper ones earning ability for a
lifetime. Some examples of this type of policy are
mediclaim policy, personal accident, group accident,
traffic accident, etc.

6. Continue……….
• BUSINESS INSURANCE-
Risks of loss of profits/business, goods, plant and
machinery are most profound in case of business.
Under this head they cover the most widely used
policies that cover a business from any loss of the
above kind. Some of these policies are burglary
insurance, shopkeepers insurance, key-man insurance,
marine insurance, public liability insurance, workmen
compensation insurance, air transit insurance, fidelity
guarantee insurance etc.

7. Continue………..
• AUTOMOBILE INSURANCE-
Auto Policy is required to be taken to cover the risks
that arise to the owner, vehicle and third party. This
includes the Compulsory Vehicle Policy (In India, by
the Motor Vehicles Act, every car owner is required to
covered against Act risks) and the Comprehensive
Vehicle Policy.
• FIRE INSURANCE- This policy is required to be taken
to prevent any loss of profits / property from incidental
fire. Eg: fire insurance and fire consequential loss
policy.

8. Chart-

9. All insurance company in India

10. Marketing Mix of Insurance
Industry
LIFE INSURANCE
• Whole life and term policies
• Endowment policies: A
lump sum amount in case of
death/expiry of the policy
• Money back policies:
Periodic payments during
the term of the policy itself;
In case of death, payment of
full sum assured
• Annuity / Pension policies:
Premium is paid as a single
lump sum or through
installments to get regular
income after the retirement
GENERAL INSURANCE
•Auto Insurance
•Health Care Insurance
•Travel Insurance
•Home Insurance
•Fire Insurance
•Marine Insurance
•Accident Insurance

11. Price
• In an insurance business, the pricing decisions are
concerned with:
– The premium charged against the policies,
– Interest charged for defaulting the payment of
premium and credit facilities
– Commission charged for underwriting and consultancy
services
• For general insurance (Auto) the premium depends on
– Make of the vehicle
– Year of manufacture
– Place of registration
– Current showroom price of the vehicle

12. Price
• For life insurance the premium depends on three factors
– Costs: Fixed percentage of insurer’s office expenses,
salaries, computers, and maintenance of buildings,
commissions to be paid to the agents
– Mortality: Mortality tables allow the insurer to calculate the
average chance of someone dying within one year
– Interest: The insurance firm receives interest on the
premium payment, from the time of policy taken, up to the
maturity/death. When the period is longer , the effects on
interest income is more
• Discounts may be offered for existing clients renewing the
policy

13. Place - Channels of distribution
Direct Selling
• Agents
• Financial
Advisors
• Call Centres
Partner Selling
• Bancassurance
• Postal
Department
• Selling through
Corporates
• Tie – ups with
financial
institutions
Electronic
Channel
• Internet
• Information
Kiosks
• SMS

14. Promotion
Advertising
& Publicity
Word of
mouth

15. People
People
External
Customers
Internal
Customers
Agents
External
Customers
Insurer i.e.
Customers
Internal
Employees
On Desk
Employees
Back - end
employees

16. Market Segmentation (External
Customers)
Household
• Salaried Class
• Self – Employed
• Retired
Industrial
• Public Sector
• Private Sector
Trade
• Big Business
• Small Business
Institutional
• Universities
• Colleges
• Schools

17. Market Segmentation(External
Customers)
Region Wise
• Central
• Eastern
• Northern
• Southern
Gender
• Males
• Females
Age
• Children
• Adults
• Senior Citizens
Rural
• Depending on location, income & population

18. Physical Evidence
Policy
Documents
Brochures
Periodic
Statements
Renewal
Notices
Business
Cards
Stationary
Calendar,
Diaries

19. Process
• Customer friendly
• Speed and accuracy of payment is of great
importance
• Installment schemes should be streamlined to
cater to the ever growing demands of the
consumers