InsuranceMeaning - 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,
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
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…
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
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.
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.
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
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
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 insurance7. Accident/Motor insurance8. Health insurance9. Liability insurance10. Fire Insurance11. Crop insurance
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.
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.
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.
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.
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 Policies5. 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…
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 policy6. Bhavishya arogya policy7. Jan arogya bima policy8. Cancer insurance9. 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.
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
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.
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 Furnitures, fixtures, and fittings Electrical installations of a building Machinery/equipments etc..
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
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.
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 andgram.iii. The scheme was available to farmers only and on voluntary basis.iv. The risk was shared between General Insurance Corporation of Indiaand State Governments in the ratio of 2:1.v. The maximum sum insured was 100 per cent of the crop loan, whichwas later increased to 150 per cent.vi. A 50 per cent subsidy was provided for insurance charges payable bysmall andmarginal farmers by the State Government and the Government of Indiaon 50:50 basis.
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