Insurance in broad terms may be described as a method of sharing financial losses of few from a common fund who are equally exposed to the same loss.
People need insurance because the unexpected do es happen. Whether it is a fire, a car wreck, illness or a death, the financial consequences can be devastating , if you are uninsured. Insurance helps people have peace of mind when life's unexpected events happen.
Indemnity or to "indemnify" means to make whole again. The concept of insurance is to restore someone to his previous status before the unexpected event occurred.
A catastrophic life event such as cancer can financially bankrupt you. For an affordable monthly premium, you can avoid being devastated by these expenses.
The most important reason to purchase insurance is peace of mind. You can spend more time focused on daily living and less time worrying about what would happen if the unexpected occurred.
When a catastrophe occurs, the insurance company will handle many events such as finding a suitable repair shop, finding a qualified doctor and handling correspondence regarding your bills.
It is much easier for the insurance company to pay a claim for you than it would be for you to pay the expenses yourself. The cost of the claim is covered by the premiums paid by all people insured by the company.
Rate of contribution or premium
The degree of hazard it is exposed to.
Classification of various types of properties.
Subject Matter Of Insurance
The Financial Loss
Types Of Insurance Life insurance Non - life Insurance(General) Aviation Marine Property Miscellaneous
Insurance Sector Reforms
In 1993, Malhotra Committee - headed by former Finance Secretary & RBI Governor R.N. Malhotra.
Objective - to create more efficient & competitive financial system.
Key recommendations of the reform;
1 . Structure: – a. government stake 50% in insurance companies.
Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the sector.
No Company should deal in both life and general insurance through a single entity.
Foreign companies may be allowed to enter the industry in collaboration with the domestic companies.
The insurance act should be changed.
An insurance regulatory body should be set up.
Controller of insurance-a part of the Finance Ministry – should be made independent.
Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%.
GIC and its subsidiaries are not to hold more than 5% in any company.
LIC should pay interest on delay on payment beyond 30 days.
Insurance companies must be encouraged to set up unit link pension plans.
Life insurance industry grows 49% New Delhi June 14, 2007
life insurance industry - 49 % growth in new businesses,
general insurance players - 16 % increase in April,
Life Insurance Corporation, ICICI Prudential and SBI Life & 16 other players
Rs 2,982 crore in April’07 ------- with Rs 1,996 crore in April’06
Country’s largest life insurer – LIC saw new premiums grow 57 % to Rs 2,134 crore in April by selling 15,89,684 policies against Rs 1,355 crore last year. It had a market share of 71.56 % in April.
life insurers - Bajaj Allianz, ING Vysya Life & Reliance Life saw a decline in premium collections.
The 15 private players together saw their business grow 32 % to Rs 848 crore with a market share of 28.44 %.
ICICI Prudential 271.00
Bajaj Allianz 124.00
SBI Life 90.00
HDFC Standard 70.00
Max New York Life 69.00
Tata AIG 48.00
Reliance Life 33.00
Birla Sunlife 28.00
Kotak Mahindra Old
ING Vysya 22.00
Met Life 19.00
Shriram Life 4.50
Sahara Life 1.70
Bharti Axa Life 0.72
ICICI Prudential - premium income rising 84.5 % to Rs 271 crore - 9.08% market share.
Bajaj Allianz - 15 % in business - collected Rs 124 crore - 4.16 % market share.
general insurance industry grew 16 % in April,
New India - With 8 % growth in premium collection at Rs 651 crore , retained its number one slot by cornering 20.72 % of market share.
ICICI Lombard - new premium 36 % to Rs 448 crore - a market share of 14.28 %
ICICI Lombard - the second-largest non-life insurance player.
Oriental Insurance premium collection at Rs 413 crore & a market of 13.16 %.
United India - 3 % growth in business at Rs 407 crore & 12.97 % of the market.
“ Indian Insurance Industry: New Avenues for Growth 2012”,
The potential of the Indian insurance industry is huge. HOW???
… .. It has an annual growth rate of 15-20% &
… .. the largest number of life insurance policies in force.
Total value of the Indian insurance market (2004-05) is at Rs. 450 billion (US$10 billion).
Insurance & Banking Services’ contribution to the country's gross domestic product (GDP) is 7%
The funds available with the state-owned Life Insurance Corporation (LIC) for investments are 8% of GDP.
The year 1999 saw a revolution in the Indian insurance sector------ the ending of government monopoly -----the passage of the Insurance Regulatory and Development Authority (IRDA) Bill
“ A foreign partner can hold 26% equity in an insurance company, but there was a proposal to increase this limit to 49%.
Foreign investments of Rs. 8.7 billion have poured into the Indian market & 21 private companies have been granted licenses.
India's insurance sector to see 500 per cent growth by 2010: Study
India's insurance sector - 500 % growth over the next three years - 60 billion-dollar industry by 2010
India's more than one billion people are uninsured, the study by the Associated Chambers of Commerce and Industry (Assocham) said.
'A large part of rural India is still untapped due to poor distribution , large distances & high costs relative to returns ,‘ said Assocham president Anil K Agarwal
He said the study had revealed that rural & semi-urban India would contribute 35 billion dollars to the Indian insurance industry by 2010.
The study added that the urban sector insurance was estimated to reach 25 billion dollars by 2010 , life insurance 15 billion and non- life insurance 10 billion dollars .
Source: Business News
retain only a part of the risk less than 10%.
balance risk is re-insured.
re-insurance is insurer's insurance.
the backbone of the insurance business.
provides a better spread of risk in the international market, allows primary insurers to accept risks beyond their capacity, settle accumulated losses arising from catastrophic events & maintain their financial stability.
GIC - the major re-insurer.
all insurance companies have to give 20 per cent of their reinsurance business to GIC.
GIC reinsures the amount further with international companies such as Swissre (Switzerland), Munichre (Germany), and Royale (UK).
Jobs in insurance involve helping individuals and business
manage risk to protect themselves from catastrophic losses
and to anticipate potential risk problems.
Insurance brokers and agents
Claims handlers [are responsible for investigating incidents and paying claims. They decide the extent and validity of the claim]
Underwriters [assess risks and decide whether to accept applications for insurance cover - and on what terms]