SlideShare a Scribd company logo
1 of 16
Download to read offline
INSURANCE MANAGEMENT
Principles & Practices


Instructor
Abdel Fatah Afifi
MA&T, MBA, ACPA, PCT
Chapter 1



   Conceptualization of
       Insurance
Chapter Contents
 1.   Introduction
 2.   Meaning of Insurance
 3.   Definition of insurance
 4.   Nature of Insurance
 5.   Functions of Insurance
 6.   Types of Insurance
 7.   Evolution of Insurance
 8.   Why Life Insurance
1. Introduction
Insurance   is a tool by which fatalities of a
 small number are compensated out of
 funds (Premium payment) collected from
 plenteous.
Insurance companies pay back for
 financial losses arising out of occurrence
 of insured events, e.g. in personal policy
 death due to accident, in stick, explosion,
 etc.
What is insurance?
Insurance is a contractual
 arrangement whereby one party
 agrees to compensate another
 for losses in return for payment
 of a consideration.
Who are the parties to an
     insurance contract?
1.   The party agreeing to pay for the losses
     called the Insurer.
2.   The party whose loss causes the insurer to
     make a claims payment called the insured.
3.   The payment that the insurer receives called
     as a premium.
4.   The contract called a policy of insurance.
5.   The insured's possibility of loss called the
     insured's exposure to loss - Risk.
2. Meaning of Insurance
 Commonly acknowledged phenomenon
    that there are countless risks in every
    sphere of life.
 1. Property: Fire risk.
 2. Shipment of goods: Perils of sea.
 3. Human Life: Risks of death or disability.
 4. And so on…….
3. Definition of insurance
The  term INSURANCE : A co-operative
 mechanism to spread the loss caused by a
 particular risk over a number of persons
 who are expected to it and who agree to
 ensure themselves against that risk.

Risk   is, an uncertainty of a financial loss.
4. Nature of Insurance
 One can observe its following
    characteristics:
 1. Risk sharing and Risk transfer.
 2. Co-operative Device.
 3. Risk Assessment in Advance.


 Give more details on each of above.
5. Functions of Insurance
Insurers    provide insurance policies.
1. Certainty
2. Protection
3. Risk Sharing
4. Assists in Capital Formation
5. Prevention of loss
6. Types of Insurance
1. Classification on the basis of nature of
   insurance.
2. Classification from business point of
   view.
3. Classification from risk point of view.
Classification on the basis of
nature of insurance.
 ◦   Life Insurance
 ◦   Fire Insurance
 ◦   Marine Insurance
 ◦   Social Insurance
 ◦   Miscellaneous Insurance
Classification from business
point of view

 1. Life Insurance
 2. General Insurance
Classification from risk point
of view

  1. Personal Insurance
  2. Property Insurance
  3. Liability Insurance
  4. Fidelity Guarantee Insurance
7. Evolution of Insurance
The  first insurers of life were the marine
 insurance underwriters who started issuing life
 insurance policies on the life of master and crew
 of the ship, and the merchants.
The early insurance contracts took the nature of
 policies for a short period only.
The underwriters issued annuities and pension
 for a fixed period or for life to provide relief to
 widows on the death of their husbands.
The first life insurance policy was issued on 18th
 June 1583, on the life of William Gibbons for a
 period of 12 months
8. Why Life Insurance
1.    Covers the risk of death.
2.    Encourages compulsory savings.
3.    Easy settlement and protection against creditors.
4.    It helps to achieve the purpose of the life assured.
5.    Peace of mind.
6.    Loss control.
7.    Social benefits.
8.    Investment of funds.
9.    Invisible earnings.
10.   Insurance facilities liquidity.
11.   Loan facility and tax relief.

More Related Content

What's hot

Principles & practices of insurance com 334
Principles & practices of insurance   com 334Principles & practices of insurance   com 334
Principles & practices of insurance com 334Haresh R
 
Introduction to non life insurance short course
Introduction to non life insurance short courseIntroduction to non life insurance short course
Introduction to non life insurance short courseJun Falcon
 
Law of insurance
Law of insuranceLaw of insurance
Law of insuranceSumit Kumar
 
Property Insurance - Black Book Project
Property Insurance - Black Book ProjectProperty Insurance - Black Book Project
Property Insurance - Black Book ProjectMihirVedpathak
 
6. risk management in insurance
6. risk management in insurance6. risk management in insurance
6. risk management in insuranceBlushing Roswahida
 
Chapter 1[definition and nature of insurance]
Chapter 1[definition and nature of insurance]Chapter 1[definition and nature of insurance]
Chapter 1[definition and nature of insurance]aaykhan
 
Ppt on insurance
Ppt on insurancePpt on insurance
Ppt on insuranceatik lodha
 
Insurance Code of the Philippines (PD 612 as amended by RA 10607)
Insurance Code of the Philippines (PD 612 as amended by RA 10607)Insurance Code of the Philippines (PD 612 as amended by RA 10607)
Insurance Code of the Philippines (PD 612 as amended by RA 10607)Luj Chan
 
Introduction to General Insurance
Introduction to General InsuranceIntroduction to General Insurance
Introduction to General Insuranceplevras
 
Insurance principles
Insurance principlesInsurance principles
Insurance principlesVivek G Iyer
 
Insurance FUNDAMENTALS/PRINCIPLES OF GENERAL INSURANCE
Insurance FUNDAMENTALS/PRINCIPLES OF GENERAL INSURANCEInsurance FUNDAMENTALS/PRINCIPLES OF GENERAL INSURANCE
Insurance FUNDAMENTALS/PRINCIPLES OF GENERAL INSURANCEAijaz Sawar
 

What's hot (20)

property insurance
property insuranceproperty insurance
property insurance
 
Chapter 38- Purpose Of Insurance
Chapter 38- Purpose Of InsuranceChapter 38- Purpose Of Insurance
Chapter 38- Purpose Of Insurance
 
Principles & practices of insurance com 334
Principles & practices of insurance   com 334Principles & practices of insurance   com 334
Principles & practices of insurance com 334
 
insurance
insuranceinsurance
insurance
 
Introduction to non life insurance short course
Introduction to non life insurance short courseIntroduction to non life insurance short course
Introduction to non life insurance short course
 
Insurance
InsuranceInsurance
Insurance
 
Principles of insurance
Principles of insurancePrinciples of insurance
Principles of insurance
 
Law of insurance
Law of insuranceLaw of insurance
Law of insurance
 
Principles
PrinciplesPrinciples
Principles
 
Property Insurance - Black Book Project
Property Insurance - Black Book ProjectProperty Insurance - Black Book Project
Property Insurance - Black Book Project
 
Insurance act for class
Insurance act   for classInsurance act   for class
Insurance act for class
 
6. risk management in insurance
6. risk management in insurance6. risk management in insurance
6. risk management in insurance
 
Chapter 1[definition and nature of insurance]
Chapter 1[definition and nature of insurance]Chapter 1[definition and nature of insurance]
Chapter 1[definition and nature of insurance]
 
Ppt on insurance
Ppt on insurancePpt on insurance
Ppt on insurance
 
Insurance Code of the Philippines (PD 612 as amended by RA 10607)
Insurance Code of the Philippines (PD 612 as amended by RA 10607)Insurance Code of the Philippines (PD 612 as amended by RA 10607)
Insurance Code of the Philippines (PD 612 as amended by RA 10607)
 
Formation of insurance contract
Formation of insurance contractFormation of insurance contract
Formation of insurance contract
 
Introduction to General Insurance
Introduction to General InsuranceIntroduction to General Insurance
Introduction to General Insurance
 
Insurance principles
Insurance principlesInsurance principles
Insurance principles
 
Insurance
Insurance Insurance
Insurance
 
Insurance FUNDAMENTALS/PRINCIPLES OF GENERAL INSURANCE
Insurance FUNDAMENTALS/PRINCIPLES OF GENERAL INSURANCEInsurance FUNDAMENTALS/PRINCIPLES OF GENERAL INSURANCE
Insurance FUNDAMENTALS/PRINCIPLES OF GENERAL INSURANCE
 

Similar to life insurance

PRESENTATION ON “ STUDY OF SALES PROMOTION’’ AND “ANALYSIS OF INSURANCE B...
PRESENTATION ON    “ STUDY OF SALES PROMOTION’’ AND  “ANALYSIS OF INSURANCE B...PRESENTATION ON    “ STUDY OF SALES PROMOTION’’ AND  “ANALYSIS OF INSURANCE B...
PRESENTATION ON “ STUDY OF SALES PROMOTION’’ AND “ANALYSIS OF INSURANCE B...Muthoot finance Ltd
 
Unit 3 insurance intro sem-1
Unit 3 insurance intro sem-1Unit 3 insurance intro sem-1
Unit 3 insurance intro sem-1Dr Isha Jaiswal
 
A project report on customer perception towards insurance
A project report on customer perception towards insuranceA project report on customer perception towards insurance
A project report on customer perception towards insuranceProjects Kart
 
Introduction to Insurance by Dr. Amitabh Mishra
Introduction to Insurance by Dr. Amitabh MishraIntroduction to Insurance by Dr. Amitabh Mishra
Introduction to Insurance by Dr. Amitabh MishraDr. Amitabh Mishra
 
A project report_on_consumer_perception towards life insurance
A project report_on_consumer_perception towards life insuranceA project report_on_consumer_perception towards life insurance
A project report_on_consumer_perception towards life insuranceSANJAYBT
 
Life insurance concept, nature & use of life insurance, distinguishing c...
Life insurance  concept, nature & use of life insurance, distinguishing c...Life insurance  concept, nature & use of life insurance, distinguishing c...
Life insurance concept, nature & use of life insurance, distinguishing c...Ravi kumar
 
pcestudynotes-150503234540-conversion-gate01.pdf
pcestudynotes-150503234540-conversion-gate01.pdfpcestudynotes-150503234540-conversion-gate01.pdf
pcestudynotes-150503234540-conversion-gate01.pdfPritibKumar1
 
PCE Learning Material_2
PCE Learning Material_2PCE Learning Material_2
PCE Learning Material_2Max Lee
 
Logistic insurance ch2 insurance intro
Logistic insurance ch2 insurance introLogistic insurance ch2 insurance intro
Logistic insurance ch2 insurance introNarudh Cheramakara
 
insurance-project
 insurance-project insurance-project
insurance-projectsukesh gowda
 
Business risks-failures-reorganization-and-liquidation-
Business risks-failures-reorganization-and-liquidation-Business risks-failures-reorganization-and-liquidation-
Business risks-failures-reorganization-and-liquidation-Felyn Denise Jover
 
Chapter10. INSURANCE SERVICES( NIOS X -BUSINESS STUDIES)
Chapter10. INSURANCE SERVICES( NIOS X -BUSINESS STUDIES)Chapter10. INSURANCE SERVICES( NIOS X -BUSINESS STUDIES)
Chapter10. INSURANCE SERVICES( NIOS X -BUSINESS STUDIES)Megha Madhusudhanan
 
Yash sbi life insurance
Yash  sbi life insuranceYash  sbi life insurance
Yash sbi life insuranceDharmik
 
Working of insurance
Working of insuranceWorking of insurance
Working of insurancecollege
 

Similar to life insurance (20)

Life insurance
Life insuranceLife insurance
Life insurance
 
PRESENTATION ON “ STUDY OF SALES PROMOTION’’ AND “ANALYSIS OF INSURANCE B...
PRESENTATION ON    “ STUDY OF SALES PROMOTION’’ AND  “ANALYSIS OF INSURANCE B...PRESENTATION ON    “ STUDY OF SALES PROMOTION’’ AND  “ANALYSIS OF INSURANCE B...
PRESENTATION ON “ STUDY OF SALES PROMOTION’’ AND “ANALYSIS OF INSURANCE B...
 
Insurance business
Insurance businessInsurance business
Insurance business
 
Unit 3 insurance intro sem-1
Unit 3 insurance intro sem-1Unit 3 insurance intro sem-1
Unit 3 insurance intro sem-1
 
Insurance
InsuranceInsurance
Insurance
 
A project report on customer perception towards insurance
A project report on customer perception towards insuranceA project report on customer perception towards insurance
A project report on customer perception towards insurance
 
Introduction to Insurance by Dr. Amitabh Mishra
Introduction to Insurance by Dr. Amitabh MishraIntroduction to Insurance by Dr. Amitabh Mishra
Introduction to Insurance by Dr. Amitabh Mishra
 
A project report_on_consumer_perception towards life insurance
A project report_on_consumer_perception towards life insuranceA project report_on_consumer_perception towards life insurance
A project report_on_consumer_perception towards life insurance
 
Life insurance concept, nature & use of life insurance, distinguishing c...
Life insurance  concept, nature & use of life insurance, distinguishing c...Life insurance  concept, nature & use of life insurance, distinguishing c...
Life insurance concept, nature & use of life insurance, distinguishing c...
 
pcestudynotes-150503234540-conversion-gate01.pdf
pcestudynotes-150503234540-conversion-gate01.pdfpcestudynotes-150503234540-conversion-gate01.pdf
pcestudynotes-150503234540-conversion-gate01.pdf
 
PCE Learning Material_2
PCE Learning Material_2PCE Learning Material_2
PCE Learning Material_2
 
Logistic insurance ch2 insurance intro
Logistic insurance ch2 insurance introLogistic insurance ch2 insurance intro
Logistic insurance ch2 insurance intro
 
insurance-project
 insurance-project insurance-project
insurance-project
 
UNIT-2.docx
UNIT-2.docxUNIT-2.docx
UNIT-2.docx
 
Business risks-failures-reorganization-and-liquidation-
Business risks-failures-reorganization-and-liquidation-Business risks-failures-reorganization-and-liquidation-
Business risks-failures-reorganization-and-liquidation-
 
Merchant banking (v unit)
Merchant banking (v  unit)Merchant banking (v  unit)
Merchant banking (v unit)
 
Chapter10. INSURANCE SERVICES( NIOS X -BUSINESS STUDIES)
Chapter10. INSURANCE SERVICES( NIOS X -BUSINESS STUDIES)Chapter10. INSURANCE SERVICES( NIOS X -BUSINESS STUDIES)
Chapter10. INSURANCE SERVICES( NIOS X -BUSINESS STUDIES)
 
UNIT-1.pptx
UNIT-1.pptxUNIT-1.pptx
UNIT-1.pptx
 
Yash sbi life insurance
Yash  sbi life insuranceYash  sbi life insurance
Yash sbi life insurance
 
Working of insurance
Working of insuranceWorking of insurance
Working of insurance
 

life insurance

  • 1. INSURANCE MANAGEMENT Principles & Practices Instructor Abdel Fatah Afifi MA&T, MBA, ACPA, PCT
  • 2. Chapter 1 Conceptualization of Insurance
  • 3. Chapter Contents 1. Introduction 2. Meaning of Insurance 3. Definition of insurance 4. Nature of Insurance 5. Functions of Insurance 6. Types of Insurance 7. Evolution of Insurance 8. Why Life Insurance
  • 4. 1. Introduction Insurance is a tool by which fatalities of a small number are compensated out of funds (Premium payment) collected from plenteous. Insurance companies pay back for financial losses arising out of occurrence of insured events, e.g. in personal policy death due to accident, in stick, explosion, etc.
  • 5. What is insurance? Insurance is a contractual arrangement whereby one party agrees to compensate another for losses in return for payment of a consideration.
  • 6. Who are the parties to an insurance contract? 1. The party agreeing to pay for the losses called the Insurer. 2. The party whose loss causes the insurer to make a claims payment called the insured. 3. The payment that the insurer receives called as a premium. 4. The contract called a policy of insurance. 5. The insured's possibility of loss called the insured's exposure to loss - Risk.
  • 7. 2. Meaning of Insurance Commonly acknowledged phenomenon that there are countless risks in every sphere of life. 1. Property: Fire risk. 2. Shipment of goods: Perils of sea. 3. Human Life: Risks of death or disability. 4. And so on…….
  • 8. 3. Definition of insurance The term INSURANCE : A co-operative mechanism to spread the loss caused by a particular risk over a number of persons who are expected to it and who agree to ensure themselves against that risk. Risk is, an uncertainty of a financial loss.
  • 9. 4. Nature of Insurance One can observe its following characteristics: 1. Risk sharing and Risk transfer. 2. Co-operative Device. 3. Risk Assessment in Advance. Give more details on each of above.
  • 10. 5. Functions of Insurance Insurers provide insurance policies. 1. Certainty 2. Protection 3. Risk Sharing 4. Assists in Capital Formation 5. Prevention of loss
  • 11. 6. Types of Insurance 1. Classification on the basis of nature of insurance. 2. Classification from business point of view. 3. Classification from risk point of view.
  • 12. Classification on the basis of nature of insurance. ◦ Life Insurance ◦ Fire Insurance ◦ Marine Insurance ◦ Social Insurance ◦ Miscellaneous Insurance
  • 13. Classification from business point of view 1. Life Insurance 2. General Insurance
  • 14. Classification from risk point of view 1. Personal Insurance 2. Property Insurance 3. Liability Insurance 4. Fidelity Guarantee Insurance
  • 15. 7. Evolution of Insurance The first insurers of life were the marine insurance underwriters who started issuing life insurance policies on the life of master and crew of the ship, and the merchants. The early insurance contracts took the nature of policies for a short period only. The underwriters issued annuities and pension for a fixed period or for life to provide relief to widows on the death of their husbands. The first life insurance policy was issued on 18th June 1583, on the life of William Gibbons for a period of 12 months
  • 16. 8. Why Life Insurance 1. Covers the risk of death. 2. Encourages compulsory savings. 3. Easy settlement and protection against creditors. 4. It helps to achieve the purpose of the life assured. 5. Peace of mind. 6. Loss control. 7. Social benefits. 8. Investment of funds. 9. Invisible earnings. 10. Insurance facilities liquidity. 11. Loan facility and tax relief.