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INDEX

Chapter no 1.

Name

Page no

Introduction of assurance

2.

New India Assurance co

3.

Products

4.

Various Products & plans

5.

Analysis & Review

6.

Questions & conclusion

THE NEW INDIA ASSURANCE CO.


IntroductionAssurance industry has always been a growth-oriented industry globally. On the Indian scene too, the assurance industry has always recorded noticeable growth vis--vis other Indian industries. The new India assurance Co. Ltd. was the first general assurance company to be established in India in 1850, which was a wholly Britishowned company. The new India assurance company to be set up by an Indian was Indian Mercantile assurance Co. Ltd., which was established in 1907. There emerged many a assurance player on the Indian scene thereafter. The general assurance business was nationalized after the promulgation of General Insurance Business (Nationalization) Act, 1972. The post-nationalization general assurance business was undertaken by the assurance Corporation of India (GIC) and its 3 subsidiaries: 1. New India Assurance Company Limited 2. National Insurance Company Limited 3. United India Insurance Company Limited Towards the end of 2000, the relation ceased to exist and the four companies are, at present, operating as independent companies. The Life assurance Corporation (AIC) was established on 01.09.1956 and had been the sole corporation to write the life assurance business in India.

The Indian assurance industry saw a new sun when the assurance Development Authority invited the applications for registration as assurors in August, 2000. With the liberalization and opening up of the sector to private players, the industry has presented promising prospects for the coming future. The transition has also resulted into introduction of ample opportunities for the professionals including Chartered Accountants. The Indian assurance industry is featured by the attributes: Low market penetration; Ever-growing middle class component in population. Growth of consumer Movement with an increasing demand for better assurance products; Inadequate application of information technology for business. Adequate Fillip from the Government in the form of tax incentives to the assured, etc. The industry formations need to keep vigil on these characteristics of the Indian market and formulate their strategies to entail maximum contribution to the output of the sector. The Indian life and non-life assurance business accounted for merely 0.42 percent of the world's life and non-life business in 1997. The figures of the basic parameters of the industry's performance viz. assurance Density and assurance Penetration also are evident of the hitherto existing low-yield Indian market conditions. The term "assurance Penetration" broadly measures the contribution of the assurance industry in relation to a nation's entire economic productivity. The figure of premium vis--vis the GDP of 1999 stood at 0.54 percent for

non-life assurance business and 1.39 percent for the life assurance business.

The term "assurance Density" reflects the assurance purchasing power. The premium per capita in India amounted to US $ 2.40 for assurance and US $ 6.10 for life assurance in 1999 but with the deregulation of the sector, a sea change in the scene is most likely. The assurance sector in India has come a full circle from being an open competitive market to Nationalization and back to a liberalized market again. Tracing the developments in the Indian assurance sector reveals the 360- degree turn witnessed over a period of almost two centuries. STRUCTURE OF THE ASSURANCE INDUSTRY The structure of the assurance industry comprises of the Operating department, Administrative department and the finance department. The Operating Department generally performs the basic functions pertaining to the designing of products, marketing thereof, servicing the insured, the insured, management of portfolio, etc. The Administrative Department looks after the day-to-day affairs of the company. The Finance Department backs the operations and administration of the company by accounting for the transactions, streamlining the flow of funds, materializing the management decisions, etc. The Administration Department as well as the Finance Department, usually, functions through in-house setup. The Finance Department functions in the areas of accounting, financial and management reporting, budgeting and controlling, etc. and thus renders enormous scope for finance

professionals. The new entrants in the assurance sector are likely to call for the services of the Chartered Accountants for their financial setup requirements. The Chartered Accountants have engaged themselves in the audit of assurance Companies since long. With the transition in the insurance sector, the horizons for their contribution have broadened. Contributions have broadened. There has, emerged a king-size pool of opportunities that the Chartered Accountants can explore and apply their professional wisdom and experience to.

BASIC FUNCTIONS OF THE ASSURANCE INDUSTRY

1. Risk Perception and Evaluation: The fundamental function of an insurer is to provide a cover against the detriment caused to the insured due to the happening of certain specified and agreed events. Thus, prior to providing such umbrella through a product, the insurer has to assess the risk involved in the transaction. The insurer has to identify the element of risk prevalent in the concerned industry or a particular unit. The perception of risk requires the study of variables through various methods including the application of scientific and statistical techniques and correlation thereof with the industry or unit under study in light of their basic environmental and infra-structural characteristics. 2. Designing the Insurance Product:

On the basis of the risks perceived, the insurer develops a product to cover the stipulated risks. While designing an insurance product, an insurer decides its cost to be charged from the insured in the form of premium, reduction thereof in certain cases like not lodging any claim during the previous covered period(s), suggesting the implementation of risk-mitigating measures, etc. 3. Marketing of the Product: The core function of the marketing force of an insurance company is to generate awareness about the insurance products among the target market. But in the Indian scenario, where the insurance penetration is too low as compared to the other nations, the marketing force needs to perform the proactive role in developing an insurance culture. It is through the efficiency of the sales force of an insurance company that the desirability and the success of a product are determined. Adequate knowledge of the insurance industry, products and the modalities attached therewith. Further, the marketing personnel should be adequately backed by the back-office setup.

4. Selling of the Products: The term selling in the context of Assurance industry connotes the issuance of policies to the applicant proposer. The Assurance basically embodies the covenant between the insurer and the insured wherein the former agrees to indemnify the latter for the loss caused to him on the happening of the certain agreed events up to a specified limit. The life

insurance policy generally contains the agreement whereby the insurer agrees to pay to the insured or the beneficiary of the policy an agreed amount on the expiry of the term of the policy or in the event of the death of the insured respectively. The additional benefits in the shape of Riders viz. Accidental Death Benefit, Double Sum Assured, Critical Illness benefits; Waiver of Premiums, etc. can also be appended with the policy on the payment of an additional premium. 5. Management of Portfolio: The management of the portfolio includes the assessment of requirement of funds, identification of various sources of finance, the evaluation of the sources in the light of their cost, availability, timing, etc., reconciling the features of various sources with the needs of the company and the selection of appropriate conjunction of sources. The insurer possesses huge amount of funds, which need proper management. The management of the portfolio of an insurance company requires the identification of investment avenues, evaluation thereof and the selection of the most appropriate mix of alternatives where the funds of the company can be invested. The selection requires the knowledge of finance related functions and techniques apart from the in-depth know of the patterns of requirement of funds in the company as well as in the industry as a whole.

ABOUT US
New India is a leading global insurance group, with offices and branches throughout India and various countries abroad. The company services the Indian subcontinent with a network of 1068 offices, comprising 26 Regional offices, 393 Divisional offices and 648 branches. With approximately 21000 employees, New India has the largest number of specialist and technically qualified personnel at all levels of management, who are empowered to underwrite and settle claims of high magnitude. New India has been rated "A-" (Excellent) by A.M.Best Co., making it the only Indian insurance company to have been rated by an international rating agency. Rating based on following factors:

Superior Capital Position Strong Operating Performance Only Company to develop significant International operations, long record of successful trading outside Indi

PROFILE

History Present Position International Presence Our Strengths Pioneers Citizens' Charter

History Incorporated on July 23rd, 1919 Founded by the House of Tata Founder member - Sir Dorab Tata. Nationalised in 1973 with merger of Indian companies. Present Position Gross Premium (in India) of Rs. 5017.20 crores in the year 2006-2007, as against Rs. 4791.49crores in the year 2005-2006. Assets Rs. 27444.57crores as on 31st March 2007. Network of Offices-26 Regional Offices, 393 Divisional Offices, 614 Branches and 34 Direct Agent Branches. Rank No. 1 in the Indian market. Largest Non-Life insurer in Afro-Asia excluding Japan. First Indian non-life company to cross Rs. 5000 crores Gross Premium. Global Re-insurance facilities. Over-seas presence in countries like Japan, U.K, Middle East, Fiji and Australia.

International Presence Overseas operations commenced in 1920. Operations in 24 countries in the year 2004-05. Network of 19 Branches, 12 Agencies, 2 Associate companies and 2 Subsidiary companies in the year 2004-05. Overseas Premium of Rs. 892.35 crores in the year 2004-05, which accounts for more than 80% of total overseas premium in India. Pre Our Strengths Largest number of Offices - In India and Abroad Trained and technically qualified staff 1068 fully computerised offices across India. "A-" (Excellent) rating by A.M.Best & Co (Europe) First domestic company to be rated by an International Rating Agency Rating based upon following factors: Superior capital position Strong operating performance Strong market position Only company to develop significant International operations, long record of successful trading outside India. Pioneers

First company to set up an Aviation Insurance Department in 1946. First company to handle the Hull Insurance requirements of the Indian Shipping Fleet.

First company to establish its own Training School. First company to introduce the concept of 'Model Office Training'. First company to create department in Engineering insurance.

Pioneer in Satellite insurance.

Citizens Charter Our Mission

To develop general insurance business in the best interest of the community.

To provide financial security to individuals, trade, commerce and all other segments of the society by offering insurance products and services of high quality at affordable cost

Our Values

Highest priority to customer needs. High standards of public conduct. Transparency in operations.

Our Commitment to the citizens

We will respond to all commercially viable general insurance requirements of the citizens, including products for weaker sections of the society at affordable price within three months from the date on which such a requirement is received.

We will ensure issuance of 100% of documents within a period of seven days.

We will ensure that prospectus of the various insurance products are provided to the customers and the extent of coverage is explained for his choosing the appropriate product. A written proposal will be obtained from the insured wherever necessary and accordingly the policy will be prepared.

We will settle all claims within a time schedule envisaged hereunder: A. Personal life insurance claims within 30 days on completion of all requirements. B. Property claims within 30 days on completion of all requirements. C. Liability claims within 30 days on completion of process of law.

We will promote customer education in general insurance products/services by holding workshops in various centers.

We will open a customer service cell in all ROs/DOs in addition to the existing 'May I Help You' counters.

We will set up proper grievance redressal mechanism in every operating office and will educate the clients about the same including the system of grievance redressal thorough ombudsman.

On request to the policy issuing office, we will make available to a customer, the status of his claim and/or claim settlement details within seven working days.

We will adhere to the IRDA guidelines in protecting the policyholders' interest.

FINANCIAL RATING

For the sixth consecutive year, the Company has been rated as "A-" (Excellent) by M/s. A.M. Best Europe Ltd. The rating reflects Company's excellent risk adjusted capitalisation, prospective improvement in underwriting performance and its leading business profile in the direct insurance market in India. A partially off-setting factor is the Company's reliance on investment income which counter balances underwriting losses. But the outlook is stable. A.M. Best believes the Company's risk adjusted capitalisation is excellent and anticipates that it will remain sufficient to absorb the likely growth in the net premium. Further it also expects that there will be a reduction in the combined ratio in the years to come. The Company is likely to maintain its leading business position as the largest direct insurer in India, despite increased competition from private players.

PERFORMANCE
New India Assurance Company is the largest non-life insurer in India. The financial strength of the Company is reflected from the following figures:-

WORKFORCE

Employee Strength (as on 31.03.2012)

Category

Total Number of Employees

Function

Class I Class II

5504 2574

Supervisory Development Force

Class III Class IV P. T. S. TOTAL

9032 2049 389 19548

Clerical/Secretarial Substaff/Drivers

PRODUCTS

PERSONAL

SOCIAL

PRODUCTS

COMMERCIAL

INDUSTRIAL

Definition
Standard fire policy that usually covers fire due to any cause, subject to some exceptions which too may be covered with additional premium. These policies may be extended further (by paying additional premium) to include collateral damages or losses such as loss of income.
Fire Insurance Definition

Fire insurance means insurance against any loss caused by fire. Section 2(61 of the Insurance Act defines fire insurance as follows: Fire insurance business means the business of effecting, otherwise than incidentally to some other class of business, contracts of insurance against loss by or incidental to fire or other occurrence customarily included among the risks insured against in fire insurance policies. What is Fire? The term fire in a Fire Insurance Policy is interpreted in the literal and popular sense. There is fire when something burns. In English cases it has been held that there is no fire unless there is ignition. Stanley v. Western Insurance Co. Fire produces heat and light but either o them alone is not fire. Lighting is not fire. But if lighting ignites something, the damage may be covered by a fire-policy. The same is the case with electricity.
Characteristics of Fire Insurance 1. Fire insurance is a contract of indemnity. The insurer is liable only to the extent of the actual loss suffered. If there is no loss there is no liability even if there is a fire. 2. Fire insurance is a contract of good faith. The policy-holder and the insurer must disclose all the material facts known to them. 3. Fire insurance policy is usually made for one year only. The policy can be renewed according to the terms of the policy. 4. The contract of insurance is embodied in a policy called the fire policy. Such policies usually cover specific properties for a specified period. 5. Insurable Interest: A fire policy is valid only if the policy-holder has an insurable interest in the property covered. Such interest must exist at the time when the loss occurs. In English cases it has been held that the following persons have insurable interest for the purposes of fire insurance- owner; tenants, bailees, including carriers; mortgages and charge-holders. 6. In case of several policies for the same property, each insurer is entitled to contribution from the others. After a loss occurs and payment is made, the insurer is subrogated to the rights and interests of the policy-holder. An insurer can reinsure a part of the risk. 7. Fire policies cover losses caused proximately by fire. The term loss by fire is interpreted liberally. Example: A women hid her jewellery under the coal in her fireplace. Later on

8. 9.

10.

11.

she forgot about the jewellery and lit the fire. The jewellery was damaged. Held, she could recover under the fire policy. Nothing can be recovered under a fire policy if the fire is caused by a deliberate act of policy-holder. In such cases the policy-holder is liable to criminal prosecution. Fire policies generally contain a condition that the insurer will not be liable if the fire is caused by riot, civil disturbances, war and explosions. In the absence of any specific expectation the insurer is liable for all losses caused by fire, whatever may be the causes of the fire. Assignment: According to English law a policy of fire insurance can be assigned only with the consent of the insurer. In India such consent is not necessary and the policy can be assigned as a chose-in-action under the Transfer of Property Act. The insurer is bound when notice is given to him. But the assignee cannot be recovering damages unless he has an insurable interest in the property at the time when the loss occurs. A stranger cannot sue on a fire policy. Payment of Claims: Fire policies generally contain a clause providing that upon the occurrence of fire the insurer shall be immediately notified so that the insurer can take steps to salvage the remainder of the property and can also determine the extent of the loss. Insurance companies keep experts on their staff of value the loss. If in a policy there is an international over valuation of the property by the policy-holder, the policy may be avoided on the ground of fraud.

Fire Insurance, Fire Insurance Policy

A fire insurance policy involves an insurance company agreeing to pay a certain amount equivalent to the estimated loss caused by fire to the insured, within the time specified in the contract. The indemnity is subject to change depending upon the policy. One should confirm with the insurer about the types of risks covered, since one cannot insure the property against all types of risks of fire.

Insurance policies are legally binding contracts between an insurance company and a policyholder that establishes the details of coverage,

specifying the conditions or perils and compensation provided should they occur. A fire insurance policy is a specific type of property insurance which covers the insured in the event their home is lost or damaged during a fire. It is a common investment and is often required and included as part of a homeowners insurance policy when a mortgage is approved.

A fire insurance policy typically has four different coverage areas. The dwelling portion refers directly to the home itself. The coverage for the dwelling should always be enough to adequately replace the home. Rebuilding expenses are often determined based on the actual square footage of the home in question. The portion referring to other structures includes the coverage of garages or sheds that are not part of the dwelling itself and are considered a separate area.

Personal property is considered a separate coverage area as well and includes the contents within the home that are not part of the dwelling itself, for example furniture, electronics, computer equipment, clothing and jewelry. Personal property items of considerable value should be specifically listed as part of the fire insurance policy, items that are not explicitly valued tend to be compensated with a standard amount.

The fourth coverage area relates to additional expenses that exceed the insureds usual cost of living as a result of the fire damage. This can refer to the expenditures of temporary housing among other things, all incurred when forced to live away from your residence during the process of rebuilding or repairing. These expenses need to be documented in order to receive reimbursement later. Usually there is a limit set for additional expenses claimed.

When insurance companies pay losses on claims it is either based on actual cash value or replacement value. Actual cash value commonly refers to the fair market value of the home at the time the loss or damage is incurred. Replacement value means the insured would be compensated for the entire cost or replacing, repairing, or rebuilding the home. Actual cash value can be considerably less than the replacement value and is usually less preferable. Most fire insurance policies also cover any water damage resulting from the process of fighting the fire, such as that created from a fire hose or a broken pipe. Some insurance policies also make stipulations for building code upgrades, for example if current building codes require a specific material but the home in question had a substandard quality of material, the homeowner would be expected to account for the discrepancy in cost relating to the repair process. What is the extent of coverage under a Fire Insurance Policy?

Fire insurance provides protection for the estimated value of the physical house. However, there are a number of exclusions to the same, for example medical bills, loss of human life and pets, loss of personal belongings, structures outside the property (including garages and gazebos), damage to the landscape and expenses for accommodation for the time being. These things can be covered under a package of extended property insurance. What are the main types of Fire Insurance policies?

* Specific Policy: The insurer is liable to pay a set amount lesser than the propertys real value. In this policy, the propertys actual value is not considered to determine the indemnity. The average clause, which requires the insured to bear the loss to some extent, does not play a role in this policy. In case the insurer inserts the clause, the policy will be known as an average policy. * Comprehensive policy: This all-in-one policy indemnifies for loss arising out of fire, burglary, theft and third party risks. The policyholder may

also get paid for the loss of profits incurred due to fire till the time the business remains shut. * Valued policy: This policy is a departure from the standard contract of indemnity. The amount of indemnity is fixed and the actual loss is not taken into consideration. * Floating policy: This policy is subject to the average clause. The extent of coverage expands to different properties belonging to the policyholder under the same contract and one premium. The policy may also provide protection to goods kept at two different stores. * Replacement or Re-instatement policy: This policy is subject to the reinstatement clause, which requires the insurance company to pay for replacing the damaged property. So, instead of giving out cash, the insurer can re-instate the property as an alternative option.

Why does one need Fire Insurance?

Fire insurance is important because a disaster can occur at any time. There could be many factors behind a fire, for example arson, natural elements, faulty wiring, etc. Some facts that stress the importance of fire insurance include:

* Fire contributes to the maximum number of deaths occurring in America due to natural disasters. * Eight out of ten fire deaths take place at home. * A residential fire takes place after every 77 seconds. * The major reason for a residential fire is unattended cooking

Fire Insurance Claim Procedure:


Individuals/corporates must inform insurer as early as possible , in no case later than 24 hours. Provide relevant information to the surveyor/claim representative appointed by the insurer. The surveyor then analyzes the extent/ value of loss or damage. The claim process takes anywhere between one to three weeks.

What is Covered in Fire & Special Perils Policy?


Accidental fires, lightning, explosion and implosion due to pressure vessels(used for domestic purposes) By rioting mob, striking workers, malicious acts by third parties and damage by terrorists Impact damage by any rail/road vehicle or animal by direct contact. Commodities damaged by water used for extinguishing fire. Loss\damage caused by pulling down of adjacent buildings by the fire brigade to prevent the flames from progressing. Breakage of commodities in the process of their removal from the premises where fire is intense. Aircraft and other aerial and and/or space devices and/or articles dropped therefrom, excluding destruction or damage occasioned by pressure waves caused by such devices Payments made to people employed in extinguishing fire. Subsidence and landslide, including rock slide. Natural calamities like storm, cyclone, typhoon, hurricane, tornado, flood and impact damage. Damages caused due to bursting or overflowing of water tanks, apparatus and pipes Bush Fire

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