CHAPTER I

INTRODUCTION
The outlook for the general insurance industry in India is stable as per the
financial forecast that has been made. Over the medium and long term,
Indias insurance market will continue to experience major changes as its
operating environment increasingly deregulates. On the one hand, a mix of
new products, new delivery system and a greater awareness of risk will
generate growth. On the other hand, the competition is expected to remain
intense as private sector insurers and those about to enter India seek to win
market share from the more established public sector entities.
In 2006-07, Indias general insurance market witnessed a variety of
changes as deregulation continued at a hectic pace. With the removal of
pricing controls on fire and engineering lies in 2007, insurers have since
discounted their rates by 50% or more in their quest to retain or win market
share. Furthermore, the number of private insurers is expected to grow as
various foreign companies have announced intentions to establish joint
ventures.
1.1 HISTORY OF INSURANCE INDUSTRY
In some sense we can say that insurance appeared simultaneously
with appearance of human society. In earlier economies, we can see
insurance in the form of people helping each other. For example, if a house
is burnt, the members of the community help build a new one. Should the
same thing happen to ones neighbour, the other neighbors must come to
help? Otherwise, neighbors will not receive help in the future.
Insurance in the modern sense, started as a methods of transferring or
distributing risk were practiced by Chinese and Babylonian traders as long
ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants
1

traveling treacherous river rapids would redistribute their cargo across many
vessels to limit the loss due to any single vessels capsizing. The
Babylonians developed a system which was recorded in the famous Code of
Hammurabi, C. 1750 BC, and practiced by early Mediterranean sailing
merchants. If a merchant received a loan to fund his shipment, he would pay
the lender an additional sum in exchange for the lenders guarantee to cancel
the loan should the shipment be stolen.
Greek monarchs were the first to insure their people and made it
official by registering the insuring process in governmental notary offices.
They invented the concept of the general average. Merchants whose goods
were being shipped together would pay a proportionally divided premium
which would be used to reimburse any merchant whose goods were
jettisoned during storm or sinking of the vessel in the sea.
The Greeks and Romans introduced the origins of health and life
insurance C. 600 AD when they organized guilds called benevolent
societies which cared for the families and paid funeral expenses of
members upon death. Guilds in the middle Ages served a similar purpose.
Before insurance was established in the late 17th century, friendly
societies existed in England, in which people donated amounts of money to
a general sum that could be used for emergencies.
Separate insurance contracts (i.e., insurance policies not bundled
with loans or other kinds of contracts) were invented in Greeks rulers in the
14th century, as were insurance pools backed by pledges of landed estates.
These new insurance contracts allowed insurance to be separated from
investment, a separation of roles that first proved useful in marine insurance.
Insurance became far more sophisticated in post-Renaissance Europe, and
specialized varieties developed. Insurance as we know it today can be traced
to the Great Fire of London, which in 1666 A.D devoured 13,200 houses. In
2

the aftermath of this disaster, Nicholas Barbon opened an office to insure

buildings. In 1680, he established Englands first fire insurance company,
The Fire Office, to insure brick and frame homes. The first insurance
company in the United States underwrote fire insurance and was formed in
Charles Town (modern-day Charleston), South Carolina, in 1732.

1.2 EVOLUTION OF INSURANCE INDUSTRY IN INDIA

IMPORTANT MILESTONES
In India, insurance has a deep-rooted history. It finds mention in the writings
of Manu (Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya
(Arthasastra ). The writings talk in terms of pooling of resources that could
be re-distributed in times of calamities such as fire, floods, epidemics and
famine. This was probably a pre-cursor to modern day insurance. Ancient
Indian history has preserved the earliest traces of insurance in the form of
marine trade loans and carriers contracts. Insurance in India has evolved
over time heavily drawing from other countries, England in particular.

Year
1818

Event
The advent of life insurance business in India with the

1834

establishment of the Oriental Life Insurance Company in Calcutta.

Oriental Life Insurance Failure

1850

The advent of General Insurance in India with the establishment of

1870

Triton Insurance Company Ltd in Calcutta

The enactment of the British Insurance Act

1907

The Indian Mercantile Insurance Ltd was set up

1912

The Indian Life Assurance Companies Act, 1912 was the first

1928

statutory measure to regulate life business.

The Indian Insurance Companies Act was enacted.

1956

Nationalization of Life Insurance Sector and Life Insurance

Corporation .The LIC absorbed 154 Indian, 16 non-Indian insurers

1971

as also 75 provident societies.

The General Insurance Corporation of India was incorporated as a

1973

company
General insurance business was nationalized with effect from
1st January 1973.
107 insurers were amalgamated and grouped into four

1993

companies namely:
1) National Insurance Company Ltd.,
2) The New India Assurance Company Ltd.,
3) The Oriental Insurance Company Ltd
4) The United India Insurance Company Ltd.
The Government set up a committee under the chairmanship of
RN

Malhotra

former

Governor

of

RBI

to

propose

recommendations for reforms in the insurance sector

2000
The IRDA was incorporated as a statutory body in April 2000.
Foreign companies were allowed ownership of up to 26%.
2000-01 Insurance Industry had 16 new entrants, 10 in Life and 6 in
General Insurance
2001-03 Insurance Industry had 5 new entrants, 2 in Life and 3 in General
2003-04 Insurance Industry had 1new entrant, Sahara India Insurance
Company Ltd. In Life Insurance category
2004-05 Insurance Industry had 1new entrant, Shri Ram Insurance
company Ltd. In Life Insurance category
2005-06 Bharti Axa Life insurance company was granted Certification of
2006

Registration in July
Bharti Axa Life insurance company commenced its operations the
4

newest player in the insurance sector.

1.3 EVOLUTION OF NON-LIFE INSURANCE IN INDIA:

The boycott of British goods and British institutions, which occurred
because of the nationalist movement, encouraged formation of Indian-owned
commercial and business houses. By 1907, the Indian mercantile the first of
the long lasting general insurance companies to be established with Indian
capital, had started functioning five offices, the New India, Vulcan, Jupiter,
British India General and the Universal, were established in 1919 almost
simultaneously for transacting general insurance business.
In 1928, prominent insurance men of Bombay met and formed the
Indian insurance companies association to protect the interest of Indian
insurers. Leaders of the insurance industry began to organize conferences,
educate public on the benefit of insurance, focus attention on the annual
remove of national wealth through invisible exports, and arise public
interest in favour of Indian insurance.
In 1950, the planning commission was set up to formulate plans for
successive five years. This five year plan brought about large scale economic
development and increased insurance consciousness among the people. As
insurance business increased the number of claims for compensation against
losses also naturally increased. Settlement of too many large claims meant a
severe demand on the funds of insurance companies. So to prevent this
situation the practice of Reinsurance was adopted according to which
insurers themselves reinsured portions of the insurances they had
undertaken. So Indian insurance companies with their expanding business
wanted to reinsure for which they had to seek foreign reinsurance markets.
Since the need for conserving foreign exchange was felt in India all
the insurers in India as well as foreigners operating in India formed the India
5

Reinsurance Corporation in 1956. This corporation provided reinsurance

facilities. It was compulsory for insurers in India to reinsure a fixed
percentage of their insurances with the corporation.
The Insurance Amendment Act 1950 imposed certain limitations on
expenses of management. The general insurance council constituted what
was called the tariff committee to control and regulate terms and conditions
of business.
In 1972, the General Insurance Business (Nationalization) Act 1972
was passed under the provisions of this act. The general insurance
corporation of India was established for the purpose of directing; controlling
and caring on the general insurance business and all the 106 insurers were
merged and grouped into four subsidiaries of the general insurance
corporation of India namely:

National Insurance Company Ltd., with its head office at Calcutta.

The New India Assurance Company Ltd., with its head office at
Bombay.

The Oriental Insurance company Ltd., with its head office at Delhi.

The United India Insurance Company Ltd., with its head office at
Madras.

1.4 THREE PHASES OF DE-TARIFFING

Indias general insurance industry has undergone de-tariffing in three phases:
1994 -- marine cargo, personal accident, health, banker liability and
aviation
2005-06 -- marine hull segment
2007 -- Fire, engineering and motor own damage (OD). However, the
de-tariffing did not immediately allow for free pricing. Instead, insurers
were required to follow the file and use method, whereby they were
expected to file a charter of proposed rates, which was then approved by
IRDA.

The only segment that remains under a tariff regime is the third party
motor business, although there has been a large upward revision in this
areas premium rates by regulators in recent times. Moreover, commercial
third party motor business, which has traditionally contributed to adverse
claims ratios, has been moved to a common pool, resulting in loss sharing.

1.5 INSURANCE SECTOR MOVING QUICKLY

The Indian insurance sector is rapidly moving towards international
standards of free (risk-based) market pricing and new/innovative product
offerings. Big changes have occurred over the last seven years, during which
the sector was opened to private participation, but with foreign direct
investment (FDI) capped at 26%. With the regulator possibly lifting the
ceiling on foreign ownership to 49%, the capacities of domestic partners
would no longer constrain capital levels for joint ventures.
In the private sector, there were nine players with future generally
the latest entrant as of September 2007. A number of potential new entrants
await the necessary approvals. Most private players have tie-ups with
international companies to compensate for their lack of experience in
insurance. Within the private sector, ICICI Lombard (IL) leads with 12.4%
market share for the period April-December 2007. Recently, Reliance
General Insurance (RGI) as emerged as the fastest growing player, recording
a 150% rise year-on-year in gross direct premium in the first nine months of
2007-08.

1.6 SIGNIFICANCE OF INSURANCE SECTOR

As the industrial revolution comes with cut throat competition, the
chances of uncertainty are also increasing day by day. Insurance plays
significant role for not only an individual or for a family but it has spread
over the entire nervous system of the nation. According to the famous
7

philosopher J. Royce, Insurance Principles comes to be more and more used

and useful in modern affairs. Not only does it serve the ends of individuals,
it tends more and more both to pervade and transform our modern social
order. It brings into new synthesis, not merely pure and applied sciences, but
private and public interests, individual prudence and a large regard for. The
general welfare theft and charity. Insurance is a method through which one
can just spread over the risk. It is a way of reducing uncertainty of
occurrence of an event. It is co-operative effort where in the loss occurred by
a specific risk in spread over a large number of persons. Insurance is a
solution for reducing risk, large number of people collect small amount,
known as premium and out of this losses are paid to the suffering persons.

1.7 ORIGIN AND DEVELOPMENTS OF INSURANCE

No one know that when the insurance transactions started? The
origin of insurance is lot in antiquity. However, there are certain evidences
on the basis of which one can say that the earliest form of insurance was
marine insurance. Evidences are also on record that arrangements
embodying the ideas of insurance were being practiced in Babylone and
India, centuries ago. References are also available in Hammurabi Manu
(Manav Dharma Shashtra). The word Yogakshema used in Rig-Veda
suggested that some form of community insurance was being carried on by
the Aryans in our country well over 3000 years ago. The existence of burial
society also acknowledge that insurance played significant role in Buddhist
period when it used to help the family of a deceased person by building a
house and protecting the widows. Marine insurance came earliest than fire
insurance and life insurance came and lastly other forms of insurances were
developed in the world.
8

1.8 MARINE INSURANCE

Marine insurance was the first form of the insurance business. It is
said that it probably began in north Italy by the end of 12th century. The
Italian merchants who came to England in 12 th or 13th century covered their
risk of assets with insurance. The first marine policy called Polliza was
issued in Italy in 1300. Charter of insurance was also established in 1300
in Belgium. Insurance was similarly developed in other European countries
like Spain, France, Germany and Holland. Insurance sector was greatly
developed in the time of Queen Elizabeth-I in England during the 14 and
the 15th centuries. Lombards, the ex-communicated businessmen of Italy
captured the whole market of marine insurance business. They run the
business along with other and settled docent the street of London which was
later on famous by the name of Lombard Street a well known place for
marine insurance transactions. The present form of marine insurance is
developed by the Lloyds Association which was established in 1774 by a
man Mr. Edward Lloyds, a coffee merchant with the publication of Lloyds
News. The merchants gathered into the coffee house and took liability in
marine insurance business as per their financial position. Even today, Lloyds
Association is one of the leading firms transacting marine insurance in the
whole world. Later on Marine Insurance Act was passed in 1906 in England.
Other countries had also passed the marine insurance act nearly the same
period. It was passed in 1963 in India.

1.9 FIRE INSURANCE

The evidences of emergence of fire insurance can be seen in 16
century in Germany. There was a scheme made to spread over the fire risk a
9

group of people in Oldenburg in 1609 by collecting the premium. The

market of fire insurance was greatly developed after the great fire of London
in 1666 in 25th which 85% of the houses burnt to ashes and property worth
10 crores sterling was completely destroyed. The first fire insurance office
was established in London in 1680. Sunlife office was set up in 1710 in
London. The industrial revolution gave impetus to develop the fire insurance
business because there was great expansion of machinery used. The market
for fire insurance expanded for protecting the highly cost machinery. Fire
Insurance started in India with the establishment of Triton Insurance
Company in Calcutta in 1850. The North British Mercantile company came
into existence in 1861.Fire insurance has very slow trend for progress in
India up to nationalization of general insurance.

1.10 LIFE INSURANCE

The origin of Life Insurance business was not so earlier. There is no
specific evidence available through which one can consider how the idea of
life insurance developed. The first life insurance policy issued on the life of
Mr. William Gybbons on 18th June, 1653 in England. It was issued for one
year period. The first registered life office in England was hand in hand
society which was established in 1690. Mutual Life Insurance Company
came into existence later on in 1696. The first mortality table prepared in the
19th century gave impetus to the life insurance transactions. Life Insurance
started in India by Europeans with the establishment of Oriental Life
Insurance Company in 1818. Bombay Mutual Life Insurance came into
existence in 1871. In 1874, the third company entered into the same business
of life insurance called The Oriental Government Security Life Assurance.
The life insurance act passed in 1956 in India.
10

1.11 MISCELLANEOUS INSURANCE

The Industrial revolution gave impetus to certain miscellaneous
insurance like accident insurance, liability insurance, theft and burglary
insurance and fidelity insurance. There are certain latest forms of insurance
like cattle insurance, crop insurance, profit insurance and consequential loss
insurance.

1.12 ORIGIN OF GENERAL INSURANCE

Insurance was a method of sharing of the losses, embodying the
principle of co-operation existed in the early civilization. Evidences are
available that proves loss of profits in industry was insured by the village cooperatives in India during the Aryan Civilization. Bottomary Bonds were
the first plan, which considered insurance as a technique of providing
protection against the fortuitous events for a Consideration. The
medilevaranean merchants as early as in the fourth century B.C issued the
bonds. The Bottomary loan was an advance of money on a ship during the
period of a voyage. It was repayable with the agreed rate of interest, on the
arrival of the ship safely at destination. There were possibilities of losing the
ship during the voyage; the obligation to repay the loan was extinguished in
that case. The interest payable constituted a sort of premium for the risk of
total loss. Similar loans were issued on the security of cargo and were
called Respondentia bonds
There are references found in Manav Dharma Shashtra, code of
Manu which contained rules for sea form contracts observed by the traders
from Broach and Surat who set sailed in Indian built ships with Indian
11

merchandise to Lanka, Egypt and Greece. The other four-runner of insurance

was the marine practice of general average whereby losses incurred to save
the common venture, were shared by contributions from all the interests
ship, freight and cargo all the things saved by the general average at. The
Rhodians also practiced it in their Mediterranean trade in 916 B.C. The
earliest transaction of insurance can be traced out to the beginning of the
fourteenth century in Northern Italy. Some Italian merchants were engaged
in the Mediterranean trade with India via Constantinople and with the
European countries by land. It originated the practice of breaking of the
botany bonds into two instruments covering separate transactions.
1. The advance of money, which was to be repaid on the safe arrival of the
ship.
2. A policy of assurance, which paid the amount, stated, in the event of loss
of sea. This was the beginning at marine insurance business.

1.13 COMPANY PROFILE

Founded in 1947, [ORIENTAL LIFE INSURANCE COMPANY
LTD] is one of India's leading finance companies. Quality in lending,
transparency in transactions, outstanding customer care and an unyielding
commitment to being the best, has made [ORIENTAL LIFE INSURANCE
COMPANY LTD] one of the most respected finance companies in India.
[ORIENTAL LIFE INSURANCE COMPANY LTD] is part of the
[ORIENTAL

GOVERNMENT

SECURITY

LIFE

ASSURANCE

COMPANY LTD]
The Company was a subsidiary of Life Insurance Corporation of
India from 1956 to 1973 (till the General Insurance Business was
nationalized in the country). In 2003 all shares of our company held by the

12

General Insurance Corporation of India has been transferred to Central

Government.
The Company is a pioneer in laying down systems for smooth and
orderly conduct of the business. The strength of the company lies in its
highly trained and motivated work force that covers various disciplines and
has vast expertise. Oriental specializes in devising special covers for large
projects like power plants, petrochemical, steel and chemical plants. The
company has developed various types of insurance covers to cater to the
needs of both the urban and rural population of India. The Company has a
highly technically qualified and competent team of professionals to render
the best customer service.

1.14 REVIEW OF LITERATURE

Oriental Insurance made a modest beginning with a first year
premium of Rs.99, 946 in 1950. The goal of the Company was Service to
clients and achievement thereof was helped by the strong traditions built up
overtime.
Oriental with its head Office at New Delhi has 30 Regional Offices
and nearly 900+ operating Offices in various cities of the country. The
Company has overseas operations in Nepal, Kuwait and Dubai. The
Company has a total strength of around 15,000+ employees. From less than
a lakh at inception, the Gross Premium went up to Rs.58 crores in 1973 and
during 2010-11 the figure stood at a mammoth Rs. 5569.88 crores.
Oriental Insurance is a professionally managed independent Boardrun Company. Illustrious personalities like Shri T.A.Pai ( who later became
Cabinet Minister in the Union Government ), Shri K. R. Puri, who rose to be
the Governor of RBI and Shri B.D.Pande (who later became the Governor of
West Bengal) were among our past Chairmen. At present Dr.A.K.Saxena is
13

Chairman-Cum-Managing Director of our Company. The Board of Directors

of our Company includes eminent personalities in various fields.
The insurance sector is sine-quo-non for development and economic
growth of any economy and it has been recognized for many years. The
significance of insurance was also acknowledged in the first conference of
United Nations Conference on Trade and Development (UNCTAD) in 1964
by stating that a sound national insurance and reinsurance market is an
essential characteristic of economic growth.
It seems Insurance not only facilitates economic transactions through
risk transfer and indemnification but it also promotes financial
intermediation (Ward and Zurbruegg, 2000). More specifically, insurance
can have effects such as promote financial stability, mobilize savings,
facilitate trade and commerce, enable risk to be managed more efficiently,
encourage loss mitigation, foster efficient capital allocation and also can be a
substitute for and complement government security programs (Skipper,
2001). Zurbruegg (2000) acknowledged Brown and Kim (1993) suggestion
that total premium fail to account for different market forces in various
countries and make comparisons difficult and fail for account for regulatory
effects on pricing, but availability of data for longer period was stated as a
reason for using total premium. In addition authors claimed:

1.14 The role of Insurance in Economic Growth and

Development.
Insurance is an important growing part of the financial sector in
virtually all the developed and developing countries. A resilient and well
regulated insurance industry can significantly contribute to economic growth
and efficient resource allocation through transfer of risk and mobilization of
savings. In addition, it can enhance financial system efficiency by reducing

14

transaction costs, creating liquidity and facilitating economies of scale in

investment.
Ward and Zurbruegg (2000) examine the casual relationship
between growth in the insurance industry and economic development by
recognizing that the economic benefits of insurance are conditioned by
national regulations, economic systems and culture. Further, Ward and
Zurbruegg (2000) argue that an examination of the interrelationship between
insurance and economic growth needs to be conducted on a country-bycountry basis. The study is important because in contrast to the available
evidence on the importance of banks-typified by the work of Levine and
Zervos (1998) little is known about Insurance.
Philip Kotler has discussed the importance of channels partners.
Better the channel partners better will be the delivery model. Detailed
discussion about how to design the channel structure so that all the
requirements could be fulfilled is provided. The various issues faced by the
organization while managing the channels are also given. When an
organization has more than one channel it becomes very important that all
the channels should be integrated in such a way that the organization get the
best out of all. At times due to the conflicting benefit of the different
channels the conflict arise so various strategies to manage these issues is
also discussed in the chapter.
Michael J. Etzel has written about the marketing of services. The
marketing of services is different from the goods because of the
characteristic of service like intangibility, inseparability, heterogeneity etc.
Brief about pricing strategies is also given in case of services. The authors
have also given the impact of technological development on the services
marketing. The author has also given the importance of brand and after sales
15

support in case of services as perception of the customers plays an important

role. In other part of the book the authors has described the importance of
distribution channels and designing of the same. A channel partner should be
consider as partner according to discussion. The legal complications
associated with channels are also discussed. These complications are
necessary to take into the consideration while managing the channels. The
conflicting interest of channels both horizontally and vertically are also
taken into the consideration.
Boone has discussed about the importance of personal financial
planning. The concept of time value of money has also been elaborated. The
importance of creating and implementing budget is given under money
management. The other important concepts for financial planning like credit
management and understanding taxes are also explained. In one section the
authors have discussed the importance of investment and what should be the
major considerations while making any investment. The considerations
include the risk associated with the investment, return on the investment etc.
The importance and benefits of life insurance has also been given. The
discussion also includes various legal aspects associated with life insurance.
The overview of retirement planning is also given which includes
importance and benefit of retirement planning. Various tools for proper
retirement planning are also discussed.

1.15 PLAN OF THE STUDY

The first chapter embodies a comprehensive introduction about the
Oriental Insurance Company Ltd in India and also gives some
important Review of Literature.
The second chapter explains the Research Methodology.
16

 The role and performance of Oriental Insurance Companies Ltd in

India is explained in the third chapter.
The last chapter would provide a required findings and valid
suggestions for further improvement in Oriental Insurance
Companies Ltd in India.

CHAPTER II
RESEARCH METHODOLOGY
17

Insurance is an important growing part of the financial sector in virtually

all the developed and developing countries. A resilient and well regulated
insurance industry can significantly contribute to economic growth and
efficient resource allocation through transfer of risk and mobilization of
savings. In addition, it can enhance financial system efficiency by reducing
transaction costs, creating liquidity and facilitating economies of scale in
investment. The objective with which this study is taken up and the methods
by which the secondary data is required to be collected are discussed in this
chapter.

2.1 OBJECTIVES OF THE STUDY

The objectives of the study are three in number they could be stated
as follows
1.To study the performance of Oriental Insurance Company Ltd.
2.To identify the various insurance policies available in Oriental Insurance
Company Ltd.
3.To find out the customers benefits from the various products introduced
by Oriental Insurance Company Ltd.

2.2 HYPOTHESIS
The two hypothesis which are proposed to be verified are
i) The new insurance products introduced Oriental Insurance Company
Ltd in India acts as a tool for improving the performance of Oriental
Insurance Company Ltd in India.
ii) The Oriental Insurance Company Ltd has been successful in providing
insurance facilities to the public in various areas.

2.3 METHODS OF STUDY

18

Though this study is purely fact finding in nature, a lot of

secondary data are required for its successful completion hence it is
necessary to explain in details the methods by which these data are sought to
be collected.

2.4 COLLECTION OF SECONDARY DATA

This research study is purely relied on the secondary data. The
secondary data required for the study could be obtained mostly form books,
journals, officials reports; periodicals brought by the Government of India
in addition to these, efforts would be made to collect as much information
from the internet about the performance of Oriental Insurance Company Ltd
in India. These information would make the analysis exhaustive and through
going in every respect.

2.5 THE USE OF THE STUDY

Though this study is apparently elementary in nature, it would be of
numerous uses for the researchers in the days ahead.
1) It would be of very great use to understand the role played by Oriental
Insurance Company Ltd for overall development of the economy by
mobilizing the funds.
2) The study would give any casual reader of the project an exposure to
the ways and means of enhancing various insurance policies of
Oriental Insurance Company Ltd.
3) Numerous innovative studies would speak off in the days ahead about
the performance of Oriental Insurance Company Ltd.

2.6 SCOPE OF THE STUDY

Though this study is purely explorative in nature, it cannot be denied
that it could be of numerous uses to researchers and enthusiasts. This study
19

has a wider scope among the insurance sector. The study which focuses on
various aspects such as competitive position of Oriental Insurance Company
Ltd, strengths and weaknesses of insurance covers, customers perception,
etc also holds good for other companies in the life and non-life insurance
segment.
The outcome of the study, which are based on the above aspects can
be utilized by the marketing department of both life and non-life insurance
companies.

2.7 NEED OF THE STUDY

This study helps the company to identify its competitive position
among its industrial competitors by which the company can further improve
its performance to enjoy high reputation among clients. This study also helps
in making necessary changes in the attributes of the insurance cover offered
by the company so that the customers can enjoy the benefits of the insurance
cover. The need for the study also arises to identify and offer additional
insurance products according to the expectations of the customers.

2.8 LIMITATIONS OF THE STUDY

There were certain limitations in undertaking this research work. As
it is understood that the limitations are a part of the project, they have been
overshadowed by the benefits of the study.
1. Adequate secondary data are not available regarding the various
insurance policies of Oriental Insurance Company Ltd.
2. The study mainly based on secondary data.

20

CHAPTER III
REVIEW OF LITERATURE
1. R I S K M A N A G E M E N T I N S U R A N C E S . ar u n a j a t e s f i r s t
e d i t i o n y e a r 2 0 0 9 . S e v e r a l c o mp l a i n t s h a v e b e e n r e c e i v e d
by IRDA regarding non-availability of motor third party
i n s u r a n c e e s p e c i a l l y f o r c o m me r c i a l v e h i c l e s . H o w e v e r i n
view

of

adverse

claim

experience

i n s u r er s

have

been

e x p r e s s i n g d i ffi c u l t y t o u n d e r w r i t e t h i s b u s i n e s s u n l e s s t h ey
a r e p er mi t t e d t o c h a rge p r e mi u m r a t e s t h a t t h ey c o n s i d e r
appropriate.
I n v i e w o f t h e ma n d a t o r y n a t ur e o f m o t o r t h i r d p a r t y
i n s u r a n c e b u s i n e s s I R D A h a s t a k e n s t e p s t o mo n i t o r t h e
r a t e s , t er ms a n d c o n d i t i o n o f c o v e r. TR D A c o n s i d e r s t h a t a l l
insurers registered to carry on general insurance business
21

including motor insurance business should actively

participate in providing such cover to vehicle owners at
r a t e s a s n o t i f i e d by t h e m.
2. BANKING AND INSURANCE
o . p . a g a r w a l s e c o n d e d i t i o n y ea r 2 0 11
At p r e s e n t , i n s u r a n c e c o v e r i s a v a i l a b l e t o a b o u t 2 6 % o f
t h e i n s u r a b l e p o p u l a t i o n , 2 4 cr o r e i n t h e c a s e o f l i f e insurance and potential general insurance India is one of the
lowest

i n s u r a n c e p e r c a p i t a r a n k i n g i n t h e w or l d a s i s s o

clear from the following chart:.

(No. of policies per 100 insurable

Indonesia
Philippines
India
Japan

persons)
6.2
12.1
26.2
201.4

P e r c a p i t a g r o s s pr e mi u m o f $ 5 i s l o w c o mp a r e d w i t h o t h e r
c o u n t r i e s l i k e Tai w a n . Th e e s t i ma t e d i n s u r a b l e p o p u l a t i o n i n
I n d i a i s e x p e c t e d t o r e a c h by 2 0 1 0 a t 7 0 c r or e .
3 . I N S U R A N C E AN D R I S K M A N A G E M E N T- p . k . g u p t a .
- S e c o n d e d i t i o n y e a r 2 0 11
Th e pr e mi u m s i n c a s e o f n o n - i n s u r a n c e a r e g e n e r a l l y o n
an annual basis. If the insurance cover is for less than 12
months, special scales short scales may be used as
p r e s c r i b e d f o r v ar i o u s pr o d u c t . I f t h e c o n s i d e r a t i o n f o r t h e
p r e mi u m t o t a l l y or p a r t i a l l y f a i l s w i t h o u t f r a u d o r o t h e r w i s e
22

o n p a r t o f t h e a s s u r e d or h i s a g e n t s t h e n , t h e pr e mi u m s s h a l l
b e a c c o r d i n g l y r e t u r n e d . Pr e mi u m i s r e f u n d e d o n l y w h e n t h e
p o l i c y p r o v i d e s f o r i t . Th e pr e mi u m c o n v e n t i o n a l l y h a s t o b e
r e c e i v e d i n a d v a n c e w i t h t h e p r o p o s a l . Th e p o l i c y c o me s i n t o
f o r c e o n l y w h e n t h e p r e mi u m i s a c t u a l l y r e c e i v e d .
4. TIMES OF INDIA
- D e c 11 , 2 0 1 2 , 0 3 . 2 6 AM I S T
R o a d a c c i d e n t v i c t i m g e t s 3 7 l a k h i n d a m a g e s NE W DE L H I :
A M o t o r Ac c i d e n t C l a i ms Tri b u n a l h a s a w a r d e d a
c o mp e n s a t i o n o f R s 3 6 . 9 8 l a k h t o a 4 0- y e a r-o l d m a n , w h o
s u ffe r e d 9 0% p e r ma n e n t d i s a b i l i t y i n a r o a d m i s h a p
i n v o l v i n g a r a s h l y - d r i v e n c a r. T h e t r i b u n a l d i r e c t e d i ffc o
t o k i o G e n e r a l I n s u r a n c e C o mp a n y L i mi t e d , w i t h w h i c h t h e
o ffe n d i n g v e h i c l e w a s i n s u r e d , t o p a y R s 3 6 , 9 8 , 9 11 t o c i t y
resident Manjeet Singh.
A s p e r t h e F I R a n d c h a rge s h e e t , t h e d r i v er w a s d r u n k w h i l e
d r i v i n g t h e v e h i c l e . Th e d o c u me n t s o f cr i mi n a l c a s e w h i c h
h a v e b e e n p l a c e d o n r e c o r d a r e pr i ma f a c i e e v i d e n c e o f t h e
f a c t t h a t S i n g h s u ffe r e d i n j u r i e s o n a c c o u n t o f r a s h a n d
n e g l i g e n t d r i v i n g o f t h e o ffe n d i n g v e h i c l e by t h e d r i v e r,
M A C T p r e s i d i n g o ffi c e r H a r i s h D u a n e s a i d .
Singh told the tribunal that the accident had taken place on
the night of July 1, 2009 when a Santro car had hit him as he
was crossing a road near Dhaula Kuan. He added that due to
t h e i mp a c t h e s u s t a i n e d gr i e v o u s i n j ur i e s a n d h a d t o b e
r u s h e d t o a n e a r by h o s p i t a l .
23

H e s a i d h e w a s r e n d e r e d p ar a l y z e d f r o m b e l o w t h e w a i s t , h a s
l o s t c o n t r o l o f h i s b o w e l m o v e me n t s a n d i s i n c a p a b l e o f
working.
S i n g h a l s o t ol d t h e t r i b u n a l t h a t h e w a s w o r k i n g a s a s e n i o r
p r o gr a mm e r w i t h a c o mp a n y h er e a n d w a s e a r n i n g a s a l a r y o f
R s 1 5 , 5 7 0 p e r mo n t h . Th e d r i v er a n d o w n e r o f t h e c a r,
S h a l e e n B h a t n a g a r a n d M a n i P a d ma r e s p e c t i v e l y, c o n t e n t e d
before the tribunal that the accident had taken place as
S i n g h w a s n e g l i g e n t a n d c a r e l e s s t o w a r d s t r a ffi c r u l e s .
5 . TI M E S O F I N D I A I n d i a b u s i n e s s J a n 6 , 2 0 1 3 , 0 6 . 2 2 P M
IST
G e n e r a l i n s u r a n c e i n d u s t r y ma y g r o w by 2 0% a n n u a l l y
M U M B A I : Th e I n d i a n g e n e r a l i n s u r a n c e i n d u s t r y i s l i k e l y t o
g r o w by a r o u n d 2 0 p e r c e n t p e r a n n u m i n t h e c o mi n g y e a r s
b e c a u s e o f i n c r e a s i n g p e n e t r a t i o n , a t o p o ffi c i a l o f N e w
I n d i a As s u r a n c e s a i d .
" D e s p i t e s l o w d o w n i n e c o n o my , t h e g e n e r a l i n s u r a n c e
i n d u s t r y h a s g r o w n by ar o u n d 2 0 p e r c e n t i n t h e r e c e n t p a s t .
We h o p e t h e i n d u s t r y w i l l s e e s i mi l a r g r o w t h i n t h e c o mi n g
y e ar s , " c h a i r ma n a n d m a n a g i n g d i r e c t o r o f N e w I n d i a
Assurance G Srinivasan said.
The penetration of the general insurance in India stands at
24

around 0.7 per cent, lower than the global average of 1.5 to
4 per cent.
R e c e n t l y, t h e f i n a n c e m i n i s t r y h a d a s k e d t h e i n d u s t r y t o
c o me u p w i t h p r o p o s a l s f o r i n c r e a s i n g t h e p e n e t r a t i o n .
A s t o t h e t o t a l pr e mi u m , S r i n i v a s a n s a i d i t s h o u l d g o u p b y
a t l e a s t f o u r t i me s i n t h e n e x t 1 0 y e a r s .

P r e s e n t l y, t h e t o t a l p r e mi u m o f t h e i n d u s t r y i s a r o u n d R s
6 0 , 0 0 0 c r o r e , w i t h a gr o w t h o f a r o u n d 2 0 p e r c e n t p e r
a n n u m.
A b o u t m a j o r c h a l l e n g e s b e f o r e t h e i n d u s t r y, S r i n i v a s a n s a i d
it will have to reduce the underwriting losses.
N e w I n d i a As s u r a n c e , t h e l a rge s t g e n e r a l i n s u r e r o f t h e
c o u n t r y, c r o s s e d R s 1 0 , 0 0 0 cr o r e m a r k i n pr e mi u m c o l l e c t i o n
i n t h e l a s t f i n a n c i a l y e a r a n d a i m s t o t o u c h a g l o b a l p r e mi u m
o f R s 1 2 , 0 0 0 c r or e i n t h e c u r r e n t f i n a n c i a l y e a r.

CHAPTER IV
25

PERFORMANCE OF ORIENTAL INSURANCE

COMPANY LTD
The Oriental Insurance Company Ltd was incorporated at Bombay on 12
September 1947. The Company was a wholly owned subsidiary of the
Oriental Government Security Life Assurance Company Ltd and was formed
to carry out General Insurance business. The Company was a subsidiary of
Life Insurance Corporation of India from 1956 to 1973 (till the General
Insurance Business was nationalized in the country). In 2003 all shares of
the company held by the General Insurance Corporation of India were
transferred to Central Government.
Oriental Insurance with its head Office at New Delhi, India has 23
Regional Offices and nearly 1000 operating Offices in various cities of the
country. The Company has overseas operations in Nepal, Kuwait and Dubai.
The Company has a total strength of around 16, 000 employees. From less
than a lakh at inception, the Gross Premium went up to Rs.58 crores in 1973
and during 2006-07 the figure stood at a mammoth Rs. 4020 crores.

4.1 CORPORATE VISION

To be the most respected & preferred non-life insurer in the markets
we operate.

4.2 CORPORATE OBJECTIVES

1) Act as a financially sound corporate entity with high business ethics.
2) Implement best human resource development practices to build a highly
efficient, dedicated and motivated workforce with high morale and moral
values.
3) Optimally utilize the information technology infrastructure.
4) Provide excellent customer service.
26

5) Run the business profitably through prudent underwriting and efficient &
proper claim management.
6) Effectively manage our reinsurance operations.
7) Effectively manage our investments for optimizing yield.
8) Have effective risk management systems.
9) Improve the penetration of non-life insurance by proper underwriting,
innovation & marketing.

4.3 MANAGEMENT
Oriental Insurance is a professionally managed independent Boardrun Company. Illustrious personalities like Shri T.A.Pai ( who later became
Cabinet Minister in the Union Government ), Shri K. R. Puri, who rose to be
the Governor of RBI and Shri B.D.Pande (who later became the Governor of
West

Bengal)

were

among

our

past

Chairmen.

At present Dr.A.K.Saxena is Chairman-Cum-Managing Director of our

Company. The Board of Directors of our Company includes eminent
personalities in various fields.

4.4 APPLYING FOR HEALTH INSURANCE

With rising medical costs, it has now become imperative for
everybody to get Health Insurance coverage. Here are the Top 6 factors to
keep in mind:

4.4.1 Adequate Coverage Amount

Take an adequate cover to protect yourself and everyone who is
dependent on your income - e.g. your family members. Hospitalization costs
are higher in metros; people living in metros typically should opt for a
higher coverage amount.
27

4.4.2 Re-imbursement or Cash Allowance?

Health Insurance comes in various flavours. It is imperative that you
understand the difference between re-imbursement plan and a cash
allowance plan. A cash allowance plan cannot replace a re-imbursement plan
(often referred to as "Mediclaim" - because here the amount you get is based
on the actual amount of expense incurred whereas in a cash allowance you
get a fixed lumpsum for every day you spend in the hospital - no matter how
expensive the treatment might be.

4.4.3 Cashless Facility

Imagine having to run around to arrange for cash in an emergency
situation for getting admitted to the hospital of your choice! Most insurance
companies had launched cashless cards for re-imbursement based plans - so
that you could simply present the card at the time of admission and an
administrator would take care of settling your hospital bills directly from the
insurance company. However in mid-2010, several public sector insurers
withdrew support for the cashless facility. Before buying your Health
Insurance, you may want to check with your insurer how many hospitals
does he offer support for the cashless facility and especially about the
hospitals in your area. But please remember that just because a hospital is in
the cashless network at the time of taking your first policy it may not remain
in the cashless network when your claim arises. So this cannot be the sole
factor for deciding about the health insurance company.

4.4.4 Age until Renewals allowed

Most of us will certainly fall ill at some point of our lives - and the
chances are that we will fall ill when we are older. Entering into a new
Health Insurance plan is significantly cheaper and easier when one is young
& healthy. The chances of having any major pre-existing disease is lower so
most plans are available and also the insurance company must disclose today
28

the premiums applicable today as well as the premiums applicable at an

older age Ensure that your health insurance plan is renewable after 65 because at that age, you don't want to discover that health insurance is
difficult to get when you need it the most.

4.4.5 Co-pay
One of the fears insurance companies nurse is that the customer
might opt for unusually expensive hospital rooms or procedures than are
warranted. To overcome this, some insurance companies introduce a co-pay
or sub-limits. In a co-pay you are required to share some of the expenses
incurred-regardless of the amount covered.
E.g. say you have a 3 lac cover and the bill you want to be reimbursed amounts to Rs. 2 lacs. With a plan that has a 20% co-pay, you will
only get 80% of the bill re-imbursed by the insurer - i.e. Rs. 1.6 lacs and you
will have to bear the rest). For the same coverage amount, a plan with a copay should come with a much lower premium than one without a co-pay.
Sub-limits simply restrict the amount of re-imbursement for individual bill
items - e.g. even a Rs 1 lac bill may not be fully re-imbursed for a Rs 3 lac
coverage amount, if say the sub-limits set on room rentals/ doctors fees/ OT
charges - or even a specific procedure (e.g. cataract/ knee replacement) is
exceeded. Again a plan with sub-limits should have a lower premium for it
to be worth considering.

4.4.6 Temporary and Permanent exclusions

Normally most policies provide coverage for pre-existing diseases
only after a waiting period. Remember pre-existing disease is not just the
disease you are suffering from at the time you took the first policy but also
any other disease that is caused due to such pre-existing disease. A common
example is that heart illness will also be treated as pre-existing (even though
at the time you took the first policy you had no heart disease) if you had
29

diabetes when you took the first policy since the heart illnesses is caused by
Diabetes. This single item is responsible for most of the disputes between
insurance companies and consumers. So make sure you disclose everything
that is required in the form. Please do not sign a blank form and leave it to
the agent to fill the form later. This will ensure that at least at the end of the
waiting period you will get the disease covered. If you do not disclose the
disease then you run the risk of your policy being cancelled or a renewal
being denied if this fact is discovered later.
Apart from the above illness contracted during the first 30-90 days of
the first policy is normally not covered. Some specific diseases/treatment
such as cataract , knee replacement, etc. may also be covered only after a
waiting period.
There are permanent exclusions as well such as beauty treatment,
sexually contracted diseases, non allopathic hospitalization expenses , etc.
Always read the policy brochure carefully and also look at the section
dealing with permanent exclusions in the policy document. Keep a copy of
all documents submitted to the insurance company for your future reference.
Any promise made by the agent or even an official of the insurance company
has no value unless it is in writing or at least on email. So if you are basing
your decision on any such promise make sure you get it in record in some
form.
Oriental health insurance family floater policy is issued for a period of one
year and it offers two plans:-

4.5 Silver plan Sum insured in multiples of Rs.1,00,000/- and up to

Rs.5,00,000/- per person aged 18 years and above . 50% of this limit for
persons less than 18 years.

30

4.6 Gold plan Sum Insured in multiples of Rs. 2,00,000/-, and up to

Rs.10,00,000/- per person aged 18 years and above. 50% of this limit for
persons less than 18 years.

4.7 Oriental Health Insurance Eligibility

The Entry age limit of the proposer is maximum 55years
Continuous renewals will be accepted till the proposer is 65years old.

4.8 Oriental Health Insurance - Coverage Benefits

The following reasonable and necessary expenses (subject to limits)
are payable under the policy for various benefits:SILVER PLAN (Limit ofGOLD PLAN (Limit of

BENEFIT
Room,

Reimbursement)

Boarding

Nursing

Expenses

provided

by

Reimbursement)

and
asNot exceeding 1 % of theNot exceeding 1 % of the
theSum Insured per day

Sum Insured per day

Hospital /Nursing Home

Intensive Care (IC) Unit
Expenses as provided byNot exceeding 2% of theNot exceeding 2% of the
the

Hospital/NursingSum Insured per day.

Sum Insured per day.

Home
Surgeon,

Anaesthetist,

Medical

Practitioner,As per the limits of theAs per the limits of the

Consultants, Specialistssum insured

Fees
Anaesthesia,
Oxygen,
Theatre

sum insured

Blood,As per the limits of theAs per the limits of the

Operationsum insured

sum insured

Charges,
31

Surgical

Appliances,

Medicines

&

Drugs,

Diagnostic Material and

X-Ray,

Dialysis,

Chemotherapy,
Radiotherapy, Cost of
Pacemaker,

Artificial

Limbs & and similar

expenses
Rs.1,000/- per illness and
limited to maximum 1%
of the sum insured or
Ambulance

servicesRs.3,000/- whichever is

charges

less, for the entire policy

period

Rs.2,000/- per illness and

limited to maximum 1% of
the

sum

insured

or

Rs.6,000/- whichever is less,

for the entire policy period
0.1% of sum insured per day
per illness subject to a
maximum compensation for

DAILY

HOSPITAL

CASH ALLOWANCE

10 days per illness. The

NIL

overall

liability

of

the

Company during the policy

period will be limited to
Attendant allowance

1.5% of the sum insured

Rs.500/per
day
of

NIL

hospitalization per illness

and up to 10 days per
illness. The overall liability
32

of the Company during the

policy period will be limited
to compensation for 15 days
of hospitalization
DOMICILIARY HOSPITALIZATION
Surgeon,
Medical
Practitioner, Consultants,
Specialists Fees, Blood,
Oxygen,

Surgical10% of Sum Insured,

Appliances, Medicines &Maximum

Drugs,

Rs.25000/-

Diagnosticduring policy period

Rs.50000/-,during

policy

period

Material and Dialysis,

Chemotherapy, Nursing
expenses
Treatment for Dog bite
(or bite of any other
rabid

animal

monkey, cat etc.)

like

Reasonable

expenses

limited up to Rs.5,000/actually

incurred

for

immunization injections
in any one policy

Reasonable expenses limited

up to Rs.5,000/- actually
incurred for immunization
injections in any one policy

4.9 ADD ON COVERS (OPTIONAL, SUBJECT TO EXTRA

PREMIUM)
Benefits
Personal Accident

Silver Plan
Gold Plan
Sum insured in multiplesSum Insured in multiples of
of Rs.1,00,000/- and upRs.2,00,000/- and up to
to

Rs.5,00,000/33

perRs.10,00,000/- per person

person aged 18 years and

above . 50% of this limit
for persons less than 18
years
Life Hardship Survival

aged 18 years and above.

50% of this limit for persons
less than 18 years

Plans

NIL

of

benefit

AS

DEFINED HEREINAFTER

4.10 ORIENTAL MEDICLAIM INSURANCE - Pre-existing

Exclusions
Pre-existing health condition or disease or ailment / injuries
Any ailment / disease / injuries / health condition which are preexisting (treated / untreated, declared / not declared in the proposal form), in
case of any of the insured person of the family, when the cover incepts for
the first time, are excluded for such insured person up to 4 years of this
policy being in force continuously.
For the purpose of applying this condition, the date of inception of
the policy taken from the Company, for each insured person of the family,
shall be considered, provided the renewals have been continuous and
without any break in period.
This exclusion will also apply to any complications arising from pre
existing ailments / diseases / injuries. Such complications shall be
considered as a part of the pre existing health condition or disease. To
illustrate if a person is suffering from hypertension or diabetes or both
hypertension and diabetes at the time of taking the policy, then policy shall
be subject to following exclusions.
34

Diabetes
Diabetic Retinopathy
Diabetic Nephropathy
Diabetic Foot /wound
Diabetic Angiopathy

Diabetes

Hypertension
Cerebro

Hypertension
Vascular

accident
Hypertensive

Diabetic Retinopathy
Diabetic Nephropathy

Nephropathy
Internal

Bleed/

Haemorrhages
Coronary

Artery

Disease

&

Diabetic Foot
Diabetic Angiopathy

Diabetic Neuropathy
Hyper / Hypoglycaemic

Diabetic Neuropathy
Hyper / Hypoglycaemic

shocks

shocks
Coronary
Disease
Cerebro

Artery
Vascular

accident
Hypertension
Nephropathy
Internal

Bleeds/

Haemorrhages

Expenses incurred on any disease, except as specified under the following

table, contracted by the Insured person during the first 30 days from the
commencement date of the policy except treatment for accidental external
injuries.
The expenses on treatment of following ailment / diseases / surgeries for
the specified periods are not payable if contracted and / or manifested during
35

the currency of the policy. If these diseases are pre-existing at the time of
proposal the exclusion for pre-existing condition shall be applicable in such
cases.
Benign ENT disorders and surgeries i.e. Tonsillectomy,
1 Year
Adenoidectomy, Mastoidectomy, Tympanoplasty etc.
Polycystic ovarian diseases
1 Year
Surgery of hernia
2 Year
Surgery of hydrocele
2 Year
Non infective Arthritis
2 Year
Undescended Testes
2 Year
Cataract
2 Year
Surgery of benign prostatic hypertrophy
2 Year
Hysterectomy for menorrhagia or fibromyoma or myomectomy
2 Year
or prolapse of uterus
Fissure / Fistula in anus
2 Year
Piles
2 Year
Sinusitis and related disorders
2 Year
Surgery of gallbladder and bile duct excluding malignancy
2 Year
Surgery of genito- urinary system excluding malignancy
2 Year
Pilonidal Sinus
2 Year
Gout and Rheumatism
2 Year
Hypertension
2 Year
2 Year
Diabetes
Calculus diseases
2 Year
Surgery for prolapsed inter vertebral disk unless arising from
2 Year
accident

36

Mediclaim Insurance is a cover for reimbursement of medical

expenses following Hospitalization/Domiciliary Hospitalization of the
Insured in respect of the following situations: (A) In case of a sudden illness
(B) In case of an accident (C) In case of any surgery which is required in
respect of any disease which has arisen during the policy period. The major
benefit for taking a Group Mediclaim policy is that the insured gets a Group
discount, hence the premium per person is lower.

4.10.1 Covered Risks

It is a hospitalization cover for reimbursement of the medical
expenses incurred in respect of covered disease /surgery while the insured
was admitted in the hospital as an in-patient. The cover also extends to prehospitalization and post- hospitalization for periods of 30 days and 60 days
respectively.

4.10.2 Salient Features

Product name - Individual Mediclaim Policy.
Coverage amount - Rs. 1,00,000.
Premium (cost of coverage) - Rs. 5,196/-.
Policy term (years) 1 year.
Cashless facility Yes.

4.10.3 Coverage
Hospitalization expenses Yes.
Daycare hospitalization Yes
Pre hospitalization expenses 30 days
Post hospitalization expenses - 60 days
Cost of health check up Yes

37

4.10.4 Eligibility
Medical test - After 45 years
Max. entry age (years)- 55 years
Eligibility conditions - Indian National only. No coverage for treatment
outside India.

4.10.5 Benefits
Income tax benefit Yes
Sub-limits applicable- Yes
Sub-limits description - The following provisions for reasonable &
customary expenses, which are reimbursable under the policy have been
introduced: Room, Board and Nursing Expenses as provided by the Hospital
Nursing Home not exceeding 1 % of the Sum Insured or Rs. 5000/- per day
whichever is less.
ICU expenses not exceeding 2 % of the Sum Insured or Rs. 10,000/- per
day whichever is less (Room stay plus I.C.U. stay should not exceed total
number of admission days). Ambulance services - 1% of the sum insured or
Rs 2000/- whichever is less shall be reimbursable where the patient has to be
shifted from residence to hospital in case of admission in Emergency Ward /
I.C.U. or from one Hospital / Nursing home to another Hospital / Nursing
Home for better medical facilities. These expenses are payable only when
registered ambulance is used.

4.10.6 Pricing
Family discount Yes
Cumulative bonus Yes
No Claim bonus Yes

38

4.10.7 Other Details

Provider type - PSU Companies
List of permanent exclusions - i-Benign ENT disorders and surgeries i.e.
Tonsillectomy, Adenoidectomy, Mastoidectomy, Tympanoplasty etc. 1 year
Polycystic ovarian diseases - 1 year
Surgery of hernia- 2 years
Surgery of hydrocele- 2 years
Non infective Arthritis- 2 years
Un-descended testes-2 Years
Cataract.2 Years
Surgery of benign prostatic hypertrophy- 2 Years
Hysterectomy for menorrhagia or fibromyoma or myomectomy or
prolapsed of uterus -2 Years
Fissure / Fistula in anus-2 Years
Piles- 2 Years
Sinusitis and related disorders-2 Years
Surgery of gallbladder and bile duct excluding malignancy- 2 Years
Surgery of genitor- urinary system excluding malignancy-2 Years
Pilonidal Sinus-2 Years
Gout and Rheumatism-2 Years
Hypertension - 2 Years
Diabetes-2 Years
Calculus diseases-2 Years
Surgery for prolapsed inter vertebral disk unless arising from accident-2
Years
Surgery of varicose veins and varicose ulcers - 2 Years
Congenital internal diseases -2 Years
39

 Joint Replacement due to Degenerative condition - 4 Years

Age related osteoarthritis and Osteoporosis - 4 Years

4.11 PRODUCT PROFILE

Oriental's vast product portfolio has been specially designed to cater to
the needs of consumers in India. We develop general insurance plans in the
best interests of our customers. Oriental Insurance continues to provide
customized insurance products for all sections of the society at affordable
prices.
Now we can buy and renew policies Online. Buy a new Insurance
policy, Renew an existing Oriental Insurance policy or renew policies
bought from any other general insurance company by registering yourself on
our Portal and paying online through your debit card / credit card or Netbanking. To check out various online facilities available, you may login on
the Portal.
The various insurance product types are given below:

4.11.1 Marine Insurance

Oriental insurance company ltd brings to India a wide range of
marine cargo products from various international markets. Their products
considerably widen the scope of coverage presently enjoyed by the insured
population without necessarily involving a high premium.

4.11.2 Burglary insurance

Burglary Insurance for machinery, stock in trade, furniture, fixtures &
fittings and for goods held in trust or on commission for the insured is
responsible.

Burglary Insurance covers burglary or housebreaking

40

accompanied by either forcible or violent entry into/exit from the premises

and hold-up.

4.11.3 Engineering Insurance:

* Erection All Risks Insurance
The Erection All Risks policy is a comprehensive insurance, which provides
complete protection against all types of risks associated with erection,
testing, commissioning of machinery, plant and equipment during
constructional stage.
* Boiler & Pressure Plant Insurance
It covers the risk of explosion and collapse of any boiler or other pressure
plant in the course of ordinary working.
*Contractor's All Risks Insurance
All types of civil engineering works, ranging from small buildings to
massive dams are exposed to damage from a wide range of causes such as
fire, lightning, flood, inundation, storm, cyclone and other accidental
damages. It is a comprehensive insurance which provides complete
protection against all types of civil construction risks.
* Machinery Breakdown Insurance
Oriental insurance company ltd extend its hand offering Machinery
Breakdown Insurance Cover ably supported by most capable technocrats to
throw more light about the mechanical side of all machines.
*Marine-Cum-Erection Insurance
It is developed as a comprehensive product to manage the risk and insurance
needs in course of erection as well as during transit. It is a combination of
Erection-All-Risks and Marine Insurance to cater to the needs of the client
where Marine/Transit insurance is connected with Erection All Risks
Insurance of any project.
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*Contractor's Plant & Machinery

Contractor's Plant & Machinery is an exclusive all risks policy covering the
plant & machinery used by the contractors at the site for various projects. It
covers the property whether they are at work or at rest or being dismantled
for the purpose of cleaning or overhauling, or in the course of operations or
when being shifted within the premises or during subsequent re-erection, but
in any case only after successful commissioning.
3.11.4 Liability Insurance:

Product Liability Insurance

Liability arises from a civil wrong or breach of personal duty imposed by
law on a person and owed to his/her fellow citizens. In some countries legal
rights and duties are framed in a Civil Code. In others they are not codified
but drawn from the precedent of decisions handed down in the courts over
the centuries; this is known as "Common Law".

Workmen's Compensation Insurance

It provides Insurance against occupational accident or disease to an
employee whilst in course of his employment.

Public Liability Act

It provides indemnity against the Insured's liability at law to the public in
general (excluding employees) for bodily injury and loss of or damage to
property due to the business activities carried on in insured's premises.
3.11.5 Business solutions:

Industrial All Risks Policy

Its a wide and comprehensive cover for the large sized business where the
assets at all locations of the insured exceed Rs.100 Corers. It is an All Risks
Policy covering a wide range of perils such as fire and allied perils, burglary,
accidental damage, breakdown as well as business interruption.

Office Shield

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A flexible policy specifically designed to meet the insurance needs of your

modern office, irrespective of the number of locations.

Hotel Shield
Tailor-made cover designed to suit the specific needs of the Hotel Industry.

Enterprise Shield.
It is a newly devised package providing total insurance solutions for
industries. You do not need to analyze and evaluate a large number of
insurance policies to insure your business completely.

Education Shield
Tailor-made cover designed to suit the specific needs of Education Industry.

Traders Shield
It is an attractive policy that provides shopkeepers with a basic insurance
package and a further range of optional covers.

All Risks Policy for Portable Equipments

It offers an overall solution to cover portable items like laptops, mobiles,
cameras and projectors.

Standard Fire and Special Perils Policy

It offers cover against fire and allied perils and the perils of nature. The
policy can cover building (including plinth and foundation), plant and
machinery, stocks, furniture, fixtures and fittings and other contents.

Consequential Loss (Fire) Insurance

It provides protection against loss of profits in business due to an
interruption in business consequent upon an insured peril covered under the
material damage policy.
3.11.6 Employee solutions:
* Group Personal Accident Policy
It is a worldwide cover providing protection for the employees against any
accidental injuries sustained by the individuals resulting in death and
disablement.
* Group Health
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Health Premium Platinum is a comprehensive health insurance package,

designed for the employees of company and their family members.
* Workmen's Compensation
Workmen's Compensation provides cover to target clients as required by law
in support to project insurances or property insurances.

4.12 FAMILY FLOATER]

4.12.1 FEATURES
This is a Health Insurance Policy.
FloaterImplies single Sum Insured for entire family.
Family includes Self ,Spouse,Children,Parents,and Parents in Laws.
Available in two plans-Silver and Gold.
4.12.2.PLANS
PLAN-SILVER
PLAN-GOLD
10% compulsory coBASIC
Without co-pay.Sum Insured choice Rs-6pay,Sum
Insured
PLAN
10lakhs.
choice Rs-1-5 lakhs
Cash Allowance for the days addmitted.
Inbuilt
Attendance allowance-If a child between
3m to 10 yrs is admitted.
Personal
Accident
Personal Accident cover for self and
Add On cover for self and
dependants.
dependants.
Life Hardship(Survival Benefit),diseases
like cancer(IV) stage,End stage Renal
Add On NIL
Disease,Stroke leading to Paralysis or
paralegia.

4.12.3 NEW FEATURES

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Daily Hospital Cash

-Benefit in Gold Scheme
-Limit 0.1% of Sum Insured Max.10 days
Attendant Allowance
-Benefit in Gold Scheme,if child below 10 yrs admitted.
-Rs-500 per day max.10 days.

4.12.4 OTHER FEATURES

Ambulance charges

Rs.1000 or 1% of S.I.in Silver

Rs.2000 or 1% of S.I in Gold

Discount on OMP Premium

Discount of 15% on OMP policy

Family Floater Policy is suspended, if OMP taken

TPA

Option to avail services or not

5% discount if opted out

4.12.5 NEW FEATURES with Extra Premium

Personal Accident
-Available in Silver and Gold plans.
-In Silver up to Rs.5 lakhs.
-In Gold up to Rs.10 lakhs.
Life Hardship
-Benefit in Gold scheme with Extra Premium
-Plan-A with 15% of Sum Insured
-Plan-B with 25% of Sum Insured
-Benefit given, if Insured person survives for 180days or 270days
after discharge

4.13 HAPPY FAMILY FLOATER POLICY

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4.13.1 PROPOSAL FORM

Proposal form and self declaration form to be filled in block letters

and in duplicate.

Please attach two stamp size photographs of each insured person.

The company will not be on risk until the proposal has been accepted

by the company and communication of the acceptance has been given to

the proposer in writing on receiving full payment of premium.

The insured above 60 yrs. Of age has to undergo pre insurance health

check up through companys authorised diagnostic centre and cost of

such expenses to be borne by him.
4.14 ORIENTALTRAVEL INSURANCE
Oriental Overseas Travel Mediclaim Insurance is available to Indian
Citizen between 6 months and 70 years of age who are undertaking bonafide
trips outside India which will not involve any form of manual work and do
not exceed 180 days duration unless specifically extended.
The overseas mediclaim policy provides indemnity for expenses
necessarily incurred for immediate treatment of illness, diseasescontracted or
injury first sustained (during the period of insurance of overseas travel
subject to policy terms and conditions.) and in addition also personal
accident, total loss of checked baggage, delay of checked baggage, loss of
passport and personal liability covers. (during the period of insurance of
overseas travel subject to policy terms and conditions.)
4.15 HEALTH INSURANCE
Oriental health insurance family floater policy is issued for a period of
one year and it offers two plans - Silver plan Sum insured in multiples of
46

Rs.1,00,000/- and upto Rs.5,00,000/- per person aged 18 years and above.
Gold plan Sum Insured in multiples of Rs. 2,00,000/-, and upto
Rs.10,00,000/- per person aged 18 years and above. 50% of this limit for
persons less than 18 years.
4.16 HOME INSURANCE
The House holder's Insurance Policy is a comprehensive shelter that
protects your house and the various contents in it against a variety of risks. It
is a single policy that takes care of a number of contingencies. The policy is
divided into 10 sections. Sec 1(B) and a minimum of any 2 other sections
are compulsory. Section 1 : Fire and Allied Perils. Section 2: Burglary.
Section 3:All risks. Section 4 : Plate Glass. Section 5 : Breakdown of
domestic appliances. Section 6: T.V. Set. Section 7 : Pedal Cycles. Section
8 : Baggage Insurance. Section 9: Personal Accident. Section 10: Public
Liability.

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CHAPTER V
FINDINGS AND CONCLUSION
5.0

Insurance covers many risks and uncertainties in the world of

business and act as a boon to the industrial or commercial concerns and

general public. Businessman can easily and confidently transfer the risk of
loss of insurance. It also safeguards the interest of individual and public.
Businessman does not have to worry about losses or damage when the risk
of loss to their property is duly insured. They will receive compensation
against actual loss takes place. In life insurance, life policy gives financial
protection to the dependents to the extent of the assured who may be the
only breadwinner initially. An insured businessman or policyholder can
enjoy normal expected profits. As the property of the businessman is duly
insured and he can get a normal profit margin, he can change lower prices to
consumers. Insurance has the effect of improving credit standing of
businessman, commercial banks and financial institutions insisted for
insurance of articles, which are kept as security for loans. Therefore,
Researcher has conducted a study of financial performance of Oriental
Insurance Companies Ltd in India. Researcher has collected secondary data
for the major part of the study. Secondary data have been collected with
published material.

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5.1 FINDINGS
1. Oriental Insurance company offers a variety of products and services to
its customers
2. The Company has to face a lot of competition from other private and
public sectors.
3. It is gaining popularity amongst the masses due to increasing customer
satisfaction and a wide range of products and services.

5.2 SUGGESTIONS
1. Oriental Insurance Company Ltd should give more advertisement to
attract the people.
2. Oriental Insurance Company Ltd should simplify the procedure for the
convenience of customer.
3. Oriental Insurance Company Ltd should simplify the claim settlement
procedure.
4. To create goodwill through good customer satisfaction.
5.3 CONCLUSION
Despite Indias vast population, rural poverty and lack of awareness
about insurance products have constrained the growth of insurance business
in the past. This is expected to change with the recent deregulation and
liberalization of the insurance sector. The Indian insurance industry
undoubtedly displays great potential. Indias high saving rate, customary
lack of social security nets and a tradition of frugality are expected to be key
growth drivers. Improved nutrition and medical standards have improved the
life expectancy necessitating the provision comfortable standard of living to
49

the retires. Another factor closely related is the rising middle class that will
encourage increased insurance spending and their growing risk awareness.
India is poised to experience major changes in its insurance market.
Insurers will operate in an increasingly deregulated and liberalized
environment. However, in spite of the liberalization, Oriental Insurance
Company Ltd will continue to maintain their dominant position in the
market, at least in the foreseeable future. However given the enormous
potential of the Indian market, it is for the insurers to come out with new
product, better packaging and improved customer service. Product
innovation and channel diversification will gain momentum, in line with
global trend of financial service convergence.

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BIBLIOGRAPHY
1. Agrawal Raj, Business Environment, Excel Books, New Delhi,
Second Edition 2002.
2. Agrawal Raj and Diwan, Parag, Business Environment, First Edition,
Excel Books, Delhi 2000
3. Insurance Institute of India Principals of General insurance, Bombay.
4. Insurance Institute of India, General insurance Institute of India,
Bombay.
5. Mishra M. N. (2004), Insurance Principles & Practice, S.Chand &
Company Limited, New Delhi.
6. Periasamy P. (2008) Principles and Practice of Insurance Himalaya
Publishing House, Mumbai.
7. Ravichandran K. (2007) Recent Trends in Insurance Sector in India,
Abijeet Publications, Delhi.
WEB SITES
1. www.irda.org
2. www.bimaonline.com
3. www.indiaiinfoline.com
4. www.insuranceinstituteofindia.com

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