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Ami Gargi Pandey Sanjana Pandya Devanshi Shah Jinal Patel Shriti Bhatt
A C K N O W L E D G E M E N T
WE WOULD LIKE TO THANK OUR PROFESSOR SAMIR TUNGARE FOR GIVING US THIS TOPIC SO THAT WE COULD LEARN SOMETHING RELATED TO THE TOPIC AND FOR ALL THE GUIDANCE AND SUPPORT.
Insurance is a form of contract or agreement under one party agrees in return of a consideration to pay an agreed amount of money to another party to make goods for a loss, damage, injury to something of value Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice
What is Insurance
India 1818 - Oriental Life Insurance Company 1st Insurance Company. 1870 - Bombay Mutual Life Assurance Society 1st Life Insurance Company. 1912 - The Indian Life Assurance Companies Act enacted the 1st Law to Regulate the Life Insurance Business. 1928 - The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life & non-life insurance businesses. 1938: Earlier legislation consolidated & amended the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian & foreign insurers & provident societies are taken over by the central government & nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The first General Insurance Company established in the year 1850 in Calcutta by the British.
evolution
Primary Functions
Providing protection The elementary purpose of insurance is to allow security against future risk, accidents and uncertainty. Insurance cannot arrest the risk from taking place, but can for sure allow for the losses arising with the risk. Collective risk bearing Insurance is an instrument to share the financial loss. It is a medium through which few losses are divided among larger number of people. All the insured add the premiums towards a fund and out of which the persons facing a specific risk is paid. Evaluating risk Insurance fixes the likely volume of risk by assessing diverse factors that give rise to risk. Risk is the basis for ascertaining the premium rate as well. Provide Certainty Insurance is a device, which assists in changing uncertainty to certainty.
Secondary Functions
assuages the businessmen from security investments. This is done by paying small amount of premium against larger risks and dubiety.
provides an opportunity to develop to those larger industries which have more risks in their setting up
Objectives of LIC
Spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. Maximize mobilization of people's savings by making insurance-linked savings adequately attractive. Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders. Act as trustees of the insured
WHY INSURANCE IN INDIA? We live in the information age. People are becoming more aware of the importance of insurance in their life. Today, natural disasters on a large scale occur regularly and even terrorism is increasing day by day. Specialized software is used in actuarial science to accurately predict life expectancy and mortality. But natural disasters are difficult to predict. Even today after 50 years, the core value of social commitment has not changed. What have changed in recent times are customers expectations and the environment in which the life insurance sector operates.
Investment by LICs :-
Official figures have confirmed that life insurance companies from across the country have managed to inject into equity markets about 50% of the total amount invested by foreign institutional investors (FII) over the first nine months of the ongoing financial year.
The potential of the Indian insurance industry is huge. It has an annual growth rate of 15-20% & the largest number of life insurance policies in force. Total value of the Indian insurance market (2004-05) is at Rs. 450 billion (US$10 billion). Insurance & Banking Services contribution to the country's gross domestic product (GDP) is 7% The funds available with the state-owned Life Insurance Corporation (LIC) for investments are 8% of GDP.
Conclusion