Know

About
Insurance
1

Contents: Life

insurance

General

insurance

Insurance

market scenario

Emerging

trends in insurance
2

Learning
Insurance
What

Is Insurance

Insurance is concerned with

protection of economic value of
assets.Tangible assets are human
beings, house, furniture, motor cycle
etc.Intangible assets are liabilities
3

History of Insurance

It

started from Lloyds coffee house

London
First policy issued in England in
1583
In India first policy issued in 1870
4

History of Insurance
LIC

of India formed in 1956 after

nationalization of life insurance
Business of 245 private insurance
companies
General insurance business of 107
insurance companies was
nationalized in 1972 & four public sector
General Insurance Companies were
formed
5

Classes of
Insurance
A. Life insurance
B. General insurance
General insurance is further
classified:1.Fire insurance
2.Marine insurance
3.Miscellaneous insurance
6

Miscellaneous Insurances:1.Motor insurance

2.Mediclaim insurance
3.Householders insurance
4.Shopkeepers insurance
5.Engineering insurances
etc.
7

Fundamental
Principles of Insurance
1.Insurable interest- Means financial interest
2.Utmost good faith- Greater duties of faith
on proposer & insurer
3.Indemnity- Actual compensation of loss.
not applicable in life policies

Fundamental Principles
of
Insurance
4.Subrogation-Transfer of rights of
insured to insurer.Not applicable in
life policies.
5.Contribution-Sharing of loss by all
insurers.Not applicable in life
policies.
9

Market Scenario before Irda Act

1999
Life insurance company
1. LIC of India
General insurance companies
1.National insurance company ltd
2.New India assurance company ltd
3.Oriental insurance company ltd
4.United India insurance company ltd
10

Market Scenario after Irda Act

1999

Stage of
Liberalization,
Privatization &
Globalization
(Competition between public sector &
private sector)
11

Life Insurance Companies

1.Bajaj Allianz Life Insurance Company Ltd
2.Birla Sun Life Insurance Company Ltd
3.HDFC Standard Life Insurance Company Ltd
4.ICICI Prudential Life Insurance Company Ltd
5.ING Vysya Life Insurance Company Ltd

12

Life Insurance Companies

6.Max New York Life Insurance
Company Ltd
7.Met Life India Insurance Company
Ltd
8.Kotak Mahindra Old Mutual Life
Insurance Company Ltd
9.SBI Life Insurance Company Ltd

13

Life Insurance Companies

10.Tata AIG Life Insurance Company Ltd
11.Reliance Life Insurance Company Ltd
12.Aviva Life Insurance Company Ltd
13.Sahara India Life Insurance
Company Ltd
14

Life Insurance Companies

14.Shriram Life Insurance Company
Ltd
15.Bharti Axa Life Insurance Company
Ltd
16.Life Insurance Corporation Of
India
17.Future Generali India Life Insurance
Company Ltd.
15

Life Insurance Companies

18. IDBI Fortis Life Insurance Company
Ltd.
19.Canara HSBC Oriental Bank of
Commerce Life Insurance Company Ltd.

20.Aegon Religare Life Insurance

Company Limited.
21. DLF Pramerica Life Insurance Co. Ltd.
22. Star Union Dai-ichi Life Insurance Co.

Ltd.
16

General Insurance Companies

1.Bajaj Allianz General Insurance
Company Ltd
2.Icici Lombard General Insurance
Company Ltd
3.Iffco Tokio General Insurance
Company Ltd
4.Reliance General Insurance Company
Ltd
5.Royal Sundaram Alliance Insurance
Company Ltd
17

General Insurance Companies

6.Tata AIG General Insurance Company
Ltd
7.Cholamandalam Ms General
Insurance Company Ltd
8.HDFC-Chubb General Insurance
Company Ltd
9.Star Health & Allied Insurance
Company Ltd
18

General Insurance Companies

10.Export Credit Guarantee
Corporation Ltd
11.Agriculture Insurance
Company Of India Ltd
12.National Insurance Company
Ltd
13.New India Assurance Company
Ltd
19

General Insurance Companies

14.Oriental Insurance Company
Ltd
15.United India Insurance Company
Ltd
16. Apollo DKV Insurance Company Ltd

20

General Insurance Companies

17.Future Generali India Insurance Company
Ltd
18. Universal Sompo General Insurance Co.
Ltd.
19.Shriram General Insurance Company Limited
20.Bharti AXA General Insurance Company ltd.
21.Raheja QBE General Insurance

Company Limited

21

Market Intermediaries
Who procure the
insurance business: Agents
Corporate agents
Insurance brokers
Banks (Bancassurance)

22

Basic Life Insurance Policies

Term assurance policy

Provides death cover only

during policy period
Premium is low
No refund of premium
Sum assured paid on death

23

Whole Life Policy

Death cover only

Period is not specified
Premium is low & paid
during life time
No refund of premium
Sum assured paid on death

24

Endowment Assurance Plan

Covers death & survival

benefits
Sum assured paid on death
or on maturity of policy
Period of policy at the option
of proposer
Most common plan
25

Money Back Policy

Available
Covers
Lump
Full

for different periods

death & survival benefits

sum paid periodically

sum assured paid on death

26

Unit Linked Insurance Policies

(ULIP)
Each

premium split into units and

risk
premium for life cover
Units are priced as per current
market value
Sum assured & current value of units
paid on death as per policy condition
Current value of units paid on
maturity
27

Annuity (Pension)
Plans
These

are pension plans

Immediate annuity or deferred annuity
starts at specified age periodically
Single premium paid for immediate
annuity
Premium in installments paid
for deferred annuity
Life cover simultaneously
28

Important aspects of Life

Insurance Policies
Policies

available with bonus or without

bonus
Death due to accidents can be covered for
additional S.A.
Policies available exclusively for women &
children
Additional cover for major diseases
available
Guaranteed bonus policies available
29

Important aspects of Life

Insurance Policies
Policies

available for limited period

premium payment & risk for longer
policy period
Premium can be paid in monthly,
quarterly, half yearly, yearly
installments

30

Important aspects of Life Insurance

Policies
Loans

are available on policies

Lapsed policies can be revived
Policy can be surrendered after three
years
Nomination & assignment can be
done

31

General Insurance Policies

Fire

policies
Marine policies
Motor vehicle policies
Personal line policies
Health insurances
Liability insurances
Rural insurance policies
Engineering insurances
32

Fire

Policies

Standard fire policyCommon policy for buildings,

shops,offices, Industrial &
manufacturing risks

33

FIRE POLICIES-SPECIAL POLICIES

Industrial & Manufacturing

clients
Floater

policy
Declaration policy
Floater declaration policy
Reinstatement value policy
Industrial all risk policy
Consequential loss policy
34

Marine Policy
Marine Cargo Policy
Policy insures physical loss or damage to

the
goods in transit by road, rail, air, water caused
due to accidents, fire etc.

Marine Hull Policy

Policy insures marine ships,steamers etc.

35

Special Marine Cargo Policies

For business, industries,
importers and exporters
Annual policy
Special declaration policy
Open cover
Open policy

36

Motor Vehicle Policies

Liability

only motor policy

Mandatory motor vehicle policy

Package motor policy
Motor policy additionally insures
loss and damage of the motor vehicle
due to theft and accidents along
with third party risk is called a
package motor policy.
37

Personal Line Insurances

House

holders policy
Shop keepers policy
Personal accident policy
Group personal accident policy
Fidelity guarantee policy

38

Health Insurance
Medi

claim policy
Overseas medi claim policy
Videsh yatra mitra policy
Corporate frequent travelers policy
Employment & study policy
Group medi claim policy
Cancer policy
39

Liability Insurances
Compulsory

public liability policy

Public liability policy
Products liability policy
Professional indemnity policy
Lift (third party) policy
Directors liability policy
Employers liability policy
40

Rural Insurance Policies

Cattle

policy

Poultry

policy

Agricultural

pump set

policy
Crop

insurance
41

Engineering Insurances

Machinery Breakdown Insurance

Loss of Profits (Machinery
Breakdown) Insurance
Electronic Equipment Insurance
Erection All Risk Insurance (EAR)
Storage cum Erection Insurance
(SCE)
42

Engineering Insurances

Contractors

All Risk Insurance (CAR)

Contractors Plant and Machinery Insurance
(CPM)
Boiler and Pressure Plant Insurance
Loss of Profits (Boiler Explosion) Insurance
Deterioration of Stocks Insurance.

43

Insurance Law
The

Insurance Act 1938

(amended)
Insurance Regulatory & Development
Authority Act 1999

44

IRDA
Insurance

Regulatory &
Development Authority is the
controlling and regulatory apex body
in the country for insurance sector
and its chairman and members are
appointed by Government of India.
IRDAs HQ is located at Hyderabad

45

Insurance Regulations
(Regulations issued by IRDA)
Irda (licencing of agents) regulation 2000
Irda (surveyors & loss assessors ) regulation,

2000

Irda (insurance advertisement & disclosures)

regulation, 2000

46

Insurance Regulations
Irda (obligations of insurers to rural

sectors) regulation, 2000

Irda

(investments) regulation, 2000

Irda

(third party administrators)

regulation 2001
47

Insurance Regulations
Irda

(third party administrators) regulations 2001

Irda

(protection of policyholders interest )

regulations, 2002

Irda

( licencing of corporate agents) regulations

2002

48

Insurance Regulations
Irda

(manner of receipt of premium)

regulation 2002
Irda (micro-insurance) regulations,
2005
Irda (licencing of brokers) regulation
2002
Irda (micro-insurance) regulations,
2005
49

Economic Growth
GDP 8.7 % in 2007-08
Sector
Agriculture
Industry
Services
(Fin.&
Insurance)

Growth
2.6
8.9
10.7
11.7

% of GDP
17.5
26.8
55.7
14.7

50

Growth of Insurance Business

Life

Insurance Premium from Rs.400

crores in 1956 to Rs.201351 crores in
2007-08 with 29 % growth
General Insurance Premium from
Rs.200 crores in 1972 to Rs.27823
crores in 2007-08 with 11.72 %
growth
51

Emerging Trends
Detariffing

in General Insurance from

1.1.2007 leading to greater price war
& new products in future
Banks entering insurance market
through joint ventures with foreign
finance majors

52

Emerging Trends
Increasing Role of
Insurance Brokers
Bancassurance
Corporate Agency
IT intervention & uses

53

Emerging Trends
Greater Job Opportunities
For thousands of Insurance
Managers, IT Professionals
For lacs of Insurance Advisors
For Insurance Professionals
For Risk Managers
For Underwriters
For claim Settlements
54

Emerging Trends
Increasing

No. of Insurance
companies & Intermediaries
Increasing Awareness about
Insurance
Growth in GDP
Increasing No. of Middle Class
55

Emerging Trends
Vast

No. of uninsured population

Underinsurance
Untapped potential for General
Insurance

56

Emerging Trends
Increasing

awareness about Health

Insurance
Increasing awareness about Personal
Line Insurance like House, Shop,
Personal Accident
Market flooded with new insurance
products
57