GENERAL

INSURANCE
K. AJAY
DM – 04 - 061
 INTRODUCTION

 What is INSURANCE

 The main function

 Benefits
 Insured:
The person known as the policyholder, a person with
insurance coverage.

 Insurer:
A company licensed to transact the business of
insurance and issue insurance policies.

 Policy:
It's the written contract between an insurance company
and its insured. It defines what the company agrees to
cover for what period of time and describes the
obligations and responsibilities of the insured.
 Premium:
It's the amount of money a policyholder pays for
insurance protection.

 Claim:
It's the notice to the insurance company that under the
terms of a policy, a loss maybe covered.

 Indemnity:
  An insured should not collect more than the actual
cash value of a loss but should be restored to
approximately the same financial position as existed
before the loss.
 Agent:
A licensed person or organization who sells insurance and
represents the insurance company to the policyholder.

 Broker:
An organization or person paid by the policyholder to look for
insurance on their behalf.
 
 Deductible:
It's the amount of the loss, which the insured is responsible
to pay before the insurance company pays the benefits.

 Expiration Date:
This is the date on which the policy ends.
 Limit:
It's the maximum amount paid by the
insurance company under the terms of a
policy.

 Underwriting:
The process of classifying applicants for
insurance by identifying characteristics such
as age, gender, health, occupation and
hobbies.
 Types of Insurance

Life insurance
Non - Life Insurance
(general insurance)
Types of Insurance

Auto insurance
Travel insurance
Health insurance
Assets / property insurance
 AUTO INSURANCE

 Property coverage
 Liability coverage
 Medical coverage
 HOME INSURANCE

 provides compensation for

damage or destruction of a
home from disasters
 such as flood and

earthquakes, that require

additional coverage.
 HEALTH INSURANCE

 Cover the cost of medical

treatments
 coverage for individuals
to protect them against
dental costs.
 TRAVEL INSURANCE

 Theft
 Accident
 Uncertainty
 INSURANCE IN INDIA
 Marine insurance was being practiced in India from
the beginning of 19th century

 Fire insurance followed in 1825 at Madras

 First Indian Company was formed in 1907 – Indian

Mercantile Insurance Company

 Need to control insurance business was felt by the

British government which introduced the Insurance
Act in 1938.
 DEVELOPMENT IN 1970
 General Insurance business was being done by 106 companies
including LIC (GI)

 In 1972 GI Nationalisation act was passed allowing the

formation of GIC as the holding company and with 4
subsidiaries

The objective of nationalisation was to spread insurance to
nook and corner of the country and to utilise people’s money
for the people’s good thus uplifting the socio economic
condition of the country
 LIBERALISATION
 Following globalisation moves Malhotra committee had
been formed to look into the methods of liberalisation of
insurance

 Later on the bill in the modified form as IRDA bill was

introduced in 1999 and the IRDA act was passed.

 An independent statutory authority as Regulator for

insurance business came into existence in 1999
DISTRIBUTION CHANNELS
 Direct selling

 Corporate agents

 Group selling

 Brokers and cooperative societies

 Banc assurance
SIZE OF INDUSTRY:
 Insurance is an Rs.400 billion business in
India, and together with banking services
adds about 7% to India’s GDP.

 It has been growing by 15 - 20% per annum.

 India also has the highest number of life

insurance policies in force in the world, and
total investible funds with the LIC are almost
8% of GDP.
 INDUSTRY STRUCTURE

REGISTERED INSURERS IN INDIA

Type of business Public Sector Private Sector Total

Life Insurance 1 21 22
General Insurance 6 15 21
Re-insurance 1 0 1
Total 8 36 44
NON-LIFE POLICIES ISSUED

Insurer Apr-Jun 2008 Apr-Jun 2009

Public 9600458 8887123
(8.52) (-7.43)
Private 4971011 5318470
(27.93) (6.99)
Total 14571469 14205593
(14.44) (-2.51)
Note: Figure in brackets indicates the growth (in per cent)
over previous year.
 KEY MARKET INDICATORS

Total Premium
Non-Life Rs.30351.84 crore
World premium *
Non-Life USD 1779 billion

Geographical restriction: None for new players

Equity restriction: Foreign promoter can hold up to 26 per cent of the
equity
Source: * Swiss Re, (figures pertain to calendar year 2008) Rest of the
figures for the financial year 2008-09
MARKET SHARE OF GENARAL INSURANCE INDUSTRY
BIBLIOGRAPHY:

WWW.IRDAINDIA.ORG
WWW.TOURINDIA.COM