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Rural Insurance Products

Unit 1
Rural insurance-Need
• India's life insurance market is booming. From a single company a decade ago to
18 active players today, the market has grown at a healthy CAGR of 24% over the
past five years. But most of this growth is coming from the urban areas.

• The increase in competition is forcing insurance providers to look beyond urban


centers and take their trade to the more challenging rural hinterlands of the
country, where only 3% of the population have any form of life insurance coverage.

• The rural India is witnessing a surge of income growth, and the propensity to
consume financial products has increased considerably in recent years.

• With increased urbanization, the rural centers' contribution to the national GDP
has come down in percentage but increased significantly in value. Insurance
providers are working overtime to ensure that this additional wealth is effectively
channeled.
Obligations of companies
• Rural sector definition:- place wheer the population (as
pet the latest census) is NOT more than 4500 and at
least 75% of the male population is engaged in
agriculture”

• 7th financial year from the year of incorporation, the


life insurer will have to underwrite 18% of the total
policies in that year in rural sector.

• 19% of the rural policies to be underwritten in the 8th


9th year and 20% from the 10th year onwards.
Major challenges- Rural insurance
• Awareness and Education
• Documentation and Certification :-
• Distribution Channels for Rural Network
• Strong need for regionalization.
• Rural incomes are largely seasonal in nature
• Robust Banking System
Types of Rural Policies

Cattle Insurance:-

• Farmers who own cattle or any FII/ bank has financed


the farmer to buy cattle.
• Policy covers loss due to death, accident, illness or
disease of the animal, Transit of cattle from one place
to another
• A qualified Veterinary certificate mandatory for
accepting proposal and claim

• Min perm of Rs 50
• Fish insurance
• Floriculture insurance
• Weather insurance
Miscellaneous Insurance
• Burglary Policy
Policy is designed to cover business premises only like godown,
factory, office etc.
Scope of cover

• Loss or damage to the property insured by theft following upon


actual, forcible and violent entry into the premises.
• Damage to the premises following upon entry as above or any
attempt thereat

The indemnity provided is to the extent of the intrinsic value of the


property so lost or damaged, subject to the limit of the sum
insured.
Exclusions:-

The company shall not be liable in respect of :


• Gold, watches, jewellery, precious stones, plans,
designs, money, business books etc. unless
specifically insured.

• Loss or damage where any insured or member of


the insured's household or of his business staff is
concerned in the actual theft or damage.
Aviation Insurance

• The aviation portfolio encompasses following type of covers.

1. Hull All Risk Insurance Policy:

• This policy is suitable for small aircraft operators belonging to flying


clubs, companies engaged in agricultural spraying operations,
aircrafts especially designed for VVIPs, business executives and for
those engaged in industrial aids.

• The policy scope includes all physical loss or damage sustained by


the insured aircraft including total loss, disappearance.

• All losses are paid subject to deductibles.


2. Spares All Risk Insurance Policy:

Covers loss or damage to spares, tools, equipments and


supplies owned by the insured or the property for which the
insured is responsible whilst on ground or in transit by land,
sea, air including in own aircraft or whilst on the premises of
others for storage only.

3. Hull/Spares War Risk Insurance: Indemnity is provided to


the aircraft as well as spares caused by war, invasion, acts of
foreign enemies, hostilities, civil war, rebellion, revolution,
resurrection, martial law, strikes, riots, civil commotion,
malicious acts, sabotage.

4. Aviation Personal Accident (crew member) Insurance: This


cover is designed to cover insured person against injury,
disablement or death arising as result of an accident that is
generally granted on annual basis.
• Political Risk Insurance

Two kinds of political risk insurance

• Contract Frustration: Companies doing business directly with foreign


governments, or with government contractors, obtain political risk
insurance to protect against payment defaults, license cancellations, or
repudiation of their contracts.

Political risk insurance can also be written to indemnify against frustration


of your contracts with private-sector entities that might be unable to
perform due to local/international government actions or political events
that would be out of their control.

• Asset Protection: Lenders, investors, and contractors with equipment,


inventories, or cash in foreign countries purchase political risk insurance
to protect their assets against expropriation, political violence, and
currency inconvertibility.

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