Introduction to Insurance Sector
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Presented ByDhananjay kumar Jaipuria institute of Management, Noida
Contents:
Life insurance General insurance Insurance market scenario Emerging trends in insurance Jobs in insurance Insurance websites Insurance glossary
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
History of Insurance
It started from Lloyds coffee house London First policy issued in England in 1583 In India first policy issued in 1870
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
Classes of Insurance
A. Life insurance B. General insurance General insurance is further classified:1.Fire insurance 2.Marine insurance 3.Miscellaneous insurance
Miscellaneous Insurances:-
1.Motor insurance 2.Mediclaim insurance 3.Householders insurance 4.Shopkeepers insurance 5.Engineering insurances etc.
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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.
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
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Market Scenario after Irda Act 1999
Stage of Liberalization, Privatization & Globalization
(Competition between public sector & private sector)
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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
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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
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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
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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.
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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.
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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
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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
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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
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General Insurance Companies
14.Oriental Insurance Company Ltd
15.United India Insurance Company Ltd
16. Apollo DKV Insurance Company Ltd
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General Insurance Companies
17.Future General India Insurance Company Ltd 18. Universal Sompo General Insurance Co. Ltd. 19.Shriram General Insurance Company Limited 20.Bharti AXA General Insurance Company ltd.
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Market Intermediaries
Who procure the insurance business: Agents Corporate agents Insurance brokers Banks (Bancassurance)
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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
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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
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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
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Money Back Policy
Available for different periods
Covers death & survival benefits
Lump sum paid periodically Full sum assured paid on death
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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
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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
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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
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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
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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
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General Insurance Policies
Fire policies Marine policies Motor vehicle policies Personal line policies Health insurances Liability insurances Rural insurance policies Engineering insurances
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Fire
Policies
Standard fire policyCommon policy for buildings, shops,offices, Industrial & manufacturing risks
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FIRE POLICIES-SPECIAL POLICIES Industrial & Manufacturing clients
Floater policy Declaration policy Floater declaration policy Reinstatement value policy Industrial all risk policy Consequential loss policy
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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.
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Special Marine Cargo Policies
For business, industries, importers and exporters Annual policy Special declaration policy Open cover Open policy
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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.
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Personal Line Insurances
House holders policy Shop keepers policy Personal accident policy Group personal accident policy Fidelity guarantee policy
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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
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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
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Rural Insurance Policies
Cattle policy Poultry policy Agricultural pump set policy Crop insurance
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Engineering Insurances
Machinery Breakdown Insurance Loss of Profits (Machinery Breakdown) Insurance Electronic Equipment Insurance Erection All Risk Insurance (EAR) Storage cum Erection Insurance (SCE)
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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.
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Insurance Law
The Insurance Act 1938 (amended) Insurance Regulatory & Development Authority Act 1999
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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
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Insurance Regulations (powers and functions
of
IRDA)
issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration.
specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents. specifying the code of conduct for surveyors and loss assessors. promoting efficiency in the conduct of insurance business promoting and regulating professional organizations connected with the insurance and re-insurance business. levying fees and other charges for carrying out the purposes of this Act.
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Insurance Regulations (powers and functions of IRDA)
specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries. regulating investment of funds by insurance companies. regulating maintenance of margin of solvency. adjudication of disputes between insurers and intermediaries or insurance intermediaries supervising the functioning of the Tariff Advisory Committee. Other.
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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
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Growth of Insurance Business
Life Insurance Premium from Rs.400 crores in 1956 to Rs.156042 crores in 2006-07 with 47 % growth General Insurance Premium from Rs.200 crores in 1972 to Rs.24905 crores in 2006-07 with 22 % growth
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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
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Emerging Trends
Increasing Role of Insurance Brokers Banc assurance Corporate Agency IT intervention & uses
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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
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Emerging Trends
Increasing No. of Insurance companies & Intermediaries Increasing Awareness about Insurance Growth in GDP Increasing No. of Middle Class
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Emerging Trends
Increasing awareness about Health Insurance Increasing awareness about Personal Line Insurance like House, Shop, Personal Accident Market flooded with new insurance products
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Jobs
In
Insurance
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Job Opportunities
45 lakh people employed
27 lakh people required by 2012
5 lakh people supply by 2012 3 % constitute executive cadre
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Job Positions
Agency Manager Sales Manager Sales Executive Branch Manager Executive Underwriting Executive Claims Executive Bancassurance
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Job Description
To recruit the insurance agents To train the agents To supervise the agents To develop the business Supervise underwriting Supervise claim settlement Customer relationship management Bancassurance
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Job Specification
Team leader Team driving capability Team management Communication Frustration tolerance Insurance knowledge Contacts
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Job Specification
Knowledge of company Fluency in English & local language Customer service Computer friendly Team goals Financial consultant Networking skills
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THE BUSINESS IDEA
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1st Business Idea
Insurance for the consumer durables Example TV, refrigerator, washing machine, air conditioner, cooler (water, air) etc. Tie up with the companies
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Advantages
To the customer
1. 2.
3.
Durability of the product Long-run cost efficiency Better service of the product Increase in sales Customer satisfaction Strategic advantage Automatic removal of local-product competitors Revenue All benefits which is lies with any insurance company
To the companies
1. 2. 3. 4. 5.
To the Insurance Company
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2. 3.
Insurance for the EDUCATION LOAN Insurance for lower class people. Example- small/daily premium insurance
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