INSURANCE Asss Prachi

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    Insurance may be described as a social device to reduce or eliminate risk of life and property. Under

    the plan of insurance, a large number of people associate themselves by sharing risk, attached toindividual.

    The risk, which can be insured against include fire, the peril of sea, death, incident, & burglary. Anyrisk contingent upon these may be insured against at a premium commensurate with the riskinvolved.

    Insurance is actually a contract between 2 parties whereby one party called insurer undertakes inexchange for a fixed sum called premium to pay the other party happening of a certain event.

    Insurance is a contract whereby, in return for the payment of premium by the insured, the insurerspay the financial losses suffered by the insured as a result of the occurrence of unforeseen events.

    With the help of Insurance, large number of people exposed to a similar risk makes contributions to

    a common fund out of which the losses suffered by the unfortunate few, due to accidental events,are made good.

    GROWTH & DEVELOPMENT OF INSURANCE INDUSTRY IN INDIA :

    According to K N Bhandari, the Secretary General of General Insurance Council, India'sgeneral insurance sector is slated to grow at a 18% rate in 2008. The comparable figure for 2007

    was 13%. As per Mr. Bhandari, the present market value of the Indian general insurance sector isRs 30,000-crore. The current penetration level of the Indian insurance sector is 0.65 %.

    The Indian urban sector is a significant contributor to the general insurance market. In

    comparison, contribution from rural India is small. Efforts are afoot to capture the dormant ruralmarket via strategies like awareness generation, institutional marketing and e-marketing.

    SOME OF THE MAJOR PLAYERS IN INDIAN INSURANCE INDUSTRY ARE :

    NATIONAL PLAYER:-

    National Insurance Company Ltd

    New India Assurance Company LtdUnited India Insurance Company Ltd

    Oriental Insurance Company Ltd

    PRIVATE PLAYERS:-

    1) Bajaj Allianz General Insurance Company

    2) Reliance Insurance Company

    3) ICICI Lombard General Insurance Company LTD

    4) Sahara India Life Insurance Company5) Cholamandalam General Insurance Company

    6) Tata AIG Life Insurance Company

    7) Max New York Life Insurance Co. Ltd8) SBI Life Insurance Company Ltd

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    Product summary:

    This is an Endowment Assurance plan that provides financial protection against death

    throughout the term of the plan. Besides payment of Sum Assured immediately on death,

    one-fourth of Sum Assured is payable at the end of each of last four years of policy termwhether the life assured dies or survives the term of the policy.

    Premiums:

    Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductionsas opted by you throughout the term of the policy or till the earlier death.

    Bonuses:

    This is a with-profits plan and participates in the profits of the Corporations life insurance

    business. It gets a share of profits in the form of bonuses. Simple Reversionary Bonusesare declared per thousand Sum Assured annually at the end of each financial year. Once

    declared, they form part of the guaranteed benefits of the plan. Bonuses for full term on the

    full Sum assured are paid at the end of the term even if death occurs during policy term.

    Final (Additional) Bonus may also be payable provided policy has run for certain minimumperiod.

    Benefits on death/survivalOne fourth of the sum assured is payable at the end of each of last four years of the policyterm. On death/survival all bonuses declared during the term of policy will also be paid

    along with the last installment. These benefits are payable whether the life assured

    survives the policy term or dies during the term of policy. Further, on death during thepolicy term, an amount equal to Sum Assured is also payable immediately.

    Supplementary/Extra Benefits

    These are the optional benefits that can be added to your basic plan for extraprotection/option. An additional premium is required to be paid for these benefits.

    LIFE INSURANCE COMPANY:-

    Life insurance ensures that your family will receive financial support in your absence. Put

    simply, life insurance provides your family with a sum of money should somethinghappen to you. It protects your family from financial crises.

    In addition to serving as a protective cover, life insurance acts as a flexible money-savingscheme, which empowers you to accumulate wealth-to buy a new car, get your children

    married and even retire comfortably.

    RISK MANAGEMENT IN INSURANCE SECTOR:-

    Insurance companies are seeking new ways to ensure shareholder value and earningsconsistency. Market conditions remain volatile, regulators are increasing capital

    requirements, and catastrophic events result in immediate cash demands. Today more

    than ever, insurers need to remain profitable while keeping earnings consistent, investorsconfident and regulators from downgrading their portfolios. To accomplish these goals,

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    you must pull information from historically separate areas-to get a complete picture of

    your total risk capital.

    Financial executives and portfolio managers need a platform that combines asset and

    liability data from different lines of business into one enterprise view. They need toemploy enterprise risk management that allows them to base strategic business decisions

    upon strong positions that can be measured qualitatively and quantitatively. Because they

    know the more clearly their organization's risk position is depicted, the more competitive

    it will appear in the marketplace.

    The following are the risks, which are not insurable:-

    Essentials of insurance.Insurable Interest

    Utmost good Faith

    Procedure for InsuranceIdentifications of risk

    Quantify the insurable value

    Evaluate the choicesProposal

    Payment of premiumPolicy documentation

    ClaimsAdministration system.

    The following are the risks, which are insurable:-

    1) People Risks

    2) Liabilities Risks3) Property Risks

    4) Financial Risks