Manokamana Baid - Insurance Sector in India(1)

7/28/2019 Manokamana Baid - Insurance Sector in India(1)

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INSURANCE SECTOR

IN INDIATHE BURNING SECTOR...........!!!

The insurance sector in India has completed all the facets of competition from

being an open competitive market to being nationalized and then getting back tothe form of a liberalized market once again.!!!!!!

2010

MANOKAMANA BAID

M.B.A. II SEM


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Insurance sector in India

CONTEMPORARY ISSUE ON SEMINAR

INSURANCE SECTOR IN INDIA

Session: 200911

Presented at

Submitted By: - Submitted To:-

Manokamana baid Mr. Rajat Mendiratta

MBA II Sem.


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Acknowledgement

The beatitude, bliss & euphoria that accompany successful completion any task would

not be completed without the expression of appreciation of simple virtues to the people

who made it possible.

So, I take my immense pleasure in expressing a whole hearted thanks to all the faculty

members who guided me all the way making this project successful.

It is my privilege to express a deep sense of gratitude and thanks to Mr. RAJAT

MENDIRATTA for providing us various information directly related to project.

I am also thankful to Rajiv Sharma for his guidance & cooperation in this work.

I extend my gratitude and thankfulness to Apex Institute of Management & Science.

Date:03-05-10 Submitted By:

Place: Jaipur Manokamana baid


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Preface

The underlying aim of the seminar on contemporary issue as an integral part of MBA

program is to provide the students with practical aspects of the organization working

environment.

Such type of presentation helps a student to visualize and realize about the

congruencies between the theoretical learning in the premises of college and actual

followed by the organization. It gives the knowledge of application aspect of the theories

learnt in the classroom.

The seminar project in INSURANCE SECTOR IN INDIA is a complete experiencein itself, which provide me with the understanding. This has become as inspirable of my

knowledge of management being learned in MBA program.


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CONTENTS

1.The Meaning Of Insurance2.Indian Insurance - Major Companies

3.Basic functions of InsurancePrimary functions of insurance

Secondary functions of insurance

Other functions of insurance

4. TYPES OF INSURANCE &GROWTHLife Insurance

Credit Insurance

Aviation Insurance

Health Insurance

Crop Insurance

Home Insurance

Medical Insurance

Pet Insurance

Two Wheeler Insurance

Travel Insurance

Weather Insurance

5.Challenges for insurance

6. References

7. Bibliography


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Executive summary

Insurance sector in India is one of the booming sectors of the economy and is growing at the rate of 15-20 per cent annum. Together with banking services, it contributes to about 7 per cent to the country'sGDP. Insurance is a federal subject in India and Insurance industry in India is governed by InsuranceAct, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalisation)Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts.

The US$ 41-billion Indian life insurance industry is considered the fifth largest life insurance market, and

growing at a rapid pace of 32-34 per cent annually, according to the Life Insurance Council. Since theopening up of the insurance sector in India, the industry has received FDI to the tune of US$ 525.6million. The government is likely to reintroduce the Insurance Bill which proposes to increase the FDIcap in private sector insurance companies from 26 per cent to 49 per cent.

Insurance Corporation (LIC) posted a 50 per cent growth in new premium collection in the first ninemonths of the 2010 fiscal, increasing its market share to 65 per cent from 56 per cent a year ago.

LICs new premium collection touched US$ 9.58 billion in the April-December 2009 period while thecombined business of the 22 private insurers grew to US$ 5.07 billion from the previous year, as perdata collated by the Insurance Regulatory and Development Authority (IRDA). Overall the industry grewat 29 per cent in the April-December period of the fiscal year 2010.


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The Meaning Of InsuranceThe meaning of insurance:Insurance is a policy from a large financial institution that offers a person,company, or other entity reimbursement or financial protection against possible future losses ordamages.

The meaning of insurance is important to understand for anybody that is considering buying aninsurance policy or simply understanding the basics of finance. Insurance is a hedging instrument usedas a precautionary measure against future contingent losses. This instrument is used for managing thepossible risks of the future.

Insurance is bought in order to hedge the possible risks of the future which may or may not take place.This is a mode of financially insuring that if such a incident happens then the loss does not affect the

present well-being of the person or the property insured. Thus, through insurance, a person buyssecurity and protection.A simple example will make the meaning of insurance easy to understand. A biker is always subjected tothe risk of head injury. But it is not certain that the accident causing him the head injury woulddefinitely occur. Still, people riding bikes cover their heads with helmets. This helmet in such cases actsas insurance by protecting him/her from any possible danger. The price paid was the possibleinconvenience or act of wearing the helmet; this ie equivalent to the insurance premiums paid.

Though loss of life or injuries incurred cannot be measured in financial terms, insurance attempts toquantify such losses financially. Insurance can be defined as the process of reimbursing or protecting aperson from contingent risk of losses through financial means, in return for relatively small, regularpayments to the insuring body or insurance company.

Insurance can range from life to medical to general (residential,commercial property, natural incidents,

burglary, etc).

Life-InsuranceIt insures the life of the person buying the Life Insurance Certificate. Once a Life Insurance issold by a company then the company remains legally entitled to make payment to thebeneficiary after the death of the policy holder.

Medical-InsuranceThis is also known as mediclaim. Here, the policy holder is entitled to receive the amount spentfor his health purposes from the insurance company.

General-InsuranceThis insurance type involves insuring the risks associated with the general life such asautomobiles, business related, natural incidents, commercial and residential properties, etc..

India Insurance


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A history of almost two centuries and an important change in the sector after the gates of the marketwere thrown open for the private companies marks the scene of India Insurance industry. An opencompetitive market then a nationalized one and again a liberalized market the industry has witnessedmany such developments. Public and private companies along with foreign companies in both thesectors of life and general aided to an immense growth of the industry. Generally focusing in the lifeinsurance sector, the industry saw a change recently, when private companies came up with hosts ofother forms of insurance like, automobile, health, property, and many other classes falling under thegeneral category. Life insurance covers the insurer against death or disability. Non life insurance orgeneral insurance covers the insurer against any risk of theft, natural disaster, accidents and many more.

Indian Insurance Reforms

The Malhotra committee formed in 1993 granted some reforms in the India insurance industry. Themain idea behind forming this committee was to assess the function of the industry and to set the roadof the future for the industry. It tried to improvise the industry in all facets and make it more efficient

so that insurance gets more stability in Indian market. The committee recommended the set up of anindependent regulatory body and the Insurance Regulatory and Development Authority Act (IRDA Act)of 1999 paved the way for establishment of Insurance Regulatory and Development Authority (IRDA) in2000. The main aim of IRDA was to protect the concerns of insurer as well as the insured and to adoptnew policies to keep up the growth of insurance in India.

Indian Insurance Policies

The India insurance companies provides a diverse range of insurance policies. Some of the most knownare:

Loan Cover Assurance Policies Group Insurance Policies Joint Life Policies Whole Life Policies

Term Life Policies Pension Plans, Endowment Policies Unit-Linked Insurance Plans General insurance policies are also provided to cover the following: Travel Insurance Health Insurance Motor Insurance

Indian Insurance Industry - Challenges

New Comer poses threat - With more companies coming up everyday with the growing demand of theindustry the markets very competitive. Until and unless the existing companies makes a mark and createtheir very own brand name it would be quite tough to sustain their position in the market. There is alsoa probability of big companies taking over the new emerging companies.

Supplier Power: The people providing the capital don't act as big terror as opportunity always lies in thebig hands and they can any day tempt good insurer from small companies to their own company.

Buyer Power: Individual never stands a chance in front of big corporate sectors as they dominate the


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insurance industries with high potential of negotiation power.

Presence of substitutes: The insurance industry is full of replacement option and the large insurancecompanies offers the same service as of others be it in any sector of home, commercial, auto, health orlife.

Indian Insurance - Growth

Such a stupendous growth after along wait was well deserved for the insurance companies. Sharp andexcellent market scheme along with wide product bandwidth proved to be a winner among the masses.A considerable growth rate was also recorded by the private companies. The India insurance sector islikely to put its foot forward towards more competition with growing importance and recognition.

Indian Insurance - Major Companies

The names of few of the major insurance companies in public sector are:

Life Insurance Corporation (LIC) of India Oriental Insurance Limited National Insurance Company Limited

The names of few of the major insurance companies in Private sector are :

Bajaj Allianz SBI Life HDFC Standard Life Tata AIG ICICI Prudential Life Aviva Life ICICI Lombard General ING Vyasya Life Royal Sundaram Alliance Peerlees Smart Financial

Functions Of InsuranceConcept of Insurance

Insured, are you? The functions of Insurance will give you an idea on how to go ahead with theapproach of insurance and what type of insurance to choose. In a layman's words, insurance means, aguard against pecuniary loss arising on the happening of an unforeseen event. In developing economies,the insurance sector still holds a lot of potential which can be tapped. Majority of the people in thedeveloping countries remains unaware of the functions and benefits of insurance and it is for this reasonthat the insurance sector is still to grow.

Tangible or intangible an individual can insure anything! Be it a house, car, factory, or the voice of asinger, leg of a footballer, and the hand of an author.....etc. It is possible to insure all these as they havethe possibility of becoming non functional by any disaster or an accident.


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Basic functions of Insurance

1. 1.Primary Functions2. 2.Secondary Functions3. 3.Other Functions

Primary functions of insurance

Providing protection The elementary purpose of insurance is to allow security against futurerisk, accidents and uncertainty. Insurance cannot arrest the risk from taking place, but can forsure allow for the losses arising with the risk. Insurance is in reality a protective cover againsteconomic loss, by apportioning the risk with others.

Collective risk bearing Insurance is an instrument to share the financial loss. It is a mediumthrough which few losses are divided among larger number of people. All the insured add the

premiums towards a fund and out of which the persons facing a specific risk is paid. Evaluating risk Insurance fixes the likely volume of risk by assessing diverse factors that give

rise to risk. Risk is the basis for ascertaining the premium rate as well. Provide Certainty Insurance is a device, which assists in changing uncertainty to certainty.

Secondary functions of insurance

Preventing losses Insurance warns individuals and businessmen to embrace appropriate deviceto prevent unfortunate aftermaths of risk by observing safety instructions; installation ofautomatic sparkler or alarm systems, etc.

Covering larger risks with small capital Insurance assuages the businessmen from securityinvestments. This is done by paying small amount of premium against larger risks and dubiety.

Helps in the development of larger industries Insurance provides an opportunity to develop tothose larger industries which have more risks in their setting up.

Other functions of insurance

Is a savings and investment tool Insurance is the best savings and investment option,restricting unnecessary expenses by the insured. Also to take the benefit of income taxexemptions, people take up insurance as a good investment option.

Medium of earning foreign exchange Being an international business, any country can earnforeign exchange by way of issue of marine insurance policies and a different other ways.

Risk Free trade Insurance boosts exports insurance, making foreign trade risk free with thehelp of different types of policies under marine insurance cover.

Insurance provides indemnity, or reimbursement, in the event of an unanticipated loss or disaster. There

are different types of insurance policies under the sun cover almost anything that one might think of.

There are loads of companies who are providing such customized insurance policies.


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List of Insurance companies in India

LIFE INSURERS WebsitesPublic SectorLife Insurance Corporation of India www.licindia.com

Private SectorAllianz Bajaj Life Insurance Company Limited www.allianzbajaj.co.in

Birla Sun-Life Insurance Company Limited www.birlasunlife.com

HDFC Standard Life Insurance Co. Limited www.hdfcinsurance.com

ICICI Prudential Life Insurance Co. Limited www.iciciprulife.comING Vysya Life Insurance Company Limited www.ingvysayalife.com

Max New York Life Insurance Co. Limited www.maxnewyorklife.com

MetLife Insurance Company Limited www.metlife.com

Om Kotak Mahindra Life Insurance Co. Ltd. www.omkotakmahnidra.com

SBI Life Insurance Company Limited www.sbilife.co.in

TATA AIG Life Insurance Company Limited www.tata-aig.com

AMP Sanmar Assurance Company Limited www.ampsanmar.com

Dabur CGU Life Insurance Co. Pvt. Limited www.avivaindia.com

GENERAL INSURERSPublic SectorNational Insurance Company Limited www.nationalinsuranceindia.com

New India Assurance Company Limited www.niacl.com

Oriental Insurance Company Limited www.orientalinsurance.nic.in

United India Insurance Company Limited www.uiic.co.in

Private SectorBajaj Allianz General Insurance Co. Limited www.bajajallianz.co.in

ICICI Lombard General Insurance Co. Ltd. www.icicilombard.com

IFFCO-Tokio General Insurance Co. Ltd. www.itgi.co.in


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Reliance General Insurance Co. Limited www.ril.com

Royal Sundaram Alliance Insurance Co. Ltd. www.royalsun.com

TATA AIG General Insurance Co. Limited www.tata-aig.com

Cholamandalam General Insurance Co. Ltd. www.cholainsurance.com

Export Credit Guarantee Corporation www.ecgcindia.com

HDFC Chubb General Insurance Co. Ltd.

REINSURER

General Insurance Corporation of India www.gicindia.com

Top Insurance Companies in IndiaFollowing are some of the top insurance companies in India.

Life Insurance Corporation of India -

The Life Insurance Corporation of India (LIC) is undoubtedly India's largest life insurance company. Fully owned

by government, LIC is also the largest investor of the country. LIC has an estimated asset of Rs. 8 Trillion. It also

funds almost 24.6% of the expenses of Government of India.

Established in 1956 and headquartered in Mumbai, Life Insurance Corporation of India has 8 zonal offices, 100

divisional offices, 2,048 branch offices and a vast network of 10,02,149 agents spread across the country.

Tata AIG Insurance Solutions-
http://www.ril.com/http://www.ril.com/http://www.gicindia.com/http://www.gicindia.com/http://business.mapsofindia.com/india-insurance/lic.htmlhttp://business.mapsofindia.com/india-insurance/home.htmlhttp://business.mapsofindia.com/india-insurance/home.htmlhttp://business.mapsofindia.com/india-insurance/home.htmlhttp://business.mapsofindia.com/india-insurance/lic.htmlhttp://www.gicindia.com/http://www.ril.com/


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Tata AIG Insurance Solutions, one of the leading insurance providers in India, started its operation on April 1,

2001. A joint venture between Tata Group (74% stake) and American International Group, Inc. (AIG) (26% stake),

Tata AIG Insurance Solutions has two different units for life insurance and general insurance. The life insurance

unit is known as Tata AIG Life Insurance Company Limited, whereas the general insurance unit is known as Tata

AIG General Insurance Company Limited.

AVIVA Life Insurance-AVIVA Life Insurance, one of the popular insurance companies in India, is a joint venture between the renownedbusiness group, Dabur and the largest insurance group in the UK, Aviva plc. AVIVA Life Insurance has an

extensive network of 208 branches and about 40 Bancassurance partnerships, spread across 3,000 cities and

towns across the country. There are more than 30,000 Financial Planning Advisers (FPAs) working for AVIAV Life

Insurance. It offers various plans like Child, Retirement, Health, Savings, Protection and Rural.

MetLife Insurance

MetLife India Insurance Company Limited is another popular player in Indian

insurance sector. A joint venture between the Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and

other private investors and MetLife International Holdings, Inc., MetLife Insurance offers a wide range of financial

solutions to its customers including Met Suraksha, Met Suraksha TROP, Met Mortgage Protector and Met

Suraksha Plus etc. It has its branches situated over 600 locations across the country. More than 50,000 Financial

Advisors work for MetLife.

ING Vysya Life Insurance-ING Vysya Life Insurance entered into the Indian insurance industry in September 2001. A joint venture between

ING Group, Ambuja Cements, Exide Industries and Enam Group, ING Vysya Life Insurance uses its two channels,

viz. the Alternate Channel and the Tied Agency Force to distribute its products. The first channel has branches in

234 cities across the country and has got 366 sales teams. On the other hand, the later one has more than60,000 advisors. Currently, ING Vysya Life Insurance has tie ups with more than 200 cooperative banks.

Birla Sun Life Financial Services-
http://business.mapsofindia.com/india-insurance/aviva-life.htmlhttp://business.mapsofindia.com/india-insurance/aviva-life.htmlhttp://business.mapsofindia.com/insurance/metlife-insurance.htmlhttp://business.mapsofindia.com/insurance/ing-vysya-life-insurance-india.htmlhttp://business.mapsofindia.com/insurance/ing-vysya-life-insurance-india.htmlhttp://business.mapsofindia.com/insurance/birla-sun-life-insurance-india.htmlhttp://business.mapsofindia.com/insurance/birla-sun-life-insurance-india.htmlhttp://business.mapsofindia.com/insurance/birla-sun-life-insurance-india.htmlhttp://business.mapsofindia.com/insurance/ing-vysya-life-insurance-india.htmlhttp://business.mapsofindia.com/insurance/metlife-insurance.htmlhttp://business.mapsofindia.com/india-insurance/aviva-life.html


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Birla Sun Life Financial Services is a joint venture between Aditya Birla Group and Sun Life Financial Inc, Canada.

It has got an extensive network of more than 600 branches. More than 1,75,000 empanelled advisors work forBirla Sun Life, which currently covers over 2 million lives.

MAX New York Life

Max New York Life Insurance Company Ltd. is one of the top insurance companies in India. A joint venture

between Max India Limited and New York Life International (a part of the Fortune 100 company - New York Life),

Max New York Life Insurance Company Ltd. started its operation in April 2001. It currently has around 715 officeslocated in 389 cities across the country. It also has around 75,832 agent advisors. Max New York Life offers 39

products, which cover both, life and health insurance.

Bajaj Allianz-Bajaj Allianz is a joint venture between Bajaj Finserv Limited and Allianz SE, where Bajaj Finserv Limited holds

74% of the stake, whereas Allianz SE holds the rest 26% stake. Bajaj Allianz has been rated iAAA by ICRA for its

ability to pay claims. The company also achieved a growth of 11% with a premium income of Rs. 2866 crore as on

March 31, 2009.

Bharti AXA Life Insurance-Bharti AXA Life Insurance, one of the top insurance companies in India, is a joint venture between Bharti group

and world leader AXA. Bharti holds 74% stakes, whereas AXA holds the rest of 26%. Bharti AXA has its brancheslocated in 12 states across the country. It offers a range of individual, group and health plans for its customers.

Currently more than 8000 employees work for Bharti AXA Life Insurance.

SOME PLAYERS IN MARKET OF

INSURANCE
http://business.mapsofindia.com/insurance/max-life-insurance-india.htmlhttp://business.mapsofindia.com/insurance/max-life-insurance-india.htmlhttp://business.mapsofindia.com/insurance/bajaj-allianz-insurance-india.htmlhttp://business.mapsofindia.com/insurance/bajaj-allianz-insurance-india.htmlhttp://business.mapsofindia.com/india-insurance/life.htmlhttp://business.mapsofindia.com/india-insurance/life.htmlhttp://business.mapsofindia.com/india-insurance/life.htmlhttp://business.mapsofindia.com/insurance/bajaj-allianz-insurance-india.htmlhttp://business.mapsofindia.com/insurance/max-life-insurance-india.html


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Insurance Companies - International

Allianz Life of North America

GAN Insurance Company LimitedLloyd's of LondonNationwide Life Insurance Company
http://www.iiin.com/iiincompanies.htmlhttp://www.iiin.com/iiincompanies.html


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Virginia Surety Company, Inc.SIRIUS International Insurance CorporationThe Insurance Company of the State of PennsylvaniaING Life Insurance and Annuity Company

TYPES OF INSURANCE & GROWTH

Life InsuranceIndia Life Insurance industry came into being with the establishment of Life Insurance Corporation(LIC)in India in 1956. Till the time Insurance Regulatory and Development Authority(IRDA) Act wasimplemented in the year 1999, private companies were controlled by the LIC of India. Since 1999onwards the market was opened for operations of private companies also in the insurance sector.

Growth Of Indian Life Insurance Sector

The life insurance sector of India has added up to 4.1% of the GDP in 2009, a considerable growth wasrecorded since the time the sector was opened for the private companies. The contribution in FDI bythe life insurance segment was recorded at US $ 1.3 billion, even though the government is likely toincrease the FDI cap limit from 26% to 49%, a bill of which is pending at the Rajya Sabha.

The year 2009-10 also saw private sector insurance company, Aviva Life Insurance establishing nine unit-linked plans, in line with the recent IRDA guidelines featuring enhanced and higher internal rate ofreturn (IRRs).

As per the data provided by the IRDA, the businesses of the life insurance companies had a growth of22% at US$ 12 billion in April-November 2009-10, in comparison to the US$ 9.8 billion during the sameperiod last year. Such a huge sale of single premium policies led the industry to record a raise of 53.25%in November 2009 alone.

With the registration of IndiaFirst Life Insurance Company Limited, a joint stake life insurance companyencouraged by Bank of Baroda and Andhra Bank of India and Legal & General Middle East Limited, UK,the total number of of life insurers registration with the Insurance Regulatory Development Authority(IRDA) has increased to 23.

According to industry body, Life Insurance Council, The life insurance industry had earlier beenanticipated to grow by 15% in the year 2009 - 10 and surpass the US$ 54.1 billion mark in totalpremium income by March-end. This growth in premium income includes new business as well asrenewals, driven by increasing awareness on the value of getting insured.

The US$ 41-billion Indian insurance industry made a grand return with better performances in theApril-November 2009 period. Life insurance in India recorded the first year premium (inclusive of SinglePremium) segment accounting to US$ 24 billion.


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FDI Policy in Indian Life Insurance Industry

The FDI limit in the insurance sector has been capped at 26% for the foreign marketeers but thegovernment is thinking to increase it to 49% and a bill of this offer is pending at the Rajya Sabha. TheLIC is still the major company in the life insurance sector but with such an emergence of the privatecompanies, providing a range of moneymaking policies and investment chances for people from all walksof life the situation is fast changing. The Unit Linked Investment Plans (ULIP) offering life cover as wellas scope for savings and investment deserves extra acknowledgement in this issue. Furthermore, withminimum lock-in period of three years such plans are subjected to avoid miss usage of important taxbenefits.

Major Indian Life Insurance Companies

In the public sector of the India life insurance, the Life Insurance Company of India functions solely.Some of the private companies operating in the life Insurance Sector are:

ICICI Prudential Life Insurance Birla Sun Life SBI Life Tata AIG Life Aviva Life Insurance Kotak Mahindra Life Insurance Bajaj Allianz Life Ing Vyasya Life Insurance

Credit Insurance

Credit insurance takes care of the risk of payment of the organizations and not of the individuals. To getinsured, the holders of the policy should have a credit limit on each of the buyers. For Credit insurance,the rate of premium is kept low. It combines both Credit Life Insurance and Trade Credit Insurance.

Credit insurance involves trade with a single buyer. The concept of this insurance was first incepted inthe nineteenth century. During the time of first and second World Wars, the idea was conceived in theWestern Europe. The various companies that were developed during this time offered credit insuranceto the individuals.

If the borrower of the loan dies or gets disabled then the insurance will pay the loan off. Trade CreditInsurance covers the risk of the payment during the time of delivery of services and goods. Privateindividuals are not provided with the facilities of this product.
http://en.wikipedia.org/wiki/File:Assorted_United_States_coins.jpg


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Premium is charged monthly against the issuance of the credit insurance. This insurance is a business

driven by broker, who helps in the creation of market competition among the policy holders for betterpremium and policy wordings.

Credit Insurance is the best way to manage credit risk in a cost effective way for any organization. Itprovides financial assistance during the time of any credit risks and overdue payments during domestictrade or exports. Before granting covers for the insurance various terms and conditions need to befulfilled.

Credit insurance is one of the important types of insurance that covers risk against the following:

Trade Receivables Portfolio Business-to-Business Transactions Short Term Credit Risk

Credit insurance offers a number of benefits, which are available in the form of

Risk Mitigation Efficient collection of debts Complements credit management of the seller Enables development of new markets against protection provided Expert advice since buyers are analyzed for credit worthiness

Aviation InsuranceLast Updated on 05-03-2010

The Aviation insurance Sector was first launched in the early years of 20th century and its policies werelaid down in the year 1911 by Lloyd's of London. The main target of this sector are the people victim toaccidents or loss of life due to air crash or similar to any such calamity. In the year 1929, the Warsawconvention was signed keeping in mind the plights of the people flying by air. The convention had someparticular terms and conditions along with some restrictions to stand by and was the firstacknowledgement for the airline sector identified till date.

Considering the fact that there should be a specialist sector, an aviation committee was formed by theInternational Union of Marine Insurance (IUMI) in the year 1933. By the following year InternationalUnion of Aviation Insurers was established with eight European aviation insurance organizationsresolving to figure out the concept of Aviation insurance. Throughout the world, there are a number ofinsurance markets depending on the aviation activity, providing aviation insurance to the people ofwhich the largest market is in London. The US also has a major share in the world's general aviationfleet and is a established market in this sector.

Associated Risks of Aviation Insurance

Hull "ALL Risks"The hull "All Risks" policy usually pertains to chances of physical loss or damage to the aircraft. Thesepolicies are subjected to a standard level of deductible (uninsured amount borne by the Insured)


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applicable in case of partial loss. This deductible presently ranges from US $ 50,000 (in case of Twin

Otter) to US $ 1,000,000 (in case of Boeing 747). The term "all risks" can be misguiding and it shouldbe cleared that the term is not subjected to any kind of consequential loss, or loss of use and delay. Theterm addresses to the restoration of the aircraft to its previous condition before the loss. Presently thebulk of airline hull "all risks" policies are formed on the basis of agreement between the insurers and theinsured covering the policy period, the value of the aircraft and in any case of total loss the agreed valueshould be payable in full. There is no option for replacement under such an agreement.

Exceptions to such risks are

Wear and tear of the aviation craft are not to be included in the aviation insurance. Mechanical breakdown are usually compensated by this type of insurance. Ingestion damage - caused by stones, grit, dust, sand, ice, is also excluded. The hull "All Risks" policy will pertain to the exclusion of war damages. War here means any

kind if civil war, strikes, riots, disturbances, confiscations, hi- jacking or any kind of political orterrorist attacks.

Liability InsuranceLiability is basically categorized in two aspects

In regard of passengers, baggage and cargoes carried on the aircraft. Aircraft Third Party Liability - the liability for any sort of property damage or to the people

outside the aircraft

The exceptions of Liability insurance are:

Any kind of loss incurred by the own property of the insured. War and allied risks associated with it. Noise and pollution unless resulted from crash, fire or any kind of explosions registered inside

the air plane,

Hull Total Loss Only CoverHull total loss only cover is subjected solely to total loss of the aircraft and is particularly formed for the

old aircrafts as the condition of such are very poor and are insured for low amount the premium of

which would also be very low. The proportion of partial losses to total losses in case of such aircraft is

very inadequate.

Health Insurance


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Last Updated on 08-03-2010

Health insurance is the form of insurance that provides financial security against any unforeseen medical

emergency. The insurance companies offering various types of policies, plans and schemes promises to pay back

the ascertained amount to the insured depending on the premium deposited. Presently many companies have

engaged themselves in providing a range of health insurance schemes suiting the needs of the people.

Insurance Companies providing health insurance schemes

The companies providing various kinds of health insurance schemes are:

Max NewYork Life Insurance

Max NewYork Life Insurance, one of the leading insurance company, has launched some health schemes suiting

the needs and requirements of people. The health insurance schemes provided by the company are:

Medicash Plan- This health insurance plan offers a fixed amount of cash benefit, covering expenses of all kindsfrom ICU admission to surgeries and recovery process on a daily basis throughout the period of hospitalization.

Wellness plan - This scheme provides coverage to thirty eight severe or critical illness. Some of these are liverdisease, cancer, heart ailment, alzheimer, deafness, etc.

Safety Net - This scheme is a term plus health protection plan that would provide coverage against any loss of theinsured in cases like accident, death, disability and critical illness.

New India Assurance Company Ltd.

The New India Assurance Company Ltd has come up with a health insurance scheme known by the name of

Universal Health Insurance Scheme.

Benefits of Universal Health Insurance Scheme

Medical reimbursement - This plan particularly offers reimbursement of the hospitalization cases that amounts upto RS. 30,000 covering the expenses of ICU admission, surgeries, medical tests and other expenses of medicines,

OT charges, etc.
http://en.wikipedia.org/wiki/File:NHS_NNUH_entrance.jpghttp://en.wikipedia.org/wiki/File:NHS_NNUH_entrance.jpg


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Personal Accident Cover - This particular plan provides coverage for death of the main earner of the family byaccident amounting to Rs. 25,000.

Disability Cover - This scheme aims to provide a compensation of Rs. 50 on a daily basis up to 15 days after a 3day wait in case the main earner of the family gets hospitalized.

Premium - The premium of this scheme is slated at Rs. 300 per year for an individual, Rs. 450 for a family of 5per year and Rs. 600 per year for a family of 7. For families falling under the below poverty line a premium

subsidy of Rs. 100 per family would be provided by the government.

Apollo DKV Insurance Company Ltd

Apollo DKV Insurance Company Ltd has come up with a range of health insurance scheme to offer better service

to the people. The Schemes are

Easy Health Insurance Plan - The easy health plan suits the needs of the people minus the heavy pocket cut.Available for individuals as well as families this plan aims to provide prevention with cure. The benefits of such

plan are:

It fives you the freedom to choose from a wide range of amount insured from Rs. 1 lac to 10 lacs.

It covers the expenses borne before and after hospitalization.

It provides incentives on every renewal after a claim free year.

Provides tax benefits for the premium

Maxima Health Plan - This plan provides a range of benefits for the outpatient as well as the inpatient sector.From consultation to medical tests, cost of pharmacy, spectacles, contact lenses to annual check up a range is

covered under the outpatient sector. In the inpatient sector from pre and post hospitalization expense to

maternity expenses and emergency ambulance a host of expenses are covered.

Individual Personal Accident Plan - This plan as conceived by the company comes with a range of benefits like Provides 50% of the amount to the insured dependent child for educational purpose in case of accidental

death or permanent disability.

Provides a major amount in case of accidental death.

Provides allowance in a per week basis in case of temporary disability.

Provides a major amount in case of bone fracture due to accident.

Reimburses the medical expenses for in patient treatment in case of an accident.

Group Health Insurance for India's HIV afflictedpopulationGroup Health Insurance for India's HIV afflicted populationOn independence day this year, Population Services International in partnership with KarnatakaNetwork for Positive People and Star Health and Allied Insurance Company launched India's first


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group health insurance policy for over 250 PLHIV ('People Living with HIV'). This laudable and

noble initiative has received support from USAID (United States Agency for InternationalDevelopment) under Project Connect. This unique project is a successful public-private partnershipaddressed to the needs of the PLHIV. Compliments have poured in from all quarters including thegovernment for this unique public-private business model.

Life insurance for women SHGsPNB (Punjab National Bank) and LIC ( Life insurance Corporation of India) have launched aunique life insurance scheme on 18th August 2008. This scheme is meant for the women self -help groups, which are credit-linked. The scheme will provide permanent disability insuranceand life insurance coverage. As per a speech by Finance Minister of India, Mr P Chidambaram,the above mentioned scheme is first of its kind in the country on a national scale. Mr JM Garg,PNB executive director launched this unique insurance scheme in Alwar. Initially the scheme willcover 5,000 members of PNB credit linked SHGs. The yearly premium sum is Rs 200. Half ofwhich will be paid by the beneficiary, the remaining portion will come from the social security

fund of the Centre. In case of death or permanent disability (due to an accident) of the insured,LIC would reimburse Rs 75,000. The amount receivable for normal death of the insured is Rs30,000. For partial disability the insured would get an amount of Rs 37,500.

Wealth Management Services from Union Bank of IndiaOn 18th August 2008, Union Bank of India launched its wealth management services. Thisservice at present is targeted at the bank's clients, who have high net worth. Initially the servicesare being offered to the bank's Bangalore based clients. For this purpose, Union Bank of Indiahas entered into a tie up with Wealth Advisors (India) Pvt Ltd. The latter is a leading wealthmanagement company.

It may be noted that, India is facing a rapid increase in its 'high-net worth' population. Thissegment is slated to record around 15% yearly growth in the coming decade. This has in turnprojected a high demand for wealth management services. This latest offering from the bankwill help it to ultimately emerge as a total financial solutions provider.

It may be noted that, Union Bank of India is a prime Indian public sector bank. The bankpossesses 2518 outlets country wide. It serves around 20 million customers at more than 1500centers. At June 2008 year ending, the bank possessed a business mix worth Rs 1, 83,058 Crs.Total Deposits stood at Rs, 1, 07,248 Crores. Advances were to the tune of Rs 75,810 Crores.Wealth Advisors India in its turn is a wing of the J V Gokal Group. This group has businessinterests in 10 countries globally.

Crop InsuranceCrop insurance is one of the various types of insurance that are offered to the people. This insurance isdirected to the farmers and agriculturists. This Crop insurance scheme has been going on since the timeof Kharif 1985. This insurance offers financial assistance for risk management in agriculture.

This insurance policy is a relief scheme for the farmers whose crops get spoiled during naturalcatastrophe. The insurance amount that is offered to the farmers is equal to the loan amount that hasbeen disbursed to them. A certain amount of premium is charged against the crop insurance.


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The loss that is incurred due to natural calamities is met by the Government of India. It is to be noted

that the insurance covers only one crop. The crop insurance does not cover financial assistance tomultiple crops.

Experimental Crop Insurance Scheme is offered to the marginal farmers. This was introduced during the1997 to 1998 rabi season by the Government of India. Large numbers of farmers are included under thisscheme. Financial security is offered to the farmers by this crop insurance.

Crop insurance services are offered to the farmers for better production of the crops and introductionof modern technologies. Top quality services are rendered to the farmers and clients. The risk factorthat is involved with the production of the crops has reduced much because of the introduction of thisinsurance policy.

India Home InsuranceIndia Home Insurance is about the protective coverage provided by the general insurance companiesagainst the natural calamities and unforeseen hazards like gas cylinder explosion, fire due to electricshort circuit as well as man-made disaster like burglary.

The insurance companies under the India Home Insurance policies, provide its customers with instanthome insurance quotes. Some factors calculates the required amount ofhome insurance cover needed,like, area of house (in sq. ft.) , location of property , approximate rate of construction (in Rs./sq. ft.) andtype of construction (only Pukka/Permanent). However, 50 years and above old properties are exemptfrom insurance cover. According to the sum insured the customer has to pay the premium for everymonth/quarter/six months. India Home Insurance policies offer different policies to suit the uniqueneeds of its customers, from policies having a standard/fixed cover to those with flexible package,including a basket of coverages. The premium for the latter is higher than the standard cover. Theinsurance companies also provide a 24 hours helpline and call centers to come up with better service tocustomers. There are appointed surveyors who reports about the loss to the company. Sometimes there

are no surveyors, in that case the party needs to submit the required documents to the company.

Home insurance policy of the India home insurance companies covers broadly two things:Building structure - Insurance covers for a building structure includes compensations paid for losses dueto fire, storm, tempest, flood, riot, strike, lightning, explosion & implosion, landslides and rockslides,bursting or overflowing of water tanks, apparatus and pipes, earthquake and damages to the structuredue to acts of terrorism.

The market value of the home is not under the coverage of the India Home Insurance as the cost of theland and cost of the land are included within the price of the home and land cannot be insured. Theinsurance price is only for covering the construction cost of the building.

Contents inside the home - This coverage is for the loss or damage of the valuables inside the home likethe electronic and electrical goods, furnitures, clothing, jewelry and any other precious contents insidethe home. The contents are covered on the market value of the items and in case of a loss the insuranceclaim is paid on the value of purchasing a similar new item exempting the depreciation value.

Some of the leading insurance companies under India Home Insurance are:


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ICICI Lombard General Insurance Co. Ltd.

IFFCO TOKIO National Insurance Company Ltd The New India Assurance Company Limited Tata AIG United Insurance General Insurance Corporation Of India

India Medical InsuranceThe India Medical Insurance provides a cushion against medical exigencies. Insurance cover is providedin case of hospitalization, other medical expenses etc. For detailed understanding ofIndia MedicalInsurance it is mandatory to have a clear idea about the basic concept of insurance.The concept ofinsurance is intimately related to security. Insurance acts as a protective shield against

risk and future uncertainties. Traditionally, a risk-averse behavior has been a characteristic feature ofIndians who preferred a "low & certain" disposable income to a "high & uncertain" one.

Hence, it goes without saying that the above proposition is even more justified when it comes toMedical Insurance. By virtue of various exogenous factors like rising medical expenses (comprising costsof medicines, consultation fees of Doctor's, hospital charges etc.), unavailability and exorbitant costs ofpatented drugs and emergence of diseases hitherto unknown.

Bearing the above situations in mind and anticipating the rising prospects ofIndia Medical Insurance ,leading insurance companies of India , are coming out with new plans to meet the requirements of theircustomers. Such plans are especially formulated for the older generation who have retired or will retirein the near future. Companies belonging to private as well as public sector are urging the peoplebelonging to younger generations to start planning early in their professional career for their life post

retirement. Such strategic planning would lead them to enjoy an even level of disposable incomethroughout their lives barring unforeseen circumstances.

The health-care policies offered by the leading medical insurance companies belonging to both publicand private sector are coming up with a variety of lucrative offers as follows:

Cashless system,where the policy holder can get medical treatment and diagnostic assistance inthe hospital entirely at the expense of the insurance companies (subject to the sum ensured andpremium paid every year)

In case if a policy holder has not received any above mentioned treatment, he/she will beentitled to a free medical check-up (again subject to the sum ensured and premium paid everyyear).

The leading medical insurance companies in India are:In Public Sector: New India Assurance Company Limited and United India Insurance Company Limited.In Private Sector: ICICI Lombard Plans ( Health Plans), Bajaj Allianz (Health Guard) and HSBC ( FirstHealth).
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With the passage of time the India Medical Insurance promises to become one of the leading segments

of the Insurance Sector in India.Pet InsurancePet insurance is slowly but surely catching up in India. Pet Insurance schemes essentially pay for theveterinary costs in case one's pet falls sick or suffers an accident or injury. Some pet plan insuranceproducts also make payments for loss or death of the insured pet.

Pet medical insurance is essentially a risk mitigation strategy for guarding against significant medicalexpenditure for treatment of sick or injured pets. With the recent developments in the field of veterinarymedicine the life expectancy of pets has increased, so did the cost of medical treatment. This haswidened the market for pet insurance. Nowadays customized pet plan insurance programs are availablefor animals like cats and dogs.

It may be noted that Claes Virgin wrote the world's first policy on pet insurance in 1890. Pet insurancepolicies worldwide are also available for livestock and animals like horses.

Pet care insurance in India is still at a nascent stage. Most of the clients come from the super richsections of society. However, the insurers foresee a huge untapped potential in this sector, in the comingyears. Pet insurers put the number of pets at over 4 million, counted across 27 main Indian metros. Thevalue of the Indian pet industry is estimated at above Rs 400 crore. Industry insiders in India expect petinsurance business to boom with the increased public awareness about the concerned schemes.

Oriental Insurance, a premier Indian insurance company, provides insurance for dogs, horses andelephants. Currently the other key players in the Indian pet insurance market are United India InsuranceCo, National Insurance Co, Bajaj Allianz General Insurance and New India Assurance Co.

Usually the premium for pet insurance varies between three to five percent of the amount insured inIndia. Pet medical insurance plans in India normally provide coverage for death from disease, disability

and sickness. Insurance coverage is also extended for public liability and accidental death of pets.Property Insurance

Last Updated on 05-03-2010

Property insurance offers security and financial aid against any kind of property risks like naturaldisaster, theft and fire. The property contents are also covered under such insurance.
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Why do you need a property insurance?

Property insurance is basically required for the financial security it provides to the property incase of any loss suffered.

The insurance pays off for the losses caused by any unfortunate disaster or for the particularcases listed on the policy.

Such an insurance also covers up for the accommodation at the time of your property beingrenovated.

Lastly, such kind of insurance also offers coverage for any kind of unintentional loss caused by you onsomeone else's property.

Types of property insurance

Property insurance includes several forms of insurance like:

Earthquake InsuranceThis is a kind of property insurance that compensates the insurer in case his property faces any kind ofloss due to earthquake, but it is to be kept in mid that homeowners insurance does not provide securityin case of damages caused by earthquake. Such type of insurance coverage comes with high deductiblerates that gains if the property gets fully damaged and does not help much in case of small losses.

Fire InsuranceFire insurance also falls under the forms of property insurance that offers protection to office,residences, hospitals, shops, industries and corporate offices. Damages caused by explosion, strike, riot,terrorist acts, landslide burst etc are all covered under this and damages caused by war, any electricalequipment or temperature change are not covered under such an insurance policy.

Home InsuranceHome insurance is the kind of property insurance that offers insurance coverage to the homes. Thisinsurance also gives liability protection (for accidents occurring inside the home) and also propertyprotection at the same time for a single premium. This insurance covers the home, its contents andpersonal possession.

Flood InsuranceThis is also another type of property insurance that offers insurance coverage against any kind ofdamages suffered by the property in an event of a flood. Such type of an insurance is not very commonin India as it is often covered under the home insurance and is not needed to separately adopt a policyas such.

Boiler InsuranceBoiler insurance is that form of property insurance that compensates for damages suffered by yourhome boiler or any kind of electrical equipment of your house with some exceptions attached to it.

Methods to get property insurance


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There are mainly two ways to gain property insurance and they are

Open Perils - Property insured through open peril policy offers coverage for all sorts of lossresulted from floods, act of terrorism, earthquakes and war.

Named Perils - Property insured through named peril policy offers coverage for all sorts of lossthat are particularly listed in the policy documents. The most common named includes range ofloss cused by explosion, fire, theft and lightning.

Tip for you

Full coverage of property is only possible through the best suited Insurance cover, so you must choosevery wisely and one thing that should always kept into mind is that high deductible rates always getslow premium.

Car Insurance India

Auto Insurance in India deals with the insurance covers for the loss or damage caused to the automobileor its parts due to natural and man-made calamities. It provides accident cover for individual owners ofthe vehicle while driving and also for passengers and third party legal liability. There are certain generalinsurance companieswho also offer online insurance service for the vehicle.Auto Insurance in India is a compulsory requirement for all new vehicles used whether for commercial

or personal use. The insurance companies have tie-ups with leading automobile manufacturers. Theyoffer their customers instant auto quotes. Auto premium is determined by a number of factors and theamount of premium increases with the rise in the price of the vehicle. The claims of the Auto Insurancein India can be accidental, theft claims or third party claims. Certain documents are required forclaiming Auto Insurance in India , like duly signed claim form, RC copy of the vehicle, Driving licensecopy, FIR copy, Original estimate and policy copy.

There are different types of Auto Insurance in India : Private Car Insurance - in the Auto Insurance in India, Private Car Insurance is the fastest

growing sector as it is compulsory for all the new cars. The amount of premium depends on themake and value of the car, state where the car is registered and the year of manufacture.

Two Wheeler Insurance - the Two Wheeler Insurance under the Auto Insurance in India coversaccidental insurance for the drivers of the vehicle. The amount of premium depends on thecurrent showroom price multiplied by the depreciation rate fixed by the Tariff AdvisoryCommittee at the time of the beginning of policy period.

Commercial Vehicle Insurance - Commercial Vehicle Insurance under the Auto Insurance inIndia provides cover for all the vehicles which are not used for personal purposes, like the
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Trucks and HMVs. The amount of premium depends on the showroom price of the vehicle at

the commencement of the insurance period, make of the vehicle and the place of registration ofthe vehicle.

The auto insurance generally includes: Loss or damage by accident, fire, lightning, self ignition, external explosion, burglary,

housebreaking or theft, malicious act. Liability for third party injury/death, third party property and liability to paid driver On payment of appropriate additional premium, loss/damage to electrical/electronic accessories

The auto insurance does not include: Consequential loss, depreciation, mechanical and electrical breakdown, failure or breakage When vehicle is used outside the geographical area War or nuclear perils and drunken driving

Some of the leading Insurance Companies offering Auto Insurance in India are:HSBC India - Auto SecureBajaj Allianz - Bajaj Allianz's Motor InsuranceICICI Lombard - Motor Plans, Two Wheeler Package PolicyUnited India Insurance Co. - Motor Package and Liability Only PoliciesThe New India Assurance Co. - Motor PolicyIndia Car Insurance is one of the modern diversifications in the insurance sector in India that has notonly provided revenue to the insurance companies but also relieved the car owners across the countryfrom the burden of incurring various unprecedented expenses.

The Private Car Insurance Policy in India provides insurance coverage on any light motor vehicle whichis used for domestic, social or commercial purposes. Individuals and corporate owners of private carsand the financiers of the car who have insurable interest in the vehicle are the ones who can reap thebenefits on Car Insurance in India.The risks covered in Indian Car Insurance are:

Loss or damage by accident, fire, lightening, self-ignition, external explosion, burglary, theft andmalicious act.

Riot and terrorism, strike and other natural calamities like earthquake, flood, cyclone. While in transit by road, rail, air or elevator. Liability of injury or death caused to third party or paid driver. Loss or damage of any electrical or electronic accessory of a car, PA cover for drivers, insured or

any named person and other unnamed passengers (subject to payment of additional premium).

However all the above situations are subjects of legal verifications by the respective authorities on whose

approval only, the claims may be realized. The claims will not be entertained under the followingsituations:


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Consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failure or

breakage. When the insured car faces the aforesaid problems outside the geographical boundary of India. When the insured car is used contrary to its limitations as to usage mentioned in the

agreements. When the insured car is driven by any person other than the driver stated in the "driver's

clause". If the driver of the car is drunk at the time of the occurrence of aforesaid problems. During war and nuclear perils.

The Car Insurance Companywill bear the following expenses on behalf of the insured. Actual amount spent on repairs and replacement of part(s ) of the car subject to depreciation

and sum insured. Garaging and towing charges. Damage caused to tires. In case of complete loss, market value of the car at the time of loss or the sum insured

whichever is less.

Today, car insurance is being provided by various private insurance companies like ICICI Bank, KotakMahindra,Bajaj etc.With growing demand for cars, the future holds good for Car Insurance in India .India Two Wheeler Insurance

India two-wheeler Insurance is of 2 types, viz., Liability Only policy and Package Policy. Two wheelerinsurance is obligatory in India and it is illegal to drive a two-wheeler in India without valid

insurance.

India two-wheeler Insurance procedures have been made convenient with the advent up of newinsurance companies in India. The Motor Vehicles Act, 1988 has laid down the insurance policies fordiesel and petrol driven automobiles. Insurance companies in India now also provide insurance fortwo-wheelers running on LPG or CNG.

Two-wheelers used for personal, business, and social reasons are being successfully insured byinsurance companies under a variety of schemes. The two-wheeler insurance policies have beenbriefly mentioned below:

Liability Only policy - Insurance against all the 'Acts Risks' in using a two-wheeler as coveredunder the Section 146 of Motor Vehicles Act, 1988 is covered by this policy. The party (orparties) other than the vehicle owner and the insurance company is known as third party. Inthe event of death, physical injury, and property damage of third party, compensation will bemade. Additional premia need to be paid for risks of fire and theft.

Package Policy - The scope of the policy covers risks associated with natural calamities and


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man-made disruptions, burglary, transit damages while on road, and third party risk. Some

insurance companies include the pillion rider in the insurance cover as well.

However, here are some claims that are not covered under two wheeler insurance: Damages due to general wear and tear Accident on account of drunken driving Vehicle used for unconventional reasons Accident caused but without valid license Depreciation, and losses due to war reasons and weapons

In the event of the two-wheeler being stolen, the owner must first lodge an FIR and present a copyof the insurance policy to the police. The claim is usually approved by the insurance company afterdue investigation. Thereafter, the two-wheeler keys will be taken from the owner and other necessaryformalities will be carried out.

For two wheeler accident claim, it is important to submit these documents - FIR (Third Party Injuryor Damage), claim form and original estimate of needed repairs, insurance policy proof, motordriving license of driver, and registration certificate.

Names of some companies dealing in two wheeler insurance are Bajaj Allianz, HSBC India, The NewIndia Assurance Co., Oriental Insurance Company Limited, ICICI Lombard, and United IndiaAssurance Company.

India Two-wheeler Insurance is gradually becoming a quick, convenient, and hassle-free process fortwo wheeler buyers, especially since two wheeler manufacturers have been tying up with topinsurance companies in India to offer attractive schemes to customers.

India Travel InsuranceIndia Travel Insurance is one of the latest introductions that have come about in the Insurance Sector ofIndia . Before delving deep into Indian Travel Insurance, let us get to the very root of the topic.The concept ofinsurance is intimately related to security. Insurance provides protection against risk andfuture uncertainties. Traditionally, a risk-averse behavior has been a characteristic feature of Indians whohave preferred a "low & certain" disposable income to a "high & uncertain" one.

With the advent of a host ofliberalization measures taken up by the Government of India in 1991, theinsurance sector has expanded radically. The issue of licenses to private companies is seen as a majorcause of such an expansion. It activated healthy competition between the various players (both publicand private) who started emerging with new policies and ideas. Travel Insurance is a product of such asituation.

Travel and tourism is one of the fastest growing sectors in India. With an improvement in the standardof living, domestic and international travel for business as well as personal purposes has become awidespread phenomenon. Coupled with this, both domestic and overseas travel has become increasinglyunpredictable which has risen the need for services that would cater to traveling requirements in theevent of occurrence of any such unprecedented consequences. Such an assurance is provided by TravelInsurance in India .


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Travel Insurance Policies cater to all worries related to traveling. It secures travelers in events such as: Cancellation or interruption of travel plans Damage or loss of luggage Travel delays Illness or accidents

Previously, any personal mishap faced by a traveler was compounded by a financial burden

Weather InsuranceAgriculture contributes 24% of the GDP of India. Therefore, even the slightest change in this sector canaffect the economy. Weather insurance covers the losses that may be caused to this sector due toabnormal weather conditions including variations in temperature, wind speeds and humidity or excess ofrainfall and shortage in rainfall.

Weather insurance is now a common term in countries like US, Canada, UK and other westerncountries. It has come into use in various industries like agriculture, food leisure, processing, energy andreinsurance. In India, ICICI Lombard is the most popular company in the field of weather insurance.

Weather insurance was developed in association with the World Bank. It was launched as a pilot schemewhich was first used to insure groundnuts in Andhra Pradesh. Now, farmers and all those dependent onthe weather conditions need not worry. There are several benefits of weather insurance. They include:

High level of client comfort Low management expenses Scientifically developed objective

Weather insurance provides protection to the farmers, banks, micro-finance lenders and agro-basedindustries. This in turn results in boosting the entire rural economy. Some vital factors of WeatherInsurance are:

Peril Identification Index Setting Back testing for payouts Pricing Monitoring Claims Settlement

There are some examples of deals initiated by Weather Insurance. Oranges in Jhalawar, Rajasthan werenot available for flowering. 782 farmers were aided by the Weather Insurance which provided a coverfor 613 acres for a sum insured of Rs. 18.3 mn to them. Another example states various crops in AndhraPradesh were provided cover when they faced losses due to deficit rainfall.

LATEST UPDATES RELATED TO INSURANCE


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AIG to sell Asian insurance biz to Prudential Plc

Submitted by Harish Dhawan on Mon, 03/01/2010 - 18:00.

Prudential has decided to buy nationalized US insurer - AmericanInternational Group's Asian business for about $35.5 billion. This would beAIG's biggest largest asset sale since the US government offeredapproximately $182 billion in taxpayers' money to keep the insurer afloatand avoid any 'collateral damage'.

Prudential Plc - UK's second-largest insurer has offered to pay about $35.5billion of which $25 billion would in cash, which it would raise by issuingequity, and the remainder in stock, said the people familiar

with the deal

Mediclaim Cos cannot fool clients by playing with words: Court

Submitted by Deepan Chawla on Wed, 03/03/2010 - 10:27.

The death of a portion of heart muscle as a result of inadequate blood supplyas evidenced by an episode of typical chest pain, new ectrocardiaographicchanges and by elevation of the cardiac enzymes. Diagnosis must be confirmedby a consultant physician.

This is not the description of a heart disease in a medical journal but definitionof the now common heart attack in the policy of a prominent life insurancecompany.

When St Stephens Hospital handed A. K. Jain a bill of Rs 1.91 lakh after heartsurgery, he remained cool.

AIG plans to sell the remaining stake in TransatlanticSubmitted by Mark Menell on Fri, 03/05/2010 - 23:39.

American International Group Inc. said on Friday in an announcementthat the company is planning to sell the remaining stake in reinsurancecompany Transatlantic Holdings, Incorporation.

Transatlantic Holdings is owned by American Home AssuranceCompany, a subsidiary of AIG. American International Group Inc. has9.19 million, or around 13.8%, shares in Transatlantic Holdings. AIGsaid it will sell its remaining stake in Transatlantic Holdings Inc. in apublic offering. The public offering is expected to begin by March 9

this year. This is the second time in last 10 months that AIG is selling its stake in Transatlanti

Alico sold for $15.5 billion to MetLife

Comment [U1]:
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Submitted by Harish Dhawan on Mon, 03/08/2010 - 23:24.

MetLife Inc. finally sealed a deal with American International Group Inc. (AIG)to buy stake in American Life Insurance Co (Alico) for $15.5 billion.

As per the deal, AIG would sell 20 per cent stake in Alico for $6.8 nillion in cashand another $8.7 billion in form of 78.2 million common stocks and 6.6 millionshares of convertible preferred stocks. Post completion, the deal would makeAIG the second largest shareholder in MetLife with 14 per cent stake in thecompany

LIC may again act as a rescuer

Submitted by Harish Dhawan on Fri, 03/12/2010 - 22:57.

Life Insurance Corporation (LIC) is again expected to come and rescue thestruggling FPO of NMDC.

The fate of the NMDC offer, which is to be decided on Friday, will tellwhether the largest insurer will have to underwrite the issue or not. Andsince the market has said that the FPO is overpriced, many of the FIIs havetried to stay away from it.

In such a case, unless and until something substantial happens, NMDC may have to face the same fateas the REC FPO.

Till now, said a government executive, LIC is the largest bidder for the issue.

LIC eyes to sell half million credit card next year

Submitted by Harish Dhawan on Thu, 03/18/2010 - 22:38.

The LIC Cards has informed that it is targeting to sell half million creditcards in the upcoming year. The LIC Cards is the subsidiary of LifeInsurance Corporation of India.

The PSU firm is optimistic to generate an impressive sell of credit cardsworth Rs. 5 lakh next year. However, the company has managed to sell50, 000 cards since it has started

IAG cuts its insurance margin second time in a month on Perth storm

Fri, 03/26/2010 - 21:50.

Insurance Australia Group Ltd., the biggest car and home insurer in Australia,has again cut its 2010 insurance margin on rising claims form Perth's
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hailstorm and the cyclone in Queensland. This is the second time in this month when the insurance

giant has cut its insurance margin.

Insurance Australia Group, the owner of the NRMA, SGIO and CGU brands, said today that thecompany has again lowered its 2010insurance margin and now expects the insurance margin between9.5% and 11.0%.

Citis life insurance unit prices IPO above expectations

Submitted by Harish Dhawan on Thu, 04/01/2010 - 23:34.

Primerica Inc., the life insurance business of Citigroup Inc., has priced itsIPO above the expected range. This was told by an underwriter, onThursday, and has been possible because of the larger than expectedturnaround for the IPO.

It managed to sell 21.36 million shares with a face value of $15 each. Atthis rate, it can get $320.4 million. Earlier, it had planned to sell 18million shares. The value of each share at that time was kept between $12and $14.

Insurance companies instructed by consumer court to compensate mediclaimSubmitted by Shalini Kakkad on Fri, 04/02/2010 - 21:34.

Insurance Sector India

Insurance companies have been instructed by the Delhi State ConsumerCommission to compensate medical expenses incurred by a patient within ayear of taking mediclaim policy even though the exclusion clause is declared

or not.

The exclusion clause acknowledged that policy holders cannot claim theirmedical policy within a year of taking it.

Talking in relation to exclusion clause government finds insurancecompanies at fault of not conveying this clause to the policy holders while policy is issued.

Insurance companies instructed by consumer court to compensatemediclaimSubmitted by Shalini Kakkad on Fri, 04/02/2010 - 21:34.

Insurance companies have been instructed by the Delhi State Consumer Commission to compensatemedical expenses incurred by a patient within a year of taking mediclaim policy even though the

exclusion clause is declared or not.

The exclusion clause acknowledged that policy holders cannot claim their medical policy within a year oftaking it.
http://www.topnews.in/citi-s-life-insurance-unit-prices-ipo-above-expectations-2257911http://www.topnews.in/citi-s-life-insurance-unit-prices-ipo-above-expectations-2257911http://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/insurance-companies-instructed-consumer-court-compensate-mediclaim-2257985http://www.topnews.in/user/shalini-kakkadhttp://www.topnews.in/business-news/insurance-sectorhttp://www.topnews.in/regions/indiahttp://www.topnews.in/insurance-companies-instructed-consumer-court-compensate-mediclaim-2257985http://www.topnews.in/insurance-companies-instructed-consumer-court-compensate-mediclaim-2257985http://www.topnews.in/insurance-companies-instructed-consumer-court-compensate-mediclaim-2257985http://www.topnews.in/insurance-companies-instructed-consumer-court-compensate-mediclaim-2257985http://www.topnews.in/user/shalini-kakkadhttp://www.topnews.in/user/shalini-kakkadhttp://www.topnews.in/insurance-companies-instructed-consumer-court-compensate-mediclaim-2257985http://www.topnews.in/insurance-companies-instructed-consumer-court-compensate-mediclaim-2257985http://www.topnews.in/regions/indiahttp://www.topnews.in/business-news/insurance-sectorhttp://www.topnews.in/user/shalini-kakkadhttp://www.topnews.in/insurance-companies-instructed-consumer-court-compensate-mediclaim-2257985http://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/citi-s-life-insurance-unit-prices-ipo-above-expectations-2257911


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IRDA asks insurance companies to ignore SEBI orderSubmitted by Harish Dhawan on Sun, 04/11/2010 - 11:20.

The Insurance Regulatory and Development Authority (IRDA) have asked insurance companies todisregard the order from the Securities Exchange Board of India (SEBI) regarding the sale of ULIPs.

Earlier SEBI has permitted these companies to sell ULIPs (unit linked insurance policies). But now IRDAhas tightened the screws and invoked its power under section 34(1) of the Insurance Act.

It has asked the insurance companies to stop selling these ULIPs and instructed them to continuebusiness as usual.

Talking in relation to exclusion clause government finds insurance companies at fault of not conveyingthis clause to the policy holders while policy is issued.

ULIPs are safe: IRDASubmitted by Harish Dhawan on Mon, 04/12/2010 - 13:13.

As on the one end, market regulator has banned several insurance companies from selling Unit linkedinvestment plans (ULIPs) in the Indian market, insurance regulator IRDA has recently confirmed the factthat the money of investors that have put in their hard earned money into the equity linked productsare safe.

Government to thrash out on insurance scuffleSubmitted by Harish Dhawan on Mon, 04/12/2010 - 12:20.

The Finance ministry is expected to have a discussion on the recent tussle between the SEBI and

IRDA over an insurance product linked to the stock market. Sale of ULIPs has become the bone ofcontention for the two regulatory bodies of the country.

The Insurance Regulatory and Development Authority (IRDA) have asked insurance companies todisregard the order from the Securities Exchange Board of India (SEBI) regarding the sale of ULIPs. SEBIhas permitted 14 companies to sell ULIPs (unit linked insurance policies).

Several ULIPs offer 50 times the cost of yearly premium
http://www.topnews.in/irda-asks-insurance-companies-ignore-sebi-order-2258625http://www.topnews.in/irda-asks-insurance-companies-ignore-sebi-order-2258625http://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/ulips-are-safe-irda-2258689http://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/government-thrash-out-insurance-scuffle-2258677http://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/several-ulips-offer-50-times-cost-yearly-premium-2258969http://www.topnews.in/several-ulips-offer-50-times-cost-yearly-premium-2258969http://www.topnews.in/several-ulips-offer-50-times-cost-yearly-premium-2258969http://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/government-thrash-out-insurance-scuffle-2258677http://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/ulips-are-safe-irda-2258689http://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/irda-asks-insurance-companies-ignore-sebi-order-2258625


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Submitted by Harish Dhawan on Fri, 04/16/2010 - 18:15.

While the investment in ULIPs is getting more criticism than other investment options by marketregulator SEBI, but it has been noted then the money invested in the ULIPs may offer much more thanthe investor could have desired for.

In fact, according to the past records, high mortality benefits that can be as high as 50 times the annualpremium or may even jump higher as per the examples set in the industry.

SEBI order may not affect Insurers in short-runSubmitted by Harish Dhawan on Fri, 04/16/2010 - 18:19.

While the ban on the sale of ULIPs and the rift between the two regulators IRDA and SEBI is gettingheated up by the day. Experts are of a view that this fight may not affect the insurance companies in theshort-run. Simply because of the fact that this order came in April and the busiest quarter of January-March has been closed.

Notably, people tend to invest a lot more money in the financial products due to the offered tax-breaks

and hence April is more of a lean period for the insurance companies.

Reliance Life sells most number of policiesSubmitted by Harish Dhawan on Thu, 04/22/2010 - 19:59.

Reliance Life Insurance is the numer uno private player as it managed to sell the highest number ofpolicies in the year 2009-10. The list includes names of 21 other private players. LIC, however, retainedits position as the market leader in life insurance segment.

Reliance Life is part of Anil Ambani's ADAG.

The company sold 23.2 lakh policies in 2009-10 as against 22.1 lakh policies in the previous year. In themonth of March alone, it sold 3.4 lakh policies.
http://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/sebi-order-may-not-affect-insurers-shortrun-2258970http://www.topnews.in/sebi-order-may-not-affect-insurers-shortrun-2258970http://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/reliance-life-sells-most-number-policies-2259513http://www.topnews.in/reliance-life-sells-most-number-policies-2259513http://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/reliance-life-sells-most-number-policies-2259513http://www.topnews.in/user/harish-dhawanhttp://www.topnews.in/sebi-order-may-not-affect-insurers-shortrun-2258970http://www.topnews.in/user/harish-dhawan


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Five challenges for insurancecompanies in 2010.As we begin 2010, insurers around the globe hope that business will return to normalcy after the 2008-

2009 recession. It has been tough -- sales premia declined, policy counts dropped, and investment

returns cratered.

At the same time, the insurance industry has also had to grapple other changes-- complying with new

government regulations, recalibrating business portfolios and dealing with changing customer behavior.

On top of all of this, insurance companies have had to take a close look at product viability issues and

new sales channels.

From my experience, I foresee five challenges for insurance companies in 2010.

Consolidating savings: Historically, insurance companies were able to achieve cost savingsthrough product re-alignment, reduction in staff, and shutting down unviable lines of business. These

resulted in easy savings but the recent economic downturn forced them to take steps that were far

reaching, and it is time to consolidate the savings, further fine tune processes to cut out inefficiencies

and equally focus on areas that would help them grow their business by focusing on new activities such

as targeting niche market / product segments and developing new products.

Boosting sales and distribution: In 2009, the policy counts dipped significantly, impactingworldwide revenues and generating one of most severe crises the insurance business has ever faced.

The only way forward is to attract new customers by launching innovative products which are

distributed through new and effective channels. However, new products require capital investment

which is scarce. At the same time, without new and viable products, profitability will suffer. The

challenge is therefore to launch new products through new channels as efficiently and cost-effectively

as possible.

Preparing for mergers and acquisitions:Todays insurance market is highly fragmented. Iexpect that this will be the year that insurance companies evaluate M&A as part of a strategy to

restructure and survive.

Leveraging new opportunities: As a result of the recession, companies simplified productportfolios, increased pricing and avoided risky market segments. Many withdrew from some of their

geographic markets and scaled back on some lines of business. This has given rise to new opportunities

for companies still in the business. Players with a superior understanding of their risk will be in a better

position to leverage potential opportunities, in 2010.

Handling Regulatory reform: Rule 151a which requires registration for equity-linked annuityproducts is expected to take effect in two years time. Rule 151a is aimed at determining who runs the

risk of making the investments underlying these products and dealing with how these products are

marketed. This new rule will result in new compliance requirements as registrations become mandatory.

In a larger context, the governments plans for a federal Insurance office will bring in greater federal


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oversight and ultimately lead to a dual regulatory system.

Insurance companies must carefully consider how best to tackle these challenges. They can either resort

to the wait-and-watch approach or look at the challenges as an opportunity to bring about far-reaching

changes.

Bibliography

1. Ecnomic times

2. Insurance sector india(icfai)

3. Business today

References

1. ^ http://www.irdaindia.org/regulations/TheInsuranceAct1938er126042004.doc2. ^History of Insurance in India, http://www.licindia.com/history.htm

3. Regulation of General Insurance in India, Insurance in India,
http://en.wikipedia.org/wiki/Insurance_in_India#cite_ref-0http://www.irdaindia.org/regulations/TheInsuranceAct1938er126042004.dochttp://en.wikipedia.org/wiki/Insurance_in_India#cite_ref-1http://en.wikipedia.org/wiki/Insurance_in_India#cite_ref-1http://www.licindia.com/history.htmhttp://www.indiacore.com/insurance.htmlhttp://www.indiacore.com/insurance.htmlhttp://www.licindia.com/history.htmhttp://en.wikipedia.org/wiki/Insurance_in_India#cite_ref-1http://www.irdaindia.org/regulations/TheInsuranceAct1938er126042004.dochttp://en.wikipedia.org/wiki/Insurance_in_India#cite_ref-0

Documents

Manokamana Baid - Insurance Sector in India(1)