Practice of Banking and Insurance

GROUP 3

Kshitiz Dhinda - 1310909 Harsha Vardhan – 1310911 S.P. Sagar – 1310912 Jessica Simon - 1310928 Sohani Mohapatra – 1310929 Megna Jain – 1310931 Twinkle Sharma – 1310941 Kavyaa G - 1310977

History of Insurance Insurance in various forms has been mentioned in the

writings of  Manusmrithi, Dharmashastra and  Arthashastra.

 Its history dating back until 1818, when Oriental Life Insurance Company was started by Anita Bhavsar in Kolkata to cater to the needs of European community.

The pre-independence era in India saw discrimination between the lives of foreigners (English) and Indians with higher premiums being charged for the latter. In 1870, Bombay Mutual Life Assurance Society became the first Indian insurer.

The Government of India issued an Ordinance on 19 January 1956 nationalising the Life Insurance sector.

Present state of Insurance in India

1) Life Insurance Corporation of India (LIC)Corporate Office – Mumbai, Maharashtra

Employees - 115900+ Business – Financial services Establishment – 1956 Website – www.licindia.inDetails – Best Insurance Company in India

dominating the market since then it established in market. In other word, It is the synonyms of Insurance in India, most important they have best settlement ratio.

2) SBI Life Insurance

Corporate Office – Mumbai, Maharashtra Employees – 7300+ Business – Insurance Establishment – 2001 Website -www.sbilife.co.inDetails -State bank of India life insurance is a

joint venture between BNP Paribas Cardif holding 74:26 ratios. It has great hold in Indian market as far as concern of Finance and banking sector, best in insurance sector after LIC

3) Birla Sunlife Insurance

Employees – 133000+ Business – Financial services Establishment – 2000 Website -www.birlasunlife.comDetails - It is financial and Insurance company,

a Joint venture of Aditya Birla and Sun life Insurance. Company offers life insurance products including health, wealth and retrial plans.

4) Reliance Life Insurance (RLIC)

Corporate Office – Navi Mumbai,Maharashtra Employees – 1000+ Business – Insurance Establishment – 2001 Website -www.reliancelife.comDetails – Company is group company of

Reliance, among of top insurance company in India. In year 2011 Nippon life insurance, Japan acquired 26% share in this company.

5) ICICI Prudential Life Insurance

Corporate Office – United Kingdom Employees – 15000+ Business – Life Insurance Establishment – 2000 Website -www.iciciprulife.comDetails – ICICI prudential is a joint venture

between ICICI and prudential Plc, United kingdom. ICICI Prudential offers wide range of Insurance Products including health, wealth, life insurance, medical insurance and retrial solutions.

General Insurance Companies:Oriental Insurance Company LtdUnited India Insurance Company

LtdNew India Assurance Company

LtdNational Insurance Company Agriculture Insurance Company

of India LtdThe Motor Assurance India

Company Ltd

United India Insurance Company Ltd

One of the top general insurers in Asia Net worth of Rs 5631crores as on the financial year 2013-14 Merger of 22 different non life insurance companies Headquartered at 24,Whites Road, Chennai Founded in 1938 , employees 17322 Products:

1) Personal policies: Householder,personal accident, mediclaim,unimedicare,Bhavisya arogya.

2) Commercial policies:Fire insurance,marine insurance,motor insurance,industrial insurance,l iability insurance.

The New India Assurance Company LtdFounded by Sri Dorabji Tata in

1919,nationalized in 1973Headquatered in MumbaiRecently collaborated with SBI ,Central bank

of India and Corporation bank.Presence in 22 different companiesTeamed with TCS to provide a core insurance

platform:

Centralized Web based Insurance System Solution

National Insurance Company LtdFounded in 1906,nationalized in 1972Headquatered in KolkataProducts:Personal insurance:medical insurance,accident,property

and auto insurance coverageRural insurance:protection against natural and climatic

disasters for agricultural and rural businesses Industrial insurance:coverage for

projects.construction,contracts,fire,equipment loss etc.Commercial insurance:protection against loss or damage

of property during transportation

Export Credit Guarantee Corporation of India

Established in 30 July 1957Objective to provide insurance

coverage to risks in export tradeHeadquatered in MumbaiProduct :credit insurance

Life Insurance Companies

Life insurance corporation in India

Employee’s state insurance corporation

Life Insurance Corporation of India

Founded in 1956 Headquatered in Mumbai Merger of 245 insurance companies and provident societies Products:

i. insurance plans

ii. pension plans

iii. unit-linked plans

iv. special plans

v. group schemes

vi. health insurance

vii. investment management’

viii. mutual fund

General Insurance Corporation of India

Founded in nov 22 ,1972Headquatered in MumbaiServes worldwideProduct: reinsuranceSole reinsurance company in the India

insurance market

Opportunities of Insuranceopportunities are based on a survey.

Are classified on the basis of:

a) Cost competitiveness

b) Customer Reach

c) Stakeholder’s confidence

d) Operational Agility

Based on Cost Competitiveness

• Re-optimizing capital structure

• Improved Distribution and Product Development

Based on stakeholder’s confidence

• Effective Enterprise Wide – risk Governance

Promoting fair outcomes for customers.

Based on Customer Reach

• Growth in emerging markets.

• Personalization of medicine and insurance policies.

• Rise of social media tools.

Based on operational Agility• Shifting sales to accommodate changing

customer needs.

• Exponential growth of experimental data and tools.

• Impact of Global demographic changes

Challenges faced in Insurance Markets

1. Industry Challenges

(i) Commoditization in personal line products.(ii) Shifting consumer requirements( everyone

wants products tailored to them, customization)(iii) Heightened competition.(iv) Global economic meltdown.

2. Business Challenges

The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products.

Distribution Channel pressures and emerging consumer demands for mass customization and hybrid products are moving rapid product development from being a competitive advantage to a necessity.

3. Process ChallengesLack of stream lined processes, change

management, automated processes, central repository.

Solutions1. New approaches and technology are  needed

to manage  and develop insurance  products which reduces the cost and time to market.

2. Speed, quality, efficiency and capacity are different dimensions to counter the above challenges.

3. Product SolutionsDeliver new products/product customizations efficiently,

quickly and in a flexible manner.Making change to existing products quickly.Meeting demand for combination products i.e

developing products that encompass multiple features in today's products.

Speed to match the competition (If market embraces a particular product feature launched by the competitor, other insurer tend to quickly follow suit to meet competition. Example: Conservative LIC introduced Unit Linked Plans to meet competition.

Real time underwriting based on customer segmentation.

4. Technology SolutionsQuickly respond to business needs by deploying

new technologies and applications.

5) Organisational SolutionsFor robust performance and growth empower

front-line staff and equip them with multiple skills.

Indian Contract Act, 1872

All law relating to contracts contained in the Indian Contract Act, 1872

Prior to Indian Contract Act, the English Law was applied into the Presidency towns of Madras, Bombay and Calcutta by the Charter granted in 1726 by King George I to the East India Company.

Came into force on September 1st 1872

Applicable for the whole of India except Jammu AND Kashmir.

Indian Contract Act Currently the act can be divided

into two parts

1 : Deals with general principles 2: Deals with special kinds of contract such

of law of contract which applies as indemnity, guarantee , bailment &

to all types of contracts pledge, agency etc.

irrespective of their nature.

What is a contract?

A contract is an agreement enforceable by law.

Two basic elements : Agreement Enforceable at law

Insurance Policy

The insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known as the premium, the insurer promises to pay for loss caused by perils covered under the policy language.

1. What is an agreement Every promise or set of promises forming

the consideration for each other

Includes two parties : Individual who makes an proposal and the individual to whom the proposal is being made to.

What is a promise? A proposal once accepted is called a promise

AGREEMENT = OFFER + ACCEPTANCE

2. Enforceable by law

Must give rise to legal obligation and legal relations.

No social or domestic agreements

eg : Agreement to attend dinner at a friends

house.

Therefore, an contract = agreement + enforceability at law

All contracts are agreements but not all agreements are contracts.

Parts of an insurance contractDECLARATIONS- identifies who is an insured, the insured's address, the insuring company, what risks or property are covered, the policy limits (amount of insurance), any applicable deductibles, the policy period and premium amount.

DEFINITIONS - define important terms used in the policy language.

INSURING AGREEMENT - describes the risks assumed, or nature of coverage. It summarizes the major promises of the insurance company, as well as stating what is covered.

EXCLUSIONS - take coverage away from the Insuring Agreement by describing property, perils, hazards or losses arising from specific causes which are not covered by the policy.

Parts of an insurance contractCONDITIONS - provisions, rules of conduct, duties and

obligations required for coverage. If policy conditions are not met, the insurer can deny the claim.

POLICY RIDERS - A policy rider is used to convey the terms of a policy amendment and the amendment thereby becomes part of the policy. Riders are dated and numbered so that both insurer and policyholder can determine provisions and the benefit level. Common riders to group medical plans involve name changes, change to eligible classes of employees, change in level of benefits.

Thank You!!