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Introductionto
Insurance SectorPresented By-Dhananjay kumar
Jaipuria institute of Management, Noida
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Contents:-
Life insurance
General insurance Insurance market scenario
Emerging trends in insurance
Jobs in insurance Insurance websites
Insurance glossary
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Learning
Insurance
What Is Insurance
Insurance is concerned with protection ofeconomic value of assets.Tangible assets are
human beings, house, furniture, motor cycleetc.Intangible assets are liabilities
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History of Insurance
It started from Lloyds coffee house London
First policy issued in England in 1583
In India first policy issued in 1870
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History of Insurance
LIC of India formed in 1956 after
nationalization of life insuranceBusiness of 245 private insurance
companies
General insurance business of 107
insurance companies was
nationalized in 1972 & four public sectorGeneral Insurance Companies were formed
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Classes of
Insurance
A. Life insurance
B. General insurance
General insurance is further
classified:-
1.Fire insurance
2.Marine insurance
3.Miscellaneous insurance
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Miscellaneous Insurances:-
1.Motor insurance2.Mediclaim insurance
3.Householders insurance
4.Shopkeepers insurance5.Engineering insurances
etc.
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1.Insurable interest- Means financial interest
2.Utmost good faith- Greater duties of faithon proposer & insurer
3.Indemnity- Actual compensation of loss.
not applicable in life policies
Fundamental
Principles of Insurance
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Fundamental Principles of
Insurance
4.Subrogation-Transfer of rights of insured toinsurer.Not applicable in life policies.
5.Contribution-Sharing of loss by allinsurers.Not applicable in life policies.
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Market Scenario before Irda Act
1999
Life insurance company
1. LIC of India
General insurance companies
1.National insurance company ltd
2.New India assurance company ltd
3.Oriental insurance company ltd
4.United India insurance company ltd
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Market Scenario after Irda Act 1999
Stage of
Liberalization,
Privatization &
Globalization
(Competition between public sector & private sector)
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Life Insurance Companies
1.Bajaj Allianz Life Insurance Company Ltd
2.Birla Sun Life Insurance Company Ltd
3.HDFC Standard Life Insurance Company Ltd
4.ICICI Prudential Life Insurance Company Ltd
5.ING Vysya Life Insurance Company Ltd
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Life Insurance Companies
6.Max New York Life Insurance Company Ltd
7.Met Life India Insurance Company Ltd8.Kotak Mahindra Old Mutual Life Insurance
Company Ltd9.SBI Life Insurance Company Ltd
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Life Insurance Companies
10.Tata AIG Life Insurance Company Ltd
11.Reliance Life Insurance Company Ltd
12.Aviva Life Insurance Company Ltd
13.Sahara India Life InsuranceCompany Ltd
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Life Insurance Companies
14.Shriram Life Insurance CompanyLtd
15.Bharti Axa Life Insurance CompanyLtd
16.Life Insurance Corporation OfIndia
17.Future Generali India Life InsuranceCompany Ltd.
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Life Insurance Companies
18. IDBI Fortis Life Insurance Company
Ltd.
19.Canara HSBC Oriental Bank of
Commerce Life Insurance Company Ltd.
20.Aegon Religare Life Insurance
Company Limited.
21. DLF Pramerica Life Insurance Co. Ltd.
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General Insurance Companies
1.Bajaj Allianz General Insurance Company Ltd
2.Icici Lombard General Insurance CompanyLtd
3.Iffco Tokio General Insurance Company Ltd
4.Reliance General Insurance Company Ltd5.Royal Sundaram Alliance Insurance
Company Ltd
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General Insurance Companies
6.Tata AIG General Insurance Company Ltd
7.Cholamandalam Ms General InsuranceCompany Ltd8.HDFC-Chubb General Insurance Company
Ltd9.Star Health & Allied Insurance Company Ltd
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General Insurance Companies
10.Export Credit Guarantee Corporation Ltd
11.Agriculture Insurance
Company Of India Ltd
12.National Insurance Company
Ltd13.New India Assurance Company
Ltd
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General Insurance Companies
14.Oriental Insurance CompanyLtd
15.United India Insurance CompanyLtd
16. Apollo DKV Insurance Company Ltd
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General Insurance Companies
17.Future General India Insurance Company
Ltd18. Universal Sompo General Insurance Co.
Ltd.
19.Shriram General Insurance Company
Limited20.Bharti AXA General Insurance Company ltd.
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Market Intermediaries
Who procure the
insurance business:- Agents
Corporate agents
Insurance brokers Banks (Bancassurance)
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Basic Life Insurance Policies
Term assurance policy
Provides death cover onlyduring policy period
Premium is low
No refund of premium
Sum assured paid on death
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Whole Life Policy
Death cover only
Period is not specified Premium is low & paid
during life time
No refund of premium Sum assured paid on death
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Endowment Assurance Plan
Covers death & survival
benefits Sum assured paid on death
or on maturity of policy
Period of policy at the optionof proposer
Most common plan
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Money Back Policy
Available for different periods
Covers death & survival benefits
Lump sum paid periodically
Full sum assured paid on death
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Unit Linked Insurance Policies
(ULIP)
Each premium split into units and risk
premium for life cover
Units are priced as per current
market value
Sum assured & current value of units paid
on death as per policy condition Current value of units paid on maturity
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Annuity (Pension)
Plans
These are pension plans
Immediate annuity or deferred annuity startsat specified age periodically
Single premium paid for immediate annuity
Premium in installments paid
for deferred annuity
Life cover simultaneously
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Important aspects of Life Insurance
Policies
Policies available with bonus or without
bonus Death due to accidents can be covered for
additional S.A.
Policies available exclusively for women &
children Additional cover for major diseases available
Guaranteed bonus policies available
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Important aspects of Life Insurance
Policies
Policies available for limited period premium
payment & risk for longer policy period
Premium can be paid in monthly, quarterly,half yearly, yearly installments
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Important aspects of Life Insurance Policies
Loans are available on policies
Lapsed policies can be revived
Policy can be surrendered after three years
Nomination & assignment can be done
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General Insurance Policies
Fire policies
Marine policies
Motor vehicle policies
Personal line policies
Health insurances
Liability insurances Rural insurance policies
Engineering insurances
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Fire Policies
Standard fire policy-
Common policy for buildings, shops,offices,Industrial & manufacturing risks
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FIRE POLICIES-SPECIAL POLICIES
Industrial & Manufacturing
clients Floater policy
Declaration policy
Floater declaration policy
Reinstatement value policy Industrial all risk policy
Consequential loss policy
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Marine Policy
Marine Cargo Policy Policy insures physical loss or damage to the
goods in transit by road, rail, air, water caused dueto accidents, fire etc.
Marine Hull Policy Policy insures marine ships,steamers etc.
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Special Marine Cargo Policies
For business, industries,
importers and exporters Annual policy
Special declaration policy
Open cover
Open policy
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Motor Vehicle Policies
Liability only motor policy
Mandatory motor vehicle policy
Package motor policyMotor policy additionally insures loss and
damage of the motor vehicle due to theft andaccidents along with third party risk is calleda package motor policy.
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Personal Line Insurances
House holders policy
Shop keepers policy
Personal accident policy
Group personal accident policy
Fidelity guarantee policy
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Health Insurance
Medi claim policy
Overseas medi claim policy Videsh yatra mitra policy
Corporate frequent travelers policy
Employment & study policy
Group medi claim policy
Cancer policy
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Liability Insurances
Compulsory public liability policy
Public liability policy Products liability policy
Professional indemnity policy
Lift (third party) policy
Directors liability policy
Employers liability policy
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Rural Insurance Policies
Cattle policy
Poultry policy
Agricultural pump set
policy
Crop insurance
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Engineering Insurances
Machinery Breakdown Insurance Loss of Profits (Machinery
Breakdown) Insurance Electronic Equipment Insurance Erection All Risk Insurance (EAR)
Storage cum Erection Insurance(SCE)
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Engineering Insurances
Contractors All Risk Insurance (CAR) Contractors Plant and Machinery Insurance (CPM) Boiler and Pressure Plant Insurance Loss of Profits (Boiler Explosion) Insurance
Deterioration of Stocks Insurance.
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Insurance Law
The Insurance Act 1938(amended)
Insurance Regulatory & DevelopmentAuthority Act 1999
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IRDA
Insurance Regulatory & DevelopmentAuthority is the controlling and regulatoryapex body in the country for insurance sectorand its chairman and members areappointed by Government of India. IRDAs
HQ is located at Hyderabad
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Insurance Regulations
(powers and functions of IRDA)
issue to the applicant a certificate of registration, renew, modify,withdraw, suspend or cancel such registration.
specifying requisite qualifications, code of conduct and practicaltraining for intermediary or insurance intermediaries andagents.
specifying the code of conduct for surveyors and lossassessors.
promoting efficiency in the conduct of insurance business promoting and regulating professional organizations connected
with the insurance and re-insurance business.
levying fees and other charges for carrying out the purposes ofthis Act.
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Insurance Regulations
(powers and functions of IRDA)
specifying the form and manner in which books of account shallbe maintained and statement of accounts shall be rendered byinsurers and other insurance intermediaries.
regulating investment of funds by insurance companies. regulating maintenance of margin of solvency.
adjudication of disputes between insurers and intermediariesor insurance intermediaries
supervising the functioning of the Tariff Advisory Committee.
Other.
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Economic Growth
GDP 8.7 % in 2007-08
Sector Growth % of GDP
Agriculture 2.6 17.5Industry 8.9 26.8
Services 10.7 55.7
(Fin.& 11.7 14.7
Insurance)
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Growth of Insurance Business
Life Insurance Premium from Rs.400 croresin 1956 to Rs.156042 crores in 2006-07 with47 % growth
General Insurance Premium from Rs.200
crores in 1972 to Rs.24905 crores in 2006-07with 22 % growth
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Emerging Trends
Detariffing in General Insurance from
1.1.2007 leading to greater price war & newproducts in future
Banks entering insurance market throughjoint ventures with foreign finance majors
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Emerging Trends
Increasing Role of Insurance Brokers
Banc assurance
Corporate Agency
IT intervention & uses
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Emerging Trends
Greater Job Opportunities
For thousands of Insurance
Managers, IT Professionals
For lacs of Insurance Advisors
For Insurance Professionals
For Risk Managers For Underwriters
For claim Settlements
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Emerging Trends
Increasing No. of Insurance companies &Intermediaries
Increasing Awareness about Insurance
Growth in GDP
Increasing No. of Middle Class
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Emerging Trends
Increasing awareness about HealthInsurance
Increasing awareness about Personal LineInsurance like House, Shop, PersonalAccident
Market flooded with new insurance products
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Jobs
In
Insurance
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Job Opportunities
45 lakh people employed
27 lakh people required by 2012
5 lakh people supply by 2012
3 % constitute executive cadre
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Job Positions
Agency Manager
Sales Manager Sales Executive
Branch Manager
Executive Underwriting Executive Claims
Executive Bancassurance
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Job Description
To recruit the insurance agents
To train the agents
To supervise the agents
To develop the business
Supervise underwriting
Supervise claim settlement Customer relationship management
Bancassurance
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Job Specification
Team leader
Team driving capability Team management
Communication
Frustration tolerance
Insurance knowledge
Contacts
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Job Specification
Knowledge of company
Fluency in English & local language Customer service
Computer friendly
Team goals Financial consultant
Networking skills
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THE BUSINESS IDEA
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1st
Business Idea
Insurance for the consumer durables
Example TV, refrigerator, washingmachine, air conditioner, cooler (water, air)etc.
Tie up with the companies
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Advantages
To the customer1. Durability of the product
2. Long-run cost efficiency3. Better service of the product
To the companies1. Increase in sales2. Customer satisfaction
3. Strategic advantage4. Automatic removal of local-product competitors5. Revenue
To the Insurance CompanyAll benefits which is lies with any insurance company
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2. Insurance for the EDUCATION LOAN3. Insurance for lower class people.
Example- small/daily premium insurance
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