insurence
Content
Insurance Policy India provides the clients with the details required for the coverages in the policy,
date of commencement of the policy and their adopting organizations. It plays a important role in the Indian insurance sector. The Insurance Policy India is regulated by certain acts like the Insurance Act(1938), the Life Insurance Corporation Act(1956), General Insurance Business (Nationalization) Act(1972), Insurance Regulatory and Development Authority (IRDA) Act(1999). The insurance policy determines the covers against risks, sometime opens investment options with insurance companies setting high returns and also informs about the tax benefits like the LIC in India. There are two types of insurance covers: 1. Life insurance 2. General insurance Life insurance – this sector deals with the risks and the accidents affecting the life of the customer. Alongside, this insurance policy also offers tax planning and investment returns. There are various types of life Insurance Policy India: a. Endowment Policy b. Whole Life Policy c. Term Life Policy d. Money-back Policy e. Joint Life Policy f. Group Insurance Policy g. Loan Cover Term Assurance Policy h. Pension Plan or Annuities i. Unit Linked Insurance Plan General Insurance – this sector covers almost everything related to property, vehicle, cash, household goods, health and also one's liability towards others. The major segments covered under general Insurance Policy India are: a. Home Insurance b. Health Insurance c. Motor Insurance d. Travel Insurance Some of the well known Insurance Policy India are: Social Security Group Scheme – a scheme covering the age group of 18-60 years and an insurance of Rs.5000 for natural death and of Rs.25000 on due to accidental death. Shiksha Sahyog Yojana – a scheme providing an educational scholarship of Rs.300 per quarter per child is given for a period of four years. Raj Rajeshwari Mahila Kalyan Yojana – a scheme providing protection to woman in the age group of 10 to 75 years with an insurance of Rs. 25,000 and premium Rs.15 per annum. Jan Arogya Bima Policy – a scheme for the adults upto the age of 45 years is Rs. 70 and for children it is Rs. 50. The limit coverage is fixed at Rs.5000 per annum. Mediclaim Insurance Policy – a scheme covering the age group from 5-80 years with a tax benefit of up to Rs 10,000. Jana Shree Bima Yojana – this is a coverage of Rs 2,000 on natural death and Rs 50,000 for accidental death. The premium amount is fixed at Rs. 200 for single member. Videsh Yatra Mitra Policy – a scheme covering medical expenses during the period of overseas travel. Bhagya Shree Child Welfare Bima Yojana – a scheme covering one girl child in a family upto the age of 18 whose parents age does not exceed 60 years, with a premium of Rs.15 per annum. Ashray Bima Yojana – a scheme covering workers in case of loss of jobs
.Personal Accident Insurance Scheme for Kissan Credit Card – a scheme covering all the KCC holders up to an age of 70 years. Insurance coverage includes 50,000 for accidental death and 25,000 for partial disability INSURANCE COMPANY It is due to globalization, deregulation and also terrorist attacks; that the insurance industry is undergoing a massive change and the metamorphosis has been noteworthy in the last few decades.
Clearing basics
Before we begin the analysis of Indian insurance industry, let us clear some basics on insurance. In the words of a layman, insurance means managing risk. For instance, in life insurance segment, the insurance company tries to manage mortality (death) rates among the wide array of clients.
•
The insurance company works in a manner by collecting premiums from policy holders,
investing the money (usually in low risk investments), and then reimbursing this same money once the person passes away or the policy matures. The greater the probability for a person to have a shorter life span than the average mark, the higher premium that person has to pay. The case is the same for all other types of insurance, including automobile, health and property. • Ownership of insurance companies is of two types: • Shareholder ownership • Policyholder ownership
Types of Insurance
1. 2. 3. Life Insurance - Insurance guaranteeing a specific sum of money to a designated beneficiary upon the death of the insured, or to the insured if he or she lives beyond a certain age. Health Insurance - Insurance against expenses incurred through illness of the insured. Liability Insurance - This insures property such as automobiles, property and professional/business mishaps.
Challenges facing Insurance Industry
•
Threat of New Entrants: The insurance industry has been budding with new entrants every
other day. Therefore the companies should carve out niche areas such that the threat of new entrants might not be a hindrance. There is also a chance that the big players might squeeze the small new entrants. • Power of Suppliers: Those who are supplying the capital are not that big a threat. For instance, if someone as a very talented insurance underwriter is presently working for a small insurance company, there exists a chance that any big player willing to enter the insurance industry might entice that person off. • Power of Buyers: No individual is a big threat to the insurance industry and big corporate houses have a lot more negotiating capability with the insurance companies. Big corporate clients like airlines and pharmaceutical companies pay millions of dollars every year in premiums. • Availability of Substitutes: There exist a lot of substitutes in the insurance industry. Majorly, the large insurance companies provide similar kinds of services – be it auto, home, commercial, health or life insurance.
•
How to choose an insurance company?
There are many factors to probe into when an investor chose an insurance company.
•
The consumers as well as the investors should only focus on the insurer's financial strength
and capability to meet ongoing responsibilities to its policyholders. • The fundamentals of the insurance company should be strong and should not indicate a poor investment opportunity as this might also deter growth.
Brief history of insurance 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 to the form of a liberalized market once again. The history of the insurance sector in India reveals that it has witnessed complete dynamism for the past two centuries approximately. With the establishment of the Oriental Life Insurance Company in Kolkata, the business of Indian life insurance started in the year 1818
Important milestones in the Indian life insurance business
•
1912: The Indian Life Assurance Companies Act came into force for regulating the life
insurance business.
•
1928: The Indian Insurance Companies Act was enacted for enabling the government to collect
statistical information on both life and non-life insurance businesses.
•
1938: The earlier legislation consolidated the Insurance Act with the aim of safeguarding the
interests of the insuring public.
•
1956: 245 Indian and foreign insurers and provident societies were taken over by the central
government and they got nationalized. LIC was formed by an Act of Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and that too from the Government of India. The history of general insurance business in India can be traced back to Triton Insurance Company Ltd. (the first general insurance company) which was formed in the year 1850 in Kolkata by the British.
Important milestones in the Indian general insurance business
•
1907: The Indian Mercantile Insurance Ltd. was set up which was the first company of its type
to transact all general insurance business. • 1957: General Insurance Council, an arm of the Insurance Association of India, framed a code of conduct for guaranteeing fair conduct and sound business patterns. • 1968: The Insurance Act improved for regulating investments and set minimal solvency levels and the Tariff Advisory Committee was set up. • 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India. It was with effect from 1st January 1973. 107 insurers integrated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC was incorporated as a company.
Insurance companies in India
IRDA has till now provided registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are considered then there are presently 13 insurance companies in the life side and 13 companies functioning in general insurance business. General Insurance Corporation has been sanctioned as the "Indian reinsurer" for underwriting only reinsurance business.
List of Insurance companies in India
LIFE INSURERS Public Sector Life Insurance Corporation of India Private Sector Allianz Bajaj Life Insurance Company Limited Birla Sun-Life Insurance Company Limited HDFC Standard Life Insurance Co. Limited ICICI Prudential Life Insurance Co. Limited ING Vysya Life Insurance Company Limited Max New York Life Insurance Co. Limited MetLife Insurance Company Limited Om Kotak Mahindra Life Insurance Co. Ltd. SBI Life Insurance Company Limited TATA AIG Life Insurance Company Limited AMP Sanmar Assurance Company Limited Dabur CGU Life Insurance Co. Pvt. Limited GENERAL INSURERS Public Sector National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited
Websites
www.licindia.com
www.allianzbajaj.co.in www.birlasunlife.com www.hdfcinsurance.com www.iciciprulife.com www.ingvysayalife.com www.maxnewyorklife.com www.metlife.com www.omkotakmahnidra.com www.sbilife.co.in www.tata-aig.com www.ampsanmar.com www.avivaindia.com
www.nationalinsuranceindia.com www.niacl.com www.orientalinsurance.nic.in www.uiic.co.in
Private Sector Bajaj Allianz General Insurance Co. Limited ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. Reliance General Insurance Co. Limited Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Limited Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation HDFC Chubb General Insurance Co. Ltd. REINSURER General Insurance Corporation of India www.gicindia.com www.bajajallianz.co.in www.icicilombard.com www.itgi.co.in www.ril.com www.royalsun.com www.tata-aig.com www.cholainsurance.com www.ecgcindia.com
Concept of Insurance
Insured, are you? The functions of Insurance will give you an idea on how to go ahead with the approach of insurance and what type of insurance to choose. In a layman's words, insurance means, ‘a guard 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 the developing countries remains unaware of the functions and benefits of insurance and it is for this reason that 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 a singer, leg of a footballer, and the hand of an author.....etc. It is possible to insure all these as they have the possibility of becoming non functional by any disaster or an accident.
Basic functions of Insurance
1. 2. 3. 1.Primary Functions 2.Secondary Functions 3.Other Functions
Primary functions of insurance
•
Providing protection – The elementary purpose of insurance is to allow security against future
risk, accidents and uncertainty. Insurance cannot arrest the risk from taking place, but can for sure allow for the losses arising with the risk. Insurance is in reality a protective cover against economic loss, by apportioning the risk with others.
•
Collective risk bearing – Insurance is an instrument to share the financial loss. It is a medium
through 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
device to prevent unfortunate aftermaths of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc. • Covering larger risks with small capital – Insurance assuages the businessmen from security investments. 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 to those 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 tax exemptions, people take up insurance as a good investment option. • Medium of earning foreign exchange – Being an international business, any country can earn foreign 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 the help 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.
List of top insurance companies
Tata AIG Insurance SolutionsTata 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 renowned business 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 than 60,000 advisors. Currently, ING Vysya Life Insurance has tie ups with more than 200 cooperative banks. Birla Sun Life Financial Services 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 for Birla 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 offices located 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 branches located 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.
Insurance Companies in India
• • • • • • • • • • • •
Life Insurance Companies Aviva Life Insurance Bajaj Allianz Life Insurance Birla Sun-Life Insurance HDFC Standard Life Insurance ING Vysya Life Insurance Life Insurance Corporation Max New York Life Insurance MetLife Insurance Om Kotak Mahindra Life Insurance Reliance Life Insurance Sahara India Life Insurance
• • • • • • • • • • • • • • • • •
SBI Life Insurance TATA AIG Life Insurance General Insurance Companies Agriculture Insurance Amsure Insurance ANZ Insurance Bajaj Allianz General Insurance Cholamandalam General Insurance Employee State Insurance Export Credit Guarantee Corporation ICICI Lombard General Insurance IFFCO-Tokio General Insurance National Insurance Oriental Insurance Peerless Smart Financial Royal Sundaram Alliance TATA AIG General Insurance
India General Insurance
India General Insurance covers almost everything related to property, vehicle, cash, household goods, health and also one's liability towards others. The basic difference of general insurance with the life insurance policy is that it offers protection against contingencies. Nearly 100 general insurance companies have been nationalized under the General Insurance Business (Nationalization) Act, 1972, and merged into four companies, namely, National Insurance , New India Assurance , Oriental Insurance and United India Insurance. Major insurance policies that are covered underIndia General Insurance are:
•
Home Insurance � Home insurance policies under the India General Insurance provides
protection against earthquake, natural calamities like floods, landslides and torrential rains, other hazards like gas cylinder explosion, fire due to electric short circuit and burglary. The home insurance policies under the India General Insurance covers:
• •
Building structure Contents inside the home
However it should be remembered, that a home insurance does not cover the market value of the house but all the contents are covered on the market value of the items.
•
Health Insurance - Health insurance under the India General Insurance is commonly calledMediclaim policies. Health insurance policy covers expenses incurred during hospitalization and also the expenses during the pre as well as post hospitalization stages like pathological tests and buying medicines. Mediclaim policies is also tax beneficial, as stated under Section 80D, with the maximum amount of deduction being fixed at Rs 10,000 and in case of senior citizens Rs 15,000. • Motor Insurance - Motor insurance policies under India General Insurance is obligatory as all vehicles are needed to be insured. It covers: • loss or damage caused to the vehicle or its accessories due to natural and man made calamities
•
compulsory personal accident coverage for individual owners of the vehicle while driving
Travel Insurance - Travel insurance policies under India General Insurance offers lots of benefits such as medical expenses, loss or delay of baggage or passport, personal accident, financial emergency assistance and hijack distress allowance and as well covers expenses incurred due to delayed flight, cancellation of trip. It also takes care of valued assets left at home. Thus, this ensures all travel worries.
(B) GENERAL INSURANCE
• • • •
Fire Insurance Marine Insurance Accident Insurance
Some of the leading insurance companies covering general insurances are the ICICI Lombard Insurance Direct, Bajaj Allianz, Tata-AIG, and others.
Health Insurance
After life insurance health insurance policies are perhaps the most insurance policies required by human beings today. Health is slowly and steadily becoming a major matter of concern for most individuals today. Since most of us today have joined the rat race and every one wants to be rich and successful the one major thing that we are neglecting is our most precious asset health. Ailments like Heart problems, diabetes, stroke, renal failure, cancer etc were rare till a few decades back but with every passing day these dreadfully diseases are getting more and more common by the day. Treatment is India is no longer cheap. In order to get treated by a good specialist or doctor one has to pay through his nose. Even daily hospital charges are sky high. In order to assist you in the event of an unforeseen health problem health insurance has been introduced. Most of the renowned companies in India provide comprehensive health insurance polices. These insurance companies have a tie up with the reputed hospital spread across the country. These health insurance policies cover all the costs incurred before hospitalization, during hospitalization and after hospitalization. There are two types of health insurance policies offered by the popular insurance companies in India. Types of Health Insurance in India
Individual Health Insurance
The most popular form of health insurance policies are the Individual Mediclaim policies. Offered by most of the reputed insurance companies in India the individual health policies insure you against any illnesses. The policies cover the hospitalization expenses for an individual for up to the sum assured limit. The insurance premium is dependent on the sum assured value.
Family Floater policy
Another common policy that is ruling the insurance sector today is the family health insurance policy. The unique feature about this policy is that with the payment of a single premium the entire family is covered against illnesses. This policy also entitles the insured or his spouse of kids to cashless hospitalization and all other benefits that are enjoyed by an individual with an Individual Health Insurance policy.
Health Insurance - Benefits
Below is a list of the advantages of a comprehensive Health Insurance policy
•
Most of the Family Health insurance policies offered by the insurance companies in India
protect you and your family which includes your spouse and two children under a single policy. • One single health insurance policy covers the entire family. • You or any of your family members is entitled to cashless facility in case of hospitalization due to illness. This facility covers a wide network of renowned hospitals spread across the country. • Some of the reputed insurance companies also provide Cash benefits to the insured during the time of hospitalization. • Pre and Post Hospitalization Expenses are taken care of by most of the health care providing insurance companies. • The policy generally covers relevant medical expenses incurred 60 days prior to and 90 days after hospitalization. • Every claim free year entitles the ensured to an additional amount known as cumulative bonus. • The health insurance policies also include Ambulance Charges. • Health insurance policies entitle you to regular free health Check ups The premiums paid for health insurance policies exempt the insured from paying Income Tax Under Section 80 D of the Income Tax Act
Health Insurance
• • • • • • • • • • • • • • • • • • • • •
Children Health Policy Health Insurance Options Individual Health Insurance Cheap Health Insiurance Health Insurance Companies Health Insurance Premium Find Health Insurance-policy Health Insurance Benefits Health Insurance Claim Health Insurance Costs Group Health Insurance Private Health Insurance Senior Health Insurance Plan Women Health Insurance Plan Corporate Health Insurance Employee Heallth Insurance Health Insurance Articles Parents Health Insurance Family Health Insurance Individual Health Coverage Instant Health Insurance
Non-life insurers clock 22% growth in AprilAbout Tata AIG Life
Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by Tata Sons and AIA Group Limited (AIA). Tata AIG Life combines Tata’s pre-eminent leadership position in India and AIA’s presence as the largest, independent listed pan-Asia life insurance group in the world spanning 15 markets in Asia
Pacific. Tata Sons holds a majority stake (74%) in the company and AIA holds 26% through an AIA Group company. Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001.
date of commencement of the policy and their adopting organizations. It plays a important role in the Indian insurance sector. The Insurance Policy India is regulated by certain acts like the Insurance Act(1938), the Life Insurance Corporation Act(1956), General Insurance Business (Nationalization) Act(1972), Insurance Regulatory and Development Authority (IRDA) Act(1999). The insurance policy determines the covers against risks, sometime opens investment options with insurance companies setting high returns and also informs about the tax benefits like the LIC in India. There are two types of insurance covers: 1. Life insurance 2. General insurance Life insurance – this sector deals with the risks and the accidents affecting the life of the customer. Alongside, this insurance policy also offers tax planning and investment returns. There are various types of life Insurance Policy India: a. Endowment Policy b. Whole Life Policy c. Term Life Policy d. Money-back Policy e. Joint Life Policy f. Group Insurance Policy g. Loan Cover Term Assurance Policy h. Pension Plan or Annuities i. Unit Linked Insurance Plan General Insurance – this sector covers almost everything related to property, vehicle, cash, household goods, health and also one's liability towards others. The major segments covered under general Insurance Policy India are: a. Home Insurance b. Health Insurance c. Motor Insurance d. Travel Insurance Some of the well known Insurance Policy India are: Social Security Group Scheme – a scheme covering the age group of 18-60 years and an insurance of Rs.5000 for natural death and of Rs.25000 on due to accidental death. Shiksha Sahyog Yojana – a scheme providing an educational scholarship of Rs.300 per quarter per child is given for a period of four years. Raj Rajeshwari Mahila Kalyan Yojana – a scheme providing protection to woman in the age group of 10 to 75 years with an insurance of Rs. 25,000 and premium Rs.15 per annum. Jan Arogya Bima Policy – a scheme for the adults upto the age of 45 years is Rs. 70 and for children it is Rs. 50. The limit coverage is fixed at Rs.5000 per annum. Mediclaim Insurance Policy – a scheme covering the age group from 5-80 years with a tax benefit of up to Rs 10,000. Jana Shree Bima Yojana – this is a coverage of Rs 2,000 on natural death and Rs 50,000 for accidental death. The premium amount is fixed at Rs. 200 for single member. Videsh Yatra Mitra Policy – a scheme covering medical expenses during the period of overseas travel. Bhagya Shree Child Welfare Bima Yojana – a scheme covering one girl child in a family upto the age of 18 whose parents age does not exceed 60 years, with a premium of Rs.15 per annum. Ashray Bima Yojana – a scheme covering workers in case of loss of jobs
.Personal Accident Insurance Scheme for Kissan Credit Card – a scheme covering all the KCC holders up to an age of 70 years. Insurance coverage includes 50,000 for accidental death and 25,000 for partial disability INSURANCE COMPANY It is due to globalization, deregulation and also terrorist attacks; that the insurance industry is undergoing a massive change and the metamorphosis has been noteworthy in the last few decades.
Clearing basics
Before we begin the analysis of Indian insurance industry, let us clear some basics on insurance. In the words of a layman, insurance means managing risk. For instance, in life insurance segment, the insurance company tries to manage mortality (death) rates among the wide array of clients.
•
The insurance company works in a manner by collecting premiums from policy holders,
investing the money (usually in low risk investments), and then reimbursing this same money once the person passes away or the policy matures. The greater the probability for a person to have a shorter life span than the average mark, the higher premium that person has to pay. The case is the same for all other types of insurance, including automobile, health and property. • Ownership of insurance companies is of two types: • Shareholder ownership • Policyholder ownership
Types of Insurance
1. 2. 3. Life Insurance - Insurance guaranteeing a specific sum of money to a designated beneficiary upon the death of the insured, or to the insured if he or she lives beyond a certain age. Health Insurance - Insurance against expenses incurred through illness of the insured. Liability Insurance - This insures property such as automobiles, property and professional/business mishaps.
Challenges facing Insurance Industry
•
Threat of New Entrants: The insurance industry has been budding with new entrants every
other day. Therefore the companies should carve out niche areas such that the threat of new entrants might not be a hindrance. There is also a chance that the big players might squeeze the small new entrants. • Power of Suppliers: Those who are supplying the capital are not that big a threat. For instance, if someone as a very talented insurance underwriter is presently working for a small insurance company, there exists a chance that any big player willing to enter the insurance industry might entice that person off. • Power of Buyers: No individual is a big threat to the insurance industry and big corporate houses have a lot more negotiating capability with the insurance companies. Big corporate clients like airlines and pharmaceutical companies pay millions of dollars every year in premiums. • Availability of Substitutes: There exist a lot of substitutes in the insurance industry. Majorly, the large insurance companies provide similar kinds of services – be it auto, home, commercial, health or life insurance.
•
How to choose an insurance company?
There are many factors to probe into when an investor chose an insurance company.
•
The consumers as well as the investors should only focus on the insurer's financial strength
and capability to meet ongoing responsibilities to its policyholders. • The fundamentals of the insurance company should be strong and should not indicate a poor investment opportunity as this might also deter growth.
Brief history of insurance 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 to the form of a liberalized market once again. The history of the insurance sector in India reveals that it has witnessed complete dynamism for the past two centuries approximately. With the establishment of the Oriental Life Insurance Company in Kolkata, the business of Indian life insurance started in the year 1818
Important milestones in the Indian life insurance business
•
1912: The Indian Life Assurance Companies Act came into force for regulating the life
insurance business.
•
1928: The Indian Insurance Companies Act was enacted for enabling the government to collect
statistical information on both life and non-life insurance businesses.
•
1938: The earlier legislation consolidated the Insurance Act with the aim of safeguarding the
interests of the insuring public.
•
1956: 245 Indian and foreign insurers and provident societies were taken over by the central
government and they got nationalized. LIC was formed by an Act of Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and that too from the Government of India. The history of general insurance business in India can be traced back to Triton Insurance Company Ltd. (the first general insurance company) which was formed in the year 1850 in Kolkata by the British.
Important milestones in the Indian general insurance business
•
1907: The Indian Mercantile Insurance Ltd. was set up which was the first company of its type
to transact all general insurance business. • 1957: General Insurance Council, an arm of the Insurance Association of India, framed a code of conduct for guaranteeing fair conduct and sound business patterns. • 1968: The Insurance Act improved for regulating investments and set minimal solvency levels and the Tariff Advisory Committee was set up. • 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India. It was with effect from 1st January 1973. 107 insurers integrated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC was incorporated as a company.
Insurance companies in India
IRDA has till now provided registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are considered then there are presently 13 insurance companies in the life side and 13 companies functioning in general insurance business. General Insurance Corporation has been sanctioned as the "Indian reinsurer" for underwriting only reinsurance business.
List of Insurance companies in India
LIFE INSURERS Public Sector Life Insurance Corporation of India Private Sector Allianz Bajaj Life Insurance Company Limited Birla Sun-Life Insurance Company Limited HDFC Standard Life Insurance Co. Limited ICICI Prudential Life Insurance Co. Limited ING Vysya Life Insurance Company Limited Max New York Life Insurance Co. Limited MetLife Insurance Company Limited Om Kotak Mahindra Life Insurance Co. Ltd. SBI Life Insurance Company Limited TATA AIG Life Insurance Company Limited AMP Sanmar Assurance Company Limited Dabur CGU Life Insurance Co. Pvt. Limited GENERAL INSURERS Public Sector National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited
Websites
www.licindia.com
www.allianzbajaj.co.in www.birlasunlife.com www.hdfcinsurance.com www.iciciprulife.com www.ingvysayalife.com www.maxnewyorklife.com www.metlife.com www.omkotakmahnidra.com www.sbilife.co.in www.tata-aig.com www.ampsanmar.com www.avivaindia.com
www.nationalinsuranceindia.com www.niacl.com www.orientalinsurance.nic.in www.uiic.co.in
Private Sector Bajaj Allianz General Insurance Co. Limited ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. Reliance General Insurance Co. Limited Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Limited Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation HDFC Chubb General Insurance Co. Ltd. REINSURER General Insurance Corporation of India www.gicindia.com www.bajajallianz.co.in www.icicilombard.com www.itgi.co.in www.ril.com www.royalsun.com www.tata-aig.com www.cholainsurance.com www.ecgcindia.com
Concept of Insurance
Insured, are you? The functions of Insurance will give you an idea on how to go ahead with the approach of insurance and what type of insurance to choose. In a layman's words, insurance means, ‘a guard 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 the developing countries remains unaware of the functions and benefits of insurance and it is for this reason that 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 a singer, leg of a footballer, and the hand of an author.....etc. It is possible to insure all these as they have the possibility of becoming non functional by any disaster or an accident.
Basic functions of Insurance
1. 2. 3. 1.Primary Functions 2.Secondary Functions 3.Other Functions
Primary functions of insurance
•
Providing protection – The elementary purpose of insurance is to allow security against future
risk, accidents and uncertainty. Insurance cannot arrest the risk from taking place, but can for sure allow for the losses arising with the risk. Insurance is in reality a protective cover against economic loss, by apportioning the risk with others.
•
Collective risk bearing – Insurance is an instrument to share the financial loss. It is a medium
through 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
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Preventing losses – Insurance warns individuals and businessmen to embrace appropriate
device to prevent unfortunate aftermaths of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc. • Covering larger risks with small capital – Insurance assuages the businessmen from security investments. 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 to those larger industries which have more risks in their setting up.
Other functions of insurance
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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 tax exemptions, people take up insurance as a good investment option. • Medium of earning foreign exchange – Being an international business, any country can earn foreign 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 the help 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.
List of top insurance companies
Tata AIG Insurance SolutionsTata 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 renowned business 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 than 60,000 advisors. Currently, ING Vysya Life Insurance has tie ups with more than 200 cooperative banks. Birla Sun Life Financial Services 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 for Birla 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 offices located 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 branches located 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.
Insurance Companies in India
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Life Insurance Companies Aviva Life Insurance Bajaj Allianz Life Insurance Birla Sun-Life Insurance HDFC Standard Life Insurance ING Vysya Life Insurance Life Insurance Corporation Max New York Life Insurance MetLife Insurance Om Kotak Mahindra Life Insurance Reliance Life Insurance Sahara India Life Insurance
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SBI Life Insurance TATA AIG Life Insurance General Insurance Companies Agriculture Insurance Amsure Insurance ANZ Insurance Bajaj Allianz General Insurance Cholamandalam General Insurance Employee State Insurance Export Credit Guarantee Corporation ICICI Lombard General Insurance IFFCO-Tokio General Insurance National Insurance Oriental Insurance Peerless Smart Financial Royal Sundaram Alliance TATA AIG General Insurance
India General Insurance
India General Insurance covers almost everything related to property, vehicle, cash, household goods, health and also one's liability towards others. The basic difference of general insurance with the life insurance policy is that it offers protection against contingencies. Nearly 100 general insurance companies have been nationalized under the General Insurance Business (Nationalization) Act, 1972, and merged into four companies, namely, National Insurance , New India Assurance , Oriental Insurance and United India Insurance. Major insurance policies that are covered underIndia General Insurance are:
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Home Insurance � Home insurance policies under the India General Insurance provides
protection against earthquake, natural calamities like floods, landslides and torrential rains, other hazards like gas cylinder explosion, fire due to electric short circuit and burglary. The home insurance policies under the India General Insurance covers:
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Building structure Contents inside the home
However it should be remembered, that a home insurance does not cover the market value of the house but all the contents are covered on the market value of the items.
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Health Insurance - Health insurance under the India General Insurance is commonly calledMediclaim policies. Health insurance policy covers expenses incurred during hospitalization and also the expenses during the pre as well as post hospitalization stages like pathological tests and buying medicines. Mediclaim policies is also tax beneficial, as stated under Section 80D, with the maximum amount of deduction being fixed at Rs 10,000 and in case of senior citizens Rs 15,000. • Motor Insurance - Motor insurance policies under India General Insurance is obligatory as all vehicles are needed to be insured. It covers: • loss or damage caused to the vehicle or its accessories due to natural and man made calamities
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compulsory personal accident coverage for individual owners of the vehicle while driving
Travel Insurance - Travel insurance policies under India General Insurance offers lots of benefits such as medical expenses, loss or delay of baggage or passport, personal accident, financial emergency assistance and hijack distress allowance and as well covers expenses incurred due to delayed flight, cancellation of trip. It also takes care of valued assets left at home. Thus, this ensures all travel worries.
(B) GENERAL INSURANCE
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Fire Insurance Marine Insurance Accident Insurance
Some of the leading insurance companies covering general insurances are the ICICI Lombard Insurance Direct, Bajaj Allianz, Tata-AIG, and others.
Health Insurance
After life insurance health insurance policies are perhaps the most insurance policies required by human beings today. Health is slowly and steadily becoming a major matter of concern for most individuals today. Since most of us today have joined the rat race and every one wants to be rich and successful the one major thing that we are neglecting is our most precious asset health. Ailments like Heart problems, diabetes, stroke, renal failure, cancer etc were rare till a few decades back but with every passing day these dreadfully diseases are getting more and more common by the day. Treatment is India is no longer cheap. In order to get treated by a good specialist or doctor one has to pay through his nose. Even daily hospital charges are sky high. In order to assist you in the event of an unforeseen health problem health insurance has been introduced. Most of the renowned companies in India provide comprehensive health insurance polices. These insurance companies have a tie up with the reputed hospital spread across the country. These health insurance policies cover all the costs incurred before hospitalization, during hospitalization and after hospitalization. There are two types of health insurance policies offered by the popular insurance companies in India. Types of Health Insurance in India
Individual Health Insurance
The most popular form of health insurance policies are the Individual Mediclaim policies. Offered by most of the reputed insurance companies in India the individual health policies insure you against any illnesses. The policies cover the hospitalization expenses for an individual for up to the sum assured limit. The insurance premium is dependent on the sum assured value.
Family Floater policy
Another common policy that is ruling the insurance sector today is the family health insurance policy. The unique feature about this policy is that with the payment of a single premium the entire family is covered against illnesses. This policy also entitles the insured or his spouse of kids to cashless hospitalization and all other benefits that are enjoyed by an individual with an Individual Health Insurance policy.
Health Insurance - Benefits
Below is a list of the advantages of a comprehensive Health Insurance policy
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Most of the Family Health insurance policies offered by the insurance companies in India
protect you and your family which includes your spouse and two children under a single policy. • One single health insurance policy covers the entire family. • You or any of your family members is entitled to cashless facility in case of hospitalization due to illness. This facility covers a wide network of renowned hospitals spread across the country. • Some of the reputed insurance companies also provide Cash benefits to the insured during the time of hospitalization. • Pre and Post Hospitalization Expenses are taken care of by most of the health care providing insurance companies. • The policy generally covers relevant medical expenses incurred 60 days prior to and 90 days after hospitalization. • Every claim free year entitles the ensured to an additional amount known as cumulative bonus. • The health insurance policies also include Ambulance Charges. • Health insurance policies entitle you to regular free health Check ups The premiums paid for health insurance policies exempt the insured from paying Income Tax Under Section 80 D of the Income Tax Act
Health Insurance
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Children Health Policy Health Insurance Options Individual Health Insurance Cheap Health Insiurance Health Insurance Companies Health Insurance Premium Find Health Insurance-policy Health Insurance Benefits Health Insurance Claim Health Insurance Costs Group Health Insurance Private Health Insurance Senior Health Insurance Plan Women Health Insurance Plan Corporate Health Insurance Employee Heallth Insurance Health Insurance Articles Parents Health Insurance Family Health Insurance Individual Health Coverage Instant Health Insurance
Non-life insurers clock 22% growth in AprilAbout Tata AIG Life
Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by Tata Sons and AIA Group Limited (AIA). Tata AIG Life combines Tata’s pre-eminent leadership position in India and AIA’s presence as the largest, independent listed pan-Asia life insurance group in the world spanning 15 markets in Asia
Pacific. Tata Sons holds a majority stake (74%) in the company and AIA holds 26% through an AIA Group company. Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001.
