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General insurance

  1. 1. Insurance <br />
  2. 2. Defining Insurance<br />Insurance in broad terms may be described as a method of sharing financial losses of few from a common fund who are equally exposed to the same loss.<br />Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of a guaranteed small loss to prevent a large, possibly devastating loss.<br /> An insurer is a company selling the insurance. The insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. <br />
  3. 3. Concept of risk<br />
  4. 4. Massive risk with high magnitude<br />Day to day risk of lesser magnitude<br />
  5. 5. Defining Risk<br />A variation in the possible outcome<br />The degree of uncertainty associated with a particular loss<br />Greater the accuracy with which the outcome can be predicted the lower is the risk. <br />Risk is the possibility of an unfortunate occurrence<br />Risk is the possibility of loss<br />The combination of hazards<br />Uncertainty of loss<br />The tendency that actual results may differ from predicted results<br />
  6. 6. Basic Terminology<br />Peril : Cause of a risk and losses. E.g. Earthquake, flood , fire, criminal activities etc.<br />
  7. 7. Basic Terminology<br />Hazard : Condition that increases the frequency or severity of loss. E.g. absence of proper security or fencing , poorly maintained fire alarm system etc. <br />
  8. 8. Basic Terminology<br />Moral Hazard: It refers to the dishonesty of the insured person leading to increase probability of loss from given risk exposure. E.g. setting fire to your own house.<br />Morale Hazard: This refers to attitude of indifference to losses that results out of a known fact that the said losses were insured.<br />Catastrophic loss: It is a potential loss that is unpredictable such as flood, but is capable of producing an extra ordinary large amount of damage related to assets held in insurance pool. These are generally natural disasters like earthquake flood etc.<br />
  9. 9. Requirements of Insurable Risk<br />Should be a Pure risk<br />Involves a chance of loss or no loss<br />Large number of exposure units<br />to predict average loss<br />Accidental and unintentional loss<br />to control moral hazard<br />to assure randomness<br />Determinable and measurable loss<br />to facilitate loss adjustment<br />
  10. 10. Requirements of Insurable Risk<br />No catastrophic loss<br />to allow the pooling technique to work<br />Probability of loss must not be very high<br />to determine the premium need<br />Economically feasible premium<br />so people can afford to buy<br />
  11. 11. Concept of Insurance<br />
  12. 12. Basic Characteristics of Insurance<br />Pooling of losses<br />Spreading losses incurred by the few over the entire group<br />Risk reduction based on the Law of Large Numbers<br />Payment of fortuitous losses<br />Insurance pays for losses that are unforeseen, unexpected, and occur as a result of chance<br />Risk transfer<br />A pure risk is transferred from the insured to the insurer, who typically is in a stronger financial position <br />Indemnification<br />The insured is restored to his or her approximate financial position prior to the occurrence of the loss<br />
  13. 13. Example<br />Say 1000 motor cars valued @ 300000/- are observed over a period of five years. On an average say per year two are total loss by accident. Then the total annual loss would be Rs.600000. If the loss is to shared by all the thousand owners then they have to contribute Rs.600/-<br />The loss experience will be established by taking the past experience, geographical area in which the vehicles are used and density of traffic.<br />
  14. 14. Basic terms<br />Insurer : The party to an insurance arrangement who undertakes to indemnify for losses.<br />Insured: A person whose interests are protected by an insurance policy.<br />Premium: Financial cost of obtaining an insurance cover, paid as a lump sum or in installments during the duration of the policy.<br />Policy: Written contract or certificate of insurance<br />Exposure to Loss: In insurance, areas in which the risk of loss exists. Four loss risk areas are: (1) property; (2) income; (3) legal vulnerability; and (4) key personnel in an organization<br />
  15. 15. Basic terms<br />Life annuity: A life annuity is a financial contract in the form of an insurance product according to which a seller (issuer) — typically a financial institution such as a life insurance company — makes a series of future payments to a buyer (annuitant) in exchange for the immediate payment of a lump sum (single-payment annuity) or a series of regular payments (regular-payment annuity), prior to the onset of the annuity.<br />Nomination: It is the right of the policy holder on his/ her own life to designate a living person to receive the policy proceeds in the event of him predeceasing the nominee before the maturity of the policy. <br />Nominee: Nominee should not be a stranger because its against the objective of insurance which in most cases is family protection.<br />
  16. 16. Basic terms<br />Assignment: An agreement under which one party–the assignor–transfers some or all of his ownership rights in a particular property, such as a life insurance policy or an annuity contract, to another party–the assignee.<br />Assignor: A property owner who transfers some or all of the ownership rights in a particular property to another party by means of an assignment.<br />Assignee: A person or party to whom a property owner transfers some or all of the property owner's rights in a particular property by means of an assignment.<br />
  17. 17. IRDA<br />The Insurance Regulatory and Development Authority (IRDA) is a <br />national agency of the Government of India, based in Hyderabad. It <br />was formed by an act of Indian Parliament known as IRDA Act 1999, <br />which was amended in 2002 to incorporate some emerging <br />requirements.<br />Mission<br />"to protect the interests of the policyholders, to regulate, promote <br />and ensure orderly growth of the insurance industry and for matters <br />connected therewith or incidental thereto."<br />
  18. 18. Benefits of Insurance to an Individual<br />Peace of mind<br />Aversion of risk<br />Protects mortgaged properties<br />Provides self dependency<br />Tool of savings<br />Tool of investment<br />Satisfies various needs<br />
  19. 19. Benefits of Insurance to Business<br />Reduced reserve requirements<br />Capital freed for investment<br />Indemnification<br />Reduction of uncertainty<br />Reduced cost of capital<br />Reduced credit risk<br />Loss control activities<br />Business and social stability<br />
  20. 20. Benefits of Insurance to Society<br />Protects wealth of the country<br />Helps in economic growth <br />Control inflation<br />
  21. 21. Cost of Insurance<br />Operating Expense<br />Distribution cost<br />Underwriting cost<br />Policy Administration Cost<br />Reserve cost<br />Moral Hazard resulting in extra cost<br />Exaggerated Losses<br />Benefit-cost Tradeoff<br />
  22. 22. Insurance Classification<br />
  23. 23. Players in the Industry<br />
  24. 24. Concept of General Insurance<br />
  25. 25. Defining General Insurance<br />General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event.<br /> General insurance typically comprises any insurance that is not determined to be life insurance. <br />It is called property and casualty insurance in the U.S. and Non-Life <br /> Insurance in Continental Europe.<br />
  26. 26. Classification<br />Commercial lines: products are usually designed for relatively small legal entities. These would include workers' comp (employers liability), public liability, product liability, commercial fleet and other general insurance products sold in a relatively standard fashion to many organizations. There are many companies that supply comprehensive commercial insurance packages for a wide range of different industries, including shops, restaurants and hotels.<br />Personal lines: products are designed to be sold in large quantities. This would include autos (private car), homeowners (household), pet insurance, creditor insurance and others.<br />
  27. 27. Principles of Insurance<br />Utmost Good Faith<br />Insurable Interest<br />Principle of Indemnity<br />Principle of Contribution<br />Principle of Subrogation<br />Principle of loss Minimization<br />Principle of ‘CAUSA PROXIMA’<br />
  28. 28. Utmost Good Faith<br />Both the parties i.e. the insured and the insurer should a good faith towards each other.<br />The insurer must provide the insured complete ,correct and clear information of subject matter.<br />The insurer must provide the insured complete ,correct and clear information regarding terms and conditions of the contract.<br />This principle is applicable to all contracts of insurance i.e. life, fire and marine insurance.<br />
  29. 29. Insurable Interest<br />The insured must have insurable interest in the subject matter of insurance.<br />In life insurance it refers to the life insured.<br />In marine insurance it is enough if the insurable interest exits only at the time of occurrence of the loss<br />In fire and general insurance it must be present at the time of taking policy and also at the time of the occurrence of loss.<br />The owner of the party is said to have insurable interest as long as he is the owner of the it.<br />It is applicable to all contracts of insurance.<br />
  30. 30. Principle of Indemnity<br />Indemnity means a guarantee or assurance to put the insured in the same position in which he was immediately prior to the happening of the uncertain event. The insurer undertakes to make good the loss.<br />It is applicable to fire ,marine and other general insurance.<br />Under this the insurer agrees to compensate the insured for the actual loss suffered.<br />
  31. 31. Principle of Contribution<br />The principle is a corollary of the principle of indemnity.<br />It is applicable to all contracts of indemnity.<br />Under this principle the insured can claim the compensation only to the extent of actual loss either from any one insurer or all the insurers.<br />
  32. 32. Principle of Subrogation<br />As per this principle after the insured is compensated for the loss due to damage to property insured , then the right of ownership of such property passes on to the insurer.<br />This principle is corollary of the principle of indemnity and is applicable to all contracts of indemnity<br />
  33. 33. Principle of Loss of Minimization<br />Under this principle it is the duty of the insured to take all possible <br />steps to minimize the loss to the insured property on the happening <br />of uncertain event.<br />
  34. 34. Principle of ‘Causa Proxima’<br />The loss of insured property can be caused by more than one cause in succession to another.<br />The property may be insured against some causes and not against all causes.<br />In such an instance, the proximate cause or nearest cause of loss is to be found out.<br />If the proximate cause is the one which is insured against ,the insurance company is bound to pay the compensation and vice versa.<br />
  35. 35. General Rules <br />Mis-description<br />Reasonable care<br />Fraud<br />Basic principles<br /> Insurable interest <br /> Utmost good faith <br />Subrogation <br />Contribution <br />Indemnity <br />Risk of loss not covered<br />
  36. 36. Types of General Insurance<br />Main types of general insurance are:<br />Fire<br />Health<br />Marine<br />Motor Vehicle<br />
  37. 37. Fire Insurance<br />
  38. 38. Fire Insurance<br />Fire insurance is a form of property insurance which protects people <br />from the costs incurred by fires. When a structure is covered by fire <br />insurance, the insurance policy will pay out in the event that the <br />structure is damaged or destroyed by fire.<br />
  39. 39. Types of Fire Insurance Policies<br />Specific policy: In this type of policy, the insurance company is liable to pay a sum, which may be less than the property’s real value. The insured is called to bear a part of the loss, as the actual value of the property is not considered in deciding the amount of indemnity. <br />Comprehensive policy: Known as “all-in-one” policy, the insurance company indemnifies the policyholder for loss arising out of fire, burglary, theft and third party risks. In this type of policy, the policyholder also gets paid for loss of profits incurred, due to fire, till the time the business remains shut.<br />Valued policy: In this type of policy, the value of the commodity is already set and actual loss is not taken into consideration. The policy follows a standard contract of indemnity, wherein the policyholder gets paid a specific amount of indemnity, without considering the actual loss.<br />
  40. 40. Types of Fire Insurance Policies<br />Floating policy: This type of policy is subject to average clause and the extent of coverage expands to different properties, belonging to the policyholder, under the same contract and one premium. The floating policy also provides protection of goods kept at two different stores.<br />Replacement or Re-instatement policy: As per replacement or re-instatement policy, the insurance company instead of paying the policyholder the amount of indemnity in cash, replaces the damaged property/commodity with a new one.<br />
  41. 41. Fire Insurance Claim Procedure<br />Individuals/corporate must inform insurer as early as possible , in no case later than 24 hours.<br /> Provide relevant information to the surveyor/claim representative appointed by the insurer. <br />The surveyor then analyzes the extent/ value of loss or damage. <br />The claim process takes anywhere between one to three weeks. <br />
  42. 42. Documents Required<br />True copy of the policy along with schedule<br />Report of fire brigade<br />Claim Form<br />Photographs<br />Past claims experience<br />
  43. 43. Need of Fire Insurance<br />Fire insurance is important because a disaster can occur at any time. <br />There could be many factors behind a fire, for example arson, natural <br />elements, faulty wiring, etc. Some facts that stress the importance of <br />fire insurance include:<br />Fire contributes to the maximum number of deaths occurring in America due to natural disasters.<br />Eight out of ten fire deaths take place at home.<br />A residential fire takes place after every 77 seconds.<br />The major reason for a residential fire is unattended cooking.<br />
  44. 44. Fire Insurance in India<br />Fire insurance business in India is governed by the All India Fire Tariff <br />that lays down the terms of coverage, the premium rates and the <br />conditions of the Fire Policy. The fire insurance policy has been <br />renamed as Standard Fire and Special Perils Policy. The risks covered <br />are as follows:<br />Dwellings, Offices, Shops, Hospitals (Located outside the compounds <br />of industrial/manufacturing risks) Industrial / Manufacturing Risks <br />Utilities located outside industrial/manufacturing risks Machinery <br />and Accessories Storage Risks outside the compound of industrial <br />risks Tank farms / Gas holders located outside the compound of <br />industrial risks<br />
  45. 45. Fire Insurance in India<br />Perils Covered: Cause of Loss Fire Lightning Explosion/Implosion Aircraft damage Riot, Strike Terrorism Storm, Flood, inundation Impact damage Subsidence, landslide Bursting or overflowing of tanks Missile Testing Operations Bush fire etc.<br />Exclusions:<br /> Loss or damage caused by war, civil war and kindered perils<br /> Loss or damage caused by nuclear activity<br />Loss or damage to the stocks in cold storage caused by change in temperature<br />Loss or damage due to over-running of electric and/ or electronic machines<br />Claims: In the event of a fire loss covered under the fire insurance policy, the Insured shall immediately give notice there of to the insurance company. Within 15 days of the occurrence of such loss the Insured should submit a claim in writing giving the details of damages and their estimated values. Details of other insurances on the same property should also be declared.<br />
  46. 46. Indian Companies Offering FI<br />ICICI Lombard General Insurance (Pvt.)<br />United India Insurance (Govt.)<br />New India Insurance (Govt.)<br />Bajaj Allianz Insurance (Pvt.)<br />Oriental Insurance (Govt.)<br />Tata-AIG General Insurance (Pvt.)<br />
  47. 47. Health Insurance<br />
  48. 48. What is Health Insurance?<br />Health insurance, like other forms of insurance, is a form of <br />collectivism by means of which people collectively pool their risk, in <br />this case the risk of incurring medical expenses.<br />
  49. 49. Importance of Health <br />Rising medical costs<br />Sharing of health related risk<br />uncertain hospital bills<br />Expensive/quality health care services<br />Money value – Sick Vs Healthy<br />Family health insurance<br />Tax benefit<br />Productivity of workforce<br />Removes some of the burden from the state<br />Keeping pace with the customer needs while achieving profitability<br />
  50. 50. How to improve the access to health care and financial protection of <br />the poor? <br />Answer<br />The most obvious solution will be to improve the health <br />insurance penetration.<br />
  51. 51. How to Improve Health Insurance Penetration?<br />Regulator/Government<br />Enhance customer awareness<br />Enhance client confidence - real value benefits in the event of a claim<br />Effective supervision<br />Compulsory percentage of total business towards health<br />Compulsory savings towards health<br />Tax incentives to employers for promoting group health coverage<br />Insurer<br />Clients confidence - warrantable claim will be paid out in a reasonable time frame<br />New clients have to be reached<br />Value for money<br />Design products as per clients needs<br />Product transparency<br />Cost efficiency<br />affordability<br />Wellness programmes<br />
  52. 52. Initiatives of IRDA<br />Committee to formulate regulations<br />Pure health insurance products<br />Allowing the formation of an stand alone health insurance company<br /> Standalone health insurance companies <br />Renewability<br />Senior citizens<br />
  53. 53. Impediments in Health Insurance<br />Lack of Data<br />Moral Hazard/Adverse Selection<br />Complex nature of the product<br />Medical Inflation<br />New treatments<br />Unnecessary treatments<br />Difficulty in pricing<br />Government provision of health care<br />Long term nature<br />Changing life style<br />Mis-selling/fraud<br />
  54. 54. Mitigation of Impediments<br />Insurer<br />Designing a less complex products<br />Transparency in the product features<br />Clarity in policy terms, conditions & exclusions<br />Efficient back-office support for underwriting and claims processing<br />Higher Reinsurance<br />Need for quicker services. E.g. Toll free numbers, cashless, quick response<br />Expense analysis on a regular basis<br />Product innovation<br />Efficient training of sales force<br />
  55. 55. Mitigation of Impediments<br />Policyholder<br />Pay attention to policy conditions<br />Read the exclusions and limitations very carefully<br />Compare premium costs, deductibles, co-payments<br />Take an informed decision<br />TPA<br />Proper infrastructure <br />Speedy claim settlement process<br />Less paper work<br />
  56. 56. Mitigation of Impediments<br />Regulator/Government<br />Come out with health insurance regulations<br />Centralized data base for health insurance experience statistics<br />Provider rating<br />Cap on renewal premiums<br />Ensure that a decent portfolio of health coverage represent the rural sector<br />Guard against ill effects of privatization<br />Further tax incentives<br />Compulsory savings towards health care<br />
  57. 57. Types of Health Insurance Plans<br />Individual health plan<br />Family floater plan<br />Senior Citizens’ plan<br />Critical illness plan<br /> Daily hospital cash and<br />Unit-linked health plan (ULHP).<br />
  58. 58. Individual Health Plans<br />Largely, an individual health insurance plan (IHIP), or ‘mediclaim’, would cover expenses if you are hospitalised for at least 24 hours.<br />These plans are indemnity policies, that is, they reimburse the actual expenses incurred up to the amount of the cover that you buy. <br />Some of the expenses that are covered are room rent, doctor’s fees, anaesthetist’s fees, cost of blood and oxygen, and operation theatre charges.<br />
  59. 59. Family Floater Plans<br />This is a fairly new entrant in the health insurance firmament.<br /> It takes advantage of the fact that the possibility of all members of a family falling ill at the same time or within the same year is low. <br />Under a family floater (FF) health plan, the entire sum insured can be availed by any or all members and is not restricted to one individual only as is the case in an individual health plan.<br /> Let’s look at an example. Say, a family of four has individual covers of Rs 1 lakh each. If the cost of treating one person crosses Rs 1 lakh, then the rest has to be borne by the family out of its own money. If, however, the entire family is insured for Rs 4 lakh through a floater policy, then any of the members will be covered for that amount in any year. To the extent of the annual cover, any number of members can avail the money.<br />
  60. 60. Senior Citizens’ Plans<br />Insurance is considered a form of long-term savings for senior citizens. This money provides financial stability and also helps them in times of need. Medical insurance enables senior citizens to pay for health checkups, emergency medical costs and long-term treatment. The income tax benefit on insurance premiums is up to Rs. 15,000 under Section 80 D of the Income Tax Act, as on March 31, 2007. Medical insurance is provided through several private insurance companies and four public sector general insurance companies. These are:<br />National Insurance Company<br />Oriental Insurance Company<br />New India Assurance<br />United India Insurance Company<br />
  61. 61. Senior Citizens’ Plans<br />The National Insurance Company offers the Varistha Mediclaim Policy for senior citizens. This policy covers hospitalization and domiciliary hospitalization expenses under Section I as well as expenses for treatment of critical illnesses, if opted for, under Section II. Diseases covered under critical illnesses are coronary artery surgery, cancer, renal failure, stroke, multiple sclerosis and major organ transplants. Paralysis and blindness are covered at extra premium. <br />Oriental Insurance Company provides a Comprehensive Health Insurance Scheme, a Group Insurance and an Individual Mediclaim Policy. These policies pay for hospitalization or domiciliary hospitalization of the insured in case of a sudden illness, an accident or surgery. These conditions should have arisen during the policy period.<br />
  62. 62. Critical Illness Plans<br />A Critical Illness plan means to insure against the risk of serious illness. It will give the same security of knowing that a guaranteed cash sum will be paid if the unexpected happens and one is diagnosed with a critical illness.<br />The purpose of a critical illness plan is to let you put aside a small regular amount now, as an insurance against all this happening.<br />Bajaj Allianz, in its efforts to provide a customer centric solution is offering an insurance policy to cover to some of these critical illnesses like Cancer Coronary Artery bypass surgery First Heart attack Kidney Failure Multiple sclerosis Major organ transplant Stroke Arota graft surgery Paralysis Primary Pulmonary Arterial Hypertension.<br />
  63. 63. Daily Hospital Cash<br />Expense benefit is paid on per day basis after hospitalization (most plans mandate at least 48 hours of hospitalization). <br />The pre-decided daily benefit amount is paid in full, irrespective of the actual expenses.<br /> For example, a person buys a DHC plan with a limit of Rs 2,000 per day. He gets hospitalised for 7 days and the total bill is Rs 35,000. He would be reimbursed Rs 14,000 (2,000x7). If the bill is Rs 8,000, he would still be reimbursed Rs 14,000.<br />
  64. 64. Unit-linked health plan (ULHP)<br />All ULHPs offer one or more combination of the other benefits (for which risk premium is deducted from fund value). Also, charges such as premium allocation charge and policy administration charge are deducted from the fund value. <br />LIC has launched Health Plus plan, a unique long term health insurance plan that combines health insurance covers for the entire family (husband, wife and the children) – Hospital Cash Benefit (HCB) and Major Surgical Benefit (MSB) along with a ULIP component (investment in the form of Units) that is specifically designed to meet domiciliary treatment (DTB) related expenses for the insured members.<br />
  65. 65. Health Insurance in India<br />The health insurance market in India is very limited covering about <br />10% of the total population. The existing schemes can be categorized <br />as:<br />Voluntary health insurance schemes or private-for-profit schemes;<br />Mandatory health insurance schemes or government run schemes (namely ESIS, CGHS).<br />Insurance offered by NGOs / community based health insurance, and<br />Employer-based schemes<br />
  66. 66. Voluntary health insurance schemes<br />In private insurance, buyers are willing to pay premium to an <br /> insurance company that pools similar risks and insures them for <br /> health related expenses. <br />The main distinction is that the premiums are set at a level, which are based on assessment of risk status of the consumer (or of the group of employees) and the level of benefits provided, rather than as a proportion of consumer’s income.<br />In the public sector, the General Insurance Corporation (GIC) and its four subsidiary companies (National Insurance Corporation, New India Assurance Company, Oriental Insurance Company and United Insurance Company) provide voluntary insurance schemes.<br />
  67. 67. Voluntary health insurance schemes<br />The most popular health insurance cover offered by GIC is Mediclaim policy.<br />Mediclaim policy: It was introduced in 1986. It reimburses the hospitalization expenses owing to illness or injury suffered by the insured, whether the hospitalization is domiciliary or otherwise.<br />Some of the various other voluntary health insurance schemes available in the market are :- Asha deep plan II , Jeevan Asha plan II, Jan Arogya policy, Raja Rajeswari policy, Overseas Mediclaim policy, Cancer Insurance policy, Bhavishya Arogya policy, Dreaded disease policy, Health Guard, Critical illness policy, Group Health insurance policy, Shakti Shield etc. <br />
  68. 68. Mandatory health insurance schemes<br />Employer State Insurance Scheme (ESI)<br />Enacted in 1948, the employers’ state insurance (ESI) Act was the first major legislation on social security in India. <br />The scheme applies to power using factories employing 10 persons or more and non-power & other specified establishments employing 20 persons or more. <br />It covers employees and the dependents against loss of wages due to sickness, maternity, disability and death due to employment injury. It also covers funeral expenses and rehabilitation allowance. Medical care comprises outpatient care, hospitalization, medicines and specialist care. <br />These services are provided through network of ESIS facilities, public care centers, non-governmental organizations (NGOs) and empanelled private practitioners.<br />
  69. 69. Mandatory health insurance schemes<br />Central Government Health Insurance Scheme (CGHS)<br />Established in 1954, the CGHS covers employees and retirees of the central government and certain autonomous and semi autonomous and semi-government organizations. <br />It also covers Members of Parliament, Governors, accredited journalists and members of general public in some specified areas.<br />Benefits under the scheme include medical care, home visits/care, free medicines and diagnostic services. <br />These services are provided through public facilities with some specialized treatment (with reimbursement ceilings) being permissible at private facilities. <br />Most of the expenditure is met by the central government as only 12% is the share of contribution.<br />
  70. 70. Mandatory health insurance schemes<br />Universal Health Insurance Scheme (UHIS)<br />For providing financial risk protection to the poor, the government announced UHIS in 2003. <br />Under this scheme, for a premium of Rs. 165 per year per person, Rs.248 for a family of five and Rs.330 for a family of seven , health care for sum assured of Rs. 30000/- was provided. <br />This scheme has been made eligible for below poverty line families only. T<br />o make the scheme more saleable, the insurance companies provided for a floater clause that made any member of family eligible as against mediclaim policy which is for an individual member. <br />
  71. 71. Insurance offered by NGOs<br />Insurance offered by NGOs/Community based schemes are typically targeted at poorer population living in communities. Such schemes are generally run by charitable trusts or non-governmental organizations (NGOs).<br /> In these schemes the members prepay a set amount each year for specified services. The premia are usually flat rate (not income related) and therefore not progressive. <br />The benefits offered are mainly in terms of preventive care, though ambulatory and inpatient care is also covered.<br /> Such schemes tend to be financed through patient collection, government grants and donations. <br />Some of the popular Community Based Health Insurance schemes are: - Self-Employed Women’s Association (SEWA), Tribuvandas Foundation (TF), The Mullur Milk Co-operative, Sewagram, Action for Community Organization, Rehabilitation and Development (ACCORD), Voluntary Health Services (VHS) etc.<br />
  72. 72. Employer based schemes<br />Employers in both public and private sector offers employer based insurance schemes through their own employer. <br />These facilities are by way of lump sum payments, reimbursement of employees’ health expenditure for out patient care and hospitalization, fixed medical allowance or covering them under the group health insurance schemes.<br />The Railways, Defense and Security forces, Plantation sector and Mining sector run their own health services for employees and their families.<br />
  73. 73. Marine Insurance<br />
  74. 74. Defining Marine Insurance<br />Marine Insurance covers the loss or damage of ships, cargo, <br />terminals, and any transport or cargo by which property is <br />transferred, acquired, or held between the points of origin and final <br />destination.<br />
  75. 75. Two Broad Categories<br />Ocean marine insurance<br />Inland marine insurance<br />
  76. 76. Ocean Marine Insurance<br />Hull<br />Cargo<br />Freight<br />Protection and indemnity insurance<br />
  77. 77. Inland Marine Insurance<br />Extension of Ocean marine insurance<br />Domestic goods in transit<br />Property held by Bailees<br />Mobile equipment and property<br />Block Policies- “all-risks” basis<br />Means of transport and communication<br />
  78. 78. Risks<br />Two types of risks are covered by ocean marine insurance. <br />The first type is the perilsof the sea that include both natural calamities and fortuitous accidents.<br />The second type of risks covered is extraneous risks. These risks include ordinary risks such as theft, pilferage, rain damage, shortage, breakage, etc and special risks such as strike, war, failure to deliver, etc.<br />
  79. 79. Covered Perils<br />Perils of the sea, such as loss due to bad weather, high waves, collision, and other navigable waters<br />Fire, enemies, pirates, thieves, jettison<br />Barratry, or fraud by crew members<br />All risks<br />
  80. 80. Further Cover<br />Pollution Hazard<br />War and strikes clause<br />Bursting boilers or breaking shafts<br />Accident or negligence of a third party<br />
  81. 81. Common Exclusions<br />Loss, damage or expenses attributable to willful misconduct of the assured<br />Ordinary or inevitable losses<br />Loss, damage or expense caused by inherent vice or nature of the subject matter insured<br />Loss/damage due to insufficient, unsuitable or defective packing (including storage)<br />Loss/damage or expenses proximately caused by delay even if the delay is caused by a peril insured against<br />Loss damage or expenses arising from insolvency of the owners, managers, operators of the vessel.<br />Loss damage due to un seaworthiness of the vessel or craft, container, lift van employed for carrying the insured matter.<br />Wars, strikes and civil commotions unless covered under separate endorsements.<br />
  82. 82. Hull Insurance<br />Covers physical damage to ship or vessel<br />Always written with a deductible<br />Contains collision liability clause<br />Covers owner’s legal liability<br />
  83. 83. Cargo Insurance<br />Covers the loss to the shipper if the goods are damaged or lost<br />Policy can be single or open cargo policy<br />Salvage loss<br />Follows forced sale of badly damaged cargo<br />
  84. 84. Cargo Partial Loss<br />Where goods delivered damage measure of indemnity is<br />Proportion of sum fixed by policy <br />equal to the gross sound value less damaged value at place of delivery<br />
  85. 85. Freight Insurance<br />Insures the profit made by a ship owners out of ships used to carry cargo, both their own and others<br />Loss occurs when cargo is not deliverable<br />
  86. 86. Liability Insurance<br />Covers the property damage or bodily injury to third party<br />Damage caused by the ship to docks, harbor installation, fines, penalties, injury to crew members, etc<br />
  87. 87. Major Types of Policy<br />Time policy<br />Voyage policy<br />Mixed policy<br />Open policy<br />
  88. 88. Time Policy<br />A time policy is one that runs for a period of time usually not exceeding 12 months.<br /> In using a time policy, the most important question is whether the loss occurred at a time in which the policy was running because sometimes it is difficult to prove in case where it is alleged that the conditions giving rise to the loss (e.g. a hole in the ship) occurred during the policy, although the final consequence (the foundering of the vessel) occurred afterwards.<br />
  89. 89. Voyage Policy<br />This is a policy that operates for the period of the voyage. <br />For cargo, the cover is from warehouse to warehouse. <br />The policy will not apply if the actual voyage and/or ports are different from those in the policy.<br />
  90. 90. Mixed Policy<br />This is a policy that covers the subject matter for the voyage within a time period.<br />It is used to cover the cargo from warehouse to warehouse with a time limit. <br />The cargo has to be warehoused within 60 days after discharge or the policy will no longer cover the cargo.<br />
  91. 91. Open Policy<br />This is an arrangement in which terms such as types of risks to be covered, validity of the insurance contract, rate, premium, maximum value of each shipment and geographical limits, etc are worked out when the contract is signed.<br />Each shipment is covered once the assured declares the details. The assured may be authorized to issue against payment a pre-printed insurance certificate which is valid after completion of shipment details and his signature for documentation purposes. <br />The insurance certificate is pre signed by the insurer. If the contract is effective only for a specified period, a clause of termination should be included.<br />
  92. 92. Auto Insurance<br />
  93. 93. Defining Auto Insurance<br />Auto insurance (also known as vehicle insurance, car insurance, or <br />motor insurance) is insurance purchased for cars, trucks, and other <br />vehicles. Its primary use is to provide protection against losses <br />incurred as a result of traffic accidents and against liability that could <br />be incurred in an accident.<br />
  94. 94. Auto Insurance Coverage<br />Auto insurance provides property, liability and medical <br />coverage:<br />Property coverage pays for damage to or theft of the car.<br />Liability coverage pays for the legal responsibility to others for bodily injury or property damage.<br />Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses<br />
  95. 95. Coverage Levels<br />Vehicle insurance can cover some or all of the following items:<br />The insured party<br />The insured vehicle<br />Third parties (car and people)<br />Third party, fire and theft<br />In some jurisdictions coverage for injuries to persons riding in the insured vehicle is available without regard to fault in the auto accident (No Fault Auto Insurance)<br />
  96. 96. Types of Auto Insurance in India<br />There are different types of Auto Insurance in India : <br />Private car insurance: It is the fastest growing sector as it is compulsory for all the new cars. The amount of premium depends on the make and value of the car, state where the car is registered and the year of manufacture. <br />Two wheeler insurance: It covers accidental insurance for the drivers of the vehicle. The amount of premium depends on the current showroom price multiplied by the depreciation rate fixed by the Tariff Advisory Committee at the time of the beginning of policy period. <br />Commercial vehicle insurance: It provides cover for all the vehicles which are not used for personal purposes, like the 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 of the vehicle. <br />
  97. 97. What it covers?<br />The auto insurance generally includes:<br />Loss or damage by accident, fire, lightning, self ignition, external explosion, burglary, housebreaking or theft, malicious act. <br />Liability for third party injury/death, third party property and liability to paid driver. <br />On payment of appropriate additional premium, loss/damage to electrical/electronic accessories. <br />
  98. 98. Exclusions<br />Typically, the motor insurance plan does not provide for: <br />Normal wear and tear or general ageing of the vehicle <br />Mechanical/electrical breakdown. <br />Depreciation, wear and tear of consumables like tubes and tires. <br />Damages that occur while a person is driving with invalid driving license. <br />Damage that occur while a person is under the influence of drugs or liquor. <br />Damage due to a war, civil war, mutiny, or nuclear risk. <br />Claims arising out of contractual liability. <br />Use of vehicle other than what it is meant for. For example, if a private car is being used as a taxi and gets involved in an accident, the owner will not be able to claim damages. <br />
  99. 99. Indian Companies Offering AI<br />HSBC India - Auto Secure <br />Bajaj Allianz - Bajaj Allianz's Motor Insurance <br />ICICI Lombard - Motor Plans, Two Wheeler Package Policy <br />United India Insurance Co. - Motor Package and Liability Only Policies <br />The New India Assurance Co. - Motor Policy<br />
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