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NIKITA PUTHRAN

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Insurance in broad terms may be described as amethod of sharing financial losses of few from a

common fund who are equally exposed to the same

loss.

Insurance is a contract between two

parties whereby one party agrees

to undertake the risk of another in exchange forconsideration known as premium

promises to pay a fixed sum of money to the otherparty on happening of an uncertain event

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Division of Insurance

Sector

INSURANCE

GENERAL INSURANCE

FIREINSURANCE

MARINEINSURANCE

MEDICLAIMMOTOR

VEHICLE

LIFEINSURANCE

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Utmost Good Faith

Insured must disclosed all relevant fact to the insurer

Indemnity

Underwriter agree to indemnity the insured against losses to the extent

of amount insured

Insurable interestThe insurable interest must exist both at the time of effecting the

insurance as well as at the time of the loss

Subrogation

The insurer after paying compensation to insured , become entitled toclaim all the right of the insured against Third party

Causa Proxima

Losses resulting from fire , margin or some other related cause, being

the proximate cause of losses are covered

PRINCIPLES OF INSURANCE

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FIRE INSURANCE

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INTRODUCTION TO FIRE

INSURANEIn strict sense, a fire insurance contract is one:

Whose principle object is insured against loss or

damage occasioned by fire.

The extent of insurer's liability being limited by the

sum assured and not necessarily by the extent of

loss or damage sustained by the insured.

The insurer having no interest in the safety or

destruction of the insured property apart from the

liability undertaken under the contract.

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SCOPE OF FIRE INSURANCE

FIRE INSURANCE BUSINESS:

Loss Due To Fire, Lightening, Explosion,

Implosion,, Riots & Strikes, Impact By Rail,Aircraft Damage, Earth Quake, Flood, Storm,

Tempest, Tornado, Typhoon, Cyclones & Land

Slide.

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Insurable object in Fire

Insurance

Building

Electrical installation in buildings

Machinery, Plant and equipment

Goods ( raw materials, stocks in process, semi finished,finished etc ) in factories

Godowns, Goods in open

Contents in dwellings

Shops, Hotels etc. Furniture, fixture and fittings, pipelines located inside or

outside the compound etc.

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Types

ofFire Insurance Policy

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VALUED POLICY It is usually taken where it is not easy to ascertain the

value of the property.

In this policy the indemnity is a fixed amount agreed

upon at the time of signing the contract.

The insured is benefited when the market value of the

property declines , but suffer loss when the market

value appreciates.

The valued insurance policy is usually offered for such

items like jewellery, furs, or paintings, which value is

difficult to estimate once they are damaged or destroyed

by fire.

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FLOATING POLICY

It is taken to cover loss on goods, which are lying indifferent places and the stock of which is almost

continuously fluctuating.

It is taken out for those goods which are frequentlychanging in a warehouse.

Floating policies are suitable to those traders or

products whose raw-materials or merchandise are lyingat different localities or godowns.

For example:-Some of the goods of other trader are

kept in one godown, and few kept in another godown,some kept in the railway godown or some at the sea

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DECLARATION POLICY

This policy is taken in respect of stock of inventory

of the policyholder.

Since the level of stock which are subject tofrequent fluctuations in value the businessman

takes a policy for a maximum amount considered

to be at risk and the premium is paid accordingly.

On a fixed date of every month the policyholder

declares the amount of stock covered under the

policy to the insurance company.

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ADJUSTABLE POLICy

It is issued for existing stock.

In this policy, premium rate shall be adjustedaccording to increase or decrease in the value of

stock, this change will be notified to the insurer bythe insured.

In case of loss by fire, the amount notified by theinsured at the maturity of the policy is taken as

final and indemnified up to that limit.

It is a contract limited to merchandise or stock intrade other than farming stock.

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SPECIFIC POLICY

A specific policy is a type of policy in which the

property is insured for a specific sum irrespective ofits value.

If there is loss, the stated amount will have to be

paid to the policyholder.

The actual value of the subject matter is notconsidered in this respect.

For example:If a property is insured for Rs. 10000though its actual value is Rs. 20000. In the event ofloss to property, not more than Rs. 10000 can be

recovered.

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AVERAGE POLICY

Where a property is insured for a sum which is less thanits value, the policy contain a clause that the insurer

shall not be liable to pay the full loss but only that

proportion of the loss which the amount insured for,

bears to the full value of the property.

For example:A value of the property is Rs.1,00,000. It

is insured for Rs.60,000 (60% of the total value)

The amount of loss is Rs 60,000.The insurancecompany will not pay Rs.60,000 to the policyholder but

will pay Rs.36,000 (60% of Rs.60,000).

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MARINE INSURaNCE

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INTRODUCTION Introduced by British Insurers with the establishment of

the first Company SUN INSURANCE OFFICE LTD in

Kolkata in 1710.

Subsequently many players came in.

Subsidiaries of General Insurance Corporation Of India

namely, New India Assurance, National Insurance,

Oriental Insurance and United India Insurance conduct

Marine Insurance

Rationale for Marine Insurance is the enormous capital

loss that the modern ships are, otherwise exposed to.

Moreover, the banks who provide all financial resources

for such Marine voyage also insist on Insurance as

collateral security

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Marine Insurance Contract

Under Mariner Insurance Act, 1963, Marine

Insurance Contract is an agreement whereby theinsurer undertakes to indemnify the assured, in the

manner and to the extent thereby agreed, against

losses incidental to Marine adventure.

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SCOPE OF MARINE INSURANCE

HULL INSURANCE: Hull Insurance involves insuranceof ships including vessel machinery.

Perils usually covered under Hull Insurance includes

stranding, sinking, fire and collision as well as includesconstruction risk when the vessel is under construction.

CARGO INSURANCE: Goods and commodities

transported by sea is the subject matter of CargoInsurance.

Two alternatives: Special Policy and Open Policy

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Types

of

MARINE InsurancePolicy

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Voyage policy

It is issued to cover the risk involved in particular transit from

a particular point to another. For eg: Policy covering a risk of transit from Mumbai to

London.

Such a policy is generally used for Cargo Insurance andrarely for Hull Insurance

Time policy The purpose of this policy is to give cover for a specified

period of time.It also covers risk of vessel underconconstruction.

For eg: Policy period till 1st

Jan 2011 It is generally taken for 1 year.

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Mixed policy Also termed as Voyage and Time policy.

Its a combination of the two policies.

It covers risk during a particular voyage for a specified time.

For eg: A vessel may be insured for voyages betweenMumbai and London for a period of 1 year.

Valued policy This policy specifies the agreed value of the subject matter

insured, which may not necessarily be the actual value of thesubject matter.

This agreed value is referred to as the Insured Value. These policies are not very common.

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UNV LUED POLICY

Time of effective insurance Insurable value

Insurers Liability limited

Floating policyLong term contract

Terms & condition of insurance contract

Customary mannerConsignment within the terms of policy

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W GERING POLICY

To establish any insurable interest

Policy contains words like PPI or interest orno interest

Annual /open coverpolicy

This policy is most popular among importer

& exporter and also avoiding the effects Business involves regular dispatch of goods

Agreement between assured & underwriter

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Types

of

MARINE LOSSES

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Types

Total loss:-

Actual total loss can occur inany form. It may mean physical

destruction

Partial loss:-

A partial loss occurs when thesubject-matter of insurance is partiallydestroyed or damaged.

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WHAT IS HEALTH

INSURANCE?

A product in written to provide protection

against the policyholder's losses for the

injury, illness or disability.

A health insurance policy is a contract

between an insurance company and an

individual or his sponsor (e.g. anemployer). The contract can be

renewable annually or monthly.

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REASONS FOR HEALTH

INSURANCE

Lifestyles have changed

Rare non-communicable diseases are now

common

Medical care is unbelievably expensive

Indirect costs add to the financial burden

Incomplete financial planning

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TYPES OF HEALTH

INSURANCE

1. Individual Claim

2. Family Floater Policy

3. Unit Link Health Plan

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A. Individual Claim Covers the hospitalization expenses for an individual for upto

the sum assured limit.

Insurance premium is dependent on the sum assured value

Example:

Suppose u have 3 family members you can get an individual

cover of Rs. 2 lacs each. In this case each of you are covered

for 2lacs, if 3 members face a need for hospitalization , all 3 of

them can get expenses recovered upto Rs.2 Lacs. All the 3

policies are independent

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B. Family Floater Policy

Sum assured value floats among the family members. i.e eachopted family member comes under the policy, and it coversexpenses for the entire family up to the sum assured limit.

Premium for family floater plans is typically less than that forseparate insurance cover for each family member.

Example : In this case if suppose there are 3 family members ,you can take a Family floater policy for Rs 6 lacs in total . Nowanyone can claim upto 6 lacs in expenses , but then the coverwill go down by that much amount for that year . So if one of thefamily member is hospitalised and the expenses are 4.5 lacs . Itwill be paid and then the cover will be reduced to 1.5 lacs for

that particular year . Next year again it will start from fresh 6lacs. Family floater makes sense for a family because that wayeach one in family gets a big cover and probability of more than1 getting hospitalized in same year is too low untill and unlesswhole family is travelling together most of the times in a year

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C .Unit Link Health Plan

This plan combine health insurance with investment and

pay back an amount at the end of the insurance term.

Returns of course are dependent on market performance.

So if you are single, opt for an Individual Mediclaim policy

and if you have family, opt for a Family Floater policy.

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BANCASSURANCE

There is no stronger force than an

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There is no stronger force than anidea whose time has come.

Banks & Insurers across the World have realizedBancassurance is the distribution channel, whichwould help them achieve economies of scale andboost their revenues in the 21stCentury.

Victor Hugo

19

th

Century French Novelist)

http://images.google.com/imgres?imgurl=http://files.db3nf.com/pictures/authors/hugo.jpg&imgrefurl=http://hugo.thefreelibrary.com/&h=259&w=191&sz=5&tbnid=4DIT7V98rr8J:&tbnh=107&tbnw=78&hl=zh-CN&start=6&prev=/images?q=victor+hugo&svnum=10&hl=zh-CN%

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BANCASSURANCE DEFINITION

The sale of insurance and other similarproducts through a bank.

This can help the consumer in some situations;for example, when a bank requires life

insurance for those receiving a mortgage loan,

the consumer could purchase the insurancedirectly from the bank.

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POTENTIAL OF BANCASSURANCE IN

INDIA

Banks are major players in the IndianFinancial System:

-> 67,000 branches(32,000 rural and 14,700 semiurban)

-> Enormous retail account base of 450 mnDeposit A/c

-> Total deposit base of Rs. 14 trillion (USD 300bn)

Br ick & Mortar Model of BankingApp rox imately 80% of Banking Transact ions are

done at the Bank B ranch es

Very High Trust in the Bank ing Sys tem

Bank Managers looked upon as FinancialAdvisors

FORMS OF BANCASSURANCE

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FORMS OF BANCASSURANCE

ARRANGEMENTS

Strategic A l l ianc e:There is a tie-up between a bankand an insurance company. The bank only markets theproducts of the insurance company.

Ful l Integrat ion:

This arrangement entails a fullintegration of banking and insurance services. Thebank sells the insurance products under its brandacting as a provider of financial solutions matchingcustomer needs.

Mixed Models: Under this approach, the marketing isdone by the insurer's staff and the bank is responsiblefor generating leads only. In other words, the databaseof the bank is sold to the insurance company.

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THANK YOU