UNIVERSITY OF MUMBAI

A PROJECT ON NON-PERFORMING ASSETS BACHELOR OF FINANCIAL MARKETS THIRD YEAR SEMESTER V

(2013-2014 SUBMITTED BY! NAME! PIYUSH GUPTA PROJECT GUIDE! MR" RAJEEV KUMAR GUPTA

SIES (NERUL COLLEGE OF ARTS# SCIENCE $ COMMERCE PLOT 1-C# SECTOR-V# NERUL# NAVIMUMBAI 400%0&

CERTIFICATE
This is to certify that M'"P()*+, G*-./ has satisfactorily carried out the project work on the topic GENERAL I0+*'/012 under the guidance of M+"K324 R3) C,3*5,*'), in partial fulfilment of Bachelor of Financial Markets (BFM) Semester V as per the curriculum laid down y the !ni"ersity of Mum ai, during the academic year #$%# & #$%'(

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DECLARATION

I, Piyush Gupta, a student of SIES College of Arts, Science & Commerce T.Y.BFM, hereb declare that I ha!e com"leted the "ro#ect on the to"ic $General Insurance for the academic ear %&'%(%&'), under the *ind guidance of +rof. Rajeev kumar Gupta as a "artial fulfilment of the course curriculum in the third ear Bachelor ,f Financial Mar*ets, Semester -. The information submitted herein is true and original to the best of m *no.ledge.

DATE!

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P()*+, G*-./

PREFACE

1. OBJECTIVES:
/

To find out general insurance and which are the companies involved in it. To know what are the trends in General Insurance. To find out the developments in the General Insurance. To find out the Procedure of Claims.

/ / /

2. METHODOLOGY:
/ / / / /

The study was carried out in Mumbai. E tensive !ibrary "esearch was carried out. #arious $ebsites were referred. Primary data was collected through interviews. #arious books% maga&ines and newspapers have been referred.

EXECUTIVE SUMMARY

Insurance is not the sale of products% but servicing customers. It is a system% by which the losses suffered by a few are spread over many% E posed to similar risks. Insurance is a protection against financial loss arising on the happening of an une pected event. Insurance companies collect premiums to provide for this protection. ' loss is paid out of the premiums collected from the insuring public and the Insurance Companies act as trustees to the amount collected. The very fundamental principle of spreading of the risk is actually practiced by the insurance companies by reinsuring the risks that they have insured. The opening up of the Insurance (ector to Private Companies% has made available more products and world class service to Indian Customer. This pro)ect has been made with an ob)ective to give an insight into various facts of General Insurance sector in India. 'n attempt has been made to e plain the ape body of General Insurance. i.e. General Insurance Corporation of India% its structure% products and subsidiaries. 'lso the review of latest entrants into insurance sector vi&% private players like T'T' 'IG General Insurance Company% "eliance General Insurance Company limited% *a)a) 'llian& General Insurance Company% I++C, Tokio General Insurance Company% "oyal (undaram General Insurance Company limited and ICICI !ombard General Insurance Company have been described in

brief% -ue to the growth in the technological sector of the country% the insurance companies have started utili&ing these technologies to it.s optimum level. ' case study based on the devastating Mumbai floods on /0th 1uly /223 is been prepared and facts of the case are being listed along with the effect of the particular situation on the General Insurance Companies is been )ustified.

INDEX (".4 ,. 6. /. 7. P'"TIC5!'"( ORIGIN OF INSURANCE HISTORY OF THE INSURANCE SECTOR INSURANCE SECTOR REFORMS INSURANCE REGULATORY AUTHORITY INSURANCE INDUSTRY CLASSIFICATION 8. 3. 4 IS OF INSURANCE GENERAL INSURANCE PRODUCT LEVELS FREQUENT TERMS USED 0. PUBLIC SECTOR SUBSIDIARIES PRIVATE PLAYERS MARKET SHARE 9. INSURANCE REGULATORY AUTHORITARIAN DEVELOPMENT P'GE 4,.

PRODUCTS :. CHANGING SCENARIO OF GENERAL INSURANCE TRENDS CLAIMS ;. CASE STUDY QUESTIONAIRE ORIGIN OF INSURANCE

$henever there is uncertainty there is risk. $e do not have any control over uncertainties which involves financial losses. The risk may be certain events like death% pension% retirement or uncertain events like theft% fire% accident% etc. Insurance is a financial service for collecting the savings of the public and providing them with risk coverage. It comes under service sector and while marketing this service due care is taken in <uality product and customer satisfaction. The main function of the Insurance is to provide protection against the possible chances of generating losses. The insurance sector in India has come a full circle from being an open competitive market to nationali&ation and back to a liberali&ed market again. Tracing the developments in the Indian insurance sector reveals the 702=degree turn witnessed over a period of almost two centuries.

B!"#$ H"%&'!( '$ &)# I*%+!,*-# S#-&'!

The business of life insurance in India in its e isting form started in India in the year6:6: with the establishment of the ,riental !ife Insurance Company in Calcutta. (ome of the important milestones in the life insurance business in India are> 6;6/> The Indian !ife 'ssurance Companies 'ct enacted as the first statute to regulate the life insurance business. 6;/:> The Indian Insurance Companies 'ct enacted to enable the government to collect statistical information about both life and non= life insurance businesses. 6;7:> Earlier legislation consolidated and amended to by the Insurance 'ct with the ob)ective of protecting the interests of the insuring public. 6;30> /83 Indian and foreign insurers and provident societies taken over by the central government and nationali&ed. !IC formed by an 'ct of Parliament% vi&. !IC 'ct% 6;30%with a capital contribution of "s. 3 crore from the Government of India. The General insurance

business in India% on the other hand% can trace its roots to the Triton Insurance Company !td.% the first general insurance company established in the year 6:32 in Calcutta by the *ritish. (ome of the important milestones in the general insurance business in India are> 6;29> The Indian Mercantile Insurance !td. set up% the first company to transact all classes of general insurance business. 6;39> General Insurance Council% a wing of the Insurance 'ssociation of India% frames a code of conduct for ensuring fair conduct and sound business practices. 6;0:> The Insurance 'ct amended to regulate investments and set minimum solvency margins and the Tariff 'dvisory Committee set up. 6;9/> The General Insurance *usiness ?4ationali&ation@ 'ct% 6;9/ nationali&ed the general insurance business in India with effect from 6st 1anuary 6;97. 629 insurers amalgamated and grouped into four companies. vi&. the 4ational Insurance Company !td.% the 4ew India 'ssurance Company !td.% the ,riental Insurance Company !td. 'nd the 5nited India Insurance Company !td. GIC incorporated as a company.

I4(5"'4CE (ECT,"

The opening up of Insurance sector was a part of the ongoing liberali&ation in the financial sector of India. The changing face of the financial sector and the entry of several companies in the field of life and non life Insurance segment are one of the key results of

these liberali&ation efforts. Insurance business by way of generating premium income adds significantly to be the G-P.

,ver the past three years% more than thirty companies have e pressed interest in doing business in India. The I"-' ?Insurance "egulatory -evelopment 'uthority@ is the regulatory authority% which looks over all related aspects of the insurance business. The provisions of the I"-' bill acknowledge many issues related to insurance sector.

The I"-' bill provides guidance for three levels of players = Insurance Company% Insurance brokers and Insurance agent. !ife Insurance sector is one of the key areas where enormous business potential e ists. In India currently the life insurance premium as a percentage of G-P is 6.7 A against% 3./ per cent in the 5(.

General Insurance is another segment% which has been growing at a faster pace. *ut as per the current comparative statistics% the general insurance premium has been lower than life insurance. General Insurance premium as a percentage of G-P was a mere 2.3Bper cent in 6;;0. In the General Insurance *usiness% General Insurance Corporation ?GIC@ and its four subsidiaries vi&. 4ew India Insurance% ,riental Insurance% 4ational Insurance and 5nited India Insurance% are doing ma)or business. The General Insurance Industry has been growing at a rate of 6; percent per year.

The entry of several private insurance companies% particularly

international insurance companies% through )oint ventures% will speed up the process of insurance mobili&ation. The competition will unleash new schemes and benefits% which will give consumers a better Chance to save as well as insure. The regulatory system in India is relatively new and takes some more time to make the Insurance sector a perfectly competitive one.

Insurance "egulatory 'uthority of India issued regulations on 63 sub)ects which included appointed. 'ctuary% actuarial report% Insurance agents% (olvency margins% re=insurance% registration of Insurers% and obligation of insurers to rural and social sector% investment and accounting procedure. The reform in Insurance in India is guided by factors like availability of a variety of products at a competitive price% improvement in the <uality of customer services etc. 'lso the employment opportunities in the Insurance sector wil6 increase as ma)or players set their business plans in India. The policy of the government to open up the financial sector and the Insurance sector is e pected to bring greater +-I inflow into the country. The increase in the investment limit in this vital sector has generated considerable business interests among the foreign Insurance companiesC Their entry wil6 certainly change the Insurance sector considerably.

INSURANCE SECTOR REFORMS: In 6;;7% Malhotra Committee% headed by former +inance (ecretary and "*I Governor ".4. Malhotra was formed to evaluate the Indian insurance industry and recommend its future% direction. The Malhotra committee was set up with the ob)ective of complementing the reforms initiated in the financial sector.

In 6;;8% the committee submitted the report and some of the key recommendations included> (tructure>
'. Government stake in the insurance Companies to be brought

down to 32A.
%. Government should take over the holdings of GlC and its

subsidiaries so that these subsidiaries can act as independent corporations.

). 'll the insurance companies should be given greater freedom

to operate.

Competition>
'. Private Companies with a minimum paid up capital of "s. 6

bn should be allowed to enter the industry.

%. 4o Company should deal in both !ife and General Insurance

through a single entity.

). +oreign companies may be allowed to enter the industry in

collaboration with the domestic companies.

0. Postal !ife Insurance should be allowed to operate in the

rural market.
1. ,nly one (tate !evel !ife Insurance Company should be

allowed to operate in each state. "egulatory *ody>

'. The Insurance 'ct should be changed. %. 'n Insurance "egulatory body should be set up. Controller of

Insurance ?Currently a part from the +inance Ministry@ should be made independent.

Investment>
'. Mandatory Investments of !IC !ife +und in government

securities to be reduced from 93A to 32A.

%. GIC and its subsidiaries are not to hold more than 3A in any

company ?There current holdings to be brought down to this level over a period of time.@

Customer (ervice>
'. !IC should pay interest on delays in payments beyond 72

days.
%. Insurance companies must be encouraged to set up unit

linked pension plans.

). Computeri&ation of operations and updating of technology to

be carried out in the insurance industry.

The committee emphasi&ed that in order to improve the customer (ervices and increase the coverage of the insurance industry should open up to competition. *ut at the same time% the committee felt the need to e ercise caution as any failure on the part of new players could ruin the public confidence in the industry. Dence% it was decided to allow competition in a limited way by stipulating the minimum capital re<uirement of "s. 622 crores. The committee felt the need to provide greater autonomy to insurance companies in

order to improve. INSURANCE REGULATORY AUTHORITY

,n the recommendations of the Malhotra Committee% government has set up an interim Insurance "egulatory 'uthority ?I"'@% with a view to activate an insurance regulatory apparatus essential for proper monitoring and control of the insurance industry. The I"' is headed by a chairman who is also Controller o2f insurance and chairman of T*C. The other members of the I"'% not e ceeding seven in number of whom not more than three shall serve full time% shall be nominated by the central government. I4(5"E"(> Insurance industry% as on 6.8./222% comprised mainly two players> the state insurers> Life Insures:
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!ife Insurance Corporation of India ?!IC@

General Insurers
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General Insurance Corporation of India ?GIC@ ?with effect from -ec E/222% a national reinsurer@

INSURANCE INDUSTRY:CLASSIFICATION

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SOME PLAYERS IN THE INDUSTRY:

!ife Insurance General Insurance !ife Insurance Corporation of India. General Insurance Corporation of India. 6.,riental Insurance Company !td. /.4ew India 'ssurance Company !td. 7.4ational Insurance Company !td.

8. 5nited India Insurance Company !td.

4ew Entrants ICICI Prudential !ife Insurance !td. Tata 'IG !ife Insurance Corporation !td. I4G #ysya !ife Insurance Corporation !td. ,m Fotak Mahindra !ife Insurance Corporation !td. *a)a) 'llia& General Insurance Company !td. "eliance General Insurance Company !td. Tata 'IG General Insurance Company !td. "oyal (undaram 'lliance Insurance Company !td.

4 IS OF INSURANCE SERVICE

The 8 I.s refers to the different dimensionsG characteristics of any service. 5nlike pure product% services have its own characteristics and its related problems. (o the service provider needs to deal with these problems accordingly. The service provider has to design different strategies according the varying feature of the service. These 8 I.s not only represent the characteristics of different services but also the problems and advantages attached to it. These 8 I.s can be broadly classified as> H Intangibility H Inconsistency H Inseparability H Inventory H Intangibility> Insurance is a guarantee against risk and neither the risk nor the guarantee is tangible. Dence% insurance rightly come under services% which are intangible. Efforts have been made by the insurance companies to make insurance tangible to some e tent by including letters and forms H Inconsistency (ervice <uality is often inconsistent. This is because service personnel have different capabilities% which vary in performance from day to day. This problem of inconsistency in service <uality can be reduced through standardi&ation% training and mechani&ation. H Inseparability (ervices are produced and consumed simultaneously. Consumers cannot and do not separate the deliverer of the service from the

service itself. Interaction between consumer and the service provider varies based on whether consumer must be physically present to receive the service. H Inventory 4o inventory can be maintained for services. Inventory carrying costs are more sub)ective and lead to idle production capacity. $hen the service is available but there is no demand% cost rises as% cost of paying the people and overhead remains constant even though the people are not re<uired to provide services due to lack of demand. In the insurance sector however% commission is paid to the agents on each policy that they sell. Dence% not much inventory cost is wasted on idle inventory. 's the cost of agents is directly proportionate to the policy sold.

GENERAL INSURANCE

$ith the opening up of the insurance industry to the private sector% the need for a strong% independent and autonomous Insurance "egulatory 'uthority was felt. 's the enacting of legislation would have taken time% the then Government constituted through a Government resolution an Interim Insurance "egulatory 'uthority pending the enactment of a comprehensive legislation. The Insurance "egulatory and -evelopment 'uthority 'ct% 6;;; is an act to provide for the establishment of an 'uthority to protect the interests of holders of insurance policies% to regulate% promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance 'ct% 6;7:%the !ife Insurance Corporation 'ct% 6;30 and the General insurance *usiness?4ationali&ation@ 'ct% 6;9/ to end the monopoly of the !ife Insurance Corporation of India ?for life insurance business@ and General Insurance Corporation and its subsidiaries?for general insurance business@.

-efinition and meaning> 1. INSURANCE: Insurance is the means of managing risk and protection against financial loss arising as a result of contingencies% which may or

may not occur. In other words% insurance is the act of providing assurance% against a possible loss% by entering into a contract% with one who is willing to give assurance. Through this contract the person willing to give assurance binds himself to make good such loss% if it occurs.

2. GENERAL INSURANCE: General insurance means managing risk against financial loss arising due to fire% marine or miscellaneous events as a result of contingencies% which may or may not occur. General Insurance means to ICover the risk of the financial loss from any natural calamities vi&. +lood% +ire% Earth<uake% *urglary% etc. i.e. the events which are beyond the control of the owner of the goods for the things having insurable interest with the utmost good faith by declaring the facts about the circumstances and the products by paying the stipulated sum% a premium and not having a motive of making profit from the insurance contract.J (ome of the General "ules> 6. Mis=description > The insurance policy shall be void and all the premiums paid by insured may be forfeited by the insurance company in the event of mis=presentation or mis=declaration andGor non=disclosure of any material facts. /. "easonable care> The insured shall take all reasonable steps to safeguard the property insured against any loss or damage. Insured shall e ercise reasonable care that only competent employees are employed and shall take all reasonable precautions to prevent all accidents and shall comply with all statuary or other regulations

7. +raud> If any claim under the policy may be in any respect fraudulent or if any fraudulent means or device are used by the insured or any one acting on the insured.s behalf to obtain any benefit under the insurance policy% all the benefits under the insurance policy may be forfeited. 8. +ew basic principles of general insurance are> 6. Insurable interest /. 5tmost good faith 7. (ubrogation 8. Contribution 3. Indemnity

3. "isks of loss not covered under general insurance are> The loss or damage or liability or e penses whether direct or indirect occasion by happening through or arising from any conse<uences of war% invasion% act of foreign enemy% hostilities ?whether war be declared or not@% civil war% rebellion revolution% civil commotion or loot or pillage in connection therewith and loss or damage caused by depreciation or wear and tear. Dowever the risk of loss or damage by war can be insured by payment of additional premium in some cases only.

PRODUCT LEVELS: In this figure there is a nucleus or core in the center% which is supported by series of tangible and intangible features and benefits and these form a cluster around the core product.

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!E#E TKPE ,+ ! (E"#ICE 6 Core service

C,4TE4T( *asic service product.

I4(5"'4CE (ECT," !ife 4on=life insurance policy

E pected service

*asic product and minimum purchase conditions that must be met.

'fter sale service !ow claim setting period

'ugmented service

(omething different Technology which enables one ,nline premium product to be payment differentiated from others. Payment through credit cards. (tanding instruction to bank.

Potential service

+eatures that attract the Maturity claim settled customers and are useful on or before the to them. maturity date !oans.

The core product of insurance company is insuring life and non life products. People opt for this service as they want to secure their life% people dependent on them and other valuable things in life.

The time factor plays an important role while providing service to the customer. The customer e pects that the procedures for settling the claim should be short and not much time consuming. They should get the benefits of the service as soon as possible.

Today the technology is boosting in each and every field. Insurance is not an e ception. Companies have started providing customers facility of online payment of premium through their websites. They

also provide online assistant to the customer the policy status and how to calculate the premium. To calculate the premium they )ust need the present age% the type of police% sum assured% and accident covered if any. *y filling in this information you can calculate the amount of premium you have to pay. The customer can pay their premiums by means of credit cards or can also give standing instruction to the bank in order to pay their monthly premiums.

The insurance companies also provide loan facilities against their policies. 't present loans are granted on unencumbered polices as follows>
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5p to ;2A of the (urrender #alue for policies% where the premium due is fully paid=up% and 5p to :3A of the (urrender #alue for policies where the premium due is partly paid=up.

The minimum amount for which a loan can be granted under a policy is "s632. The rate of interest charged is 62.3A p.a.% payable half=yearly. !oans are not granted for a period shorter than si months% or on the security of lost policies ?the assured must have the duplicate policies@ or on policies issued under certain plans. Certain types of policies are% however% without loan facility. FREQUENT TERMS USED

Agent:

'n insurance company representative licensed by the state% who solicits% negotiates or effects contracts of insurance% and provides service to the policyholder far the insurer.

Actual Total Loss: It is a loss where the goods are completely lost and become irrecoverable

Additional cover: 'n insurance policy e tended to cover additional risk perils such as strikes. "iot sand Civil commotion etc on payment of e tra premium.

Agreed value policy: Policy which undertakes to pay a specified amount in case of total loss. 5nder this case the policy does not take into account the current market value.

Assessor: Person who estimates the value of goods for the purpose of apportioning the sum payable by the underwriters to settle the claims. 'lso called as (urveyor.

Assured:

Party indemnified against 6;ss by means of insurance.

Burglary: It is a theft committed by breaking into or out of the premises. Evidence of breaking In% Is necessary.

Coverage: The scope of protection provided under a contract of insuranceL any of several risks covered by a policy.

Cargo insurance: ' generic term used in both inland marine and ocean marine insurance to designate the type.s of insurance available to provide coverage for cargo that is being transported by truck% rail% air% ship% or boat.

Certificate of Insurance: ' statement of coverage issued to an individual insured% specifying the insurance benefits and principal provisions applicable to the member.

Claim: The formal re<uest by a policyholder or a claimant for payment of loss under an insurance policy.

Co-insurance: ' provision under which an insured who carries less than the stipulated percentage of insurance to value% will receive a loss payment that is limited to the same ration which the amount of insurance bears to the amount re<uiredL

Cover Note: Is the document that is issued provisionary pending issuance of insurance Policy.

Indemnity: !egal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to appro imately the same financial position as e isted before the loss.

Insurable Interest: ' condition in which the person applying for insurance and the person who is to receive the policy benefit will suffer all emotional or financial loss% if any untouched event occurs. $ithout insurable interest% an insurance contract is invalid%

Insurance: (ocial device for minimi&ing risk of uncertainty regarding loss by spreading the risk over a large enough number of similar e posures to predict the individual chance of loss.

Net Premium: The portion of premium rate which is designed to cover benefits of the policy% e cluding e penses% contingencies and profit.

Policy: Is the legal document that has the conditions of the insurance contract.

Premium: It is the amount paid to secure an insurance policy.

alvage: "ecovery made by an insurance company by the sale of property which has been taken over from that insured as a part of loss settlement. The remains of damaged vehicle or any other property. Third party> 'ny person other than the two parties signing an insurance% contract.

!nder"riting:

5nderwriting of a risk involves consideration of material% facts on the basis of which a decision will be taken whether to accept the risk and if so at what rate of premium.

PUBLIC SECTOR SUBSIDIARIES

I. O!"#*&,. I*%+!,*-# C'/0,*(. The ,riental Insurance Company !td. ?,IC!@ is one of the leading General Insurance companies in India and is a subsidiary of the General Insurance Corporation ?GIC@ of India. It is one of the oldest Insurance. If companies and was established in the year 6;89.The Company transacts all kinds of non=life insurance business ranging from insurance covers for very big pro)ects to small rural insurance covers. ,IC!% is the M
/

+irst to have underwritten the biggest Grass "oot "efinery Pro)ect% "eliance 1amnagar "efinery. +irst to have issued a Package Policy under mega risk to P(5 ,il giants. . +irst to have issued 'dvance !oss of Profits policy in India. +irst to have issued directors N ,fficers liability policy in India. +irst to introduce Fidnap N "ansom cover in India.

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+irst to have issued (tock *rokers and (tock E change custodial services policy in India. +irst to have issued tailor=made cover for Cellular Communication systems. +irst to have front office computeri&ation drive in India. +irst to have a system of in=house loss assessment up to statutory limits. +irst to have started motor third party conciliatory proceedings.

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THE PROFILE The ,riental Insurance CompanyB !td. ?,IC!@ is one of the leading General Insurance companies in India and is a subsidiary of the General Insurance Corporation?GIC@ of India. It is one of the oldest Insurance companies and was established in the year 6;89. The Company transacts all kinds of non=life insurance business ranging from insurance covers for very big pro)ects to small rural insurance covers. ,IC! has its Dead office in 4ew -elhi% the capital of India. The Company has /6"egional ,ffices% 766 -ivisional ,ffices and 073 *ranch offices in various cities of the country. "einsurance connections are spread all over the world. The Company has a reputation in the "einsurance market. ,IC! speciali&es in devising special covers for large pro)ects like Power Plants% Petro=chemical% (teel Plants and chemical plants. It

has a highly technically <ualified and competent team of professionals% to render the best customer service. The Company has a dedicated pro)ect cell at the Dead ,ffice as well as ma)or cities of India. ' special " N - team has been dedicated to bring out special innovative covers like (tock=*rokersB Policies% (pecial Package Policies etc.

MISSION
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To develop general insurance business in the best interest of the community. To provide financial security to individuals% trade and commerce by offering insurance products and service of high <uality at affordable cost.

VALUES
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Dighest priority to customer needs. Digh standards of public conduct. Transparency in operations.

COMMITMENTS TO THE CITI1ENS

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In areas coming within competence of GIC respond to all commercially viable general insurance re<uirements of the citi&ens% not hitherto available within three months from the

date on which such a demand is received.

/

In areas covered by tariff% appropriate proposals will be submitted to the Tariff 'dvisory Committee with appropriate comments within two months. Continue to provide customi&ed insurance products for weaker sections of the society at affordable price within si months of receipt of a re<uest for a specific type of cover. Prepare booklets on standard policy covers setting out essential information and make such booklets readily available for purchase at suitable places. Promote customer education in general insurance service by holding workshops in important regional centers. Make available to a customer% on re<uest to the policy issuing office% the status of his claim andGor claim settlement details within 9 working days. Endeavor to set up a system of ,mbudsman at four metropolitan cities to conciliate disputes on personal line insurance claims

CORPORATE OBJECTIVES:

To serve better the insurance needs of the entire community% keeping C5(T,ME" as the focus. To serve better the insurance needs of the entire community% keeping C5(T,ME" as the focus.

To manage *usiness profitably% Manage funds )udiciously and deploy investible funds for optimum Kield. To manage *usiness profitably% Manage funds )udiciously and deploy investible funds for optimum Kield. To work towards minimi&ation of losses and develop "isk Management Technologies. To function as a strong and dynamic non=life insurer.

P",-5CT(> The various products can be grouped under the following categories>
o o o o o o o o o o

IndividualsG+amily Marine Professionals *usinessG,fficeGTraders EngineeringGIndustry 'gricultureG(ericultureGPoultry 'nimalsG*irds 'viation Motor #ehicle M PrivateGCommercial Dealth=MediclaimG,verseas MediclaimGPersonal 'ccident

#ocuments re$uirement for various types of Claims

-ifferent documents are re<uired for settling different types of claims. The most commonly re<uired ones are mentioned under each claims type listed below. Kour full cooperation to surveyorGInvestigator appointed by the Company would enable prompt settlement of claims.
o o

Claim due to +ire andGor E plosion. Claim due to +lood% (torm% Cyclone% Earth<uake% and (ubsidenceG!andslide. Claim due to "iot% (trike% Malicious -amage and Terrorism ?"(M-T@. Marine Inland Transit !oss of cargoGmachinery. Marine !oss of cargoGmachinery for e portB Marine !oss of cargoGmachinery during Import Claim due to ElectricalGMechanicalGElectronic *reakdownGmishandlingG Impact damage to machine. Claim due to *urglaryGTheft of #ehicle 'ccidental -eath Claim Permanent -isabilityGIn)ury claim due to accident Temporary Total -isability ?TT-@ ?$eekly compensation@ claim due to accident Mediclaim claim due to hospitali&ation ?diseaseGaccident@ Claim due to -eath of Cattle ?4on=I"-P@GPermanent Total -isablement. -amage claim to private #ehicle

o o o o

o o o o o

o o

?CarG/$heeler@ due to accident

o

Claim of -amage to Commercial #ehicle ?Ta iG*usG!orry@ due to accident. Third Party ?T.P.@ Claim due to accident

II. T)# N#2 I*3", A%%+!,*-# C'/0,*(. Established by (ir -orab tata in 6;6;% 4ew India. was the first fully Indian owned insurance company in India. There were nearly 632 insurance firms in India M including ones from +rance% the 5F and 'merica. These were operated through managing agencies in India largely held by Indian business houses. 4ew India is a leading global insurance group% with offices and branches throughout India and various countries abroad. The company services the Indian subcontinent with a network of 6%672 offices% comprising/0 "egional offices% 700 -ivisional offices and 97: *ranches. $ith appro imately/3%222 employees% 4ew India has the largest number of specialist and technically <ualified personnel at all levels of management% who are empowered to underwrite and settle claims of high magnitude 4ew India has historically been a frontrunner in several diverse fields of business and industrial activity. 4ew India are lead underwriters of IndiaBs (pace programme having insured several I4('T and other% satellites. 4ew India are pioneers in Engineering insurance% +inancial risks insurance and are now offering customi&ed "isk Management solutions to our> corporate clients in the Private and public (ectors in Power% Telecom% Petrochemicals% (teel and 'utomobile industries 4ew IndiaBs foreign operations started with the establishment of an

office in !ondon in6;/2. 'n international presence was built up by 4ew India as a direct writing Company in /7 countries spanning 3 continents. It increased its reach and capacity% for reinsurance facilities for all classes of business. (tarting way back in the 6;/2s% 4ew IndiaBs 5F operations have now taken deep root. 4ew India is party to one of the oldest reinsurance treaties in the 5F market. Through participation in 'viation and Marine Dull underwriting% 4ew India has% over a period of time% strengthened its market presence. In 6;:2Bs with the establishment of a full=fledged branch to underwrite 5F *usiness% it has e tended its 5F operations% authori&ed by the -epartment of Trade and industry The 4ew India commenced its 1apan operations in 6;32% and now> operates through :branches. The 1apanese operation covers 73A of the Company.s overseas premium income.

III. THE NATIONAL INSURANCE COMPANY (ince incorporation in the year 6;20% 4ational InsuranceO Company has been carrying out general insurance business under private management until 6;9/% the year of its nationali&ation. In the same year // foreign and 66 Indian Insurance Companies were amalgamated with 4ational Insurance Company !imited% as a subsidiary company of General Insurance Corporation of India Dead<uartered in Calcutta it has an organi&ational network of over ;08 offices with around /2%299 trained workforces. The company also has operations in Dong Fong and 4epal and ranks among the top global business insurers. !ater on in /22/% with the passage of

Insurance amendment *ill ?/22/@% 4ational Insurance Company has been delinked from GlC and. has been functioning as an independent company Its product range includes motor vehicle insuranceL fire insurance on buildings and other assetsL various crime covers like burglary and theft of cashL machinery breakdown cover for industrial e<uipmentL transit damage cover for imported or e ported goodsL as well as legal liability cover.

Professional indemnity and directors and officer.s liability covers are some of the new covers. 4IC, General Insurance seeks to attract clients and intermediaries and fle ibility in claims settlements% and at the same time ensuring that we do not erode shareholder value. The ob)ective is to add value to the shareholdersB funds whilst ensuring customer satisfactionP The strength of 4GI is in its balance sheet. 4IC, General Insurance views the future and its prospects as e tremely bright% e citing and rewarding for staff% clientele and shareholders alike.

IV. U*"&#3 I*3", I*%+!,*-# C'/0,*( 5nited India Insurance is one of the four subsidiaries of the General Insurance Company carrying on general insurance business with its head office at Chennai. !ater on in /22/% with the passage of Insurance amendment *ill ?/22/@% 5nited India Insurance has been -el inked from GIC and has been functioning as an independent company.

5I spans the country with a network of 66/7 offices and manpower of ,ver/6%222 employees. The organi&ational structure comprises // regional offices% 7/9divisional offices..% and 999 branch offices% supported by /6%323 employees. IC"' has maintained the I ''' rating% indicating the claims paying ability of 5nited India Insurance ?5II@ to be of the highest order. The rating takes into consideration the favorable prospects for the domestic general insurance industry following the deregulation of the sector. 5II continues to be a dominant player in the Indian insurance industry% with an overall market share of /3A and a leadership position in the southern markets. 5II is a Pioneer of Personal Insurance Products in India who speciali&es in non=life insurance products including Medical and 'ccident Insurance. It en)oys a market share of over /3percent of the non=life insurance sector in India.

PRIVATE COMPANIES

1. B,4,4 A..",*5 G#*#!,. I*%+!,*-# C'/0,*(: Allian% AG: 'llian& group was founded in 6:;2 and is one of the worldBs leading insurance companies with over 622 yearBs e perience in insurance and related services. It is also the largest insurer in Europe. 'llian& group has multi=local structure and presence in over 92countries. The key business areas of 'llian& group include General Insurance ?property% engineering% marine% motor% casualty and miscellaneous@% "einsurance% "isk Management% !ife N health insurance% 'sset Management and Pension +unds Management.

Ba&a& Auto Ltd' *a)a) 'uto !td the flagship company of *a)a) Group was incorporated in 6;83 as *achra) Trading Corporation. Initially it started by assembling two and three wheelers in collaboration with Piaggio of Italy. 'fter the e piry of the 'greement in 6;96 the two and three wheelers ac<uired the brand name of *a)a). The strength of the company lies in its strong brand image and ability to offer value for money products leveraging on its large=scale operations.

T(e )oint *enture *a)a) 'llian& General Insurance a )oint venture non=life company promoted )ointly by *a)a) 'uto and German insurer= 'llian&. Indian auto ma)or holds 98A while 'llian& holds /0A in the 1oint #enture% and has an authori&ed and paid up capital of "s.ll2 crores. Mr. Graham 4orris is the CE, of the company. *a)a) 'llian& General Insurance will leverage the customer base and e pertise of *a)a) 'uto !td and 'llian&.

2. R'(,. S+*3,!,/ G#*#!,. I*%+!,*-# C'/0,*( L"/"&#3:

undaram +inance (undaram +inance !imited ?(+@ was established In 6;38 with a paid=up capital of "s. 62.2/ million% primarily to assist the development of "oad Transport Industry. (+ has been providing financial assistance to road transport

operators for ac<uiring commercial vehicles under hire purchase system. Emerging as the leader in the industry% (+ has been staying at that position for over four decades. (+ diversified in to e<uipment leasing in 6;:6.

,oyal - un Alliance "oyal N (un 'lliance is one of the worldBs leading international Insurance companies. The (un was established in 6962 and is the oldest. Insurance company in e istence still trading under its original name. The 'lliance was founded in 6:/8 and the "oyal in 6:83. The GroupBs international presence began to emerge in the 6:th century with business ventures in mainland Europe. +orays into the 5( and Canadian markets followed in the 6;th century% and in 6;;:% "oyal N (un 'lliance became the first 5F insurance company to be granted a license to operate in China.

T(e )oint *enture The )oint venture bringing together "oyal N (un 'lliance Insurance and (undaram +inance !imited started its operations from March /226. The company is Dead Quartered at Chennai% and has two "egional ,ffices% one at Mumbai and another one at -elhi. The venture is aiming at "s. 6/2 Crores in revenue during first year of its operations and is confident of breaking even by fifth year.

6. ICICI L'/7,!3 G#*#!,. I*%+!,*-# C'/0,*(: ICICI

ICICI !td. was established in 6;33 by the $orld *ank% the Government of India and the Indian Industry% to promote industrial development of India by .Providing pro)ect and corporate finance to Indian industry. (ince inception% ICICI has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India. ICICI has thus far financed all the ma)or sectors of the economy% covering 0%:8:companies and 60%:36 pro)ects.

Lombard !ombard Canada !td.% is a leading insurance management company responsible for providing insurance management services for all of the !ombard groupBs commercial% personal% and speciali&ed insurance companies. Canadian owned and operated% !ombard Canada !td. has its head office in Toronto and has annual sales in e cess ofR322 million and is a wholly owned subsidiary of +airfa +inancial Doldings !imited ?++D on the T(+ !ombard Canada !td. has achieved a reputation for providing solid under writing performance% diversified books of business and strong capital positions.

T(e )oint *enture ICICI !ombard General Insurance Co will be headed by Mr. (an)iv Ferkar. ICICI would hold about 98 percent stake% while Canadian insurer !ombard would hold the ma imum permissible /0 percent and commence business with a start=up capitalof"s.622 crore. ICICl !ombard has plans to sell covers to the corporate clients of

ICICl. (t the same time it will sell property insurance for ICICI home loan seekers and auto insurance for those availing of car finance.

4. T,&, AIG G#*#!,. I*%+!,*-# C'/0,*( L"/"&#3: TATA Group Tata Enterprises with :/ companies% spread over seven sectors and with an annual turnover e ceeding 5( R :.: billion% employs more than /0/%222 people. Tata Group has shown over years that it is a value driven company and hasC pioneering contributions in various fields including insurance% activation% iron and steel. Tata companies have forgeda number of global alliances with eminent international partners in several fields. In terms of capital market performance as many as 82 listed Tata companies account for nearly3A 0fthe total market capitali&ation of all listed companies.

TATA Group in Insurance The !ate (ir -orab Tata was the founder Chairman of 4ew India 'ssurance Co. !td.% a group company incorporated way back in 6;6;. Government of India took over the management of this company as a part of 4ationali&ation of general insurance companies in 6;9/. 4ot deterred by the move% Tata group have ventured intoC risk management services having tied up with 'IG group% back in 6;99% with the incorporation of Tata 'IG "isk Management (ervices Pvt. !td.

AIG

I'merican Insurance Group is the leading 5.(. based international insurance and financial services organi&ation and the largest underwriter of commercial and industrial insurance in the 5nited (tates. Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 672countries and )urisdictions throughout the world. 'IGBs global businesses also include financial services and asset management% including aircraft leasing% financial products% trading and market making% consumer finance% institutional% retail and direct investment fund asset management% real estate investment management% and retirement savings products.

T(e )oint *enture Tata 'IG General Insurance Co. !td. has a start=up capital of "s. 6/3 crores of which 98 per cent has been brought in by Tata (ons and 'merican partner brings in the balance /0 per cent. Tata ='IG plans to be the first Indian insurance company to offer a comprehensive policy to cover various risks in the IT sector% risk arising out of virus% cyber crime% negligent acts% errors and omissions and third party liability from a security failure. ,ther products on offer are property% casualty% marine% directors and officer.s liability% accident and health% homeowners and automobile insurance. *a)a) 'llian& General Insurance Products>
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Personal 'ccident Dospital Cash -aily 'llowance Policy

o o o o o o o o o o o

Dealth Guard Critical Illness *urglary Insurance Douseholders Insurance Travel Companion +idelity Guarantee Policy ,ffice package Money Insurance Public !iability Plate Glass Insurance Conse<uential !oss ?+ire@ Insurance Policy

Tata 'IG General Insurance Company Products

o o o o o o

E ecutive Guard +amily Guard Travel Guard Dome (ecure *usiness Guard (an)eevani *usiness Guard 1yothi

8. R#.",*-# G#*#!,. I*%+!,*-# C'/0,*( L"/"&#3: "eliance GroupB "eliance BGroup is IndiaBs largest business house has annual sales turnover of "s. 86%/:2crore ?5(R ;%227 million@ and has posted a net profit of "s. /%;82 crore ?5( R 086million@ for the 6/=month period ending 1une 72% /222. The Group has total assets of "s.3/%622 crore and net worth of "s. //%863 crore. It has a large investor base of over 3million% as well as a large customer base in retail ?te tiles% !PG% Cellular phones% etc.@ and commercial segments.

"eliance Industries !imited% IndiaBs largest private sector enterprise% is a% ma)or player in the Indian petrochemicals sector. "elianceBs operations capture value addition at every stage from producing crude oil and gas to polyester and polymer products and are vertically integrated to the production of te tiles. "eliance has one of the largest marketing networks in the Indian Industry. 'll its brands are market leaders. ,eliance General Insurance Company Limited "eliance group has announced its plans to enter the Indian insurance sector= both in the life and general insurance businessesB. "eliance Industries plans to bring in around "s. 722 Crores into its insurance venture through its financial arm "eliance Capital !td. "eliance group will be the lead investor for this initiative. The two companies will have an initial authori&ed capital of "s./22 crores ?5( R 87.0/ million@ each. This is the first application from an Indian company without a foreign insurance tie=up. Dowever%

"eliance will associate with international insurance consultants to bring the best practices in the business to India.

MARKET SHARE 's by this time we are well versed with all the General Insurance companies both Public and private we know how each company contributes serving the customers and also generating revenue through it. $e also know that General Insurance contributes towards the Gross -omestic Profit% but now let us see how these companies individually contribute towards the Gross -omestic Profit through the way of Market (hare of each company both Private N Public. 's we can see in the Pie Charts a comparison of 7 consecutive years have been taken which are /227=28% /228=23 N /223=20. Public Companies have been dominating the General Insurance Market since a long time% the market share of Private companies have been improving in the last few years by appro imately 0 A

each year% but then too Public sector companies capturing the ma)or market. *ut also in Public sector companies 4ew India 'ssurance is been leading the way which is been closely followed by the remaining. 'mong the private players we can note that ICICI !ombard is leading the way. *y considering /223=20 as the base year% we can note that the market share of Public companies have been deteriorating having 97.87A of the market share from :3.38A in the year /227=28.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITARIAN Insurance "egulatory and -evelopment 'uthority 'ct% 6;;;% came into being from 6;G28G/222. ,b)ects are stated in 'ct are as follows> C'n 'ct to provide for establishment of 'uthority to protect interests of holders of insurance policies to regulate% promote and ensure orderly growth of insurance industry and for matters connected

there with and further to amend Insurance 'ct% 6;7:%!ife Insurance Corporation 'ct% 6;30 and General Insurance *usiness ?4ationali&ation@'ct% 6;9/C. Composition> I"-' will consist of a chairperson and not more than +ive whole time members and not more than four part time members. $hole time members shall hold office for 3 years or until age of 0/ ?03 in case of chair person@ whichever is earlier. Part time members shall hold office for not more than3 years. P'2#!% ,*3 F+*-&"'* '$ A+&)'!"&(
o o

To regulate% promote and ensure orderly growth of insurance and re= insurance business To issue a certificate of registration% renew% modify% withdraw% suspend or cancel such registration of applicant% i.e. insurance company To prepare a code of conduct for agents% surveyors and loss accesses and other intermediaries who take part in insurance business To e ercise all powers and perform all functions of controller of Insurance under Insurance 'ct% 6;7: To protect interest of policy holders in matters concerning assignment of policy% settlement of claims% terms and conditions of contract etc. To promote efficiency in conduct of insurance business To promote and regulate professional organi&ations connected with insurance business

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o o o o

To regulate investment of funds of insurance companies To regulate maintenance of margin of solvency To ad)udicate disputes between insurers and intermediaries To call for information fromC undertake inspection and conduct en<uiries and investigations including audit of insurers% intermediaries etc. control and regulate ratesB% advantages% terms and conditions offered by Insurers in respect of general insurance business riot so controlled by Tariff 'dvisory committee To prescribe manner and forms in which books of accounts is to be maintained To e ercise other powers as such may be prescribed by central government.

o o

Insurance Advisory Committee: 'uthority has power to appoint a committee to provide guidance to 'uthority and committee is called Insurance 'dvisory Committee. This committee contains not more than /3 members e cluding e = officio member representing interest of commerce% trade industry% agriculture% surveyors% agents% intermediaries etc. Chairperson and members 'uthority are e =officio members of Insurance 'dvisory Committee. Code of conduct for insurance agent> Every insurer agent shall%

o o o

Identify himself and insurance company of whom he is an agent -isclose his license to prospect on demand Give re<uisite information in respect of insurance product offered for sale by his insurer and into account needs of prospect while recommending a specific Bplan. -isclose scales of commission payable to him if asked by prospect Indicate premium to be charged by insurer on insurance product E plain to prospect nature of information re<uired in proposal from and also importance of disclosure of material information *ring to notice of insurer any adverse habits or income inconsistency of Prospect Inform promptly about acceptance of re)ection of proposal by insurer. "ender necessary assistance to policyholder or claimant in complying with% re<uirements of settlement of claims

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PRODUCTS The different types of General insurance products are listed below. $hile most policies are optional that is at the behest of the insured% some are mandatory. The mandatory ones are>
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Motor Insurance Public liability ?for corporate class@

,ther policies include> +ire insurance

o *uilding or flat o +urniture fi tures N other content.s o !oss of profit that is conse<uential loss

Miscellaneous insurance
o Personal insurance o *urglary %theft o $orkmen.s compensation o +idelity guarantee o Cancer o Mediclaim o Comprehensive Package Policy for )ewelry% T.#% #.C."%

+urniture etcS Marine Cargo Insurance

o Cargo In Transit o Cargo -eclaration Policy

Marine Dull Insurance Inland vessels ocean going vessels% fishing N sailing vessels% freight at risk% construction of ships% voyage insurance of various vessels% ship breaking % insurance 'waiting break up% insurance ,il N energy in respect of onshore N offshore risks including construction risk. 4on M Traditional G "ural
o o o o o o

Cattle G Dens Crop $ater Pump for agriculture Dut ,ther !ivestock Motor Insurance

Motor insurance is mandatory for all types of vehicles in India. There are two types of motor insurance vi&
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Third party% which only insures the party G parties other than the owner in an accident Comprehensive% which insures the owner as well as the third party involved.

The premium for motor vehicles is decided on the following factors>

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#alue of the vehicle !ocation where it is to registered .places having higher claim rates ?like Mumbai@ are likely to have higher premium

The premium for heavy commercial>

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#alue of the vehicle Gross laden weight% that is% the carrying capacity of the vehicle.

+or DC#.s the driver is also insured along with the vehicle. ' charge of rs.63G= is made as premium for the driver. +or all sorts of vehicles insured% the policy would not cover the use on hire % reward or organi&ed racing %speed reliability trails and speed testing. There is ?4C*@ 4o Claim *onus applicable for each year an insured person does not claim .It is accrued as a 3A deduction from the premium amount for the ne t year% sub)ect to ma imum 32A. P!'0#!&( I*%+!,*-# Property insurance covers land% buildings and the contents of building. There are several types of Property insurance packages% but the most common are the +ire Insurance and burglary Insurance

F"!# I*%+!,*-# +ire insurance is a comprehensive policy% which goes beyond only fire accidents. The policy% besides covering loss on account of fire% also covers loss on account of the following
o o o o o

Earth<uake "iots (trikes Malicious Intent +loods

+ire insurance only can be taken by the owner of the premises to be insured. ' tenant Cannot insure rented premises since he does not have insurable interest. *ut the tenant has the option of insuring the contents of the premises. The premium is based on IGood faithJ and depends on the value of property being insured. It should be noted that thought fire insurance is not compulsory% in case of corporate availing of loans% the lending institution may insist on e<uipment or relevant property to be insured against fire. This trend is now also being followed by housing finance companies% some of which are insisting that the premises be insured against fire

*urglary *urglary insurance covers all losses arisen out of burglary committed in one.s premises. The only condition for lodging a claim

on the insurance party is that there should be a Iforced entryJ in to the premises. ' forced entry may in the form of physical damage to the entry area% or to a person or entry gained through coercion. In this case too% the policy has no limitations and it is the right of the insured to decide upon the value of the insurance cover O9#!%#,% M#3"-.,"/ P'."-( : T!,9#. I*%+!,*-# Policies issued in India under ,verseas Mediclaim (cheme% as approved by "eserve *ank ,f Indian residents traveling abroad for any approved visits vi&. *usiness% (tudy Tour% (peciali&ed training conferences% Employment or higher studies. Premium on such policies may be collected in rupees but for employment in foreign currency. This policy was originally introduced in 6;:8% to provide for payment of medical e penses in respect of illness suffered or accident sustained by Indian residents during their overseas trips for official or holiday purposes. In. 6;;:% a new policy known as #I-E(D K'T"' MIT"'% was made available for *usiness and Doliday Travelers. Cover for corporate fre<uent travelers were also introduced. The policy provides for following (ections>= Medical Cover
'. "epatriation ,f "emains %. Checked *aggage !oss G *aggage -elay ). Passport !oss 0. Personal 'ccident M ,verseas 1. Personal !iability 2. Di)ack "elief *enefit

The plan available now with various companies are however not the same as each company has introduced. (ome variation in the cover to suit the varying re<uirements.
'. Types of overseas Mediclaim insurance policy %. Individual ,verseas Mediclaim insurance policy ). (tudent ,verseas Mediclaim insurance policy 0. (enior Citi&en Mediclaim insurance policy.

CHANGING SCENARIO OF GENERAL INSURANCE MARKET B!ooks to the future with confidence and optimismB B!"#$ &)# )"%&'!( '$ ;#*#!,. I*%+!,*-#. In India General Insurance business started% Marine Insurance started on later part of the69th century. *efore nationali&ation in 6;89 we have 689 insurance companies% foreign and Indian both.

*ut during there nationali&ation% in 6;97 we have 629 companies that merge into four companies% i.e. taken over by Government. General Insurance Corporation of India ?GIC@ was set up in 6;97 as a holding company% with four subsidiary operating companies = 4ational Insurance co !td.% 4ew India 'ssurance Co. !td.% ,riental Insurance co !td.% and 5nited India Insurance Co !td.% with a clear cut mission as set out in the 'ct. The overall scenario in the insurance market in India after nationali&ation. GIC and its subsidiaries function through a vast country = wide network of around 8622offices spread across the length and breadth of the country% GIC has taken the benefit of insurance to almost every district% across hilly terrain and often inaccessible areas of the country. The customer interface is made easy through a network of agents% development officers and employees at *ranch% -ivisional and "egional offices as well as at the corporate level. The GIC and its subsidiaries have a workforce of appro imately :0%222 In 6;97 tainted at various levels through in house training institutions. 4ow the total number of employees went up. The industry has also promoted the 4ational Insurance 'cademy ?4I'@% which is the premier training institute in insurance% catering not only to Indian 4ationals but also to select foreign nationals. The industry issues around /7 million documents and settles /million claims every year. Country wide computeri&ation in the recently past has made the task of policy= holderBs servicing easier and rapid. 't the same time% profitable lines and premium components increases and we became a investment company. .(ere does Indian Insurance sector stand compared to International Insurance ector/

Technologically% Indian insurance sector is <uiet comparable with the international sector. ,ur vast resources of skilled and technical manpower% huge market potentiality and technical know=how = all are comparable with the international market. *ut lacking in the process of computeri&ation and in pricing ?premium rate@ is also seen. In product% we have demand in less because lack of awareness for ade<uate insurance cover in India with insuring public. ,ur marketing strategy is not very modern. *ut we are trying to rectify both these ?Technology and Marketing@ areas. The problems faced by Indian Insurance (ector Today> The main problems are>
o o o o

!ack of awareness for insurance needs. !ack of penetration due to inade<uate marketingGdelivery system. Total computeri&ation still in the process of implementation. (ophisticated covers do not have ade<uate demands because of General attitude to insurance in India.

T)# S-)#/#% "ecogni&ing its organi&ational strengths% the Govt. of India has also entrusted the corporation with the administration of various schemes for social melioration and public welfare. (ocial security schemes benefiting millions of Citi&ens below the poverty line. Personal 'ccident Insurance and Dut Insurance are operated all over the country for which the premiums are paid by the Government. The GIC administers on behalf of Government% the crop Insurance scheme for areas and crops notified under the crop Insurance (cheme. #arious low cost mass insurance policies have been evolved over a period of time% e.g.B1an 'rogya *ima PolicyB.

R'.# G#*#!,. I*%+!,*-# I*3+%&!( "% 0.,("*; "* &)# ;!'2&) '$ #-'*'/( '$ &)# -'+*&!(: The General Insurance Industry has an enviable track record among public sector units. It has a consistent profit and dividend paying record accompanied by a steady growth in its financial resources. Through investments in the= Government sector and> socially = oriented (ectors the Industry has contributed immensely to the nationBs development. The industry is recogni&ed as one of the largest financialB Institutions in the Country. The ventures initiated by the industry in the areas of Mutual +und% Dousing +inance have done e ceedingly well in recent years. To protect the countryBs foreign e change reserves% the reinsurance arrangement are so organi&ed that ma imum retention is made possible within the country while at the same time protecting interests of the policy holders. The GICB( inwards reinsurance wing% called the ($I+T% ma imi&es the foreign e change balance by acting as an international insurer=accepting risk from all over the globe. GIC<S I*&#!*,&"'*,. '0#!,&"'*: GICB( international operations span over 76 countries around the globe. The reinsurance e pertise built over a long period has made the Indian Insurance Industry a globally acknowledged reinsurer of repute GICB( risk management skill has been backed by specialists with a vast insurance e perience. Thus% the technical and underwriting skills have been acknowledged in the international market. The corporation operates in 69 countries through branches and agencies% whereas in another 68 countries% it has subsidiaries and associate companies. The GIC

has a subsidiary company known as BIndia International Pvt% !td.%B operating in (ingapore and a )oint=venture company% Fenindia Insurance co.!td. The impact of liberali&ation of economy in the activities of GlC. $ith the liberali&ation of economy% General Insurance in India is poised for a <uantum )ump% both in <uality and <uantity. V"%"'* $'! &)# $+&+!#: It is estimated that the industry will outstrip the present rate of growth and reach a premium value of over "s. l%/2%222 millions by taking advantage of the e tra=large mega=risk and social awareness of insurance in general% even as . a developing country turns in to a developed country. The task before the industry to service the growing number of policy=holders would e<ually see a <uantum )ump in issuance of documents and settlement of claims. Matching reserves and conse<uent investment will be a natural corollary. It is e pected that the investment portfolio will touch around "s. /%32%222 millions by the end of the ne t decade% with the strength built up over the years since nationali&ation% GIC new looks to the future with confidence and optimism% takes on global chal6engewith its high standard of service% innovative initiative and a compelling social perspective. GIC<% 0.,* = "* *#2 7+%"*#%% ,!#,%: The two new areas that GIC is getting into are the areas of health care and crop insurance. +or the health care business% the corporation has received permission to set up a separate management services company. GIC has plans to increase the scope of cover in health care% personal accident and crop insurance and will re<uire e pertise in pricing the products.

T)# R#%#,!-)

D#9#.'0/#*& ,-&"9"&"#%:

They have )ust entered these areas and for the coming five years we are investing appro imately 322 crores. GICB( " N - cell is created backed up market research data. The subsidiaries of GIC are becoming an autonomous body. Privati&ation in the insurance sector of India = Is it in the right direction ItBs purely a government decision and the nationali&ed sector is ready to face the challenge. 'nd have taken the challenge to stand in the stiff competition. 'nd now% many private companies have entered the market. These companies are a result of merger of Indian companies with foreign companies.

TRENDS Trends in any sector basically refers to the up gradations or ac<uiring new technologies which has replaced the conventional methods in any organi&ations In Today.s automated and moderni&ed era any organi&ation cannot take a chance by not maintaining pace with the competition. $ith the passage of time and taking into consideration today.s needs and changing scenario insurance companies should also adopt new technology i.e. it should be trendy enough to meet customer needs and e pectations. Trends or use of technology should be such that it is eco friendly enough to be used by customers. Today% right from a grocery shop to I.T sector technologies is e plored to the fullest E=*usiness or E=commerce has sown its seeds in every sector of business which is one of the strongest sign of improvement and technology. 's we are dealing here with insurance industry let us see the

technology involved in the Insurance sector. T#-)*'.';"-,.: > C'/0+&#!"5,&"'*: Initially% in the late 6;32.s the insurance companies used 5nit "ecord Machines ?Electro Magnetic Machines@ to process data punched into cards. Computers were introduces in the mid 6;02.s and by the 6;:2.s the 5nit Phased Machines were phased out and the entire process was computeri&ed. This brought about greater efficiency and <uick service delivery.

> I*&#!*#&: Internet usage has drastically improved in the last decade. There was a tremendous increase in the use of technology by GIC during the late 6;;2.s. The companies !aunched its website in the mid 6;;2.s to offer basic services such as modifying policies?change of address% change of nominee% etc@ and <uerying the status of the policy. *ut today% the internet has completely changed the service delivery process. Internet is today used to even sell insurance policies. Internet is% in fact% proving to be one of the widely used distribution networks for selling insurance policies. 'lso internet is used for sending premium notices to policy holders through e= mails. 'lso GIC has a special feature on its website. It has a premium calculator which accurately displays the amount of premium month wise and the remaining balance. ,ne )ust has to enter the age%

name of the insurance policy% the sum assured and whether there is an accident cover or not. *y keying in this information% the entire premium amounts are shown within no time. This has helped the customer in a way so that heGshe doesn.t have to travel all the way to the branch to ascertain the amount of premium to be paid. > M#&!'0'."&,* A!#, N#&2'!? @MANA ,*3 B"3# A!#, N#&2'!? @BANA: GIC has commissioned a M'4 connecting more than 93 branches in Mumbai. This enabled the policy holders to pay their premiums and get their status report% surrender value <uotations and loan <uotation% from any branch in the city. +ollowing the M'4 in Mumbai% seven M'4 centres ?Chennai% *angalore% -elhi% Calcutta% Pune% Dyderabad%and 'hmedabad@ became operational. These M'4 centres were connected to each other by a $'4 network. This $'4 was designed for distributed processing without a central database M each division maintained a database of the policyholders. The central office in Mumbai maintained an inde of policy numbers and the corresponding IP addresses of the servers where the details of the policy were maintained.

> E.#-&!'*"- C.#,!,*-# S#!9"-# @ECSA: 'lmost all the big organi&ations today provide the EC( facility to its customers. ' policyholder having an account in any bank which is a member of the local clearing house can opt for EC( debit to pay premiums. The advantage here is that once the option is e ercised% the policy holder need not visit a branch for paying the premium or collecting the receipts. ,n the day indicated by the policy holder% the premium amount will be directly debited to the bank account of the policyholder and the receipt will be issued by the designated branch office.

> B,*? ATM%: Many insurance companies have a tie=up with commercial banks so as to enable policyholders to use the facility of paying premiums through the bank 'TM.s. ICICI !ombard has a tie up with ICICI bankL *a)a) 'llian& has a tie=up with Corporation bank and 5TI *ank.

C,.. C#*&!#% ,*3 SMS %#!9"-#%: 'lmost all the insurance companies have their own call centres which cater to the phone based <ueries of the policyholders. This service is /8 9 and they have the Interactive #oice "esponse ?I#"@ systems at all the branches. 'lso% !IC and other companies now provide (M( services going with the new trends like (M( banking in the banking sector.

C.,"/% The (ettlement of claims constitutes one of the important functions in an insurance organisation. The proper settlement of claims re<uires a sound knowledge of thee law% principles and practices governing insurance contracts

and in particular a thorough knowledge of the terms and conditions of the standard policies and various e tensions and modifications there under. The procedure in respect of claim a under various classes of insurance follows a common pattern and may be considered under 7 broad headings

P!#."/"*,!( 0!'-#3+!# It is essential that early notification of the loss is received by insurance undue delay in notification would adversely affect the position of the insurer. Dowever if there is any delay in notification or not or weather is material will be ultimately decided by the courts based on the facts of the individual cases The notice of loss condition in liability policies provides for two aspects> a.@4otification of the happening of the accident immediately followed by b.@4otification of the receipt of claim or suit filed against the insured. 5nder certain types of policies ?e.g. *urglary@ notice is also to be given to police authorities.

L'%% M"*"/"5,&"'* 't common law% there is a duty on the part of the insured to observe good faith .This duty of good faith means that at all times the insured has to act as if he is uninsured.

+or E.g.% the private car package policy provides % among other things % that the insured shall take all reasonable steps to safeguard the motor car from loss or damage and to maintain it in efficient condition. In the event of any accident or breakdown the motor car shall not be left unattended without proper precautions being taken to prevent further damage or loss.

P!'-#3+!,. ,n receipt of intimation of loss or damage insurers check that> a.@The policy is in force on the date of occurrence of the loss or damage. b.@The loss or damage is by a peril insured by the policy. c.@4otice of loss received without undue delay. 'fter this check up the loss is allotted a number and entered in the claims register.

C.,"/ F'!/% The contents of the claim form vary with each class of insurance .In general the claim in general the claim form is designed to elicit full information regarding the circumstances of the loss such as date of loss% time% cause of loss% e tent of loss etc claim forms are invariably sued in fire and miscellaneous insurance.

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,n receipt of the claim form duly completed from the insured the insurers decide about the investigation and assessment of loss if the loss is small the investigation to determine the cause and e tent of loss is done by an officer of the insurers. (ome times even this may be waived and the loss settled he basis of the claim form only. The investigation of larger or complicated claims is entrusted to independent professional surveyors who are specialist in their line the appointment of a surveyor is intimated to the claimant the surveyor is furnished with all relevant claim papers such as claim form policy copy etcSDowever% many a times surveyor is appointed and survey is carried immediately on receipt on notice of loss% that is even before claim form could be issued.

C.,"/% 3'-+/#*&% In addition to the claim form independent survey report certain documents are re<uired to be submitted by the insurers to substantiate the claim for e ample for fire claims for fire claims a report for the fire brigade for motor claims driving license registration copy police report etc

A!7"&!,&"'* It is distinct from litigation and is a method of settling disputes under contract in accordance and conciliation act 6;;0.

S#&&.#/#*& The claim is processed on the basis of Claim form Independent

report from (urveyors% legal opinion% medical opinion etc as the case maybe. #arious documents furnished by the insured. 'ny other evidence secured by the insurers If the claim is in order settlement is effected by che<ue the payment is entered in claims register as well as in the relevant process record. 'ppropriate recoveries are made from the insurers if any.

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Mumbai will never be the same again. 'nd so will the insurance sector in Mumbai after the /0G9 floods. Torrential rains which killed thousands and rendered many homeless% also led to loss of business and vehicles.

T)# $,-&%:

's fallout of the torrential rains% the non=life insurance sector was flooded with more than62222 claims totalling over "s. /222 crores. Dowever% these did not include the 32222cars that have been damaged in Maharashtra. $hile the top four private sector general insurance companies% ICICI !ombard General Insurance% *a)a) 'llian& General Insurance% Iffco Tokio General Insurance and Tata 'IG have together received

claims worth over "s 6%222 croreL the four state=owned general insurance companies 4ew India Insurance% ,riental Insurance% 5nited Insurance and 4ational Insurance received claims close to "s 6%322 crore. Private insurer% *a)a) 'llian& General Insurance Company !td ?*'GIC!@ alone had received claims for at least 62%222 motor vehicles after the recent floods in Mumbai. 's several companies temporarily closed down their operations and go down stocks went missing% corporate claims were the highest% in terms of value. 4e t came claims for cars and household goods and from shopkeepers and traders for their warehouses. ' ma)ority of individuals and small and medium entrepreneurs also submitted claims. ,4GCBs insurance claim is considered to be the largest given its loss of R 322 million after fire gutted the *ombay Digh rig.

Insurance firms set up special cells to visit victims and settle claims. In many firms% the special teams worked round=the=clock to take stock of the loss and speed up the settlement process. *a)a) 'llian& settled claims worth about "s /22 crore without any documentation% to the victims of the recent floods in Mumbai. 'fter the natural calamity% the +inance Minister sought speedy redressal of claims. De directed the Chairmen and Managing -irectors of the four public sector general insurance companies that claims below "s 32%222% arising out of the recent floods in Maharashtra and Gu)arat% should be settled by 'ugust 76. Public sector player% 4ational Insurance Company received 7%222 claims for "s 732 crore from its customers in Mumbai for damage

to property caused by the recent rains. $hile some insurers had taken a re=insurance cover% some have not. Mumbai floods brought to fore the ill=preparedness both among the mega polis administrative officials and the insurance sector. $hile the latter seems to have reali&ed the damages% the former is still grappling with the situation. 's death toll continues to rise% insurance firms have reali&ed the need to better manage natural calamities. The premium for flood covers may rise in coming years.

> T)# #$$#-&: Dere.s a warning to the lakhs of Mumbaikars who are planning to insure their houses in the wake of the recent deluge. ,ne will have to read the fine print carefully. Public sector insurance firms are <uietly planning to drop the word Eflood. from the policy. 's of now% a household insurance policy is basically a fire insurance policy% which also incorporates a flood insurance policy. Dowever% with 62%222 policy=holders filing claims totalling "s 6%322 crores% insurance firms are looking at new ways to keep their heads above water. 'fter the last calamityTthe !atur <uake of 6;;7T insurance firms had dropped earth<uakes from the household insurance policy. Those wanting to insure their homes against flooding may now have to pay a separate premium. The insurance sector has suffered losses of about "s 6%322 crore. These companies may not get re=insurance for these policies as they had not taken re= insurance for these small individual polices.

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