NIKITA PUTHRAN

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.

Insurance is a contract between two
parties whereby one party agrees

to undertake the risk of another in exchange for
consideration known as premium

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

Division of Insurance
Sector
INSURANCE
GENERAL INSURANCE
FIRE
INSURANCE
MARINE
INSURANCE
MEDICLAIM
MOTOR
VEHICLE
LIFE
INSURANCE
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 interest
The 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 to
claim 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

FIRE INSURANCE
INTRODUCTION TO FIRE
INSURANE
In 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.

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.

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.

Types
of
Fire Insurance Policy
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.


FLOATING POLICY

It is taken to cover loss on goods, which are lying in
different places and the stock of which is almost
continuously fluctuating.

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

Floating policies are suitable to those traders or
products whose raw-materials or merchandise are lying
at 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
port open.
DECLARATION POLICY

This policy is taken in respect of stock of inventory
of the policyholder.

Since the level of stock which are subject to
frequent 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.
ADJUSTABLE POLICy
It is issued for existing stock.

In this policy, premium rate shall be adjusted
according to increase or decrease in the value of
stock, this change will be notified to the insurer by
the insured.

In case of loss by fire, the amount notified by the
insured 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 in
trade other than farming stock.

SPECIFIC POLICY

A specific policy is a type of policy in which the
property is insured for a specific sum irrespective of
its value.

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

The actual value of the subject matter is not
considered in this respect.

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


AVERAGE POLICY

Where a property is insured for a sum which is less than
its 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 insurance
company will not pay Rs.60,000 to the policyholder but
will pay Rs.36,000 (60% of Rs.60,000).
MARINE INSURaNCE
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

Marine Insurance Contract


Under Mariner Insurance Act, 1963, Marine
Insurance Contract is an agreement whereby the
insurer undertakes to indemnify the assured, in the
manner and to the extent thereby agreed, against
losses incidental to Marine adventure.
SCOPE OF MARINE INSURANCE
HULL INSURANCE: Hull Insurance involves insurance
of ships including vessel machinery.

Perils usually covered under Hull Insurance includes
stranding, sinking, fire and collision as well as includes
construction risk when the vessel is under construction.

CARGO INSURANCE: Goods and commodities
transported by sea is the subject matter of Cargo
Insurance.

Two alternatives: Special Policy and Open Policy


Types
of
MARINE Insurance
Policy
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 and
rarely 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 under
conconstruction.
For eg: Policy period till 1
st
Jan 2011
It is generally taken for 1 year.



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





Time of effective insurance
Insurable value
Insurers Liability limited

Floating policy
Long term contract
Terms & condition of insurance contract
Customary manner
Consignment within the terms of policy


To establish any insurable interest
Policy contains words like PPI or interest or
no interest

Annual /open cover
policy
This policy is most popular among importer
& exporter and also avoiding the effects
Business involves regular dispatch of goods
Agreement between assured & underwriter


Types
of
MARINE LOSSES

Types
Total loss:-
Actual total loss can occur in
any form. It may mean physical
destruction

Partial loss:-
A partial loss occurs when the
subject-matter of insurance is partially
destroyed or damaged.
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. an
employer). The contract can be
renewable annually or monthly.

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
TYPES OF HEALTH
INSURANCE
1. Individual Claim
2. Family Floater Policy
3. Unit Link Health Plan


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

B. Family Floater Policy

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

Premium for family floater plans is typically less than that for
separate 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 . Now
anyone can claim upto 6 lacs in expenses , but then the cover
will go down by that much amount for that year . So if one of the
family member is hospitalised and the expenses are 4.5 lacs . It
will 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 6
lacs. Family floater makes sense for a family because that way
each one in family gets a big cover and probability of more than
1 getting hospitalized in same year is too low untill and unless
whole family is travelling together most of the times in a year
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.
BANCASSURANCE
There is no stronger force than an
idea whose time has come.

Banks & Insurers across the World have realized
Bancassurance is the distribution channel, which
would help them achieve economies of scale and
boost their revenues in the 21
st
Century.
Victor Hugo
(19
th
Century French Novelist)
BANCASSURANCE - DEFINITION
The sale of insurance and other similar
products 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 insurance
directly from the bank.

POTENTIAL OF BANCASSURANCE IN
INDIA

Banks are major players in the Indian
Financial System:
-> 67,000 branches(32,000 rural and 14,700 semi
urban)
-> Enormous retail account base of 450 mn
Deposit A/c
-> Total deposit base of Rs. 14 trillion (USD 300
bn)
Brick & Mortar Model of Banking
Approximately 80% of Banking Transactions are
done at the Bank Branches
Very High Trust in the Banking System
Bank Managers looked upon as Financial
Advisors



FORMS OF BANCASSURANCE
ARRANGEMENTS


Strategic Alliance: There is a tie-up between a bank
and an insurance company. The bank only markets the
products of the insurance company.

Full Integration: This arrangement entails a full
integration of banking and insurance services. The
bank sells the insurance products under its brand
acting as a provider of financial solutions matching
customer needs.

Mixed Models: Under this approach, the marketing is
done by the insurer's staff and the bank is responsible
for generating leads only. In other words, the database
of the bank is sold to the insurance company.
THANK YOU