General Insurance

Insurance

Fortunate
Many
Unfortunate
Few
 Insurance

 Insurance provides financial protection against a loss arising out of

happening of an uncertain event. Organization can avail this protection
by paying premium to an insurance company.
 Insurance works on the basic principle of risk-sharing. A great
advantage of insurance is that it spreads the risk of a few over a large
group exposed to risk of similar type.
 Insurance is a contract between two parties whereby one party agrees
to undertake the risk of another in exchange for consideration known
as premium and promises to pay a fixed sum of money to the other
party on happening of an uncertain event
 The party bearing the risk is known as the 'insurer' or 'assurer' and the
party whose risk is covered is known as the 'insured' or 'assured'
Insurance Marketing– Points for discussion

 Corporate and Retail Customer – B2B & B2C

 Learn my business and work with me
 Protect me from loss events
 Provide immediate response- Quick Claims servicing
 Share my urgency
 Be by my side
 Keep me informed
 Classification– Product or Services?
B2B/B2C
Expenses Income
Material -60,000 Sales -100,000
Wages/Salaries – 20,000
Marketing Expenses - 5,000
Admin Expenses - 2,000
Interest - 3,000
Profit - 10,000
Expenses Income
Material -60,000 Sales -100,000
Wages/Salaries – 20,000
Marketing Expenses - 5,000
Admin Expenses - 2,000
Interest - 3,000
Loss Event - 60,000
Profit/Loss ?
 Insurance – A Risk
Management Tool

 Primarily used to hedge against risk of uncertain loss

 Protects against Potential Financial Losses

 Only Pure risks can be insured

 Acts as a Risk Transfer Mechanism 9

 Policies and Indian Insurance Market

Policies/Products
• Life Policies
• Non- Life Policies

Features of the Insurance Market

 Expertise
 Competition
 Capacity
Quantity Sold 1
Sales 20
Variable Charges 15
Contribution 05
Fixed Cost 10,000
Profit/Loss 9,995
Quantity to be sold for Break Even ?
Profit at Sell of 2,500 Quantity ?
Profit at Sell of 3,000 Quantity ?
 Intermediaries

 Brokers
 Agents
 Web Aggregators (Online Comparison Websites)
 Corporate Agents (Banc assurance)
 IMF (Insurance Marketing Firm)
 Other Channels
 Regulators

IRDA’s main Functions

 Regulating maintenance of margin of solvency
 Regulating investment of funds by insurance companies
 Protection of interests of policy holders
 Control and regulate Rates, Terms and conditions of products that is
offered by General Insurers.
 Insurance Market
Regulator

Customer
•Corporate/Institutional
•Retail/Individual

Insurers
•Life
•General

Intermediary
•Agents
•Bancassurance
•Brokers

Reinsurer
 Value of Asset

 Original Value
 Depreciation - Concept
 Market Value
 Book Value
 Reinstatement Value
 Task for You

Group A.
 History of General Insurance in India
Group B
 List & Type of General Insurers in India
Group C
 Business Figures – 2018/19 (General Insurance & Life Insurance)
 Market Size
Group D.
 Concept of Pure Risk & Speculative Risk
Group E
 Insurance as Risk Mitigating tool
 Contract
Definition of Contract - An agreement between two or more parties to do or to abstain from
doing an act, with an intention to create a legally binding relationship.

Contract:-
*It Is An Agreement
*Which Is Enforceable By Law

Thus for the formation of a contract, there must be:-

*An Agreement
*The agreement should be enforceable by Law
 Insurance Contract

Insurance is a contract between two parties whereby one party agrees:-

Like any other Contract – there is An Offer and an acceptance
The Offer usually comes from the Proposer – Offer is known as proposal
Insurer accepts the proposal and indicates acceptance by issuing a policy.

Payment of Contract of
Acceptance of
premium by Insurance /
Risk By Insurer
insured Insurance Policy
 PRINCIPLES OF GENERAL INSURANCE

1. Utmost Good Faith

2. Insurable Interest
3. Indemnity - Subrogation & Contribution
4. Proximate Cause