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Acknowledgement We would like to thank our faculties for their constant support when ever needed for making presentation. And this project would not have been possible with out support of our friends and group members2
Insurance Insurance is actually a contract between 2 parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party happening of a certain event. Insurance is a federal subject in India. Life and general insurance in India is still a nascent sector with huge potential for various global players.3
History of Insurance Insurance in India has its history dating back till 1818, when Oriental Life Insurance Company was started by Europeans in Kolkata to cater to the needs of European community. The oldest existing insurance company in India is National Insurance Company Ltd, which was founded in 1906 and is doing business even today. Insurance industry, earlier comprised of only two state insurer. Life Insurance Corporation of India (LIC)4 General Insurance Corporation of India (GIC).
Contd…. In the recent years when the Govt. of India in 1999 opened up the insurance sector by allowing private insurance companies to work in the market by depositing 100 crores rupees in the reserve of government and allowing FDI up to 26%. This has encouraged many overseas insurance companies, having a required amount in their reserve, to open their branch in our country.5
Why Insurance? To provide security Old age pensions As an investment/ or saving mechanism As a collateral for loans For tax benefits6
Functions of Insurance • Provide protection • Collective bearing of risk Primary Functions • Provide Certainty • Provide prevention of losses • Small capital to cover larger risk Secondary Functions • Contributes towards the developments of larger industries • Means of saving & investments • Sources of earning foreign exchange Other Functions • Risk free trade7
Why Insurance Sector is privatized? To give individual & corporate consumers a competitive environment that can deliver products & services in tune with their requirements. Industry to benefit from technology transfer & capital from global insurance players. India is a signatory to WTO committed to open insurance & banking.8
5 ‘R’s of Insurance Risk Return Riders Rewards Value add Rebate9
Insurance is Fortunate Many For Unfortunate few10
Classification chart Insurance General Life Insurance Insurance Health Motor Marine Fire Insurance Insurance Insurance Insurance11
General Insurance General insurance is basically an insurance policy that protects you against losses and damages other than those covered by life insurance. Types :- Motor Insurance Fire Insurance Health Insurance Marine Insurance Life Insurance It is an insurance coverage that pays out a certain amount of money12 to the insured or their specified beneficiaries upon a
General Insurers: Public Sector Public Sector National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited13
General Insurers: Private Sector Bajaj Allianz General Insurance Co. Limited ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokyo General Insurance Co. Ltd. Reliance General Insurance Co. Limited Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Limited Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation HDFC Chubb General Insurance Co. Ltd.14
Chart showing segment wise share in GENERAL INSURANCE business16
Life Insurers: Market Share Life Insurance Corporation of India17
Life Insurers: Private sector Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co. Ltd HDFC Standard life Insurance Co. Ltd ICICI Prudential Life Insurance Co. Ltd. ING Vysya Life Insurance Company Ltd. Met Life India Insurance Company Ltd. Max New York Life Insurance Co. Ltd Tata AIG Life Insurance Company Limited , etc…18
Comparison of a public & private companies . This shows us that still in our economy in the sector of insurance , public company i.e. LIC a major player is still huge in terms of premium collection .20
Need for Insurance Planning "Insurance is not for the person who passes away, it’s for those who survive” • Insurance Planning is concerned with ensuring adequate coverage against insurable risks • Insurance enables us to live our lives to the fullest, without worrying about the financial impact of events that could hamper it. • A major reason why you need insurance is to ensure that you are not forced to close if you are exposed to a claim21
Reinsurance Based on the same principle as insurance itself, reinsurance is a mechanism to provide for a further sharing of the risk so as to help insurance companies meet their obligations to policyholders. General Insurance Corporation of India is the Reinsurance Company in India.22
"Huge scope for insurance market" “There is enough opportunity, but the way has to be discovered. It’s not that it is impossible. Only Insurance companies have to bring their brains together and find out the way. But, the message has to be sent to customers that these companies are not to cheat them, but deliver. Increasing health and self awareness. As now FDI investment limit has gone up to 49% from 26% earlier , hence better growth in terms of investment. It has become a good source of investment for23 some people.
Exemption under IT Act Life Insurance Premiums: Any amount that you pay towards life insurance premium for yourself, your spouse or your children can also be included in Section 80C deduction. If you are paying premium for more than one insurance policy, all the premiums can be included. It is not necessary to have the insurance policy from Life Insurance Corporation (LIC) – even insurance bought from private players can be considered here. ULIP: Policyholder is allowed to claim income tax benefits against his Ulip premium payments by way of both deduction and exemption. He can deduct from his taxable income, to a total of Rs 1 lakh in certain instances, under Section 80C of the Income Tax Act. Policyholders can also seek exemption from gross income under Section 10 (10) D for any sum received from25 insurance policy as maturity proceeds; death benefits are
Role in Economy According to IRDA, the insurance sector constitutes around 4.5 per cent to the GDP. Last year, the total premium collected was at Rs 2.83 lakh crore. Better percentage of GDP contribution is expected in future , due to high opportunities in the sector.26