This document provides an overview of insurance. It defines insurance as a means of protection from financial loss through risk management. The key characteristics of insurance are pooling of losses, payment of fortuitous losses, risk transfer, and indemnification. There are six prerequisites for an insurable risk, including that the loss must be accidental, determinable, and not catastrophic. The types of insurance discussed include life, non-life, general, marine, fire, personal accident, vehicle, and others. The benefits of insurance to society include indemnification for loss, less worry and fear, investment funds, loss prevention, and credit enhancement. The document also discusses insurance products, reinsurance, bancassurance, and provides a definition

1. INSURANCE
submitted by:- vrinda sood
branch:- cse bfsi
year:- 2nd

2. Insurance Defined
 Insurance is a means of protection from financial
loss. It is a form of risk management primarily
used to against the risk of a contingent, uncertain
loss.
 An entity which provides insurance is known as an
insurer, insurance company, or insurance carrier. A
person or entity who buys insurance is known as
an insured or policyholder.

3. Characteristics of Insurance
 The basic characteristics of insurance are:
1. Pooling of losses.
2. Payment of fortuitous losses.
3. Risk Transfer.
4. Indemnification.

4. Characteristics of Insurance
Pooling of Losses
 Pooling is spreading of losses incurred by the few
over the entire group, so that in the process average
loss is substituted for actual loss.
 Pooling implies:
1. Sharing of losses by the entire group
2. Prediction of future losses with some accuracy based
on the Law of Large Numbers.
Payment of Fortuitous/ Accidental Losses
 A fortuitous loss is one that is unforeseen &
unexpected and occurs as a result of chance. The
loss must be accidental.

5. Characteristics of Insurance
Risk Transfer
 Risk Transfer means that a pure risk is
transferred from the insured to the insurer who
typically is in a stronger financial position to pay
the loss than the insured.
Indemnification
 Indemnification means that the insured is restored
to his or her approximate financial position prior
to the occurrence of the loss.

6. Elements of Insurable Risk
There are six pre-requisites of insurable risk:
1. There must be large number of similar exposure
units.
2. The loss must be accidental and unintentional.
3. The loss must be determinable and measurable.
4. The loss should not be catastrophic.
5. The chance of loss must be calculable.
6. The premium must be economically feasible.

7. Types Of Insurance
Types of
Insurance
Life Insurance
Non Life
Insurance
General
Insurance
Marine
Insurance
Fire Insurance
Personal
Accident
Insurance
Vehicle
Insurance
Misc. Insurance
Fidelity
Guarantee
Insurance
Crop Insurance
Burglary
Insurance
Flood Insurance

8. Benefits Of Insurance to Society
 The major social and economic benefits of
insurance include:
1. Indemnification for loss.
2. Less worry and fear.
3. Source of investment funds.
4. Loss prevention.
5. Enhancement of Credit.

9. Insurance products
 Child Plans
 Health Plans
 Pension Plans
 Endowment Plans
 Term Plans
 Wealth Plans
 Vehicle Insurance
 Fire Insurance
 ULIP Policies

10. Reinsurance
 Reinsurance is Insurance that is purchased by
an Insurance Company (the "ceding
company" or "cedant" or "cedent" under the
arrangement) from one or more other
insurance companies (the "reinsurer") as a
means of risk management, sometimes in
practice including tax mitigation. The reinsurer
is paid a "reinsurance premium" by the
ceding company, which issues insurance
policies to its own policyholders.
 Benefits-
◦ Risk transfer, Income smoothing, Surplus
relief, Reinsurer's expertise, Arbitrage

11. Bancassurance
 The bank insurance model (BIM), also sometimes known
as bancassurance, is the partnership or relationship between a
bank and an insurance company whereby the insurance
company uses the bank sales channel in order to sell insurance
products, an arrangement in which a bank and an insurance
company form a partnership so that the insurance company can
sell its products to the bank's client base.
 BIM allows the insurance company to maintain smaller direct
sales teams as their products are sold through the bank to
bank customers by bank staff and employees as well.
 The bank and the insurance company share the commission.
Insurance policies are processed and administered by the
insurance company.
 This partnership arrangement can be profitable for both
companies. Banks can earn additional revenue by selling the
insurance products, while insurance companies are able to
expand their customer base without having to expand their sales
forces or pay commissions to insurance agents or brokers.

12. THANK YOU