General Insurance -India

Live your life with complete confidence and ensure your family’s well-being. At DENIP Consultants we make a sincere effort to offer a range of life insurance products to fulfil all your insurance requirements. We offer Life Insurance Products of companies like LIC, Reliance and ICICI Prudential to our clients. Our unique portfolio planning application ensures tailor made plans to suit our clients’ requirements. We have also forayed into General Insurance and offer products of India’s No.1 General Insurance Company ICICI Lombard & also Bajaj Allianz Company & STAR Health & Allied Insurance Co.Ltd.

1.GENERAL INSURANCE

Insurance other than ‘Life Insurance’ falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary etc, personal insurance such as Accident and Health Insurance, and liability insurance which covers legal liabilities. General Insurance Companies in India is a 45,000 - 50,000 crores industry today and has come a long way from the first time Triton Insurance Company of Calcutta had established the first general insurance house in the country.

IRDA – Insurance Regulatory and Development Authority protects the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto.

Non-life insurance companies have products that cover property against Fire and allied perils, flood storm and inundation, earthquake and so on. There are products that cover property against burglary, theft etc. The non-life companies also offer policies covering machinery against breakdown, there are policies that cover the hull of ships and so on. A Marine Cargo policy covers goods in transit including by sea, air and road. Further, insurance of motor vehicles against damages and theft forms a major chunk of non-life insurance business.

The public sector companies in general insurance are:-

1. The New India Assurance Co.Ltd

2. United India Insurance Co.Ltd

3. The Oriental Insurance Co.Ltd

4. National Insurance Co.Ltd

Some of the private sector companies in general insurance are:-

1. ICICI Lombard General Insurance Co.Ltd

2. Bajaj Allianz General Insurance Co.Ltd

3. Reliance General Insurance Co.Ltd

4. CholamandalamMS General Insurance Co.Ltd

5. TATA AIG General Insurance Co.Ltd

6. HDFC ERGO General Insurance Co.Ltd

2.Principles of Insurance

1. Utmost good faith :-

The insured and the insurer are bound by a good faith bond of honesty and fairness.

2. Principle of Indemnity:-

Insurance is a legal agreement entered between Insured and Insurer due to which due to the consideration, the Insurer agrees to indemnify the Insured, for the loss or damage or liability created due an accident which is covered under the policy subject to the terms and conditions of the contract.

3. Proximate Cause:-

The cause of loss (the "peril") must be covered under the insuring agreement of the policy, and dominant cause must not be excluded. Proximate cause means the active, efficient cause that sets in motion a train of events which brings about a result, without the intervention of any force started and working actively from a new and independent source.

4. Law of contribution:-

Insurers which have similar obligations to the insured contribute in the indemnification, according to some: method.

5. Insurable Interest:-

Only the person who has insurable interest can arrange insurance and seek indemnity due to loss or damage.Insurable interest is defined as legal interest in another person’s life or in the protection of property from injury, loss, destruction.

6. Subrogation :–

The insurance company acquires legal rights to pursue recoveries on behalf of the insured; for example, the insurer may sue those liable for insured's loss.It can be simply stated as transfer of rights or ownership to the insurer.

3. Market Share

Source : Deloitte

ICICI Lombard is the market leader in the private sector and New India Insurance Co.Ltd in the public sector.

4.Product Mix

• Growth has been majorly fuelled by the retail segment.
• Motor continues to be the largest business segment having 44% of the share with own damage 62% ,third party 38%
  
  
• Marine insurance is dominated by the public sector –Marine premiums 60%, marine cargo 38%
• Source : Deloitte
• Health is picking up being on the second will go a long way in the coming time.

5. Below are few general insurance products

5.1 Health insurance

Health Insurance (popularly known as Mediclaim) offers protection in case of unexpected medical emergencies. In case of a sudden illness or accident, the health insurance policy takes care of the hospitalization, medical and other costs incurred. Health insurance like other forms of insurance is a form of collectivism by means of which people collectively pool their risk, in this case the risk of incurring medical expenses. It may be purchased on a group basis (e.g., by a firm to cover its employees) or purchased by an individual. In each case, the covered groups or individuals pay premiums or taxes to help protect themselves from unexpected healthcare expenses. Similar benefits paying for medical expenses may also be provided through social welfare programs funded by the government.

By estimating the overall risk of healthcare expenses, a routine finance structure (such as a monthly premium or annual tax) can be developed, ensuring that money is available to pay for the healthcare benefits specified in the insurance agreement.

Health Insurance are based on cashless basis wherein the settlement of the expenses is directly done between the hospital and the Insurance company or on reimbursement basis wherein the person insured pays the dues and then the insurance company reimburses the sane to the insured.

5.2 Motor Insurance

Indian Automobile industry has witnessed the launch of various cars by domestic as well as international manufacturers. The expansion in automobile sector has indirectly led to the growth in Car insurance segment of auto insurance industry. As per Indian law insuring your car is compulsory. There are number of auto insurance companies in India which offer various car insurance plans. Many insurance firms even have tie-ups with car producers to make their coverage simple and trouble-free.

Features of Car Insurance in India

• The insurance seeker can go for a personal accident cover for himself as well as for the other unspecified commuters in the insured car. It could either be a family member, friend, etc.

• You can insure electrical and non-electrical items discretely under the cover

• A concession in premium is allowed if the indemnified person is an associate of a certified Automobile Association.

• It remains applicable for 1 year and one must restore it to avoid the policy from getting annulled.

• The insurance premium is allocated by the company considering the total cost of vehicle, seating capacity and energy supplied by the vehicle engine.

Inclusions under Car Insurance in India

The car insurance schemes insures against any loss and harm caused to the insured car and its accessories due to:

• Natural mishaps such as lightning, rockslide, fire, outpouring, hailstorm, avalanche, tremor, detonation, etc.

• Other mishaps such as robbery, uprising, strike, malevolent activities, accident caused by external factors, rebellious activities, damage caused in delivery by rail, lift, airways or road.

• Accidents caused while driving .

To safeguard the policyholder against any legal responsibility emerging due to fortuitous damages, car insurance offers third party legal responsibility in case of permanent injury, death or damage caused to the vehicle.

5.3 Property Insurance

Property insurance is a form of insurance which protects a building and its contents. In an open peril property insurance policy, any form of damage which is not specifically excluded in the policy is covered. Named peril policies spell out a list of potential causes of damage which are covered. Property insurance can be specialized, as in the case of earthquake, flood, fir e, boiler, and theft insurance products. The property insurance policy will usually contain very clear language about exclusions, and exclusions can vary depending on where someone lives and what type of policy it is.

Property owners commonly purchase property insurance which will allow them to replace a structure in the event that they experience a fire, earthquake, flood, or similar catastrophe. This type of property insurance may specifically exclude the contents of the building, or it may exclude certain types of contents. For example, fixtures may be covered, but movable property may not be. Separate policies are available for residential, commercial, and industrial properties.

Tenants can also buy property insurance. Commercial and industrial tenants commonly purchase insurance so that in the event that their inventories are damaged, they can replace them. Because a business can have large amounts of capital tied up in inventory and equipment, such losses could be catastrophic without insurance to cover them. Residential renters can also benefit from property insurance, although many are uninsured. Renters are sometimes astounded to learn how much it will cost to replace their possessions after a flood or fire without insurance to cover the loss.

Before buying property insurance, tenants should ask their landlords bout the policies already out on the property, and what is covered under those policies. There's no point in overinsuring a building and its contents, and a landlord may have advice about insurance agencies or companies for the tenant. Liability insurance for property is also available. Property casualty insurance as it is known, protects people from legal damages resulting from injuries or damage caused on or by their property. For example, an owner of a retail shop could maintain a property casualty insurance policy so that if someone slipped and fell in the shop, the insurance would pay the medical costs and any legal damages handed down as a result of a lawsuit.

5.4 Marine Insurance

Marine insurance is a type of insurance that covers boats and ships, as well as their cargo and in some instances the places where the boat or ship is docked. There are several varieties of insurance that can be taken out by a boat or ship owner. Marine cargo insurance covers whatever goods the boat is carrying. Inland marine insurance can be procured for floating vessels that are not ocean-bound, but travel primarily on lakes, rivers and reservoirs. There are also more general policies that cover the boat itself and its passengers, liability for damages to other moving vehicles and liability during an encounter with a non-moving object. These all fall under the heading of a marine insurance policy.

A private ship owner who uses his large boat for pleasure cruising in a marina may wish to take out inland marine insurance. A merchant ship sailing in politically unsure waters may find it necessary to take out cargo insurance as well as a specific war policy that protects the boat and goods in the event of unfriendly actions. Marine insurance is often available through general insurance companies, and many car insurance dealers offer discounts to those who pay for more than one policy through their company. Policies can be broken down to cover only the boat, only the cargo, or both; most do not include coverage of objects on the boat that are not required for the ship's operation, such as computers, cell phones, or other types of valuables.

Prepared by :

RISHMA SHETTY

(Business development)