General insurance

A presentation by, Avish Shah (87), Deepa Suvarna (103), Saraniya Esakie (86), Shyam Subramaniam (97) and Vaishnavi Esakie (86).

GENERAL / NON LIFE INSURANCE

DEFINITION OF INSURANCE

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 defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of a guaranteed small loss to prevent a large, possibly devastating loss.

PRINCIPLES OF INSURANCE

UTMOST GOOD FAITH, INSURABLE INTEREST, PRINCIPLE OF INDEMNITY, PRINCIPLE OF CONTRIBUTION, PRINCIPLE OF SUBROGATION, PRINCIPLE OF LOSS MINIMIZATION, PRINCIPLE OF ‘CAUSA PROXIMA’

UTMOST GOOD FAITH

Both the parties i.e. the insured and the insurer should a good faith towards each other.

The insurer must provide the insured complete ,correct and clear information of subject matter.

The insurer must provide the insured complete ,correct and clear information regarding terms and conditions of the contract.

This principle is applicable to all contracts of insurance i.e. life, fire and marine insurance.

INSURABLE INTEREST

The insured must have insurable interest in the subject matter of insurance.

The owner of the party is said to have insurable interest as long as he is the owner of the it.

It is applicable to all contracts of insurance.

PRINCIPLE OF INDEMNITY

Indemnity means a guarantee or assurance to put the insured in the same position in which he was immediately prior to the happening of the uncertain event.

The insurer undertakes to make good the loss. It is applicable to fire ,marine and other general insurance.

Under this principle the insurer agrees to compensate the insured for the actual loss suffered.

PRINCIPLE OF CONTRIBUTION

The principle is a corollary of the principle of indemnity.

It is applicable to all contracts of indemnity.

Under this principle the insured can claim the compensation only to the extent of actual loss either from any one insurer or all the insurers.

PRINCIPLE OF SUBROGATION

As per this principle after the insured is compensated for the loss due to damage to property insured , then the right of ownership of such property passes on to the insurer.

This principle is corollary of the principle of indemnity and is applicable to all contracts of indemnity

PRINCIPLE OF LOSS OF MINIMIZATION

Under this principle it is the duty of the insured to take all possible steps to minimize the loss to the insured property on the happening of uncertain event.

PRINCIPLE OF ‘CAUSA PROXIMA’

The loss of insured property can be caused by more than one cause in succession to another.

The property may be insured against some causes and not against all causes.

In such an instance, the proximate cause or nearest cause of loss is to be found out.

If the proximate cause is the one which is insured against, the insurance company is bound to pay the compensation and vice versa.

GENERAL INSURANCE

DEFINITION, TYPES, ETC

DEFINITION OF GENERAL INSURANCE

General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event.

General insurance typically comprises any insurance that is not determined to be life insurance.

It is called property and casualty insurance in the U.S. and Non-Life Insurance in Continental Europe.

TYPES OF GENERAL INSURANCE

The major types of General Insurance are:

• Fire

• Motor

• Health

• Marine

FIRE INSURANCE

WHAT IS FIRE INSURACE? ITS SCOPE AND PERILS COVERED

WHAT IS FIRE INSURANCE?

A fire insurance is a contract under which the insurer in return for a consideration (premium) agrees to indemnify the insured for the financial loss which the latter may suffer due to destruction of or damage to property or goods, caused by fire, during a specified period.

SCOPE

All moveable/ immoveable properties of the proposer on land (excluding those in transit) broadly categorised as follows :

1. Building (including plinth and foundations, if required):

• Whether completed or in course of construction (excluding the value of land).

• Interiors, Partitions and Electricals.

2. Plant & Machinery, Equipments & Accessories (including foundations, if required)

• Bought Second hand.• Bought New• Obsolete Machinery

SCOPE

Stocks:

• Raw Material• Finished Goods• In process• In trade belonging to Wholesaler, Manufacturer and Retailer.

Other Contents such as

• Furniture, Fixtures and Fittings• Cables and Piping's• Spares, Tools and Stores• Household goods, etc.

PERILS COVEREDFire Perils

• Fire• Explosion / implosion• Aircraft damage• AOG perils (Lightening, SCTTTHF, Flood)• Subsidence & landslide including rock slide

Social Perils

• Riot, strike, malicious damage.• Terrorism (the optional cover).

Other perils

• Impact damage.• Bursting or overflowing of water tanks & pipes.• Bush fire.

MARINE INSURANCE

WHAT IS MARINE INSURANCE? ITS SCOPE, WHO CAN TAKE THE POLICY? HOW TO SELECT SUM INSURED? AND HOW TO CLAIM?

WHAT IS MARINE INSURANCE?

This policy covers goods, freight and other interests against loss or damage to goods whilst being transported by rail, road, sea and or air.

SCOPE

Goods in Transit:

• Inland Transit• Import • Export

WHO CAN TAKE THE POLICY?

The contract of sale would determine who buys the policy. The most common contracts are :

• FOB (Free on Board)• C & F (Cost & Freight)• CIF (Cost, Insurance & Freight)

In FOB AND C&F contracts, the buyer is responsible for insurance.Whereas in CIF contracts the seller is responsible for insurance from his own premises to that of the purchaser.

NEW INDIA ASSURANCE CO. LTD

COMPANY PROFILE, VISION, MISSION, STRENGTHS, PRESENCE, ETC

HISTORY

Incorporated on July 23rd, 1919 Founded by the House of Tata Founder member - Sir Dorabji Tata.

Nationalized in 1973 with merger of Indian companies.

PRESENT POSITION

Gross Premium (in India) of Rs. 8542.86 crores in the year 2011-2012, as against Rs. 7097.14 crores in the year 2010-2011.

Assets Rs. 42162.74 crores as on 31st March 2012.

MARKET SHARE

PRESENCE

INDIA

• 28 Regional Offices• 5 Large Corporate Offices• 400 Divisional Offices• 588 Branches• 26 Direct Agent Branches• 149 Micro Offices

INTERNATIONAL

• Overseas operations commenced in 1920• Operations in 20 countries• Overseas Premium of Rs. 1531.37 crores in the year 2011-12

STRATEGY

VISION: To be the most respected, trusted and preferred Non-life Insurer in the Global markets we operate.

MISSION: To develop General Insurance Business in the best interest of the community. To provide Financial Security to Individuals, Trade, Commerce & all other segments of the Society by offering Insurance products & Services of High Quality at affordable Cost.

PIONEERS

First company to set up an Aviation Insurance Department in 1946.

First company to handle the Hull Insurance requirements of the Indian Shipping Fleet.

First company to establish its own Training School.

First company to introduce the concept of 'Model Office Training'.

First company to create department in Engineering insurance.

Pioneer in Satellite insurance.

AWARDS

Best Insurance Provider rated by IRDA.

Rated best non life insurance company by Nielsen for 5 years (2005, 2006, 2007, 2010, 2011)