DSPM’S K. V.PENDHARKAR COLLEGE OF ARTS, SCIENCE & COMMERCE DOMBIVLI (EAST) PROJECT REPORT ON ‘ NEW INDIA ASSURANCE CO ’’ PROJECT REPORT SUBMITTED IN PARTIAL FULLFILLMENT OF REQUIREMENT FOR THE DEGREE OF B.COM (BANKING & INSURANCE) UNIVERSITY OF MUMBAI SUBMITTED BY KIRTI KISHOR AMBERKAR. ROLL NO: - 108251 T.Y.B.COM (B&I) SEM-VI UNDER THE GUIDENCE OF Omkar Datar ACADEDMIC YEAR 2010-2011
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DSPM’S
K. V.PENDHARKAR COLLEGE OF ARTS, SCIENCE &
COMMERCE DOMBIVLI (EAST)
PROJECT REPORT ON
‘ NEW INDIA ASSURANCE CO ’’
PROJECT REPORT SUBMITTED IN PARTIAL FULLFILLMENT
OF REQUIREMENT FOR THE DEGREE OF B.COM (BANKING &
INSURANCE)
UNIVERSITY OF MUMBAI
SUBMITTED BY
KIRTI KISHOR AMBERKAR.
ROLL NO: - 108251
T.Y.B.COM (B&I) SEM-VI
UNDER THE GUIDENCE OF
Omkar Datar
ACADEDMIC YEAR
2010-2011
INDEX
Chapter no
Name Page no
1. Introduction of assurance
2. New India Assurance co
3. Products
4. Various Products & plans
5. Analysis & Review
6. Questions & conclusion
ASSURANCE
Introduction-
Assurance industry has always been a growth-oriented industry
globally. On the Indian scene too, the assurance industry has always
recorded noticeable growth vis-à-vis other Indian industries.
The new India assurance Co. Ltd. was the first general assurance
company to be established in India in 1850, which was a wholly British-
owned company. The new India assurance company to be set up by an
Indian was Indian Mercantile assurance Co. Ltd., which was established in
1907. There emerged many a assurance player on the Indian scene
thereafter. The general assurance business was nationalized after the
promulgation of General Insurance Business (Nationalization) Act, 1972.
The post-nationalization general assurance business was undertaken by the
assurance Corporation of India (GIC) and its 3 subsidiaries:
1. New India Assurance Company Limited
2. National Insurance Company Limited
3. United India Insurance Company Limited
Towards the end of 2000, the relation ceased to exist and the four
companies are, at present, operating as independent companies.
The Life assurance Corporation (AIC) was established on 01.09.1956 and
had been the sole corporation to write the life assurance business in India.
The Indian assurance industry saw a new sun when the assurance
Development Authority invited the applications for registration as assurors
in August, 2000. With the liberalization and opening up of the sector to
private players, the industry has presented promising prospects for the
coming future. The transition has also resulted into introduction of ample
opportunities for the professionals including Chartered Accountants.
The Indian assurance industry is featured by the attributes:
Low market penetration;
Ever-growing middle class component in population.
Growth of consumer
Movement with an increasing demand for better assurance products;
Inadequate application of information technology for business.
Adequate
Fillip from the Government in the form of tax incentives to the assured,
etc.
The industry formations need to keep vigil on these characteristics of
the Indian market and formulate their strategies to entail maximum
contribution to the output of the sector.
The Indian life and non-life assurance business accounted for merely
0.42 percent of the world's life and non-life business in 1997. The figures of
the basic parameters of the industry's performance viz. assurance Density
and assurance Penetration also are evident of the hitherto existing low-yield
Indian market conditions.
The term "assurance Penetration" broadly measures the contribution of
the assurance industry in relation to a nation's entire economic productivity.
The figure of premium vis-à-vis the GDP of 1999 stood at 0.54 percent for
non-life assurance business and 1.39 percent for the life assurance business.
The term "assurance Density" reflects the assurance purchasing power.
The premium per capita in India amounted to US $ 2.40 for assurance and
US $ 6.10 for life assurance in 1999 but with the deregulation of the sector, a
sea change in the scene is most likely.
The assurance sector in India has come a full circle from being an open
competitive market to Nationalization and back to a liberalized market
again. Tracing the developments in the Indian assurance sector reveals the
360- degree turn witnessed over a period of almost two centuries.
STRUCTURE OF THE ASSURANCE INDUSTRY
The structure of the assurance industry comprises of the Operating
department, Administrative department and the finance department. The
Operating Department generally performs the basic functions pertaining to
the designing of products, marketing thereof, servicing the insured, the
insured, management of portfolio, etc.
The Administrative Department looks after the day-to-day affairs of
the company. The Finance Department backs the operations and
administration of the company by accounting for the transactions,
streamlining the flow of funds, materializing the management decisions, etc.
The Administration Department as well as the Finance Department,
usually, functions through in-house setup. The Finance Department
functions in the areas of accounting, financial and management reporting,
budgeting and controlling, etc. and thus renders enormous scope for finance
professionals. The new entrants in the assurance sector are likely to call for
the services of the Chartered Accountants for their financial setup
requirements. The Chartered Accountants have engaged themselves in the
audit of assurance Companies since long. With the transition in the
insurance sector, the horizons for their contribution have broadened.
Contributions have broadened.
There has, emerged a king-size pool of opportunities that the
Chartered Accountants can explore and apply their professional wisdom and
experience to.
BASIC FUNCTIONS OF THE ASSURANCE INDUSTRY
1. Risk Perception and Evaluation:
The fundamental function of an insurer is to provide a cover against
the detriment caused to the insured due to the happening of certain specified
and agreed events. Thus, prior to providing such umbrella through a product,
the insurer has to assess the risk involved in the transaction. The insurer has
to identify the element of risk prevalent in the concerned industry or a
particular unit. The perception of risk requires the study of variables through
various methods including the application of scientific and statistical
techniques and correlation thereof with the industry or unit under study in
light of their basic environmental and infra-structural characteristics.
2. Designing the Insurance Product:
On the basis of the risks perceived, the insurer develops a product to cover
the stipulated risks. While designing an insurance product, an insurer
decides its cost to be charged from the insured in the form of premium,
reduction thereof in certain cases like not lodging any claim during the
previous covered period(s), suggesting the implementation of risk-mitigating
measures, etc.
3. Marketing of the Product:
The core function of the marketing force of an insurance company is
to generate awareness about the insurance products among the target market.
But in the Indian scenario, where the insurance penetration is too low as
compared to the other nations, the marketing force needs to perform the pro-
active role in developing an insurance culture. It is through the efficiency of
the sales force of an insurance company that the desirability and the success
of a product are determined.
Adequate knowledge of the insurance industry, products and the
modalities attached therewith. Further, the marketing personnel should be
adequately backed by the back-office setup.
4. Selling of the Products:
The term selling in the context of Assurance industry connotes the
issuance of policies to the applicant proposer. The Assurance basically
embodies the covenant between the insurer and the insured wherein the
former agrees to indemnify the latter for the loss caused to him on the
happening of the certain agreed events up to a specified limit. The life
insurance policy generally contains the agreement whereby the insurer
agrees to pay to the insured or the beneficiary of the policy an agreed
amount on the expiry of the term of the policy or in the event of the death of
the insured respectively. The additional benefits in the shape of Riders viz.
Accidental Death Benefit, Double Sum Assured, Critical Illness benefits;
Waiver of Premiums, etc. can also be appended with the policy on the
payment of an additional premium.
5. Management of Portfolio:
The management of the portfolio includes the assessment of
requirement of funds, identification of various sources of finance, the
evaluation of the sources in the light of their cost, availability, timing, etc.,
reconciling the features of various sources with the needs of the company
and the selection of appropriate conjunction of sources. The insurer
possesses huge amount of funds, which need proper management. The
management of the portfolio of an insurance company requires the
identification of investment avenues, evaluation thereof and the selection of
the most appropriate mix of alternatives where the funds of the company can
be invested. The selection requires the knowledge of finance related
functions and techniques apart from the in-depth know of the patterns of
requirement of funds in the company as well as in the industry as a whole.
ABOUT US
New India is a leading global insurance group, with offices and
branches throughout India and various countries abroad. The company
services the Indian subcontinent with a network of 1068 offices, comprising
26 Regional offices, 393 Divisional offices and 648 branches. With
approximately 21000 employees, New India has the largest number of
specialist and technically qualified personnel at all levels of management,
who are empowered to underwrite and settle claims of high magnitude.
New India has been rated "A-" (Excellent) by A.M.Best Co., making it the
only Indian insurance company to have been rated by an international rating
agency. Rating based on following factors:
Superior Capital Position
Strong Operating Performance
Only Company to develop significant International operations, long
record of successful trading outside Indi
PROFILE
History
Present Position
International Presence
Our Strengths
Pioneers
Citizens' Charter
History
Incorporated on July 23rd, 1919 Founded by the House of Tata Founder
member - Sir Dorab Tata. Nationalised in 1973 with merger of Indian
companies.
Present Position
Gross Premium (in India) of Rs. 5017.20 crores in the year 2006-2007, as
against Rs. 4791.49crores in the year 2005-2006. Assets Rs. 27444.57crores
as on 31st March 2007. Network of Offices-26 Regional Offices, 393
Divisional Offices, 614 Branches and 34 Direct Agent Branches. Rank No. 1
in the Indian market. Largest Non-Life insurer in Afro-Asia excluding
Japan. First Indian non-life company to cross Rs. 5000 crores Gross
Premium. Global Re-insurance facilities. Over-seas presence in countries
like Japan, U.K, Middle East, Fiji and Australia.
International Presence
Overseas operations commenced in 1920. Operations in 24 countries in the
year 2004-05. Network of 19 Branches, 12 Agencies, 2 Associate companies
and 2 Subsidiary companies in the year 2004-05. Overseas Premium of Rs.
892.35 crores in the year 2004-05, which accounts for more than 80% of
total overseas premium in India. Pre
Our Strengths
Largest number of Offices - In India and Abroad Trained and technically
qualified staff 1068 fully computerised offices across India. "A-" (Excellent)
rating by A.M.Best & Co (Europe) First domestic company to be rated by an
International Rating Agency Rating based upon following factors: Superior
capital position Strong operating performance Strong market position Only
company to develop significant International operations, long record of
successful trading outside India.
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.
Citizens’ Charter
Our Mission
To develop general insurance business in the best interest of the
community.
To provide financial security to individuals, trade, commerce and all
other segments of the society by offering insurance products and
services of high quality at affordable cost
Our Values
Highest priority to customer needs.
High standards of public conduct.
Transparency in operations.
Our Commitment to the citizens
We will respond to all commercially viable general insurance
requirements of the citizens, including products for weaker sections of
the society at affordable price within three months from the date on
which such a requirement is received.
We will ensure issuance of 100% of documents within a period of
seven days.
We will ensure that prospectus of the various insurance products are
provided to the customers and the extent of coverage is explained for
his choosing the appropriate product. A written proposal will be
obtained from the insured wherever necessary and accordingly the
policy will be prepared.
We will settle all claims within a time schedule envisaged hereunder:
A. Personal life insurance claims within 30 days on completion of all
requirements.
B. Property claims within 30 days on completion of all requirements.
C. Liability claims within 30 days on completion of process of law.
We will promote customer education in general insurance
products/services by holding workshops in various centers.
We will open a customer service cell in all ROs/DOs in addition to the
existing 'May I Help You' counters.
We will set up proper grievance redressal mechanism in every
operating office and will educate the clients about the same including
the system of grievance redressal thorough ombudsman.
On request to the policy issuing office, we will make available to a
customer, the status of his claim and/or claim settlement details within
seven working days.
We will adhere to the IRDA guidelines in protecting the
policyholders' interest.
All the above services and commitments will be honoured without the
citizen having to pay any gratification/bribe.
(This Citizens' Charter was adopted at the board meeting held on
31.12.2003)
FINANCIAL RATING
For the sixth consecutive year, the Company has been rated as "A-"
(Excellent) by M/s. A.M. Best Europe Ltd. The rating reflects Company's
excellent risk adjusted capitalisation, prospective improvement in
underwriting performance and its leading business profile in the direct
insurance market in India. A partially off-setting factor is the Company's
reliance on investment income which counter balances underwriting losses.
But the outlook is stable. A.M. Best believes the Company's risk adjusted
capitalisation is excellent and anticipates that it will remain sufficient to
absorb the likely growth in the net premium. Further it also expects that
there will be a reduction in the combined ratio in the years to come. The
Company is likely to maintain its leading business position as the largest
direct insurer in India, despite increased competition from private players.