Evol. of Insurance

8/3/2019 Evol. of Insurance

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design of study

Scope:

Insurance itself means that getting secured against the

uncertainties in life. In todays world we see a wide scope in the

insurance sector. Earlier their were only few in this business like

L.I.C, G.I.C etc., But now after private sectors entry in this field

there has been tremendous improvement and lot of opportunities

for people have increased. They are now benefited with various

other types of Insurance like Health, Accident, Cattle, and Crop

etc.

Objective:

The main objective of all these insurance is to provide the people

against the best possible assistance against the loss occurred to

them. And the basic objective of mine behind this project is to put

glance over various kinds of insurance available to the people.

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INTRODUCTION

TO

INSURANCE

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Nature Of Insurance.

Insurance is defined as a co-operative device to spread the loss

caused by a particular risk over a number of persons who are

exposed to it and who agree to ensure themselves against the risk.

Risk is uncertainty of a financial loss. It should not be confused

with the chance of loss which is the probable number of losses out

of the given number of exposures. It should not be confused with

the perils that is defined as the cause of loss or with the hazard

which is a condition that may increase the chance of loss. They are

agreed to share the loss because the chances of loss, i.e., the

time, amount, to a person is not known.

Anybody of them may suffer loss to a given risk, so, the rest of

persons who are agreed will share the loss. In fact, the loss is

shared by them by payment of premium which is calculated on the

probability of loss. In olden time, the contribution by the personswas made at the time of loss. The insurance is also defined as a

social device to accumulate funds to meet the uncertain losses

arising through a certain risk against the person insured against the

risk.

Definition of InsuranceThe definition of insurance can be made from two points:

i) Functional Definition and,

ii) Contractual Definition.

i) Functional Definition

Insurance is a co-operative device to spread the loss caused by a

particular risk over a number of persons, who are exposed to it and

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who agree to insure themselves against the risk. Thus, the

insurance is (a) a co-operative device to spread the risk: (b) the

system to spread the risk over a number of persons who are

insured against the risk; (c) the principles to share the loss of eachmember of the society on the basis of probability of loss to their

risk; and (d) the method to provide security against the losses to

the insured.

Similarly, another definition can be given. Insurance is a co-

operative device of disturbing losses, falling on an individual or his

family over a large number of persons, each bearing a nominal

expenditure and feeling secure against the loss.

ii] Contractual Definition.

Insurance has been defined to be that in which a sum of money as

a premium is paid in consideration of the insurers incurring the risk

of paying a large sum upon a given contingency. The insurance,

thus, is a contract whereby

(a) Certain sum, called premium, is charged in consideration,

(b) Against the said consideration, a large sum is guaranteed to be

paid by the insurer, who received the premium,

(c) The payment will be made in a certain definite sum, i.e., the

loss or the policy amount whichever may be, and

(d) the payment is made only upon a contingency. More specific

definition can be given as follows-

Insurance may be defined as a consisting one party (the insurer)

agrees to pay to the other party (the insured) or his beneficiary, a

certain sum upon a given contingency (the risk) against which

insurance is sought.

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Evolution

of

Insurance

Evolution of Insurance.

The origin of insurance is lost in antiquity. The earliest traces of

insurance in the ancient world are found in the form of marine trade

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loans or carriers contracts which included an element of insurance.

Evidence is on record that arrangements embodying the idea of

insurance were made in Babylonia and India at quite at early

period. The codes of Hummurabi and of Manu had recognized theadvisability of provision for sharing the future losses. However,

there is no evidence that insurance in its present form was

practiced prior to the twelfth century.

There are basically four types of Insurance:

1. Marine Insurance

2. Fire Insurance

3. Life Insurance

4. Miscellaneous Insurance

1. Marine Insurance

It is the oldest form of insurance. Under the Bottomry bond, the

system of credit and the law of interest were developed and were

based on a clear appreciation of the hazard involved and the

means of safeguarding against it. The contract of insurance was

made a part of the contract of carriage, and Manu shoes the

Indians had even anticipated the doctrine of average and

contribution.

Freight was fixed according to season and was expected

to be reasonable in the case of marine transport which was then

very much at the mercy of winds and elements. Travelers by sea

and land were very much exposed to the risk of loosing their

vessels and merchandise because the piracy on the open ses and

highway robbery of caravans were very common. Besides, there

were several risks. The risks to the owners of such ships were

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enormous and, therefore, to safeguard them the marine traders

devised a method of spreading over them the financial loss which

could not be conveniently borne by unfortunate individual victims.

The marine policies of the present forms were sold in the

beginning of fourteenth century by the Brugians. On the demand of

inhabitants of burges, the Count of Flanders permitted in the year

1310, the establishment in this town of a character of Assurance,

by means of which merchants could insure their goods, exposed to

the risks of sea.

2. Fire Insurance

After marine insurance, fire insurance developed in present form. It

had been observed in Anglo-Section Guild form for the first time

where the victims of fire hazards were given personal assistance

by providing necessaries of life. It had been originated in Germany

in the beginning of sixteenth century. The fire insurance got

momentum in England after the great fire in 1666 when the fire

losses were tremendous. About 85 per cent of the houses were

burnt to ashes and property worth of sterling ten crores were

completely burnt off. Fire Insurance Office was established in 1681

in England. Sun Fire Office was successful fire insurance

institution.

In India, the general insurer started working since 1850

with establishment of the Triton Insurance, Calcutta. The general

insurance in India could not progress much. The slow growth of

joint stock enterprise and mechanized production was another

reason for low level of mechanized business.

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3. life Insurance

Life insurance made its first appearance in England in 16th

century,first recorded evidence in England being the policy on life of

William Gybbons on June 18, 1653. Even before this date annuities

had become quite common in England, and marine insurance had,

in fact, made its appearance three thousand years ago. The life

insurance developed at exchange Alley.

The first registered life office in England was the Hand-in-

Hand Society established in 1696. Life insurance did not prosper in

the United States during the 18th century, because of serious

fluctuations in the death-rate, but soon after 1800 some active

interest began to be shown in this enterprise because of the

application of level premium plan which had by then been in

operation in U.k. for more than a generation. In India, some

European started the first life insurance company in 1818. The year

1870 was a year of landmark in the history of Indian Insurance

separating the early period of pioneering attempts at life insurance

from the subsequent period of steady development at the

establishment of Indian life office, viz., Bombay Mutual Life

Assurance Society in 1871. The next important life office wasOriental Government Security life Assurance Co., Ltd., which

started its operation since 1874. Since then several offices

developed in India.

4. Miscellaneous Insurance

The miscellaneous insurance took the present shape at the later

part of nineteenth century with the industrial revolution in England.

Accident insurance, fidelity insurance, liability insurance and theft

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insurance were the important form of insurance at that time.

Lloydss Association was the main functioning institution. Now,

insurance, etc., are taking place. The scope of general insurance is

increasing with the advancement of the society.

Kinds of Insurance According to Risk Point of

View.

INSURANCE

PERSONAL PROPERTY LIABILITY FIDELITY

LIFE

PERSONAL

ACCIDENT

HEALTH

MARINE

FIRE

AUTOMOBILE

CATTLE

CROP

MACHINERY

THEFT

3RD PARTY

EMPLOYEES

MOTOR

REINSURANCE

FIDUCIARY

CREDIT

PRIVELEGE

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personal

insurance

1] Personal Insurance

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Introduction:

The personal insurance means insurance related to human life which

may suffer loss due to death, accident and disease.

Personal Insurance is then divided into:

a) Life Insurance

b) Personal Accident Insurance

c) Health Insurance

Let us study each of them.

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Life

insurance

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i) Life Insurance

Introduction:

Life Insurance products have to suit the requirements of

customers. The three major concern of any person could be :

a) Dying too early or b) Living too long c)Living with disability.

Besides, there are other concerns about taking care of children and

their future and about creating wealth that most individuals cherish.

Life insurance products are generally designed to address such

needs of an individual.

With these situations in mind, life insurance products provide for a)

Risk Cover b) Investment c) Health Cover.

There are four types of insurance policies-

1. Term Insurance

2. Endowment life Insurance

3. Whole Life Insurance

4. Annuities

1. Term Insurance

Term Insurance pays a death benefit to the legal heirs if the person

insured dies during the term of the policy. It may be described as

temporary insurance. Term insurance plan could be of following

different types-

a) Level Term Insurance- Here there is a uniform premium and

benefit throughout the term of the policy. In the event of death

anytime during the term, the same sum assured is payable. Where

the term is for over a year, the renewal premium is same each

year. It is simple plan.

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3. Endowment Insurance

Pure endowment is a plan where the benefit is payable to the

insured only on survival of the specified term. Combining the future

of term assurance and pure endowment are endowment policiesthat pay either on the death of assured, whenever it occurs, or after

a fixed period. Here the claim may arise either by death or by

maturity.

4. Annuities

Annuities are a form of pension which an insurance company

makes a series of periodic payments to a person (annuitant) or his

or her dependents over a number of years (term), in return for the

money paid to the insurance company in lump sum or installments.

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PERSONAL

ACCIDENTINSURANCE

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ii) Personal Accident Insurance

Personal accident insurance is the insurance designed to replace a

substantial part of earned income lost disability to a person caused

by accident injury including the medical expenses. It also indemnify

the loss due to death, leading to the accident.

Types of personal accident insurance

Some important types of policies are as below:

1. Janata individual accident policy

2. Third party/passenger/driver accident policy

3. accident policy issued by aviation department

4. Group insurance personal accident policy for school children

5. Rural personal accident policy

6. Personal accident family package policy

7. Medical (Hospital and house) treatment policy

Every type of policy has its own features and premium rate.

Classification of risks

The amended rules in regard to personal accident policy have

been implanted from April 1, 1994. According to these directions,

the personal accident risks are classified as:

1] Risk group I- It includes Accountants, Doctors, Advocates,

Artisans, Consultants, Engineers, Teachers, Bankers,

Administrative officers and other professional field.

2] Risk group II- It includes architects, contractors, vertinary

doctors, vehicle drivers, other form of same trade but not doing

manual work.

3] Risk group III- All such persons, excluding the risk group IV,

engaged in physical labour, such as garage and motor mechanics,

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machine operators, drivers of trucks or other vehicles sportsmen

and athletics, carpenters engaged in this type of risks.

4] Risk group IV- Persons engaged in underground mines, and

armory, persons engaged in electricity generation, circus, hoarse

race, mountaineers, winter sports, and polo players others

belonging to this field.

Insurance cover/benefits in personal accident policy.

1. In case of death Full sum assured

2. Permanent disablement Full sum assured

(damages to both hands/legs, or

both eyes, or one eye and one leg.

3. In the case of damages to one 50 % of the sum

assured

Hand/leg or one eye

4. Other kind of permanent disablement 100 %

in addition to the damages happened to

the injury

5.Temporary or total disablement Paid on weekly basis

1.00 % of the sum

assured per week

6. Temporary or partial disablement Paid on weekly basis

current rate is 3.00

%

of sum assured perweek.

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HEALTH

INSURANCE

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iii) Health Insurance

Health Insurance mainly covers two types of benefits: one is

related to the reimbursement of medical expenses related to

specific diseases and the other is related to the hospitalization.

Globally, the health covers operate in two ways cashless and

cash reimbursable ones.

The health insurance has changed the way medicine is dispensed

and sold in the most parts of the world. In India, its impact has yet

to be felt. However, the introduction of the now famous Mediclaim

policy made a huge difference to an ordinary citizens usage of

insurance for medical cover purpose. There are following types of

policies:

1) Individual Mediclaim Policy

2) Bhavishya Arogya Policy

3) Jan Arogya Bima Policy

4) Cancer Insurance

5) Group Mediclaim Policy

1. Individual Mediclaim Policy

This policy covers the domiciliary hospitalization expenses for

diseases sufferd during the policy period. It also covers

hospitalization for injuries caused during an accident.

The policy covers following expenses:

1. Boarding expenses in a hospital or nursing home-as per the

description provided in the policy.

2. Surgical fees, medical practitioner and consultants fees.3. Nursing expenses.

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4. Anesthesia, blood, oxygen operation theatre charges, surgical

appliances, medicine and drugs chemotherapy, prosthetic limbs

etc.

2. Bhavishya Arogya PolicyThis is deferred Mediclaim policy that can taken at any age

between 25 and 55 years of age. The retirement age can be

selected by the insured at the time of taking policy and can be

between 55 and 60 years of age.

The amount of total benefit can be a maximum of Rs. 50000 during

the lifetime of insured commencing from the date of retirement, andcannot exceed Rs. 20000 per illness or injury.

3. Jan Arogya Bima Policy

It was devised to address the smaller covers and people with

limited means of paying the premium. It does not offer any

cumulative bonuses. It does not offer any medical check up

benefits. The sum assured is limited to Rs. 5000 premium is low

compared to regular policy. So this differs it from usual Mediclaim

policy.

4. Cancer Insurance

There are two Cancer policies offered in India; Group Policy issued

by Indian Cancer Society and other is Group Policy offered by

members of Cancer Patients Aid Association. The cover is limited

upto Rs. 50000 in the case of the ICS policy and can go upto Rs.

200000 in the case of CPAA policy. Both policies require cancer

check up prior taking the policy It includes costs of diagnosis,

surgery, biopsy, radio therapy, hospitalization.

5. Group Mediclaim Policy

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This policy is available to any corporate, association, institution and

group of people provided they form the minimum number of

persons to be covered under the policy. The policyholder in this

type of insurance is the group itself and the premiums are payableby the group. The individual member of the group may enter and

exit the policy upon their becoming or ceasing to be member of the

group.

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PROPERTY

INSURANCE

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II] Property Insurance

The property insurance of an individual and of the society is

insured against the loss of fire and marine perils; the crop is

insured against unexpected decline in production, unexpected

death of the animals engaged in the business, breakdown of

machines and theft of the property and goods. Property Insurance

is further divided into:

a) Marine Insurance

b) Fire Insurance

c) Automobile Insurance

d) Cattle Insurance

e) Crop Insurance

f) Machinery Insurance

g) Theft Insurance

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marine

insurance

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a) Marine Insurance

Marine insurance has been defined as a contract between insurer

and insured whereby the insurer undertakes to indemnify the

insured in a manner and to the interest thereby agreed, against

marine losses incident to marine adventure. Section 2(13) A of

Insurance Act 1938 defines it as follows:

Marine insurance business means the business of effecting

contracts of insurance upon vessels of any description, including

cargoes freights and other interests which may be legally insured

in or in relation to such vessels, cargoes, freights, goods, wares,

merchandise and property of whatever description insured for any

transit by land or water or both, and whether or not including

warehouses risks or similar risks in addition or as incidental to such

transit and includes any other risks customarily included among

the risks insured in marine policies. The standard policy contains

the following information:

(i) Name of insured or his agent.

(ii) Subject matter insured. It may be ship (hull) cargo and freight.

(iii) Risks insured against.

(iv) Name of vessels and officers.

(v) Description of voyage and period of insurance.

(vi) Amount and term of insurance. (vii) Premium

Different types of policies are used in marine

insurance they are:

1. Voyage policy- This policy is issued to cover a particular

voyage from one port to another and from one place to another.The policy mentions the port of departure and the port of

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destination, between which the risks are generally underwritten. It

is used in case of cargo insurance. The liability of the insurer

continues during lading and re-shipping of goods.

2. Time policy- Here the subject matter is insured for a specific

period of time. This policy is taken for one year although it may be

for less than one year. It is commonly used for hull insurance. The

policy may cover while navigating the vessel or under construction.

Risk covered for under construction is for more than 12 months.

3. Voyage and time policy- The elements of voyage and time

policy is combined under this policy.

4.Valued policy- Here the value of loss to be compensated is fixed

and remains constant throughout the risk except where there is

fraud excessive over-valuation The value of the subject matter is

agreed by the insurer and the assured at the time of taking the

insurance.

5. Unvalued policy-When the value of the policy is not determined

at the time of commencement of risk but is left to be valued when

the loss takes place. The value thus left to be decided later on is

called the insurable value or unvalued or valuable policy. Usually

unvalued policies are not common in marine insurance because

evaluation of loss at the time of damage poses a difficult problem.

6. Floating policy- The policy describes the general terms and

leaves the amount of each shipment and other particulars to be

declared later on. It is made in order of dispatch of shipment. The

most popular form of contract is Open Cover. In which both the

insured and the assured agree to accept all the shipment falling

within the scope of the open cover which is merely an original

ship.

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7. Blanket policies- It is taken to cover losses within the particular

time and place. Policy is taken for certain amount and premium is

paid on the whole of it in the beginning of the policy and is re-

adjusted according to the actual amount at roisk.

8. Named policy- Here the name of the ship and the amount of

cargo are mentioned. they are specific policies.

9. Single vessel and fleet policy- A ship or a fleet of ship is

insured here. When one policy is assured, it is single vessel policy

and when a fleet is insured in single policy, it is fleet insurance

policy.

10. Block policy- This policy insures incidental risks, too, along

with the marine perils. eg. Cotton is insured from the time of its

processing to the time it is delivered to destination.

11. Currency policy- It is issued in foreign currency, where the

sum assured is stated in foreign currency. It avoids fluctuations in

foreign currency.

12. P.P.I. Policies- It is to avoid the complication of principle of

insurable interest. It is called Policy Proof of Interest .It is based

on mutual understanding, they are known as honored policies. It is

called as wagering policy as insurable interest is not required, and

cannot be enforceable.

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Fire

insurance

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b) Fire Insurance

Fire Insurance is one of the oldest form of insurance and goes as fr

back as Marine insurance. Its origins are in the the age-old fear of

fire and human failing to control fire. In the early development of

industrial society fire was the main source of energy. No industrial

activity or commerce was possible without fire and the need to

insure the risk of uncontrolled fire became the integral part of

society.

Fire insurance is designed to provide for financial loss to property

due to fire and few other related hazards. Fire insurance isgoverned by Tariff under the Tariff Advisory Committee (TAC).

Examples of property that can be covered under the Fire insurance

policy are:

1. Buildings

2. Contents of Building such as Machinery, equipments, semi-

finished goods, finished goods etc stored in factories and godowns.

3. Electrical installation of Building

4. Goods in the open

5. Dwellings and contents of dwellings

6. Furniture, fixture and fittings

7. Pipelines located inside and outside buildings, dwellings and

compounds.

The standard Fire Policy covers the following hazards

1. Fire- Usually this excludes destruction or damage caused to

property by,

i. Its own fermentation, natural heating

ii. Its undergoing any heating or drying processiii.burning of any property insured by order any Public Authority.

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2. Explosion/Implosion- This would exclude the destruction or

damage caused to boilers, economizers, or other vessels in which

steam is generated, machinery or apparatus subject to centrifugal

force by its own explosion/implosion.

Such explosion as may happen to boilers can be covered by Boiler

Explosion policy under Engineering insurance.

3. Aircraft damage- Destruction or damage caused by Aircraft,

other aerial or spatial devices and articles dropped from them

excluding those caused by pressure waves.

4. Lightning

5. Riot, strike, malicious and terrorism damage- Direct visible

physical loss, destruction or damage by external violent means

caused to property but excluding those caused by:

a) Total or partial cessation of work, stoppage, retardation/slow

down, or interruption or cessation of any process or operation of

omission of any kind.

b) Permanent or temperory dispossession of any building or

plant, or factory or unit or machinery resulting from unlawful

occupation by any person of such building or plant or unit or

machinery or prevention of access to the same.

c) Permanent or temporary disposition resulting from

confiscation, commandeering, requisition or destruction by order of

the government or any lawfully constituted authority.

d) Burglary, housebreaking theft, larceny or any attempt by any

person taking part in such activities.

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6. Impact damage- Impact by any rail/road vehicle or animal by

direct contact not belonging to or owned by

a) The insured or any occupier of premises, or

b) Their employees while acting in the course of employment.7. Storm, cyclone, typhoons, tempest, hurricane, flood and

inundation.

8. Subsidence and Landslide including rock slides, or

destruction, damage caused by subsidence of part of site on

which the property stands or landslide/rockslide excluding:

a) The normal cracking, settlement or breeding or bedding down

of new structures.

b) Coastal or river erosion.

c) Defective design or workmanship or use of defective material.

d) Demolition, construction, or repair of any property.

e) Leakage from automatic sprinkler installation excluding:i) Repair or alterations to the buildings or premises.

ii) Repairs, removals or extensions of sprinkler installations.

iii) Defects in construction known to insured.

9. Bush fire, excluding fire caused by forest fires.

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automobile

insurance

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c) Automobile Insurance

Introduction:

Losses from property damage, medical and legal costs, and lost

income add up to billions of dollars annually for automobile

mishaps. Automobile insurance plays an important role in

protecting consumers from serious financial losses that can result

from such accidents

The basic types of auto insurance coverage include:

Bodily Injury Liability. Pays your legal defense costs and claimsagainst you if your car injures or kills someone. Covers family

members living with you and others driving with your permission.

Property Damage Liability. Pays your legal defense costs and

claims against you if your car damages another's property. Does

not cover your property, including your auto.

Medical Payments or Personal Injury Protection. Pays

medical expenses resulting from an accident for you and others

riding in your car. Also pays for you or your family members injured

while riding in another's car or while walking.

Collision. Pays for repairs of damage to your car caused by a

collision with another vehicle or any other object, regardless of whowas responsible.

Comprehensive Physical Damage. Pays for damages to your

car resulting from theft, fire, hail, vandalism, or a variety of other

causes.

Uninsured or Underinsured Motorist. Pays for costs related to

injuries or property damage to you or your family members and

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guests in your car caused by an uninsured, underinsured, or hit-

and-run driver.

If you are involved in an auto accident, take the following steps: Dont leave the scene.

Call for medical assistance if there are injuries. Provide basic first

aid.

Call a law enforcement officer if needed. Get the officer's name

and police station address. Ask when the accident report will be

filed, its case number and how to get a copy.

Take careful note of the following:

o Date and time of the accident.

o Street and city.

o Weather and road conditions.

o Direction and speed you and other drivers were going.

o Brief description of how the accident occurred.

o Record the license plate, drivers license and insurance

information numbers of each driver involved.

Filing claim

Phone your insurance agent or a local company representative as

soon as possible.

Ask your agent how to proceed and what forms or documents will

be needed to support your claim.

Keep records of your expenses because any you incur as a result

of an automobile accident may be reimbursed under your policy.

Keep copies of your paper work.

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cattle

insurance

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d) Cattle Insurance

Introduction:

Risk is an inherent part of any agricultural business. The cattle

business is no exception. Most experienced events beyond their

control such as drought or mad cow scares.

One of the effective ways to limit risk is a crop producer is to use

crop insurance. Insurance Corporation programs are now an

integral part of many producers risk management plans. Until

2003, however, there had been no federal insurance option for

beef cattle producers. The pilot program of Livestock Risk

Protection (LRP) Insurance was halted in December of 2003 due

to the discovery of bovine spongiform encephalopathy (BSE),

known as mad cow disease, but insurance is again available to

cattle producers in certain states.

How LRP WorksLRP contracts are essentially a single peril price contract.

Currently,

LRP contracts are available for both feeder cattle and fed cattle in

Wyoming. The insurance price level is tied directly to a Chicago

Mercantile Exchange (CME) index.

LRP contracts are available for a certain price level, weight, andnumber of head. For example, a producer has 75 head of steers

expected to weigh 650 pounds in six months at marketing.

Assume that an insurance coverage price of $100 per cwt is

selected. When it comes time to market the steers, assume the

price (as determined by the CME index) is $90 per cwt. This results

in an indemnity payment of $10 per cwt or $4,875 total. It is

important to note that LRP does not necessarily guarantee the

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producer a cash price. The cash price a producer receives on the

open market may be different than that determined by CME index.

Therefore, it is important to try and market cattle for the CME index

price to fully take advantage of

an LRP contract.

LRP Requirements and contracts

A producer must make an application with insurance agent

determine eligibility for an LRP contract. To be eligible, a cattle

producer must own or have a substantial interest in the cattle being

insured. Heifers, Brahma, and dairy crosses are now eligible for

LRP, but their specific coverage levels are determined by the

U.S.Department of

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crop

insurance

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e) Crop Insurance

India is basically an agricultural country and different varieties of

crops have been cultivated here. Cultivation of agricultural and

commercial crops have been faced with many problems such as:

1. Adverse climatic conditions causing draughts, floods, untimely

rains, storms, fog, frequent changes in temperatures, etc.

2. Pests and insects causing damages to crops.

3. Wild animals, etc.

The important agricultural cultivated in the country include:

1. Food crops- such as wheat, jowar, millet, paddy etc.

2. Plantation crops- like coffee, tea, rubber etc.

3. Fruits orchids- such as apples, oranges, etc.

4. Commercial crops- Such as cotton, jute, tobacco, groundnuts

etc.

Objects of crop insurance

New methods cultivation and high yielding crops have been

developed in country in the areas of food crops and commercial

crops. In spite of these developments, the Indian farmers still have

to bear heavy losses from unfavourable climatic conditions.

Most of the agricultural based countries do not have suitablemeans or resources to overcome such losses arising out of failure

of crops.

The objectives of crop insurance is to indemnify the farmers from

losses of natural calamities, disease spread in crops and plants,

damage to crops, riots and strikes etc.

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Advantages of crop insurance

1. Provide security for agricultural production.

2. Provide rights to the farmers against damage to crops.

3. Certainty of payment for farmers who depends upon the

economic conditions of farmers.

4. Stability to agricultural economy

5. Increase in income

6. Assistance to industries

7. Acts as the coordinating agency of government.

8. Refund of agricultural credit.

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Machinery

insurance

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f) Machinery Insurance

Introduction:

Machinery insurance coverage is a special type of property

insurance designed to reduce-through periodic inspections-the

chance of malfunction among boilers and other equipment,

including pressurized, electrical, and electronic machinery.

Machinery insurance reduces risk, direct loss and indirect loss

arising from accidents to objects. Objects include boilers,

generators, engines, pumps, compressors, and turbines.

The first step in the risk identification process for machinery is to

determine what objects present could cause loss-not an easy task.

The most apparent is any object containing steam. In addition to

steam boilers, any object under pressure or vacuum should be

considered. Refrigeration and air conditioning compressors are

also insured under a machinery policy.

BASIC COVERAGE:

This coverage can be written under the small business form to

cover boilers and vessels equipment, including or excluding air

conditioners/compressor units.

Machinery insurance covers direct damage to covered property

when caused by a covered cause of loss. Covered property is any

property that is owned by the named insured or is in the named

insured's care, custody, or control and for which the named insured

is legally liable.

A covered cause of loss is a sudden and accidental breakdown of

the insured's boiler and machinery equipment or any part of the

equipment described in the policy.

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Machinery insurance is necessary because commercial property

policies exclude explosion of steam boilers and breakdown of

machinery. The standard machinery policy contains three

extensions of coverage.

Theft

Insurance

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g) Theft Insurance

Introduction:

The theft cover is usually restricted to items taken after a forcible

entry of your home. So theft by a maid or guests may not be

covered. Nor is theft during or after a fire more properly called

looting usually covered under the theft clauses of a home

insurance. Property insurance can also be extended to cover

neighboring liabilities also called neighbors recourse. Such an

addition covers damages done to neighboring properties as a

result of fire coming out of your property or destruction or any

damage to it. It is very similar to third party liability in motor

insurance

Applying

The property application form is one of the longest in terms of

detail. In addition to the name of the applicant (whether tenant or

owner), the companies require the full address of the property, the

plot number, the type of property (residential or office, retail or

factory), the story to be insured, and the period of insurance. Other

sections in the application would concern the sum to be insured,

broken down into building, contents, neighbors recourse, and

other risks.

Particulars of the building, the furniture, and the machinery or

equipment are also required, as well as the fire protection

measures available. A detailed description of the neighborhood is

also required, and there is a complete section to be filled in with

regard to theft insurance, if that is taken as part of the policy.

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Your reimbursement may also be limited, depending on the

constraints of your insurance. Homeowner's insurance is designed

to assure you that you will not panic when things like jewelry,

cameras, collectibles, heirloom silver, computers, clothing, storedvehicles like boats, or legal documents are lost or irreparably

harmed. Again, be sure that your policys monetary limits match

what all of your valuables are actually worth. There are always

ways of increasing the coverage amount when you plan ahead.

Homeowner's insurance protects your home, belongings, family,

and valuables in the event of unexpected misfortunes like

vandalism, theft, accidents, or natural disasters. It is designed to

replace or rebuild your property when it gets damaged, from

reproofing a garage after a hurricane to purchasing a laptop stolen

from your home office. Homeowner's insurance doesnt just cover

your home, but usually extends to shield you from accidents your

pets, family, or property cause, such as a dog digging up a

neighbors new magnolia or a child breaking a window with a

baseball.

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Liability

insurance

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Liability Insurance

Introduction:

The liability insurance covers the risks of third party, compensation

to employes, liability of the automobile owners and re-insurances

It includes:

a)Third Party Insurance

b) Employee Insurance

c) Motor Insurance

d) Re-insurance

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THIRD

PARTY

INSURANCE

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i) Third Party Insurance

Introduction

Third Party Insurance (TPI) indemnifies vehicle owners and drivers

who are legally liable for personal injury to any other road user in

the event of a motor vehicle accident. Your TPI insurance will

cover you for personal injury claims made against you by other

road users such as drivers, passengers, pedestrians, cyclists,

motorcyclists and pillion passengers.

It is a compulsory form of insurance and the TPI premium is

included in your registration payment.

Management of Third Party Insurance

In the Australian Capital Territory (ACT) vehicle registrations and

Third Party Insurance (TPI) schemes are owned by the ACT

Government.

The Department of Urban Services manages vehicle registrations.

NRMA Insurance manages TPI claims and in consultation with the

ACT Government, TPI premiums.

NRMA Insurance is listed under "Third Party Insurance Company"

on Certificate of Registration (Renewal) documents. The TPI

premium is paid with other registration fees as a single payment at

Road User Services or ACT Government shop fronts.

Compulsory Third Party

Queensland operates a common law 'fault' based Compulsory

Third Party (CTP) scheme, first introduced in 1936. The scheme

provides motor vehicle owners with an insurance policy that covers

their unlimited liability for personal injury caused by, through or in

connection with the use of the insured motor vehicle in incidents towhich the Motor Accident Insurance Act 1994 applies.

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For the injured third party it provides access to common law, that

is, the injured person has a right to approach a law court to seek

monetary compensation from the person 'at fault' for the personal

injury and other related losses. As a fault based scheme it requiresproof of liability, i.e. the injured party must be able to establish

negligence against an owner or driver of a motor vehicle.

Consequently, circumstances can arise where, for example, a

driver who is wholly at fault in an accident cannot obtain

compensation because there is no negligent party against whom a

claim can be made.

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EMPLOYEE

INSURANCE

ii) Employee Insurance

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Introduction:

The geneses of employees liability insurance can be traced to

industrial development. It was, however, thought that the employer

had no more than the ordinary duty of care to his employees.Hence an employer injured as a result of negligence on the part of

his employer. Employee has the same rights against the employer

for the damage as any other could have.

So, the employer should take care of the following:

a) A safe place of work,

b) Proper plant, tools, machinery and working implements for their

maintenance in good working order.

c) Competent and fellow employees.

It would appear that the duties of employer would wide enough toencompass all situations in which an employee might be placed

that would give him automatically a right of action against employer

and enable avoid damages

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Motor

insurance

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iii)Motor Insurance

Introduction:

Motor Insurance is one of the largest non-life insurance business in

the world. This is because it is statutorily mandated in most parts of

world. All motor vehicles are required to be registered with road

transport authorities and insured for third party liability. The basic

premise is that motor vehicles could either cause injury or be a

subject to damage and injury and thus require insurance.

The Motor Vehicle Act of 1939 introduces compulsory insurance totake care of those who may get injured in an accident. The

insurance of damage to vehicle is not mandatory. In U.S every

state has to comply with it but in India Tariff Advisory Committee

regulates this business.

Types of Vehicles

For the purpose of insurance motor vehicles are classified into

three categories:

1) Private cars,

2) Motor cycles and scooters,

3) Commercial vehicles;

a) Goods carrying vehicles

b) Passengers carrying vehiclesi) Auto-rickshaw

ii) Taxis

iii) Buses

c) Miscellaneous vehicles

i) Hearses

ii) Ambulancesiii) Cinema vans/Recording vans

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iv) Mobile Utilities

re-insurance

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iv ) Re-insurance

Introduction:

The term Re-insurance, is also termed as insurance of insurance.

It means an insurer who has assumed larger risk may arrange with

another insurer to insure a portion of his insured risk. In other

words in the event of loss, it would be beyond the capacity of

insurer, then this re-insurance process is resorted to. In re-

insurance, therefore, the one insurer insures the risk which has

been undertaken by another insurer. The original insurer who

transfers a part of insurance contract is called re-insured and the

second insurer is called the re-insurer. Of course, the re-insurance

has to pay re-insurance premium for risk shifted.

To be effective, the re-insurance policy must be formulated after

carefully considering all aspects of situation to which it is to be

applied.

Characteristics of re-insurance

1) Re-insurance is like insurance which is practiced by which

insurers can spread their loss.

2) Its contract is applied by same principles which governed

original contract of insurance.

3) An original insurer has got insurable interest to the extent of risk

undertaken by him. Therefore, he can re-insure the property to thatextent.

4) Re-insurance can be terminated when the original insurance

lapses for any reason.

5) In the extent of loss, the original insurer has to pay the assured

sum first to the insured then he will recover from re-insurance his

share.

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6) In the absence of any privity of contract between the original

party who has insured his subject matter and the re-insurer, the re-

insurance are discharged.

7) The re-insurance is not liable to original insurer in the extent ofloss.

fidelity/

guarantee

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Fidelity/Guarantee Insurance

Introduction

This policy is designed for companys need to cover any loss

caused by the dishonesty or fraud of any loss of the persons

mentioned in the schedule to be advised whilst in the

employment of the assured and up to the extend of the

respective sums set opposite the name of such persons

Fidelity/Guarantee Insurance Further includes:

1) Fiduciary Insurance

2) Credit Insurance

3) Privilege Insurance

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1) Fiduciary Liability Insurance

Introduction :

On knowing about this insurance we come to know that fiduciary

insurance is first of all a kind of liability insurance. We can study

this in detail as follows:

Moreover, designated fiduciaries are not the only targets of such

lawsuits; targets can also include the employer and even the plan

itself. Claims can be brought by plan participants, participants

legal estates, the Department of Labor, and the Pension Benefit

Guaranty Corporation. Such claims may include allegations of:

Improper advice or disclosure

Inappropriate selection of advisors or service providers

Imprudent investments

Lack of investment diversity

Breach of responsibilities or fiduciary duties imposed by ERISA Negligence in the administration of a plan

Conflict of interest with regard to investments

A private company can help mitigate the personal liability of its

fiduciaries by following the advice of outside experts and by

selecting diverse, financially sound investments. But, it cannot

entirely eliminate their personal liability.

In order to help protect private companies, their fiduciaries and

the benefit plans they manage, against fiduciary liability claims,

InsureCast offers Fiduciary Liability Insurance coverage. Please

go to our online Coverage Coach questionnaire to get a free no

obligation Fiduciary Liability Insurance quote.Typical Fiduciary Liability Insurance coverage

highlights:

Broad definition of insured including the company, its benefit

lans and its fiduciaries

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credit insurance

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b) Credit Insurance

Introduction:

Like any form of insurance, Credit Insurance is usually purchased

by a company to protect itself against specific losses that could

impair the performance of the company. In the case of credit

insurance, protection is offered to the supplier against the risk of

the debtor going into liquidation (Insolvency); delayed or non-

payment (Protracted Default) and in respect of export risks, the

unilateral cancellation of contract (Repudiation) as well as a myriad

of Political related risks.

Cost

Insurance costs depend on many factors such as: policy structure,

credit worthiness of the risks involved, and the amount of retention

of risk assumed by the insured. Typically a policy of domestic

credit insurance would range between one tenth of one percent of

sales to four tenths of one percent of sales.

Additionally, the degree of risk (or quality of the customers);

historical loss experience in your organization; current credit

extension and collection operating procedures; level of experience

or expertise (as evaluated by the insurer) and the concentration or

distribution of risk throughout your customer base is considered.

However, as with any insurance product, the quality of what is

being insured will have a bearing on the cost of the insurance. This

supports the assertion that insurance should be viewed as a

partnership with the credit management objective. Consequently,

the better job you are doing, the more economical the insurance is

in protecting your company against a catastrophic loss.

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privilege

insurance

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3) Privilege Insurance

Introduction:

Privilege specializes in offering highly competitive car

insurance for safe drivers, with a guarantee to beat renewal

quotes for any driver with 4 years or more no claims discount-

proving that you really don't have to be posh to get cheaper car

insurance.

Privilege Car Insurance

Who cares if the only estate you own has four wheels and an

engine? With Privilege car insurance, you only need 4 years No

Claim Discount to get high class car insurance for a lower price.

Which means youll enjoy such luxury treatment:

A guarantee that we'll beat your renewal quote if you have 4 years

or more No Claims Discount.*

Car Insurance Benefits

When you choose car insurance from Privilege, you're privy to a

wealth of great benefits and services.

Repairs guaranteed for at least 5 years when undertaken by an

approved repairer.

Courtesy car provided for you, in the event of an accident (not

theft or total loss), if you use one of our approved repair companies

(subject to availability).

24-hour accident recovery.

Convenient installments, subject to status*.

Windscreen replacement hotline, open 24 hours.

Emergency roadside assistance will arrive within 3 hours of

your call if your car's glass breaks

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How to claim

It doesn't matter if you're upper crust or down at heel, anyone can

be involved in an accident or fall prey to car crime. With Privilege

car insurance, claiming on your car insurance couldn't be easier.

Insurance companys claims representative will get to work on

getting you back on the road. One of network repairers will also

collect your car and deliver it to your doorstep repaired, cleaned

and in tip-top condition.

Make sure you have all the following in order to contact any

insurance company:

Your insurance policy number.

The date and time that the accident happened.

Details of the event.

What the damage was to your car and any other vehicles.

If other people were involved, you'll need their insurance details

(including their policy numbers).

A policy report number of reference if you were given one.

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CONCLUSION

Thus I tried my best to put before you the concept of my topic

Kinds of by mainly focusing on types of insurance before you and

their way of developing in the field.

Here we have seen that each insurance has its own features and

benefits to the people.

Lastly, I would like to conclude my saying that it was a great

experience working on this project.

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Case Study

on

marine

insurance

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ENERGY AND UTILITIES CASE STUDY

Thames Water: Streamlining IS operations and improving service

delivery, strengthening customer relationships and creating a thin

layer of IS

Thames Water is the worlds third largest water company providing

clean and waste water services to over 69 million customers around the

world. In the past year Thames Water has strengthened their position in

key markets; most notably in the Americas with the acquisition of

American Water Works. With around 13 million customers in the UK,

Thames continues to be one of the most efficient water companies in

the world.

The challengeThames Water had embarked on a journey to streamline their IS

operations to ensure better service delivery, improved customer

relationship and closer links with business. They also wanted to

move to a thin layer of IS. This was a challenge considering that

the Thames

Support Estate consists mostly of bespoke applications using a wide

spectrum of technologies and functional areas that cover all the

business functionality of a typical Water Utility.

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Over a two year period, through a series of strategic initiatives Wipro

made Thames Water realize significant cost savings as well as

remarkably improved the quality of the application estate. This was

done by following a cycle of Define, Perform, Review and Refine foreach of the functions that Wipro was entrusted with. Wipro devised and

implemented a strategy for cost savings by leveraging on its Global

Sourcing model. The savings in the application support budget was

also enabled through a system of Forecasting and reviewing service

requirements with partners and third party vendors.

The benefits

The solution has resulted in higher service levels and a productivity

improvement of 45 minutes per user per day in the work management

area. The solution also resulted in improved partner performance and a

reduction in Total Cost of Ownership by 0.5 million GBP per annum.

This combined with other business benefits resulted in a cost saving of

32% in two years.

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BIBLIOGRAPHY.

For this project I have have referred certain books and websites

which helped me to complete my project.

Books

1) Principals and Practice of Insurance

By, Dr. Pariasamy

2) Insurance

By, J.M Mathew

3) Principals of Insurance

By, M.N Mishra

Websites

1) www.google.co.in

2) www.lic.com.

Evol. of Insurance

Documents

Transcript of Evol. of Insurance