Insurance
Content
1.1 EXECUTIVE SUMMARY
Insurance is not the sale of products, but servicing customers. It is a system, by which the losses
suffered by a few are spread over many, Exposed to similar risks. Insurance is a protection
against financial loss arising on the happening of an unexpected event. Insurance companies
collect premiums to provide for this protection. A loss is paid out of the premiums collected from
the insuring public and the Insurance Companies act as trustees to the amount collected. The
very fundamental principle of spreading of the risk is actually practiced by the insurance
companies by reinsuring the risks that they have insured. The opening up of the Insurance Sector
to Private Companies, has made available more products and world class service to Indian
Customer.
This project has been made with an objective to give an insight into various facts of General
Insurance sector in India. An attempt has been made to explain the apex body of General
Insurance. i.e. General Insurance Corporation of India, its structure, products and subsidiaries.
Also the review of latest entrants into insurance sector viz. private players like TATA AIG
General Insurance Company, Reliance General Insurance Company limited, Bajaj Allianz
General Insurance Company, IFFCO Tokyo General Insurance Company, Royal Sundaram
General Insurance Company limited and ICICI Lombard General Insurance Company have been
described in brief, Due to the growth in the technological sector of the country, the insurance
companies have started utilizing these technologies to it‚as optimum level.
1.2
INTRODUCTION TO
INSURANCE
INDUSTRY
a. Origin and Development of the industry
Till May, 1971 there were 107 companies operating in the market, both Indian and foreign. Some
companies were in the co-operative sector. The size of the companies and there reach varied to a
great extent. Whereas many companies used to underwrite all types of covers fire, marine&
miscellaneous insurance.
The government in May, 1971 took over the undertaking of all the Companies as a prelude to
ultimate nationalization. This was brought about under the General insurance business
(Nationalsation) Act, 1972.
Thus, effective 01/01/1973 a single holding company was created named as General Insurance
Corporation of India, with 4 subsidiaries to take care of the general insurance business operation.
Brief History of the Insurance Sector
The business of life insurance in India in its existing form started in India in the year 1818 with
the establishment of the Oriental Life Insurance Company in Colkata. Some of the important
milestones in the insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956 :
245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crore from the Government of India. The General insurance business
in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first
general insurance company established in the year 1850 in Colkata by the British.
Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of
conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency margins
and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act, 1972.Nationalized the general
insurance business in India with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies.
The four subsidiaries formed were as under:
1. The National Insurance Co. Ltd
2. The India Assurance Co. Ltd
3. The Oriental Insurance Co. Ltd
4. The United India Insurance Co. Ltd
Insurance is not the sale of products, but servicing customers. It is a system, by which the losses
suffered by a few are spread over many, Exposed to similar risks. Insurance is a protection
against financial loss arising on the happening of an unexpected event. Insurance companies
collect premiums to provide for this protection. A loss is paid out of the premiums collected from
the insuring public and the Insurance Companies act as trustees to the amount collected. The
very fundamental principle of spreading of the risk is actually practiced by the insurance
companies by reinsuring the risks that they have insured. The opening up of the Insurance Sector
to Private Companies, has made available more products and world class service to Indian
Customer.
This project has been made with an objective to give an insight into various facts of General
Insurance sector in India. An attempt has been made to explain the apex body of General
Insurance. i.e. General Insurance Corporation of India, its structure, products and subsidiaries.
Also the review of latest entrants into insurance sector viz. private players like TATA AIG
General Insurance Company, Reliance General Insurance Company limited, Bajaj Allianz
General Insurance Company, IFFCO Tokyo General Insurance Company, Royal Sundaram
General Insurance Company limited and ICICI Lombard General Insurance Company have been
described in brief, Due to the growth in the technological sector of the country, the insurance
companies have started utilizing these technologies to it‚as optimum level.
1.2
INTRODUCTION TO
INSURANCE
INDUSTRY
a. Origin and Development of the industry
Till May, 1971 there were 107 companies operating in the market, both Indian and foreign. Some
companies were in the co-operative sector. The size of the companies and there reach varied to a
great extent. Whereas many companies used to underwrite all types of covers fire, marine&
miscellaneous insurance.
The government in May, 1971 took over the undertaking of all the Companies as a prelude to
ultimate nationalization. This was brought about under the General insurance business
(Nationalsation) Act, 1972.
Thus, effective 01/01/1973 a single holding company was created named as General Insurance
Corporation of India, with 4 subsidiaries to take care of the general insurance business operation.
Brief History of the Insurance Sector
The business of life insurance in India in its existing form started in India in the year 1818 with
the establishment of the Oriental Life Insurance Company in Colkata. Some of the important
milestones in the insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956 :
245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crore from the Government of India. The General insurance business
in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first
general insurance company established in the year 1850 in Colkata by the British.
Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of
conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency margins
and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act, 1972.Nationalized the general
insurance business in India with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies.
The four subsidiaries formed were as under:
1. The National Insurance Co. Ltd
2. The India Assurance Co. Ltd
3. The Oriental Insurance Co. Ltd
4. The United India Insurance Co. Ltd
