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SUMMER TRAINING REPORT ON

³POSITIONING OF EMKAY GLOBAL FINANCIAL SERVICES LTD WITH THE COMPETITORS FOR CUSTOMER WITH RESPECT TO DMAT AND INSURANCE´

FOR
EMKAY GLOBAL FINANCIAL SERVICES LTD By MANOJ KUMAR D-23
In partial fulfillment for the award of the degree ³Post Graduate Diploma in Business Management´ (2009-11 SESSION)

NEW DELHI INSTITUTION OF MANAGEMENT
(F-13, Okhla Phase- 1, New Delhi, Pin: 110020)

MANOJ KUMAR

³POSITIONING OF EMKAY GLOBAL FINANCIAL SERVICES LTD WITH THE COMPETITORS FOR CUSTOMER WITH RESPECT TO DMAT AND INSURANCE´
FOR

EMKAY GLOBAL FINANCIAL SERVICES LTD
Under the Supervision Of

Mr. Jyotish Panday

Submitted ByManoj Kumar D-23

Submitted ToKalpana Singh

MANOJ KUMAR

ACKNOWLEDGEMENT
I would like to thank my faculty guide DR. Kalpana Singh for her guidance and support in the project. She always supports me when I need to her help. I also express my sincere depth of gratitude to EMKAY¶s branch manager Mr. Jai Prakash, my mentor Mr. Jyotish Panday and his all staff to encourage me. Sir without your precious guidance I won¶t be able to complete this project. I would also like to thank my parents and my friends who have always been very cooperative whenever I need them.

Manoj Kumar

MANOJ KUMAR

DECLARATION
I¶m Manoj Kumar student of New Delhi Institution of Management batch 2009-11 declare that every part of the Project Report ³Positioning of EMKAY Global Services Ltd´ that I have submitted is original. I was regular contact with the nominated guide and contacted 5 times for discussing on the project.

Date of project submission:____________________ Signature of t he student

Faculty¶s Comments:

Signature of faculty guide

MANOJ KUMAR

Table of Content

1. Acknowledgement««««««««««««««««..03 2. Declaration«««««««««««««««««««..04 3. Executive summary««««««««««««««««06 4. About company«««««««««««««««««...07 5. Company Product««««««««««««««««...10 6. Company¶s Brokerage charge««««««««««««10 7. Details of Demat«..««««««««««««««««.11 8. Details of Insurance«««««««..««««««««...18 9. List of Insurance Companies In India««««««««..40 10. Detail of some insurance companies«««««««.42 y Life Insurance Corporation««««««««««42 y Aviva Life Insurance«««««««««««««44 y Birla Sun Life Insurance«««««««««««.44 y HDFC Standard Life Insurance««««««««.46 y Tata AIG Life Insurance«««««««««««.48 y Reliance Life Insurance««««««««««««49 y SBI Life Insurance««««««««««««««50 11. Survey Report««««««««««««««««53 12. Chart Related Report«««««««««««««55 13. Detail of Work Done«««««««««««««..61 14. Major Learning«««««««««««««««..62 15. Constraints Faced««««««««««««««..63 16. Recommendation ««««««««««««««..64 17. Conclusion«««««««««««««««««..65 18. Bibliography«««««««««««««««««66
MANOJ KUMAR

Executive Summary
The topic of my survey report µPositioning of Emkay Global Financial Service Ltd¶. It is basically find out the positioning of Emkay in the market with the competitor with respect of Demat and Insurance. We decided to collect primary data through survey by using the questionnaire sheet provided by the company. To do this, we first analyzed the various parameters to the positioning of a stock and brokerage company in the market. Emkay is the new company in the stock and brokerage sector, it is stabled in 2005. So that people are not must aware about the Emkay name. The purpose of this project is creating a value for the company and telling to people about the services facilitated by the company.

MANOJ KUMAR

ABOUT COMPANY

INTRODUCTION Emkay Global marked its genesis as Emkay Share and Stock Brokers Private Limited. The company was promoted by two enterprising Chartered Accountants, Mr. Krishnakumar Karwa and Mr. Prakash Kacholia, on January 24, 1995. The company subsequently got listed on the BSE and the NSE in 2006. The journey that was embarked upon 20 years ago has enabled Emkay to grow into a Rs.130 crore plus net worth company, with over 350 retail outlets spread across the country. Emkay invites everyone to join it on this very rewarding journey and reap the benefits of a resurgent India. Membership: BSE, NSE, BSE Trading & Clearing Member (derivatives), CDSL (depository participant), BSE (debt markets) and NSE Trading & Clearing Member (derivatives). Setting paradigms and then shifting them is how we define our business at Emkay. Guided at each step, since its inception in 1995, by the mission to build a seamless world of Investment Opportunities, Emkay Global, along with Emkay Commotrade Ltd., Emkay Insurance Brokers Ltd., and Emkay Fin cap Ltd., offers comprehensive Investment solutions to more than a lack satisfied customers throughout the length and breadth of the country.
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From Equity to Commodities, from Financial Advisory to Investment Banking, from Mutual Funds to Wealth Management, from Insurance Broking to IPOs, we have tried to offer the most comprehensive avenues for investments. In our journey from Emkay Share to Emkay Global, we have left no stone unturned in the last 20 years to offer anything but the best. We are embracing every opportunity ± Big and Small, to build bridges that help investors reach their financial destinations. It is the confidence that our customers place in us, that has seen us grow and retain our rich clientele, which includes Foreign Institutional Investors, Domestic Mutual Funds, Hedge Funds, Banks, Insurance Companies, Private Equity Firms, Corporate and Industrial Houses, Businessmen and High Net worth Individuals. Emkay Global Financial Services Limited is a name that reckons trust, integrity, growth and a passion to perform. We have over the years, chiseled the world of Investment Opportunities for you« A world that empowers you with TIMELY INFORMATION to make that split second decision; A world that equips you with the RIGHT TOOLS to timely execute those decisions; and a world that gives you the POWER OF CHOICE so that you don¶t compromise on the best and reach your financial goals effortlessly. We at Emkay Global believe that Your Success is Our Success!!!

We have always believed that your success is our success. It's the only truth of every business. And we have built our foundation around this philosophy. Every endeavor at Emkay is to ensure success - success of its clients, employees, partners, investors and of the society at large. And we have been doing this since 1995.

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We consider ourselves as a Services & Solutions company and not a financial product disseminator. We understand that needs differ, and hence, no one size fits all. Our ultimate aim is to delight the people, whose lives we touch and every fraction of our existence works towards achieving this, every single second.

Emkay Fin cap Limited (EFL), a 100 per cent subsidiary of EMKAY, is a RBI registered Non Deposit taking NBFC. The firm was incorporated on May 16, 2005 for carrying out share financing activities. The company went public on February 14, 2006. Emkay Commotrade Limited (ECL), a 100 per cent subsidiary of EMKAY, was incorporated on January 5, 2006 and carries out commodity broking business. ECL is a member of the two popular commodity exchanges - MCX Commodity Exchange and NCDEX Commodity Exchange. ECL offers trading in many commodities such as bullion (gold, silver), energy (crude oil, natural gas), metals, food grains (rice, maize), spices, oil and oil seeds and others.
MANOJ KUMAR

Emkay Insurance Brokers Limited (EIBL), a 100 per cent subsidiary of EMKAY, was incorporated on March 8, 2007 as a direct Insurance broker as per the IRDA regulations. Focusing on life and non-life businesses, the company aims to benefit from its huge existing retail client base and existing corporate relationships. Emkay's Mission: - "To provide our clients with Secure, Customized & Comprehensive financial solutions to achieve sustained growth." Emkay's Values
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To be fair, empathetic and responsive in serving our clients. To respect and reinforce our fellow employees and the power of teamwork. To strive relentlessly to improve what we do and how we do it. To always earn and be worthy of our customers' trust.

MANOJ KUMAR

COMPANY PRODUCTS It deals with its own product demat and life insurance, general insurance, health insurance and mutual fund of any xyz company. Demat Account EMKAY provide its own product demat account. There are two types of demat one of the life time plan and one of the super plan. Both plans have their different brokerage rate and services. Both plans brokerage given in the below:-

EMTRADE LIFETIME Particulars Cost of subscription Validity period Brokerage on Delivery Trades Brokerage on Intraday Trades Brokerage on Future Trades Brokerage on Option Trades Emtrade 1000 Rs 1000 Life time 0.25% 0.05% 0.025%+0.025% 1.00% on premium or Rs.10 Whichever is higher Emtrade 2500 Rs. 2500 Life time 0.20% 0.02% 0.02%+0.02% 1.00% on premium or Rs. 50 (whichever is higher) Emtrade 5000 Rs. 5000 Life time 0.15% 0.015% 0.015%+0.015% 1.00% on premium or Rs. 50 (whichever is higher)

MANOJ KUMAR

EMTRADE SUPER Particulars Emtrade 2500 Cost of Rs. 2500 subscription Reversible Rs.3000 Amount Validity 6 months period Brokerage 0.30% on delivery trades Brokerage 0.03%(one on intraday side) trades Brokerage 0.03% on future trades Brokerage Flat Rs.45 on option trade Emtrade 5000 Rs. 5000 Rs.6000 12 months 0.25% Emtrade 10000 Rs. 10000 Rs.12500 12 months 0.20% Emtrade 15000 Rs.15000 Rs.20000 12 months 0.15% Emtrade 25000 Rs.25000 Rs.325000 12 months 0.10%

0.025%(one 0.02%(one 0.015%(one 0.010%(one side) side) side) side) 0.025% 0.02% 0.015% 0.010%

Flat Rs.40

Flat Rs.35

Flat Rs.30

Flat Rs.25

MANOJ KUMAR

BASICS OF Demat The term Demat, in India, refers to a dematerialized account for individual Indian citizens to trade in listed stocks or debentures. The Securities Exchange Board of India (SEBI) requires the investor to maintain a Demat account. In a demat account shares and securities are held in electronic form instead of taking actual possession of certificates. A Demat Account is opened by the investor while registering with an investment broker (or sub broker). The Demat account number which is quoted for all transactions to enable electronic settlements of trades to take place. Access to the demat account requires an internet password and a transaction password as well as initiating and confirming transfers or purchases of securities. Purchases and sales of securities on the Demat account are automatically made once transactions are executed and completed.

Advantages of Demat The demat account reduces brokerage charges, makes pledging/hypothecation of shares easier, enables quick ownership of securities on settlement resulting in increased liquidity, avoids confusion in the ownership title of securities, and provides easy receipt of public issue allotments. It also helps you avoid bad deliveries caused by signature mismatch, postal delays and loss of certificates in transit. Further, it eliminates risks associated with forgery, counterfeiting and loss due to fire, theft or mutilation. Demat account holders can also avoid stamp duty (as against 0.5 per cent payable on physical shares), avoid filling up of transfer deeds, and obtain quick receipt of such benefits as stock splits and bonuses. Indian Market Scenario Indian capital market has seen unprecedented boom in its activity in the last 15 years in terms of number of stock exchanges, listed companies, trade volumes, market intermediaries, investor population, etc. However, this surge in activity has brought with it numerous problems that threaten the very survival of the
MANOJ KUMAR

capital markets in the long run, most of which are due to the large volume of paper work involved and paper based trading, clearing and settlement. Until the late eighties, the common man kept away from capital market and thus the quantum of funds mobilized through the market was meager. A major problem, however, continued to plague the market. The Indian markets were drowned in shares in the form of paper and hence it was problematic to handle them. Fake and stolen shares, fake signatures and signature mismatch, duplication and mutilation of shares, transfer problems, etc. The investors were scared and were under compensated for the risk borne by them. The century old system of trading and settlement requires handling of huge volumes of paper work. This has made the investors, both retail and institutional, wary of entering the capital market. However, lack of modernization become a hindrance to growth and resulted in creation of cumbersome procedures and paper work. However, the real growth and change occurred from mid-eighties in the wake of liberalization initiatives of the Government. The reforms in the financial sector were envisaged in the banking sector, capital market, securities market regulation, mutual funds, foreign investments and Government control. These institutions and stock exchanges experienced that the certificates are the main cause of investors` disputes and arbitration cases. Since the paper work was not matching the rapid growth so there was a need for a better system to ensure removal of these impediments. Government of India decided to set up a fully automated and high technology based model exchange that could offer screen-based trading and depositories as the ultimate answer to all such reforms and eliminate various bottlenecks in the capital market, particularly, the clearing and settlement system in stock exchanges.[1] A depository in very simple terms is a pool of pre-verified shares held in electronic mode which offers settlement of transactions in an efficient and effective way.

MANOJ KUMAR

Object Of Demat System India has adopted this system in which book entry is done electronically. It is the system where no paper is involved. Physical form is extinguished and shares or securities are held in electronic mode. Before the introduction of the depository system by the Depository Act, 1996, the process of sale, purchase and transfer of shares was a huge problem and the safety perspective was zero. Demat Benefits The benefits are enumerated as follows: . It¶s a safe and convenient way to hold securities . Immediate transfer of securities is there . There is no stamp duty on transfer of securities . Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc . There is a major reduction in paperwork involved in transfer of securities, reduction in transaction cost etc . No odd lot problem, even one share can be sold thus there is an advantage . Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately; ‡ Transmission of securities is done by DP eliminating correspondence with companies; ‡ Automatic credit into demat account of shares, arising out of bonus/split/consolidation/merger etc. ‡ Holding investments in equity and debt instruments in a single account. Benefit to the Company The depository system helps in reducing the cost of new issues due to less printing and distribution cost. It increases the efficiency of the registrars and transfer agents and the Secretarial Department of the company. It provides better facilities for communication and timely services with shareholders, investor etc. Benefit to the Investor The depository system reduces risks involved in holding physical certificated, e.g., loss, theft, mutilation, forgery, etc. It ensures transfer
MANOJ KUMAR

settlements and reduces delay in registration of shares. It ensures faster communication to investors. It helps avoid bad delivery problem due to signature differences, etc. It ensures faster payment on sale of shares. No stamp duty is paid on transfer of shares. It provides more acceptability and liquidity of securities. Benefit to Brokers the depository system reduces risk of delayed settlement. It ensures greater profit due to increase in volume of trading. It eliminates chances of forgery ± bad delivery. It increases overall of trading and profitability. It increases confidence in investors. Demat conversion Converting physical holding into electronic holding (dematerializing securities) In order to dematerialize physical securities one has to fill in a DRF (Demat Request Form) which is available with the DP and submit the same along with physical certificates one wishes to dematerialise. Separate DRF has to be filled for each ISIN Number. The complete process of dematerialisation is outlined below: ‡Surrender certificates for dematerialisation to your depository participant. ‡Depository participant intimates Depository of the request through the system. ‡Depository participant submits the certificates to the registrar of the Issuer Company. ‡Registrar confirms the dematerialisation request from depository. ‡After dematerializing the certificates, Registrar updates accounts and informs depository of the completion of dematerialisation. ‡Depository updates its accounts and informs the depository participant. ‡Depository participant updates the demat account of the investor. Fees Involved There are four major charges usually levied on a demat account: Account opening fee, annual maintenance fee, custodian fee and transaction fee. All the charges vary from DP to DP. Account-opening fee Depending on the DP, there may or may not be an opening account fee. Private Banks, such as ICICI Bank, HDFC Bank and UTI Bank, do not have one. However, players such as Globe Capital, Karvy Consultants and the State Bank
MANOJ KUMAR

of India do so. But most players levy this when you re-open a demat account, though the Stock Holding Corporation offers a lifetime account opening fee, which allows you to hold on to your demat account over a long period. This fee is refundable.

Annual maintenance fee This is also known as folio maintenance charges, and is generally levied in advance. Custodian fee This fee is charged monthly and depends on the number of securities (international securities identification numbers ² ISIN) held in the account. It generally ranges between Rs 0.5 to Rs 1 per ISIN per month. DPs will not charge custody fee for ISIN on which the companies have paid one-time custody charges to the depository. Transaction fee The transaction fee is charged for crediting/debiting securities to and from the account on a monthly basis. While some DPs, such as SBI, charge a flat fee per transaction, HDFC Bank and ICICI Bank peg the fee to the transaction value, subject to a minimum amount. The fee also differs based on the kind of transaction (buying or selling). Some DPs charge only for debiting the securities while others charge for both. The DPs also charge if your instruction to buy/sell fails or is rejected. In addition, service tax is also charged by the DPs. In addition to the other fees, the DP also charges a fee for converting the shares from the physical to the electronic form or vice-versa. This fee varies for both demat and remat requests. For demat, some DPs charge a flat fee per request in addition to the variable fee per certificate, while others charge only the variable fee. For instance, Stock Holding Corporation charges Rs 25 as the request fee and Rs 3 per certificate as the variable fee. However, SBI charges only the variable fee,
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which is Rs 3 per certificate. Remat requests also have charges akin to that of demat. However, variable charges for remat are generally higher than demat. Some of the additional features (usually offered by banks) are as follows. Some DPs offer a frequent trader account, where they charge frequent traders at lower rates than the standard charges. Demat account holders are generally required to pay the DP an advance fee for each account which will be adjusted against the various service charges. The account holder needs to raise the balance when it

falls below a certain amount prescribed by the DP. However, if you also hold a savings account with the DP you can provide a debit authorisation to the DP for paying this charge. Finally, once you choose your DP, it will be prudent to keep all your accounts with that DP, so that tracking your capital gains liability is easier. This is because, for calculating capital gains tax, the period of holding will be determined by the DP and different DPs follow different methods. For instance, ICICI Bank uses the first in first out (FIFO) method to compute the period of holding. The proof of the cost of acquisition will be the contract note. The computation of capital gains is done account-wise. Disadvantages of Demat The disadvantages of dematerialization of securities can be summarized as follows: Trading in securities may become uncontrolled in case of dematerialized securities. It is incumbent upon the capital market regulator to keep a close watch on the trading in dematerialized securities and see to it that trading does not act as a detriment to investors. The role of key market players in case of dematerialized securities, such as stock-brokers, needs to be supervised as they have the capability of manipulating the market. Multiple regulatory frameworks have to be confirmed to, including the Depositories Act, Regulations and the various By-Laws of various depositories.
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Additionally, agreements are entered at various levels in the process of dematerialization. These may cause anxiety to the investor desirous of simplicity in terms of transactions in dematerialized securities. However, the advantages of dematerialization outweigh its disadvantages and the changes ushered in by SEBI and the Central Government in terms of compulsory dematerialization of securities is important for developing the securities market to a degree of advancement. Freely traded securities are an essential component of such an advanced market and dematerialization addresses such issues and is a step towards the advancement of the market.

MANOJ KUMAR

INSURANCE EMKAY Global Financial Services Ltd is a company which is sold the xyz companies insurance. This company sold many types of insurance like life insurance, health insurance etc. EMKAY specific sold the life insurance policy of Tata AIG, Birla Sun Life Insurance, and LIC etc. BASICS OF INSURANCE Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; an insured or policyholder is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a large, possibly devastating loss. The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated. Insurance involves pooling funds from many insured entities (known as exposures) in order to pay for relatively uncommon but severely devastating losses which can occur to these entities. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be insurable, the risk insured against must meet certain characteristics in order to be an insurable risk. Insurance is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses.

MANOJ KUMAR

History of insurance In some sense we can say that insurance appears simultaneously with the appearance of human society. We know of two types of economies in human societies: money economies (with markets, money, financial instruments and so on) and non-money or natural economies (without money, markets, financial instruments and so on). The second type is a more ancient form than the first. In such an economy and community, we can see insurance in the form of people helping each other. For example, if a house burns down, the members of the community help build a new one. Should the same thing happen to one's neighbour, the other neighbors must help? Otherwise, neighbours will not receive help in the future. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread. Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the financial sphere), early methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively.[11] Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen or lost at sea. Achaemenian monarchs of Ancient Persia were the first to insure their people and made it official by registering the insuring process in governmental notary offices. The insurance tradition was performed each year in Norouz (beginning of the Iranian New Year); the heads of different ethnic groups as well as others willing to take part, presented gifts to the monarch. The most important gift was presented during a special ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold coin) the issue was registered in a special office. This was advantageous to those who presented such special gifts. For others, the presents were fairly assessed by the confidants of the court. Then the assessment was registered in special offices.
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The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient Iran: "[W]he never the owner of the present is in trouble or wants to construct a building, set up a feast, have his children married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of twice as much.´ A thousand years later, the inhabitants of Rhodes invented the concept of the 'general average'. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sink age. The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "benevolent societies" which cared for the families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Before insurance was established in the late 17th century, "friendly societies" existed in England, in which people donated amounts of money to a general sum that could be used for emergencies. Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed. Some forms of insurance had developed in London by the early decades of the seventeenth century. For example, the will of the English colonist Robert Hayman mentions two "policies of insurance" taken out with the diocesan Chancellor of London, Arthur Duck. Of the value of £100 each, one relates to the safe arrival of Hayman's ship in Guyana and the other is in regard to "one hundred pounds assured by the said Doctor Arthur Ducke on my life". Hayman's will was signed and sealed on 17 November 1628 but not proved until 1633.[12]

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Toward the end of the seventeenth century, London's growing importance as a centre for trade increased demand for marine insurance. In the late 1680s, Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships¶ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of London remains the leading market (note that it is not an insurance company) for marine and other specialist types of insurance, but it works rather differently than the more familiar kinds of insurance. Insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured more than 13,000 houses. The devastating effects of the fire converted the development of insurance "from a matter of convenience into one of urgency, a change of opinion reflected in Sir Christopher Wren's inclusion of a site for 'the Insurance Office' in his new plan for London in 1667."[13] A number of attempted fire insurance schemes came to nothing, but in 1681 Nicholas Barbon, and eleven associates, established England's first fire insurance company, the 'Insurance Office for Houses', at the back of the Royal Exchange. Initially, 5,000 homes were insured by Barbon's Insurance Office.[14] The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732. Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses. In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance markets have become centralized nationally and internationally, state insurance commissioners operate individually, though at times in concert through a national insurance commissioners' organization. In recent years, some have called for a dual state and federal regulatory system (commonly referred to as the Optional federal charter (OFC)) for insurance similar to that which oversees state banks and national banks.
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Types of insurance Any risk that can be quantified can potentially be insured. Specific kinds of risk that may give rise to claims are known as "perils". An insurance policy will set out in detail which perils are covered by the policy and which is not. Below are (non-exhaustive) lists of the many different types of insurance that exist. A single policy may cover risks in one or more of the categories set out below. For example, auto insurance would typically cover both property risk (covering the risk of theft or damage to the car) and liability risk (covering legal claims from causing an accident). A homeowner's insurance policy in the U.S. typically includes property insurance covering damage to the home and the owner's belongings, liability insurance covering certain legal claims against the owner, and even a small amount of coverage for medical expenses of guests who are injured on the owner's property. Business insurance can be any kind of insurance that protects businesses against risks. Some principal subtypes of business insurance are (a) the various kinds of professional liability insurance, also called professional indemnity insurance, which are discussed below under that name; and (b) the business owner's policy (BOP), which bundles into one policy many of the kinds of coverage that a business owner needs, in a way analogous to how homeowners insurance bundles the coverages that a homeowner needs.

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Auto insurance

A wrecked vehicle Auto insurance protects you against financial loss if you have an accident. It is a contract between the insured and the insurance company. You agree to pay the premium and the insurance company agrees to pay losses as defined in the policy. Auto insurance provides property, liability and medical coverage: 1. Property coverage pays for damage to or theft of the car. 2. Liability coverage pays for the legal responsibility to others for bodily injury or property damage. 3. Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses. An auto insurance policy comprises six kinds of coverage. Most countries require you to buy some, but not all, of these coverages. If you're financing a car, the lender may also have requirements. Most auto policies are for six months to a year. In the United States, the insurance company should notify you by mail when it¶s time to renew the policy and to pay the premium.

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Home insurance Home insurance provides compensation for damage or destruction of a home from disasters. In some geographical areas, the standard insurances exclude certain types of disasters, such as flood and earth quakes, that require additional coverage. Maintenance-related problems are the homeowners' responsibility. The policy may include inventory, or this can be bought as a separate policy, especially for people who rent housing. In some countries, insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household, including pets.

Health

NHS Facility Health insurance policies by the National Health Service in the United Kingdom (NHS) or other publicly-funded health programs will cover the cost of medical treatments. Dental insurance, like medical insurance, is coverage for individuals to protect them against dental costs. In the U.S., dental insurance is often part of an employer's benefits package, along with health insurance. Accident, Sickness and Unemployment Insurance
y

Disability insurance policies provide financial support in the event the policyholder is unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as mortgage loans and credit cards.

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y y

y

Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work. Total permanent disability insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance. Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expenses incurred because of a job-related injury.

Casualty Casualty insurance insures against accidents, not necessarily tied to any specific property.
y

y

Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement. Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss.

Life Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies and regulated as insurance and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive
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his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance. Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed. In many countries, such as the U.S. and the UK, the tax law provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death. In U.S., the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. This depends upon the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover, other income tax saving vehicles (e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value accumulation. Property

Property insurance provides protection against risks to property, such as fire, theft or weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.
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Automobile insurance, known in the UK as motor insurance, is probably the most common form of insurance and may cover both legal liability

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Claims against the driver and loss of or damage to the insured's vehicle itself. Throughout the United States an auto insurance policy is required to legally operate a motor vehicle on public roads. In some jurisdictions, bodily injury compensation for automobile accident victims has been changed to a no-fault system, which reduces or eliminates the ability to sue for compensation but provides automatic eligibility for benefits. Credit card companies insure against damage on rented cars. o Driving School Insurance provides cover for any authorized driver whilst undergoing tuition, cover also unlike other motor policies provides cover for instructor liability where both the pupil and driving instructor are equally liable in the event of a claim. Aviation insurance insures against hull, spares, deductibles, hull wear and liability risks. Boiler insurance (also known as boiler and machinery insurance or equipment breakdown insurance) insures against accidental physical damage to equipment or machinery. Builder's risk insurance insures against the risk of physical loss or damage to property during construction. Builder's risk insurance is typically written on an "all risk" basis covering damage due to any cause (including the negligence of the insured) not otherwise expressly excluded. Builder's risk insurance is coverage that protects a person's or organization's insurable interest in materials, fixtures and/or equipment being used in the construction or renovation of a building or structure should those items sustain physical loss or damage from a covered cause.[18] Crop insurance "Farmers use crop insurance to reduce or manage various risks associated with growing crops. Such risks include crop loss or damage caused by weather, hail, drought, frost damage, insects, or disease, for instance."[19] Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake damage. Most earthquake insurance policies feature a high deductible. Rates depend on location and the probability of an earthquake, as well as the construction of the home. A fidelity bond is a form of casualty insurance that covers policyholders for losses that they incur as a result of fraudulent acts by specified

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individuals. It usually insures a business for losses caused by the dishonest acts of its employees.
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Flood insurance protects against property loss due to flooding. Many insurers in the U.S. do not provide flood insurance in some portions of the country. In response to this, the federal government created the National Flood Insurance Program which serves as the insurer of last resort. Home insurance, also commonly called hazard insurance or homeowners insurance (often abbreviated in the real estate industry as HOI), is the type of property insurance that covers private homes. Landlord insurance covers residential and commercial properties which are rented to others. Most homeowner's insurance covers only owneroccupied homes. Marine insurance and marine cargo insurance cover the loss or damage of ships at sea or on inland waterways, and of cargo in transit, regardless of the method of transit. When the owner of the cargo and the carrier are separate corporations, marine cargo insurance typically compensates the owner of cargo for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier or the carrier's insurance. Many marine insurance underwriters will include "time element" coverage in such policies, which extends the indemnity to cover loss of profit and other business expenses attributable to the delay caused by a covered loss. Surety bond insurance is a three party insurance guaranteeing the performance of the principal. Terrorism insurance provides protection against any loss or damage caused by terrorist activities. Volcano insurance is an insurance that covers volcano damage in Hawaii. Windstorm insurance is an insurance covering the damage that can be caused by hurricanes and tropical cyclones. Liability

Liability insurance is a very broad superset that covers legal claims against the insured. Many types of insurance include an aspect of liability coverage. For example, a homeowner's insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property; automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can
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cause to others' lives, health, or property. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of willful or intentional acts by the insured.
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Public liability insurance covers a business against claims should its operations injure a member of the public or damage their property in some way. Directors and officers liability insurance protects an organization (usually a corporation) from costs associated with litigation resulting from mistakes made by directors and officers for which they are liable. In the industry, it is usually called "D&O" for short. Environmental liability insurance protects the insured from bodily injury, property damage and cleanup costs as a result of the dispersal, release or escape of pollutants. Errors and omissions insurance: See "Professional liability insurance" under "Liability insurance". Prize indemnity insurance protects the insured from giving away a large prize at a specific event. Examples would include offering prizes to contestants who can make a half-court shot at a basketball game, or a hole-in-one at a golf tournament. Professional liability insurance, also called professional indemnity insurance, protects insured professionals such as architectural corporation and medical practice against potential negligence claims made by their patients/clients. Professional liability insurance may take on different names depending on the profession. For example, professional liability insurance in reference to the medical profession may be called malpractice insurance. Notaries public may take out errors and omissions insurance (E&O). Other potential E&O policyholders include, for example, real estate brokers, Insurance agents, home inspectors, appraisers, and website developers.

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Credit Credit insurance repays some or all of a loan when certain things happen to the borrower such as unemployment, disability, or death.
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Mortgage insurance insures the lender against default by the borrower. Mortgage insurance is a form of credit insurance, although the name credit insurance more often is used to refer to policies that cover other kinds of debt. Many credit cards offer payment protection plans which are a form of credit insurance.

Insurability Risks which can be insured by private companies typically share seven common characteristics. 1. Large number of similar exposure units. Since insurance operates through pooling resources, the majority of insurance policies are provided for individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. Exceptions include Lloyd's of London, which is famous for insuring the life or health of actors, actresses and sports figures. However, all exposures will have particular differences, which may lead to different rates. 2. Definite Loss. The loss takes place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.
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3. Accidental Loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be µpure,¶ in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks, are generally not considered insurable. 4. Large Loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is little point in paying such costs unless the protection offered has real value to a buyer. 5. Affordable Premium. If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that anyone will buy insurance, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance. (See the U.S. Financial Accounting Standards Board standard number 113) 6. Calculable Loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim. 7. Limited risk of catastrophically large losses. Insurable losses are ideally independent and non-catastrophic, meaning that the one losses do not happen all at once and individual losses are not severe enough to bankrupt the insurer; insurers may prefer to limit their exposure to a loss from a single event to some small portion of their capital base, on the order of 5 percent. Capital constrains insurers' ability to sell earthquake insurance as well as wind insurance in hurricane zones. In the U.S., flood risk is insured by the federal government. In commercial fire insurance it is
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possible to find single properties whose total exposed value is well in excess of any individual insurer¶s capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

Legal When a company insures an individual entity, there are basic legal requirements. Several commonly cited legal principles of insurance include: 1. Indemnity ± the insurance company indemnifies, or compensates the insured in the case of certain losses only up to the insured's interest. 2. Insurable interest ± the insured typically must directly suffer from the loss 3. Utmost good faith ± the insured and the insurer are bound by a good faith bond of honesty and fairness. 4. Contribution ± insurers which have similar obligations to the insured contribute in the indemnification, according to some method. 5. 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. 6. Causa Proxima or 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.

Indemnification To "indemnify" means to make whole again, or to be put in the position that one was in, to the extent possible, prior to the happening of a specified event or peril. Accordingly, life insurance is generally not considered to be indemnity insurance, but rather "contingent" insurance (i.e., a claim arises on the occurrence of a specified event). There are generally two types of insurance contracts that seek to indemnify an insured:
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1. an "indemnity" policy and 2. a "pay on behalf" or "on behalf of policy. The difference is significant on paper, but rarely material in practice. An "indemnity" policy will never pay claims until the insured has paid out of pocket to some third party; for example, a visitor to the home slips on a floor

that you left wet and sues you for $10,000 and wins. Under an "indemnity" policy the homeowner would have to come up with the $10,000 to pay for the visitor's fall and then would be "indemnified" by the insurance carrier for the out of pocket costs (the $10,000). Under the same situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the insured (the homeowner) would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language. An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, called an insurance 'policy'. Generally, an insurance contract includes, at a minimum, the following elements: the parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be "indemnified" against the loss covered in the policy. When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a 'claim' against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the 'premium'. Insurance premiums from many insured¶s are used to fund accounts reserved for later payment of claims²in theory for a relatively few claimants²and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (i.e., reserves), the remaining margin is an insurer's profit.
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Effects Insurance can have various effects on society through the way that it changes who bears the cost of losses and damage. It can increase fraud. On the other hand, it can help societies and individuals prepare for catastrophes and mitigate the effects of catastrophes on both households and societies. Insurance can influence the probability of losses through moral hazard, insurance fraud, and preventive steps by the insurance company. Insurance scholars have typically used morale hazard to refer to the increased loss due to unintentional carelessness and moral hazard to refer to increased risk due to intentional carelessness or indifference.[6] Insurers attempt to address carelessness through inspections, policy provisions requiring certain types of maintenance, and possible discounts for loss mitigation efforts. While in theory insurers could encourage investment in loss reduction, some commentators have argued that in practice insurers had historically not aggressively pursued loss control measures - particularly to prevent disaster losses such as hurricanes because of concerns over rate reductions and legal battles. However, beginning around 1996 insurers began to take a more active role in loss mitigation through building codes.

Underwriting and investing The business model can be reduced to a simple equation: Profit = earned premium + investment income - incurred loss - underwriting expenses Insurers make money in two ways: 1. Through underwriting, the process by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks; 2. By investing the premiums they collect from insured parties. The most complicated aspect of the insurance business is the underwriting of policies. Using a wide assortment of data, insurers predict the likelihood that a claim will be made against their policies and price products accordingly. To this
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end, insurers use actuarial science to quantify the risks they are willing to assume and the premium they will charge to assume them. Data is analyzed to fairly accurately project the rate of future claims based on a given risk. Actuarial science uses statistics and probability to analyze the risks associated with the range of perils covered, and these scientific principles are used to determine an insurer's overall exposure. Upon termination of a given policy, the amount of premium collected and the investment gains thereon minus the amount paid out in claims is the insurer's underwriting profit on that policy. Of course, from the insurer's perspective, some policies are "winners" (i.e., the insurer pays out less in claims and expenses than it receives in premiums and investment income) and some are "losers" (i.e., the insurer pays out more in claims and expenses than it receives in premiums and investment income); insurance companies essentially use actuarial science to attempt to underwrite enough "winning" policies to pay out on the "losers" while still maintaining profitability. An insurer's underwriting performance is measured in its combined ratio [8] which is the ratio of losses and expenses to earned premiums. A combined ratio of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an underwriting loss. A company with a combined ratio over 100% may nevertheless remain profitable due to investment earnings. Insurance companies earn investment profits on ³float´. ³Float´ or available reserve is the amount of money, at hand at any given moment that an insurer has collected in insurance premiums but has not paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest or other income on them until claims are paid out. The Association of British Insurers (gathering 400 insurance companies and 94% of UK insurance services) has almost 20% of the investments in the London Stock Exchange.[9] In the United States, the underwriting loss of property and casualty insurance companies was $142.3 billion in the five years ending 2003. But overall profit for the same period was $68.4 billion, as the result of float. Some insurance industry insiders, most notably Hank Greenberg, do not believe that it is forever possible to sustain a profit from float without an underwriting profit as well, but this opinion is not universally held. Naturally, the ³float´ method is difficult to carry out in an economically depressed period. Bear markets do cause insurers to shift away from investments and to toughen up their underwriting standards. So a poor economy generally
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means high insurance premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the "underwriting" or insurance cycle.[10] Property and casualty insurers currently make the most money from their auto insurance line of business. Generally better statistics are available on auto losses and underwriting on this line of business has benefited greatly from advances in computing. Additionally, property losses in the United States, due to unpredictable natural catastrophes, have exacerbated this trend.

Claims Claims and loss handling is the materialized utility of insurance; it is the actual "product" paid for, though one hopes it will never need to be used. Claims may be filed by insured¶s directly with the insurer or through brokers or agents. The insurer may require that the claim be filed on its own proprietary forms, or may accept claims on a standard industry form such as those produced by ACORD. Insurance company claims departments employ a large number of claims adjusters supported by a staff of records management and data entry clerks. Incoming claims are classified based on severity and are assigned to adjusters whose settlement authority varies with their knowledge and experience. The adjuster undertakes a thorough investigation of each claim, usually in close cooperation with the insured, determines if coverage is available under the terms of the insurance contract, and if so, the reasonable monetary value of the claim, and authorizes payment. Adjusting liability insurance claims is particularly difficult because there is a third party involved, the plaintiff, who is under no contractual obligation to cooperate with the insurer and may in fact regard the insurer as a deep pocket. The adjuster must obtain legal counsel for the insured (either inside "house" counsel or outside "panel" counsel), monitor litigation that may take years to complete, and appear in person or over the telephone with settlement authority at a mandatory settlement conference when requested by the judge. If a claims adjuster suspects underinsurance, the condition of average may come into play to limit the insurance company's exposure.
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In managing the claims handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages. As part of this balancing act, fraudulent insurance practices are a major business risk that must be managed and overcome. Disputes between insurers and insured¶s over the validity of claims or claims handling practices occasionally escalate into litigation; see insurance bad faith.

Insurance companies
Insurance companies may be classified into two groups:
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Life insurance companies, which sell life insurance, annuities and pensions products. Non-life, General, or Property/Casualty insurance companies, which sell other types of insurance.

General insurance companies can be further divided into these sub categories.
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Standard Lines Excess Lines

In most countries, life and non-life insurers are subject to different regulatory regimes and different tax and accounting rules. The main reason for the distinction between the two types of company is that life, annuity, and pension business is very long-term in nature ² coverage for life assurance or a pension can cover risks over many decades. By contrast, non-life insurance cover usually covers a shorter period, such as one year. In the United States, standard line insurance companies are "mainstream" insurers. These are the companies that typically insure autos, homes or businesses. They use pattern or "cookie-cutter" policies without variation from one person to the next. They usually have lower premiums than excess lines and can sell directly to individuals. They are regulated by state laws that can restrict the amount they can charge for insurance policies.

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Excess line insurance companies (also known as Excess and Surplus) typically insure risks not covered by the standard lines market. They are broadly referred as being all insurance placed with non-admitted insurers. Non-admitted insurers are not licensed in the states where the risks are located. These companies have more flexibility and can react faster than standard insurance companies because they are not required to file rates and forms as the "admitted" carriers do. However, they still have substantial regulatory requirements placed upon them. State laws generally require insurance placed with surplus line agents and brokers not to be available through standard licensed insurers. Insurance companies are generally classified as either mutual or stock companies. Mutual companies are owned by the policyholders, while stockholders (who may or may not own policies) own stock insurance companies. Demutualization of mutual insurers to form stock companies, as well as the formation of a hybrid known as a mutual holding company, became common in some countries, such as the United States, in the late 20th century. Other possible forms for an insurance company include reciprocals, in which policyholders 'reciprocate' in sharing risks, and Lloyd's organizations. Insurance companies are rated by various agencies such as A. M. Best. The ratings include the company's financial strength, which measures its ability to pay claims. It also rates financial instruments issued by the insurance company, such as bonds, notes, and securitization products. Reinsurance companies are insurance companies that sell policies to other insurance companies, allowing them to reduce their risks and protect themselves from very large losses. The reinsurance market is dominated by a few very large companies, with huge reserves. A reinsurer may also be a direct writer of insurance risks as well. Captive insurance companies may be defined as limited-purpose insurance companies established with the specific objective of financing risks emanating from their parent group or groups. This definition can sometimes be extended to include some of the risks of the parent company's customers. In short, it is an inhouse self-insurance vehicle. Captives may take the form of a "pure" entity (which is a 100% subsidiary of the self-insured parent company); of a "mutual"
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captive (which insures the collective risks of members of an industry); and of an "association" captive (which self-insures individual risks of the members of a professional, commercial or industrial association). Captives represent commercial, economic and tax advantages to their sponsors because of the reductions in costs they help create and for the ease of insurance risk management and the flexibility for cash flows they generate. Additionally, they may provide coverage of risks which is neither available nor offered in the traditional insurance market at reasonable prices. The types of risk that a captive can underwrite for their parents include property damage, public and product liability, professional indemnity, employee benefits, employers' liability, motor and medical aid expenses. The captive's exposure to such risks may be limited by the use of reinsurance. Captives are becoming an increasingly important component of the risk management and risk financing strategy of their parent. This can be understood against the following background:
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heavy and increasing premium costs in almost every line of coverage; difficulties in insuring certain types of fortuitous risk; differential coverage standards in various parts of the world; rating structures which reflect market trends rather than individual loss experience; Insufficient credit for deductibles and/or loss control efforts.

There are also companies known as 'insurance consultants'. Like a mortgage broker, these companies are paid a fee by the customer to shop around for the best insurance policy amongst many companies. Similar to an insurance consultant, an 'insurance broker' also shops around for the best insurance policy amongst many companies. However, with insurance brokers, the fee is usually paid in the form of commission from the insurer that is selected rather than directly from the client.

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List of insurance companies in India
Life Insurer in Public Sector 1. Life Insurance Corporation of India Life Insurers in Private Sector 2. MetLife India Life Insurance 3. ICICI Prudential 4. Bajaj Allianz Life Insurance 5. Max New York Life Insurance 6. Sahara Life Insurance 7. TATA AIG Life Insurance 8. HDFC Standard Life Insurance 9. Birla Sun life Insurance 10. SBI Life Insurance 11. Kotak Life Insurance 12. Aviva Life Insurance 13. Reliance Life Insurance Company Limited - Formerly known as AMP Sanmar LIC 14. ING Vysya Life Insurance 15. Shriram Life Insurance 16. Bharti AXA Life Insurance Co Ltd
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17. Future Generali Life Insurance Co Ltd 18. IDBI Fortis Life Insurance 19. AEGON Religare Life Insurance 20. DLF Pramerica Life Insurance 21. CANARA HSBC Oriental Bank of Commerce LIFE INSURANCE 22. Star Union Dai-ichi Life Insurance Co. Ltd. 23. INDIA First Life INSURANCE

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Detail of some major insurance companies:Life Insurance Corporation of India Life Insurance Corporation of India (LIC) is a Government of India enterprise, and is said to be the largest life insurance company and also the largest investor of the country. LIC had been established on the 1st of September, 1956, after the Life Insurance Corporation Act had been passed by the Parliament of India in the same year. The corporation is aimed at providing life insurance services primarily to the rural masses and the socially & economically backward sections of the Indian society. It also aims at promoting the people for saving their money, and offers attractive savings features along with various insurance policies.

Vital Detail The headquarters of Life Insurance Corporation of India are located in Mumbai, and as of April 2009 it has 8 zonal offices, 101 divisional offices and 2048 branches located in different towns and cities of India. Along with a workforce of 112,184 employees serving the institution, more than 1 Million agents of the Life Insurance Corporation of India are helping the people nationwide in adopting the various life insurance policies being offered by the corporation. Apart from India, LIC is also present in 12 other countries currently, fulfilling the life insurance needs of its overseas customers most of which are Non Resident Indians (NRIs). During the financial year 2006-07, the total number of Life Insurance Corporation of India policy holders were more than 200 Million, which was equal to the population of fourth largest populous country in the world at that time.

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Objectives of LIC
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Spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. Maximize mobilization of people's savings by making insurance-linked savings adequately attractive. Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best advantage of the investors as well as the community as a whole, keeping in view national priorities and obligations of attractive return. Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders. Act as trustees of the insured public in their individual and collective capacities. Meet the various life insurance needs of the community that would arise in the changing social and economic environment. Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy. Promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective.

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Aviva Life Insurance, India Aviva Life Insurance Company India Ltd. is a private insurance company, formed by a joint venture between the Aviva insurance group of UK and the Dabur group of India. In reference to the government regulations, Aviva holds 26 percent stake and the Dabur group holds the balance 74 percent share in the joint venture. Not only largest in the UK, Aviva is also known as the fifth largest insurance group in the world. Since 1834, Aviva is ensuring the lives of Indians. At the time of nationalization, Aviva was the largest foreign insurer in India in terms of the compensation paid by the Government of India. Aviva is distinguished for being the first foreign insurance company to set up its representative office in India, in 1995. Aviva Life Insurance Company established the concept of Bancassurance in India, and has leveraged its global expertise in Bancassurance successfully here. The company boasts of 223 branches in India, supporting its vast distribution network. Aviva offers various products that are meant to provide customers flexibility, transparency and value for money. Given here is a complete list of products & services offered by Aviva Life Insurance Company India Ltd.

Birla Sun Life Insurance Birla Sun Life Insurance Co. Ltd. is a joint venture between Aditya Birla Group, an Indian multinational corporation, and Sun Life Financial Inc, a leading global insurance company. Birla Sun Life Insurance is distinguished as the first company in the sector of financial solutions to begin Business Continuity Plan. This insurance company has pioneered the unique Unit Linked Life Insurance Solutions in India. Within 4 years of its launch, BSLI became one of the leading players in the industry of Private Life Insurance Scheme. Birla Sun Life Insurance believes in passion, integrity, speed, commitment and seamlessness. The mission of the company is to help people with risk
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management. It also helps in managing the financial situation of firms as well as individuals. Here is given a comprehensive list of policies and products offered by Birla Sun Life Insurance Co. Ltd. Birla Sun Life Insurance Co. Ltd. has so many plans in insurance sector to attract the customers. Detail given in the below:Protection Plans
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Birla Sun Life Insurance Term Plan Birla Sun Life Insurance Premium Back Term Plan

HDFC Standard Life Insurance Established on 14th August 2000, HDFC Standard Life Insurance Co. Ltd. is a joint venture between Housing Development Finance Corporation Limited (HDFC Limited) - India's leading housing finance institution, and a Group Company of the Standard Life Plc, UK. The Company is one of leading private insurance companies, offering a range of individual and group insurance solutions, in India. Being a joint venture of top financial services groups, HDFC Standard Life has adequate financial expertise to manage long-term investments safely and resourcefully. HDFC Standard Life Insurance offers a range of individual and group solutions, which can be easily personalized to specific needs. Its group solutions have been planned to offer complete flexibility, together with a low charging structure. As of 31 December, 2008, the Company's new business premium income stood at Rs. 1,839.70 Cores; it has covered over 812,811 lives so far. Given below is a comprehensive list of policies and products on offer by HDFC Standard Life Insurance: Protection Plans
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HDFC Term Assurance Plan HDFC Loan Cover Term Assurance Plan

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Tata AIG Life Insurance y Tata AIG Life Insurance Company Limited, which is a joint venture between Tata Group and American International Group, Inc. (AIG), offers a number of standard and custom-made life insurance policies. Tata is one of the oldest and leading business groups of India. Tata Group has had a long association with India's insurance sector being the largest insurance company in India prior to the nationalization. American International Group, Inc (AIG) is the leading U.S. based international insurance and financial services organization. y For Children Tata AIG offers a range of flexible insurance products for children. Policies dedicated to children and their key features are as given under.

Reliance Life Insurance Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd., a part of Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India's leading private sector financial services companies, which ranks among the top 3 private sector financial services and banking companies. Reliance Life Insurance is not only one of India's fastest growing life insurance companies, but also counts among the top 4 private sector insurers. In just 2 years, the Company has crossed the mark of 1.7 Million policies. RLIC launched around 600 branches in 10 months, taking the overall branch network above to 740. Reliance Life Insurance Co. is one of the only two ISO 9001:2000 certified Life Insurance companies in India. It has been awarded with the Jamnalal Bajaj Uchit Vyavahar Puraskar 2007- Certificate of Merit in the Financial Services category by Council for Fair Business Practices (CFBP). Given below is the list of the policies provided by Reliance Life Insurance Company:

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SBI Life Insurance SBI Life Insurance offers a slew of products designed for various segments of society. These include money back products, pension products, protection cum savings products, and unit linked products. All these products cater to various requirements of its end users. Money Back Products these are traditional saving plans with additional advantage of life cover and guaranteed cash inflow at regular intervals. Key features of money back plan are periodic return options suited to your needs, and competitive premium rates. Apart from normal death cover, the plan also provides four additional covers. Sanjeevan Supreme is designed for individuals who want to plan for various financial obligations at specified times in life. Pension Products Pension products have been designed keeping in mind the needs of retired individuals. Four products currently offered under this segment are Horizon II Pension, Unit Plus Pension, Lifelong Pensions and Immediate Annuity. Under these plans, one can choose retirement date, the plan option and the regular premium amount. Protection cum Savings Products These products are designed to provide savings and protection at the same time. These products offer the option of tailoring your policy according to your requirement and needs, by opting for riders (extra covers).

MANOJ KUMAR

Survey Report My survey was very good, I rally enjoin it. I face some difficulty during survey but I enjoin it. I did survey in the market through a questionnaire. It helps me to know about the customer¶s needs, requirement and expectations from the any company. It has also helps me to know about the customer¶s attitude and his or her behavior. My survey was that to find out the best investment financial product. I went to many places for survey e.g. Gurgaon, Greater Noida and New Delhi (Govin Puri Ex., Kalkaji Market and Okhla Phase III). I found most of the people are investing in the insurance sector, they prefer life insurance and health insurance. LIC is the only company where people are investing more than 60%. Mostly people are investing to save their tax. According to my survey report, people are investing many sectors for e.g. Shares, Mutual Funds, Property, Bank Deposit and Insurance but insurance is the most popular because people think it is the more safe and returnable than other financial products.

MANOJ KUMAR

PROFESSION CHART
Profession Business Service

Percentage

10%

90%

Percentage

Business Service

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Annual Income Chart
Annual Income Percentage 100000200000 12% 200000300000 10% 300000400000 20% 400000500000 8% 500000 $ Above 50%

Percentage
60% 50% 40% 30% 20% 10% 0% Percentage

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Investment Chart
Investment Choice percentage Yes 90% No 10%

percentage

Yes No

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Investment Choice among people
investment in No of person(out of 100) Shares Insurance 28 30 Mutual fund Bank deposit property 17 20 5

No of person(out of 100)
35 30 25 20 15 10 5 0 Shares Insurance Mutual fund Bank deposit property No of person(out of 100)

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Possession of Demat
Possession Have 70% Percentage Don¶t have 30%

Have Don t have

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Satisfaction with the services (Those who have)
Satisfied Percentage Yes 70% No 30%

Percentage

Yes No

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Wish to open a Demat
Opening Percentage(Out of those who have, don¶t have and not known) Yes 35% No 65%

Percentage(Out of those who have, don t have and not known)

Yes No

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Wish to invest in tax saving investment plan
Wish to invest Percentage yes 80% No 20%

Percentage

yes No

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Awareness of ³EMKAY GLOBAL FINANCIAL SERVICES LTD´
Status No of persons(out of 100) known 10 unknown 90

No of persons(out of 100)

known unknown

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EMKAY¶s customer chart
Customer Percentage(out of those who know) Yes 30% No 70%

Perce tage(out of t ose

ok o )

Yes No

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Satisfaction with EMKAY
Satisfied Percentage Yes 80% No 20%

Percentage

Yes No

MANOJ KUMAR

DETAILS OF WORK DONE
y

y y y y y y y

I made database on the excel sheet for the company in starting days. I fold the company¶s papers in envelope and ending to respective address. Go to the Nehru Place for collecting data for the company. Attending some classes of life insurance and health policy on three days. This is arranged by the branch managers for us. Go to cold call for self in the field (Govin Puri, Kalkaji Ex.). Filling up questionnaire (customer information sheet) for at least three weeks to go to the fields (Gurgaon, Grater Noida and New Delhi). Working on project like data collecting through internet. Took experience through interacting with customers.

MANOJ KUMAR

MAJOR LEARNING
I learned a lot of things during the summer training. My training is sales and marketing so I learned a lot of selling skills. I also learned how to behave in the office during the working time and talking to seniors. The company made learn about basic of insurance through training given by Jitendra Khatter (sales manager of TATA AIG). HOW TO SELL A PRODUCT PROCESS1. Introduction about yourself. 2. Rapport Building (saying some things about customer that makes him happy so that he could be familiar to you). 3. Knowing about the customer¶s need and requirements. 4. After to know all things, pitch the product that suits his or her needs.

My other learning¶s are:1. Talking friendly to customers. 2. How to start to get time from customer. 3. Knowing about consumer behavior.

MANOJ KUMAR

CONSTRAINTS FACED
y Company did not give travelling allowance to us; we spend money from our pocket. y Training was in sales so it is very difficult to talking to customer on the way. y People response was not good during the market survey. y People are not aware about the ³EMKAY¶S´ name so it¶s very difficult to tell him about the company¶s work and services. y We went to meet customer without appointment so some time they didn¶t meet us and we come back without any information.

MANOJ KUMAR

RECOMMENDATION
y Company should spend some money on the advertisement because people are not aware of even company¶s name. y There are some companies who open demat account free, so company should reduce some cost of opening account. y Company should look for flexible brokerage rate. y Brokerage rate should be on the amount of trading not of opening account. y Company should open more branches like Gurgaon or Noida etc. y Company should have its own insurance police rather than selling other companies polices.

MANOJ KUMAR

CONCLUSION
I met so many people during the survey and go the so many places like Gurgaon, Greater Noida and New Delhi etc. I found people are interesting in investment. Those people I met during the survey have already insurance police of XYZ companies. But there is a concept in the insurance sector HLV (Human Life Value), according to this concept a man should be have his or her assured amount 20 times of his or her annual income. That¶s why people buy more polices. More than 60% people think insurance is the best investment financial product. 20% people are say share market is the best investment because it is uncertain and it can give you more return. And 20% people believe in other investment. Most of the people are investing in the LIC¶s product. People say it is safer rather than other private companies. During the survey I found only 10% people are aware of ³EMKAY¶S´ name.

MANOJ KUMAR

Questionnaire is gives in the below:1. NAME: «««««««««««««««««««««« 2 .ADDRESS: «««««««««««««««««««««««««« 3. CONTACT NO: Landline No«««««««, Mob. No«««««««« Email ID: «««««««««««««««««««.. 4. PROFESSION: 5. ANNUAL INCOME: BUSINESS SERVICE 2, 00,000-3, 00,000 4, 00,000-5, 00,000

1, 00,000-2, 00,000 3, 00,000-4, 00,000 5, 00,000 & Above

6. Do you invest somewhere? 7. INVESTMENT IN:

Yes Insurance Shares Property

No Mutual funds Bank deposits Others

8. Which product do you like for best investment: «««««««««««« 9. Do you have Demat account? Yes No

10. If yes, of which company & what is brokerage rate: ««««««««« ««««««««««««««««««««««««««. 11. Are you satisfied with the services 12. Do you want to open a Demat account
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Yes Yes

No No

13. Do you want to invest in tax saving investment plan

Yes

No

14. Do you know about´ EMKAY GLOBAL FINANCIAL SERVICES LTD´? Yes No

15. Are you a customer of ³EMKAY GLOBAL FINANCIAL SERVICES LTD´? Yes No Yes No

16. Are you satisfied with EMKAY?

MANOJ KUMAR

BIBLIOGRAPHY
REFERENCE 1. www.google.com 2. www.wikipedia.com 3. www.searchengine.com

MANOJ KUMAR

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