1. THE EVOLUTION OF GENERAL INSURANCE IN INDIA
A PROJECT TOWARDS 2ND SEMESTER
POST GRADUATE DIPLOMA IN MANAGEMENT, HYBRID (PGDM-HB) TO
WE SCHOOL, WELINGKAR EDUCATION BY
DEVENDRA PRABHU
ROLL NO: HPGD/JL15/2988

2. Acknowledgement
 I would sincerely like to thank WE SCHOOL, WELINGKAR EDUCATION with the its contents in We Tube, We Lounge and Newswire for giving me the opportunity to work on this report on “The Evolution of General Insurance in India”. During the course of this Project, I came across many new instances which broadened my education outlook. Beside adding to my knowledge on the aforesaid subject the project work exposed me to the practical sides of various techniques of managing project in an organization.

3. Preface
Change is constant…! Change is always with us and seems to be happening at an increasing rate. Every day we face challenges and the need to improve yesterday’s practices in any organization. The familiar command and control structure introduced at the turn of the century are rapidly disappearing. In their place are task force, self directed work teams, and various forms of projectized organizations. In all cases, empowerment of the worker lies at the foundation of this new structure. To be competitive we now develop applications that cross departmental lines, applications that span organization, applications that are not clearly defined, applications that will change because the business climate is changing. All of this means that we must anticipate changes that will affect our and be skilled at those changes. I, as a student of business administration and a future manager have approached this subject with beginners & self help kind of approach, integrating what management practices & theories I have learnt into this subject with the approval of our professor. I have also included in the last section of my thesis, case studies, which I found to have applied managerial principles of project management.

4. 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 Tokio 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’s optimum level. A case study based on the devastating Chennai floods in February 2016 is been prepared and facts of the case are being listed along with the effect of the particular situation on the General Insurance Companies is been justified.

5. Objectives
To find out general insurance and which are the companies involved in it.
To know what are the trends in General Insurance.
To find out the developments in the General Insurance.
To find out the Procedure of Claims.
What are the challenges faced by insurance industry currently?
Who are the market players in this insurance sector?
What is the current market situation about of the insurance sector?
What are the various market strategies followed by these industries?
How the companies are taking steps in order can overcome the challenges.
What are the future prospects of insurance industry?

6. Brief History of the Insurance Sector
Origin of Insurance
 Whenever there is uncertainty there is risk. We do not have any control over uncertainties which involves financial losses. The risk may be certain events like death, pension, retirement or uncertain events like theft, fire, accident, etc. Insurance is a financial service for collecting the savings of the public and providing them with risk coverage. It comes under service sector and while marketing this service due care is taken in quality product and customer satisfaction. The main function of the Insurance is to provide protection against the possible chances of generating losses. The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries.
Brief History of the Insurance Sector
  The business of life insurance in India in its existing form started in India in the year1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life 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 Calcutta by the British.

7. Insurance Sector Reforms:
In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N. Malhotra was formed to evaluate the Indian insurance industry and recommend its future, direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector.
In 1994, the committee submitted the report and some of the key recommendations included:
Structure:
Government stake in the insurance Companies to be brought down to 50%.
Government should take over the holdings of GlC and its subsidiaries so that these subsidiaries can act as independent corporations.
All the insurance companies should be given greater freedom to operate.

8. Insurance Industry: Classification

9. Some Players In The Industry
Life Insurance
General Insurance
Life Insurance Corporation of India
General Insurance Corporation of India
Oriental Insurance Company Ltd.
New India Assurance Company Ltd.
National Insurance Company Ltd.
United India Insurance Company Ltd.
New Entrants
ICICI Prudential Life Insurance Ltd
Bajaj Alliaz General Insurance Company Ltd.
TATA AIG Life Insurance Corporation Ltd
Reliance General Insurance Company Ltd.
ING Vysya Life Insurance Corporation Ltd.
TATA General Insurance Company
OM Kotak Mahindra Life Insurance Corporation Ltd.
Royal Sundaram Alliance Insurance Company Ltd.

10. 4 I’s of Insurance Service
The 4 I’s refers to the different dimensions/ characteristics of any service. Unlike pure product, services have its own characteristics and its related problems. So the service provider needs to deal with these problems accordingly. The service provider has to design different strategies according the varying feature of the service. These 4 I’s not only represent the characteristics of different services but also the problems and advantages attached to it.
These 4 I’s can be broadly classified as:
Intangibility
Inconsistency
Inseparability
Inventory

11. General Insurance
With the opening up of the insurance industry to the private sector, the need for a strong, independent and autonomous Insurance Regulatory Authority was felt. As the enacting of legislation would have taken time, the then Government constituted through a Government resolution an Interim Insurance Regulatory Authority pending the enactment of a comprehensive legislation. The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938,the Life Insurance Corporation Act, 1956 and the General insurance Business(Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of India (for life insurance business) and General Insurance Corporation and its subsidiaries(for general insurance business).

12. Frequent Terms Used
Agent: An insurance company representative licensed by the state, who solicits, negotiates or effects contracts of insurance, and provides service to the policyholder far the insurer.
Actual Total Loss: It is a loss where the goods are completely lost and become irrecoverable.
Additional cover: An insurance policy extended to cover additional risk perils such as strikes. Riots and Civil commotion etc on payment of extra premium.
Agreed value policy: Policy which undertakes to pay a specified amount in case of total loss. Under this case the policy does not take into account the current market value.
Assessor: Person who estimates the value of goods for the purpose of apportioning the sum payable by the underwriters to settle the claims. Also called as Surveyor.
Assured: Party indemnified against 19ss by means of insurance.
Burglary: It is a theft committed by breaking into or out of the premises. Evidence of breaking In, Is necessary.
Coverage: The scope of protection provided under a contract of insurance; any of several risks covered by a policy.
Cargo insurance: A generic term used in both inland marine and ocean marine insurance to designate the type’s of insurance available to provide coverage for cargo that is being transported by truck, rail, air, ship, or boat.
Certificate of Insurance: A statement of coverage issued to an individual insured, specifying the insurance benefits and principal provisions applicable to the member.
Claim: The formal request by a policyholder or a claimant for payment of loss under an insurance policy.

13. Co-insurance: A provision under which an insured who carries less than the stipulated percentage of insurance to value, will receive a loss payment that is limited to the same ration which the amount of insurance bears to the amount required;
Cover Note: Is the document that is issued provisionary pending issuance of insurance Policy.
Indemnity: Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss.
Insurable Interest: A condition in which the person applying for insurance and the person who is to receive the policy benefit will suffer all emotional or financial loss, if any untouched event occurs. Without insurable interest, an insurance contract is invalid,
Insurance: Social device for minimizing risk of uncertainty regarding loss by spreading the risk over a large enough number of similar exposures to predict the individual chance of loss.
Net Premium: The portion of premium rate which is designed to cover benefits of the policy, excluding expenses, contingencies and profit.
Policy: Is the legal document that has the conditions of the insurance contract.
Premium: It is the amount paid to secure an insurance policy. 
Salvage: Recovery made by an insurance company by the sale of property which has been taken over from that insured as a part of loss settlement. The remains of damaged vehicle or any other property.
Third party: Any person other than the two parties signing an insurance, contract. 
Underwriting: Underwriting of a risk involves consideration of material, facts on the basis of which a decision will be taken whether to accept the risk and if so at what rate of premium.

14. PRODUCTS
The various products can be grouped under the following categories:
Individuals/Family (Personal Accident, Hospital Cash Daily Allowance Policy, Health Guard, Critical Illness, Householders Insurance, Travel Companion, etc.)
Marine
Professionals, Business/Office/Traders (Burglary insurance, Fidelity Guarantee Policy, Office package, Money Insurance, Public Liability, Plate Glass Insurance, Fire insurance policy etc)
Engineering/Industry
Agriculture/Sericulture/Poultry
Animals/Birds
Aviation
Motor Vehicle – Private/Commercial
Health-Mediclaim / Overseas Mediclaim / Personal Accident

15. Company wise Market Share of Gross Premium Underwritten (In India)

17. Documents requirement for various types of Claims
Different documents are required for settling different types of claims. The most commonly required ones are mentioned under each claims type listed below. Your full cooperation to surveyor/Investigator appointed by the Company would enable prompt settlement of claims.
Claim due to Fire and/or Explosion.
Claim due to Flood, Storm, Cyclone, Earthquake, and Subsidence/Landslide.
Claim due to Riot, Strike, Malicious Damage and Terrorism (RSMDT).
Marine Inland Transit Loss of cargo/machinery.
Marine Loss of cargo/machinery for export'
Marine Loss of cargo/machinery during Import
Claim due to Electrical/Mechanical/Electronic Breakdown/mishandling/ 
Impact damage to machine.
Claim due to Burglary/Theft of Vehicle
Accidental Death Claim
Permanent Disability/Injury claim due to accident
Temporary Total Disability (TTD) (Weekly compensation) claim due to accident
Mediclaim claim due to hospitalization (disease/accident)
Claim due to Death of Cattle (Non-IRDP)/Permanent Total Disablement. Damage claim to private Vehicle (Car/2Wheeler) due. to accident
Claim of Damage to Commercial Vehicle (Taxi/Bus/Lorry) due to accident. Third Party (T.P.) Claim due to accident