Professional Documents
Culture Documents
1. OBJECTIVES:
To know what are the trends in General Insurance.
To find out the developments in the General Insurance
To find out general insurance and which are the companies involved in
To find out the Procedure of Claims.
2. METHODOLOGY:
INSURERS:
Insurance industry, as on 1.4.2000, comprised mainly two players: the state
insurers:
1. Life Insures:
1.1. Life insurance corparatio of india (LIC) General insuers
1.2. General insurance corporation of india(GIC)
INSURANCE INDUSTRY:
CLASSIFICATION
INSURANCE
Life General
Insurance Insurance
Life Insurance Oriental
Corporation Insurance
of India. Company Ltd
New India
Assurance
Company Ltd.
National
Insurance
Company Ltd.
United India
Insurance
Company Ltd.
SOME PLAYERS IN THE INDUSTRY:
Life General
Insurance Insurance
Om Kotak Mahindra
Royal Sundaram
Life
Alliance Insurance
InsuranceCorporation
Company Ltd.
Ltd.
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
4 I’s of
Insurance
Service
• Intangibility:
Insurance is a guarantee against risk and neither the risk nor the guarantee is
tangible. Hence, insurance rightly come under services, which are intangible.
Efforts have been made by the insurance companies to make insurance tangible
Inconsistency
Service quality is often inconsistent. This is because service personnel have
different capabilities, which vary in performance from day to day. This problem
of inconsistency in service quality can be reduced through standardization,
training and mechanization.
• Inseparability
Services are produced and consumed simultaneously. Consumers cannot and
do not separate the deliverer of the service from the service itself. Interaction
between consumer and the service provider varies based on whether consumer
must be physically present to receive the service.
• Inventory
No inventory can be maintained for services. Inventory carrying costs are
more subjective and lead to idle production capacity. When the service is
available but there is no demand, cost rises as, cost of paying the people and
overhead remains constant even though the people are not required to provide
services due to lack of demand.
The core product of insurance company is insuring life and non life products.
People opt for this service as they want to secure their life, people dependent on
them and other valuable things in life.
The time factor plays an important role while providing service to the
customer. The customer expects that the procedures for settling the claim should
be short and not much time consuming. They should get the benefits of the
service as soon as possible.
Today the technology is boosting in each and every field. Insurance is not an
exception. Companies have started providing customers facility of online
payment of premium through their websites. They also provide online assistant to
the customer the policy status and how to calculate the premium. To calculate the
premium they just need the present age, the type of police, sum assured, and
accident covered if any. By filling in this information you can calculate the
amount of premium you have to pay. The customer can pay their premiums by
means of credit cards or can also give standing instruction to the bank in order to
pay their monthly premiums.
The insurance companies also provide loan facilities against their policies. At
present loans are granted on unencumbered polices as follows:
• Up to 90% of the Surrender Value for policies, where the premium due is
fully paid-up, and
• Up to 85% of the Surrender Value for policies where the premium due is
partly paid-up.
The minimum amount for which a loan can be granted under a policy is
Rs150. The rate of interest charged is 10.5% p.a., payable half-yearly. Loans are
not granted for a period shorter than six months, or on the security of lost policies
(the assured must have the duplicate policies) or on policies issued under certain
plans. Certain types of policies are, however, without loan facility.
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.
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.
Public Sector Subsidiaries
I. Oriental Insurance Company.
The Oriental Insurance Company Ltd. (OICL) is one of the leading General
Insurance companies in India and is a subsidiary of the General Insurance
Corporation (GIC) of India. It is one of the oldest Insurance. If companies and
was established in the year 1947. The Company transacts all kinds of non-life
insurance business ranging from insurance covers for very big projects to small
rural insurance covers. OICL, is the –
• First to have underwritten the biggest Grass Root Refinery Project,
Reliance Jamnagar Refinery.
• First to have issued a Package Policy under mega risk to PSU Oil giants. .
• First to have issued Advance Loss of Profits policy in India.
• First to have issued directors & Officers liability policy in India.
• First to introduce Kidnap & Ransom cover in India.
• First to have issued Stock Brokers and Stock Exchange custodial
services policy in India.
• First to have issued tailor-made cover for Cellular Communication
systems.
• First to have front office computerization drive in India.
• First to have a system of in-house loss assessment upto statutory limits.
• First to have started motor third party conciliatory proceeding
THE PROFILE
The Oriental Insurance Company' Ltd. (OICL) is one of the leading General
Insurance companies in India and is a subsidiary of the General Insurance
Corporation (GIC) of India. It is one of the oldest Insurance companies and was
established in the year 1947. The Company transacts all kinds of non-life
insurance business ranging from insurance covers for very big projects to small
rural insurance covers.
OICL has its Head office in New Delhi, the capital of India. The Company has
21 Regional Offices, 311 Divisional Offices and 635 Branch offices in various
cities of the country.
Reinsurance connections are spread all over the world. The Company has a
very high reputation in the Reinsurance market.
OICL specializes in devising special covers for large projects like Power
Plants, Petro-chemical, Steel Plants and chemical plants. It has a highly
technically qualified and competent team of professionals, to render the best
customer service. The Company has a dedicated project cell at the Head Office
as well as major cities of India. A special R & D team has been dedicated to
bring out special innovative covers like Stock-Brokers' Policies, Special Package
Policies etc.
MISSION
To develop general insurance business in the best interest of the community
To provide financial security to individuals, trade and commerce by
offering insurance products and service of high quality at affordable cost
COMMITMENTS TO THE CITIZENS
In areas coming within competence of GIC respond to all commercially viable
general insurance requirements of the citizens, not hitherto available within
three months from the date on which such a demand is received.
In areas covered by tariff, appropriate proposals will be submitted to the
Tariff Advisory Committee with appropriate comments within two months.
Continue to provide customized insurance products for weaker sections of
the society at affordable price within six months of receipt of a request for
a specific type of cover.
Prepare booklets on standard policy covers setting out essential
information and make such booklets readily available for purchase at
suitable places.
Promote customer education in general insurance service by holding
workshops in important regional centers.
Make available to a customer, on request to the policy issuing office, the
status of his claim and/or claim settlement details within 7 working days.
Endeavor to set up a system of Ombudsman at four metropolitan cities to
conciliate disputes on personal line insurance claims
CORPORATE OBJECTIVES:
To serve better the insurance needs of the entire community, keeping
CUSTOMER as the focus..
To manage Business profitably, Manage funds judiciously and deploy
investible funds for optimum Yield.
To manage Business profitably, Manage funds judiciously and deploy
investible funds for optimum Yield.
To work towards minimization of losses and develop Risk Management
Technologies.
To function as a strong and dynamic non-life insurer
PRODUCTS:
The various products can be grouped under the following categories:
Individuals/Family
Marin
Professionals
Business/Office/Traders
Engineering/Industry
Agriculture/Sericulture/Poultry
Animals/Birds
Aviation
Motor Vehicle – Private/Commercial
Health-Mediclaim
Overseas Mediclaim
Personal Accident
II. The New India Assurance Company.
Established by Sir Dorab tata in 1919, New India’ was the first fully Indian
owned insurance company in India. There were nearly 150 insurance firms in
India - including ones from France, the UK and America. These were operated
through managing agencies in India largely held by Indian business houses.New
India is a leading global insurance group, with offices and branches throughout
India and various countries abroad. The company services the Indian
subcontinent with a network of 1,130 offices, comprising 26 Regional offices,
366 Divisional offices and 738 Branches. With approximately 25,000 employees,
New India has the largest number of specialist and technically qualified
personnel at all levels of management, who are empowered to underwrite and
settle claims of high magnitude
New India has historically been a frontrunner in several diverse fields of
business and industrial activity. New India are lead underwriters of India's Space
programn1e having insured several INSAT and other, satellites. New India are
pioneers in Engineering insurance, Financial risks insurance and are now offering
customized Risk Management solutions to our: corporate clients in the Private
and public Sectors in Power, Telecom, Petrochemicals, Steel and Automobile
industries
New India's foreign operations started with the establishment of an office in
London in 1920. An international presence was built up by New India as a direct
writing Company in 23 countries spanning 5 continents. It increased its reach
and capacity, for reinsurance facilities for all classes of business.
Starting way back in the 1920s, New India's UK operations have now taken
deep root. New India is party to one of the oldest reinsurance treaties in the UK
market. Through participation in Aviation and Marine Hull underwriting, New
India has, over a period of time, strengthened its market presence. In 1980's with
the establishment of a full-fledged branch to underwrite UK Business, it has
extended its UK operations, authorized by the Department of Trade and industry
The New India commenced its Japan operations in 1950, and now: operates
through 8 branches. The Japanese operation covers 35% of the Company’s
overseas premium income.
II. The National Insurance Company
Since incorporation in the year 1906, National Insurance~ Company has been
carrying out general insurance business under private management until 1972,
the year of its nationalization. In the same year 22 foreign and 11 Indian
Insurance Companies were amalgamated with National Insurance Company
Limited, as a subsidiary company of General Insurance Corporation of India
Headquartered in Calcutta it has an organizational network of over 964
offices with around 20,077 trained workforces. The company also has operations
in Hong Kong and Nepal and ranks among the top global business insurers. Later
on in 2002, with the passage of Insurance amendment Bill (2002), National
Insurance Company has been delinked from GlC and. has been functioning as an
independent company
Its product range includes motor vehicle insurance; fire insurance on
buildings and other assets; various crime covers like burglary and theft of cash;
machinery breakdown cover for industrial equipment; transit damage cover for
imported or exported goods; as well as legal liability cover.
Professional indemnity and directors and officer’s liability covers are some
of the new covers. NICO General Insurance seeks to attract clients and
intermediaries and flexibility in claims settlements, and at the same time
ensuring that we do not erode shareholder value. The objective is to add value to
the shareholders' funds whilst ensuring customer satisfaction? The strength of
NGI is in its balance sheet.
NICO General Insurance views the future and its prospects as extremely
bright, exciting and rewarding for staff, clientele and shareholders alike.
IV. United India Insurance Company
United India Insurance is one of the four subsidiaries of the General
Insurance Company carrying on general insurance business with its head office
at Chennai. Later on in 2002, with the passage of Insurance amendment Bill
(2002), United India Insurance has been Del inked from GIC and has been
functioning as an independent company.
UI spans the country with a network of 1123 offices and manpower of Over
21,000 employees. The organizational structure comprises 22 regional offices,
327 divisional offices.., and 777 branch offices, supported by 21,505 employees.
ICRA has maintained the iAAA rating, indicating the claims paying ability of
United India Insurance (UII) to be of the highest order. The rating takes into
consideration the favorable prospects for the domestic general insurance industry
following the deregulation of the sector.
UII continues to be a dominant player in the Indian insurance industry, with
an overall market share of 25% and a leadership position in the southern
markets. UII is a Pioneer of Personal Insurance Products in India who
specializes in non-life insurance products including Medical and Accident
Insurance. It enjoys a market share of over 25 percent of the non-life insurance
sector in India.
PRIVATE COMPANIES
1. Bajaj Allianz General Insurance Company:
Allianz AG:
Allianz group was founded in 1890 and is one of the world's leading insurance
companies with over 100 year's experience in insurance and related services. It is
also the largest insurer in Europe. Allianz group has multi-local structure and
presence in over 70 countries. The key business areas of Allianz group include
General Insurance (property, engineering, marine, motor, casualty and
miscellaneous), Reinsurance, Risk Management, Life & health insurance, Asset
Management and Pension Funds Management.
Bajaj Auto Ltd.
Bajaj Auto Ltd the flagship company of Bajaj Group was incorporated in 1945
as Bachraj Trading Corporation. Initially it started by assembling two and three
wheelers in collaboration with Piaggio of Italy. After the expiry of the Agreement
in 1971 the two and three wheelers acquired the brand name of Bajaj. The
strength of the company lies in its strong brand image and ability to offer value
for money products leveraging on its large-scale operations.
The Joint Venture
Bajaj Allianz General Insurance a joint venture non-life company promoted
jointly by Bajaj Auto and German insurer- Allianz. Indian auto major holds 74%
while Allianz holds 26% in the Joint Venture, and has an authorized and paid up
capital of Rs. ll0 crores. Mr. Graham Norris is the CEO of the company. Bajaj
Allianz General Insurance will leverage the customer base and expertise of Bajaj
Auto Ltd and Allianz.
Royal Sundaram General Insurance Company Limited:
Sundaram Finance
Sundaram Finance Limited (SF) was established In 1954 with a paid-up
capital of Rs. 0.02 million, primarily to assist the development of Road Transport
Industry.
SF has been providing financial assistance to road transport operators for
acquiring commercial vehicles under hire purchase system. Emerging as the
leader in the industry, SF has been staying at that position for over four decades.
SF diversified into equipment leasing in 1981.
Royal & Sun Alliance
Royal & Sun Alliance is one of the world's leading international Insurance
companies. The Sun was established in 1710 and is the oldest. Insurance
company in existence still trading under its original name. The
Alliance was founded in 1824 and the Royal in 1845.
The Group's international presence began to emerge in the 18th century with
business ventures in mainland Europe. Forays into the US and Canadian markets
followed in the 19th century, and in 1998, Royal & Sun Alliance became the first
UK insurance company to be granted a license to operate in China.
The Joint Venture
The joint venture bringing together Royal & Sun Alliance Insurance and
Sundaram Finance Limited started its operations from March 2001. The
company is Head Quartered at Chennai, and has two Regional Offices, one at
Mumbai and another one at Delhi. The venture is aiming at Rs. 120 Crores in
revenue during first year of its operations and is confident of breaking even by
fifth year.
ICICI Lombard General Insurance Company:
ICICI
ICICI Ltd. was established in 1955 by the World Bank, the Government of
India and the Indian Industry, to promote industrial development of India by
.Providing project and corporate finance to Indian industry.
Since inception, ICICI has grown from a development bank to a financial
conglomerate and has become one of the largest public financial institutions in
India. ICICI has thus far financed all the major sectors of the economy, covering
6,848 companies and 16,851 projects.
Lombard
Lombard Canada Ltd., is a leading insurance management company
responsible for providing insurance management services for all of the Lombard
group's commercial, personal, and specialized insurance companies. Canadian
owned and operated, Lombard Canada Ltd. has its head office in Toronto and has
annual sales in excess of$500 million and is a wholly owned subsidiary of
Fairfax Financial Holdings Limited (FFH on the TSF Lombard Canada Ltd. has
achieved a reputation for providing solid underwriting performance, diversified
books of business and strong capital positions.
The Joint Venture
ICICI Lombard General Insurance Co will be headed by Mr. Sanjiv Kerkar.
ICICI would hold about 74 percent stake, while Canadian insurer Lombard would
hold the maximum permissible 26 percent and commence business with a start-
up capital ofRs.100 crore. ICICl Lombard has plans to sell covers to the
corporate clients of ICICl. St the same time it will sell property insurance for
ICICI home loan seekers and auto insurance for those availing of car finance.
4. Tata AIG General Insurance Company Limited:
TATA Group
Tata Enterprises with 82 companies, spread over seven sectors and with an
annual turnover exceeding US $ 8.8 billion, employs more than 262,000 people.
Tata Group has shown over years that it is a value driven company and has"
pioneering contributions in various fields including insurance, activation, iron
and steel. Tata companies have forged a number of global alliances with eminent
international partners in several fields. In terms of capital market performance as
many as 40 listed Tata companies account for nearly 5% 6fthe total market
capitalization of all listed companies.
TATA Group in Insurance
The Late Sir Dorab Tata was the founder Chairman of New India Assurance Co.
Ltd., a group company incorporated way back in 1919.
Government of India took over the management of this company as a part of
Nationalization of general insurance companies in 1972. Not deterred by the
move, Tata group have ventured into" risk management services having tied up
with AIG group, back in 1977, with the incorporation of Tata AIG Risk
Management Services Pvt. Ltd.
AIG
“American Insurance Group is the leading U.S. based international insurance
and financial services organization and the largest underwriter of commercial and
industrial insurance in the United States. Its member companies write a wide
range of commercial and personal insurance products through a variety of
distribution channels in over 130 countries and jurisdictions throughout the
world.
AIG's global businesses also include financial services and asset management,
including aircraft leasing, financial products, trading and market making,
consumer finance, institutional, retail and direct investment fund asset
management, real estate investment management, and retirement savings
products.
The Joint Venture
Tata AIG General Insurance Co. Ltd. has a start-up capital of Rs. 125 crores
of which 74 per cent has been brought in by Tata Sons and American partner
brings in the balance 26 per cent.
Tata -AIG plans to be the first Indian insurance company to offer a
comprehensive policy to cover various risks in the IT sector, risk arising out of
virus, cyber crime, negligent acts, errors and omissions and third party liability
from a security failure. Other products on offer are property, casualty, marine,
directors and officer’s liability, accident and health, homeowners and automobile
insurance.
Bajaj Allianz General Insurance Products
o Personal Accident
o Hospital Cash Daily Allowance Policy
o Health Guard
o Critical Illness
o Burglary Insurance
o Householders Insurance
o Travel Companion
o Fidelity Guarantee Policy
o Office package
o Money Insurance
o Public Liability
o Plate Glass Insurance
o Consequential Loss (Fire) Insurance Policy
The plan available now with various companies are however not the same as
each company has introduced. Some variation in the cover to suit the varying
requirements.
Types of overseas Mediclaim insurance policy
1) Individual Overseas Mediclaim insurance policy
2) Student Overseas Mediclaim insurance policy
3) Senior Citizen Mediclaim insurance policy
These MAN centres were connected to each other by a WAN network. This
WAN was designed for distributed processing without a central database – each
division maintained a database of the policyholders. The central office in
Mumbai maintained an index of policy numbers and the corresponding IP
addresses of the servers where the details of the policy were maintained.
• Electronic Clearance Service (ECS):
Almost all the big organizations today provide the ECS facility to its
customers. A policy holder having an account in any bank which is a member of
the local clearing house can opt for ECS debit to pay premiums. The advantage
here is that once the option is exercised, the policy holder need not visit a branch
for paying the premium or collecting the receipts. On the day indicated by the
policy holder, the premium amount will be directly debited to the bank account of
the policyholder and the receipt will be issued by the designated branch office.
Bank ATM’s:
Many insurance companies have a tie-up with commercial banks so as to
enable policyholders to use the facility of paying premiums through the bank
ATM’s. ICICI Lombard has a tie up with ICICI bank; Bajaj Allianz has a tie-up
with Corporation bank and UTI Bank.
• Call Centres and SMS services
Almost all the insurance companies have their own call centres which cater to
the phone based queries of the policyholders. This service is 24x7 and they have
the Interactive Voice Response (IVR) systems at all the branches.
Also, LIC and other companies now provide SMS services going with the new
trends like SMS banking in the banking sector.
Claims
The Settlement of claims constitutes one of the important functions in an
insurance organisation.
The proper settlement of claims requires a sound knowledge of thee law,
principles and practices governing insurance contracts and in particular a
thorough knowledge of the terms and conditions of the standard policies and
various extensions and modifications there under.
The procedure in respect of claim a under various classes of insurance follows
a common pattern and may be considered under 3 broad headings
Preliminary procedure
It is essential that early notification of the loss is received by insurance undue
delay in notification would adversely affect the position of the insurer. However
if there is any delay in notification or not or weather is material will be ultimately
decided by the courts based on the facts of the individual cases
The notice of loss condition in liability policies provides for two aspects
a.) Notification of the happening of the accident immediately
followed by b.) Notification of the receipt of claim or suit filed against
the insured.
Under certain types of policies (e.g. Burglary) notice is also to be given to
police authorities.
Loss Minimization
At common law, there is a duty on the part of the insured to observe good
faith .This duty of good faith means that at all times the insured has to act as if he
is uninsured.
For E.g., the private car package policy provides , among other things , that
the insured shall take all reasonable steps to safeguard the motor car from loss or
damage and to maintain it in efficient condition. In the event of any accident or
breakdown the motor car shall not be left unattended without proper precautions
being taken to prevent further damage or loss.
Procedural
On receipt of intimation of loss or damage insurers check that:
a.) the policy is in force on the date of occurrence of the loss or
damage
b.) The loss or damage is by a peril insured by the policy.
c.) Notice of loss received without undue delay.
After this check up the loss is allotted a number and entered in the claims
register.
Claim Forms
The contents of the claim form vary with each class of insurance .In general
the claim in general the claim form is designed to elicit full information regarding
the circumstances of the loss such as date of loss, time, cause of loss, extent of
loss etc claim forms are invariably sued in fire and miscellaneous insurance.
Investigation and Assessment
On receipt of the claim form duly completed from the insured the insurers
decide about the investigation and assessment of loss if the loss is small the
investigation to determine the cause and extent of loss is done by an officer of the
insurers. Some times even this may be waived and the loss settled he basis of the
claim form only.
The investigation of larger or complicated claims is entrusted to independent
professional surveyors who are specialist in their line the appointment of a
surveyor is intimated to the claimant the surveyor is furnished with all relevant
claim papers such as claim form policy copy etc…However, many a times
surveyor is appointed and survey is carried immediately on receipt on notice of
loss, that is even before claim form could be issued.
Claims documents
In addition to the claim form independent survey report certain documents are
required to be submitted by the insurers to substantiate the claim for example for
fire claims for fire claims a report for the fire brigade for motor claims driving
license registration copy police report etc
Arbitration
It is distinct from litigation and is a method of settling disputes under contract
in accordance and conciliation act 1996.
Settlement
The claim is processed on the basis of Claim form
Independent report from Surveyors, legal opinion, medical opinion etc as the
case may be. Various documents furnished by the insured. Any other evidence
secured by the insurers
If the claim is in order settlement is effected by cheque the payment is entered
in claims register as well as in the relevant process record. Appropriate recoveries
are made from the insurers if any.
Case Study
26/7/2005 – Mumbai under water
Mumbai will never be the same again. And so will the insurance sector in
Mumbai after the 26/7 floods. Torrential rains which killed thousands and
rendered many homeless, also led to loss of business and vehicles.
• The facts:
As fallout of the torrential rains, the non-life insurance sector was flooded
with more than 10000 claims totalling over Rs. 2000 crores. However, these did
not include the 50000 cars that have been damaged in Maharashtra.
While the top four private sector general insurance companies, ICICI
Lombard General Insurance, Bajaj Allianz General Insurance, Iffco Tokio
General Insurance and Tata AIG have together received claims worth over Rs
1,000 crore; the four state-owned general insurance companies New India
Insurance, Oriental Insurance, United Insurance and National Insurance received
claims close to Rs 1,500 crore.
Private insurer, Bajaj Allianz General Insurance Company Ltd (BAGICL)
alone had received claims for at least 10,000 motor vehicles after the recent
floods in Mumbai.
ONGC's insurance claim is considered to be the largest given its loss of $ 500
million after fire gutted the Bombay High rig.
Insurance firms set up special cells to visit victims and settle claims. In many
firms, the special teams worked round-the-clock to take stock of the loss and
speed up the settlement process.
Bajaj Allianz settled claims worth about Rs 200 crore without any
documentation, to the victims of the recent floods in Mumbai.
After the natural calamity, the Finance Minister sought speedy redressal of
claims. He directed the Chairmen and Managing Directors of the four public
sector general insurance companies that claims below Rs 50,000, arising out of
the recent floods in Maharashtra and Gujarat, should be settled by August 31.
Public sector player, National Insurance Company received 3,000 claims for
Rs 350 crore from its customers in Mumbai for damage to property caused by the
recent rains.
While some insurers had taken a re-insurance cover, some have not. Mumbai
floods brought to fore the ill-preparedness both among the mega polis
administrative officials and the insurance sector. While the latter seems to have
realized the damages, the former is still grappling with the situation. As death toll
continues to rise, insurance firms have realized the need to better manage natural
calamities. The premium for flood covers may rise in coming years.
The effect:
Here’s a warning to the lakhs of Mumbaikars who are planning to insure their
houses in the wake of the recent deluge. One will have to read the fine print
carefully. Public sector insurance firms are quietly planning to drop the word
‘flood’ from the policy.
Those wanting to insure their homes against flooding may now have to pay a
separate premium. The insurance sector has suffered losses of about Rs 1,500 crore.
These companies may not get re-insurance for these policies as they had not taken
re-insurance for these small individvidual policy
Questionnaire
Q1.) What according to you, Is the General Insurance market growing to its
maximum level or some more products/dimensions are yet to be
discovered?