Explain in detail life insurance, general insurance & and reinsurance.
Ans: Life insurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount (at regular intervals or in lump sums.
History of life insurance: Insurance began as a way of reducing the risk of traders, as early as 2000 BC in China and 1750 BC in Babylon. The first insurance company in the United States was formed in Charleston, South Carolina in 1732, but it provided only fire insurance.
Over its existence of around 50 years, Life Insurance Corporation of India, which commanded a monopoly of soliciting and selling life insurance in India, created huge surpluses, and contributed around 7 % of India's GDP in 2006.The Corporation, which started its business with around 300 offices, 5.6 million policies and a corpus of INR 459 million. According to The Brand Trust Report 2011, LIC is the 8th most trusted brand of India.
General insurance: General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. General insurance typically comprises any insurance that is not determined to be life insurance. It is called property and casualty insurance in the U.S. and Non-Life Insurance in Continental Europe.
India general insurance was nationalized with the General Insurance Business (Nationalization) Act of 1972. By this process of nationalization, the government of India took charge of about 55 insurance companies in the country and about 52 insurers who were in the general insurance business. The General Insurance Corporation of India saw its inception from Section 9(1) of GIBNA.
With the formation of the General Insurance Corporation (GIC), the government's shares related to general insurance were transferred to it. The merger of the general insurance companies led to the formation of the four subsidiaries under the General Insurance Company of India. They were the National Insurance Company Limited, the New India Assurance Company Limited, the Oriental Insurance Company Limited and the United India Insurance Company Limited.
Reinsurance is insurance that is purchased by an insurance company (insurer) from another insurance company (reinsurer) as a means of risk management, to transfer risk from the insurer to the reinsurer. The reinsurer and the insurer enter into a reinsurance agreement which details the conditions upon which the reinsurer would pay the insurer's losses .
Types:
Facultative Reinsurance In facultative reinsurance, the ceding company cedes and the reinsurer assumes all or part of the risk assumed by a particular specified insurance policy.
Treaty Reinsurance is a method of reinsurance requiring the insurer and the reinsurer to formulate and execute a reinsurance contract.
NIC: National Insurance Company Limited was incorporated in 1906. National Insurance Company Ltd (NIC) is one of the leading public sector insurance companies of India, carrying out non life insurance business. Headquartered in Kolkata, NIC's network of about 1000 offices, manned by more than 16,000 skilled personnel, is spread over the length and breadth of the country covering remote rural areas, townships and metropolitan citiesNational Insurance is the second largest non life insurer in India having a large market presence in Northern and Eastern India.
ICICI Lombard, Bajaj Allianz and Iffco-Tokio, general insurance industry gave a tough fight to the established players in all departments of business to capture 26 per cent of market share
Except Reliance General, the new players gave a tough fight to the established players in all departments of business to capture 26 per cent of market share.
