Insurance may be described as a social device to reduce or eliminate risk of life and property.

Under
the plan of insurance, a large number of people associate themselves by sharing risk, attached to
individual.

The risk, which can be insured against include fire, the peril of sea, death, incident, & burglary. Any
risk contingent upon these may be insured against at a premium commensurate with the risk
involved.

Insurance is actually a contract between 2 parties whereby one party called insurer undertakes in
exchange for a fixed sum called premium to pay the other party happening of a certain event.

Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers
pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events.

With the help of Insurance, large number of people exposed to a similar risk makes contributions to
a common fund out of which the losses suffered by the unfortunate few, due to accidental events,
are made good.

GROWTH & DEVELOPMENT OF INSURANCE INDUSTRY IN INDIA :

According to K N Bhandari, the Secretary General of General Insurance Council, India's

general insurance sector is slated to grow at a 18% rate in 2008. The comparable figure for 2007
was 13%. As per Mr. Bhandari, the present market value of the Indian general insurance sector is
Rs 30,000-crore. The current penetration level of the Indian insurance sector is 0.65 %.

The Indian urban sector is a significant contributor to the general insurance market. In
comparison, contribution from rural India is small. Efforts are afoot to capture the dormant rural
market via strategies like awareness generation, institutional marketing and e-marketing.

SOME OF THE MAJOR PLAYERS IN INDIAN INSURANCE INDUSTRY ARE :

NATIONAL PLAYER:-

National Insurance Company Ltd

New India Assurance Company Ltd
United India Insurance Company Ltd
Oriental Insurance Company Ltd

PRIVATE PLAYERS:-

1) Bajaj Allianz General Insurance Company

2) Reliance Insurance Company
3) ICICI Lombard General Insurance Company LTD
4) Sahara India Life Insurance Company
5) Cholamandalam General Insurance Company
6) Tata AIG Life Insurance Company
7) Max New York Life Insurance Co. Ltd
8) SBI Life Insurance Company Ltd
Product summary:
This is an Endowment Assurance plan that provides financial protection against death
throughout the term of the plan. Besides payment of Sum Assured immediately on death,
one-fourth of Sum Assured is payable at the end of each of last four years of policy term
whether the life assured dies or survives the term of the policy.

Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions
as opted by you throughout the term of the policy or till the earlier death.

Bonuses:
This is a with-profits plan and participates in the profits of the Corporation’s life insurance
business. It gets a share of profits in the form of bonuses. Simple Reversionary Bonuses
are declared per thousand Sum Assured annually at the end of each financial year. Once
declared, they form part of the guaranteed benefits of the plan. Bonuses for full term on the
full Sum assured are paid at the end of the term even if death occurs during policy term.
Final (Additional) Bonus may also be payable provided policy has run for certain minimum
period.
Benefits on death/survival
One fourth of the sum assured is payable at the end of each of last four years of the policy
term. On death/survival all bonuses declared during the term of policy will also be paid
along with the last installment. These benefits are payable whether the life assured
survives the policy term or dies during the term of policy. Further, on death during the
policy term, an amount equal to Sum Assured is also payable immediately.

Supplementary/Extra Benefits
These are the optional benefits that can be added to your basic plan for extra
protection/option. An additional premium is required to be paid for these benefits.

LIFE INSURANCE COMPANY:-

Life insurance ensures that your family will receive financial support in your absence. Put
simply, life insurance provides your family with a sum of money should something
happen to you. It protects your family from financial crises.

In addition to serving as a protective cover, life insurance acts as a flexible money-saving

scheme, which empowers you to accumulate wealth-to buy a new car, get your children
married and even retire comfortably.

RISK MANAGEMENT IN INSURANCE SECTOR:-

Insurance companies are seeking new ways to ensure shareholder value and earnings
consistency. Market conditions remain volatile, regulators are increasing capital
requirements, and catastrophic events result in immediate cash demands. Today more
than ever, insurers need to remain profitable while keeping earnings consistent, investors
confident and regulators from downgrading their portfolios. To accomplish these goals,
you must pull information from historically separate areas-to get a complete picture of
your total risk capital.

Financial executives and portfolio managers need a platform that combines asset and
liability data from different lines of business into one enterprise view. They need to
employ enterprise risk management that allows them to base strategic business decisions
upon strong positions that can be measured qualitatively and quantitatively. Because they
know the more clearly their organization's risk position is depicted, the more competitive
it will appear in the marketplace.

The following are the risks, which are not insurable:-

Essentials of insurance.
Insurable Interest
Utmost good Faith
Procedure for Insurance
Identifications of risk
Quantify the insurable value
Evaluate the choices
Proposal
Payment of premium
Policy documentation
Claims
Administration system.

The following are the risks, which are insurable:-

1) People Risks
2) Liabilities Risks
3) Property Risks
4) Financial Risks