Case Study on New India Assurance
Introduction Assurance industry has always been a growth-oriented industry globally. On the Indian scene too, the assurance industry has always recorded noticeable growth visa- a-visa other Indian industries. The new India assurance Co. Ltd. Was the first general assurance company to be established in India in 1850, which was a wholly British-owned company. The new India assurance company to be set up by an Indian was Indian Mercantile assurance Co.
Ltd. , which was established minion. There emerged many a assurance player on the Indian scene thereafter.
The general assurance business was nationalized after the promulgation of General Insurance Business (Nationalization) Act, 1972. The post- nationalization general assurance business was undertaken by the assurance Corporation of India (GIG) and Its 3 subsidiaries: 1. New India Assurance Company Limited 2.
National Insurance Company Limited 3. United India Insurance Company Limited Towards the end of 2000, the relation ceased to exist and the four companies are, at present, operating as independent companies. The Life assurance Corporation (IAC) was established on 01. 9. 956 and had been the sole corporation to write the life assurance business in India.
The Indian assurance industry saw a new sun when the assurance Development Authority invited the applications for registration as assessors in August, 2000. With the liberalizing and opening up of the sector to private players, the industry has presented promising prospects for the coming future. The transition has also resulted Into Introduction of ample opportunities for the professionals Including Chartered Accountants.
I nee Animal assurance Industry Is Auteur Day TN e attributes Low market penetration; Ever-growing middle class component in population Growth of consumer 0 Movement with an increasing demand for better assurance products; 0 Inadequate application of information technology for business. Adequate Fillip from the Government in the form of tax incentives to the assured, etc The industry formations need to keep vigil on these characteristics of the Indian market and formulate their strategies to entail maximum contribution to the output of the sector.
The Indian life and non-life assurance business accounted for merely.
42 percent of the world’s life and non-life business in 1997. The figures of the basic parameters of the industry’s performance biz. Assurance Density and assurance Penetration also are evident of the hitherto existing low-yield Indian market conditions. I nee term “assurance Penetration” Doorway measures ten contribution AT ten assurance industry in relation to a nation’s entire economic productivity. The figure of premium visa–visa the GAP of 1999 stood at 0.
54 percent for non-life assurance business and 1. 9 percent for the life assurance business. The term “assurance Density” reflects the assurance purchasing power. The remit per capita in India amounted to US $ 2. 40 for assurance and US $ 6. 10 for life assurance in 1999 but with the deregulation of the sector, a sea change in the scene is most likely.
The assurance 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 assurance sector reveals teeth()- degree turn witnessed over a period of almost two centuries.
The structure of the assurance industry comprises of the Operating department, Administrative department and the finance department. The Operating Department generally performs the basic functions pertaining to the designing of products, marketing thereof, servicing the insured, the insured, management of portfolio, etc. The Administrative Department looks after the day-to-day affairs of the company.
The Finance Department backs the operations and administration of the company by accounting for the transactions, streamlining the flow of funds, materializing the management decisions, etc.
The Administration Department as well as the Finance Department, usually, unction through in-house setup. The Finance Department functions in the areas of accounting, financial and management reporting, budgeting and controlling, etc. And thus renders enormous scope for finance professionals. The new entrants in the assurance sector are likely to call for the services of the Chartered Accountants for their financial setup requirements. The Chartered Accountants have engaged themselves in the audit of assurance Companies since long.
With the transition in the insurance sector, the horizons for their contribution have broadened. Contributions eve broadened. I nerve NAS, emerged a Klan-sale pool AT opportunities Tanat ten cantered can explore and apply their professional wisdom and experience to. 1. Risk Perception and Evaluation: Accountants The fundamental function of an insurer is to provide a cover against the detriment caused to the insured due to the happening of certain specified and agreed events.
Thus, prior to providing such umbrella through a product, the insurer has to assess the risk involved in the transaction. The insurer has to identify the element of risk prevalent in the concerned industry or a particular unit. The perception of risk requires the study of variables through various methods including the application of scientific and statistical techniques and correlation thereof with the industry or unit under study in light of their basic environmental and infra- structural characteristics. 2.
Designing the Insurance Product: On the basis of the risks perceived, the insurer develops a product to cover the stipulated risks. While designing an insurance product, an insurer decides its cost to e charged from the insured in the form of premium, reduction thereof in certain cases like not lodging any claim during the previous covered period(s), suggesting the Implementation AT rills-amalgamating measures, etc.
3. Marketing of the Product: The core function of the marketing force of an insurance company is to generate awareness about the insurance products among the target market.
But in the Indian scenario, where the insurance penetration is too low as compared to the other nations, the marketing force needs to perform the pro-active role in developing an insurance culture. It is through the efficiency of the sales force of an insurance company that the desirability and the success of a product are determined. Adequate knowledge of the insurance industry, products and the modalities attached therewith.
Further, the marketing personnel should be adequately backed by the back-office setup. 4.
Selling of the Products: The term selling in the context of Assurance industry connotes the issuance of policies to the applicant proposes. The Assurance basically embodies the covenant between the insurer and the insured wherein the former agrees to indemnify the tater for the loss caused to him on the happening of the certain agreed events up to a specified limit. The life insurance policy generally contains the agreement whereby the insurer agrees to pay to the insured or the beneficiary of the policy an agreed amount on the expiry of the term of the policy or in the event of the death of the insured respectively.
The additional benefits in the shape of Riders biz.
Accidental Death Benefit, Double Sum Assured, Critical Illness benefits; Waiver of Premiums, etc. Can also be appended with the policy on the payment of an additional premium. 5. Management of Portfolio: The management of the portfolio includes the assessment of requirement of funds, identification of various sources of finance, the evaluation of the sources in the light of their cost, availability, timing, etc. , reconciling the features of various sources with the needs of the company and the selection of appropriate conjunction of sources.
Network of Offices-26 Regional Offices, divisional Offices, 614 Branches and 34 Direct Agent Branches. Rank No. Line the Indian market. Largest Non-Life insurer in Afro-Asia excluding Japan. First Indian non-life company to cross RSI. 5000 scores Gross Premium.
Global Re-insurance facilities. Over-seas presence in countries like Japan, U. K, Middle East, Fiji and Australia. Overseas operations commenced in 1920. Operations in 24 countries in the year 2004-05.
Network of 19 Branches, 12 Agencies, 2 Associate companies and 2 Subsidiary companies in the year 2004-05. Overseas Premium of RSI. 92. 35 scores in the year 2004-05, which accounts for more than 80% of total overseas premium in India Our Strengths Largest number of Offices – In India and Abroad Trained and technically qualified staff 1068 fully computerized offices across India. “A-” (Excellent)rating by A.
M. Best & Co (Europe) First domestic company to be rated by an International Rating Agency Rating based upon following factors: Superior capital position Strong operating performance Strong market position Only company to develop significant International operations, long record of successful trading outside India.
Planners First company to set up an Aviation Insurance Department in 1946. First company to handle the Hull Insurance requirements of the Indian Shipping Fleet. First company to establish its own Training School.
First company to introduce the concept of ‘Model Office Training’. First company to create department in Engineering insurance. Pioneer in Satellite insurance. Citizen’s Charter Our Mission To develop general insurance business in the best interest of the community.
To provide financial security to individuals, trade, commerce and all other segments of the society by offering insurance products and services of high quality at deteriorated coos Our Values % Highest priority to customer needs.
High standards of public conduct. Transparency in operations. Our Commitment to the citizens We will respond to all commercially viable general insurance requirements of the tizzies, including products for weaker sections of the society at affordable price within three months from the date on which such a requirement is received.
We will ensure issuance of 100% of documents within a period of seven days. + We will ensure that prospectus of the various insurance products are provided to the customers and the extent of coverage is explained for his choosing the appropriate product.
A written proposal will be obtained from the insured wherever necessary and accordingly the policy will be prepared. + We will settle all claims within a time schedule envisaged hereunder: A. Personal life insurance claims within 30 days on completion of all requirements. B.
Property claims within 30 days on completion of all requirements.
C. Liability claims within 30 days on completion of process of law. We will promote customer education in general insurance products/services by holding workshops in various centers. + We will open a customer service cell in all Ross/DOs in addition to the existing ‘May I Help You’ counters. + We will set up proper grievance redressed mechanism in every operating office and will educate the clients about the same including the system of grievance redressed thorough