“A STUDY ON FINANCIAL STATEMENT ANALYSIS with reference to
UNITED INDIA INSURANCE Ltd., Chennai.”
CHAPTER - 1
Finance is the study of how investors allocate their assets over time under conditions of certainty and uncertainty. A key point in finance, which affects decisions, is the time value of money, which states that a unit of currency today is worth more than the same unit of currency tomorrow. Finance measures the risks vs. profits and gives an indication of whether the investment is good or not. Different parties are interested in financial statement for different reasons. The management is keen on finding out the performance of the business and for the purpose of evaluating policies and plans for the future course of action. The project has been done in UNITED INDIA INSURANCE CO. Ltd and it is purely based on the financial statement of the company during the last three years. The process of financial analysis is widely employed to evaluate the past, present and likely performance of a business organization and identify the financial strengths and weakness of the enterprise by properly establishing relationship between the items of the balance sheet and profit & loss account. The study of this project is “FINANCIAL STATEMENT ANALYSIS OF UNITED INDIA INSURANCE CO. Ltd” and analyses the various financial statements and studies about the sources and application of funds. The project work is based on secondary data. The secondary data was collected from the annual report of the company
What is General Insurance?
Insurance other than ‘Life Insurance’ falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary etc, personal insurance such as Accident and Health Insurance, and liability insurance which covers legal liabilities. There are also other covers such as Errors and Omissions insurance for professionals, credit insurance etc. Non-life insurance companies have products that cover property against Fire and allied perils, flood storm and inundation, earthquake and so on. There are products that cover property against burglary, theft etc. The non-life companies also offer policies covering machinery against breakdown,there are policies that cover the hull of ships and so on. A Marine Cargo policy covers goods in transit including by sea, air and road. Further, insurance of motor vehicles against damages and theft forms a major chunk of non-life insurance business. In respect of insurance of property, it is important that the cover is taken for the actual value of the property to avoid being imposed a penalty should there be a claim. Where a property is undervalued for the purposes of insurance, the insured will have to bear a rateable proportion of the loss. For instance if the value of a property is Rs.100 and it is insured for Rs.50/-, in the event of a loss to the extent of say Rs.50/-, the maximum claim amount payable would be Rs.25/- ( 50% of the loss being borne by the insured for underinsuring the property by 50% ). This concept is quite often not understood by most insureds. Personal insurance covers include policies for Accident, Health etc. Products offering Personal Accident cover are benefit policies. Health insurance covers offered by non-life insurers are mainly hospitalization covers either on reimbursement or cashless basis. The cashless service is offered through Third Party Administrators who have arrangements with various service providers, i.e., hospitals. The Third Party Administrators also provide service for reimbursement claims. Sometimes the insurers themselves process reimbursement claims. Accident and health insurance policies are available for individuals as well as groups. A group could be a group of employees of an organization or holders of credit cards or deposit holders in a bank etc....
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