Performance Analysis of Hdfc Life Funds - Ii

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INTRODUCATIO TO INUDSTRY
HISTORY OF INSURANCE
PRESENT SCENARIO OF INUSRANCE INDUSTRY
TYPES OF INURANCE
PLAYERS OF INDUSTRY & THEIR MARKET SHARE
PURPOSE & NEED OF INSURANCE
DEVELOPMENT OF LIFE INSURANCE IN INDIA
ADVANTAGE OF LIFE INSURANCE
LIMITATION OF LIFE INSURANCE

INTRODUCTION TO INDUSTRY.

The first methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 2nd and 3rd millennia BC. Chinese merchants traveling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system which was recorded in the famous code of Hammurabi, 1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen.

The ancient Athenian "maritime loan" advanced money for voyages with repayment being cancelled if the ship was lost. In the 4th century BC, rates for the loans differed according to safe or dangerous times of year, implying an intuitive pricing of risk with an effect similar to insurance.

The Greek and Romans introduced the origins of health and life insurance. 600 BCE when they created guilds called "benevolent societies" which cared for the families of deceased members, as well as paying funeral expenses of members. Guilds in the Ages served a similar purpose.

The Talmud deals with several aspects of insuring goods. Before insurance was established in the late 17th century, "friendly societies" existed in England, in which people donated amounts of money to a general sum that could be used for emergencies.

Risk is found everywhere. It cannot be eliminated together, only it can be minimized. Human life is full of risk. There is a risk when a man walks on the road, travels in a bus, train or an aero plane and when he is engaged in trade, profession or business. Also there is a risk when property is destroyed by fire, flood, earthquakes, etc. Thus, the involvement of risk is inescapable.

RiskPercentage
Drought4%
Earthquakes20%
Floods35%
Storms41%

Insurance is a method by which we can spread over the risk. It is a way of reducing uncertainty of occurrence of an event. Insurance is entirely a method of co-operative endeavor where in the loss caused by a particular risk is spread over among a large section of persons. Insurance is a process in which a large number of persons collect their small contributions, called the premium, in a pool and out of these losses are paid to the suffering persons.

The Business of insurance is related to the protection of the economic values of assets. Every asset has a value. The asset would have been created through the efforts of the owner. The asset is valuable to the owner, because he expects to get some benefits from it. It is a benefit because it meets some of a factory or a cow, the product generated by it is sold and income is generated. In the case of a motor car, it provides comfort and convenience in transportation. There is no direct income. Both are assets and provide benefits.

HISTORY OF INSURANCE.

Although insurance may have been used by the Babylonians, the Greeks and the Romans, insurance in the modern sense originated in the Mediterranean during the 13th or 14th century. The earliest references to insurance which have so far been traced appear in the accounts of North Italian merchant-bankers who dominated the international trade of Europe at that time. Marine insurance is the oldest form of insurance (1347), followed by life insurance some 300 years later and fire insurance (1666). Insurance in these fields followed the pattern that had been established in England.

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