general insurance

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Topics: Insurance
UNIT 3 GENERAL INSURANCE

General Insurance: Principles, products (Fire, Marine, Motor vehicles, public liability, third party insurance, medi-claim and health policies, group insurance, burglary insurance).

1

Sunil Kushwaha

INTRODUCTION

Insurance is an important aid to minimize the effect of uncertainties of life as well as property. With the increasing complexities in our personal and professional life, the range of risks that the insurance companies accept has also expended substantially. The broadest classification of insurance is in terms of Life Insurance and non-Life Insurance (General insurance). The overall general insurance industry growth has kept pace with the GDP growth in the country and general insurance penetration has varied in a narrow band:

After liberalisation of the Indian insurance industry in the year 1999- 2000, the Indian general insurance industry has witnessed rapid growth. The industry, in terms of gross direct premium, has grown from INR 11,446 crore in FY02 to INR 57,964 crore in FY12, which corresponds to a compounded annual growth rate (CAGR) of 17.6 percent. Insurance density, which is defined as the ratio of premium underwritten in a given year to the total population, has increased from USD 2.4 in 2001 to USD 10 in 2011. The growth in the general insurance industry has kept pace with the nominal GDP growth rate resulting in general insurance penetration remaining stable in the range of 0.55% to 0.75% over the last 10 years.

2

Sunil Kushwaha

A non-life insurance contract is different from a life insurance contract.

Life Vs General Insurance

1.
2.

3.

4.

Life
Long term contract
Risk is assure but uncertain. Difficult to determine economic value of life
Principle of indemnity, contribution and subrogation not applicable 
1.

2.

3.

4.

General
1-year contract
(renewable)
Risk (event) may or may not happen.
Financial value of asset can be

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