Insurance Sector in India
Discuss Insurance sector from different angles and discuss entry and exit of firms in insurance sector
Discuss Insurance sector from different angles
• TERM INSURANCE:
Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks which can be insured against include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance.
DEFINITION:
➢ General definition:
In the words of John Magee, “Insurance is a plan by which large number of people associate themselves and transfer to the shoulders of all, risks that attach to individuals.” ➢ Fundamental definition:
In the words of D.S. Hansell, “Insurance may be defined as a social device providing financial compensation for the effects of misfortune, the payment being made from the accumulated contributions of all parties participating in the scheme.” ➢ Contractual definition: •
In the words of justice Tindall, “Insurance is a contract in which a sum of money is paid to the assured as consideration of insurer’s incurring the risk of paying a large sum upon a given contingency.”
• Functions of insurance:
In a layman's words, insurance means, ‘a guard against pecuniary loss arising on the happening of an unforeseen event’. In developing economies, the insurance sector still holds a lot of potential which can be tapped. Majority of the people in the developing countries remains unaware of the functions and benefits of insurance and it is for this reason that the insurance sector is still to grow.
Basic functions of Insurance
1. Primary Functions 2. Secondary Functions 3. Other Functions
1. Primary Functions:
a) Providing protection –
Discuss Insurance sector from different angles
• TERM INSURANCE:
Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks which can be insured against include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance.
DEFINITION:
➢ General definition:
In the words of John Magee, “Insurance is a plan by which large number of people associate themselves and transfer to the shoulders of all, risks that attach to individuals.” ➢ Fundamental definition:
In the words of D.S. Hansell, “Insurance may be defined as a social device providing financial compensation for the effects of misfortune, the payment being made from the accumulated contributions of all parties participating in the scheme.” ➢ Contractual definition: •
In the words of justice Tindall, “Insurance is a contract in which a sum of money is paid to the assured as consideration of insurer’s incurring the risk of paying a large sum upon a given contingency.”
• Functions of insurance:
In a layman's words, insurance means, ‘a guard against pecuniary loss arising on the happening of an unforeseen event’. In developing economies, the insurance sector still holds a lot of potential which can be tapped. Majority of the people in the developing countries remains unaware of the functions and benefits of insurance and it is for this reason that the insurance sector is still to grow.
Basic functions of Insurance
1. Primary Functions 2. Secondary Functions 3. Other Functions
1. Primary Functions:
a) Providing protection –