Professional Documents
Culture Documents
Training Supervisor :
Shailendra Pratap
Submitted By:
Mohd Shoeb
B.B.A. VIth Sem.
SESSION 2009 2010
TABLE OF CONTENTS
S.No.
1
2
3
4
5
6
7
8
9
10
Chapter
Declaration
Introduction
Life Insurance - A Basic Need
Insurance Advisors- Tasks Performed
Insurance Advisors -Work Activities
Insurance Advisors - Job Description
Company Profile
Competition Information
Annexures LIC Policy List
Market Share of Life Insurers
Life Insurance Offices
Distribution of The Offices
List of Private Life Insurance
Companies
Bibliography
DECLARATION
This is for general declaration purposes only that all
relevant work pertaining to presented miniature project
on :
" Practical Working of Insurance Advisor
In
Jeevan Rakshak Life Multi Services"
INTRODUCTION
The
In India, Insurance is a national matter, in which life and general
insurance is yet a booming sector with huge possibilities for different
global companies, as life insurance premiums account to 2.5% and
general insurance premiums account to 0.65% of India's GDP. The
Indian Insurance sector has gone through several phases and
changes, especially after 1999, when the Govt. of India opened up
the insurance sector for private companies to solicit insurance,
allowing FDI up to 26%. Since then, the Insurance sector in India is
considered as a flourishing market amongst global insurance
companies. However, the largest life insurance company in India is
still
owned
by
the
government.
The history of Insurance in India dates back to 1818, when Oriental
Life Insurance Company was established by Europeans in Kolkata to
cater to their requirements. Nevertheless, there was discrimination
among the life of foreigners and Indians, as higher premiums were
charged from the latter. In 1870, Indians took a sigh of relief when
Bombay Mutual Life Assurance Society, the first Indian insurance
company covered Indian lives at normal rates. Onset of the 20th
century brought a drastic change in the Insurance sector.
In 1912, the Govt. of India passed two acts - the Life Insurance
Companies Act, and the Provident Fund Act - to regulate the
insurance business. National Insurance Company Ltd, founded in
1906, is the oldest existing insurance company in India. Earlier, the
Insurance sector had only two state insurers - Life Insurers i.e. Life
Insurance Corporation of India (LIC), and General Insurers i.e.
General Insurance Corporation of India (GIC). In December 2000,
these subsidiaries were de-linked from parent company and were
declared independent insurance companies: Oriental Insurance
Company Limited, New India Assurance Company Limited, National
Insurance Company Limited and United India Insurance Company
Limited.
About Insurance
Insurance, in law and economics, is a form of risk management primarily
used to hedge against the risk of a contingent loss. Insurance is defined
as the equitable transfer of the risk of a loss, from one entity to another,
in exchange for a premium, and can be thought of as a guaranteed small
loss to prevent a large, possibly devastating loss. An insurer is a
company selling the insurance; an insured is the person or entity buying
the insurance. The insurance rate is a factor used to determine the
amount to be charged for a certain amount of insurance coverage, called
the premium.
About Life Insurance: - Life insurance provides a monetary benefit
to a decedent's family or other designated beneficiary, and may
specifically provide for income to an insured person's family, burial,
funeral and other final expenses. Life insurance policies often allow the
option of having the proceeds paid to the beneficiary either in a lump
sum cash payment or an annuity. Annuities provide a stream of
payments and are generally classified as insurance because they are
issued by insurance companies and regulated as insurance and require
the same kinds of actuarial and investment management expertise that
life insurance requires. Annuities and pensions that pay a benefit for life
are sometimes regarded as insurance against the possibility that a
retiree will outlive his or her financial resources. In that sense, they are
the complement of life insurance and, from an underwriting perspective,
are the mirror image of life insurance. Certain life insurance contracts
accumulate cash values, which may be taken by the insured if the policy
is surrendered or which may be borrowed against. Some policies, such
as annuities and endowment policies, are financial instruments to
accumulate or liquidate wealth when it is needed. In many countries,
such as the U.S. and the UK, the tax law provides that the interest on
this cash value is not taxable under certain circumstances. This leads to
widespread use of life insurance as a tax-efficient method of saving as
well as protection in the event of early death.
Principles of insurance
Commercially insurable risks typically share seven common
characteristics: 1.
A large number of homogeneous exposure units. The vast majority
of insurance policies are provided for individual members of very large
classes. Automobile insurance, for example, covered about 175 million
relative to the amount of protection offered, it is not likely that anyone will
buy insurance, even if on offer. Further, as the accounting profession
formally recognizes in financial accounting standards, the premium
cannot be so large that there is not a reasonable chance of a significant
loss to the insurer. If there is no such chance of loss, the transaction may
have the form of insurance, but not the substance.
6.
Calculable Loss. There are two elements that must be at least
estimable, if not formally calculable: the probability of loss, and the
attendant cost. Probability of loss is generally an empirical exercise,
while cost has more to do with the ability of a reasonable person in
possession of a copy of the insurance policy and a proof of loss
associated with a claim presented under that policy to make a
reasonably definite and objective evaluation of the amount of the loss
recoverable as a result of the claim.
7.
Limited risk of catastrophically large losses. The essential risk is
often aggregation. If the same event can cause losses to numerous
policyholders of the same insurer, the ability of that insurer to issue
policies becomes constrained, not by factors surrounding the individual
characteristics of a given policyholder, but by the factors surrounding the
sum of all policyholders so exposed. Typically, insurers prefer to limit
their exposure to a loss from a single event to some small portion of their
capital base, on the order of 5 percent. Where the loss can be
aggregated, or an individual policy could produce exceptionally large
claims, the capital constraint will restrict an insurer's appetite for
additional policyholders. The classic example is earthquake insurance,
where the ability of an underwriter to issue a new policy depends on the
number and size of the policies that it has already underwritten. Wind
insurance in hurricane zones, particularly along coast lines, is another
example of this phenomenon. In extreme cases, the aggregation can
affect the entire industry, since the combined capital of insurers and
reinsurers can be small compared to the needs of potential policyholders
in areas exposed to aggregation risk. In commercial fire insurance it is
possible to find single properties whose total exposed value is well in
excess of any individual insurers capital constraint. Such properties are
generally shared among several insurers, or are insured by a single
insurer who syndicates the risk into the reinsurance market.
Types of insurance
Any risk that can be quantified can potentially be insured. Specific kinds
of risk that may give rise to claims are known as "perils". An insurance
policy will set out in detail which perils are covered by the policy and
which are not. Below are (non-exhaustive) lists of the many different
types of insurance that exist. A single policy may cover risks in one or
more of the categories set out below. For example, auto insurance would
typically cover both property risk (covering the risk of theft or damage to
the car) and liability risk (covering legal claims from causing an
accident).
1.
Business Insurance: 2.
Auto Insurance:
3.
Home Insurance: 4.
Health Insurance
5.
Disability Insurance
6.
Casualty Insurance
7.
Property Insurance
8.
Liability insurance
9.
Life Insurance.
10. Other Types: Collateral protection insurance or CPI, insures property (primarily
vehicles) held as collateral for loans made by lending institutions.
Defense Base Act Workers' compensation or DBA Insurance provides
coverage for civilian workers hired by the government to perform
contracts outside the U.S. and Canada. DBA is required for all U.S.
citizens, U.S. residents, U.S. Green Card holders, and all employees or
subcontractors hired on overseas government contracts. Depending on
the country, Foreign Nationals must also be covered under DBA. This
coverage typically includes expenses related to medical treatment and
loss of wages, as well as disability and death benefits.
Expatriate insurance provides individuals and organizations operating
outside of their home country with protection for automobiles, property,
health, liability and business pursuits.
Financial loss insurance protects individuals and companies against
various financial risks. For example, a business might purchase
coverage to protect it from loss of sales if a fire in a factory prevented it
from carrying out its business for a time. Insurance might also cover the
failure of a creditor to pay money it owes to the insured. This type of
The life assured can name a person or persons to whom the policy
moneys would be payable in the event of his death. The proceeds of a
life insurance policy can be protected against.The claims of the creditors
of the life assured by effecting a valid assignment of the policy. A married
womens property act policy constitutes a trust in favor of the wife and
children and no separate assignment is necessary. The beneficiaries are
fully protected from creditors except to the extent of any interest in the
policy retained by the assured.
4. Administering the legacy for beneficiaries:
It often happens that a provision which a husband or father has made
through insurance is quickly lost through speculative or unwise
investment or by unnecessary expenditure on luxuries. These
contingencies can be provided against in the case of insurance. The
policyholder can arrange that in the in the event of his death the
beneficiary should receive, instead of a single sum (a). payment of the
net claim amount by equal installments over a specified period of years,
or (b).payment of the claim amount by smaller monthly installments over
the selected period followed by a lump sum at the end thereof.
5. Ready marketability and suitability for quick borrowings:
After an initial period, if the policy holder finds himself unable to continue
payment of premiums he can surrender the policy for a cash sum.
Alternatively he can tide over a temporary difficulty by taking loan on the
sole security of the policy without delay. Further a life insurance policy is
sometimes acceptable as security for a commercial loan.
6. Tax relief:
For computing income tax (especially in India the Indian income tax act)
follows deduction from income tax payable, a certain percentage of a
portion of the taxable income of individuals which is diverted to payment
of insurance premiums. When this tax relief is taken into account it will
be found that the assured is n effect paying a lower premium for his
insurance.
How Insurance Works
The mechanism of insurance is very simple. People who are exposed to
the same risks come together and agree that, if any one of the members
suffers a loss, the others will share the loss and make good to the
person who lost. All people who send goods by ship are exposed to the
same risk related to water damage, ship sinking, piracy, etc. those
owning factories are not exposed to these risks, but they are exposed to
different kinds of risks like, fire, hailstorms, earthquakes, lightening,
burglary, etc. like this, different kinds of risks can be identified and
separate groups, made including those exposed to such risks. By this
method, the risk is spread among the community and the likely big
impact on one is reduced to smaller manageable impacts on all.
If a Jumbo Jet with more than 350 passengers crashes, the loss would
run into several crores of rupees. No airline would be able to bear such a
loss. It is unlikely that many Jumbo Jets will crash at the same time. If
100 airline companies flying Jumbo Jets, come together into an
insurance pool, whenever one of the jumbo jets in the pool crashes, the
loss to be borne by each airline would come down to a few lakhs of
rupees. Thus, insurance is a business sharing.
Role of Insurance in Economic Development
For economic development, investments are necessary.
Investments are made out of savings. A life insurance company is
a major instrument for the mobilization of savings of people,
particularly from the middle and lower income groups. These
savings are channeled into investments for economic growth.
An insurance companys strength lies in the fact that huge
amounts come by way of premiums. Every premium represents a
risk that is covered by that premium. In effect, therefore, these vast
amounts represent pooling of risks. The funds are collected and
held in trust for the benefit of the policyholders.
The management of insurance companies is required to keep this
aspect in mind and make all its decisions in ways that benefit the
community. This applies also to its investments. This is why
successful insurance companies would not be found investing in
speculative ventures. Their investments benefit the society at
large.
The system of insurance provides numerous direct and indirect
benefits to the individual and his family as well as to industry and
commerce and to the community and the nation as a whole. Those
who insure, both individuals and corporate, are directly benefited
because they are protected from the consequences of the loss that
COMPANY
PROFILE
Life Insurance
Corporation of India
Type
Industry
Founded
Headquarters
Key people
Products
Total assets
Owner(s)
Employees
Subsidiaries
Website
Government-owned corporation
Insurance
1 September 1956
Mumbi, India
T. S. Vijayan (Chairman)
D. K. Mehrotra, Thomas Mathew
and A. Dasgupta (Managing
Directors)
Life insurance
Pensions
Mutual funds
Rs. 8 trillion (US$ 170.4 billion)
Government of India
112,184 (2008)
LIC Housing Finance Limited
LIC(Nepal)Ltd
LIC(Lanka)Ltd
LIC(International)BSC(C)
LICindia.com
The Life Insurance Corporation of India (LIC) is the largest life insurance
company in India and also the country's largest investor. It is fully owned
by the government of India. It also funds close to 24.6% of the Indian
Government's expenses. It was founded in 1956.
Headquartered in Mumbai, which is considered the financial capital of
India, the Life Insurance Corporation of India currently has 8 zonal
Offices and 101 divisional offices located in different parts of India, at
least 2048 branches located in different cities and towns of India along
with satellite Offices attached to about some 50 Branches, and has a
network of around 1.2 million agents for soliciting life insurance business
from the public.
History
The Oriental Life Insurance Company, the first corporate entity in India
offering life insurance coverage, was established in Calcutta in 1818 by
Bipin Behari Dasgupta and others. Europeans in India were its primary
target market, and it charged Indians heftier premiums. The Bombay
Mutual Life Assurance Society, formed in 1870, was the first native
insurance provider. Other insurance companies established in the preindependence era included
Indian Mercantile
General Assurance
LIC Nepal: A joint venture company formed in 2001 with the Vishal
Group of Industries, Nepal.
People
LIC is one of the largest employers in India. The organization is headed
by 4 officers, namely the Chairman and three Managing Directors. The
top brass is appointed by the Government of India after an intensive
selection procedure. Though the company was accused to go by mere
seniority in number of years for the selection of the senior management,
this has changed as seen in the case of Thomas Matthew and A.
Dasgupta (Managing Directors).
The Chairman assumes authority of the CEO and chairs the board
while the Managing Directors are allotted the three main
categories of the organization's functioning.
Meet the various life insurance needs of the community that would
arise in the changing social and economic environment.
OVERVIEW
The Life Insurance Corporation of India (LIC) is the largest life
insurance company in India fully owned by the Government of India.
LIC has assets estimated of 8 Trillion Rupees (or about $170 Billion
dollars) and has a network of around 1.2 million of its agents for soliciting
life insurance business from the public.
LIC has more than 2048 branches and offices in various cities and
towns of India.
Vital Details
The headquarters of Life Insurance Corporation of India are located
in Mumbai, and as of April 2009 it has 8 zonal offices, 101 divisional
offices and 2048 branches located in different towns and cities of
India. Along with a workforce of 112,184 employees serving the
institution, more than 1 Million agents of the Life Insurance
Corporation of India are helping the people nationwide in adopting
the various life insurance policies being offered by the corporation.
Apart from India, LIC is also present in 12 other countries currently,
fulfilling the life insurance needs of its overseas customers most of
which are Non Resident Indians (NRIs).
During the financial year 2006-07, the total number of Life
Insurance Corporation of India policy holders were more than 200
Million, which was equal to the population of fourth largest populous
country in the world at that time.
Subsidiaries
Life Insurance Corporation of India has a number of subsidiaries
which help it in leveraging its potential to the maximum, providing an
enhanced set of diversified services to its customers. These
subsidiaries include LIC International, LIC Nepal, LIC Lanka, LIC
Housing Finance and LICHFL Care Homes.
Head Office
Life Insurance Corporation of India,
"Yogakshema", Jeevan Bima Marg,
Mumbai - 400021
Website: www.licindia.com.
COMPETITION
INFORMATION
Compititor Information
LIC has following Main Competitors -
Annexures
LIFE INSURANCE POLICY LIST
1.
2.
3.
4.
5.
6.
7.
8.
9.
2006-07
Regular Premium
65.89
34.11
100.00
Single Premium
86.96
13.04
100.00
First Year Premium
74.32
25.68
100.00
Renewal Premium
89.02
10.98
100.00
Total Premium
81.90
18.10
100.00
LIC
Private Sector
Total
LIC
Private Sector
Total
LIC
Private Sector
Total
LIC
Private Sector
Total
LIC
Private Sector
Total
2007-08
47.77
52.23
100.00
86.99
13.01
100.00
64.02
35.98
100.00
83.42
16.58
100.00
74.39
25.61
100.00
2001
2002
2003
2004
2005
2006
2007
2008
Private
13
116
254
416
804
1645
3072
6391
LIC
2186
2190
2191
2196
2197
2220
2301
2522
Industry 2199
Total
2306
2445
2612
3001
3865
5373
8913
Metro
Urban
Semiurban
Others
Total
Private
628
1169
2692
1902
6391
LIC
311
468
848
895
2522
Industry
Total
939
1637
3540
2797
8913
Insurers
Foreign partners
Year
of
Operation
2000-01
2000-01
Prudential, UK
2000-01
2001-02
2000-01
2000-01
2001-02
ING Insurance
Netherlands
2001-02
Allianz, Germany
2001-02
10
2001-02
11
12
AVIVA
13
14
2005-06
15
2006-07
16
2007-08
17
Fortis, Netherlands
2007-08
18
HSBC, UK
2008-09
19
Prudential of America
2008-09
20
Aegon
Religare
Company Ltd.
Religare, Netherlands
2008-09
International,
B.V.,
2001-02
AVIVA International Holdings Ltd., UK
Life
Insurance
2002-03
2004-05
BIBLIOGRAPHY
BIBLIOGRAPHY
The work presented here has been prepared
and polished with the help of several sources. I
feel it my moral responsibility to enlist the used
sources, thereby the list is given below. I feel
extremely obligated to the content creators of
these resources and truly appreciate their spirit.
Websites: www.Wikipedia.org
http://www.buzzle.com
http://www.insurancejobs.com
http://careerplanning.about.com
www.licindia.com
www.wikipedia.org
www.icallinsurance.com
www.bimaonline.com
www.irdaindia.org
www.censusofindia.org
Books: Insurance
Others: T.S.
2009
Niraj Bajaj , insuring a bright future ,business
India, April2008
Articles related to insurance from various news
papers like The Times of India, The Hindu,
Economic Times, Business Standard etc.
IRDA Journa