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CHAPTER I
INTRODUCTION
The outlook for the general insurance industry in India is stable as per the
financial forecast that has been made. Over the medium and long term,
Indias insurance market will continue to experience major changes as its
operating environment increasingly deregulates. On the one hand, a mix of
new products, new delivery system and a greater awareness of risk will
generate growth. On the other hand, the competition is expected to remain
intense as private sector insurers and those about to enter India seek to win
market share from the more established public sector entities. In !!"#!$, Indias general insurance market witnessed a variety of
changes as deregulation continued at a hectic pace. %ith the removal of
pricing controls on fire and engineering lies in !!$, insurers have since
discounted their rates by &!' or more in their (uest to retain or win market
share. )urthermore, the number of private insurers is expected to grow as
various foreign companies have announced intentions to establish joint
ventures.1.1 HISTORY OF INSURANCE INDUSTRY
In some sense we can say that insurance appeared simultaneously
with appearance of human society. In earlier economies, we can see
insurance in the form of people helping each other. )or example, if a house
is burnt, the members of the community help build a new one. *hould the
same thing happen to ones neighbour, the other neighbors must come to
help+ Otherwise, neighbors will not receive help in the future.Insurance in the modern sense, started as a methods of transferring or
distributing risk were practiced by hineseand -abyloniantraders as long
ago as the rd and nd millennia -, respectively. hinese merchants
/
http://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Babyloniahttp://en.wikipedia.org/wiki/3rd_millennium_BChttp://en.wikipedia.org/wiki/2nd_millennium_BChttp://en.wikipedia.org/wiki/Millenniumhttp://en.wikipedia.org/wiki/Common_Erahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Babyloniahttp://en.wikipedia.org/wiki/3rd_millennium_BChttp://en.wikipedia.org/wiki/2nd_millennium_BChttp://en.wikipedia.org/wiki/Millenniumhttp://en.wikipedia.org/wiki/Common_Era -
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traveling treacherous river rapids would redistribute their cargo across many
vessels to limit the loss due to any single vessels capsi0ing. The
-abylonians developed a system which was recorded in the famous ode of
1ammurabi, . /$&! -, and practiced by early 2editerranean sailing
merchants. If a merchant received a loan to fund his shipment, he would pay
the lender an additional sum in exchange for the lenders guarantee to cancel
the loan should the shipment be stolen. 3reek monarchs were the first to insure their people and made it
official by registering the insuring process in governmental notary offices.
They invented the concept of the 4general average. 2erchants whose goods
were being shipped together would pay a proportionally divided premium
which would be used to reimburse any merchant whose goods were
jettisoned during storm or sinking of the vessel in the sea.The 3reeksand 5omansintroduced the origins of health and life
insurance . "!! 67 when they organi0ed guilds called 8benevolent
societies9 which cared for the families and paid funeral expenses of
members upon death. 3uildsin the middle 6gesserved a similar purpose.
-efore insurance was established in the late /$th century, 8friendly
societies9 existed in :ngland, in which people donated amounts of money to
a general sum that could be used for emergencies. *eparate insurance contracts ;i.e., insurance policies not bundled
with loans or other kinds of contracts< were invented in 3reeks rulers in the
/=th century, as were insurance pools backed by pledges of landed estates.
These new insurance contracts allowed insurance to be separated from
investment, a separation of roles that first proved useful in marine insurance.
Insurance became far more sophisticated in post#5enaissance :urope, and
speciali0ed varieties developed. Insurance as we know it today can be traced
to the 3reat )ire of >ondon, which in /""" 6.7 devoured /,!! houses. In
http://en.wikipedia.org/wiki/Code_of_Hammurabihttp://en.wikipedia.org/wiki/Code_of_Hammurabihttp://en.wikipedia.org/wiki/Mediterraneanhttp://en.wikipedia.org/wiki/Merchanthttp://en.wikipedia.org/wiki/General_averagehttp://en.wikipedia.org/wiki/Ancient_Greecehttp://en.wikipedia.org/wiki/Ancient_Romehttp://en.wikipedia.org/wiki/Familyhttp://en.wikipedia.org/wiki/Funeralhttp://en.wikipedia.org/wiki/Deathhttp://en.wikipedia.org/wiki/Guildhttp://en.wikipedia.org/wiki/Middle_Ageshttp://en.wikipedia.org/wiki/Renaissancehttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Great_Fire_of_Londonhttp://en.wikipedia.org/wiki/Code_of_Hammurabihttp://en.wikipedia.org/wiki/Code_of_Hammurabihttp://en.wikipedia.org/wiki/Mediterraneanhttp://en.wikipedia.org/wiki/Merchanthttp://en.wikipedia.org/wiki/General_averagehttp://en.wikipedia.org/wiki/Ancient_Greecehttp://en.wikipedia.org/wiki/Ancient_Romehttp://en.wikipedia.org/wiki/Familyhttp://en.wikipedia.org/wiki/Funeralhttp://en.wikipedia.org/wiki/Deathhttp://en.wikipedia.org/wiki/Guildhttp://en.wikipedia.org/wiki/Middle_Ageshttp://en.wikipedia.org/wiki/Renaissancehttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Great_Fire_of_London -
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the aftermath of this disaster,?icholas -arbonopened an office to insure
buildings. In /"@!, he established :nglands first fire insurance company,
8The )ire Office,9 to insure brick and frame homes. The first insurance
company in the Anited *tatesunderwrote fire insurance and was formed in
harles Town ;modern#day harlestontd in alcutta
/@$! The enactment of the -ritish Insurance 6ct
/D!$ The Indian 2ercantile Insurance >td was set up
http://en.wikipedia.org/wiki/Nicholas_Barbonhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Charleston,_South_Carolinahttp://en.wikipedia.org/wiki/South_Carolinahttp://en.wikipedia.org/wiki/Nicholas_Barbonhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Charleston,_South_Carolinahttp://en.wikipedia.org/wiki/South_Carolina -
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/D/ The Indian >ife 6ssurance ompanies 6ct, /D/ was the first
statutory measure to regulate life business.
/D@ The Indian Insurance ompanies 6ct was enacted.
/D&" ?ationali0ation of >ife Insurance *ector and >ife Insurance
orporation .The >I absorbed /&= Indian, /" non#Indian insurers
as also $& provident societies.
/D$/ The 3eneral Insurance orporation of India was incorporated as a
company
/D$ 3eneral insurance business was nationali0ed with effect from
/st Eanuary /D$.
/!$ insurers were amalgamated and grouped into fourcompanies namelyF/< ?ational Insurance ompany >td.,< The ?ew India 6ssurance ompany >td.,< The Oriental Insurance ompany >td=< The Anited India Insurance ompany >td.
/DD The 3overnment set up a committee under the chairmanship of
5? 2alhotra former 3overnor of 5-I to propose
recommendations for reforms in the insurance sector!!! The I576 was incorporated as a statutory body in 6pril !!!.
)oreign companies were allowed ownership of up to "'.
!!!#!/ Insurance Industry had /" new entrants, /! in >ife and " in
3eneral Insurance
!!/#! Insurance Industry had & new entrants, in >ife and in 3eneral
!!#!= Insurance Industry had /new entrant, *ahara India Insurance
ompany >td. In >ife Insurance category!!=#!& Insurance Industry had /new entrant, *hri 5am Insurance
company >td. In >ife Insurance category
!!!" -harti 6xa >ife insurance company was granted ertification of
5egistration in Euly
!!" -harti 6xa >ife insurance company commenced its operations the
=
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newest player in the insurance sector.
1.3 EVOLUTION OF NON-LIFE INSURANCE IN INDIA The boycott of -ritish goods and -ritish institutions, which occurred
because of the nationalist movement, encouraged formation of Indian#owned
commercial and business houses. -y /D!$, the Indian mercantile the first of
the long lasting general insurance companies to be established with Indian
capital, had started functioning five offices, the ?ew India, Gulcan, Eupiter,
-ritish India 3eneral and the Aniversal, were established in /D/D almost
simultaneously for transacting general insurance business. In /D@, prominent insurance men of -ombay met and formed the
Indian insurance companies association to protect the interest of Indian
insurers. >eaders of the insurance industry began to organi0e conferences,
educate public on the benefit of insurance, focus attention on the annual
remove of national wealth through invisible exports, and arise public
interest in favour of Indian insurance. In /D&!, the planning commission was set up to formulate plans for
successive five years. This five year plan brought about large scale economicdevelopment and increased insurance consciousness among the people. 6s
insurance business increased the number of claims for compensation against
losses also naturally increased. *ettlement of too many large claims meant a
severe demand on the funds of insurance companies. *o to prevent this
situation the practice of 45einsurance was adopted according to which
insurers themselves reinsured portions of the insurances they had
undertaken. *o Indian insurance companies with their expanding business
wanted to reinsure for which they had to seek foreign reinsurance markets. *ince the need for conserving foreign exchange was felt in India all
the insurers in India as well as foreigners operating in India formed the India
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5einsurance orporation in /D&". This corporation provided reinsurance
facilities. It was compulsory for insurers in India to reinsure a fixed
percentage of their insurances with the corporation. The Insurance 6mendment 6ct /D&! imposed certain limitations on
expenses of management. The general insurance council constituted what
was called the tariff committee to control and regulate terms and conditions
of business. In /D$, the 3eneral Insurance -usiness ;?ationali0ation< 6ct /D$
was passed under the provisions of this act. The general insurance
corporation of India was established for the purpose of directingH controlling
and caring on the general insurance business and all the /!" insurers were
merged and grouped into four subsidiaries of the general insurance
corporation of India namelyF ?ational Insurance ompany >td., with its head office at alcutta.
The ?ew India 6ssurance ompany >td., with its head office at
-ombay. The Oriental Insurance company >td., with its head office at 7elhi.
The Anited India Insurance ompany >td., with its head office at
2adras.
1.! THREE PHASES OF DE-TARIFFIN"Indias general insurance industry has undergone de#tariffing in three phasesF /DD= ## marine cargo, personal accident, health, banker liability and
aviation !!!" ## marine hull segment
!!$ ## )ire, engineering and motor own damage ;O7
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The only segment that remains under a tariff regime is the third party
motor business, although there has been a large upward revision in this
areas premium rates by regulators in recent times. 2oreover, commercial
third party motor business, which has traditionally contributed to adverse
claims ratios, has been moved to a common pool, resulting in loss sharing.
1.# INSURANCE SECTOR MOVIN" $UIC%LY The Indian insurance sector is rapidly moving towards international
standards of free ;risk#based< market pricing and newinnovative product
offerings. -ig changes have occurred over the last seven years, during which
the sector was opened to private participation, but with foreign directinvestment ;)7I< capped at "'. %ith the regulator possibly lifting the
ceiling on foreign ownership to =D', the capacities of domestic partners
would no longer constrain capital levels for joint ventures. In the private sector, there were nine players with future generally
the latest entrant as of *eptember !!$. 6 number of potential new entrants
await the necessary approvals. 2ost private players have tie#ups with
international companies to compensate for their lack of experience in
insurance. %ithin the private sector, III >ombard ;I>< leads with /.='
market share for the period 6pril#7ecember !!$. 5ecently, 5eliance
3eneral Insurance ;53I< as emerged as the fastest growing player, recording
a /&!' rise year#on#year in gross direct premium in the first nine months of
!!$#!@.
1.& SI"NIFICANCE OF INSURANCE SECTOR 6s the industrial revolution comes with cut throat competition, the
chances of uncertainty are also increasing day by day. Insurance plays
significant role for not only an individual or for a family but it has spread
over the entire nervous system of the nation. 6ccording to the famous
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philosopher E. 5oyce, Insurance Jrinciples comes to be more and more used
and useful in modern affairs. ?ot only does it serve the ends of individuals,
it tends more and more both to pervade and transform our modern social
order. It brings into new synthesis, not merely pure and applied sciences, but
private and public interests, individual prudence and a large regard for. The
general welfare theft and charity. Insurance is a method through which one
can just spread over the risk. It is a way of reducing uncertainty of
occurrence of an event. It is co#operative effort where in the loss occurred by
a specific risk in spread over a large number of persons. Insurance is a
solution for reducing risk, large number of people collect small amount,
known as premium and out of this losses are paid to the suffering persons.
1.' ORI"IN AND DEVELOPMENTS OF INSURANCE
?o one know that when the insurance transactions started+ The
origin of insurance is lot in anti(uity. 1owever, there are certain evidences
on the basis of which one can say that the earliest form of insurance was
marine insurance. :vidences are also on record that arrangements
embodying the ideas of insurance were being practiced in -abylone and
India, centuries ago. 5eferences are also available in 1ammurabi 2anu
;2anav 7harma *hashtra
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1.( MARINE INSURANCE
2arine insurance was the first form of the insurance business. It is
said that it probably began in north Italy by the end of / thcentury. The
Italian merchants who came to :ngland in /th or /thcentury covered their
risk of assets with insurance. The first marine policy called 8Jolli0a9 was
issued in Italy in /!!. 8harter of insurance9 was also established in /!!
in -elgium. Insurance was similarly developed in other :uropean countries
like *pain, )rance, 3ermany and 1olland. Insurance sector was greatly
developed in the time of Kueen :li0abeth#I in :ngland during the /= andthe /&th centuries. >ombards, the ex#communicated businessmen of Italy
captured the whole market of marine insurance business. They run the
business along with other and settled docent the street of >ondon which was
later on famous by the name of 4>ombard *treet L a well known place for
marine insurance transactions. The present form of marine insurance is
developed by the >loyds 6ssociation which was established in /$$= by a
man 2r. :dward >loyds, a coffee merchant with the publication of 4>loyds
?ews. The merchants gathered into the coffee house and took liability in
marine insurance business as per their financial position. :ven today, >loyds
6ssociation is one of the leading firms transacting marine insurance in the
whole world. >ater on 2arine Insurance 6ct was passed in /D!" in :ngland.
Other countries had also passed the marine insurance act nearly the same
period. It was passed in /D" in India.
1.) FIRE INSURANCE
The evidences of emergence of fire insurance can be seen in /"
century in 3ermany. There was a scheme made to spread over the fire risk a
D
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group of people in Oldenburg in /"!D by collecting the premium. The
market of fire insurance was greatly developed after the great fire of >ondon
in /""" in &thwhich @&' of the houses burnt to ashes and property worth
/! crores sterling was completely destroyed. The first fire insurance office
was established in >ondon in /"@!. 4*unlife office was set up in /$/! in
>ondon. The industrial revolution gave impetus to develop the fire insurance
business because there was great expansion of machinery used. The market
for fire insurance expanded for protecting the highly cost machinery. )ire
Insurance started in India with the establishment of Triton Insurance
ompany in alcutta in /@&!. The ?orth -ritish 2ercantile company came
into existence in /@"/.)ire insurance has very slow trend for progress in
India up to nationali0ation of general insurance.
1.1* LIFE INSURANCE
The origin of >ife Insurance business was not so earlier. There is no
specific evidence available through which one can consider how the idea of
life insurance developed. The first life insurance policy issued on the life of
2r. %illiam 3ybbons on /@thEune, /"& in :ngland. It was issued for one
year period. The first registered life office in :ngland was 4hand in hand
society which was established in /"D!. 2utual >ife Insurance ompany
came into existence later on in /"D". The first mortality table prepared in the
/Dthcentury gave impetus to the life insurance transactions. >ife Insurance
started in India by :uropeans with the establishment of 4Oriental >ife
Insurance ompany in /@/@. 4-ombay 2utual >ife Insurance came into
existence in /@$/. In /@$=, the third company entered into the same business
of life insurance called 4The Oriental 3overnment *ecurity >ife 6ssurance.
The life insurance act passed in /D&" in India.
/!
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1.11 MISCELLANEOUS INSURANCE
The Industrial revolution gave impetus to certain miscellaneous
insurance like accident insurance, liability insurance, theft and burglary
insurance and fidelity insurance. There are certain latest forms of insurance
like cattle insurance, crop insurance, profit insurance and conse(uential loss
insurance.
1.12 ORI"IN OF "ENERAL INSURANCE
Insurance was a method of sharing of the losses, embodying the
principle of co#operation existed in the early civili0ation. :vidences are
available that proves loss of profits in industry was insured by the village co#
operatives in India during the 6ryan ivili0ation. 8-ottomary -onds9 were
the first plan, which considered insurance as a techni(ue of providing
protection against the fortuitous events for a onsideration. The
medilevaranean merchants as early as in the fourth century -. issued thebonds. The -ottomary loan was an advance of money on a ship during the
period of a voyage. It was repayable with the agreed rate of interest, on the
arrival of the ship safely at destination. There were possibilities of losing the
ship during the voyageH the obligation to repay the loan was extinguished in
that case. The interest payable constituted a sort of premium for the risk of
total loss. *imilar loans were issued on the security of cargo and were
called9 5espondentia bonds9
There are references found in 82anav 7harma *hashtra9, code of
2anu which contained rules for sea form contracts observed by the traders
from -roach and *urat who set sailed in Indian built ships with Indian
//
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merchandise to >anka, :gypt and 3reece. The other four#runner of insurance
was the marine practice of general average whereby losses incurred to save
the common venture, were shared by contributions from all the interests L
ship, freight and cargo all the things saved by the general average at. The
5hodians also practiced it in their 2editerranean trade in D/" -.. The
earliest transaction of insurance can be traced out to the beginning of the
fourteenth century in ?orthern Italy. *ome Italian merchants were engaged
in the 2editerranean trade with India via onstantinople and with the
:uropean countries by land. It originated the practice of breaking of the
botany bonds into two instruments covering separate transactions.
/. The advance of money, which was to be repaid on the safe arrival of the
ship.
. 6 policy of assurance, which paid the amount, stated, in the event of loss
of sea. This was the beginning at marine insurance business.
1.13 COMPANY PROFILE )ounded in /D=$, +ORIENTAL LIFE INSURANCE COMPANY
LTD, is one of IndiaMs leading finance companies. Kuality in lending,
transparency in transactions, outstanding customer care and an unyielding
commitment to being the best, has made NORIENTAL LIFE INSURANCE
COMPANY LTD one of the most respected finance companies in India.
NORIENTAL LIFE INSURANCE COMPANY LTD is part of the
+ORIENTAL "OVERNMENT SECURITY LIFE ASSURANCE
COMPANY LTD,The ompany was a subsidiary of >ife Insurance orporation of
India from /D&" to /D$ ;till the 3eneral Insurance -usiness was
nationali0ed in the country
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3eneral Insurance orporation of India has been transferred to entral
3overnment. The ompany is a pioneer in laying down systems for smooth and
orderly conduct of the business. The strength of the company lies in its
highly trained and motivated work force that covers various disciplines and
has vast expertise. Oriental speciali0es in devising special covers for large
projects like power plants, petrochemical, steel and chemical plants. The
company has developed various types of insurance covers to cater to the
needs of both the urban and rural population of India. The ompany has a
highly technically (ualified and competent team of professionals to render
the best customer service.
1.1! REVIE OF LITERATURE Oriental Insurance made a modest beginning with a first year
premium of 5s.DD, D=" in /D&!. The goal of the ompany was 8*ervice to
clients9 and achievement thereof was helped by the strong traditions built up
overtime.
Oriental with its head Office at ?ew 7elhi has ! 5egional Offices
and nearly D!!P operating Offices in various cities of the country. The
ompany has overseas operations in ?epal, Cuwait and 7ubai. The
ompany has a total strength of around /&,!!!P employees. )rom less than
a lakh at inception, the 3ross Jremium went up to 5s.&@ crores in /D$ and
during !/!#// the figure stood at a mammoth 5s. &&"D.@@ crores.
Oriental Insurance is a professionally managed independent -oard#
run ompany. Illustrious personalities like *hri T.6.Jai ; who later became
abinet 2inister in the Anion 3overnment
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hairman#um#2anaging 7irector of our ompany. The -oard of 7irectors
of our ompany includes eminent personalities in various fields. The insurance sector is sine#(uo#non for development and economic
growth of any economy and it has been recogni0ed for many years. The
significance of insurance was also acknowledged in the first conference of
Anited ?ations onference on Trade and 7evelopment ;A?T67< in /D"=
by stating that 8a sound national insurance and reinsurance market is an
essential characteristic of economic growth.9 It seems Insurance not only facilitates economic transactions through
risk transfer and indemnification but it also promotes financial
intermediation ;%ard and Qurbruegg, !!!
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transaction costs, creating li(uidity and facilitating economies of scale in
investment. ar8 an8 :r;re examine the casual relationship
between growth in the insurance industry and economic development by
recogni0ing that the economic benefits of insurance are conditioned by
national regulations, economic systems and culture. )urther, %ard and
Qurbruegg ;!!!< argue that an examination of the interrelationship between
insurance and economic growth needs to be conducted on a country#by#
country basis. The study is important because in contrast to the available
evidence on the importance of banks#typified by the work of Lev5ne an8
:erv/;/DD@< little is known about Insurance.
P5059 %/t0erhas discussed the importance of channels partners.
-etter the channel partners better will be the delivery model. 7etailed
discussion about how to design the channel structure so that all the
re(uirements could be fulfilled is provided. The various issues faced by the
organi0ation while managing the channels are also given. %hen an
organi0ation has more than one channel it becomes very important that all
the channels should be integrated in such a way that the organi0ation get the
best out of all. 6t times due to the conflicting benefit of the different
channels the conflict arise so various strategies to manage these issues is
also discussed in the chapter.
M54ae0 ?. Et@e0has written about the marketing of services. The
marketing of services is different from the goods because of thecharacteristic of service like intangibility, inseparability, heterogeneity etc.
-rief about pricing strategies is also given in case of services. The authors
have also given the impact of technological development on the services
marketing. The author has also given the importance of brand and after sales
/&
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support in case of services as perception of the customers plays an important
role. In other part of the book the authors has described the importance of
distribution channels and designing of the same. 6 channel partner should be
consider as partner according to discussion. The legal complications
associated with channels are also discussed. These complications are
necessary to take into the consideration while managing the channels. The
conflicting interest of channels both hori0ontally and vertically are also
taken into the consideration.
//nehas discussed about the importance of personal financial
planning. The concept of time value of money has also been elaborated. The
importance of creating and implementing budget is given under money
management. The other important concepts for financial planning like credit
management and understanding taxes are also explained. In one section the
authors have discussed the importance of investment and what should be the
major considerations while making any investment. The considerations
include the risk associated with the investment, return on the investment etc.
The importance and benefits of life insurance has also been given. The
discussion also includes various legal aspects associated with life insurance.
The overview of retirement planning is also given which includes
importance and benefit of retirement planning. Garious tools for proper
retirement planning are also discussed.
1.1# PLAN OF THE STUDY
The first chapter embodies a comprehensive introduction about the
Oriental Insurance ompany >td in India and also gives some
important 5eview of >iterature.
The second chapter explains the 5esearch 2ethodology.
/"
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The role and performance of Oriental Insurance ompanies >td in
India is explained in the third chapter.
The last chapter would provide a re(uired findings and valid
suggestions for further improvement in Oriental Insuranceompanies >td in India.
CHAPTER II
RESEARCH METHODOLO"Y
/$
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Insurance is an important growing part of the financial sector in virtually
all the developed and developing countries. 6 resilient and well regulated
insurance industry can significantly contribute to economic growth and
efficient resource allocation through transfer of risk and mobili0ation of
savings. In addition, it can enhance financial system efficiency by reducing
transaction costs, creating li(uidity and facilitating economies of scale in
investment.The objective with which this study is taken up and the methods
by which the secondary data is re(uired to be collected are discussed in this
chapter.
2.1 O?ECTIVES OF THE STUDY
The objectives of the study are three in number they could be stated
as follows
/.To study the performance of Oriental Insurance ompany >td..To identify the various insurance policies available in Oriental Insurance
ompany >td.
.To find out the customers benefits from the various products introduced
by Oriental Insurance ompany >td.
2.2 HYPOTHESIS
The two hypothesis which are proposed to be verified are
i) The new insurance products introduced Oriental Insurance ompany
>td in India acts as a tool for improving the performance of Oriental
Insurance ompany >td in India.ii)The Oriental Insurance ompany >td has been successful in providing
insurance facilities to the public in various areas.
2.3 METHODS OF STUDY
/@
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has a wider scope among the insurance sector. The study which focuses on
various aspects such as competitive position of Oriental Insurance ompany
>td, strengths and weaknesses of insurance covers, customers perception,
etc also holds good for other companies in the life and non#life insurance
segment.
The outcome of the study, which are based on the above aspects can
be utili0ed by the marketing department of both life and non#life insurance
companies.
2.' NEED OF THE STUDY
This study helps the company to identify its competitive position
among its industrial competitors by which the company can further improve
its performance to enjoy high reputation among clients. This study also helps
in making necessary changes in the attributes of the insurance cover offered
by the company so that the customers can enjoy the benefits of the insurance
cover. The need for the study also arises to identify and offer additional
insurance products according to the expectations of the customers.
2.( LIMITATIONS OF THE STUDY There were certain limitations in undertaking this research work. 6s
it is understood that the limitations are a part of the project, they have been
overshadowed by the benefits of the study.
/. 6de(uate secondary data are not available regarding the various
insurance policies of Oriental Insurance ompany >td.. The study mainly based on secondary data.
!
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CHAPTER III
REVIE OF LITERATURE
1. RIS% MANA"EMENT INSURANCE * . a runa ja tes f i r s t
ed i t ion Lyear !!D . *evera l compla in t s have been r ece ived
by I576 regarding non#avai labi l i ty of motor th ird par ty
i n su r an ce e spec ia l ly f or co mm er c ia l v ehi c le s . 1o wev er i n
v iew o f ad ve rse c lai m ex pe rie nce i ns urer s ha ve b ee n
express ing d i f f icul ty to underwr i te th is business unless they
a r e p er m it t ed t o ch ar ge p r em iu m r a te s t h at t h ey co ns i de r
appropr ia te . In v iew of the mandatory nature of motor th i rd par ty
insurance business I576 has taken s teps to moni tor the
rates, terms and condit ion of cover . T576 considers that al l
insurers regis tered to car ry on genera l insurance business
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inc luding motor insurance business should ac t ive ly
par t icipate in providing such cover to vehic le owners a t
ra tes as not i f ied by them.
2. AN%IN" AND INSURANCE
o . p .agarwal second edi t ion L year !//6t p resen t , i nsurance cover i s ava i lab le to about "' of
t he i ns ur ab le p op ul at io n, = c ro re i n t he c as e o f l ife #
insurance and potent ia l genera l insurance India i s one of the
l o wes t i n su r an ce p e r c api t a r ank i ng i n t h e wor l d a s i s so
clear f rom the fo l lowing char t F .
; ?o . o f p ol ic ie s p er / !! i ns ur ab le
personstd was incorporated at -ombay on /
*eptember /D=$. The ompany was a wholly owned subsidiary of the
Oriental 3overnment *ecurity >ife 6ssurance ompany >td and was formed
to carry out 3eneral Insurance business. The ompany was a subsidiary of
>ife Insurance orporation of India from /D&" to /D$ ;till the 3eneral
Insurance -usiness was nationali0ed in the country
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&< 5un the business profitably through prudent underwriting and efficient
proper claim management."< :ffectively manage our reinsurance operations.$< :ffectively manage our investments for optimi0ing yield.
@< 1ave effective risk management systems.D< Improve the penetration of non#life insurance by proper underwriting,
innovation marketing.
!.3 MANA"EMENT Oriental Insurance is a professionally managed independent -oard#
run ompany. Illustrious personalities like *hri T.6.Jai ; who later became
abinet 2inister in the Anion 3overnment
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!.!.2 Re-56;re6ent /r Ca A00/7an4e1ealth Insurancecomes in various flavours. It is imperative that you
understand the difference between re#imbursement plan and a cash
allowance plan. 6 cash allowance plan cannot replace a re#imbursement plan;often referred to as S2ediclaimS # because here the amount you get is based
on the actual amount of expense incurred whereas in a cash allowance you
get a fixed lumpsum for every day you spend in the hospital # no matter how
expensive the treatment might be.
!.!.3Ca0e Fa4505t Imagine having to run around to arrange for cash in an emergency
situation for getting admitted to the hospital of your choiceU 2ost insurancecompanies had launched cashless cards for re#imbursement based plans # so
that you could simply present the card at the time of admission and an
administrator would take care of settling your hospital bills directly from the
insurance company. 1owever in mid#!/!, several public sector insurers
withdrew support for the cashless facility. -efore buying your 1ealth
Insurance, you may want to check with your insurer how many hospitals
does he offer support for the cashless facility and especially about the
hospitals in your area. -ut please remember that just because a hospital is in
the cashless network at the time of taking your first policy it may not remain
in the cashless network when your claim arises. *o this cannot be the sole
factor for deciding about the health insurance company.
!.!.! A
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the premiums applicable today as well as the premiums applicable at an
older age :nsure that your health insurance plan is renewable after "& #
because at that age, you donMt want to discover that health insurance is
difficult to get when you need it the most.!.!.# C/-9a
One of the fears insurance companies nurse is that the customer
might opt for unusually expensive hospital rooms or procedures than are
warranted. To overcome this, some insurance companies introduce a co#pay
or sub#limits. In a co#pay you are re(uired to share some of the expenses
incurred#regardless of the amount covered.
:.g. say you have a lac cover and the bill you want to be re#imbursed amounts to 5s. lacs. %ith a plan that has a !' co#pay, you will
only get @!' of the bill re#imbursed by the insurer # i.e. 5s. /." lacs and you
will have to bear the rest
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diabetes when you took the first policy since the heart illnesses is caused by
7iabetes. This single item is responsible for most of the disputes between
insurance companies and consumers. *o make sure you disclose everything
that is re(uired in the form. Jlease do not sign a blank form and leave it to
the agent to fill the form later. This will ensure that at least at the end of the
waiting period you will get the disease covered. If you do not disclose the
disease then you run the risk of your policy being cancelled or a renewal
being denied if this fact is discovered later. 6part from the above illness contracted during the first !#D! days of
the first policy is normally not covered. *ome specific diseasestreatment
such as cataract , knee replacement, etc. may also be covered only after a
waiting period. There are permanent exclusions as well such as beauty treatment,
sexually contracted diseases, non allopathic hospitali0ation expenses , etc.
6lways read the policy brochure carefully and also look at the section
dealing with permanent exclusions in the policy document. Ceep a copy of
all documents submitted to the insurance company for your future reference.
6ny promise made by the agent or even an official of the insurance company
has no value unless it is in writing or at least on email. *o if you are basing
your decision on any such promise make sure you get it in record in some
form.
Oriental health insurance family floater policy is issued for a period of one
year and it offers two plansF#
!.# S50ver 90an *um insured in multiples of 5s./,!!,!!!# and up to
5s.&,!!,!!!# per person aged /@ years and above . &!' of this limit for
persons less than /@ years.
!
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!.& "/08 90an*um Insured in multiples of 5s. ,!!,!!!#, and up to
5s./!,!!,!!!# per person aged /@ years and above. &!' of this limit for
persons less than /@ years.
!.' Or5enta0 Hea0t Inran4e E05
5oom, -oarding and
?ursing :xpenses as
provided by the
1ospital ?ursing 1ome
?ot exceeding / ' of the
*um Insured per day
?ot exceeding / ' of the
*um Insured per day
Intensive are ;I< Anit
:xpenses as provided by
the 1ospital?ursing
1ome
?ot exceeding ' of the
*um Insured per day.
?ot exceeding ' of the
*um Insured per day.
*urgeon, 6naesthetist,
2edical Jractitioner,
onsultants, *pecialists
)ees
6s per the limits of the
sum insured
6s per the limits of the
sum insured
6naesthesia, -lood,
Oxygen, Operation
Theatre harges,
6s per the limits of the
sum insured
6s per the limits of the
sum insured
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*urgical 6ppliances,
2edicines 7rugs,
7iagnostic 2aterial and
W#5ay, 7ialysis,
hemotherapy,
5adiotherapy, ost of
Jacemaker, 6rtificial
>imbs and similar
expenses
6mbulance services
charges
5s./,!!!# per illness and
limited to maximum /'
of the sum insured or
5s.,!!!# whichever is
less, for the entire policy
period
5s.,!!!# per illness and
limited to maximum /' of
the sum insured or
5s.",!!!# whichever is less,
for the entire policy period
76I>B 1O*JIT6>
6*1 6>>O%6?:?I>
!./' of sum insured per day
per illness subject to a
maximum compensation for
/! days per illness. The
overall liability of the
ompany during the policy
period will be limited to
/.&' of the sum insured6ttendant allowance ?I> 5s.&!!# per day of
hospitali0ation per illness
and up to /! days per
illness. The overall liability
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of the ompany during the
policy period will be limited
to compensation for /& days
of hospitali0ation
7O2II>I65B 1O*JIT6>IQ6TIO?
*urgeon, 2edical
Jractitioner, onsultants,
*pecialists )ees, -lood,
Oxygen, *urgical
6ppliances, 2edicines
7rugs, 7iagnostic
2aterial and 7ialysis,
hemotherapy, ?ursing
expenses
/!' of *um Insured,
2aximum 5s.&!!!#
during policy period
5s.&!!!!#,during policy
period
Treatment for 7og bite
;or bite of any other
rabid animal like
monkey, cat etc.
ene5t S50ver P0an "/08 P0an
Jersonal 6ccident *um insured in multiples
of 5s./,!!,!!!# and up
to 5s.&,!!,!!!# per
*um Insured in multiples of
5s.,!!,!!!# and up to
5s./!,!!,!!!# per person
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person aged /@ years and
above . &!' of this limit
for persons less than /@
years
aged /@ years and above.
&!' of this limit for persons
less than /@ years
>ife 1ardship *urvival?I>
Jlans of benefit 6*
7:)I?:7 1:5:I?6)T:5
!.1* ORIENTAL MEDICLAIM INSURANCE - Pre-e5t5n