General Insurance provides much-needed protection against unforeseen events such as accidents, illness, fire, burglary etc. Unlike Life Insurance, General Insurance is not meant to offer returns but is a protection against contingencies. Almost everything that has a financial value in life and has a probability of getting lost, stolen or damaged, can be covered through General Insurance policy.
Property (both movable and immovable), vehicle, cash, household goods, health, dishonesty and also one’s liability towards others can be covered under general insurance policy. Under certain Acts of Parliament, some types of insurance like Motor Insurance and Public Liability Insurance have been made compulsory.
With the opening up of the insurance industry to the private sector, the need for a strong, independent and autonomous Insurance Regulatory Authority was felt. As the enacting of legislation would have taken time, the then Government constituted through a government resolution an Interim Insurance Regulatory Authority pending the enactment of a comprehensive legislation.
The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General insurance Business (Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of India (for life insurance business) and General Insurance Corporation and its subsidiaries (for general insurance business).
Some of the General Rules:
1. Mis-description :
The insurance policy shall be void and all the premiums paid by insured may be forfeited by the insurance company in the event of mis-presentation or mis-declaration and/or non-disclosure of any material facts.
2. Reasonable care :
The insured shall take all reasonable steps to safeguard the property insured against any loss or damage. Insured shall exercise reasonable care that only competent employees are employed and shall take all reasonable precautions to prevent all accidents and shall comply with all statuary or other regulations.
3. Fraud :
If any claim under the policy may be in any respect fraudulent or if any fraudulent means or device are used by the insured or any one acting on the insuredâ€™s behalf to obtain any benefit under the insurance policy, all the benefits under the insurance policy may be forfeited.
4. Few basic principles of general insurance are :
a. Insurable interest
b. Utmost good faith
5. Risks of loss not covered under general insurance are:
The loss or damage or liability or expenses whether direct or indirect occasion by happening through or arising from any consequences of war, invasion, act of foreign enemy, hostilities (whether war be declared or not), civil war, rebellion revolution, civil commotion or loot or pillage in connection therewith and loss or damage caused by depreciation or wear and tear. However the risk of loss or damage by war can be insured by payment of additional premium in some cases only.
General Insurance in the current scenario:
The total number of general insurers registered with IRDA has gone up to 22, with registration of SBI General Insurance Company Limited, a joint venture general insurance company promoted by State Bank of India and Insurance Australia Group, Australia, as a General Insurer in December 2009.
The four public sector general insurance companiesâ€”United India Insurance, National Insurance Company, New India Assurance and Oriental Insurance Companyâ€”have together grown at a slightly faster rate during the April-November period this year than the private players, for the first time since 2000 when private entry was allowed in the general insurance sector.
The Gross Direct Premium Income (GDPI) for the public sector grew at 11.05 per cent during April-November 2009 as against 5.98 per cent during the same period last year and as compared to the growth of 11.02 per cent by the private sector. According to IRDA data, out of US$ 5 billion premium garnered by the industry during the period, US$ 2.84 billion came from the four public sector companies compared to US$ 2.56 billion during the corresponding period last year. The PSU insurers also held on to last year’s market share of 57 per cent. New India managed to garner the highest premium at US$ 850 million in the first eight months of this fiscal. Private players grew 7.1 per cent during April-November period 2009-10 by collecting US$ 2 billion premium.
- Bharti AXA General Insurance Company is planning to infuse US$ 139.5 million of capital in the next five years. It is also looking at expanding its network and planning to add 500 agents during the current year.
- The summer paddy crop in Palakkad district and cashew crop in many districts of Kerala will be brought under a climate-based crop insurance programme during the ongoing rabi season. The scheme is being implemented jointly by the Union Agriculture Ministry, the Agriculture Department of Kerala and the Agriculture Insurance Company of India.
- Small and medium enterprises (SMEs) have become the preferred segment for general insurers, despite the former’s small size and unorganised nature of business. Over 60 per cent of the business underwritten in the corporate side is coming from the SME segment.
Insurance companies are also witnessing increasing demand for project insurance in the last few months. Corporates are beginning to demand project insurance across sectors such as power generation with the cover beginning right from the start of the project till it is declared ready for commercial use. Some of the big projects also take cover for financial loss arising out of delay in completion.
Industry players estimate that premiums collected from project insurance will be around US$ 216.2 million for the industry as a whole and is expected to increase significantly.
- Oriental Insurance Company Ltd will be offering comprehensive project insurance for the Tata Power Project at Mundra in Gujarat.
Health insurance market was at around US$ 1.5 billion in 2008-09 and is expected to grow to US$ 9 billion by 2016-17. While health insurance policies are mostly provided by general insurance companies, life insurers contribute about five per cent to the overall health insurance business.
- Eyeing a place among the top three health insurers in the country within three years, Anil Ambani group firm, Reliance Life Insurance, has added a new vertical that would focus on developing the health insurance segment. The company would offer 3-5 year policies in the coming months and it plans to have a market share of about 10 per cent in the next three years.
- Apollo DKV Health Insurance has renamed itself Apollo Munich Health Insurance as a part of its five-year strategic plan to gain a five per cent market share. Apollo Munich is a joint venture between Asiaâ€™s largest integrated healthcare provider, The Apollo Hospitals Group, and Germany-based Munich Re’s segment, Munich Health.
- Max India is planning to invest US$ 43.25 million in its health insurance joint venture (Max Bupa) and will launch a product over the Januaryâ€“June 2010 period.
- Private life insurer, Aegon Religare, plans to enter the health insurance segment while continuing to focus on term insurance products.
- Star Health and Allied Insurance expects to invest US$ 38.9 million during the current financial year to grow its health insurance business, taking the total invested capital to US$ 67 million.
Major insurance policies that are covered under General Insurance are:
Every man has a dream to own a house one day. For an ordinary person it takes a whole lifetime of savings to build a house. And one cannot predict a natural calamity like earthquake.
It is said that a healthy mind resides in a healthy body. Hence it is very important to stay healthy. These days life is very fast and stressful.
Legally, no motor vehicle is allowed to be driven on the road without valid insurance. Hence, it is obligatory to get the vehicle insured.
Travel and tourism is one of the most fast growing sectors around the world. With rise in standards of living, more and more people are embarking on journeys and exploring new places.
Tags: Anil Ambani, Bharti AXA General Insurance, Cash, Financial, Fraud, GDPI, General Insurance, Health Insurance, Home Insurance, IRDA, Life Insurance, Motor, project, PSU, Risk, SBI, SMEs, Travel Insurance, Vehicle