Insurance

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Non-life insurance sector suffers Rs4.8bn net loss

Claim ratios dropped to 65pc from 73pc in 2007 as listed general insurance companies suffered investment losses in equity markets.

Profits of non life insurance sector has recorded a net loss of Rs4.8 billion the in year 2008 versus the profits of Rs26.5 billion in 2007 on the back of turmoil in equity markets, JS Research reported.

Major listed non life insurance companies have announced their 2008 results. These companies have posted a net loss of Rs4.8 billion mainly due to a huge investment loss of Rs4.8 billion on account of downturn in equity markets. JS sample is based on 11 out of the total 24 listed non-life insurance companies, representing approximately 85 per cent of the total listed sector gross premiums and 90 per cent of listed non life market capitalization. Top line posted another year of decent growth as net premiums of the sector rose to Rs18.2 billion, up 16 per cent YoY.

However, net claims only rose by 3 per cent to Rs11.8 billion as claim ratio normalized to 65 per cent in 2008 versus 73 per cent in 2007, while expense ratio remained steady at 18 per cent. Claim ratio has risen to 73 per cent in 2007 on account of unfortunate events of Dec 27, 2007. As a result, underwriting profits rose to Rs1.6 billion up a massive 358 per cent from Rs348 million in 2007.

Despite strong showing by the insurance business, turmoil in the equity markets resulted in investment income turning in to the red with total investment loss of Rs4.8 billion versus an investment income of Rs27 billion in 2008. This was first time in this decade that the non life sector has posted a net loss during a financial year.

Courtsey: The News

Insurance Overview

Insurance is something that almost all of us will need sometime, and it is worth understanding it before buying it.

Various types of insurance include motor insurance, which includes automobile, motorcycle, and boat insurance, health insurance, life insurance, home insurance, travel insurance, personal property insurance, keyman insurance, dental insurance, rental insurance, and more.

Often, insurance is required - especially in the cases of motor insurance. Other times, it is a safeguard.

Insurance is a form of risk-management which spreads risk of many people in exchange for small payments from each. Specifically, insurance transfers some type of risk (accident, theft, natural disaster, illness, etc) from one person or group to a more financially-sound entity in exchange for a payment (also known as a premium). Premiums are often annual or monthly, but depending on the type of insurance they can be at other intervals.

For example, a consumer can pay a certain amount to an insurer each year to insure that person's car. This sum represents the insurance company's assessment of the likelihood that the car will be damaged or wrecked. These data are normally taken from historical figures relating to the age, sex, profession, driving record, and accident history of the insured, as well as statistics concerning make and model of the car and its accident record, as well as the engine size, number of passengers, and even color of the vehicle.

Statistically, if the make and model of the vehicle in question, and/or its driver have been in numerous accidents, the insurance company will charge a higher premium in order to hedge expected losses. As the risk increases, so too do the premiums. In fact, sometimes, insurance companies will not even insure certain people and/or vehicles as the chance of them having to make a payout (in the event of an accident) will be almost guaranteed.

Types of Insurance

1.Motor insurance

This includes automobile, truck, motorcycle, aircraft, boat, or any other form of motorized transportation. It is perhaps the most common type of insurance, and is required by law in many countries.

Motor insurance covers the insured party against financial loss that he may incur to repair his vehicle or a third party’s in the event of an accident. In return for annual or semi-annual premiums, the insurance company is bound to pay any losses as described in the policy. Such a policy may include property, liability or third party, and medical coverage.

Property coverage insures damage to or theft of a vehicle; liability covers bodily injury or property damage that may occur as a result of the insured’s actions, and medical coverage pays any fees necessary for bodily injuries, rehabilitation and in some cases foregone wages and funeral costs.

In many countries, all of these types of automovile insurance are required of vehicle owners. In some countries, or states, only third party is required. However, in the case of new vehicles, any banks which may be financing the vehicle may require full insurance as a condition of financing.

2.Health insurance

Most developed nations have government-funded health care which means that most or all citizens have access to medical facilities and treatment, as well as health insurance.

For example, the National health Service (NHS) in the United Kingdom pays for citizens’ medical needs. However, in the US, there is no government-funded health policy – whether for insurance or treatment. As a result, US citizens and residents must be insured or risk facing astronomical medical bills, garnishing of wages, and bankruptcy. Often, medical insurance (both health and dental) is included in employee benefit packages in the US and other countries. Nevertheless, the issue of affordable health insurance and treatment in the US is one of the most controversial and heated, as many cannot afford either.

3.Disability insurance

This form of insurance protects workers from injuries and illnesses which prevent them from doing their jobs. It can pay for existing commitments the policyholders may have such as outstanding bills, mortgages, utilities, and more.

Workers’ compensation is common in the US, and pays a worker his wages and medical expenses in the event of an injury on the job.

Permanent disability which prevents a worker from ever working again is covered by total permanent disability insurance. This provides the disabled employee with benefits for the rest of his or her life, or according to the terms specified in the policy. Companies can purchase a similar type of insurance, called, disability overhead insurance. This pays for ongoing overhead costs of a business while the owners are not able to work.

4.Property insurance

This type of insurance typically covers things like homes, machinery, crops, valuable goods, shipped cargo, rented property (homes or apartments), and more.

It can cover damages as a result of various activities including acts of God (earthquakes, floods, storms, hurricanes, etc), vandalism, terrorism, fraud, and more.

5.Liability insurance

This covers negligent acts of an insured party with reference to a vehicle or a home. It protects the insured against legal claims and indemnification.

There are various types of liability insurance such as professional indemnity insurance Environmental liability insurance and Prize indemnity insurance .

Professional indemnity insurance protects employees from malpractice suits (as in the medical profession), errors and omissions (by appraisers, home inspectors, realtors, insurance agents, notaries, and others), and other acts of unintentional workplace negligence.

6.Credit insurance

This is taken by lenders who need coverage against the people that have credit with them (borrow money). In the event of their inability to pay it back (usually due to unemployment, disability, or death), this insurance protects the lender.

There are many other kinds of insuance, and even each of the major categories mentioned above has dozens of variations and types. They differ depending on the markets, the understanding of risk and availability of historical data, government regulation and law, cultural perceptions and expectations, and more.

Insurance in the World

Insurance Types

Auto Insurance
Dental Insurance
Home Insurance
Travel Insurance
Medical Insurance
General Insurance
Renters Insurance
Life Insurance
Disability Insurance
Term Insurance
Insurance Marketing
Framer Insurance
Insurance Agent

Insurance

Protection against possible hazard. You can buy insurance against an event which may or may not happen, such as a burglary, an illness, loss of property or a legal liability. 'General insurance' policies can cover a residence, its contents, commercial property, vehicles, livestock or crops against specified events, including natural disasters. They can also cover the expenses of accidents or sickness, loss of income or contractual costs such as the forfeiture of travel tickets through cancellation. Any form of insurance entails the payment of a sum (premium) to the insurer; this is often split into regular instalments. It is important to read the small print in an insurance policy carefully for details of specific coverage, exemptions and liability limits. Insurance on people's lives is usually referred to as life assurance.

The Meaning of Insurance

The meaning of insurance: Insurance is a policy from a large financial institution that offers a person, company, or other entity reimbursement or financial protection against possible future losses or damages.

The meaning of insurance is important to understand for anybody that is considering buying an insurance policy or simply understanding the basics of finance. Insurance is a hedging instrument used as a precautionary measure against future contingent losses. This instrument is used for managing the possible risks of the future.

Insurance is bought in order to hedge the possible risks of the future which may or may not take place. This is a mode of financially insuring that if such a incident happens then the loss does not affect the present well-being of the person or the property insured. Thus, through insurance, a person buys security and protection.

A simple example will make the meaning of insurance easy to understand. A biker is always subjected to the risk of head injury. But it is not certain that the accident causing him the head injury would definitely occur. Still, people riding bikes cover their heads with helmets. This helmet in such cases acts as insurance by protecting him/her from any possible danger. The price paid was the possible inconvenience or act of wearing the helmet; this ie equivalent to the insurance premiums paid.

Though loss of life or injuries incurred cannot be measured in financial terms, insurance attempts to quantify such losses financially. Insurance can be defined as the process of reimbursing or protecting a person from contingent risk of losses through financial means, in return for relatively small, regular payments to the insuring body or insurance company.

Insurance can range from life to medical to general (residential,commercial property, natural incidents, burglary, etc).

Life Insurance
It insures the life of the person buying the Life Insurance Certificate. Once a Life Insurance is sold by a company then the company remains legally entitled to make payment to the beneficiary after the death of the policy holder.

Medical Insurance
This is also known as mediclaim. Here, the policy holder is entitled to receive the amount spent for his health purposes from the insurance company.

General Insurance
This insurance type involves insuring the risks associated with the general life such as automobiles, business related, natural incidents, commercial and residential properties, etc.