AMRITA VIDYALAYAM KOLKATA

NAME – MOHIT AGARWAL

CLASS – XI SECTION – C
ROLL NO. – 7
SUBJECT – BUSINESS STUDIES

INSURANCE
 CONTENT
👉Introduction
👉History of Insurance
👉History of Insurance in India
👉Lloyd's Contribution
👉Development of regulatory mechanism
👉 Insurance companies in India
👉Principle of Insurance
👉Types of Insurance
👉Importance of Insurance to a businessman
👉Benefits of Insurance to the farmers
👉Terminology use
👉Interesting cases of Insurance
👉Conclusion
 INTRODUCTION
Insurance is a commonly acknowledged phenomenon that there are countless risks in every
sphere of life for property, there are fire risk; for shipment of goods. There are perils of sea; for
human life there are risk of death or disability; and so on the chances of occurrences of the
events causing losses are quite uncertain because these may or may not take place. Therefore,
with this view in mind, people facing common risks come together and make their small
contribution to the common fund. While it may not be possible to tell in advance, which person
will suffer the losses, it is possible to work out how many persons on an average out of the group,
may suffer losses. When risk occurs, the loss is made good out of the common fund in this way
each and every one shares the risk in fact they share the loss by payment of premium, which is
calculated on the likelihood of loss in olden time, the contribution make the above-stated notion
of insurance.

DEFINITION OF INSURANCE : Insurance has been defined to be that in, which a sum of money as
a premium is paid by the insured in consideration of the insurer's bearings the risk of paying a
large sum upon a given contingency.
 HISTORY OF INSURANCE

Insurance in some form is as old as historical society. So-called Bottomry contracts

were known to merchants of Babylon as early as 4000–3000 BCE. Bottomry was
also practiced by the Hindus in 600 BCE and was well understood in ancient
Greece as early as the 4th century BCE. Under a bottomry contract loans were
granted to merchants with the provision that if the shipment was lost at sea
the loan did not have to be repaid. The interest on the loan covered the
insurance risk. Ancient Roman law recognized the bottomry contract in which an
article of agreement was drawn up and funds were deposited with a money
changer. Marine insurance became highly developed in the 15th century.

In Rome there were also burial societies that paid funeral costs of their members
out of monthly dues. The insurance contract also developed early. It was known CANVA
in ancient Greece and among other maritime nations in commercial contact with
Greece.
 HISTORY OF INSURANCE IN INDIA
Insurance in this current form has its history dating back to 1818, when Oriental Life
Insurance Company was started by Anita Bhavsar in Kolkata to cater to the needs of European
community. The pre-independence era in India saw discrimination between the lives of
foreigners (English) and Indians with higher premiums being charged for the latter. In
1870, Bombay Mutual Life Assurance Society became the first Indian insurer.
At the dawn of the twentieth century, many insurance companies were
founded. In the year 1912, the Life Insurance Companies Act and the Provident
Fund Act were passed to regulate the insurance business. The Life Insurance
Companies Act, 1912 made it necessary that the premium-rate tables and
periodical valuations of companies should be certified by an actuary.
The Government of India issued an Ordinance on 19 January 1956 nationalising the Life
Insurance sector and Life Insurance Corporation came into existence in the same year. The
Life Insurance Corporation (LIC) absorbed 154 Indian, 16 non-Indian insurers and also 75
provident societies—245 Indian and foreign insurers in all. The General Insurance
Corporation of India was incorporated as a company on 22 November 1972 as a private
company under Companies Act, 1956 in Bombay and received its Certificate for
Commencement of Business on 1 January 1973.
 LLOYD’S CONTRIBUTION
Presentations are communication tools that can
be used as demonstrations.
Lloyd's of London, generally known simply as Lloyd’s, isan insurance
and reinsurance market located in London, England. Unlike most of its
competitors in the industry, it is not an insurance company; rather,
Lloyd's is a corporate body governed by the Lloyd's Act 1871 and
subsequent Acts of Parliament. It operates as a partially-mutualised
marketplace within which multiple financial backers, grouped
in syndicates, come together to pool and spread risk.
These underwriters, or "members", are a collection of
both corporations and private individuals, the latter being traditionally
known as "Names".
Today, it has a dedicated building on Lime Street which is Grade I listed.
Traditionally business is transacted at each syndicate's "box" in the
underwriting "Room" within this building, with the policy document
being known as a "slip", but in more recent years it has become
increasingly common for business to be conducted outside of the
Lloyd's building itself, including remotely.
 DEVELOPMENT OF REGULATORY MECHANISMS
The insurance industry of India is a huge market with several major players. So it
becomes important that there is an authority overseeing the industry. And this is where
the Insurance Regulatory and Development Authority of India (IRDAI) comes in.

The IRDAI is an independent and autonomous statutory body. The IRDAI was constituted
under the Insurance Regulatory and Development Authority Act which was passed in
1999. The main function of the IRDAI is to regulate the insurance industry of the
country. For many years the insurance sector of India was protected. The IRDA Act of
1999 allowed the entry of private companies in the insurance sector. It also allowed for
26% investment by foreign companies. Since 2014 the FDI limit has been increased to
49% and further opened up the insurance sector.

So the Insurance Regulatory and Development Authority of India has a role to protect

the policyholders from any form of discriminatory practices. They regulate all the
insurance companies. All companies have to approach the IRDAI for registration
certificates. And they are responsible for the renewal, modification or cancellation of
these certificates.
 INSURANCE
COMPANIES IN INDIA
NAME OF COMPANY CLAIM SETTLEMENT RATIO NAME OF COMPANY CLAIM SETTLEMENT
RATIO
1. Aditya Birla Sun 98.04% 16. Max Life Insurance 99.35%
2. Aegon Insurance 99.25% 17. PNB Metlife India 98.17%
3. Ageas Federal Insurance 95.07% 18. Pramerica Limited 98.61%
4. Aviva Insurance 98.01% 19. Reliance Nippon 98.49%

5. Bajaj Allianz 98.48% 20. Sahara Indian 97.18%

6. Bharti AXA 99.05% 21. SBI 93.09%
7. Canara HSBC OBC 97.10% 22. Shriram 95.12%

8. Edelweiss Tokio 97.01% 23. Star Union Dai-Ichi 95.96%

9. Exide company 98.54% 24. Tata AIA 98.02%
10. Future General India 94. 86%
11. HDFC 98.01%
12. ICICI Prudential 97.10%
13. India First 96.81%.
14. Kotak Mahindra 98.50%
 PRINCIPLE OF INSURANCE
The principal of insurance are the rules of action or conduct adopted by the stakeholders involved
in the insurance business. The specific principal of utmost significance to a valid insurance
contract consists of the following:

1) UTMOST GOOD FAITH: A contract of insurance is a contract of uberrimae fidei i.e., a contract
found on utmost good faith. Both the insurer and the insured should display good faith
towards each other in regard to the contract.
The Insured should provide all the information related to the subject matter, and the insurer must
give precise details regarding the contract.

2) INSURABLE INTEREST: This principle says that the individual (insured) must have an insurable
interest in the subject matter. Insurable interest means that the subject matter for which the individual
enters the insurance contract must provide some financial gain to the insured and also lead to a
financial loss if there is any damage, destruction or loss.

3) INDEMNITY: This principle says that insurance is done only for the coverage of the loss; hence
insured should not make any profit from the insurance contract. In other words, the insured should be
compensated the amount equal to the actual loss and not the amount exceeding the loss. The purpose
of the indemnity principle is to set back the insured at the same financial position as he was before the
loss occurred. Principle of indemnity is observed strictly for property insurance and not applicable for
the life insurance contract.
 PRINCIPAL OF INSURANCE
4) PROXIMATE CAUSE: This is also called the principle of ‘Causa Proxima’ or the nearest cause. This principle
applies when the loss is the result of two or more causes. The insurance company will find the nearest cause of
loss to the property. If the proximate cause is the one in which the property is insured, then the company must pay
compensation. If it is not a cause the property is insured against, then no payment will be made by the insured. 

5) SUBROGATION: Subrogation means one party stands in for another. As per this principle, after the insured, i.e.
The individual has been compensated for the incurred loss to him on the subject matter that was insured, the
rights of the ownership of that property goes to the insurer, i.e. The company.
Subrogation gives the right to the insurance company to claim the amount of loss from the third-party responsible
for the same.

6) CONTRIBUTION: Contribution principle applies when the insured takes more than one insurance policy for the
same subject matter. It states the same thing as in the principle of indemnity, i.e. The insured cannot make a profit
by claiming the loss of one subject matter from different policies or companies.

7) MITIGATION: This principle says that as an owner, it is obligatory on the part of the insurer to take necessary
steps to minimise the loss to the insured property. The principle does not allow the owner to be irresponsible or
negligent just because the subject matter is insured.
 TYPES OF INSURANCE

OPTION 1 OPTION 2 OPTION 3

Presentations Presentations Presentations
are are are
communication communication communication
tools. tools. tools.

Presentations are communication tools that can be used as demonstrations, lectures, speeches,
reports, and more. It is mostly presented before an audience.
 TYPES OF INSURANCE

1) LIFE INSURANCE: Life insurance is a type of insurance policy in which the insurance company
undertakes the task of insuring the life of the policyholder for a premium that is paid on a daily/monthly/
quarterly/yearly basis.
Life Insurance policy is regarded as a protection against the uncertainties of life. It may be defined
as a contract between the insurer and insured in which the insurer agrees to pay the insured a sum of
money in the case of cessation of life of the individual (insured) or after the end of the policy term.
For availing life insurance policy the person needs to provide some details like age, medical history
and any type of smoking or drinking habits.
As there are many requirements of persons for availing a life insurance, the requirements can be needs
of family, education, investment for old age, etc.
Some of the types of life insurance policies that are prevalent in the market are:
• Whole Life Policy
• Endowment Life Assurance Policy
• Joint Life Policy
• Annuity Policy
• Children’s Endowment Policy
 TYPES OF
INSURANCE
2. GENERAL INSURANCE: General Insurance is related to all other aspects of human life apart from the life
aspect and it includes health insurance, motor insurance, fire insurance, marine insurance and other types of
insurance such as cattle insurance, sport insurance, crop insurance, etc.
Some of the general insurance are:
A) FIRE INSURANCE: Fire insurance is a type of general insurance policy where the insurer helps in paying off
for any damage that is caused to the insured by an accidental fire till the specified period of time, as mentioned
in the insurance policy.
Generally, fire insurance policy is valid for a period of one year and it can be renewed each year by paying a
premium, which can be a lump sum or in installments.
The claim for a fire loss must satisfy the following conditions:
i. It should be an actual loss
ii. The fire must be accidental and not done intentionally
B) MARINE INSURANCE: Marine insurance is a contract between the insured and the insurer. In marine
insurance, the protection is provided against the perils of the sea. The instances of dangers in sea can be
collision of ship with rocks present in sea, attacking of the ship by pirates, fire in ship.
Marine insurance covers three different types of insurance which are ship hull, cargo and freight insurance.
C) HEALTH INSURANCE: Health insurance is an effective safeguard for protection against rising healthcare
costs. Health insurance is a contract that is made between an insurer and an individual or a group where the
insurer agrees to provide health insurance against certain types of illnesses to the insured individual or
individuals.
D) MOTOR VEHICLE INSURANCE: Motor vehicle insurance is a popular option for the owners of motor
vehicles. Here the owners’ liability to compensate individuals killed by negligence of motorists is borne by
the insurance company.
E) CATTLE INSURANCE:  In case of cattle insurance, the owner of the cattle receives an amount in the event
of death of the cattle due to accident, disease or during pregnancy.
F) CROP INSURANCE: Crop insurance is a contract for providing financial support to the farmers in the event
of crop failure due to drought or flood.
G) BURGLARY INSURANCE: Burglary insurance comes under the insurance of property. Here the insured is
compensated in the event of a burglary for the loss of goods, damage occurred to household goods and
personal effects due to burglary, larceny or theft.

STEP 1 STEP 2 STEP 3 STEP 4 STEP 5

Elaborate on the Elaborate on the Elaborate on the Elaborate on the Elaborate on the
step here step here step here step here step here
 IMPORTANCE OF
INSURANCE TO A
BUSINESS MAN
The importance of insurance to a businessman can be understood from the following points.
1. Security and Safety: It gives a sense of security and safety to the businessman. It enables him to receive compensation
against actual loss. He can concentrate on his business with a secure feeling that in case of losses arising from insurable risk,
his losses will be compensated.
2. Distribution of Risk: Risk in insurance is spread over a number of people rather being concentrated on a single
individual.
3. Normal expected profit: An insured trader can enjoy normal margin of profit all the time. He is protected from
unexpected losses because of insurance.
4. Easy to get loans: A trader can get bank loans easily if his stock or property is insured, as insurance provides a sense of
security to the lenders.
5. Advantages of Specialization: Businessmen can concentrate on their business activities without spending more time on
safeguarding their property. The insurance companies, on the other hand, can provide specialized insurance services.
6. Development of Social Sectors: Insurance funds are available for economic development particularly for the
development of social sectors. Especially for a developing country like India, insurance funds are an important source for
investing in infrastructure projects (roads, power, water supply, telecom etc.).
7. Social cooperation: The burden of loss is shouldered by so many persons. Thus, insurance provides a form of social
cooperation.
 BENEFITS OF INSURANCE TO THE
FARMERS
Farmers takes several insurance to protect their crops, poultry, animals etc. Some of the insurances and their
benefits are: Presentations are communication tools that can be used
1) CROP INSURANCE: Crop insurance is a basic necessity that all farmers should incorporate to help maintain
as demonstrations.
agricultural earnings, especially in disaster-prone years, by benefiting from financial assistance and insurance
coverage in the event of natural disasters, illnesses, and pests. Encourage farmers to use improved technology to
undertake progressive farming practices. EXAMPLE EXAMPLE
Advantages of Crop Insurance  
a) Income stability -It secures farmers against crop failure-related4.3%losses. It's a resource that assists farmers
9.5% 9.5%in
managing yield and price risks.
b)Minimum debts- Even during crop failure, farmers will 21.3%
be in the condition31.9%
to repay their loans with the help of
crop insurance.
c) Technological advancement  - Insurance companies can also provide information on how 30.5% to reduce losses, which
can help farmers. In addition, IoT can support in technological advancement.
d)New agricultural practices  - By protecting against loss, Crop insurance assures economic interest. And farmers 41% can
adopt new agricultural practices in return to this and can try new measures to protect their crops.  
21.3%

21.3% 9.5%
2) POULTRY INSURANCE:It provides compensation to poultry birds including layers, broilers, and hatchery birds. (Breeding
stock) which are exotic and crossbred. Indigenous and non-native birds will not be insured. The scheme applies to poultry
farms with a minimum of 100 birds under the scheme category and 500 birds under the non-scheme category and under
general broilers - 100 per batch, layers 500 per batch, and hatching 200 birds per batch.
Poultry insurance offers many important benefits for protecting animals and investment of farmers.
• Protection under a farm policy • Protection against falling prices
• Life is protected from dangers faster • Stray animals are covered
• Animal mortality coverage • Stay safe from liability

3) ORCHARDS INSURANCE: Orchard insurance provides protection cover against the loss of crop and fruit from hail, fire,
flood and other nature and climate perils.
The insurance product can offer cover from fire, wind, storm, and hail cover for a variety of orchard tree types, including
nursery stock. The orchard fruit policy also includes wine grapes, pip, and stone fruit and also covers harvested fruit
against sudden and unforeseen loss, within a definite and specified period from the date of harvest.
BENEFITS :
• Protective cover to trees that you own, which are maintained and grown for the purposes of commercial harvesting, at your
rural property
• Insurance cover for sudden and accidental loss to orchard trees caused by fire, lightning or explosion, or thunderbolt
• Additional frost loss cover where equipment has a mechanical or electrical failure.
• Seasonal cover for growing and harvested fruit.
 TERMINOLOGY USE
Some common terms of insurance are:
PREMIUM- This is a fixed amount that the policyholder pays the insurance company in return for insurance.
You can choose between different plans of payment like monthly, quarterly, annually, etc. The premium is
an important aspect of an insurance policy.

FACE VALUE: The face value of life insurance is the dollar amount equated to the worth of your policy. It can
also be referred to as the death benefit. or the face amount of life insurance. In all cases, life insurance face
value is the amount of money given to the beneficiary when the policy expires.

MARKET VALUE: Market value, in the context of insurance, is the price an insured asset in its current state would
be able to command in a competitive market setting from a willing buyer. It differs from replacement cost, actual
cash value, trade-in value, and other forms of valuation.

MATURITY VALUE: The maturity amount . meaning refers to the sum of the premiums paid upto that time
and the additional benefits which the insurance company chooses to give to the policyholder. You will
only be eligible for this if you have paid all of your premiums and finished the term.
 INTERESTING CASES OF
INSURANCE
There are several interesting cases of insurance. Some of which are the following:
1) HCA/Medicare: In 2000 and 2002, HCA pleaded guilty to 14 felonies, including fraudulently billing Medicare as well as
other programs. HCA had inflated the seriousness of diagnoses, filed false cost reports, and paid kickbacks to doctors to
refer patients. HCA had to pay the US government $631 million plus interest, as well as $17.5 million to state Medicaid
agencies, on top of $250 million already paid to Medicare for outstanding expense claims. It was the largest fraud
settlement in US history, with law suits reaching $2 billion in total.
2) John Darwin’s Death: John Darwin faked his death in a canoeing accident, turning up five years later. He’d been secretly
living in his house and the house next door, while his wife claimed the money on his life insurance. They were both
sentenced to six years in prison, but released on probation. BBC created a TV drama about their story called Canoe Man.
3) Swoop and squat: In the 90s, car insurance fraud ran rampant. Cars would purposely get into accidents with innocent
people on the road, hoping to score insurance money, and often, they did. These accidents frequently injured drivers, and
some were even fatal. These accidents usually earned the orchestrators about $20,000 each.
4) The Titanic: Everyone knows the story of the Titanic, but not everyone realizes that some believe it’s part of a conspiracy
to pull off a huge insurance fraud. The Olympic, Titanic’s sister ship, was damaged and rendered useless during one of its
voyages-and some believe that the Titanic as it sunk was actually the Olympic. Conspiracy theorists note several
inconsistencies in the performance and construction of the “Titanic” that indicate the Titanic sinking was a case of
swapped ships.
5) I get knocked down, but I get up again…and knocked down again 48 more times: With 49 cases, Isabel
Parker earned her title as the queen of the slip and fall scam. During her career, she received claims totalling $500,000.
 CONCLUSION
Insurance is a tool by which fatalities of a
small number are compensated out of
funds collected from plenteous.
Insurance is a safeguard against
uncertain events that may occur in the
future. Company image is the highly
important criteria that consumers
consider before taking up a life insurance.
This is mainly because people expect
safety and secure for their money which
they invest, followed by the factor
Premium which we pay to the insurer and
then Bonus and Interest paid by the
company, services etc.
THANKS FOR
WATCHING
AUM NAMAH SHIVAY