BBA461: Insurance and Risk

Management
Introduction to risk management
• “Risk management” helps an organization to identify, evaluate,
analyze, monitor, and mitigate the risks that threaten the
achievement of the organization's strategic objectives in a
disciplined and systematic way
Types of Business Risks

• A business risk threatens a company's financial goals. Business

risks can be categorized as internal or external risks and can
include:
• Political changes
• Cybersecurity threats
• Threats to reputation
• Mergers and acquisitions
• Health crises
• Location hazards
TYPES OF RISKS IN BUSINESS
• 1. Compliance risk
• 2. Legal risk
• 3. Strategic risk
• 4. Reputational risk
• 5. Operational risk
• 6. Human risk
• 7. Security risk
• 8. Financial risk
• 9. Competition risk
• 10. Physical risk
Essential Steps of A Risk Management Process
• Step 1: Identifying Risks.
• Step 2: Risk Assessment.
• Step 3: Prioritizing the Risks.
• Step 4: Risk Mitigation.
• Step 5: Monitoring the Results.
TYPES OF RISK MANAGEMENT
• Risk Avoidance – Avoidance of risk means withdrawing from a risk
scenario or deciding not to participate.
• Risk Reduction – The risk reduction technique is applied to keep risk
to an acceptable level and reduce the severity of loss through.
• Risk Transfer – Risk can be reduced or made more acceptable if it is
shared.
• Risk Retention – When risk is agreed, accepted, and accounted for in
budgeting, it is retained.
Sources of Risk
• Operating Profit
• Cash Flow
• Employee-Related Issues
• International Risk
• 1. Decision/Indecision
• 2. Business Cycles/Seasonality
• 3. Economic/Fiscal Changes
• 4. Market Preferences
• 5. Political Compulsions
Sources of Risk
• 6. Regulations
• 7. Competition
• 8. Technology
• 9. Non-availability of Information
Methods of handling Risk
• AVOIDANCE,
• RETENTION,
• TRANSFERRING,
• SHARING, AND
• LOSS REDUCTION
Business Risk Exposures
• Risk exposure is a measure of possible future loss (or losses)
which may result from an activity or occurrence. In business,
risk exposure is often used to rank the probability of different
types of losses and to determine which losses are acceptable or
unacceptable.
• Risk exposure in any business or investment is the
measurement of potential future loss due to a specific event or
business activity and is calculated as the probability of the event
multiplied by the expected loss due to the risk impact. A risk
exposure calculator is used to differentiate the losses that are
acceptable or unacceptable for a business.
Risk exposure
• Risk exposure is a quantification of the vulnerability of an individual,
organization, or asset to adverse events or uncertainty. It can show how
susceptible an entity may be to financial, operational, or reputational losses
as a result of security breaches, market fluctuations, natural disasters,
technological failures, legal liabilities and more. The extent of exposure to
risk depends on numerous factors:
• what the entity does,
• where it is geographically located, what industry it operates in,
• its financial structure, and
• the risk management strategies it has in place.
Types of risk exposure
1. Cybersecurity risk – Threats to digital systems, data breaches, and unauthorized access (more on this below)
2. Operational risk – Risk arising from errors, fraud, system failures, and disruptions to business operations owing
to systems, people, or external events
3. Market risk – Potential losses resulting from fluctuations in interest rates, foreign exchange rates, stock prices,
or other market conditions
4. Political/geopolitical risk – Risk from changes in political landscapes, policies, or international relations
5. Reputational risk – Potential harm from negative public perception about an organization’s brand,
trustworthiness, and success
6. Legal/regulatory risk – Non-compliance with laws, regulations, or industry standards, which can lead to legal
actions or fines
7. Environmental risk – Risk resulting from climate change, natural disasters, and ecological concerns
•
Process to calculate Risk exposure
• Risk exposure management involves assessing the potential impact of various risks on a specific entity,
investment, project, or portfolio. While the exact approach may vary depending on the context, here’s a general
process to calculate risk exposure:
• Identify Risks: Start by identifying and listing all the potential risks that could affect the entity or investment. These
could include financial risks, operational risks, market risks, legal risks, and more.
• Assess Probability: Estimate the likelihood of each identified risk occurring. This could be expressed as a
percentage or a qualitative assessment (low, medium, high).
• Quantify Impact: Determine the potential financial or non-financial impact of each risk if it were to occur. This could
involve estimating monetary losses, delays, reputational damage, or other negative consequences.
• Calculate Expected Loss: Multiply the probability of each risk by its corresponding impact. This gives you the
expected loss for each risk event.
• Aggregate Expected Losses: Sum up the expected losses from all identified risks. This provides an overall
estimate of the potential impact of multiple risks.
• Consider Correlations: If some risks are interrelated, consider their correlations. Some risks might amplify or
mitigate each other’s impact when they occur simultaneously.
• Adjust for Mitigation Measures: If the entity or investment has implemented risk mitigation measures (such as
hedging, diversification, or insurance), adjust the expected losses accordingly.
• Report and Analyze: Present the aggregated expected losses as the risk exposure. Analyze the results to prioritize
risks based on their potential impact and likelihood.
How to calculate risk exposure?

• To calculate risk exposure, organizations conduct a systematic assessment of potential

threats and their impacts, which generally involves the following steps:
• Identify and categorize relevant risks, taking into consideration factors such as market
conditions, operational processes, legal requirements, and technological vulnerabilities
• Assess the likelihood of each risk identified occurring and estimate the potential magnitude
of its impact
• Quantify the likelihood and impact of each risk, calculating a risk exposure score
• Prioritize various risks based on exposure scores, focusing resources on high-exposure
areas
• Mitigate and manage identified risks via risk mitigation strategies such as risk avoidance,
risk transfer, risk reduction or risk acceptance
• Monitor and continuously review the effectiveness of risk management strategies –
adjusting as necessary based on emerging risks or evolving circumstances
Risk identification

• Risk identification is identifying potential business risks and

analyzing them to learn about their effects on the business.
Risks come in many forms for businesses and different
industries may have different risks. For example, a software
development company and a construction company may share
the risk of losing revenue if they don't upgrade their tools for
modern processes.
• Risk identification allows a business's leadership team to learn
more about the risks the company may face and create
solutions to the challenges behind the risk. It also can help
provide a clear picture of a business's risk factors for bank loans
or investor funds.
 Ways to identify risk

• 1. Brainstorming
• 2. Stakeholder interviews
• 3. NGT technique
• 4. Affinity diagram
• 5. Requirements review
• 6. Project plans
• 7. Root cause analysis
• 8. SWOT analysis
Strengths: Areas where the team excels and how they relate to projects.
Weaknesses: Areas where the team can improve to increase productivity and
efficiency.
Opportunities: Areas where the team or business can improve or expand.
Threats: Areas of risk for the project or business and how the team can minimize
those risks.
FINANCIAL EXPOSURE
• In finance, exposure refers to the amount of money invested in
a particular asset. It represents the amount that an investor
could lose on an investment. Financial exposure can be
expressed in monetary terms, or as a percentage of an
investment portfolio.
• Financial exposure refers to the risk inherent in an investment,
indicating the amount of money an investor stands to lose.
• Experienced investors usually seek to optimally limit their
financial exposure which helps maximize profits.
• Asset allocation and portfolio diversification are broadly used
strategies for managing financial exposure.
• The situation of people, infrastructure, housing, production
capacities and other tangible human assets located in
hazard-prone areas. Annotation: Measures of exposure can
include the number of people or types of assets in an area.
Exposures of Human Assets

• The situation of people, infrastructure, housing, production capacities and other tangible human
assets located in hazard-prone areas. Annotation: Measures of exposure can include the number of
people or types of assets in an area.
Legal liability exposures
• Examples of liability exposures are bodily injury or death of
customers, product liability, completed operations (i.e., faulty
work away from the premises), environmental pollution,
personal injury (e.g., false arrest, violation of right of privacy),
sexual harassment, and employment discrimination.
LEGAL LIABILITY EXPOSURE
• Legal liability is the responsibility to remedy a wrong done to another
• Special damages, general damages, and punitive damages are the types of
monetary remedies applied to liability
• Liability exposure arises out of statutory law or common law and cases are heard
in criminal or civil court
• Negligent actions may result in liability for losses suffered as a result
• Liability through negligence is proven through existence of a duty to act (or not
act) in some way, breach of the duty, injury to one owed the duty, and causal
connection between breach of duty and injury
• Defenses against liability include assumption of risk, contributory negligence,
comparative negligence, last clear chance, and immunity
• Modifications to help the plaintiff in a liability case include res ipsa loquitur, strict
liability, vicarious liability, and joint and several liability
Evaluating the Frequency and
Severity of Losses
• To calculate the frequency and severity of a loss, you need to go through a few
steps.
• The first step is to estimate the average loss per occurrence.
• The second step is to estimate the cumulative losses over time.
The frequency-severity method has a few limitations
• The frequency-severity method is an actuarial method for determining the
expected number of claims an insurer will receive during a time period and the
average claim's cost.
• Frequency refers to the number of claims an insurer anticipates will occur over a
given period of time.
• Severity refers to the costs of a claim—a high-severity claim is more expensive
than an average claim, and a low-severity claim is less expensive.
• The frequency-severity method is one option that insurers use to develop models.
• When assessing the risk of a business, insurance companies look at three
factors when it comes to their claims; the cause(s) of loss, the frequency of
similar incidents and the severity of each. Claims are typically categorize
them into these four classifications:
• 1. Low Frequency – Low Severity
2. High Frequency – Low Severity
3. High Frequency – High Severity
4. Low Frequency – High Severity
• With these four classifications in mind, the business owner can decide how
to best handle losses to be viewed as a better insurance risk to the insurance
companies.
10 Types of Risk Management Strategies

• Type 1: Business Experiments

• Type 2: Theory Validation
• Type 3: Minimum Viable Product Development
• Type 4: Isolating Identified Risks
• Type 5: Building in Buffers
• Type 6: Data Analysis
• Type 7: Risk-Reward Analysis
• Type 8: Lessons Learned
• Type 9: Contingency Planning
• Type 10: Leveraging Best Practices
4 Common Risk Responses

• 1. Avoiding Risks
• 2. Accepting Risks
• 3. Mitigating Risks
• 4. Risk Transferring
Risk Management Strategy Important

• 1. Operational Effectiveness and Business Continuity

• 2. Protection of Your Company’s Assets
• 3. Customer Satisfaction and Loyalty
• 4. Realizing Benefits and Achieving Goals
• 5. Increased Profitability
Unit 2 : Risk identification and
measurement
RISK MANAGEMENT

• Risk management is the process of identifying, assessing and controlling

threats to an organization's capital, earnings and operations. These risks
stem from a variety of sources, including financial uncertainties, legal
liabilities, technology issues, strategic management errors, accidents and
natural disasters.

• Risk management encompasses the identification, analysis, and response to risk

factors that form part of the life of a business. Effective risk management means
attempting to control, as much as possible, future outcomes by acting proactively
rather than reactively. Therefore, effective risk management offers the potential to
reduce both the possibility of a risk occurring and its potential impact.
HOW TO MANAGE RISK?
• There are five basic techniques of risk management:
• Avoidance.
• Retention.
• Spreading.
• Loss Prevention and Reduction.
• Transfer (through Insurance and Contracts)
•
TOP TECHNIQUE FOR RISK MANAGEMENT
• 1. Prioritize
• 2. Buy Insurance
• 3. Limit Liability
4. Implement a Quality Assurance Program
• 5. Limit High-Risk Customers
• 6. Control Growth
• 7. Appoint a Risk Management Team
Risk Management by Individuals
• Risk management for individuals is a key element of life-cycle
finance, which recognizes that as investors age, the fundamental
nature of their total wealth evolves, as do the risks that they
face. Life-cycle finance is concerned with helping investors achieve
their goals, including an adequate retirement income, by taking a
holistic view of the individual’s financial situation as he or she moves
through life.
• Individuals are exposed to a range of risks over their lives: They may
become disabled, suffer a prolonged illness, die prematurely, or
outlive their resources.
Risk Management Strategy for
Individuals
1. Specify the objective.
2. Identify risks.
3. Evaluate risks and select appropriate methods to manage the
risks.
4. Monitor outcomes and risk exposures and make appropriate
adjustments in methods.
Risk Management Strategy for
Individuals
• 1. Risk Identification: Bowtie Analysis
• 2. Risk Assessment and Prioritization: Risk Heat Maps
• 3. Risk Mitigation Strategies: Hierarchy of Controls
• 4. Risk Transfer and Insurance: Contractual Risk Allocation
• 5. Crisis Management and Response Planning: Business Impact
Analysis (BIA)
• 6. Risk Monitoring and Early Warning Systems: Key Risk Indicators
(KRIs)
• 7. Risk Communication and Stakeholder Engagement: Risk Workshops
• 8. Risk Culture and Awareness: Training and Education Programs
What is a risk map (risk heat map)?

• A risk map (risk heat map) is a data visualization tool for

communicating specific risks an organization faces. A risk map
helps companies identify and prioritize the risks associated with
their business.
• An important component of enterprise risk management, a risk
map facilitates the following:
• drives an understanding of an organization's risk profile and risk
appetite;
• clarifies thinking on the nature and impact of risks; and
• improves the organization's risk assessment
Benefits of a risk heat map

1. see the organization's total risk environment at a high level, providing a big-picture view;
2. ensure that risk mitigation priorities -- and resources -- are aligned to the most significant
risks;
3. reduce insurance costs -- developing risk maps can help organizations demonstrate a
comprehensive, well-aligned risk management strategy to insurance companies and gain
more favorable premiums;
4. support collaboration between the organization's risk function and other functional
departments, which have greater visibility into risk due to the risk heat map;
5. encourage shared strategic decision-making on risk issues;
6. effectively focus on improving risk management and risk governance;
7. sharpen the enterprise's definition of its risk appetite and risk tolerance;
8. generate better integration of risk management activities across enterprise functions; and
9. give teams throughout the enterprise a common language for discussing risk.
Importance to use a risk heat map

• Creating a risk map forces executives and their teams to identify the
risks that could threaten the organization and rank their possible
impact and likelihood. The exercise can clarify priorities for enterprise
leaders and help them get ahead of issues before they threaten the
organization's operations.
• Furthermore, as noted in the benefits section above, creating a risk
map also facilitates interdepartmental dialogues about an
organization's inherent risks. It forces greater collaboration between
the risk function and other departments within an organization as
they must all work together to identify, prioritize and visualize risks.
As such, a risk heat map can help the company visualize how risks in
one part of the organization can affect operations of other business
units across the enterprise.
Hierarchy of controls
• The hierarchy of controls is a method of identifying and ranking
safeguards to protect workers from hazards. They are arranged from
the most to least effective and include elimination, substitution,
engineering controls, administrative controls and personal protective
equipment.
• The hierarchy of controls is used to keep employees safe from injury
and illness in the workplace.
• The five steps in the hierarchy of controls, from most effective to least
effective, are elimination, substitution, engineering controls,
administrative controls and personal protective equipment.
• The hierarchy of controls is especially vital in occupations where
employees come into regular contact with hazardous chemicals,
vehicle-related accidents and heavy machinery errors.
STAGES OF HIERARCHY OF
CONTROL
Crisis Management and Response Planning:
Business Impact Analysis (BIA)
• A business impact analysis or business impact assessment (BIA) is a
structured process that organizations use to determine how critical
various business activities and resources are to continuing normal
business operations.
• The various organs of a business have different goals, dependencies,
and resources that determine how they function. A business impact
analysis… well, analyzes these organs and determines what happens to
the rest of the business when one of them is disrupted or fails.
• A BIA identifies the financial and operational impacts resulting from
the disruption of business functions and processes. Operational impact
analysis may include:
• Lost or delayed revenue
• Increased expenses
• Regulatory fines and legal fees
• Contractual penalties
• Brand and reputational damage
4 Key Business Impact Analysis Steps

• Step #1: Build business impact analysis project team

• Step #2: Gather and evaluate business process information
• Step #3: Prepare a BIA report to aid business continuity and
disaster recovery
• Step #4: Implement recommendations to address continuity
vulnerabilities
Risk Monitoring and Early Warning Systems:
Key Risk Indicators (KRIs)
• A key risk indicator is an indicator, or metric, used to assess and
measure a possible risk. A simple way to think about a KRI is to
consider it like you do an alarm. If something is heading down
the path of a disaster, you will be made aware of it by taking
measurement of a KRI, rather than waiting for the negative
outcomes to occur.

• As mentioned, KRIs are just a selection of measurement tools to

monitor overall risk. While you won’t focus, or even know, every
type of risk your business faces, you can take proactive and
reasonable steps to keep an eye on the most crucial types of
risk.
Main categories of KRI
• KRIs can be broken down into three main categories, based on
types of risk:

• Financial: These are metrics that help to quantify market risk,

regulatory changes or competitive risk.

• People: KRIs that measure employee satisfaction, customer

churn, employee retention, etc.

• Operational: Ways to take stock of risks that can stem from

day-to-day like a technical malfunction or security breach.
Characteristics KRI
• Relevant: the indicator/data helps identify, quantify, monitor or manage risk
and/or risk consequences that are directly associated with key business
objectives/KPIs.
• Measurable: the indicator/data is able to be quantified (a number,
percentage, etc.) and is reasonably precise, comparable over time, and is
meaningful without interpretation.
• Predictive: the indicator/data can predict future problems that
management can preemptively act on.
• Easy to monitor: the indicator/data should be simple and cost effective to
collect, parse, and report on.
• Auditable: you should be able to verify your indicator/data, the way you
sourced it, aggregated it, and reported on it.
• Comparable: it’s important to be able to benchmark your indicator/data,
both internally and to industry standards, so you can verify the indicator
thresholds.
Risk Communication and Stakeholder
Engagement
• Risk communication is the process of conveying relevant risk
information to stakeholders in a clear, concise, and timely
manner. It aims to ensure that stakeholders have a
comprehensive understanding of risks, their potential impacts,
and the organization's risk management efforts.
Risk Culture and Awareness: Training and
Education Programs
•

Define risk appetite

•Establish a risk management framework
•Educate and train staff
•Communicate and collaborate with
stakeholders
•Be the first to add personal experience
•Reward and recognize good practices
•Review and improve your culture
Cost of risk in risk management
• Cost of risk (COR) is the total cost of managing risks and losses incurred by an
organization.
• Cost of Risk Components
Total Cost of Risk is the sum of four major components that are individually measured and
quantified:
1. Risk Financing Costs
2. Loss Costs (Direct and Indirect)
3. Administrative Costs
4. Taxes & Fees

FORMULEA : TCOR is the best measure of the actual cost of risk and a better risk
management key performance indicator than premium costs. Premium cost +
estimated cost of retained losses + risk management costs = total cost of insurable
risk.
Risk-Risk Management and Societal Welfare.

• Risk management may increase the likelihood of success in

public organisations' fulfilment of the social objectives that have
been set for them. In this context, uncertainty as a research
category in economic sciences should not be neglected. In
theoretical discussions, uncertainty is a much broader concept
than risk.
• Social Risk Management (SRM) is a new conceptual framework
– put forward by the World Bank - that extends the traditional
framework of SP by looking into public actions to improve
market-based and non-market-based (informal) instruments of
social risk management.
Risk Financing

• Risk financing is the determination of how an organization will

pay for loss events in the most effective and least costly way
possible. Risk financing involves the identification of risks,
determining how to finance the risk, and monitoring the
effectiveness of the financing technique that is chosen.
Risk financing technique
• Risk financing techniques include retention, noninsurance
transfer, and insurance.
• Retention involves setting aside funds from the organization's
current income to cover potential losses.
• Noninsurance transfer involves transferring the risk to another
party, such as a reinsurer.
RISK MANAGEMENT METHODS
• Avoidance means not participating in activities that could harm you;
in the case of health, quitting smoking is a good example.
• Retention acknowledges the inevitability of certain risks, and in terms
of health care, it could mean picking a less expensive health
insurance plan that has a higher deductible rate.
• Sharing risk can be applied to how employer-based benefits are often
more affordable than if an individual gets their own health insurance.
• Transferring risk relates to healthcare in that the cost of the care is
transferred to the insurer from the individual, beyond the cost of
premiums and a deductible.
• Loss prevention and reduction are used to minimize risk, not
eliminate it—the same concept is used in healthcare with
preventative care.
Issues in Risk Management:

• Workers’ Compensation
• Payroll and Tax Management
• Technology
• Third Parties
• Fraud and Misconduct
• Employment
• Legal Compliance and Regulatory Requirements
• Crisis Management
Top 5 HR Risks

1. Employment– discriminatory practices, hiring the wrong candidate, “unjust” employment, errors in
employment contracts and employee handbooks, and more.
2. Labor Protection and Workplace Safety– physical injuries, uncertain working conditions, lack of
safety checks, lack of staff training, inappropriate clothing and safety equipment, and inadequate or
non-existing safety policies and procedures.
3. Employee Supervision– insults, harassment, revealing personal information, inadequate job
descriptions, no employee manual, disconnect between training and actions, and no adequate
monitoring or discipline procedures.
4. Leaving of Employees– compensation, organizational assets and equipment theft, and not
deactivating all access codes and passwords.
5. Compliance and Regulatory Issues– labor and employment regulations, compensation, payroll,
taxes, benefits, and more compliance and regulatory requirements.
ADVANCED ISSUES IN RISK MANAGEMENT
• Integrated Risk Management:
• Quantitative Risk Analysis:
• Cybersecurity Risk Management:
• Climate and Environmental Risk:
• Supply Chain Risk Management:
• Reputational Risk Management:
• Model Risk Management:
• Regulatory Compliance:
• Behavioral Risk Management:
• Crisis Management and Resilience:
• Third-Party Risk Management:
• Emerging Technology Risks:
• Data Privacy and Security:
• Risk Culture and Governance
 UNIT – 3
Introduction to Insurance
Principles of Insurance

• To ensure the proper functioning of the insurance contract, the insurer and the insured have to follow the
following principles.
• Utmost Good Faith
• Direct Cause
• Insurable Interest
• Indemnity
• Subrogation
• Contribution
• Minimizing the loss
Types of Insurance

• Health Insurance

• Car Insurance

• Life Insurance

• Homeowners Insurance

• Umbrella Insurance

• Renters Insurance

• Travel Insurance

• Pet Insurance
INSURANCE SECTOR REFORMS
IN INDIA
o Launch of LIC IPO: The government-owned Life Insurance Corporation of India (LIC) made headlines with its
Rs 21,000-crore initial public offering (IPO), with up to 10 percent of its offer size reserved for its
policyholders.

o Emphasis on Guaranteed Return Policies by Life Insurers: Many life insurance companies introduced
traditional endowment policies, marketed as an opportunity for policyholders to benefit from the increased
interest rates introduced by RBI.

o Increase in Health Insurance Premiums and Introduction of New Products: Health insurance premiums for
individuals saw an increase of 8-15 percent this year, largely due to a significant rise in claims during 2020
and 2021.

o Introduction of Innovative Motor Insurance Riders: The IRDAI has given the green light for insurance
companies to offer innovative motor insurance riders such as pay-as-you-use, pay-as-you-drive and motor
floater policies.

• Implementation of Use-and-File Procedure for Faster Product Launches:

Life Insurance and General Insurance

• Life insurance covers an individual's life and fixed health

benefits like critical illnesses e.g. Cancer, heart ailments etc.
General insurance covers non-life assets, such as houses,
vehicles, health, events, travel, and more.
 Key Points Life Insurance General Insurance.

It is an insurance contract, It is an insurance that is not

Meaning which covers the life-risk of covered under Life
the person insured. insurance.

Form It is a form of investment. It is a contract of indemnity.

Term of Contract. It's a long term contract. It's a short term contract.
Premium has to be paid Premium has to be paid
Premium
over the year. lump sum.
Loss is reimbursed, or
Insurable amount is paid
liability will be repaid on the
Insurance claim either on the occurrence of
occurrence of uncertain
the event, or on maturity.
event.

Must be present at the time Must be present, at the time

Insurable Interest.
of contract. of contract and loss both.

It can be done for any value The amount payable under

Policy Value. based on the premium life insurance is confined to
policy. the actual loss suffered.
ESSENTIALS OF AN INSURANCE CONTRACT

∙ Offer and Acceptance – This refers to an offering being made and then being accepted by the other party. When
fulfill this legal requirement, its saying that all of the negotiations have been settled and you’ve come to an
agreement. This is also often called “agreement” or a “meeting of the minds”. In the insurance context, that means
you have made an application to the insurance company, they have accepted it and you have accepted the policy
terms they offered.
∙ Consideration – This refers to a fair exchange of value. A contract where one party gets everything while another
party contributes nothing does not meet this requirement. In the example of an insurance policy, you are paying them
premiums while they are providing you with a promise to pay claims in the future.
∙ Legal Capacity – To satisfy this requirement, everyone that is a party to the contract must have the legal capacity or
competence to enter into a contract. This means you have to meet certain requirements such as being above the age of
majority in your jurisdiction and have the mental capacity to understand what you are signing and agreeing to.
• Legal Purpose Obviously, the courts will not enforce a contract that is not legal. For example, a contract for the
provision of illegal services would not be a legal and valid contract because the course would not enforce it.
INDIAN INSURANCE INDUSTRY

• The Insurance Sector in India is a vital part of the country’s financial industry, offering a diverse range of
insurance products and services to mitigate risks and provide financial protection. It is regulated by the
Insurance Regulatory and Development Authority of India (IRDAI) to ensure fairness and stability.
YEAR IMPORTANT MILESTONES

• 1818 Oriental Life Insurance Company, the first life insurance company in India, was established in
Kolkata (then Calcutta) by Anita Bhavsar and others. It primarily catered to European customers.

• 1850 Triton Insurance Company, the first general insurance company, was set up in Kolkata to provide
non-life insurance services.

• 1870 The Bombay Mutual Life Assurance Society, the first Indian-owned life insurance company, was
founded in Mumbai (then Bombay).
GROWTH OF INSURANCE SECTOR IN INDIA

• 1907 The Indian Mercantile Insurance Company and the United India Insurance Company were established, marking the entry of
Indian companies into the insurance market.

• 1912 The Indian Life Assurance Companies Act was passed, which laid the foundation for the regulation and supervision of insurance
companies in India.

• 1928 The Indian Insurance Companies Act was enacted, introducing comprehensive regulations for insurance companies operating in
India.

• 1938 The Insurance Act was passed, leading to the nationalization of life insurance in India. The government established the Life
Insurance Corporation of India (LIC) as a statutory body to take over and consolidate various life insurance companies.

• 1956 The General Insurance Business (Nationalization) Act was enacted, leading to the nationalization of the general insurance sector.
The government established the General Insurance Corporation (GIC) and four subsidiary companies to handle different classes of general
insurance.

• 1991 The government initiated economic reforms, including liberalization and opening up of the insurance sector to private players. The
Insurance Regulatory and Development Authority of India (IRDAI) was established as the regulatory authority for the insurance sector.
GROWTH OF INSURANCE SECTOR IN
INDIA
• 2000 Private insurance companies were allowed to operate in India, leading to the entry of various
domestic and foreign players. This brought increased competition, product innovation, and improved
customer services.

• 2002 The IRDAI issued guidelines for the introduction of unit-linked insurance plans (ULIPs), a type of
life insurance policy linked to the performance of investment funds. ULIPs gained popularity due to their
investment and insurance benefits.

• 2013 The Insurance Laws (Amendment) Act was passed, increasing the foreign direct investment (FDI)
limit in the insurance sector from 26% to 49%. This allowed foreign insurance companies to have a higher
stake in Indian insurance ventures.

• 2020 The government increased the FDI limit in the insurance sector to 74%, further opening up the
sector to foreign investors.
Regulation of Insurance-IRDA

• Insurance Regulatory and Development Authority of India

(IRDAI), is a statutory body formed under an Act of Parliament,
i.e., Insurance Regulatory and Development Authority Act, 1999
(IRDA Act, 1999) for overall supervision and development of the
Insurance sector in India.
Regulation of IRDA
• Regulation 31 of the Insurance Regulatory and Development Authority of India (IRDA) is a crucial regulatory
provision that aims to safeguard the interests of policyholders and promote transparency in the insurance
industry. By understanding the essence of Regulation 31, individuals can gain insights into the rights and
protections afforded to them as insurance consumers.
• The primary objective of Regulation 31 is to ensure that insurance brokers establish and maintain robust internal
systems that can effectively handle the challenges and demands of their business. By doing so, insurance brokers
can provide efficient and reliable services to their clients while adhering to regulatory standards.
• The regulation recognizes that insurance brokerage firms vary in terms of size, clientele, and scope of operations.
Therefore, it emphasizes the importance of adapting internal systems accordingly, ensuring that the systems are
proportionate to the specific characteristics of the brokerage business.
• One of the key elements of Regulation 31 is the emphasis on the adequacy of internal systems. Adequate internal
systems refer to the structures, processes, and controls put in place by insurance brokers to manage their
operations, risks, and compliance obligations effectively. These systems encompass various aspects, such as
governance, risk management, compliance, information technology, human resources, and customer service.
• Under Regulation 31, insurance brokers are required to conduct an
assessment of their business operations to determine the appropriate
level of internal system adequacy. This assessment should take into
account factors such as the number of employees, the volume and
complexity of transactions, the types of insurance products offered,
the geographical spread of operations, and any specific risks
associated with the business.
• Based on this assessment, insurance brokers must design and
implement internal systems that can address these factors
adequately.
• Insurance brokers must ensure that their internal systems facilitate
efficient and secure data management. With the increasing reliance on
technology in the insurance industry, brokers must have robust
information technology systems in place to handle data storage,
processing, and security.
• This includes protecting sensitive customer information, maintaining
backups, implementing cybersecurity measures, and ensuring compliance
with relevant data protection laws and regulations.
• Furthermore, Regulation 31 emphasizes the significance of effective risk
management systems within insurance brokerage firms. Brokers must
identify, assess, and manage risks associated with their operations to
protect the interests of policyholders. This includes implementing risk
mitigation strategies, monitoring risk exposure, and establishing
contingency plans to minimize potential disruptions to their business.
• Compliance is another critical aspect addressed by Regulation 31.
Insurance brokers must establish mechanisms to ensure compliance
with relevant laws, regulations, and codes of conduct.
• The requirement for insurance brokers to have adequate internal
systems serves multiple purposes. It not only helps protect the
interests of policyholders but also contributes to the overall stability
and integrity of the insurance industry.
• By maintaining robust internal systems, insurance brokers can
enhance their operational efficiency, minimize risks, improve
customer service, and demonstrate their commitment to regulatory
compliance.
REFORMS IN INSURANCE SECTOR IN INDIA

∙ 1999 Formation of the Insurance Regulatory and Development Authority of India (IRDAI)
∙ The IRDAI was established as an autonomous regulatory body in 1999 to oversee and regulate the
insurance sector in India. Its primary role is to protect the interests of policyholders and ensure the orderly
growth of the insurance industry.
∙ 2000 Introduction of Unit-Linked Insurance Plans (ULIPs) In 2000, the IRDAI issued guidelines for
ULIPs, which combined investment and insurance benefits. ULIPs allowed policyholders to invest in various
funds and participate in the market’s ups and downs while providing life insurance coverage.
∙ 2002 Bancassurance Guidelines The IRDAI introduced guidelines for bancassurance, which enabled
banks to sell insurance products. This partnership between banks and insurance companies expanded the
distribution network, making insurance products more accessible to customers.
∙ 2005 Compulsory Listing of Insurance Companies In 2005, the IRDAI made it mandatory for insurance
companies to be listed on the stock exchanges. This move aimed to increase transparency, improve corporate
governance, and enhance market discipline within the insurance sector.
∙ 2007 Introduction of Health Insurance Portability Health insurance portability was introduced,
allowing policyholders to switch between insurance companies without losing the benefits earned under their
existing policies. This reform increased competition among insurers and provided greater choice and
flexibility to policyholders.
∙ 2010 Introduction of Point of Sales (POS) Products The IRDAI introduced POS products in 2010,
allowing insurance policies to be sold through authorized intermediaries at designated points of sale. POS
products simplified the sales process and made insurance more accessible to customers.

• 2013 Increase in Foreign Direct Investment (FDI) Limit The Insurance Laws (Amendment) Act was
passed in 2013, increasing the FDI limit in the insurance sector from 26% to 49%. This reform aimed to
attract foreign investment, bring in expertise, and promote the growth of the insurance industry.
∙ 2016 Introduction of E-insurance Policies The IRDAI mandated the issuance of electronic insurance
policies in 2016. E-insurance policies eliminated the need for physical documents, reduced paperwork, and
provided convenience to policyholders.
∙ 2017 Standardization of Health Insurance Products The IRDAI introduced guidelines for standardization
of health insurance products in 2017. This reform aimed to simplify policy comparisons, increase
transparency, and facilitate informed decision-making for customers.
∙ 2020 Increase in FDI Limit to 74% In 2020, the government raised the FDI limit in the insurance
sector from 49% to 74%. This move was intended to attract more foreign investment, enhance capital inflow,
and foster growth in the insurance industry.... Read more at:
[Link]
INSURANCE OMBUDSMAN

• The Insurance Ombudsman scheme was created by the Government of India for individual policyholders to
have their complaints settled out of the courts system in a cost-effective, efficient and impartial way.

• Who is the Ombudsman?: An ombudsman is someone appointed to investigate complaints against an

institution and seek resolutions to those complaints.

• What Is an Ombudsman?

• An ombudsman is an official, usually appointed by the government, who investigates complaints (usually
lodged by private citizens) against businesses, financial institutions, universities, government departments, or
other public entities, and attempts to resolve the conflicts or concerns raised, either by mediation or by making
recommendations.
• Ombudsmen may be called by different names in some countries, including titles such as a public advocate or
national defender.
TYPES OF OMBUDSMEN

•[Link] Ombudsman
•[Link] Ombudsman
• [Link] Ombudsman
• [Link] Ombudsman
•[Link] Ombudsman
ADVANTAGES AND DISADVANTAGES OF AN
OMBUDSMAN
• PROS AND CONS OF OMBUDSMEN
• Pros

∙ Facilitates customer or public complaints

∙ Unbiased and objective
∙ Can restore and maintain confidence in organizations or institutions
• Cons

∙ Poor performance can erode trust

∙ Cannot provide legal advice
∙ Complex issues can take a lot of time to resolve
ROLE AND POWERS OF AN OMBUDSMAN

• ROLE: An ombudsman is someone appointed to investigate complaints against an institution and seek
resolutions to those complaints. Some have full authority to investigate and resolve issues, and some have
limited capacity to only investigate and provide suggested resolutions to a governing authority or the
institution subject to the complaint.

• POWERS: An ombudsman has the power to investigate and file complaints against otherwise influential
organizations or high-ranking officials. They often have the power to request key documents, interview
individuals, and order a legal investigation if necessary. If agreed to, ombudsmen rulings are legally binding.
Unit 4
Life insurance
Principles of Life Insurance
• [Link] of Utmost Good Faith
• 2. Principle of Insurable Interest
• 3. Principle of Proximate Cause
• 4. Principle of Subrogation
• 5. Principle of Indemnity
• 6. Principle of Contribution
• 7. Principle of Loss Minimisation
Documents Required for Life Insurance

• Duly filled Proposal Form

• Photograph of the Proposer/Life Assured (Adhaar Card, Voter ID Card,
Passport etc.)
• Age Proof of the Proposer/Life Assured
• Photo Identity Proof of the Proposer/Life Assured
• Address Proof of the Proposer/LIfe Assured
• Medical Examination Report of the Proposer/Life Assured
• Income Proof of the Proposer/Life Assured
• PAN Card of the Proposer/Life Assured
ANNUITY
• An annuity is an insurance contract that exchanges present contributions
for future income payments. Sold by financial services companies.
• An annuity can provide with a predictable stream of income in retirement.
The primary benefits of an annuity include:
• Predictable payments. Annuity income payments may be guaranteed for
a set period of time or until the end of your life, or the life of your spouse or
another beneficiary.
• Tax-deferred growth. Money paid into an annuity grows on a tax
deferred basis. When you later receive annuity payments, the earnings
portion of your payments is taxed as ordinary income, while principal is
generally free of tax.
• Death benefits. Depending on the type of annuity you choose, a named
beneficiary can receive payments after you pass away.
Types of Annuity

• Fixed Annuity
• A fixed annuity pays you a guaranteed annual minimum, ensuring you receive a baseline of
income from the contract each year. Depending on the details of the annuity contract, a
fixed annuity could pay you more in years when the annuity company’s investments earn
higher returns. But during less profitable years, you receive at least the guaranteed
minimum amount of income.
• Variable Annuity
• With a variable annuity, your income payments depend on market performance. You choose
a selection of investments, typically mutual funds that hold stocks, bonds and money
market instruments. The amount of money paid out to you is determined by the
performance of these investments, after expenses.
• Index Annuity
• The amount you earn from an index annuity is determined by the performance of a market
index, like the S&P 500. Your annual return is calculated over the course of a specified
period, typically one year. When the index gains value, the value of your index annuity
increases, but it also loses value when the index declines.
General insurance
• General insurance is an agreement between a policyholder and insurer
wherein the insurance company protects your valuable assets from
fire, theft, burglary, or any other unfortunate accident.
 General Insurance Life Insurance

Covers non-life assets Covers life of an individual

It is not a type of savings This insurance helps you accumulate savings

for future

Annual contract with a lumpsum premium Long-term contract with the option of installment
premiums

Pays sum assured in case of an eventuality Pays sum assured to the nominee in case of
such as theft or accident the death of the policyholder
Types of General Insurance:

• Types of General Insurance:

1. Health Insurance – A Health Insurance protects from heavy
medical
2. Travel Insurance
3. Home Insurance -
4. Motor Insurance
benefits of General Insurance
Marine insurance
• Marine insurance covers the loss or damage of ships, cargo,
terminals, and any transport by which the property is
transferred, acquired
• Marine insurance refers to a contract of indemnity. It is an assurance
that the goods dispatched from the country of origin to the land of
destination are insured. Marine insurance covers the loss/damage of
ships, cargo, terminals, and includes any other means of transport by
which goods are transferred, acquired, or held between the points of
origin and the final destination.
Principles of Marine Insurance

1. Principle of Good faith - Parties demand absolute trust on the part of both; the insurer and
the guaranteed.
2. Principle of Proximate Cause - The proximate cause is not adjacent in time; also, it is
inefficient. Nevertheless, it is the definitive and adequate cause of loss.
3. Principle of Insurable Interest - Any object presented as a marine risk and the assured
covering the insurance of goods - both should have legal relevance. Also, a series is
devoted called 'Incoterms' to respectfully assign the insurance of goods to each party.
4. Principle of Indemnity - The insurance extended to the parties will only be applicable up
to the loss. The parties can't buy insurance to gain profits. If they do, they won't get more
than the actual loss.
5. Principle of Contribution - Sometimes, the risk coverage for goods has more than one
insurer. In such cases, the amount has to be fairly distributed amongst the insurers.
Types of Marine Insurance
1. Freight Insurance
2. Liability Insurance
3. Hull Insurance
4. Marine Cargo Insurance
• Freight Insurance
In freight insurance, for example, if the goods are damaged in transit, the operator would lose freight receivables & so the insurance
will be provided on compensation for loss of freight.
• Liability Insurance
Marine Liability insurance is where compensation is bought to provide any liability occurring on account of a ship crashing or
colliding.
• Hull Insurance
Hull Insurance covers the hull & torso of the transportation vehicle. It covers the transportation against damages and accidents.
• Marine Cargo Insurance
Marine cargo policy refers to the insurance of goods dispatched from the country of origin to the country of destination.
Motor Vehicles Insurance

• Motor Insurance is a type of insurance policy which covers your

vehicles from potential risks financially. Policyholder's car or two
wheeler is provided financial security against damages arising
out of accidents and other threats. In India, motor insurance is
mandatory.
Types Of Motor Vehicle Insurance
• Private Car Insurance
• Two-wheeler Insurance
• Commercial Vehicle Insurance
Different Clauses In Marine Insurance Policy
• Institute Cargo Clauses
• ICC (A): Covers all risks except those specifically excluded (e.g., war, nuclear peril, inherent vice).
• ICC (B): Covers named perils (e.g., fire, stranding, collision, theft).
• ICC (C): Covers only a limited number of specific perils (e.g., fire, stranding, collision).
• Valuation Clause
• 'At' and 'From' Clause
• Sue and Labour Clause
• Warehouse to Warehouse Clause
• Memorandum Clause
• Change of Voyage Clause
• Inchmaree Clause
• Jettison Clause
Motor Vehicles Insurance

• Vehicle insurance or motor insurance is similar to any other

insurance coverage, except that it is mandatory. As the name
implies, it is insurance for all types of motor vehicles -
motorcycles, cars, jeeps, commercial vehicles, and so on. The
government has made motor insurance necessary for your
protection and the safety of others.
• Motor insurance is a contract between you and an insurance
company that provides financial protection in case your vehicle
is damaged, stolen, or involved in an accident. It covers both
your vehicle and any liabilities you may have towards others.
Types of Vehicle Insurance in India

• Private Insurance Policy

• The Government of India requires automobile insurance for any
private car owned by a person. Private car insurance, among other
things, protects the vehicle from damage caused by accidents, fire,
natural disasters, and theft, as well as the owner from personal injury.
It also safeguards the third party against any losses or injuries.
• Commercial Vehicle Insurance
• All vehicles that are not utilised for personal reasons are covered by
a commercial vehicle insurance policy. This sort of Insurance covers
any automobiles used for business purposes. Trucks, buses, heavy
commercial vehicles, light commercial vehicles, multi-utility vehicles,
agricultural vehicles, taxis/cabs, ambulances, auto-rickshaws, and
other vehicles are covered by this Insurance.
Motor Insurance Policies

• 1. Third Party Car Insurance Policy

• 2. Own Damage Car Insurance Policy

3. Comprehensive Car Insurance Policy

• Coverage and Benefits:
• a) Own vehicle damage: Comprehensive insurance pays for repairs if
your vehicle is damaged due to accidents, theft, fire, or natural
disasters.
• b) Third-party liability: Motor insurance protects you financially if you
cause injury or property damage to someone else.
• c) Personal accident cover: Some policies offer coverage for personal
injuries or death resulting from a motor accident.
• Factors affecting insurance premiums:
• a) Vehicle type and age: Newer or expensive cars usually have higher
premiums.
• b) Insured declared value (IDV): The current market value of your
vehicle affects the premium calculation.
• c) Policy add-ons: Additional coverage options like zero depreciation
or roadside assistance can increase the premium.
• Importance of motor insurance:
• a) Legal requirement: Motor insurance is mandatory in many
countries to promote responsible driving and protect everyone
involved.
• b) Financial security: It safeguards your finances by covering
expensive repairs, medical expenses, and legal liabilities.
• c) Peace of mind: With motor insurance, you can drive with
confidence, knowing you're protected against unforeseen events on
the road.
Health Insurance

• Health Insurance is a type of insurance that covers the medical

expenses of the insured due to an illness or accident in
exchange for a premium amount. It enables the insurance
company to provide medical coverage for hospitalization
expenses, day care procedures, critical illnesses, etc. A health
plan also offers multiple benefits, including cashless
hospitalization and free medical check-ups.
• A common area of confusion for most people is the difference
between health insurance and Mediclaim, often mistaking one for the
other. Even though both offer financial protection during emergencies,
Mediclaim is not just another word for health insurance.
Benefits of Buying Health Insurance Plans
for Family
• There are several benefits that the insured family members can
avail with family floater health insurance plans. For instance,
you can get coverage for all the family members, irrespective of
their age, under a single policy. Here is a quick rundown of the
major benefits of buying a family health insurance plan:
• 1. Stress-free Hospitalization Expense Cover
• In case of hospitalization, the insured family member can avail
cashless treatment in a network hospital of the insurer just like
in individual health plans. In this way, you can get all your family
members eligible to get medical attention without compromising
on their treatment
• What is covered in a Family Health Insurance Plan?
• Take a look at the most common coverage available under
family health insurance plans:
• In-patient Hospitalization Expenses– Any medical expenses
incurred on hospitalization of more than 24 hours due to an
illness or accidental injury is covered.
• Day Care Procedures– It covers the cost of day care
procedures that require hospitalization of less than 24 hours.
Eligibility Criteria to Buy a Family Health
Insurance Plan
Every family health insurance plan comes with eligibility
criteria. Although the eligibility criteria vary from one plan to
another, the following table shows the common eligibility criteria
for family health insurance plans in India:
Categories Specifications

Minimum Entry Age Adult – 18 years

Children – 90 days

Maximum Entry Age Adult – 65 years

Children – 25 years

Family Members Covered Self, spouse, dependent children, dependent

parents and parents-in-law

Renewability Lifetime
Group Health Insurance

• What is Group Health Insurance?

• Group health insurance is the health plan that proposes coverage to a group of
individuals against various types of risks. These individuals are part of a
recognised group such as trade unions, business groups, employer-employee etc. A
single policy is delivered in the name of the group and is known as the
master policy. All members of the group are insured under the same.
• With the increasing cost of healthcare and medical facilities, it has become
mandatory for anyone and everyone to have a health cover. There were times when
health insurance was considered as an added benefit. But today, it has become a
sheer necessity. Without adequate health cover, an individual is left to suffer
financial hardships, in case of medical emergencies. During such critical times,
worrying about money is the last thing one would want to do. Thus increased need
for health insurance has led the companies to offer health coverage to their
employees.
 Characteristics of Group Health Insurance

1. Customized and tailor-made

2. Purpose
3. Cashless facility
4. Covering pre and post hospitalization costs
5. No waiting period
6. coverage for pre-existing illness
7. Coverage for dependents
8. Pocket friendly premiums
9. Minimum number of employee
10. Time duration
11. Co-payment option
 The Features Of Group Health Insurance

• Group health insurance comes loaded with features like:

1. Simplicity
2. Customization
3. Medical coverage for family members and dependents
4. Pre and post hospitalization expenses
5. No waiting period
6. Medical coverage for pre-existing diseases
7. No pre-medical screening
8. Maternity cover
9. Hassle-free claims
10. Added benefits
Medi-claim Policy
• A Mediclaim policy is a sort of health insurance policy in which
the insurer reimburses the policyholder for medical expenses
incurred in treating their medical condition. If you have a
medical insurance policy, you can submit your bills to the
insurance company for payment.
Mediclaim Policy Claim Procedure

• Cashless Claim Procedure:

• Cashless claims ensure that a patient is treated in a network hospital on a cashless basis
as the insurer settles the bill amount directly with the hospital. It means that the insured
doesn’t have to pay a penny to the hospital for the treatment. Follow the steps given below
to raise a cashless claim:
• Visit an empanelled hospital of your insurance company to receive the treatment
• Obtain a pre-authorization form from the insurance desk at the hospital.
• Duly fill the form with correct information and get it stamped by the hospital
• The hospital will send the form to the Third Party Administrator (TPA) or the insurer for
approval.
• After carefully examining the form, the company will approve the treatment and send a fax
back to the hospital stating the amount covered by them.
• Get treated and sign all documents during discharge
• Your insurer will pay the hospital bill amount.
• Reimbursement Claim Procedure:
• In the case of a reimbursement claim, it is important to inform
your insurance company that hospitalization has taken place or
is likely to take place soon. You can do so by sending an email
or calling the customer service of your insurance provider.
• Once you have received the treatment, collect all the medical
documents from the hospital. To get a reimbursement, you need
to submit all hospital bills and payment receipts, including
medicine bills to your insurer along with the original discharge
card and claim form. The insurance company will review your
claim and will pay the reimbursement amount after claim
approval.
What is Covered in a Mediclaim
Policy?
• A mediclaim policy provides coverage for the following
expenses:
• Hospitalization Charges
• It covers all the direct charges incurred during
hospitalization, such as OT charges, diagnostic procedures,
blood, oxygen, medicines, chemotherapy, x-ray, radiotherapy,
donor expenses, pacemakers, etc. It provides coverage for
sickness as well as accidental hospitalization.
What is Not Covered in a Mediclaim
Policy?
• Every mediclaim policy has some limitations. Mentioned below
are the circumstances where your claim can be denied:
• A mediclaim policy will not cover pre-existing ailmentsuntil the
waiting period gets over.
• Any medical condition or critical illnesses that are diagnosed
within 30 days of the policy commencement date are not
covered.
• Specific ailments, such as joint replacement surgery, etc.,are
not covered for 2 to 4 years as per the terms of the policy
Types of Mediclaim Policies in India

• There are different types of mediclaim policies available in India. You can choose the policy
as per your health needs and avail medical treatment with peace of mind. Let’s have a look
at the various types of mediclaim plans:
• Individual Mediclaim Policy
• An individual mediclaim policy offers health insurance coverage to only the policyholder.
Only one person can avail the medical insurance benefits against the premium paid under
this type of policy. Several health insurance companies provide individual mediclaim plans
in India.
• Family Floater Mediclaim Policy
• A family floater mediclaim policy provides coverage to the policyholder along with
his/her family members, including parents, spouse, and children. Under this type of policy, a
single sum insured amount is available to all the family members on a floater basis.
• Senior Citizen Mediclaim Policy
• Senior citizen mediclaim policy is designed to cover hospitalization expenses incurred
by elderly people who have crossed the age of 60 years. The senior citizen health
insurance policy coverage are customized to cover the health needs of senior citizens.
Personal Accident Policy
What is Accident Insurance?
• Accident Insurance entitles the policyholder to a fixed payout in case of injury or death due to an
accident. Accident Insurance policies provide cover against accidental death, permanent total
disablement, permanent partial disablement and temporary total disablement. It also provides
educational grant, ambulance charges and other benefits. Accidents are unpredictable and may lead
to financial stress besides other worries. At such times, Accident Insurance proves to be a financial
tool to be prepared for uncertainties.
• An accident Insurance policy is essential as it secures oneself and their family against unfortunate
death or injury due to an accident.
What is a personal accident policy?
• Personal Accident insurance or PA insurance is an annual policy which provides
compensation in the event of injuries, disability or death caused solely by violent,
accidental, external and visible events. It is different from life insurance and medical &
health insurance.
What is covered under personal accident?
• As its name suggests, a personal accident plan is primarily meant for protection against
accident-related complications, providing compensation for injuries, disabilities or death.
Personal Accident Insurance
• Personal Accident Insurance provides compensation or payout in the
event of unfortunate death or disablement of the insured person
incurred due to accidents. A comprehensive policy will provide other
coverage such as an educational grant, hospitalisation expenses,
ambulance charges, hospital cash and other benefits as well.
• Personal accident insurance safeguards you against the financial pain of an
accident. Personal Accident insurance is a fixed benefit plan that provides
financial protection to policyholders in case of death, permanent or
temporary disability caused due to an accident. In case of any of these
unfortunate events, the plan will provide a lump sum payout, as specified
under the policy terms and conditions.
• Covers Accidental Death
• Covers Disabilities
• Affordable Protection
• Instant Policy Issuance
Need for Personal Accident Insurance

• Provide Extra Financial Safety : Accidents can happen at any time and to anyone! More
often than not, such mishaps bring a string of unwanted expenses. Personal Accident
Insurance provide an extra financial safety net for such unwanted expenses.
• 2Makes up for the loss of income : That’s right, in case an accident results in total
disability, your personal accident insurance policy will offer payout to help you cover your
loss of income. This will help you sail through a challenging time with ease.
• 3Provide Financial Security to Your Family : In case of temporary disability, the plan
will offer payout, and in case of permanent disability, the plan will offer a lump sum
payment as the policy underwriting and the nature of your injuries.
• 4Safeguarding your child’s future : An accident that results in your disability or untimely
demise could upset your child’s future. This is where accident insurance can step in and
save the day. Personal Accident Insurance plan offer coverage for the dependent children’s
education cost.
Who Can Buy PA Policy?
•
Any individual between 18 and 65 years of age can buy this
policy for oneself, their spouse, dependent children (91 days -
23 years), parents & parents-in-law.
Best Accident Insurance Plans

Accident Care Individual Insurance Policy

• Family Discount: Get a 10% premium discount for opting the policy on a family basis
• Cover for Accidental Death: 100% of the Sum Insured is provided as a lump sum in case
of accidental death of the insured person
• Educational Grant: An educational grant of up to Rs. 20,000/- is provided for dependent
children in case of death or permanent total disablement of the insured
Family Accident Care Insurance Policy
• Cover for Accidental Death: 100% of the Sum Insured is provided as a lump sum in case
of accidental death of the insured person
• Permanent Total disablement cover: 100% of the Sum Insured is provided for permanent
total disablement due to accidents
• Lifelong Renewal: Avail lifelong renewal option for this policy
WHY NEED PAI?
• NO MEDICAL SCREENING
• ACCIDENTAL DEATH
• PERMANENT TOTAL DISABILITY
• PERMANENT PARTIAL DISABILITY
• TEMPORARY PARTIAL DISABILITY
• EDUCATIONAL GRAND
• HOSPITALIZATION EXPENSES
• HOSPITAL CASH
• AMBULANCE COST