AIDS TO TRADE-
INSURANCE
A KEY COMPONENT IN BUSSINESS RISK
MANAGEMENT
INTRODUCTION TO INSURANCE
Insurance is a contrast in which an individual or business
recieves financial protection from an insurance company
in exchage of regular premium [Link] reduces
uncertainties by covering risks like accidents,health
issue,and business losses.
How it works
a)A person buys an insurance policy
b)pays regular premiums
c)if a covered risk happens ,the insurer pays compensation
HISTORY OF INSURANCE
*ANCIENT INSURANCE PRACTISES MEDIEVAL PERIOD:
$ Baylonian treders(1750 bc):Hammurabi s 14 CENTURY ITALY:First recorded marine
codehas early rules on risk sharing insurance conteacts
$ chinese merchants (3rd century bc): spead llyord s coffe house :(1688)foundationof
goods across multiple ships to reduce risk modern insurance
Lloyds Contibution
Lloyds of london stared in 1688 as a coffee house
where merchants and shipowners met to discuss
business risks.
It became the worlds largest insurance market for
marine , aviation, and special risk insurance.
Ex-titanic1912 insured for 1million euros
Development of regulatory mechanisms in
insurance
Irdai(insurance regulatory and development authority of India) regulates and promotes the
insurance industry
Consumer protection laws : ensure policy holders rights and transperancy
Insurance acts: legal framework for the in india
Insurance
companies in
india
*public sector -lic(life insurance
corporation),gic(general insurance
corporation)
*Private sector -icici Lombard, hdfc
ergo,bajaj Allianz, max life insurance etc
*Reinsurance -gic re(general insurance
corporation of India)
Importance of insurance for businessmen
Protects businesses from financial risks.
Covers fire, liability, employee compensation
Hepls in business continuity and risk management.
Principles of insurance
1) utmost good faith-both parties must provide honest
information.
2) Insurable intrest -The insured must have financial
stake in the insured item/person.
3) indemnity -only actual losses are covered no profit.
4) subrogation -after claim settlement insurer cac
recover losses from the third party.
5) contribution- if multiple policies exist, all insurers
share liability
6)proximate cause- only direct losses of are covered.
Types of insurance
Life insurance -provides financial security to a policy holders family
Health insurance -covers medical expenses
Motor insurance - compulsory for all vehicle holder
Property insurance -covers damage due to theft ,fire and disasters.
Marine insurance -protects cargo and ships.
Liability insurance -covers legal liabilities in case of third party claims.
Terminologies used in insurance
Premium: amount paid for insurance coverage
Policy holders: the person who buys the insurance
Claim: request for compensation after loss
Sum assured: the guaranteed payout amount.
Anecdotes and interesting cases of
insurance
The titanic insurance claim-assured 1 millioneuros
Benflied case-a man faked his death for insurance claim
Strange insurance policies- ce;ebrities insure ther body
parts for ex messihas insured his left foot
Careers in insurance
Insurance agent-sells policies
Underwriter-assesses risk and determines premiums
Actuary-uses ,mathematics to predict losses
Claims adjuster-investigates and settles claims
Conclusion and future of insurance
Insurance is evolving with ai,blockchain,and digital policies.a
Increasing demand for cyber insurance and climate risk coverage
Essential for both individuals and businesesses
bibliography
Cbse business studies testbook
Irdai offical website
Varios online references