INTRODUCTION
An arrangement by which a company or a state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium.
In India, insurance has a deep-rooted history. It finds mention in the writings of Manu (Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya (Arthasastra).
The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance.
The origin of life insurance in India can be traced back to 1818 with the establishment of the Oriental Life Insurance Company in Calcutta.
The major insurance markets of the world are obviously the US, Europe, Japan, and South Korea. Emerging markets are found throughout Asia, specifically in India and China.
Over the past ten years, global insurance premiums have risen by more than 50%, with annual growth rates ranging between 2 and 10%. In 2004, global insurance premiums amounted to $3.3 trillion. The global insurance market grew by 7.6% in 2007 to reach a value of $3,688.9 billion. In 2012, the global insurance market has a value of $4,608.5 billion, an increase of 24.9% since 2007 .
Life insurance dominates the global insurance market, accounting for 59.7% of the market′s value. Europe accounts for 39.3% of the global insurance market′s value.
Top ten global insurance companies are American intl group(USA), AXA group (France), Allianz worldwide(Germany), Manulife financial (Japan),General group (Italy), prudential financial (united states), met life (united states), Aviva(united kingdom) and Aegon (Netherland).
Insurance Regulatory and Development Authority (IRDA)
Insuran...
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Inflation is one of the major causes to change the scenario of the insurance sector. High inflation means purchasing power will decrease, and that will lead to decrease in savings. Decrease in savings means decrease in surplus money, so people will lose attraction to buy insurance policies.
Interest Rate
Insurance sector will witness decline in profits as legislative and regulatory measures come in the force. If interest rate increases then saving will increase. If savings will increase then surplus money of people increase. This may lead to investment in insurance sector.
3.5.3. Social Factor
Population
India is the second largest country in world population. Growth in population results in increasing demand. This acts as an opportunity for insurance sector. Consider an example, due to increase in population results in increasing number of insurers and profit.
In 1982 the company began offering homeowner's insurance and this venture also proved to be financially successful for the company. The vast majority of the homes insured by 20th Century are located in the Valley cites and at one time the homeowner's insurance made up about 10% of the company's business, however, to date it onl...
On March 10, 1937, Joseph Lewis and Jack Green started Progressive Mutual Insurance Company. They wanted to provide vehicle owners with security and protection and they thought an insurance company was a good investment for a couple of lawyers who were just getting started. Since its beginning, Progressive has taken an innovative approach to auto insurance. They offered drive-in claims service before any other auto insurance company and in another industry first, they allowed customers to pay their premiums in installments. An appealing option for those who could not afford annual payments. Progressive wanted and still wants to make auto insurance accessible and easy so more people could protect their vehicles.
Allstate insurance is the second largest property and casualty insurance company by premiums in the United States. Allstate insurance handles about 12% of the U.S home and auto insurance market. (Allstate, 2014). Many of Allstate’s customers fall under what one could refer to as a traditional selection of insurance for automobiles. Recently, Allstate has noticed a major shortcoming in lifestyle insurance, which includes coverage for motorcycles, boats, and other recreational vehicles, in comparison to its competitors. The motorcycle insurance sector is a 10.4 billion dollar industry and growing (PRWEB, 2012). The U.S. Department of Transportation website reports some astounding figures, including that 5,370,035 motorcycles were registered three years before the article, 7,138,476 motorcycles registered at the time of the article, and grew to 9,477,243 registered motorcycles at the end of 2012 (NHTSA, 2013). It is obvious as to why Allstate would identify motorcycle insurance as a worthy lifestyle product to devote marketing research dollars into in order to develop new strategies for cornering a share of the market.
This is very similar to what is now known as disability insurance. Established in 1850, the Franklin Health Assurance Company of Massachusetts offered the first form of medical insurance to cover nonfatal injuries in the United States (Scofea, 1994). The company provided protection against lost income due to railway or steamboat accidents, rather than covering health services (Scofea, 1994). The policy would pay the injured worker two hundred dollars for a fifteen cent premium (Scofea, 1994). In the case of total disability, the policy would pay up to four hundred dollars. Although the Franklin Health Assurance Company of Massachusetts did not provide insurance for health services, this company paved the way for accident related health insurance in the United
Managed care dominates health care in the United States. It is any health care delivery system that combines the functions of health insurance and the actual delivery of care, where costs and utilization of services are controlled by methods such as gatekeeping, case management, and utilization review. Different types of managed care plans came into development by three major factors. These factors include choice of providers, different ways of arranging the delivery of services, and payment and risk sharing. Types of managed care organizations include Health Maintenance Organizations (HMOs) which consist of five common models that differ according to how the HMO is related to the participating physicians, Preferred Provider Organizations (PPOs), Exclusive Provider Organizations (EPO), and Point of Service Plans (POS). `The information management system in a managed care organization is determined by the structure of the organization' (Peden,1998, p.90). The goal of a managed care system is to provide subscribers and dependants with needed health care services at the lowest possible cost. Certain managed care plans also focus on prevention by trying to keep members healthy.
In America, the number of uninsured rises every year and no solution to the problem has
I would have to admit that at the age of 20, I still knew very little about insurance. Coming from a different country, I had no idea that one could insure belongings or people. Today, I know that insurance acts as a safety net. It is there to help cope with the unanticipated and sometimes even the loss of a beloved one. The general notion behind insuring your treasured possessions and cherished ones can be of a vast benefit at the time of a tragedy. As we grow older, we actively begin to concern ourselves more about the future of our family rather than the latest trends in fashion or gadgets.
Business Insurance News, Analysis & Articles. Web. The Web. The Web.
Within the Asian/Pacific market, 900 different insurance companies operate in the twelve eastern pacific countries. The influence of the companies varied in each different country. This was also due to specific regulatory rules for each country. For example, Hong Kong was a country with few regulations thus providing an easier entry to the market where as other countries had certain regulations in the fields of licensing, product styles and prices. However, the World Trade Organization (WTO) lobbied for highly regulated markets to open up and become more accessible.
Rousmaniere, Peter. “Facing a tough situation.” Risk & Insurance 17.7 (June 2006): 24-25. Expanded Academic ASAP. Web. 23 March 2011.
Managed care is simply a system that delivers health care to a specific population purchased through health insurance plans. Practitioners and providers manage the use of health care services and cost by providing effective diagnosis and treatment, appropriate use of inpatient and outpatients facilities, population-based planning, health promotion and education, and disease prevention. Managed care uses a “gatekeeper” system, where patients or beneficiaries are assigned a Primary Care Physician (PCP), who they see initially for all medical care. The PCP acts as a gatekeeper by initiating referrals to specialists when required and approving inpatient admissions. Managed care was seen across communities in America as early as the 19th century and by 1938, Henry Kaiser had adopted a pre-paid medical plan for his employees. During World War II Kaiser used pre-paid medical programs for his workers and after the war he opened these plans to the public, which became the Kaiser Permanente we know today. Pre-paid healthcare and Health Maintenance Organizations (HMOs) came into full use in the 1970’s when the federal government established grants and loans as part of a health care strategy to provide care for uninsured Americans by increasing the number of HMO, increasing enrollment, and containing the cost of healthcare. Since the 70’s employers have used managed care as a form of high quality low cost insurance for their employees and the federal government has turned to managed care for both Medicare and Medicaid programs.
...e covering for example hail, frost, and floods, or yield insurance which covers all climatic risks. Combined risk insurances cover most risky events that can affect the crops but they do not cover against systematic risk which requires high level of reinsurance costs and can be covered only if there is public support or public reinsurance. Systematic risks or risks affecting vast regions or a lot of farmers used to be non-insurable due to the high magnitude of the indemnities. But the yield insurance covers all kinds of climatic risks including droughts, storms, frosts, fires, hail. In some places (not in Europe) it can cover even against plant diseases and pest. Since the demand for agricultural insurances is growing, the market is expanding and different instruments like index insurance products, weather derivatives and weather options are already in circulation.
Catastrophe bonds are a new type of insurance securitization and have become increasingly popular in the insurance industry throughout the 21st century. Unlike traditional reinsurance products, cat bonds are “fixed income instruments issued primarily by insurers and reinsurers as a way of passing on their exposure to potential large financial risks associated with natural catastrophes” (Ip). in the form of an insurance linked security. These securities are designed to protect insurers and reinsurers against “super” catastrophes, or events that are high severity, but low frequency of occurrence, defined as having around a 1% or 1 in 100 years probability. Cat bonds first emerged in the 1990s, after hurricane Andrew and the Northridge Earthquake in California wiped approximately USD 30 billion off balance sheets of insurers and reinsurers. Insurers and reinsurers noticed the industry’s vulnerability to such “super” catastrophes. “The potential cost of a disaster had outgrown the capacity of the insurance industry to protect against it” (Ip). Reinsurers had to increase equity levels in order to protect against a natural disaster which increased the price for catastrophe risk. Although catastrophe bonds have parameters which strictly limit the type and location of a disaster they cover, cat bonds have had a positive impact on the insurance industry because cat bonds add reinsurance capacity through the financial market, cat bonds influence the price of traditional reinsurance, and cat bonds enable regional insurance carriers to expand underwriting.
Long time ago, there was no need for health insurance in America, as doctors had many clients because their services were not so expensive and in some cases in rural areas, people could pay by giving other items. Doctors were not as knowledgeable as they are nowadays to care for the sick, therefore this didn't have much effect then on the patients, as they were treated for the basic illnesses.
J. David Cummins, A. S. (1999). Changes in the Life Insurance Industry: Efficiency, Technology and Risk Management: Efficiency, Technology, and Risk Management. Springer.