What is Insurance? |
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"Insurance is a contract between two parties whereby one party called insurer
undertakes in exchange for a fixed sum called premiums, to pay the other party
called insured a fixed amount of money on the happening of a certain event."
Insurance is a protection against financial loss arising on the happening of an
unexpected event. Insurance companies collect premiums to provide for this
protection. A loss is paid out of the premiums collected from the insuring
public and the Insurance Companies act as trustees to the amount collected.
For
Example, in a Life Policy, by paying a premium to the Insurer, the family of the
insured person receives a fixed compensation on the death of the insured.
Similarly, in a car insurance, in the event of the car meeting with an accident,
the insured receives the compensation to the extent of damage.
It is a system by
which the losses suffered by a few are spread over many, exposed to similar
risks.
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What is the scenario after privatization? |
-Insurance penetration has increased from about 1.5% although it is still
abysmally low at about 2% of the population.
-Selling insurance is no more a
part-time job. For most of the consultants it is full-time job.
-Although
insurance is supposed to be solicited, competition is so severe it is now being
aggressively sold.
-Several innovative marketing avenues have been opened up
like bank channels, Selling through departmental stores, telemarketing, mailers
for marketing insurance.
-Presence of IRDA - the watch dog of the industry is a
comfort factor to insured.
-Information is available on the Net for the public
to examine each product, including premium rates and buying policy online.
-Thanks to ITES it is possible to pay premium online or through ECS mandate.
-Online servicing, including, viewing of account statement, Fund switches,
servicing. |
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