SUMMER TRAINING

REPORT

ON

CUSTOMER BEHAVIOUR
ON
INSURANCE

IN AXIS BANK KAITHAL

OPP. R.K.S.D COLLEGE, AMBALA ROAD
KAITHAL.

UNDER THE SUPERVISION OF: COMPILED BY:

MR. VIVEK SHARMA SHAIFFALI

(BRANCH MANAGER) R.NO 48
IVth Sem.

INSTITUTE OF MANAGEMENT STUDIES

KURUKSHETRA UNIVERSITY, KKR.
 CONTENTS
Page No.

CHAPTER 1 INTRODUCTION 1-10

• MISSION

• VALUES

• BOARD OF DIRECTORS

• PROMOTERS

• MILESTONES

CHAPTER 2 CUSTOMER BEHAVIOUR ON INSURANCE 11-23

• INTRODUCTION TO INSURANCE

• PRINCIPLES OF INSURANCE

• INSURER’S BUSINESS MODEL

CHAPTER 3 INTRODUCTION TO LIFE INSURANCE 24-25

CHAPTER 4 INTRODUCTION TO GENERAL INSURANCE 26-29

CHAPTER 5 QUESTIONNAIRE 30-41

CHAPTER 6 LIMITATIONS 42

CHAPTER 7 SUGGESTIONS 43

BIBLIOGRAPHY 44
 DECLARATION

I (Miss Shaiffali) declare that the project entitled ‘CUSTOMER

BEHAVIOUR ON INSURANCE’ is an original piece of work done by me
and has not been submitted to any College /Institute /University in any
means possible.

Shaiffali
 ACKNOWLEDGEMENT

At the very outset I am highly indebted to MR. VIVEK SHARMA

(BRANCH MANAGER) for giving me an opportunity to carry out my
project on CUSTOMER BEHAVIOUR ON INSURANCE at their
esteemed organization.

The one single person whose contribution towards the consummation of the
project can never be adequately paid back in any manner is, of course, my
project guide MR. ASHWINI SARDANA (DEPUTY MANAGER). He
undoubtedly friend, guide through out my training without whom it would
have been impossible to attain success. I have experienced a rare
combination of profound human behaviour, energetic teacher, and an
affectionate considerable individual.

My heartiest thanks to MR. VIVEK SHARMA (BRANCH MANAGER)

for helping me through out my project tenure.

Finally, I would like to express my profound sense of gratitude to my guide

MR. ASHWINI SARDANA (DM) for giving me immense inspiration,
technical, moral, and valuable guidance for the successful development of
project.
 PREFACE
“MANY PEOPLE DO NOT LIKE THEIR JOBS
MANY FEEL THEIR JOBS ARE TOO BORING
MOST PEOPLE THINK THEY ARE NOT PAID ENOUGH”

A concern about all the above factors is must for an industry. If a worker is
not satisfied with his work, then both the quality as well as the quantity of
his output suffers. Every new project or task is a kind of challenge for us.
However every challenge teaches us a new lesson. It makes us familiar with
new problems, new situations, new methods, new ideas, new solutions and
new field. It is the test of our knowledge and problem solving skills.

Knowledge doesn’t mean only theoretical one it also includes practical part.
Theory and practice go hand in hand, if one is river, other is its bank, if one
is the rung of ladder, other is the foot we put on it. Both cannot survive
without each other. We the management students learn the important
prospective of business, whether it is Marketing, Finance or HRM in our
classroom study is not enough to compete, so in order to bridge them such a
barrier between the classroom life and real life practical experience is
necessary.

This summer training which go into are very good instrument to bridge the
gap between theory and practice. My project deals with CUSTOMER
BEHAVIOUR ON INSURURANCE. I learnt a lot of new things that could
have never been learnt from theory classes. This report is presentation of my
work.
 INTRODUCTION
TO
AXIS BANK
Axis Bank was the first of the new private banks to have begun operations in
1994, after the Government of India allowed new private banks to be
established. The Bank was promoted jointly by the Administrator of the
specified undertaking of the Unit Trust of India (UTI - I), Life Insurance
Corporation of India (LIC) and General Insurance Corporation of India
(GIC) and other four PSU insurance companies, i.e. National Insurance
Company Ltd., The New India Assurance Company Ltd., The Oriental
Insurance Company Ltd. and United India Insurance Company Ltd.

The Bank today is capitalized to the extent of Rs. 358.56 crores with the
public holding (other than promoters) at 57.60%.

The Bank's Registered Office is at Ahmadabad and its Central Office is

located at Mumbai. Presently, the Bank has a very wide network of more
than 701 branch offices and Extension Counters. The Bank has a network of
over 2854 ATMs providing 24 hrs a day banking convenience to its
customers. This is one of the largest ATM networks in the country.

The Bank has strengths in both retail and corporate banking and is
committed to adopting the best industry practices internationally in order to
achieve excellence.
 1

MISSION

• Customer Service and Product Innovation tuned to diverse needs

of individual & corporate clientele.
.
• Continuous technology up gradation while maintaining human
values.

• Progressive globalization and achieving international standards.

• Efficiency and effectiveness built on ethical practices.

2
 VALUES

• Customer Satisfaction through

 Providing quality service effectively and efficiently.

 "Smile, it enhances your face value" is a service quality
stressed on.

• Periodic Customer Service Audits.

• Maximization of Stakeholder value.

• Success through Teamwork, Integrity and People.

3
Promoters

Axis Bank Ltd. has been promoted by the largest and the best Financial
Institution of the country, UTI. The Bank was set up with a capital of Rs.
115 crores, with UTI contributing Rs. 100 crores, LIC - Rs. 7.5 crores and
GIC and its four subsidiaries contributing Rs. 1.5 crores each.

SUUTI - Shareholding 27.11%

Erstwhile Unit Trust of India was set up as a body corporate under the UTI
Act, 1963, with a view to encourage savings and investment. In December
2002, the UTI Act, 1963 was repealed with the passage of Unit Trust of
India (Transfer of Undertaking and Repeal) Act, 2002 by the Parliament,
paving the way for the bifurcation of UTI into 2 entities, UTI-I and UTI-II
with effect from 1st February 2003. In accordance with the Act, the
Undertaking specified as UTI I has been transferred paving the way for the
bifurcation of UTI into 2 entities, UTI-I and UTI-II with effect from 1st
February 2003. In accordance with the Act, the Undertaking specified as
UTI I has been transferred and vested in the Administrator of the Specified
Undertaking of the Unit Trust of India (SUUTI), who manages assured
return schemes along with 6.75% US-64 Bonds, 6.60% ARS Bonds with a
Unit Capital of over Rs. 14167.59 crores.

The Government of India has currently appointed Shri K. N. Prithviraj as the

Administrator of the Specified undertaking of UTI, to look after and
administer the schemes under UTI - I, where Government has continuing
obligations and commitments to the investors, which it will uphold.

4
Board of Directors
The Bank has 10 members on the Board. Dr. P. J. Nayak is the Chairman
and CEO of the Bank.

The members of the Board are:

Dr. P.J. Nayak Chairman & CEO

Shri N.C. Singhal Director
Shri A.T. Pannir Selvam Director
Shri J.R. Varma Director
Smt. Rama Bijapurkar Director
Shri R.B.L. Vaish Director
Shri M.V. Subbiah Director
Shri Ramesh Director
Ramanathan
Shri K. N. Prithviraj Director

5
MILESTONES
Mar-08
Axis Bank lulaunches Platinum Credit Card, India's first EMV chip based card
Dec-07 Axis Bank gets AAA National Long-Term Rating from Fitch Ratings
Sept-07 Axis Bank ties up with Banque Privée Edmond de Rothschild Europe
for Wealth Management
July-07 UTI Bank re-brands itself as Axis Bank
July-07 UTI Bank successfully raises USD 1050 million
July-07 UTI Bank ties up with Tata Motors Ltd. for Car Loans
June-07 UTI Bank's expansion into Asia supported by FRS
May-07 UTI Bank launches 'Spice Rewards' on the bankcards - India's first-ever
merchant-supported rewards program
April-07 UTI Bank opens a Financial Services Category I Branch in the DIFC in
Dubai
Mar-07 UTI Bank ties up with Hyundai Motor India Ltd. for Car Loans
Mar-07 UTI Bank ties up with IIFCL to provide finance for infrastructural
projects in the country
Mar-07 UTI Bank launches Car Loans in association with Maruti Udyog Ltd
Mar-07 UTI Bank opens a Full Licence Bank Branch in Hong Kong
Feb-07 Finance Minister Shri P. Chidambaram Launches Shriram - UTI Bank
Co - Branded Credit Card Exclusively For Small Road Transport
Operators (SRTOS)
Feb-07 UTI Bank announces the launch of its Meal Card
Feb-07 UTI Bank announces the launch of its Gift Card
Feb-07 LIC Premium payment now through UTI Bank Branches
Jan-07 UTI bank opens Priority Banking branch in Mumbai and Kolkata

Nov-06 UTI Bank opens Priority Banking Lounge in Pune

Sep-06 UTI Bank launches operations of UBL Sales, its Sales Subsidiary -
Inaugurates its first office in Bangalore 6

Aug-06 UTI Bank announces the launch of its Credit Card Business
Aug-06 UTI Bank becomes the first Indian Bank to successfully issue Foreign
Currency Hybrid Capital in the International Market
Aug-06 UTI Bank Business Gold Debit Card MasterCard Launched - Designed
for business related spending by SMEs and self employed professionals
Aug-06 UTI Bank announces the scheme of issuance of "Senior Citizen ID
 10

CUSTOMER BEHAVIOUR
ON
INSURANCE
11
INTRODUCTION TO INSURANCE

Insurance, in law and economics, is a form of risk management primarily

used to hedge against the risk of a contingent loss. Insurance is defined as
the equitable transfer of the risk of a loss, from one entity to another, in
exchange for a premium. An insurer is a company selling the insurance.
The insurance rate is a factor used to determine the amount, called the
premium, to be charged for a certain amount of insurance coverage. Risk
management, the practice of appraising and controlling risk, has evolved as a
discrete field of study and practice.

History of insurance

In some sense we can say that insurance appears simultaneously with the
appearance of human society. We know of two types of economies in human
societies: money economies (with markets, money, financial instruments and
so on) and non-money or natural economies (without money, markets,
financial instruments and so on). The second type is a more ancient form
than the first. In such an economy and community, we can see insurance in
the form of people helping each other. For example, if a house burns down,
the members of the community help build a new one. Should the same thing
happen to one's neighbour, the other neighbours must help?

12
Otherwise, neighbours will not receive help in the future. This type of
insurance has survived to the present day in some countries where modern
money economy with its financial instruments is not widespread (for
example countries in the territory of the former Soviet Union).

Turning to insurance in the modern sense (i.e., insurance in a modern money

economy, in which insurance is part of the financial sphere), early methods
of transferring or distributing risk were practiced by Chinese and Babylonian
traders as long ago as the 3rd and 2nd millennia BC, respectively.

Chinese merchants traveling treacherous river rapids would redistribute

their wares across many vessels to limit the loss due to any single vessel's
capsizing. The Babylonians developed a system which was recorded in the
famous Code of Hammurabi, c. 1750 BC, and practiced by early
Mediterranean sailing merchants. If a merchant received a loan to fund his
shipment, he would pay the lender an additional sum in exchange for the
lender's guarantee to cancel the loan should the shipment be stolen.

Achaemenian monarchs were the first to insure their people and made it
official by registering the insuring process in governmental notary offices.
The insurance tradition was performed each year in Norouz (beginning of
the Iranian New Year); the heads of different ethnic groups as well as others
willing to take part, presented gifts to the monarch. The most important gift
was presented during a special ceremony. When a gift was worth more than
10,000 Derrik (Achaemenian gold coin) the issue was registered in a special
office. This was advantageous to those who presented such special gifts. For
others, the presents were fairly assessed by the confidants of the court. Then
the assessment was registered in special offices. 13
The purpose of registering was that whenever the person who presented the
gift registered by the court was in trouble, the monarch and the court would
help him. Jahez, a historian and writer, writes in one of his books on ancient
Iran: "[W]henever the owner of the present is in trouble or wants to
construct a building, set up a feast, have his children married, etc. the one in
charge of this in the court would check the registration. If the registered
amount exceeded 10,000 Derrik, he or she would receive an amount of twice
as much."

A thousand years later, the inhabitants of Rhodes invented the concept of the
'general average'. Merchants whose goods were being shipped together
would pay a proportionally divided premium which would be used to
reimburse any merchant whose goods were jettisoned during storm or
sinkage.

The Greeks and Romans introduced the origins of health and life insurance
c. 600 AD when they organized guilds called "benevolent societies" which
cared for the families and paid funeral expenses of members upon death.

Guilds in the middle Ages served a similar purpose. The Talmud deals with
several aspects of insuring goods. Before insurance was established in the
late 17th century, "friendly societies" existed in England, in which people
donated amounts of money to a general sum that could be used for
emergencies.

Separate insurance contracts (i.e., insurance policies not bundled with loans
or other kinds of contracts) were invented in Genoa in the 14th century, as
were insurance pools backed by pledges of landed estates. 14
These new insurance contracts allowed insurance to be separated from
investment, a separation of roles that first proved useful in marine insurance.
Insurance became far more sophisticated in post-Renaissance Europe, and
specialized varieties developed.

Toward the end of the seventeenth century, London's growing importance as

a centre for trade increased demand for marine insurance. In the late 1680s,
Mr. Edward Lloyd opened a coffee house that became a popular haunt of
ship owners, merchants, and ships’ captains, and thereby a reliable source of
the latest shipping news. It became the meeting place for parties wishing to
insure cargoes and ships, and those willing to underwrite such ventures.
Today, Lloyd's of London remains the leading market (note that it is not an
insurance company) for marine and other specialist types of insurance, but it
works rather differently than the more familiar kinds of insurance.

Insurance as we know it today can be traced to the Great Fire of London,

which in 1666 devoured 13,200 houses. In the aftermath of this disaster,
Nicholas Barbon opened an office to insure buildings. In 1680, he
established England's first fire insurance company, "The Fire Office," to
insure brick and frame homes.

The first insurance company in the United States underwrote fire insurance
and was formed in Charles Town (modern-day Charleston), South Carolina,
in 1732. Benjamin Franklin helped to popularize and make standard the
practice of insurance, particularly against fire in the form of perpetual
insurance.

15
In 1752, he founded the Philadelphia Contribution ship for the Insurance of
Houses from Loss by Fire. Franklin's company was the first to make
contributions toward fire prevention. Not only did his company warn against
certain fire hazards, it refused to insure certain buildings where the risk of
fire was too great, such as all wooden houses. In the United States,
regulation of the insurance industry is highly Balkanized, with primary
responsibility assumed by individual state insurance departments. Whereas
insurance markets have become centralized nationally and internationally,
state insurance commissioners operate individually, though at times in
concert through a national insurance commissioners' organization. In recent
years, some have called for a dual state and federal regulatory system
(commonly referred to as the Optional Federal Charter (OFC)) for insurance
similar to that which oversees state banks and national bank.

16
Principles of insurance
Commercially insurable risks typically share seven common characteristics.

1. A large number of homogeneous exposure units. The vast

majority of insurance policies are provided for individual members of
very large classes. Automobile insurance, for example, covered about
175 million automobiles in the United States in 2004.[2] The existence
of a large number of homogeneous exposure units allows insurers to
benefit from the so-called “law of large numbers,” which in effect
states that as the number of exposure units increases, the actual results
are increasingly likely to become close to expected results. There are
exceptions to this criterion. Lloyd's of London is famous for insuring
the life or health of actors, actresses and sports figures. Satellite
Launch insurance covers events that are infrequent. Large commercial
property policies may insure exceptional properties for which there
are no ‘homogeneous’ exposure units. Despite failing on this criterion,
many exposures like these are generally considered to be insurable.

2. Definite Loss. The event that gives rise to the loss that is subject to
insurance should, at least in principle, take place at a known time, in a
known place, and from a known cause. The classic example is death
of an insured on a life insurance policy. Fire, automobile accidents,
and worker injuries may all easily meet this criterion.

17
3. Other types of losses may only be definite in theory. Occupational
disease, for instance, may involve prolonged exposure to injurious
conditions where no specific time, place or cause is identifiable.
Ideally, the time, place and cause of a loss should be clear enough that
a reasonable person, with sufficient information, could objectively
verify all three elements.

4. Accidental Loss. The event that constitutes the trigger of a claim

should be fortuitous, or at least outside the control of the beneficiary
of the insurance. The loss should be ‘pure,’ in the sense that it results
from an event for which there is only the opportunity for cost. Events
that contain speculative elements, such as ordinary business risks, are
generally not considered insurable.

5. Large Loss. The size of the loss must be meaningful from the
perspective of the insured. Insurance premiums need to cover both the
expected cost of losses, plus the cost of issuing and administering the
policy, adjusting losses, and supplying the capital needed to
reasonably assure that the insurer will be able to pay claims. For small
losses these latter costs may be several times the size of the expected
cost of losses. There is little point in paying such costs unless the
protection offered has real value to a buyer.

18
6. Affordable Premium. If the likelihood of an insured event is so
high, or the cost of the event so large, that the resulting premium is
large relative to the amount of protection offered, it is not likely that
anyone will buy insurance, even if on offer. Further, as the accounting
profession formally recognizes in financial accounting standards, the
premium cannot be so large that there is not a reasonable chance of a
significant loss to the insurer. If there is no such chance of loss, the
transaction may have the form of insurance, but not the substance.

7. Calculable Loss. There are two elements that must be at least

estimable, if not formally calculable: the probability of loss, and the
attendant cost. Probability of loss is generally an empirical exercise,
while cost has more to do with the ability of a reasonable person in
possession of a copy of the insurance policy and a proof of loss
associated with a claim presented under that policy to make a
reasonably definite and objective evaluation of the amount of the loss
recoverable as a result of the claim.

8. Limited risk of catastrophically large losses. The essential risk is

often aggregation. If the same event can cause losses to numerous
policyholders of the same insurer, the ability of that insurer to issue
policies becomes constrained, not by factors surrounding the
individual characteristics of a given policyholder, but by the factors
surrounding the sum of all policyholders so exposed. 19
 9. Typically, insurers prefer to limit their exposure to a loss from a

single event to some small portion of their capital base, on the order of
5 percent. Where the loss can be aggregated, or an individual policy
could produce exceptionally large claims, the capital constraint will
restrict an insurer’s appetite for additional policyholders. The classic
example is earthquake insurance, where the ability of an underwriter
to issue a new policy depends on the number and size of the policies
that it has already underwritten. Wind insurance in hurricane zones,
particularly along coast lines, is another example of this phenomenon.
In extreme cases, the aggregation can affect the entire industry, since
the combined capital of insurers and reinsures can be small compared
to the needs of potential policyholders in areas exposed to aggregation
risk. In commercial fire insurance it is possible to find single
properties whose total exposed value is well in excess of any
individual insurer’s capital constraint. Such properties are generally
shared among several insurers, or are insured by a single insurer who
syndicates the risk into the reinsurance market.

20

.
Insurer’s Business Model

Profit = earned premium + investment income - incurred loss - underwriting

expenses.

Insurers make money in two ways: (1) through underwriting, the process by
which insurers selects the risks to insure and decide how much in premiums
to charge for accepting those risks and (2) by investing the premiums they
collect from insured’s.

The most complicated aspect of the insurance business is the underwriting of

policies. Using a wide assortment of data, insurers predict the likelihood that
a claim will be made against their policies and price products accordingly.
To this end, insurers use actuarial science to quantify the risks they are
willing to assume and the premium they will charge to assume them. Data is
analyzed to fairly accurately project the rate of future claims based on a
given risk. Actuarial science uses statistics and probability to analyze the
risks associated with the range of perils covered, and these scientific
principles are used to determine an insurer's overall exposure. Upon
termination of a given policy, the amount of premium collected and the
investment gains thereon minus the amount paid out in claims is the insurer's
underwriting profit on that policy. Of course, from the insurer's perspective,
some policies are winners (i.e., the insurer pays out less in claims and
expenses than it receives in premiums and investment income) and some are
losers (i.e., the insurer pays out more in claims and expenses than it receives
in premiums and investment income). 21
An insurer's underwriting performance is measured in its combined ratio.
The loss ratio (incurred losses and loss-adjustment expenses divided by net
earned premium) is added to the expense ratio (underwriting expenses
divided by net premium written) to determine the company's combined ratio.
The combined ratio is a reflection of the company's overall underwriting
profitability.

A combined ratio of less than 100 percent indicates underwriting

profitability, while anything over 100 indicates an underwriting loss.
Insurance companies also earn investment profits on “float”. “Float” or
available reserve is the amount of money, at hand at any given moment that
an insurer has collected in insurance premiums but has not been paid out in
claims. Insurers start investing insurance premiums as soon as they are
collected and continue to earn interest on them until claims are paid out.

In the United States, the underwriting loss of property and casualty

insurance companies was $142.3 billion in the five years ending 2003. But
overall profit for the same period was $68.4 billion, as the result of float.
Some insurance industry insiders, most notably Hank Greenberg, do not
believe that it is forever possible to sustain a profit from float without an
underwriting profit as well, but this opinion is not universally held.
Naturally, the “float” method is difficult to carry out in an economically
depressed period. Bear markets do cause insurers to shift away from
investments and to toughen up their underwriting standards. So a poor
economy generally means high insurance premiums. This tendency to swing
between profitable and unprofitable periods over time is commonly known
as the "underwriting" or insurance cycle. 22
Property and casualty insurers currently make the most money from their
auto insurance line of business. Generally better statistics are available on
auto losses and underwriting on this line of business has benefited greatly
from advances in computing. Additionally, property losses in the US, due to
natural catastrophes, have exacerbated this trend.

Finally, claims and loss handling is the materialized utility of insurance. In

managing the claims-handling function, insurers seek to balance the
elements of customer satisfaction, administrative handling expenses, and
claims overpayment leakages. As part of this balancing act, fraudulent
insurance practices are a major business risk that must be managed and
overcome.

23
Introduction to Life Insurance

Life insurance or life assurance is a contract between the policy owner

and the insurer, where the insurer agrees to pay a sum of money upon the
occurrence of the insured individual's or individuals' death or other event,
such as terminal illness or critical illness. In return, the policy owner (or
policy payer) agrees to pay a stipulated amount called a premium at regular
intervals or in lump sums.

There may be designs in some countries where bills and death expenses plus
catering for after funeral expenses should be included in Policy Premium.

In the United States, the predominant form simply specifies a lump sum to
be paid on the insured's demise.

As with most insurance policies, life insurance is a contract between the

insurer and the policy owner (policyholder) whereby a benefit is paid to
the designated Beneficiary (or Beneficiaries) if an insured event occurs
which is covered by the policy. To be a life policy the insured event must
be based upon life (or lives) of the people named in the policy.

24
Insured events that may be covered include:

• Serious illness

Life policies are legal contracts and the terms of the contract describe the
limitations of the insured events. Specific exclusions are often written into
the contract to limit the liability of the insurer; for example claims relating to
suicide, fraud, war, riot and civil commotion.

Life based contracts tend to fall into two major categories:

• Protection policies - designed to provide a benefit in the event of

specified event, typically a lump sum payment. A common form of
this design is term insurance.

• Investment policies - where the main objective is to facilitate the

growth of capital by regular or single premiums. Common forms (in
the US anyway) are whole life, universal life and variable life
policies.

25
Introduction to General Insurance
General insurance or non-life insurance policies, including automobile and
homeowners policies, provide payments depending on the loss from a
particular financial event. General insurance typically comprises any
insurance that is not determined to be life insurance. It is called property
and casualty insurance in the U.S..

In the UK, General insurance is broadly divided into three areas; personal
lines, commercial lines and London market.

The London market insures large commercial risks, for example insuring
supermarkets, football players and other very specific risks. It consists of a
number of insurers, reinsures, [P&I Clubs], brokers and other companies that
are typically physically located in the City of London. The Lloyd's of
London is a big participant in this market.[1] The London Market also
participates in personal lines and commercial lines, domestic and foreign,
through reinsurance.

Commercial lines products are usually designed for relatively small legal
entities. These would include workers comp (employers liability), public
liability, product liability, commercial fleet and other general insurance
products sold in a relatively standard fashion to many organizations.

Personal lines products are designed to be sold in large quantities. This

would include autos (private car), homeowners (household), pet insurance,
creditor insurance and others.

Insurance other than ‘Life Insurance’ falls under the category of General
Insurance. General Insurance comprises of insurance of property against fire,
burglary etc, personal insurance such as Accident and Health Insurance, and
liability insurance which covers legal liabilities. There are also other covers
such as Errors and Omissions insurance for professionals, credit insurance
etc.

26
Non-life insurance companies have products that cover property against Fire
and allied perils, flood storm and inundation, earthquake and so on. There
are products that cover property against burglary, theft etc. The non-life
companies also offer policies covering machinery against breakdown, there
are policies that cover the hull of ships and so on.

A Marine Cargo policy covers goods in transit including by sea, air and
road. Further, insurance of motor vehicles against damages and theft forms a
major chunk of non-life insurance business.

In respect of insurance of property, it is important that the cover is taken for

the actual value of the property to avoid being imposed a penalty should
there be a claim. Where a property is undervalued for the purposes of
insurance, the insured will have to bear a rate able proportion of the loss. For
instance if the value of a property is Rs.100 and it is insured for Rs.50/-, in
the event of a loss to the extent of say Rs.50/-, the maximum claim amount
payable would be Rs.25/- (50% of the loss being borne by the insured for
underinsuring the property by 50%). This concept is quite often not
understood by most insured’s.

Personal insurance covers include policies for Accident, Health etc. Products
offering Personal Accident cover are benefit policies. Health insurance
covers offered by non-life insurers are mainly hospitalization covers either
on reimbursement or cashless basis.

The cashless service is offered through Third Party Administrators who

have arrangements with various service providers, i.e., hospitals. The Third
Party Administrators also provide service for reimbursement claims.
Sometimes the insurers themselves process reimbursement claims.

27
Accident and health insurance policies are available for individuals as well
as groups. A group could be a group of employees of an organization or
holders of credit cards or deposit holders in a bank etc. Normally when a
group is covered, insurers offer group discounts.

Liability insurance covers such as Motor Third Party Liability Insurance,

Workmen’s Compensation Policy etc offer cover against legal liabilities that
may arise under the respective statutes— Motor Vehicles Act, The
Workmen’s Compensation Act etc.

Some of the covers such as the foregoing (Motor Third Party and
Workmen’s Compensation policy) are compulsory by statute. Liability
Insurance not compulsory by statute is also gaining popularity these days.
Many industries insure against Public liability. There are liability covers
available for Products as well.

There are general insurance products that are in the nature of package
policies offering a combination of the covers mentioned above. For instance,
there are package policies available for householders, shop keepers and also
for professionals such as doctors, chartered accountants etc. Apart from
offering standard covers, insurers also offer customized or tailor-made ones.

Suitable general Insurance covers are necessary for every family. It is

important to protect one’s property, which one might have acquired from
one’s hard earned income. A loss or damage to one’s property can leave one
shattered. Losses created by catastrophes such as the tsunami, earthquakes,
cyclones etc have left many homeless and penniless.

Such losses can be devastating but insurance could help mitigate them.
Property can be covered, so also the people against Personal Accident.

28
 A Health Insurance policy can provide financial relief to a person
undergoing medical treatment whether due to a disease or an injury.

Industries also need to protect themselves by obtaining insurance covers to

protect their building, machinery, stocks etc. They need to cover their
liabilities as well. Financiers insist on insurance. So, most industries or
businesses that are financed by banks and other institutions do obtain covers.
But are they obtaining the right covers? And are they insuring adequately are
questions that need to be given some thought. Also organizations or
industries that are self-financed should ensure that they are protected by
insurance.

Most general insurance covers are annual contracts. However, there are few
products that are long-term.

It is important for proposers to read and understand the terms and conditions
of a policy before they enter into an insurance contract. The proposal form
needs to be filled in completely and correctly by a proposer to ensure that
the cover is adequate and the right one.

29
QUESTIONNAIRE

30
120

100

80

60

40

20

0
yes no

• Do you have insurance?

Yes-99 No-1

31
60

50

40

30

20

10

0
life general both

• What type of insurance you have?

Life-30 General-13 Both-56

32
35
30
25
20
15
10
5
0

ne
le

me
h

l
na

lth
l
alt

ar

na
hic

l
no
na
ea
ho

ell

rso
he

so
ve

so
jew

+h
er
pe

er
le
+p

+p
hic
le

lth
hic

ve

ea
ve

+h
le
hic
ve

• In general what type of insurance you have?

Vehicle-32 Health-2 Home&Jewellery-0

Personal-12 veh.+personal-14
Veh.+health-7 veh.+health+personal-2
None-30 33
40
35
30
25
20
15
10
5
0

all
fe
ts
elf

ern

+c elf
wi

ife
ren

ts
re n
urs

ild

c h ildre
s

urs n+w

en

ts
ur
pa

ch
yo

ren
ar
yo

+p
fe+

pa
ild

elf
elf

n+
wi
urs

dre
yo
yo

hil
+c
elf
urs
yo

• For whom you will prefer life insurance?

Yourself-36 Parents-2 Children-2 Wife-3

Wife+yourself-8 yourself+children-8
Children+wife-3 yourself+parents-2
Yours.+par.+childr.-7 all-15 34
45
40
35
30
25
20
15
10
5
0

all
it
t
y

en

ef

t
rit

fit

fit

en
en

ne
ne
tm
cu

m
be
se

xb

be
es

st
ve
inv

ax
ta

tax

in
+t
t+

y+
y
rit
en

rit
cu
tm

cu
se
es

se
inv

• For what purpose you have insurance?

Security-40 Investment-11 Tax benefit-5

Invest.+tax-8 security+tax-6
security+invest.-14 all-15

35
45
40
35
30
25
20
15
10
5
0
m

r
es
fit

ity

fit
s

he
ge
iu

ne

ne
ur
rg

ot
em

ar
be

at
a

be

y
ch

ch
+m
pr

an
it y

ax
ss

s
m
ur

+t
es
le

iu
at

it y
+l
em
m

ur
it y

at
pr

ur

m
at
m

• Which factor attracts you most?

Premium-14 Maturity-42 Lesscharges-13

premium+maturity-11 maturity+lesscharges-4

maturity+ tax benefit-3 anyother-12

36
70

60

50

40

30

20

10

0
public private

• Which sector you will prefer for insurance?

Public-64 Private-35

37
 10
15
20
25
30
35
40

0
5

10
fa
ith

re
fr
en
ce
as
su
ra
nc
e
po
pu
la
rit
m y
ar
ke
ts
fa ha

Marketshare-10
ith re
+
as
fa su
ith ra
fa
+m n
ith ce
+p ar

faith+popul.+assur.-5
o

Faith-35 Refrence-5
ke
fa pu t
ith la sh
fa + ri
ty a
ith po re
+a
+p p s
fa o
ul
ar su
ith pu it y ra
+p la + n
o r ity m ce
pu + ar
la re ke
ri fr ts
ty e ha
+m nc

faith+popu. +refrence+assure-.3
po
ar e re
p[ +a
u ke ss
la t u
rit sh ra
a

faith+assu.- 10
y+
m re
nc
e

Assurance-8
a +
rk a ss
et
sh u ra
ar nc
e+ e
as
su
ra
nc
e

• Which attracts you towards this sector?

Popularity-

faith+popul.+makt.5
faith+markt.5
 faith+popu.+markt.+assure.-2 popu.+mkt.+assur.-
1
38

45
40
35
30
25
20
15
10
5
A
0

S
S
R

R
R
IC
S
D
C

E
I
IS

E
R
IC

IC
IN

H
F

H
E
X

IC

T
D

T
H

H
A

O
C
H

O
A

+
M

+
O

K
D

A
K

F
A

T
D

O
T

H
O

K
K

• In which private bank you have insurance?

AXIS-0 HDFC-7 ICICI-8

KOTAK MAHINDRA-4 OTHERS-40

HDFC+ICICI-2 HDFC+OTHERS-1

KOTAK+OTHERS-1

39
70

60

50

40

30

20

10

I
B
C

I
I

R
B

S
LI

E
U
S

+
O

C
T

LI
O

• In which public bank you have insurance?

LIC-63 OBC-0 SBI-2 UBI-0

OTHERS-6 LIC+SBI-3

40
120

100

80

60

40

20

0
yes

• Are you satisfied?

Yes-99
 41

LIMITATIONS
 Lack of operational staff.

 Lack of infrastructural facilities.

 Lack of telephonic lines.

 Less market reaches.

 42

SUGGESTIONS

 Operational staff must be increase.

 Infrastructure facility should be improved.

 Telephonic lines must be increase.

 Market reaches increase up to customers.

 43

BIBLIOGRAPHY

• www.axisbank.com
44