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The document discusses the functions of the Insurance Regulatory and Development Authority of India (IRDAI), which regulates and develops the insurance industry. It outlines the IRDAI's roles such as issuing and renewing registrations, protecting policyholders, regulating rates and solvency, and adjudicating disputes. It also briefly discusses the growth of private insurers in India and the launch of the country's first insurance repository system.

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39 views6 pages

P6

The document discusses the functions of the Insurance Regulatory and Development Authority of India (IRDAI), which regulates and develops the insurance industry. It outlines the IRDAI's roles such as issuing and renewing registrations, protecting policyholders, regulating rates and solvency, and adjudicating disputes. It also briefly discusses the growth of private insurers in India and the launch of the country's first insurance repository system.

Uploaded by

pardeshikanchan07
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The functions of the IRDAI are defined in Section 14 of the IRDAI Act, 1999,

and followings are:

Issuing, renewing, modifying, withdrawing, suspending or cancelling


registrations
Protecting policyholder interests
Specifying qualifications, the code of conduct and training for
intermediaries and agents
Specifying the code of conduct for surveyors and loss assessors
Promoting efficiency in the conduct of insurance businesses
Promoting and regulating professional organisations connected with
the insurance and re-insurance industry
Levying fees and other charges
Inspecting and investigating insurers, intermediaries and other relevant
organisations
Regulating rates, advantages, terms and conditions which may be
offered by insurers not covered by the Tariff Advisory Committee
under section 64U of the Insurance Act, 1938 (4 of 1938)
Specifying how books should be kept
Regulating company investment of funds
Regulating a margin of solvency
Adjudicating disputes between insurers and intermediaries or insurance
intermediaries
Supervising the Tariff Advisory Committee
Specifying the percentage of premium income to finance schemes for
promoting and regulating professional organisations
Specifying the percentage of life- and general-insurance business
undertaken in the rural or social sector
Specifying the form and the manner in which books of accounts shall
be maintained, and statement of accounts shall be rendered by insurers
and other insurer intermediaries.

India, with a population of 1 Billion offers great potential and opportunity for
the insurance industry. Currently, two state-owned monoliths - Life Insurance
Corporation and Non Life Insurance companies runs various types of plans
such as in Life Insurance they have LIC New Jeevan Anand, LIC Jeevan
Lakshya, LIC Cancer cover,etc; and in

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Non Life Insurance plans like Health Insurance, Motor Insurance, Travel
Insurance, Home Insurance,etc. The private players have recorded more growth
in 2008 financial year. This has helped them to grab 28 percent more market
share. During the same period, private players underwrote premium worth
Rs.313809 crore as compared to Rs. 1710712 crore in the public sector,(LIC)
according to the latest journal of insurance Regulatory & Development
Authority (IRDA). This indicates that the private players are becoming the
flavor of the 'emerging market', an industry watcher said, adding that "the
aggressive marketing of their unit linked policies, where the traditional LIC is
lagging behind, has helped the private insurers gain in terms of market share".

The Insurance Repository in India is a database of insurance policies. It allows


policy holders to make revisions to a policy. It launched on 16 September
2013. It is the world's first of its kind. The prime minister of India announced
an insurance repository system, helping policyholders buy and maintain
insurance policies in electronic form rather than on paper. Insurance
repositories, like share depositories or mutual fund transfer agencies, will hold
electronic records of insurance policies issued to individuals as electronic
IDIOTIC or e-policies.

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1.5 CONCEPT
The concept of this research is to analyse the marketing strategies insurance
companies uses and the perception of consumers how they percept these
strategies is it win win or big loss for Insurance companies?
Marketing has emerged as widespread discipline covering almost all the
activities of the organization. To define it we can say that it is the development
and distribution of goods as well as services for chosen consumer segments by
which an organization can achieve its goal of customer satisfaction profitably.

Modern economy is characterized by the free market, which means that


business activities and economic generally are associated exclusively with the
market. Traditionally, insurance companies in India are human intensive, and
the business is managed by a large number of insurance agents or advisors. All
insurance companies have an agency building distribution strategy under
which they recruit, train, finance and supervise their agents or advisors. For
decades, this agency system was the only distribution channel for insurance in
the country.

Marketing in the insurance market plays a key role to meet supply and
demand, because insurance products are products that are not seen, not
touched, but exist only in the form of pledges. Selling a promise requires a
confidence, a belief that the service provider will be realized if the loss will
occur. In any other economic or economic subject, whether manufacturer or
service does not have such kind of product.

The findings and recommendations are an important part of this work by


giving opinions about forms of marketing and the role that marketing in the
development and advancement of insurance companies, thereby attempting to
convince people that every company wants to win over rivals.

When it comes to marketing in insurance marketing as discipline then


scientific thought and understood as the conception of the work in the field of
insurance. Such an approach requires the construction of a unique marketing
your strategy and integration within comprehensive insurance.

The market today is highly competitive and brutal and the life insurance
business in India is not aloof of it. Today the organizations have only two
choices; they can either react to the situations or they can become proactive,
and take the initiative of planning and implementation of their plans and
strategies for maintaining and enhancing their market share.

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The strategic marketing is important because of the following reasons;

1. Firms have to select various strategic options Product, price, promotion and
place; and for service the people, process and physical evidences also.

2. Timely decisions are become curtail because of complex business


environment. Long term planning is become important.

3. Strategic analysis is needed to understand the real situation which includes


external and internal scanning of the environment and the organization's own
core competencies.

4. The allocation of organizational resources in a planned manner is become


mandatory for cost cutting and gaining competitive advantage.

5. Importance of communication both internal as well as external.

6. Analysis of competitors and competition.

PRINCIPLES OF INSURANCE

Insurance is based upon:

(a) Principles of Co-operation

(b) Principles of Probability

(a) Principles of Co-operation

Insurance is a co-operative device. If one person is providing for his own


losses, it cannot be strictly insurance because in insurance the loss is shared by
a group of persons who are willing to co-operate.

(b) Principles of Probability

The loss in the form of premium can be distributed only on the basis of theory
of probability. The chances of loss are estimated in advance to affix the
amount of premium. Since the degree of loss depends upon various factors, the
affecting factors are analyzed before determining the amount of loss. With the
help of this principle, the uncertainty of loss is converted into certainty. The

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insurer did not have to suffer loss as well as gain windfall. Therefore, the
insurer has to charge only so much of amount which is adequate to meet the
losses. The insurer, on the basis of past experience, present conditions and
future prospects, fixes the amount of premium. Without premium, no co-
operation is possible and the premium cannot be calculated without the help of
theory of probability, and consequently no insurance is possible.

FUNCTIONS OF INSURANCE

The functions of insurance can be bifurcated into two parts:

(a) Primary Functions (b) Secondary Functions

(a) Primary Functions

The primary functions of insurance include the following:

¬ Provide Protection The primary function of insurance is to provide


protection against future risk, accidents and uncertainty. Insurance cannot
check the happening of the risk, but can certainly provide for losses of risk.
Insurance is actually a protection against economic loss, by sharing the risk
with others.

¬ Assessment of risk Insurance determines the probable volume of risk by


evaluating various factors that give rise to risk. Risk is the basis for
determining the premium rate also.

¬ Collective bearing of risk Insurance is a device to share the financial loss of


few among many others. Insurance is a means by which few losses are shared
among large number of people. All the insured contribute premiums towards a
fund, out of which the persons exposed to a particular risk, are paid.

¬ Savings and investment Insurance serves as a tool for savings and


investment, insurance is a compulsory way of savings and it restricts the
unnecessary expenses by the insured. For the purpose of availing income-tax
exemptions, people invest in insurance also.

(b) Secondary Functions

The secondary functions of insurance include the following:

¬ Prevention of Losses Insurance cautions individuals and businessmen to


adopt suitable device to prevent unfortunate consequences of risk by observing

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safety instructions; installation of automatic sparkler or alarm systems, etc.
Reduced rate of premiums stimulate more business to go for safety and
security.

¬ Small capital to cover large risks Insurance relieves the businessmen from
investment in securities by paying small amount of premium against larger
risks and uncertainty.

¬ Contributes towards the development of large industries Insurance provides


development opportunity to large industries having more risks. Even the
financial institutions may be prepared to give credit to sick industrial units
which have insured their assets including plant and machinery.

¬ Source of Earning Foreign Exchange Insurance is an international business.


The country can earn foreign exchange by way of issue of insurance policies.

¬ Risk Free Trade Insurance promotes exports insurance, which makes the
foreign trade risk free with the help of different types of policies under marine
insurance cover.

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