General Insurance

General Insurance Corporation Of India
The General insurance business in India started with the establishment of Triton Insurance Company Limited in 1850 at Calcutta .In 1907, the first company, The Mercantile Insurance Ltd. Was set up to transact all classes of general insurance business. General Insurance Council, a wing of the Insurance Association of India in 1957, framed a code of conduct for ensuring fair conduct and sound business practices. In 1968 the Insurance Act was amended to regulate investments and to set minimum solvency margins. In the same year the Tariff Advisory Committee was also set up.

In 1972, The General Insurance Business (Nationalisation) Act was passed to nationalise the general insurance business in India with effect from 1st January 1973. For these 107 insurers was amalgamated and grouped into four company’s viz., the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. And the United India Insurance Company Ltd. General Insurance Corporation of India was incorporated as a company.

Current Scenario In new economic policies formulated since 1991, globalisation, privatisation and liberalisation have become new buzzwords. Under new economic policies, many economic and financial reforms took place. Like liberalising licensing policy, attracting FDI, allowing foreign equity in public sector undertakings. The financial reforms restructured banking sector by allowing entry of new private and foreign banks. They also allowed private sector and commercial banks in mutual funds investment business, rationalising the EXIM policy and so on.

General Insurance can be divided into property and liability form of insurance.

  • Under the property insurance property of a person is insured against a certain specified risks. The risk may be fire or marine perils, theft of property or goods, damage to property at accident. Examples of this are:

    • Home insurance
    • Business insurance
    • Commercial insurance

    Marine Insurance
    Marine insurance provides protection against loss of marine perils. The marine perils are collision with rock, or ship attacks by enemies, fire and capture by pirates etc. These perils cause damage, destruction or disappearance of the ship and cargo and non-payment of freight. So, marine insurance insures ship (Hull), cargo and freight. Types of policies are:

    • Voyage policies
    • Time policies
    • Valued policies
    • Hull insurance
    • Cargo insurance
    • Freight insurance

    Fire Insurance
    Fire insurance covers risks of fire. In the absence of fire insurance, the fire waste will increase not only to the individual but to the society as well. With the help of fire insurance, the losses, arising due to fire are compensated and the society is not losing much. The individual is protected from such losses and his property or business or industry will remain in the same position in which it was before the loss. The fire insurance does not protect only losses but it provides certain consequential losses also. Policies available in this insurance are:

    • Consequential loss policy
    • Comprehensive policy
    • Valued policy
    • Valuable policy
    • Floating policy
    • Average policy

    Miscellaneous Insurance
    The property, goods, machine, furniture, automobile, valuable goods etc., can be insured against the damage or destruction due to accident or disappearance due to theft. There are different forms of insurances for each type of the said property whereby not only property insurance exists but liability insurance and personal injuries are also insured. Miscellaneous insurance covers:

    • Motor
    • Disability
    • Engineering and aviation risks
    • Credit insurance
    • Construction risks
    • Money insurance
    • Burglary and theft insurance
    • All risks insurance