PREFACE

With the advent of insurance sector, private sector insurance sector has emerged as a trusted sector. It simplifies customers life by providing them the tailor made product and quality services, thus helping to take the informed investment decisions. The emphasis in this study is basically on the procedures followed while settling the claims of the clients. It is a very detailed and vast area of insurance. So, this report only consists the process of own damage and third party claims This report consists of T !"" parts # I, II, III and I$. %art I& 'escription about the Insurance Sector in India. %art II& 'escribes the profile of the organi(ation where I have taken my summer training, to make description of organi(ation brief and effective it is divided into sub parts such as introduction, profitability, growth report, etc. %art III& Is about actual pro)ect carried out. It contains overview of claims process, documents, etc. The ob)ectives, utility and method adopted to carry out the pro)ect method of data analysis are discussed in this part in detail. %art I$& Tells about the value addition achieved by the author *myself+. ,onsidering this value addition as an effect and its cause has been traced under different heads such as career path, augmentation of soft skills, acquired knowledge, etc at -S..

This report contains all the essential details regarding claims settlement in IT0I. It is the aim of the report to help the reader to develop a skill to understand, analyse and interpret financial problems and data to make good financial decisions.

ACKNOWLEDGEMENT
2irst, I thank my advisor 3r.4bhishek Shrivastava, for his continuous support in my training program. e is responsible for involving me in the pro)ect in the first place. e showed me different ways to approach the problem and the need to be persistent to accomplish any goal.

I also thank 3rs .hakti, who as my leader 5 advisor guided me in my study of claim settlement. She taught me how to handle clients as well as their query. She was always there to meet and talk about my ideas, to proofread and mark up my pro)ect report and think through my problems.

.esides my advisors, I would like to thank 3r .ri)esh Tiwari and 3r Suresh !aghuvanshi, for solving my queries regarding premium and policy creation.

I am also grateful to 3s 6eena and 3s -usrat for her friendly behaviour throughout my programme. They also e7tended their helping hand whenever I needed.

I would like to e7tend my sincere regards to my 'ean 3r. -ikhil 8ulsheshtra and my %lacement ,ell 'irector, 3r. 4lok Satsangi because of whom I am here to pursue my training.

6ast, but not least, I thank my family and my parents for giving me life in the first place, for educating me and for unconditional support and encouragement to pursue my interests. I am also thankful to my brother who has always supported me and for listening to all my complaints and frustration and for believing in me.

TABLE OF CONTENT
PART I
INTRODUCTION TO INSURANCE

PART II
ORGANISATIONAL PROFILE - I-T!;'<,TI;& ;$"!$I"W & ;%"!4TI-0 "-$I!;-3"-T & %"!2;!34-," 0!;WT & %!;'<,T ;22"!I-0 & !<!46 I-ITI4TI$" & S"!$I," %4!43T"! & ,<ST;3"! S4TIS24,TI;-

& 0!;WT !"%;!T

PART III
REPORT ON PROJECT WORK CHAPTER 1: CLAIM SETTLEMENT PROCEEDURE - ;W- '4340" ,64I3S & T I!' %4!T> ,64I3S

CHAPTER 2: CLAIM DOCUMENTS & %!;%;S46 2;!3S & ,;$"! -;T" & I-TI34TI;- ;2 ,64I3 2;!3 & ,64I3 2;!3 & S<!$"> !"%;!T & ;T "! ';,<3"-TS
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CHAPTER

3:

LOSSES

COVERED

UNDER

CLAIM

SETTLEMENT & %!;,"SS ;2 S"TT6I-0 & !"%4I! .4SIS & T6 5 ,T6 & ,4S 6;SS

PART IV LEARNING FROM THE SUMMER TRAINING

& 4%%6I,4TI;- ;2 S8I66 6"4!-T 4T NSB & -"W 8-;W6"'0" 4,@<I!"' & 'I!",TI;- 2;! 2<T<!" 6"4!-I-0

BIBLIOGRAPHY ANNEXURES

PART- I

INTRODUCTION TO INSURANCE

In !"#n$% & M%#n'n() D%*'n'+',n - C,n$%.+

Insurance may be considered a G#/% ,* "' 0 in which individuals and businesses protect themselves, their families, and their property from possible losses resulting from unpredictable events such as storms, fires, accidents, and illnesses. The first rule of the game, devised centuries ago is Cshare the risk.D To play by this rule, many people take a small loss in place of one personEs taking a large one.

It is a simple ideaF 4n individual pays a small amount of money called a premium to an agent who acts on behalf of an insurance company, or underwriter, which holds the individualEs premium and the premiums paid by thousands of others. The individual receives an insurance policy, a promise that if there is a loss to the individual as defined in the policy the insurance company will pay for it. The funds will come from the individualEs premium, the premiums paid by others who did not have losses, and money from the companyEs investment of all the premiums. 4n individual who does not have a loss loses the premium money but purchases what insurance underwriters callCpeace of mind.D It is a gamble for both the customer and the underwriter, but it is built on the first rule of riskF that losses are small when shared by many.

Insurance, in law and business, C,n+"#$+!#1 #""#n(%/%n+ that provides for compensation by an insurer to an insured party if or when a specified set of circumstances occurs. Such circumstances may include death or personal in)ury,

accident, unemployment or old age, loss of or damage to property, or any one of a number of instances that can be compensated for financially. The insurer conducts its operations by amassing relatively small contributions from many people who are e7posed to the risk of occurrence of an unforeseen event in order to create a fund that is used to reimburse those insured who actually suffer from such an occurrence. The contributions of the policyholders are called premiums. 4 contract of insurance is embodied in a policy that specifies the terms under which the insurer agrees to indemnify the policyholder for loss in consideration of the payment of a stated premium or premiums. 2or specific details on 6ife Insurance, see that article.

PRINCIPALS OF INSURANCE:
,ommercially insurable risks typically share seven common characteristics. 12 A 1#"(% n!/3%" ,* 4,/,(%n%,! %5., !"% !n'+ The vast ma)ority of insurance policies are provided for individual members of very large classes. 4utomobile insurance, for e7ample, covered about /A= million automobiles in the <nited States in 1HH:. The e7istence of a large number of homogeneous e7posure units allows insurers to benefit from the so& called Claw of large numbers,D which in effect states that as the number of e7posure units increases, the actual results are increasingly likely to become close to e7pected results. There are e7ceptions to this criterion. 6loydEs of 6ondon is famous for insuring the life or health of actors, actresses and sports figures.

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Satellite 6aunch insurance covers events that are infrequent. 6arge commercial property policies may insure e7ceptional properties for which there are no Ihomogeneous e7posure units. 'espite failing on this criterion, many e7posures like these are generally considered to be insurable. 22 D%*'n'+% L, The event that gives rise to the loss that is sub)ect to insurance should, at least in principle, take place at a known time, in a known place, and from a known cause. The classic e7ample is death of an insured on a life insurance policy. 2ire, automobile accidents, and worker in)uries may all easily meet this criterion. ;ther types of losses may only be definite in theory. ;ccupational disease, for instance, may involve prolonged e7posure to in)urious 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 ob)ectively verify all three elements. 32 A$$'6%n+#1 L, 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 Ipure, in the sense that it results from an event for which there is only the opportunity for cost. "vents that contain speculative elements, such as ordinary business risks, are generally not considered insurable.

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72 L#"(% L, The si(e of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the e7pected cost of losses, plus the cost of issuing and administering the policy, ad)usting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. 2or small losses these latter costs may be several times the si(e of the e7pected cost of losses. There is little point in paying such costs unless the protection offered has real value to a buyer. 82 A**,"6#31% P"%/'!/ 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. 2urther, as the accounting profession formally recogni(es 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. 92 C#1$!1#31% L, There are two elements that must be at least estimable, if not formally calculableF the probability of loss, and the attendant cost. %robability of loss is generally an empirical e7ercise, 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 /1

loss associated with a claim presented under that policy to make a reasonably definite and ob)ective evaluation of the amount of the loss recoverable as a result of the claim. :2 L'/'+%6 "' 0 ,* $#+# +",.4'$#11; 1#"(% 1, % 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 e7posed. Typically, insurers prefer to limit their e7posure to a loss from a single event to some small portion of their capital base, on the order of = percent. Where the loss can be aggregated, or an individual policy could produce e7ceptionally large claims, the capital constraint will restrict an insurers appetite for additional policyholders. The classic e7ample is earthquake insurance, where the ability of an underwriter to issue a new policy depends on the number and si(e of the policies that it has already underwritten. Wind insurance in hurricane (ones, particularly along coast lines, is another e7ample of this phenomenon. In e7treme cases, the aggregation can affect the entire industry, since the combined capital of insurers and reinsurers can be small compared to the needs of potential policyholders in areas e7posed to aggregation risk. In commercial fire insurance it is possible to find single properties whose total e7posed value is well in e7cess of any individual insurers capital constraint. Such properties are generally shared

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among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

INDEMNIFICATION:
The technical definition of JindemnityJ means to make whole again. There are two types of insurance contractsK 1< 4n JindemnityJ policy and 2< 4 Jpay on behalfJ or Jon behalf ofJ policy. The difference is significant on paper, but rarely material in practice. 4n JindemnityJ policy will never pay claims until the insured has paid out of pocket to some third partyK i.e. a visitor to your home slips on a floor that you left wet and sues you for L/H,HHH and wins. <nder an JindemnityJ policy the homeowner would have to come up with the L/H,HHH to pay for the visitorEs fall and then would be JindemnifiedJ by the insurance carrier for the out of pocket costs *the L/H,HHH+. <nder the same situation, a Jpay on behalfJ policy, the insurance carrier would pay the claim and the insured *the homeowner+ would not be out of pocket for anything. 3ost modern liability insurance is written on the basis of Jpay on behalfJ language. 4n entity seeking to transfer risk *an individual, corporation, or association of any type, etc.+ becomes the EinsuredE party once risk is assumed by an EinsurerE, the

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insuring party, by means of a contract, called an insurance EpolicyE. 0enerally, an insurance contract includes, at a minimum, the following elementsF the parties *the insurer, the insured, the beneficiaries+, the premium, the period of coverage, the particular loss event covered, the amount of coverage *i.e., the amount to be paid to the insured or beneficiary in the event of a loss+, and e7clusions *events not covered+. 4n insured is thus said to be JindemnifiedJ against the loss events covered in the policy. When insured parties e7perience a loss for a specified peril, the coverage entitles the policyholder to make a EclaimE against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the EpremiumE. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claimsMin theory for a relatively few claimantsMand for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses *i.e., reserves+, the remaining margin is an insurerEs profit.

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TYPES OF INSURANCE:
%erils often covered by insurance include burglary and theft, vehicle collision, and dishonesty of employees *fidelity insurance+. 2orms of insurance such as life insurance or maritime insurance are effectively whole subtypes of insurance, with their own norms. Insurance is also available to cover the e7tension of credit and to guarantee the title to a property, or as part of a mortgage policy. In addition, speciali(ed types of insurance cover damage to glass, boilers and machinery, lifts, animals, and other property, as well as losses to property arising from lightning, wind, tornadoes, hail, storms, insects, blight, bombardment, e7plosion, and water damage. 3any insurance policies are comprehensive, that is, they cover a group of related perilsK but most also have e7clusion clauses, detailing what events are not covered by the policy.

Insurance comes in many varieties. ,ategories include property, liability, homeownersE, automobile, medical, life, workersE compensation, and marine.

P",.%"+; In !"#n$%: %roperty insurance is the modern form of the fire insurance that was sold by early insurance companies. The name has changed because the coverage has changed.

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-o longer are )ust the losses resulting from fire protected by property insurance. Such losses as those from windstorm, theft, vandalism, and water damage are also covered.

<sually property insurance policies are Cwritten,D as insurance underwriters say, for a specific value such as the cost of replacing a building or its value if sold on the open market. The premium is based on the insurable value. Individuals can also buy special property insurance for the contents and personal belongings within a building, damage to and caused by boilers and unusual machinery, and damage from floods. .usiness interruption insurance protects businesses against losses when property damage causes their business or a supplierEs to be shut down.

While early insurers offered nothing more than a promise to pay for losses, modern insurance companies offer such additional services as safety and fire protection engineers to inspect buildings and to make recommendations for added safety. Suggestions might include such improvements as sprinkler systems and fire doors. 2ire&resistant buildings built of materials like brick or concrete and steel are offered lower insurance premiums.

L'#3'1'+; In !"#n$%: 6iability insurance is the most important kind of business insurance. 4 liability is a duty one person owes another, or is liable for, for some special reason. 6iability insurance pays an individual or a business for liabilities that result from unforeseen situations. %ersonal liability insurance, for e7ample, indemnifies, or pays,

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attorneysE fees and other losses that occur when another person is in)ured on an individualEs property and files a lawsuit seeking damages, or payment. .usiness liability insurance is almost always sold separately and comes in manyforms, including comprehensive general liability, which protects a business from a wide variety of liability lossesK professional or malpractice liability insurance, which protects physicians, lawyers, and other professionals from liabilities resulting from professional mistakesK and product liability insurance, which protects manufacturers from any liabilities caused by their products.

H,/%,=n%" > In !"#n$%: omeownersE insurance is a combination offering both property and liability coverage. <sually it includes protection for a personEs home, any other buildings on the property, and for the buildingsE contents and personal belongings e7cept automobiles and pets. The policy can be written to include the property of guests. If disaster strikes, homeownersE insurance usually pays a familyEs living e7penses until they get settled at home once again. omeownersE policies include two kinds of liability insurance. 0eneral liability coverage, as discussed above, protects homeowners from losses from lawsuits. 3edical payment coverage pays for medical treatment of people in)ured on the insured property. 4lthough homeownersE insurance generally does not cover such perils as flood, earthquake, or volcanic eruption, the added coverage is sometimes available in areas where it is needed and can be added for an additional premium. omeownersE

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insurance is not restricted to homeowners but is available in a modified form to people who rent living quarters.

A!+,/,3'1% In !"#n$%: 4utomobile insurance is the most complicated kind of insurance purchased by individuals. It combines several kinds of property and liability coverage. The standard automobile policy includes collision insurance, covering property damage to a car when it is struck by another vehicle, and comprehensive insurance, covering general property damage that occurs when an automobile is damaged by something other than another vehicle. In other words, a dented fender resulting from another automobileEs backing into it is insured with collision coverage, while the windshield broken by a poorly thrown baseball is covered under comprehensive insurance. 4utomobile insurance also includes a variety of liability coverages, including general liabilityMcalled bodily in)ury liability coverageMand medical payment insurance. The automobile policy, however, covers liabilities that occur when an uninsured motorist is involved in an accident with an insured driver and creates liabilities for both. %roperty damage liability insurance pays for damage to other peopleEs property caused by the insured automobile. 2or e7ample, damage caused by backing a car into a neighborEs garage is paid for by such a policy.

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4utomobile insurance underwriters charge premiums based on classes of drivers and their safety records. 0enerally drivers who have had accidents pay more for automobile insurance than do drivers who have had none. ,harging by classes of drivers may seem unfair to the individual. 2or e7ample, a young driver, even with a good safety record, pays a higher premium than a comparable older driver because younger drivers as a class have poorer safety records. 4ccording to insurance records, the worst driversMand thus the most e7pensive drivers to insureMare unmarried males between the ages of /= and 1=. ,ompanies generally offer premium discounts for good students, drivers who have more than one car, and drivers who own larger, low& powered cars, which tend to incur little damage in accidents.

M%6'$#1 In !"#n$%: 3edical insurance pays the costs of hospitali(ation and physiciansE fees for insured individuals who are in)ured or become ill. It is unlike medical payment liability insurance in that the place where an in)ury occurs or an illness begins is not involved. ,overage usually includes emergency treatment, surgery, long&term care, and sometimes dental and vision care. 3edical insurance plays according to share&the&risk rules. The premiums paid by those people who remain healthy provide the money to treat those who are ill. The cost of individual health insurance is very high, and many individuals do not purchase this insurance for themselves. 3ost medical insurance is purchased in group policies by employers for their employees. "mployees may contribute to the premium, or they may receive the insurance as an e7tra benefit. 3ost employees are allowed to

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include their marital partners and dependent children by contributing to the additional cost.

L'*% In !"#n$%: 6ife insurance is designed to insure lives, though it frequently includes coverage for ma)or disabilities such as the loss of limbs or organs. There are basically three kinds of life insurance that may be purchased by individuals for themselves or others or by employers for their employees. The most common kind is called term insurance, which pays a benefit to the beneficiary, or previously chosen survivor, if the insured person dies during the period of time defined in the policy. <nlike some other types of life insurance, term life coverage has no real value while an individual is alive. It e7ists for the financial protection of an individualEs survivors. Term life insurance premiums are based on mortality tables, statistical charts that show appro7imately how long individuals are likely to live. 4lthough obviously these tables cannot predict e7actly the years any one person will live, they are indicators of how long large groups of people live and allow insurers to bill individuals according to the share of risk the purchaser is asking the insurance company to take. -ormally the older an individual is when purchasing the policy, the higher the

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premium. <nderwriters also take into account an individualEs health history, weight, and personal habits such as smoking. Some individuals, especially those with a history of medical problems, may not be able to purchase term life insurance, but it is generally available to all. Whole life insurance pays a death benefit to a beneficiary but also pays dividends based on the premium and the insurance companyEs investments. In a whole life plan the insurer calculates how much premium is needed to pay benefits for the people it insures, invests the remainder of the premium, and pays back to the insured a portion of the earnings on investments. 4fter a long period of time, an individual may have a paid&up policy. This means paying no more premiums but still having the policy in force. Individuals may also borrow against the value of the policy at a low interest rate so long as they continue to pay the premiums. This option is frequently taken when general interest rates are high. 4 third kind of life insurance is new but popular among underwriters. ,alled universal life insurance, it combines term insurance and an investment plan that pays higher interest than does whole life insurance.

W,"0%" > C,/.%n #+',n: WorkersE compensation is a special state&controlled insurance purchased by employers for the benefit of their employees. 6ike general liability and medical payment liability insurance, it pays for medical treatment required by employees of a company according to a state&regulated schedule of benefits. The ob)ect is to prevent

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employees from the need to sue their employers if they are in)ured and to compensate workers for losses from accidents on the )ob. This insurance can be purchased from general insurance underwriters who charge employers a premium based on their safety records. Insurance companies may not offer such coverage to employers with poor accident recordsK so state governments usually maintain a special pool of underwriters for such employers in order to provide this legally required insurance. Sometimes state governments assign bad&risk employers to a specific insurance company, which then charges a particularly high premium. Some states provide for wage loss workersE compensation, which eliminates specific benefits but pays workers any salary or wages lost from in)uries. Such insurance tends to reduce the premium.

M#"'n% In !"#n$%: The oldest form of insurance that scholars have been able to document, marine insurance now includes much more than the shared risk of shipsE cargo. It might best be called transportation insurance because variations of the coverage include protection for ships, trucks, railroads, and aircraft. <nderwriters generally divide it into two typesF ocean marine, which deals with every kind of water conveyance, and inland marine for truck and rail cargo. ;cean marine insurance protects ship&owners and companies that ship goods by water from such perils as damage to a ship and loss of cargo from windstorm, lightning, collision, capsi(ing, or stranding. 4lso included are losses from piracy and

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barratry, an illegal act by captain or crew that does in)ury to the ship&owner or cargo. 4lthough aviation insurance is not considered ocean marine insurance, it is sold almost the same way and generally protects participants from the same perils to hull and cargo. Inland marine insurance has become a catchall for almost any kind of transportation or storage peril. It is designed to insure cargo carried by trucks and railcars, but recently inland marine insurance has added protection from losses of data stored in computers and the temporary storage of customersE valuables by shopkeepers. D' #3'1'+; In !"#n$%:

'isability insurance policies provide financial support in the event the policyholder is unable to work because of disabling illness or in)ury. It provides monthly support to help pay such obligations as mortgages and credit cards.

Total permanent disability insurance insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an ad)unct to life insurance.

'isability overhead insurance allows business owners to cover the overhead e7penses of their business while they are unable to work.

WorkersE compensation insurance replaces all or part of a workerEs wages lost and accompanying medical e7pense incurred because of a )ob&related in)ury.

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C# !#1+; In !"#n$%: ,asualty insurance insures against accidents, not necessarily tied to any specific property.

,rime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. 2or e7ample, a company can obtain crime insurance to cover losses arising from theft or embe((lement.

%olitical risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss.

O+4%" +;.% :

,ollateral protection insurance or ,%I, insures property *primarily vehicles+ held as collateral for loans made by lending institutions.

'efense .ase 4ct WorkersE compensation or '.4 Insurance insurance provides coverage for civilian workers hired by the government to perform contracts outside the <S and ,anada. '.4 is required for all <S citi(ens, <S residents, <S 0reen ,ard holders, and all employees or subcontractors hired on overseas government contracts. 'epending on the country, 2oreign -ationals must also be covered under '.4. This coverage typically includes e7penses

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related to medical treatment and loss of wages, as well as disability and death benefits.

"7patriate insurance provides individuals and organi(ations operating outside of their home country with protection for automobiles, property, health, liability and business pursuits.

2inancial loss insurance protects individuals and companies against various financial risks. 2or e7ample, a business might purchase cover to protect it from loss of sales if a fire in a factory prevented it from carrying out its business for a time. Insurance might also cover the failure of a creditor to pay money it owes to the insured. This type of insurance is frequently referred to as Jbusiness interruption insurance.J 2idelity bonds and surety bonds are included in this category, although these products provide a benefit to a third party *the JobligeeJ+ in the event the insured party *usually referred to as the JobligorJ+ fails to perform its obligations under a contract with the obligee.

8idnap and ransom insurance 6ocked funds insurance is a little&known hybrid insurance policy )ointly issued by governments and banks. It is used to protect public funds from tamper by unauthori(ed parties. In special cases, a government may authori(e its use in protecting semi&private funds which are liable to tamper. The terms of this type of insurance are usually very strict. Therefore it is used only in e7treme cases where ma7imum security of funds is required.

-uclear incident insurance covers damages resulting from an incident involving radioactive materials and is generally arranged at the national level.

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*2or the <nited States, see the %rice&4nderson -uclear Industries Indemnity 4ct.+

%et insurance insures pets against accidents and illnesses & some companies cover routineNwellness care and burial, as well.

%ollution Insurance, which consists of first&party coverage for contamination of insured property either by e7ternal or on&site sources. ,overage for liability to third parties arising from contamination of air, water, or land due to the sudden and accidental release of ha(ardous materials from the insured site. The policy usually covers the costs of cleanup and may include coverage for releases from underground storage tanks. Intentional acts are specifically e7cluded.

%urchase insurance is aimed at providing protection on the products people purchase. %urchase insurance can cover individual purchase protection, warranties, guarantees, care plans and even mobile phone insurance. Such insurance is normally very limited in the scope of problems that are covered by the policy.

Title insurance provides a guarantee that title to real property is vested in the purchaser andNor mortgagee, free and clear of liens or encumbrances. It is usually issued in con)unction with a search of the public records performed at the time of a real estate transaction.

Travel insurance is an insurance cover taken by those who travel abroad, which covers certain losses such as medical e7penses, lost of personal belongings, travel delay, personal liabilities, etc.

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TYPES OF INSURERS -

4 variety of organi(ations, chiefly commercial but including some fraternal or non&profit bodies, underwrites insurance. Insurance companies are owned by their shareholders, who in return for providing the company with capital by their share purchases, share in the profits in the form of dividends. 3utual insurance

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companies, however, do not issue shares but operate solely on the money obtained as premiumsK these organi(ations are owned by the policyholders, who share in the profits and losses.

<nder the 6loyds type of insuring organi(ation, patterned after the celebrated .ritish firm of 6loyds, a number of individuals *generally grouped into syndicates which act on their behalf+ each agree to accept a portion of a risk for a specified premium and to share in the profit or loss in proportion to the percentage of the risk assumed. -on&profit insurance corporations are cooperatives maintained and operated for the benefit of their members and subscribers. Welfare insurance plans generally are trust funds established or maintained in some countries by employers and their employees to provide life insurance, health benefits, and pensions to employees.

In addition to the private insurance organi(ations described above, certain types of insurance are provided in most countries by governmental organi(ations. -otable e7amples include social security and health insurance, although in many countries government insurance is only partial, with the individual having to bear some risk. %artial insurance can help overcome Cmoral ha(ardD problems. That is, if a person is completely insured against a loss, the probability of which can be influenced by his or her actions, then there will be little incentive to take care, which would raise the cost of insurance greatly.

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INSURER?S BUSINESS MODEL:

P",*'+ O "arned premium P Investment income & Incurred loss & <nderwriting e7penses.

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Insurers make money in two waysF */+ 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 *1+ .y investing the premiums they collect from insured. The most complicated aspect of the insurance business is the underwriting of policies. <sing 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. 'ata is analy(ed to fairly accurately pro)ect the rate of future claims based on a given risk. 4ctuarial science uses statistics and probability to analy(e the risks associated with the range of perils covered, and these scientific principles are used to determine an insurerEs overall e7posure. <pon termination of a given policy, the amount of premium collected and the investment gains thereon minus the amount paid out in claims is the insurerEs underwriting profit on that policy. ;f course, from the insurerEs perspective, some policies are winners *i.e., the insurer pays out less in claims and e7penses than it receives in premiums and investment income+ and some are losers *i.e., the insurer pays out more in claims and e7penses than it receives in premiums and investment income+. 4n insurerEs underwriting performance is measured in its combined ratio. The loss ratio *incurred losses and loss&ad)ustment e7penses divided by net earned

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premium+ is added to the e7pense ratio *underwriting e7penses divided by net premium written+ to determine the companyEs combined ratio. The combined ratio is a reflection of the companyEs overall underwriting profitability. 4 combined ratio of less than /HH percent indicates underwriting profitability, while anything over /HH indicates an underwriting loss. Insurance companies also earn investment profits on CfloatD. C2loatD 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 <nited States, the underwriting loss of property and casualty insurance companies was L/:1.9 billion in the five years ending 1HH9. .ut overall profit for the same period was L?B.: billion, as the result of float. Some insurance industry insiders, most notably ank 0reenberg, 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. -aturally, the CfloatD method is difficult to carry out in an economically depressed period. .ear 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 JunderwritingJ or insurance cycle.

91

%roperty and casualty insurers currently make the most money from their auto insurance line of business. 0enerally better statistics are available on auto losses and underwriting on this line of business has benefited greatly from advances in computing. 4dditionally, property losses in the <S, due to natural catastrophes, have e7acerbated this trend. 2inally, claims and loss handling is the materiali(ed utility of insurance. In managing the claims&handling function, insurers seek to balance the elements of customer satisfaction, administrative handling e7penses, and claims overpayment leakages. 4s part of this balancing act, fraudulent insurance practices are a ma)or business risk that must be managed and overcome.

INSURANCE POLICIES: 4n insurance contract often contains an element of contingency, that is, the event insured against must be possible but not certain to occur in a given period of time and must be substantially beyond the control of either insured or insurer. owever, this is clearly not so in those cases where, for e7ample, insurance policies are used as a form of old&age pension and the contingency element of reaching a certain age is negligible. 0enerally, the number of risks involved must be sufficient to compute the chances of occurrence of the event based on the law of averages, and thereby to determine the amount of premium required. In addition to the requirement that the risk be contingent, the policyholder must generally have an insurable interest, that is, the policyholder must be one who would suffer a material loss by the happening of the

99

event. 4 policy in which the insured does not have such an interest would be deemed a gambling contract and therefore voidK an e7ample of such a void policy is one by which a person insured the house of a stranger against fire.

PROTECTION: Insurance plays a ma)or role in the modern economy, providing an orderly means for the replacement of property lost or destroyed and for sustaining purchasing power adversely affected by illness, in)ury, or death. 3oreover, the huge reserves accumulated by insurance companies to meet e7pected claims are invested, thus providing industry with needed funds for capital e7pansion or other investments.

Insurance companies constantly search for additional business by providing insurance protection against new types of ha(ards. 3ost standard homeowners policies do not protect against catastrophes, such as earthquakes, nuclear e7plosion or radiation, war, and certain other perils.

9:

PART: II

ORGANISATIONAL PROFILE

9=

INTRODUCTION
I22,;&T;8I; 0eneral Insurance *IT0I+ is Indias trusted insurance company. It simplifies customers life by providing them tailor made products and quality services, thus helping them take informed investment decisions. It is a )oint venture between The Indian 2armers 2ertiliser ,o&operative *I22,;+ and its associates and Tokio 3arine and -ichido 2ire 0roup, the largest listed insurance group in Qapan. IT0I was incorporated on 'ecember :, 1HHH and has its head office in 0urgaon, aryana.

9?

0% 26% 0% IFFCO TOKIO & NICHIDO 74%

We are among IndiaEs top three private&sector general insurance companies with /HH offices and a country&wide network of :BH e7clusive point of presence. In our constant effort to provide our customers with J +4% 1'*% +4%; 6% %"@%J, we offer a wide range of over :H uniquely customi(ed policies covering a wide range of customers, from farmers to some of IndiaEs largest automobile manufacturers. We are among IndiaEs top three private&sector general insurance companies with /HH offices and a country&wide network of :BH e7clusive point of presence. In our constant effort to provide our customers with Jthe life they deserveJ, we offer a wide range of over :H uniquely customi(ed policies covering a wide range of customers, from farmers to some of IndiaEs largest automobile manufacturers.

9A

VISION AND MISSION

VISION:
The vision of IT0I is to be an industry leader by building customer satisfaction through farmers transparency and quick response.

MISSION:
4s per IT0I the mission is to win the trust of individuals, trade, industry and commerce and protect citi(ens, corporate, and international investors in India.

9B

OPERATING ENVIRONMENT OF ITGI

9G

2inancial focus

,ustomer focus

uman 2ocus

%rocess focus

!enewal 5developm& ental focus

It mainly focuses on above mentioned areas so that its working is up to date and the latest one. 2inancial focus is based upon the fund creation and its flows. !5' is done for renewal strategies and new areas development.

OVERVIEW
:H

We see ourselves as a JpeopleEs companyJK our principal aim is to provide benefits for the common man who traditionally lacks knowledge and access to quality insurance products. To achieve this, we have leveraged the deep knowledge of I22,; by studying ?HH of the countryEs ?H1 districts before drawing up our business plan.

We closely follow the rigorous global financial standards of the 3illea group, combining sound financial management with rapid growth. IT0I is the only private general insurance company in India to have made five consecutive years of profit. We are also one of the few to report underwriting profits within four years of operations.

We also believe in focusing on creative solutions to provide optimum service to our customers. We are the only company in the country to have a /HHR&owned distribution channel to service our retail customers, called I22,;&T;8I; Insurance Services 6td *ITIS+K this subsidiary has more than AHH employees and is present in ?B cities. ITIS is an e7ample of an indigenously developed best practice that will be replicated in other Tokio 3arine 4sia subsidiaries. Innovation has also played a significant part in making us a dynamic industry leader both in India and globally. We are the first company in India to underwrite mega policies for a fertili(er and an automobile client. This comprehensive policy is based on international rates and optimi(es the premium outflow for clients even as it offers a one&stop, all&risk cover.

:/

PERFORMANCE GROWTH

:1

A#< PROFITABLE GROWTH:

;ur commitment to innovation and customer service has helped us consistently raise the bar on our performance. We strongly believe in profitable growthF ;ur rapidly reducing "arned Income 6oss !atio *"I6!+ is testimony to this.

PBT ,* ITGI 4# 'n$"%# %6 *",/ B23: $"; 'n 2CC2-C3 +, 72279 $","% 'n 2CC9-C:2

A3< GROSS WORKING PROFIT:

:9

IT0IEs sound financial management has been achieved in a period of fast&paced growth. ;ur 0W% has grown from !s. BG? crores in 1HH=&? to !s. //=1 crores in 1HH?&HA.

IT0I voluntarily maintains strong institutional checks and balances. 4n investment committee of board members and senior e7ecutives scrutini(es all ma)or investment decisions. 4n in&house audit committee audits all the branches and suggests ways to

::

improve their functioning. 2inally, there is an e7ecutive committee of senior management that monitors policy decisions. 4ll these have ensured that IT0I has established a reputation for the highest standards of corporate governance

:=

ITGI- PRODUCT OFFERINGS

!isks are inherent in every aspect of life. They are present in whatever we do everyday and all businesses face the threat of losses that may never occur. Worrying about these possibilities hardly makes life pleasant. ;f course, it is impossible to eliminate risks & but they can be controlled, lessened or minimi(ed. That is e7actly what risk management is a all about. We at IT0I have established a proficient risk management team to provide customi(ed, need&based solutions. 4rmed with a high level of domain knowledge in a wide range of industry verticals, our risk management e7perts identify and evaluate the risk e7posures of your facility or business to provide a comprehensive risk management solution based on your special needs. 4s a part of our value&added services, we also provide recommendations for loss reduction and risk mitigation and continuously update you about international best practices. IT0I offers various products to its customers so that it may cover all sorts of risks

:?

ITGI?S PRODUCT DETAILS

Standard 2ire and Special perils 3arine open ,over 3achinery .reakdown 3otor %vt. ,ar ,omprehensive 0roup %ersonal 4ccident 4ll !isk .urglary and ousebreaking 3oney %rofessional indemnity Workmens ,ompensation "lectronic equipment
:A

 Tractor Sankat aran .ima Individual %ersonal 4ccident 2idelity 0uarantee %ublic 6iability %roduct 6iability ,ontractors 4ll !isk .oiler and %ressure plants ,ontractors plant and machinery Industrial 4ll !isk "rection 4ll !isk 2ire Special ,ontingency
:B

 3ega !isk and %ackage %olicies Weather Insurance Qewelers .lock 3T; ,redit Insurance .ankers Indemnity

RURAL CENTRIC INITIATIVES

:G

IT0I has always engaged itself in rural problem solving and it also take initiatives to reduce the risk which is open to their crops, land, etc. The latest initiatives taken are as follows &F 3ausam .ima >o)na *3.>+ .arish .ima >o)na *..>+

Sankat aran

8isan 8alyan

Qan 8alyan

8isan .ima

S#n0#+ H#"#n B'/# Y,Dn#: It was concluded in ;ctober, 1HH/. 4t that time a free cover of !s.:HHH per bag *ma7. of !s. / lac+ was granted on the purchase of fertili(er. It is the largest single policy issued in the world.

B#"' 4 B'/# Y,Dn#: It is a weather insurance product and was introduced in 4pril, 1HH:. 4s it is an inde7 based product, it covers anticipated deficiency in crop yield due to deficient rainfall during monsoon. It is sold as a group policy through co&op societiesNbanksN-0;s etc.

=H

M#4'1# S!"#0 4# B'/# Y,Dn#: It was launched on September, 1HH= on International Womens 'ay. It covers against all accidental occurrences, including death and in)ury.

G%n4! M#! #/ B'/# Y,Dn#: It covers frost in)ury and heat stress to crops as well as cover for low temperature during the flowering stage. With this it also covers for high temperature during the grain filling stage.

4mong them Sankat aran is the largest single policy of the world.These policies have been created and modified from time to time as per the needs and requirement of rural ha(ard.

=/

ITGI- SERVICE PARAMETERS

IT0I caters to almost all areas of risk management. .elow is a list of some of our mainstream servicesF

<nderwriting surveyN6oss control SurveyN!isk management survey -atural ha(ard risk evaluation .usiness continuity planning .usiness interruption and interdependency risk analysis 3arine loss control surveys Safety management ,onsequence analysis studies 'ocumentation Time frame ,ommitment ,laims

=1

 'ocumentation Timeframe commitmentF Issuance of receipt on the same working day Issuance of cover note immediately Issuance of policy ma7imum five working days

,laimsF Surveyor appointment same working day Surveyor visit ma7imum :B hours of notification %reliminary report ma7imum = working days of survey
=9

 !esponse to enquiry reply in ma7imum = working days*or else reasons for the delay+

C! +,/%" S#+' *#$+',n

So how satisfied are customers of the insurance sectorS ave private sector players

made any difference in the quality of service provided to consumersS I>"S says Indias first ever study of customer satisfaction in the insurance sector. %ublic sector companies need to improve their services and grievance response time, if they wish to maintain a loyal customer base. -owadays, various companies try to deal mainly with customer satisfaction and try to follow certain norms such asF To improve response times To reduce costs and increase revenues

=:

To settle claims as fast as possible

To build long lasting relationship with the customers

To do improvement in the policy formulation

To get feedback from the customers

IFFCO TOKIO +,. 'n /,+," 'n !"#n$% "#n0

%$,n6 'n 4,/% 'n !"#n$% #n6

*'*+4 'n 4%#1+4 'n !"#n$%. This report is given by the Consumer Voice survey of /1 life, and // general insurance companies. This agency studies the consumer preference in regard with the claim settlement as well as overall performance.

MOTOR INSURANCE: CARD OF MERITS

NAME OF THE COMPANY

OVERALL RANK

PS

RE

IFFCO-

==

TOKIO

HDFC CHUBB

TATA AIG

TANGIBILITY AT< : %romptness in terms of policy issueK on&time procedures for policy issue and renewalK depth *network+ of survey team and inspectors *on time survey+K promptness of reali(ation of the payment after bill submissionK cheque pick up facilityK cashless transaction facilities. PROBLEM SOLVING SYSTEM APS<: 8nowledge of the customer service representativeK waiting time for getting connected to the customer service representativeK politeness and behavior of the customer service representativeK persuasiveness of the customer service representative to address the question. RELIABILITY AR<: To tie up with the automobile companies in terms of number of service centers, quality of service provided at these service centersK tie up with the automobile companies in terms of location of service centers where the insured can take the vehicle to claim insuranceK Infrastructure of service centersK network of the company, appropriateness of claim valuationK promptness in claim redressK promised services level provided.

=?

RESPONSIVENESS AR<: Immediate deputation of surveyorsK immediate loss assessment and claim redressedK promptness towards addressing claim settlements problemsK effective renewal reminder mechanismK in case of lost policy documents *promptness to react+K acceptance of the lost policy cases. ASSURANCE AA<: 6evel of satisfaction with productNpolicy coverK customi(ation of the productNpolicy as per the requirementsK in&depth knowledge of the productNpolicy by the companyK regular updates provided by the company on timely basisK transparency in premium calculationK awarding of C-o ,laim .onusD. EMPATHY AE<: %rovision provided for loss during break periodK satisfaction with the claim valuationK personali(ed consulting providedK affective customer loyalty programsK dealing with the situation of lost insurance documents. IT0Is bi&annual customer satisfaction surveys & another unique feature at IT0I && indicates the speed and fairness in handling policy&holdersE claims. This is backed by robust IT infrastructure that is robust enough to handle large volume of documents. 4ll IT0IEs branches and distributors are networked. This not only enables a detailed and accurate analysis of the companyEs performance based on specific parameters, the web& based claim response system has enabled the speedy settlement of claims, achieving a G9R claim settlement ratio.

=A

GROWTH REPORT
*B; DNA money+
The 0eneral Insurance Industry is beginning to see the benefits of a price& deregulated regime. 4fter witnessing a =HR decline in growth in 1HHA& HBb, the new financial year has started off well for them. ;n average, they grew by over /:R. While private sector players have grown by an average of 1:R in 4pril, the four nationali(ed companies registered #n EF (",=+4 'n +4% *'" + /,n+4 ,* +4% *' $#12

=B

A *#" # +4% (",=+4 'n +4% (", $,n$%"n%62 IFFCO TOKIO)

3! 'n% TATA

."%/'!/ 6!"'n( +4% /,n+4 ' AIG G%n%"#1 In !"#n$% #n6

CHOLAMANDALAM +,..%6 +4% $4#"+2

PART - III

=G

REPORT ON PROJECT WORK

CHAPTER: 1

?H

CLAIM SETTLEMENT PROCEEDURE

CLAIM SETTLEMENT

?/

Whenever an insured persons vehicle mets with an accident or his vehicle suffers any loss or damage then he can file a claim to his insurer. The claim for 3otor Insurance includes two ma)or categoriesF& 1 2O=n D#/#(% C1#'/ 22 T4'"6 P#"+; L'#3'1'+; C1#'/ This can be e7plained in detail with the help of their procedures involved.

12

O=n D#/#(% C1#'/

2rom the procedural view point, claims settlement involves three phasesF& *a+ %reliminary Scrutiny *b+ 4ssessment of losses *c+ Settlement

A#< P"%1'/'n#"; S$"!+'n;

?1

;n the receipt of notice of loss, the policy records are checked to see that the policy is in force and that it covers the vehicle involved. The loss is entered in the ,laims !egister and claim form is issued to the insured for completion and return.

The insured is required to submit a detailed estimate of repairs from any repairer of his choice. 0enerally, these repairs are acceptable to the insurer but they at times ask the insured to obtain repair estimate from another repairer, if they have reason to believe that the competence, moral ha(ard or business integrity of the repairer first chosen is not satisfactory.

A3< A % /%n+ ,* 1, %
Independent automobile surveyors are assigned the task of assessing the cause and e7tent of loss. They are supplied with the copy of the policy, the claim form and the repairers estimate. They inspect the damaged vehicle and discuss the cost of repair or replacement with the repairer and submit their survey report. In respect of mirror damage, independent surveyors are not always appointed. The insurers own in&house surveyors inspect the vehicle and submit the report.

A$< S%++1%/%n+

?9

The survey report is e7amined and the settlement is effected in accordance with the recommendations contain therein. The usual practice is to authori(e the repairs directly with the repairers to whom the letters is issued to the effect. In this letter the repairers are also instructed to collect direct form the insured the amount of the 'eductible if applicable to the claim, and also the amount of depreciation falling to be borne by the insured before delivering the repaired value to him. The repairer are also instructed to keep aside the salvage value of the damaged parts, if there any, for being collected by the salvage buyers nominated by the Insurers. ;r else,

if the repairers are willing to retain the salvage value, as indicated by the surveyors, is deducted from the claim bill. ;n the receipt of the bill of repairs after completion of repairs and the satisfaction note or voucher from the insured that the vehicle has been repaired to his satisfaction note or voucher from the insured that the vehicle has been repaired to his satisfaction, the payment to the repairs is effected. Sometimes, the repairers is paid directly by the insured in which case the latter is reimbursed on submission of the receipt bill from the repairers. In either the case, discharge voucher or receipt bill is obtained. The ,laims !egister and the policy renewals records are marked that the claims are paid indication the amount of claim and the amount of salvage, if any.

22 T4'"6 P#"+; L'#3'1'+; C1#'/

?:

The procedural aspects of third party liability claims may be briefly described as followsF& /. ;n the receipt of notice of claim from the insured, from the 3otor accident ,laims tribunal, is to make entry in the claims register including date of intimation, claim no., policy no., period, date of accident, vehicle no., date of accident, vehicle no., etc. Separate sections are mentioned in the register for fatal claims and bodily in)ury claims. 1. The matter is entrusted to an advocate. If the company has a legal department for motor third party claims, then the claim is dealt with that department.

Thais early action is necessary so that the insurers are represented at the very first hearing. 9. If the claim intimation is received from the 34,T, a letter is addressed to the insured to make certain the following informationF& The claim no. for own damage if lodged.

The %olice Station where the claim was reported indicating the number and the date of their station 'iary.

'rivers name and address.

-ame and address of the advocate if the insured has appointed one.

'etails of drivers prosecution.

?=

:.

Simultaneously, a letter is addressed to the police station asking for copies of police report or panchnama and of the statement made to them relating to the accident.

=.

4 copy of the claim form is obtained from the insured or if there is an I;wn 'amage claim already lodged, a copy is obtained from the Iown damage section and sent to the advocate along with copy of the policy.

?.

The following information is needed to determine the question of the insured and the liability under the policyF "7istence of insurance and limit of liability under the policy. 'rivers statement and statement of witnesses to the accident.

liability of

'etails of drivers prosecution, charges depositions during the proceedings and the )udgement in the criminal case. 'etails of the accident to decide negligence of parties. %ost mortem report *fatal accident+.

A.

In case of bodily in)ury, medical report is obtained indicatingF The age of claimant. is occupation.

The nature and e7tent of in)ury. ??

'uration of disability, etc.

B.

In order to consider the quantum of damages that may be

regarded as

reasonable, the following information is soughtF& *a+ Status of deceased, *b+ 3onthly income, *c+ ,ontribution to the family, *d+ !elationship with the claimant, *e+ Status of the claimant. *f+ 3edical certificate, *g+ 3edical e7penditure, *h+ 3onthly income. G. ;n the basis of the above information, the advocates opinion is obtained. 6arge claims are usually referred to solicitors. 4 written statement is then filed by the advocate depending upon the facts of the case.

?A

/H.

The insured and the driver is required to operate with the insurers advocate.

//. "ventually, the claim is decided upon the 34,T where usually, the insurers, insured, driver, and the third party along with their advocate is present. The amount awarded is paid to the third party against proper discharge.

C1#'/ S%++1%/%n+ P",$%6!"% 'n ITGI 'n # N!+ 4%11

Whenever a request is received for the settlement of claim from the client following procedure is followed by the companyF& Surveyor 4ppointment same working day. 4ll related documents of insured is handovered to him.

Surveyor visit ma7imum :B hours of notification.

%reliminary report ma7imum = working days of surveyor.

!esponse to enquiry reply in ma7imum = working days *or else reasons to delay+.

%art payment processing within 1 working days of receipt of preliminary survey report and submission of required information or documents from insured.

?B

%art payment approval in 1: hours.

2inal survey report within /H days of submission of required information or document from insured 2inal survey report within /H working days of the submission of required information or documents from insured.

This is forwarded to IT0I corporate office *3umbai+ and from there cheques are issued.

2inally, the cheques are given to client.

ITGI C1#'/ S%++1%/%n+ S+#+' +'$

FY 2CC7-C8
'uring 1HH:&H= total nos. of claims reported is ?A,:=B -o. of claims settled during this period is ?:,9/1

,ustomer satisfaction inde7 is over G/R as observed through a market survey

?G

FY 2CC8-C9
IT0Is claims department has processed more than /,9B,HHH claim Settlement ratioF G1R

This includes ma)or ,atastrophic 2loods in 0u)arat 5 3umbai

CHAPTER: 2

AH

DOCUMENTS

C1#'/ D,$!/%n+
2ollowing are the document which are required at the time of settlement of claimsF& I2 P",., #1 F,"/ II2 C,@%" n,+%

A/

III2 In+'/#+',n ,* C1#'/ IV2 C1#'/ F,"/ V2 S!"@%; R%.,"+ VI2 O+4%" 6,$!/%n+

I2 P",., #1 F,"/
The proposal form is the basis of insurance. It is so desired as to elicit all information necessary for a proper evaluation of the risk and for rating. The queries made in the form are the minimum requirement to be furnished by the proposer. It includesF %roposer name 4ddress

;ccupation

'etails of $ehicles to be insuredF& 'etails of vehicle, such as !egistration letters and -umbers, make of the vehicle, "ngine and ,hassis no., >ear of 3anufacture, Type of

A1

.ody, and Seating ,apacity for pvt. ,ars, 'ate of purchase and price paid, I'$ of the vehicle. 'etails of Insurance history for the purpose of ,ancellation, 'eclinature.

'etails of other vehicle, if owned by the proposer.

II2 C,@%" N,+%

A9

4 cover note is usually issued when the policy and the certificates of insurance cannot be immediately issued for any reasons. and it is issued only in form =1 in terms of !ule,/:1, Sub rule*/+ of the ,entral 3otor $ehicles !ules, /GBG. 4ccording to which it is unstamped document and is valid for a period of si7ty days from the date of its issue. It containsF !egistered mark and no. 3ake and cubic capacity

-ame 5 address of insured

"ffective date of commencement of insurance

"7piry date

6imitation to use

4dditional risk

Special conditions.

A:

III2 In+'/#+',n ,* C1#'/ F,"/

This form is used when loss is occurred and client comes to the office and gives the detail of him and of accident and in that form. It contains the following particularsF& ,lient name is contact no.

'ate of loss

%olicy no

$ehicle no

,ause of loss

%urpose of 4ccident !eportN ,laim 2ormF /. To establish that the policyholder is entitled to indemnity under hisNher policy, i.e. actual loss or potential cover by policy and information in report whether matches with the proposal form or not. 1. It provides sufficient information to permit the insurers to begin processing any claim.

A=

9. It enables the Insurer to take preliminary view on whether there is likely any Third party claim. :. It enables the Insurer to take a view to the severity of the potential cost of the claim.

IV2 C1#'/ F,"/

The format and the contents of the claim form differ from ,ompany to ,ompany but the forms contain question relating to the following particularsF&

A2 T4% In !"%6
The name of insured, 4ddress,

;ccupation,

%olicy no.,

'ate of payment of last premium.

This information leads to identify the policy in the insurers records, and to supplement the preliminary scrutiny.

A?

B2 T4% V%4'$1%
3ake and >ear, orse %ower or ,ubic ,apacity,

!egistered letters 5 number

This helps in checking that whether the claimant is the owner of the vehicle or is it hired to him under a hire purchase agreement. 2or a ,ommercial vehicle, the additional questions are being asked such asF !egistered 6aden Weight -ature of goods carried

C2 T4% U % ,* V%4'$1%
Is it used for social, domestic purposesS Is it used for business purposesS

Is it used hire or rewardS

Were passengers being carriedS

D2 T4% D"'@%"
-ame of the driver,

AA

4ge

4ddress of the driver,

Is driver is paid.

E2 W'+n% %
-ame and address of all witnesses of 4ccident

i. %assengers in the car ii. Independent witnesses iii. If his name not taken then reasons for it iv. -ame address of police constable witness. 2ull e7tent of personal in)uries or damage to property.

F2 InD!"; +, D"'@%"
The question readsF& CWas any in)ury sustained by your driver or occupants of your motor vehicle or by any third partyS If so, then state full e7tent. If any in)ured person has been removed to the hospital or medically attended to, give name and address of the ospital or 'octor.D AB

G2 D#/#(% +, V%4'$1%
2ull particulars of damage "stimated cost of repairs

4ddress where damaged vehicle may be inspected.

4lso, a brief particular about the accident is to be mentioned and it is to be attached with the signature of insured.

V2 S!"@%; R%.,"+
The survey report would amplify the information obtained in the claim form and also incorporate additional information. There is no standardi(ed form for survey report, but the following information is e7pected in a survey report F&

A2 A$$'6%n+

AG

 'ate of occurrence Time

%lace

,ause

Special features

%hotographs

B2 A % /%n+ ,* L,
6abour %arts less depreciation

'eductible, if any

Salvage.

C2 N%+ L'#3'1'+; ,* In !"%"

BH

 6abour P %arts *less depreciation+ #'eductibleN salvage !s

D2 G%n%"#1 O3 %"@#+',n
These would relate to compliance with policy conditions, warranties, etc. this would be followed by surveyors recommendation regarding the payment of the claim. If adverse features are involved, the surveyor would leave the settlement question to the insurers, giving the reasons.

VI2 O+4%" D,$!/%n+

B/

The other document required for proceeding the claim are F& /+ 1+ 9+ :+ =+ ?+ A+ B+ 'riving 6icense !egistration ,ertificate .ook 2itness ,ertificate %ermit %olice report 2inal bill from repairer Satisfaction note from the insured !eceipted bill from the repairer, if any.

CHAPTER: 3
B1

Losses Covere U! er C"#$% Se&&"e%e!&

B9

PROCESS OF SETTLING LOSSES

,laims under 3otor %olicies can be of three types namelyF C,n +"!$+'@% T,+#1 1, ) L, % ,n R%.#'" 3# ' #n6 T4'"6 P#"+; C1#'/ .

LOSSES ON REPAIR BASIS

Whenever a surveyor finds that the vehicle is either beyond repairs or the repairs are not an economic propositions, he negotiates with the insured to assess the loss on the total loss basis # for a reasonable sum representing the market value of the vehicle immediately prior to loss. If the market value is more than the insured value, the settlement will be brought about for the settlement value. The insured will be paid in cash and the insurers will take over the salvage of the damaged vehicle which will thereafter be disposed off for their own benefit calling tenders through advertisement in the newspaper. owever, before the actual payment is made to the insured, the insurers will collect from him the !egistration and Ta7ation books, ignition keys and the bank T.;. and T.T.;. forms duly signed by the insured, so that the salvage can be transferred in the name of the salvage buyer. Total loss can also arise due to the theft of the vehicle and is remaining untraced by the police authorities till the end. These copies have to be supported by a copy of 2.I.! lodged with the police immediately after the theft has been detected. %olice authority B:

register the complaint allotting in a number of the entry made in the Station diary. This number which is usually known as S'" or ,.!. -o. has to be quoted by the insured in the claim intimation to the insurers. The police keep the investigation going until the vehicle is traced and delivered to its owner. owever, if they do not succeed in recovering the vehicle after a period of say, 9&: months, they file away a case is certifying that the case is classified as true but undetected. This certificate is essential before a total loss following theft is settled by the insurers. The document to be submitted by the insured will be the same as those described above. If the !., book and the ta7ation certificate are also stolen along with the vehicle, it will be necessary for the insured to obtain duplicate ones from the !egistering 4uthority and thereafter deposit them with the insurers. The only additional document will be a letter addressed by the insured to the !.T.; informing about the loss of the vehicle due to theft and filing of a -on&<ser 2orm so that he is no made liable to pay the ta7es. 2or arriving at the market value of untraced vehicles, insurers take the opinion of 1&9 automobiles surveyors after giving them necessary information. If three surveyors indicate three different figures, the average amount is worked out. ,laims on repair basis also arises when the stolen vehicles are recovered are recovered in damaged condition.

B=

4lso, in case of ,ommercial $ehicles, particularly when goods trucks meet with serious accident in remote parts on the highwayK it is usual practice for insurers to arrange for what is known as a CSpot SurveyD. This consists of noting the vehicle at the site of the accident in Ias is, where is condition and noting down the damages sustained by it. The final survey is carried out when the vehicle is brought to the repairs garage. The spot survey help to establish the e7tent of damage caused by the accident so that it is not e7aggerated by the claimant after the vehicle reaches the place of repair.

B?

TOTAL LOSS ATL< AND CONSTRUCTIVE TOTAL LOSS ACTL< SETTLEMENT

Insureds 'eclared $alue is deemed to be the CS<3 I-S<!"'D which will be fi7ed at the commencement of each period for each insured vehicle. The I'$ of the vehicle is to be fi7ed on the basis of manufacturers listed selling price of the brand and model as the vehicle proposed for the insurance at the commencement of the insurance N renewal and ad)usted for depreciation as per specified in the Tariff. The I'$ of the side car*s+ and of accessories, if any fitted to the vehicle but not included in the manufacturers listed price of the vehicle is also likewise fi7ed. The schedule of agewise depreciation specified in Tariff, is applicable for the purpose of the T6 N ,T6 claims only. 4 vehicle will be considered to be a ,T6, where aggregate cost of retrieval and Nor repair of the vehicle, sub)ect to terms and condition of the policy e7ceeds A=R of the I'$ less the value of wreck. I'$ shall be treated as market value throughout the policy period without any further depreciation for the purpose of Total 6oss 5 ,T6 claims.

BA

2or the purpose of T6N ,T6 claim settlement this I'$ will not change the during the currency of the policy period. It is clearly understood that the liability of the insurer shall in no case e7ceed the I'$ as specified in policy schedule less the value of the wreck, in Ias is where is condition.

BB

CASH LOSS SETTLEMENT

<nder certain circumstances, insurers are forced to settle Total loss claim without claiming the salvage or reimbursed the insured with his repair bill without submission of repairs bill. These types of settlement are in nature of compromise mode of settlement and are known as C,ash 6ossD settlement. .oth the parties to the insurance contract to an arrangement whereby the insured agrees to accept a sum which is lower than the assessed amount by, say 1=&9HR and the insurer agrees to pay it in cash without insisting that the repairs will be carried out. This mode of settlement is also adopted when the claim is assessed for total loss. 4lso when an insured purchase spare parts from the black market and is not able to produce the bill then insurer settles his loss by cash without insisting for the bill.

BG

PART: I'

LEARNING FROM SUMMER TRAINING

GH

A..1'$#+',n ,* S0'11 L%#"n+ #+ NSB

3y college -S. has taught me various skills likeF 6ife skills 3arketing skills

2inancing skills

<nconventional working hours

!ecruiting skills

uman resource management

4ll these skills helped me to tackle the problems while working in IT0I, like while dealing with the clients, playing with the claim numbers, etc.

G/

W4#+ I D'6
Inwarding of cover note Telecalling

.illing

,heques dispatch

!egistering claim intimation in software *polisy :HH+

Solving clients queries

3aintaining 'atabase

<nderstanding motor policies of two wheeler, four wheelers and commercial vehicles of IT0I.

G1

 .ack office work

CAREER PATH
4s far as question of career path is concerned now I can say that I am really interested for making a career in insurance sector. The reason is that this industry offers a great variety of )obs. 3oreover, I think there is a huge scope for new talent in insurance research field. In this field one need to keep abreast of new technology, ahead of general insurance and also it is a booming sector nowadays.

G9

FUTURE LEARNING
4s far as future learning is concerned this pro)ect has generated sufficient interest within me to acquire thorough knowledge in insurance sector. 2rom the very first day of my life at -S., I had planned to take up 2inance as my speciali(ation and I will still go for that but now I am sure to study insurance as my minor sub)ect. The reason is very simple I have felt the work very e7citing, dynamic and challenging. In addition to this I am planning to acquire certifications like 6icentiate, 4ssociate, and 2ellowship

G:

from Insurance Institute of India. These will boost my learning in insurance domain and can launch my career in a different orbit.

P"#$+'$#1 L%#"n'n( In ITGI:

PART & I P"%/'!/ C#1$!1#+',n:

G!% +',nF $alue of a new two wheeler O !s.9A, HHHN&

0eographical 4rea of ;perationF Tone .

G=

.elow = years ,ubic ,apacityF up to A= ,,

S,1!+',nF If the cost of a new two wheeler is !s. 9A,HHHN&, than first of all =R will be

deducted. =N/HHU9A,HHHO/B=HN& 9AHHH&/B=HHO9=,/=HN& The amount !s.9=, /=H will be considered as I'$ *Insured 'eclared $alue+. -ow as per the table according to the geographical (one, cubic capacity, Tone the rate is /.?A?R. !s.9=, /=HV /.?A?RO =BGN&, i.e. ;wn 'amage. Third %arty 6iability is fi7ed as per the rules, i.e. !s 9HHN& as per the two wheeler. With this, %ersonal 4ccident is also fi7ed i.e. !s. =HN&. 4fter adding ;.'., T.%., %.4., it counts as G9GN&. -ow service ta7 is also going to be charged, i.e. /1.9?R. G9G P //?O !s. /H==N& comes as the total premium for a two wheeler as per the above question.

G?

If the policy is further renewed, so it would be as per the table, for the first renewal i.e./=R and if there is no claim than bonus is being granted as per the table.

PART & II

T4% C1#'/ In+'/#+',n

If a claim arises, than first of all the insured will intimate the Insurer by providing hisN her policy no. such as 9BG/B:/A. 4t that time the confirmation of policy is being checked by the Insured in the Software.

GA

4t that moment the date of loss is also required such as /=N=NHB, and the cause should be pro7imate. The claim form is being is submitted by the Insured within seven days and with that the estimate from !epairers for verification is also being submitted. The receipt of spot survey is also submitted after assessing the damages, and a 2I! is also being obtained if in)uries or death is being reported. The claim is not being paid as per the Insured but it is being assessed by the surveyor. The surveyor maintains a report, under which the depreciation is being charged as per the consistency and quality of the parts of the vehicle. Such as forF /. 2ibreN !ubberF =HR 1. 3etal F/HHR 9. 'entingF 2ull :. 6abor ,hargesF full

4fter the completion of repairs, submission of repair bills, checking of bills and settlement of claim is being done. The data is being stored in the software.

GB

BIBLIOGRAPHY
BOOKSF
andbook on 3otor Insurance

*.y Insurance Institute of India+ GG

INTERNET:
www.iifcotokio.co.in www.google.com

www.wikipedia.com

www.insuranceindia.com

www.encyclopedia.com

4 special thanks to 4bhishek Sir for guiding me in my pro)ect report and for providing me the relevant data that I required from time to time.

/HH

ANNEXURES

F,"/#+ ,* D,$!/%n+ =4'$4 #"% ! %6 *," +4% .!"., % ,* $1#'/ 'n ITGI:
/H/

 P",., #1 F,"/ C,@%" n,+% In+'/#+',n ,* C1#'/ C1#'/ F,"/ S!"@%; R%.,"+ M,+," T#"'** C4#"+

/H1