Incudes Key Notes.

Insurance business in India is primarily considered under two major categories namely life insurance and general insurance (also known as non-life insurance) We live and express ourselves through our possessions. We also derive material value from our homes and other possessions. These things fulfil our needs, act as a source of comfort and satisfaction and also enable us to earn money. However, human life has greater value. We treasure them all for what they are and what they can do for us. In the language of economics we call them assets. These assets can be destroyed or their values affected by various unforeseen events. Life can be ravaged or cut short by disease or death. Our properties can be destroyed by fires or earthquakes or they can simply be taken away by burglars. Even if these events do not occur, the fact remains that we are exposed to the chance of their happening. This situation of uncertainty about the future can make it difficult to plan and conduct any human enterprise. However, while the future is uncertain, it is possible to predict what will happen to a reasonable extent. Fortunately, only a few of us suffer a certain type of loss at the same point of time. These two aspects - that loss affects only a few and that its chance of occurrence can be predicted on the basis of past experience - have enabled mankind to create a wonderful institution called insurance. It provides a mechanism by which the economic losses that one would suffer as a result of an event can be shared by all members of a group exposed to the same event. Just as small streams and rivulets go to make the mighty ocean, the small contributions of numerous individuals in a group get collected and pooled into a common fund. The unfortunate few, who suffer a loss, get compensated from this fund created by the contributions of many. In this book, we shall get introduced to the insurance we will study the markets – both domestic and international, the documentation and processes, individual classes of business, underwriting, rating, claims and insurance accounting. We will have an insight into what it is all about and how it works in various contexts.