Insurance- Introduction
Author: Aneesh Garg Posted on 09 May 2019 13:48:19
Risk and uncertainty are associated with life in some of the other ways. These risks and uncertainties are increasing daily because of the increment in the speed of life. For example, if you drench yourself in rain, than you may fall sick. There would be a risk of illness. Due to the rain, short circuit of electricity may happen. There may be a risk of electronic breakdown of TV as well as other domestic appliances. There is a risk of theft of your car which is parked in the garage and there is also a risk of accident while crossing the road. These all uncertainties can cost an individual the attractive sum which eventually will prompt the misfortune. Whenever there is uncertainty, risk and insecurity always exist. It is to provide against risk and insecurity that Insurance came into existence. The main concept underlying insurance is the pooling of risks.
Let us now understand the real meaning of Insurance.
Insurance is a contract between two parties whereby one party (insurer) agrees to undertake the risk of another in return for the payment of a specified premium and promises to pay a fixed sum of money to the other party (insured) on happening of an uncertain event which comprises of loss, illness, damage or death.
Insurance is the responsibility and the simplest way of convincing yourself that you care for your loved ones.
During the ancient days, various forms of insurance were widespread. Of them, marine insurance is the oldest form of insurance. The fire insurance got momentum when the fire losses were horrible in England. After that, Life insurance made its first appearance at the same time. Since then, several insurance companies developed and are developing speedily all over the country.
The Insurance market is simply the market place in which companies are involved in buying and selling of insurance.
SWOT Analysis of Insurance Market
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Strengths:
- Introduction of New Products
- Premium rates are increasing and so commissions.
- Provides security against the sudden losses.
- Insurance not only provides protection against risks but it is also a good form of investment by developing a habit of saving money by paying the premium.
- Helped the development of international trade on a large scale. For example: Marine insurance.
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Weakness:
- Lack of awareness among individual in rural areas
- Dominance of the public sector
- Often slow to respond to changing needs
- Promotion as a barrier
- Low penetration level as compared to the global average
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Opportunities:
- Strong future growth
- Client’s increasing need for an “insurance consultant” can open new ways to provide service to the clients and generate income.
- Capital formation and economic development of the nation.
- Push of digitization with India having 430 million internet users
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Threat:
- Individual don’t buy the insurance policy
- Insurance frauds
- Changes in nature climate
- Political environment
- New entrants are bringing focused and superior positions.
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To be continued…..
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