Introduction
Insurance is the equitable transfer of the risk of a
loss, from one entity to another in exchange for payment. It is a form of risk management
primarily used to hedge
against the risk of a contingent, uncertain loss.
Reasons for slow growth of insurance:
1)
Ineffective distribution networks
2)
poor marketing strategies
3)
low consumer
4)
awareness
5)
lack of competition
6)
govt. monopoly
Discussion:
Life insurers monitor and
manage performance on an ongoing basis but as life insurance policies remain in
force for many years and sometimes even decades, the ultimate profitability of
the underwritten business is only known in later years when all the policy
obligations are fulfilled.
The attractiveness of India has always
been the sheer size of the market and finding the right distribution model to
address the different target segments is of grave importance. As sale of new
policies and increasing the penetration of life insurance is one of the levers
of creating profits, the first wave of insurance companies concentrated on
building a distribution model to enable
Conclusion
and Policy Implications
Solvency of a life
insurer is heavily dependent on the
returns received from
total investible funds and the
interest rate
• The need for
efficient investment decision and strictness
from the part of the
regulator with the insurers’
investment guidelines
• The non-life
insurers’ solvency is affected by the interest
rate ... Are they
more into short term investments?
• One of the
investment performance predictor, investment
yield have the
expected sign and strongly suggests that
returns available
from total investments or investment
decisions contributes
to overall non-life insurer solvency
status
Good Attempt!!!!! :)
ReplyDelete