1273522, BHAVNA DEVI,F1,Q-14, COMMENT ON GROWTH OF SPECIFIC INSURANCE SEGMENTS SUCH AS MOTOR INSURANCE.

INTRODUCTION :

Insurance may be described as a financial device or contract to mitigate or eliminate risk of loss to life and property. Insurance is a form of risk management primarily used to hedge against the risk of a contingent or uncertain loss. Insurance is a collective bearing of risk. Insurance spreads the risks and losses of few people among  a large number of people as people  prefer small fixed liability instead of big uncertain and changing liability. Insurance is a scheme of economic co-operation by which members of the community share  the unavoidable risks.

INSURANCE SEGMENTS :

·         Marine Insurance

·         Fire Insurance

·         Motor Insurance

·         Health Insurance

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The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business Act, 1972, IRDA Act, 1999 and other related Acts. With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per cent to the country’s GDP . It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation “Malhotra Committee” was constituted by the government in 1993 to examine the various aspects of the industry.

DISCUSSION :

High-end cars including cars of premier segment will drive growth in the motor insurance segment, said ICICI Lombard General Insurance in its outlook for 2014 for the Health and Motor insurance segments.  The company said that in motor insurance, there is an increase in liability premium by 12% and also been a nominal growth in two-wheeler segment.It said that launch of new add-ons which contributed to the overall increase in the OD premium.
With respect to the products in the segment, ICICI Lombard said that the motor category could see demand for covers like engine protect and voluntary deductible. Engine protect covers consequential losses, such as damage to engine arising out insufficient lubricants, water lock among others, while voluntary deductible provides discount on premium for a higher deductible chosen by the customer.
On the health insurance front, it was seen that disease pattern is shifting towards non-communicable diseases.


CONCLUSION :

Insurance industry segments in India has now been through a high growth and more recent  moderation. The next wave of growth will be of different nature and complexity, led by players who change the market dynamics through innovation. With a decade of experience and learning about customer behavior and business economics, Indian insurers are well-placed to select and diffuse innovative ideas. However, this would require that insurers bring about fundamental difference in mindset on how they perceive the role of innovation in achieving profitable growth. The insurers will need to align the people strategies to create a culture of generating new ideas and implementing those using optimal resources.