Category Archives: Insurance

Premium Rates for Motor Insurance Cover for FY 2019-20

Premium Rates for Motor Insurance Cover for FY 2019-20 (WEF. 16/06/2019)

Disclaimer: Its Ready Reckoner Indian Motor tariff Rates as per IRDIANL/NL/NTFN/MOTP/91/06/2018

For Details Refer IRDA Website –
https://www.irdai.gov.in/ADMINCMS/cms/frmGeneral_Layout.aspx?page=PageNo3827&flag=1

or Call Toll Free No. 155255 (or) 1800 4254 732

It’s Mandatory for Insurance Coverage – 3 Years For Cars & 5 Years For Two Wheelers

With the Supreme Court refusing to extend the deadline, all new vehicles sold from 1st September 2018, should have mandatory third-party insurance coverage

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While considering a public interest litigation seeking guidelines for improving road safety filed by S. Rajaseekaran, Chairman & Head of Orthopedic Department, Ganga Hospital, Coimbatore, the bench comprising of Justice Madan B. Lokur and Justice Deepak Gupta, on 20th July, had ordered that third-party insurance coverage of three years for cars and five years for two-wheelers should be mandatory for all vehicles sold from September 1.

The direction was issued by the bench on the basis of decisions taken by the Supreme Court Committee on Road Safety, headed by former SC judge Justice K. S Radhakrishnan. The bench noted that in a meeting held by Committee on 26th March 2018, it was recorded that there are about 18 crore vehicles plying on the road and only about 6 crore vehicles have the mandatory third-party cover, which meant that 66% of the vehicles were plying without third party insurance.

The applications filed by General Insurance Council to extend the deadline were listed on 31st August. The bench dismissed the applications refusing to extend the deadline.

IRDA Circular

  • The Insurance Regulatory and Development Authority of India has issued a circular complying with the order of the top court. It reads:
  • Offer only three-year Motor Third-Party Insurance covers for new cars and five-year motor third party insurance policies for new two-wheelers.
  • The premium has to be collected for the entire term (three years or five years as the case may be) at the time of sale of insurance but would be recognised on a yearly basis. In other words, it shall be recognised for each year as 1/nof total premium as Gross Written Premium during that year where ‘n’ is the term of the policy. Thus, the premium for the year shall only be recognised as income and the remaining premium shall be treated as “Premium Deposit” or “Advance Premium”.
  • Currently, as far as Motor Own Damage Insurance is concerned, Package Policies (i.e. comprehensive covers) are available wherein two components are covered—Motor Third Party Liability and Motor Own Damage cover. After the introduction of long-term Motor Third-Party Insurance for new cars and new two-wheelers, an insured may be given the following two options:
  • Long-term Package cover offering both Motor Third-Party Insurance and Own Damage insurance for three years or five years as the case may be OR a bundled cover with a three-year or five-year term (as applicable) for the third party component and a one-year term for the Own Damage.Adobe_Post_20180902_171607.jpg
  • No Motor Third-Party Insurance may be cancelled by either the insurer or the insured except on the following grounds:
    Double Insurance
  • Vehicle not in use anymore because of Total Loss or Constructive Total Loss
    In the event the vehicle is sold and/or transferred

From a consumer’s perspective, long-term premium payments would substantially increase the initial outgo on purchase of new vehicles. Prima facie, the order will increase insurance penetration and will benefit insurance players. While it is still early days, we outline the dynamics of the third party motor insurance industry and how this move will impact growth and profitability of the insurers.

 

What is Insurance Underwriting? (General Insurance)

What is Insurance Underwriting?

Let’s take a look at the concept of underwriting.

“Underwriting is a core insurance function. It is a methodological approach to ensure that the insurance business is conducted on sound lines and that risks are evaluated for loss potential on both frequency and severity over a period of time.”

Underwriting is the process of:

  • Determining the level of risk presented by a proposer
  • Deciding whether to accept the proposal
  • Deciding the terms and price of the accepted proposal

Each underwriting decision involves balancing the insurer’s desire to earn premium often in competitive conditions with margins required to pay claims and expenses and also to ensure compliance with regulatory requirements. Underwriting is essential in all forms of insurance. For example, an automobile insurer will charge higher rates to young drivers, old models of vehicles, or may refuse coverage to drivers with a history of accidents. The underwriter may offer discounts for vehicles fitted with anti-theft devices. Fire insurers may inspect properties, offer reduced premiums for safety features such as sprinkler systems, and so on.

Understanding Risk Sharing

Understanding the concept of risk sharing or pooling will make it easier for you to understand the role of underwriting and risk classification in insurance.

All risks are not equal. For example, in the field of property and casualty insurance, wooden structures are at a greater risk of burning than stone structures. Therefore, a higher premium is required to insure a wooden structure. The same concept applies to life insurance. An individual with a serious illness such as cancer or diabetes is at a greater risk of premature death than an individual without the illness.

Since all risks are not equal, it would be inequitable to make all insured contribute the same amount. Thus, underwriting attempts to classify risks based upon their characteristics so that each insured in a specific class pays a premium in proportion to the risk involved.

The issue of fairness to the other participants is at the core of this risk classification (underwriting) process. When viewed from a perspective of fairness, proper risk classification becomes a central obligation of insurers to the policyholders who participate in their risk pools. This applies for all risks – life, assets or earnings.

Definition of Combined Ratio for Insurance Business

“Combined Ratio’

A measure of profitability used by an insurance company to indicate how well it is performing in its daily operations.

The combined ratio is defined as

The sum of incurred losses and operating expenses measured as a percentage of earned premium.

The combined ratio is comprised of the claims ratio and the expense ratio.

The claims ratio is claims owed as a percentage of revenue earned from premiums.

The expense ratio is operating costs as a percentage of revenue earned from premiums.

The combined ratio is calculated by taking the sum of incurred losses and expenses and then dividing them by earned premium.

It is a measure of the profitability of the insurer. (The ratio is typically expressed as a percentage.)

The combined ratio shows the underwriting profitability of the insurer. A ratio below 100% indicates that the company is making underwriting profit while a ratio above 100% means that it is paying out more money in claims that it is receiving from premiums.

‘Combined Ratio Calculated as:

“Combined Ratio”= “Incurred Loses + Expanses” /”Earned Premium”

 

Combined Ratio

Combined Ratio

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Eat That Frog : Six “P” formula

You may have heard of the six “P” formula. It says,

“Proper Prior Planning Prevents Poor Performance.”

I have found a simple truth. The ability to concentrate single-mindedly on your most important task, to do it well and to finish it completely, is the key to great success, achievement, respect, status and happiness in life.

(Moon+ Reader Pro v2.3.2, Eat That Frog)

Posted from WordPress for Android By Shashi Kumar Aansoo

Create a total life

So, how do you create a total life? Consider the following five key elements

Practice self-development

Self-development is a major theme throughout Drucker’s writings and teachings. “What matters,” he said, “is that the knowledge worker, by the time he or she reaches middle age, has developed and nourished a human being rather than a tax accountant or a hydraulic engineer.” Think about your life, both as it is now and where you’d like to be. Consider not just your work, but also your family, friends, interests, activities, and pursuits. Assess what’s working, what’s not, and what you might want to add or subtract to create more satisfaction and fulfillment.

Identify and develop your unique strengths

The concept of core competencies may have been created for organizations, but today it applies to individuals as well. Drucker urged people to consciously articulate their own strengths. Consider what’s unique about what you do, and in what areas you excel and contribute the most, both at work and outside of work. Focus on those strengths—your own core competencies—and find new ways to value and cultivate them. Odds are you can apply them to a variety of jobs, volunteer positions, and more.

Create a parallel or second career

Drucker said, “The purpose of the work on making the future is not to decide what should be done tomorrow, but what should be done today to have a tomorrow.” One unique idea he advocated was creating a “parallel career” in areas such as teaching, writing, or working in nonprofit organizations. He also encouraged developing a second career, often by doing similar work in a significantly different setting—a lawyer, for instance, might move from a traditional law firm to a legal nonprofit dedicated to a personally meaningful cause. While still in your main job, start thinking about your own possibilities for a parallel or second career. Consider how to match your values, experience, and education, and what shifts you might need to make in your life to support such changes.

Exercise your generosity

An essential part of living in more than one world, Drucker believed, is displaying a sense of generosity. Here, he said, “…everybody is a leader, everybody is responsible, everybody acts.” Sharing your time and talents by getting involved in volunteerism, social entrepreneurship, and mentoring not only provide opportunities to contribute, but also offer personal benefits, from broadening and deepening your life experience to expanding your circle of friends and colleagues. Think about what happens outside your workplace—in other industries, professions, and walks of life—and consider ways you can exercise your own generosity.

Teach and learn

Education plays a key role in Drucker’s vision of a strong, functioning society. He believed that knowledge workers should never stop learning. However, it’s up to them, he said, to incorporate continuous learning as a natural part of daily life— deciding what and how they’d like to learn and determining how they’ll build in the time. Consider your own priorities for learning, as well as how you learn best—taking classes, reading articles and books, asking or observing others, etc. You might also want to teach. As Drucker acknowledged, “No one learns as much as the person who must teach his subject.”

Start Where You Are

Drucker’s tenets can help you create a more satisfying and meaningful personal life and career. Here are seven tips for getting started:

Focus on achievement—not money

Drucker drew an important distinction between achievement and money. He suggested focusing on achievement and paying attention to how your successes, on and off the job, benefit both you and others. That doesn’t mean you shouldn’t or won’t make money, but that the pursuit of money ought to play a subordinate role.

Make time for thinking

Thinking is hard work, and in our fast-paced society, said Drucker, it is sorely devalued. The point, he urged, is to break from the daily grind and think about where you are and where you’re going. You might not have the desire or means

for Drucker’s suggested “week in the wilderness,” but surely you can carve out

an hour now and then for self-reflection. Take a walk, practice yoga or meditation, or enjoy nature.

Practice “systematic abandonment”

“People are effective because they say no…because they say, ‘This isn’t for me,’” declared Drucker. Practice what he called “systematic abandonment”—stepping back, at regular intervals, to determine which of your present activities can be scaled back or eliminated. Only then can you make way for something more fruitful, such as teaching, learning, or volunteering.

Volunteer your time and talent

Drucker saw volunteerism as essential to the smooth functioning of society, as well as a satisfying way of ensuring that work doesn’t consume your life. Today, there are hundreds of volunteering opportunities to choose from. Drucker’s recommendation was simple: Find an organization and cause you believe in—and get to work!

Become a mentor

Mentorship may be broader than just showing someone the ropes in a group or organization. It can include wide-ranging career and life advice, and as Drucker said, provide big benefits not only to the “mentee” but also to the mentor. If you’ve been guided by mentors of your own, pay it forward by mentoring others. If not, look for opportunities to both mentor and be mentored.

Learn the art of leisure

Drucker observed that “loafing” is easy, but “leisure” is difficult. As important as work is, avoid allowing it to be your only source of fulfillment. Find some outside interests; focus on things that may bring you pleasure, satisfaction, and a heightened sense of self-worth.

Be the CEO of your own life

Drucker saw self-management as an ongoing discipline, requiring self-knowledge, introspection, and personal responsibility. “In effect,” he said, “managing oneself demands that each knowledge worker think and behave like a chief executive officer.” Start now to think of yourself as the CEO of your own life and career. Take accountability for your decisions and actions. Know who you are, what is important to you, and how you will contribute at work and in the world.



Finally, take a deep breath and don’t expect everything to happen at once. Start

where you are and move towards your total life, one step at a time.

Thanks for visiting My Blog. Keep Visiting and give your Valuable Comments. Regards, Shashi Kumar Copyright © All rights reserved. http://shashiaansoo.blogspot.com Be Nothing Less Than The Best ™

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