General Insurance Corporation Of India
The General insurance business in India started with the establishment of Triton Insurance Company Limited in 1850 at Calcutta .In 1907, the first company, The Mercantile Insurance Ltd. Was set up to transact all classes of general insurance business. General Insurance Council, a wing of the Insurance Association of India in 1957, framed a code of conduct for ensuring fair conduct and sound business practices. In 1968 the Insurance Act was amended to regulate investments and to set minimum solvency margins. In the same year the Tariff Advisory Committee was also set up.
In 1972, The General Insurance Business (Nationalisation) Act was passed to nationalise the general insurance business in India with effect from 1st January 1973. For these 107 insurers was amalgamated and grouped into four company’s viz., the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. And the United India Insurance Company Ltd. General Insurance Corporation of India was incorporated as a company.
Current Scenario In new economic policies formulated since 1991, globalisation, privatisation and liberalisation have become new buzzwords. Under new economic policies, many economic and financial reforms took place. Like liberalising licensing policy, attracting FDI, allowing foreign equity in public sector undertakings. The financial reforms restructured banking sector by allowing entry of new private and foreign banks. They also allowed private sector and commercial banks in mutual funds investment business, rationalising the EXIM policy and so on.
General Insurance can be divided into property and liability form of insurance.
Under the property insurance property of a person is insured against a certain specified risks. The risk may be fire or marine perils, theft of property or goods, damage to property at accident. Examples of this are:
Marine Insurance
Marine insurance provides protection against loss of marine perils. The marine perils are collision with rock, or ship attacks by enemies, fire and capture by pirates etc. These perils cause damage, destruction or disappearance of the ship and cargo and non-payment of freight. So, marine insurance insures ship (Hull), cargo and freight. Types of policies are:
Fire Insurance
Fire insurance covers risks of fire. In the absence of fire insurance, the fire waste will increase not only to the individual but to the society as well. With the help of fire insurance, the losses, arising due to fire are compensated and the society is not losing much. The individual is protected from such losses and his property or business or industry will remain in the same position in which it was before the loss. The fire insurance does not protect only losses but it provides certain consequential losses also. Policies available in this insurance are:
Miscellaneous Insurance
The property, goods, machine, furniture, automobile, valuable goods etc., can be insured against the damage or destruction due to accident or disappearance due to theft. There are different forms of insurances for each type of the said property whereby not only property insurance exists but liability insurance and personal injuries are also insured. Miscellaneous insurance covers:
The general insurance also includes liability insurance whereby the insurer is liable to pay the damage of property or to compensate the loss of personal injury or death. The examples of this type of insurance are fidelity insurance, automobile insurance and machine insurance. Examples are:
- Third party insurance
Bajaj Allianz General Insurance Company Limited
It is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. The company registered on May 2, 2001 to conduct General Insurance business (including Health Insurance business) in India. The company has an authorised and paid up capital of Rs.110 Crores and has a network of 31 offices across the country.
ICICI Lombard General Insurance Company Limited
It is a joint venture between ICICI Bank Limited India’s second largest bank and Lombard Canada Limited, one of the oldest property and casualty insurance companies in Canada. ICICI Lombard offers a wide range of retail and corporate general insurance customised products. The company has over 100 branches across the country.
IFFCO-TOKIO General Insurance Company Limited
It is a joint venture between IFFCO and The Tokio Marine and Fire Insurance Company Limited, Japan Krishak Bharati Cooperative Limited (KRIBHCO), and Indian Potash contributing 49 percent, 26 percent and 5 percent respectively to its Rs.100 Crores capital. After getting the licence the company started operations and is a leading private General Insurance Company in India in launching innovative insurance cover for farmers called the “Sankat Haran Policy” It is operating from 20 cities in India.
National Insurance Company Limited
It was incorporated in 1906 to carry out general insurance business and nationalised in 1972.In the same year, 22 foreign and 11 Indian Insurance Companies were amalgamated with National Insurance Company Limited, as a subsidiary company of General Insurance Corporation of India. In 2002, 25 with the passage of Insurance amendment Bill (2002), National Insurance Company has been delinked from GIC and has been functioning as an independent company. Apart from domestic insurance business the company also undertakes reinsurance and foreign operations.
New India Assurance Company Limited
The New India Assurance Company was incorporated on July 23, 1919 and commenced business from October 14, 1919. In 1972 the Government of India took over the management of the company along with allsite other non-life insurers in the country. New India Assurance was subsequently reconstituted taking over 23 companies. In2002, with the passage of Insurance amendment Bill, New India Assurance Company Limited has been delinked from GIC and has been functioning as an independent company.
Oriental Insurance Company Limited
The Oriental Insurance Company Limited is a public sector company and is one of the four subsidiary companies of the General Insurance Corporation of India. In 1956, Oriental became a subsidiary of the Life Insurance Corporation of India. On May 13, 1971 Government of India took over the management of all general insurance companies in India and nationalised the Oriental Fire and General Insurance Company under the General Insurance Corporation of India as one of the four subsidiaries. In 2002, with the passage of Insurance amendment Bill, the Oriental Insurance Company Limited has been delinked from GIC and has been functioning as an independent company.
United India Insurance Company Limited
United India Insurance is one of the four subsidiaries of the General Insurance Company carrying on general insurance business in India. In 2002, with the passage of Insurance amendment Bill (2002), United India Insurance has been delinked from GIC and has been functioning as an independent company.
Tata AIG General Insurance Company Limited
Tata AIG General Insurance Company Ltd. And Tata AIG Life Insurance Company Ltd. (collectively “Tata AIG”) are joint venture companies between the Tata group and American International Group Inc. (AIG), the leading U.S. based international insurance and financial services organisation. It has a capital of Rs.125 Crores out of which 74 percent has been brought in by Tata Sons and the remaining 26 percent by American partner. Tata AIG General Insurance Company Limited claims to be the first Indian insurance company to offer a comprehensive policy to cover various risks in the IT sector.
Royal Sundaram General Insurance Company Limited
The joint venture between Royal and Sun Alliance Insurance and Sundaram Finance Limited started its operation from March 2001. Royal and Sun Alliance is one of the world’s leading international insurance companies. The Sun was established in 1710 and is the oldest insurance company in existence still trading under its original name. The Alliance was founded in 1824 and the Royal in 1845.
Cholamandalam General Insurance Company Limited
It is promoted by Chennai based Murugappa Group. The company is founded with Rs.105 Crores out of which 75 percent is being held by Tube Investment, a Murugappa group company. While Cholamandalam Investment and Finance Company Limited holds 15 percent stake and the rest is by other privately held Murugappa companies with 5 percent stake each.
Reliance General Insurance Company Limited
Reliance group has announced its plans to enter the Indian insurance sector – both in the life and general insurance businesses. Reliance Industries plans to bring in around Rs.300 Crores into its insurance venture through its financial arm Reliance Capital Limited. The two companies will have an initial authorised capital of Rs.200 Crores each. This is the first Indian company without a foreign tie-up.
HDFC ERGO General Insurance Limited
HDFC, India’s premier financial services company and ERGO Corporation, leading global non-life insurer, entered into a joint venture agreement for non-life insurance in 2002. HDFC holds 74 percent and ERGO 26 percent in the joint venture company, HDFC ERGO General Insurance Limited with initial capital of Rs.100 Crores.