INTODUCTION TO INSURANCE
at the end of this lession the student shoul have understood
1. the basic concepts relation to insurance business.
2. The meaning s of the worlds peril and risk.
3. Different kinds of rishs
4. the ways of managing risks.
5. Importance of insurance in society and economy.
WHAT IS INSURANCE :-
1. The Business of insurance is related to the protection of the economic values of assets. Every asset has a velue would have been created through the efforts of the owner. The asset is valuable to the owner, ecause it meets some ot his needs. The benefit may be an income or in some other form. In the case of a factory or a cow, the product generated by it is sold and income is generated. In the case of a motor cas, it provides comfort and convenience in transportation. There is no direct income. Both are assets and provide benifits.
2. Every asset is expected to last for a certain period ot ththim during which it will provide the benefits. After that the benefit may not be available. There is a life time for a machine in a factory or a cor or a motor car. none of them will last for ever. The owner is aware of this and he can so manage his affairs that by the end of that perid or life time. a substitue is made available. Thus he makes sure that the benefit is not lost. However, the asset may get lost earlier. An accident or some other unfortunate event may destroy is or make it incapable or giving the benefits. An epidemic benefits therfrom, would be deprived ot the benefits. the planned substitue would not have been ready . There is an adverse or unplsasant situation. Insurance is a mechanism that hels to reduce the effict of such adverse situation. It promises to pay to the owner or beneficiary ot hte asset a certain sum if the loss occur.
3. Insurance has been known to exist in some form or other since 3000 bc. The chinese traders , traveling treacherous river rapids would distribute their goods among serveral vessels so that the loss from any one vessel traders would agree to pay additional sums to lenders as the price for writing off the loans, in case of the shipment being stolen. the inhabitants of Rhodes adopted the principle of gernral average whareby if goods are shipped togetheer the owners would bear the losses in proportion of loss occures. due to jettisoning during distress. CCaptains of ships caught in storms would throw away some of the cargo to reduce the weight and restore balance. Such trtowing away is called hettisoning ) the greeks had stared benevolent societies in the late 7th century AD ti take care of the funeral and families of members who died. The friendly societies of England were similarly constituted. The Great Fiire of London in 1666 in which more that 13000 houses were lost, gave a boost to insurance and the firest fire insurance company. called the fire office was statedd in 1680.
4. The origins of insurance business as in vogue at present is traced to the lloys coffee house in loand. traders who used tio gather in the lloyds coffee house in london agreed to share the losses to theri good while robbed on the high seas or becase of bad weather. spoiling the goods or sinking the ship. In India insurance began in 1818 with life insurance beaing transcted by an English company the oriental .ife insurance co. ltd. the first indian insurence company was the Bombay Mutual Assurance Society Ltd. formed in 1870 in Mumbai. This is folloed by the bharat Insuirance co in 186 in Delhi the cCmpire of Inida in 1897 in Mumbai the united india in Chennai the natinal the nationa lIndian and the Hindusthan Cooperative in Kolkata.
worldbookies.eu
at the end of this lession the student shoul have understood
1. the basic concepts relation to insurance business.
2. The meaning s of the worlds peril and risk.
3. Different kinds of rishs
4. the ways of managing risks.
5. Importance of insurance in society and economy.
WHAT IS INSURANCE :-
1. The Business of insurance is related to the protection of the economic values of assets. Every asset has a velue would have been created through the efforts of the owner. The asset is valuable to the owner, ecause it meets some ot his needs. The benefit may be an income or in some other form. In the case of a factory or a cow, the product generated by it is sold and income is generated. In the case of a motor cas, it provides comfort and convenience in transportation. There is no direct income. Both are assets and provide benifits.
2. Every asset is expected to last for a certain period ot ththim during which it will provide the benefits. After that the benefit may not be available. There is a life time for a machine in a factory or a cor or a motor car. none of them will last for ever. The owner is aware of this and he can so manage his affairs that by the end of that perid or life time. a substitue is made available. Thus he makes sure that the benefit is not lost. However, the asset may get lost earlier. An accident or some other unfortunate event may destroy is or make it incapable or giving the benefits. An epidemic benefits therfrom, would be deprived ot the benefits. the planned substitue would not have been ready . There is an adverse or unplsasant situation. Insurance is a mechanism that hels to reduce the effict of such adverse situation. It promises to pay to the owner or beneficiary ot hte asset a certain sum if the loss occur.
3. Insurance has been known to exist in some form or other since 3000 bc. The chinese traders , traveling treacherous river rapids would distribute their goods among serveral vessels so that the loss from any one vessel traders would agree to pay additional sums to lenders as the price for writing off the loans, in case of the shipment being stolen. the inhabitants of Rhodes adopted the principle of gernral average whareby if goods are shipped togetheer the owners would bear the losses in proportion of loss occures. due to jettisoning during distress. CCaptains of ships caught in storms would throw away some of the cargo to reduce the weight and restore balance. Such trtowing away is called hettisoning ) the greeks had stared benevolent societies in the late 7th century AD ti take care of the funeral and families of members who died. The friendly societies of England were similarly constituted. The Great Fiire of London in 1666 in which more that 13000 houses were lost, gave a boost to insurance and the firest fire insurance company. called the fire office was statedd in 1680.
4. The origins of insurance business as in vogue at present is traced to the lloys coffee house in loand. traders who used tio gather in the lloyds coffee house in london agreed to share the losses to theri good while robbed on the high seas or becase of bad weather. spoiling the goods or sinking the ship. In India insurance began in 1818 with life insurance beaing transcted by an English company the oriental .ife insurance co. ltd. the first indian insurence company was the Bombay Mutual Assurance Society Ltd. formed in 1870 in Mumbai. This is folloed by the bharat Insuirance co in 186 in Delhi the cCmpire of Inida in 1897 in Mumbai the united india in Chennai the natinal the nationa lIndian and the Hindusthan Cooperative in Kolkata.
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