Risk mitigation has been the oldest human trait. Growth of trade, led to the practice of distribution and transfer of risk .The earliest form of cooperative insurance existed even in Aryan civilization during major natural catastrophe. The merchants in 2nd Century BC used to take a token value to protect the goods being damaged during transportation. A more evolved Sea Trade Insurance came into existence in early 14th Century and it is now known as Marine Insurance. Hence Marine Insurance is considered to be the oldest form of Insurance.
The famous 1666 London fire, paved the way for what is now known as the Property Insurance and a set up of one of the oldest Insurance Syndicate – Lloyds of London.
Similarly the early 19th century litigations against the incidents caused by Industrialization eventually saw the rise of Liability Insurance.
The Britishers first set up the Triton General Insurance in 1850 in India and since then General Insurance in India has come a long way.
The General Insurance Industry has its regulation rooted to the Insurance Act 1938 and its subsequent amendment. The General Insurance Council formation in 1957 cemented the controlling authority for General Insurance and it also framed various policies related to the functioning and governing of Insurance Companies. This was followed by formation of Tariff Advisory Committee which fixed and monitored the rates of various Property risks in India.
In 1999 Insurance Regulatory and Development Authority became the pivotal regulatory framework in India following the Malhotara committee report which paved the wave for privatization of insurance in 2000. Subsequently TAC was dismantled in 2007 and the price for all Property insurance was de-terrifed in 2007.
Today India has 25 General Insurance Companies and 6 Stand Alone Health Insurance Companies.
The distinguishing nature of Life and General Insurance is that it Life Insurance is a long term contract, whereas General Insurance is One Year Renewable contract. General Insurance is based on the fixation of Economic Value of the subject matter of insurance where as no economic value can be assigned to a Life assured. This is a very peculiar nature which makes the distinguishing factor between the two.
The following products have evolved and are in vogue under General Insurance
Property Insurance- Fire, Industrial All Risk, Mega Risk Policies, Home Insurance, Stand Alone Terrorism Risk Insurance, Port Package, Aviation Insurances.
Equipment Insurance
– Electronic Equipment, Portable All Risks, Machinery Break Down Policies, Contractors’ Plant & Machinery Insurance
Marine Insurance
- Open Policy, Specific Cargo Policy, Marine Hull Insurances,
Motor Vehicles
– 2 wheeler, Car, Commercial Vehicle Insurance, Miscellaneous Vehicle Insurance
Human
- Personal Accident, Health, Critical Illness insurances, Workmen Compensation, Overseas Mediclaim
Legal Liabilities
– Public Liability, D&O, Crime Insurance, Product Liability, Product Recall, Crisis Management Cover
Specialized Products
– Credit Insurance, Bankers’ Indemnity Insurance, Loss of Profit Policies, Burglary Insurances, Money Insurance.
General Insurance Policies can be held by an Individual as well as Group of Individuals which is a unique feature. One of the most important aspects of General Insurance is that all policies are Indemnity Based policies thus the individual /group suffering loss cannot benefit out of insurance and his losses will be indemnified to the extent of financial/economic loss suffered.
