how insurance company works

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At Iqra university Peshawar.

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In the name of Allah, the most beneficent, the most merciful.

UPLOADED BY imranudas@yahoo.com

How Insurance Companies Work ?

Sami Ullah ID#9706

Maaz ID# 9702

Shah Junaid ID#9722

Naveed Afzal ID#9713

Imran ID# 9714

Qazi Fazli Rabi ID#4110

By

Course out lines from I to B

• What is insurance• Fundamental of insurance • Principles of insurance • Advantages of insurance

Insurance by Definition

It is a contract or agreement b/t tow parties by which one of them (called insurer) agree to indemnify the other (called insured) against a lost which may occur to the insured on the happening some event.

Common Terminologies used in Insurance

• An insurer is a company, selling the insurance.• An insured is the person or entity buying the insurance

policy.

• Premium is the price paid by the customer to the insurance company to purchase the contract .

• Indemnity is the total amount that the insurance company has to pay on behalf of the claim of insured.

What insurance company Do? • Collect premium (Least premium per year 20,000)

• Funds (premium) are invested in diversified portfolio• Company provides the loss suffered by insured person.

The insurance company collects its premiums from all clients, invests that money in extremely safe investments, such as government bonds, and keeps capital on hand to pay claims made by its clients.

Neeo
Poytfolio:meanslist of securities and stocks

To whom the benefit will be paid

Accumulated cash value along with applicable benefit will be paid to the person nominated by the policyholder.

Neeo
Accumulated:means: gathered; collected

CAREER PATH IN AN INSURANCE COMPANY

by

Maaz

ID:9702

CAREER PATH

Field survey (activity)

Foundation course (one week)

Go and sell life policies

DEVELOPMENT OFFICER

Note: your performance will be evaluated quarterly.

Unit manager

Zonal manager

Group manager

Senior branch manager

Senior unit manager

Branch manager

Assistant branch manager mamanmanager

Regional manager

Trainee agent (one week)Sales associate

(field force)

Career incentive plan

RankSalary/month

Business /month

BasicCommissi

on

Quarterly bonus on

excess premium

Development

Officer 7,000+ 20,000/- 30% 10%

Senior development officer

11,000+ 35,000/- 32% 10%

DevelopmentManager

15,000+ 60,000/- 35% 10%

Senior development manager

20,000+ 100,000/- 40% 10%

Ethical & legal behavior

Customer focus

Positive attitude

Employee development

Team work

Speedy responsiveness

Innovation

Profitability

Continuous process improvement

Insurance company’s core values

Principles of insuranceby

Shah Junaid ID:9722

Principles of insurance

1. Principle of Indemnity

2. Principle of Insurable interest

3. Principle of Utmost good faith

4. Principle of Contribution

5. Principle of Subrogation

6. Principle of Proximate cause

Neeo
Principles: fundamental law, primary law on which other laws are based

1. Principle of Indemnity

• This means the insured cannot make a profit from an insurance claim.

• For example if you have a four year motorcar and it is damaged, the insurance company will only give you the current value not the value when it was new.

Neeo
Indemnity:It is the total amount th einsurer hase to pay on behalf on the insured claim.
Neeo
claim: demand; sue; plea; assert

2. Principle of insurable Interest

• To insure anything the Insured must have an insurable interest in the subject matter of insurance, i.e. he/she

must benefit by its safety or be biased by its loss.

• For example you can insure your own home , but not your friend’s home.

In the same way you can take out Assurance on your wife’s life, but not that of your neighbour.

Neeo
Interest:v. arouse curiosity; cause to become involved in, cause to become concerned with

3. Principle of utmost good faith

• The insured and the insurer are bound by a good faith,honesty and fairness.

• For examples if the loss occurs, they will check the facts and if in-accurate details have been given they will not pay damages to incurred.

Neeo
utmost:supreme; highest, greatest, most; extreme; farthest

4. Principle of Contribution

• One can insurance the same propriety item with more then one insurance company, the insured can’t demand more then total loss from all companies put together

• In sample words there is no advantage insuring the same risk with two companies.

Neeo
Contribution:act of donating; donation, something donated, something given

5. Principle of Subrogation

• Insurance company has the legal right to claim compensation from any other party that caused the accident.

• For example Vehicle A hits B, which as a result hits C. C will claim of B’s insurance company, but that insurance

company has the right to claim from A’s insurance company, as it was A that really caused the damage to C.

Neeo
SUBROGATION:the substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties.
Neeo
compensation :recompense, repayment; something done to make up for (a loss, deficiency or fault)

6. Principle of Proximate cause

• The damage to the prosperity can takes place due to many causes the insurer company will look first cause of damage or the original cause of damage.

Neeo
Proximate:next, closest, nearest; adjacent, nearby, located in close proximity

Major Types of Insurance

by

Naveed Afzal

ID:9713

There are major two types of insurance:

1) Life insurance:

Own life. Family/Household insurance Group insurance. Medical insurance Disability insurance

2) General insurance: Automobile & truck Insurance Marine insurance. Travel insurance Property insurance etc.

Main difference b/w life insurance&

general insurance:

• Life is very long-term in nature — life insurance can cover risks over many decades.

• General insurance cover usually a shorter period, such as one year.

(1) Life Insurance • On periodic basis premium is paid by insured.• If the insured die within that time period, The

nominee get a specified amount of money.

There are two types of life insurance.

(a) Term Life Insurance

• The most basic one.• Least expensive. • Open ended.• For example:

• You buy coverage for a certain period of time, such as 10, 15, 20 or 30 years.

• If you die before the term is over, your nominee gets the benefit.

• If you live beyond the term, the policy expires. 

(b) Whole Life Insurance

• This type of policy never expires. • As long as premiums are paid, it remains in force.• Premiums are usually based on your age.• You'll pay the same amount of premium for the rest of

your life. (Start young and the less expensive the premiums will be)

Steps for Life insuranceby

ImranID:9714

Feedback@Imranudas@gmail.com

Step (I) Medical ExamMedical exam include:

• Age, height, weight, nicotine use and other health factors, such as any history of high blood pressure or depression.

• Your health status will determine what rate class category you fit in.

Step (II) Rating Class

• It will determine the price you pay in premiums.• As you can guess, a smoker will pay a higher premium

than a non-smoker.• Similarly an over-weight person will pay more than a thin

person.• Buying insurance when you are younger, healthier and a

non-smoker, you will save your money in many ways.

Step (III) Filing a Claim

In step (iv) there are four steps in filing a claim.

1. Obtain several copies of the death certificate.2. Contact your insurance agent.3. Submit a certified copy of the death certificate (or any alternative in extraordinary circumstances) 4. Once a life insurance claim is submitted, wait for further inquiries.

Step (iv) Settlement Options In some cases there are four settlement options:• Critical illness benefits: Provide a cash sum upon diagnosis or

occurrence of one of 18 critical illnesses, Like: Heart attack, cancer, blindness, deafness, loss of speech, loss of

limb, kidney failure, coma etc.• Family income benefit: In case of death of individual during the

term, monthly income of 01% to 02% of basic sum assured is paid for remaining term.

• Accidental death and disability :Additional benefits are paid on accidental death and disability.

• Hospital cash benefits: – A daily benefit is paid if you are hospitalized.– The benefit is doubled in case of critical illness.– In case of ICU additional 50% cash is paid. – Spouse and children can also be covered under this benefit.

Neeo
Settlement means:arrangement;
Neeo
process of identifying a disease from its symptoms, conclusion following a diagnostic exam diagnosis

General insurance

by

Qazi Fazal Rabi

ID:4110

General insurance

It provides protection against risks to property.

It include specialized forms of insurance such as: • Home insurance. • Automobile insurance• Marine insurance• Travel insurance etc.

(I) Home insurance

It is determined by :• Where you live (Location).• Size of your home. • Structure of your home. • Property.• The extent of your protective devices, such as alarms.

(II) Automobile insurance

Motor insurance is determined by:• Your living place.• Type of vehicle. • Your job. • Age.

Young drivers pay high premiums because statistics show that they’re involved in more crashes than older

drivers.

(III) Marine insurance

It’s two major form of transportation coverage are: 1) Ocean marine: It cover all losses to the ship & cargo while port or at sea.2) Inland marine: It provide coverage to transportation of goods by rail,

truck ,airplane, and water ways.

(IV) Travel insurance

• For limited time of period. • It include personal accident,

medical expenses, loss of Luggage. • The amount of premium is determined

by tour area and time duration.• Annual trivial policy is also available.

We can say insurance: ---Secure the community. ---Promote trade.

---Create jobs.

References

• Personal visit to efu & NJI. • Introduction to Business by M.Saeed Nasir.• Wikipedia.org• eHow.com• Research project on “HR policy of NJI regarding

motivation” by M. Ismail & Khalid Usman, BBA (Hons),2004-08,Iqra university Peshawar.

• Research report on “individual life insurance brands, a perspective study” by Syed Affan Ahmad & M. Zarak BBA (Hons),2005-09,Iqra university Peshawar.

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