Insurance

WHAT IS INSURANCE
The business of insurance is related to the protection of the economic values of assets. Every asset has a value. The asset would have been created through the efforts of the owner. The asset is valuable to the owner, because he expects to get some benefits from it. The benefits may be an income or some thing else. It is a benefit because it meets some of his needs. In the case of a factory or a cow, the product generated by is sold and income generated. In the case of a motor cycle, it provides comfort and convenience in transportation. There is no direct income.
Every asset is expected to last for a certain period of time during which it will perform. After that, the benefit may not available. There is a life-time for a machine in a factory or a cow 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 the period or life-time, a substitute is made available. Thus, he makes sure that the value or income is not lost earlier. An accident or some other unfortunate event may destroy it or make it non-functional. In that case, the owner and those deriving benefits there from, would be deprived of that benefit and the planned substitute would not have been ready. There is an adverse or unpleasant situation. Insurance is a mechanism that helps to reduce the effect of such adverse situation.
BRIEF HISTORY OF INSURANCE
The business of insurance stared with marine business.
Traders, who used to gather in the Lloyd’s coffee house in London, agreed to share the losses to their good while being carried by ships. The losses used to occur because of pirates who robbed on the high seas or because of bad weather spoiling the good or sinking the ship the first insurance policy was issued in 1583 in England.
In India insurance began in 1970 with life insurance being transacted by an English company, the European and the Albert. The Indian insurance company was the Bombay
Mutual Assurance society Ltd, formed in 1870 .This was followed by the oriental life assurance co . In 1874, the Bharat .in 1896 and the empire of India in 1897. later , the Hindustan cooperative was formed in Calcutta , the united India in madras , the Bombay life in Bombay , the national Calcutta .the new India in Bombay the Jupiter in Bombay and the lakshmi in new Delhi . These were all Indian companies, started as a result of the swadeshi movement in the early 1900s . By the year 1956,. When the life insurance business was nationalised and the life insurance corporation of India {LIC} was formed on 1 September 1956, there were 170 companies and 75 provident fund societies transacting life insurance business in India. After the amendments to the relevant laws in 1999, the L.I.C. did not have the exclusive privilege of doing life insurance business in
India. By 31.3.2002, eleven new insurers had been registered and had begun to transact life business in India