A STUDY OF THE NEW INDIA ASSURANCE COMPANY

LIMITED WITH SPECIAL REFERENCE TO MARINE

INSURANCE

Bachelor of Commerce
Banking & Insurance
Semester VI
(2013-2014)

PROF. JANHAVI . RAO

Submitted by
JINAL D. PANCHAL
Roll No.24

Mumbai Pradesh Arya Vidya Sabhas

GURUKUL COLLEGE OF COMMERCE
Tilak Road, Ghatkopar (E) Mumbai-77

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A STUDY OF NEW INDIA ASSURANCE COMPANY
LIMITED WITH SPECIAL REFERENCE TO MARINE
INSURANCE

Bachelor of Commerce
Banking & Insurance
Semester VI
(2013-2014)
In Partial Fulfillment of the requirements
For the Award of Degree of Bachelor of
Commerce- Banking & Insurance
By

JINAL D.PANCHAL
Roll No.24

Mumbai Pradesh Arya Vidya Sabhas

GURUKUL COLLEGE OF COMMERCE

Tilak Road, Ghatkopar (E) Mumbai -77

[2]
 DECLARATION

I JINAL D. PANCHAL the Student of B.com. Banking

& Insurance Semester VI (2013-2014) hereby declare that

I have completed the Project on A study of new India

assurance company limited with special reference to marine
insurance. The information submitted is true and original to the
best of my knowledge.

Signature of Student

JINAL D. PANCHAL
Roll No:-24

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 GURUKUL COLLEGE OF COMMERCE

(Tilak road ,Ghatkopar (E) ,MUMBAI-77)

CERTIFICATE

This is to certify that Miss .JINAL D. PANCHAL

Roll No. 24 of B.Com. Banking & Insurance Semester VI
(2013-2014) has successfully completed the project on
Under the guidance of PROF. JANHAVI. RAO

Course Co-ordinator Principal

PROF. NITIN AGARWAL DR. KSHITIJ PRABHA

Project Guide External Examiner

PROF. JANHAVI . RAO

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 ACKNOWLEDGEMENT

Preparing the project on MARINE INSURANCE NEW INDIA

ASSURANCE COMPANY LTD has given me extensive practical
knowledge related to the course.
I am thankful to my guide PROF.JANHAVI. RAO for
providing me the guidance throughout the course of this project. I am
also thankful to her for patiently and critically evaluating the content of
this project.
I would like to f thank my Principal for her valuable support in
preparing this project.
I express my deep sense of Gratitude to the Course coordinator
Prof. Nitin Agarwal for the valuable guidance and support during my
project work.

I would like to take this opportunity to express my gratitude to all

the staff of the Library and the Computer Lab for their support and even
my friends who have helped me throughout the completion of the
project.

JINAL D. PANCHAL
.

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 TABLE OF CONETNTS
Chapter No. Name Of The Chapter Page Nos.

1. Overview of insurance industry 1-16

2. Research Methodology 17-20
3. Marine Insurance 21-38
4. New India assurance company ltd 39-55
5. Findings and Suggestions 56-60

CHAPTER 1

INTRODUCTION

Insurance is the equitable transfer of the risk of a loss, from one entity to another
in exchange for payment. It is a form of risk management primarily used to hedge
against the risk of a contingent, uncertain loss. An insurer, or insurance carrier, is a
company selling the insurance; the insured, or policyholder, is the person or entity

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buying the insurance policy. The amount to be charged for a certain amount of
insurance coverage is called the premium. Risk management, the practice of
appraising and controlling risk, has evolved as a discrete field of study and
practice. The transaction involves the insured assuming a guaranteed and known
relatively small loss in the form of payment to the insurer in exchange for the
insurer's promise to compensate (indemnify) the insured in the case of a financial
(personal) loss. The insured receives a contract, called the insurance policy, which
details the conditions and circumstances under which the insured will be
financially compensated. The Life is full of uncertainties. People opt for insurance
purely for the reasons of uncertainties in life. Insurance gives the insured a kind
of peace of mind as he is assured to making up the loss in the event of such
uncertainties in life happen.

The New India Assurance Co. Ltd., based in Mumbai, is one of the five public
sector insurance companies in India. It is the "largest general insurance company of
India on the basis of gross premium collection inclusive of foreign operations". It
was founded by Dorab Tata in 1919, and nationalized in 1973. Previously it was a
subsidiary of the General Insurance Corporation of India (GIC). But when GIC
became a reinsurance company as per the IRDA Act 1999, its four primary
insurance subsidiaries New India Assurance, United India Insurance, Oriental
Insurance and National Insurance got autonomy.

New India Assurance provides Marine Insurance Policy as well as the shipping
Cargo policy which helps to recover the damage to the ships and the goods during
the travel from origin to the destination. This policy covers goods, freight and other
interests against loss or damage to goods whilst being transported by rail, road, sea
and/or air.

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1.1MEANING OF INSURANCE

Insurance is the equitable transfer of the risk of a loss, from one

entity to another in exchange for payment. It is a form of risk
management primarily used to hedge against the risk of a
contingent, uncertain loss. An insurer, or insurance carrier, is a
company selling the insurance; the insured, or policyholder, is the
person or entity buying the insurance policy. The amount to be
charged for a certain amount of insurance coverage is called the
premium. Risk management, the practice of appraising and
controlling risk, has evolved as a discrete field of study and
practice. The transaction involves the insured assuming a
guaranteed and known relatively small loss in the form of
payment to the insurer in exchange for the insurer's promise to
compensate (indemnify) the insured in the case of a financial
(personal) loss. The insured receives a contract, called the
insurance policy, which details the conditions and circumstances
under which the insured will be financially compensated.

Insurance is a form of risk management in which the insured transfers the cost of
potential loss to another entity in exchange for monetary compensation known as
premium. Insurance allows individuals, businesses and other entities to protect
themselves against significant potential losses and financial hardship at a
reasonably affordable rate. We say "significant" because if the potential loss is
small, then it doesn't make sense to pay a premium to protect against the loss. After
all, you would not pay a monthly premium to protect against a $50 loss because
this would not be considered a financial hardship for most. Insurance is a technique

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wherein a number of people, who are exposed to similar risk, participate in the
scheme and contribute in the shape of periodic premiums. Such premiums are
received by the insurer who is able to pay out of the premiums received by him, for
the losses of some of those who have participated in the scheme. Thus it is
wonderful technique of spreading and transfer or risks.

Everyone that wants to protect themselves or someone else against financial

hardship should consider insurance. This may include:
Protecting family after one's death from loss of income
Ensuring debt repayment after death

Covering contingent liabilities

Protecting against the death of a key employee or person in your business

Buying out a partner or co-shareholder after his or her death

Protecting your business from business interruption and loss of income

Protecting yourself against unforeseeable health expenses

Protecting your home against theft, fire, flood and other hazards

Protecting yourself against lawsuits

Protecting yourself in the event of disability

Protecting your car against theft or losses incurred because of accidents

And many more

1.2 ORIGIN OF INSURANCE

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Whenever there is uncertainty there is risk. We do not have any control over
uncertainties which involves financial losses. The risk may be certain events like
death, pension, retirement or uncertain events like theft, fire, accident; etc.
Insurance is a financial service for collecting the savings of the public and
providing them with risk coverage. It comes under service sector and while
marketing this service due care is taken in quality product and customer
satisfaction. The main function of the Insurance is to provide protection against the
possible chances of generating losses. The insurance sector in India has come a full
circle from being an open competitive market to nationalization and back to a
liberalized market again. Tracing the developments in the Indian insurance sector
reveals the 360-degree turn witnessed over a period of almost two centuries. In
some sense we can say that insurance appears simultaneously with the appearance
of human society. We know of two types of economies in human societies: natural
or non-monetary economies and more modern monetary economies (with markets,
currency, financial instruments and so on). The former is more primitive and the
insurance in such economies entails agreements of mutual aid. If one family's
house is destroyed the neighbors are committed to help rebuild.

1.3 HISTORY OF INSURANCE

Turning to insurance in the modern sense (i.e., insurance in a modern money

economy, in which insurance is part of the financial sphere), early methods of
transferring or distributing risk were practiced by Chinese and Babylonian traders
as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants
travelling treacherous river rapids would redistribute their wares across many
vessels to limit the loss due to any single vessel's capsizing. The Babylonians
developed a system which was recorded in the famous Code of Hammurabi, c.

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1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant
received a loan to fund his shipment, he would pay the lender an additional sum in
exchange for the lender's guarantee to cancel the loan should the shipment be
stolen or lost at sea.
The business of life insurance in India in its existing form started in India in the
year1818 with the establishment of the Oriental Life Insurance Company in
Calcutta. Some of the important milestones in the life insurance business in India
are:
1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to
collect statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with
the objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies taken over by the
central government and nationalized. LIC formed by an Act of Parliament, viz. LIC
Act, 1956,with a capital contribution of Rs. 5 crore from the Government of India.
The General insurance business in India, on the other hand, can trace its roots to
the Triton Insurance Company Ltd., the first general insurance company
established in the year 1850 in Calcutta by the British.
Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all
classes of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India,
frames a code of conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum
solvency margins and the Tariff Advisory Committee set up.
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1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the
general insurance business in India with effect from 1st January 1973. 107 insurers
amalgamated and grouped into four companies viz. the National Insurance
Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance
Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as
a company.

1.4 PRINCIPLES OF INSURANCE

Insurance involves pooling funds from many insured entities (known as exposures)
to pay for the losses that some may incur. The insured entities are therefore
protected from risk for a fee, with the fee being dependent upon the frequency and
severity of the event occurring. In order to be insurable, the risk insured against
must meet certain characteristics in order to be an insurable risk. Insurance is a
commercial enterprise and a major part of the financial services industry, but
individual entities can also self-insure through saving money for possible future
losses.

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1. UTMOST GOOD FAITH:

Principle of Utmost Good Faith is a very basic and first primary principle of
insurance. According to this principle, the insurance contract must be signed by
both parties (i.e. insurer and insured) in an absolute good faith or belief or trust.
The person getting insured must willingly disclose and surrender to the insurer his
complete true information regarding the subject matter of insurance. The insurer's
liability gets void (i.e. legally revoked or cancelled) if any facts, about the subject
matter of insurance are either omitted, hidden, falsified or presented in a wrong
manner by the insured.

2. INSURABLE INTEREST:

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The principle of insurable interest states that the person getting insured must have
insurable interest in the object of insurance. A person has an insurable interest
when the physical existence of the insured object gives him some gain but its non-
existence will give him a loss. In simple words, the insured person must suffer
some financial loss by the damage of the insured object.

For example: - The owner of a taxicab has insurable interest in the taxicab because
he is getting income from it. But, if he sells it, he will not have an insurable interest
left in that taxicab.

3. PRINCIPLE OF INDEMNITY:

Indemnity means security, protection and compensation given against damage, loss
or injury. According to the principle of indemnity, an insurance contract is signed
only for getting protection against unpredicted financial losses arising due to future
uncertainties. Insurance contract is not made for making profit else its sole purpose
is to give compensation in case of any damage or loss. In an insurance contract, the
amount of compensations paid is in proportion to the incurred losses. The amount
of compensations is limited to the amount assured or the actual losses, whichever
is less. The compensation must not be less or more than the actual damage.
Compensation is not paid if the specified loss does not happen due to a particular
reason during a specific time period. Thus, insurance is only for giving protection
against losses and not for making profit. However, in case of life insurance, the
principle of indemnity does not apply because the value of human life cannot be
measured in terms of money.

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4. PRINCIPLE OF CONTRIBUTION:

Principle of Contribution is a corollary of the principle of indemnity. It applies to

all contracts of indemnity, if the insured has taken out more than one policy on the
same subject matter. According to this principle, the insured can claim the
compensation only to the extent of actual loss either from all insurers or from any
one insurer. If one insurer pays full compensation then that insurer can claim
proportionate claim from the other insurers.

5. PRINCIPLE OF SUBSTITUTING:

Subrogation means substituting one creditor for another. Principle of Subrogation

is an extension and another corollary of the principle of indemnity. It also applies
to all contracts of indemnity. According to the principle of subrogation, when the
insured is compensated for the losses due to damage to his insured property, then
the ownership right of such property shifts to the insurer. This principle is
applicable only when the damaged property has any value after the event causing
the damage. The insurer can benefit out of subrogation rights only to the extent of
the amount he has paid to the insured as compensation.

6. PRINCIPLE OF LOSS MINIMIZATION:

According to the Principle of Loss Minimization, insured must always try his level
best to minimize the loss of his insured property, in case of uncertain events like a
fire outbreak or blast, etc. The insured must take all possible measures and
necessary steps to control and reduce the losses in such a scenario. The insured
must not neglect and behave irresponsibly during such events just because the

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property is insured. Hence it is a responsibility of the insured to protect his insured
property and avoid further losses.

7. PRINCIPLE OF CAUSA PROXIMA:

Principle of Causa Proxima (a Latin phrase), or in simple English words, the

Principle of Proximate (i.e. Nearest) Cause, means when a loss is caused by more
than one causes, the proximate or the nearest or the closest cause should be taken
into consideration to decide the liability of the insurer. The principle states that to
find out whether the insurer is liable for the loss or not, the proximate (closest) and
not the remote (farest) must be looked into.

For example: - A cargo ship's base was punctured due to rats and so sea water
entered and cargo was damaged. Here there are two causes for the damage of the
cargo ship - (i) The cargo ship getting punctured because of rats, and (ii) The sea
water entering ship through puncture. The risk of sea water is insured but the first
cause is not. The nearest cause of damage is sea water which is insured and
therefore the insurer must pay the compensation.

However, in case of life insurance, the principle of Causa Proxima does not apply.
Whatever may be the reason of death (whether a natural death or an unnatural
death) the insurer is liable to pay the amount of insurance.

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1.5 TYPES OF INSURANCE

1. LIFE INSURANCE:

Life insurance provides a monetary benefit to a decedent's family or other

designated beneficiary, and may specifically provide for income to an insured
person's family, burial, funeral and other final expenses. Life insurance policies
often allow the option of having the proceeds paid to the beneficiary either in a
lump sum cash payment or an annuity. Annuities provide a stream of payments and
are generally classified as insurance because they are issued by insurance
companies, are regulated as insurance, and require the same kinds of actuarial and
investment management expertise that life insurance requires. Annuities and
pensions that pay a benefit for life are sometimes regarded as insurance against the
possibility that a retiree will outlive his or her financial resources. In that sense,

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they are the complement of life insurance and, from an underwriting perspective,
are the mirror image of life insurance. Certain life insurance contracts accumulate
cash values, which may be taken by the insured if the policy is surrendered or
which may be borrowed against. Some policies, such as annuities and endowment
policies, are financial instruments to accumulate or liquidate wealth when it is
needed. In the US, the tax on interest income on life insurance policies and
annuities is generally deferred. However, in some cases the benefit derived from
tax deferral may be offset by a low return.

2. GENERAL INSURANCE:

Also known as non-life insurance, general insurance is normally meant for a short-
term period of twelve months or less. General insurance means managing risk
against financial loss arising due to fire, marine or miscellaneous events as a result
of contingencies, which may or may not occur. Recently, longer-term insurance
agreements have made an entry into the business of general insurance but their
term does not exceed five years. General insurance can be classified as follows:

1. FIRE INSURANCE:

Fire insurance provides protection against damage to property caused by accidents

due to fire, lightening or explosion, whereby the explosion is caused by boilers not
being used for industrial purposes. Fire insurance is a contract under which the
insurer in return for a consideration (premium) agrees to indemnify the insured for
the financial loss which the latter may suffer due to destruction of or damage to
property or goods, caused by fire, during a specified period. The contract specifies
the maximum amount, agreed to by the parties at the time of the contract, which
the insured can claim in case of loss. This amount is not, however, the measure of

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the loss. The loss can be ascertained only after the fire has occurred. The insurer is
liable to make good the actual amount of loss not exceeding the maximum amount
fixed under the policy.

A fire insurance policy cannot be assigned without the permission of the insurer
because the insured must have insurable interest in the property at the time of
contract as well as at the time of loss. The insurable interest in goods may arise out
on account of (i) ownership, (ii) possession, or (iii) contract. A person with a
limited interest in a property or goods may insure them to cover not only his own
interest but also the interest of others in them.

2. MARINE INSURANCE:

Marine insurance basically covers three risk areas, namely, hull, cargo and freight.
The risks which these areas are exposed to are collectively known as "Perils of the
Sea". These perils include theft, fire, collision etc. Marine Cargo: Marine cargo
policy provides protection to the goods loaded on a ship against all perils between
the departure and arrival warehouse. Therefore, marine cargo covers carriage of
goods by sea as well as transportation of goods by land. Marine Hull: Marine hull
policy provides protection against damage to ship caused due to the perils of the
sea. Marine hull policy covers three-fourth of the liability of the hull owner (ship-
owner) against loss due to collisions at sea. The remaining 1/4th of the liability is
looked after by associations formed by ship-owners for the purpose (P and I clubs).

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3. MISCELLANEOUS INSURANCE:

As per the Insurance Act, all types of general insurance other than fire and marine
insurance are covered under miscellaneous insurance. Some of the examples of
general insurance are motor insurance, theft insurance, health insurance, personal
accident insurance, money insurance, engineering insurance etc. Miscellaneous
Insurance refers to contracts of insurance other than those of Life, Fire and Marine
insurance. It covers a variety of risks, the chief of which are:-

4. PERSONAL ACCIDENT INSURANCE:

Personal Accident insurance is insurance for individuals or groups of persons

against any personal accident or illness. The risk insured is the bodily injury
resulting solely and directly from accident caused by violent, external and visible
means. In India this type of insurance is done by the General Insurance
Corporation. A contract of personal accident insurance is not a contract of
indemnity and the insurer has to pay a fixed sum of money on the death or total
disablement of the insured or provide medical benefits for recovery from the
injury. If risks against certain specified diseases are also covered, the policy is
known as 'Personal Accident and Sickness Insurance.

5. MOTOR VEHICLE INSURANCE:

under it, a personal or commercial vehicle is subjected to combined insurance

against the risks of :- (i) loss or damage to the motor vehicle and its accessories on
account of accident or theft; (ii) death of or injury to the owner or passenger of the
vehicle due to accident; (iii) damages payable to third parties by the owner of the
vehicle for accident. A comprehensive insurance policy may be taken to cover all

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these risks. Insurance against the first two types of risks is optional. But every
owner of motor vehicle is required to take out an insurance policy to cover the
third party risks under the Motor Vehicles Act, 1956. Such a policy is known as
'third party insurance or liability insurance'. Under such a policy, the third party
who has suffered any loss can sue the insurer directly even though he was not a
party to the contract of insurance. This policy provides insurance cover to owners
of the vehicle, financiers or lessee, who have insurable interest in a motor vehicle.

6. FEDILITY INSURANCE:

under it, the insurer undertakes to compensate the insured i.e. the employers
against the losses suffered by him due to the employees. The losses may be due to
fraud, dishonesty, and misappropriation of funds, goods or damages to property
caused by the employees. In order to avail the protection under it, the employer is
required to provide all material facts about their employees to the insurer and also,
notify all changes in the condition of their service.

7. CREDIT INSURANCE:

Credit Insurance is a policy taken to cover the loss which may arise due to bad
debts or non-payment of dues by the debtors. It provides protection to
businessmen, who sell goods on credit terms while substantially reducing the
overall risk of exposure to non-payment. It protects them against losses arising out
of insolvency of their debtors. It thus enables a business to take advantage of peak
and cyclical selling periods and to safely expand into new product lines or
territories.

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8. TRAVEL INSURANCE:

Travel insurance provides protection cover to all those individuals travelling

outside India against risks such as loss of baggage, travel related accidents
including injuries, illnesses and medical emergencies requiring hospitalization
treatment. In India, this insurance policy has become popular among International
travelers.

1.6 SOME PLAYERS IN THE INSURANCE INDUSTRY

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 CHAPTER 2

RESEARCH METHODOLOGY
2.1 OBJECTIVES OF THE STUDY
i) To determine and analyze the Market Potential of the New India Assurance Co.
Ltd.
ii) To determine whether the customers are satisfied with the Marine insurance
policies of the company.
iii)To know the customer awareness regarding the New India Assurance Co. Ltd
and its products.
iv)To study and determine the competitor position in the market.
v) To know the future plans of the people for buying the marine insurance policies.

2.2 HYPOTHESIS

i) The new technologies adopted by the New India Assurance Co. Ltd acts as a
tool for improving the performance of the company.
ii) It has reduced the role of other Private sector insurance companys & made the
Marine insurance policies which are effective to the customers.

2.3 METHODOLOGY
SECONDARY DATA:
The secondary data required for the study are obtained from books, journals,
officials reports; periodicals brought by the Government of India in addition to

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these, efforts would be made to collect as much information from the internet about
the Marine Insurance Industries in India.

2.4 LIMITATIONS OF THE STUDY

Though this study is purely explorative in nature, it is brought with a number of
limitations. The most outstanding among them could be listed as follows.
i) Adequate secondary data are not available regarding financial aspects of
New India Assurance Co. Ltd.
ii) This study concentrates more on the role and performance of New India
Assurance Co. Ltd without considering the role played by the company in
life insurance sector.
iii)This study does not analyze the problems faced by the customers.
iv)Study of primary data is not available.

2.5 REVIEW OF LITERATURE

1. Jackson Mark, 11 Jan, 2013. The intention behind covering piracy in the hull
and cargo claims is to prevent the stunting of trade and trade routes for reasons like
barbaric activities. The understanding of the term piracy and pirates has gone far

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ahead to include passengers who mutiny and rioters who attack the ship even from
the shores. The widely recognized hull and cargo clauses cover the issues of piracy.
According to the Marine Insurance Act, 1963 (India), the term "pirates" includes
passengers who mutiny and rioters who attack the ship from the shore. Anyhow,
piracy is excluded from the paramount war exclusion clause of ITCH and IVCH.
The test to be applied in this regard is that of proximate cause whereby the loss that
has been incurred should not have been caused by barratry or piracy. However, any
loss caused by seizure, even if the seizure were to result from a barratrous or
piratical act, is not excluded from the war exclusion clause. There may not be a
situation where in the clause of piracy as such may stand deleted from the marine
insurance policies. But the situations demand that the insurers should increase the
costs of insurance on account of piracy, especially relating to notorious routes of
the times like Somalia, Indonesia, and Philippines etc.

2. Roshan Sahasrabuddhe, Jan 2013 stated that The Indian

general insurance industry is likely to grow by around 20% per
annum in the coming years because of increasing penetration, a
top official of New India Assurance said. "Despite slowdown in
economy, the general insurance industry has grown by around
20% in the recent past.

We hope the industry will see similar growth in the coming years," Chairman and
Managing Director of New India Assurance G Srinivasan said. The penetration o
the general insurance in India stands at around 0.7%, lower than the global average
of 1.5-4%.

3. Nikhil Walavalkar (Jan 7, 2013) gives his reviews as The Indian general
insurance industry is likely to grow by around 20% per annum in the coming years

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because of increasing penetration, a top official of New India Assurance said.
"Despite slowdown in economy, the general insurance industry has grown by
around 20% in the recent past.

We hope the industry will see similar growth in the coming years," Chairman and
Managing Director of New India Assurance G Srinivasan said. The penetration o
the general insurance in India stands at around 0.7%, lower than the global average
of 1.5-4%.

4. Shiply Sinha (April 12, 2006) gives reviews: Good performance of ICICI
Lombard, New India, Oriental Insurance and Bajaj Allianz, pushed the general
insurance industry growth to 16% in April-February of '06. The 12 non-life players
together mopped up Rs 18,414 crore in premium till February last fiscal even as
National Insurance (NIC) and Reliance General continued to see decline in
business, according to data compiled by IRDA.

Market leader New India Assurance collected Rs 4,281 crore in first year premium
by logging 15% growth to corner 23.3% of the market. Kolkata-based NIC was at
second spot despite seeing 6.5% decline in premium income at Rs 3,202 crore and
had a market pie of 17.4%. Delhi-based Oriental Insurance was close behind NIC
by collecting Rs 3,200 crore in premium and a market share of 17.4%. United India
Insurance grew by mere 5.7% to garner 15.4% of the market after it collected Rs
2,839 crore in premium.

CHAPTER 3
MARINE INSURANCE

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3.1 INTRODUCTION:

Marine insurance covers the loss or damage of ships, cargo, terminals, and any
transport or cargo by which property is transferred, acquired, or held between the
points of origin and final destination.

Cargo insurance discussed here is a sub-branch of marine insurance, though

Marine also includes Onshore and Offshore exposed property (container terminals,
ports, oil platforms, pipelines); Hull; Marine Casualty; and Marine Liability.

Maritime insurance was the earliest well-developed kind of insurance, with origins
in the Greek and Roman maritime loan. Separate marine insurance contracts were
developed in Genoa and other Italian cities in the fourteenth century and spread to
northern Europe. Premiums varied with intuitive estimates of the variable risk from
seasons and pirates. In the 19th century, Lloyd's and the Institute of London
Underwriters (a grouping of London company insurers) developed between them
standardized clauses for the use of marine insurance, and these have been

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maintained since. These are known as the Institute Clauses because the Institute
covered the cost of their publication.

Within the overall guidance of the Marine Insurance Act and the Institute Clauses
parties retain a considerable freedom to contract between themselves.

A contract of marine insurance is an agreement whereby the insurer undertakes to

indemnify the assured, in the manner and to the extent agreed, against losses
incidental to marine adventure. There is a marine adventure when any insurable
property is exposed to maritime perils i.e. perils consequent to navigation of the
sea. The term 'perils of the sea' refers only to accidents or causalities of the sea, and
does not include the ordinary action of the winds and waves. Besides, maritime
perils include, fire, war perils, pirates, seizures and jettison, etc.

3.2 IDEMNITY:

A marine policy typically covered only three-quarter of the insured's liabilities

towards third parties. The typical liabilities arise in respect of collision with
another ship, known as "running down" (collision with a fixed object is a
"harbour"), and wreck removal (a wreck may serve to block a harbour, for
example).

In the 19th century, ship-owners banded together in mutual underwriting clubs

known as Protection and Indemnity Clubs (P&I), to insure the remaining one-
quarter liability amongst themselves. These Clubs are still in existence today and
have become the model for other specialized and noncommercial marine and non-
marine mutuals, for example in relation to oil pollution and nuclear risks.

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Clubs work on the basis of agreeing to accept a ship-owner as a member and
levying an initial "call" (premium). With the fund accumulated, reinsurance will be
purchased; however, if the loss experience is unfavorable one or more
"supplementary calls" may be made. Clubs also typically try to build up reserves,
but this puts them at odds with their mutual status.

3.3 FEATURES OF MARINE INSURANCE

1. Comprehensive Accidental loss or damage cover and also includes theft

of the boat and/or its contents and personal effects, malicious damage and
transit damage, if the vessel is designed to be transported on its own trailer.
2. Third Party Only Restricted to damage or injury that you cause to a third
party.
3. Extended Blue Water Yacht Racing A policy extension for Blue Water
racing provided that operator and boat meet underwriting criteria (conditions
apply)
4. Blue Water Cruising A policy extension for Blue Water racing provided
that operator and boat meet underwriting criteria (conditions apply).
5. Commercial Use A policy extension to allow your boat to be involved in
commercial activities (conditions apply).
6. Transit Risk Cover one-off transit risks for boats that are not designed to
be normally transported on land e.g. large power boats and fixed keel yachts
generally longer than 9.0metres.

3.4 ELEMENTS OF MARINE INSURANCE

1. FEATURES OF GENERAL CONTRACT:

[29]
A marine insurance policy must fulfill all the essentials of a valid contract i.e. offer,
acceptance agreement, competent party, free consent, legal objects and lawful
consideration.

In marine insurance, the proposal may be offered by a ship owner or a cargo owner
or a freight receiver. He is the insured. When the insurer accepts the proposal, it
becomes an agreement. The insurer is known as Underwriter.

2. INSURABLE INTEREST:

Section 7, 8 and 9 to 16 provide for insurable interest. An insured person will have
insurable interest in the subject-matter where he stands in any legal or equitable
relation to the subject-matter in such a way that he may benefit by the safety or due
arrival of insurable property or may be prejudiced by its loss, or by damage thereto
or by the detention thereof or may incur liability in respect thereof. Since marine
insurance is frequently affected before the commercial transactions to which they
apply are formally completed it is not essential for the assured to have an insurable
interest at the time of effecting insurance, though he should have an expectation of
acquiring such an interest. If he fails to acquire insurable interest in due course, he
does not become entitled to indemnification. Since the ownership and other interest
of the subject matter often change from hands to hands, the requirement of the
insurable interest to be present only at the time of loss makes a marine insurance
policy freely assignable.

3. UTMOST GOOD FAITH:

[30]
Section 19, 20, 21 and 22 of the Marine Insurance Act 1963 explained doctrine of
utmost good faith. The doctrine of caveat emptor (let the buyer beware) applies to
commercial contracts, but insurance contracts are based upon the legal principle of
uberrimae fides (utmost good faith). If this is not observed by either of the parties,
the contract can be avoided by the other party. The duty of the utmost good faith
applies also to the insurer. He may not urge the proposer to affect an insurance
which he knows is not legal or has run off safely. But the duty of disclosure of
material facts rests highly on the insured because he is aware of the material
common in other branches of insurance are not used in the marine insurance. Ships
and cargoes proposed for insurance may be thousands of miles away, and surveys
on underwriters' behalf are usually impracticable. The assured, therefore, must
disclose all the material information which may influence the decision of the
contract.

4. DOCTRINE OF INDEMNITY:

Under Section 3 of the Act at is provided 'A contact of marine insurance is an

agreement whereby the insurer undertakes to indemnify the assured in the manner
and the extent agreed upon. The contract of marine insurance is of indemnity.
Under no circumstances an insured is allowed to make a profit out of a claim. In
the absence of the principle of indemnity it was possible to make a profit. The
insurer agrees to indemnify the assured only in the manner and only to the extent
agreed upon. Marine insurance fails to provide complete indemnity due to large
and varied nature of the marine voyage. The basis of indemnity is always a cash
basis as underwriter cannot replace the lost ship and cargoes and the basis of
indemnification is the value of the subject-matter.

5. PRINCIPLE OF SUBROGATION:
[31]
Section 79 of the Act explains doctrine of subrogation. The aim of doctrine of
subrogation is that the insured should not get more than the actual loss or damage.
After payment of the loss, the insurer gets the light to receive compensation or any
sum from the third party from whom the assured is legally liable to get the amount
of compensation. At the same time the right of subrogation must be distinguished
from abandonment. If property is abandoned to a marine insurer, he is entitled to
whatever remains to the property irrespective of value of subrogation.

6. WARRANTIES:

A warranty is that by which the assured undertakes that some particular thing shall
or shall not be done, or that some conditions shall be fulfilled or whereby he
affirms or negatives the existence of a particular state of facts. Warranties are the
statement according to which insured person promises to do or not to do a
particular thing or to fulfill or not to fulfill a certain condition. It is not merely a
condition but statement of fact. Warranties are more vigorously insisted upon than
the conditions because the contract comes to an end if a warranty is broken
whether the warranty was material or not. In case of condition or representation the
contract comes to end only when these were material or important.

7. PROXIMATE CAUSE:

According to Section 55 (1) Marine Insurance Act,' Subject to the provisions of the
Act and unless the policy otherwise provides the insurer is liable for any loss
proximately caused by a peril insured against, but subject to as aforesaid he is not
liable for any loss which is not proximately caused by a peril insured against.'

[32]
Section 55 (2) enumerates the losses which are not payable are (i) misconduct of
the assured (ii) delay although the delay be caused by a peril insured against (iii)
ordinary wear and tear, ordinary leakage and breakage inherent vice or nature of
the subject matter insured, or any loss proximately caused by rates or vermin or
any injury to machinery not proximately caused by maritime perils. Thus the
proximate cause is the actual cause of the loss. There must be direct and non-
intervening cause. The insurer will be liable for any loss proximately caused by
peril insured against.

8. ASSIGNMENT:

A marine policy is assignable unless it contains terms expressly prohibiting

assignment. It may be assigned either before or after loss. A marine policy may be
assigned by endorsement thereon or on other customary manner. A marine policy is
freely assignable unless assignment is express prohibited. A marine policy is not an
incident of sale. So, if there is intention to assign a policy when interest passes,
there must be an agreement to this effect. Sections 53 of the Marine Insurance Act,
1963 states, Where the assured has parted with or lost his interest in the subject-
matter insured and has not, before or at time of so doing, expressly or impliedly
agreed to assign the policy, any subsequent assignment of the policy is inoperative.
Section 17 of the Act states, "Where the asserted assigns or otherwise parts with
his interest in the subject-matter insured, he does not thereby transfer to the
assignee his rights under the contracts of insurance.

[33]
3.5 TYPES OF MARINE INSURANCE

1. CARGO INSURANCE:

Cargo insurance caters specifically to the cargo of the ship and also pertains to the
belongings of a ships voyagers. Marine cargo Insurance is the insurance of
property as it moves from place to place. The word marine conjures up the sea
and foremost in the minds of the writers of the Marine Insurance Act 1906 (MIA)
was indeed sea transits. While the Act in its opening sections refers to marine
losses and to the marine adventure and to maritime perils, marine insurance
departments insure property conveyed by aircraft and road and rail vehicles as
well. Many transits, particularly international ones require two or more types of
transport and the Act makes provision for them.

2. HULL INSURANCE:

Hull insurance mainly caters to the torso and hull of the vessel along with all the
articles and pieces of furniture in the ship. This type of marine insurance is mainly
taken out by the owner of the ship in order to avoid any loss to the ship in case of
any mishaps occurring.

3. LIABILITY INSURANCE:
Liability insurance is that type of marine insurance where compensation is sought
to be provided to any liability occurring on account of a ship crashing or colliding
and on account of any other induced attacks.
4. FRIEGHT INSURANCE :
Freight insurance offers and provides protection to merchant vessels corporations
which stand a chance of losing money in the form of freight in case the cargo is
lost due to the ship meeting with an accident. This type of marine insurance solves

[34]
the problem of companies losing money because of a few unprecedented events
and accidents occurring.

3.6 TYPES OF MARINE INSURANCE POLICIES

1. TIME POLICY:

A time policy is taken for definite period of time, usually not exceeding 12 months
say from January 1, 1981 to December 31, 1981. This policy is most suitable for
hull insurance.

2. VOYAGE POLICY:

Where the subject matter is insured for a specific voyage, say from Gateway of
India to Port in Srilanka it is named as voyage policy.

3. MIXED POLICY:

This policy is the combination of time and voyage policy. It, therefore, covers the
risks for both particular voyage and for a stated period of time.

4. FLOATING POLICY:

Floating policy is taken for a relatively large sum by the regular suppliers of goods.
It covers several shipments which are declared afterwards along with other
particulars. This policy is most situated to exporter in order to avoid trouble of
taking out a separate policy for every shipment.

5. VALUED POLICY:
[35]
Under its terms the agreed value of the subject matter of insurance is mentioned in
the policy itself. In case of cargo this value means the cost of goods plus freight
and shipping charges plus 10% to 15% margin for anticipated profit. The said
value may be more than the actual value of goods.

6. OPEN POLICY:

Where the value of the subject matter of insurance is not declared but left to be
ascertained and proved later it is called unvalued policy.

7. BUILDERS RISK POLICY:

This policy is issued for more than one year. This covers the risk of damage to
vessels from the time its construction commences until its trail is completed.

8. BLANKET POLICY:

Under the condition of the blanket policy the maximum limit of the required
amount of protection is estimated which is purchased in lump sum. The amount of
premium is usually paid in advance. This policy describes the nature of goods
insured, specific route, ports and places of the voyages and covers all the risk
accordingly.

9. PORT RISK POLICY:

[36]
This policy covers all the risk of a vessel while it is standing at a port for particular
period of time.

10. WAGER POLICY:

Where the assured has no insurable interest in the subject matter of insurance that
is known as wager policy. As this policy has no legal effect so it cannot be taken to
a court of law. If underwrite refuses to accept the claim the policy holder cannot
take any legal action against him. It is, therefore, also called as gambling policy.

11. SPECIAL HAZARD POLICY:

This policy covers special risks incident to piracy and war. It provides protection to
insured under agreement against seizure, capture, detention and other war risks.

12. COMPOSITE POLICY:

This type of policy is purchased from more than one under writers. If there is no
any motive of fraud then insured will be indemnified by each under writer
separately in case of loss.

13. BLOCK POLICY:

This policy is particularly purchased to gold diggers. It covers all the risks of
damage to gold from the time of its recovery to its distinction. This type of policy
has been introduced in Africa and is very popular in the mine fields of gold.

3.7 IMPORTANT CLAUSES IN MARINE POLICY

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1. Lot of Not Lot: This clause protects the insured, which in good faith
insures goods which are on a ship which has left a foreign port, in case they
were destroyed unknown to him, before he affected the policy. In this case
both the injured as well as the insurer ought not to have been aware of the
loss of the goods or the steamer at the time of the insurance.

If the insured knew of the loss and did not inform the insurer at the time of
effecting insurance the policy would be void.

2. Name of the Ship and Master: Here is given the name of the ship
and the master for the voyage which is insured.

3. Valuation Clause: This clause states the actual value of the goods as
agreed upon between the underwriter and the insured in the case of a valued
policy, and in the ca se of an open policy a bland is left after the words, 'and
shall be valued at..'

4. The Parties: All persons competent to contract may be parties to policy

of insurance. A policy may be underwritten or undertaken either by an
insurance company or an individual underwriter as is the case with Lloyd's
in England.

The expression for and in the name of all and every other person or persons,
etc.' protects all persons who has insurable interest at the time of effecting
the policy or who acquired insurable interest during the continuation of the
risk.

5. Description of the Voyage or Duration of the Risk: This clause

begins with the works 'at and from' and in the blank left in the policy is
[38]
inserted the description of the voyage intended to be insured. The risk begins
from the place at which the steamer is at the time of insurance and ends
when she arrives at the port of destination.

6. Sea Perils Insured Against, or the Perils of the Sea: These perils
include in detail all the perils against which the insured is protected. This
clause in Lloyd's embraces almost all the sea perils including 'periods of the
seas, men-of-war, fire, pirates, rovers, thieves, jettisons, arrests restraints and
detention of all kings, princes and people, and mariners and of all other
perils, losses, and misfortunes that have or shall come to the hurt, detriment,
or damage of the sail goods or merchandise and the ship.'

7. Receipt of Premium and the Rate Charge: The receipt of

premium and the rate charged are stated in this clause. Premium is the
consideration paid by the insured to the underwriter for undertaking to
indemnify him against the loss as per the terms of the policy.

The form of Lloyd's policy clearly uses the words, 'confessing ourselves
paid the consideration due...', as if the premium had already been paid to the
underwriter, at the time the policy was affected. In practice, however, the
premium in London on Lloyd's is not paid by the broker at the time of
affecting the policy. The practice there is to pass the amount in account
between the insurance broker and the underwriter.

8. Sea Perils Insured Against, or the Perils of the Sea: These

perils include in detail all the perils against which the insured is protected.
This clause in Llyod's embraces almost all the sea perils including 'perils of
the seas, men-of-war, fire, pirates, rovers, thieves, jettisons, arrests, restraints

[39]
and detention of all kings, princes and people, barratry of masters and
mariners and of all other perils, losses, and misfortunes that have or shall
come to the hurt, detriment, or damage of the said goods or merchandise and
the ship.'

9. Memorandum: The commodities which are the subject matter of

marine insurance comprise various articles which are liable to undergo
deterioration or damage to a greater or lesser extent according to their
peculiar nature.

Some of these commodities may even perish or be damaged through

detention or delay. To avoid, therefore, claims arising through the inherent
vice in the nature of such commodities, almost every policy of insurance
includes a clause or memorandum; in the case of the Lloyd's policy it is
called the F.P.A. clause.

Under the F.P.A. clause the underwriter is liable for total loss but is not liable
for particular average or partial loss. Partial loss is agreed to be paid if it
exceeds three per cent in certain cases, and five per cent in others.

10. Waiver Clause: This is in fact continuation of the 'sue and labour'
clause because it lays down that 'no acts of the assurer or assured in
recovering, saving or preserving the property insured, shall be considered as
a waiver or acceptance of abandonment. 'This clause is nowadays found in
almost all public policies of Lloyds's.

11. Sue and Labour Clause:Under this clause it is specifically provided

that it shall be lawful to the assured, his factors, agents and assigns to do all

[40]
in their power to defend the property insured in case of damage or loss; and
in return in the underwriter agrees that the insured's rights to his insurance
claim are not in any way prejudiced; and that all the expense thought lawful
in such prejudiced; and that all the expenses though lawful in such attempt
shall, save costs against the damage insured, be made good by the
underwriter.

12. Implies Warranties:

Besides the actual conditions the following are implied by law:-

a. Seaworthiness-i.e. at the time of insurance the ship is en every respect

fit for the voyage.
b. Legality of Voyage-i.e. it is for a legal purpose and is not, for
example, a smuggling adventure.

c. Non-deviation-i.e. where a voyage is between two specified ports that

the ship will take the usual route and not deviate from it except
through unavoidable necessity.

13.Causa Proxima:

The literal meaning of this Latin expression is "Proximate Cause.' This arises
when a property is insured at sea and more than one cause operates to bring
about loss, in which case the proximate cause ought to be considered. Thus,
in a case where the cargo was damaged by sea- water which trickled from a
pipe gnawed by rats, it was held that the proximate cause was the sea-water,
and the insured was entitled to damages, the rat's beings remote cause.

[41]
 14. Bottomry Bond

When the master of a ship is in urgent need of money which he cannot raise
on the owner's credit, or is unable to communicate with the owner, he has the
power to give a bond known as the "bottomry bond,' by which he pledges
the ship as a security to the person advancing money.

The peculiarity of this bond is that the capital and interest on the loan is
payable only if the ship reaches its destination if therefore, after this bond is
given, the master proceeds its destination. If, therefore, after this bond is
given, the master proceeds with the voyage and has, at women other port, to
raise further money for urgent repairs, for which he gives a second bottomry
bond to some other person, this second part acquires a prior right over that of
the lender on the first bond.

3.8 BENEFITS OF MARINE INSURANCE

The cover, automatic and optional extensions bring many benefits to your
extensive insurance cover options.

Cover includes:

1. Sudden accidental physical loss or damage.

2. Agreed value single sum insured on the vessel which includes, where
applicable, spars, sails, machinery, tender, outboards, trailer, equipment and
other accessories that would normally be sold with the craft.

3. Provision to insure fishing gear kept permanently aboard vessels on

Moored or Berthed craft policies.
[42]
 4. Navigation limits up to 200 nautical miles from North and South Islands
of New Zealand including transportation and storage on land.

Automatic extensions include:

1. Emergency towing costs following a breakdown up to $2,000 per year.

2. Crew rescue costs up to $10,000.

3. Reimbursement of temporary accommodation costs up to $1,000

following an accident to your vessel.

4. Personal effects, your own or guests whilst aboard your vessel and not
otherwise insured. For moored launches and yachts up to $1,000 for fishing
gear and $5,000 in total and for trailer craft $1,000.

5. Reimbursement of costs up to $1,000 for replenishing, refilling or

replacing fire extinguishers and/or safety flares used during an incident
giving rise to an admitted claim.

6. Reimbursement of costs, up to 25% of the sum insured, incurred in

preventing or attempting to prevent loss or damage.

7. Medical expenses up to $2,000 incurred as a result of an accident to any

person while in, upon boarding or leaving your vessel.

8. Items purchased for the vessel during any one period of insurance
automatically covered up to $25,000 in respect of moored vessels, and
$5000 for trailer craft.

[43]
 9. Lump sum payment of $10,000 in total for the accidental death of the
insured/s as a result of bodily injury whilst aboard the vessel.

10. Legal liability arising from the ownership or use of the vessel
$5,000,000.

11. Punitive or exemplary damages $250,000.

12. General damages for mental injury $250,000.

13. With our prior approval legal costs up to $10,000 should you or your
vessel be involved or implicated in a maritime accident which is the subject
of a MSA, TAIC or Coroner's inquiry.

Optional extensions include:

Full racing cover for yachts.

Partnership deaths by accident cover-specifically for syndicates.

Blue water off shore facility.

CHAPTER 4

NEW INDIA ASSURANCE COMPANY LIMITED

[44]
The New India Assurance Co. Ltd., based in Mumbai, is one of the five public
sector insurance companies in India. It is the "largest general insurance company of
India on the basis of gross premium collection inclusive of foreign operations". It
was founded by Dorab Tata in 1919, and nationalized in 1973. Previously it was a
subsidiary of the General Insurance Corporation of India (GIC). But when GIC
became a reinsurance company as per the IRDA Act 1999, its four primary
insurance subsidiaries New India Assurance, United India Insurance, Oriental
Insurance and National Insurance got autonomy.

New India Assurance operates both in India and foreign countries. In the recent
past it has succeeded in forging tie-ups with some of the leading public sector
banks in India such as State Bank of India, Central Bank of India, Corporation
Bank and United Western Bank to increase its distribution network. New India
Assurance is a Government of India undertaking. New India Assurance became

[45]
nationalized in 1973. The New India Assurance Company Limited is one of the
leading global insurance groups and has offices and branches throughout India and
in many countries abroad.

New India Assurance has established itself in the Indian as well as global insurance
industry and has gained significant recognition owing to numerous achievements:

Largest Non-Life insurer in Afro-Asia excluding Japan

First Indian non-life company to cross Rs. 8225.51 crores Gross Premium

Over-seas presence in countries like Japan, U.K, Middle East, Fiji and
Australia

Largest number of offices in India and Abroad Trained and technically

qualified staff 1085 fully computerized offices across India.

"A-" (Excellent) rating by A. M. Best & Co (Europe), first domestic

company to be rated by an International Rating Agency.

First company to set up an Aviation Insurance Department in 1946.

First company to handle the Hull Insurance requirements of the Indian

Shipping Fleet.

First company to establish its own Training School.

First company to introduce the concept of 'Model Office Training'.

First company to create department in Engineering insurance.

Pioneer in Satellite insurance.

[46]
4.1 OFFICES

The company with its corporate office in Mumbai has about 28 regional offices,
397 divisional offices, 588 branches, 27 direct agent branches and 23 extension
counters in the year 2011-2012. The number of regional offices of the company in
the year 2011 stood at 28, with numerous other offices down the hierarchy of
divisional offices, branch offices, direct agents branches, micro offices. Centralized
claim processing offices called claims hubs are operated from 29 locations.

Its overseas offices for the year 2011-2012 consisted of 19 branches, seven
agencies, four associate companies and three subsidiary companies spread over 23
countries.

4.2 THE PIONEERS

First company to set up an Aviation Insurance Department in 1946.

First company to handle the Hull Insurance requirements of the Indian
Shipping Fleet.

First company to establish its own Training School.

First company to introduce the concept of 'Model Office Training'.

First company to create department in Engineering insurance.

Pioneer in Satellite insurance.

[47]
4.3 THE NEW INDIA ASSURANCE GENERAL INSURANCE
PRODUCTS

1. HEALTH PLAN:

Hospitalization burn a hole in our pocket and alter our quality of life by imposing
financial restrictions New India Assurance health plans guarantee peace of mind
for the insured against financial perils caused due to sudden hospitalization:

Pravasi Bharatiya Bima Yojana Policy

Personal Accident Policy

Rasta Apatti Kavach (Road Safety Insurance)

A. Mediclaim Policy

1. Janata Mediclaim policy: The New India health insurance policy covers
pre and post hospitalization expenses but in the case when hospitalization is for
more than 24 hours. The policy also provides medical expenses towards day care
treatments and ambulance charges are also met by the policy. Pre-existing diseases
are covered after four continuous and claim free renewals with the company.

2. Family Floater Mediclaim policy: This is the policy specially designed to

cover family under single premium. It covers individuals spouse and children
under the same policy. The basic premium charged is per the highest aged member
and loadings are charged for covering spouse and children. This policy provides
pre and post hospitalization expenses.

[48]
3. Senior citizens Mediclaim policy: This policy is meant for senior citizens
above the age of 60 years till 80 years. Proposers must undergo a prescribed pre-
acceptance health check at their own cost to identify pre-existing diseases. The
health check is waived if the proposer is already having Mediclaim insurance in
continuity with our Company.

2. CAR INSURANCE:
New India Assurance plans provide you with a comprehensive motor policy that
lets you take care of yourself rather than a car i case of an accident. The motor
insurance plan provided by the company covers scooters, motorcycles, private cars
and all types of commercial vehicles. The policy is available under two variants-
liability only policy and package policy. Liability only policy covers third party
liability for bodily injury, death and property damage, personal accident cover for
driver is also included under the liability variant while package policy covers loss
or damage to the vehicle plus everything covered under liability policy. The
package policy also covers loss arising from fire, explosion, earthquake, flood, riot,
strike and any damage from terrorist activity. Various add on covers like damage or
loss to electrical and other accessories, legal liability to employees can be added by
paying extra premium.

Motor Policy

3. MOTOR INSURANCE:

New India Assurance Policies become a great companion for you on your holidays,
business trips or visits and help in safeguarding the dilemma of lost baggage on the
way.

[49]
A) Overseas Mediclaim policy: The New India Assurance Overseas travel
insurance is specially meant for travelers travelling frequently outside India. The
main feature of this plan is that the premium is paid in local currency while claims
are settled foreign currency. It covers medical expenses incurred by insured outside
India as a direct result of the bodily injury caused or sickness or disease contracted
during the travel. Additional benefits like loss of baggage, personal accident, loss
of passport and personal liability are extended with the payment of extra premium.

B) Suhana Safar policy: The New India Assurance Suhana Safar policy is
designed particularly for domestic travelers. The policy covers any mode of
transport like rail, road, air, water including own vehicle. This policy can be
availed for a shorter period for as short as 60 days. The policy covers the risk of
personal accident, loss or damage to the baggage of a family consisting of spouse
and dependent children. The cover operates from declared place of departure and
terminates on schedule date of return or on actual return, whichever may happen
earlier.

4. MARINE INSURANCE PLAN:

New India Assurance provides Marine Insurance Policy as well as the shipping
Cargo policy which helps to recover the damage to the ships and the goods during
the travel from origin to the destination. This policy covers goods, freight and other
interests against loss or damage to goods whilst being transported by rail, road, sea
and/or air.

Different policies are available depending on the type of coverage required

ranging from an ALL RISK cover to a restricted FIRE RISK ONLY cover.
This policy is freely assignable and is basically an agreed value policy.

[50]
5. HOME INSURANCE PLAN:

New India Assurance Policies help to safeguard your home and give you
comprehensive coverage against many perils.

A) The New India Assurance Householders policy: This policy is a

package policy specially designed to meet the insurance requirements of a house
holder. The coverage of this policy is very large. It covers for any damage due to
fire, explosion, lightening and natural calamities like floods, earthquakes,
landslides, hurricane, tornado, storm etc. This policy covers whole building as well
as its contents. This policy covers the contents of the home from loss suffered from
burglary and house-breaking. Jewelry, glass and domestic appliances are covered
from any loss or damage from any kind of accident. Electrical appliances damage
is also covered under this policy. The New India Assurance house holders policy
covers the loss or damage of pedal cycles due to fire and allied perils, burglary,
housebreaking, accidental external means and third party personal injury or third
party property damage. It also covers insureds legal liability for bodily injury or
loss of or damage to property of third party limited to amount specified in the
schedule and workmen's compensation liability to domestic servants engaged in
insured's premises.

It is advisable to compare all New India Assurance General insurance plans from
other General insurance companies in India to choose the best insurance plan that
suits you the most.

[51]
6. PERSONAL ACCIDENT PLAN:

The New India Assurance personal accident plans are one of the comprehensive
plans available in the market. One can make online comparison between The New
India Assurance personal accident premium and The New India Assurance personal
accident quotes to understand the policy.

A) Personal Accident policy: This is a broader coverage plan which compensates

an insured or its nominees in the event of death and any kind of permanent or
temporary disability. The policy provides compensation in case of any bodily
injury or death to the insured, directly and solely as a result of accident by external,
visible and violent means. The policy does not compensate in the case of death due
to any pre-existing illnesses. Under this policy, family floater and group insurance
policies are also available. There is a special student plan under this policy as well.

B) Rasta Apatti Kavach (Road safety insurance): This insurance policy has been
designed to cater to the specific need of an individual who meets with an accident
with a motor vehicle on road and sustains injuries which requires hospitalization
for treatment. The policy also has provision for compensation for death and
permanent disability. The policy has two sections. One of which provides
compensation payment in case of personal accident and other is the compensation
by providing medical expenses in case of any hospitalization.

4.4 FINANCIAL RATING

For the sixth consecutive year, the Company has been rated as "A-" (Excellent) by
M/s. A.M. Best Europe Ltd. The rating reflects Company's excellent risk adjusted
capitalization, prospective improvement in underwriting performance and its

[52]
leading business profile in the direct insurance market in India. A partially off-
setting factor is the Company's reliance on investment income which counter
balances underwriting losses. But the outlook is stable. A.M. Best believes the
Company's risk adjusted capitalization is excellent and anticipates that it will
remain sufficient to absorb the likely growth in the net premium. Further it also
expects that there will be a reduction in the combined ratio in the years to come.
The Company is likely to maintain its leading business position as the largest direct
insurer in India, despite increased competition from private players.

[53]
4.5 THE NEW INDIA ASSURANCE PERFORMANCE

New India Assurance Company is the largest non-life insurer in India. The
financial strength of the Company is reflected from the following figures:-

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Statistical data on performance of NEW INDIA ASSURANCE COMPANY LTD
(1998-2012)

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4.6 NEW INDIA ASSURANCE MARINE CARGO POLICY

This policy covers goods, freight and other interests against loss or damage to
goods whilst being transported by rail, road, sea and/or air.

Highlights
This policy covers goods, freight and other interests against loss or damage
to goods whilst being transported by rail, road, sea and/or air.
Different policies are available depending on the type of coverage required
ranging from an ALL RISK cover to a restricted FIRE RISK ONLY cover.

This policy is freely assignable and is basically an agreed value policy.

Premium & Claims

The sum insured or value of the policy would depend upon the type of contract.
Usually, in addition to the contract value 10/15% is added to take care of incidental
cost.

The following steps should be taken in event of a loss or damage to goods insured:

1. Take immediate steps to minimize loss.

2. Inform nearest office of the insurance company or claim settling agent
mentioned on the policy.

3. In case of damage to goods whilst on ship or port, arrange for joint ship
survey or port survey.

4. Lodge monetary claim with carrier within stipulated time period.

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 5. Submit duly assigned insurance policy/certificate along with the original
invoice and other documents required to substantiate the claim such as :

1. Bill of Lading / AWB/GR

2. Packing list

3. Copies of correspondence exchanged with carriers.

4. Copy of notice served on carriers along with acknowledgment/receipt.

5. Shortage/Damage Certificate issued by carriers.

6. Survey fees are to be paid to the surveyor appointed by the insurance

company. These fees will be reimbursed along with the claim if the claim is
otherwise admissible.

Policy Covers

All types of Oceangoing vessels

All type of Coastal/Inland vessels

Yard and pleasure Crafts

Port Crafts

Shipbuilding- construction of vessel

Ship Repairers' Liabilities

Charterers Liabilities

Breaches of warranties / voyage cover

Freight- at -Risks insurance for voyages

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 Dredgers

Fishing vessels / Trawlers

Sailing Vessels

Jetties (with or without cranes), fixed pontoons/Pontoons Jetties, wharves

etc.

Ship breaking

4.7 PERILS / RISKS

(A) The policy covers perils of the seas, rivers, lakes or other navigable waters
loss/damage to the property insured caused by:

Fire, explosion
Stranding, sinking etc.

Overturning, derailment ( of land conveyance )

Violent theft by persons outside the vessel.

Collision

General average sacrifice, sacrifice, salvage charges

Jettisons

Piracy

Breakdown of or accident to nuclear installations or reactors

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 Contact with aircraft or similar objects, or objects falling there from, land
conveyance, dock or harbour equipment or installation.

Earthquake volcanic eruption or lightning.

Crew Negligence.

Exclusions

The policy does not cover loss/ damage due to:

Deliberate damage/destruction of the vessel by wrongful act of any person

Use of any weapon of war employing atomic / nuclear fission and or fusion.

Radioactive Contamination, Chemical, Biochemical, Biological,

Electromagnetic Weapons.

Insolvency or financial default of the vessel owner /operators /charterers

War / civil war, Strike, Riot or Civil Commotion

Any terrorist or person/s acting with political motive

(B) COMPREHENSIVE PORT PACKAGE POLICIES:

Cover can be purchased by:-

Port Authorities

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 Port / Terminal operators

Private Jetty Owners

Scope of Comprehensive covers:-

Physical Damage
Third Party Liability

Business Interruption

Terrorism

Wreck Removal

- H & M Cover for Vessels

Exclusions:-

Confiscation, requisition, detention

Blocking of sewers, drains

Wear & Tear, deterioration

Error in design, workmanship

Mechanical / Electrical Breakdown

(C) Oil & Energy Risk Insurance Policies:

Cover can be purchased by - Oil and Energy Industries.

Scope of Comprehensive covers -

o Offshore / Onshore constructions / Erections ( Builders Risks )

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 o Production / Operation Cover - Well head platform/ process platform.

o Exploratory Drilling (Offshore - Jack Up Rigs, Drilling Rigs, Semi

Submersibles etc. Onshore- Fixed Land rigs, Mobile Land Rigs,
Work-over Land rigs)

o Seismic Survey

o Single Buoy Mooring ( SBM )

o Under water pipeline / Cable Insurance

Claim Intimation and Steps to be taken by Owners:

In the event of casualty likely to give rise to a claim

Immediate notice to policy issuing office.

Giving brief details as to name of vessel, place of occurrence, date & time of
casualty, circumstances leading to incident.

Seek appointment of surveyor to inspect and assess loss.

In case of theft please notify police.

In case of fire assistance of fire brigade to extinguish fire.

Appointment of adjuster in case of Oceangoing Vessels where necessary.

All steps to minimize loss as prudent uninsured.

Documents Essential:

Certified copy of note of protest by master

Marine casualty form issued by M.M.D.

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 Insured's report on occurrence.

Survey Report

Original Repair Bill, cash memo, Invoices

Weather Report by Meteorological Dept.

Affidavits filed by rescue vessels

Certificate of survey for inland vessels

Registry certificate

Free board certificate

Load line certificate (where applicable )

Status / copies of Mandatory certificates

Notarized statements of master and chief engineer of the vessel.

Log Book extracts (Engine & Deck )

Crew list with details of competency certificates.

Copy of Claim bill with supporting documents.

CHAPTER 5
FINDINGS & SUGGESTIONS

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The complete findings and required suggestions are finally given in this chapter for
the purpose of improving the performance of New India Assurance Company
Limited in providing Marine insurance policies & also framing new policies in the
future.

5.1 FINDINGS

1. Introduction chapter explained the overview of the project report; it contains

the objectives, hypothesis & the limitations of the study. It also has the
reviews given by certain authors regarding the general insurance sector and
the marine insurance.
2. The second chapter contains about the introduction to insurance, its
principles, and various types of insurance.

3. The third chapter is the analysis chapter which contains detailed information
about marine cargo insurance, the marine insurance products, its different
policies & important clauses in marine insurance.

4. The fourth chapter is also an analysis chapter which states about the New
India Assurance Company Ltd, the products offered by the company, &
different types of marine insurance and services offered by the company and
the premiums, claims and eligibility regarding the marine insurance policies.

5. The fifth chapter is the final chapter which includes required findings &
suggestions for the project.

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 6. During the survey it was observed that major source of information for
consumer are television and newspaper and least preference are given to
magazines, agents and friends.

7. Attractive schemes and brand image are the most important factor that
influences the buying behavior of the consumers.

5.2 SUGGESTIONS

On the basis of the collected data and the analysis, some suggestions can be made
to the New India Assurance Co. Ltd which will be helpful to them in improving
their services operational and financial performance. These suggestions have been
discussed as follows:

1. Even though most of the policy holders are satisfied with policies, plans they
have but some new attractive insurance plans should be introduce to bind them not
to switch over to other companies insurance plans.

2. The company should find out the no. of people who are not having any of the
Marine insurance plans through an intensive market research and motivate them to
get insured.

3. Leveraging technology to service customers quickly, efficiently and

conveniently.

4. Developing and implementing superior risk management and

investment strategies to offer sustainable and stable returns to our
policyholders.

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5. New India Assurance Co. Ltd should target each and every class of the society
while providing the products.

6. Company should provide full information to the customers before

targeting so they can take interest in the Marine Insurance policy which they
have opted for.

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 CONCLUSION

After completing the project it is concluded that New India assurance Co. Ltd has
develop its various plans and policies, flexible in nature, according to the
requirements of its targeted market or customers and is thus beneficial to its
customers in various ways. The most important benefit it provides to its customers
is that it is a government owned company. This lead to increase in the satisfaction
level of its customer that is why New India assurance Co. Ltd has28 regional
offices, 397 divisional offices, 588 branches, 27 direct agent branches and 23
extension counters in the year 2011-2012. Therefore it is not only beneficial but
better than other insurance companies not only regarding its product but also its
services.

From the discussion it is evident that general insurance industry expanded

tremendously from 1973 onwards in terms of number of offices, number of agents,
new business policies, premium income etc. Further, many new products (Marine
insurance, motor insurance, Mediclaim policy, etc.) and the insured were provided
by the insurers to suit the requirements of various customers. The marine insurance
policy provided by the New India Assurance Company Ltd act as a tool for
improving the performance of the company for providing the marine insurance
policy to its customers satisfying their most of the needs.

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 BIBLIOGRAPHY

BOOKS:

1.MISHRA M.N.(2004), Insurance Principles and practices, S. Chand

company limited, New Delhi.

2.Pereiasamy P.(2008) Principles and Practices of Insurance

Himalaya publishing House , Mumbai.

3. Ravinchandran K. (2007) Recent Trends in Insurance Sector in

India Abhijeet publishing , Delhi.

WEBSITES

www.newindia.co.in

www.insuremarine.com

www.myinsuranceclub.com

www.allinsuranceinfo.com

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