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    Role and Significance of Insurance

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    Rohit Padalkar
    Insurance plays an important role in promoting industry, commerce, and economic development. It protects businesses and individuals from risks, allowing for stability and growth of business. Insurance also provides social benefits like employment, education opportunities, healthcare, and a safer society by reducing issues like poverty and crime. On a national level, insurance increases savings, employment, and investment in infrastructure that drives the economy and national income.

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    Role and Significance of Insurance

    Uploaded by

    Rohit Padalkar
    131 views10 pages
    Insurance plays an important role in promoting industry, commerce, and economic development. It protects businesses and individuals from risks, allowing for stability and growth of business. Insurance also provides social benefits like employment, education opportunities, healthcare, and a safer society by reducing issues like poverty and crime. On a national level, insurance increases savings, employment, and investment in infrastructure that drives the economy and national income.

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    insurance

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    Significance of Insurance

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    Insurance plays an important role in promoting industry, commerce, and economic development. It protects businesses and individuals from risks, allowing for stability and growth of business. Insurance also provides social benefits like employment, education opportunities, healthcare, and a safer society by reducing issues like poverty and crime. On a national level, insurance increases savings, employment, and investment in infrastructure that drives the economy and national income.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    131 views10 pages

    Role and Significance of Insurance

    Uploaded by

    Rohit Padalkar
    Insurance plays an important role in promoting industry, commerce, and economic development. It protects businesses and individuals from risks, allowing for stability and growth of business. Insurance also provides social benefits like employment, education opportunities, healthcare, and a safer society by reducing issues like poverty and crime. On a national level, insurance increases savings, employment, and investment in infrastructure that drives the economy and national income.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
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    Role and significance of insurance

    ROLE AND SIGNIFICANCE OF INSURANCE


    1. ROLE OF INSURANCE IN THE DEVELOPMENT OF INDUSTRY AND COMMERCE: Insurance is the creator, planner and protector of industries and commerce. Protective Role Settlement of claims Protection from risks arising out of natural calamities. Protection from the risks caused by human beings: Such as strikes of workers , their negligence in carrying out work, theft and dacoits, evil disturbances and many other such acts. Protection Against statutory liabilities ( Fulfilling statutory liabilities towards the workers, arising out of industrial accidents. The employer is bound to compensate such workers under the provision of Workers Compensation Act. Financial Security Protection from loss of profits Protection from debts

    Continued
    Protection to the business institution due to sudden death of the key man ( insuring the life of key man in the business so that future can be protected safely from uncertainties) Provides stability in commercial and industrial activities 2. PROMOTIONAL ROLE OF INSURANCE: Extension of credit facilities. Facilitates industrialization and commercialization Increases business and industrial efficiency ( insurance provides protection from various risks and thus it increases the business efficiency Investment in Shares and debentures. Subscription of shares and debentures in new companies Promotes setting up of industrial estates Contribution Towards the development of basic industries

    Continued
    Underwriting of shares and debentures ( Undertake underwriting of new issue of shares and debentures of newly formed companies public limited companies) Investment in securities Contribution towards the development of infrastructure Contribution towards fulfillment of social and statutory obligations ( contributing well in social welfare schemes operated by industrial establishments, social security schemes, workers compensation plans, payment of gratuity etc.) Contribution towards development of international trade ( various policies issued by marine insurance companies help for the development of insurance trade by protecting the exporters /importers from marine losses and risks.) Extension of proper credit Increase competing ability among small and medium scale

    UTILITY OF INSURANCE TO DIFFERENT CATEGORIES


    1. SIGNIFICANCE FOR THE INDIVIDUALS/ FAMILY Security and stability Investment Preservation of health Increase efficiency Security of the property mortgaged Mental peace Planning for future Safeguard against statutory liabilities Capitalization of earning capacity Create awareness among insured's Availability of credit against insurance policy

    CONTINUED..
    Exemption from tax liability Safety to investment made 2. SIGNIFICANCE TO THE BUSINESS: Insurance is inseparable part of the business and no business can survive without insurance. Because business is the name for risk and uncertainty and it is insurance that gives protection against various risk. Safety against risks Source of credit Safety against perils Protection against the loss of key man In determining the cost of accidents

    Continued
    Loss prevention measures Protection to employees ( paying pension, gratuity and other economic benefits) Promotes foreign trade ( imports and exports trade are usually involved by marine perils and losses) Contribution towards the growth of larger business houses ( larger credit facilities, larger buildings, wide channel of distribution system, larger production and marketing plans, bearing various industrial and commercial risks and the major means of contributions towards the business from the insurance business. Significance to small business Significance to partnership business Business Stability Promotes employee welfare

    Continued.
    Promotes employee welfare: ( make provisions for old age, benefit like pension, provident fund, gratuity and accidental benefit. Retirement benefit, medical and housing etc) Promotes Industrialization: ( one side it protects the business from various kinds of risks and on the other the insurance companies make involvement in business activities by way of direct investment, underwriting of shares and extension of credit facilities. Human Resource Development 3. SOCIAL SIGNIFICANCE: Economic Security Encourages for education ( extends scholarship for poor students, in addition to extension of loan facility for education)

    Continued..
    Provides employment Distribution of risks Removes social evils ( the root cause of any evil in the society is lack of education, poverty and unemployment. The lack of opportunity to the people makes the way for committing social evils like theft, decoity etc. insurance helps a person to become self sufficient economically by providing for education, employment and protection against risk of life and property. Awareness towards health Prevention of losses Contribution towards the development of utility services Increases standard of living of the people Security to private and public property Provides social security

    4. NATIONAL SIGNIFICANCE
    It increased the national savings by way of small contributions of the people towards insurance premium. Insurance provides additional employment opportunities to the people. The premium collected by the insurance companies by small savings from the insured's are invested in such national schemes like electricity generation and irrigation, construction of dams and bridges, railway lines, scientific research etc. Insurance contributes towards the national income of the nation. different types of commercial and industrial units are set up every year with the financial assistance extended by insurance companies in addition to providing for employment to good number of people in insurance companies. Insurance contributes towards the social security measures.

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