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PROJECT REPORT ON GENERAL INSURANCE
Master of Commerce
(Advanced Financial Accounting)
Semester II
(2013-2014)
Submitted
In Partial Fulfillment of the Requirement For The
Award of Degree of Master of Commerce – (Advanced Financial Accounting)
Submitted By,
NAME- MR.SUHAS HARISHCHANDRA JUVEKAR
ROLL NO: - 59
SUB: - Advanced Financial Accounting
Under The Guidance Of,
PROF: - N.N.Jani (CA)
KONKAN GYANPEETH URAN COLLEGE OF COMMERCE & ARTS
URAN – RAIGAD-400702
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ACKNOWLEDGEMENT
I take this opportunity to express my sincere gratitude towards my project guide for his
constant encouragement and valuable guidance during the completion of this project.
I would also like to thank N.N.Jani (CA), Head, Department of commerce and PROF. K. A.
SHAMA, Principal, K.G.U.C. Commerce & Arts, Uran, Navi Mumbai 400702, for their
support & motivation for completion of this project work.
I also extend my sincere thanks to all the staff members of the department of commerce for
their support and help for the project work. Finally I express my thanks to all those who helped and
cooperated with me who helped and cooperated with me during data collection from them for this
project work during data collection for this project, helped me in completing my project work.
Date:
Place: Uran
(MR.SUHAS. H .JUVEKAR.)
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STUDENT DECLARATION
I hereby declare that the Project report titled “GENERAL INSURANCE” is my
original work and has not been published or submitted for any degree, diploma
or other similar titles elsewhere. This has been undertaken for the purpose of
partial fulfillment of master of commerce in K.G.Uran College of commerce &
Arts.
DATE:
SUHAS H JUVEKAR
ROLL NO. 59
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CERTIFICATE
This is to certify that MR. SUHAS HARISHCHANDRA JUVEKAR .a student M.Com– I,
Semester II Roll No 59 has successfully completed the project work on the topic „PROJECT
REPORT ON GENERAL INSURANCE, under my guidance, as a part of internal assessment
system of students in the subject of Advanced Financial Accounting, for the semester II for the
academic year 2013-14
Internal Examiner Signature of Principal
(With Seal)
External Examiner
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CONTENTS
Acknowledgement 1
Certificate 2
Declaration 3
Sr.No Topic Page No.
Chapter- I
1.1. Introduction
1.2. History
1.3. Objectives of the study
1.4. Rational behind the study
1.5. Research problem
1.6. Research Methodology
Chapter- II
2.1 Review of Literature
Chapter- III
3.1 Data Analysis
Chapter- IV
4.1 Findings
4.2 Recommendations
4.3 Conclusion
4.4 Summary
Appendix
A) Bibliography
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Chapter – I
1.1. Introduction
1.2. History
1.3. Objectives of the study
1.4. Rational behind the study
1.5. Research problem
1.6. Research Methodology
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Introduction:
Now day‟s today world is growing with new Technique and innovations to develop their strength
in all activities like manufacturing of new cars, electronic gadgets, ammunitions and many more.
But no one is serious about their future liabilities or upcoming unsound risks which affect direct
on assets.
The business of insurance is related to the protection of the economic values of assets. Every
assets has a value, the assets would have been created through the efforts of the owner. The asset
is valuable to the owner, because he expects to get some benefit from it. The benefit may be in
income or in some other form.
In short the word insurance means “some to be paid out of compensation for theft or
damage”.
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History:
Insurance has been known to exist in some form since 3000 BC. The Oriental Insurance
Company Ltd was incorporated at Bombay on 12th September 1947. The Company was a
wholly owned subsidiary of the Oriental Government Security Life Assurance Company Ltd and
was formed to carry out General Insurance business. The Company was a subsidiary of Life
Insurance Corporation of India from 1956 to 1973 till the General Insurance Business was
nationalized in the country. In 2003 all shares of our company held by the General Insurance
Corporation of India has been transferred to Central Government.
The Company is a pioneer in laying down systems for smooth and orderly conduct of the
business. The strength of the company lies in its highly trained and motivated work force that
covers various disciplines and has vast expertise. Oriental specializes in devising special covers
for large projects like power plants, petrochemical, steel and chemical plants. The company has
developed various types of insurance covers to cater to the needs of both the urban and rural
population of India. The Company has a highly technically qualified and competent team of
professionals to render the best customer service.
Oriental Insurance made a modest beginning with a first year premium of Rs.99, 946 in 1950.
The goal of the Company was “Service to clients” and achievement thereof was helped by the
strong traditions built up overtime.
Oriental with its head Office at New Delhi has 30 Regional Offices and nearly 900+ operating
Offices in various cities of the country.
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The Company has overseas operations in Nepal, Kuwait and Dubai. The Company has a total
strength of around 15,000+ employees. From less than a lakh at inception, the Gross Premium
went up to Rs.58 cores in 1973 and during 2010-11 the figure stood at a mammoth Rs. 5569.88
cores.
The entire general insurance business in India was nationalized by the Government of India
(GOI) through the General Insurance Business (Nationalisation) Act (GIBNA) of 1972.
55 Indian insurance companies and 52 other general insurance operations of other companies
were nationalized through the act. The General Insurance Corporation of India (GIC) was formed
in pursuance of Section 9(1) of GIBNA. It was incorporated on 22 November 1972 under the
Companies Act, 1956 as a private company limited by shares. GIC was formed to control and
operate the business of general insurance in India.
The GOI transferred all the assets and operations of the nationalized general insurance
companies to GIC and other public-sector insurance companies. After a process of mergers and
consolidation, GIC was re-organized with four fully owned subsidiary companies named:
National Insurance Company Limited,
New India Assurance Company Limited,
Oriental Insurance Company Limited
United India Insurance Company Limited.
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GIC and its subsidiaries had a monopoly on the general insurance business in India until the
landmark Insurance Regulatory and Development Authority Act (IRDA Act) of 1999 came into
effect on 19 April 2000. This act also amended the GIBNA Act and Insurance Act of 1938. The
act along with the amendments ended the monopoly of GIC and its subsidiaries and liberalized
the insurance business in India. In November 2000, GIC was renotified as India's Reinsurer, but
its supervisory role over its subsidiaries was ended. This was followed by the General Insurance
Business (Nationalisation) Amendment Act of 2002. Coming into effect from 21 March 2003,
this amendment ended GIC's role as a holding company of its subsidiaries.
The ownership of the subsidiaries was transferred to the Government of India, which in turn
divested its stake in the companies through listings on Indian stock exchanges. As a result of
these reforms, GIC became the sole Re-Insurer in India, and is now called GIC Re. Indian
insurance companies are required by law to cede 10% of every policy value to GIC Re, subject to
some limitations and exceptions. GIC Re has diversified its operations and is now emerging as
an important Re-Insurer in SAARC countries, Southeast Asia, Middle East and Africa. GIC Re
has also expanded its international operations through branches in London and Moscow.
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Objectives of the study:
When I started to do this project work there is my some objectives which are as follows:
To know the meaning of insurance.
To know the types of insurance.
To know the types of risk.
To know Accounts for insurance and no of schedules.
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Rational behind the study:
To know the meaning of insurance :
A promise of compensation for specific potential future losses in exchange for
a periodic payment. Insurance is designed to protect the financial well-being of an
individual, company or other entity in the case of unexpected loss. Some forms of insurance are
required by law, while others are optional. Agreeing to the terms of an insurance policy creates
a contract between the insured and the insurer. In exchange for payments from the insured
(called premiums), the insurer agrees to pay the policy holder a sum of money upon the
occurrence of a specific event. In most cases, the policy holder pays part of the loss (called
the deductible), and the insurer pays the rest. Examples include car insurance, health
insurance, disability insurance, life insurance, and business insurance.
A) Insurer: In above statement “Insurer” means who is ready to pay the loss or ready to
compensate the loss of insured. In other words an insurance company which agrees to
pay someone who pays them for insurance for losses suffered pursuant to the terms of an
insurance policy. For this benefit the customer pays the company a fee, called a premium.
B) Insured: In the above statement “insured” means who is ready to pay premium for
covering his risk and losses in other words a person whose interests are protected by an
insurance policy a person who contracts for an insurance policy that indemnifies him
against loss of property loss of property or life.
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To know the types of insurance:
We know only word insurance but the insurance sector is very browed sector. There are various
types of insurance Policies as below.
1. Vehicle insurance :
Auto insurance protects the policyholder against financial loss in the event of an
incident involving a vehicle they own, such as in a traffic collision. Coverage
typically includes:
a) Property coverage, for damage to or theft of the car.
b) Liability coverage, for the legal responsibility to others for bodily injury or property
damage;
Most countries, such as the United Kingdom, require drivers to buy some, but not all,
of these coverage‟s. When a car is used as collateral for a loan the lender usually
requires specific coverage.
2. Health insurance:
Health insurance policies cover the cost of medical treatments. Dental insurance, like
medical insurance protects policyholders for dental costs. In the US and Canada, dental
insurance is often part of an employer's benefits package, along with health
insurance.
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3. Life Insurance :
The greatest factor in having life insurance is providing for those you leave behind. This
is extremely important if you have a family that is dependent on your salary to pay the
Bills. Industry experts suggest a life insurance policy should cover "ten times your yearly
income." This sum would provide enough money to cover existing expenses, funeral
expenses and give your family a financial cushion. That cushion will help them re-group
after your death. When estimating the amount of life insurance coverage you need,
remember to factor in not only funeral expenses, but also mortgage payments and
living expenses such as loans, credit cards and taxes, but also child care, and future
college costs.
4. Marine Insurance :
The marine insurance is the oldest form of insurance. Under Bottom bond, the system of
credit and the law of interest were well-developed and were based on a clear appreciation
of the hazard involved and the means of safeguarding against it. If the ship was
lost, the loan and interest were forfeited. The contract of insurance was made a part of
the contract of carriage, and Manu shows that Indians had even anticipated the
doctrine of average and contribution. Freight was fixed according to season and
was expected to be reasonable in the case of marine transport which was then very
much at the mercy of winds and elements. Travelers by sea and land were very
much exposed to the risk of losing their vessels and merchandise because the piracy
on the open seas and highway robbery of caravans were very common.
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Besides there were several risks, Many times, it might have been captured by the king's
enemies or robbed by pirates or got sunk in the deep waters.
The risk to owners of such ships were enormous and, therefore, to safeguard them the
marine traders devised a method of spreading over them the financial loss which could
not be conveniently borne by the unfortunate individual victims.
The co-operative device was quite voluntary in the beginning, but now in modern it
has been converted into modified shape of premium.
The marine policies of the present forms were sold in the beginning of fourteenth century
by the Brogans. On the demand of the inhabitants of Burges, the Court of Flanders
permitted in the year 1310, the establishment in this Town of a charter of Assurance, by
means of which the merchants could insure their goods, exposed to the risks of the
sea.
The insurance development was not confined to the Lombard's and to the Hansa
merchants; it spread throughout Spain, Portugal, France, Holland and England. The
marine form land lending prominence of Lombard's merchants got a prominent section
of the London City.
They built homes there and took the name of Lombard Street. Later on, this street
became famous in insurance history. The Lloyd's coffee-house gave an impetus to
develop the marine insurance.
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5. Fire Insurance :
After marine insurance, fire insurance developed in present form. It had been
observed in Anglo- Section Guild form for the first time where the victims of fire
hazards were given personal assistance by providing necessaries of life.
It had been originated in Germany in the beginning of sixteenth century. The fire
insurance got momentum in England after the great fire in 1666 when the fire losses
were tremendous.
About 85 per cent of the houses were burnt to ashes and property worth of sterling ten
cores were completely burnt off. Fire Insurance Office was established in 1681 in
England. With colonial development of England, the fire insurance spread all over the
world in present form 'Sun Fire Office was successful fire insurance institution.
In India, the general insurer started working since 1850 with the establishment of the
Triton Insurance, Calcutta. Again in 1861, the North British and Mercantile catered
the requirements of insurance business.
The general insurance in India could not progress much. The slow growth of joint-
stock enterprise and mechanized production was another reason for the low level of
general insurance business.
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To know the type of risk:
Risks are classified in various ways. One classification is based on the extent of the
damage likely to be caused.
a) Critical or catastrophic risks:
This risk is those risk which leads to the bankruptcy of the owner. It would happen if the
loss is total, like in a tsunami, wiping out everything. It can also happen if the deceased
person was heavily in debt.
“Important risk may not spell doom, but may upset family or business finances badly
which requires lot of time to recover the adverse effect on an economic recession is one
such. Less damaging are unimportant risk, like temporary illness or accident”
b) Financial & Non-financial Risk:
This is a type of risk classified into financial & non-financial risks, referred to in an
earlier important note.
c) Dynamic Risk:
The dynamic risks are caused by perils, which have national consequences, like inflation,
calamities, technology, political upheavals, etc.
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d) Static Risk:
This risk caused by perils which have no consequences on the national economy, like a
fire or theft or misappropriation.
“Dynamic risks are likely to occur than static risks but are also less predictable static
risks are more suited to management through insurance”
e) Fundamental Risk & Particular Risk:
Fundamental Risk is those that affect large populations while particular risk affect only
specific persons. A train crash is an fundamental risk while a theft is a particular risk.
Life insurance business deals with particular risks but in most of the cases it affected with
fundamental risk.
f) Pure Risk & Speculative Risk:
The latter between the nature of betting or gambling where the risk is, to some extent,
under the control of the person concerned, while a pure risk is not so.
It is more in the nature of an Act of God. Insurance deals with only pure risks and not
speculative risks.
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To know what is claim and producers to compensate the claims:
A Claim is the demand that the insurer should redeem the promise made in the contract.
The insurer has then to perform his part of the contract i.e. settle the claim, after
satisfying himself that all the conditions and requirements for settlement of claim have
been complied with.
To know the Accounts and schedules of the insurance companies:
As per my studies I found there are all around 02 Accounts i.e. Revenue A/c &
Profit & Loss A/c. and Balance sheet.
In Revenue Accounts there are 4 Schedules. And in Balance sheet there are 11 Schedules..
Performa of Revenue A/c, Profit & Loss A/c, & B/s as follows.
Form (A)
Revenue A/c for the year Ended .
Particulars Sch No. Amount (CY) Amount (PY)
Premium Received 01 XX XXTotal (A) -- XX XXClaim 02 XX XXCommission 03 XX XXManagement Expenses 04 XX XXTotal (B) -- XX XXSurplus/ Defecate (A-B) -- XX XX
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Sch No.01 premium received shows about the income of the insurance co. it Calculated
as Total (A)
Sch No.02 Claim Paid shows Total Claim Paid for the year this is expenses for the co.
Sch No.03 Commission shows about the total commission paid to their agents and
advisers.
Sch No. 04 Management Expenses shows their expenses for the year. It calculated as
total (B)
After entering all amounts calculate (A) - (B) = Total surplus/ Defecates.
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Form A
Profit & Loss A/c For the year ended .
Particulars Amt AmtA) Income
1) Operating Profit Fire Marine Misc.
XX XX XX XX
2) Income From Investment Interest & Dividend Received Rent Received
XX XX XX
3) Other Income Share Transfer Fees. Misc IncomeTotal
XX XX XX
XX
B) Expenditure 1)Provision other than Tax Provision for deprecation Provision For Bad Debts XX
XX XX
02) Other Expenses Deprecation Bad debts Other Expenses
XX XX XX XX
Net Profit Before Tax (NPBT) (Less) Provision For Tax
XX XX
Net Profit After TaxProfit & Loss Bal. B/F from previous YearTotal (Income - Expenses)
XX XX
XX
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Profit & Loss Appropriation A/c.
Particulars Amt
Interim Dividend XXProposed Dividend XXTransfer To General Reserve (20%) XXBal C/F to B/s. XXTotal XX
Form B
Balance sheet as on .
Particulars Sch No. AmtSources of Fund
05 XXShare CapitalReserve & Surplus Fund 06 XXBorrowed Fund 07 XXTotal XX Application of Fund
08 XXInvestmentLoan 09 XXFixed Assets 10 XX(A) XXCurrent Assets
11 XXCash & Bank BalanceOther Assets & Advance 12 XXSub Total (11+12) XX(Less) Current Liabilities
13 XXLiabilitiesProvision 14 XXSub Total (13+14) XXNet Current Assets (B) XXMiscellanies Expenses (Not W/Off)Total (A+B+C)
(C) 15 XXXX
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Sources of Fund:
Sch No.05 Share Capital: Is shows Total Capital which includes both type of share i.e. Equity &
Preference Share Capital.
Sch No.06 It Shows Reserve Fund like capital reserve, share premium, general reserve &
Surplus Fund Which carried forward from P&L A/c.
Sch No.07 Borrowed fund Shows the fund which is borrowing from outside from the
Companies. It includes Debentures, bonds, and financial institutions.
Sch No.08 Investment Shows total investment for the year for e.g. Long Term Investment, Short
term investment, Investment in Indian Govt. Securities, investment in Bonds Etc.
Sch No.09 Loan Shows the Loan taken from Banks and other outsiders, it includes Secured
Loans as well as unsecured loan.
Sch No.10 Fixed Assets shows the total fixed assets which include goodwill, land & building,
Plant & Machinery, all assets net value.
Sch No. 11 Cash & Back Balance Shows total Balance in Hand & Balance Available in Bank
A/c.
Sch No. 12 Other Assets & advance shows Advance to Directors, Advance Tax Paid,
Application money for investment, outstanding premiums, deposit with reserve bank of India
Etc.
Sch No. 13 Other Liabilities shows total Creditors O/s Claims Not Clear or Claim O/s, Deposits
on re-insurance ceded, Premium received in advance Etc.
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Sch No.14 Provisions shows provision for Provision for Proposed Dividend, Dividend
distribution tax, Etc.
Sch No.15 Misc. Exp Shows Discount Allowed in issue of share/ Debenture & other Exp.
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Research problem:
When I began working on this project work I faced a lot of hurdles in my way however due to
the help and timely guidance of our teaching staff, friends and family members, I could collect
information and complete this project report successfully on time. I faced the problems which are
common ly faced by most of the students; however these problems could not discourage me and
stop me from completing this project
1) Electricity Problem (Power Cut)
2) Low speed of internet connection.
3) Had to check different sites for single information for better results.
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Research Methodology:
Each and every person tries in his/her own way to gather information about the given topics for
project. The information collected might be same, however the methods differ.
Listed below are some of the methods, sites and places where I had to visit and many people
whom I had to consult in order to successfully complete my project work and to fulfill the
required information as per the benchmark.
Research and development is creative work undertaken systematically to increase the stock of
knowledge, including knowledge of humanity, culture and society. The research is done with the
data which is available; the research is undertaken with the help of secondary data Each and
every person tries in his/her own way to gather information about the given topics for project.
The information collected might be same, however the methods differ.
1) Historical research Method.
2) Secondary research Method.
1) Historical research Method:
This research method is help to understand the basic structure of the insurance
companies. In history we can see in insurance services in introduce in 3000 BC. This
insurance business introduce in Indian in 1972. It was incorporated on 22 November
1972 under the Companies Act, 1956 as a private company limited by shares.
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GIC was formed to control and operate the business of general insurance in India. The
GOI transferred all the assets and operations of the nationalized general insurance
companies to GIC and other public-sector insurance companies. After a process of
mergers and consolidation, GIC was re-organized with four fully owned subsidiary
companies named:
National Insurance Company Limited,
New India Assurance Company Limited,
Oriental Insurance Company Limited
United India Insurance Company Limited.
2) Secondary research Method:
This method helps me to understand the various producers regarding settlement of
various claims, various product of insurance companies, various types of services
introduce by insurance companies, types of accounts which are helps to insurance
companies, how to calculated premium, Type of insurance like ceded & re-insurance Etc.
This data also help me to understand the important document or we can say document of
agreement i.e. policy. If we lost the policy we will loss all rights n insurance companies
will reject all claims & demands.
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Chapter- II
2.1 Review of Literature:
Insurance companies introduce premium payment plans
Limited premium payment policies seem to be the rage currently. Many insurance companies
have already introduced limited premium payment products, while many more are on the anvil,
according to industry sources. Conventional life insurance policies require investors to pay their
premiums till the year of maturity, whereas in limited premium payment products, the premium
is paid for a far shorter period of time. Of course, the amount paid would be far higher in the
latter case than in the former.
Review:
Plan about payment of insurance is very nice plan taken by insurance company, which generates
saving habits in small income group also some insurance companies introduced premium plans
like monthly premium plan, quartile premium plan, half yearly premium plan as yearly premium
plan.
There is one good comment in this article is pay your premium regular which help to get far
returns.
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Third-party motor insurance premiums to rise by up to 65 %
New Delhi: Owning a vehicle would now pinch your pockets even more, with third-party motor
insurance premiums set to rise by up to 65 per cent for two-wheelers, private cars and heavy load
carriers from April 25.
The premiums are being revised after a gap of four years, the sector watchdog Insurance
Regulatory and Development Authority (IRDA) said, adding, from now onwards the third-party
motor insurance premium rates would be revised annually. The IRDA has also fixed a formula
for revising the motor insurance premium rates, which would be done after taking into account
inflation and data on claim settlement.
Schedules for Third-Party Premium:
Cubic Capacity (CC) Amount of Premium For Privet Cars & Heavy Vehicles
1,000-cc 740.001,000 cc - 1,500 cc 880.00above 1,500 cc 2,750.00
For Two & three wheelers Up to350 cc 330.00Above 350 CC 680.00
"If the premium rates get revised annually on specified parameters it will save a lot of time
which gets wasted on account of negotiation with several associations," National Insurance
Company CMD N S R Chandra Prasad said.
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The insurance companies had actually sought a 150 per cent hike in premium rates as these
companies are bleeding on account of high claim to premium cost. However, IRDA in its
exposure draft had suggested a 10 per cent increase in premium for private cars and two-
wheelers and up to 80 per cent for goods carriers.
Though regulation of the tariffs in the non-life sector was withdrawn in 2007, third-party motor
insurance continues to be regulated. It is mandatory to for a vehicle owner to obtain third-party
insurance to provide insurance cover to others in case of injury or loss of life.
Review:
As per above article companies decided to increases premium by 65% annually is a right
decision by them. But it is very expensive for the third party insurance holders. There are slabs
for premium which is introduced as per the CC of Vehicle.
There is one statement in above article i.e. when they inspect their companies‟ accounts.
Accounts shows high claim to premium cost
Today nearly about 100 Vehicles s caused in accident and they claim to repair their damage they
are paying insurance premium for Rs. 15, 000 or 20, 0000 and Appling for claim Rs. 30,000-
35,000 whatever. That‟s why companies have to increase their rates for third party insurance.
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Chapter- III
3.1 Data Analysis
My Data analysis is based on General Insurance Corporation of India for the year ended
31 March 2012
Revenue Account of M/s. General Insurance Company
For the Year ended 31st March 2012
Insurance Type Fire Marine MiscellaneousYears 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Premium earned3,15,76,337 2,73,73,264 7,21,92,080 6,01,39,643 89,81,772 76,85,571
Profit on sale of7,24,455 12,85,365 14,50,664 25,15,593 2,66,124 5,13,328investmen
tProfit/Loss on Exchange Fluction 2,218 -1,17,150 82,414 -98,418 24,218 10,310
Interest Div &Rent34,80,854 27,02,189 69,70,140 52,88,466 12,78,670 10,79,155Gros
TOTAL (A)3,57,83,864 3,12,43,668 8,06,95,298 6,78,45,284 1,05,50,784 92,88,364
Claims Incurred 5,23,03,961 2,20,04,887 7,47,41,586 5,86,36,096 1,26,43,110 54,37,852
Commission 71,76,222 65,09,120 1,09,34,501 1,06,75,387 25,31,111 20,42,160
Operating Expenses 3,50,648 2,51,916 6,02,158 4,54,516 74,181 51,704
Expenses for
Investments8,403 8,300 16,827 16,244 3,087 3,315
Premium Deficiency - - 14,14,674 - - -
TOTAL (B) 5,98,39,234 2,87,74,223 8,77,09,746 6,97,82,243 1,52,51,489 75,35,031
Operating
Profit/Loss from
Business C =(A-B)
-2,40,55,370 24,69,445 -70,14,448 -19,36,959 -47,00,705 17,53,333
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In this revenue A/c there are two types of total i.e. A & B. total A is for premium received, profit on sale
of investment, and other income. Total B shows the expenditure i.e. claim paid operating expenses of
management, etc.
To find out the operating profit /loss A-B = C. c shows operating profit/ loss fot the particular business.
In year 2011-12 Fire insurance suffer loss amounted to Rs. (2,40,55,370) but in previous year i.e. 2010-11
this business earned healthy profit of Rs. 24,69,445. In fire insurance risk cover is 50% of net premium.
In year 2011-12 marine insurance suffer loss amounted to Rs. (70, 14,448) same conduction in previous
year i.e. 2010-11 there is loss of Rs. (19, 36,959) in this marine business risk cover is 100% of net
premium. This is only in case of marine insurance business.
In year 2011-12 miscellanies insurance suffer loss amounted to Rs. (47, 00, 705) but in previous year i.e.
2010-11 this year shows healthy profit Amounted to Rs. 17, 53,333 in this insurance business risk cover
is 50% of net premium.
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Profit & Loss Account of M/s. General Insurance Company
For the year ended 31st march 2012
2011-12 Current Year
2010-11 Previous Year
A. (INCOME) 1. Operating Profit/ loss A)FireB) MarineC)Miscellanies
-2,40,55,370
-70,14,448
24,69,445
-19,36,959
-47,0,705 17,53,333Total -3,15,40,523 22,85,819
2. Income from Investment
A) Interest , Dividend & Rents – Gross 69,37,370 59,63,945
B) Income from other sources 14,43,844 28,36,902Total 83,81,214 88,00,847
3. Other Income
A) Profit on Exchange 33,81,161 2,66,297
B) Profit on sale of assets (Net) 895 237
C) Interest on income-tax refund 4,90,633 11,94,290
D) Miscellaneous Receipts 10, 292 2,58,193Total 38,82,981 17,19,017
Total (A) = (1+2+3) -1,92,76,328 1,28,05,683
B. (EXPENDITURE)
1. Provision other than Tax
A) Provision for Doubtful Loans, Investment & Debts 15,06,990 3,64,256
B) Amortization of premium on Investments 2,02,050 2,27,330
C) Diminution in the value of investments written off 1,61,486 3,19,238Total 18,70,526 9,10,824
2. Other Expenses A) Expenses relating to Investments 16,748 18,319B) Loss on Exchange 0 0C) Sundry Balances Written off (Net) 3 1,298D) Loss on Distribution of LPA Assets 0 0E) Interest on Service Tax 0 21, 920
Total 16,751 41,537Total (B) = (1+2) 18,87,277 9,52,361
Net profit before tax (NPBT) = (A-B) -2,11,63,605 1,18,53,322(Less) Provision for Tax -1,86,624 -11,64,647
Net Profit After Tax (NPAT) -2,13,50,229 1,06,88,675
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Appropriation A) Proposed Dividend 0 20,64,000B) Dividend Distribution Tax 7, 927 3,42,805
C) Transfer to General Reserve 0 79,27,300
Balance carried forward to Balance Sheet -2,46,78,973 599-2,46,86,900 1,03,34,704
From The above Profit & loss A/c and P&L Appropriation A/c. we can see the GIC suffering
loss in the year 2011-12 as compare with year 2010-11.
Due to loss in current year company not announced dividend to their stack holders. In previous
year company earning healthy profit amount to Rs. 1, 06, 88, 675 due to good and healthy profit
company ready to pay dividend and some of amount transfer to general reserve.
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Balance Sheet of M/s. General Insurance Company
As on 31st march 2012.
Particulars Sch No.
2011-12 2010-11
Sources of Fund Share CapitalReserve & Surplus Fund Borrowed FundTotal
050607
43,00,000 43,00,0007,26,05,07 9,39,02,19
--
--7,69,05,078 9,82,02,190
Application of Fund Investment LoanFixed Assets
(A)
080910
36,94,60,86449,91,9304,94,018
36,69,24,79559,53,9354,48,945
37,49,46,812 37,60,27,675Current Assets Cash & Bank Balance Other Assets & Advance
Sub Total (11+12)
1112
6,91,43,7429,31,68,102
4,75,66,0417,63,76,758
16,23,11,844 12,39,42,799(Less) Current Liabilities Liabilities Provision
Sub Total (13+14)
1314
21,34,47,2787,62,28,926
14,76,64,2456,32,42,127
28,96,76,204 21,09,06,372Net Current Assets i.e.
(Current Assets – Current liabilities) (B) -12,73,64,360 -8,69,63,573Miscellanies Expenses (Not W/Off) (C)
Total (A+B+C)
15 -- --
7,69,05,078 9,82,02,190
As per profit and loss A/c‟s view that shows loss for the year 2011-12 due to which balance sheet
also shows more liability in this year. Share capital is remaining same Amounted to Rs. 43,
00,000. But if we amount in Reserve & Surplus amount is less compare to re previous year i.e.
2010-11 is shows Rs. 7, 26, 05, 078 in year 2011-12 and Rs. 9, 39, 02, 190 in year 2010-11
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Chapter- IV
4.1 Findings:
From the above information and data I found that insurance is for safe guard to our life and
family. The insurance companies show their care towards their policy holder or the consumer
with their new ideas for remaindering regarding their policy premiums insurance companies have
to minted their A/c‟s to see the financial prostration which I learn theoretically in this topic, but
piratical done this work in my project work.
From this project I studied about the various types of insurance which I didn‟t know earlier. With
the help of this project work I found following things which is new for me i.e. as follows:
Payments types for policy i.e. monthly, Quartile, half yearly, annual.
How to use various types of A/c‟s.
How to calculated premium.
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4.2 Conclusion:
Before doing this project report I am not having any knowledge about insurance company &
don‟t know the types of insurance also. After collecting information I found that there are
various types of insurance which are useful for safety and returns on that insurance plans.
I want to conclude that there are many companies in insurance sector which are playing very
major role to protect our life and assets from any damage & losses. These project reports help me
to understand the types of schedules, main heads of profit & loss A/c, and types of Accounts
which are needed to minted and see their financial position of the company this A/c‟s are also
helpful to their share investors.
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4.3 Summary:
The word insurance is looks like very simple and common but it‟s having very majors important.
This history is the oriental insurance Company is very helpful to me for understanding
what is insurance, at the starting of insurance Company what type of services they
offered, what is the main purpose behind the established of insurance companies, what is
insure & insurer etc.
This project work also helps me understand the types of insurance policy and types of
risks which occurred at the time of indemnity.
Is also help full me to understand the secludes No. for the Revenue/c, as well as for
Balance Sheet.
There is various A/c‟s in insurance Company, and in my subject there are same related
topic to insurance company. I had solved some of the practical problem from my book
but it is nice experiences to me to solve some problem from really questions.
39
Appendix
A) Bibliography
I am gathering information from various resources i.e. are websites, books news papers
insurance agents, etc.
Book of Financial Accounts (Part I/ II) both of M.com - I of Manan Publication
& Sheth Publication.
Website of oriental insurance company. http://www.orientalinsurance.org.in
Website of general insurance Company. http://gicofindia.com
News papers: times of India, Indian Express, Economic times.
Websites of policy bazaar. www.policybazaar.com
General books related to insurance topics. http://www.bimabazaar.com