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Types of insurance

Any risk that can be quantified can potentially be insured. Specific kinds of risk that maygive rise to claims are known as perils. An insurance policy will set out in detail whichperils are covered by the policy and which are not. Below are non-exhaustive lists of the

many different types of insurance that exist. A single policy may cover risks in one ormore of the categories set out below. For example, vehicle insurance would typicallycover both the property risk (theft or damage to the vehicle) and the liability risk (legalclaims arising from an accident). A home insurance policy in the U.S. typically includescoverage for damage to the home and the owner's belongings, certain legal claims againstthe owner, and even a small amount of coverage for medical expenses of guests who areinjured on the owner's property.

Business insurance can take a number of different forms, such as the various kinds ofprofessional liability insurance, also called professional indemnity (PI), which arediscussed below under that name; and the business owner's policy (BOP), which

packages into one policy many of the kinds of coverage that a business owner needs, in away analogous to how homeowners' insurance packages the coverages that a homeownerneeds.[18]

[edit] Auto insurance

Main article: Vehicle insurance

A wrecked vehicle in Copenhagen

Auto insurance protects the policyholder against financial loss in the event of an incidentinvolving a vehicle they own, such as in a traffic collision.

Coverage typically includes:

1. Property coverage, for damage to or theft of the car;2. Liability coverage, for the legal responsibility to others for bodily injury or

property damage;3. Medical coverage, for the cost of treating injuries, rehabilitation and sometimes

lost wages and funeral expenses.
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Most countries, such as the United Kingdom, require drivers to buy some, but not all, ofthese coverages. When a car is used as collateral for a loan the lender usually requiresspecific coverage.

[edit] Home insurance

Main article: Home insurance

Home insurance provides coverage for damage or destruction of the policyholder's home.In some geographical areas, the policy may exclude certain types of risks, such as floodor earthquake, that require additional coverage. Maintenance-related issues are typicallythe homeowner's responsibility. The policy may include inventory, or this can be boughtas a separate policy, especially for people who rent housing. In some countries, insurersoffer a package which may include liability and legal responsibility for injuries andproperty damage caused by members of the household, including pets.[19]

[edit] Health insurance

Main articles: Health insuranceandDental insurance

Great Western Hospital, Swindon

Health insurance policies issued by publicly-funded health programs, such as the UK's

National Health Servicewill cover the cost of medical treatments. Dental insurance, likemedical insurance, protects policyholders for dental costs. In the U.S. and Canada, dentalinsurance is often part of an employer's benefits package, along with health insurance.

[edit] Funeral insurance

Funeral insurance is a very old type of health insurance which is payed out upon death tocoverfuneral expenses of the insuree. The Greeks and Romans introduced funeralinsurance circa 600 AD when they organizedguilds called "benevolent societies" whichcared for the surviving families and paid funeral expenses of members upon death. Guildsin the Middle Agesserved a similar purpose.

[edit] Accident, sickness and unemployment insurance
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Workers' compensation, or employers' liability insurance, is compulsory in somecountries

Disability insurance policies provide financial support in the event of thepolicyholder becoming unable to work because of disabling illness or injury. Itprovides monthly support to help pay such obligations as mortgage loans and

credit cards. Short-term and long-term disability policies are available toindividuals, but considering the expense, long-term policies are generallyobtained only by those with at least six-figure incomes, such as doctors, lawyers,etc. Short-term disability insurance covers a person for a period typically up to sixmonths, paying a stipend each month to cover medical bills and other necessities.

Long-term disability insurance covers an individual's expenses for the long term,up until such time as they are considered permanently disabled and thereafter.Insurance companies will often try to encourage the person back into employmentin preference to and before declaring them unable to work at all and thereforetotally disabled.

Disability overhead insurance allows business owners to cover the overhead

expenses of their business while they are unable to work. Total permanent disability insurance provides benefits when a person is

permanently disabled and can no longer work in their profession, often taken asan adjunct to life insurance.

Workers' compensation insurance replaces all or part of a worker's wageslost andaccompanying medical expenses incurred because of a job-related injury.

[edit] Casualty

Main article: Casualty insurance

Casualty insurance insures against accidents, not necessarily tied to any specific property.It is a broad spectrum of insurance that a number of other types of insurance could beclassified, such as auto, workers compensation, and some liability insurances.

Crime insurance is a form of casualty insurance that covers the policyholderagainst losses arising from the criminal acts of third parties. For example, acompany can obtain crime insurance to cover losses arising fromtheft orembezzlement.
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Political risk insurance is a form of casualty insurance that can be taken out bybusinesses with operations in countries in which there is a risk that revolution orotherpolitical conditions could result in a loss.

[edit] Life

Main article: Life insurance

Life insurance provides a monetary benefit to a descendant's family or other designatedbeneficiary, 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 ofhaving the proceeds paid to the beneficiary either in a lump sum cash payment or anannuity.

Annuities provide a stream of payments and are generally classified as insurance becausethey 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 insuranceagainst the possibility that a retiree will outlive his or her financial resources. In thatsense, 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 theinsured if the policy is surrendered or which may be borrowed against. Some policies,such as annuities and endowment policies, are financial instruments to accumulate orliquidatewealth when it is needed.

In many countries, such as the U.S. and the UK, thetax law provides that the interest onthis cash value is not taxable under certain circumstances. This leads to widespread use oflife insurance as a tax-efficient method ofsavingas well as protection in the event ofearly death.

In the U.S., the tax on interest income on life insurance policies and annuities is generallydeferred. However, in some cases the benefit derived from tax deferral may be offset by alow return. This depends upon the insuring company, the type of policy and othervariables (mortality, market return, etc.). Moreover, other income tax saving vehicles(e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value accumulation.

[edit] Property

Main article: Property insurance
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This tornado damage to an Illinois home would be considered an "Act of God" forinsurance purposes

Property insurance provides protection against risks to property, such as fire,theft orweatherdamage. This may include specialized forms of insurance such as fire insurance,flood insurance,earthquake insurance, home insurance, inland marine insurance orboilerinsurance. The term property insurance may, like casualty insurance, be used as a broadcategory of various subtypes of insurance, some of which are listed below:

US Airways Flight 1549 waswritten offafter ditching into the Hudson River

Aviation insurance protects aircraft hulls and spares, and associated liability risks,such as passenger and third-party liability. Airportsmay also appear under thissubcategory, including air traffic control and refuelling operations forinternational airports through to smaller domestic exposures.

Boiler insurance (also known as boiler and machinery insurance, or equipmentbreakdown insurance) insures against accidental physical damage to boilers,equipment or machinery.

Builder's risk insurance insures against the risk of physical loss or damage toproperty during construction. Builder's risk insurance is typically written on an"all risk" basis covering damage arising from any cause (including the negligenceof the insured) not otherwise expressly excluded. Builder's risk insurance iscoverage that protects a person's or organization's insurable interest in materials,fixtures and/or equipment being used in the construction or renovation of abuilding or structure should those items sustain physical loss or damage from aninsured peril.[20]
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Crop insurance may be purchased by farmers to reduce or manage various risksassociated with growing crops. Such risks include crop loss or damage caused byweather, hail, drought, frost damage, insects, or disease.[21]

Earthquake insurance is a form of property insurance that pays the policyholder in

the event of an earthquake that causes damage to the property. Most ordinaryhome insurance policies do not cover earthquake damage. Earthquake insurancepolicies generally feature a high deductible. Rates depend on location and hencethe likelihood of an earthquake, as well as theconstruction of the home.

Fidelity bond is a form of casualty insurance that covers policyholders for lossesincurred as a result of fraudulent acts by specified individuals. It usually insures abusiness for losses caused by the dishonest acts of its employees.

Hurricane Katrina caused over $80bn of storm and flood damage

Flood insurance protects against property loss due to flooding. Many insurers inthe U.S. do not provide flood insurance in some parts of the country. In responseto this, the federal government created the National Flood Insurance Program

which serves as the insurer of last resort.

Home insurance , also commonly called hazard insurance, or homeownersinsurance (often abbreviated in the real estate industry as HOI), is the type ofproperty insurance that covers private homes, as outlined above.

Landlord insurance covers residential and commercial properties which are rentedto others. Most homeowners' insurance covers only owner-occupied homes.

Fire aboard MV Hyundai Fortune
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Marine insurance and marine cargo insurance cover the loss or damage of vesselsat sea or on inland waterways, and of cargo in transit, regardless of the method oftransit. When the owner of the cargo and the carrier are separate corporations,marine cargo insurance typically compensates the owner of cargo for lossessustained from fire, shipwreck, etc., but excludes losses that can be recovered

from the carrier or the carrier's insurance. Many marine insurance underwriterswill include "time element" coverage in such policies, which extends theindemnity to cover loss of profit and other business expenses attributable to thedelay caused by a covered loss.

Supplemental natural disaster insurance covers specified expenses after a naturaldisaster renders the policyholder's home uninhabitable. Periodic payments aremade directly to the insured until the home is rebuilt or a specified time periodhas elapsed.

Surety bond insurance is a three-party insurance guaranteeing the performance of

the principal.

The demand for terrorism insurance surged after9/11

Terrorism insurance provides protection against any loss or damage caused byterrorist activities. In the U.S. in the wake of9/11, theTerrorism Risk InsuranceAct 2002 (TRIA) set up a federal Program providing a transparent system ofshared public and private compensation for insured losses resulting from acts ofterrorism. The program was extended until the end of 2014 by the Terrorism RiskInsurance Program Reauthorization Act 2007 (TRIPRA).

Volcano insurance is a specialized insurance protecting against damage arisingspecifically from volcanic eruptions.

Windstorm insurance is an insurance covering the damage that can be caused bywind events such as hurricanes.

[edit] Liability

Main article: Liability insurance
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Liability insurance is a very broad superset that covers legal claims against the insured.Many types of insurance include an aspect of liability coverage. For example, ahomeowner's insurance policy will normally include liability coverage which protects theinsured in the event of a claim brought by someone who slips and falls on the property;automobile insurance also includes an aspect of liability insurance that indemnifies

against the harm that a crashing car can cause to others' lives, health, or property. Theprotection offered by a liability insurance policy is twofold: a legal defense in the eventof a lawsuit commenced against the policyholder and indemnification (payment on behalfof the insured) with respect to a settlement or court verdict. Liability policies typicallycover only the negligence of the insured, and will not apply to results of wilful orintentional acts by the insured.

The subprime mortgage crisis was the source of many liability insurance losses

Public liability insurance covers a business or organization against claims shouldits operations injure a member of the public or damage their property in someway.

Directors and officers liability insurance (D&O) protects an organization (usually

a corporation) from costs associated with litigation resulting from errors made bydirectors and officers for which they are liable.

Environmental liability insurance protects the insured from bodily injury, propertydamage and cleanup costs as a result of the dispersal, release or escape ofpollutants.

Errors and omissions insurance is business liability insurance for professionalssuch as insurance agents, real estate agents and brokers, architects, third-partyadministrators (TPAs) and other business professionals.

Prize indemnity insurance protects the insured from giving away a large prize at aspecific event. Examples would include offering prizes to contestants who canmake a half-court shot at abasketballgame, or ahole-in-one at a golftournament.

Professional liability insurance , also calledprofessional indemnity insurance (PI),protects insured professionals such as architectural corporations and medicalpractictioners against potential negligence claims made by their patients/clients.Professional liability insurance may take on different names depending on theprofession. For example, professional liability insurance in reference to themedical profession may be called medical malpractice insurance.

[edit] Credit
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Main article: Credit insurance

Credit insurance repays some or all of a loan when certain circumstances arise to theborrower such as unemployment, disability, ordeath.

Mortgage insurance insures the lender against default by the borrower. Mortgageinsurance is a form of credit insurance, although the name "credit insurance" moreoften is used to refer to policies that cover other kinds of debt.

Many credit cards offer payment protection plans which are a form of creditinsurance.

[edit] Other types

All-risk insurance is an insurance that covers a wide-range of incidents and perils,except those noted in the policy. All-risk insurance is different from peril-specificinsurance that cover losses from only those perils listed in the policy.[22] Incar

insurance, all-risk policy includes also the damages caused by the own driver.

High-value horses may be insured under a bloodstock policy

Bloodstock insurance covers individualhorsesor a number of horses undercommon ownership. Coverage is typically for mortality as a result of accident,illness or disease but may extend to include infertility, in-transit loss, veterinaryfees, and prospective foal.

Business interruption insurance covers the loss of income, and the expensesincurred, after a covered peril interrupts normal business operations.

Collateral protection insurance (CPI) insures property (primarily vehicles) held ascollateral for loans made by lending institutions.

Defense Base Act (DBA) insurance provides coverage for civilian workers hired

by the government to perform contracts outside the U.S. and Canada. DBA isrequired for all U.S. citizens, U.S. residents, U.S. Green Card holders, and allemployees or subcontractors hired on overseas government contracts. Dependingon the country, foreign nationals must also be covered under DBA. This coveragetypically includes expenses related to medical treatment and loss of wages, aswell as disability and death benefits.
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Expatriate insurance provides individuals and organizations operating outside oftheir home country with protection for automobiles, property, health, liability andbusiness pursuits.

Kidnap and ransom insurance is designed to protect individuals and corporationsoperating in high-risk areas around the world against the perils of kidnap,

extortion, wrongful detention and hijacking. Legal expenses insurance covers policyholders for the potential costs of legal

action against an institution or an individual. When something happens whichtriggers the need for legal action, it is known as "the event". There are two maintypes of legal expenses insurance: before the event insurance and after the eventinsurance.

Locked funds insurance is a little-known hybrid insurance policy jointly issued bygovernments and banks. It is used to protect public funds from tamper byunauthorized parties. In special cases, a government may authorize its use inprotecting semi-private funds which are liable to tamper. The terms of this type ofinsurance are usually very strict. Therefore it is used only in extreme cases where

maximum security of funds is required. Livestock insurance is a specialist policy provided to, for example, commercial or

hobby farms, aquariums, fish farms or any other animal holding. Cover isavailable for mortality or economic slaughter as a result of accident, illness ordisease but can extend to include destruction by government order.

Media liability insurance is designed to cover professionals that engage in filmand television production and print, against risks such asdefamation.

Nuclear incident insurance covers damages resulting from anincident involvingradioactive materialsand is generally arranged at the national level. (See thenuclear exclusion clauseand for the U.S. the Price-Anderson Nuclear Industries

Indemnity Act.) Pet insurance insures pets against accidents and illnesses; some companies cover

routine/wellness care and burial, as well. Pollution insurance usually takes the form of first-party coverage for

contamination of insured property either by external or on-site sources. Coverageis also afforded for liability to third parties arising from contamination of air,water, or land due to the sudden and accidental release of hazardous materialsfrom the insured site. The policy usually covers the costs of cleanup and mayinclude coverage for releases from underground storage tanks. Intentional acts arespecifically excluded.

Purchase insurance is aimed at providing protection on the products peoplepurchase. Purchase insurance can cover individual purchase protection,warranties, guarantees, care plans and even mobile phone insurance. Suchinsurance is normally very limited in the scope of problems that are covered bythe policy.

Title insurance provides a guarantee that title to real property is vested in thepurchaser and/ormortgagee, free and clear ofliens or encumbrances. It is usuallyissued in conjunction with a search of the public records performed at the time ofareal estate transaction.
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Travel insurance is an insurance cover taken by those who travel abroad, whichcovers certain losses such as medical expenses, loss of personal belongings, traveldelay, and personal liabilities.

A2. PERMANENT LIFE INSURANCE :

In a Permanent Life contract, a portion of the money paid as premiums is invested in afund that earns interest on a tax-deferred basis. Thus, over a period of time, this policywill accumulate certain "cash value" which you will be able to get back either during theperiod of the policy or at the end of the policy.

Your need for life insurance can change over a lifetime. At any age, you should consideryour individual circumstances and the standard of living you wish to maintain for yourdependents. In most cases, you need life insurance only if someone depends on you forsupport. Your life insurance premium is based on the type of insurance you buy, theamount you buy and your chance of death while the policy is in effect. This type of

policy not only provides protection for your dependents by paying a death benefit to yourdesignated beneficiary upon your death, but it also allows you to use some part of themoney while you are alive or at the end of the policy. Some examples of such policiesare :- Whole Life, Universal Life and Variable-Universal Life.

ENDOWMENT POLICIES

These policies provide for period payment of premiums and a lump sum amount either inthe event of death of the insured or on the date of expiry of the policy, whichever occursearlier.

MONEY BACK POLICIES

These policies provide for periodic payments of partial survival benefits during the termof the policy itself. A unique feature associated with this type of policies is that in theevent of death of the insured during the policy term, the designated beneficiary will getthe full sum assured without deducting any of the survival benefit amounts, which havealready been paid as money-back components. Moreover, the bonus on such policies isalso calculated on the full sum assured.

ANNUITY / PENSION POLICIES / FUNDS

This policies / funds require the insured to pay the premium as a single lump sum orthrough installments paid over a certain number of years. The insured in return willreceive back a specific sum periodically from a specified date onwards (the returns cancan be monthly, half yearly or annually), either for life or for a fixed number of years. Incase of the death of the insured, or after the fixed annuity period expires for annuitypayments, the invested annuity fund is refunded, usually with some additional amounts asper the terms of the policy.
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Annuities / Pension funds are different from from all other forms of life insurance as anannuity policy / fund does not provide any life insurance cover but merely offers aguaranteed income either for life or a certain period. Therefore, this type of insurance istaken so as to get income after the retirement.

Industry structure

Currently, a US$41 billion industry, India is the world's fifth largest life insurance marketand growing at a rapid pace of 32-34% annually as perLife Insurance Councilstudies.

Currently, in India only two million people (0.2 % of the total population of 1 billion) arecovered under Mediclaim, whereas in developed nations like USA about 75 % of the total

population are covered under some insurance scheme. With more and more privatecompanies in the sector, the situation may change soon.

[edit] Specialisation

ECGC, ESIC and AIC provide insurance services for niche markets. So, their scope islimited by legislation but enjoy special powers.

Acts

The insurance sector went through a full circle of phases from being unregulated to

completely regulated and then currently being partly deregulated. It is governed by anumber of acts.

The Insurance Act of 1938[1] was the first legislation governing all forms of insurance toprovide strict state control over insurance business.

Life insurance in India was completely nationalized on January 19, 1956, through theLife Insurance Corporation Act. All 245 insurance companies operating then in thecountry were merged into one entity, the Life Insurance Corporation of India.[2]

The General Insurance Business Act of 1972 was enacted to nationalise the about 100

general insurance companies then and subsequently merging them into four companies.All the companies were amalgamated into National Insurance, New India Assurance,Oriental Insurance and United India Insurance, which were headquartered in each of thefour metropolitan cities.[3]

Until 1999, there were not any private insurance companies in India. The governmentthen introduced the Insurance Regulatory and Development Authority Act in 1999,thereby de-regulating the insurance sector and allowing private companies. Furthermore,
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foreign investment was also allowed and capped at 26% holding in the Indian insurancecompanies.

In 2006, the Actuaries Act was passed by parliament to give the profession statutorystatus on par with Chartered Accountants, Notaries, Cost & Works Accountants,

Advocates, Architects and Company Secretaries.

A minimum capital of US$20 million(Rs.100 Crore) is required by legislation to set upan insurance business.

Investment policies

With-profits policies:

Main article: With-profits policy

Some policies allow the policyholder to participate in the profits of the insurancecompany these are with-profits policies. Other policies have no rights to participate in theprofits of the company, these are non-profitpolicies.

With-profits policies are used as a form ofcollective investmentto achieve capitalgrowth. Other policies offer a guaranteed return not dependent on the company'sunderlying investment performance; these are often referred to as without-profitpolicieswhich may be construed as a misnomer.

Investment Bonds

Main article: Insurance bond

Pensions: Pensions are a form of life assurance. However, whilst basic life assurance,permanent health insurance and non-pensions annuity business includes an amount ofmortality ormorbidity riskfor the insurer, for pensions there is a longevity risk.

A pension fund will be built up throughout a person's working life. When the personretires, the pension will become in payment, and at some stage the pensioner will buy anannuity contract, which will guarantee a certain pay-out each month until death.

AnnuitiesMain article: Life annuity

An annuity is a contract with an insurance company whereby the insured pays an initialpremium or premiums into a tax-deferred account, which pays out a sum at pre-determined intervals. There are two periods: the accumulation (when payments are paidinto the account) and the annuitization (when the insurance company pays out). IRS rules
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restrict how you take money out of an annuity. Distributions may be taxable and/orpenalized.

Tax and life insurance

Taxation of life insurance in the United States

Premiums paid by the policy owner are normally not deductible for federal and stateincome tax purposes.

Proceeds paid by the insurer upon death of the insured are not included in gross incomefor federal and state income tax purposes;[8] however, if the proceeds are included in the"estate" of the deceased, it is likely they will be subject to federal and state estate andinheritance tax.

Cash value increases within the policy are not subject to income taxes unless certain

events occur. For this reason, insurance policies can be a legal and legitimate tax shelterwherein savings can increase without taxation until the owner withdraws the money fromthe policy. On flexible-premium policies, large deposits of premium could cause thecontract to be considered a "Modified Endowment Contract" by the Internal RevenueService (IRS), which negates many of the tax advantages associated with life insurance.The insurance company, in most cases, will inform the policy owner of this danger beforeapplying their premium.

The tax ramifications of life insurance are complex. The policy owner would be welladvised to carefully consider them. As always, theUnited States Congress or the statelegislatures can change the tax laws at any time.

Taxation of life assurance in the United Kingdom

Premiums are not usually allowable against income tax orcorporation tax, howeverqualifying policies issued prior to 14 March 1984 do still attract LAPR (Life AssurancePremium Relief) at 15% (with the net premium being collected from the policyholder).

Non-investment life policies do not normally attract either income tax orcapital gains taxon claim. If the policy has as investment element such as an endowment policy, whole oflife policy or an investment bond then the tax treatment is determined by the qualifyingstatus of the policy.

Qualifying status is determined at the outset of the policy if the contract meets certaincriteria. Essentially, long term contracts (10 years plus) tend to be qualifying policies andthe proceeds are free from income tax and capital gains tax. Single premium contractsand those run for a short term are subject to income tax depending upon your marginalrate in the year you make a gain. All (UK) insurers pay a special rate of corporation taxon the profits from their life book; this is deemed as meeting the lower rate (20% in200506) liability for policyholders. Therefore a policyholder who is a higher rate
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taxpayer (40% in 2005-06), or becomes one through the transaction, must pay tax on thegain at the difference between the higher and the lower rate. This gain is reduced byapplying a calculation calledtop-slicing based on the number of years the policy has beenheld. Although this is complicated, the taxation of life assurance based investmentcontracts may be beneficial compared to alternative equity-based collective investment

schemes (unit trusts,investment trusts and OEICs). One feature which especially favorsinvestment bonds is the '5% cumulative allowance' the ability to draw 5% of theoriginal investment amount each policy year without being subject to any taxation on theamount withdrawn. If not used in one year, the 5% allowance can roll over into futureyears, subject to a maximum tax deferred withdrawal of 100% of the premiums payable.The withdrawal is deemed by theHMRC (Her Majesty's Revenue and Customs) to be apayment of capital and therefore the tax liability is deferred until maturity or surrender ofthe policy. This is an especially useful tax planning tool for higher rate taxpayers whoexpect to become basic rate taxpayers at some predictable point in the future (e.g.retirement), as at this point the deferred tax liability will not result in tax being due.

The proceeds of a life policy will be included in the estate fordeath duty (in the UK,inheritance tax (IHT)) purposes, except that policies written intrust may fall outside theestate. Trust law and taxation of trusts can be complicated, so any individual intending touse trusts for tax planning would usually seek professional advice from an IndependentFinancial Adviser(IFA) and/or a solicitor.

Pension Term Assurance

Although available before April 2006, from this date pension term assurancebecamewidely available in the UK. Most UK product providers adopted the name "life insurancewith tax relief" for the product.Pension term assuranceis effectively normal term life

assurance with tax relief on the premiums. All premiums are paid net of basic rate tax at22%, and higher rate tax payers can gain an extra 18% tax relief via their tax return.Although not suitable for all, PTA briefly became one of the most common forms of lifeassurance sold in the UK until the Chancellor, Gordon Brown, announced the withdrawalof the scheme in his pre-budget announcement on 6 December 2006. The tax reliefceased to be available to new policies transacted after 6 December 2006, however,existing policies have been allowed to enjoy tax relief so far.

Various challenges faced in Insurance Markets are

1. Industry Challenges

(i) Commoditization in personal line products.

(ii) Shifting consumer requirements( everyone wants products tailored to them,customization)
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(iii) Heightened competition.

(iv) Global economic meltdown.

2. Business Challenges

The key business challenge for most of the insurers is to reduce the turnaround time andimprove their speed to market their products.

Distribution Channel pressures and emerging consumer demands for mass customizationand hydrid products are moving rapid product development from being a competitiveadvantage to a necessity.

3. Process Challenges

Lack of stream lined processes, change management,automated processes,central

repository.

Solutions

1. New approaches and technology are needed to manage and develop insuranceproducts which reduces the cost and time to market.

2. Speed, quality, efficiency and capacity are different dimentions to counter the abovechallenges.

3. Product Solutions

Deliver new products/product customizations efficiently, quickly and in a flexiblemanner.

Making change to existing products quickly.

Meeting demand for combination products i.e developing products that encompassmultiple features in todays products.

Speed to match the competition (If market embraces a particular product feature launchedby the competitor, other insurer tend to quickly follow suit to meet competition.

Example: Consevative LIC introduced Unit Linked Plans to meet competition.

Real time underwriting based on customer segmentation.

Organisational Solutions

For robust performance and growth empower front-line staff and equip them withmultiple skills.


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Insurance marketers face a daunting task in today's marketplace. Compliancerequirements, an ever growing and disconnected communications channel, and tightbudgets are all part of the challenges faced by thousands of insurance marketers. Add inthe lingering mistrust for all corporations fostered by the recession, and the commonchallenges can seem immense.

Technology, in the form of distributed marketing tools like the Distribion(R) DistributedMarketing Platform(TM) can resolve many of these problems by delivering measurablereturn on investment, compliance automation and control, and true ease-of-use for fieldand local marketing.

"As an insurance provider, ask yourself how easy it is for your agents to executemarketing campaigns? Do they have direct mail lists, email templates and print adsavailable at their fingertips? Do they have to go through corporate marketing for even thetiniest website changes made to their microsites? How easy is it for them to pull togethersales presentations for their next meeting-or a logo or sales letter for that matter?" said

Edgar Rodriguez, Executive Vice President of Marketing at Distribion.

"Too many insurance marketers look at those questions and realize that the end result ofthe disconnected processes they use today have created a situation where marketingmessages are inevitably inconsistent," Rodriguez adds. "That's where we come in, with areliable marketing system that manages compliance and makes it easy to createpersonalized, customized campaigns in all media." The Distribion insurance marketingplatform delivers a seamless process, where corporate marketing controls brand andregulatory compliance and creative, while MGAs, local agents, and field marketing staffcan select the best marketing asset - print, web, email, video, Flash, PowerPoint, flip-book, sales kit, proposal, and so on - and then customize it for one or thousands of

prospects or customers. For more information on how distributed marketing technologycan solve common insurance marketing challenges, download a new insurance marketingdocument here.

About Distribion Distribion (www.distribion.com) is a leading provider of web-basedsoftware that provides businesses with a streamlined, centralized management ofmarketing communications and campaign development that adhere to brand andcompliance standards. Distribion's online system is permission based; empowering localoffices with the ability to customize campaigns and collateral within corporate standards.Campaigns are easily produced, deployed and tracked across marketing channels,eliminating the need for disconnected, single-function solutions. The DistribionDistributed Marketing Platform is deployed in over 100 companies globally representingover 100,000 users.

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