Insurance & Insurance Marketing

1.(a) What do you mean by insurable interest?
For and insurance contract to be valid ,the insured must process an insurable interest in the subject matter of insurance .The insurable interest is the pecuniary interest whereby the policy holder is benefited by the existence of the subject matter and is prejudiced by the death or damage of the subject matter.
In insurance contract, considers-"No insurable interest no insurance.''

According to Goash and Agorwala-"Insurable interest may be defined as a financial or pecuniary interest in the subject matter of insurance where by the insured benefits financially by its safety and suffer financially by its loss or damage."
From the light of above definition we can say that in insurance contract, insurer's possession in the subject matter of insurance is considered as insurable interest.

1.(b) What are the essentials of insurable interest?
In insurance contract –insurer's possession in the subject matter of insurance is considered as insurable interest.
The essentials of a valid insurable interest are given in below:

Existence of subject matter:
There must be a subject matter to be insured .In insurance contract, subject matter is considered as existence of any kind of insurance.

Financial relationship:
The policy holder should have monetary relationship with the subject matter.

Legal relation to the subject matter
The relationship between the policy holders and the subject matter should be recognized by law. In other words, there should not be any illegal relationship between the policy holder and the subject matter to be insured.

Financial gain or loss:
The financial relationship between the policy holder and subject matter should such that the policy holder is economically benefited by the survival or existence of the subject matter and will suffer economic loss, at the death or existence of the subject matter.
The subject matter is life in the life insurance, property and goods in property insurance, liability and adventure in general insurance. Insurable interest is essentially a pecuniary interest.
No economical and sentimental loss as an expectation or an anxiety would be the ground of the insurable interest .the event insured should be one that if it happens the party suffers financially and if it does not happen, the party is benefited by the existence.

2. (a) What are the marine perils?
The perils insured against are mentioned in the policy and the underwriter shall be liable for damage caused by the insured perils.
There are some marine perils. They are given in bellow:
Perils of sea:
Under perils of sea, ordinary action of the winds and waves, ordinary were and tear to the vessel, inherent risk of the cargo are not included .The underwriter may be liable for losses caused by perils of the sea, he is not necessarily liable for perils on sea. Perils of the sea refer to fortuitous accidents or casualties of the sea.
In olden times fire was the biggest maritime perils, but recently it has been under control to a greater extent. Damage resulting from fire and smoke is include under fire-peril .The water used for extinguishing fire may cause damage to the insured goods .So, this peril is also insurable.
This is the vessel which is authorized by nation for the purpose of defense or attack in the event of hostilities. Any damage to the goods or ships arising out of collision against a man-of war is insurable.
The ships belonging to the foe (enemy) may cause loss to the insured and is re-underwritten by the marine policy. This policy extends to all the person of the enemy country and to their hostile acts provided such acts from part of the enemy actions.
Pirates, Rovers, Thieves:
The perils on account of pirates, rovers and thieves were common in olden times, but it has been reduced considerably these days. These acts are generally committed for the pursuit of individual gain by the person beyond the jurisdiction of a state. The term 'thieve' does not mean clandestine theft committed by any one of the crews, officers or passengers.
So we can say that, these points which are described, is the main point of marine perils.

2. (b) Under what circumstances deviation from the route is accepted in marine insurance?
Deviation is excused under certain circumstances but it should be noted that the ship must resume his/her course and prosecute the voyage with reasonable dispatch.
Under the following circumstances devotion from the route is accepted in marine insurance:   

  • Deviation or delay is authorized according to a particular warranty of the policy.

  • When the delay or deviation was beyond the reasonable approach of the master or crew.

  • The deviation or delay is exempted for the safety of ship or insured matter or human lives.

  • Deviation or delay was due to barratry.

  • For the purpose of saving and for obtaining medical or surgical aid, deviation or delay is required.
From the light of above discussion we can say that above circumstances which are describe is the deviation from route accepted.

3. (a) Discuss the role and importance of insurance in marketing?
We cannot think our modern marketing activities without insurance. Condition of marketing is complex and very competitive at present. Risk and uncertainty are in everywhere. And by taking insurance policy we can remove these risks. So insurance is very much important in marketing.
The importance of insurance in marketing is as follows:

  1. Help to produce more products: By insuring the production company, we can produce more products according to meet the demand. So insurance helps to increase product.

  2. Protect the internal factors: Every company has some internal factors, e.g. land, labor, capital & organization. By insuring these factors we can protect these factors properly that helps marketing.

  3. Increase export and import: To export and import product, there are a lot of problems and risks. We can remove those risks by insurance.

  4. Prevention of loss: We can take advance preparation against forthcoming risks and losses by insurance. In this way we can prevent the loss.

  5. Increase industrialization: Insurance acts as a protection of all kinds of losses and risks of the society. So the people and entrepreneurs can expand their activities. As a result industrialization increases.

  6. Increase standard of living: By purchasing policies the people can avoid all kinds of risks. So they participate themselves with a full attention. So they can increase the standard of their living.

  7. Create foreign market: We can do insurance policy for export and import trade. So without any loss or risk we can earn foreign money by insurance.

  8. Increase marketing activities: Marketing activities are spread in every sphere of our economic activities. We can increase these activities by insurance.

  9. Efficiency of entrepreneur: There are many new and potential entrepreneurs who cannot do their business properly for risk. But if they insured then they can improve their efficiency.

  10. Increase labor efficiency: There needs a lot of labors for performing marketing activities. By insuring their lives and properties they can improve their efficiency.

  11. Expansion of trade and commerce: All activities of trade and commerce are very much risky. But insurance provides certainty against risk. So trade and commerce are expanded.

  12. Economic development: By increasing marketing activities e.g. trade, commerce and business, our economic development will be increased.
From the light of above discussion we can say that the role and importance of insurance in marketing is lot to describe. By insurance we can improve our marketing activities. As a result we can improve our economic condition.

3. (b) Discuss the problems and prospects of insurance marketing in Bangladesh.
Problems of insurance marketing in Bangladesh:
For the development of economic infrastructure of a developing country like Bangladesh, there is a great role of insurance. But the insurance business in our country is not satisfactory. Mainly these reasons are:

  1. Problems of planning and administration: Planning and administration structure are not suitable for public and private insurance business in Bangladesh.

  2. Lack of skilled staff: There needed a lot of educated and skilled staff for insurance business. But lack of skilled and trained staff the insurance business in our country is not wide.

  3. Limitations of insurance knowledge: The scope of education about insurance is so much little in our country. The education about insurance is very limited in syllabus of our primary and higher education. It is a hindrance in our insurance business.

  4. Lack of training: The people who are concerned with insurance business are not trained. There are no sufficient institutions in our country to give training to employees and entrepreneur.

  5. Insufficient service: The insurers or companies are not able to give the proper services to the insured people. So the people are not interested to involve themselves and their properties with insurance business.

  6. Delay in payments of claims: The insurance companies in our country are not fully able to pay the claim of insured as when claimed. That is another problem of insurance in Bangladesh.

  7. Lack of motivation of public: The people of our country are not interested on insurance. People don't know how the insurance can ease and free our life from risk.

  8. Traditional method: The modern and technological methods are not followed in insurance business in our country. All most all insurance company ran their business in traditional way. It is a hindrance of insurance business.

Prospects of insurance marketing in Bangladesh:
At the very beginning of insurance business in Bangladesh, the people were not much aware about insurance. But now situation is gradually changing. We recommend some ways by which insurance can turn a leaf by which overcoming the existing problems. If it is possible to overcome, then a good time is waiting for insurance marketing in Bangladesh. These are as follows:

  1. Formulation of effective principle: To run the insurance smoothly, it is mandatory to implement the principles strictly. If everyone follows principles and rules, achieving goal is possible.

  2. To arrange training facilities: Insurance business is very complex and technical. To perform this business properly, obviously it needs vast knowledge regarding its performance. To achieve vast knowledge training has no alternative. So training is very necessary to overcome problem in insurance.

  3. Publicity should be increased: We know by proper publicity it is easy to market anything. Insurance is one type of unsought goods. So, people are not so much aware of it. High publicity and insurance knowledge can led the people to make insurance policy more and more.

  4. Development of management: Like every sector insurance is affected by mismanagement in Bangladesh. Management can play a vital role in the development of insurance business. When there will be coming good managerial environment in insurance then a good performance can be done easily.

  5. Modernization of insurance business: Modernization of insurance business means to make the business much more modern and suitable for new generation. New policies can be introduced if it is familiar to other world. Everyone try to improve the present condition and serve clients more properly. More modern insurance business must attract the clients.

  6. Govt. monitoring system: The private insurance companies are not so much aware about the govt. rules and regulations. For this reason, sometimes unreal competition created in the market. So proper govt. monitoring system should be introduced.

  7. Emphasize on economic development: Insurance business development depends on the development of other sectors. So, it is possible to develop insurance sector by developing other sectors like, industry, mining, agriculture etc.
Now-a-days people of Bangladesh are so much aware of their future. They try their best level to be insured themselves against any type of hazard. It is a good sign for insurance market in Bangladesh. Every insurance company also tries to overcome the problems. So we can hope that if the insurance company can overcome every problems regarding insurance marketing in Bangladesh then the insurance marketing in Bangladesh will be facilitated.

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