Project on Disaster Management

A report on An analysis of POLICIES AND SCHEMES OF INSURANCE FOR DISASTER MANAGEMENT

By Joydeep mondal [09bsddu0033] Karvy stock broking ltd. KARVY STOCK BROKING LTD.

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A report on An analysis of POLICIES AND SCHEMES OF INSURANCE FOR DISASTER MANAGEMENT

By Joydeep mondal [09bsddu0033]

Company guide Mr. abhishek mishra [area head- ksbl]

KARVY STOCK BROKING LTD.

faculty guide prof. vinesh jain [faculty member-ibs dehradun]

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Authorization

This summer internship program has been conducted for partial fulfillment of MBA-program at IBS-Dehradun. Summer Internship Program also included a project work on –“an analysis of policies and schemes of insurance for disaster management.” Karvy Stock Broking Limited-Dehradun and IBS-Dehradun hereby authorize Mr. Joydeep Mondal to conduct his research dissertation under Mr. Abhishek Mishra, Area head, Karvy Stock Broking Ltd.Dehradun and Prof. Vinesh Jain, Faculty member starting from date: 15th February, 2010 to 14th May, 2010. A complete report of research findings will have to be provided to Karvy Stock Broking LimitedDehradun.

Mr. Abhishek Mishra

Prof. Vinesh Jain

[Area head—Karvy stock broking ltd.]

[Faculty member—IBS-Dehradun]


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Certificate by the organization::


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ACKNOWLEDGEMENT Sometimes words fall short to show gratitude, the same happened with me during this project. The immense help and support received from Karvy stock broking limited overwhelmed me during the project. As I sum up draft of my study, I appreciatively reminisce the contribution of all those people without whose support and help, this study would have never taken its present form. My sincere gratitude to Mr.Abhishek Mishra (area head , Dehradun, Karvy Stock Broking Ltd.) and Dr. Sanjeev Malavia (Placement Coordinator, IBS dehradun), for providing me with an opportunity to work with karvy stock broking limited. I am highly indebted to Mr. Pankaj Dwivedi, Senior Officer (Insurance) karvy stock broking ltd., Dehradun , who has provided me with the necessary information and his valuable suggestion and comments on bringing out this report in the best possible way. I also thank Prof. Vinesh Jain, faculty guide, IBS Dehradun who has sincerely supported me with the valuable insights into the completion of this project. I am grateful to Mr. Gagan Shukla and all of the members of karvy stock broking Ltd. Of Dehradun, who have helped me in the successful completion of this project. I also very thankful to my friends who help me in completion of the project. I am thankful to that power that always inspires me to take right step in the journey of success of my life.


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Table of contents:: Contents

page no.

Executive summary Objectives Introduction Company profile Company overview Disaster Classification of disaster Natural disaster Man made disaster Hazard vulnerability in INDIA Administrative structure for disaster management in UTTARANCHAL National disaster management framework Disaster management act 2005 Insurance Basic insurance terminologies General insurance Need for insurance in disaster Bodies that regulate insurance sector Major challenges of insurance sector Future prospects of insurance sector List of general insurers Market share of different companies in general insurance Methodology Observation and findings Conclusion Annexure-I Questionnaire Abbreviations References


7 8 8 9 9 12 12 12 13 13 16 21 25 28 28 29 30 32 34 35 36 37 38 39 43 44 46 46

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Executive summary With the liberalization and entry of private players in insurance field, the Indian insurance sector has started showing signs of significant change. Within a short span of time, private insurance has acquired a great market share of insurance market. The study will help to find out the awareness of disaster insurance of the people of Dehradun and accessibility of disaster insurance in Dehradun. It also measures the perception of the people of Dehradun about disaster insurance. What they think about disaster insurance, is it really effective to recover the damages caused by disaster. How many of them have disaster insurance coverage, as we know that Uttaranchal state is very disaster prone. Apart from that the report also considers the current state of insurance market. Presently how many companies are in general insurance business, and also the market share of different companies. It also contains the administrative structure & their preparedness for disaster management in Uttaranchal and national disaster management framework of India.


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Objectives:: Project will help to make people more aware about various products of different insurance companies. This study will help to know the market situation of disaster insurance in Dehradun. The main objectives of the studies are as follows::  The awareness of disaster insurance of the people of dehradun and accessibility of disaster insurance in dehradun.  The potential role of disaster insurance for disaster risk reduction.  To study the fruitfulness of disaster management schemes to recovery from disaster.  To study the administrative structure & their preparedness for disaster management in uttaranchal.  To study the activities; and various policies and schemes of disaster management provided by government of uttaranchal.  To study national disaster management framework.

Introduction:: A contract between two parties is known as Insurance. Shifting or transferring of risk of loss or damage, from owners and thereby sharing of losses by all the members of the group are main uniqueness. Thus a contract of insurance is a contract by which one party undertakes to make good the loss of another, in consideration of a sum of money, on the happening of a specified event. For example fire, accident or death. Since liberalization in 2000, the Indian insurance sector has become a buyer’s market. Owing to liberalization customer has the choice to select from variety of products, services and service providers. In the year 2005 karvy established a new division karvy insurance broking ltd. Karvy insurance broking ltd. is working with most of the insurance company’s products. They can reach every customer whatever customer needs.


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Company profile:: Company overview:: Karvy was established as karvy and company by five chartered accountants during the year 1979-80, and then its work was confined to audit and taxation only. Later on it diversified into financial and accounting services during the year 1981-82 with a capital of rs.150000. it achieved its first milestone after its first investment in technology. Karvy became a known name during the year 1985-86 when it forayed into capital market as registrar.

Evolution of KARVY:: It is well said that success is a journey not a destination and we can see it being proved by karvy. Under this section we will see that how this “karvy and company” of 1980 became “karvy” of 2008. Karvy blossomed with the setting up of its first branch at Mumbai during the year 1987-88. The turning point came in the year 1989 when it decided to enter into one of the not only emerging rather potential field too i.e; stock broking. It added the feather of stock broking into its cap. At the same time it became the member of Hyderabad Stock Exchange through associate firm karvy securities ltd and then karvy never looked back……..it went on adding services one after another, it entered into retail stock broking in the year 1990. Karvy investor service centers were set up in the year 1992. Karvy which already enjoyed a wide network through its investor service centers, entered into financial product distribution services in the year 1993. One year more and karvy was now dealing into mutual fund services too in the year 1994 but it didn’t stopped there, it stepped into corporate finance and investment banking in the year 1995. Karvy’s strategy has always been being the first entrant in the market. Karvy again hit the limelight by becoming the first registrar in the country to be awarded ISO 9002 in the year 1997. Then it stepped into the other most happening sector i.e; IT enabled services by establishing its own BPO units and at a gap of just 1 year it took the path of e-Business through its website www.karvy.com . Then it entered into insurance services in the year 2001 with the launch of its retail arm “karvy- the finapolis: your personal finance advisor”. Then in the year 2002 it launched its PCG(Private Client Group) which looks after its High Networth Individuals .and maintain their portfolio and provides them with other financial services. In the year 2003, it commenced secondary debt and WDM trading. It was a decade which saw many Indian companies going global…..so why the largest financial KARVY STOCK BROKING LTD.

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service provider of India should lag behind? Hence, karvy launched “karvy global services limited” after entering into a joint venture with Computershare, Australia in the year 2004.the year 2004 also saw karvy entering into commodities marketing through karvy comtrade. Year 2005 saw karvy establishing a separate branch for its insurance services under the head “ karvy insurance broking ltd” and in the same year, after being impressed with the rapid growth of karvy stock broking limited, PCG group of Hong Kong acquired 25% stake at KSBL. In the year 2006, karvy entered into one of the hottest sector of present time i.e real estate through Karvy realty& services (India) ltd. hence , we can see now karvy being established as the lagest financial service provider of the country.

Reason behind the success of karvy:: karvy achieved success by working mainly on eight basic points; these are trust, integrity, dedication, commitment, enterprise, hard work and team play, learning and innovation, empathy and humility.

Mission statement:: “Our mission is to be a leading and preferred service provider to our customers, and we aim to achieve this leadership position by building an innovative, enterprising , and technology driven organization which will set the highest standards of service and business ethics.”

Now karvy group consists of 10 highly renowned entities which are as follow:: : The first securities registry to receive ISO 9002 certification in India. Registered with SEBI as Category I Registrar, is Number 1 Registrar in the Country. The award of being ‘Most Admired’ Registrar is one among many of the acknowledgements that Karvy received for customer friendly and competent services. : karvy stock broking ltd. Consists of five units namely stock broking servics, depository participant, advisory services, distribution of financial products, advisory services and private client goups.


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:: Karvy Financial Services Ltd. is a wholly owned subsidiary of Karvy Stock Broking Ltd. Karvy Stock Broking Ltd a member of the National Stock Exchange of India and the Bombay Stock Exchange, ranks among the top 5 stock brokers in India. With over 6 Lac active accounts, it ranks among the top 5 Depositary Participant in India, registered with NSDL and CDSL. : It is a SEBI registered Merchant Banker has emerged as a leading Investment Banking entity in the country with over a decade of experience. KISL has built its reputation by capitalizing on its qualified professionals, who have successfully executed a large number of complex and unique transactions : karvy insurance broking ltd is also a part of karvy stock broking ltd. At Karvy Insurance Broking Limited both life and non-life insurance products are provided to retail individuals, high net-worth clients and corporates. : The company provides investment, advisory and brokerage services in Indian Commodities Markets. And most importantly, it offer a wide reach through our branch network of over 225 branches located across 180 cities.

: Karvy Global is a leading business and knowledge process outsourcing Services Company offering creative business solutions to clients globally. It operates in banking and financial services, inurance, healthcare and pharmaceuticals, media , telecom and technology. It has its sales and business development office in New York, USA and the offshore global delivery center in Hyderabad, India

: Karvy Realty (India) Limited is engaged in the business of real estate and property services offering: Buying/ selling/ renting of properties Identifying valuable investments opportunities in the real estate sector Facilitating financial support for real estate and investments in properties Real estate portfolio advisory services

:: Karvy Data Management Services is the domestic BPO arm of the Karvy Group and services corporate across various industry verticals and business horizons. KARVY STOCK BROKING LTD.

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KDMS is committed to provide best in class, value driven business solutions to its clients by way of its innovative techniques and technology framework.

: it is a joint venture between Computershare, Australia and KarvyConsultants Limited, India in the registry management services industry.

DISASTER:: WHAT IS DISASTER:: Disaster is the tragedy of a natural or human-made hazard (a hazard is a situation which poses a level of threat to life, health, property, or environment) that negatively affects society or environment.

CLASSIFICATION:: Disaster can bi classified into two categories viz. NATURAL DISASTER and MAN–MADE DISASTER.

NATURAL DISASTER:: A natural disaster is a consequence when a natural hazard (e.g., volcanic eruption or earthquake) affects humans. Human vulnerability, caused by the lack of appropriate emergency management, leads to financial, environmental, or human impact.

VARIOUS TYPES OF NATURAL DISASTER:: 1. EARTHQUAKE:: An earthquake is the result of a sudden release of energy in the Earth's crust that creates seismic waves. 2. AVALANCHE:: An avalanche is a rapid flow of snow down a slope, from either natural triggers or human activity. 3. FLASHFLOOD:: A flash flood is a rapid flooding of geomorphic low-lying areas - washes, rivers, dry lakes and basins. It may be caused by heavy rain associated with a storm, hurricane, or tropical storm or meltwater from ice or snow flowing over icesheets or snowfields. 4. FLOODS:: A flood is an overflow or accumulation of an expanse of water that submerges land. 5. LANDSLIDES:: A landslide or landslip is a geological phenomenon which includes a wide KARVY STOCK BROKING LTD.

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range of ground movement, such as rock falls, deep failure of slopes and shallow debris flows, which can occur in offshore, coastal and onshore environments. 6. CYCLONES:: A cyclone is an area of closed, circular fluid motion rotating in the same direction as the Earth 7. DROUGHT:: A drought is an extended period of months or years when a region notes a deficiency in its water supply. Generally, this occurs when a region receives consistently below average precipitation

MAN MADE DISASTER:: Disasters caused by human action, negligence, error, or involving the failure of a system are called man-made disasters. Man-made disasters are in turn categorized as technological or sociological. Technological disasters are the results of failure of technology, such as engineering failures, transport disasters. Sociological disasters have a strong human motive, such as criminal acts, stampedes, riots and war.

VARIOUS MAN –MADE DISASTER:: 1. STAMPADE:: A stampede is an act of mass impulse among herd animals or a crowd of people in which the herd (or crowd) collectively begins running with no clear direction or purpose. 2. Road accidents. 3. Rail accidents. 4. Boat accidents. 5. Building and bridge collapse. 6. Bomb explosions.

Hazard vulnerability in india::  54% of land vulnerable to earthquakes.  8% of land vulnerable to cyclones.  5% of land vulnerable to floods.  More than 1 million houses damaged annually , plus human, social, and other losses.


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EARTHQUAKES::  12% land is liable to severe earthquakes [intensity MSK(Medvedev-Sponheuer-Karnik) IX or more]  18% land is liable to MSK VIII.  25% land is liable to MSK VII.  Biggest quakes in :: Andamans , Kuchchh , Himachal, Kashmir, North Bihar and the North East.

WIND AND CYCLONES::  1981-1990 :: 262 cyclones[92 severe] in a 50 km wide strip of the east coast.  Less severe cyclonic activity on west coast[ 33 cyclones in the same period].  In 19 severe cyclonic storms , death toll> 10000 lives.  In 21 cyclones in Bay of Bengal 1.25 million lives have been lost.

FLOODS::  Floods in the Indo-Gangetic-Bramhaputra plains are an annual feature.  On an average , a few hundred lives are lost.  Millions are rendered homeless .  Lakhs of hectares of crops are damaged every year.

Increasing visibility and impacts of disaster:: Natural disasters are increasingly making headline news, due to the impact of modern communications and connectivity, and the proliferation of TV and news media. There is hardly any part of the globe, whether Asia, Africa, Oceania or elsewhere which is really free from natural disaster of one kind or the other. Painful tales of what they mean are told to us either by the kith and kin of the dead, or by the lucky survivors of the natural disasters they have personally gone through. To say that these disasters take heavy toll of life and property or derail national economics, is an understatement. In some cases, they wipe out the future of generations, still unborn.


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The past decade has witnessed frequent natural hazards all over the world. At the beginning of the 1990s, the events that hit the headlines were mainly earthquakes and windstorms. Some of the examples are the winter storms in Europe in 1990, Typhoon Mireille in Japan in 1991, Hurricane Andrew in Florida in 1992, the earthquakes in California in 1994 and Kobe in 1995; 1998 was the year of largest number of events and highest damages cost and witnessed floods as most notable events. Severe floods as the aftermath of storm surges in the wake of tropical cyclones were also noticed as in the case of Gujarat, in June 1998, and Central America at the end of October. The recent super cyclone in Orissa (1999), a catastrophe claiming more than 10,000 lives and recently the earthquake of Gujarat in the new millennium are the most tragic events that have shaken up the world. The analysis and trends of these natural catastrophes world over indicates: During last ten years the number of great natural disasters have increased three times and economic losses due to these disasters have increased nine times. Number of loss events worldwide in 1998 alone (one of the years with largest number of catastrophes in the decade) indicate that 50 per cent of the events are earthquakes and windstorms and these have been higher in the Americas (255) compared to 202 in Asia. While the occurrence of number of events is highest in the Americas, number of deaths occurring due to these events have been higher in Asia, i.e. 34,303 as compared to 14,995 in the Americas. Economic losses due to earthquakes and windstorms is highest in the Americas while these losses are highest due to floods in Asia. These trends (Sigma, 2001) world over indicate that in spite of technological advancements in prediction techniques and warning systems: There has been an increase in the occurrence of events as well as cost of damage; Economic losses are more in developed countries than developing countries; and Number of deaths is much more in Asia than America. The main reasons for such dramatic increases are: The concentration of population is constantly growing in a numbe r of large cities, which are often located in high-risk zones; Greater susceptibility of modern industrial societies to catastrophes; and Accelerating deterioration of natural environmental conditions.


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Administrative Structure for Disaster Management in Uttaranchal:: Shortly, after the carving out of state of Uttaranchal, a new administrative structure for disaster management has been put in place, The state became the first in the country to have ministry of Disaster Management. The structure of disaster management system is as follows::

Institutional Arrangements at District Level:: DMMC

District Magistrate/ District Disaster Manager

Operation Desk Service Desk Infrastructure Health Desk Logistics Desk Agri Desk

District Control Room Desk Offices

Information and Communication

And

Police Civil Hospital PWD Corporation RTO DSO Others

Officers in Charge

Site Operation centre Site Manager

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Transit Camp

Relief Camp


Cattle Camps

Feeding Centres

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Institutional arrangements at state level:: Ministry of Disaster Management

Pr. Secretary of Disaster Management

Commissioner Disaster Management

Disaster Management and Mitigation Center

Pr. Secretary of Disaster Management

Disaster Mitigation and Management Centre:: The disaster mitigation and management centre is the apex centre in the field of disaster mitigation and management in Uttaranchal. It was established in October 2001. The objectives of DMMC are  To find and promote solutions to the root causes of disasters in the state of Uttaranchal and  To facilitate the smooth transition from relief to rehabilitation and development. DMMC has a well structured framework to carry out its activities. It involves three focallayers of participatory organizations. 1. State level: Ministry/department of disaster management through State emergency Operations Group under the control of Principal Secretary/ Commissioner, disaster management. 2. District level: District ,Magistrate through District Emergency Operations Group under the control of District Disaster Manager. 3. Local level: Tehsil/Block/Village through Site Operations Centre under the control of the Site Manager. Through these institutions, DMMC strives to::  Offer an extensive range of training programmes.  Provide advance information about likely disasters through latest technologies.  Maintain a network of experienced experts working in the field.  Provide consultancy services to all levels of government and NGOs and  Develop a strong regional knowledge base towards disaster policy. The DMMC has also formulated a strategy to be adopted for five years from its inception. KARVY STOCK BROKING LTD.

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These include::  Setting up of State Emergency Operations Group.  Setting up of District Emergency Operations Group  Institutional Strengthening and Coordination  Strengthening of Village Disaster Intervention team.  Creation and strengthening of Rescue Teams.  Networking of NGOs.  Capacity building, training and sensitization.  Creation of RS/GIS Database for village, town, block and the district.  Updating the strategy for disaster management from the lessons learnt.  Technical assistance to the Government of Uttaranchal and  Consultancy.

District Project Officer:: Amongst the various initiatives taken for disaster management is the creation of a post of District Project Officer. This new post has been created under the Disaster Risk Management Program of Government of India-United Nations Development Programme [UNDP]. This program aims to contribute towards the social and economic development goals of the national and state Governments by enabling them to programme is being implemented in 8 districts of Uttaranchal with the help of the local governments and PRI institutions in two phases. The District Project Officer (DPO) will be posted at district head quarters to work in consultation with the state nodal agency DMMC and under the direct supervision of the District Magistrate and perform the following duties;  Facilitate and Coordinate for pre paration of multi-hazard Disaster Management plans of the District, Blocks, GPs and Villages along with government functionaries.  Help the District administration Block for selection of partners for the Community Based Disaster preparedness work.  Helping in development of awareness campaign strategy and awareness generation activities like street plays, rallies, painting and drawing competitions amongst school children on disaster preparedness.  Supporting in the training and capacity building programme of government officials/PRIs/ NGOs/CBOsN outh Clubs/ SHGs Teachers and others concerned on various aspects of disaster management.  Facilitate the process Community Based Disaster Preparedness exercises at blocks, GP and village levels through active involveme nt of government officials, PRIs, NGOs/CBOs, youth clubs.  Coordinating and facilitating training programmes for disaster management task forces formed at various levels on Health and First Aid, Search and Rescue Operation, Sanitation, KARVY STOCK BROKING LTD.

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      

Shelter Management, Carcasses & Garbage disposal, use of early warning equipments IEM! radio operation etc. Establishing linkages with Civil Society Response group at various levels for emergency response plan development. Networking with NGOs/CBOs/NCC/NSS and other agencies working in the field of Disaster Management for unification of the strategy and process. Assisting the Collector and District Magistrate in performing all activities related to disaster management. Regular reporting to the Collector State Nodal Agency and State Project Officer on the programme activities. Helping district administration in organizing mock drill at various levels. Facilitating establishment of effective communication systems for early tracking and dissemination of warnings at the district level. Facilitating establishment of control rooms at District and block levels for Disaster Management Information dissemination.

Initiatives for Earthquake Resistant Houses:: In 1999, Garhwal was rocked with an earthquake which was measured 6.8 on the richter scale.It was second major earthquake in the last 10 years. Around 20000 houses collapsed,85000 houses damaged and 130 people lost their lives. One of the prime reasons of such a huge devastation was that the structures could not withstand the tremors because the design and quality of these houses was substandard. Earthquake resistance was not kept in view while constructing these houses. Thus, it is felt today that all houses in Uttaranchal should be earthquake resistant. Constructing a new house is an expensive preposition and more so in the hilly terrains as it is difficult to transport modem construction equipments and articles in these regions. Moreover, construction activities lead to environmental degradation which is a potential threat in the region. In this context, it becomes imperative to repair and retrofit the existing structures so that they can withstand any future eventuality. It is not only cost effective hut also will help in future from the devastating aftereffects of earthquakes. The existing structure should be repaired and retrofitted accordingly, while, the new structures should be constructed as per the earthquake resistant techniques. With the help of modem day techniques, the old houses can be converted into earthquake resistant houses without demolishing them even there is no need to remove the roofs. It is not required that houses should be of brick, cement and iron rods only. It is quite possible to construct houses with the locally available materials. The only thing which s hould be kept in mind is that appropriate techniques should be adopted.


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Repair and Retrofitting of Existing Houses:: The house owners have little or no awareness about the dangers of a future disaster and the ways the houses can be made stronger to withstand the impact of a future disaster. It is difficult for people to invest more than their already stretched resources in their houses to build better. There is little or no knowledge in the public about the alternate affordable technologies. Nor do the people know that their vulnerability to future disasters can be reduced through the use of suitable technologies for the construction. DMMC has taken up this task and is creating awareness in this regard through its machinery. It has laid down various categories of damage as G-l, G-2, G-3, G-4. and has developed detailed plan to rectify that. In order to prove the strength of such houses an experiment was done in Latur in 1998-99. In this demonstration two houses were constructed on a temporary platform. The first one was a traditional house of stone, mud and wood while the second was again a traditional house but Retrofit with new techniques. Now, earthquake like situation was created by hitting the platform with a tractor. It was shown that Retrofitted house withstand such collisions. The total expenditure in Retrofitting. is just 15% of constructing a new house. This experiment is being given wide publicity through pamphlets and training programmes to build up acceptability and confidence of the masses. DMMC has prepared booklets for local masons in Hindi language. These booklets are prepared after taking into account the experiences of Lattur in Maharashtra, Jabalpur in MP and Uttaranchai state's own house construction methods. Aiso, earthquake related Indian standards have been taken into account.

Training:: One major initiative taken by DMMC is that of Building centers which have played a pivotal role in promoting safer building technologies and practices. A number of workshops involving middle level government officers, academicians and engineers took part in the workshops. These workshops were:  Review of functioning of Building Centers, their role in Earthquake Resistant Constructionand means to revitalize them.  Review of adequacy of current legislation in implementation of Building codes and meansto improve implementation of codes.  Review of current curriculum with regard to awareness about Earthquake Vulnerability of the state population and recommendations to include Earthquake Engineering in Civil Engineering curriculum.

Mason's Training:: To percolate the awareness and technology at the bottom level DMMC has organized training camps for the Masons. One such camp was held in the district Rudraprayag from 28th March to 31st March KARVY STOCK BROKING LTD.

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2004. In this camp, 35 masons from different villages were trained by experts in building earthquake resistant structures and retrofitting techniques. In the training, a model of different retrofit techniques was constructed. It consisted of traditional as well as modem design of construction and their retrofitting. During our visit to Rudraprayag district we visited the place and had a look on this model. In order to prevent the sliding of lower portion of hills one more model was constructed there. These masons after getting trained will further act as 'gurus' to their next generations and will ensure the sustainability of the process. At the district level, a computerized database of trained masons and construction workers is being created. Till date, 800 masons have been registered in the database.

Integration with Other Schemes:: DMMC is also exploring the possibilities of integrating disaster preparedness and mitigation efforts with other government schemes.

IAY:: Under this scheme government provides assistance to weaker and marginalized sections of society to construct houses. DMMC is trying that all houses to be constructed under the scheme should be earthquake resistant. Block offices are taking care of this aspect. During our field visit, we came across one such initiative where a BPL family who lost their house due to sinking of the ground was provided a house under lAY. 53

Rina Sahay Yojana:: Under this scheme, Government of Uttaranchal is providing a loan of Rs 30000-40000 with Rs 10000 as subsidy to construct earthquake resistant houses.

NATIONAL DISASTER MANAGEMENT FRAMEWORK:: I.INSTITUTIONAL MECHANISMS:: Expected Outputs

Areas of intervention

Agencies/sectors to be involved and resource linkages

Nodal agency for disaster management at the national level with appropriate systems


(i)Constitution of National Emergency Management Authority with appropriate legal, financial and administrative powers.

Ministries/ Departments of Health, Water Resources, Environment and Forests, Agriculture, Railways, Atomic Energy, Defence, Page 21

Setting up State Disaster Management Authorities


(ii)Roles and responsibilities of the NEMA: -Coordinating multi hazard mitigation, prevention, preparedness and response programs. - Policies for disaster risk reduction and mitigation -Preparedness at all levels. -Coordination of response -Coordination of post disaster relief and rehabilitation. -Amendment of existing laws, procedures, instructions. Ministries/ Departments of Health, Water Resources, Environment and Forests, Agriculture, Railways, Atomic Energy, Defence, Chemicals, Science & Technology, Rural Development, Road Transport & Highways Etc. (i) State Disaster Management Authority to be headed by the Chief Minister. (ii) The Authority to lay down policies and monitor mitigation, prevention and preparedness as also oversee response.

Chemicals, Science & Technology, Rural Development, Road Transport & Highways etc.

Ministers for Agriculture, Home, Disaster Management, Water Resources, Health, Road & Transport, Civil Supplies, Environment & Forests, Rural Development, Urban Development and Public Health Engineering Departments as Members.

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II.LEGAL/POLICY FRAMEWORK:: Disaster Management to be listed in List – III – [Concurrent List] of Seventh Schedule to the Constitution State Disaster Management Acts

(i) Bill to be drafted.

National Policy on Disaster Management

(i) Mainstreaming disaster management into planning and development process.

(ii) Bill to be brought before Parliament Model Act to be circulated to the States.

(ii) Mandate safe construction.

States to enunciate Policy on Disaster Management .

(iii) Coordinated action by all relevant Departments as per policy (i) Mainstreaming disaster management into planning and development process.

Ministry of Home Affairs/ Ministry of Law (Legislative Department) Ministry of Home Affairs State Governments Ministry of Home Affairs, Ministry of Finance, Planning Commission, Ministry of Environment & Forests, Rural Development, Urban Development and other relevant Ministries to be consulted.

State Governments

(ii) Mandate safe construction. (iii) Coordinated action by all relevant Departments as per policy State Disaster Management Codes


Amendment of existing relief codes/scarcity codes/famine codes to incorporate mitigation,

State Governments

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preparedness and planning measures at all levels from community to State, constitution of Emergency Support Teams /Disaster Management Teams /Committees /State Disaster Management Authorities, delegation of administrative and financial powers to disaster incident managers etc, protocol to update the inventory of resources and plans.

iii.EARLY WARNING SYSTEMS:: (i) State of the art sensors to be set up. (ii) Hazard monitoring, tracking and modelling.

Warning Protocols


(i) IMD/CWC to carry out a review of sensors available and draw up plans for strengthening the system. (ii) Models to be updated to improve prediction accuracy. (i) Warning protocols to be user friendly. (ii) Warning to be communicated as quickly as possible to the States/districts/community. (iii) Protocols should be simple to understand. (iv) Districts to set up protocols for

Indian Meteorological Department/ Central Water Commission/ National Centre for Medium Range Weather Forecasting

Ministry of Home Affairs/ State Governments /Indian Meteorological Department/ Central Water Commission/ National Remote Sensing Agency/ Information and Broadcasting/ Page 24

communication of early warning to the community. (v) Panchayats/local bodies to be used for early warning communication. vi) Communication linkages for early warning.

Doordarshan/ All India Radio.

Disaster Management Act, 2005:: The Act lays down institutional, legal, financial and coordination mechanisms at the National, State, District and Local levels. These institutions are not parallel structures and will work in close harmony. The new institutional framework is expected to usher in a paradigm shift in DM from relief-centric approach to a proactive regime that lays greater emphasis on preparedness, prevention and mitigation.

Institutional Framework under the Act:: National Disaster Management Authority (NDMA):: The NDMA, as the apex body for disaster management, is headed by the Prime Minister and has the responsibility for laying down policies, plans and guidelines for DM and coordinating their enforcement and implementation for ensuring timely and effective response to disasters. The guidelines will assist the Central Ministries, Departments and States to formulate their respective DM plans. It will approve the National Disaster Management Plans and DM plans of the Central Ministries/Departments. It will take such other measures, as it may consider necessary, for the prevention of disasters, or mitigation, or preparedness and capacity building, for dealing with a threatening disaster situation or disaster. Central Ministries/Departments and State Governments will extend necessary cooperation and assistance to NDMA for carrying out its mandate. It will oversee the provision and application of funds for mitigation and preparedness measures. NDMA has the power to authorise the Departments or authorities concerned, to make emergency procurement of provisions or materials for rescue and relief in a threatening disaster situation or disaster. The general superintendence, direction and control of the National Disaster Response Force (NDRF) is vested in and will be exercised by the NDMA. The National Institute of Disaster Management (NIDM) works within the framework of broad policies and guidelines laid down by the NDMA. The NDMA is mandated to deal with all types of disasters; natural or man-made. Whereas, such KARVY STOCK BROKING LTD.

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other emergencies including those requiring close involvement of the security forces and/or intelligence agencies such as terrorism (counter-insurgency), law and order situations, serial bomb blasts, hijacking, air accidents, CBRN weapon systems, mine disasters, port and harbor emergencies, forest fires, oilfield fires and oil spills will continue to be handled by the extant mechanism i.e., National Crisis Management Committee (NCMC).

National Executive Committee (NEC):: The NEC comprises the Union Home Secretary as Chairperson, and the Secretaries to the Govt. of India in the Ministries/Departments of Agriculture, Atomic Energy, Defence, Drinking Water Supply, Environment and Forests, Finance (Expenditure), Health, Power, Rural Development, Science & Technology, Space, Telecommunications, Urban Development, Water Resources and the Chief of the Integrated Defence Staff of the Chiefs of Staff Committee as members. Secretaries in the Ministry of External Affairs, Earth Sciences, Human Resource Development, Mines, Shipping, Road Transport & Highways, and the Secretary, NDMAwill be special invitees to the meetings of the NEC. The NEC is the executive committee of the NDMA, and is mandated to assist the NDMA in the discharge of its functions and also ensure compliance of the directions issued by the Central Government. The NEC is to coordinate the response in the event of any threatening disaster situation or disaster. The NEC will prepare the National Plan for Disaster Management based on the National Policy on Disaster Management. The NEC will monitor the implementation of guideline s issued by NDMA. It will also perform such other functions as may be prescribed by the Central Government in consultation with the NDMA.

State Disaster Management Authority (SDMA):: At the State level, the SDMA, headed by the Chief Minister, will lay down policies and plans for DM in the State. It will, inter alia approve the State Plan in accordance with the guidelines laid down by the NDMA, coordinate the implementation of the State Plan, recommend provision of funds for mitigation and preparedness measures and review the developmental plans of the different Departments of the State to ensure the integration of prevention, preparedness and mitigation measures. The State Government shall constitute a State Executive Committee (SEC) to assist the SDMA in the performance of its functions. The SEC will be headed by the Chief Secretary to the State Government and coordinate and monitor the implementation of the National Policy, the National Plan and the State Plan. The SEC will also provide information to the NDMA relating to different aspects of DM.


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District Disaster Management Authority (DDMA):: The DDMA will be headed by the District Collector, Deputy Commissioner or District Magistrate as the case may be, with the elected representative of the local authority as the Co- Chairperson. The DDMA will act as the planning, coordinating and implementing body for DM at the District level and take all necessary measures for the purposes of DM in accordance with the guidelines laid down by the NDMA and SDMA. It will, inter alia prepare the District DM plan for the District and monitor the implementation of the National Policy, the State Policy, the National Plan, the State Plan and the District Plan. The DDMA will also ensure that the guidelines for prevention, mitig ation, preparedness and response measures laid down by the NDMA and the SDMA are followed by all the Departments of the State Government at the District level and the local authorities in the District.

Local Authorities:: For the purpose of this Policy, local authorities would include Panchayati Raj Institutions (PRI), Municipalities, District and Cantonment Boards, and Town Planning Authorities which control and manage civic services. These bodies will ensure capacity building of their officers and employees for managing disasters, carry out relief, rehabilitation and reconstruction activities in the affected areas and will prepare DM Plans in consonance with the guidelines of the NDMA, SDMAs and DDMAs. Specific institutional framework for dealing with dis aster management issues in mega cities will be put in place.

National Institute of Disaster Management (NIDM):: The NIDM, in partnership with other research institutions has capacity development as one of its major responsibilities, along with training, research, documentation and development of a National level information base. It will network with other knowledge-based institutions and function within the broad policies and guidelines laid down by the NDMA. It will organise training of trainers, DM officials and other stakeholders. The NIDM will strive to emerge as a ‘Centre of Excellence’ in the field of Disaster Management.

National Disaster Response Force (NDRF):: For the purpose of specialised response to a threatening disaster situation or disasters/ emergencies both natural and man-made such as those of CBRN origin, the Act has mandated the constitution of a National Disaster Response Force (NDRF). The general superintendence, direction and control of this force shall be vested in and exercised by the NDMA and the command and supervision of the Force shall vest in an officer to be appointed by the Central Government as the Director General of Civil Defence and National


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Financial Arrangements:: National Disaster Response and Mitigation Funds:: A National Disaster Response Fund may be constituted as mandated in the Act. The National Disaster Response Fund will be applied by the NEC towards meeting expenses for emergency response, relief and rehabilitation, in accordance with the guidelines laid down by the Central Government in consultation with the NDMA. The proposal for merging the National Calamity Contingency Fund (NCCF) with the National Disaster Response Fund shall be as recommended by the Finance Commission from time to time. Similarly, as mandated by the Act, the National Disaster Mitigation Fund (NDMF) may be created for projects exclusively for the purpose of mitigation. The NDMF shall be applied by the NDMA and shall be as recommended by the Finance Commission from time to time.

Insurance:: Nothing is certain in this world except the death but even in this the timing of death is not certain. There is uncertainty in the world. Every one has a desire to be secure. Every one takes precautionary measures to prevent the unforeseen and unfortunate events. Even then , accidents do occur. Therefore to cover such incidents we require insurance . This occurrence has to be random, accidental and not the deliberate creation of the insured person. Risk which may be measured in money and which is not against public policy can only be insured. Insurance is a technique , which provides for collection of small amounts of premium from many individuals out of which losses suffered by few are reimbursed. In this method, the individual insured is able to buy protection through the payment of a small cost viz. premium. Functionally insurance may be defined as a method where by the uncertain risks of individuals are combined in a group through small individual contributions out of which those who suffer losses are reimbursed. Legally insurance is a contract between the insurer and the insured where by in consideration of payment of the premium by insured , the insurer agrees to make good any financial loss the insured may suffer due to the operation of a peril insured The policy which is a document issued by the insurer is evidence of the contract. A contract of insurance does not undertake to prevent the occurrence of the peril insured against. What it provides is a promise to make good the financial loss caused by the operation of the insured peril.

BASIC INSURANCE TERMINOLOGIES:: Insured:: The person known as the policyholder, a person with insurance coverage. Insurer:: KARVY STOCK BROKING LTD.

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A company licensed to transact the business of insurance and issue insurance policies . Policy:: It's the written contract between an insurance company and its insured. It defines what the company agrees to cover for what period of time and describes the obligations and responsibilities of the insured. Premium:: It's the amount of money a policyholder pays for insurance protection. Claim:: It's the notice to the insurance company that under the terms of a policy, a loss maybe covered. Indemnity:: Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss. Broker:: An organization or person paid by the policyholder to look for insurance on their behalf. Expiration Date:: This is the date on which the policy ends. Grace Period:: A period (usually 30 or 31 days) following each insurance premium due date, other than the first due date, during which an overdue premium may be paid. All provisions of the policy remain in force throughout this period Limit:: It's the maximum amount paid by the insurance company under the terms of a policy. Underwriting:: The process of classifying applicants for insurance by identifying characteristics such as age, gender, health, occupation and hobbies. People with similar characteristics are grouped together and are charged a premium based on the group's level of risk.

GENERAL INSURANCE:: Insurance other than ‘Life Insurance’ falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary etc The non-life insurance sector is on an upswing! The non-life insurance industry in India has grown by over 16 % p.a. over the last 5 years. There is a vast business potential that lies untapped, as more and more cities enter the development phase…. Mr. Yogesh Lohiya, Chairman-cum-Managing Director of gic


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WHO SHOULD BUY GENERAL INSURANCE? Anyone who owns an asset can buy insurance to protect it against losses due to fire and theft and so on. Each one of us can insure our and our dependents’ health and well being through hospitalization and personal accident policies. To buy a policy the person should be the one who will bear financial losses if they occur. This is known as insurable interest.

RISK COVERED UNDER GENERAL INSURANCE:: Non-life insurance companies have products that cover property against fire and allied perils, flood, storm and inundation, earthquake and so on. There are products that cover property against burglary, theft etc. The non-life companies also offers policies covering machinery against breakdown, there are policies that cover the hull of ships and so on.

IMPORTANCE OF GENERAL INSURANCE:: General insurance cover is necessary for every family. It is important to protect one’s property, which one might have acquired from one’s hard earned income. A loss loss or damage to one’s property can leave one shattered. Losses created by catastrophes such as tsunami, Earthquakes, Cyclones etc.have left many homeless and penniless. Such losses can be devastating but insurance could help mitigate them. Property can be covered , so also the people against personal accidents. A health insurance policy can provide financial relief to a person undergoing medi cal treatment whether due to a disease or an injury. Industries also need to protect themselves by obtaining insurance covers to protect their building , machinery, stocks etc. They need to cover their liabilities as well. Financiers insist on insurance. So ,most industries and businesses that are financed by banks and other institutions do obtain covers. But are they obtaining the right covers? And are they insuring adequately are questions that need to be given some thought. Also organizations or industries that are self-financed should ensure that they are protected by insurance.

Need for insurance in disasters:: In the Indian context where people below the poverty line are high and per capita income is low, insurance penetration is bound to be low. It is, therefore, essential to make the best use of available public insurances and affordable commercial insurances, in disaster mitigation. The loss of property in Gujarat is likely to be close to Rs 10,000 crore. Most of this was residential property and, tragically, uninsured. This means that survivors of the quake are faced with the bleak prospect of not getting a penny for what most would have regarded a rock solid investment, built KARVY STOCK BROKING LTD.

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with a lifetime’s savings. The irony is that earthquake insurance is available in the country. Most industrial establishments are, in fact, insured against earthquakes and fire. But, residential establishments seldom are. This must change. Just as in the case of motor insurance, where third party insurance is compulsory, insurance against calamities – earthquake, flood or fire – must also be made compulsory. It already is in most developed countries – where property is separately insured against different kinds of risk depending on the location and exposure to the risk in question – and there is no reason why it should not be made so in India as well. People affected by calamities would not then have to depend on charity, but would instead be able to face the prospect of their immediate state of homelessness with greater equanimity, secure in the knowledge that they will receive compensation once they file their insurance claim. It was US insurance companies that picked up the tab after Hurricane Mitch and the earthquake in Los Angeles, for instance. True, it left many insurance companies bleeding but that risk is an integral part of the insurance business. This will have the additional advantage of serving as a check on the quality of construction, since insurance companies, anxious to limit their liability, will insist on certain minimum standards being met. For the same reason, they will also be compelled to draw up zoning maps, demarcating areas as flood/earthquake/ cyclone prone and accordingly tailor policies to the requirements of each area instead of having the current one-size-fits-all approach. The insurance industry has at its disposal comprehensive worldwide loss experience which it uses not only in calculating premiums commensurate with the risk and in classifying hazard areas, known as rating zones, but also in tracing relationships between event intensity and loss intensity and estimating loss potentials from realistic disaster scenarios (Gopalakrishanan, 2001). On the other hand, the insurance industry is known to have extensive information in the form of leaflets, brochures, films and television spots with which it alerts the public to risks and draws attention to possible effective precautions. Before, such information campaigns have concentrated on fire, accident and burglary prevention; efforts today are shifting more and more to the area of natural hazards, where there are many possibilities for loss prevention, which hitherto have scarcely been tapped.


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Some of

the important

milestones

in

the general

insurance business in india::  1907:: The Indian Mercantile Insurance Ltd. Set up , the first company to transact all classes of general insurance business.  1957:: General Insurance council , a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices.  1968:: The Insurance Act amended to regulate investments and set minimum solvency margins and the tariff Advisory Committee set up.  1972:: The General Insurance Business (Nationalization) Act,1972 nationalized the general insurance business in India with effect from 1st January 1973.  107 insurers amalgamated and grouped into four companies viz. the National insurance company ltd.,the new india assurance company ltd., the oriental insurance company ltd., and the united india insurance company ltd. GIC incorporated as a company.

BODIES THAT REGULATE THE SECTOR:: For better regulation purpose of the insurance sector the government has established following bodies:

1. IRA:: Insurance Regulatory Authority:: The IRA, under the chairmanship of Rangachary, was set-up in January 1996. The IRA Bill has to be passed by parliament to make the IRA a statutory body. Comprehensive legislation aimed at reviewing the insurance Act of 1938 and repealing the life insurance corporation Act of 1956 have to be passed.

2. IRDA:: Insurance Regulatory and development Authority:: The Insurance Regulatory and Development Authority, constituted under the IRDA Act, 1999, provide for the establishment of an authority to protect the interest policyholders, to regulate, promote and ensure orderly growth of the life insurance industry.

Business Requirement:A company will not be issued a license unless the IRDA is satisfied with the sound financial condition, the general character of management, the volume of business, the capital s tructure, earning prospects for the insurers and that the interests of the general public will be served if registration is granted to the insurer. Foreign insurance companies have been allowed to have a maximum 26% share holding. No life insurance company can be registered under the Act unless they have a paid up capital of Rs.100 crores. Every life insurer shall deposit with the reserve bank of India one percent of the total gross KARVY STOCK BROKING LTD.

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premium written in India in any financial year, not exceeding Rs.10 crores .

Investment of Assets:Every insurer is required to invest, and keep invested, assets equivalent to not less than the net liabilities as follows: a. 25 % in government securities, b. a least 25% of the said sum in government securities or other approved securities and b. the balance in any approved investment rated as “very strong” or more by reputed rating agencies, which include various debt instruments on which dividend on its ordinary shared for the five years immediately preceding or for at least five out of the six or seven years immediately preceding have been paid and which have priority in payment over ordinary shares of the company in winding up.

3. TAC:: Tariff Advisory Committee:: The tariff advisory committee established under the Act is empowered to control and regulate the rates, terms, and etc. that may be offered by insurers in respect of any risk or of any category of risks. It is provided that in fixing, amending or modifying such rates etc. the committee shall try to ensure as far as possible that there is no unfair discrimination between risk of essentially the same hazard and also that consideration is given to past and prospective loss experience. Every insurer is required to make payment to the TAC of the prescribed annual fees.

Present situation of General Insurance in India:: The Indian insurance sector is rapidly moving towards international standards of free (risk-based) market pricing and new/innovative product offerings. Big changes have occurred over the last few years, during which the sector was opened to private participation, along with foreign direct investment (FDI) capped at 26%. India is the 5th largest market in Asia by premium, following Japan, Korea, China and Taiwan. The country is geographically large and has the world’s 2nd largest population -- 1.13 billion in 2007 – but it also has one of the lowest penetration rates for property and casualty insurance in Asia in terms of premium as a percentage of GDP. India’s general insurance market witnessed a variety of changes as deregulation continued at a hectic pace.


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The total number of general insurers registered with IRDA are increasing day by day, with the registration of SBI General Insurance Company Limited, a joint venture general insurance company promoted by State Bank of India and Insurance Australia Group, Australia, as a general insurer in December 2009. Moreover, L&T General Insurance is readying to launch its operations in the next three to five months. The Gross Premium underwritten by public sector non-life insurers for the April-December 2009 period posted year-on-year growth of 11.37 per cent as compared to the year-on-year growth of 7.93 per cent posted by private sector non-life insurers. Overall, the non-life insurance sector grew 9.95 per cent in April-December 2009, compared to the corresponding period last year. According to IRDA data, out of the US$ 5.46 billion premium underwritten by the industry during the April December 2009 period, US$ 3.24 billion came from the four public sector companies as compared to US$ 2.91 billion during the same period in 2008. Moreover, in the 2010-11 budget, Finance Minister, Mr Pranab Mukherjee, has decided to roll back the government’s decision to tax the unrealised gains of non-life insurance companies. “The appreciation in the value of investments, being in the nature of unrealized gain is not taken into account for determining profit or loss of non-life insurance business as per the IRDA regulations. It is, therefore, proposed that the unrealized gains due to appreciation in the value of investments will not be included in the total income,” according to the budget documents. According to data from the IRDA (Summary Reports of Motor Data of Public and Private Sector Insurers - 2008-09), in 2008-09, nearly 30 million vehicles were registered and a total premium worth US$ 2.03 billion was collected.

MAJOR CHALLENGES:: Awareness::

It is the main problem faced by all the insurance company is lack of awareness

about Risk exposures and about insurance products available to the customers. In India only 20% of the population is insured. Majority of the populations who are living in the rural areas and sub urban areas are not aware of the about risk exposures and about insurance products available in the market.

Affordability::

In India majority of the population standard of living is low and majority

of them belong to middle class and lower class and they have very little money left after satisfying basic needs. Uneconomical premium of insurance policy is also a major constrains.


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Accessibility::

The policies are complex to understand by a layman the procedures are difficult to obtain policies if done individual .there are a lot of activities and formalities involved in order to get the insurance policy.

Inappropriate / inadequate distribution strategies:: Majority of the population is not aware of the benefits that the insurance company provides. And they are also not aware of the various schemes which these companies introduce.

FUTURE PROSPECTS::  Huge market largely untapped especially in Rural & Urban regions can be targeted to increase the number of insurer in the market.  As high as 70% of population is still not covered by insurance. So the company can conduct mass campaign and educated the people more about the products and also about the risk covered and the various benefits which they can avail .The Company can use various medium to increases the awareness.  Increase in standard of living, disposable income, literacy, insurance awareness throws open huge opportunities on insurance.  High growth in Automobile sector.  Huge strides in Health Care opening up huge Health Insurance potential.  In Rural sector large number of Micro finance institutions, Self Help Groups are setup who can be the major clients of this industry.  The Government initiatives on Mass insurance.  General Insurance would grow at CAGR 17% next 5years.

Pros of Disaster Insurance::  It could save livelihoods, therefore it can be more financially sustainable than traditional humanitarian aid, which focus on saving lives.  By making disaster risk reduction an integral part of national policies and guaranteeing a predictable and reliable payout in case of disaster, it will allow for longer term planning in development.  By reducing the need for international involvement in emergencies, it can diminish the negative effect external relief and reconstruction interventions often have in eroding local markets and exacerbating social inequalities (Pelling, 2007).  It will create or reinforce the idea that the state has responsibilities to ensure its citizens’ safety and protection of their livelihoods (Pelling, 2007).  It can increase governments self-determination. KARVY STOCK BROKING LTD.

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 It can guarantee greater dignity for the beneficiaries than aid appeals (Syroka and Wilcox, 2006).  If weather data collected are openly shared, they can be valuable for any Disaster Risk Reduction programme.  Current experience is, according to the experts involved in its implementation, transferable to other countries with available historical and update weather data. The World Bank and WFP are also exploring the opportunity for Satellite Data to be considered acceptable by the reinsurance market as this would allow virtually insuring any country in the world against bad weather, even if weather stations are not available.

Challenges & Limitations of Disaster Insurance ::  There is the risk of conflict with existing response capacities, where existing systems can overlap with new programmes complementing the Insurance (see possible conflict between DPPC and Contingency Plan in Ethiopia3)  It seems quite clear from actual experience that Disaster Insurance can not be a stand alone tool and it needs to be part of a broader contingency plan, since it can not cover the risk of mild droughts or other chronic risks (as otherwise the premium would become too costly).  It is not capable of addressing all types of humanitarian crisis (for instance crisis due to conflict or poor governance) and therefore, as a social protection tool, it needs to be part of a broader set of emergency response mechanisms (Barnett et al., 2006).  It is also important to recognize that insurance can at the most replace losses but it is not oriented to create improvements in quality of life (Pelling, 2007).

List of GENERAL INSURERS:: Public Sector:: National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited Export Credit Guarantee Corporation` Agriculture Insurance Company of India Limited

www.nationalinsuranceindia.com www.niacl.com www.orientalinsurance.nic.in www.uiic.co.in www.ecgcindia.com www.aicofindia.org

Private Sector:: Bajaj Allianz General Insurance Co. Limited ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. Reliance General Insurance Co. Limited Royal Sundaram Alliance Insurance Co. Ltd. KARVY STOCK BROKING LTD.

www.bajajallianz.co.in www.icicilombard.com www.itgi.co.in www.ril.com www.royalsun.com Page 36

TATA AIG General Insurance Co. Limited Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation HDFC Chubb General Insurance Co. Ltd. BHARTI-AXA General insurance FUTURE GENERALI ICICI Prudential General Insurance AEGON Religare General Insurance Ltd.

www.tata-aig.com www.cholainsurance.com www.ecgcindia.com

REINSURER:: General Insurance Corporation of India

Market

share

of

www.gicindia.com

different

companies

ingeneral

insurance industry::

Table-2


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Methodology:: Literature Survey:: The analysis has started with the literature survey of various news papers, magazine which helped the various aspects of the insurance industry in India. According to Parasuraman et al (1985) customer’s perceptions of the service received equate with customer’s prior expectations, and then a quality service has been delivered.

Design of Questionnaire:: A questionnaire was prepared on the basis of objective of the study. It was parted into some categories as follows  Personal details of the customers  Experience of natural disaster  Awareness about disaster insurance  What they think about disaster insurance is it really effective to recover the damages caused by disaster. A sample questionnaire is given into Annexure-I.

Design of sample survey::

Primary data was collected in the sample size of seventy five

due to time constraint. Data was collected through one to one interaction from different people. The respondents are from govt. officers, businessmen, shopkeepers etc. The respondent were mostly from Rajpur Road area, Balliwala chock, Canuaght Place, Gandhi Road and Indira Nagar area. They were from different age group and income level.

Data Tabulation::

Sche matics showing Methodological Steps


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Observations & Findings:: EXPERIENCE OF NATURAL DISASTER

32% YES

68%

FIG:: 1

NO

Source: Questionnaire

Out of 75 sample size it was found that in the field of experience of natural disaster natural disaster 68% respondent has experience of natural disaster. From this we can say that Uttaranchal state is a disaster prone state. Those have the experience of natural disaster among of them 64% of the people has the experience of earthquake ,so it is clear that Uttaranchal state is liable to several earthquakes.

20%

2%

VARIOUS TYPES OF DISASTER

14%

EARTH QUAKE

64%

HOUSEHOLD FIRE LAND SLIDES

WIND STORM FIG:: 2



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FIG:: 3


From this figure we can interpret that the people of Dehradun generally get the information related to disaster, how to make their home and life safer from disaster.

Disaster insurance coverage

12% yes

88%

FIG::4

no


From this figure we can say only 12% people has disaster insurance coverage.


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FIG:: 5 Source: Questionnaire From the previous figure it is clear that 64% of the people are aware about disaster insurance , but the most important thing is that do they have insurance coverage?

FIG:: 6 Source: Questionnaire From this figure we get to know that those who aware about disaster insurance among of them only 42% people has insurance coverage. The penetration of insurance should increase to reduce the financial damages caused by disaster. Govt. should take some initiative to promote insurance. Later we will see what the opinion of the people of Dehradun that Govt. should take some initiative to KARVY STOCK BROKING LTD.

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promote disaster insurance.

FIG:: 7


Those who has disaster insurance coverage among of them 63% has earthquake coverage, 22% coverage against land slides, 11% against flash flood and 4% has coverage against fire.

FIG:: 8


In Dehradun in general insurance there has 4 major players general insurance corporation has 40% market share; new india assurance has 35% market share; united india insurance has 20% market share and oriented insurance has 5% market share.


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FIG:: 9 Source: Questionnaire I also try to find out the perception of the people of Dehradun about disaster insurance. What they think about disaster insurance. Is disaster insurance effective to recover the damages caused by natural disaster. 61.2% of the respondent those who aware about disaster insurance , think that ‘disaster insurance is effective to recover the damages caused by natural disaster.’ And another amazing thing is that 91.2% of the respondent think that Govt. of Uttaranchal should take some initiative to improve the awareness of disaster insurance.

CONCLUSION:: Uttaranchal, due to its peculiar geographical setting is vulnerable to minor ecological changes. This makes the state disaster prone in terms of land slides, forest fires, cloud bursts, flash floods, and most importantly earth quakes. Given the frequency and the unpredictability of the occurrence of these disasters, an attempt to develop capacity to undertake disaster mitigation strategies is very important. The ultimate end of all these strategies should be to reduce the vulnerabil ity of the state to disasters. These programs should include, inter alia, disaster vulnerability assessment for the entire state and investment that would reduce vulnerability. In short the emphasis of the approach to disasters should shift from reaction to anticipation. In other words, the thrust should be on pro active pre- disaster measures rather than post disaster response. If any person has disaster insurance he can reduce financial loss caused by disaster. But the people of Dehradun not so much aware about disaster insurance. In this situation Govt. of Uttaranchal should take some initiative to improve the awareness of disaster insurance. 91.2% of the respondent think that Govt. of Uttaranchal should take some initiative to improve the awareness of disaster insurance. 61.2% of the respondent those who aware about disaster insurance , think that ‘disaster insurance is effective to recover the damages caused by natural disaster. KARVY STOCK BROKING LTD.

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Disasters both man made and natural are one of the most challenging problems faced by the state of Uttaranchal. It is true that we cannot avert or prevent the occurrence of many of the disasters. But by taking appropriate steps, we can definitely reduce their effects. The focus should be on all areas including connectivity in form of road, telecommunication and air connectivity. It is here that the role of a proper mechanism to guide and coordinate a comprehensive disaster preparedness programme becomes relevant. Some of the initiatives have been taken in the right direction but still there is a long way to go.

Annexure-I:: QUESTIONNAIRE Dear Respondent, Thank you for taking the time to answer this questionnaire; this questionnaire is aimed at your awareness and your perception about insurance for disaster management. Your response will be dealt with strict confidentially and it will be used only for academic purpose. Again thank you for spending your valuable time to fill this questionnaire. GENERAL INFORMATION::

Optional::

Name::……………………………………………………………… Contact no.::……………………………………………………………….. E-Mail ID::…………………………………………………………. Gender::

Male

Female

Age Group (years old) :: Occupation::

Below 30

Student

Employee

Educational qualification::

Marital status:: 31-40

41-50

51-60

Self-Employed

Under graduate

Unmarried

Married

Above 60

Other, Specify………………..

Graduate

Post-Graduate

Other, specify……………………. Income (annually)::

Below 1 lakh

1.01-3 lakh

3.01-5 lakh

Above 5 lakhs.

INFORMATION RELATED TO NATURAL DISASTER AND DISASTER INSURANCE:: 1. Experience of natural disaster [if no then go to question no.3]. Yes no 2.

Type of disaster. Drought Dust Storm


Wildfire Household Fire Page 44

Earthquake Wind Storm Flood Winter Storm Landslide / Debris Flow Other (Specify)………………………… 3. Have you ever received information about how to make your family and home safer from natural disasters? [if no then go to question no.5]. yes No 4.

How recently? Within the last 6 months Between 2 and 5 years Between 6 and 12 months Between 1 and 2 years 5 years or more

5. Are you aware about disaster insurance? [if no then go to question no.11]. Yes No. 6. Does your family have any disaster insurance coverage? [ if no then go to question no.9]. Yes No 7. Do you have the insurance coverage any of the following. Earth quake Land slides Flashflood Avalanche Others-specify…………………………… 8. Name of the company. General insurance corporation of india New india assurance Oriented insurance United india insurance Other- specify…………………………….. 9. What is the main reason that your family doesn’t have insurance coverage against disaster. Not easily accessible Too expensive Not necessary Never considered it Other [Please specify your level of agreement for the following statements(just put a tick mark). SD-strongly

disagree, D-disagree, U-undecided ,A-agree, SA-strongly agree] 10. Disaster insurance is effective to recover the damages caused by natural disaster. SD


D

U

A

SA

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11. Govt. of Uttaranchal should take some initiative to improve the awareness of disaster insurance of the state. SD

D

U

A

SA

Other comments:: ……………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………… ……………………………………………………………………………………………………… …………………………………………………………………………………………………………………

Thank you very much for providing these informations

AbbreviationS:: IAY – Indira Awas Yojana ARMVs – Accident Relief Medical Vans BIS – Bureau of Indian Standards CBOs – Community Based Organisations CBRN – Chemical, Biological, Radiological and Nuclear CCMNC – Cabinet Committee on Management of Natural Calamities CCS – Cabinet Committee on Security CSR – Corporate Social Responsibility DDMA – District Disaster Management Authority DM – Disaster Management GIS – Geographic Information System GoI – Government of India GPS – Global Positioning System HLC – High Level Committee MHA – Ministry of Home Affairs NCC – National Cadet Corps NCCF – National Calamity Contingency Fund NCMC – National Crisis Management Committee NDEM – National Database for Emergency Management NDMA – National Disaster Management Authority NDMF – National Disaster Mitigation Fund

References::  http://ndmindia.nic.in/EQProjects/Disaster%20Management%20in%20India%20%20A%20Status%20Report%20-%20August%202004.pdf  http://www.azadindia.org/social-issues/poverty-in-india.html  http://ncw.nic.in/pdfreports/Gender%20Profile-Uttaranchal.pdf  http://www.afminetwork.org/fichiers/ressources/18.pdf KARVY STOCK BROKING LTD.

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http://www.proventionconsortium.org/themes/default/pdfs/IIASA_microfin_draft.pdf http://www.ccsindia.org/ccsindia/policy/live/studies/wp0010.pdf http://www.gdrc.org/icm/disasters/disaster.pdf http://www.duryognivaran.org/documents/country%20papers/India%20Country%20Paper.p df http://planningcommission.nic.in/aboutus/committee/wrkgrp11/wg11_disastermg.pdf http://en.wikipedia.org/wiki/Avalanche http://en.wikipedia.org/wiki/Cyclone http://en.wikipedia.org/wiki/Flash_flood http://en.wikipedia.org/wiki/Drought http://en.wikipedia.org/wiki/Climate_of_India http://saarc-sdmc.nic.in/pdf/publications/sdr/chapter-13.pdf http://nidm.gov.in/idmc2/PDF/Outcome/Manmade.pdf http://www.gisdevelopment.net/proceedings/mapworldforum/sem5/MWF_sem5_Disaster Management_131.pdf http://india.gov.in/citizen/agriculture/natural_schemes.php http://en.wikipedia.org/wiki/Category:Earthquakes_in_India http://www.sristi.org/dmis/plan_manage http://www2.unescobkk.org/elib/publications/103/disaster.pdf http://data.undp.org.in/dmweb/pp/UNDP_IDPR%2045%20Versionweb.pdf http://ndma.gov.in/ndma/hr/consultant.pdf


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Project on Disaster Management

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