Sernet - Risk Management

life insurance

Introduction
Strategy
Process
Offerings
FAQ

If life is one big adventure where accident, illness, theft and natural disaster wait in the shadows, then life insurance is a safety belt that enables us to enjoy the ride without worries.

As with most insurance policies, life insurance is a contract between the insurer and the policy owner whereby a benefit is paid to the designated beneficiaries if an insured event occurs which is covered by the policy. To be a life policy the insured event must be based upon the lives of the people named in the policy.

Roles of Life Insurance

Life insurance as "Risk cover"
Life insurance as "Tax planning"
Life insurance as "Wealth Builder"

Types of Life Insurance

Term Insurance
Whole Life Insurance
Endowment Insurance
Money Back Insurance
Annuity / Pension Plans
Unit Linked Insurance Plans

Types of Insurers:

Public Sector: Postal Life Insurance, LIC of India
Private Sector: HDFC SL, ICICI PRU, Birla SL, Reliance, TATA AIG, Met Life etc.

Highlights

Life Insurance is most commonly used to financially protect your family from the premature death of you and/or your spouse
Life Insurance can also be used to provide for your retirement or your children's education and marriage and also for tax benefits.
Over the years, insurers have added various features to basic insurance policies in order to address specific needs of a cross section of people.

To know how Sernet can help you with getting yourself insured, click here.

Life insurance is an agreement between a life insurance company and the policyholder. Under the terms & conditions of the policy, the life insurance company agrees to the payment of a stated amount of monetary benefits to a named beneficiary, on the happening of a specified event contingent on the human life. Usually the agreement provides for:

Payment of an amount by the life insurance company on the date of maturity or at specified
periodic intervals or at death, if it occurs earlier.
Periodical payment of insurance premium by the policyholder to the life insurance company

Life Insurance products helps one mitigate following types of risks in life:

Critical Illness: Uncertain
Accident: Uncertain
Disability: Uncertain
Death: Certain but Not sure When
Pension / Annuity: Certain on retirement, on an unplanned or forced retirement?

Life Insurance Process:

Risk Identification in a selected domain of interest

Life Cover
Critical Illness
Child Benefit
Retirement
Wealth Protection
Liability Cover

Risk Assessment: Applying Human Life Value method

Life Stage
Wealth Stage
Life Style
Dependants

Considerations:

Priority & Values: Existing Commitments, Savings, Spending or Insure
Existing Insurance: Excess or Shortage

Implementation:

Examine alternate risk mitigating options
Consult registered and reputed intermediary
Insist an ideal Product Mix

Review and evaluation:

Periodic update
Next Risk Identification
Involve family members and required professionals

The client would be offered following different execution models

Fee Based Model

Financial Plan: Indicating required savings to meet desired goals in required Asset Allocation
Mailers and Messages: Updating with current market trends, indices and informing about available new or concurrent schemes
Periodic Reports: Showing current status of the executed plan on regular intervals or on
demand* (*Charges apply)
Annual Review by the advisor: Restructuring the plan if required

Charges

First Meeting chargeable on hourly basis.
Following charges shall be discussed on case to case basis.

Commission Based Model

Mailers and Messages: Updating with current market trends, indices and informing about available new or concurrent schemes
Periodic Reports: Showing current status on regular intervals or on demand* (*Charges apply)

Charges

First Meeting: Nil
Following charges: Nil

Declaration

Life Insurance is a contract by which you can protect yourself against specific losses by paying a premium over a period of time. Since each one of us, during our lives are faced with numerous risks - failing health, financial losses, accidents and even fatalities, our instinct drives us to cover ourselves against those risks. Though an insurance cover can't protect you against the emotional losses arising out of these risks, it softens the economic crisis that usually accompanies these losses.

Why Do I Need Life Insurance?
Simply put, life brings with it many surprises, both pleasant and unpleasant. By taking a Life Insurance Plan one can ensure that he / she is better prepared to face uncertainties in number of ways.

What are the advantages of Life Insurance ?

Protection
Most importantly, we need life insurance to protect the people we love, taking care that our family has a means to look after itself after we are gone. In a nutshell, it is to protect the economic value of a human life for the benefit of those financially dependent on him.
For example - Suppose you suffer an injury that keeps you from earning? Would you like to be a financial burden on your family, already losing out on your salary? With a life insurance policy, you are protected. Your family is protected.

Savings and Investments
Insurance is also a means to Save and Invest. The periodic premiums are like savings and you are assured of a lump sum amount on maturity. A policy can come in really handy at the time of your child's education or marriage. Besides, it can be used as supplemental retirement income.

Tax Benefits
Life insurance is one of the best tax saving options today. Your tax can be saved twice on a life insurance policy-once when you pay your premiums and once when you receive maturity benefits. Money saved is money earned!

personal & health insurance

Introduction
Strategy
Process
Offerings

With rising healthcare costs, a serious illness can spell the doom for a household economy. Health Insurance is a wise precaution that more and more people in India are employing.

If you want to shield your health problems and want to be safe as far as your medical treatment is concerned, personal health insurance in India gives you the avenue to that end.

Roles of Personal & Health Insurance

Personal insurance as "Hazard Leverage"
Health insurance as "Precaution"
Health insurance as “Income Protection”

Types of Personal & Health Insurance Plans

Medicare: provide you with security as to the cost and outlays for your medical treatment.
Accident & Disability: secures you with compensation in case of death or disability due to accident
Travel: Is a cover for the risks you might face in your trip, overseas or domestic. Typically, it covers death, personal accident, medical expenses, repatriation, loss/ delay of checked baggage, passport loss and third party liability.
Property: helps one to shield property and belongings.
Vehicle: can protect your loss due to car damage or break down etc.

Types of Insurers:

Public Sector: New India, United India, National Insurance, Oriental Insurance
Private Sector: ICICI Lombard, Bajaj Allianz, Royal Sundaram, TATA AIG etc.

Highlights

Cashless claim settlement
Premium for 1 lakh Medicare cover is approx Rs. 1,400 annually (below 45 yrs)
Tax saving under Section 88D

To know how Sernet can help you with getting yourself insured, click here.

Personal & Health insurance Plans in India have assumed paramount importance in this age of proliferating economic condition. The level of per capita income of the people is on an increase.

Personal & Health Insurance products helps one mitigate following types of risks in life:

Ailments: Hospital Bills, Transportation Expenses
Accident & Disability: Beneficiary Compensation, Income Protection
Theft, Fire & Burglary: Beneficiary Compensation

Please Note:

Uncertainty is nothing but Unplanned, Forced or Undesired event or situation that one faces in life.
One can plan for Unsystematic but one has to always remain prepared for Systematic Risk.
Communication and consultation is equally important in this whole proces

Personal & Health Insurance Process:

1. Risk Identification in a selected domain of interest

Ailments: Medical Care
Property: Theft, Fire & Burglary
Vehicle: Accident & Disability
Travel: Medical Care, Transport, Theft

2. Risk Assessment: Applying Human Life Value and Asset life Value method

Life Stage
Wealth Stage
Life Style
Dependants

Considerations:

Priority & Values: Existing Commitments, Savings, Spending or Insure
Existing Insurance: Excess or Shortage

3. Implementation:

Examine alternate risk mitigating options
Consult registered and reputed intermediary
Insist an ideal Product Mix

4. Review and evaluation:

Periodic update & renewal
Next Risk Identification
Involve family members and required professionals

The client would be offered following different execution models

Fee Based Model

Financial Plan: Indicating required savings to meet desired goals in required Asset Allocation
Mailers and Messages: Updating with current market trends, indices and informing about available new or concurrent schemes
Periodic Reports: Showing current status of the executed plan on regular intervals or on
demand* (*Charges apply)
Annual Review by the advisor: Restructuring the plan if required

Charges

First Meeting chargeable on hourly basis.
Following charges shall be discussed on case to case basis.

Commission Based Model

Mailers and Messages: Updating with current market trends, indices and informing about available new or concurrent schemes
Periodic Reports: Showing current status on regular intervals or on demand* (*Charges apply)

Charges

First Meeting: Nil
Following charges: Nil

Declaration

commercial & marine insurance

Introduction
Strategy
Process
Offerings

You can never be sure of what life has in store for you. Some unforeseen incident might suddenly alter the course of your life, putting your valuable assets at risk. Commercial Insurance cover can provide you with the financial support to ride over this situation.

Marine Insurance covers the loss or damage of ships, cargo, terminals, and any transport or property by which cargo is transferred, acquired, or held between the points of origin and final destination. Marine also includes Onshore and Offshore exposed property (container terminals, ports, oil platforms, pipelines); Hull; Marine Casualty; and Marine Liability.

Along with the feeling of security, insurance also keeps your savings intact so you don’t have to liquidate your savings to overcome the sudden change in your life. A proof of how vital they are to an individual and family’s financial security, certain types of insurances, like motor insurance, public liability insurance etc, have been made compulsory under law.

Roles of Commercial & Marine Insurance

1. Commercial insurance as "Hazard Leverage"
2. Marine insurance as "Precaution"

Types of Plans and coverage available
Commercial Insurance	Marine Insurance
Fire, Theft & burglary	Import Transit
Plate Glass	Export Transit
Workmen’s Compensation & Group Peril	Inland Transit
Industrial & Engineering	Marine Hull
Project, Product & Public Liability
Fidelity
Money

Types of Insurers:

Public Sector: New India, United India, National Insurance, Oriental Insurance
Private Sector: ICICI Lombard, Bajaj Allianz, Royal Sundaram, TATA AIG etc.

Highlights:

The Insurance contracts are based on ‘agreed values’. Some of them are tariff products
Premiums vary based on risk estimations
Commercial & Marine insurance is complex but indispensible or in some cases compulsory in today’s world
Almost everything that has a chance of getting lost, stolen or damaged can be insured

To know how Sernet can help you with getting yourself insured, click here

It is very important to have adequate amount of coverage for each insurance policy. For any asset or property insurance, the value of the asset is to be taken into consideration before deciding the sum insured. Most of the property covers in fact carries a clause that says that if the sum assured is not adequate, the percentage representing the uncovered portion of the asset is to be borne by the insured.

Scope of cover available
Commercial: The policy pays for damages that the insured is legally liable to pay in consequence of accidental death/injury or disease to third parties including damage to third party property due to any defect in the products manufactured.	Marine: It covers transit of goods
Exports to other countries can also be covered provided domestic sales are also covered.	By Sea: All ocean voyages and inland water ways
Additional covers: Vendors' Liability extension	Send by post or parcels
Technical collaborators liability	By rail/road/Air
Products manufactured by sub-contractors/licensed manufacturers on their own brand name can also be covered under the same policy.

Features and Benefits:

Claims arising out of accidents during the policy period due to defects in the products covered by the policy are payable.
The policy also covers injury to third party and pollution liability on account of products covered.
Indemnity is extended to officials of the insured in their business capacity.
Officers, committees and members of insured's welfare association’s personal representatives of the estate.
All costs, fees and expenses incurred in investigation, defense and settlement of claim made against the insured, cost of representation at any inquiry or other proceedings in respect of matters having direct relevance to the claim made against the insured are covered by the policy subject to the overall limits stated in the policy

Considerations:

The risk perception of the property/person you want to cover
Probability of occurrence of the perils covered under the policy (e.g. How often can a landslide occur in Delhi?)
Premium charged for the policy by the different insurance companies. (Premiums are fixed for certain products while for other there can be certain discounts as well us extra premium given by different insurance companies)
Ease in claim settlement is an important aspect of selecting a company and policy
Transparency in the policy documents clearly indicating the covered and uncovered items of the policy
Ease to apply and accessibility at all times
Service standards, simplicity of the claim process, transparency in all its dealings, philosophy, infrastructure and network, commitments and timelines of the insurance company.

Please Note:

Uncertainty is nothing but Unplanned, Forced or Undesired event or situation that one faces in life.
One can plan for Unsystematic but one has to always remain prepared for Systematic Risk.
Communication and consultation is equally important in this whole process

Commercial & Marine Insurance Process:

1. Risk Identification in a selected domain of interest

Theft, Fire & Burglary: Office, Factory Property, Vessels, Onshore Properties
Personal Accident: Employees
In warehouse & Transit: Goods
In safe, Transit & Forgery: Cash, Cheque, DD etc.(Money)
Fidelity: Fraud and Dishonesty
Public Liability: Product, Project
Riots & Terrorism: Human made disaster
Natural Disaster: Earth Quake, Flood, Storm etc.

2. Risk Assessment: Applying Asset life Value method

Business Type
Government Policy
Cash Flows
Risk Occurrence
Risk Volatility

Considerations:

Priority & Values: Existing Commitments, Savings, Spending or Insure
Existing Insurance: Excess or Shortage

3. Implementation:

Examine alternate risk mitigating options
Consult registered and reputed intermediary
Insist an ideal Product Mix

4. Review and evaluation:

Periodic update & renewal
Next Risk Identification
Involve responsible members or departments and required professionals

The client would be offered following different execution models

Fee Based Model

Financial Plan: Indicating required savings to meet desired goals in required Asset Allocation
Mailers and Messages: Updating with current market trends, indices and informing about available new or concurrent schemes
Periodic Reports: Showing current status of the executed plan on regular intervals or on
demand* (*Charges apply)
Annual Review by the advisor: Restructuring the plan if required

Charges

First Meeting chargeable on hourly basis.
Following charges shall be discussed on case to case basis.

Commission Based Model

Mailers and Messages: Updating with current market trends, indices and informing about available new or concurrent schemes
Periodic Reports: Showing current status on regular intervals or on demand* (*Charges apply)

Charges

First Meeting: Nil
Following charges: Nil

Declaration

financial insurance

Introduction
Strategy
Process
Offerings

Financial Liability & Credit insurance protects your business with comprehensive security cover. It entails

Product Insurance: The manufacturer / seller of faulty products could be held liable for such damages, causing severe financial losses. Hence, protection from that is must.
Workman Compensation Policy: Indemnity against legal liability to all employees and Fata Accident Act.
Directors and Officers Liability: Directors and officers hold a position of trust and are
responsible towards the company, the shareholders, the employees, and the public at large. So protecting them, Saves Company’s image and balance sheet both on a doom day.
Credit Insurance: is an insurance policy and risk management product that covers the payment risk resulting from the delivery of goods or services.

Roles of Commercial & Marine Insurance

Financial Liability insurance as "Financial Leverage"
Credit insurance as "Precaution"

Types of Coverage

Personal Accident
Damage to Property
Indemnity against Financial Loss
Credit Lines

Types of Insurers:

Public Sector: New India, United India, National Insurance, Oriental Insurance
Private Sector: ICICI Lombard, Bajaj Allianz, Royal Sundaram, TATA AIG etc.

Highlights:

The Insurance contracts are based on ‘agreed values’. Some of them are tariff products
Premiums vary based on risk estimations
Financial Liability & Credit insurance is complex but indispensible or in some cases compulsory in today’s world
Almost everything that bears a financial loss risk can be insured

To know how Sernet can help you with getting yourself insured, click here.

Liability insurance is a very broad superset that covers legal claims against the insured. Many types of insurance include an aspect of liability coverage. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict.

Liability policies typically cover only the negligence of the insured, and will not apply to results of willful or intentional acts by the insured. If the sum assured is not adequate, the percentage representing the uncovered portion of the peril is to be borne by the insured.

Scope of cover available
Product insurance covers legal liability of the Insured towards damages to the third party arising due to faulty products manufactured / sold by the insured, liability with respect to	• Accidental death • Bodily injury or disease • Loss or damage to property
Workman Compensation Policy: The policy provides for two forms of insurance viz.	• Table ‘A’ - Indemnity against legal liability to all employees (whether or not coming within the definition of the term Workmen) under the W.C. Act 1923 and subsequent amendment to the said Act prior to the date of issue of the policy, the Fatal Accidents Act, 1855 and at Common Law. • Table ‘B’ - Indemnity against legal liability under the Fatal Accidents Act, 1855 and Common Law. (Table ‘B’ policies may not be issued to cover employees who fall within the definition of “Workmen” under the Workmen’s Compensation Act, 1923 as amended).
Directors and officers hold a position of trust and are responsible towards the company, the shareholders, the employees, and the public at large. They may become liable to pay damages in scenarios such as the following:	• Misstatement in prospectus • Inaccurate statement of financial conditions • Errors in annual accounts • Conflict of interest • Using insider information • Lack of judgment, diligence, good faith • Mismanagement of funds • Unfair allotment of shares
Credit Insurance is purchased by business entities to insure their accounts receivable from loss due to the insolvency of the debtors. This product is not available to private individuals	• Trade Receivables • Business-to-Business Transactions • Short Term Credit Risk • Portfolio

Features and Benefits:

Claims arising out of accidents during the policy period due to defects in the products covered by the policy are payable.
The policy also covers injury to third party and pollution liability on account of products covered.
Indemnity is extended to officials of the insured in their business capacity.
Officers, committees and members of insured's welfare association’s personal representatives of the estate.
All costs, fees and expenses incurred in investigation, defense and settlement of claim made against the insured, cost of representation at any inquiry or other proceedings in respect of matters having direct relevance to the claim made against the insured are covered by the policy subject to the overall limits stated in the policy

Considerations:

The risk perception of the product/person/peril you want to cover
Probability of occurrence of the perils covered under the policy (e.g. How often can an
engineering product give faulty results?)
Premium charged for the policy by the different insurance companies. (Premiums are fixed for certain products while for other there can be certain discounts as well us extra premium given by different insurance companies)
Ease in claim settlement is an important aspect of selecting a company and policy
Transparency in the policy documents clearly indicating the covered and uncovered items of the policy
Ease to apply and accessibility at all times
Service standards, simplicity of the claim process, transparency in all its dealings, philosophy, infrastructure and network, commitments and timelines of the insurance company.

Please Note:

Uncertainty is nothing but Unplanned, Forced or Undesired event or situation that one faces in life.
One can plan for Unsystematic but one has to always remain prepared for Systematic Risk.
Communication and consultation is equally important in this whole process

Financial Liability & Credit Insurance Process:

1. Risk Identification in a selected domain of interest

Goods & Service Malfunction: Products, Event
Personal Accident: Employees, Third Party Individual / Property
Public Liability: Product, Project, Employee, Directors & Officers
Riots & Terrorism: Human made disaster
Natural Disaster: Earth Quake, Flood, Storm etc.

2. Risk Assessment: Applying Product/Employee Value method

Business Type
Employee Type
Government Policy
Cash Flows
Risk Occurrence
Risk Volatility

Considerations:

Priority & Values: Existing Commitments, Savings, Spending or Insure
Existing Insurance: Excess or Shortage

3. Implementation:

Examine alternate risk mitigating options
Consult registered and reputed intermediary
Insist an ideal Product Mix

4. Review and evaluation:

Periodic update & renewal
Next Risk Identification
Involve responsible members or departments and required professionals

The client would be offered following different execution models

Fee Based Model

Financial Plan: Indicating required savings to meet desired goals in required Asset Allocation
Mailers and Messages: Updating with current market trends, indices and informing about available new or concurrent schemes
Periodic Reports: Showing current status of the executed plan on regular intervals or on
demand* (*Charges apply)
Annual Review by the advisor: Restructuring the plan if required

Charges

First Meeting chargeable on hourly basis.
Following charges shall be discussed on case to case basis.

Commission Based Model

Mailers and Messages: Updating with current market trends, indices and informing about available new or concurrent schemes
Periodic Reports: Showing current status on regular intervals or on demand* (*Charges apply)

Charges

First Meeting: Nil
Following charges: Nil

Declaration

There is only one way to control Risk, Transfer it!!

risk management

Introduction
Strategy
Process
Offerings

Risk management is a structured approach to managing uncertainty related to a threat, a sequence of human activities including: risk assessment, strategies development to manage it, and mitigation of risk using managerial resources.

The strategies include avoiding the risk, reducing the negative effect of the risk, accepting some and transferring the risk to another party or all of the consequences of a particular risk.

Some traditional risk managements are focused on risks stemming from

Physical: Natural disasters or fires, accidents and death
Legal: Lawsuits

Financial risk management: on the other hand, focuses on risks that can be managed using traded financial instruments.

Objective of risk management is to reduce different risks related to a preselected domain to the level accepted by society. It may refer to numerous types of threats caused by environment, technology, humans, organizations and politics. On the other hand it involves all means available for humans, or in particular, for a risk management entity (person, staff and organization).
In ideal risk management, a prioritization process is followed whereby the risks with the greatest loss and the greatest probability of occurring are handled first, and risks with lower probability of occurrence and lower loss are handled in descending order.

In practice the process can be very difficult, and balancing between risks with a high probability of occurrence but lower loss versus a risk with high loss but lower probability of occurrence can often be mishandled.

Hence forth there is a need of a regulated reliable and organized route of Risk Management.

Highlights:

Risk Management means a continuous exercise of control Vs uncertainty
Risk Transfer is most sought after remedy for most of uncertainties
Risk Management does not mean leveraging Risk too much.

Risk management also faces difficulties allocating resources. This is the idea of opportunity cost. Resources spent on risk management could have been spent on more profitable activities.

Again, ideal risk management minimizes spending while maximizing the reduction of the negative effects of risks.

Rules of Risk Management

Don’t risk more then what you can afford to lose
Consider the odds of the risk occurring
Don’t risk a lot for a little

Risk Transfer is an efficient key to Control Risk. Following Risk Transfer areas are open till date for one who is looking in that context.

Life Insurance: Endowment, Money Back, Whole life, Ulips
Health Insurance: Medicare, Accident, Disability, Travel
Commercial Insurance: Theft, Burglary, Fire, Natural Disasters, Terrorism
Marine Insurance: Goods Transport by Water ways
Financial Insurance: Product, Event, Professional, Director & Officers etc

Risk Management Process:

Risk Identification in a selected domain of interest

Source analysis
Problem analysis

Planning the remainder of the process: Common risk identification methods are:

Objectives-based risk identification
Scenario-based risk identification
Taxonomy-based risk identification
Common-risk Checking
Risk Charting

Risk Assessment: Developing an analysis of risks involved in the process and create a risk management plan

Social scope of risk management
To identity and objectives of stakeholders
Basis upon which risks will be evaluated, constraints.

Select appropriate controls or countermeasures to measure each risk. Risk mitigation needs to be approved by the appropriate level of management.

The risk management plan should propose applicable and effective security controls for managing the risks. A good risk management plan should contain a schedule for control implementation and responsible persons for those actions.

Risk Control: Defining a framework for the activity and potential treatment.

Avoidance (eliminate): Not performing an activity that could carry risk
Reduction (mitigate): Methods that reduce the severity of the loss or the likelihood of the loss from occurring
Transference (outsource or insure): Means causing another party to accept the risk, typically by contract or by hedging
Retention (accept and budget): Involves accepting the loss when it occurs

Implementation: Follow all of the planned methods for mitigating the effect of the risks. Purchase insurance policies for the risks that have been decided to be transferred to an insurer, avoid all risks that can be avoided without sacrificing the entity's goals, reduce others, and retain the rest.

Risk Monitor: Review and evaluation of the plan.

Initial risk management plans will never be perfect. Practice, experience, and actual loss results will necessitate changes in the plan and contribute information to allow possible different decisions to be made in dealing with the risks being faced.

The client would be offered following different execution models

Fee Based Model

Financial Plan: Indicating required savings to meet desired goals in required Asset Allocation
Mailers and Messages: Updating with current market trends, indices and informing about available new or concurrent schemes
Periodic Reports: Showing current status of the executed plan on regular intervals or on demand* (*Charges apply)
Annual Review by the advisor: Restructuring the plan if required

Charges

First Meeting chargeable on hourly basis.
Following charges shall be discussed on case to case basis.

Commission Based Model

Mailers and Messages: Updating with current market trends, indices and informing about available new or concurrent schemes
Periodic Reports: Showing current status on regular intervals or on demand* (*Charges apply)

Charges

First Meeting: Nil
Following charges: Nil