INSURANCE MODELS

AND
APPLICATION OF MODELS
Presented by:
-AISHWARYA SINGH RATHOR
-RAKSHA SAGAR
-SUMIT KUMAR PATEL
-RADHIKA BAHETY
What is
insurance?
Insurance is a contract between an individual or an
entity (the policyholder) and an insurance company
(the insurer), wherein the insurer agrees to provide
financial protection or compensation against specified
risks or losses in exchange for the payment of
premiums. The purpose of insurance is to transfer the
risk of potential financial losses from the policyholder
to the insurer, providing peace of mind and financial
security.

-AISHWARYA SINGH RATHOR

 Peer-to-peer (P2P) Direct to Consumer
Insurance Model

Usage-based
Catastrophe (CAT)
Insurance(UBI) model
Modelling
INSURANCE
MODELS Block chain based
Traditional Insurance
Model Insurance Model

Mutual Insurance Micro Insurance Model

Model

-AISHWARYA SINGH RATHOR

 PEER-TO-PEER
INSURANCE
• Peer-to-peer (P2P) insurance is a collaborative insurance model that lets a
group of people pool their money together to cover each other for various
risks. Typically, these people are family, friends, or people who share a
similar interest.

• One of the main benefits is that members can receive excess premiums
back, and they have more control over management decisions.

• Peer-to-peer insurance can be offered as an insurance policy or alternative

to insurance.

• The concept is based on the principle of mutual assistance, where

individuals collectively share the financial burden of potential risks.

-AISHWARYA SINGH RATHOR

 Application of
peer to peer
insurance
Property and Casualty Health Small Business Insurance Specialty
Insurance Insurance Insurance
• P2P insurance can benefit small • P2P insurance models can be tailored to
• P2P insurance can be applied to • P2P insurance models can be utilized in
businesses by allowing them to join address specific niche markets or unique
property and casualty insurance, such health insurance to create communities
insurance pools with other similar risks, such as travel insurance, pet
as homeowners, renters, or auto of individuals who share the cost of
businesses to share risks and reduce insurance, or event insurance.
insurance. medical expenses.
insurance costs. • Communities of travelers, pet owners, or
• Communities of policyholders can • Members of a P2P health insurance
• Small business owners can form event organizers can come together to share
pool their resources to share the risk group can contribute premiums to cover
communities or networks to collectively the costs of unexpected events or
of property damage, theft, or each other's healthcare costs, including
provide coverage for property damage, emergencies, providing peace of mind and
accidents, resulting in potentially doctor visits, prescription medications,
liability claims, or business financial protection.
lower premiums and increased and hospitalizations.
transparency. interruptions.
-AISHWARYA SINGH RATHOR
ADVANTAGES OF PEER TO PEER
INSURANCE
• Lower Premiums
• Transparency
• Community Engagement
• Personalized Service
• Risk Mitigation

-AISHWARYA SINGH RATHOR

DISADVANTAGES OF PEER TO
PEER INSURANCE
• Limited Scale and Coverage
• Risk Selection and Adverse Selection
• Trust and Reliability
• Complexity and Governance

-AISHWARYA SINGH RATHOR

 CATASTROPHE
INSURANCE
• Catastrophe insurance, also known as CAT insurance, is a type of insurance
coverage designed to protect against the financial losses resulting from
catastrophic events. These events are typically rare but severe in nature,
such as natural disasters like hurricanes, earthquakes, floods, wildfires, or
man-made disasters like terrorist attacks.

• The purpose of catastrophe insurance is to provide financial protection and

help policyholders recover from the devastating effects of catastrophic
events by reimbursing them for the losses they incur. Catastrophe
insurance can cover various types of losses, including property damage,
business interruption, extra expenses, and liability claims arising from
catastrophic events.

-AISHWARYA SINGH RATHOR

 Application of
catastrophe
insurance
Property Insurance Supply Chain Management Specialty Risk Coverage Natural Resource
• Catastrophe insurance is commonly • Catastrophe insurance encompasses Management
• Catastrophe insurance can mitigate risks • Agricultural and environmental sectors
used to protect physical assets, such as specialty risk coverage for diverse perils,
associated with disruptions to supply employ catastrophe insurance to mitigate
buildings, equipment, and inventory, including terrorism, pandemics,
chains caused by catastrophic events. risks related to natural disasters, such as
against damage or destruction caused by cyberattacks, and space-related events.
Supply chain insurance covers losses droughts, floods, and wildfires. Insurance
catastrophic events like hurricanes, Tailored insurance solutions address specific
stemming from interruptions in the flow coverage can assist farmers, ranchers, and
earthquakes, floods, and wildfires. This vulnerabilities and exposures faced by
of goods, materials, and services due to conservationists in recovering losses
coverage helps property owners recover industries, enabling proactive risk
disasters, ensuring businesses can incurred due to adverse weather events,
from significant losses and rebuild management and financial protection against
manage disruptions and maintain fostering sustainable resource management
damaged properties. emerging threats.
operations. practices.

-AISHWARYA SINGH RATHOR

 ADVANTAGES OF
CATASTROPHE INSURANCE
• Financial Protection
• Risk Transfer and risk management
• Business Continuity and Resilience
• Facilitating Investments in High-Risk
Areas

-AISHWARYA SINGH RATHOR

 DISADVANTAGES OF
CATASTROPHE INSURANCE
• Costly Premiums
• Coverage Limitations
• Risk of Underinsurance
• Insurer Solvency Risks
• Complex Claims Processes

-AISHWARYA SINGH RATHOR

DIRECT TO CONSUMER
(D2C) INSURANCE
• D2C insurance is a business model where insurance products can be sold
directly from an insurers’ sales advisors to policyholders without using
brokers or third-party agents. In other words, D2C insurance eliminates
middlemen while purchasing insurance, which can lead to lower prices for
policyholders.

• It refers to the distribution of insurance products directly from the

insurance provider to the consumer, without the involvement of
intermediaries such as agents or brokers.

• In this model, insurance companies interact directly with customers

through various channels, including online platforms, mobile apps, call
centers, and direct mail

-RAKSHA SAGAR
 Application of Direct to
Consumer(D2C) insurance
Personal Lines Insurance Travel Insurance Health and Medical
Life Insurance
• D2C insurance is commonly used for • D2C insurance is widely used for travel Insurance • D2C insurance is becoming more prevalent
• D2C insurance is increasingly utilized for
personal lines insurance products such insurance, providing coverage for trip in the life insurance sector, allowing
as auto insurance, home insurance, cancellations, medical emergencies, health and medical insurance products,
consumers to purchase term life insurance,
renters insurance, and personal liability baggage loss, and other travel-related including individual health insurance plans,
whole life insurance, or other life insurance
insurance. Consumers can research, risks. Travelers can conveniently short-term health coverage, and
products directly from insurers. Online tools
compare, and purchase these insurance purchase travel insurance policies online supplemental health policies. Consumers can
and calculators help consumers estimate
policies directly from insurers through or through mobile apps before explore various health insurance options,
their coverage needs, compare quotes, and
online platforms, mobile apps, or call embarking on their trips, ensuring compare premiums and coverage levels, and
apply for life insurance coverage without
centers, bypassing traditional financial protection and peace of mind enroll in health plans directly through
the need for face-to-face meetings with
intermediaries. during their travels. insurance company websites or digital
agents.
platforms.

-RAKSHA SAGAR
ADVANTAGES OF DIRECT TO
CONSUMER(D2C)INSURANCE

• Cost Savings
• Better Policyholder Experiences
• Faster Time to Market
• Convenience and Accessibility

-RAKSHA SAGAR
DISADVANTAGES OF DIRECT
TOCONSUMER(D2C)
INSURANCE
• Lack of Trust
• Complexity
• Data Security
• Risk of Misrepresentation or
Misunderstanding

-RAKSHA SAGAR
 USAGE BASED
INSURANCE(UBI)
• Usage-based insurance calculates insurance premiums depending on the
driving of an individual rather than conventional car insurance which is a
fixed amount. The two important factors that decide car insurance
premiums include distance travelled and driving behaviour.

• The insurer uses data such as driving speed, acceleration rate, whether an
individual uses the phone while driving and other data to calculate
insurance premiums. Usage-Based Insurance rewards good driving
behaviour and helps one save on premiums if one doesn’t drive his/her car
often.

-RAKSHA SAGAR
 Application ofUsage based
insurance(UBI)
Auto Insurance Pay-Per-Mile Insurance Fleet Management Young and Inexperienced
Usage-based insurance is widely used in Drivers
Usage-based insurance is also applied in
the auto insurance industry to offer UBI can be utilized to offer pay-per- • Usage-based insurance is particularly
fleet management to monitor and manage
personalized and dynamic pricing based mile insurance policies, where beneficial for young and inexperienced
the driving behavior of commercial
on driving behavior and vehicle usage. drivers pay premiums based on the drivers who may face higher insurance
vehicles such as trucks, vans, and taxis.
Insurers collect data from telematics number of miles driven rather than a premiums due to their perceived higher risk.
Fleet operators can use telematics systems
devices installed in vehicles or through fixed annual premium. Pay-per-mile By using telematics devices or mobile apps,
to track vehicle location, speed, fuel
smartphone apps to monitor driving insurers can offer personalized insurance
insurance is suitable for infrequent
consumption, maintenance needs, and
patterns, including factors such as rates based on individual driving
drivers, low-mileage vehicles, or
driver performance in real-time.
mileage, speed, acceleration, braking, and performance, allowing young drivers to
individuals who use alternative
cornering. demonstrate their safe driving habits and
transportation modes such as public
potentially lower their insurance costs over
transit or cycling
time.

-RAKSHA SAGAR
 ADVANTAGES OF USAGE
BASED INSURANCE(UBI)

• Fair and Personalized Premiums

• Incentives for Safer Driving
• Improved Risk Assessment
• Enhanced Customer Engagement

-RAKSHA SAGAR
DISADVANTAGES OF USAGE
BASED INSURANCE(UBI)

• Privacy Concerns
• Data Security Risks
• Technological Limitations
• Potential for Misinterpretation of Data

-RAKSHA SAGAR
 BLOCK CHAIN
INSURANCE
• A blockchain insurance model refers to the use of blockchain technology in
the insurance industry to improve transparency, security, and efficiency in
various insurance processes. In a blockchain-based insurance model,
transactions and data related to insurance policies, claims, and other
relevant information are recorded on a decentralized and distributed
digital ledger called a blockchain.

• Blockchain technology allows for the creation of an immutable record of

transactions. Once data is recorded on the blockchain, it cannot be altered
or tampered with, ensuring the integrity and transparency of insurance
transactions.

-SUMIT KUMAR PATEL

 Application of Blockchain
insurance
Policy Management Claims Processing Reinsurance Parametric Insurance

Blockchain can be used to Blockchain streamlines the claims Blockchain can facilitate the Parametric insurance relies on predefined
manage insurance policies parameters to trigger automatic payouts in the
processing by providing a secure and reinsurance process by providing a
event of a specified event occurring.
more efficiently by recording transparent platform for recording transparent and auditable record of
Blockchain and smart contracts can enable
policy details, premiums, and and verifying claims data. Smart reinsurance contracts and transactions.
parametric insurance by automatically
terms on a blockchain. This contracts can automate the claims This enhances trust between insurers
executing payouts when the predefined
settlement process, reducing the time and reinsurers and improves the
ensures transparency and conditions are met, without the need for manual
and cost associated with manual efficiency of reinsurance operations.
reduces the risk of disputes claims processing.
between insurers and processing.

policyholders. -SUMIT KUMAR PATEL

ADVANTAGES OF BLOCKCHAIN
INSURANCE

• Transparency
• Security
• Efficiency
• Cost Reduction
• Improved Claims Processing

-SUMIT KUMAR PATEL

 DISADVANTAGES OF
BLOCKCHAIN INSURANCE
• Scalability
• Regulatory Uncertainty
• Data Privacy
• Cost Reduction
• Technical Complexity
• Adoption Hurdles

-SUMIT KUMAR PATEL

 MICROINSURANCE
• Microinsurance is a type of insurance specifically designed to provide
financial protection to low-income individuals or populations in developing
countries who have limited access to traditional insurance products.

• It aims to address the unique needs and affordability constraints of this

demographic by offering insurance coverage for small-scale risks at
affordable premiums. Microinsurance typically covers risks such as illness,
death, accidents, and natural disasters, providing a safety net for
vulnerable communities.

-SUMIT KUMAR PATEL

 Application of Microinsurance

Health Insurance Life Insurance Crop Insurance Weather Index Insurance

Microinsurance can provide Microinsurance offers life insurance Microinsurance helps smallholder Microinsurance uses weather data to trigger
coverage for basic healthcare insurance payouts based on predefined weather
coverage to provide financial support farmers protect their crops and
conditions, such as rainfall, drought, or
services, such as to the families of insured individuals livelihoods against the impact of
temperature, offering farmers a reliable safety
hospitalization, outpatient care, in the event of death or disability, natural disasters, pests, and crop
net against climate-related risks.
and medications, to protect ensuring their long-term financial failures, enabling them to recover and
security. sustain their agricultural activities.
low-income individuals from
the financial burden of medical
expenses.

-SUMIT KUMAR PATEL

 ADVANTAGES OF
MICROINSURANCE
• Financial Protection
• Empowerment and Dignity
• Accessibility and Inclusivity
• Affordability
• Risk Management and Resilience

-SUMIT KUMAR PATEL

 DISADVANTAGES OF
MICROINSURANCE
• Trust and Reliability
• Distribution and Accessibility
• Limited Awareness and Education
• Data and Information Gaps

-SUMIT KUMAR PATEL

 Traditional Insurance Model
• Traditional insurance products are usually billed as a lump-sum payment
for a pre-determined coverage package that auto-renews annually.
Customers can switch policies and providers only when their current
protection is up for renewal.

• Key components

a. Underwriting Profits
b. Product diversification
c. Agent Distribution
d. Premiums
e. Policy Terms and Conditions

Note: Traditional insurance plans offer you life cover along with guaranteed
returns.

-RADHIKA BAHETY
 Application of Traditional
Insurance
Life Insurance Health Insurance Property Insurance Travel Insurance

Life insurance is one of the 1. Employers often provide health 1. Property insurance protects against Travel insurance provides coverage for
most common applications of insurance benefits to employees as damage to or loss of physical property, unexpected events that may occur while
the traditional insurance model. part of their compensation package. including homes, vehicles, and traveling, such as trip cancellation or
Individuals purchase life Health insurance policies may cover a businesses. Homeowners insurance, interruption, medical emergencies, lost
insurance policies to provide range of services, including doctor renters insurance, and commercial baggage, and travel-related accidents.
financial security to their loved visits, hospitalization, prescription property insurance are examples of
ones in the event of their death. medications, and preventive property insurance policies that provide
screenings. coverage for perils such as fire, theft,
vandalism, and natural disasters.
-RADHIKA BAHETY
ADVANTAGES OF TRADITIONAL
INSURANCE
a. Financial Protection
b. Predictable Costs
c. Peace of Mind
d. Incentives for Loss Prevention
e. Stability and Sustainability

-RADHIKA BAHETY
 DISADVANTAGES OF
TRADITIONAL INSURANCE
a. Costly Premiums
b. Limited Coverage
c. Claim Denials and Disputes
d. Lack of Customization

-RADHIKA BAHETY
 Mutual Insurance Model
• A mutual insurance company is an insurance company that is owned by
policyholders. The sole purpose of a mutual insurance company is to
provide insurance coverage for its members and policyholders, and its
members are given the right to select management.
• In accordance with the “one person = one vote” principle, each member can
play an equal part in the democratic life of their mutual insurance
company, regardless of how many policies they hold.

• Key components

a. Member Benefits
b. Long-Term Focus
c. Customer-Centric Approach
d. Diverse Product Offerings
e. Community Involvement

-RADHIKA BAHETY
 Application of Mutual Insurance

Property and Casualty Agricultural Insurance Worker's Compensation Nonprofit and Cooperative
Insurance Insurance Insurance
Mutual insurers offer policies Mutual agricultural insurance Mutual worker's compensation Mutual insurance models are applied in
for homes, automobiles, companies offer insurance coverage insurance companies provide coverage nonprofit organizations, cooperatives, and
businesses, farms, and other for farmers, ranchers, and agricultural for workplace injuries, occupational mutual aid societies to provide insurance
properties, pooling premiums producers to protect against risks illnesses, and disability benefits to coverage and risk pooling services to their
from policyholders to cover such as crop failures, livestock losses, employees and employers members.
losses from events such as weather events, and market
fires, thefts, accidents, and fluctuations.

natural disasters.
-RADHIKA BAHETY
 ADVANTAGES OF MUTUAL
INSURANCE

a. Ownership and Control

b. Aligned Interests
c. Policyholder Dividends
d. Stability and Longevity
e. Risk Sharing and Mutual Support

-RADHIKA BAHETY
DISADVANTAGES OF MUTUAL
INSURANCE
a. Limited Access to Capital
b. Member Conflicts and Governance
Issues
c. Limited Growth Potential
d. Member Turnover and Loyalty

-RADHIKA BAHETY
 Conclusion...
Insurance models play a critical role in the provision of financial protection,
risk management, and resilience-building for individuals, businesses, and
communities worldwide. From traditional models to innovative approaches,
insurance companies employ a variety of strategies to meet the diverse needs
and preferences of policyholders.

-RADHIKA BAHETY
Thank you !