Oriental Insurance may drop four intermediaries with rival stakes

Insurer sees these third party administrators as competitors since their parent firms are from the same sector

With private insurance rivals buying equity stakes in third party administrators (TPAs), The Oriental Insurance Co. Ltd is likely to withdraw its business from four TPAs—Family Health Plan Ltd, Paramount Healthcare Management, Medi Assist India Pvt. Ltd and TTK Healthcare Services Pvt Ltd.
These administrators maintain databases of policyholders and handle all post-policy issues, including claim settlements. They were introduced by the insurance regulator to speed up what was typically a very long-drawn-out settlement procedure. With the TPAs, policyholders can use their insurance ID card at authorized hospitals to get cashless treatment and then the TPAs take over the claim settlement process.
A senior official of Oriental, who didn’t want to be named because of company policy, said: “These TPAs are being viewed as competitors since their parent firms are from the health insurance industry and we cannot share our databases with our competitors. The other three general insurance companies have already withdrawn their business from them, we also want to discontinue.” He was referring to the National Insurance Company Ltd, The New India Assurance Co. Ltd and United India Insurance Co. Ltd.
None of the four TPAs were willing to comment.
India’s insurance regulator, Insurance Regulatory and Development Authority (Irda) said insurance companies buying stakes in TPAs was not a major issue.
“Though some of the health insurance companies have tied up with TPAs, we still have sufficient number of 22 registered TPAs for the rest of the insurance companies,” said C.S. Rao, chairman of Irda. “It is well within the rights of insurance companies if they tie up with these insurance intermediaries,” he added.
An executive associated with the insurance business said the move could prompt more insurance companies to depanelize the four TPAs.
“There are high chances that more companies will follow the route of Oriental Insurance and will scrap the services of TPAs who are involved with competitors,” said S.K. Sethi, CEO at Ria Insurance Brokers, a Delhi-based insurance brokerage company.
Last year, the Reliance-Anil Dhirubhai Ambani Group bought a major stake in Bangalore-based Medi Assist. The Apollo Group owns a stake in Family Health Plan, and Munich Re, the world’s largest reinsurance company, has acquired a stake in Paramount. Similarly, Swiss Re, a leading reinsurer, has a stake in TTK Healthcare Services.
Oriental Insurance currently has 16 TPAs in its panel. The removal of four TPAs could mean more business for the remaining ones.
“Policyholders of Oriental will not get affected by the decision, as old policyholders will continue to be served by the depanelized administrators for the next 12 months. However, new policyholders will not get registered with the depanelized administrators,” said the Oriental official.

Source: Teena Jain, Mint

Bajaj Allianz launches new health, life cover

Mumbai June 11 Bajaj Allianz Life has launched a product called `Bajaj Allianz Care First' which provides health as well as life cover.
This plan provides a common sum assured which can be utilised in case of hospitalisation cover for treatment as well as a life cover benefit on the death of the policy holder, said a press release. The sum assured cover ranges from Rs 1 lakh to Rs 7 lakh.
Bajaj Allianz Life Insurance in association with Medicare TPA services will issue photo identity cards to all the insured members, which will facilitate cashless hospitalisation at empanelled hospitals all over India. The cashless treatment is available across 2,000 hospitals in 200 towns.
Individuals between 18 to 56 years can buy this policy, which can be renewed up to the age of 65. All treatment pertaining to critical illness is covered under this plan.

Source: The Hindu Business Line

Barclays ties up with ICICI Lombard

Mumbai: Barclays Bank PLC, which recently launched retail banking services in India, has tied up with ICICI Lombard General Insurance Company Ltd for bancassurance.
ICICI Lombard will provide exclusively designed non-life insurance products for Barclays retail customers.
It will also provide insurance products for Barclays customers who have availed themselves of credit cards, personal loans, SME loans, premier investment services or any other banking product, said a press release.
The insurer has designed health insurance policies for Barclays customers that can also cover check-ups, hospital allowances and ambulance charges.
Personal loan customers will have the option of increasing the loan amount to pay the premium on their policies and repay the amount along with their EMI payments.
Barclays currently has three branches in India, which are in Mumbai, Kanchipuram and Nelamangala, near Bangalore.

Bureau, The Hindu Business Line

Iffco-Tokio General sets modest growth target

Iffco-Tokio General Insurance Company (ITGI), a joint venture promoted by Indian Farmers Fertiliser Cooperative (IFFCO) and Japan's Tokio Marine and Fire Insurance Company, expects its gross written premiums (GWPs) to touch Rs 1,200 crore during the current financial year.

Gross written premiums
The company reported a 28.58 per cent increase in its GWP to Rs 1,152.21 crore for the financial year ended March 31, 2007 against Rs 896.04 crore.
"We have set a conservative growth target looking at the market scenario. Since we are operating in de-tariffed market at the moment, the competition is going to be fierce and the market trends on premiums have changed. So we are looking at having our house in order before looking at high growth targets," Mr Ajit Narain, Managing Director and Chief Executive Officer of Iffco-Tokio General Insurance Company, told Business Line.
He, however, said though the company had set modest targets in its topline growth, it expects the bottomline to maintain the same growth rate as in the past.
ITGI's net profit for the fiscal under review increased 85.69 per cent to Rs 27.13 crore compared with Rs 14.61 crore in 2005-06.
For 2006-07, the retail line contributed approximately 55 per cent (Rs 634.6 crore) to the revenues, of which motor insurance was a substantial chunk at Rs 448.89 crore.
For the current financial year, according to the company's annual report, it is targeting Rs 450 crore from its commercial lines and Rs 750 crore from its retail portfolio.

Vending products
Though the company is not looking at launching new products in the immediate future, Mr Narain said: "We have launched specialised products - for fine arts collectors and galleries, errors and omissions policy for the ITeS sector - now we are looking at marketing these products better."
He said the company was looking at having various combinations of its existing products and also customising it to the needs of a specific area.
"In the last six years, we have invested around Rs 8 crore in upgrading our communication infrastructure and this year this is going to a major focus area and are planning to increase the investments quite substantially," Mr Narain said.

Market share
At the moment, the company has a market share of 4.56 per cent as against 4.4 per cent in 2005-06. "Looking at the anticipated impact of shift from the regulated market to a detariffed market and also expecting a couple of new players, we are looking at maintaining the current market share in the current fiscal also. Apart from this, since we anticipate growth from the retail lines we will enter into suitable understanding with intermediaries, enter into tie-ups with more dealers and banks," he said. Mr Narain also said Iffco-Tokio plans to increase the number of offices from the present 98 to 150 across the country by the end of the current financial year.

Source: Phalguna Jandhyala, The Hindu Business Line

Cyclone Gonu causes $US1b damage in Oman

Source: The age, 09 June, 2007