Howden plans cover for human lab tests

India now attracts hundreds of clinical research service projects from both domestic and multinational drug makers

Howden Insurance Brokers India Pvt. Ltd, the Indian broking arm of the London-based Hyperion Insurance Group, is extending its services to the Indian clinical research services sector, trying to capitalize on a fast-emerging opportunity.
India now attracts hundreds of clinical research service projects from both domestic and multinational drug makers and contract research organizations (CROs) because of its cost advantages, availability of a varied genetic pool of subjects and a growing pharmaceuticals market.
At the same time, the high risk due to involvement of human subjects for testing new drugs has still not been brought under a foolproof monitoring system even as the regulator gets about 30 applications a month for new drug trials.
A clinical trial insurance will cover the risk of any legal liability arising out of physical injury, death or any harm caused to the health of the subject. According to industry analysts, Howden is the first insurance broking company looking at this opportunity in India.
In India, many players, including the four state-owned general insurance firms and a few private sector ones such as Bajaj Allianz General Insurance Co. Ltd and Cholamandalam General Insurance Co. Ltd , are ready to offer policies for clinical trials.
In most cases, these companies are going for re-insurance with international insurance firms as claims could possibly be huge.
As an insurance brokerage firm, Howden’s role will be to identify the suitable risk cover offered by the insurers looking at the nature of trials, number of human volunteers required for the trials, the capability of CROs, risk nature of the drugs under test, etc. A right risk analysis and a project-long follow-up by the broking firm would also help both the parties settle claims in the event of mishaps and litigations.
“The entry of globally experienced clinical trial insurance players into India will also help developing the right regulatory framework for this sector. In the recent past, litigations against clinical trials has increased manifold. CROs and their sponsors are sued for lack of care and negligence by human subjects for bodily injury and even death,” says Arun Bhatt, president, ClinInvent Research Pvt. Ltd, a local CRO.
“Clinical research is one of the areas which our group has expertise in. Since India is emerging as a preferred global destination for clinical trials, this is the right time to enter this space,” says Anup K. Mathur, vice-president (corporate business division) Howden India.
“Initially, we are not looking at expanding our topline by entering this sector. But it is more of an experimentation phase now in India and also a service to this high-risk sector,” adds Mathur.
According to him, insurance companies were not coming forward in the absence of a proper legal framework pertaining to clinical research, risk clauses of test subjects, recruitment procedures and compensation of volunteers.
“There is a need to create strong awareness about the possibilities of risk cover for all stakeholders, such as sponsors, CROs and the human volunteers,” Mathur adds.

Source: Mint

Insurer ordered to pay Rs1.6 lakh for repudiating claim

Consumer court says heart disease difficult to detect, does not qualify as pre-existing disease if claimant is unaware he suffers from it

New Delhi: The State Consumer Commission has pulled up an insurance company for denying mediclaim on the ground of “concealment of pre-existing ailment” and asked it to reimburse Rs1.61 lakh to a man who underwent cardiac surgery within days of purchasing the policy.
Terming the act as an example of “unfriendly approach”, the Commission headed by Justice J D Kapoor asked the National Insurance Company Ltd (NICL) to pay the amount, with interest, to the policy holder Raj Narayan in a month.
“Such an approach is not at all consumer friendly but is an approach accentuated and prompted by dubious design as to how to frustrate and reject the claim of consumer...,” the Commission said.
Denying its liability, NICL took refuge under the exclusion clause of the insurance policy which provided that mediclaims can be denied if it is proved the pre-existing disease was not disclosed by the insured at the time of purchasing the policy.
Heart disease is such an ailment which sometimes a person finds difficult to detect at first go, it said, adding “Unless a person is diagnosed and hospitalised for such a disease in the near proximity of obtaining insurance policy, he is not supposed to know as to from which disease he is suffering from”.
To expect a layman to come to the conclusion that he is having a heart disease merely because he feels chest pain or some other pain, was “too much,” the Commission said.
Narayan, a resident of Rohini in north-west Delhi here, was forced to undergo a heart surgery in July 1999 following his sudden illness and was denied reimbursement of Rs1.61 lakh incurred on his treatment.
Narayan, however, had challenged the repudiation of mediclaim, saying he had no history of any heart problem and hence, the stand taken by NICL was “unjustified and unfair”.
Making a strong remark on the structure of the proposal forms that are signed by the consumers in order to accept the terms and conditions of the policy, the Commission observed that no consumer was expected to understand these “micro printed terms running into pages”.
It has directed the NICL to pay Rs1.61 lakh towards reimbursement along with an interest of 10 per cent within a month to Narayan.

Source: PTI

Article: Distribution channels driving the insurance business in India

Distribution, mainly through insurance agents and banks, has emerged as the single most important factor driving the business of Indian life insurers

New Delhi: Eric B. Campbell recounts the tale with a smile. In 1976, a savvy insurance agent in the US discovered that Campbell was dating a girl, whom he would eventually marry, and pitched the need for a life insurance policy. Campbell succumbed and bought his first policy, one from New York Life.
Thirty-one years later, Campbell, now executive vice-president and chief distribution officer, New York Life International, Llc., visits India at regular intervals to sharpen the distribution network of the company’s joint venture, Max New York Life, and perhaps train his agents to be as savvy as the one who sold him his first policy.
Campbell’s visits to India come at a time when insurers’ premia are growing at a scorching pace. The annual report of the Insurance Regulatory and Development Authority (Irda) for 2005-06 said the industry’s premium collections in April-September 2006-07 grew by 162% year-on-year to Rs29,664.64 crore.
Distribution, mainly through insurance agents and banks, has emerged as the single most important factor driving the business of Indian life insurers. The complicated nature of an insurance policy has made the efficacy of distribution channels the key determinant in a company’s profitability.
“Insurance is sold, whereas a banking product is bought,” says U.S. Roy, managing director and chief executive officer of SBI Life Insurance Co. Ltd.
“Overall, the distribution channel is the primary deciding factor in customer choice. Trust takes a long time to build up,” he adds.
But once it does, it helps in a big way. “It is primarily the SBI brand which attracted me. I need not think twice, I know what SBI is,” says V. Amrithavarshini, a Chennai-based SBI Life customer who bought a policy last September.
SBI Life, where India’s largest bank State Bank of India (SBI) has a 74% equity stake and the balance is held by the French firm Cardif SA, broke even in March 2006, its the fourth year of operations, becoming the first private insurer to do so. SBI Life leveraged the 14,000-odd bank branches of its parent SBI to push insurance policies.
In India, penetration is very low, making distribution channels important, says Roy. India’s insurance penetration (gross premium as a percentage of gross domestic product) was 2.53% in 2005, against a global average of 4.34% the same year.
The distribution channels’ importance also puts them in a position to influence customer choice. “Most people do not understand insurance; what they understand is what is conveyed by distributors,”says Rahul Aggarwal, director, Optima Risk Management Services Ltd, which carries out broking in both life and non-life products.
The influence of distribution channels on customer choice holds the potential of partially neutralizing product innovations as they would push the product that is the flavour of the month.
For instance, unit-linked insurance products, which unlike traditional insurance products such as endowment policies, allow the customers to choose from one among the investment options offered by the company. Insurers offer equity investments as an option in unit-linked products, and in the wake of the boom in the stock market, these products are gaining market share.
Thanks to the bull run in the markets, distribution channels have been hawking these products regardless of the customer’s ability to bear the risk.
The market share of unit-linked products increased to 44.78% in 2005-06 from 32.54% in the previous year. “The customers’ response to the unit-linked products in the last two years clearly reflects their preference for such products,” said the Irda report for 2005-06.
Despite the huge influence of distribution channels, some insurers feel novelty in designing insurance packages has not lost its relevance.
“Product innovation will continue to be important, but it will not give you sustainable long-term advantage unless you keep innovating,” says Vivek Khanna, director, marketing, Aviva India.

Article By: Sanjeev Shankaran for Mint

SC reserves order on Motor Vehicles Act provisions

States fail to comply with directions of High Courts, claims petition

New Delhi June 20 The Supreme Court has reserved its verdict on a petition alleging non-compliance of the provisions of Section 158 (6) of the Motor Vehicles (MV) Act in sending accident reports to the insurer and the Motor Accident Claims Tribunal. The final order is expected soon.
The court reserved its order after noting that its earlier directions in various other cases that district Superintends of Police shall be responsible for complying with the provisions, had not been observed.
As per the Act, as soon as any information regarding any accident involving death or bodily injury to any person is recorded, the police officer should forward a report of the same within 30 days to the Claims Tribunal having jurisdiction with a copy thereof to the insurer and the owner of the vehicle. Appearing before the Vacation Bench, for the petitioners - the General Insurance Council, National Insurance Company, New India Assurance Company, Oriental Insurance Company and United India Insurance Company — the Solicitor-General, Mr Goolam E. Vahanvati said that various states have failed to comply with the provisions despite the earlier orders of the court in various other cases.
Mr Vahanvati also assured the court that the insurance companies were willing to constitute a special committee to evolve and suggest steps for overcoming the problem.
The Supreme Court had on May 28 issued notice to all the states seeking implementation of the provisions of Section 158 (6) of the MV Act.
The Bench had asked the respondent states to indicate the number of cases wherein the report in terms of Section 158 (6) of the MV Act had been forwarded to the Tribunal.
The petition said there had been a near breakdown of the adjudicatory system with as many as 1.5 million cases pending in the Claims Tribunals and the High Courts. Of the total number, around 70 per cent cases relate to minor injuries. It said the states had failed to comply with the directions of the High Courts in this regard.

Source: The Hindu Business Line

Life insurance cos aim at tapping health segment

General insurance cos contribute 63% of total biz in '06-07

New Delhi June 21 Health insurance is a young sector which is predominately dominated by the public sector general insurance companies. It is also one of the fastest growing businesses for them.
As on March 31, 2007 these companies accounted for nearly 63 per cent of the health business and the segment grew by about 44 per cent that is almost double the growth witnessed by the entire non-life business in the same period.
To cash in on this boom, life insurance companies are looking at entering the segment.
Though the public sector players have enjoyed the dominant role in the segment, they are receiving stiff competition from private players. ICICI Lombard General Insurance was the most aggressive in the segment and recorded a 168.1 per cent growth at Rs 735.85 crore compared with Rs 274.46 crore in 2005-06.
On the other hand, New India Assurance grew only by 14.34 per cent in 2006-07 fiscal to Rs 765.29 crore from Rs 669.28 crore in the previous fiscal.

Private players
According to Mr Rahul Aggarwal, Chief Executive Officer, Optima Risk Insurance Services, "Both private and public sector insurers are growing their health insurance portfolios at a healthy pace. Reliance General Insurance, ICICI Lombard and Bajaj Allianz are looking at this segment seriously among the private insurers."
Mr Aggarwal said general private insurers were able to show better results because retail financial distribution required strong and well-defined processes to minimise human intervention and discretion.
"It is in this area that the PSU insurers lag behind and are ceding ground to private insurers in metros and large cities. However, they are growing because of their distribution spread in many small towns and villages where private insurers do not have a presence," he said.

Big push
The current fiscal is likely to see a major push from both the private as well as public sector companies. "On the other hand, general insurance companies might face some stiff competition from life insurance companies who are also eyeing this segment. From last year, life insurance companies too have started providing health insurance.
ICICI Prudential has launched its standalone product and has more schemes lined up. Bajaj Allianz Life Insurance has recently launched `Care First' which is modelled along the lines of health insurance products sold by general insurance companies.
ING Vysya Life Insurance has also been among the first few to offer a plan that protects against critical illnesses.
"Due to increasing health awareness and escalating medical costs, there seems to be a growing demand for products that cater to health related expenses," Mr Y.V.D.V. Prasad, Head of Products, ING Vysya Life Insurance, told Business Line.
He also added that the company is in the process of expanding its portfolio in this category of products.
Max New York Life is also looking at tapping this segment and is evaluating its prospects. "We are mapping the landscape very carefully. And once the IRDA comes out with the rules and regulations on the issue, we will plan our next move and decide if it is a viable option for us to foray into the health segment or not," Mr B. Ananthraman, Joint Managing Director, Max India Ltd, said.
The icing on the cake, however, would be when Life Insurance Corporation (LIC) enters the segment. LIC has a health division in place and with a strong distribution network, it will be a force to reckon with.

Source: The Hindu Business Line