Mumbai: More home loan borrowers are opting for creditor life insurance. Major mortgage lenders say that 25 per cent to 50 per cent of the borrowers are now insured.
Under a loan cover term assurance plan, the insurer pays the outstanding loan amount in case of death or disability of the borrower.
SBI clients
Five years ago, SBI Life Insurance introduced the home loan (creditor) life insurance cover and has been selling it on State Bank of India’s home loans. Today, half of SBI’s home loan borrowers are protected by insurance.
"Around 50 per cent of SBI’s home loan portfolio is covered by insurance. As old loan accounts are expiring, the coverage of insurance is increasing as awareness has increased among new borrowers," said a senior SBI official.
SBI’s current outstanding home loan portfolio stands at Rs 38,000 crore.
Besides, its parent State Bank of India, SBI Life has tie-ups with Dewan Housing Finance and other banks such as Union Bank of India and Federal Bank.
"SBI Life Insurance has covered a total of 6.5 lakh home loan borrowers. The awareness of such insurance has increased significantly over the last two years," said U.S. Roy, MD and CEO, SBI Life.
ICICI Prudential Life Insurance introduced the product two-and-half years ago and has a tie-up with home loan market leader ICICI Bank. The company is seeing a strong year-on-year growth of 250 per cent in terms of premium from this product.
“There has been significant increase in real estate prices in the past five to six years which has prompted people to buy insurance,” said Pranav Mishra, Senior Vice-President, ICICI Prudential Life Insurance.
Changing trend
“Earlier, those who were 40 plus were buying property and since they had the capital, they were taking loans for only 50-60 per cent of the total amount. Now, more people in their late 20s and 30s are buying property and taking loans for 80-90 per cent of the amount, with repayment periods extending to 20 years,” he adds.
Under ICICI Prudential’s plan, the single premium is around Rs 27,000 on a Rs 20-lakh loan.
Deepak Satwalekar, MD and CEO, HDFC Standard Life, said: “We are working with HDFC to look at customers who are with us at least for a couple of years.”
HDFC’s outstanding home loan portfolio is at Rs 56,512 crore as on March 31, 2007 and around 20 per cent of it is covered by insurance.
Until 2003-04, 100 per cent of LIC Housing Finance’s portfolio was insured, as taking a life insurance policy (equivalent to the amount of the loan) had been made mandatory for borrowers.
"Since it is no longer mandatory, the proportion has slightly come down. But most borrowers still opt for insurance," said an LIC Housing Finance official.
Source: Sify Insurance News
Wednesday, July 18, 2007
Tata AIG to strengthen branch network by Aug 2007
Chennai: The Tata AIG Life Insurance company would strengthen its branch network to 205 by the end of August next, as against the existing 169 branches, according to Company's Chief Distribution Officer, Joydeep Roy and Sr Vice President, Investments, Prasun Gajri.
Talking to newspersons here today, soon after the launch of company's nationwide campaign for Invest Assure gold, a whole life unit-linked Insurance solution years, they said Invest Assure gold blends in protection and tax advantages of Life Insurance with attraction of investments in assets through multiple fund options upto 100 years.
They said the product is a complete and comprehensive insurance plan which precludes the investors' need to look for more than one product to satisfy his financial needs.
They said the new product would have five-fund options, namely whole life mid cap equity fuind, whole life aggressive growth fund, whole life stable growth fund, whole life income fund and whole life short-term fixed income fund and the policy holders could choose any one.
They said customers could apply for their policies till attaining the age of 70 and can enjoy protection for their entire life, till he becomes 100-year-old. The policy could be availed of 30 days from birth for 70 years.
They said apart from death and maturity benefits, the product provides the policy holder the option to pay premium only for five years to avail life-cover up for investors upto 100 years. The investors could either withdraw money when the need arises or invest surplus money to further augment his corpus, they added.
The premium paid under this policy is eligible for tax deduction, they said.
At present the company is having 23400 advisors (agents) and 13,000 business associates, they added.
Source: Financial Express
Talking to newspersons here today, soon after the launch of company's nationwide campaign for Invest Assure gold, a whole life unit-linked Insurance solution years, they said Invest Assure gold blends in protection and tax advantages of Life Insurance with attraction of investments in assets through multiple fund options upto 100 years.
They said the product is a complete and comprehensive insurance plan which precludes the investors' need to look for more than one product to satisfy his financial needs.
They said the new product would have five-fund options, namely whole life mid cap equity fuind, whole life aggressive growth fund, whole life stable growth fund, whole life income fund and whole life short-term fixed income fund and the policy holders could choose any one.
They said customers could apply for their policies till attaining the age of 70 and can enjoy protection for their entire life, till he becomes 100-year-old. The policy could be availed of 30 days from birth for 70 years.
They said apart from death and maturity benefits, the product provides the policy holder the option to pay premium only for five years to avail life-cover up for investors upto 100 years. The investors could either withdraw money when the need arises or invest surplus money to further augment his corpus, they added.
The premium paid under this policy is eligible for tax deduction, they said.
At present the company is having 23400 advisors (agents) and 13,000 business associates, they added.
Source: Financial Express
Reliance General bets on retail
MUMBAI, JULY 16: Reliance General Insurance, a fully owned company of Anil Dhirubhai Ambani Group(ADAG) is betting big on retail business.
The company, which has earned Rs 252 crore, the highest incremental premium among the general insurance companies in first two months of the fiscal, has mobilised almost 50% from its retail exposure during the period.
Some companies have witnessed a slow down or negative growth during this period.
“Our recently launched health policy has done well and 40% of the the total premium has come from motor,’’ said K A Somasekharan, president and chief executive officer of Reliance General Insurance.
The health policy has already covered 1,50,000 families
The company which has over 100 offices is adding another 115 offices by September.
“After September I would apply for more branch licenses,’’ he said adding that the company is equally expanding its manpower base.
Going forward the company is focusing on tier I and tier II cities.
Turning its focus on untapped home insurance market the company has launched its hassle free home insurance policy on Monday.
With premiums ranging from Rs 497 to Rs 3,799 the over-the-counter-householders policy includes personal accident policy, provision for paying six equated monthly installments against housing loan in case of disability or death of the policy holder.
It is the first policy to cover loss of passport expenses, loss of goods in transit and loss of title deed expenses in case of their looses in home. The policy is available at a fixed price of price of Rs 499 for Standard plan, Rs 799 for Silver plan, Rs 1799 for Gold plan and Rs 3799 for Platinum plan for a cover upto Rs 5 lakh.
Home Insurance contributes less than 1% of total general insurance in the country.
Just over 2 % of the 3 crore households have household insurance in the country.Of late increasing incident of natural hazards, accidents and gaining crime rate pose grave threat to properties and lives.
Source: Financial Express
The company, which has earned Rs 252 crore, the highest incremental premium among the general insurance companies in first two months of the fiscal, has mobilised almost 50% from its retail exposure during the period.
Some companies have witnessed a slow down or negative growth during this period.
“Our recently launched health policy has done well and 40% of the the total premium has come from motor,’’ said K A Somasekharan, president and chief executive officer of Reliance General Insurance.
The health policy has already covered 1,50,000 families
The company which has over 100 offices is adding another 115 offices by September.
“After September I would apply for more branch licenses,’’ he said adding that the company is equally expanding its manpower base.
Going forward the company is focusing on tier I and tier II cities.
Turning its focus on untapped home insurance market the company has launched its hassle free home insurance policy on Monday.
With premiums ranging from Rs 497 to Rs 3,799 the over-the-counter-householders policy includes personal accident policy, provision for paying six equated monthly installments against housing loan in case of disability or death of the policy holder.
It is the first policy to cover loss of passport expenses, loss of goods in transit and loss of title deed expenses in case of their looses in home. The policy is available at a fixed price of price of Rs 499 for Standard plan, Rs 799 for Silver plan, Rs 1799 for Gold plan and Rs 3799 for Platinum plan for a cover upto Rs 5 lakh.
Home Insurance contributes less than 1% of total general insurance in the country.
Just over 2 % of the 3 crore households have household insurance in the country.Of late increasing incident of natural hazards, accidents and gaining crime rate pose grave threat to properties and lives.
Source: Financial Express
New portal on insurance
Ram Informatics Ltd will be launching InsuranceOnline.com, a portal to cater to the needs of general public, insurance agents, brokers and other professionals. The portal would offer quick policy search, LIC forms, policy serving matters, value-added services such as policy marketing aspects besides updated information on insurance industry, according to a release. —
Source: The Hindu Business Line
Source: The Hindu Business Line
Public sector non-life insurers comply with management ratio
Bangalore, July 16 For the first time this decade, public sector non-life insurance companies have complied with the statutorily prescribed management ratios.
The ratio is 19.5 per cent for non-life insurers under section 40C of the Insurance Act of 1938. The management ratio is a prescribed cost cap on wages, dividends and commissions. Till 2005-06 this ratio ranged between 23 and 25 per cent. But in 2006-07, PSU insurers have sharply pared it down to about 19.1 per cent. This was despite the high dividend payouts to its shareholders, entirely government.
Reliable sources said that the PSU insurers had largely managed to contain their costs during the year. However, in the case of private sector, the ratios are still well over 25 per cent with focus on business acquisition. For the private sector, this is the last year of the Insurance Regulatory and Development Authority’s six-year reprieve for complying with the management ratio. PSU insurers contained all the three components of management expenses during the financial year. The growth in business volumes also helped. Business volume growth was higher than the cost of acquisition, one of the crucial components of the management ratio.
Last year gross premiums grew 9 per cent over 2005-06. Wages grew less than five per cent during the year, the sources said. This was largely due to the absence of wage revisions in the industry since 2003. Besides, low inflation also ensured that the indexed components of salaries stayed at about 5 per cent. Moreover, the two rounds of voluntary retirement scheme effected in four PSUs had ensured a reduction in manpower.
The sources said that the profits realised from cost containment were ploughed back to bolster net worth. This had a favourable impact on solvency. As a result, New India Assurance Company reported a solvency ratio (the excess of the value of assets and capital over the insured liabilities) of close to 5 times, well above the IRDA’s prescribed figure of 1.5 times. For other PSU insurers like Oriental, it is about 2.2 times.
Source: The Hindu Business Line
The ratio is 19.5 per cent for non-life insurers under section 40C of the Insurance Act of 1938. The management ratio is a prescribed cost cap on wages, dividends and commissions. Till 2005-06 this ratio ranged between 23 and 25 per cent. But in 2006-07, PSU insurers have sharply pared it down to about 19.1 per cent. This was despite the high dividend payouts to its shareholders, entirely government.
Reliable sources said that the PSU insurers had largely managed to contain their costs during the year. However, in the case of private sector, the ratios are still well over 25 per cent with focus on business acquisition. For the private sector, this is the last year of the Insurance Regulatory and Development Authority’s six-year reprieve for complying with the management ratio. PSU insurers contained all the three components of management expenses during the financial year. The growth in business volumes also helped. Business volume growth was higher than the cost of acquisition, one of the crucial components of the management ratio.
Last year gross premiums grew 9 per cent over 2005-06. Wages grew less than five per cent during the year, the sources said. This was largely due to the absence of wage revisions in the industry since 2003. Besides, low inflation also ensured that the indexed components of salaries stayed at about 5 per cent. Moreover, the two rounds of voluntary retirement scheme effected in four PSUs had ensured a reduction in manpower.
The sources said that the profits realised from cost containment were ploughed back to bolster net worth. This had a favourable impact on solvency. As a result, New India Assurance Company reported a solvency ratio (the excess of the value of assets and capital over the insured liabilities) of close to 5 times, well above the IRDA’s prescribed figure of 1.5 times. For other PSU insurers like Oriental, it is about 2.2 times.
Source: The Hindu Business Line
ICICI Pru plans healthcare in UP
ICICI Prudential Life Insurance, in a bid to tap the potential in healthcare sector, has tied up with private hospitals and nursing homes of Uttar Pradesh.
Speaking to Business Standard, Pranav Mishra, senior vice-president, ICICI Prudential life insurance, said, “The Company at present has tied up with about 60 hospitals and nursing homes in the state to offer its hospital care plan. This will cover major cities like Lucknow, Allahabad, Kanpur, Varanasi and Agra.”
Hospital care is structured to ensure that customers receive a pre determined insurance amount for each procedure or hospitalisation, ranging from room charges, doctor and surgery fees and other incidental expenses.
“Our research revealed that many customers believe that existing health insurance policies would not cover all the expenses related to hospitalisation or surgical procedures, leaving them with a considerable financial burden,” Mishra said.
“This is compounded by the concern that these policies are not long term and that once a claim is made, it might not be renewed or will attract a higher premium. Our policy will fill this gap in health insurance and also offer customers control over their health spends,” he said.
The company already has six products in health insurance space and now has introduced hospital care to cover over 1,000 surgical procedures and hospitalisation.
“We have networked with 3,000 hospitals across the country for cashless facilities,” added Mishra. The company at present has 55 branches in 45 locations, in the state.
In the next one year, 5-6 more branches will be opened in the state. These will be centered in B category cities.
Source: Business Standard
Speaking to Business Standard, Pranav Mishra, senior vice-president, ICICI Prudential life insurance, said, “The Company at present has tied up with about 60 hospitals and nursing homes in the state to offer its hospital care plan. This will cover major cities like Lucknow, Allahabad, Kanpur, Varanasi and Agra.”
Hospital care is structured to ensure that customers receive a pre determined insurance amount for each procedure or hospitalisation, ranging from room charges, doctor and surgery fees and other incidental expenses.
“Our research revealed that many customers believe that existing health insurance policies would not cover all the expenses related to hospitalisation or surgical procedures, leaving them with a considerable financial burden,” Mishra said.
“This is compounded by the concern that these policies are not long term and that once a claim is made, it might not be renewed or will attract a higher premium. Our policy will fill this gap in health insurance and also offer customers control over their health spends,” he said.
The company already has six products in health insurance space and now has introduced hospital care to cover over 1,000 surgical procedures and hospitalisation.
“We have networked with 3,000 hospitals across the country for cashless facilities,” added Mishra. The company at present has 55 branches in 45 locations, in the state.
In the next one year, 5-6 more branches will be opened in the state. These will be centered in B category cities.
Source: Business Standard
PNB insurance foray hits roadblock
Punjab National Bank’s (PNB) proposed foray into life insurance with the UK-based Principal Financial Group, UK Paints (India) and Vijaya Bank has hit a roadblock, with some of the partners wanting to withdraw from the venture.
Berger Paints, which was to own 32 per cent in the new venture - ‘Principal PNB Life Insurance Compan - is considering withdrawing from the venture, while Vijaya Bank, with a 12 per cent stake, is weighing its options. Principal Financial holds the remaining 26 per cent stake , the maximum that a foreign partner can hold.
PNB, which has 30 per cent stake in the joint venture, said the venture needs to be reviewed.
“There has to be some rethink on the proposed venture. There is a problem as some of the shareholders are not willing to participate,” said K C Chakrabarty, chairman and managing director, PNB.
In May, the Insurance Regulatory and Development Authority (Irda) declined to clear the R1 application of Principal PNB Life insurance and had sought clarifications. The clearance is basically an in-principle approval by the Irda to the proposed terms of an insurance company.
“We had asked for certain clarifications on which they have still not got back to us,” said an Irda official.
According to sources, the Irda had raised concerns on the participation of UK Paints in the venture. The Kolkata-based paints company was considering withdrawing from the venture.
The company’s officials could not be reached for comments.
Rajan Ghotgalkar, country head of Principal Financial in India, said: “We are reviewing the entire strategy. There is no talk about exiting. The issues could be long-term or short–term. We are having strategic discussions and are hopeful of resolving the issues . Currently, we want to put all the issues behind us and get the R1 licence.”
PNB’s Chakrabarty, however, said: “The company has still not been formulated. The entire company may be up for a rethink. The shareholding and constitution of the company may change.”
The four partners had entered into a memorandum of understanding way in April 2004 to roll out an insurance company.
“There could be issues like equity stakes. However, these should be sorted out,” said one of the partners.
The sources said Vijaya Bank which has only a 12 per cent stake may want to increase its stake in the venture.
Earlier, Andhra Bank, had pulled out of a life insurance venture led by Bank of India (BoI) and Dai-Ichi Mutual Life Insurance Company of Japan, as it was offered only a 23 per cent stake.
BoI was to hold 51 per cent with Dai-Ichi having 26 per cent stake. Union Bank of India subsequently replaced Andhra Bank as a partner with an identical stake in the venture but with the option of scaling up its stake along with the foreign partner.
The bank (Union Bank) will have the option of increasing its stake once the FDI (foreign direct investment) norms are liberalised allowing the foreign partner to scale up its stake from 26 per cent to 49 per cent,” said a senior BoI official.
Source: Business Standard
Berger Paints, which was to own 32 per cent in the new venture - ‘Principal PNB Life Insurance Compan - is considering withdrawing from the venture, while Vijaya Bank, with a 12 per cent stake, is weighing its options. Principal Financial holds the remaining 26 per cent stake , the maximum that a foreign partner can hold.
PNB, which has 30 per cent stake in the joint venture, said the venture needs to be reviewed.
“There has to be some rethink on the proposed venture. There is a problem as some of the shareholders are not willing to participate,” said K C Chakrabarty, chairman and managing director, PNB.
In May, the Insurance Regulatory and Development Authority (Irda) declined to clear the R1 application of Principal PNB Life insurance and had sought clarifications. The clearance is basically an in-principle approval by the Irda to the proposed terms of an insurance company.
“We had asked for certain clarifications on which they have still not got back to us,” said an Irda official.
According to sources, the Irda had raised concerns on the participation of UK Paints in the venture. The Kolkata-based paints company was considering withdrawing from the venture.
The company’s officials could not be reached for comments.
Rajan Ghotgalkar, country head of Principal Financial in India, said: “We are reviewing the entire strategy. There is no talk about exiting. The issues could be long-term or short–term. We are having strategic discussions and are hopeful of resolving the issues . Currently, we want to put all the issues behind us and get the R1 licence.”
PNB’s Chakrabarty, however, said: “The company has still not been formulated. The entire company may be up for a rethink. The shareholding and constitution of the company may change.”
The four partners had entered into a memorandum of understanding way in April 2004 to roll out an insurance company.
“There could be issues like equity stakes. However, these should be sorted out,” said one of the partners.
The sources said Vijaya Bank which has only a 12 per cent stake may want to increase its stake in the venture.
Earlier, Andhra Bank, had pulled out of a life insurance venture led by Bank of India (BoI) and Dai-Ichi Mutual Life Insurance Company of Japan, as it was offered only a 23 per cent stake.
BoI was to hold 51 per cent with Dai-Ichi having 26 per cent stake. Union Bank of India subsequently replaced Andhra Bank as a partner with an identical stake in the venture but with the option of scaling up its stake along with the foreign partner.
The bank (Union Bank) will have the option of increasing its stake once the FDI (foreign direct investment) norms are liberalised allowing the foreign partner to scale up its stake from 26 per cent to 49 per cent,” said a senior BoI official.
Source: Business Standard
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