Mumbai: Insurance companies can now invest up to 25 per cent in their group companies - that is what is being proposed in the investment guidelines to be notified by the Insurance Regulator IRDA, next week.
Earlier, insurance companies were allowed to invest only 10 per cent in their group companies.
Not only that, unit linked insurance products - popularly known as Ulips will come under investment regulation for the first time.
But insurance companies say that not much will change for them.
Source : IBNLIVE
PITAMBER
Monday, May 12, 2008
Heavy discounting stalls growth in non-life sector
The growth momentum in the general insurance industry has dropped by almost 50% in 2007-08.
A year of deregulated rates and huge discounting in premiums has seen a 12% growth during the year, against a 25% growth the previous year. The year saw gross premium underwritten of Rs 28,130.68 crore.
The four nationalised companies - New India Assurance, Oriental Insurance Co, National Insurance Co and United Insurance - together underwrote a premium amount of Rs 16899.49 crore in 2007-08, although their combined market share declined to 60% in 2007-08 from 80% two years back.
Meanwhile, the eight private sector insurers, with a 40% market share, grew 29% and garnered a total premium of Rs 11,231.19 crore.
Currently there are 10 private players operating in the general insurance space, including Tata AIG, Iffco-Tokio, Cholamandalam, and HDFC Ergo.
Two players - Future Genrali and Universal Sompo - have commenced operations later, so comparable data for these firms is not available.
Data with the Insurance Regulatory & Development Authority (Irda) shows that Reliance General grew the fastest - over 113% - during the year, while all the other companies grew in double digits, the fastest among them being Cholamandalam at 79%. The third-fastest grower, Bajaj Allianz, boosted gross premium by 33%.
While the industry was expecting a decline in premium growth, the 50% drop has been driven by what the industry observers call "reckless discounting" of almost 70-80% on fire and engineering premiums.
Covers for these two areas accounted for a major chunk of business for all general insurance companies earlier. But the free market rates from January 2007 have resulted in a 50% drop in fire and engineering premium rates and some decrease in motor own damage premium. The subsequent heavy discounting by companies of the lower premiums has hit growth in the sector.
Separately, standalone health insurance companies have grown manifold, records show.
While Star Health & Allied Insurance has grown 669% to collect Rs 173 crore premium in 2007-08 from a low base of Rs 22 crore, Apollo DKV, which commenced operations in November 2007, collected premium of Rs 2.98 crore.
Source: DNA
A year of deregulated rates and huge discounting in premiums has seen a 12% growth during the year, against a 25% growth the previous year. The year saw gross premium underwritten of Rs 28,130.68 crore.
The four nationalised companies - New India Assurance, Oriental Insurance Co, National Insurance Co and United Insurance - together underwrote a premium amount of Rs 16899.49 crore in 2007-08, although their combined market share declined to 60% in 2007-08 from 80% two years back.
Meanwhile, the eight private sector insurers, with a 40% market share, grew 29% and garnered a total premium of Rs 11,231.19 crore.
Currently there are 10 private players operating in the general insurance space, including Tata AIG, Iffco-Tokio, Cholamandalam, and HDFC Ergo.
Two players - Future Genrali and Universal Sompo - have commenced operations later, so comparable data for these firms is not available.
Data with the Insurance Regulatory & Development Authority (Irda) shows that Reliance General grew the fastest - over 113% - during the year, while all the other companies grew in double digits, the fastest among them being Cholamandalam at 79%. The third-fastest grower, Bajaj Allianz, boosted gross premium by 33%.
While the industry was expecting a decline in premium growth, the 50% drop has been driven by what the industry observers call "reckless discounting" of almost 70-80% on fire and engineering premiums.
Covers for these two areas accounted for a major chunk of business for all general insurance companies earlier. But the free market rates from January 2007 have resulted in a 50% drop in fire and engineering premium rates and some decrease in motor own damage premium. The subsequent heavy discounting by companies of the lower premiums has hit growth in the sector.
Separately, standalone health insurance companies have grown manifold, records show.
While Star Health & Allied Insurance has grown 669% to collect Rs 173 crore premium in 2007-08 from a low base of Rs 22 crore, Apollo DKV, which commenced operations in November 2007, collected premium of Rs 2.98 crore.
Source: DNA
LIC pulls down overall industry growth rate
Friday, 09 May , 2008
High growth in previous years including FY 2007, volatile markets in the last quarter of fiscal 2008, which accounts for a large chunk of business, and a mere 6% in new business collections by the Life Insurance Corporation of India have cut the industry’s growth rate to 23% in fiscal 2008, from last year’s 110%.
The growth rate of private insurers has also declined to 74% from 90% a year ago. Reliance Life, Birla Sun Life and SBI Life were the top performers in attracting new business. The industry collected Rs 92,989 crore of new business premium in FY 2008, registering growth of 23%. LIC new premium collection was Rs 59,182 crores, up just 6% from last year’s Rs 55,935 crore.
Private insurers contributed Rs 33,807 crore in new business, up from Rs 19,472 crore last year. Reliance Life recorded the most growth in new business — 196% more than the previous year’s. ICICI Prudential’s new business grew 58% year-on-year, while Bajaj Allianz life registered y-o-y growth of 52%.
LIC has taken a hit in the 'individual non-single premium’ segment. While private insurers managed 90% growth in new business, LIC’s collection was less than last year’s.
In this segment, private players collected Rs 26,198 crore in the year ended March, while LIC collection dropped to Rs 23,583 crore from Rs 23,899 crore a year ago. In the 'individual single premium’ segment, LIC managed 21% growth.
An LIC official said the company collected more than Rs 1.5 lakh crore of regular premium in fiscal 2008 and attributed the drop in growth of new business to LIC's high growth in previous years. The official indicated the firm needed to increase its network of agents, which currently numbers 12 lakh, to match private insurers, some of which have more than 10 lakh agents, despite being operational for just seven to eight years.
SBI Life registered an increase of 87% in premiums from a year ago. “Our growth is a result of SBI's brand strength, capital efficient multi-distribution model and customer-centric approach. We will continue to balance high growth with profitability,” said U S Roy, MD, SBI Life Insurance. New policies issued by private insurers grew 67% from a year ago, while LIC registered a drop in new policies.
“Volatility in the stock markets in the last quarter of the financial year, which is the most important period for business, has affected business of life insurance companies,” said senior vice president-agency west and south, Max New York Life Insurance, Rajendra Sud.
Source: DNA
High growth in previous years including FY 2007, volatile markets in the last quarter of fiscal 2008, which accounts for a large chunk of business, and a mere 6% in new business collections by the Life Insurance Corporation of India have cut the industry’s growth rate to 23% in fiscal 2008, from last year’s 110%.
The growth rate of private insurers has also declined to 74% from 90% a year ago. Reliance Life, Birla Sun Life and SBI Life were the top performers in attracting new business. The industry collected Rs 92,989 crore of new business premium in FY 2008, registering growth of 23%. LIC new premium collection was Rs 59,182 crores, up just 6% from last year’s Rs 55,935 crore.
Private insurers contributed Rs 33,807 crore in new business, up from Rs 19,472 crore last year. Reliance Life recorded the most growth in new business — 196% more than the previous year’s. ICICI Prudential’s new business grew 58% year-on-year, while Bajaj Allianz life registered y-o-y growth of 52%.
LIC has taken a hit in the 'individual non-single premium’ segment. While private insurers managed 90% growth in new business, LIC’s collection was less than last year’s.
In this segment, private players collected Rs 26,198 crore in the year ended March, while LIC collection dropped to Rs 23,583 crore from Rs 23,899 crore a year ago. In the 'individual single premium’ segment, LIC managed 21% growth.
An LIC official said the company collected more than Rs 1.5 lakh crore of regular premium in fiscal 2008 and attributed the drop in growth of new business to LIC's high growth in previous years. The official indicated the firm needed to increase its network of agents, which currently numbers 12 lakh, to match private insurers, some of which have more than 10 lakh agents, despite being operational for just seven to eight years.
SBI Life registered an increase of 87% in premiums from a year ago. “Our growth is a result of SBI's brand strength, capital efficient multi-distribution model and customer-centric approach. We will continue to balance high growth with profitability,” said U S Roy, MD, SBI Life Insurance. New policies issued by private insurers grew 67% from a year ago, while LIC registered a drop in new policies.
“Volatility in the stock markets in the last quarter of the financial year, which is the most important period for business, has affected business of life insurance companies,” said senior vice president-agency west and south, Max New York Life Insurance, Rajendra Sud.
Source: DNA
IRDA permits Canara, HSBC, OBC to jointly launch Insurance Co
Chennai: The Insurance Regulatory Development Authority (IRDA) has granted license to Canara Bank, HSBC Insurance (Asia-Pacific) Holdings Ltd and Oriental Bank of Commerce (OBC) to jointly launch a life insurance company in India.
The new company, to be called Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd, has already been capitalised at Rs 325 crore, a release said.
Source : UNI
The new company, to be called Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd, has already been capitalised at Rs 325 crore, a release said.
Source : UNI
Insurance cos meet $27.6 bn bills on catastrophes in 2007
New Delhi, April 7: Insurance Companies across the globe settled claims for USD 27.6 billion on natural disasters in 2007, even as 40 per cent of the property losses were insured with India figuring among the worst hit countries, says a report.
"Individuals, Companies and state institutions absorbed most of the USD 70.6 billion in catastrophe losses in 2007. Only 40 per cent of the total losses, USD 27.6 billion, were insured," Swiss Reinsurance Company said in its latest report.
Swiss Re, which is world's largest reinsurance company, has presence in India's health insurance sector through a partnership with TTK Healthcare Services.
The report says that Bangladesh, China, India and Pakistan were worst catastrophe hit countries last year. Europe was worst hit in terms of property losses, while losses in the US were minor in comparison, the report said.
Of the total 21,500 people falling victim to catastrophes last year, 32 per cent were from Bangladesh and India alone. "About 6,700 people lost their lives last year in India and Bangladesh. About 14,600 died as a result of natural catastrophe, wherein about 90 per cent was due to storms and flooding."
The report revealed that in developing countries like India and Bangladesh losses were mostly due to floods, and the government had to pay compensation to the affected families as the insurance cover for natural disasters is almost non-existent.
"Individuals, Companies and state institutions absorbed most of the USD 70.6 billion in catastrophe losses in 2007. Only 40 per cent of the total losses, USD 27.6 billion, were insured," Swiss Reinsurance Company said in its latest report.
Swiss Re, which is world's largest reinsurance company, has presence in India's health insurance sector through a partnership with TTK Healthcare Services.
The report says that Bangladesh, China, India and Pakistan were worst catastrophe hit countries last year. Europe was worst hit in terms of property losses, while losses in the US were minor in comparison, the report said.
Of the total 21,500 people falling victim to catastrophes last year, 32 per cent were from Bangladesh and India alone. "About 6,700 people lost their lives last year in India and Bangladesh. About 14,600 died as a result of natural catastrophe, wherein about 90 per cent was due to storms and flooding."
The report revealed that in developing countries like India and Bangladesh losses were mostly due to floods, and the government had to pay compensation to the affected families as the insurance cover for natural disasters is almost non-existent.
Sonia seeks corporate help in providing health insurance
New Delhi, April 29: Expressing concern over an abysmally low percentage of people of the country being covered by health insurance, UPA Chairperson Sonia Gandhi today asked the corporate sector to pitch in to provide health security to a greater population.
"Less than two per cent of the families outside the governmental sector have some form of health cover. This is abysmally low," Gandhi said launching the `Healthy Villages Project' of the Confederation of Indian Industries (CII) in New Delhi.
"This is another area where the corporate sector's participation would be of great help," she said. Gandhi noted that some states like Andhra Pradesh and Karnataka have introduced health insurance schemes for the poor and the UPA Government has announced special health cover for vulnerable sections like the handloom weavers and craftsmen.
"We also have a Bill in Parliament that provides for social security, including health insurance, for workers in the unorganised sector. As much as 93 per cent of the workforce belongs to the unorganised sector," Gandhi said.
Underlining the importance of rural infrastructure as a prerequisite for having inclusive growth, she said there were "terrible lacunae" everywhere, especially in the northern part of the country.
Gandhi, who launched the CII's project for improving health, sanitation and education conditions in 100 villages of the country, said the UPA Government's National Rural Health Mission envisaged an important role for public-private partnership.
"Less than two per cent of the families outside the governmental sector have some form of health cover. This is abysmally low," Gandhi said launching the `Healthy Villages Project' of the Confederation of Indian Industries (CII) in New Delhi.
"This is another area where the corporate sector's participation would be of great help," she said. Gandhi noted that some states like Andhra Pradesh and Karnataka have introduced health insurance schemes for the poor and the UPA Government has announced special health cover for vulnerable sections like the handloom weavers and craftsmen.
"We also have a Bill in Parliament that provides for social security, including health insurance, for workers in the unorganised sector. As much as 93 per cent of the workforce belongs to the unorganised sector," Gandhi said.
Underlining the importance of rural infrastructure as a prerequisite for having inclusive growth, she said there were "terrible lacunae" everywhere, especially in the northern part of the country.
Gandhi, who launched the CII's project for improving health, sanitation and education conditions in 100 villages of the country, said the UPA Government's National Rural Health Mission envisaged an important role for public-private partnership.
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