Life Insurance Corporation of India plans to tie up with management institutes to offer its employees a special MBA programme. They will offer this postgraduate programme to officers who have been with LIC for more than 10 years. Since we find it difficult get people from the market, they are planning to build on their existing talent.
Retention of human resources was a big challenge for LIC. They are storehouse for trained manpower, but this has also become a weakness. With the government as owner, there are limitations.
They cannot pay huge salaries and our incentives are mainly intangible and invisible. In a recent employee engagement and satisfaction survey conducted in LIC, employees said that they were ‘happy with the business growth of the corporation’ and enjoyed the ‘social status’ attached to their being part of a brand like LIC.
Source: www.insuremagic.com
Wednesday, May 14, 2008
Salaried class prefers PSBs for insurance
State-owned banking mechanism is the preferred choice for majority of salaried employees for insurance products given the reliability and security such institutions provide.
Over 60 per cent of salaried employees prefer state-owned banking mechanism, while 20 per cent prefer private banks for the same purpose and remaining 20 per cent have shown their indifference to either of the two. However, half of the salaried employees prefer private sector for mutual fund (MF) products, while only 20 per cent prefer public sector banks (PSBs) for the same, the study, which interviewed over 250 salaried employees. About 20 per cent are indifferent to either of the two sectors for parking their funds in MFs, while 10 per cent do not avail this service. Over 40 per cent of the employees prefer PSBs for purposes of investment in bonds and securities as compared to 30 per cent who prefer the private banks.
For bonds and securities, businessmen's preference is the other way round i.e. 80 per cent preferring PSBs. For Demat services, 40 per cent prefer private banks while 20 per cent are indifferent. For opening demand deposit accounts 40 per cent of businessmen prefer PSBs, while the same percentage prefer the private banks for demand deposit.
For credit cards and ATMs, 60 per cent of the businessmen prefer PSBs, while for debit cards 40 per cent prefer private banks, 20 per cent prefer PSBs and 20 per cent being indifferent.
Source: www.insuremagic.com
Over 60 per cent of salaried employees prefer state-owned banking mechanism, while 20 per cent prefer private banks for the same purpose and remaining 20 per cent have shown their indifference to either of the two. However, half of the salaried employees prefer private sector for mutual fund (MF) products, while only 20 per cent prefer public sector banks (PSBs) for the same, the study, which interviewed over 250 salaried employees. About 20 per cent are indifferent to either of the two sectors for parking their funds in MFs, while 10 per cent do not avail this service. Over 40 per cent of the employees prefer PSBs for purposes of investment in bonds and securities as compared to 30 per cent who prefer the private banks.
For bonds and securities, businessmen's preference is the other way round i.e. 80 per cent preferring PSBs. For Demat services, 40 per cent prefer private banks while 20 per cent are indifferent. For opening demand deposit accounts 40 per cent of businessmen prefer PSBs, while the same percentage prefer the private banks for demand deposit.
For credit cards and ATMs, 60 per cent of the businessmen prefer PSBs, while for debit cards 40 per cent prefer private banks, 20 per cent prefer PSBs and 20 per cent being indifferent.
Source: www.insuremagic.com
ICICI Pru to ramp up rural presence
13/May/2008
In line with its thrust on establishing added rural presence, ICICI Prudential Life Insurance will expand its presence in interior Kerala this year.
They have decided to open at least five new branches in Kerala this year. The locations are being finalized. This is part of the company's initiative to grow more in the tier-II and tier-III locations this year.
Adding that the life insurance player has made a successful foray into the rural segment posting significant growth in fiscal 2007-08. The company had opened over 1,000 rural branches in 12 states.
It had also launched tie-ups with key state-governed institutes to increase convenience among rural customers. During fiscal 2007-08, it tied up with the Department of Posts in the states of Andhra Pradesh, Uttar Pradesh, Punjab and Gujarat.
In Kerala, apart from the Department of Posts, we have formed an alliance with South Indian Bank to provide convenient premium paying facilities to customers. The bank also sells our products.
The bank has more than tripled its distribution capabilities and the number of branches has gone up from 583 to 1,950 across the country. This includes the 1,000-plus micro branches in the rural segment.
The company had maintained its position as the largest private life insurer for the seventh year in a row. It currently manages the largest funds among private life insurance companies with over Rs 28,000 crore of assets and the total capital base stands at Rs 3,772 crore.
Source: Domain-b
In line with its thrust on establishing added rural presence, ICICI Prudential Life Insurance will expand its presence in interior Kerala this year.
They have decided to open at least five new branches in Kerala this year. The locations are being finalized. This is part of the company's initiative to grow more in the tier-II and tier-III locations this year.
Adding that the life insurance player has made a successful foray into the rural segment posting significant growth in fiscal 2007-08. The company had opened over 1,000 rural branches in 12 states.
It had also launched tie-ups with key state-governed institutes to increase convenience among rural customers. During fiscal 2007-08, it tied up with the Department of Posts in the states of Andhra Pradesh, Uttar Pradesh, Punjab and Gujarat.
In Kerala, apart from the Department of Posts, we have formed an alliance with South Indian Bank to provide convenient premium paying facilities to customers. The bank also sells our products.
The bank has more than tripled its distribution capabilities and the number of branches has gone up from 583 to 1,950 across the country. This includes the 1,000-plus micro branches in the rural segment.
The company had maintained its position as the largest private life insurer for the seventh year in a row. It currently manages the largest funds among private life insurance companies with over Rs 28,000 crore of assets and the total capital base stands at Rs 3,772 crore.
Source: Domain-b
Now, pay insurance premium via your mobile
MAX New York Life Insurance announced the launch of a convenient and secure payment solution for its policyholders to make policy payments using their mobile phones. Powered by Citibank and mChek, this smart and secure solution enables policyholders to pay their renewal premiums, subscribe to and top-up investments in ULIPs and links the charges to their preferred bank account or credit card.
The company values policy holders’ faith in them and is committed to bringing benefits of modern technology at their fingertips. Their customers can now use this ubiquitous channel and transact on a 24X7 basis. Due to delay in payments, many policies lapse or policyholders have to shell out additional charges for their policy revival. This new service is an attempt at streamlining timely payments by policyholders to ensure that they remain financially protected throughout the term of the policy.
All transactions are secured by a mChekPIN, and encrypted end-to-end with 3DES encryption, ensuring banking-grade security from the convenience of the mobile phone. Settlements are powered by Citi’s cash management services.
Citi is committed to providing innovative, practical and secure payment solutions. We pioneered payments by mobile phones and are pleased to extend this service to Max New York Life and its customers. In banking and payment transactions, secure remote authorizations are crucial and we are delighted to work closely with Citi and Max New York Life to pioneer the use of the mobile phone for such transactions.
Source: Reuters
The company values policy holders’ faith in them and is committed to bringing benefits of modern technology at their fingertips. Their customers can now use this ubiquitous channel and transact on a 24X7 basis. Due to delay in payments, many policies lapse or policyholders have to shell out additional charges for their policy revival. This new service is an attempt at streamlining timely payments by policyholders to ensure that they remain financially protected throughout the term of the policy.
All transactions are secured by a mChekPIN, and encrypted end-to-end with 3DES encryption, ensuring banking-grade security from the convenience of the mobile phone. Settlements are powered by Citi’s cash management services.
Citi is committed to providing innovative, practical and secure payment solutions. We pioneered payments by mobile phones and are pleased to extend this service to Max New York Life and its customers. In banking and payment transactions, secure remote authorizations are crucial and we are delighted to work closely with Citi and Max New York Life to pioneer the use of the mobile phone for such transactions.
Source: Reuters
IRDA panel moots changes in distribution set-up
13/May/2008
The Committee on Distribution Channels, constituted by the Insurance Regulatory and Development Authority (Irda), has recommended that banks should not have referral arrangements with more than one life insurer and a non-life insurer.
The committee also recommended a drastic reduction in the capital required for a corporate agent from Rs 15 lakh to Rs 1 lakh. Irda, which constituted the committee on September 21, 2007.
In its 60-page report, the 10-member committee constituted under the chairmanship of NM Govardhan, former chairman of LIC, stated that urban cooperative banks, regional rural banks, microfinance institutions registered with the RBI and non-government organizations registered as trusts should be permitted to distribute micro insurance policies.
The committee also recommended direct marketing and web-based selling of all insurance products. These should be developed as channels to reach out to the mass market with simple products requiring limited or no advisory.
The report also stated that a customer who buys through the telecalling mode should be provided a printed copy of the caller's questions and the resultant responses. In case of e-mail interactions, encryption should be used to protect the target person's privacy.
The committee has made over two dozen recommendations on retail products with the intention of increasing the penetration of general insurance in the country.
Max New York Life Insurance Company emphasized that banks should be permitted to sell products of more than one life insurer. This would be in the interest of the customer and has also been strongly recommended by the Indian Banks Association.
Source: www.insuremagic.com
The Committee on Distribution Channels, constituted by the Insurance Regulatory and Development Authority (Irda), has recommended that banks should not have referral arrangements with more than one life insurer and a non-life insurer.
The committee also recommended a drastic reduction in the capital required for a corporate agent from Rs 15 lakh to Rs 1 lakh. Irda, which constituted the committee on September 21, 2007.
In its 60-page report, the 10-member committee constituted under the chairmanship of NM Govardhan, former chairman of LIC, stated that urban cooperative banks, regional rural banks, microfinance institutions registered with the RBI and non-government organizations registered as trusts should be permitted to distribute micro insurance policies.
The committee also recommended direct marketing and web-based selling of all insurance products. These should be developed as channels to reach out to the mass market with simple products requiring limited or no advisory.
The report also stated that a customer who buys through the telecalling mode should be provided a printed copy of the caller's questions and the resultant responses. In case of e-mail interactions, encryption should be used to protect the target person's privacy.
The committee has made over two dozen recommendations on retail products with the intention of increasing the penetration of general insurance in the country.
Max New York Life Insurance Company emphasized that banks should be permitted to sell products of more than one life insurer. This would be in the interest of the customer and has also been strongly recommended by the Indian Banks Association.
Source: www.insuremagic.com
Insurance products may soon be sold over the net, phone
14/May/2008
You may soon be able meet all your insurance needs online. Web-based selling and tele-marketing of all insurance policies could be a realty if the insurance regulator accepts the recommendations of an expert committee on distribution channels for insurance products.
The panel has recommended new sales channels for retail insurance products with safeguards such as provision of encryption to protect the target person’s privacy or a voice record of sales call. Tele-marketing agencies should follow the norms laid down by the telecom and insurance regulators, the panel said. Direct marketing channels for insurance products are popular in Australia, Korea, Japan, China, Indonesia, the UK, among others. The distribution channels here include agency, corporate agency, bancassurance, referrals and direct sales. New channels will enable insurers to increase insurance penetration.
Although insurance companies sell some products online, they are not able to sell all products on the net as existing laws require a signed proposal form. For instance in marine cargo insurance, which is governed under a separate act, the proposal form is treated as the basis of a contract.
The committee was mandated to assess the functioning of these channels, factoring in view constraints faced by general insurance agents, including low-ticket size, fixed commission rates and restrictions on selling products of more than one insurer. It has made a slew of recommendations, including differential commission, pricing and product structure for various channels to give flexibility to insurers and reducing the capital required for a corporate agent from Rs 15 lakh to Rs 1 lakh, among others. It has also suggested allowing banks and financial service companies — with group companies that have a separate management and an independent line of business — to have different corporate agencies. The net-worth criteria would be over Rs 10 crore.
Currently, banks are barred from setting up a broking company. The panel reckons that safeguards need to be provided in the form of a minimum capital of Rs 1 crore to ensure that such group companies have not been floated for backdoor entry into broking. But it has voted against multiple tie-ups of a corporate agent with an insurer. This could be a big dampener for banks that were hoping to sell products of several insurers. Banks had argued that they offer products of multiple mutual funds and hence, should be allowed to sell insurance products of multiple companies. The panel has recommended considering a model akin to Independent Financial Advisors (IFA) in the future.
It has also made out a case for a change in the definition of corporate agents to include an institution or an organization other than a person. The panel has proposed calling referral providers as introducers like in the UK. The UK model of introducer envisages the introduction of customers to insurance products. But the sale has to be concluded by an insurer.
Banks should not have referral arrangement with more than one life insurer and one non-life insurer. These recommendations, if implemented, would require changes in the Corporate Agents Regulations 2002.
Broadening the definition of a micro-insurance agency to include rural kiosks and other rural distribution networks also features in the recommendations. Micro-insurance agents should be allowed to work with multiple insurers.
Source: www.insuremagic.com
You may soon be able meet all your insurance needs online. Web-based selling and tele-marketing of all insurance policies could be a realty if the insurance regulator accepts the recommendations of an expert committee on distribution channels for insurance products.
The panel has recommended new sales channels for retail insurance products with safeguards such as provision of encryption to protect the target person’s privacy or a voice record of sales call. Tele-marketing agencies should follow the norms laid down by the telecom and insurance regulators, the panel said. Direct marketing channels for insurance products are popular in Australia, Korea, Japan, China, Indonesia, the UK, among others. The distribution channels here include agency, corporate agency, bancassurance, referrals and direct sales. New channels will enable insurers to increase insurance penetration.
Although insurance companies sell some products online, they are not able to sell all products on the net as existing laws require a signed proposal form. For instance in marine cargo insurance, which is governed under a separate act, the proposal form is treated as the basis of a contract.
The committee was mandated to assess the functioning of these channels, factoring in view constraints faced by general insurance agents, including low-ticket size, fixed commission rates and restrictions on selling products of more than one insurer. It has made a slew of recommendations, including differential commission, pricing and product structure for various channels to give flexibility to insurers and reducing the capital required for a corporate agent from Rs 15 lakh to Rs 1 lakh, among others. It has also suggested allowing banks and financial service companies — with group companies that have a separate management and an independent line of business — to have different corporate agencies. The net-worth criteria would be over Rs 10 crore.
Currently, banks are barred from setting up a broking company. The panel reckons that safeguards need to be provided in the form of a minimum capital of Rs 1 crore to ensure that such group companies have not been floated for backdoor entry into broking. But it has voted against multiple tie-ups of a corporate agent with an insurer. This could be a big dampener for banks that were hoping to sell products of several insurers. Banks had argued that they offer products of multiple mutual funds and hence, should be allowed to sell insurance products of multiple companies. The panel has recommended considering a model akin to Independent Financial Advisors (IFA) in the future.
It has also made out a case for a change in the definition of corporate agents to include an institution or an organization other than a person. The panel has proposed calling referral providers as introducers like in the UK. The UK model of introducer envisages the introduction of customers to insurance products. But the sale has to be concluded by an insurer.
Banks should not have referral arrangement with more than one life insurer and one non-life insurer. These recommendations, if implemented, would require changes in the Corporate Agents Regulations 2002.
Broadening the definition of a micro-insurance agency to include rural kiosks and other rural distribution networks also features in the recommendations. Micro-insurance agents should be allowed to work with multiple insurers.
Source: www.insuremagic.com
Trichy tops in Rural Postal Life Insurance
The central region of Tamil Nadu postal circle headquartered at Trichy bagged the numero uno position in the country by selling Rs 1,017 crore worth of Rural Postal Life Insurance (RPLI) in 2007-08, surpassing the target of Rs 690 crore by 47 per cent. The Vijayawada region followed by garnering a business of worth Rs 650 crore.
Addressing the media here, SP Rajalingam, post master general, central region-Trichy, said the region had, since the launch of RPLI in 1995-96, sold 830,000 policies for a sum assured of Rs 3,557 crore.
Trichy also recorded an increase in international money transfer service during the year by enabling 416,000 transactions over previous year's 169,000 transactions. The region covers 24 head post offices, 64 sub offices and 2,839 branch offices.
Source: Business Standard
Addressing the media here, SP Rajalingam, post master general, central region-Trichy, said the region had, since the launch of RPLI in 1995-96, sold 830,000 policies for a sum assured of Rs 3,557 crore.
Trichy also recorded an increase in international money transfer service during the year by enabling 416,000 transactions over previous year's 169,000 transactions. The region covers 24 head post offices, 64 sub offices and 2,839 branch offices.
Source: Business Standard
General insurers may get nod to change covers
Non-life insurance companies will soon get the freedom to change the coverage, wordings, terms and conditions of insurance policies. However, the changes that will be proposed by the insurer to individuals or companies will have to be approved by the Insurance Regulatory Development Authority (Irda).
While non-life insurers are now free to price the products, the Tariff Advisory Committee (TAC) mandates the wordings, terms and conditions for motor, fire, engineering, marine (hull) and workmen compensation policies. Till January 2007, TAC also controlled and regulated the premium rates that had to be offered by insurers.
"We are holding discussions with the General Insurance Council (a self-regulatory body of non-life insurers). Insurance companies can file with us the deviations from the TAC wordings for each line of business and we will give the approvals on a case by case basis. But the products should be comparable by customers across insurance companies," Irda chairman C S Rao said on the sidelines of a seminar.
Irda had earlier proposed to give freedom to insurers to change covers from April 1, 2008. However, it later deferred the deadline on concerns of confusion among consumers.
Last year, the General Insurance Council had prepared uniform market wordings for the industry that could be used once they were granted the freedom to change covers. "The General Insurance Council has rephrased the existing terms and conditions. It has thrown a number of issues. We will see the changes suggested,"Rao said.
He also said that after the April figures containing the premium underwritten by non-life insurance companies are released, the insurance regulator will be able to gauge the impact of detariffing.
With 40 per cent of the corporate renewals taking place in April, any drop in premium will be reflected in the business underwritten by insurance companies. "We will get a complete picture only after the April figures are released and we will intensify our inspection of insurance companies," said Rao.
Irda is also planning to tighten the norms for granting fresh licenses to third party administrators (TPAs), who perform back-end functions for insurance companies.
"The job of a TPA is to see if the claim is supported by evidence and if genuine claims should be paid quickly. In future, we will look at the TPA's IT ability, which we had earlier ignored while giving licences," Rao said.
While non-life insurers are now free to price the products, the Tariff Advisory Committee (TAC) mandates the wordings, terms and conditions for motor, fire, engineering, marine (hull) and workmen compensation policies. Till January 2007, TAC also controlled and regulated the premium rates that had to be offered by insurers.
"We are holding discussions with the General Insurance Council (a self-regulatory body of non-life insurers). Insurance companies can file with us the deviations from the TAC wordings for each line of business and we will give the approvals on a case by case basis. But the products should be comparable by customers across insurance companies," Irda chairman C S Rao said on the sidelines of a seminar.
Irda had earlier proposed to give freedom to insurers to change covers from April 1, 2008. However, it later deferred the deadline on concerns of confusion among consumers.
Last year, the General Insurance Council had prepared uniform market wordings for the industry that could be used once they were granted the freedom to change covers. "The General Insurance Council has rephrased the existing terms and conditions. It has thrown a number of issues. We will see the changes suggested,"Rao said.
He also said that after the April figures containing the premium underwritten by non-life insurance companies are released, the insurance regulator will be able to gauge the impact of detariffing.
With 40 per cent of the corporate renewals taking place in April, any drop in premium will be reflected in the business underwritten by insurance companies. "We will get a complete picture only after the April figures are released and we will intensify our inspection of insurance companies," said Rao.
Irda is also planning to tighten the norms for granting fresh licenses to third party administrators (TPAs), who perform back-end functions for insurance companies.
"The job of a TPA is to see if the claim is supported by evidence and if genuine claims should be paid quickly. In future, we will look at the TPA's IT ability, which we had earlier ignored while giving licences," Rao said.
J Harinarayan is new IRDA chief
NEW DELHI/HYDERABAD: Jandhyala Harinarayan will take over as the next IRDA chairman. Mr Harinarayan, who was the former chief secretary of Andhra Pradesh, was chosen by the government for the top job in IRDA, based on recommendations of a search committee headed by finance secretary D Subba Rao. The recommendation has been ratified by the Appointments Committee of Cabinet chaired by the Prime Minister. The incumbent chairman CS Rao’s five-year term ends on Wednesday. The final order is expected soon.
United India net at Rs. 632 crore
Chennai: United India Insurance has achieved a net profit of Rs. 631.62 crore for 2007-08, an increase of 19.5 per cent over 2006-07. The company has ended the year with a premium of Rs. 3,739.56 crore against Rs. 3,498.77 crore in 2006-07. The directors have recommended a dividend of 84 per cent against 70.52 per cent.
General Insurance industry grows 12.5 pc growth
The general insurance industry grew 12.53 per cent in 2007-08 with robust performance by private players, including Reliance General which continues to be the fastest growing insurer. The 13 non-life insurers collected Rs 28,131 crore in premium in FY'08, against Rs 24,998 crore collected in the previous fiscal, according to the industry data. During the period, the four public sector non-life insurance companies collected Rs 16,899 crore in the reviewed fiscal, against Rs 16,278 crore in the previous fiscal. Private players increased their business from Rs 8,720 crore to Rs 11,231 crore during the period.
Reliance General Insurance continues to be the fastest growing insurer with its premium collection growing by a whopping 113 per cent to Rs 1,946 crore in last fiscal against Rs 912 crore FY'07. In percentage terms, while the public sector firms could increase their premiums by just 4 per cent, nine private sector players clocked premium growth of 29 per cent. Private sector players' market share has grown to about 40 per cent in FY'08 as compared to the public sector's 60 per cent share.
Reliance General Insurance continues to be the fastest growing insurer with its premium collection growing by a whopping 113 per cent to Rs 1,946 crore in last fiscal against Rs 912 crore FY'07. In percentage terms, while the public sector firms could increase their premiums by just 4 per cent, nine private sector players clocked premium growth of 29 per cent. Private sector players' market share has grown to about 40 per cent in FY'08 as compared to the public sector's 60 per cent share.
Fortis starts India life insurance activities
Amsterdam: Dutch-Belgian financial services group Fortis said on Tuesday its Indian life insurance joint venture has started operations in India.
IDBI Fortis Life Insurance, a joint venture between Indian financial group IDBI, privately-owned Federal Bank and Fortis in India, will focus mainly on bancassurance activities, cross-selling across top-tier client segments, Fortis said in a statement.
IDBI Fortis, which has a workforce of about 400 employees, will service IDBI's 490 bank branches and Federal Bank's network of 550 banks, Fortis said.
Source: Reuters
State Bank of India, Australia's IAG in insurance JV
Tuesday, 13 May
Mumbai: State Bank of India, the country's top lender, said on Tuesday it has signed a memorandum of understanding with Insurance Australia Group for general insurance.
Both firms will finalise an agreement and approach regulators for approvals, they said in a joint statement, without specifying financial details.
SBI will hold 74 per cent in the venture, with IAG holding the remaining 26 per cent, the maximum allowed under Indian law.
A general insurance joint venture "is a key element of SBI's strategy to pursue emerging, high growth opportunities," it said.
"SBI hopes to commence business in the current financial year and aspires to be amongst the top three players in the general insurance space in a period of about 10 years," it said.
State-run SBI has a venture with Cardiff, a unit of BNP Paribas , for life insurance.
Source: Reuters
Mumbai: State Bank of India, the country's top lender, said on Tuesday it has signed a memorandum of understanding with Insurance Australia Group for general insurance.
Both firms will finalise an agreement and approach regulators for approvals, they said in a joint statement, without specifying financial details.
SBI will hold 74 per cent in the venture, with IAG holding the remaining 26 per cent, the maximum allowed under Indian law.
A general insurance joint venture "is a key element of SBI's strategy to pursue emerging, high growth opportunities," it said.
"SBI hopes to commence business in the current financial year and aspires to be amongst the top three players in the general insurance space in a period of about 10 years," it said.
State-run SBI has a venture with Cardiff, a unit of BNP Paribas , for life insurance.
Source: Reuters
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