Kolkata: Oriental Insurance Co Ltd, the Delhi-based non-life insurance major, is moving out of its public sector mindset and looking at the idea of a health policy with a cover of up to $1 million, which will entitle the insured to go for treatment anywhere in the world. M Ramadoss, chairman and managing director, said public sector insurance Companies like Oriental are usually directed into the low-end and 'Janata' segment, but there is no reason for them not to target high net worth individuals (HNIs), considering that the PSU insurers have the highest financial strength, the government's backing and longest-standing market presence.
"One person came to me recently and said he wants a health insurance product with a coverage of $1 million, and he can go anywhere in the world to receive treatment, but he was skeptical of our ability," Ramadoss said.
Against this cover of $1 million or Rs 4.37 crore, Oriental's highest health cover at present is Rs 5 lakh.
Ramadoss said the policy is at "a very preliminary stage, but nothing has been finalised so far."
"What I am saying is that in health, we should have a low premium, but we can also come up with very premium products, and there is no constraint," Ramadoss said. "People think only private Companies can do it."
Ramadoss pointed out that competition is increasing in the insurance segment, with more players entering the national scene and some even speaking of regional players. So it is imperative for PSU Companies to focus on service.
Source: The Financial Express
Friday, May 30, 2008
LIBERALISATION BOOSTS INSURANCE GROWTH
Kolkata: The insurance market has grown rapidly following liberalisation in 2001, feel major public sector companies. Speaking at the third insurance conclave organised by Federation of Indian Chambers of Commerce and Industry, Mr M Ramadoss, chairman and managing director of The Oriental Insurance Company said: "Whereas the gross direct premium of general insurance industry has gone up by Rs 2,000 crore from 1997 to 2000, it has grown by Rs 20,000 crore in the period between 2002-08," he said.
He, however, pointed out that general insurance has done poorly compared to life insurance.
Mr G Srinivasan chairman and managing director of United India Insurance Company Ltd, felt that liberalisation had created an environment where the industry could reach its full potential.
Source: The Statesman
He, however, pointed out that general insurance has done poorly compared to life insurance.
Mr G Srinivasan chairman and managing director of United India Insurance Company Ltd, felt that liberalisation had created an environment where the industry could reach its full potential.
Source: The Statesman
LIC TO TAKE REFUGE IN MORE CONVENTIONAL POLICIES
Mumbai: The country’s largest insurer — Life Insurance Corporation (LIC) — has decided to rebalance its product portfolio to have more of conventional policies. The corporation, which sees most of its revenues from unit-linked insurance plans, feels that more conventional policies have to be sold if it wants to have a steady premium income.
Speaking to ET, DK Mehrotra, managing director, LIC, said one reason for the slowdown in new business growth from 110% in 2006-07 to 6% in 2007-08 was the move to promote conventional policies. “We are looking at repositioning some of the old conventional plans which were very strong products. In the long run, conventional products have to be focused upon,” he said.
“An insurance company cannot depend only on unit-linked insurance plans. In the previous year (2006-07), because of the stock market wave everybody cashed in on it,” said Mr Mehrotra.
He added that although the corporation may not have succeeded in the shift, a message was sent that ‘we have to come to conventional’. In terms of number of policies in 2007-08, LIC sold almost as many conventional policies as ULIPs.
While LIC sold 1.74 crore conventional policies, the number of ULIPs sold was 1.9 crore. But since the average premium under ULIP was around Rs 20,000 as against Rs 3,400 in conventional, the impact of the shift was not much on premium, said Mr Mehrotra.
Unit-linked plans have been the flavour of the insurance market for the past few years. While funds mobilised under conventional products are invested in government securities, ULIPs leaves the choice of investment category to the policyholder.
In 2006-07, the surge in stock indices saw policyholders using insurance to channelise savings into the stock market. 2007-08, too, saw a surge of investments in ULIPs. However, the pace of collections slowed as a market crash in the last quarter turned investors cautious.According to Mr Mehrotra, it was necessary to move to conventional as these policies focused on protection. Also, it ensures stability for the corporation and policyholders.
“This year we tried to have 70:30 mix between unit-linked and conventional plans. Last year, the ratio was 82:18 in favour of ULIPs,” he said. Though the corporation wants to shift focus, it will not do so overnight nor will it stop coming out with new ULIPs.
The new products that it will launch will be a mix of ULIPs and conventional plans. “We cannot make the shift overnight. There is a customer demand for ULIPs and we cannot afford to leave a vacuum in the market,” said Mr Mehrotra.
Source: Economic Times
Speaking to ET, DK Mehrotra, managing director, LIC, said one reason for the slowdown in new business growth from 110% in 2006-07 to 6% in 2007-08 was the move to promote conventional policies. “We are looking at repositioning some of the old conventional plans which were very strong products. In the long run, conventional products have to be focused upon,” he said.
“An insurance company cannot depend only on unit-linked insurance plans. In the previous year (2006-07), because of the stock market wave everybody cashed in on it,” said Mr Mehrotra.
He added that although the corporation may not have succeeded in the shift, a message was sent that ‘we have to come to conventional’. In terms of number of policies in 2007-08, LIC sold almost as many conventional policies as ULIPs.
While LIC sold 1.74 crore conventional policies, the number of ULIPs sold was 1.9 crore. But since the average premium under ULIP was around Rs 20,000 as against Rs 3,400 in conventional, the impact of the shift was not much on premium, said Mr Mehrotra.
Unit-linked plans have been the flavour of the insurance market for the past few years. While funds mobilised under conventional products are invested in government securities, ULIPs leaves the choice of investment category to the policyholder.
In 2006-07, the surge in stock indices saw policyholders using insurance to channelise savings into the stock market. 2007-08, too, saw a surge of investments in ULIPs. However, the pace of collections slowed as a market crash in the last quarter turned investors cautious.According to Mr Mehrotra, it was necessary to move to conventional as these policies focused on protection. Also, it ensures stability for the corporation and policyholders.
“This year we tried to have 70:30 mix between unit-linked and conventional plans. Last year, the ratio was 82:18 in favour of ULIPs,” he said. Though the corporation wants to shift focus, it will not do so overnight nor will it stop coming out with new ULIPs.
The new products that it will launch will be a mix of ULIPs and conventional plans. “We cannot make the shift overnight. There is a customer demand for ULIPs and we cannot afford to leave a vacuum in the market,” said Mr Mehrotra.
Source: Economic Times
GENERAL INSURANCE INDUSTRY EYES 23% GROWTH IN 2008-09
Kolkata: The general insurance industry is slated to touch Rs 50,000 crore premium income in the next five years against Rs 28,130 crore achieved in 2007-08. In 2008-09 — the first full year of the detariffed regime — state-owned general insurance companies are targeting a total premium income of about Rs 20,000 crore, a 23% growth, against Rs 16,259 crore achieved in 2007-08.
New India Assurance, the largest general insurer, expects a 10% growth to about Rs 5,800 crore in 2008-09, while United India Insurance has pegged it at Rs 4,200 crore against Rs 3,739 crore achieved in 2007-08. Both National Insurance and Oriental Insurance are hoping to garner a total premium income of Rs 4,500 crore each in 2008-09 against Rs 4,032 crore in the previous fiscal.
“However, in a bid to facilitate growth, a slew of measures need to be taken. These include tax breaks like removal of service tax on health insurance and personal accident policies, encouragement for growth of individual agents including removal of sealing on commission as well as freedom of policy designing,” said M Ramadoss, chairman and managing director, Oriental Insurance Company.
He was talking to media persons at the sidelines of an Insurance Conclave organised by Ficci’s eastern region council. Mr Ramadoss added that the industry should concentrate in facilitating insurance skill development and offer more liberalised norms for creation of intermediaries.
Additionally, some regulations for the health service providers should be introduced to enable orderly growth in the segment. In a bid to achieve these, the relevant portion of the Insurance Act of 1938 also needs to be amended, he added.
V Ramasaamy, chairman, National Insurance, who was present, said: “Total premium is only a small 0.61% of GDP and penetration of general insurance business is low. However, detariffing will lead to introduction of new innovative products and the huge untapped market will be targeted soon.”
Mr Ramasaamy, however, believes that in the near future growth in fire and engineering may not be encouraging, while the insurance industry will concentrate more on retail and micro insurance in rural areas, too.
Products development will eventually be more customer need-based. On the distribution front, present channels will be broad based and new channels like tele-marketing, co-operative banks, RRBs, micro insurance agents, NGOs, travel agents will widen.
Talking about health insurance, Mr Ramasaamy said demand from the segment is rising and is likely to reach Rs 40,000 crore by 2020. It is expected to grow at 35% for the next five years.
Talking about the recent past, G Srinivasan, chairman, United India Insurance, said: “Though in absolute terms the growth seems large, but the sector has not outperformed growth in the Indian economy.”
Source: Economic Times
New India Assurance, the largest general insurer, expects a 10% growth to about Rs 5,800 crore in 2008-09, while United India Insurance has pegged it at Rs 4,200 crore against Rs 3,739 crore achieved in 2007-08. Both National Insurance and Oriental Insurance are hoping to garner a total premium income of Rs 4,500 crore each in 2008-09 against Rs 4,032 crore in the previous fiscal.
“However, in a bid to facilitate growth, a slew of measures need to be taken. These include tax breaks like removal of service tax on health insurance and personal accident policies, encouragement for growth of individual agents including removal of sealing on commission as well as freedom of policy designing,” said M Ramadoss, chairman and managing director, Oriental Insurance Company.
He was talking to media persons at the sidelines of an Insurance Conclave organised by Ficci’s eastern region council. Mr Ramadoss added that the industry should concentrate in facilitating insurance skill development and offer more liberalised norms for creation of intermediaries.
Additionally, some regulations for the health service providers should be introduced to enable orderly growth in the segment. In a bid to achieve these, the relevant portion of the Insurance Act of 1938 also needs to be amended, he added.
V Ramasaamy, chairman, National Insurance, who was present, said: “Total premium is only a small 0.61% of GDP and penetration of general insurance business is low. However, detariffing will lead to introduction of new innovative products and the huge untapped market will be targeted soon.”
Mr Ramasaamy, however, believes that in the near future growth in fire and engineering may not be encouraging, while the insurance industry will concentrate more on retail and micro insurance in rural areas, too.
Products development will eventually be more customer need-based. On the distribution front, present channels will be broad based and new channels like tele-marketing, co-operative banks, RRBs, micro insurance agents, NGOs, travel agents will widen.
Talking about health insurance, Mr Ramasaamy said demand from the segment is rising and is likely to reach Rs 40,000 crore by 2020. It is expected to grow at 35% for the next five years.
Talking about the recent past, G Srinivasan, chairman, United India Insurance, said: “Though in absolute terms the growth seems large, but the sector has not outperformed growth in the Indian economy.”
Source: Economic Times
GENERAL INSURANCE PREMIUM GROWTH DIPS TO 12.5% ON DETARIFFING
Kolkata: The growth of general insurance business has slowed down to 12.5 per cent in 2007-08 compared to 25 per cent in the previous financial year due to the end of pricing control on regulated businesses such as fire, motor and engineering from January 2007.
Growth was also impacted by the subsequent price war among the insurance companies. In 2007-08, the gross premium underwritten by non-life insurance companies stood at Rs 28,126.29 crore compared with Rs 24,998.41 in 2006-07. In order to retain corporate clients and grab new businesses, insurers had to cut their property premium rates by more than 70 per cent.
"A reduction of premium rates by 70-80 per cent in the fire and engineering portfolio has accounted for a significant fall in the premium underwritten in these segments," National Insurance Chairman and Managing Director V Ramasaamy said.
"The tremors expected after detariffing have not really got pronounced in 2007-08," added Oriental Insurance Chairman and Managing Director M Ramadoss, during a presentation in the Ficci Insurance Conclave.
The fire insurance premium has dipped 15.39 per cent to Rs 3,517 crore in 2007-08 compared to Rs 4,157 crore in the previous year. Of the Rs 639.87 crore loss in premium, the public sector companies accounted for Rs 469.51 crore.
Fire premium for the public sector insurers came down by 17.95 per cent to Rs 2,144.95 crore compared to Rs 2614.46 crore reported a year ago.
Private insurers fared marginally better, registering a drop of 11.04 per cent to Rs 1,372.32 crore against Rs 1,542.68 crore reported in the previous year.
The four public sector general insurers - New India Assurance, Oriental Insurance, National Insurance and United India Insurance - grew 3.76 per cent to Rs 16,895.70 crore as against a gross premium of Rs 16,282.10 crore reported a year ago. The 10 private insurers grew by 28.85 per cent to Rs 11,231.19 crore from Rs 8,716.31 crore a year earlier.
However, motor insurance and health insurance businesses were the growth drivers with a premium of Rs 2200 crore and Rs 1,800 crore, respectively.
Of Rs 2,200 crore premium in motor insurance, the private sector accounted for Rs 1800 crore, mainly due to the creation of motor third party insurance pool for commercial vehicles. In the case of health insurance, public insurers contributed Rs 1200 crore of the total Rs 1800 crore.
"This belies the theory that health insurance is the forte of private insurers. Health insurance is likely to be the focus area of public sector insurance players," Ramadoss said.
Commenting about future trends, Ramadoss said the compounded annual growth rate of the insurance industry is likely to be around 16 per cent in the next five years in tune with the expected gross domestic product growth of 8 per cent. He said that the premium rates would stabilise from the next financial year.
Source: Business Standard
Growth was also impacted by the subsequent price war among the insurance companies. In 2007-08, the gross premium underwritten by non-life insurance companies stood at Rs 28,126.29 crore compared with Rs 24,998.41 in 2006-07. In order to retain corporate clients and grab new businesses, insurers had to cut their property premium rates by more than 70 per cent.
"A reduction of premium rates by 70-80 per cent in the fire and engineering portfolio has accounted for a significant fall in the premium underwritten in these segments," National Insurance Chairman and Managing Director V Ramasaamy said.
"The tremors expected after detariffing have not really got pronounced in 2007-08," added Oriental Insurance Chairman and Managing Director M Ramadoss, during a presentation in the Ficci Insurance Conclave.
The fire insurance premium has dipped 15.39 per cent to Rs 3,517 crore in 2007-08 compared to Rs 4,157 crore in the previous year. Of the Rs 639.87 crore loss in premium, the public sector companies accounted for Rs 469.51 crore.
Fire premium for the public sector insurers came down by 17.95 per cent to Rs 2,144.95 crore compared to Rs 2614.46 crore reported a year ago.
Private insurers fared marginally better, registering a drop of 11.04 per cent to Rs 1,372.32 crore against Rs 1,542.68 crore reported in the previous year.
The four public sector general insurers - New India Assurance, Oriental Insurance, National Insurance and United India Insurance - grew 3.76 per cent to Rs 16,895.70 crore as against a gross premium of Rs 16,282.10 crore reported a year ago. The 10 private insurers grew by 28.85 per cent to Rs 11,231.19 crore from Rs 8,716.31 crore a year earlier.
However, motor insurance and health insurance businesses were the growth drivers with a premium of Rs 2200 crore and Rs 1,800 crore, respectively.
Of Rs 2,200 crore premium in motor insurance, the private sector accounted for Rs 1800 crore, mainly due to the creation of motor third party insurance pool for commercial vehicles. In the case of health insurance, public insurers contributed Rs 1200 crore of the total Rs 1800 crore.
"This belies the theory that health insurance is the forte of private insurers. Health insurance is likely to be the focus area of public sector insurance players," Ramadoss said.
Commenting about future trends, Ramadoss said the compounded annual growth rate of the insurance industry is likely to be around 16 per cent in the next five years in tune with the expected gross domestic product growth of 8 per cent. He said that the premium rates would stabilise from the next financial year.
Source: Business Standard
Insurers clip TPAs’ wings
Kolkata: Bugged by ‘upfront cash payment’ issues when admitting someone to hospital? Don’t worry, help is at hand.
General insurance companies covering over 85% of mediclaim policies issued in India have decided to make payments of claims directly to health service providers (or hospitals etc) through some private banks instead of routing the money through third-party administrators (TPAs) as is being done now.
Insurance companies, TPAs and health service providers have been into a blame-game over payment of claims for quite some time now.
Many hospitals and nursing homes have often refused to admit mediclaim patients through the “cashless” option.
Some hospitals refuse the cashless option even after upfront payments because of the delay in receiving the balance money from TPAs, “in some cases for 9-10 months” said a hospital executive.
G Srinivasan, chairman and managing director, United India, said the company has already initiated making payments through its designated banks instead of TPAs.
V Ramasaamy, chairman and managing director, National Insurance Company, and M Ramadoss, Oriental Insurance chief, are following suit.
TPAs will now process the claims and send it to the bank, which, in turn, will make the payment directly to the health service provider.
Insurance companies have been conducting quarterly reviews of TPAs, which involves auditing and checking of their records and flow of funds.
The potential of the health insurance, which is around Rs 5,500 crore at present is said to be Rs 40,000 crore by 2020 and expected to grow by 35% for the next five years.
Source: DNA Money
General insurance companies covering over 85% of mediclaim policies issued in India have decided to make payments of claims directly to health service providers (or hospitals etc) through some private banks instead of routing the money through third-party administrators (TPAs) as is being done now.
Insurance companies, TPAs and health service providers have been into a blame-game over payment of claims for quite some time now.
Many hospitals and nursing homes have often refused to admit mediclaim patients through the “cashless” option.
Some hospitals refuse the cashless option even after upfront payments because of the delay in receiving the balance money from TPAs, “in some cases for 9-10 months” said a hospital executive.
G Srinivasan, chairman and managing director, United India, said the company has already initiated making payments through its designated banks instead of TPAs.
V Ramasaamy, chairman and managing director, National Insurance Company, and M Ramadoss, Oriental Insurance chief, are following suit.
TPAs will now process the claims and send it to the bank, which, in turn, will make the payment directly to the health service provider.
Insurance companies have been conducting quarterly reviews of TPAs, which involves auditing and checking of their records and flow of funds.
The potential of the health insurance, which is around Rs 5,500 crore at present is said to be Rs 40,000 crore by 2020 and expected to grow by 35% for the next five years.
Source: DNA Money
Lifestyle protection plans from ING Vysya
Chennai: ING Vysya Life has launched two lifestyle protection products -- ING Term Life and ING Term Life Plus.
Speaking at the launch function, T K Uthappa, Director- Sales, Tied Agency, ING Vysya Life Insurance said, “ING Term Life and ING Term Life Plus have highly attractive premium rates, thus making it a value proposition for customers. While both are lifestyle protection products, ING Term Life Plus offers return of premiums, paid half-way through the policy term and at the end of the policy term, on maturity.”
Both the products offer flexibility to choose the premium paying tenure between 10 years and 30 years. They also have a wide spectrum of age of entry, wherein a customer can buy either of the products between the completed age of 18 and 65, and provide cover upto the completed age of 75.
Some of the other features of the products are:
Both the products are simple to obtain and offer high non-medical limits. Rider options, including accidental death benefits and accidental death, disability and dismemberment benefits are also available on the two plans.
Source: Sify Finance
Speaking at the launch function, T K Uthappa, Director- Sales, Tied Agency, ING Vysya Life Insurance said, “ING Term Life and ING Term Life Plus have highly attractive premium rates, thus making it a value proposition for customers. While both are lifestyle protection products, ING Term Life Plus offers return of premiums, paid half-way through the policy term and at the end of the policy term, on maturity.”
Both the products offer flexibility to choose the premium paying tenure between 10 years and 30 years. They also have a wide spectrum of age of entry, wherein a customer can buy either of the products between the completed age of 18 and 65, and provide cover upto the completed age of 75.
Some of the other features of the products are:
Both the products are simple to obtain and offer high non-medical limits. Rider options, including accidental death benefits and accidental death, disability and dismemberment benefits are also available on the two plans.
Source: Sify Finance
ISO CERTIFICATION TO BE MUST FOR ESI HOSPITALS
New Delhi: ESI hospitals providing healthcare facilities to workers covered under the Employees State Insurance Corporation (ESIC) will be soon required to have ISO certification. Minister of state for labour and employment Shri Oscar Fernandes has said that the certification will be made mandatory so that hospitals provide world class medical facilities to workers of both organised as well as unorganised sector.
In the first conference of revenue officers of ESIC, the minister said ESIC revenue officers should dedicate themselves to the cause of healthcare of workers and should aim at increasing the number of beneficiaries to at least 4 crores, same as EPF members.
The minister added that the doctors and staff at these hospitals would be given special training to meet the shortage of medical personnel in the country.
Labour and employment secretary Sudha Pillai said that the government will ensure that the insurance scheme is expanded to new areas. The latest figures show that during 2007-08, the scheme was implemented in 37 new areas covering nearly 98,000 workers. The total number of beneficiaries were 3.94 crore. During the year, contribution income increased to a record high of Rs 3,249 crore against the target of Rs 2,450 crore, thereby registering an increase of Rs 800 crore which is 32.61% higher than the target, Ms Pillai said.
The motive of this conference was to interact with field workers and make them aware about their role in the implementation of policies and programmes of the ESIC and the ministry. Insurance inspectors and other officials were also asked to improve efficiency so that delivery system could be improved.
Source: The Economic Times
In the first conference of revenue officers of ESIC, the minister said ESIC revenue officers should dedicate themselves to the cause of healthcare of workers and should aim at increasing the number of beneficiaries to at least 4 crores, same as EPF members.
The minister added that the doctors and staff at these hospitals would be given special training to meet the shortage of medical personnel in the country.
Labour and employment secretary Sudha Pillai said that the government will ensure that the insurance scheme is expanded to new areas. The latest figures show that during 2007-08, the scheme was implemented in 37 new areas covering nearly 98,000 workers. The total number of beneficiaries were 3.94 crore. During the year, contribution income increased to a record high of Rs 3,249 crore against the target of Rs 2,450 crore, thereby registering an increase of Rs 800 crore which is 32.61% higher than the target, Ms Pillai said.
The motive of this conference was to interact with field workers and make them aware about their role in the implementation of policies and programmes of the ESIC and the ministry. Insurance inspectors and other officials were also asked to improve efficiency so that delivery system could be improved.
Source: The Economic Times
United India, Honda Motor tie up
United India Insurance Company Ltd has entered into an agreement with Honda Motorcycle & Scooter India Pvt Ltd, under which the insurer will provide its services to HMSI's customers at the latter's dealer outlets. Initially, customers will be able to avail themselves of insurance cover for scooters and motorcycles purchased from the outlets. Subsequently, this will be expanded to include other personal lines insurances such as house, personal accident, and health insurance.
As a part of the agreement, United India will provide insurance for new vehicles at competitive rates. Another value addition will be provision of "cashless repairs" at dealer's premises in case of accidents, says a press release from the company. Meanwhile, United India has announced a new health policy. The `Family Medicare Policy' covers family members under a single sum insured, against hospitalisation expenses due to disease or accident. "In other words, the sum insured "floats" over the entire family," says a press release from the insurer.
Source: The Hindu Business Line
As a part of the agreement, United India will provide insurance for new vehicles at competitive rates. Another value addition will be provision of "cashless repairs" at dealer's premises in case of accidents, says a press release from the company. Meanwhile, United India has announced a new health policy. The `Family Medicare Policy' covers family members under a single sum insured, against hospitalisation expenses due to disease or accident. "In other words, the sum insured "floats" over the entire family," says a press release from the insurer.
Source: The Hindu Business Line
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