New Delhi: Post de-tariffing, if fire and engineering are making holes in the balance sheets of non-life insurance companies, it is the retail business — health and motor — that is raking in the moolah. The two sectors account for almost two-third of the Rs 28,126.4 crore general insurance industry.
While the health insurance premium for non-life insurers shot up 55 per cent to Rs 4,969 crore in 2007-08, motor insurance posted a more modest 20 per cent growth during the year. The industry as a whole grew just 12.5 per cent during the year compared with Rs 24, 998.4 crore in 2006-07.
According to an IRDA report card, Reliance General Insurance — with nearly 7 per cent market share — has booked the highest jump in health insurance premium. It collected Rs 257.62 crore, up 307 per cent as against Rs 67.69 crore in 2006-07. The biggest non-life insurer, state-owned New India Assurance, collected nearly Rs 114 crore, 58 per cent more than the previous year. For other major players such as National Insurance, United India and Bajaj Allainz too, the health business premia rose by 105 per cent, 60 per cent and 53 per cent, respectively.
"With the fall in the prices of engineering and fire premia, insurance companies are now focusing more on the retail lines – motor and health," says T Ramalingam, head (underwriting), Bajaj Allianz General Insurance. "Before de-tariffing, group health insurance was bundled with property insurance and offered at a subsidised rate. With de-tariff kicking in, insurance premium for property has come down and medical insurance costs has risen. This has further led to a rise in premium collection for health insurance."
The health insurance sector in the country has witnessed rapid growth since insurance liberalisation in 2001. The premium has grown from Rs 774 crore in 2001, to Rs 3,300 crore in 2006-07. The sector is expected to maintain momentum and grow at a CAGR of 40 per cent in future.
"De-tariffing has led to hectic competition and at present market-driven rates prevail. Owing to this, everybody is slowly shifting to the more stable segments, i.e., the retail segment — motor and health. Health segment is growing fast at the rate of more than 30 per cent. This 30-35 per cent growth rate is expected to continue for the next two-three years," says M Ramadoss, chairman and managing director Oriental Insurance.
Motor insurance is further classified into own damage and third-party. While premium for own damage motor insurance saw a sluggish growth at 8 per cent, it is the third party motor insurance that booked a 50 per cent rise in premium collection. “The spurt in the premium collection for third party motor insurance is primarily due to the creation of pool from April 1, 2007,” says Rahul Aggarwal, CEO of Optima Insurance Brokers. “The move has encouraged a lot of small companies for third party underwriting.”
Source: Suneeti Ahuja
The Indian Express
Thursday, July 10, 2008
FEATURES OF NEW HEALTH INSURANCE SCHEME EXPLAINED
Tuticorin: The district administration conducted an awareness programme at the Treasury here on Wednesday to highlight the salient features of the ‘New Health Insurance Scheme’ (NHIS) introduced by the State Government last month.
The scheme is being implemented under the control of Director of Treasuries and Accounts. Addressing government officials, D. Ganesan, District Treasury Officer, said that the scheme, which replaced the Tamil Nadu Government Employees’ Health Fund Scheme, offers wider coverage extending health insurance to employees of all departments, local bodies, public sector undertakings, statutory boards and state universities, and their families.
“About 21,000 employees and their families in the district are being benefited by the scheme,” he added. The family members of the employees entitled to the coverage include spouse, children till they got employed, married or attained 25 years, whichever was the earliest, and parents if the employee was unmarried.
“The new package provides cashless assistance at an affordable premium of Rs.25 a month, which is being deducted from the employees’ salary, instead of the reimbursement model followed under the earlier scheme,” Mr. Ganesan said.
The insurance company identified to provide the coverage (Star Health and Allied Insurance Company) would reimburse the medical expenses up to Rs.2 lakh for a family for a block of four years, directly to the ‘approved hospitals’ identified for the scheme.
In the district, Sundaram Arulraj Hospital, K. J. Nursing Home, Rajam Nursing Home (all in Tuticorin town), and Aarthy Hospital, Venkateswara Hospital (both in Kovilpatti), would provide medical assistance.
The insurance company would issue identity cards to all the employees carrying details about them and their family members before August 31, to help them display their identification while availing treatment at the said hospitals.
Mr. Ganesan said that cost of medicines of laparoscopic, cardiac and emergency life saving surgeries, doctor fees, room charges, diagnostic charges and dietary charges, incurred at the ‘approved hospitals’, would be reimbursed. The District Public Relations Officer, S.R. Sarathy, was present.
Source: The Hindu
The scheme is being implemented under the control of Director of Treasuries and Accounts. Addressing government officials, D. Ganesan, District Treasury Officer, said that the scheme, which replaced the Tamil Nadu Government Employees’ Health Fund Scheme, offers wider coverage extending health insurance to employees of all departments, local bodies, public sector undertakings, statutory boards and state universities, and their families.
“About 21,000 employees and their families in the district are being benefited by the scheme,” he added. The family members of the employees entitled to the coverage include spouse, children till they got employed, married or attained 25 years, whichever was the earliest, and parents if the employee was unmarried.
“The new package provides cashless assistance at an affordable premium of Rs.25 a month, which is being deducted from the employees’ salary, instead of the reimbursement model followed under the earlier scheme,” Mr. Ganesan said.
The insurance company identified to provide the coverage (Star Health and Allied Insurance Company) would reimburse the medical expenses up to Rs.2 lakh for a family for a block of four years, directly to the ‘approved hospitals’ identified for the scheme.
In the district, Sundaram Arulraj Hospital, K. J. Nursing Home, Rajam Nursing Home (all in Tuticorin town), and Aarthy Hospital, Venkateswara Hospital (both in Kovilpatti), would provide medical assistance.
The insurance company would issue identity cards to all the employees carrying details about them and their family members before August 31, to help them display their identification while availing treatment at the said hospitals.
Mr. Ganesan said that cost of medicines of laparoscopic, cardiac and emergency life saving surgeries, doctor fees, room charges, diagnostic charges and dietary charges, incurred at the ‘approved hospitals’, would be reimbursed. The District Public Relations Officer, S.R. Sarathy, was present.
Source: The Hindu
INSURANCE CO TO PAY FOR STOLEN JEWELLERY
New Delhi: In an unusual case, state consumer commission has directed Oriental Insurance Company Ltd to pay Rs 10.5 lakh for rejecting the claim of a woman whose jewellery was stolen from her car while she met with an accident in which 6-8 cars rammed into each other. The insurance company rejected the claim on the grounds that the insured had not taken reasonable care while coming out of the car when the accident took place. It argued that and the theft from the car was an ‘exception’ since the car was not parked when the jewellery was stolen.
Presiding over the commission, Justice J D Kapoor said: ‘‘It is understood why the occupants had to come out during the accident from their car, which could not be avoided. It was a natural reaction from the complainants to leave the car oblivious of the fact that something would go wrong. Therefore it was not correct on the part of the insurance company to invoke exception clause of the policy.’’
In this case, Usha Anand, an NRI had removed jewellery from the locker on August 1, 2001. With the jewellery in a bag, she was driving with her sister and as they reached Defence Colony flyover, the accident took place. Usha and her sister got out of the car to quell the ensuing chaos, but returned to find the jewellery missing.
An FIR for missing jewellery was lodged but the case was closed on September 28, 2001. The complainant submitted documents to the company for claiming insurance for the stolen jewellery which was rejected and closed as ‘‘no claim’’ as the company stated it shall not be liable for ‘‘theft from a car except one in which all the doors, windows and other opening securely locked and properly fastened.’’
Source: Times of India
IFFCO-TOKIO GENERAL Q1 PREMIUM INCOME UP 34%
New Delhi: Iffco-Tokio General Insurance Co Ltd is targeting 30 per cent growth in premium income this fiscal, much higher than the projected industry average of 12 per cent, its Managing Director and Chief Executive Officer, Mr S. Narayanan, has said. In 2007-08, the company had recorded premium income of Rs 1,235 crore. For the first quarter of the current fiscal, the company has recorded 34 per cent increase in premium income at Rs 414 crore. “I am sure we will be able to achieve the 30 per cent premium income growth target for this fiscal. We have made the plans,” Mr Narayanan told Business Line here.
Besides expanding its distribution network, through its associate company, Iffco-Tokio Insurance services, plans are afoot to introduce add-ons in the motor insurance segment. “We are in the process of filing for motor insurance add-ons (additional benefits such as depreciation waiver, road side assistance),” Mr Narayanan said.
Motor insurance
He said that motor insurance would continue to be the main source of revenue for the company in the current fiscal as well. Last year, motor insurance accounted for 45 per cent of the premium income of the company, a trend in line with national average.
Mr Narayanan also felt that the recent hardening of interest rates would to some extent have an impact on premium incomes. “But, even if car sales dip, premium may not dip in the same ratio as car prices are on the rise, ” he said.
Meanwhile, the company plans to roll out more micro-insurance products and also utilise the cooperatives network to extend these products to semi-urban and rural areas.
“We have two micro-insurance products already put on the market. We are working on few more with more variation,” he said.
On initiatives for simplification of procedures, Mr Narayanan said that the company was working, on an experimental basis, on electronic settlement of claims.
Source: The Hindu Business Line
METLIFE TECH MOVE
Metlife India Insurance has launched Metlife integrated voice response application (MIVRA), a technology platform, which would help customers obtain information about their insurance plan and other details round the clock. MIVRA, designed to expand the access of opportunities to more customers, raise the efficiency bar of the service levels and reduces costs for the organisation, the insurer said in a statement.Source: Deccan Chronicle, The Telegraph
BAJAJ ALLIANZ LIFE REGISTERS RS 3 CRORE LOSS IN THE FIRST QUARTER
Bajaj Allianz Life Insurance Company Limited (BALIC) has posted a loss of Rs 3 crore for the period ended June 30, 2008, as compared to a profit of Rs 31 crore in the corresponding period of the previous year. The policyholder surplus is Rs 67 crore, as against Rs. 71 crore for the previous year's corresponding quarter and the shareholder loss stands at Rs 70 crore, as compared to the loss of Rs 40 crore for the same period last year. During the quarter, intense competition amongst private players has resulted in increased payouts of commission to agents. BALIC has adopted a wait and watch policy and not increased commissions to safeguard long-term profitability, a company statement said.
The gross written premium was Rs 1,847 crore in the first quarter 2008-09, as compared to Rs 1,060 crore in the first quarter 2007-08, a growth of 74%. New business premiums was Rs 764 crore in the first quarter, as compared to Rs 658 crore in the same quarter last year, showing a growth of 16%.
The company's overall market share for the period ended May 31, 2008 was 5.98%, as compared to 5.57% in the same time last year.
Bajaj Allianz General Insurance Company Limited has reported a PAT of Rs 7 crore in the first quarter 2008-09, as against Rs 13 crore during the first quarter 2007-08. The company had an underwriting loss of Rs 24 crore in the first three months of 2008-09, as against a profit of Rs 3 crore in the same period last year. The major reason for this is the increase in the loss ratio arising out of certain large losses in the first two months of the year, a company statement said.
Due to heavy discounting in corporate lines, the company's focus has shifted towards retail. Motor insurance constituted 57% of the total portfolio, property and engineering 18%, as against 27% in the same period last year. The gross written premiums was Rs 734 crore in this quarter.
Source: The Financial Express
PVT BANKS, INSURERS GAIN CONSUMER CONFIDENCE
Mumbai: Indian consumer confidence in private banks has in creased in the past three years, helping them gain market share in a retail financial industry that is still transiting from public sector monopolies to a more open and competitive market, research firm IIMS Dataworks says.
IIMS Dataworks, in an analysis based on its Invest India Incomes and Savings Survey of last year, found that between 2004 and 2007, consumer confidence in government-run banks fell.
But there was one sterling exception: State Bank of India, or SBI, the country’s largest lender.
“In the case of retail banks, in locations such as Delhi, Punjab and Tamil Nadu, the rise in confidence in private banks was dramatic, while in others such as Assam, Chhattisgarh and Gujarat, progress has been more muted,” the firm said in a report.
The findings point to a shift in the consumer perception of a financial industry where the public sector accounts for three-fourths of banking assets.
As a pointer to how the consumer mindset is shifting, the findings are important for financial firms that invest in brand building to retain customers and attract new ones.
In the past three years, the cooperative banking sector was the big loser in the public confidence stakes, with its share of the retail customer base almost halving to 16.4% from 31.3%, IIMS Dataworks found. An overwhelming majority of the deserters moved to public-sector commercial banks, it said.
The total public sector customer base grew by 29% between 2004 and 2007, outpaced by a 35% increase in that of lenders operating outside of government control, it said.
But the retail customer share of public sector banks widened to 75.4% from 61.5%; that of private banks grew to 8.3% from 7.2%.
India’s demographics, skewed towards younger wage earners, favour private banks, says Kiran Khalap, founder of Chlorophyll Brand Consultancy. This generation of Indians “do not look for security in either their life, jobs or investments,” Khalap says.
“Naturally, they do not seek the safety of a public sector bank; they prefer the younger private and international brands.” In the insurance industry, too, private companies enjoyed a lift in public confidence levels between 2004 and 2007, according to the report.
But that didn’t translate into a fall in public confidence in state-owned Life Insurance Corp. of India, or LIC.
“Private banks, private insurance players and foreign banks are stressing on brand building and more than that, delivery on ground and professionalism which has worked well for them,” says Mahesh Chauhan, president of the advertising agency Rediffusion DY&R Pvt. Ltd.
SBI and LIC are exceptions in the public sector because they are “larger than life” and have government backing, Chauhan adds.
Source: Mint
IIMS Dataworks, in an analysis based on its Invest India Incomes and Savings Survey of last year, found that between 2004 and 2007, consumer confidence in government-run banks fell.
But there was one sterling exception: State Bank of India, or SBI, the country’s largest lender.
“In the case of retail banks, in locations such as Delhi, Punjab and Tamil Nadu, the rise in confidence in private banks was dramatic, while in others such as Assam, Chhattisgarh and Gujarat, progress has been more muted,” the firm said in a report.
The findings point to a shift in the consumer perception of a financial industry where the public sector accounts for three-fourths of banking assets.
As a pointer to how the consumer mindset is shifting, the findings are important for financial firms that invest in brand building to retain customers and attract new ones.
In the past three years, the cooperative banking sector was the big loser in the public confidence stakes, with its share of the retail customer base almost halving to 16.4% from 31.3%, IIMS Dataworks found. An overwhelming majority of the deserters moved to public-sector commercial banks, it said.
The total public sector customer base grew by 29% between 2004 and 2007, outpaced by a 35% increase in that of lenders operating outside of government control, it said.
But the retail customer share of public sector banks widened to 75.4% from 61.5%; that of private banks grew to 8.3% from 7.2%.
India’s demographics, skewed towards younger wage earners, favour private banks, says Kiran Khalap, founder of Chlorophyll Brand Consultancy. This generation of Indians “do not look for security in either their life, jobs or investments,” Khalap says.
“Naturally, they do not seek the safety of a public sector bank; they prefer the younger private and international brands.” In the insurance industry, too, private companies enjoyed a lift in public confidence levels between 2004 and 2007, according to the report.
But that didn’t translate into a fall in public confidence in state-owned Life Insurance Corp. of India, or LIC.
“Private banks, private insurance players and foreign banks are stressing on brand building and more than that, delivery on ground and professionalism which has worked well for them,” says Mahesh Chauhan, president of the advertising agency Rediffusion DY&R Pvt. Ltd.
SBI and LIC are exceptions in the public sector because they are “larger than life” and have government backing, Chauhan adds.
Source: Mint
ARIBA IN TALKS WITH INSURERS, BANKS
Mumbai: Faced with pressure on profits due to rising interest charges, banks and financial services companies are looking at deploying spend management solutions to cut costs. Spend management can help banks, financial services and insurance companies, which are generally topline and growth focused, to cut costs, said Mr Thulasidoss Sivakumar, Group Director – South Asia, Ariba Solutions, provider of spend management solutions.Ariba, which already provides services to insurance companies such as ICICI Prudential, ICICI Lombard, Aviva India and HDFC Standard Life, is also in talks with some Indian banks, he said.
“The banking sector is traditionally focused on growth and increasing their reach through branches and introducing new products. For majority of the banks about 30-40 per cent of revenues go into spending. With the increase in interest rates and pressure on margins, banks are also looking costs through spend management,” Mr Sivakumar said.
Some areas where banks incur huge costs are marketing, postage and courier, IT and technology such as ATM machines, printing machines, note-counting machines and also on furniture in case of branch expansion.
“A large bank in India spends about Rs 2,000-4000 crore every year. If spends are managed efficiently, a bank can save about 10-15 per cent across various categories,” Mr Sivakumar said.
Source: The Hindu Business Line
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