Finance minister Palaniappan Chidambaram has pulled up the four state-owned general insurance companies (GICs), which have rapidly lost market share to their private sector counterparts.
Over the past seven years since the sector’s liberalisation, the 12 private sector general insurers have cornered over 40% market share in the Rs 28,130-crore industry. They consistently gained 5% market share every year since they were allowed to undertake general insurance business.
Chidambaram had met the chiefs of the four general insurers--New India Assurance, Oriental Insurance, United Insurance and National Insurance—to review their performance recently. However, he was reportedly unhappy that despite a strong manpower base and national branch network, they continued to lose substantial market share.
“The finance minister sat patiently through the presentations made by us, and at the end gave his critical comments about our functioning,’’ said the chief of a state-owned general insurance company, requesting anonymity. The FM stressed that state-owned general insurers have to improve their performance, he added.
In last year’s review meeting, the FM held up as an example the performance of Life Insurance Corporation (LIC), which, he said, had given the private sector life insurers a tough fight to retain market share. This year, however, the FM was silent on LIC, as the behemoth had also seen severe erosion of its market share in 2007-08, said the insurance company chairman.
Oriental Insurance has lost 2% market share and is down to 13.7%; New India Assurance, the country’s largest general insurer, has seen its market share erode 1.35% to 18.75%.
Significantly, the launch of detariffing—where general insurers are allowed competitive pricing—was expected to benefit the public sector firms as they are in a much better position to offer competitive pricing due to their large balance sheet size.
“Detariffing, sought by the public sector players from the Insurance Regulatory & Development Authority to taken on private sector competitors, does not seem to have been the expected boon,’’ said GV Rao, a former chairman of Oriental Insurance. In one of the most expensive exercises among public sector companies, the four state-run general insurers engaged Boston Consulting Group and PricewaterhouseCoopers at a cost of around Rs 64 crore to chart out their future course of action.
The consultants have already submitted their reports and the firms are currently preparing to implement their wide-ranging recommendations. “However, even that is unlikely to provide too many advantages to these companies in regaining their market share,’’ said Rao.
Source: Sitanshu Swain
The Financial Express
Tuesday, July 15, 2008
NEW INSURANCE PRODUCT FOR EXPAT INDIANS
Dubai: LIC (International), the global subsidiary of India’s Life Insurance Corporation, has launched a new insurance product targeted at expatriate Indians.
Called Fortune Builder, it is a new units-linked insurance plan (ULIP) launched to mark the company's 20th year of operations in the Gulf.
“The new product will cater to the investment as well as insurance needs of the customers,” reports quoted Sudhin Roy Chowdhury, LIC (International)’s managing director and chief executive, as saying in Doha.
“The product is a multi-benefit ULIP providing an opportunity to benefit from the returns available in the Indian capital market as well as across the globe. It is positioned as a wealth generation tool that simultaneously offers life insurance protection,” he added.
Fortune Builder has three products - one aimed at the Indian equity market, another at the world market and a third flexible one.
“It also provides an option to take back your money systematically over a period of five years on maturity of the policy. The premium paying terms are also highly flexible,” Chowdhury said.
The Gulf is home to around 4.6 million expatriate Indians and around 200,000 of them live in Qatar.
According to Chowdhury, LIC (international) has sold 128,446 policies for an insurance cover of $1.08 billion in the region.
Contributions to ULIP products from the Gulf last year amounted to Rs.20 billion. The insurance company is also tying up with Doha Bank so that customers can get both banking and insurance products through a single window.
Source: The Economic Times, Daily News & Analysis
Called Fortune Builder, it is a new units-linked insurance plan (ULIP) launched to mark the company's 20th year of operations in the Gulf.
“The new product will cater to the investment as well as insurance needs of the customers,” reports quoted Sudhin Roy Chowdhury, LIC (International)’s managing director and chief executive, as saying in Doha.
“The product is a multi-benefit ULIP providing an opportunity to benefit from the returns available in the Indian capital market as well as across the globe. It is positioned as a wealth generation tool that simultaneously offers life insurance protection,” he added.
Fortune Builder has three products - one aimed at the Indian equity market, another at the world market and a third flexible one.
“It also provides an option to take back your money systematically over a period of five years on maturity of the policy. The premium paying terms are also highly flexible,” Chowdhury said.
The Gulf is home to around 4.6 million expatriate Indians and around 200,000 of them live in Qatar.
According to Chowdhury, LIC (international) has sold 128,446 policies for an insurance cover of $1.08 billion in the region.
Contributions to ULIP products from the Gulf last year amounted to Rs.20 billion. The insurance company is also tying up with Doha Bank so that customers can get both banking and insurance products through a single window.
Source: The Economic Times, Daily News & Analysis
BANKS ASKING BORROWERS TO BUY INSURANCE
Hyderabad: Several loan-seekers from banks are finding themselves in a tricky situation as they are being asked to go in for an insurance policy to enhance the ‘chances’ of loan approval. The policy is on the life of the borrower against accident and other risks.
The sale of insurance by banks is seen more in the case of those banks that have an insurance arm of their own or that are marketing the products of an insurance provider, according to sources.
While some see reason in taking an insurance cover, others feel they are being ‘coerced’ into it by banks — this is against the norms set by Insurance Regulatory and Development Authority .
“I was forced to go for a shield policy when I took a personal loan of Rs 1.3 lakh by a branch manager of a public sector bank, which cost me about Rs 12,000. I was told that the loan application would be approved only if I go for it,” Mr P. Muneeswara Rao, a small-time employee in IDL here told Business Line.
Mr Sesha Rao, a software professional with Google, agrees: “When I approached State Bank of India for a housing loan of Rs 25 lakh, I was told curtly to buy insurance as well, though I have a very reasonable cover for life.”.
Further, the customers are also denied choice. “Even though I have many insurance polices, I was made to go for another policy when I took a home loan from ICICI Bank,” Mr Ravi, an IT professional working for Computer Associates, said.
Coercion clause
Interestingly, the loan application forms of some banks indeed carry a column for insurance that even says explicitly that “efforts will be made to pursue the loanee to go for insurance”.
Bancassurance pressure
According to experts, the pressure on bank officials to sell bancassurance products to increase the fee-based income and the safe recovery of loan amount, among others, are resulting in the trend.
“It is a fact that some pressure is put on the loan applicants for insurance. It sure is a drain on the purse for them but its adds to our performance if we could convince them to go for insurance cover,” an official of a leading private bank said.
Source: G. Naga Sridhar
The Hindu Business Line
The sale of insurance by banks is seen more in the case of those banks that have an insurance arm of their own or that are marketing the products of an insurance provider, according to sources.
While some see reason in taking an insurance cover, others feel they are being ‘coerced’ into it by banks — this is against the norms set by Insurance Regulatory and Development Authority .
“I was forced to go for a shield policy when I took a personal loan of Rs 1.3 lakh by a branch manager of a public sector bank, which cost me about Rs 12,000. I was told that the loan application would be approved only if I go for it,” Mr P. Muneeswara Rao, a small-time employee in IDL here told Business Line.
Mr Sesha Rao, a software professional with Google, agrees: “When I approached State Bank of India for a housing loan of Rs 25 lakh, I was told curtly to buy insurance as well, though I have a very reasonable cover for life.”.
Further, the customers are also denied choice. “Even though I have many insurance polices, I was made to go for another policy when I took a home loan from ICICI Bank,” Mr Ravi, an IT professional working for Computer Associates, said.
Coercion clause
Interestingly, the loan application forms of some banks indeed carry a column for insurance that even says explicitly that “efforts will be made to pursue the loanee to go for insurance”.
Bancassurance pressure
According to experts, the pressure on bank officials to sell bancassurance products to increase the fee-based income and the safe recovery of loan amount, among others, are resulting in the trend.
“It is a fact that some pressure is put on the loan applicants for insurance. It sure is a drain on the purse for them but its adds to our performance if we could convince them to go for insurance cover,” an official of a leading private bank said.
Source: G. Naga Sridhar
The Hindu Business Line
INSURANCE FIRMS CAN'T REASSESS CAR VALUE
New Delhi: Insurance companies that reassess the market value of a car after theft or damage due to accident, can no longer do so. State consumer commission in a recent order stated that cost of the vehicle assessed at the time of issuing the insurance policy and charged the corresponding premium stands even after theft or damage.
Justice J D Kapoor added, "Insurance contract, once concluded, cannot be re-opened again. At the most insurance companies can deduct the depreciated value of the vehicle at 5% or 10%."
These observations were made in a case where a second-hand Toyota Qualis was purchased by complainant Mahjabi from Sunita Devi at a cost of Rs 5.2 lakh. Mahjabi then arranged for an insurance cover with Oriental Insurance Company effective for a year from 2002-2003 fixed at Rs 4.8 lakh. On 16 November, 2002, the vehicle met with an accident, but the insurance firm rejected the claim on the ground that the original owner did not give any authority to the purchaser.
Source: Deeksha Chopra
The Times of India
Justice J D Kapoor added, "Insurance contract, once concluded, cannot be re-opened again. At the most insurance companies can deduct the depreciated value of the vehicle at 5% or 10%."
These observations were made in a case where a second-hand Toyota Qualis was purchased by complainant Mahjabi from Sunita Devi at a cost of Rs 5.2 lakh. Mahjabi then arranged for an insurance cover with Oriental Insurance Company effective for a year from 2002-2003 fixed at Rs 4.8 lakh. On 16 November, 2002, the vehicle met with an accident, but the insurance firm rejected the claim on the ground that the original owner did not give any authority to the purchaser.
Source: Deeksha Chopra
The Times of India
DRIVING YOUR VEHICLE ON THE RIGHT MOTOR INSURANCE
One of the good things about the privatisation in insurance sector is that there is plenty of competition and, hence, a wider choice for consumers.
As you would have noticed, this has also helped expand the market for motor insurance Still, many vehicle owners tend to ignore the issue despite motor insurance being an integral part of vehicle management. In fact, vehicle owners are not even aware of their policy details and get into trouble at the time of claims.
What car or two-wheeler owners need to know are the types of a vehicle policy so that they can choose the one they think is best suited for their vehicle:
Comprehensive policy
A comprehensive policy takes care of all damages to the vehicle, right from theft to small dents. Such a policy would protect the vehicle owner from different types of damages, like the ones from rains or floods.
Because of its broad nature, a comprehensive policy is also more expensive but - financially - this would be more prudent than a mere third-party insurance policy.
Third-party policy
As the name suggests, a third-party insurance policy only covers the damages resulting out of the actions of a third party. As a result, the policy is much cheaper but is not full-proof. A classic case is the growing traffic problems in major cities of India where it has become difficult for vehicle owners not to have dents in their vehicles.
Accident policies
In recent times, there has been a growing popularity for accident insurance policies.
This can be an additional option for vehicle owners as none of the existing motor policies ensure protection from the inevitable loss of salary income that arises out of an accident.
A personal accident cover can take care of medical expenses arising out of a mishap which, in turn, reduces the cash outflow for the policy-holder in the event of an accident. In combination with other motor policies, this can provide better risk protection for vehicle owners.
Do remember that one also needs to follow certain guidelines for a motor insurance. The pre-requisite is the discipline needed in respect to premium payments.
Unlike other insurance products - such as life or health policies - a motor insurance does not allow the luxury of grace period for premium payment and, hence, one needs to keep in mind the due date for premium payments.
Source: Srikala Bhashyam
Mumbai Mirror
As you would have noticed, this has also helped expand the market for motor insurance Still, many vehicle owners tend to ignore the issue despite motor insurance being an integral part of vehicle management. In fact, vehicle owners are not even aware of their policy details and get into trouble at the time of claims.
What car or two-wheeler owners need to know are the types of a vehicle policy so that they can choose the one they think is best suited for their vehicle:
Comprehensive policy
A comprehensive policy takes care of all damages to the vehicle, right from theft to small dents. Such a policy would protect the vehicle owner from different types of damages, like the ones from rains or floods.
Because of its broad nature, a comprehensive policy is also more expensive but - financially - this would be more prudent than a mere third-party insurance policy.
Third-party policy
As the name suggests, a third-party insurance policy only covers the damages resulting out of the actions of a third party. As a result, the policy is much cheaper but is not full-proof. A classic case is the growing traffic problems in major cities of India where it has become difficult for vehicle owners not to have dents in their vehicles.
Accident policies
In recent times, there has been a growing popularity for accident insurance policies.
This can be an additional option for vehicle owners as none of the existing motor policies ensure protection from the inevitable loss of salary income that arises out of an accident.
A personal accident cover can take care of medical expenses arising out of a mishap which, in turn, reduces the cash outflow for the policy-holder in the event of an accident. In combination with other motor policies, this can provide better risk protection for vehicle owners.
Do remember that one also needs to follow certain guidelines for a motor insurance. The pre-requisite is the discipline needed in respect to premium payments.
Unlike other insurance products - such as life or health policies - a motor insurance does not allow the luxury of grace period for premium payment and, hence, one needs to keep in mind the due date for premium payments.
Source: Srikala Bhashyam
Mumbai Mirror
LIC MOVES TO CURB FRAUDULENT CLAIMS
Chennai: The state-owned life insurer Life Insurance Corporation of India (LIC) has decided to introduce strict norms for agents in a move to arrest fraudulent and early claims (arising after first year of the policy). The corporation found that early claims arose due to poor underwriting and moral hazards.
A senior LIC executive said the corporation had identified agents with a high incidence of early claims.
An index file called "watch-listed agents" has been created to track these agents' records. Whenever a new business proposal is registered by these agents, a message will flash on the screen saying "the agent has a history of adverse early claim experience".
The corporation has looked into agent-wise early claim ratios for the last 4 years and zeroed in on 1,767 agents after getting confirmation from the respective branches.
Every claim has been a matter of great concern for the corporation. In 2006-07, LIC settled total claims worth over Rs 127.93 crore. The corporation settles more than 45,800 claims on every working day or 2.21 claims a second.
Several analytical exercises have been carried out at various levels to understand the pattern behind early claims and pinpoint the sources of leakage. The corporation has centralised its claim processing system to manage claims worth over Rs 20,000 crore out of the total one crore policies annually.
LIC has introduced differential underwriting rules for watch-listed agents. Proposals submitted by such agents would be registered only after 100 per cent implementation of know your customer (KYC) norms.
Such agents will only be allowed to procure business under the medical and non-medical (special) categories, but not under the non-medical (general) category.
If the case is non-medical (special), a duly signed certificate will have to be procured from the employer of the prospective policy buyer and attached with the records of leave taken on medical grounds in the last five years.
Medical examinations would have to be conducted by third party administrators (TPAs), irrespective of the sum assured, or by examiners and specialists in the LIC panel in the absence of TPAs.
The policy buyer must provide his photo identity during the medical examination. The policy documents will be handed to the insured on the basis of photo identification or sent by post.
Source: T E Narasimhan
Business Standard
A senior LIC executive said the corporation had identified agents with a high incidence of early claims.
An index file called "watch-listed agents" has been created to track these agents' records. Whenever a new business proposal is registered by these agents, a message will flash on the screen saying "the agent has a history of adverse early claim experience".
The corporation has looked into agent-wise early claim ratios for the last 4 years and zeroed in on 1,767 agents after getting confirmation from the respective branches.
Every claim has been a matter of great concern for the corporation. In 2006-07, LIC settled total claims worth over Rs 127.93 crore. The corporation settles more than 45,800 claims on every working day or 2.21 claims a second.
Several analytical exercises have been carried out at various levels to understand the pattern behind early claims and pinpoint the sources of leakage. The corporation has centralised its claim processing system to manage claims worth over Rs 20,000 crore out of the total one crore policies annually.
LIC has introduced differential underwriting rules for watch-listed agents. Proposals submitted by such agents would be registered only after 100 per cent implementation of know your customer (KYC) norms.
Such agents will only be allowed to procure business under the medical and non-medical (special) categories, but not under the non-medical (general) category.
If the case is non-medical (special), a duly signed certificate will have to be procured from the employer of the prospective policy buyer and attached with the records of leave taken on medical grounds in the last five years.
Medical examinations would have to be conducted by third party administrators (TPAs), irrespective of the sum assured, or by examiners and specialists in the LIC panel in the absence of TPAs.
The policy buyer must provide his photo identity during the medical examination. The policy documents will be handed to the insured on the basis of photo identification or sent by post.
Source: T E Narasimhan
Business Standard
PAY INSURANCE MONEY EVEN WHEN VEHICLE IS USED FOR MURDER: COURT
Madurai: An automobile insurance company is liable to pay third party insurance not only for accidental death but also when the vehicle had been intentionally used to murder a person, the Madras High Court has ruled.
Dismissing a Civil Appeal petition filed by National Insurance Company Limited before the Madurai Bench, Justice M. Venugopal said that the words “accident arising out of use of a motor vehicle” in Section 165 of the Motor Vehicles Act should be given an extended meaning and not a narrow one.
The judge pointed out that Halsbury’s Laws of England, Fourth Edition, defined the term ‘accident’ as covering any unlooked for mishap or an untoward event, which was not expected or designed, or any unexpected personal injury resulting from any unlooked for mishap or occurrence. It further stated that “the test of what is unexpected is whether the ordinary reasonable man would not have expected the occurrence, it being irrelevant that a person with expert knowledge, for example of medicine, would have regarded it as inevitable. The standpoint is that of the victim, so that even wilful murder may be accidental as far as the victim is concerned.”
The judge recalled that in 1910, a cashier while travelling in a train to a colliery with a large sum of money, for the payment of his employer’s workmen, was robbed and murdered. Dealing with the case, reported as Nisbet Vs. Rayne and Burn, the then Court of Appeal held that the murder shall be treated as an accident and also that it arose out of employment.
Striking a comparison, Mr. Justice Venugopal said that in the present case a retired agricultural officer in Tuticorin was allegedly killed by ramming a tanker lorry owing to previous enmity between him and another person. “The wilful murder of the deceased is an unexpected happening and, therefore, this court opines that it is an accident arising out of the use of the motor vehicle,” he added.
Consequently, the judge confirmed a compensation of Rs.2,97,500 awarded by the Motor Accident Claims Tribunal in Tuticorin to the wife and two children of the deceased as against their claim of Rs.18,06,000, which was later reduced to Rs.6 lakh.
Source: Mohamed Imranullah S.
The Hindu
Dismissing a Civil Appeal petition filed by National Insurance Company Limited before the Madurai Bench, Justice M. Venugopal said that the words “accident arising out of use of a motor vehicle” in Section 165 of the Motor Vehicles Act should be given an extended meaning and not a narrow one.
The judge pointed out that Halsbury’s Laws of England, Fourth Edition, defined the term ‘accident’ as covering any unlooked for mishap or an untoward event, which was not expected or designed, or any unexpected personal injury resulting from any unlooked for mishap or occurrence. It further stated that “the test of what is unexpected is whether the ordinary reasonable man would not have expected the occurrence, it being irrelevant that a person with expert knowledge, for example of medicine, would have regarded it as inevitable. The standpoint is that of the victim, so that even wilful murder may be accidental as far as the victim is concerned.”
The judge recalled that in 1910, a cashier while travelling in a train to a colliery with a large sum of money, for the payment of his employer’s workmen, was robbed and murdered. Dealing with the case, reported as Nisbet Vs. Rayne and Burn, the then Court of Appeal held that the murder shall be treated as an accident and also that it arose out of employment.
Striking a comparison, Mr. Justice Venugopal said that in the present case a retired agricultural officer in Tuticorin was allegedly killed by ramming a tanker lorry owing to previous enmity between him and another person. “The wilful murder of the deceased is an unexpected happening and, therefore, this court opines that it is an accident arising out of the use of the motor vehicle,” he added.
Consequently, the judge confirmed a compensation of Rs.2,97,500 awarded by the Motor Accident Claims Tribunal in Tuticorin to the wife and two children of the deceased as against their claim of Rs.18,06,000, which was later reduced to Rs.6 lakh.
Source: Mohamed Imranullah S.
The Hindu
RISK FIRMS BET BIG IN DALAL STREET
Mumbai/Kolkata: LIC, ICICI Prudential invest Rs 13,000 crore and Rs 2,000 crore respectively in the first quarter of FY09.
Insurance companies have emerged as the big boys of Dalal Street with Life Insurance Corporation (LIC) alone investing around Rs 13,000 crore in the first quarter of 2008-09.
The largest private insurer ICICI Prudential bought equity worth Rs 2,000 crore during the same period.
According to Sebi data, foreign institutional investors have sold Rs 14,000 crore in the first quarter this year.
There is no data on the equity investments of life insurance companies as a whole. But they have been the biggest buyers among the domestic institutions, according to company executives.
With insurance companies reporting sustained double-digit growth in new sales and unit-linked insurance plans (Ulips) holding their own, the investment from the segment continues to remain robust.
"We look at the long term economic growth prospects for India. We do not take long-term equity buying decisions based on short-term volatility," said ICICI Prudential Life Insurance Executive Director NS Kannan.
"We will confine (our purchases) to NSE's CNX-Nifty and junior Nifty," added an LIC executive.
LIC is expected to invest around Rs 60,000 crore in the stock markets this year compared to around Rs 42,000 crore in 2007-08. Its investible corpus is expected to climb up from last year's Rs 1,50,000 crore to over Rs 1,75,000 crore this year.
A Bajaj Allianz Life Insurance executive said the company is hoping to invest around Rs 2,000 crore in equities during the current financial year.
Max New York Life has invested around Rs 500 crore in equities so far this year and expects to invest a similar amount till December.
Max New York Life Managing Director & Chief Executive Officer (CEO) Gary R Bennett said the bias in favour of equity was still strong.
"Currently, we are noticing a strange phenomenon. Our customers are increasingly switching from balanced options to equity, as the general expectation is that the market has bottomed out," added SBI Life Managing Director & CEO US Roy.
"A bear market cycle is a fantastic buying opportunity, subject to the right choice. In the first six months of this year, Ulips constituted 85 per cent of the products sold by us," Bennett told Business Standard.
Source: Falaknaaz Syed/Niladri Bhattacharya
Business Standard
Insurance companies have emerged as the big boys of Dalal Street with Life Insurance Corporation (LIC) alone investing around Rs 13,000 crore in the first quarter of 2008-09.
The largest private insurer ICICI Prudential bought equity worth Rs 2,000 crore during the same period.
According to Sebi data, foreign institutional investors have sold Rs 14,000 crore in the first quarter this year.
There is no data on the equity investments of life insurance companies as a whole. But they have been the biggest buyers among the domestic institutions, according to company executives.
With insurance companies reporting sustained double-digit growth in new sales and unit-linked insurance plans (Ulips) holding their own, the investment from the segment continues to remain robust.
"We look at the long term economic growth prospects for India. We do not take long-term equity buying decisions based on short-term volatility," said ICICI Prudential Life Insurance Executive Director NS Kannan.
"We will confine (our purchases) to NSE's CNX-Nifty and junior Nifty," added an LIC executive.
LIC is expected to invest around Rs 60,000 crore in the stock markets this year compared to around Rs 42,000 crore in 2007-08. Its investible corpus is expected to climb up from last year's Rs 1,50,000 crore to over Rs 1,75,000 crore this year.
A Bajaj Allianz Life Insurance executive said the company is hoping to invest around Rs 2,000 crore in equities during the current financial year.
Max New York Life has invested around Rs 500 crore in equities so far this year and expects to invest a similar amount till December.
Max New York Life Managing Director & Chief Executive Officer (CEO) Gary R Bennett said the bias in favour of equity was still strong.
"Currently, we are noticing a strange phenomenon. Our customers are increasingly switching from balanced options to equity, as the general expectation is that the market has bottomed out," added SBI Life Managing Director & CEO US Roy.
"A bear market cycle is a fantastic buying opportunity, subject to the right choice. In the first six months of this year, Ulips constituted 85 per cent of the products sold by us," Bennett told Business Standard.
Source: Falaknaaz Syed/Niladri Bhattacharya
Business Standard
INVESTORS SEEK RELIEF IN INSURANCE PRODUCTS
New Delhi: Indian investors are now seeking refuge in insurance products. With diminishing returns coming from equities and mutual funds, the life insurance industry has seen a sudden jump in sales activity during the first two months of the current fiscal. Cashing in on this uncertainty in the capital markets, insurance companies are now coming up with different variants of both traditional policies and Unit Linked Insurance Plans (Ulips).
Typically, the first six months of a financial year is seen as a lean period for the life insurance industry, and majority of the sales occur in the second half when people buy insurance policies to claim tax deductions. In fact, the life insurance companies are also looking at the current market scenario as an opportunity to increase its manpower, which they feel will benefit them during the second half of the current fiscal.
During the first two-months of current fiscal 2008-09, the life insurance sector collected fresh individual premium worth Rs 6,436 crore, an increase of almost 6% from Rs 6,091 crore premium collected during the same period previous year, as per the latest insurance regulator, Insurance Regulatory and Development Authority (IRDA) figures.
Says, Gaurang Shah, MD, Kotak Mahindra Old Mutual Life Insurance: “Given the current volatility, insurance as an investment ranks high on a risk-return matrix because of its long-term nature. We’re looking at this as an opportunity in disguise. In fact, we’re already in a hiring mode and are currently working on launching new products, which are a balance between traditional products and Unit Linked Policies (Ulips).”
With the regular individual premium collections for the said period increasing by more than 8%, insurance companies believe that the lean phase may well set the stage for coming months, when the activity heightens in this space. Concurs Prashant Tripathy, executive vice-president, strategic initiatives and business development, Max New York Life insurance: “We’ve achieved a growth rate of 90% in the last five months. Currently, we’re strengthening our product portfolio and the focus right now is towards those policies which provide some kind of capital guarantee to the customers.” Mr Tripathy feels that if the current volatility continues for another six months, the sales volumes of the insurance companies may also get affected. “But right now, we’ve yet to see any slack,” he asserts.
According to N S Kannan, executive director, ICICI Prudential Life Insurance, the industry has remained passive to any volatility in the markets because insurance is a long-term investment. “The fundamentals of the Indian economy are still strong and there are no doubts that the life insurance industry will continue its march forward. We expect life insurance space to grow by more than 40% this financial year. Probably, the stage is now set for secondgeneration Ulip products,” he says.
A similar optimist view is shared by ING Vysya Life Insurance, which has achieved a growth rate of 50% during the first five months of 2008. Says, Amit Gupta, director, marketing, ING Vysya: “There’s no letdown in advertising budget or hiring plans. If this slowdown continues for some more months, there can be a slowdown in Ulip products but then you’ll see the sales of traditional products going up.”
S B Mathur, secretary general, Life Insurance Council, believes that the stage has come for the insurance industry to introduce more innovative products besides Ulips. “This is the right time for insurance industry to focus on other traditional products. The next few months will see insurance companies coming up with more unique policies,” he says.
Sameer Bali, partner, Ernst & Young India, however, feels that the recent surge in the life insurance volumes is more a result of the private life insurers bearing fruit for tapping into new markets and the infrastructure they had set up in the last year or so.
“This scramble for people and resources will continue. Every private company is currently busy establishing base for future expansion. This, in fact, will set the tone for future action in the life insurance segment,” he says.
According to Associated Chambers of Commerce and Industry of India (ASSOCHAM), the life insurance industry in India will witness an increase of almost 500% in the size of its business which will grow to $60 billion (Rs 2,40,000 crore) by 2010 from the current size of around $10 billion (Rs 40,000 crore) as the growing competitive age is developing a larger appetite among people for wider insurance coverage.
Source: Aman Dhall & Dheeraj Tiwari
The Economic Times
Typically, the first six months of a financial year is seen as a lean period for the life insurance industry, and majority of the sales occur in the second half when people buy insurance policies to claim tax deductions. In fact, the life insurance companies are also looking at the current market scenario as an opportunity to increase its manpower, which they feel will benefit them during the second half of the current fiscal.
During the first two-months of current fiscal 2008-09, the life insurance sector collected fresh individual premium worth Rs 6,436 crore, an increase of almost 6% from Rs 6,091 crore premium collected during the same period previous year, as per the latest insurance regulator, Insurance Regulatory and Development Authority (IRDA) figures.
Says, Gaurang Shah, MD, Kotak Mahindra Old Mutual Life Insurance: “Given the current volatility, insurance as an investment ranks high on a risk-return matrix because of its long-term nature. We’re looking at this as an opportunity in disguise. In fact, we’re already in a hiring mode and are currently working on launching new products, which are a balance between traditional products and Unit Linked Policies (Ulips).”
With the regular individual premium collections for the said period increasing by more than 8%, insurance companies believe that the lean phase may well set the stage for coming months, when the activity heightens in this space. Concurs Prashant Tripathy, executive vice-president, strategic initiatives and business development, Max New York Life insurance: “We’ve achieved a growth rate of 90% in the last five months. Currently, we’re strengthening our product portfolio and the focus right now is towards those policies which provide some kind of capital guarantee to the customers.” Mr Tripathy feels that if the current volatility continues for another six months, the sales volumes of the insurance companies may also get affected. “But right now, we’ve yet to see any slack,” he asserts.
According to N S Kannan, executive director, ICICI Prudential Life Insurance, the industry has remained passive to any volatility in the markets because insurance is a long-term investment. “The fundamentals of the Indian economy are still strong and there are no doubts that the life insurance industry will continue its march forward. We expect life insurance space to grow by more than 40% this financial year. Probably, the stage is now set for secondgeneration Ulip products,” he says.
A similar optimist view is shared by ING Vysya Life Insurance, which has achieved a growth rate of 50% during the first five months of 2008. Says, Amit Gupta, director, marketing, ING Vysya: “There’s no letdown in advertising budget or hiring plans. If this slowdown continues for some more months, there can be a slowdown in Ulip products but then you’ll see the sales of traditional products going up.”
S B Mathur, secretary general, Life Insurance Council, believes that the stage has come for the insurance industry to introduce more innovative products besides Ulips. “This is the right time for insurance industry to focus on other traditional products. The next few months will see insurance companies coming up with more unique policies,” he says.
Sameer Bali, partner, Ernst & Young India, however, feels that the recent surge in the life insurance volumes is more a result of the private life insurers bearing fruit for tapping into new markets and the infrastructure they had set up in the last year or so.
“This scramble for people and resources will continue. Every private company is currently busy establishing base for future expansion. This, in fact, will set the tone for future action in the life insurance segment,” he says.
According to Associated Chambers of Commerce and Industry of India (ASSOCHAM), the life insurance industry in India will witness an increase of almost 500% in the size of its business which will grow to $60 billion (Rs 2,40,000 crore) by 2010 from the current size of around $10 billion (Rs 40,000 crore) as the growing competitive age is developing a larger appetite among people for wider insurance coverage.
Source: Aman Dhall & Dheeraj Tiwari
The Economic Times
GOVT WANTS INSURANCE BILL TO BE PASSED: FM
New Delhi: Finance Minister P Chidambaram on Saturday expressed hope that insurance bill, which envisages among other things raising FDI limit in the sector to 49 per cent, would be passed by Parliament in this term of the government. "As far as insurance is concerned, it is still on our agenda, we want the insurance bill to be passed... I have hope this bill will be passed in the term of this government," Chidambaram said.
He also noted that the bill has already been passed by the Parliamentary Standing Committee, which had objections to one or two clauses. He further added that "I have asked the Left to clear it".
The Left parties, which have been opposing government's proposal to raise the FDI limit in the sector from 26 per cent to 49 per cent, have already withdrawn their support to the UPA government.
Players in the insurance space are expecting that government may move forward to raise the FDI limit once it gets trust vote in the Lok Sabha on July 22.
A Group of Minister led by Externals Affairs Minister Pranab Mukherjee is looking into the issue of opening of insurance sector, but due to strong opposition from the Left parties it failed to reach any consensus.
Referring to the opening of the insurance sector to the private players, the Finance Minister said he had introduced the bill in 1997 though it was defeated at that time by the BJP. "The same bill was passed in 1999," he added.
Source: PTI, The Times of India, The Indian Express
BAJAJ ALLIANZ’S NEW PRODUCT
Kolkata: Bajaj Allianz Life Insurance on Friday announced the launch of its first family medical insurance product— Family CareFirst. Unveiling the new health insurance product, company Head of Sales ECJ Augustine said that it is the first of its kind in India, which offers health insurance cover to an individual’s entire family including parents and in-laws. The company is also aiming to clock a total first premium business of Rs 8,000 crore in the 2008-09.
Source: Deccan Chronicle, The Hindu
Source: Deccan Chronicle, The Hindu
BAG TARGETS RURAL BIZ
Kolkata: Bajaj Allianz General - a 74:26 joint venture between Bajaj Auto Ltd and Allianz AG, Germany — is looking to boost rural business, according to Mr E.C.J. Augustin, head of sales and strategic initiatives.
“We are looking to raise rural contribution to total business to 27 per cent this year, up from 24 last year,” he said. There are also plans to launch a new micro-insurance policy by November, which would cater mainly to the rural market, he said here on Friday.
The company has set targets for achieving 15,000 crore premium income, up from Rs 11,000 crore last year. Bajaj Allianz on Friday launched a new health insurance plan, ‘Family Care First’.
The new policy will provide health insurance cover to the entire family and will also include parents-in-law at an additional premium payment.
Source: The Hindu Business Line
“We are looking to raise rural contribution to total business to 27 per cent this year, up from 24 last year,” he said. There are also plans to launch a new micro-insurance policy by November, which would cater mainly to the rural market, he said here on Friday.
The company has set targets for achieving 15,000 crore premium income, up from Rs 11,000 crore last year. Bajaj Allianz on Friday launched a new health insurance plan, ‘Family Care First’.
The new policy will provide health insurance cover to the entire family and will also include parents-in-law at an additional premium payment.
Source: The Hindu Business Line
BAJAJ STEPS TOWARDS POLICY PORTABILITY
Kolkata: Unhappy with your health policy and looking for a switch? Bajaj Allianz Life Insurance has introduced a facility under which people having a health policy of another insurer can make a lateral shift to a similar policy from Bajaj Allianz, while maintaining the continuity of their original policy i.e., customers will not lose the premium paid to the earlier insurer.
The shift, subject to Bajaj Allianz’s approval, also requires that the immediate preceding year be claim-free. Portability in health insurance policies is currently being examined by the insurance regulator (Irda). At present, policyholders can shift their mediclaim policies within the four nationalised general insurance companies, but such instances are few.
Ujjaini Dasgupta, head, health insurance, Bajaj Allianz, told DNA Money, “All that is generally needed is a copy of the existing policy and a certificate from the earlier company that the premium has been paid. It is too early to forecast a trend, but the option is definitely there for a lateral shift from similar products.”
The company is also preparing to counter the possibility of fraud on such offers. “What we are now looking at is sharing of a database of the negative profile of the customer, if any, to prevent frauds and help underwrite better,” Dasgupta said.
Bajaj Allianz Life unveiled its national expansion plans for its health insurance vertical here on Friday. The insurer also rolled out a new product, Family CareFirst family floater plan, that covers policyholders family as well as in-laws.
E C J Augustine, head, sales and strategic initiatives, Bajaj Allianz Life said, “Health is one of our key verticals and we expect to do Rs 120 crore of premium this year from the products we have at present. We will be introducing new products on women and children in the coming months.”
“The company will aim to sell 2 lakh policies and we are looking at cross selling within the group,” Ujjaini Dasgupta added.
Bajaj Allianz suffered a knock last year, as it has to do away with actuarially funded products, which contributed almost 50% of sales. But the company has been able to reverse the situation through rise in sales of other products.
According to Augustine, the company will lay emphasis on rural sales, for which it is upping its agent count to 20,000. It will also have 1,000 unit managers for the new thrust. Overall, the company is planning 50,000 additional agents to take their total count to 3 lakh.
Source: DNA Money
The shift, subject to Bajaj Allianz’s approval, also requires that the immediate preceding year be claim-free. Portability in health insurance policies is currently being examined by the insurance regulator (Irda). At present, policyholders can shift their mediclaim policies within the four nationalised general insurance companies, but such instances are few.
Ujjaini Dasgupta, head, health insurance, Bajaj Allianz, told DNA Money, “All that is generally needed is a copy of the existing policy and a certificate from the earlier company that the premium has been paid. It is too early to forecast a trend, but the option is definitely there for a lateral shift from similar products.”
The company is also preparing to counter the possibility of fraud on such offers. “What we are now looking at is sharing of a database of the negative profile of the customer, if any, to prevent frauds and help underwrite better,” Dasgupta said.
Bajaj Allianz Life unveiled its national expansion plans for its health insurance vertical here on Friday. The insurer also rolled out a new product, Family CareFirst family floater plan, that covers policyholders family as well as in-laws.
E C J Augustine, head, sales and strategic initiatives, Bajaj Allianz Life said, “Health is one of our key verticals and we expect to do Rs 120 crore of premium this year from the products we have at present. We will be introducing new products on women and children in the coming months.”
“The company will aim to sell 2 lakh policies and we are looking at cross selling within the group,” Ujjaini Dasgupta added.
Bajaj Allianz suffered a knock last year, as it has to do away with actuarially funded products, which contributed almost 50% of sales. But the company has been able to reverse the situation through rise in sales of other products.
According to Augustine, the company will lay emphasis on rural sales, for which it is upping its agent count to 20,000. It will also have 1,000 unit managers for the new thrust. Overall, the company is planning 50,000 additional agents to take their total count to 3 lakh.
Source: DNA Money
GUJ TO FORM 10% REVENUE OF APOLLO DKV
Mumbai/Ahmedabad: Banking on its chain of hospitals and pharmacy outlets in the state, Apollo DKV Insurance Company Ltd., a joint venture between The Apollo Hospitals Group and Europe-based private health insurer DKV AG, expects to generate Rs 5-6 crore worth premium in the financial year 2008-09. "We expect to generate at least 10 per cent of our business in Gujarat. We have also entered into a corporate agency tie-up with Landmark Group which has a prominent presence in the state with interests in automobile, finance and insurance," said C Chandrasekhar, chief marketing officer of Apollo DKV.
For the fiscal ‘09, the company is targeting a premium revenue of Rs 50-60 crore across the country. Having launched its branch office in Ahmedabad, the company now intends to launch more number of offices in cities like Vadodara, Surat, Rajkot and Anand. Through its tie-up with Landmark Group, Apollo DKV intends to expand its distribution network from 200 agents to over 1,500 agents in an year.
Currently, the company offers three variants in health insurance solutions including personal accident, and overseas and domestic travel health insurance. Over a period of time, the company is set to launch other products and services like out patients insurance, disease management and long term care.
Nationally, Apollo DKV will be investing Rs 500 crore over a period of five years to expand its operations and achieve a market share of 10-12 per cent, said Chandrasekhar.
Conscious about the 7-8 per cent growth rate in health inflation, the company is expecting a rise in premium rates in the coming year, he added.
Source: Business Standard
MAX NEW YORK LIFE TIES UP WITH IOC
New Delhi: Max New York Life Insurance has tied up with Indian Oil Corporation (IOC) to make available its insurance products through the latter’s Kisan Seva Kendras. IOC has about 2,000 Kisan Seva Kendras across the country.Announcing the tie-up, Max New York Life Insurance Deputy Managing Director Mr Rajesh Sud said: “The tie-up will bring insurance to the masses and help boost financial security. This tie-up is a step towards furthering our reach in emerging markets and serve these markets more efficiently.”
Speaking on the occasion, IOC’s General Manager, Retail Sales, Mr K.R. Suresh Kumar said: “This tie-up would also enable Kisan Seva Kendras to move up the value chain by making life insurance available to the rural consumers”
Max New York Life will start setting up offices at 100 such Indian Oil’s Kisan Seva Kendras across Punjab, Haryana, Gujarat and Western UP.
Source: The Hindu Business Line, The Economic Times, The Pioneer, The Hindu, The Statesman, The Financial Express
LIC TARGETS URBAN POOR FOR MICRO INSURANCE PRODUCTS
Kolkata: The eastern zone of Life Insurance Corporation will focus on tapping the hitherto untouched urban poor population this year through its micro insurance policy, according to Mr R.R. Dash, Zonal Head, Life Insurance Corporation.
While the zone figured among the top performers for LIC in micro insurance in the first quarter of 2008-09, its four urban divisions contributed a mere 8 per cent in the segment.
“This year, we are trying to organise all the NGOs, self-help groups and other micro finance institutions associated with us to concentrate on the BPL segment in the cities. We have identified a large untapped customer base in urban segments such as sweepers, vegetable vendors, rickshaw and bus drivers, conductors, labour groups, dhobi and so on,” Mr Dash said. “We have a target of selling 50,000-60,000 Jeevan Madhur policies, LIC’s flagship micro insurance product, in the cities of the eastern zone this year,” a senior LIC official said.
Last year, only 20,000 policies were sold in the urban areas out of the total 1,30,729 policies sold in the entire zone. “The NGOs tend to avoid the urban market because it is difficult to convince urban poor for a life cover as they are more aware and argumentative,” the official said.
The life risk attached to the urban labour class is however relatively greater, making it necessary for them to have insurance covers, said Mr Dash.
In an effort to boost the sale of micro insurance policy, the zone has also set targets of adding 100 new agents in each of the 11 divisions in the zone, he said.
The target for each agent would also be scaled up to over 1,000 policies from 235 policies being sold by each agent last year.
In the quarter ended June 30, 2008, the eastern zone has sold 44,825 micro insurance policies, up from 1,558 policies sold in the same period last year.
The zone has thus taken a lead in the country in terms of realisation of target, covering 9.07 per cent of the yearly target of 4.94 lakh policies already. The zone follows the southern zone in terms of total micro insurance policies sold.
Source: The Hindu Business Line
While the zone figured among the top performers for LIC in micro insurance in the first quarter of 2008-09, its four urban divisions contributed a mere 8 per cent in the segment.
“This year, we are trying to organise all the NGOs, self-help groups and other micro finance institutions associated with us to concentrate on the BPL segment in the cities. We have identified a large untapped customer base in urban segments such as sweepers, vegetable vendors, rickshaw and bus drivers, conductors, labour groups, dhobi and so on,” Mr Dash said. “We have a target of selling 50,000-60,000 Jeevan Madhur policies, LIC’s flagship micro insurance product, in the cities of the eastern zone this year,” a senior LIC official said.
Last year, only 20,000 policies were sold in the urban areas out of the total 1,30,729 policies sold in the entire zone. “The NGOs tend to avoid the urban market because it is difficult to convince urban poor for a life cover as they are more aware and argumentative,” the official said.
The life risk attached to the urban labour class is however relatively greater, making it necessary for them to have insurance covers, said Mr Dash.
In an effort to boost the sale of micro insurance policy, the zone has also set targets of adding 100 new agents in each of the 11 divisions in the zone, he said.
The target for each agent would also be scaled up to over 1,000 policies from 235 policies being sold by each agent last year.
In the quarter ended June 30, 2008, the eastern zone has sold 44,825 micro insurance policies, up from 1,558 policies sold in the same period last year.
The zone has thus taken a lead in the country in terms of realisation of target, covering 9.07 per cent of the yearly target of 4.94 lakh policies already. The zone follows the southern zone in terms of total micro insurance policies sold.
Source: The Hindu Business Line
INSURANCE COVER FOR DEVOTEES
Chandigarh: The Haryana administration has decided to extend insurance cover to all the pilgrims reaching Kurukshetra on the occasion of Solar Eclipse Fair on August 1.
An official spokesman said the pilgrims reaching within the radius of 7 km would be insured. As many as 15 lakh devotees were likely to take holy dip on this occasion, he added.
He said the district administration had started gearing up for the Solar Eclipse Fair. Instructions had already been issued to all the officers related to fair administration to complete all arrangements well in advance.
Giving details of the arrangements being made for the smooth conduct of the fair, the spokesman said that various committees had already been constituted for the purpose. The whole fair area had been divided into 12 sectors and senior officers would act as Duty Magistrates in each sector and security forces would also be deputed.
Parking facilities would be provided near the fair area for the devotees coming to take holy dip. Identity slips bearing name, address and telephone number would be tagged to the children coming with the devotees.
Source: PTI, The Hindu Business Line
An official spokesman said the pilgrims reaching within the radius of 7 km would be insured. As many as 15 lakh devotees were likely to take holy dip on this occasion, he added.
He said the district administration had started gearing up for the Solar Eclipse Fair. Instructions had already been issued to all the officers related to fair administration to complete all arrangements well in advance.
Giving details of the arrangements being made for the smooth conduct of the fair, the spokesman said that various committees had already been constituted for the purpose. The whole fair area had been divided into 12 sectors and senior officers would act as Duty Magistrates in each sector and security forces would also be deputed.
Parking facilities would be provided near the fair area for the devotees coming to take holy dip. Identity slips bearing name, address and telephone number would be tagged to the children coming with the devotees.
Source: PTI, The Hindu Business Line
Max India in JV with UK health insurance major
NEW DELHI: Healthcare and insurance company, Max India, has forayed into health insurance through a joint venture with UK health insurance major, British United Provident Association (BUPA). Max India will hold 50% in the JV, promoter and chairman Analjit Singh and his family will hold 24%, and BUPA will hold the remaining 26%, reports Our Bureau. BUPA has the option of raising its stake in the JV to 50% when the sector opens up. The JV, Max Bupa Health Insurance, will initially invest Rs 100 crore, a Max India release said. This is Max India’s second venture in the insurance sector. It already has a 26:74 general insurance JV with US-based New York Life Insurance.
“We have been interested in the health insurance sector for a long time, but were waiting for some regulatory reforms to take place. Our decision to partner with BUPA was based on the synergies and unique strengths that BUPA brings to this venture,” said Max India chairman, Analjit Singh.
. BUPA has the expertise in creating and delivering differentiated health-insurance products and a proven ability to operate in and adapt to international health care markets. Through Max India, we will capitalise on our knowledge and experience in the health and life insurance sectors,”
Mr Singh told ET that BUPA was the market leader in the health insurance sector in most of the market it operates. ‘It has a 45% market share in the UK health insurance market. It is the market leader in Spain, in Europe and in emerging markets,’’ he said.
BUPA group chief executive, Ray King, said, “The Indian health insurance market has massive potential, with a growing, young, population. We believe that many of its citizens will be looking for the high quality of care and customer service that Max BUPA will be well placed to offer.”
Health Insurance is a under penetrated market in India, a country where about 70% of the healthcare spend is in the private sector. According to industry estimates, the country’s healthcare spend is expected to touch Rs 3,33,480 crore by 2012 from Rs 1,53,330 in 2006. But less than 2% of the country’s population have any private health related insurance covering.
Source: Economic Times
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