Mediclaim to cost a bomb now

MUMBAI: The days of 'pay it-forget it-claim it' of health insurance are numbered. What lies ahead, at least with India's largest general insurance player, New India Assurance, are sweeping changes of the kind Indians aren't used to. These include higher premiums as you grow older, or for that matter, if you live in a Zone I city like Mumbai. From July 15, if you are a Mumbaikar, you pay a higher premium than those in Delhi or Bangalore, who in turn, pay more than those in other parts of the country. That is because New India Assurance reckons that Mumbai is the most expensive city to get hospitalised in. Delhi or Bangalore, which lie in Zone II, are cheaper, but more expensive than the rest of the country that has been classified as Zone III. So, for a Mediclaim policy worth Rs 2 lakh, a Mumbaikar in the 5-35 years age bracket will pay an annual premium of Rs 2,595. Those in Zone II will pay Rs 2,530 and those in Zone III will pay only Rs 2,470. But there is a caveat here. If you pay Zone I premiums, you can avail of treatment anywhere in the country and get 100% coverage. If you live in Delhi or Bangalore, however, and are admitted to a hospital in Mumbai, you will have to bear 10% of the claim while those from Zone III will have to have pay 20% of the expenses if treated in India’s commercial capital. But that is only the beginning. Children between three months and five years will have to pay a higher premium than those between 5 and 35 years. This is presumably because according to sources, data shows a higher incidence of claims for children in that age group. Then there is the whole thing about age brackets. Until now, the brackets were defined in 10-year segments. That will now be five years. Therefore, if you are 37, live in Mumbai and had subscribed to a policy worth Rs 2 lakh, your annual premium in the earlier regime would be Rs 3,900 until age 45. Now, if you are between 35 and 40, the premium for the same cover will be Rs 2,990. Between 40 and 45, it will shoot up to Rs 3,665.

Source: Times News Network

‘Strong growth predicted in insurance sector’

MUMBAI, JUL 9 : Swiss Re’s sigma study reported that strong premium growth seen in both India’s life and non-life sectors is expected to continue in 2007.
The life business saw an exceptionally strong 60% growth in 2006, with aggressive business expansion by the private sector particularly through the use of new channels such as bancassurance sales.

The drive to increase rural penetration by the regulator is expected to further this growth drive in 2007, said the study. A strong 17% growth in non-life premiums was observed in 2006.
‘While the pace of growth is not expected to be maintained in 2007, changes in the tax deduction limits for medical insurance and sustained economic growth are expected to continue to underpin demand,” observed the report. The report further said the world insurance premium growth in 2006 accelerated further, driven by the strong expansion of the life insurance sector.The worldwide premiums written amounted to $3723 billion, an increase of 5% over prior year.
The performance of the insurance industry has further improved in terms of capitalisation and profitability. Real premium growth in the emerging markets of 16% continued to outpace the growth of 4% experienced in the industrialised countries.
Looking at insurance spending, the industrialised countries spent about 9% of the gross domestic product on insurance in 2006, while in the emerging markets this ratio varies from 1.4% in the Middle East and Central Asia to 4.7% in Africa.

Source: Financial Express

Swiss Re, Munich Re in talks with SBI for JV

The UK-based Lloyd’s, the world’s leading provider of specialist insurance services, and leading global reinsurers, Germany’s Munich Re Group and Switzerland’s Swiss Re, are in talks with the State Bank of India (SBI), the country’s largest bank, for partnering in its general insurance foray. The partner is likely to be finalised in the next two months.

A senior SBI official said, “We will be partnering with a foreign reinsurer for our non-life insurance business and discussions are currently on with the world’s leading reinsurers.”

The bank is in the process of appointing an advisor to zero in on a foreign partner, according to sources within. The plans for venturing into general insurance come at a time when the bank is planning to hive off stakes in its life insurance and asset management companies to a separate holding company.

SBI holds 74 per cent stake in its life insurance venture, with Cardif SA of France owning the rest. The life insurance venture would require incremental capital of Rs 600 crore every year.

“The general insurance business requires less capital. In the first year, an infusion of around Rs 200 crore may be needed. The incremental capital requirement would depend on how the business grows”, according to an SBI official.

Lloyd’s reported a profit of £ 3,662 million in 2006 and has a capacity to write business worth about £16.1 billion in 2007. It has insured more than 92 per cent of FTSE 100 companies and 93 per cent of Dow Jones companies.

The insurer covers the world’s most complex and specialist risks, from oil rigs to celebrity body parts, and from major airlines to the biggest banks and sporting events.

Munich Re, the second largest primary insurer in Germany, wrote gross premiums of ¤ 37.4 billion in 2006.

Swiss Re, which acquired GE Insurance Solutions, reported a net income of swiss francs 4.6 billion in 2006. Its income from life and health business stood at swiss francs 1.7 billion during the period.

Source: Business Standard

IRDA issues circular on use of forms for riders

Riders are add-ons to the basic insurance policy to supplement the cover provided. One can also combine a set of riders and append it to the main policy. The premiums will, obviously, undergo an upward revision, depending on the rider or a combination of them chosen.

New Delhi, Policy holders will now get a clearer picture on the riders they wish to add to their basic life insurance products.
The Insurance Regulatory and Development Authority (IRDA) in a circular issued to the life insurance companies has said that they must use appropriate forms for riders which are to be attached to the specific or main product.
Riders are add-ons to the basic insurance policy to supplement the cover provided. One can also combine a set of riders and append it to the main policy. The premiums will, obviously, undergo an upward revision, depending on the rider or a combination of them chosen.
The circular has come into force from July 4. As for “the riders which are offered by the companies, as on the date the circular comes into effect, there is no need to file their features in the new format with the Authority. However, if any modification is proposed, then the new format must be used. Those riders filed with the Authority for which approval is in the process, they need not file the features in the new format,” Dr R Kannan, Member (Actuary), Insurance Regulatory and Development Authority, told Business Line.

Rider form
The circular states that the ‘Form IRDA-Life-Rider’, shall be the application form for the riders which are to be attached to a specific product which could be either linked or non-linked.
The same form has to be used for group riders too until specified by the IRDA.
“If a life insurer wishes to offer riders along with a basic life insurance product, the insurer must furnish the information in respect of each rider separately using the form,” the circular states.

Clearance vital
Dr Kannan also said unless the rider is cleared by the IRDA, it cannot be attached to any of the base products.
“The form has to be used whenever a rider is first filed with the Authority and attached to life insurer’s product for the first time. And whenever a rider is modified (already attached to a product), this form should be used for modification of the existing rider. Only items relevant to the proposed modification have to be filled in and all the other items should reflect ‘no change from the earlier filing’. Finally, whenever a rider is further added to second or subsequent product, the relevant portions of the said form has to be furnished,” the circular said.
“The notification is important in today’s context as many life insurance companies are using the same file and use features which are applicable to the main policies to offer rider products. In order to bring to surface the special features of the rider products, the circular is very useful. It also helps the policy holder to get a better understanding of the policy,” Dr Kannan said.
According to estimates around 20 to 25 per cent of the new premium income comes from rider products.

Conditions laid
The circular also states that insurers must not alter the riders in any manner subsequent to clearance under the file and use procedure without the concurrence of the Authority.
It also states that if an insurer wishes to withdraw an existing rider in the market, it may do so, but has to inform the Authority giving reasons for the withdrawal within seven days from the date of withdrawal.
Finally, the circular also states that no change in the name of the rider is permitted once it is cleared and a unique identification number is allotted by the IRDA.

Source: Business Line

United rolls out three new health covers

General insurance firm United India Insurance (UII) has launched three new health insurance policies, which would replace the existing mediclaim policy.

The new policies — Platinum, Gold and Senior Citizens — was launched today and would be administered strictly through third party administrators.

The launch of new health insurance policies comes on the back of UII’s strategy to generate large volumes to drive business growth.

The entry age will be from 3 months to 35 years for the Platinum category, 36 years to 60 years for the Gold category, and 61 to 80 years for the Senior Citizens category.

These products would encourage the youth to buy health insurance policies to cover even pre-existing illnesses, a statement said.

The minimum sum insured for all the three polices would be Rs 50,000 and can be increased in multiples of Rs 25,000. The maximum sum insured for Platinum, Gold and Senior citizens would be Rs 10 lakh, Rs 5 lakh and Rs 3 lakh.

Source: Business Standard