New India Assurance Company, the country’s largest general insurance company, more than doubled its net profit to Rs 1,459.95 crore in 2006-07 from Rs 716.38 crore a year earlier by underwriting less of the loss-making motor insurance business and increasing business in profitable lines such as fire and engineering.
The public sector general insurer’s decision to do less of motor insurance business helped it reduce its net incurred claims ratio to 76.68 per cent for the year from last year’s 83.64 per cent.
However, this strategy resulted in a marginal growth in the company’s gross premium income. Its premium income grew by 4.71 per cent to Rs 5,017.20 crore for the year from Rs 4,791.49 crore a year earlier. The increase in the public sector general insurer’s premium income in 2005-06 was 14 per cent.
“We did selective underwriting for the year. The accretion percentage is less than the previous year due to strict underwriting of motor third-party insurance, a loss-making segment. The growth in motor portfolio was 3 per cent this year, compared with 15 per cent last year. However, the growth in other profitable lines was ensured. Fire business grew by 8 per cent compared with 6 per cent in FY06,” said A R Shekhar, general manager, New India Assurance.
New India has operations in 26 countries with direct operations in 23 countries and subsidiaries in West Indies, Nigeria and Sierra Leone. The gross premium income from overseas operations (excluding three subsidiaries) increased by 4.02 per cent to Rs 919.58 crore against Rs 884.05 crore a year earlier.
The gross direct global premium registered a growth of 4.60 per cent to Rs 5936.78 crore against Rs 5675.54 crore a year ago. The global net premium rose by 9.42 per cent to Rs 4751.76 crore for the year compared with Rs 4342.66 crore a year ago.
New India has set a target of Rs 5587 crore of gross direct premium in India and Rs 1013 crore from its foreign operations with a global target of Rs 6,600 crore, an accretion of 11.17 per cent.
Source: Business Standard
Thursday, August 9, 2007
Royal & Sun bullish on India
United Kingdom’s second largest insurer, Royal & SunAlliance Group (R&SA) is bullish on India. It expects the share of its Indian presence to rise four-fold to 40 per cent of total income from its operations in emerging markets by 2010.
The foreign insurer is present in India as a promoter of Royal Sundaram General Insurance Company with a 26 per cent stake.
R&SA’s operations in emerging market consists of seven countries in Latin America, China, India, Saudi, Oman, UAE, Singapore and Hongkong besides countries in Central, Eastern Europe and three countries in the Baltics.
At present, the Royal Sundaram contributes 5 per cent to R&SA’s profits from emerging markets and 10 per cent to income.
“India is one of the biggest markets. At present, the Indian contribution is not major but its potential is very big like China, Brazil and Mexico. We expect our India business to be at least four times of the present business by the year 2010. Beyond that the growth potential is still large,” said Paul Whittaker, CEO, emerging markets, R&SA.
With the Indian non-life industry on the verge of being fully detariffed, R&SA will be replicating better price sophistication, distribution model and products from other countries in India.
“In the emerging markets, we have two measures to calculate the market potential - GDP growth and insurance penetration. In the UK, GDP growth is 2 to 3 per cent while in India it is close to 10 per cent. In the UK, the insurance penetration is saturated with 3.65 per cent of GDP being spent on insurance while the insurance penetration in India is 0.65 per cent. There are different products and different levels of penetration,” said Whittaker.
Speaking about the impact of detariffing, Whittaker said, “In all countries prices have fallen initially and profitability is lost. But over the time market matures. Risk-based pricing comes into effect. But in one to two years, normality will return.”
Royal Sundaram General Insurance started its operations in 2001. Antony Jacob, CEO, Royal Sundaram General Insurance said, “The first five years we have focussed on building a large happy customer base. We have 1.7 million customers and our customer rating is 82 per cent as per the AC Nielson survey. We are looking at improving visibility, distribution and brand. The second phase we will focus on accelerating the growth.
Royal Sundaram General Insurance will be increasing the branches to 60 by March 2008 from the present 60. The company reported a Gross Written Premium of Rs 601 crore and a profit after tax of Rs 21 crore , for the year ended 31st March 2007.
Royal & SunAlliance is one of the world’s leading multinational quoted insurance groups, with the capability to write business in over 130 countries and with major operations in the UK, Scandinavia, Canada, Ireland, the Middle East and Latin America.
Focussing on general insurance, it has around 24,000 employees. In 2006, its net written premiums were 5.5 billion pounds. With an almost 300 year heritage, Royal & SunAlliance is the oldest insurance company in the world still trading under its original name.
Source: Business Standard
The foreign insurer is present in India as a promoter of Royal Sundaram General Insurance Company with a 26 per cent stake.
R&SA’s operations in emerging market consists of seven countries in Latin America, China, India, Saudi, Oman, UAE, Singapore and Hongkong besides countries in Central, Eastern Europe and three countries in the Baltics.
At present, the Royal Sundaram contributes 5 per cent to R&SA’s profits from emerging markets and 10 per cent to income.
“India is one of the biggest markets. At present, the Indian contribution is not major but its potential is very big like China, Brazil and Mexico. We expect our India business to be at least four times of the present business by the year 2010. Beyond that the growth potential is still large,” said Paul Whittaker, CEO, emerging markets, R&SA.
With the Indian non-life industry on the verge of being fully detariffed, R&SA will be replicating better price sophistication, distribution model and products from other countries in India.
“In the emerging markets, we have two measures to calculate the market potential - GDP growth and insurance penetration. In the UK, GDP growth is 2 to 3 per cent while in India it is close to 10 per cent. In the UK, the insurance penetration is saturated with 3.65 per cent of GDP being spent on insurance while the insurance penetration in India is 0.65 per cent. There are different products and different levels of penetration,” said Whittaker.
Speaking about the impact of detariffing, Whittaker said, “In all countries prices have fallen initially and profitability is lost. But over the time market matures. Risk-based pricing comes into effect. But in one to two years, normality will return.”
Royal Sundaram General Insurance started its operations in 2001. Antony Jacob, CEO, Royal Sundaram General Insurance said, “The first five years we have focussed on building a large happy customer base. We have 1.7 million customers and our customer rating is 82 per cent as per the AC Nielson survey. We are looking at improving visibility, distribution and brand. The second phase we will focus on accelerating the growth.
Royal Sundaram General Insurance will be increasing the branches to 60 by March 2008 from the present 60. The company reported a Gross Written Premium of Rs 601 crore and a profit after tax of Rs 21 crore , for the year ended 31st March 2007.
Royal & SunAlliance is one of the world’s leading multinational quoted insurance groups, with the capability to write business in over 130 countries and with major operations in the UK, Scandinavia, Canada, Ireland, the Middle East and Latin America.
Focussing on general insurance, it has around 24,000 employees. In 2006, its net written premiums were 5.5 billion pounds. With an almost 300 year heritage, Royal & SunAlliance is the oldest insurance company in the world still trading under its original name.
Source: Business Standard
Disputes over mediclaims settlement on the rise
Hyderabad, Aug. 7 Complaints pertaining to settlement of mediclaims by health insurance companies are on the rise, according to the data available with the Insurance Ombudsman.
Also complaints relating to issues such as lack of transparency in settlement of medical claims are growing of late, Mr P.A. Chowdary, Ombudsman, told Business Line.
“While most of the claims are being rejected by the insurance provider on the grounds of ‘pre-existence of disease’, there is no clarity on the upper limit of claims and diseases covered,” he said.
Settlement of overseas mediclaims was also becoming an issue with the increase in the number of people going abroad on work, he added. In both life and non-life, complaints on settlements are on the rise.
For instance, as per the data of office of the Governing Body of Insurance Council, about 7,420 complaints were made to Insurance Ombudsmen in the 12 circles in the country between April and December 2006. Kolkata has a major share with over 1,300 complaints, followed by Mumbai with 1091 , Lucknow 907, Chennai 870 and Hyderabad 947, among others.
“Generally there are more complaints (about two-thirds) from non-life pertaining to motor insurance and other related aspects. Over two thirds of the complaints settled were in the non-life sector,” Mr Chowdary said.
According to Mr Srinivas Rao, Deputy Secretary (Non-Life) office of Insurance Ombudsman here, the reason for increasing litigation in motor insurance was the non-transfer of insurance documents in the pre-owned vehicle segment.
Source: The Hindu Business Line
Also complaints relating to issues such as lack of transparency in settlement of medical claims are growing of late, Mr P.A. Chowdary, Ombudsman, told Business Line.
“While most of the claims are being rejected by the insurance provider on the grounds of ‘pre-existence of disease’, there is no clarity on the upper limit of claims and diseases covered,” he said.
Settlement of overseas mediclaims was also becoming an issue with the increase in the number of people going abroad on work, he added. In both life and non-life, complaints on settlements are on the rise.
For instance, as per the data of office of the Governing Body of Insurance Council, about 7,420 complaints were made to Insurance Ombudsmen in the 12 circles in the country between April and December 2006. Kolkata has a major share with over 1,300 complaints, followed by Mumbai with 1091 , Lucknow 907, Chennai 870 and Hyderabad 947, among others.
“Generally there are more complaints (about two-thirds) from non-life pertaining to motor insurance and other related aspects. Over two thirds of the complaints settled were in the non-life sector,” Mr Chowdary said.
According to Mr Srinivas Rao, Deputy Secretary (Non-Life) office of Insurance Ombudsman here, the reason for increasing litigation in motor insurance was the non-transfer of insurance documents in the pre-owned vehicle segment.
Source: The Hindu Business Line
Insurers seek time on pricing
The proposed full pricing freedom to general insurers will have to wait till November 1 this year. At a meeting with the Insurance Regulatory and Development Authority (Irda) yesterday, general insurers have sought more time to better their risk under-writing guidelines to face another round of pricing competition.
Accordingly, Irda has decided to remove the 51.2 per cent cap on discounts from November 1 instead of September 1 this year, industry sources said.
The full pricing freedom was expected to result in another round of pricing war with discounts expected to rise up to 70 per cent in fire, engineering and motor covers. When general insurance was partly detariffed in January this year, insurers were allowed to give discounts on premiums up to 51.2 per cent on individually rated risks.
However, industry sources say many insurers have already violated this restriction on discounts by offering higher discounts than permitted in anticipation of full pricing freedom from September 1.
“At this point it is not clear how to guide clients on what is the right price. The market has not bottomed out yet and with insurance companies testing new bottoms regularly, we can only look to mature markets for guidance on what is a fair price for our clients,” said Pavanjit Singh Dhingra, Vice President, Prudent Insurance Brokers.
While there will not be any major impact in terms of day to day decision making for clients making their buying decision, it is possible that the short time gap between complete pricing de-tariffing and the freeing up of policy terms and conditions planned on January 1, 2008 may not make the process smooth.
“Everyone feels uncomfortable when the pricing gets too low; even clients feel that too low a price would eventually impact the claim paying ability of insurance companies and yet one cannot ignore market realities”, added Dhingra.
Source: Business Standard
Accordingly, Irda has decided to remove the 51.2 per cent cap on discounts from November 1 instead of September 1 this year, industry sources said.
The full pricing freedom was expected to result in another round of pricing war with discounts expected to rise up to 70 per cent in fire, engineering and motor covers. When general insurance was partly detariffed in January this year, insurers were allowed to give discounts on premiums up to 51.2 per cent on individually rated risks.
However, industry sources say many insurers have already violated this restriction on discounts by offering higher discounts than permitted in anticipation of full pricing freedom from September 1.
“At this point it is not clear how to guide clients on what is the right price. The market has not bottomed out yet and with insurance companies testing new bottoms regularly, we can only look to mature markets for guidance on what is a fair price for our clients,” said Pavanjit Singh Dhingra, Vice President, Prudent Insurance Brokers.
While there will not be any major impact in terms of day to day decision making for clients making their buying decision, it is possible that the short time gap between complete pricing de-tariffing and the freeing up of policy terms and conditions planned on January 1, 2008 may not make the process smooth.
“Everyone feels uncomfortable when the pricing gets too low; even clients feel that too low a price would eventually impact the claim paying ability of insurance companies and yet one cannot ignore market realities”, added Dhingra.
Source: Business Standard
ING Vysya Life hopes to double premium income
ING Vysya Life Insurance Company Ltd, headquartered in Bangalore, expects to capture a 2 per cent share of the insurance market in the country by the end of 2008.
Kshitij Jain, managing director and chief executive director of ING Vysya Life, told a news conference in Hyderabad on Wednesday that the insurance market in the country was growing at upwards of 30 per cent in premium terms, and the company hoped to grow at double that pace by 2008.
ING Vysya Life achieved a market share of 1.1 per cent in the first quarter of the current fiscal. Its premium business stood at Rs 700 crore during the last financial year.
The company announced the launch of ‘ING Positive Life’, a unit-linked insurance plan designed for ING Vysya Bank customers. The plan allows the customer to enter at as low as Rs 834 a month.
The premium can be invested in any of five fund options – debt, secure, balanced, growth or equity – besides offering liquidity when needed by allowing one partial withdrawal each year after the fifth year of the policy.
Jain said, “We will leverage ING Vysya Bank’s network of over 400 branches, understandings, sign-ups and referral agreements with about 100 co-operative banks and the more than 40,000 tied agents in 173 cities across the country, to access the 1.5 million customers of the bank for this product. Though we have introduced this unit-linked plan only for the existing customers, we are also looking at the possibility of acquiring new customers significantly.”
ING Vysya Bank contributes 10 per cent to the overall business of ING Vysya Life and that is expected to go up with the launch of the new product.
“ING Positive Life will facilitate access for ING Vysya life insurance products to the rural markets, where the life insurance business is yet to pick up,” Jain said.
About 100 ING Vysya Bank’s branches are located in rural areas. The interior markets accounted for 28 per cent of ING Vysya Life’s total insurance business last year.
In Andhra Pradesh, the bank has some 200 branches, which account for 25 per cent of ING Vysya Life’s business.
Source: Business Standard
Kshitij Jain, managing director and chief executive director of ING Vysya Life, told a news conference in Hyderabad on Wednesday that the insurance market in the country was growing at upwards of 30 per cent in premium terms, and the company hoped to grow at double that pace by 2008.
ING Vysya Life achieved a market share of 1.1 per cent in the first quarter of the current fiscal. Its premium business stood at Rs 700 crore during the last financial year.
The company announced the launch of ‘ING Positive Life’, a unit-linked insurance plan designed for ING Vysya Bank customers. The plan allows the customer to enter at as low as Rs 834 a month.
The premium can be invested in any of five fund options – debt, secure, balanced, growth or equity – besides offering liquidity when needed by allowing one partial withdrawal each year after the fifth year of the policy.
Jain said, “We will leverage ING Vysya Bank’s network of over 400 branches, understandings, sign-ups and referral agreements with about 100 co-operative banks and the more than 40,000 tied agents in 173 cities across the country, to access the 1.5 million customers of the bank for this product. Though we have introduced this unit-linked plan only for the existing customers, we are also looking at the possibility of acquiring new customers significantly.”
ING Vysya Bank contributes 10 per cent to the overall business of ING Vysya Life and that is expected to go up with the launch of the new product.
“ING Positive Life will facilitate access for ING Vysya life insurance products to the rural markets, where the life insurance business is yet to pick up,” Jain said.
About 100 ING Vysya Bank’s branches are located in rural areas. The interior markets accounted for 28 per cent of ING Vysya Life’s total insurance business last year.
In Andhra Pradesh, the bank has some 200 branches, which account for 25 per cent of ING Vysya Life’s business.
Source: Business Standard
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