Mumbai: Bajaj Allianz Life Insurance will receive capital infusion of around Rs 500 crore from its promoters this fiscal. Bajaj Allianz is a joint venture between the Bajaj group (Bajaj Finserv) and Allianz.
Mr Kamesh Goyal, Country Manager Allianz and CEO Bajaj Allianz Insurance, said that the company’s current capital base stood at Rs 1,210 crore which would be further hiked by around Rs 500 crore. .
The company’s focus this year is to maintain its expense ratio by curbing expenditure on hiring new agents and branches. The expense ratio stands at around 14 per cent.
“Our agency force is around 2.3 lakh and we have a branch network of 1,200. This year our focus is more on increasing the productivity of the existing agency force,” Mr Goyal said.
Bajaj Allianz Life made a net loss of Rs 19 crore in the last fiscal and the company hopes to wipe out its earlier losses by bringing down expenses. In terms of new products, the company plans to launch a pension and health insurance plan this fiscal.
On the recent volatility in the stock market, Mr Goyal said that customers in the interiors of the country may now look at switching to traditional products. ULIPs currently contribute 95 per cent of the company’s business and its funds under management stand at Rs 14,000 crore.
Bajaj Allianz Life on Thursday tied up with Thomas Cook for the distribution of life insurance policies. As a corporate agent, Thomas Cook will sell Bajaj Allianz’s products across its 160 retail branches.
Source: Business Standard, Deccan Chronicle, The Tribune, Asian Age, The Statesman, Deccan Herald
Tuesday, June 17, 2008
NEW IRDA CHIEF FOR THRUST ON RURAL, HEALTH INSURANCE
Hyderabad: Developing an enabling environment for the growth of rural and health insurance tops the agenda of Mr J. Hari Narayana, new Chairman of Insurance Regulatory and Development Authority (IRDA).
“While protection of policy-holders’ interest is paramount to the regulator always, we will also ensure the spread of insurance in rural and health sectors. There is lot of potential in these sectors,” Mr Hari Narayana told Business Line after taking over as the third chairman of IRDA here on Thursday.
The regulator would be happy as long as the prescribed rural and social obligations are met by the companies, he said, adding that the current scenario was satisfactory in that regard.
Various ways and means would be “carefully examined” to ensure the health and penetration of health insurance, the chairman said. “There are some high-level panels which examined various aspects on health insurance and we will take appropriate steps shortly,” he said.
Personally, he felt that one should take health insurance at a younger age itself.
Observing that the growth of insurance industry was “very good” at 13 per cent last year at over Rs 75,000 crore, he said the growth could be 18 per cent this year.
On the significant share of Unit Linked Insurance Plans (ULIPs) in insurance industry and their dependence on a volatile financial market, Mr Hari Narayana said, “There is nothing to worry as Indian investors (holders of insurance policies) are very mature. We will monitor the situation while promoting transparency.”
Source: The Hindu Business Line
“While protection of policy-holders’ interest is paramount to the regulator always, we will also ensure the spread of insurance in rural and health sectors. There is lot of potential in these sectors,” Mr Hari Narayana told Business Line after taking over as the third chairman of IRDA here on Thursday.
The regulator would be happy as long as the prescribed rural and social obligations are met by the companies, he said, adding that the current scenario was satisfactory in that regard.
Various ways and means would be “carefully examined” to ensure the health and penetration of health insurance, the chairman said. “There are some high-level panels which examined various aspects on health insurance and we will take appropriate steps shortly,” he said.
Personally, he felt that one should take health insurance at a younger age itself.
Observing that the growth of insurance industry was “very good” at 13 per cent last year at over Rs 75,000 crore, he said the growth could be 18 per cent this year.
On the significant share of Unit Linked Insurance Plans (ULIPs) in insurance industry and their dependence on a volatile financial market, Mr Hari Narayana said, “There is nothing to worry as Indian investors (holders of insurance policies) are very mature. We will monitor the situation while promoting transparency.”
Source: The Hindu Business Line
Wednesday, June 11, 2008
LIC TARGETS 40 LAKH RURAL MICRO-INSURANCE POLICIES
Mumbai: LIC has set a target of selling 40 lakh micro-insurance policies this year, said Mr T.S. Vijayan, Chairman, LIC. With the establishment of a technology platform and tie-ups with NGOs, micro-finance organisations, co-operative societies and rural banks, the corporation expected to sell 40 lakh micro-insurance policies this year, against 8 lakh policies in the previous year, Mr Vijayan said, speaking at the SKOCH Banking Financial Services and Insurance summit.
LIC’s micro-insurance policy, “Jeevan Madhur” was launched in 2006 and, offers the option of a minimum weekly premium payment of Rs 25. He said the corporation had devised new products, both in terms of payment schedule and delivery, for the rural areas keeping affordability of the rural people in mind.
Mr Vijayan said that distribution costs in the case of micro-insurance policies were high.
“It has been estimated that, if the cost of a policy is Rs 300-400, the cost of distribution is double that,” he said.
He suggested that as in the case of micro-credit, the insurance sector should also have access to technology funds for micro-insurance, “There is a technology infusion fund available with the Reserve Bank of India for micro-credit and another one with Nabard for giving micro-credit. These or some such additional measures should be made available to the insurance sector,” he said
Integrated product
The Chairman also called for all-round pooling of resources of insurance companies to evolve an integrated insurance product covering life, health as well as other areas.
“For this, insurance companies will need to come together as a “virtual corporation” offering a combined micro-insurance face while the technology handles the back-end break-up of who gets to service what part.
A business structuring for a settlement and servicing mechanism can also be worked out,” he said. In the last fiscal, the insurance industry sold over 5 crore policies of which 1.1 crore were sold in rural areas. However, in terms of penetration, urban India remains ahead. Penetration in urban India is 47 per cent, while it is only 27 per cent in rural areas.
Source: The Hindu Business Line
LIC’s micro-insurance policy, “Jeevan Madhur” was launched in 2006 and, offers the option of a minimum weekly premium payment of Rs 25. He said the corporation had devised new products, both in terms of payment schedule and delivery, for the rural areas keeping affordability of the rural people in mind.
Mr Vijayan said that distribution costs in the case of micro-insurance policies were high.
“It has been estimated that, if the cost of a policy is Rs 300-400, the cost of distribution is double that,” he said.
He suggested that as in the case of micro-credit, the insurance sector should also have access to technology funds for micro-insurance, “There is a technology infusion fund available with the Reserve Bank of India for micro-credit and another one with Nabard for giving micro-credit. These or some such additional measures should be made available to the insurance sector,” he said
Integrated product
The Chairman also called for all-round pooling of resources of insurance companies to evolve an integrated insurance product covering life, health as well as other areas.
“For this, insurance companies will need to come together as a “virtual corporation” offering a combined micro-insurance face while the technology handles the back-end break-up of who gets to service what part.
A business structuring for a settlement and servicing mechanism can also be worked out,” he said. In the last fiscal, the insurance industry sold over 5 crore policies of which 1.1 crore were sold in rural areas. However, in terms of penetration, urban India remains ahead. Penetration in urban India is 47 per cent, while it is only 27 per cent in rural areas.
Source: The Hindu Business Line
NEW IRDA CHIEF J HARINARAYAN WANTS TO FOSTER COMPETITION
Hyderabad/New Delhi: Jandhyala Harinarayan is the new chairman of the Insurance Regulatory Development Authority of India (IRDA). The government cleared the order for his appointment on Tuesday.
Mr Harinarayan, who was a former chief secretary of Andhra Pradesh, will have a five-year tenure at IRDA. He succeeds CS Rao who retired in May this year. He was chosen for the top job based on the recommendations of a search committee headed by finance secretary D Subba Rao.
“My mission would be to widen and deepen insurance penetration in India and encourage competition among insurers to give a better deal to consumers,” Mr Harinarayan told ET on Tuesday.
According to him, new channels of distribution have helped improve insurance coverage. But more needs to be done. “We need to look at the role of various distributors, including agents and brokers and also encourage direct marketing of retail insurance products,” he said.
Insurance penetration in India is low compared with developed countries such as the UK and Japan. Measured in terms of premium collections, the penetration is close to 4.1% of GDP in life and 0.6% of the GDP in the non-life segment.
Penetration in the non-life segment is expected to improve, with free pricing and product innovation. But IRDA is yet to allow insurers the freedom to design their own products.
Mr Harinarayan reckons there is a case for lowering the premium on mediclaim policies to make it more affordable to consumers. Mediclaim is a voluntary health insurance policy and normally comes up for renewal annually.
“Companies can perhaps look at a longer renewal period. On their part, policy holders should start off with medical insurance schemes as early as possible, as it would mean ammortising risk over a longer period of time,” he said.
Many senior citizens’ organisations have registered complaints with the insurance regulator on surging premiums and denial of fresh insurance covers.
An expert committee that examined these complaints recommended universal coverage for health insurance. It has also made out a case for a health insurance pool, factoring in the high claims ratio in medical insurance. Here again, the regulator is yet to take a view on these suggestions which can help improve insurance penetration.
According to Mr Harinarayan, there is also need to ensure greater transparency in unit-linked insurance plans, a popular savings instrument that offer protection in terms of life cover and flexibility in investments to the policyholder. “IRDA has already initiated work on this, asking insurers to give a break up of the exact amount that will be available for investments during the premium period. But there is no doubt that investors need greater clarity on ULIPs,” he said.
Source: The Economic Times
Monday, June 9, 2008
UCO Bank, Liberty to form non-life JV
There would be another nationalised bank as a partner in the joint venture besides UCO. Liberty will hold 26% as per regulatory norms.
Kolkata: UCO Bank has decided to enter into a joint venture agreement with the US-based Liberty to foray into non-life insurance business during the current financial year.
“After deciding to enter the non-life insurance business, the bank was in talks with several foreign players like the Liberty of US, Engine of Italy and a few other Japanese firms for roping in a foreign partner as per IRDA regulations,” a bank official told PTI.
While UCO would have a minimum stake of 30% in the JV, there would be another nationalised bank as a partner in the joint venture. The foreign company would hold 26% as per regulatory norms.
The official, however, declined to divulge the name of the nationalised bank.
“UCO would take a period at least three months to ink an agreement among the three partners. Then a subsidiary firm would be formed,” the official added.
Restructuring capital
The bank would raise Rs325 crore in the form of perpetual preference cumulative shares during the last week of June.
Although the bank has obtained the Finance Ministry’s nod to restructure its capital, it was yet to get the approval of the Cabinet. ”The Cabinet approval is expected any moment,” the official said.
On getting the Cabinet nod and depending upon the capital market conditions, UCO would go for a follow-on public issue to raise Rs450-500 crore from the market. “We expect the market to improve by September,” the official said.
Post follow-on offer, government holding in the bank would come down to 54%. It had approached the government for restructuring of its capital base in order to reduce the Rs800 crore equity base with a view to enhance EPS.
On the bank’s earlier plans of entering the derivatives market, the official said seeing the experience of other banks, it was not advisable to venture into this area.
At the end of March 2008, Capital Adequacy Ratio (CAR) of the bank stood at 10.09%.
“After deciding to enter the non-life insurance business, the bank was in talks with several foreign players like the Liberty of US, Engine of Italy and a few other Japanese firms for roping in a foreign partner as per IRDA regulations,” a bank official told PTI.
While UCO would have a minimum stake of 30% in the JV, there would be another nationalised bank as a partner in the joint venture. The foreign company would hold 26% as per regulatory norms.
The official, however, declined to divulge the name of the nationalised bank.
“UCO would take a period at least three months to ink an agreement among the three partners. Then a subsidiary firm would be formed,” the official added.
Restructuring capital
The bank would raise Rs325 crore in the form of perpetual preference cumulative shares during the last week of June.
Although the bank has obtained the Finance Ministry’s nod to restructure its capital, it was yet to get the approval of the Cabinet. ”The Cabinet approval is expected any moment,” the official said.
On getting the Cabinet nod and depending upon the capital market conditions, UCO would go for a follow-on public issue to raise Rs450-500 crore from the market. “We expect the market to improve by September,” the official said.
Post follow-on offer, government holding in the bank would come down to 54%. It had approached the government for restructuring of its capital base in order to reduce the Rs800 crore equity base with a view to enhance EPS.
On the bank’s earlier plans of entering the derivatives market, the official said seeing the experience of other banks, it was not advisable to venture into this area.
At the end of March 2008, Capital Adequacy Ratio (CAR) of the bank stood at 10.09%.
Source: LiveMint 8/6/2008 (PTI)
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