Aviva Life signs Sachin as brand ambassador

PRAGUE: Aviva Life Insurance, a joint venture between UK's biggest insurer Aviva and Dabur, has roped in master blaster Sachin Tendulkar as brand ambassador and named its new child insurance policy after the cricketer's title - Little Master. Announcing this here, Aviva India Managing Director Bert Paterson told reporters: "Sachin is the most popular icon in India for all age-groups and his popularity transcends the boundaries of religion, caste and region. Our new product - Aviva Little Master - is a tribute to our brand ambassador." The company will be launching a nationwide campaign featuring Tendulkar soon, Paterson said. This is for the first time that Aviva India has gone for a brand ambassador to increase its market presence, currently pegged at little over four per cent. When asked why the has company chosen a cricketer as its brand ambassador even after the Indian team performed dismally in the World Cup, he said: "It (the World Cup) is over now." Tendulkar, who was present through video conferencing said: "Aviva Little Master is a great opportunity for forward thinking parents to secure their children's future." Aviva Little Master, the 20th product from Aviva India, is a unit-linked plan designed for parents to secure their child's future. The policy is available for the child up to 17 years and the parent's age should be between 18 to 45 years. The policy, with minimum annual premium of Rs 15,000 for a 10-year term or above and Rs 25,000 for less than 10 years, provides accidental death benefit, a comprehensive health benefit and income benefit, the company said. Five years into operations in India, Aviva has so far pumped in Rs 750 crore as paid up capital in the country.

Source: Economic Times

ING Vysya Life Insurance declares bonus

ING Vysya Life Insurance Company has declared a bonus of Rs 75 per thousand on three of its policies.
The Vice-President and Head of Product Development Mr Y.V.D.V. Prasad, told presspersons here today, "We have earned good returns on our investments to reward our policyholders."
The three risk covers are `Power Life' (a limited payment endowment plan, where the sum assured plus accrued bonus is paid on maturity or earlier on death of life assured), `Best Years' (retirement plan with capital guarantee provisions) and `New Fulfilling Plan' (whole life limited payment policy that pays the entire sum assured during the premium payment term and continues to provide life cover and maturity benefit).
Mr Prasad said the mean yield targeted for the retirement plan was 8 per cent. As the mean yield target has been exceeded, ING has rewarded its policyholders, he added. Only about 10 per cent of the investments were in equities, he said. This target would continue as all the investments were long-term and almost entirely in government securities.
Almost the entire premium collection in all the three policies was from individuals. ING's Retirement Plan has so far collected premiums of about Rs 90 crore, he said.

Source: The Hindu Business Line

Bangalore, July 2 For the eleventh year in succession, the public sector National Insurance Company Ltd NICL has retained the Infosys Technologies account.
NICL officials said that the company paid an estimated premium of Rs 16 crore, the same as last year. The sum assured included Rs 5,000 crore for asset coverage and another Rs 3,000 crore for liability cover, essentially implying loss of profit (LOP) risks. The risk coverage also included medical risks for Infosys’ 56,000 employees.
The officials that the assets covered were mostly in the vicinity Bangalore, Mysore, Pune, Chennai and Bhubaneshwar.

Coinsurance partners
NICL, however, is yet to decide on the coinsurance partners this year. The officials said that both ICICI-Lombard Insurance Company and Tata AIG Insurance were pitching hard for a coinsurance partnership with NICL.
Last year National Insurance’ coinsurance partner was ICICI-Lombard. The officials said that a decision on ceding 25 per cent or even 30 per cent to either of these companies would be decided only next week after negotiations with the two companies.
Although Infosys had high medical claims, the company has hardly lodged any claims on the LOP or property covers.
This, the officials said was one of the major factors that weighed in favour of Infosys. Infosys’s claims from for the medical risk cover for last year was close to 95 per cent, though below the national average of about 120 per cent.
Besides, what also weighed in favour of the info tech company were the low probable maximum loss (PML) ratios. This was largely on account of the spread of Infosys’s assets across the country.
This ratio estimates the losses of the underwriter in the case of a claim event. Consequently at any point of time the PML ratios are unlikely to exceed Rs 300 crore for the insurers, the officials said. PML ratios tend to be low in the case of information technology companies.
As a result companies like Infosys tend to be highly profitable for insurers allowing them to obtain competitive tariffs.

Mega risk cover
However, the officials said that the sum assured beyond Rs 1,500 crore were treated as mega risk covers. Mega risk covers were in any case, deregulated some time ago, and were entirely reinsurance driven.

Source: The Hindu Business Line

Insurers plan roadmap against cartelisation

Non-life insurers are in the process of preparing a roadmap to ensure that none of them engage in cartelisation when the Insurance Regulatory and Development Authority (Irda) totally lifts the price controls on fire and engineering insurance from September 1. The code of market conduct is being prepared under the aegis of the General Insurance Council (a self-regulatory body of the 12 non-life insurance companies) in this regard.

"The code of market conduct will ensure there is no cartelisation among insurers, that they don't indulge in restrictive practices, and will ensure that insurance is available to the consumer at reasonable cost. It is to ensure that the insured is not put to any disadvantage by insurance companies charging arbitrary rates," said K N Bhandari, secretary general of the General Insurance Council.

The code of market conduct has to be adopted and filed with the Irda by July 31.

The Irda, on June 25, sent a circular to the CEOs of all non-life insurance companies stating that effective September 1, 2007, the control on the rates of fire, engineering and workmen's compensation would be totally removed.

However, the freedom is subject to two stipulations. Firstly, insurers should prepare a code of market conduct and secondly, they have to file their base rates and the procedure to be followed for rating of individual risks based on the risk features and the range of loadings/discounts with the Irda. However, this time, there will be no approvals required from the Irda. The circular says that insurers will have to adopt a code of conduct through the General Insurance Counicl on matters relating to market conduct and competition as a matter of urgency and abide by such a code in letter and spirit.

The non-life insurance industry was detariffed from January this year. Though the Irda lifted price controls on insurance products (fire, engineering and motor) from January 1 this year, it restricted the discounts insurers could give, fearing a price war between them.

Insurers can give maximum discounts up to 51.25 per cent of the erstwhile tariff rates on individual rated products (those risks, where the sum insured is more than Rs 10 crore), and up to 43.75 per cent in case of class rated products (those risks, whose sum insured is less than Rs 10 crore).

Source: Business Standard

LIC not to appoint retired staff on company boards

The Life Insurance Corporation (LIC) has decided not to nominate any retired employee as a director on the board of the almost 90 companies in which it has equity or loan exposure.

The decision, which comes after LIC was involved in a tussle with one of its retired nominee directors over exercise of the employee stock option plan (Esop) in Larsen & Toubro (L&T), will be implemented once retired employees currently serving as nominee directors complete their term.

Confirming the development, sources in LIC said the corporation would send senior officials of the rank of executive director and above to the company boards.

“The average age of senior officers of the rank of executive director and above is 54; so we may not see many retirements in the near future,” they added.

In most cases, LIC appoints one of its high-level retired employees as a director on the board of a company in which it is a lender or an equity stake holder.

Industry experts said the corporation might find it difficult to meet its own criterion— designation of executive director and above—to fill up vacancies on company boards.

However, a top source in LIC said the corporation’s representation on company boards would be significantly reduced in the near future.

“Today, companies go to the capital markets to meet their fund requirements. There has been a reduction in the number of companies approaching us for a term loan and so we may not need that many nominee directors in the future,” he added.

LIC and GIC were caught in a major controversy two months ago with their representatives in L&T – Kranti Sinha and B P Deshmukh, respectively – exercising their Esops and transferring them to their personal demat accounts without informing the institutions.

LIC took legal recourse against Sinha and received a restraint order from the Bombay High Court.

Later, both directors were replaced from the L&T board and also returned their Esops to the institutions.

Source: Business Standard