Fortis starts India life insurance activities

Amsterdam: Dutch-Belgian financial services group Fortis said on Tuesday its Indian life insurance joint venture has started operations in India.

IDBI Fortis Life Insurance, a joint venture between Indian financial group IDBI, privately-owned Federal Bank and Fortis in India, will focus mainly on bancassurance activities, cross-selling across top-tier client segments, Fortis said in a statement.

IDBI Fortis, which has a workforce of about 400 employees, will service IDBI's 490 bank branches and Federal Bank's network of 550 banks, Fortis said.

Source: Reuters

State Bank of India, Australia's IAG in insurance JV

Tuesday, 13 May
Mumbai: State Bank of India, the country's top lender, said on Tuesday it has signed a memorandum of understanding with Insurance Australia Group for general insurance.

Both firms will finalise an agreement and approach regulators for approvals, they said in a joint statement, without specifying financial details.

SBI will hold 74 per cent in the venture, with IAG holding the remaining 26 per cent, the maximum allowed under Indian law.

A general insurance joint venture "is a key element of SBI's strategy to pursue emerging, high growth opportunities," it said.

"SBI hopes to commence business in the current financial year and aspires to be amongst the top three players in the general insurance space in a period of about 10 years," it said.

State-run SBI has a venture with Cardiff, a unit of BNP Paribas , for life insurance.

Source: Reuters

Bancassurance boost for SBI Life

SBI Life Insurance posted a net profit of Rs 34 crore for the financial year ended March 31, 2008, in its third consecutive year of profitable operations.

While the private insurer grew premium collections by 92% to Rs 5,622 crore in 2007-08, the new business premium grew 87% to Rs 4,792 crore.

The new business annualised premium equivalent (APE) , a standard measure in the industry that takes single premium at 10%, has grown 93% to Rs 3,481 crore.

SBI Life is also readying itself for an initial public offer sometime later this year, once market conditions turn conducive.

"The growth in bancassurance by 108% over the last one year has contributed significantly to growth," SBI Life Insurance managing director and chief executive officer U S Roy told DNA Money. "We have done almost Rs 1,600 crore of premium in 2007-08 in bancassurance from about Rs 800 crore the previous year. In fact, the branches selling SBI Life products have started functioning on their own momentum."

The life insurer has greater hopes from this channel. "Currently, bancassurance contributes to 38% of the total premium and the target is to increase its share to 50% in the coming years," Roy said.

After growing 100% till December 2007 and about 40% in the fourth quarter, the company is looking at a conservative 75-80% growth this year.

And the company has no immediate plans to raise additional equity. "If at all any equity is needed, it will not be before the third quarter of the current year. A capital of Rs 1,000 crore can take along a business of Rs 7,500 crore," Roy said.

On its proposed public float, Roy said, "Our internal exercise on arriving at actuarial ratios is underway and the first round of findings will be vetted by external agencies in June. And with three consecutive years of profit, we are looking forward for an IPO."

SBI Life's assets under management have more than doubled to Rs 10,493 crore.

For the current year, SBI Life is planning a massive expansion plan in tier 4 towns and certain areas where SBI is not present.

It is also planning a bouquet of health insurance plans, of which the first set of products should be launched shortly.

According to Roy, the piloted microfinance insurance plan "Grameen Shakti" in Orissa has met with huge response. The company now plans to take this low cost simple plan to other states as well this year.

Source: DNA

While going for health insurance

Healthcare has suddenly caught the fancy of life insurance companies. Be it lumpsum amount on hospitalisation or ambulance expense reimbursements, the benefits offered under such policies have shot through the roof. Some even claim to cover more than 1,000 illnesses under one policy.

However, before signing the documents for such tempting benefits on the health and hospitalisation side, one should ask a few quintessential questions, lest his claim is denied after he has got a lengthy bill.

Yes, the billboard of the insurance firm would proclaim that no medical tests are required to take the health policy. But, the fact is that there would be conditions laid out on the same. One would either have to declare that he is healthy or he would have to have another policy with the same firm, under which he had undergone a medical examination.

Even though most policies offer the basic benefit of hospitalisation charges reimbursement, there is a minimum period for which the policy holder has to be hospitalised. Usually, insurers ask for a minimum of 24-hour hospitalisation, but a few others put out additional conditions.

One of the life insurance health product insists that the policy holder must be hospitalised for at least two consecutive nights and he must be charged the room rent for at least two days for the claim to be made.

There is also a survival period for the patient, which distributors say is used as an excuse frequently by insurers to deny claims. This basically specifies the minimum period during which the policyholder must be alive for the claims to be payable.

The survival period asked by companies ranges between 30 to 60 days. So, if a survival period of 30 days is specified in the policy and the policyholder dies on the 29th day, none of the medical expenses will be reimbursed.

Few health insurance policies offer post-hospitalisation benefits as well, which is meant for the treatment and care needed after the hospitalisation period, essentially medicines etc. But, companies specify a condition for this too.

For example, a recently launched policy states that the benefits provided for follow-up tests and post-hospitalisation consultation would be given only if the person has been hospitalised for at least five days. The same policy puts another condition to claims for surgery.

If more than one surgery is conducted under one anesthesia than the claim for the severest surgery is paid in full, while only 50% benefit is given for the second surgery. No claim would be paid for any subsequent surgery under the same anesthesia.

The procedure for submission of bills for claims can be another area that one must pay attention to. Most policies ask for original bills and hospital documents for claims purposes.

So, the policy holder might face a problem as he wants to apply for claims to two different health insurance companies. Check, with the insurance firm whether duplicate or attested photocopies of bills are acceptable.

Source: DNA

Max New York Life Insurance launches SMART Assure

New Delhi: Max New York Life Insurance, a joint venture between Max India Ltd and New York life, today introduced its unit-linked insurance plan 'SMART Assure' plan.

''The plan offers the customer a choice of allocating up to 100 per cent of premium paid beyond specified premium bracket. As the premium amount goes up, the allocation charges keep decreasing with no allocation charges levied on premiums upward of Rs three lakhs,'' a statement said.

Also, it offers an increasing premium option under which the customer has the choice to increase the annual premium by five per cent of the initial premium on each policy anniversary and accordingly the sum assured also increases at five per cent per annum without any additional underwriting.

The plan caters to wide customer segment with the entry age ranging from as low as 91 days to as high as 75 years and the maximum age at maturity of 85 years which makes it an ideal proposition for Senior Citizens seeking insurance coverage along with investments.

''The customer has the flexibility to choose any policy term between 10 years to 30 years with regular payment terms. The minimum premium which can be paid under this plan is Rs 20,000 per month,'' the statement added.

Source: DNA