IFFCO-TOKIO GENERAL Q1 PREMIUM INCOME UP 34%

New Delhi: Iffco-Tokio General Insurance Co Ltd is targeting 30 per cent growth in premium income this fiscal, much higher than the projected industry average of 12 per cent, its Managing Director and Chief Executive Officer, Mr S. Narayanan, has said. In 2007-08, the company had recorded premium income of Rs 1,235 crore.

For the first quarter of the current fiscal, the company has recorded 34 per cent increase in premium income at Rs 414 crore. “I am sure we will be able to achieve the 30 per cent premium income growth target for this fiscal. We have made the plans,” Mr Narayanan told Business Line here.

Besides expanding its distribution network, through its associate company, Iffco-Tokio Insurance services, plans are afoot to introduce add-ons in the motor insurance segment. “We are in the process of filing for motor insurance add-ons (additional benefits such as depreciation waiver, road side assistance),” Mr Narayanan said.

Motor insurance
He said that motor insurance would continue to be the main source of revenue for the company in the current fiscal as well. Last year, motor insurance accounted for 45 per cent of the premium income of the company, a trend in line with national average.

Mr Narayanan also felt that the recent hardening of interest rates would to some extent have an impact on premium incomes. “But, even if car sales dip, premium may not dip in the same ratio as car prices are on the rise, ” he said.

Meanwhile, the company plans to roll out more micro-insurance products and also utilise the cooperatives network to extend these products to semi-urban and rural areas.

“We have two micro-insurance products already put on the market. We are working on few more with more variation,” he said.

On initiatives for simplification of procedures, Mr Narayanan said that the company was working, on an experimental basis, on electronic settlement of claims.

Source: The Hindu Business Line

METLIFE TECH MOVE

Metlife India Insurance has launched Metlife integrated voice response application (MIVRA), a technology platform, which would help customers obtain information about their insurance plan and other details round the clock. MIVRA, designed to expand the access of opportunities to more customers, raise the efficiency bar of the service levels and reduces costs for the organisation, the insurer said in a statement.

Source: Deccan Chronicle, The Telegraph

BAJAJ ALLIANZ LIFE REGISTERS RS 3 CRORE LOSS IN THE FIRST QUARTER

Bajaj Allianz Life Insurance Company Limited (BALIC) has posted a loss of Rs 3 crore for the period ended June 30, 2008, as compared to a profit of Rs 31 crore in the corresponding period of the previous year. The policyholder surplus is Rs 67 crore, as against Rs. 71 crore for the previous year's corresponding quarter and the shareholder loss stands at Rs 70 crore, as compared to the loss of Rs 40 crore for the same period last year.

During the quarter, intense competition amongst private players has resulted in increased payouts of commission to agents. BALIC has adopted a wait and watch policy and not increased commissions to safeguard long-term profitability, a company statement said.

The gross written premium was Rs 1,847 crore in the first quarter 2008-09, as compared to Rs 1,060 crore in the first quarter 2007-08, a growth of 74%. New business premiums was Rs 764 crore in the first quarter, as compared to Rs 658 crore in the same quarter last year, showing a growth of 16%.

The company's overall market share for the period ended May 31, 2008 was 5.98%, as compared to 5.57% in the same time last year.

Bajaj Allianz General Insurance Company Limited has reported a PAT of Rs 7 crore in the first quarter 2008-09, as against Rs 13 crore during the first quarter 2007-08. The company had an underwriting loss of Rs 24 crore in the first three months of 2008-09, as against a profit of Rs 3 crore in the same period last year. The major reason for this is the increase in the loss ratio arising out of certain large losses in the first two months of the year, a company statement said.

Due to heavy discounting in corporate lines, the company's focus has shifted towards retail. Motor insurance constituted 57% of the total portfolio, property and engineering 18%, as against 27% in the same period last year. The gross written premiums was Rs 734 crore in this quarter.

Source: The Financial Express

PVT BANKS, INSURERS GAIN CONSUMER CONFIDENCE

Mumbai: Indian consumer confidence in private banks has in creased in the past three years, helping them gain market share in a retail financial industry that is still transiting from public sector monopolies to a more open and competitive market, research firm IIMS Dataworks says.

IIMS Dataworks, in an analysis based on its Invest India Incomes and Savings Survey of last year, found that between 2004 and 2007, consumer confidence in government-run banks fell.

But there was one sterling exception: State Bank of India, or SBI, the country’s largest lender.

“In the case of retail banks, in locations such as Delhi, Punjab and Tamil Nadu, the rise in confidence in private banks was dramatic, while in others such as Assam, Chhattisgarh and Gujarat, progress has been more muted,” the firm said in a report.

The findings point to a shift in the consumer perception of a financial industry where the public sector accounts for three-fourths of banking assets.

As a pointer to how the consumer mindset is shifting, the findings are important for financial firms that invest in brand building to retain customers and attract new ones.

In the past three years, the cooperative banking sector was the big loser in the public confidence stakes, with its share of the retail customer base almost halving to 16.4% from 31.3%, IIMS Dataworks found. An overwhelming majority of the deserters moved to public-sector commercial banks, it said.

The total public sector customer base grew by 29% between 2004 and 2007, outpaced by a 35% increase in that of lenders operating outside of government control, it said.

But the retail customer share of public sector banks widened to 75.4% from 61.5%; that of private banks grew to 8.3% from 7.2%.

India’s demographics, skewed towards younger wage earners, favour private banks, says Kiran Khalap, founder of Chlorophyll Brand Consultancy. This generation of Indians “do not look for security in either their life, jobs or investments,” Khalap says.

“Naturally, they do not seek the safety of a public sector bank; they prefer the younger private and international brands.” In the insurance industry, too, private companies enjoyed a lift in public confidence levels between 2004 and 2007, according to the report.

But that didn’t translate into a fall in public confidence in state-owned Life Insurance Corp. of India, or LIC.

“Private banks, private insurance players and foreign banks are stressing on brand building and more than that, delivery on ground and professionalism which has worked well for them,” says Mahesh Chauhan, president of the advertising agency Rediffusion DY&R Pvt. Ltd.

SBI and LIC are exceptions in the public sector because they are “larger than life” and have government backing, Chauhan adds.

Source: Mint

ARIBA IN TALKS WITH INSURERS, BANKS

Mumbai: Faced with pressure on profits due to rising interest charges, banks and financial services companies are looking at deploying spend management solutions to cut costs. Spend management can help banks, financial services and insurance companies, which are generally topline and growth focused, to cut costs, said Mr Thulasidoss Sivakumar, Group Director – South Asia, Ariba Solutions, provider of spend management solutions.

Ariba, which already provides services to insurance companies such as ICICI Prudential, ICICI Lombard, Aviva India and HDFC Standard Life, is also in talks with some Indian banks, he said.

“The banking sector is traditionally focused on growth and increasing their reach through branches and introducing new products. For majority of the banks about 30-40 per cent of revenues go into spending. With the increase in interest rates and pressure on margins, banks are also looking costs through spend management,” Mr Sivakumar said.

Some areas where banks incur huge costs are marketing, postage and courier, IT and technology such as ATM machines, printing machines, note-counting machines and also on furniture in case of branch expansion.

“A large bank in India spends about Rs 2,000-4000 crore every year. If spends are managed efficiently, a bank can save about 10-15 per cent across various categories,” Mr Sivakumar said.

Source: The Hindu Business Line