HEALTH INSURANCE FOR TSUNAMI-HIT

Chennai: Families across the State, who were affected by the tsunami, have been provided medical and accident insurance by the United India Insurance Company. Of this, about 6,500 families are in the city.

Addressing presspersons here recently, the company’s chairman and managing director G.Srinivasan said that about 16,000 families across the State have benefited from the insurance cover over the past one year. The Tsunami Jan Bhima Yojana was launched in March 2007 in association with the Central Government.

Disbursed
Insurance claims worth Rs.7.12 crore have been disbursed so far and the cost has been sponsored by Prime Minister’s National Relief Fund. On the benefits, he said the tsunami affected families have been provided a photo identity card which they could use to avail of medical facilities.

Each family is provided with an insurance cover up to Rs.30,000 a year.
About 180 hospitals in the State have been enlisted based on the quality of healthcare and their location. The yearly premium of Rs.800 a family is provided by the Central Government, Mr.Srinivasan said.

A total of three lakh families have been provided the insurance cover in Tamil Nadu, including those in Tiruvallur, Nagapattinam and Cuddalore districts, and in Kerala.
It would soon be expanded to Andhra Pradesh and Puducherry, he added.

Source: The Hindu

INSURANCE CLAIMS HUB

Kochi: The New India Assurance Company is setting up a centralised claims hub at Ernakulam shortly in order to expedite claim settlement. The service centre, being a specialised office, will be able to settle claims faster as a single-window operations. All offices operating in the city will be attached to it, Mr Girish Raj, Chief Regional Manager, Kerala region said. To start with, the service centres will deal with motor OD claims and later other claims will be added.

Source: The Hindu Business Line

STAR HEALTH POSTS RS 3.16-CR PROFIT IN FIRST YEAR

Chennai: Star Health and Allied Insurance has turned in a net profit of Rs 3.16 crore for the year 2007-08, its first full year of operations. The company’s Chairman and Managing Director, Mr V. Jagannathan, termed the achievement as unprecedented in the industry.

The company collected premium of Rs 168 crore, compared with Rs 22 crore in 2006-07, in which year, the company operated only ten months. Mr Jagannathan said that Star Health had fixed for itself a target of Rs 400 crore of premium for the current year. Half this amount has already been achieved, he said.

The company has been chosen by the Andhra Pradesh Government as the insurer for covering 6.55 crore of ‘below poverty line’ people in the State. The company received premium of about Rs 70 crore from the Andhra Pradesh Government.

In 2007-08, Star Health had made an investment profit of Rs 9.2 crore. The company did not make any underwriting profit. However, Mr Jagannathan expects the company to make profits on both investments as well as underwriting operations in the current year.

At a press conference here today, Mr Jagannathan estimated that investment profit for the current year would be about Rs 14 crore.

Outpatient care
Star Health introduced in Tamil Nadu a policy which would pay doctors’ fees on behalf of the policyholders. It sold about 3,200 policies — the only one of its kind in the country — and the claims are less than half the premium.

The company intends to extend the policy across the country. The premium is different for different cities. In Tamil Nadu, it is Rs 350 per family — the policy floats on all the members of the family. In Delhi, it would be Rs 1,000 and Rs 500 in Bangalore.

The company has also introduced a ‘super surplus’ policy, which covers hospitalisation expenses of more than Rs 3 lakh. For example, if a policyholder spends Rs 4 lakh, Star Health will bear Rs 1 lakh. The premium is Rs 3,000 for coverage of Rs 7 lakh over Rs 3 lakh and Rs 4,000 for Rs 10 lakh over Rs 3 lakh.

Source: The Hindu Business Line

‘SHORT-TERM PROFITABILITY OF GENERAL INSURANCE FIRMS COULD BE HIT’

Mumbai: While the short-term profitability of general insurance firms in India could be affected by the current situation in the industry, the outlook for these firms is stable on account of steady fundamental credit conditions for the next 12-18 months, says a joint report by Moody’s Investor Services and ICRA.

Pressure on the premium rates due to intense competition, higher reinsurance costs and falling premium income could adversely affect short-term profitability of the general insurance firms, says the report.

The greater reliance of the insurers on their investment portfolios to generate income could expose them to the volatility of the financial markets. The report also stresses on the need for raising more capital for unconstrained growth by private insurers, as reliance on reinsurance for capital relief is not always viable. It also stresses on the need for ensuring greater transparency and the need for more trained insurance professionals and technicians.

However, highlighting the positives, the report says that rising income levels, low penetration levels for most consumer products, availability of financing and changes in lifestyle and higher risk awareness would sustain consumer demand for the products provided by the general insurance providers.

The intense competition brought about by deregulation could encourage the insurance providers to innovate in the areas of underwriting, marketing, policyholder servicing and record keeping.

Answering queries about the impact of relaxation of foreign investment limits in the insurance sector, Mr Subrata Ray, Head-Corporate Sector Ratings, ICRA, said that increasing the limit to 49 per cent would lead to increased capital inflows into the sector, which could be beneficial in the long run.

But it would also mean increased competition, which might adversely affect the position of the fringe players. There are 14 players in the general insurance market, of which eight players enjoy a market share of 90 per cent, he added.

Source: The Hindu Business Line

‘PVT SECTOR INSURANCE PLAYERS TO CAPTURE HIGHER MKT SHARE’

‘Private general insurance players will continue to capture market share at the expense of public enterprises its a mix of aggressive distribution and service. Having penetrated the corporate segment in the past, most private insurers now seek to grow their retail books, says a report on Moody’s -ICRA global insurance.

Furthermore, the number of private insurers is expected to grow as various foreign companies have announced intentions to establish joint ventures. Given the low level of penetration in some segments, this trend towards foreign participation is likely to continue, informed the report.

According to the report, rate deductions in the recently de-tariffed corporate portfolio (fire & engineering) will impact premium growth, but this outcome will be offset by greater sales of existing and new products.

The formation of a third-party motor pool, where all general insurers are required to participate based on the size of their overall market shares, will reduce the underwriting burden on public entities. The claim ratio for the segment is likely to improve in the medium term as premium rates for the third party motor pool have also climbed.

Although, public entities have sustained consistent underwriting losses on some product lines, in particular for third-party motor business, their investment income and gains have more than offset their underwriting losses and helped them achieve solvency margins.

On challenges for the domestic general insurance industry the report said premium rates will remain under pressure due to intense competition on the more profitable lines. Falling premium income - without a corresponding reduction in claims - is likely to drive down profits.

Reinsurance is likely to cost more as treaty reinsurers reduce ceding commissions to compensate for the lower rates following deregulation. Public and private sector insurers’ greater reliance on their investment portfolios to generate sufficient income and gains for net profits would subject them to the volatility of the financial markets.

Source: The Financial Express