Life Insurance

50 PER CENT SUBSIDY FOR CROP INSURANCE

Tiruchi: About 557 acres of banana, 476 acres of tapioca and 3,108 acres of onion crops in Tiruchi district would be brought under the crop insurance scheme implemented with 50 per cent government subsidy, according to Deputy Director of Horticulture S.Robert Vincent.

Banana-growers in Musiri, Andhanallur, Lalgudi, Tiruverambur and Manachanallur taluks, tapioca growers in Thuraiyur and Uppilliyapuram taluks and onion-growers in Manachanallur, Thuraiyur, Uppilliyapuram, Thottiyam and Pullampadi taluks can avail of the scheme.

In a press release, Mr.Vincent said that farmers who had obtained crop loans from banks would be eligible for a subsidy of 50 per cent on the premium for the insurance cover and those who have not taken loans would be eligible for 55 per cent. Farmers could obtain information about the scheme from horticulture officers.

He disclosed that about 428 hectares would be covered under vegetable crops under the Integrated Horticulture Development Scheme in the district. Under the scheme, farmers would be provided quality seeds at 50 per cent subsidy. The seeds were being distributed through the assistant directors of horticulture and horticulture field officers.

Mr.Vincent also stated that quality seedlings and saplings of various horticulture crops were available at the Horticulture Farm functioning at Mudalaipatti on the Tiruchi-Thogamalai Road. Farmers and public could purchase seedlings of sapotta, tamarind, amla, lemon, guava, teak, bamboo, jack fruit, curry leaf, eucalyptus, jasmine and other decorative plants.

Source: The Hindu

FARM COVER: DEADLINE EXTENDED

Hyderabad: The Union Ministry of Agriculture has agreed to extend the cut-off date to August 16 for submission of insurance proposals by farmers who have not taken loans for this kharif season. The Ministry, however, put some conditions for farmers to be eligible for the scheme.

The extension would be applicable only to crops sown during the extended period (after July 31, 2008). The condition of crop on the date of submission of proposal should be normal. The banks would be asked to accept the proposals of only farmers without loans furnishing the area sown certificate, a Government of Andhra Pradesh press release said.

Source: The Hindu Business Line

INSURERS BET ON INNOVATION

Mumbai: You do not need to go to the insurance agent to insure your car, health, travel or house, as you can buy it over phone. General insurance companies are coming up with innovative products offering a variety of services as competition in the industry picks up. There is also one company which offers free cover from terrorist attack to the first one lakh applicants.

India’s largest private general insurance company ICICI Lombard has silently launched first-of-its kind, mobile commerce service. Using this service a customer can buy the insurance cover using his mobile phone. While elaborating on the innovation Ms Vishakha Mulye, executive director, ICICI Lombard, said "In India, insurance products are available at low costs, but there are supply side constraints. Insurance companies are not reaching to the masses but technology and innovation holds the key for a change."

To meet this, the company has made insurance products available through mobile phones, said Ms Mulye. Customers will be able to choose the product, pay the premium using a credit card and get the insurance immediately. Later on, they could get the print out of the policy from website as well.

So, for a consumer going abroad it will take minutes to get the travel insurance cover two hours before he boards the plane, explains Ms Mulye. Innovation is helpful for students learning abroad as well. ICICI Lombard offers personalised insurance schemes to students, which match the requirements of their respective universities. To cater to this segment, the company has tied up with 500 universities across the world.

Bajaj Allianz General Insurance Company is also using mobile service for renewals, reminders, SMS alerts and other host of services, said a company spokesperson. As on today, the company is offering the option of online service, but it is looking for more innovative options, he said.

Another example of innovation is the offer of free insurance cover against terrorist attack for the first one lakh people who accept the offer. Mr Rahul Agarwal, managing director and CEO, Optima Insurance Brokers Pvt. Ltd said after the Jaipur bomb blasts it was seen that the many affected families had not received the compensation declared by the government. To fill this void, Optima Insurance tied up with New India Assurance and offered cover of Rs 1 lakh for free for the first 1 lakh people who sign up across India, he said. To avail this insurance policy one only needs to go to the website and apply to get the cover from terrorist attack.

In the last two weeks, 15,000 Indians have taken advantage of the scheme and many more are expected to do the same, said Mr Agarwal.

Source: Asian Age

INVESTORS CONTINUE TO PREFER ULIPs: SHIKHA SHARMA

With the government focus shifting to reforms, insurance sector could be a big beneficiary. In an exclusive interview, ICICI Prudential managing director Shikha Sharma tells ET about the state of the industry and a possible hike in the FDI limit for the sector. She feels that an increase in the limit, to 49%, would help Indian companies build a stronger and long-term relationship with their foreign partners. Excerpts:

Do you see insurance reforms happening anytime soon, now that the UPA is no longer dependent on the Left?

With the UPA winning the trust vote, it is reasonable to expect the government will pursue reformist policies more vigorously than it did in the past four years. But I think it may take some time before the final Act is passed on these lines. In fact I am less optimistic about it happening immediately as the government may first want to look at tackling some of the larger issues such as inflation. However, once the appropriate regulatory structure is in place, the industry is likely to witness consolidation. The sector is relatively new and there are currently about 18 players of which some are still small. Reforms may eventually lead to fewer but stronger players in the country.

Has the low FDI limit imposed any capital constraints on you? Do you plan to expand your capital base this year?

We plan to boost our operation and for that we definitely need to put in more money. But that is a part of our annual exercise. Our current capital base is around Rs 4,272 crore. We see India’s rural areas as the next big opportunity as the growth there is almost 13-14% compared to the metros, which are witnessing about 7% growth. We are already in talks with MFIs and NGOs to boost our penetration in rural India. Apart from strengthening our presence in the villages, we also plan to foray into the international market. West Asia has good potential as we see a demand for rupee-based products there. We have a representative office there, which promotes our brand. We are in the process of completing the regulatory requirement in India and applying for a licence for a full-fledged office in west Asia.

Will the sharp rise in inflation and the stock market slump dampen appetite for insurance products?

Insurance companies have managed to record a decent growth in this financial year so far, but sales do appear to be easing. Although our product profile hasn’t changed much, the industry has seen a marginal shift away from unit linked plans (ULIP) to traditional products. The insurance sector managed around 20% growth in the first quarter of this year compared to the corresponding period last year that saw over 30% growth. Although the industry hasn’t faced any negative growth so far, there has certainly been a mild deceleration in growth.

Has the volatility in the stock market affected the demand for ULIPs?

ULIPs have so far have been the main channel for retail investment in the stock market and comprise about 85-90% of the overall products of the insurance sector. There has been some drop in investment in ULIPs but I would say it is more like a blip. In fact, in the months to come, ULIPs will continue to be the preferred alternative for investors. For those who are not concerned about the short-term volatility in stocks, I would say this is the right time to buy. Also, while market returns are important, ULIPs cover a variety of needs, and are flexible and transparent. I do not foresee any switch from ULIPs in the long-term.

How have the first-time premium collections grown of late? Has the global slowdown or subprime crisis had any impact on the insurance sector in India?

Premium from new policies has fallen for the insurance industry in the last few months but as I said earlier, it is more like a blip. While there has been a deceleration of growth in the equity-linked and mutual fund-related products, the life insurance industry has seen a sudden jump in sales in the recent past. The global slowdown hasn’t had an impact on insurance companies in India. The industry is relatively new and it’s not dependent on the global economy.

What is your outlook for the stock market? Do you see any sharp recovery?

The stock market has witnessed a lot of fluctuation this year, after touching an all-time high in early January. Such high levels of volatility make it difficult to predict the future. But as far as I think, markets will take some time, may be eight to 12 months, to revive.

Source: The Economic Times