MUMBAI: The benefits of de-tariffing in non-life insurance is finally trickling down to individuals. Insurance brokers have started providing aggregations services, offering quotes across a range of insurance companies to retail buyers of property, auto or health insurance. The key difference between a broker and an insurance agent is that unlike an agent, who pushes products for an insurance company, the brokers represent the customer and are expected to get their clients the best deals from across companies. So far, insurance brokers had been constrained by regulations that required that any person selling insurance be a fully-qualified insurance person. Also, brokers were not allowed to have sub-brokers’ selling insurance. As a result of these restrictions, brokers focused only on high-networth corporate customers. Corporates made the best of de-tariffing by playing up one insurance company against the other. But now insurance brokers have found out that by leveraging the power of the internet, they can aggregate quotes from across companies and offer the best rates to individuals. Insurance broking firms Optima Risk Management and Bonsai Insurance Broking services have managed to tie up with insurance companies, allowing buyers to purchase cover directly over the internet. Optima offers quotes through its website click2insure.com while Bonsai’s site is insurancemall.in. For the consumer, what this means is s/he can purchase the cheapest health or auto insurance online in the same way s/he compares and buys air tickets online. Another silent revolution that has made this possible is the outsourcing of claims servicing by insurance companies. Both in health as well as motor insurance, companies are offering cashless servicing of claim servicing through tie-up with either third-party administrators or auto dealers. “Involvement of the branch has gone down drastically. The location of the branch, therefore, does not matter for the customer,” said Optima Risk Management MD Rahul Aggarwal. But the cashless service has not evolved to the extent that policyholders can get service from across service providers. This means that if either the car is repaired at a not-networked workshop or the policyholder is hospitalised outside the TPA network, the documents will have to be forwarded to the policy issuing officer for reimbursement. According to Mr Aggarwal, after the purchase, the buyer can get the receipt and proof of insurance through email almost immediately. The brokers are also able to extend the benefit of no-claim bonus based on proof of no-claim, either in the form of a renewal notice or through a letter issued by the insurer, who has issued the expiring policy. Mr Aggarwal anticipates retail business to get much bigger than corporate business. He expects to generate a premium of Rs 500 crore from a 10-lakh customer base in the next three to five years. With auto and health insurance dominating the non-life market and private life insurance almost doubling every year, international insurers have also started showing interest in retail. Howden India, an affiliate of the UK-based Hyperion group, has shown interest in distributing life insurance products for multiple companies in India.
Source : ET
Friday, May 16, 2008
Thursday, May 15, 2008
Apollo DKV Insurance to invest Rs 5 bn in India
MUMBAI: Health insurer Apollo DKV Insurance Co Ltd plans to invest up to Rs 5 billion in the next five years to increase market share, Vice Chairperson of the Apollo Hospitals Group, Shobana Kamineni, told reporters on the sidelines of a health insurance summit on Friday. "To be a significant player we need at least 15 per cent of business in the health insurance sector in India," she said. She estimated the health insurance business in India at $1 billion now. The addressable market is the 250 million middle class Indians, she said. The company is a joint venture between Apollo Hospitals Group, which holds 74 per cent in the venture, and DKV Deutsche Krankenversicherung AG, which is a part of German re-insurer Munich Re. Apollo Hospitals Enterprise Ltd is the flagship of the Apollo Hospitals Group. The venture has so far invested 1 billion rupees in India. In the five months of its operations in India, Apollo DKV Insurance Co has generated 100 million rupees revenue in premiums collected
Source: ET
Source: ET
Aviva plans MF foray
15/May/2008
Life Insurance firm Aviva India is planning to foray into mutual funds by setting up an asset management company. The company is also doubling its sales force for the insurance business and plans to launch new products for the health insurance segment.
India and China have massive geographic potential and will continue to drive our growth in the Asia-Pacific region. In India, Aviva plans to foray in the asset management segment either through a joint venture with a local partner or independently. According to the existing laws, foreign companies will have to invest a minimum of $5 million if it wants to start an asset management company through a JV. If the overseas company pursues the venture independently, it will have to invest a minimum of $50 million. It takes around 6-12 months to get an asset management Licence in India.
Asset management is a key unit of the company. Globally, Aviva Plc has around $326 billion worth of funds as asset under management. An ideal Indian partner should have a large distribution network. However, he declined to comment if the company is in talks for an Indian partner. Aviva also intends to raise its stake in Aviva India to 49% whenever the government increases the FDI limit in the sector to 49% from the present 26%.
The hike in FDI in the sector has been opposed by the Left parties for the past 4 years. Aviva India is a 26:74 JV with the Dabur Group holding the majority stake.
One of the focus areas of the company is to drive its growth in India by augmenting its distribution channel.
Source: Insuremagic
Life Insurance firm Aviva India is planning to foray into mutual funds by setting up an asset management company. The company is also doubling its sales force for the insurance business and plans to launch new products for the health insurance segment.
India and China have massive geographic potential and will continue to drive our growth in the Asia-Pacific region. In India, Aviva plans to foray in the asset management segment either through a joint venture with a local partner or independently. According to the existing laws, foreign companies will have to invest a minimum of $5 million if it wants to start an asset management company through a JV. If the overseas company pursues the venture independently, it will have to invest a minimum of $50 million. It takes around 6-12 months to get an asset management Licence in India.
Asset management is a key unit of the company. Globally, Aviva Plc has around $326 billion worth of funds as asset under management. An ideal Indian partner should have a large distribution network. However, he declined to comment if the company is in talks for an Indian partner. Aviva also intends to raise its stake in Aviva India to 49% whenever the government increases the FDI limit in the sector to 49% from the present 26%.
The hike in FDI in the sector has been opposed by the Left parties for the past 4 years. Aviva India is a 26:74 JV with the Dabur Group holding the majority stake.
One of the focus areas of the company is to drive its growth in India by augmenting its distribution channel.
Source: Insuremagic
The bonus bounty: Play your cards right
MUMBAI: It’s that time of the year when your salary is supposed to look fatter — after all, the financial year has ended. And the New Year brings cheer with pay hikes and lumpsum performance bonus, if any. Are you one of those lucky employees to boast of such a windfall? If yes, ET congratulates you as it takes you through a financial plan to park your bonus money.
It’s better that you pay off your ‘bad and ugly loans’ with it. These could be your high interest-paying credit card bills, personal loans or car loan. “Any loan that costs above 14% should be paid off,” says Kartik Jhaveri, a certified financial planner, and director, Transcend India.
Never miss the wood for the trees and ensure that any investment is directed towards the ultimate financial goal, experts say. The idea is that you should see your money grow to meet your financial targets.
If you want to use the money for medium-term needs, say 3-4 years, consider safe instruments like debt. This could be debt funds or even arbitrage funds. Arbitrage funds generate fixed income by taking advantage of price differentials between the cash and the futures market.
“I would advise not to invest this bonus in aggressive instruments as this windfall is not part of regular investment plan. It’s better to park it in safe instruments, which can later be used for downpayment of home loan. This would lower the overall loan amount,” says Swapnil Pawar, director, Park Financial Advisors, a personal financial planning company.
If you are above 35 years old, you could also look at adding this amount to your retirement corpus. Consider index funds or balanced funds, Mr Pawar suggests. If you have smaller amounts like Rs 50,000 or below, you could look at PPF. That would shore up your long-term savings.
When you think long term, experts suggest equity. The reason being equity investments can give tremendous returns in the long term. This may be a good time to buy stocks, given that markets are looking choppy. But the bigger question is whether you want to enter the equity route via stocks or look at equity mutual funds? “You should look at splitting your money over 5-6 blue chip companies. If you don’t have the expertise, then a diversified equity fund will be a safe bet,” Mr Jhaveri adds.
Consider parking the money in liquid funds, fixed deposits if you require money in the near term. Liquid funds can be a good alternative as the effective tax rate would be less.
Every windfall comes with a price tag. In this case, the bonus amount will be taxed as part of your salary. How much it would exactly cost you would depend upon the tax slab. You could look at insurance, PPF or even equity-linked saving scheme, which would come under Section 80C. Even home loan could help.
The overall tax deduction on the interest component for a single borrower is Rs 1,50,000 and Rs 3 lakh in case of joint loans. Even the principal component of the loan enjoys tax rebate. So, base your decision on the post-tax return, not to mention your liquidity needs.
Source: Economic Times/15 May,2008
It’s better that you pay off your ‘bad and ugly loans’ with it. These could be your high interest-paying credit card bills, personal loans or car loan. “Any loan that costs above 14% should be paid off,” says Kartik Jhaveri, a certified financial planner, and director, Transcend India.
Never miss the wood for the trees and ensure that any investment is directed towards the ultimate financial goal, experts say. The idea is that you should see your money grow to meet your financial targets.
If you want to use the money for medium-term needs, say 3-4 years, consider safe instruments like debt. This could be debt funds or even arbitrage funds. Arbitrage funds generate fixed income by taking advantage of price differentials between the cash and the futures market.
“I would advise not to invest this bonus in aggressive instruments as this windfall is not part of regular investment plan. It’s better to park it in safe instruments, which can later be used for downpayment of home loan. This would lower the overall loan amount,” says Swapnil Pawar, director, Park Financial Advisors, a personal financial planning company.
If you are above 35 years old, you could also look at adding this amount to your retirement corpus. Consider index funds or balanced funds, Mr Pawar suggests. If you have smaller amounts like Rs 50,000 or below, you could look at PPF. That would shore up your long-term savings.
When you think long term, experts suggest equity. The reason being equity investments can give tremendous returns in the long term. This may be a good time to buy stocks, given that markets are looking choppy. But the bigger question is whether you want to enter the equity route via stocks or look at equity mutual funds? “You should look at splitting your money over 5-6 blue chip companies. If you don’t have the expertise, then a diversified equity fund will be a safe bet,” Mr Jhaveri adds.
Consider parking the money in liquid funds, fixed deposits if you require money in the near term. Liquid funds can be a good alternative as the effective tax rate would be less.
Every windfall comes with a price tag. In this case, the bonus amount will be taxed as part of your salary. How much it would exactly cost you would depend upon the tax slab. You could look at insurance, PPF or even equity-linked saving scheme, which would come under Section 80C. Even home loan could help.
The overall tax deduction on the interest component for a single borrower is Rs 1,50,000 and Rs 3 lakh in case of joint loans. Even the principal component of the loan enjoys tax rebate. So, base your decision on the post-tax return, not to mention your liquidity needs.
Source: Economic Times/15 May,2008
Munich Re, Hero start Indian life insurance venture
FRANKFURT: Germany's Ergo Insurance Group and India's Hero Group have agreed to form a life insurance joint venture in India, Ergo parent Munich Re said on Friday.
"Under the proposed agreement, equity will be shared between the two partners, and Ergo International AG will take a 26 per cent share in Hero Ergo Life Insurance Co Ltd, which is the maximum permissible limit under the existing guidelines for the insurance sector in India," a statement said.
The plan is to seek regulatory approval over the next 10 to 12 months and to start operations during the second quarter of 2009, it added.
"Our tie-up for life insurance will strengthen our primary insurance footprint in the entire insurance sector, that is life, health and non-life business in India," Munich Re Chief Executive Nikolaus von Bomhard said. It said the Indian life insurance market grew around 63 percent in 2006 and 47 per cent in 2007.
"With household earnings accelerating in the fast-growing economy, the life insurance market is projected to double in size from $40 billion in 2007 to $80 billion and may even grow to $100 billion by 2012, according to market research," it said.
Source: Economic Times/2 May, 2008
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