25-Jul-2011
Source : Future Generali
To simplify the process of a cumbersome, tiring and time consuming motor claim, Future Generali India Insurance Co Ltd has launched Future Xpress and Future Xpress+. The primary objective of Future Xpress and Future Xpress+ is to offer customers a more personalized service and enhanced touch points for smooth and speedy motor claims settlement.
While Future Xpress+ is targeted for those who wish to get their loss assessed and claim finalized on the spot with an option to get their vehicle repaired at a workshop of their choice and convenience, Future Xpress is targeted for those who wish to get their vehicle repaired on priority, at lower costs teamed with personalized service from the Insurer.
Speaking to media persons at a Press Conference in Chennai , KG Krishnamoorthy Rao, MD & CEO, Future Generali India Insurance Company said, “Earlier, claim segmentation on quantum of loss was not available and the survey request and documents verification was an elaborate and exhaustive process. It was mandatory to have the vehicle surveyed pre and post repairs, claim settlement typically happened post repairs and submission of relevant documents to the workshop or surveyor. “
Our Mission is to enrich the lives of the people we touch upon; by providing them an ethical advice on the highest quality of financial products that helps them fulfill their responsibilities & build better tomorrows.
Thursday, July 28, 2011
Wednesday, July 27, 2011
Insurer liable even if ownership changes: SC
26-Jul-2011
Source : Moneycontrol.com
Insurance companies are bound to pay compensation even if the offending vehicle’s ownership is transferred from the original owner to another as there is no requirement under law to go for a fresh policy, the Supreme Court has ruled.
A bench of justices Dalveer Bhandari and Deepak Verma said compulsory insurance provided under the Motor Vehicle Act was meant to provide protection for third party victims as part of social objective and there was no bar on a vehicle being driven only by the owner.
"The liability to pay compensation is based on a statutory provision. Compulsory insurance of the vehicle is meant for the benefit of the third parties. The liability of the owner to have compulsory insurance is only in regard to third party and not to the property.
"Once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of the owner. Section 146 of the Act does not provide that if any person uses the vehicle independently, a separate insurance policy should be taken," Justice Verma said writing the judgement.
The apex court passed the ruling while directing the National Insurance Company to compensate a widow Kulsum whose husband and three children were mowed down on June 13, 1998, by a mini bus belonging to a private party but hired by the UP State Road Transport Corporation.
Source : Moneycontrol.com
Insurance companies are bound to pay compensation even if the offending vehicle’s ownership is transferred from the original owner to another as there is no requirement under law to go for a fresh policy, the Supreme Court has ruled.
A bench of justices Dalveer Bhandari and Deepak Verma said compulsory insurance provided under the Motor Vehicle Act was meant to provide protection for third party victims as part of social objective and there was no bar on a vehicle being driven only by the owner.
"The liability to pay compensation is based on a statutory provision. Compulsory insurance of the vehicle is meant for the benefit of the third parties. The liability of the owner to have compulsory insurance is only in regard to third party and not to the property.
"Once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of the owner. Section 146 of the Act does not provide that if any person uses the vehicle independently, a separate insurance policy should be taken," Justice Verma said writing the judgement.
The apex court passed the ruling while directing the National Insurance Company to compensate a widow Kulsum whose husband and three children were mowed down on June 13, 1998, by a mini bus belonging to a private party but hired by the UP State Road Transport Corporation.
5 key factors to consider before buying an insurance plan
25-Jul-2011
Source : The Economic Times
There are many occasions in life when you wonder if you have taken the right decision. Some of the decisions may concern your financial life. Investing your hard-earned money in any financial product of a company or a bank - recommended by your friends, family or agent - without understanding how it works, is a common issue. Your mind is filled with doubts and uncertainty on whether you have made the right investment, especially if it is in a long-term product like insurance.
An insurance policy is a must in any financial portfolio as it covers the risk associated with the loss of life or property. Since it’s a long-term contract for 10 years or more, it is difficult to make changes or amend these contracts during the policy term. Hence, you must spend a little time to research these products to ensure you don’t have regrets later. It may not be possible for you to understand all the intricacies of a life insurance policy. But, you could consider the following factors while choosing a plan:
Need-based investment: The standard thumb rule is that your life cover should be 10 times your annual income so that your family is not impacted financially in case something were to happen to you.
You should also take into account any pre-existing medical complication or property loans while selecting the life cover. Your financial portfolio should be well balanced and need-based. For example, in case you need to build a corpus for your child’s education, you can select from a range of products from insurance companies that ensure the funds that you had planned for your child’s education are available whether you are around or not.
You need to remember that insurance is a protection-cum-long-term investment and savings tool. You need to define your need - like your child’s education or retirement - and accordingly buy a policy that will help you meet your requirement in future.
Background check and due diligence: Once you have decided on the policy, you could do the necessary background check on the company concerned. All life insurance companies have comprehensive disclosures on their websites that give all required information. Policy structure, customer service capabilities, scope of network, online platform (in case someone wants to buy online term policy), are some of the key things you should look for.
Secondly, there are many sites that help you compare various policies as well as the premiums. However, the one thing you need not worry is the financial health of an insurance company. The insurance sector is highly regulated and all companies need to maintain a solvency ratio to ensure that the customer does not suffer.
Fund performance: When buying a Ulip, which also acts as an investment vehicle, you could look at the past performance of the company. All life insurance companies provide details of their fund’s performance online. An important thing to consider here would be stability. A company with a good fund performance will have a consistent track record with the fund performance neither being erratic nor extremely risky
Source : The Economic Times
There are many occasions in life when you wonder if you have taken the right decision. Some of the decisions may concern your financial life. Investing your hard-earned money in any financial product of a company or a bank - recommended by your friends, family or agent - without understanding how it works, is a common issue. Your mind is filled with doubts and uncertainty on whether you have made the right investment, especially if it is in a long-term product like insurance.
An insurance policy is a must in any financial portfolio as it covers the risk associated with the loss of life or property. Since it’s a long-term contract for 10 years or more, it is difficult to make changes or amend these contracts during the policy term. Hence, you must spend a little time to research these products to ensure you don’t have regrets later. It may not be possible for you to understand all the intricacies of a life insurance policy. But, you could consider the following factors while choosing a plan:
Need-based investment: The standard thumb rule is that your life cover should be 10 times your annual income so that your family is not impacted financially in case something were to happen to you.
You should also take into account any pre-existing medical complication or property loans while selecting the life cover. Your financial portfolio should be well balanced and need-based. For example, in case you need to build a corpus for your child’s education, you can select from a range of products from insurance companies that ensure the funds that you had planned for your child’s education are available whether you are around or not.
You need to remember that insurance is a protection-cum-long-term investment and savings tool. You need to define your need - like your child’s education or retirement - and accordingly buy a policy that will help you meet your requirement in future.
Background check and due diligence: Once you have decided on the policy, you could do the necessary background check on the company concerned. All life insurance companies have comprehensive disclosures on their websites that give all required information. Policy structure, customer service capabilities, scope of network, online platform (in case someone wants to buy online term policy), are some of the key things you should look for.
Secondly, there are many sites that help you compare various policies as well as the premiums. However, the one thing you need not worry is the financial health of an insurance company. The insurance sector is highly regulated and all companies need to maintain a solvency ratio to ensure that the customer does not suffer.
Fund performance: When buying a Ulip, which also acts as an investment vehicle, you could look at the past performance of the company. All life insurance companies provide details of their fund’s performance online. An important thing to consider here would be stability. A company with a good fund performance will have a consistent track record with the fund performance neither being erratic nor extremely risky
Three attacks later, one-fourth of bullion traders still uninsured
22-Jul-2011
Source : The Financial Express
Even after the recent serial terror blasts that ripped through Mumbai’s Zaveri Bazaar and Opera House last week, around a fourth of the traders at the city’s premier bullion and diamond hubs continue to remain uninsured.
“It has been observed that over 20-25 per cent bullion traders in both Zaveri Bazaar and Opera House are still uninsured. We have already cautioned our bullion traders and associates to insure themselves before stepping into this business,” said Bombay Bullion Association (BBA) president Prithviraj Kothari.
Zaveri Bazaar, which has been targeted by the terrorists thrice, had at least 5,000 bullion and jewellery shops and offices. After the earlier blasts, some of them had shifted to the Opera House area to avoid the crowds and congestion, but have ignored the need to secure their future. Kothari believes that mere shifting cannot substitute the act of getting oneself insured: “Transferring any unit from one place to another is not the solution at all. Tragedy can happen anywhere, but one should not risk his life and property. So I think getting oneself insured is a must for every one.”
This fact was corroborated by the spokesman of the Life Insurance Corporation: “I’m quite surprised over the number of claims that we have come across in this tragedy. What concerns me is that people are still unaware of this kind of situation. We were expecting maximum claims, but only got 2 out of 20 claims which are very small in amount (around Rs 5 lakh) and we have already settled them.”
Bharat Shah, a prominent diamond trader attested to the general laxity on the matter: “The Opera House area, which accommodates over 2,000 bullion traders, is not 100 per cent insured, be it individual, auto, property or anything possessed by the trader. Most of the diamond merchants buy insurance, considering the high value of their raw materials. For instance, insurance for diamonds is available, but it is too expensive and out of bounds for the smaller traders.”
At the end of a normal trading day, brokers deposit the diamonds in the four or five safety vaults in the area.
Source : The Financial Express
Even after the recent serial terror blasts that ripped through Mumbai’s Zaveri Bazaar and Opera House last week, around a fourth of the traders at the city’s premier bullion and diamond hubs continue to remain uninsured.
“It has been observed that over 20-25 per cent bullion traders in both Zaveri Bazaar and Opera House are still uninsured. We have already cautioned our bullion traders and associates to insure themselves before stepping into this business,” said Bombay Bullion Association (BBA) president Prithviraj Kothari.
Zaveri Bazaar, which has been targeted by the terrorists thrice, had at least 5,000 bullion and jewellery shops and offices. After the earlier blasts, some of them had shifted to the Opera House area to avoid the crowds and congestion, but have ignored the need to secure their future. Kothari believes that mere shifting cannot substitute the act of getting oneself insured: “Transferring any unit from one place to another is not the solution at all. Tragedy can happen anywhere, but one should not risk his life and property. So I think getting oneself insured is a must for every one.”
This fact was corroborated by the spokesman of the Life Insurance Corporation: “I’m quite surprised over the number of claims that we have come across in this tragedy. What concerns me is that people are still unaware of this kind of situation. We were expecting maximum claims, but only got 2 out of 20 claims which are very small in amount (around Rs 5 lakh) and we have already settled them.”
Bharat Shah, a prominent diamond trader attested to the general laxity on the matter: “The Opera House area, which accommodates over 2,000 bullion traders, is not 100 per cent insured, be it individual, auto, property or anything possessed by the trader. Most of the diamond merchants buy insurance, considering the high value of their raw materials. For instance, insurance for diamonds is available, but it is too expensive and out of bounds for the smaller traders.”
At the end of a normal trading day, brokers deposit the diamonds in the four or five safety vaults in the area.
IRDA for more companies to participate in pension market
23-Jul-2011
Source : PTI
Insurance regulator IRDA on Friday said that domination of one company in the pension market could be risky and it was important for other insurance companies to participate actively.
"There is a structural problem that will unwind for the regulator and the industry as a whole, and will affect the country. More than 90 per cent of all the pensions are actually in the LIC . There is such a huge concentration in one institution. I think that is a recipe for high risk," IRDA Chairman, J Hari Narayan , said at an insurance summit.
"I think it is too much of a risk to be allowed to continue. Therefore, we must build up mechanisms which allow other companies also to participate actively in the pension market," he added.
Narayan further said that pension funds should offer life annuity and companies that sell pension products should have a guaranteed capital.
"I think at the very minimum that every product that is sold as a pension product should have a capital guarantee so that the principal is safe," he said.
Pension plans are estimated to account for about 30 per cent of the life insurance industry’s business.
Meanwhile, Narayan said that the regulatory body was working towards creating an exchange for re-insurance, but did not divulge when the mechanism would be in place.
"We have tried to create a platform on re-insurance, which is more transparent and more like a re-insurance exchange. Initial work is going on. What we visualise is that all matters on re-insurance will be routed only through the exchange. The advantage will be that transactions are clear and there cannot be any glitches in terms of the fine print of the policy," he said.
Source : PTI
Insurance regulator IRDA on Friday said that domination of one company in the pension market could be risky and it was important for other insurance companies to participate actively.
"There is a structural problem that will unwind for the regulator and the industry as a whole, and will affect the country. More than 90 per cent of all the pensions are actually in the LIC . There is such a huge concentration in one institution. I think that is a recipe for high risk," IRDA Chairman, J Hari Narayan , said at an insurance summit.
"I think it is too much of a risk to be allowed to continue. Therefore, we must build up mechanisms which allow other companies also to participate actively in the pension market," he added.
Narayan further said that pension funds should offer life annuity and companies that sell pension products should have a guaranteed capital.
"I think at the very minimum that every product that is sold as a pension product should have a capital guarantee so that the principal is safe," he said.
Pension plans are estimated to account for about 30 per cent of the life insurance industry’s business.
Meanwhile, Narayan said that the regulatory body was working towards creating an exchange for re-insurance, but did not divulge when the mechanism would be in place.
"We have tried to create a platform on re-insurance, which is more transparent and more like a re-insurance exchange. Initial work is going on. What we visualise is that all matters on re-insurance will be routed only through the exchange. The advantage will be that transactions are clear and there cannot be any glitches in terms of the fine print of the policy," he said.
IRDA mulls making listing of life insurance companies mandatory
24-Jul-2011
Source : The Economic Times
Insurance regulator Irda on Friday said it is mulling over making it mandatory for insurance companies to go public, even though the final IPO norms are still awaited and most players are not keen to hit the market.
"The (Insurance) Act doesn’t stipulate companies to go public, but the regulator might," Insurance Regulatory and Development Authority (Irda) J Hari Narayan told reporters on the sidelines of an industry summit here.
He said the industry is competing with other sectors for capital and the IPO would help them to raise some. "The capital has to grow. We need capital," Narayan said.
He added that the final IPO guidelines for the life insurance industry will be ready by the end of the month.
However, none of the existing laws, be they the Companies Act or the Sebi or Irda Acts, make it mandatory for any company in any sector to get listed. If the Irda wants to have its way, then all these Acts mentioned above will have to be amended, besides the LIC Act.
LIC, despite being the nation’s largest financial entity, is fully owned by the government and is not a company under the Companies Act but is governed by the LIC Act.
Interestingly, among the 22 private life players only a few like HDFC Standard Life and Reliance Life, are keen to tap the primary markets to mop up funds. Most of the players says that they are not looking to raise capital.
Last month, Irda had released a set of draft guidelines for insurance companies to raise funds through public offers.
As per the draft norms, only those with 10 years of operations and strong financials would be allowed to access the capital markets.
Insurance firms planning public offers have to seek ’formal approval’ from Irda and then approach the Sebi for final approval, the draft norms had said. As part of the eligibility criteria, the insurers should have maintained the prescribed regulatory solvency margin during the preceding six quarters, it said.
Source : The Economic Times
Insurance regulator Irda on Friday said it is mulling over making it mandatory for insurance companies to go public, even though the final IPO norms are still awaited and most players are not keen to hit the market.
"The (Insurance) Act doesn’t stipulate companies to go public, but the regulator might," Insurance Regulatory and Development Authority (Irda) J Hari Narayan told reporters on the sidelines of an industry summit here.
He said the industry is competing with other sectors for capital and the IPO would help them to raise some. "The capital has to grow. We need capital," Narayan said.
He added that the final IPO guidelines for the life insurance industry will be ready by the end of the month.
However, none of the existing laws, be they the Companies Act or the Sebi or Irda Acts, make it mandatory for any company in any sector to get listed. If the Irda wants to have its way, then all these Acts mentioned above will have to be amended, besides the LIC Act.
LIC, despite being the nation’s largest financial entity, is fully owned by the government and is not a company under the Companies Act but is governed by the LIC Act.
Interestingly, among the 22 private life players only a few like HDFC Standard Life and Reliance Life, are keen to tap the primary markets to mop up funds. Most of the players says that they are not looking to raise capital.
Last month, Irda had released a set of draft guidelines for insurance companies to raise funds through public offers.
As per the draft norms, only those with 10 years of operations and strong financials would be allowed to access the capital markets.
Insurance firms planning public offers have to seek ’formal approval’ from Irda and then approach the Sebi for final approval, the draft norms had said. As part of the eligibility criteria, the insurers should have maintained the prescribed regulatory solvency margin during the preceding six quarters, it said.
IndiaFirst Life ties up with five RRBs to sell its plans
25-Jul-2011
Source : Financial Chronicle
IndiaFirst Life Insurance has tied-up with five regional rural banks (RRBs) in an effort to penetrate rural markets. The company hopes to achieve Rs 100 crore business from RRBs in next two-three years, according to a statement.
IndiaFirst Life Insurance is a joint venture between Bank of Baroda, Andhra Bank and UK’s Legal & General. The five RRBs that the company has partnered with are Baroda Uttar Pradesh Gramin Bank, Baroda Rajasthan Gramin Bank, Baroda Gujarat Gramin Bank, Nainital-Almora Kshetriya Gramin Bank and Jhabua-Dhar Kshetriya Gramin Bank, sponsored by its partner, Bank of Baroda.
The five RRBs at present have approximately 1,000 branch offices in close to 40 districts, which will increase over time. IndiaFirst has acquired 14 per cent of its business from the rural areas and has also covered over 500,000 lives in the social sector in its first year of its operations. Initially, the company plans to tie up with its partner bank RRBs and later expand to other nationalised bank RRBs and cooperative banks.
“The critical success factors for us will be achieving maximum synergy from integration, devising the right product mix for the rural customer and providing the right technological and manpower support to the RRBs,” said P Nandagopal, MD & CEO, IndiaFirst Life Insurance.
Source : Financial Chronicle
IndiaFirst Life Insurance has tied-up with five regional rural banks (RRBs) in an effort to penetrate rural markets. The company hopes to achieve Rs 100 crore business from RRBs in next two-three years, according to a statement.
IndiaFirst Life Insurance is a joint venture between Bank of Baroda, Andhra Bank and UK’s Legal & General. The five RRBs that the company has partnered with are Baroda Uttar Pradesh Gramin Bank, Baroda Rajasthan Gramin Bank, Baroda Gujarat Gramin Bank, Nainital-Almora Kshetriya Gramin Bank and Jhabua-Dhar Kshetriya Gramin Bank, sponsored by its partner, Bank of Baroda.
The five RRBs at present have approximately 1,000 branch offices in close to 40 districts, which will increase over time. IndiaFirst has acquired 14 per cent of its business from the rural areas and has also covered over 500,000 lives in the social sector in its first year of its operations. Initially, the company plans to tie up with its partner bank RRBs and later expand to other nationalised bank RRBs and cooperative banks.
“The critical success factors for us will be achieving maximum synergy from integration, devising the right product mix for the rural customer and providing the right technological and manpower support to the RRBs,” said P Nandagopal, MD & CEO, IndiaFirst Life Insurance.
LIC, Franklin up stake in RIL; buy shares worth Rs 200cr
25-Jul-2011
Source : Moneycontrol.com
State-run insurer LIC and private fund house Franklin Templeton have hiked their stake in Mukesh Ambani-led Reliance Industries by collectively buying about 23 lakh shares, currently worth an estimated Rs 200 crore.
As per the latest shareholding pattern filed by RIL with the stock exchange today, LIC has increased its stake in the company to 7.16% in the first quarter of this fiscal. During the same period, Franklin Templeton Investment Funds hiked its stake to 1.05%.
As per the quarterly shareholding disclosure, LIC’s holding in RIL increased by 18.6 lakh shares during April-June period, while that of Franklin Templeton rose by about 4.3 lakh shares. At RIL’s current share price of Rs 867.10, the additional shares acquired by LIC is worth Rs 161 crore, while that of Franklin Templeton is Rs 37 crore.
Source : Moneycontrol.com
State-run insurer LIC and private fund house Franklin Templeton have hiked their stake in Mukesh Ambani-led Reliance Industries by collectively buying about 23 lakh shares, currently worth an estimated Rs 200 crore.
As per the latest shareholding pattern filed by RIL with the stock exchange today, LIC has increased its stake in the company to 7.16% in the first quarter of this fiscal. During the same period, Franklin Templeton Investment Funds hiked its stake to 1.05%.
As per the quarterly shareholding disclosure, LIC’s holding in RIL increased by 18.6 lakh shares during April-June period, while that of Franklin Templeton rose by about 4.3 lakh shares. At RIL’s current share price of Rs 867.10, the additional shares acquired by LIC is worth Rs 161 crore, while that of Franklin Templeton is Rs 37 crore.
Friday, July 15, 2011
Everything about IGMS
14-Jul-2011
Source : Magicgyan Team
What is IGMS?IRDA has launched a website, igms.irda.gov.in for Integrated Grievance Management System (IGMS) earlier this month. Customers can register their complaints as well as check its status later. IGMS is linked to IRDA grievance call centre. Customers can also avail of further assistance on toll-free number 155255.
How does it work?
If the customer has a grievance he needs to approach the insurance company’s grievance cell first and lodge a complaint. The contact details of insurance company’s grievance cell is mostly available in the policy document as well as the insurance company’s website. Approaching IGMS is the next step
Registration process to be followed by customers
For registration personal details such as name, date of birth, gender, contact number and address as well as PAN/ voter ID number/ passport number are required.
After registration customer has choose the relevant branch code from the list provided on the website and provide your policy details. Customers also need to select the appropriate options for type of policy, type of complaint and description of the complaint.
An IRDA token number and a reference number will be generated at the time of registration of the complaint. Based on the complaint registration date, the system will calculate the age of each complaint and show the IRDA token number and a column for turnaround time (TAT) tolerance that displays the tolerance of a particular complaint against the number of days it stays pending. Based on the complaint registration date and TAT, the screen also shows the expected disposal date.
Source : Magicgyan Team
What is IGMS?IRDA has launched a website, igms.irda.gov.in for Integrated Grievance Management System (IGMS) earlier this month. Customers can register their complaints as well as check its status later. IGMS is linked to IRDA grievance call centre. Customers can also avail of further assistance on toll-free number 155255.
How does it work?
If the customer has a grievance he needs to approach the insurance company’s grievance cell first and lodge a complaint. The contact details of insurance company’s grievance cell is mostly available in the policy document as well as the insurance company’s website. Approaching IGMS is the next step
Registration process to be followed by customers
For registration personal details such as name, date of birth, gender, contact number and address as well as PAN/ voter ID number/ passport number are required.
After registration customer has choose the relevant branch code from the list provided on the website and provide your policy details. Customers also need to select the appropriate options for type of policy, type of complaint and description of the complaint.
An IRDA token number and a reference number will be generated at the time of registration of the complaint. Based on the complaint registration date, the system will calculate the age of each complaint and show the IRDA token number and a column for turnaround time (TAT) tolerance that displays the tolerance of a particular complaint against the number of days it stays pending. Based on the complaint registration date and TAT, the screen also shows the expected disposal date.
India up 10 places in 10 yrs on insurance chart
13-Jul-2011
Source : Times of India
India has overtaken Spain to become the 11th largest insurance market in the World. But while the Indian market has jumped up 10 places in the last decade, Indian companies individually are yet to make their presence in global rankings because of their localized operations.
According to a report on world insurance markets in 2010, compiled by Swiss Re, total premium volume in the world market rose to $4339bn in 2010 – a growth of 2.7% after falling for two years after the global financial crisis.
India’s inflation adjusted growth which was only 4.91% in 2010-11 is still twice the growth recorded by global markets following a decline in US and several European markets.
In the decade since the opening up of the insurance sector the domestic protection industry has overtaken several developed markets. The gain in market share has accelerated after the crisis largely because of the shrinkage in several European markets. In the life insurance business alone India has raced ahead of ten major markets in the last decade. These include - Australia, Switzerland, Spain, Belgium, Sweden, Ireland, Netherlands, Canada, South Africa and Taiwan.
While the Indian market has grown, Indian companies are yet to make it to the top 20 list either in sales or market capitalisation.
According to Ashvin Parekh Partner Ernst & Young, Indian insurers have managed to grow by riding on the performance of the stock markets. "India per se is a strong savings economy and insurers have tried to capture this aspect by designing products around savings. And in order to render higher return they have designed products that are riding on the performance of other financial markets"
However, while the saving products give them the topline it does not necessarily translate into profits. "Although the margins are in the protection products, the real effort to push protection has not happened" said Mr Parekh. He points out that while the insurance companies have been successful in capturing the behavioural aspect of Indians when it came to finance they have willy-nilly shifted orientation to medium-term instead of having a long-term focus.
"From 2000 onwards, the Indian insurance markets has grown seven times. But at the same time the number of companies has grown four fold with around 45 insurance companies" said Monish Shah, director, Deloitte India. According to Mr Shah, the structural changes introduced by the regulator which will enable companies to raise capital from the markets and merge will be good for the industry. "In the medium-term there should be some consolidation and we will see some global size players from India" he said.
Most of the smaller markets like Canada, South Africa, Australia have companies that are giants compared to Indian companies. In terms of market capitalization, the top two life companies in the world are Chinese – China Life and Ping An Life Insurance.
Source : Times of India
India has overtaken Spain to become the 11th largest insurance market in the World. But while the Indian market has jumped up 10 places in the last decade, Indian companies individually are yet to make their presence in global rankings because of their localized operations.
According to a report on world insurance markets in 2010, compiled by Swiss Re, total premium volume in the world market rose to $4339bn in 2010 – a growth of 2.7% after falling for two years after the global financial crisis.
India’s inflation adjusted growth which was only 4.91% in 2010-11 is still twice the growth recorded by global markets following a decline in US and several European markets.
In the decade since the opening up of the insurance sector the domestic protection industry has overtaken several developed markets. The gain in market share has accelerated after the crisis largely because of the shrinkage in several European markets. In the life insurance business alone India has raced ahead of ten major markets in the last decade. These include - Australia, Switzerland, Spain, Belgium, Sweden, Ireland, Netherlands, Canada, South Africa and Taiwan.
While the Indian market has grown, Indian companies are yet to make it to the top 20 list either in sales or market capitalisation.
According to Ashvin Parekh Partner Ernst & Young, Indian insurers have managed to grow by riding on the performance of the stock markets. "India per se is a strong savings economy and insurers have tried to capture this aspect by designing products around savings. And in order to render higher return they have designed products that are riding on the performance of other financial markets"
However, while the saving products give them the topline it does not necessarily translate into profits. "Although the margins are in the protection products, the real effort to push protection has not happened" said Mr Parekh. He points out that while the insurance companies have been successful in capturing the behavioural aspect of Indians when it came to finance they have willy-nilly shifted orientation to medium-term instead of having a long-term focus.
"From 2000 onwards, the Indian insurance markets has grown seven times. But at the same time the number of companies has grown four fold with around 45 insurance companies" said Monish Shah, director, Deloitte India. According to Mr Shah, the structural changes introduced by the regulator which will enable companies to raise capital from the markets and merge will be good for the industry. "In the medium-term there should be some consolidation and we will see some global size players from India" he said.
Most of the smaller markets like Canada, South Africa, Australia have companies that are giants compared to Indian companies. In terms of market capitalization, the top two life companies in the world are Chinese – China Life and Ping An Life Insurance.
LIC wins Readers Digest Trusted Brand Award-2011
13-Jul-2011
Source : Capitalmarket.com
Life Insurance Corporation of India has won the Readers Digest Trusted Brand Award -2011, Platinum Category, in the Insurance sector for the sixth year in a row.
During the year 2010-11, LIC sold more than 37 million policies, earning a First Year Premium Income of more than Rs 522 billion.
It has covered another 35.66 million lives under its various Group Schemes earning more than Rs 342 billion as Group First Year Premium Income.
Its gross total Income was almost Rs 3 trillion, total Premium Income was more than Rs 2 trillion and the Assets under Management of the Corporation are more than Rs 13 trillion.
It has 53 different individual plans catering to the different segments of the Society. It also provides 13 pension and Group schemes. As on March, 31, 2011, LIC had a market share of 76.92 per cent in terms of new policies issued and 68.70 per cent in terms of the total First Premium Income earned during the year.
LIC has provided more than 280 million individual policies and 83 million group policy holders, a release said.
Source : Capitalmarket.com
Life Insurance Corporation of India has won the Readers Digest Trusted Brand Award -2011, Platinum Category, in the Insurance sector for the sixth year in a row.
During the year 2010-11, LIC sold more than 37 million policies, earning a First Year Premium Income of more than Rs 522 billion.
It has covered another 35.66 million lives under its various Group Schemes earning more than Rs 342 billion as Group First Year Premium Income.
Its gross total Income was almost Rs 3 trillion, total Premium Income was more than Rs 2 trillion and the Assets under Management of the Corporation are more than Rs 13 trillion.
It has 53 different individual plans catering to the different segments of the Society. It also provides 13 pension and Group schemes. As on March, 31, 2011, LIC had a market share of 76.92 per cent in terms of new policies issued and 68.70 per cent in terms of the total First Premium Income earned during the year.
LIC has provided more than 280 million individual policies and 83 million group policy holders, a release said.
HCL group may buy majority stake in DLF’s insurance JV for Rs 4.5 bln
14-Jul-2011
Source : The Economic Times
The HCL group founder of the India’s fifth-largest information technology company HCL Technologies Ltd is in advanced talks to buy a majority equity stake in realty firm DLF Ltd’s insurance joint venture DLF Pramerica Life Insurance Company Ltd for Rs 4.5 billion. The acquisition, which will be routed through the Shiv Nadar-controlled HCL group’s privately-held company, will be made in two phases, the paper said.
HCL group will initially acquire 44% stake in DLF Pramerica Life Insurance by purchasing fresh shares of the company and in the second stage buy another 30%.
The stake transfer will, however, be subject to approval by India’s insurance watchdog Insurance Regulatory and Development Authority (IRDA).
As per current guidelines governing insurance sector in India, the original partner in a life insurance company cannot sell its stake in the first 10 years of the company’s operations.
Currently, DLF owns 76% stake in the joint venture, while the remaining stake is held by the U.S.-based insurance giant Prudential International.
Source : The Economic Times
The HCL group founder of the India’s fifth-largest information technology company HCL Technologies Ltd is in advanced talks to buy a majority equity stake in realty firm DLF Ltd’s insurance joint venture DLF Pramerica Life Insurance Company Ltd for Rs 4.5 billion. The acquisition, which will be routed through the Shiv Nadar-controlled HCL group’s privately-held company, will be made in two phases, the paper said.
HCL group will initially acquire 44% stake in DLF Pramerica Life Insurance by purchasing fresh shares of the company and in the second stage buy another 30%.
The stake transfer will, however, be subject to approval by India’s insurance watchdog Insurance Regulatory and Development Authority (IRDA).
As per current guidelines governing insurance sector in India, the original partner in a life insurance company cannot sell its stake in the first 10 years of the company’s operations.
Currently, DLF owns 76% stake in the joint venture, while the remaining stake is held by the U.S.-based insurance giant Prudential International.
Tuesday, July 12, 2011
Health insurance portable from October 1
06-Jul-2011
Source : Financial Express
By Deepak Yohanan,
The insurance industry is a buzz with the announcement of Health Insurance Portability, which will be effective no later than October 1, 2011. Policyholders are also eagerly looking forward to the successful roll-out of health insurance portability. This is the first time that a portability option is being introduced in any insurance product in India. Once the portability law is implemented, then just like the mobile number portability, customers will be allowed to port their health insurance policy from one company to another.
What is portability?
Health insurance portability means the freedom to switch over to another health insurance provider from your existing health insurer, without losing any benefits or credits earned on your existing health insurance policy. The benefits that a policyholder primarily gets in a health insurance policy are a no-claim bonus for every claim free year and cover on pre-existing diseases (PED) after certain years of continuous renewal.
All health insurance policies have a specific waiting period on pre-existing diseases and conditions. This waiting period ranges from 11 months to 48 months. During this time frame, the insurance company is not liable to pay treatment expenses for any ailment already in existence at the time of taking the policy or prior to it. So for example, if a person has suffered from a heart attack or stroke before commencement of the policy and he suffers from stroke or any heart condition in the first 48 months of the policy, then the insurance company will not cover any medical expenses incurred for the same.
The current scene
Without the health insurance portability condition, if a policyholder wants to move to another health insurance provider then he would lose out on the credits earned on PEDs. This fear has always compelled policyholders to stay with the same insurance company. Once portability is implemented, the new insurance company will have to take into account this existing credit on PED.
The aim of health insurance portability is to improve the service standards of health insurance providers. Policyholders who are not happy with the coverage amount, policy benefits or service provided by their existing health insurer can now freely move to another health insurer with the same policy. The usual problems faced by customers in a health insurance policy are:
* Restrictions on age till which they can renew their policy
* Strict limits in their policy on hospital room rent, doctor’s fees, etc.
* Flexibility to increase coverage amount or family members
Before you switch...
Please remember these key points before switching:
1. Existing policy should be in force.
2. Portability has to be initiated by the policyholder well within the renewal date.
3. Do not change your health insurance provider just for the sake of doing it.
4. Do some basic research before switching to another company.
— Author is CEO, MyInsuranceClub.com
Source : Financial Express
By Deepak Yohanan,
The insurance industry is a buzz with the announcement of Health Insurance Portability, which will be effective no later than October 1, 2011. Policyholders are also eagerly looking forward to the successful roll-out of health insurance portability. This is the first time that a portability option is being introduced in any insurance product in India. Once the portability law is implemented, then just like the mobile number portability, customers will be allowed to port their health insurance policy from one company to another.
What is portability?
Health insurance portability means the freedom to switch over to another health insurance provider from your existing health insurer, without losing any benefits or credits earned on your existing health insurance policy. The benefits that a policyholder primarily gets in a health insurance policy are a no-claim bonus for every claim free year and cover on pre-existing diseases (PED) after certain years of continuous renewal.
All health insurance policies have a specific waiting period on pre-existing diseases and conditions. This waiting period ranges from 11 months to 48 months. During this time frame, the insurance company is not liable to pay treatment expenses for any ailment already in existence at the time of taking the policy or prior to it. So for example, if a person has suffered from a heart attack or stroke before commencement of the policy and he suffers from stroke or any heart condition in the first 48 months of the policy, then the insurance company will not cover any medical expenses incurred for the same.
The current scene
Without the health insurance portability condition, if a policyholder wants to move to another health insurance provider then he would lose out on the credits earned on PEDs. This fear has always compelled policyholders to stay with the same insurance company. Once portability is implemented, the new insurance company will have to take into account this existing credit on PED.
The aim of health insurance portability is to improve the service standards of health insurance providers. Policyholders who are not happy with the coverage amount, policy benefits or service provided by their existing health insurer can now freely move to another health insurer with the same policy. The usual problems faced by customers in a health insurance policy are:
* Restrictions on age till which they can renew their policy
* Strict limits in their policy on hospital room rent, doctor’s fees, etc.
* Flexibility to increase coverage amount or family members
Before you switch...
Please remember these key points before switching:
1. Existing policy should be in force.
2. Portability has to be initiated by the policyholder well within the renewal date.
3. Do not change your health insurance provider just for the sake of doing it.
4. Do some basic research before switching to another company.
— Author is CEO, MyInsuranceClub.com
IRDA slaps Rs 70 lakh fine on SBI Life
09-Jul-2011
Source : Economic Times
Insurance regulator Irda on Friday imposed a fine of Rs 70 lakh on SBI Life Insurance for paying excess commission to the agents in violation of the group insurance guidelines.
"Considering the gross and continued nature of the violations, the Authority has come to the conclusion that it is just and proper to impose a penalty of Rs 5 lakh each for such payments made in 14 instances to Corporate Agents and Master Policy Holders totalling Rs 70 lakh," Irda said in an order.
The Insurance regulatory and development Authority (Irda) said that as per the guidelines, SBI Life was required to pay group administration expenses to Master Policyholders.
Under the guidelines, insurers can pay commission only to agents or corporate agents within the limits prescribed by the Authority.
SBI Life, Irda added, has paid commission to 14 master policyholders in violation of the guidelines.
"The insurer has failed to adhere to the guideline every time such payment is made," added the order, issued by Irda Chairman J Hari Narayan.
SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Cardif. SBI owns 74 per cent of the total capital and BNP the remaining 26 per cent.
Source : Economic Times
Insurance regulator Irda on Friday imposed a fine of Rs 70 lakh on SBI Life Insurance for paying excess commission to the agents in violation of the group insurance guidelines.
"Considering the gross and continued nature of the violations, the Authority has come to the conclusion that it is just and proper to impose a penalty of Rs 5 lakh each for such payments made in 14 instances to Corporate Agents and Master Policy Holders totalling Rs 70 lakh," Irda said in an order.
The Insurance regulatory and development Authority (Irda) said that as per the guidelines, SBI Life was required to pay group administration expenses to Master Policyholders.
Under the guidelines, insurers can pay commission only to agents or corporate agents within the limits prescribed by the Authority.
SBI Life, Irda added, has paid commission to 14 master policyholders in violation of the guidelines.
"The insurer has failed to adhere to the guideline every time such payment is made," added the order, issued by Irda Chairman J Hari Narayan.
SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Cardif. SBI owns 74 per cent of the total capital and BNP the remaining 26 per cent.
PAN no must for life insurance premium of Rs 50,000 or above
04-Jul-2011
Source : Rediff News
Any policyholder paying a life insurance premium of Rs 50,000 or above will have to quote Permanent Account Number (PAN) from July 1.
Also, any individual buying jewelery of Rs 500,000 or above too will have to furnish PAN before the jeweler.
Currently, any transactions that involves money valued at Rs 500,000 or more require PAN, including sale or purchase of any immovable property. In addition, the sale or purchase of vehicles other than two-wheelers and bank deposits exceeding Rs 50,000 also require PAN.
Source : Rediff News
Any policyholder paying a life insurance premium of Rs 50,000 or above will have to quote Permanent Account Number (PAN) from July 1.
Also, any individual buying jewelery of Rs 500,000 or above too will have to furnish PAN before the jeweler.
Currently, any transactions that involves money valued at Rs 500,000 or more require PAN, including sale or purchase of any immovable property. In addition, the sale or purchase of vehicles other than two-wheelers and bank deposits exceeding Rs 50,000 also require PAN.
Monday, July 11, 2011
House panel defers adopting report on FDI in insurance
30-Jun-2011
Source : CNBC TV18
The parliamentary panel has deferred its decision on the government’s proposal to hike the foreign direct investment limit in the insurance sector to 49% from the existing 26%.
One can read the importance of this bit of news in the context of recent moves in the insurance space, specifically Bharti deciding to exit certain segments of the insurance play that it has and Reliance Industries wanting in.
The key thing really is that the Insurance Amendment Bill 2010 has proposed a hike in the FDI limit from 26% to 49%. This is a proposal that has been there for several years now.
The standing committee of finance in parliament which is headed by former finance minister and BJP leader Yashwant Sinha has prepared a detailed draft report of 250 odd pages which conclusively and effectively rejects a call for hiking the FDI limit. The insurance FDI is governed by in act of parliament in contrast to other sectors where rate has been done through executive decisions and that report was to be adopted formally today. However that could not happen, primarily because Mr Yashwant Sinha, I pick up from sources, was not able remain present at the meeting and therefore this is a deferral that may eventually be sorted out as and when the next date is fixed. For now the formal adoption of this report has been deferred.
The big picture really is that even the finance ministry does not expect this standing committee or the MPs to support this move in hiking FDI from 26% to 49% and in the long-term this is a big message for the government as well as for insurance companies and foreign investors that as far as the Indian parliament is concerned a hike in FDI and insurance is not going to happen for the foreseeable future.
Source : CNBC TV18
The parliamentary panel has deferred its decision on the government’s proposal to hike the foreign direct investment limit in the insurance sector to 49% from the existing 26%.
One can read the importance of this bit of news in the context of recent moves in the insurance space, specifically Bharti deciding to exit certain segments of the insurance play that it has and Reliance Industries wanting in.
The key thing really is that the Insurance Amendment Bill 2010 has proposed a hike in the FDI limit from 26% to 49%. This is a proposal that has been there for several years now.
The standing committee of finance in parliament which is headed by former finance minister and BJP leader Yashwant Sinha has prepared a detailed draft report of 250 odd pages which conclusively and effectively rejects a call for hiking the FDI limit. The insurance FDI is governed by in act of parliament in contrast to other sectors where rate has been done through executive decisions and that report was to be adopted formally today. However that could not happen, primarily because Mr Yashwant Sinha, I pick up from sources, was not able remain present at the meeting and therefore this is a deferral that may eventually be sorted out as and when the next date is fixed. For now the formal adoption of this report has been deferred.
The big picture really is that even the finance ministry does not expect this standing committee or the MPs to support this move in hiking FDI from 26% to 49% and in the long-term this is a big message for the government as well as for insurance companies and foreign investors that as far as the Indian parliament is concerned a hike in FDI and insurance is not going to happen for the foreseeable future.
LIC acquires 10% stake in Andhra Bank in open mkt
29-Jun-2011
Source : Financial Express
The country’s largest insurer, LIC, has hiked its stake in State-run Andhra Bank to 10% through stock market purchase. LIC bought over 5.58 crore shares or 9.99% stake in Andhra Bank on June 21 through open market deals, Andhra Bank said in a disclosure to the Bombay Stock Exchange. Post acquisition, LIC holds over 5.59 crore shares or a little over 10% stake in the PSU lender.
At the current market price, LIC’s holding in Andhra Bank is valued at over Rs.750 crore.
Source : Financial Express
The country’s largest insurer, LIC, has hiked its stake in State-run Andhra Bank to 10% through stock market purchase. LIC bought over 5.58 crore shares or 9.99% stake in Andhra Bank on June 21 through open market deals, Andhra Bank said in a disclosure to the Bombay Stock Exchange. Post acquisition, LIC holds over 5.59 crore shares or a little over 10% stake in the PSU lender.
At the current market price, LIC’s holding in Andhra Bank is valued at over Rs.750 crore.
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