ICICI Prudential strikes at rural life insurance

It is reported that ICICI Prudential Life has done Rs.100 crore worth of rural business in Feb 2007. The company’s ED Mr. Bharghav Das Gupta told, “ the company has built a strong network of offices in the five states and was in process of building the network in another five states. The first five states are Andhra Pradesh, Kerala, Punjab, Gujarat and Rajasthan. The company has 260 micro offices in Districts with 20000 advisors dedicated to the rural segments besides tie-ups with RRBs and micro finance institutions. The company also provides their policy documents in five regional languages to the rural people.”

ICICI Prudential Life has tied up with Indian Postal Services in the above five states to provide policy- holders with the facility of paying premium in cash through the post offices in these states. They also issued biometric smart cards to its rural policy- holders at no extra cost to enable the policyholders for easy interaction with the insurer.

SBI launches policies for rural people

SBI Life insurance has announced two new micro insurance products Grameen Super Suraksha and Grameen Shakti to cater to the requirements of the weaker section of the population. Grameen Super Suraksha is a pure term product and Grameen Shakti is a ROP product. Mr. U.S. Roy, MD and CEO, SBI Life, said, “Our micro insurance products are tailored to meet the needs of the larger rural population and enhance the stability and profitability of poor households. This policies will help minimize the level of insecurity of rural people.”
Grameen Super Suraksha is a single premium or yearly premium policy while Grameen Shakti provides maturity benefit also. Both are understandably group policies covering the complete family.

Birla Sunlife increases Capital

Birla Sunlife has added another Rs.123 crore, taking the company’s paid up capital to Rs.1000 crore. This has been done to meet expansion expenses and to conform to the solvency margin requirement. Their new business premium was Rs.746.6 crore in October 2007. The asset under the management is slightly more than Rs.6100 crore as on November 2007.

TATA AIG’s new exclusive child policy

TATA AIG Life launched a range of children’s insurance products for the customers of United Bank of India under the title “united child solutions”. There are three different schemes – Educare18 provides the child lump sum benefit at age 18 to pursue graduate studies, - Educate21 provides lump sum benefit at age 21 for post-graduate studies, - Career build-up plan gives lump sum at age 18, 21,24 and 27 to take care of expenses at various critical milestones. In all the above plans a payer benefit rider can be attached to ensure continuation of the child’s policy and meeting of education needs on time even in the case of parent’s untimely demise. Mr. Joydeep Roy, Chief distribution officer, Tata AIG Life said “the launch of ‘united child solutions’ is the first among many services that we aim to exclusively offer through our alliance with United Bank of India. We are looking at products in the area of health and pension also. We firmly believe that the banking channel has a key role in spreading the concept of life insurance across the country.”

Postal Life Insurance – Finance to be managed by PSU Fund managers

It is reported that Union Cabinet has ordered that the funds of Postal Life Insurance and rural postal life insurance schemes of the postal departments are henceforth to be managed by UTI Mutual and SBI Mutual fund in order to secure better returns on them. Presently the funds are managed by Postal department. As on 31-03-2006 PLI corpus was about Rs.8934 crore and that of RPLI was Rs.1625 crore. The funds are lying presently in special deposit scheme. Finance Minister while announcing the decision told that this proposal is very similar to the pattern of management of disinvestments money.

It was also decided that two public sector fund managers would act according to the recommendations of a governing board which is being set up for the purpose in managing the funds.

ING Vysya Life to increase its capital

ING Vysya Life Insurance, ninth ranked private insurer has increased its capital base by Rs. 100 crore to cover the cost of expansion. It is managed by ING group with 26% stake, exide industries 50% and the balance stake remains with Ambuja Cement and Enam group.
Mr. Kshitij Jain, MD and CEO ING Vysya Life insurance said that total premium collections stands at Rs.950 crore and the company is planning to reach Rs. 2000 crore during 2008. He further said that they have presently underwritten more than 5 lakh policies and expect it to increase to one million. It may be mentioned that 80% of the policies sold by them are ULIPs. To achieve the target the company is planning to bring in new products including a pure risk policy which ensures return of the premium paid in case of no claim during the period of insurance

IDBI approved to enter Life Insurance

IDBI Fortis Life Insurance Co.Ltd., a joint venture between IDBI, Federal Bank and Fortis Insurance of Netherlands has been approved to operate as Life Insurance Co. in India by IRDA. IDBI will have 48% share and Fortis and Federal Bank will have 26% each. Fortis is one of the largest Insurers in Europe and successfully operates in many Asian Countries. IDBI and Federal Bank are banking partners. With this the number of life insurers has gone upto 18.

ICICI Prudential Life offers Life Stage Pension

ICICI Prudential Life Insurance Co. has brought out another unit linked retirement plan called life stage pension. The new plan ensures investment of 100% of investor’s premiums in the market, meaning that there will not be any premium allocation charges. It further enables the investor in creating a retirement kitty depending on the risk aptitude, by opting for automatic asset allocation and quarterly rebalancing. The scheme is flexible in offering five annuity options with choice of retirement age. Speaking at the launch, Mr. Bhargav Das Gupta, ED of ICICI Prudential Life said, ‘ it is critical that individuals have long term vision while creating their retirement kitty. They must ensure that their investments have a proper mix of equity and debt elements which will help create a healthy environment kitty. Life Stage pension with its unique features of automatic asset allocation, quarterly rebalancing and capital preservation at maturity ensures investors saving towards their retirement taking advantage of the successful market scenario of the country.’ The pension scheme is having two portfolio strategies. Investor can also choose the mode of receipt of the pension.

India Bulls in Life Insurance

India Bulls financial services Ltd. is entering Life Insurance market in association with SogeCap, insurance wing of Societe Generale, wherein IBFSL will hold 74% share and SogeCap will hold 26%. The initial capital will be around Rs.300 crore. The new venture will be called India Bulls Societe Generale Life Insurance and already approached IRDA for approval. Mr. A.K Shukla, former Chairman of LIC is the non-executive Chairman of the new company. Societe Generale is present in India through SBI mutual fund where it has 35% stake. They also bought Apeejay Finance, a NBFC for retail financing. Their Insurance wing SogeCap is in Life Insurance business in ten countries and is the third in size in the Insurance business of France. Socgen is, of course, among the top ten Banks in Europe. IBFSL has retail finance services already having 600 offices in over 200 cities of the country. Hence the association is expected to operate at a large scale even at the time of starting. Incidentally India Bulls is the largest Corporate Agents for Max NewYork Life. IBFSL is already having plans for new initiative in asset management and a proposal in establishing multi commodity exchange in JV with PSU MMTC, in addition to Life Insurance business.

Life Insurers seek extension

The private life insurance industry, in their recommendation to finance ministry during this budget period have sought additional grace period for four more years to carry forward their losses because most insurers are yet to achieve break-even, even after eight years mainly because the business involves longer gestation time. Presently losses can be carried forward only up to eight years. Further, Indian promoters have to scale down their stakes to 26% within 10 years of operations. Many companies may not be ready to go public yet because they have not achieved break-even. They also seek separate limit of exemption under sec. 80C of Income tax Act for long term insurance products.

ASSOCHAM findings on insurance

Assocham have reported under a study titled ‘Insurance in next two years” that PSU Insurance companies would grow by 35 to 40% and the total sector is likely to achieve 200% growth i.e. a size of Rupees two trillion by 2009-10. The private insurers are offering a rate of return at 35% as against 20% for domestic insurance company. This will be the main reason to increase the share of private sector to 140% out of the above. The findings further state that the growth area will not be corporate segment anymore. They suggest that the focus therefore be on services sector where there is immense opportunity and rural India. It also informs the insurers that nearly 25 million Kisan credit cards have been issued to rural people which should be a very useful and huge database and opportunity for Insurance companies.

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