ICICI Prudential Life and UAE Exchange tie up for premium

ICICI Prudential Life Insurance entered into an agreement for collecting first and renewal premiums of NRI customers in the Gulf, with UAE Exchange House based in Dubai. This tie-up would ensure the insurers to get access to all branches of the exchange spread across the region. This is a follow-up arrangement to their earlier facility offered to customers to directly remit insurance premium from their ICICI Bank, NRE account into the insurers account. On the occasion Ms. Anita Pai, VP of the firm said,” with this tie-up, our NRI customers can now make their first and renewal payments at an exchange house closer to them. The arrangement would help serve customers in a better way.”

Life Insurance Corporation’s model for HNI

LIC based on a survey, which indicated that high premium paying customers expect ‘ customized services, high quality contact and dissemination of information’. To evolve a model to suit them LIC has engaged the services of a consultancy firm, in addition to looking at the possibility of creating an appropriate organizational structure.

Postal Life Insurance

The Government has decided to invest postal life insurance and rural postal life insurance funds, which are to be deposited with Ministry of Finance, in Government Bonds and Securities as per IRDA Norms. An investment Board would decide policy guidelines for managing the funds and an investment division manned by financial experts would take day-to-day decisions which will be executed by two public sector Asset management companies.

SBI Life Insurance expands in North

SBI Life Insurance plans to open 15 to 20 new branches in the northern region in addition to increasing the number of their insurance advisors. It is expected that an investment of Rs.300 crores would be made for expansion of the business. The insurer is aiming a total business premium of Rs.6500 crores during financial year 2007-08. Mr. U.S. Roy, MD and CEO of SBI Life said that the potential in the northern region is very high though it contributed only 15% of the total business. The northern region has earned Rs.323 crores as premium during the financial year 2007-08. 68% of the business was through Banc assurance route and 26% through Agency channel. The company has set a target of Rs.500 crore of total premium collection from the region during the current financial year and expected to grow by 100% in the next financial year. SBI Life sells its products in northern region through its 15 branches and 1500 State Bank group branches. The company has increased the number of insurance advisors to 2426 as in January 2008. The CEO told that the company has plans to launch “Grameen Shakti” a micro insurance product to other states also. First it was launched in a pilot basis in Orissa.

Kotak Life on expansion mode

Mr. Shekhar Bhandari, Senior Vice President of Sales, Kotak Life Insurance informed that they plan to open 100 more branches on a pan India basis achieving a total network of 210 branches by March 2009. Of this 40 branches will come during the current financial year itself. He further said that the company has adopted a state-wise business development strategy on the basis of business potential and selected the following five states for the purpose. Kerala, Maharashtra, Gujarat, Haryana and Punjab form these five and Tamilnadu and Andhra Pradesh will join them in second stage, according to their Senior VP, Sales.

Birla Sunlife best in claims settlement

According to survey by Life Office Management Agency, Birla Sunlife Insurance is credited to be the best at claims settlement among private life insurers in 2007. The company is reported to be quick and fast in settlement of death and rider claims in all categories. The pending claims are reported to be 0.41% of total claims in 2006-07. Mr. Vikram Mehmi, CEO of Birla Sunlife said,” In life insurance, claims is the key area of the service. We are happy to note that Birla Sunlife Insurance excels on this core parameter.”

Reliance’s wealth plus health

Reliance Life Insurance have launched a first of its kind unit linked plan combining health benefits under their Wealth + Health plan. While launching the new product Mr. Nandagopal, CEO said, “this is the first wealth creation product that offers health coverage as a key differentiator. It offers complete investment flexibility to grow wealth by investing in different plans and funds and also provides financial support for managing health expenses. It is in line with our strategy to offer best-in-class product to our customers”. This plan offers cashless payment, cover for entire family under one plan and option to increase life cover. With a low annual premium of Rs.10000/- per annum the insured can get health and saving benefits and also protect himself against high medical bills. The plan also provides lump-sum benefit to take care of hospitalization expenses and recuperation benefits after hospitalization. This product is expected to contribute 35 to 40% of total sales of last quarter 2008.

Insurance penetration in India

According to a recent survey by MaxNewYork Life Insurance Co. and NCAER , it is found that awareness of Insurance is high in India but only 3 out of 10 households have opted for Insurance cover. In urban households though 90% are aware of Life Insurance policies only 38% have purchased life insurance products. That is, 62% of households in cities and towns have no insurance cover. For rural India 73% are aware of insurance but only 19% have any insurance cover. Among the people who are aware of insurance 86% consider life insurance as the most important, health at 6%, automobile at 5% and crop at 3% follows in that order. The awareness was 96% among salary earners, 89% among non-agriculture and self-employed, 77% agricultural households, 63% labor households. The survey points out that the awareness decreases as we go down the income slabs.

Among landlords and land workers only large landlords are aware of insurance. The survey says 87% of life insurance owners are married and 11% are unmarried and only 2.6% fall under categories such as divorcee, widows etc. It was also attempted to equate insurance and prosperity i.e. households owning life insurance policies were more prosperous more educated and owned more consumer durables than those who do not own life insurance. Education also has relevance, the study says, pointing out that incidence of insurance being high where chief earner was educated.

Tax - relief for people but not for insurance

The recent hiking of basic exemption limit of taxable income has put in a spanner in the hopes of insurers. Many who were marginally falling into tax net usually go for purchase of life and health insurance policies to save tax. But the present increase in the exemption may not be forcing them to look for insurance policies to save tax. and tempt them instead for more lucrative investment options. This is mainly because of the attitude of people to invest in life insurance only to save tax. The industry should therefore endeavor to educate people about the importance and advantages of investment in insurance and health.

Aviva Life appoints new director

Aviva Life Insurance Company has appointed Ms. Monica Agrawal as its Director for Corporate Initiatives based in New Delhi reporting to MD and CEO, Mr. Bert Paterson. Ms. Agrawal will be responsible for implementing a wide range of high impact strategic and business initiatives.

Bank mergers may affect Insurance sector

It is reported that Bank mergers in India may impact Insurance sector as many insurers have select Banks as their Banc assurance- partners. The merger announcement of HDFC Bank and Centurion Bank of Punjab will affect the business of Aviva Life Insurance Co. and ICICI Lombard General Insurance, as Centurion Bank is the Banc assurance –partner for these insurers. HDFC Bank sells both life and non-life policies of group companies, HDFC Standard Life Insurance and HDFC General Insurance.

Banks procure nearly 40% of fresh business for life insurers and hence are almost the lifelines of Life Insurance. In addition, recruiting, training and retaining individual agents are a costlier proposition. So Banks as partners are the easier option for life insurers to penetrate the market. Banks also are highly profited in selling life insurance products. In this situation Banks realizing their critical role are now dictating terms and demanding commission and other fees totaling 70% of first year premium on a policy. So far the policy was one Bank one Insurance. This concept was not right and would lead to skewed scenario, according to Mr. Srinivasan, CFO, of Bharti AXA, as no single insurer can satisfy the needs of wide variety of banking customers.

LIC Housing intends combining reverse mortgage and insurance

LIC housing finance is considering possibilities of combining its reverse mortgage plans with whole life annuity provided by a life insurer. This permits a home - owner to use his property to earn income for life as against for only 15 years as provided under the present reverse mortgage plans. LIC Housing Chief, Mr. S.K. Mitter, told that the company was in talks, with insurance companies to work out a scheme where home equity could be used to buy an annuity that provides income for the entire life span of the borrower. “We are working out how to achieve it,” said Mr. Mitter. This is a unique idea considered by the company to offset the difficulties experienced by reverse mortgage when the owner of the property survives the mortgage period of 15 years with also a lien on his property in his old age.

ISO 27001 for Bajaj Allianz Life

Bajaj Allianz Life Insurance Co. has been given the prestigious security certification of ISO 27001; 2005 based on its compliance with the new standards for data and information security set forth by ISO. This is the only Life insurance company to receive this certification and recognition.

The ISO 27001 is the highest certification available from ISO (adopted from BS 7799 Standards of BSI) and is awarded for effective e-security and physical security measures. This is the only international standard where an organization can receive a truly independent assessment of their Information Security Management System. The standards specified requirements for the state of the art products, services, processes, materials and systems, as well as for good conformity assessment managerial and organizational practice.

Ms. Ishita Mukherjee, CIO, Bajaj Allianz Life Insurance said, “ we are proud to be the first insurance co in India to get ISO 27001 and this demonstrates our stringent measures that secure the data and information of our customers. This certification also shows our strong commitment to high level of customer satisfaction.”

Policy lapse in life insurance

It is reported that in life insurance industry, in the last 3 years, many policies are lapsing. Lapsing ratio in LIC is 25% but for private insurers it is 40%. According to IRDA a major cause for growing lapsing ratio is “forced selling by agents to achieve their target. Agents also sell policies without taking customer needs into account.” Once the customer pays premium for the first year the insurance agent conveniently forgets the policyholder for the subsequent premiums, as commission for first premium at 40% was the only attraction for the agents. The private insurers also experience this situation. The consumer also finds it difficult to pay further premium. Only solution for this malady is constant reminders by insurers. ICICI Prudential life insurance has maintained its persistency ratio (the continuation of policy by a policy holder) at about 93% in the first year and 97% in the second year by use of IT in constantly reminding insurers according to Ms. Kalpana Sampath, of ICICI Prudential.

Archives | Top