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Volume 7, Issue 3, March 2011
 


Aviva Life’s new premium payment mode
Aviva Life tied up with Suvidhaa for its new payment renewal service. This facility is available for 500 cities and 10000 touch-points across India. Aviva customers can walk-in to any Suvidhaa outlet and pay the renewal premium Suvidhaa is a leading Services Commerce player in India. Customers will get a receipt of their premium from the outlet. Mr. Snehil Gambhir, Aviva Life ‘s Diredctor, Operations & Business Excellence said, "We always put our customers at the heart of our business. This new service will not only add to our services eco-system and provide additional convenience to our customers for premium payments, it will also boost our persistency."

Aviva Life is a Joint venture between Dabur Group and Aviva with 74:26 ratio of stake holding.

India First Life launches ‘LifeStore’
IndiaFirst Life Insurance launched online store called ‘LifeStore’. This is a new concept targeting young people who are familiar with internet and online platforms. This is a complete do-it-yourself online store, which helps understanding the different types of insurance policies and for buying the same. The company expects 5 percent business to come from this online store. There are now around 7 crore interenet users. Now they can go through the policy details and select the one suitable to them. There is also a helpline for the customer.

IndiaFirst Life started its operations in March 2010 with a capital base of Rs.455 crore. At present it has two lakh customers and six lakh group policies.

Life Insurance New business premium falls
There is a decline in new business premium income seen in the life insurance companies mainly due to strict regulations on sale of ULIPs. The premium collected is Rs.3009 crore in Feb.2011 compared to Rs.4896 crore collected last year in the same period. State-owned LIC ‘s sale also shows decreased to Rs.1296 crore in Feb 2011 compared to last year Feb. 2353 crore. Private Insurers ICICI Pru and SBI Life also reported a fall.

Nippon Life to partner Reliance life
Nippon Life Insurance Co., Japan is expected to acquire 26% stake in Reliance Life Insurance for Rs.3062 crore ($680 million) subject to regulatory approvals. At present Reliance capital holds 100 percent stake in Reliance life. Nippon Life Insurance President Kunie Okamoto said, "We both share the same passion and philosophy and, together, we believe we can develop a strategic partnership to help Reliance Life Insurance become a world-class insurance company in India”.

IRDA moots permitting ETF
IRDA is thinking of a proposal which will allow life insurance companies to invest in gold and ETFs (exchange- traded funds). Proposals have come from number of insurance companies to allow them to invest in ETFs of commodities and equities. IRDA would like to restrict the insurers to any single commodity. Insurance companies are unable to find new products after the new guidelines imposed for ULIPs.

Total of 16 ETFs are now in India including gold and equity. In the present regulations insurance companies are not allowed to invest in commodities.

SBI’s Life’s new ULIP ‘Smart Wealth Assure’
SBI Life launched an ULIP named Smart Wealth Assure. The policy ensures guaranteed returns on pre-specified NAV applicable, at the end of the term. This is a single premium product with optional accidental Death benefit and partial withdrawal from the 6th year of the policy onwards. Minimum amount is Rs.50000 with policy term of 10 to 30 years. The age group is from 8 to 65 years. At present SBI Life has eight ULIPs focusing on the long-term wealth creation to satisfy various need of the customers. SBI Life Insurance MD &; CEO M N Rao said

"Our aim is to build a sizeable and attractive suite of Simple and Smart products so as to allow our customers to choose relevant solutions that best meet their needs, aligned to their income and risk profile.”

Birla sunlife’s ‘Foresight’
Birla Sun Life came out with a new product named BSLI Foresight Plan. This is a ULIP plan, which gives upside of market returns to customers protecting their investments from
Downward risks. The plan has a combination of guarantee, liquidity and flexibility options. Chief Actuarial Officer Mr. Fabien Jeudy, Birla Sun Life said, "Equity markets have a huge potential towards meeting customer's long-term wealth creation needs. However, many customers tend to stay away from this attractive opportunity due to lack of knowledge on timing the market and the resultant fear of losing their money”. The company is expecting a postive response for this product and aim to collect around Rs.1000 crore premium in the first year.

Impact of Budget proposal on service tax
ULIPs and traditional insurance plans will be costlier due to the proposed increase in the service tax on life insurance products. Mr. S.B. Mathur Secretary General, Life Insurance Council said, "Policies are going to get costlier with the increase in service tax. While traditional plans will cost nearly 50 basis points more, Ulips may see a 75 basis points increase”.

Unique NRI annuity scheme for Life
ICICI Prudential Life announced that it would offer Annuity solution to the NRIs. The product called ‘ICICI Pru Immediate Annuity’ ensures a regular flow of income to their ageing parents in India. The plan provides guaranteed Income for Life of the parents. They will receive annuities for life on a fixed rate of interest, which will not change on market volatility. In the event of the death of parent the investment used to purchase the annuity will return to the NRI. This is an easy onetime transaction for the NRI and the regular income to the parent will commence immediately on purchase.

Tarun Chugh, Executive Vice President, ICICI Prudential Life said, “We have observed that one of the most important needs of the NRI’s across the globe is that of gifting financial freedom to their ageing parents in India while ensuring preservation of capital. The ICICI Pru Immediate Annuity is tailored to suit exactly these needs. We understand the need of the customer to protect his capital and therefore have structured the product to support this.
He further added, “It fulfills multiple financial goals as it not only allows the NRI customer to potentially earn a higher annuity. We at ICICI Prudential Life are committed to developing an array of need based financial solutions for various customer segments.”

Kotak Mahindra Old Mutual Life’s New Assured Income plan
Kotak Mahindra Old Mutual Life Insurance launched a new product named ‘Kotak Assured Income Plan’. The plan is for customers who are expecting a tax-free stable guaranteed second income. The plan assures upto 10.10% as second income of the basic sum Assured to customers’ upto 20 years. On maturity Basic Sum Assured upto 110% will be paid. The premium payment term is for 15 years and the plan assured life cover for 30 years. During the policy period if death occurred it guarantees the basic sum assured to the customer.

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