Seminar on rural insurance

Coming June 12 there is going to be a seminar on the “Issues, Challenges & Opportunities faced by Insurance companies in Rural India” held in Hyderabad. The Rural Marketing Agencies Association of India in association with the Public Relations Council of India is conducting the seminar.

Reinsurance market growing consistently

Insurance broking house, India Insure is very optimistic on the Indian reinsurance Market. Only the top ten re-insurers dominate the market. There are hundreds of smaller players operating in various niche markets across the world.

The only reinsurance player in India is the General Insurance Corporation. Out of 225 Insurance brokers in India only 31 are said to be in the reinsurance business.

The Managing Director of India Insure, Mr V. Ramakrishna, in his company’s newsletter ‘inotes’ said that the business of reinsurance would require hands-on experience and expertise. The market, estimated at over Rs 3,000 crore in 2004, is registering a consistent growth. After the liberalisation of the sector, a number of foreign brokers as well as international re-insurers have started eyeing this space.

IRDA seeks analysts

The Insurance Regulatory and Development Authority (IRDA) has invited applications from analysts for analyzing the data that was collected by the Tariff Advisory Committee (TAC). This data now needs to be analysed from the actuarial and ratemaking point of view so as to be used in the ensuing detariffed regime.

TAC collected the data from all the general insurance companies on motor and health insurance for the years 2003-04 and 2004-05. The IRDA on a notification put forth that before a final analysis was contemplated, it becomes necessary that a preliminary exercise need to be conducted on the collected data so as to assess the usefulness of the data from the analytics point of view and for ratemaking purposes.

As per IRDA the agencies based on the in-house technical capabilities and with proven experience in the analysis of general insurance data would be short-listed as service providers at a later date. This would be based on the preliminary exercise that they would undertake now on the available data. The agencies with proven experience in the analysis of general insurance data were asked to express their interest by approaching the IRDA within 21 days from May 26.

Iffco-Tokio Ranked Number One In Customer Satisfaction

Iffco-Tokio General Insurance Company (ITGI), a joint venture by Indian Farmers Fertilizer Co-operative (IFFCO) and the Tokio Marine and Nichido Fire group, the largest listed insurance group in Japan, has been ranked first in the motor insurance category and second in the home insurance category in a customer satisfaction study conducted by the “Voluntary Organization in Interests of Consumer Supported by the Ministry of Consumer Affairs, the survey was conducted among 12 General Insurers in India and was based on six parameters of tangibility, problem solving, reliability, responsiveness, assurance and empathy. HDFC Chubb followed ITGI in the motor insurance rankings and was the leader in the Home Insurance category.Education (VOICE)” in eight major cities across India over a period of three months.

Oriental Insurance Company Given B++ Rating By A.M. Best

Oriental Insurance Company Limited, the second largest non-life insurer in India has been assigned a financial strength rating of B++ (Very Good) and an issuer credit rating of “bbb+” by A.M. Best Co. The outlook on both ratings is stable. Oriental’s Business portfolio is focused up to 40-45% in the motor insurance segment and the rest is well diversified.

A.M.Best said “Oriental’s current and prospective operating performance is likely to remain good, though it is entirely reliant upon strong projected investment returns of approximately 8% over the next two years.” Performance in Underwriting will remain poor with a combined ratio of approximately 120%. The main contributor for Oriental’s very high loss ratio of approximately 90%-95% over the next two years will likely be the motor third party liability segment. Pre-tax profits are expected to be within the range of Rs2-3 billion (US$45-67 million) in 2007 and 2008, compared to an estimated Rs3.3 billion (US$74 million) by year-end 2006.

Insurance Industry Set To Grow In Rural India

A study by Associated Chambers of Commerce in India on the Indian Insurance Sector show results of the rural and semi-urban life Insurance industry in India is expected to grow to US $ 20 Billion by 2010 at the same time the non-life business would also rise to $15 billion.

Indian Insurance Business, which is now at $10 billion, would grow to $60 billion by 2010. This is a 500% increase in size. . India’s life insurance premium as a percentage of the GDP is 1.8% against 5.2% in the US, 6.5% in the UK and 8% in South Korea. The study has also found out that in the coming years, the corporate segment will not be a big area of growth for insurance firms.

IRDA Forms Committee To Look Into Grievance Redressal Systems

The IRDA has formed a committee to look into the existing grievance redressal systems in the Public Sector Undertakings (PSUs) and formulate guidelines for adoption by the insurers and suggest modifications to the regulations for protection of policyholders’ interests.

The committee, which will have to submit it report within three months from the date of the order and will comprise of five eminent persons. Mr Vepa Kamesam, Managing Director of the Institute of Insurance and Risk Management will be its Chairman. The other members of the committee include H C Jain, executive director, Life Insurance Corporation of India, Asha Nair, deputy general manager, New India Assurance Company Limited, and Pushpa Girimaji, a consumer activist.

Max NY Life to cross 1 m policies

Max New York Life Insurance company’s CEO Mr.Gary Bennet said, “: Max New York Life is all set to cross one million policies by June, and the company has sold 9.3 lakh policies so far, with the sum assured being Rs 27,000 crore.” He also said ““has built up a quality business portfolio by insuring young and healthy lives, and the sales force is widely recognised as being among the best in the Indian marketplace.”

He said that the company has 66 offices in 41 cities across the country. They have 22 products, with eight options. He said “We customise solutions for our policy-holders. As many as 400 product combinations are possible,”

He said the company had 2,600 employees and over 15,000 agent-advisers. The paid-up capital was Rs 557 crore. He said the role of the regulatory authority in India was laudable and satisfactory.

lAAA rating for ICICI Lombard

ICICI Lombard General Insurance Company Ltd has been assigned IAAA rating by ICRA, an associate of Moody’s Investors Service, indicating highest claims paying ability.

According to a statement, the company said that this is the first rating assigned to a private sector general insurance company in India. The rating takes into consideration ICICI Lombard’s strong parentage, the high growth prospects for general insurance business in the country, strong capitalisation level, its prudent underwriting and reinsurance strategy, and its satisfactory underwriting performance. ICICI Lombard’s competitive cost structure and prudent underwriting practices places it in a favourable position to compete in the anticipated de-tariffed environment.

LIC comes to the rescue?

LIC came to the rescue of the stock markets when it suffered its steepest fall in May. According to LIC officials, the PSU insurer bought stocks in excess of Rs 100 crore on the first day and around Rs 180 crore in the following day.

In fact, last week, the corporation bought stocks worth Rs 700 crore.

“We have been buying oil, IT and banking stocks in the past week. If there are favourable infrastructure-related stocks, we will buy them as well,” said the official.

He denied reports on buying equities under pressure from the Finance Ministry. “The market was overvalued and a correction was due. After this fall, there will emerge a market that rests on strong fundamentals,” said the official.

In the last week, when the BSE shed 1346 points or 11 per cent, LIC purchased stocks worth Rs 700 crore. On an average, the corporation buys around Rs 60 crore everyday, said a source.

LIC’s gross investment in the equity market, including ULIPs in the recently concluded fiscal was around Rs 14,867 crore. The book value of LIC’s equity investment is around Rs 44,000 crore.

LIC raises charges on changes in policy terms

Life Insurance Corporation of India, the country’s largest life insurer, has decided to hike charges on a slew of services like reducing the insurance cover, changing the mode of premium payment, adding additional riders like accident cover, reviving lapsed policies and changing nominee among others.

It has increased the charge for most services to Rs 50 from Rs 5, with the fee for assignment of policies going up to Rs 250. Thomas Mathew, MD, LIC, says the insurance firm has only standardised the fee structure. “We had various alteration fees for different changes. It was different for some policies, too,” he says.

Private insurers make fast buck

The five years of liberalisation has been a highly paying proposition for the new insurance companies. Though, it is said that a new insurance company globally takes five to seven years for break even, there has been increasing instances where Indian private sector insurance companies are making net profit quite early.

In 2005-2006, two more insurers - SBI Life Insurance and HDFC Chubb General Insurance - have entered into the list of insurance companies, which are booking net profit. The SBI Life Insurance, a joint venture between State Bank of India (SBI) and French-based Cardif, with a new business income of Rs 828 crore has controlled its expenses through bancassurance model and recorded a net profit of Rs 2.02 crore during 2005-06. With a premium of Rs 206 crore, HDFC-Chubb reported a profit after tax of Rs 4.41 crore as against a loss of Rs 7.98 crore in the previous year.

Royal Sunderam Alliance in its sixth year of operations, with a premium income of Rs 461 crore has recorded a profit before tax of Rs 10 crore.

Some of the private sector general insurance companies, which had already made net profit, have increased their kitty. Pune-based Bajaj Allianz General Insurance has recorded a net profit of Rs 51.6 crore in 2005-06 compared to the previous years profit of Rs 47 crore. Similarly, ICICI Lombard General Insurance has seen its net profit growing from Rs 48 crore to Rs 50 crore in 2005-06.

LIC issues ATM-cum-debit card to its pensioners

India’s largest insurance company, LIC, has launched a prepaid ‘Annuity Card’ to help its policyholders withdraw pension and annuities from UTI ATMs and also shop at various outlets in India and abroad. “In keeping up with our endeavour to provide the best services to our customers and as a golden jubilee year bonanza for them, the Annuity Card will enable the pensioners to withdraw cash round the clock from anywhere in India,” LIC Chairman T S Vijayan said.

The annuity card will cover four lakh pensioners of group pensions and the pensioners will have an option of getting their pension through ECS, cheques or Annuity Card and the card will be issued free of cost, he added. The proposed card will be issued on Visa platform like any other ATM-cum Debit Card. The card holder will be able to use the card not only to withdraw the amount of cash from 1906 ATMs of UTI Bank but also from partner banks of UTI. The pensioner need not open a bank account with UTI for availing this benefit. The card will be valid for a period of 10 years.

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