SBI Life targets youth Population of India
SBI Life targets youth Population of India Taking leverage on India’s growing youth population, SBI Life plans to launch the “SBI Life Smart Power Insurance Plan” on 7th October 2013 which targets the youth population. This plan is designed to match the dual needs of insurance and investment. It is a low premium product and it is designed to take care of the changing needs of the individuals when the income increases. The unique feature of this plan is that there is flexibility of periodic increase in sum assured and it allows partial withdrawal.
It also offers a unique advantage of adding an inbuilt ‘Accelerated Total and Permanent Disability’ (TPD) benefit, advancing the policy benefit in case of TPD due to accident or sickness. Smart Power Insurance Plan comes with two options to choose from; the first: Level Cover option, and the second: Increasing Cover option.
The minimum premium payable works out to Rs 2,000 monthly, Rs 5,500 quarterly, Rs 9,500 half yearly and Rs 15,000 annually.
The product is open for the age group of 18 to 45 years with the maximum age of maturity being 65 years.
Deadline Extended for life insurance plans till Dec 31
http://www.indiainfoline.com/Markets/News/IRDA-extends-deadline-for-life-insurance-plans-till-Dec-31/5792317377
The Insurance Regulatory and Development Authority (IRDA) has extended the deadline to withdraw old products in the traditional category from the market to December 31.
Earlier the deadline to phase out old products was October 1. As per the IRDA directives, the insurers have to submit the details of the products withdrawn within one week. The insurers should also submit a weekly statement with details of products launched and the products withdrawn as per the guidelines by end of first week of October.
There is also a ban on the sale of highest net asset value (NAV) products and index-linked products in the life insurance segment from 1st October 2013.
All individual products filed after September 30, 2013 will be approved in due course and hence the old products will have to be entirely phased out from January 1,2014.
Insurance repositories to act as one single point of service
While it costs around Rs. 600 per year to service a physical policy, it costs around Rs. 80 to 100 in a year if the policy is maintained in the e format. Insurance repositories help the insurance companies to save on cost of servicing of policies.
An insurance repository is like a demat account for insurance policies. The saving of Rs 500 per policy means that the industry stands to cut costs by Rs 2,000 crore on the estimated 4 crore policies it issues every year. The saving could be much more if the life insurance policies which are to the tune of Rs. 37 crores in numbers are converted into e policies and stored in the insurance repositories in the e-insurance accounts.
The insurance repositories are not only beneficial to the insurance companies in terms of savings on cost of servicing, they also stand to benefit the customers. When the policies are in e format, they are safe and the risk of misplacing the physical documents or loss of the documents is absent. It becomes easier to track one’s policies and the paper work also reduces. Updation of the policies like change of address or change of nomination etc., becomes faster, easier and more reliable. All these benefits are given to the policyholder at free of cost. Policyholders can open an e-insurance account for free with any of the five entities approved by the Insurance Regulatory & Development Authority.
Insurance Repository System (IRS) was last week inaugurated by Finance Minister P Chidambaram in Hyderabad to enable and encourage policy-holders to hold their insurance policies in demat form.
The Insurance Regulatory and Development Authority ( IRDA) has approved five companies - Database Management Limited, Central Insurance Repository Limited, SHCIL Projects Limited, CAMS Repository Services Limited and Karvy Insurance Limited - as Insurance Repositories (IR).
Reliance Life offers policies in electronic demat for
Following the launch of Insurance Repository System (IRS) by Finance Minister P. Chidambaram in Hyderabad last week, Reliance Life Insurance announces issue of its life insurance policies in electronic form for all its products. According to Chief Executive Officer Anup Rau, "The electronic insurance account will eliminate repetitive KYC requirements and provide one view of policies, premium paid, claim history, nominee details, and bring in all the benefits of demat to the life insurance business, including automatic reminders for premium,"
ING Life Insurance launches 'Guaranteed Income Insurance Plan'
ING Life Insurance has launched Guaranteed Income Insurance Plan, a traditional life solution that offers a host of guaranteed benefits to customers and complies with the new product guidelines. In this plan the customer makes premium payments for 50 per cent of the chosen policy term and enjoys guaranteed tax free regular income over the remaining policy term. At the end of the policy term, the customer gets a guaranteed tax free lump sum payout. Based on the premium paying ability, the customer can decide the income payout option he would like to benefit from.
Private insurers cut down on branches; LIC ups the ante
While Life Insurance Corporation (LIC), the State-owned life insurance company is planning to expand its footprint across the country, the private insurers have cut down on their branches by over 10% in the last two years by closing down some of the branches.
The total number of branches or offices operated by private sector life insurance companies stood at 6,759 at the end of latest fiscal 2012-13, down by 1,416 branches from the level of 8,175 branches two years ago on March 31, 2011.
During the same period, public sector player LIC's network grew by 155 to 3,526 offices as on March 31, 2013.
The major reason contributing to the closure of some branches by the private insurers may be due to the downtrend in the business. While ICICI Pru cut down its branches by 845 during 2010-11 and 2011-12, Bajaj Allianz closed down around 110 branches during the same period.
HDFC Standard and Reliance Life also saw their branch networks declining by 48 and 18, respectively.
On the other hand, there are few players who had increased their branches which are Sunlife, IDBI, India First, Sahara, Shriram Life and Star Union.
IRDA Tightens Advertisement Norms
NEW DELHI: Insurance regulator Irda has tightened advertising norms for life insurers asking them not to offer any awards or reward points as inducement to lure customers.
"...in order to enhance the extant transparency of the insurance advertisements, and to improve compliance...life insurance advertisements should not offer, as inducement, any award/reward points, discounts and rebates, except those approved by the Authority as part of product features," the Insurance Regulatory Authority of India has said.
Irda said a review of the advertisements, especially Internet advertisements, revealed the necessity to improve the compliance.
Irda also observed a trend of advertisements showing the combination of benefits of more than one product, it said.
It further asked life insurers for a complete disclosure of all related particulars of an individual product, where more than one product and combination of their benefits were being offered in a single advertisement.
"Such advertisements should contain a specific declaration as 'Advertisement Disclaimer' on Top in BOLD (not less than Font size 7)," it added.
Customer complaints rise against insurers by over 10%
http://economictimes.indiatimes.com/personal-finance/insurance/insurance-news/customer-complaints-rise-against-insurers-by-over-10/articleshow/22203374.cms
Grievances related to alleged mis-selling by insurance companies are placed under the category of 'unfair business practices' at the point of sale.
Grievances related to alleged mis-selling by insurance companies are placed under the category of 'unfair business practices' at the point of sale.
NEW DELHI: Customer complaints against life insurance companies rose by nearly 10 per cent to over 3.41 lakh in the last fiscal, with state-run LIC and private players like Birla Sunlife and Bajaj Allianz accounting for a large portion of grievances.
According to data available with the insurance regulator IRDA's centralised customer complaint redressal system, the Integrated Grievance Management System, the total number of complaints against life insurers stood at about 3.1 lakh in 2011-12 and it rose by over 31,000 during 2012-13.
Complaints included those related to unfair business practices. Grievances related to alleged mis-selling by insurance companies are placed under the category of 'unfair business practices' at the point of sale.
This central system of the Insurance Regulatory and Development Authority ( IRDA) creates a central repository of complaints of policy holders against all insurance firms.
The companies that witnessed significant increase in the number of complaints during 2012-13 included LIC (over 20,000) and Birla Sunlife (about 18,000), while Bajaj Allianz and HDFC Standard Life also saw the number of complaints against them rising by about 14,000 each.
Besides, complaints against Aegon Religare rose by about 4,000, while those against Max Life increased by nearly 5,000.
At the same time, companies like Aviva, ICICI Prudential, ING life, Tata AIA recorded lower number of complaints during the last fiscal, while Reliance Life witnessed the largest decline of about 30,000 in the number of complaints against it.
On a positive note, most of the companies managed to resolve a large number of complaints filed against them during the year and the number of pending complaints across all insurers stood at just about 1,200 at the end of last fiscal.
In terms of number of resolved complaints during 2012-13, LIC was on the top (over 72,000), followed by HDFC Standard Life (over 50,000), Bajaj Allianz (over 37,000), Birla Sunlife (over 30,000) and Reliance Life (over 21,000).
LIC also topped the list for total number of complaints reported during 2012-13 (over 73,000), followed by HDFC Life (nearly 51,000), Bajaj Allianz (over 37,000), Birla Sun Life (over 30,000) and Reliance Life (over 21,000).
The grievance management data shows that the unfair business practice complaints accounted for over 30 per cent of the total complaints filed against life insurers in 2012-13.
The data indicates that out of the total 3,41,012 complaints filed against 24 life insurers, including LIC, in 2012-13, as many as 1,68,482 complaints were for unfair business practices.
The number of such complaints in the previous fiscal 2011-12 stood at little over one lakh.
Other life insurers against whom a large number of complaints were reported include ICICI Pru (19,759), SBI Life (18,681) and Tata AIA (11,672) in the last fiscal.
Banks can only sell standard insurance products through branch
http://economictimes.indiatimes.com/personal-finance/insurance/insurance-news/banks-can-only-sell-standard-insurance-products-through-branch/articleshow/22436837.cms
The move is aimed at ensuring that lenders do not sell customised insurance products where risk assessment is more complex.
NEW DELHI: Banks will be allowed to sell only standard or vanilla insurance products through their branches following the relaxation of brokerage norms by the sectoral regulator Irda, said a finance Ministry official.
The move is aimed at ensuring that lenders do not sell customised insurance products where risk assessment is more complex.
It will also address various concerns of the Reserve Bank, including those pertaining to conflict of interest. RBI does not want banks to undertake new risk in the form of insurance broker.
"Products with same features will not only prevent mis- selling but also ensure that customers can chose a product based on the performance and efficiency of the insurer," the official said.
Irda will ensure that all products sold through banks are standardised in terms of features and commission structure, the official added.
A broking licence will allow a bank to sell products of multiple insurance firms, compared with the current bancassurance model that allows lenders to sell products of just one life and non-life insurance company.
Banks have wide network of delivery channel, over 1 lakh branches, which can be leveraged to increase insurance penetration in the country.
Finance Minister P Chidambaram in his budget speech this year had said: "Banks will be permitted to act as insurance brokers so that the entire network of bank branches will be utilised to increase penetration."
Life insurance penetration in the country is as low as 4.4 per cent of GDP.
Last month, the Insurance Regulatory and Development Authority (Irda) notified rules allowing banks to act as brokers of insurance companies, a process termed as bancassurance.
As per the norms, there is no capital requirement for insurance broking business carried out by banks, according to Irda (Licencing of Banks as Insurance Brokers) Regulations, 2013.
To qualify for the licence, each bank will have to have the principal officer - an officer of general manager or equivalent category, who is appointed exclusively to carry out the functions of an insurance broker.
The licence, once issued, will be valid for three years from the date of issue, it said, adding that the renewal of licence can be applied 30 days before expiry of licence.
Every insurance broker will, before the commencement of the business, deposit and keep deposits with any scheduled bank as sum of Rs 50 lakh, it said.
Life Insurance industry to grow 12%-15% in 5 years
http://www.indiainfoline.com/Markets/News/Life-Insurance-industry-to-grow-12-percent-15-percent-in-5-years/5786212432
India Infoline News Service/ 15:34 , Sep 25, 2013
Increase in FDI for Life Insurance Industry to 49% will see inflow of upto US$ 10 billion, Life Insurance Council says
Life Insurance Council, the industry body of life insurers in India, has estimated life insurance industry to record a CAGR of 12-15% over the next 5 years. This growth expectation is based on multiple regulatory and industry changes brought over in the past few years as well as the favourable demographics of the country.
Favourable Indian demography – insurable population, expected to grow to 75 crore and life expectancy to 74 years by FY 2020, would help achieve spurt in the preference for Life Insurance. Thus, Life Insurance, which is the second most preferred financial instrument, would drive the growth in Net Household Financial Savings to an estimated 35% of Total Savings in the next seven years, as compared to meager 26% in FY10, Life Insurance Council said in a press release on Thursday.
The Life Insurance industry is expected to record a CAGR of 12-15% over the next five years and the Life Insurance Penetration measured as the percentage of Insurance Premium to gross domestic product (GDP) is expected to grow to 5% by year 2020 from current 3.2%.
“The worst is over for the Life Insurance industry that has not seen very positive growth figures in the past few years. With favourable demographics, new products launches on the anvil, industry expanding their operations and infusing efficiencies the industry will see significant growth in India,” said Mr V Manickam, Secretary General, Life Insurance Council.
Life Insurance Council also estimated a potential foreign exchange inflow of US$10 billion in the near term, when the FDI in Insurance increases to 49%, as proposed by Central Government. The increase in the permissible limit would bring in stable capital inflows and help the industry mature faster.
Life Insurance industry stands to immensely benefit, with increasing distribution landscape especially in semi-urban and rural areas with the accessibility to Common Service Centres, considered as the cornerstone of National e-governance plan. Currently, there are around one lakh CSCs, each of which serves a cluster of 6-7 villages, thereby covering close to 6.5 lakh villages across India. IRDA has already issued guidelines to facilitate tie-up with CSCs and individual life insurance companies are in the process of sewing tie-ups with CSCs. The move will help Insurance Companies to open more outlets/offices in rural areas.
Recently, IRDA has granted license to five Repositories that are authorized to open e-Insurance Accounts. These accounts will help safeguard policyholders to hold insurance policy documents in electronic format and also provide access to the insurance portfolio online.
Life Insurers also plan to expand their distribution channel and increase the number of Life Insurance Advisors to more than 30 lakhs over next five years and is expected to contribute INR 3,50,000 crores towards the Infrastructure projects by FY 2020.
The Life Insurance industry has witnessed spectacular growth in AUMs, with investments that have been targeted towards deployment of funds enabling infrastructure growth in the country. The AUMs of Life Insurers has risen to INR 17,41,175 crore as on March 31, 2013 as compared to INR 1,94,010 crore in 2000-01, a phenomenal growth of around 900%.
The total benefits paid to customers by Indian Life Insurance industry in most challenging period, has increased to INR 1,91,336 crore as March 31, 2013 as compared to INR 1,41, 806 crore as on March 2011. In addition, there has been a marked improvement in death claims settled by Life Insurers in terms of number of policies as also by amount and the time taken to settle death claims.
Single KYC required for e-insurance account holders
http://www.indiainfoline.com/Markets/News/Single-KYC-required-for-e-insurance-account-holders/5784252628
India Infoline News Service/ 12:40 , Sep 23, 2013
The IRDA said within seven days of submitting an application, a customer would get an e-insurance account.
The Insurance Regulatory and Development Authority (IRDA) on Friday said an e-insurance accountholder under the insurance repository system need not submit additional know your customer (KYC) documents each time a policy is bought.
At present, for every new insurance cover, a customer has to submit new KYC documents since there is no sharing of this information among insurers.
Insurance repositories have been launched to hold policies in digital or electronic form.
The five licensed insurance repositories will sign an agreement with the insurers who share the electronic data pertaining to the insurance policies with the repositories.
The IRDA said within seven days of submitting an application, a customer would get an e-insurance account.
"Both new and existing life, annuities, health and general insurance policies can all be credited to this account. However, during the initial phase, the life insurance policies would be credited to this account. The general insurance and group insurance policies would be credited subsequently," IRDA said.
Aviva may exit from Indian market PTI
http://businesstoday.intoday.in/story/aviva-india-insurance-business-exit/1/197514.html
UK-based financial services major Aviva Plc is reportedly planning to exit from its over 10-year old Indian joint venture life insurance company with diversified FMCG player Dabur.
Aviva is reportedly in the process of hiring corporate advisors to find buyers for its 26 per cent stake in the Indian business.
When contacted for comments, Aviva India in an email said: "We don't comment on market speculations or rumours as a policy."
Emails sent to Aviva Plc in this regard did not elicit response.
Various options are being considered for the exit including the sale of its stake to Dabur Group if Aviva Plc fails to find a foreign insurer to buy it.
Started in 2002, the life insurance firm has a paid up capital of Rs 2,004 crore.
Aviva India, a 26:74 joint venture the UK-based Aviva Plc and Dabur, posted a decline of 11 per cent in terms of total premium collection at Rs 2,140.6 crore in 2012-13 compared with Rs 2,415.8 crore in the previous fiscal.
Earlier this year, the Netherlands-based ING decided to exit ING Vysya Life Insurance Company by selling its 26 per cent stake to domestic partner Exide Industries.
ING's exit from the Indian life insurance joint venture is part of the previously announced divestment of ING's Asian Insurance and Investment Management businesses, the Dutch banking and insurance company had said in a statement.
Last year, US-based insurer New York Life had exited India by selling its 26 per cent stake in its joint venture company to Japan's Mitsui Sumitomo Insurance Company.
Indian insurance sector has 42 private players in life and general insurance business sharing about 30 per cent of the market share in life insurance and 41 per cent of the market share in general insurance sector.
Boom in women insurance agents, says Tata AIA Deputy CEO
Nearly half the company’s new agent recruits in the last three months have been women.
In 2010, there was a mass exodus of agents from the insurance sector. But now, a number of people are opting for a career in insurance, says Mukesh Dhawan, Deputy CEO of Tata AIA Life Insurance.
A number of women and youngsters have joined the industry as agents. This is a major shift in trend, where men have dominated the industry until recently.
Tata AIA Life Insurance, a joint venture between the Tata Group and the Hong Kong-based insurer AIA Group, recently launched ‘Fenomena’, a programme to enrol more women into the insurance agency business.
“To bring in the right talent we have developed ‘Fenomena’, which is derived from the word phenomenal. We believe women are phenomenal, as they can multitask far more naturally than men,” said Dhawan.
Insurance agency provides women time and work flexibility. They can sell policies anywhere and anytime, he explains.
Tata AIA has come up with special training programmes for women on insurance products, which are apart from the mandatory training that IRDA (Insurance Regulatory and Development Authority) rules stipulate.
The initial results have been encouraging with nearly half the company’s new agent recruits in the last three months being women, says Dhawan.
LIC on a drive to revive lapsed policies
http://www.thehindubusinessline.com/industry-and-economy/banking/lic-on-a-drive-to-revive-lapsed-policies/article5086306.ece
The Life Insurance Corporation of India has launched a drive to revive 7.5 lakh lapsed policies.
“We are also relaxing some of the norms for revival, including waiver of interest up to Rs 2,000,” A. K. Sahoo, Zonal Manager, South Central Zone of LIC, told newspersons here Monday.
The drive will continue up to October 31, 2013. “We have sent letters to 7.5 lakh customers and expect them to respond positively,” he added.
On the performance of LIC, which completed 57 years of service as on September 1, 2013, Sahoo said, even after competing for 13 years with many private life insurers, it now had 74 per cent and 82 per cent market share in terms of premium and policies, respectively.
“The South Central Zone comprising Andhra Pradesh and Karnataka are doing very well and plans like Jeevan Anand and Bachat are driving growth and we are in the first position in the entire country in these products,” he said.
For the current fiscal, the zone had set a target of collecting Rs 11,000 crore in new business premium. Asked how this could be achieved as it could do only Rs 1,000-crore business till now, he said: “Insurance business could pick up any time and we are doing very well in some segments.”
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