Top Stories
More insurers needed to provide annuity provisions: IRDA
The two important aspects of life insurance products are to provide protection and annuity provisions like pension schemes. Going forward, more and more people would want annuity, said J Hari Narayan, Chairman, IRDA (Insurance Regulatory and Development Authority).
He elaborated, “Earlier LIC (Life Insurance Corporation of India) was the only company providing annuity hence there was no competition. But with the increase in demand for annuity products, more companies are entering this segment and would offer customers genuine choice.”… Read more
IRDA proposes minimum surrender value for traditional plans
The Insurance Regulatory and Development Authority (IRDA), in revised draft guidelines on the design of life insurance products, has recommended a minimum guaranteed surrender value (GSV) for traditional policies, which would be comparatively higher than what is being paid by insurers at present… Read more
NPS creates huge opportunities for life insurers
Despite the New Pension System (NPS) throwing up a large opportunity to life insurers, there are not enough players in the system to take advantage of this, the Pension Fund Regulatory and Development Authority (PFRDA) said.
According to PFRDA Chairman Yogesh Agarwal, the minimum 40% contribution under NPS towards annuity is a great opportunity for life insurers, as they can get captive customers from this system. But we don't have enough players in this area… Read more
IRDA to introduce demat insurance policies soon
A number of changes are planned to take place in the insurance industry with IRDA’s (Insurance Regulatory and Development Authority) final approval to insurance repositories which will allow introduction of demat policies.
J Harinarayan, chairman, IRDA, said, demat life insurance policies will be introduced soon. The regulator is ready to grant certificate of registration to five companies for building insurance repositories. The companies that have received IRDA approval for setting up insurance repositories include NSDL, CDSL, Karvy, CAMS and STCI… Read more
Leader Speak
Next generation reforms in non-life insurance
Up-gradation of technology and telecom solutions will be the foremost factor in determining the future growth of the industry, Dr Amarnath Ananthanarayanan emphasizes… Read more
Delivery not distribution: Please do mind your language!
Distribution and delivery are virtually used as synonyms, not only in our industry but across the financial services. As a matter of fact, distribution dominates in terms of usage and application. However innocuous it may seem—there are some serious implications of this which ought not to be ignored, points out Praveen Gupta… Read more
Need for underwriting & risk management focus
The Indian industry has to tighten its internal underwriting and risk management practices, so that risks don’t spiral and consume precious capital, stresses Bhargav Dasgupta… Read more
Micro Insurance: Protection for the most vulnerable ones
In case of offering a health insurance the challenge is lack of proper hospitals and this segment is more prone to common illnesses due to poor state of hygiene and sanitation, says V Philip… Read more
Free pricing does not mean free fall of prices
At current levels many insurers may not be able to sustain their existence for long and only prudent underwriting discipline would help insurers to generate a decent profitable portfolio, according to Tapan Singhel… Read more
New Launches
HDFC ERGO introduces motor insurance add-on covers
Car and home remain the most aspirational acquisitions for the rising middle class in India. Primarily because of its mandatory nature, motor insurance constitutes approximately 45% of the non-life insurance business and remains one of the fastest growing business lines in the country. However, seemingly not much has changed when it comes to the product offering in motor insurance… Read more
Domestic News
Apollo Munich to turnaround in 5-6 years
Apollo Hospitals Group expects its health insurance business Apollo Munich to turnaround in five to six years. The losses have come down, said Chairman Dr C. Prathap Reddy, at the company’s AGM (annual general meeting)… Read more
IRDA set to raise LIC’s equity limit to 20% in single firm
The Insurance Regulatory and Development Authority (IRDA) is ready to increase equity exposure of Life Insurance Corporation of India (LIC) in a single company to 20%, according to media reports.
At present, LIC can invest up to 10% of capital employed by the investee company, or 10% of the fund size in a company—whichever is lower. The capital employed comprises share capital, free reserves and debentures, the reports added… Read more
EPFO approves RCap-Nippon Life deal
The Central Board of Trustees (CBT) of the EPFO (Employees' Provident Fund Organisation) on Tuesday has approved the proposal of Reliance Capital Asset Management (RCAML) to sell 26% stake to Japanese insurer Nippon Life. The deal is worth around Rs. 14.5 billion.
Reliance Capital is one of the four fund managers of the EPFO managing 20% of its corpus. The approval was needed because according to the contract with the EPFO, its fund managers cannot do mergers, acquisitions etc without the approval of the Trust… Read more
India remains under-penetrated market for insurance
The Indian insurance industry seems to be in a state of flux. While there has been a perceptible change in the market dynamics since liberalisation and economic reforms, a considerable amount needs to be done for future growth and development of the market in an orderly and sustained manner, according to Confederation of Indian Industry (CII) and Ernst & Young Report titled, ‘Insurance industry: Challenges, Reforms and Realignment’… Read more
Industry, IRDA & Govt need to realign growth of insurance
The insurance industry is faced with multiple challenges, while life insurance has seen de-growth in new business premium in FY12, non-life insurance is weighed down by underwriting losses. A multitude of changes in the regulatory landscape has given little time to the industry to adjust to changed market dynamics. Despite the challenges the insurance remains a market with huge potential with growth and emergence of individual lines of business like health… Read more
Learning
NPS: Building substantial corpus for your retirement
Retirement planning involves time and skill. Unfortunately, many of us hate finance and remain ignorant towards it. At the same time, we also remain ignorant towards our retirement planning. Some of us constantly delay our decision to make investments—saying there is a lot of time for our retirement. Most of us do make investment. However, we invest randomly in different investment options and prefer easy exit. Hardly anyone plans for retirement systematically. We need to understand that for retirement planning we have to focus on financial products where we can invest for long term and not touch our investment till we retire… Read more
International News
Japanese non-life groups vulnerable to catastrophe: Fitch
Fitch Ratings says that Japanese non-life insurers are likely to come under rating pressure if insured catastrophe losses rise unexpectedly, or the domestic stock market falls sharply before they are able to restore their capitalisation. Insurers are restoring their capital buffer after the major natural disasters in 2011, partially underpinned by the strong capital positions of their life subsidiaries. The Rating Outlook is currently Stable… Read more