Insurance Newsletter – March 17 to 21, 2014

The premium income of non-life insurance companies grew 5% to Rs. 60.66 billion in the month of February, according to Insurance Regulatory and Development Authority data

March 22, 2014 1:36 IST | India Infoline News Service
Top Stories

Insurance @ Digital–20X by 2020
The exploding popularity of smart phones and Internet has become a core part of life for many consumers across the globe and in India. This mega trend, which has already disrupted several sectors, is set to have a huge impact on Insurance sector in India. It is estimated that three in every four insurance policies sold by 2020 would be influenced by digital channels during either the pre-purchase stage, purchase or renewal stages, according to a new report by Boston Consulting Group (BCG) and Google India. This report, titled Digital@Insurance-20X By 2020, asserts that not only will insurance sales from online channels grow 20x from today by 2020, but overall Internet influenced sales would be Rs 300-Rs. 400 trillion. Digital disruption is expected to impact insurance significantly and, whether considered an opportunity or a threat, insurers need to be creative to leverage this opportunity immediately... Read more

Gross premium of general insurers rises 12.84% in Apr-Feb
The premium income of non-life insurance companies grew 5% to Rs. 60.66 billion in the month of February, according to Insurance Regulatory and Development Authority (IRDA) data. The four public sector insurers—National Insurance, New India Assurance, Oriental Insurance and United India Insurance—saw their gross premium collection rise by 2.6% year-on-year to Rs. 33.95 billion in February. The gross premium of 28 general insurers rose 12.84% to Rs. 698.33 billion during April-February period of 2013-14. For April-February period, premium collected by public general insurance companies grew by 10.9% from a year earlier to Rs. 390.69 billion, IRDA data showed.

LIC's pension and group business zooms 50%
Life Insurance Corporation of India (LIC) on Tuesday said its pension and group business recorded new business premium of Rs. 391.43 billion as on 28 February for this fiscal. The premium collected between April 2013 and February 2014 was about five times the premium collected by 23 private life insurers put together, LIC said in a press release. As on 31 January, LIC’s market share in group business was 84%. “Under the Aam Admi Bima Yojana, a social security scheme of the government of India, about 10 million new lives have been covered,” LIC said... Read more

Domestic News

Motor insurance: New India waiting for IRDA decision
In order to control increasing losses from motor insurance segment, New India Assurance is waiting for the final approval from IRDA (Insurance Regulator Development Authority). Earlier this year, IRDA released an exposure draft in which it proposed for an increase in premium for third-party motor cover for 2014-15. Motor insurance in India has two components: own damage cover and third-party cover. The latter is compulsory, to cover third-party damage in terms of property or life.

According to the draft, IRDA is looking for a hike of 25%-137% rise to attain breakeven in this segment. Motor insurance is mandatory for all vehicles plying on roads. All stakeholders had to give their views by February 28, 2014 following which the IRDA will bring out the final guidelines... Read more

Citibank, Apollo Munich provide 16mn households with health insurance services
Citibank India and Apollo Munich announced they will provide specialized health care services to cater to India’s urban emerging affluent and affluent customers of over 16 million households across eight cities, growing at 9% annually. Citibank India, amongst the leading distributors of wealth management products in 2013, will now offer a complete suite of specialized health care solutions from Apollo Munich to its clients across emerging affluent, affluent, high net-worth and non-resident Indians. These services will combine financial protection as well as health & lifestyle management support for non-communicable diseases (NCD) such as hypertension, diabetes, heart disease, cancers and tumours... Read more

Birla Sun Life Insurance introduces MySolutions
Birla Sun Life Insurance, the life insurance arm of the Aditya Birla Financial Service Group launched MySolutions offering customers tailor-made insurance solutions with combination plans for goal based savings. MySolutions is supported by a unique technology platform that aids sales force and advisor communities to gauge the customers’ requirements and offer customised solutions to help them achieve planned financial milestones in life. Birla Sun Life Insurance currently offers 4 solutions within the MySolutions basket - BSLI Premier Retirement Solution, BSLI Aspire Future Solution, BSLI Wealth Forever Solution and BSLI Secure Income Solution. Each addresses a distinct need in the customers’ life-cycle including retirement, wealth creation and regular income... Read more

Edelweiss Tokio Life launches Wealth Builder
Edelweiss Tokio Life Insurance has launched Edelweiss Tokio Life - Wealth Builder, a non participating, non-linked life insurance plan which offers a combination of savings and protection. The plan addresses the Wealth Accumulation need of a customer and protects the family against any contingency. Edelweiss Tokio Life – Wealth Builder is a simplified savings plan that guarantees all the benefits of the plan right at the beginning of the policy. The minimum entry age for the plan is 91 days and the maximum maturity age is 70 years. The policy term ranges between 10 and 30 years with the option of paying premiums in monthly, semi annually or annual installments. In addition, the plan offers tax benefits under section 80 C and section 10(10D) of Income Tax Act, 1961... Read more

Liberty Videocon General enters eight cities
Liberty Videocon General Insurance Company announced the expansion of its foot print by commencing business operations in eight more cities. These cities are Kolkata, Bhubaneswar, Jaipur, Chandigarh, Coimbatore, Vizag, Hubli & Surat. With the opening of offices in these cities, Liberty Videocon General Insurance is now well set to operate out of 20 branches across India before end of current financial year. Roopam Asthana, CEO & Director, Liberty Videocon General Insurance said that “Last year we focused on establishing our presence in major metros in order to reach out to large institutional and retail audiences effectively. After consolidating our operations in those cities, we have now branched out in these new locations.”... Read more

Infosys signs Five Year deal with Sweden’s Länsförsäkringar AB
Infosys, a global leader in consulting, technology and outsourcing solutions, announced that it has signed a five-year agreement with Länsförsäkringar AB (LFAB) to provide application development and management support for its life and non-life insurance business. The new agreement with Infosys will see Länsförsäkringar AB, owned by Länsförsäkringar Alliance, a mutual organization of 23 regional insurance companies with a strong local brand, improve the quality of service and time to market for its alliance members at a reduced cost... Read more

International News

Allianz starts payment on MH370 claims
German insurer Allianz has revealed that it has made the initial payments in the case of the missing MH 370. Hugo Kidston, global-communications head, Allianz said that the Munich-based insurer with other co-insurers of the Malaysian aviation "hull and liability policy" have made the initial payments. The company says it is seeking to complete claims payments by the end of the week. However, no information is provided on the insurance amount and the persons who have received the payment... Read more

Chinese insurer unveils smog insurance policy
People's Insurance Company of China (PICC) has rolled out a new smog-focused health insurance - the first of its kind nationally - which compensates Beijingers made ill by air pollution with up to 1,800 yuan (HK$2,270). PICC is a state-owned company in China. The holding company promotes its subsidiaries, PICC Asset Management Company Ltd and PICC Property and Casualty Company Ltd (PICC P&C). The insurance is available for Beijing residents, aged 10 to 50, at premiums ranging of 78 to 154 yuan. Clients who land in hospital for smog-related illnesses, such as respiratory and cardiovascular diseases, can claim 100 yuan per day for 15 days... Read more

US billionaire buys $201mn life insurance policy
Guinness World Records, the global authority on record breaking, on 13 March 2014, confirmed a new record broken for the most valuable life insurance policy, valued at a total of $201 million (£121 million), on the life of a well-known U.S. billionaire. The record-breaking insurance policy was sold by Dovi Frances, Managing Partner of SG LLC, a company based in Santa Barbara, California, USA. The policy features a combined death benefit to be paid upon the death of the single insured that more than doubles the previous record, set by Peter Rosengard from the UK, whose record-breaking insurance sale in 1990 sold at $100 million (then £56 million) on the life of a U.S. entertainment industry figure... Read more


An anecdote on the importance of retirement planning
When Dr Amit Nandy (not his real name) retired away in 1981, the pension from the public-sector company where he had been employed was enough for a comfortable life for him and his wife. His children were employed, the son at a pharmaceutical company and the daughter as a doctor. Today, nearly three decades later, they are struggling to make ends meet. Too proud to take help from their children, they count every rupee they spend on food; they refuse to subscribe to cable television; and their visits to the Ramkrishna Mission (today a Rs. 60 auto drive from their house in a Mumbai suburb) have dwindled... Read more

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