Insurance Newsletter June 23 to 27, 2014

The Reserve Bank of India released the Financial Stability Report (FSR) June 2014, the ninth issue of the half-yearly publication.

June 27, 2014 11:45 IST | India Infoline News Service
Top Stories

RBI releases June 2014 Financial Stability Report
The Reserve Bank of India released the Financial Stability Report (FSR) June 2014, the ninth issue of the half-yearly publication. The FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC), on risks to financial stability. The Report aims to promote awareness about the vulnerabilities in the financial system, to inform about the resilience of the financial institutions and to encourage debate on issues relating to development and regulation of the financial sector. The latest issue is being brought out at a time when global financial markets are showing signs of improved stability although growth is still not on strong ground and easy monetary policy continues in many jurisdictions... Read more

GIC plans to introduce 3-5 yrs motor insurance policies
In order to solve the issue of large number of uninsured vehicles, the General Insurance Council is planning to introduce three to five-year motor insurance policies. Speaking at the Insure India 4th annual Fintelekt Summit, R Chandrasekaran, Secretary-General, GIC, said that the option to buy three-year policies will be voluntary and will save customers the hassle of renewing the policy annually. The council is working on the pricing mechanism for such policies as the premium for third party insurance is fixed by the Insurance Regulatory and Development Authority. According to Chandrasekeran, there is unlikely to be discounts on long-term policy as insurers are facing losses on the third party motor insurance portfolio.

Domestic News

75% of insurance sales to be online by 2020: Study
Over 75% of insurance policies sold by 2020 will be influenced by digital channels, says a report by global management consulting firm Boston Consulting Group and Google India. The report also states that insurance sales from online channels will grow 20 times by 2020, and overall Internet influenced sales would be Rs. 3 trillion- Rs. 4 trillion. At present, online purchases represent a small part of insurance buying in India today. However, the overall influence of the Internet on insurance product purchase is already six times and growing rapidly, the report added. The online population forms a brand new market that cuts across borders, it added.

Govt to announce new farm insurance scheme in 6 months
Union Agriculture Minister Radha Mohan Singh said the central government would announce a new agriculture insurance scheme in about six months after taking advise from state governments and farmers organisations. According to Singh, the present 'Krishi Bima Yojana' (agriculture insurance scheme) is not offering proper benefits. The minister has sent letters to all Chief Ministers, seeking their advice so that farmers get maximum benefit from the scheme. Singh said that currently, the finance ministry is considering recommendations made by a commission on the Minimum Support Price (MSP) for various farm produce.

Reliance Life Insurance launches Claims Guarantee
Reliance Life Insurance Company (RLIC), part of Reliance Capital Limited, on Tuesday launched Claims Guarantee, a unique customer-centric service initiative to settle death claim payment in the shortest possible time. The company guarantees to pay claims within 12 working days of receipt of all required death claim documents from the nominee or claimant, provided full premium is paid by the policyholder for at least three policy years and the required claim application documents are submitted. The company will pay an interest to the customer at the rate of 6.5 per cent per annum, if the decision is repudiated and 12-day timeline is breached... Read more

SBI General plans to enter crop insurance
SBI General Insurance plans to raise Rs. 350 crore from its shareholders to fund its expansion plans in FY15, according to a media report. SBI General's gross underwritten premium collection increased 56% to Rs. 1,200 crore in FY14 from Rs. 771 crore in FY13. The insurer reported a loss of Rs. 98 crore last fiscal against Rs. 88 crore. The company expects to breakeven in FY15-16. The general insurer plans to enter the crop insurance segment in six districts, the report added. However, no further details have been provided about the time period and the amount of money to be invested. SBI General Insurance is a joint venture between the State Bank of India and Sydney-headquartered Insurance Australia Group.

AEGON Religare Life is E-Business Leader at Indian Insurance Awards
The Indian Insurance Awards chose AEGON Religare Life Insurance (ARLI) as the E-Business Leader, under the category of Overall Insurance Industry Awards. This is the second year in a row that AEGON Religare is being awarded this honour. The E-Business Leader award seeks to honor an insurer that has deployed the online insurance channel effectively for marketing, lead generation and sales for the business. The award seeks to commend an insurer bringing special focus on this nascent distribution channel.

KS Gopalakrishnan, Managing Director & Chief Executive Officer at ARLI said, AEGON Religare Life Insurance is extremely proud and happy to be honoured as the E-Business Leader at the Indian Insurance Awards for the second year in a row. As pioneers in the online business in life insurance in this country, it gives me immense pleasure to accept this well-deserved award...
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International News

Outsourced Insurance general account assets reach $1.2 trillion: Cerulli
According to new research from global analytics firm Cerulli Associates, outsourced non-affiliated insurance general account assets reached $1.2 trillion in 2013, and will account for 23% of total insurance general account assets in 2014. "Insurance general account assets overseen by outside institutional asset managers stand at about $1.2 trillion, which is small relative to the addressable market size of other institutional channels," explains Alexi Maravel, associate director at Cerulli. "However, insurers have many incentives right now to seek new asset classes and strategies, so there is certainly an opportunity there for institutional asset managers."

Cerulli's new report, Insurance General Accounts: Opportunities in an Underserved Market, assesses the management of insurance general account investment portfolios in the United States and insurance companies' increasing interest in outsourcing investment functions to institutional asset managers...
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How to file income-tax returns online
Individuals prefer to file their tax return through experienced accountants or professionals due to lack of knowledge or the fear of making mistakes. The below article provides the basics of electronic tax return filing that could help you complete the process on your own... Read more

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