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ADDENDUM : How to deal with anxiety ? [-]
"Worrying is carrying tomorrow's load with today's strength- carrying two days at once. It is moving into tomorrow ahead of time. Worrying doesn't empty tomorrow of its sorrow, it empties today of its strength." - Corrie ten Boom

"Man is not worried by real problems so much as by his imagined anxieties about real problems" - Epictetus

"Okay, so, flying," I started, taking a deep breath and focusing on the thing I loved most in the world. "Flying is … great. It feels great when you're doing it. It's fun. Pure freedom. There's nothing better." Dylan smiled, a slow, easy smile that seemed to light up his whole face. "So the first thing we're going to do," I told him, "is push you off the roof." - James Patterson, Fang

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Insurance slideshow

Its success lies in the fact that it's an insurance plan, not
an investment plan or a welfare plan.- James Roosevelt

Agent,sales person least trustworthy for
those buying insurance: Study

Thesynergyonline Insurance Bureau


"Insurance is the equitable transfer of any risk of a loss, by one entity to another with deal for money. this is the form involving risk management primarily supposed to hedge against your current risk of an contingent, uncertain loss. a good insurer, or even insurance carrier, is usually selling your insurance; ones insured, or maybe policyholder, is usually the person or maybe entity buying your current insurance policy. The type of funds to be charged intended for an certain range regarding insurance coverage can be called your own premium. Risk management, the practice regarding appraising along with controlling risk, has evolved as being a discrete field of study as well as practice. The settlement incorporates your insured assuming a guaranteed in addition to known relatively small loss for the form connected with repayment on the insurer with transaction to its insurer's promise to help compensate (indemnity) the insured with the case of the financial (personal) loss. your insured receives the contract, called the insurance policy, that details your Disorders as well as Conditions under that the insured will be financially compensated."



"If a child, a spouse, a life partner, or a parent depends on you and your income, you need life insurance."
― Suze Orman

And so the insurance agent is taken as the least trustworthy source in the sales process of an insurance policy across different policy segments both among the financially literate and financially non-literate consumers, an ASSOCHAM study has found.

Among the first set of people with no specific knowledge of insurance and finance and those who fall in the age group of 18 to 60 years, 72 per cent of those covered in the study said their agent/sales person was the least trustworthy source in the sales process of an insurance policy.

The second least trustworthy source in the sales process was the insurance company itself, though the percentage on this count was much less at 29 per cent.

The second set of people who are financially savvy and can get better interpretations of the insurance policies find their agent and sales person as the least trustworthy in the sales value chain. As many as 34 per cent of this set of people, aged 25 -40 years, found the agents lacking on trust, followed by the insurance company itself.

Insurance learning-icon  

Likewise, misrepresentation of benefits was also an area of concern. On this count, the more let down was felt by those who are financially savvy and are in the age group of 25-40 years. As many as 65 per cent of them, who were covered in the ASSOCHAM study, found the issues on this score. Besides, those in the age group of 18-60 years and those who are not so financially savvy, also found the problem of misrepresentation of benefits. Forty three per cent of them said there are problems with regard to misrepresentation of benefits.

"There is a need for simplification of processes and procedures of insurers to take away the awe and fear of the common man on different products. Demystification of insurance concept is a necessary requirement for people to take to this in a large way, particularly, in the background of low financial literacy," ASSOCHAM said.

He said the industry also needs to do a few things to hasten up the process of insurance inclusion. The product space is cluttered with a large number of complex policies. "There must be simple, standard vanilla products in personal products."

The study suggested that since the insurance agent or the sales person is the face of industry, "It is of utmost importance that we select these ambassadors very cautiously. Right from spreading the awareness to conducting the need analysis for a sale, to servicing the customers' request in time, to explaining and supporting customers in times of claim, sales representative must do it."

The lack of information of our customers is what creates the disconnect; once that is taken care of all, apprehensions will slowly begin to disappear.

People won't buy insurance until they're sick. If you can call on your way to the hospital and get coverage, it's not really insurance at that point. Angela Braly

Canara HSBC Oriental Bank of Commerce Life Insurance Assured Nivesh Plan and Smart Suraksha Plan

Canara HSBC Oriental Bank of Commerce unveils Assured Nivesh Plan and Smart Suraksha Plan

Thesynergyonline Insurance Bureau


New Products



NEW DELHI, JUNE 02 : "In health care, the biggest imperative is: Fix those who cannot get insurance without changing the world for everyone else.- Eric Massa

And so Canara HSBC Oriental Bank of Commerce Life Insurance Company added two new products to its suite - Assured Nivesh Plan and Smart Suraksha Plan, both designed to protect and meet the future financial needs.

Assured Nivesh Plan is a traditional endowment plan that caters to the need of savings along with life cover in a single plan. This plan offers limited premium payment options where an individual pays premiums for a limited number of years and yet enjoys the benefits for the complete policy term.

Smart Suraksha Plan is a cost effective pure protection plan that provides insurance coverage against untimely death, thereby, helping one secure their family's financial future. A term plan is a must-have in the financial portfolio of every individual as it helps in preserving and sustaining the lifestyle of the family of the insured even when the individual is not around.

Mr Anuj Mathur, Chief Executive Officer, Canara HSBC Oriental Bank of Commerce Life Insurance Company said, "Our new set of products aim towards a sharper customer proposition, addressing short and long-term financial needs and also help in ensuring financial security of your family in case of any unforeseen circumstances. Assured Nivesh Plan helps in planning the financial requirements so that the customers have the means to fund their future financial goals without any compromises, thereby, ensuring a smooth life journey for their loved ones. On the other hand, Smart Suraksha Plan is a step towards offering a comprehensive suite of protection solutions to our customers."

Mr Mathur further added," Our product philosophy is closely aligned to our bancassurance business model, where we focus on products which meet the core needs of the customers. All our products are based on market research among our target segments and the insights gained are used to define the various product propositions."

In a joint study released in September last year by FICCI & Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited, it came out that savings for the future needs (75 per cent) and security for the family (64 per cent) are the top reasons for which the policyholders have invested in various life insurance products.

Salient features of the Plans are: Canara HSBC Oriental Bank of Commerce Life Insurance Assured Nivesh Plan • Insurance coverage throughout the policy term through payout of death benefit in case of death of the life assured

• Limited premium term of either 7 or 10 years depending on what suits you best

• Guaranteed savings through guaranteed payout of Sum Assured at maturity

• Maturity benefit with Annual bonuses & Final bonus (if any)

• Better Value for higher premiums - through high Sum Assured rebate structure

Canara HSBC Oriental Bank of Commerce Life Insurance Smart Suraksha Plan

• Option to cover accidental death or/and total and permanent disability

• Rewards healthy lifestyle (lower premium rates for non-consumers of tobacco)

• Additional rebate for women opting protection cover

• Easy claims process – with a dedicated manager to assist the family in claim settlement

Salient features of the Plans are:
Canara HSBC Oriental Bank of Commerce Life Insurance Assured Nivesh Plan
• Insurance coverage throughout the policy term through payout of death benefit in case of death of the life assured
• Limited premium term of either 7 or 10 years depending on what suits you best
• Guaranteed savings through guaranteed payout of Sum Assured at maturity
• Maturity benefit with Annual bonuses & Final bonus (if any)
• Better Value for higher premiums - through high Sum Assured rebate structure

Canara HSBC Oriental Bank of Commerce Life Insurance Smart Suraksha Plan
• Option to cover accidental death or/and total and permanent disability
• Rewards healthy lifestyle (lower premium rates for non-consumers of tobacco)
• Additional rebate for women opting protection cover
• Easy claims process – with a dedicated manager to assist the family in claim settlement

ASSURANCE : Nothing consoles and comforts like certainty does. [-]
In our reasonings concerning matter of fact, there are all imaginable degrees of assurance, from the highest certainty to the lowest species of moral evidence. A wise man, therefore, proportions his belief to the evidence." - David Hume, An Enquiry Concerning Human Understanding

Tell me, he said, "What is this thing about time? Why is it better to be late than early? People are always saying, we must wait, we must wait. what are they waiting for?" "Well […] I guess people wait in order to make sure of what they feel." "And when you have waited—-has it made you sure?" - James Baldwin, Giovanni's Room

"To be content, horse people need only a horse, or, lacking that, someone else who loves horses with whom they can talk. It was always that way with my grandfather. He took me places just so we could see horses, be near them. We went to the circus and the rodeo at Madison Square Garden. We watched parades down Fifth Avenue. Finding a horse, real or imagined, was like finding a dab of magic potion that enlivened us both. Sometimes I'd tell my grandfather about all the horses in my eleborate dreams. He'd lean over, smile, and assure me that, one day, I'd have one for real. And if my grandfather, my Opa, told me something was going to come true, it always did." ? Allan J. Hamilton, Zen Mind, Zen Horse: The Science and Spirituality of Working with Horses

The 'Dance of Love' is much more of a dialogue, one takes the lead and the other follows. One dictates a step and the other carries it out. One determines the direction, the other determines the distance travelled in a given figure. One sets the pace, the other reveals the grace. One understands the language of the other and knows what is coming next. The one leading leads with love and respect; never seeing the follower as being weak or inferior. And in the same manner, the one following follows with Trust and Submission; never feeling too big to be led or scared to jump. There is a blind assurance that someone is there to catch.- Olaotan Fawehinmi

Assurance: You will never be alone, you hear so deep a sound when autumn comes. Yellow pulls across the hills and thrums, or in the silence after lightning before it says its names-and then the clouds' wide-mouthed apologies. You were aimed from birth: you will never be alone. Rain will come, a gutter filled, an Amazon, long aisles-you never heard so deep a sound, moss on rock, and years. You turn your head- that's what the silence meant: you're not alone. The whole wide world pours down. - William Stafford

"We rescue our tears from the sea , secure them by writ" - M. NourbeSe Philip, Zong!

More than Rs 12,000 crore FDI likely to
come in insurance sector in 2016

Thesynergyonline Insurace Bureau

"If a child, a spouse, a life partner, or a parent depends on you and your income, you need life insurance." - Suze Orman

So the foreign investment of over Rs 12,000 crore is expected to land in India as more than dozen foreign companies are planning to raise their stake in private sector insurance joint venture this year, an ASSOCHAM study said.

These investment deliberations are different stages and foreign funds will flow in during course of the year. The investment push has come as a result of liberalisation of foreign investment ceiling from 26 per cent to 49 per cent last year through the passage of Insurance Laws (Amendment) Bill last year.

The Bill was passed by Parliament in March clearing decks for foreign entities to increase their stake in private sector insurance companies.

Soon after the law took effect, foreign investors started ploughing capital into their Indian joint ventures, raising their equity holdings.

Companies including AXA of France, Bupa of the UK, Nippon Life Insurance of Japan announced raising stake in their respective joint venture.

This year has begin with Rs 1,705 HDFC Standard Life Insurance Company's proposal getting inter-ministerial panel nod for increase of share of Standard Life of the UK in the insurance joint venture from 26 per cent to 35 per cent.

Based on the suggestions of Foreign Investment Promotion Board, the proposal of HDFC Standard Life Insurance Company has been referred to Cabinet Committee on Economic Affairs (CCEA) for its approval. The money will flow as the approval from Cabinet comes, said Mr. D S Rawat, Secretary General, ASSOCHAM said.

Besides, more than a dozen foreign companies including BNP Paribas Cardif, Insurance Australia Group, Aviva Plc, Standard Life Plc, AIA, QBE Insurance Group and Fairfax Financial Holdings of Canada are expected to raise stakes in their ventures during this year.

Mitsui Sumitomo Insurance Company of Japan also proposed to increase stake to 40 per cent from 26 per cent in Cholamandalam MS General Insurance Company for consideration of about Rs 883 crore.

About 9 insurance companies have already applied for regulatory clearances to bring in foreign investment , as per the data compiled by ASSOCHAM. If these proposals get approval, it will lead to inflow of about Rs 6,000 crore of foreign capital.

In addition, 10 companies are at different stage of deliberations with regard to increasing stake in their Indian insurance joint venture.

"So more than Rs 12,000 crore is set to flow in the insurance sector comprising of both life and non-life during 2016. Besides, re-insurance sector would also see some fund flow as it has also get a leg-up through the amended Act," said Mr. Rawat.

According to IRDAI, the total FDI in insurance sector as on March 31, 2015, was about Rs 8,031 crore.

"This figure could well cross Rs 20,000 crore by the end of December this year" he said.

There are 52 insurance companies operating in India, of which 24 are in the life insurance business and 28 in the general insurance. State-owned General Insurance Corporation (GIC), in addition, is the sole national reinsurer.

In order to deepen the re-insurance market, IRDAI permitted UK-based Lloyds to set up business in India.

Lloyds India will ensure that the market and the constituents are housed in one location for the conduct of reinsurance business.

It is to be noted that AXA raised stake in both life and non-life insurance ventures with Bharti Enterprises, leading to foreign capital inflow of about Rs 1,300 crore.

Japan's Nippon Life Insurance, too, announced the acquisition of another 23 per cent stake in Reliance Life Insurance for about Rs 2,265 crore. At the same time, Bupa also announced to raise its stake to 49 per cent in Max Bupa Health Insurance for Rs 191 crore.

The Netherlands based Ageon has also increased its stake in life insurance venture Aegon Life Insurance Company to 49 per cent.


LIC presents cheque for R.2000 crore to IRFC

Thesynergyonline Insurance Bureau

Life Insurance Corporation (LIC), a PSU of Government of India, presented the cheque for Rs2000 crore to Railway PSU Indian Railway Finance Corporation (IRFC) as the first tranche of funding assistance to Railways for its projects. The handing over of cheque was done on Tuesday at a function at Rail Bhawan in the presence of Ministry of Railways Mr Suresh Prabhakar Prabhu. The cheque was handed over by Mr S.B. Mainak, MD/LIC to MrRajiv Dutt, MD/IRFC.
On the occasion, Chairman Railway Board Mr A.K. Mital, Financial Commissioner (Railways) & Chairman, IRFC Mr S. Mookerjee; and other board members and other Railway and LIC officials were among those present.

Mr Suresh Prabhakar Prabhu, pointed out that finding resources for investment in capacity enhancement projects was a major challenge for Railways. Without investment, it would not be possible to decongest the network, increase traffic output and generate adequate internal resources.

He said that without the fresh investment, the Railways would have gone further down and down and it would not have succeeded in breaking the vicious cycle. The Railway budget 2015-16 had, therefore, envisaged a new source of funds in the form of Institutional Finance. It was a big achievement that within a few days of presenting the budget, the Ministry of Railways signed a memorandum of understanding with LIC for funding assistance of Rs.1.5 lakh crore for financing Railway projects over a period of 5 years.

As LIC funding will be of 30 year tenor, it matches the Railways' requirement of long term funds for investment in projects. LIC funds will carry low interest rates tied to Government security, and the cost of funds are expected to come down further over a period of time. Shri Suresh Prabhakar said that an important beginning has been made today with the release of first cheque of LIC funds.

It is now for the Railways to match up to the challenge of utilizing the funds in a productive and appropriate manner for realizing maximum benefit. He said that these funds will not only meet the requirement for the new railway projects but will also be utilised for those ongoing projects which will bring quick benefit to the railway system. He said that this arrangement of funds from LIC will be beneficial for both the organizations. Referring to Railway PSU IRFC, Shri Suresh Prabhu said that IRFC has now emerged as an important vehicle for channelizing investment for Railways.

In his speech, MD/LIC Mr Mainak described it as a Golden Day as LIC has found a partner in the Indian Railways which is a viable and sound organization for investing the long term funds available with LIC. MD/LIC offered continued support for Railway projects in future.

The LIC funds are available to the Railways at a rate of 30 bps over the 10-year benchmark yield. The tenor is 30 years with a moratorium of 5 years followed by payment of only interest from year 6 to year 10. From the 11th to the 30th year the loan will be repaid in equated instalments.

Advisor Finance, Railway Board, Mr P.V. Vaidialingam proposed the vote of thanks at the end of the programme. Ms Namita Mehrotra, Executive Director Finance (Resource Mobilization) Railway Board, conducted the proceedings of the programme.

"We rescue our tears from the sea
secure them by writ"

Distribution is key to enhancing
insurance penetration

Thesynergyonline Insurance Bureau

"Insurance is the equitable transfer of any risk of a loss, by one entity to another with deal for money. this is the form involving risk management primarily supposed to hedge against your current risk of an contingent, uncertain loss. a good insurer, or even insurance carrier, is usually selling your insurance; ones insured, or maybe policyholder, is usually the person or maybe entity buying your current insurance policy. The type of funds to be charged intended for an certain range regarding insurance coverage can be called your own premium. Risk management, the practice regarding appraising along with controlling risk, has evolved as being a discrete field of study as well as practice.

The settlement incorporates your insured assuming a guaranteed in addition to known relatively small loss for the form connected with repayment on the insurer with transaction to its insurer's promise to help compensate (indemnity) the insured with the case of the financial (personal) loss. your insured receives the contract, called the insurance policy, that details your Disorders as well as Conditions under that the insured will be financially compensated."

And so there is a need to set up an insurance index in India for insurance penetration to be quantified as a measure of financial and social progress as it is not enough to limit the study of insurance growth to mere premium figures and policy numbers, highlighted a just-concluded ASSOCHAM-Crisil joint study.

"By including insurance parameter within a measure, it is possible to get a more holistic view of the extent of financial under-penetration," highlighted the study titled 'Changing Landscape of Insurance in India,' conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) jointly with research firm Crisil.

Such an index could also be used by relevant industry players and policymakers to move towards financial inclusion and reach out to potential markets, noted the study.

At 3.9 per cent (2013-14), insurance penetration in India paints a grim picture against the world average of 6.3 per cent largely due to limited financial awareness and literacy among masses.

Besides, India is also far behind advanced economies on insurance density, which is measured as a ratio of premium to total population unlike insurance penetration, which is a ratio of premium to gross domestic product (GDP).

Highlighting the various potential characteristics of an insurance index, the ASSOCHAM-Crisil study said that penetration of various kinds of insurance like micro-insurance, livelihood insurance and others should be considered to ensure inclusive growth.

Besides, there is also need for a gender-based view as it is also important to know the number of female policy holders to gauge whether insurance and financial services are accessible to both sexes equally.

It also said that extent of postal insurance penetration can give an overall view of the scope of insurance in the country as it is an expansive channel of distribution with a wide reach across India.

"There is a considerable amount of misinformation about insurance in the mind of an average Indian investor, so there is clearly a need to change people's perceptions and outlook on insurance," noted the ASSOCHAM-Crisil study.

Distribution is the key to enhancing insurance penetration in India as distributors play a pivotal role in educating and advising clients on the need and suitability of investment products, further highlighted the study.

RSBY will be rejigged to widen
the coverage: Health Secretary

Thesynergyonline Insurance Bureau

Rashtriya Swasth Bhima Yojana (RSBY) will be restructured to make its coverage wider, intensive, flexible and IT driven. The restructured scheme to be coordinated by the Union Health Ministry will bring together the disjointed schemes coordinated by different agencies under one umbrella.    The new scheme is likely to be operational shortly.

Giving details of the proposed restructured RSBY at the 9th Health Insurance Summit organized by Confederation of Indian Industry (CII) in the capital today, Mr Bhanu Pratap Sharma, Secretary, Health, Ministry of Health and Family Welfare,  said that the new scheme would have more benefits and beneficiaries.  MOUs would be entered with the state governments. Those States which want to extend the services to people above poverty line (APL) and provide secondary and tertiary benefits could do so as a top up of the scheme.

An important feature of the new scheme, Mr Sharma said was the strong IT platform which would be created for facilitating the operations of the scheme. A large database is being created that would detail facilities at every hospitals, disease profile and other details and would help immensely every stakeholder. 

Mr Sharma informed that the restructured RSBY would  cover around 8 to 10 crore BPL people   and there will be enhancement of cash limits for treatment.  Improved quality, universal coverage, affordability would be the hall mark of the new scheme, which will also lay stress on preventive medical care.  In this regard, he said that the scheme envisages free medical check-ups once in every three years for the age group vulnerable  to cardiac diseases and diabetes.

The Health Secretary stressed that the private-public partnership (PPP) model would be used for creating strong infrastructure in the health landscape. This is possible through a   good contract management framework, where aspirations and responsibilities of the stakeholders are addressed to.  Some of the reputed NGOs could also be brought into the health insurance sector by having such systems in place. About the availability of medical personnel, the Health Secretary assured that legislation should be passed in the near future for augmenting the supply of quality personnel, such as doctors, para-medical staff.  And barefoot doctors, There is also a proposal to speed up the process of accredition of hospitals.

Regarding the regulatory framework, Mr Sharma said that Centre has enacted the Clinical Establishment Act which has to be adopted by the State Government.  So far, 14 or 15 State Governments have adopted it and the rest are considering it though there are some differences of opinion, which he hoped would be resolved at the earliest.

Mr G Srinivasan, CMD, New India Assurance Co Ltd, in his special address, stressed the need for insurance companies coming out with simple products to gain acceptance of the customers. Warning that India has become a disease and accident capital of the world, he called for   urgent steps for promoting insurance products in the country. Vast majority of the people are outside the purview of health insurance, which he opined should need urgent attention. He laid emphasis on   quality, accessibility and affordability, which should become corner stone of the health policy.    Standardization, digitization coupled with high awareness could enhance the insurance penetration in the country.

Dr Naresh Trehan, Chairman, CII National Council on Healthcare, in his address, said, “We have a lot of reservoir of knowledge technology and human capital in the private sector. This along with predetermined realistic costs can be used to our advantage to plug the gaps that may exist today in healthcare delivery”.

Mr A Vaidheesh, Chairman, CII Sub-Committee on Accessibility and Health Insurance, said that health insurance is critical for the middle class. They are the backbone of the country.  “We need insurance products that suit them.  One health episode in the family destroys their aspirations”, he added.

Mr Rahul Khosla, Co-chairman, CII Healthcare Council and MD, Max India Ltd, has stressed the need for streamlining the payments to RSBY. He also wanted building up of trust among the players through regular consultations among the stakeholders to sort out their differences and build mutual trust.

"We rescue our tears from the sea secure
them by writ" - M. NourbeSe Philip, Zong!

'Need assessment analysis is very important
before buying life insurance products'

Thesynergyonline Insurance Bureau



NEW DELHI, SEPTEMBER 30 : "Insurance business is about promises and trust. It is about delivering to the customer in times of need and if this cannot be imbibed in a professional neither him nor the industry will succeed."

And so a survey by FICCI-Canara HSBC Oriental Bank of Commerce Life Insurance Company brings to the fore that buyers of life insurance policies recognize the significance of professional need assessment for choosing suitable insurance products. To help shape their need-based investment, they would be willing to spend time and money.

The study 'Life Insurance: A Consumers' Perspective' reveals that more than half of the policyholders purchased life insurance policies in a planned manner. However, about 60 per cent of the respondents consider their life coverage to be inadequate and show willingness to pay extra premium to obtain additional cover.

The study has attempted to understand the overall perception of an individual towards various aspects of life insurance and the decision making process that a person undergoes while making a choice in favour or against life insurance. The report highlights that while people understand the importance of life insurance, they are not completely aware of the true benefits of the plans which they currently hold. They consider life insurance to be a key instrument primarily to accumulate savings for taking care of future needs like child's marriage, higher education, etc.

The study also identifies the factors which can boost insurance penetration in India, particularly through the Bancassurance channel. The study highlights that respondents display an inclination to buy from Bancassurance channel in future after understanding product features and benefits in detail, receiving preferential treatment in services and continued security of their money.

The study is based on a pan-India survey conducted during April to June 2015 and covers over 5000 people, including 4488 policyholders of which around 60% were Bancassurance customers and 647 non-policyholders.

More than 80 per cent of the respondents were found to be in the age group of 25 years to 44 years, close to 70 per cent respondents were graduates and above, the annual income of 90 per cent of the respondents were in the range of Re 1 to Rs 5 lakh. The respondents were primarily self-employed (47 per cent) and salaried (40 per cent), while Professionals constituted 6 per cent.

Dr. A Didar Singh, Secretary General, FICCI says "the survey was conducted in the backdrop of the low penetration and density of the Indian life insurance market. As compared to global average penetration and density level of 3.4 per cent and US$ 368, India's insurance penetration and density levels are much lower at 2.6 per cent and US$ 44".

"Life insurance is an important asset class which not only provides people an opportunity to save but provides protection to the family members of the insured on the occasion of his/her untimely death. Therefore, these products should be demand driven. On the contrary, life insurance largely remains a push product even now. This necessitated analysis of the mindset of consumers towards life insurance products on one hand and the robustness of the existing industry practices on the other", observed Dr. Singh.
Mr. Anuj Mathur, Chief Executive Officer, Canara HSBC Oriental Bank of Commerce Life Insurance Company said," the key objective of this study was to assess insurance awareness and understand consumers' perspective on life insurance. The survey reveals that a consumer knows the importance of having a protection cover and how it enhances the quality of life for a secure future."

Mr. Mathur further added, "Need assessment analysis is very important. The propositions should be designed to meet the needs of the identified customer segment. Life insurance is not about 'Buy once and then forget about it'. The coverage should be reviewed at every step and hence the quest for providing genuine value to consumer must start with a better understanding of their life needs."

The following are the key findings:
• Life insurance appears as a key asset category for policyholders who have invested about one fifth (21 per cent) of their savings in this asset, followed by bank deposits (18%), and physical assets like gold & precious stones (10 per cent). All respondents have indicated willingness to invest 6-8% of their income in life insurance in near future (next six months).
• Savings for future needs (75 percent) and security for family (64 per cent) are the top two reasons for which policyholders have invested in life insurance. Non-policyholders perceive life insurance primarily as an instrument to provide protection against uncertainties (35 per cent ) and as a tax saving destination (35 per cent).

• There is a strong preference in the respondent group for Traditional Plans (64 per cent, followed by ULIPs (19 per cent).
• 54 per cent of the policyholders indicated that their purchase was a planned decision and they also undertook a need assessment exercise during their purchase.
• Three fourth of policyholders and 45 per cent of non-policyholders indicated willingness to spend time in the range of 30-60 minutes for need assessment exercise in future. Nearly half of the policyholders and around 34 per cent of the non-policyholders showed readiness towards spending money to conduct the exercise as well.
• For 89 per cent of the policyholders, agents or company/bank representatives initiated and approached the customers for pitching life insurance.
• 59 per cent and 68 per cent of the policyholders are not aware of the policy benefits payable on death and maturity, respectively.
• About 60 per cent of the policyholders & 40% of non-policyholders feel inadequately secured with their existing policies and current savings respectively. Respondents are willing to pay extra premium/amount to get additional cover/security.
• 81 per cent of the respondents indicated that they have their operating bank account branch within 3 kms of their residence/ office. Respondents indicated that they will be motivated to purchase life insurance from banks in the future after understanding product features and benefits in detail, receiving preferential treatment in services and continued safety and security of their money.
• Overall, there is satisfaction among the policyholders regarding the quality of services provided by the insurance companies/distribution channels. 91% of them received policy documents within a month of paying the first premium and 88% received reminders for premium payments.
Based on the research findings, the FICCI-Canara HSBC Oriental Bank of Commerce Life Insurance Company survey recommends the following actions to enable the life insurance industry to weave a better future.
• Professional need assessment is a key requirement and hence a comprehensive and ongoing process should be implemented as part of the sales engagement cycle.
• Keeping the risk averse nature and customer preference for savings in consideration, focused & localized awareness campaigns and workshops be conducted to further promote benefits of life insurance traditional plans.
• Since gold and bank deposits appear to be preferred investment avenues, life insurance providers should showcase the value proposition of Life Insurance as an alternative / complementary offering for the target customers.
• As a part of the purchase and sales quality review processes, ensuring that prospective customers are informed about type of policy they are buying, key benefits which will be available at specified events and key risks should take primacy.
• There is latent opportunity for the industry to Cross sell & Up sell to promote coverage of the 'mortality gap' - respondents perceive they are not adequately covered and are willing to pay for additional cover.
• Banks are an important access point for the target segment and customers have shown a significant preference for banks as a channel for insurance purchase. Hence, insurance companies need to leverage on their positive association to further reach out to bank customers through their partnerships with banks.
• Alternate channels (online and ATM) can be leveraged by banks to improve customer engagement.
• As customer's first point of contact is the sales person for any policy servicing, adequate emphasis is needed for training salespersons.

Report on the insurance industry calls for better synergy between distribution channels

Thesynergyonline Insurance Bureau

ACII – EY Report on the Insurance Industry titled ‘Building Growth, Building Value’ recommends chasing efficiency in distribution by finding greater synergy among the different channels. This will help in well-rounded industry growth and enable maximum value creation for all the stakeholders. The report also states that insurers must be careful in identifying the right ways to employ additional capital inflows that they may receive over the next few years with capital infusion from the foreign partners.

Mr Sanjiv Bajaj, Chairman, CII National Committee on Insurance & Pensions said, “The market has expanded and given each one of us more than enough room to prosper. Solvency is far in excess of minimum regulatory requirements. We made some mistakes and the slowdown of the economy hit us hard but the regulator stepped in and the life insurance sector responded by realigning well. The onus is clearly on the industry to realise its full potential in the coming years.”

Mr Rohan Sachdev, Global Insurance Emerging Markets Leader and Partner, EY India said, “The Indian insurance sector has evolved and is looking at the future with renewed optimism. In order to realize the full potential, the industry must focus on aspects that will build value for all stakeholders – customers, distributors, shareholders and the insurers. A step-by-step approach must be adopted to build value for customers, the primary stakeholders. Technology and analytics helps to understand exactly what customers want thereby creating long-term value for customers and earning their loyalty.”

The report highlights that:
•     Skill development at an industry level and better service integration between the insurer and the distributors will help in distribution efficiency.
•    The potential capital infusion must be effectively utilized to drive awareness and reach out to the under-penetrated segments.

•     Insurers must embrace digital with a resilient cyber security framework to disrupt the traditional business structures.

The report also states that cyber security is a key risk area for insurance. Companies maintain information systems for core processes such as sales management system, policy administration system and claims management system, and as a result are one of the prime targets for cyber-attacks. To improve information security, insurance companies need to develop a strong risk management and governance framework by implementing enterprise-wide security programs that address processes and controls, privacy and data protection. Regular initiatives to measure monitor and report the effectiveness of security programs will help to refine strategies based on the changing threats.

The report also shares a view on issues in the global markets identifying themes which may play out in the Indian context in the future. The Indian insurance industry has witnessed both volatility and success over the last decade and must strive to maintain high governance standards and eliminate risks.

Insurance company valuations remain an enigma, reveals CII - Towers Watson study

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With the government increasing the FDI limit to 49 per cent, there is a keen sense of anticipation within the Indian insurance industry that is expecting a flush of foreign investment in the sector. However, valuation of insurance companies is still a relative novelty for investment analysts in India as the industry has historically been isolated from the analysts' radar. A joint study by CII and Towers Watson, titled Indian Insurance Sector: In Pursuit of Value demonstrates the measurement of value from insurance business and chronicles the industry's experience to date in being able to deliver stakeholder value for both consumers and providers of insurance.

The report is particularly useful for newcomers to Indian insurance analysis and would also serve as a key reference document for seasoned sector observers. The study sheds light on sources of profits for insurers and through stylized case studies, illustrates possible paradoxes in the analysis of long term life insurance business for the shrewd investor.

Despite recent challenges – including a raft of regulatory changes, growing competition, mis-selling and a prolonged economic slowdown - that have all required insurers to constantly reassess their business strategies, the study has highlights that insurers remain upbeat about the industry's prospects and have emerged anew seeking growth, momentum and value.

The report identifies four fundamental drivers that would help realise the value that this sector promises:

Business optimization: to remedy high expenses and poor persistency that has plagued the sector. Highlighting the long-term nature of the insurance business, the report argues that to achieve the desired optimization it is critical to set the right KPIs to ensure management focus remains on long term value drivers rather than achieving short-term milestones.
• The right product-price-process proposition: need for being customer centric, adopting need-based selling and enhancing the customer value proposition.
• Favourable macroeconomic fundamentals: Young Indian population, optimistic market sentiment and government policy announcements act as the right ingredients for insurers to flourish.
• Confidence building: concerted effort aimed at regaining customer confidence that has been dented due to negative press that the sector has faced recently.
Commenting on the findings of the report, Sanjiv Bajaj, Chairman, CII National Committee on Insurance and Pensions and Managing Director, Bajaj Finserv said.

"The government has done a commendable job with FDI in creating a conducive environment for the sector to realise its full potential and unlock value. It is now critical for all the stakeholders, led by the insurance companies, to make a concerted effort in building a value creating and value delivering industry, thus staking claim to its rightful position among the most promising insurance markets in the world.

Vivek Jalan, Director, Risk Consulting, Towers Watson India further added, "With all the corrective measures and regulatory changes in the past, the Indian insurance industry is poised for positive growth. To achieve this, it is important for companies to realign their business model as well as maintain realistic expectations. Further, how efficiently insurers are able to utilise the expected capital infusion from foreign partners will be a key determinant of growth and profitability."

Key challenges for the insurance sector

Distribution appears to have posed maximum challenges for the insurance sector in the recent past, yet continues to be seen as the major driver of value in future. A majority of the bigger challenges faced by life insurers have either been related directly to distribution channels - for example, retention and productivity of agency force and managing third-party distribution tie-ups or indirectly (such as, managing policy persistency). Similarly, the balance of power being significantly in favor of the distributors was one of the major challenges faced by the non-life insurance companies as well.

The inability to balance growth with profits was cited as one of the key challenges faced by non-life companies. Inefficiency prevalent within the insurance sector is again one of the key challenges that need to be overcome for all stakeholders, including policyholders, investors and distributors, to realize the true potential of the business.

RISK : "You cannot swim for new horizons until you have courage to lose sight of the shore." - William Faulkner

Liberty Videocon unveils risk engineering services for its commercial insurance clients

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Mr Roopam Asthana, CEO and Director, Liberty Videocon along with Balaji.C - Country Head, Underwriting and Technical at the launch of Risk Engineering Practice of Liberty Videocon General Insurance Company in New Delhi. 

NEW DELHI, MAY 21 : "Insurance business is about promises and trust. It is about delivering to the customer in times of need and if this cannot be imbibed in a professional neither him nor the industry will succeed." - Tapan Singhel

And so Liberty Videocon General Insurance Company, a joint venture between India's Videocon Industries and Liberty Citystate Holdings, part of US-headquartered multinational Liberty Mutual Insurance Group (, unveiled its Risk Engineering Practice, a strategic service which assesses internal as well as external risks for its commercial insurance customers.

Liberty Videocon's Risk Engineering Cell has been specially designed to provide comprehensive risk management services as a part of its insurance proposition. Apart from traditional site surveys, the objective of our Risk Engineering services is to identify and reduce possible loss exposures of our customers before they interrupt business, thereby protecting expensive assets and ensuring that there is no adverse effect on their productivity.

Liberty Videocon's Risk Engineering Cell has qualified specialists experienced in areas like fire protection, industrial safety, liability, equipment breakdown, business continuity and worker safety, who work with our customers in effective risk management. The services provided include Property Risk Assessment, Cargo Risk Assessment, Business Interruption Risk Assessment, Technical Document Development, Thermography Audit and Work Place Safety.

Commenting on the development Mr Roopam Asthana, CEO & Director, Liberty Videocon said, "With the introduction of REC services we will strengthen our overall offering to our commercial customers and would be in a position to give differentiated pre-emptive services aimed towards loss prevention besides the insurance coverage that is normally offered."

Recently, Liberty Videocon received another capital infusion of Rs 320 crore from its promoters further strengthening its balance sheet. This funding is a clear indicator that both Videocon Group and Liberty Mutual Insurance Group consider India as a major global market for non-life insurance business with many years of growth still to come.

With Liberty Videocon already present in all major cities of India, the latest tranche of capital will be utilised to further expand the company's portfolio as well as its distribution capabilities besides advancement of its technology platform. Commenting on the latest round of capital infusion Mr Roopam Asthana,said "Our strategy at Liberty Videocon has been to establish a strong foundation and grow sensibly. We have seen more than market growth across all our markets and segments and have been exceeding our fiscal targets every year. Our promoters see India as a very important growth market, are committed to the business, and are willing to provide capital support as required."


"Mother was,' June thought, 'a beautiful little ornament that was damaged.' Her broken edges cut her daughters in ways both emotional and physical, and only sharpened with age." ― Karen Abbott, American Rose: A Nation Laid Bare: The Life and Times of Gypsy Rose Lee

Gross direct premium in motor insurance (own damage) may cross Rs 38K crore by 2016-17: Study

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" I am immensely contrite and I am sorry for the damage I've done. " -. Jayson Blair"

And so the gross direct premium earned by general insurance companies from the motor vehicle industry in the own damage category is likely to reach Rs 38,200 crore mark by the end of 2016-17 from a level of about Rs 17,000 crore as of 2012-13, locking a compounded annual growth rate (CAGR) of about 22 per cent, according to a just concluded study by apex industry body ASSOCHAM.

"With a share of over 56 per cent, individual agents are the most preferred choice for issuing of motor insurance policies in India followed by direct business which accounts for about 22 per cent share in this regard," highlighted the study titled 'Motor Insurance: The way ahead,' conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

In terms of revenue it is seen that individual agents fetched a gross direct premium worth over Rs 9,200 crore while the brokers generated premium worth about Rs 4,700 crore, noted the study prepared by the ASSOCHAM Economic Research Bureau (AERB).

Motor is the largest component of general insurance market as the motor business continued to be the largest non-life insurance segment with a share of 47.05 per cent (45.84 per cent in 2011-12) of the total premium underwritten within the country and it reported a growth rate of 22.24 per cent (33.38 per cent in 2011-12), it added.

"The Motor insurance segment in the country is poised to grow in tandem with the growth in automobile industry as newer and faster models are hitting Indian roads along with better and larger road surface as a result of infrastructure development," said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the findings of the chamber's study.

"The cumulative effect of increase in road surface and the growth in automobile population should directly impact the growth of motor portfolio of the non-life insurance industry," said Mr Rawat.

"Rising income levels, increased demand for vehicles, growing auto finance market, increasing health awareness and other related factors can together give a major boost to this sector," he added.

With the total automobile production including passenger vehicles, commercial vehicles, two and three wheelers growing from about 1.08 crore as of 2007-08 to over 2.06 crore as of 2012-13 and total domestic sales of automobiles growing from over 96 lakh to 1.78 crore during the aforesaid period, motor insurance sector is poised for a strong growth in the coming years, highlighted the ASSOCHAM study.

Customers no longer want just an insurance policy but are increasingly asking for services based insurance coverage, for instance the consumer is looking out for options that provide zero depreciation motor insurance cover, enhanced personal accident and hospitalization cover.

As such, the industry needs to take cognizance of the changing consumer preferences and adopt appropriate strategies as some of the service providers are actually providing certain additional assistance services such as fuel assistance on a highway, towing, spot repairs and others, suggested the ASSOCHAM study.

Another key challenge faced by insurers is that there is not much of data to help them in pricing a risk, pointed out the study. "The pricing as of today is based more on the year of manufacture of the vehicle, engine capacity, price and the zone in which the vehicle is bought and less on the age, occupation and credit score of the driver and usage of the vehicle."

As we go forward realistic pricing of the insurance product will be required, it added.

Highlighting the importance of claims processing, ASSOCHAM in its study suggested that insurance companies need to work on claims settlement as it is during this process that insurers interact directly with consumers, offering an untapped opportunity to really differentiate them from their competitors.

"Life is not a having and a getting. But a being and becoming ." 

Bank of Maharashtra , LIC
team up for PMJJBY

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"It is not such a bad thing to always know that someone other side of the world cares about you." - Laura Fraser

And so public sector lender Bank of Maharashtra (BoM) has partnered with Life Insurance Corporation (LIC) of India to provide life insurance cover to all its Savings account holders under Prime Minister Jeevan Jyoti Bima Yojana (PMJJBY). The Memorandum of Association (MoA) was signed on Tuesday by Mr S. Bharatkumar, General Manager (Resource Planning) Bank of Maharashtra, Head Office and Mrs Radha Chatterjee, Divisional Manager, (P & Gs Dept.)Divisional Office, LIC of India, Pune.

PMJJBY was announced during Union Budget 2015-16 under which Rs. 2 lakh will be paid in case of death due to any reason, and a premium of Rs. 330- per annum will be auto debited from the account holder's account. The premium is payable every year on May 31 and insurance cover will start from June 1.

According to the scheme, an individual of the age group from 18 to 50 years will be given life insurance cover of Rs. 2 lakh.

Eligibility: Available to people in the age group of 18 to 50 and having a bank account. People who join the scheme before completing 50 years can, however, continue to have the risk of life cover up to the age of 55 years subject to payment of premium.

Premium: Rs.330 per annum. It will be auto-debited in one instalment.
Payment Mode: The payment of premium will be directly auto-debited by the bank from the subscribers account.

Risk Coverage: Rs.2 Lakh in case of death for any reason.

Terms of Risk Coverage: A person has to opt for the scheme every year. He can also prefer to give a long-term option of continuing, in which case his account will be auto-debited every year by the bank.

Who will implement this Scheme?: The scheme will be offered by Life Insurance Corporation and all other life insurers who are willing to join the scheme and tie-up with banks for this purpose.

Initially, on launch for the cover period June 1 , 2015 to May 31 , 2016, subscribers will be required to enroll and give their auto-debit consent by 31st May 2015. Late enrolment for prospective cover will be possible up to August 31 , 2015, which may be extended by Govt. of India for another three months, i.e. up to November 30,, 2015. Those joining subsequently may be able to do so with payment of full annual premium for prospective cover, with submission of a self-certificate of good health in the prescribed proforma.

PFRDA to open pension fund investments to private equity, VC sector

Thesynerfgyonline Insurance Bureau

With a view to diversify the portfolio, the Pension Fund Regulatory and Development Authority (PFRDA) is very actively looking to invest some money in private equity and venture capital sector, chairman of pension fund regulator, Mr Hemant G. Contractor said at an ASSOCHAM event held in New Delhi .

"We are envisaging a phased rollout of new products in which the industry can invest and we are very actively looking at putting aside some money in private equity and venture capital area also, this is something we are very actively looking at," said Mr Contractor while inaugurating a conference on 'Budget Proposals and Role of Private Equity: The Road Ahead,' organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

"We have been alive to the need for diversifying the asset base of the pension industry as in last few years we have added new investment instruments coming into the market in which the pension funds are deployed and we have been permitting investment in new securities as well and going forward I am quite sure we will be looking very positively at investing in private equity and venture capital market aswell," added the PFRDA chairman.

Mr Contractor also informed that PFRDA was going through the report submitted by Mr G.N. Bajpai led committee appointed by the pension regulator to look into the whole issue of investment pattern of pension funds.

"It basically deals with the current investment pattern that NPS has been following, fund managers, fee and commission structure and a gamut of investment related activities," said Mr Contractor while sharing details of the report.

"We will be putting up to the board the recommendations which we feel are worth implementing and that should be I think by next month or so," he added.

"We are currently following a directed investment regime while they are suggesting us to move to prudential management regime where the choice of decision regarding investment will be left more to the fund managers who are right now not in a position to do so, as such they are proposing a phased transition from current regime to the new regime which might take about 2-3 years in PE & VC sector while complete roll out might take about 4-5 years," further said the PFRDA chief.

"Some of the recommendations may be implemented immediately," he added.
He also said that the industry should take up the responsibility to built up the skills required to make an evaluation and assessment of the PE and VC sector if it wants to see funds coming into this sector in a big way.

"Our pension fund managers need to build up some skills for putting in money in private equity and venture capital as right now the level of skills is not of the order in which they can make an informed decision about investing in these assets," said Mr Contractor.
"The industry can probably do some hand-holding in the form of making them more literate about these kinds of investments," he said.

"PE and VC for the pension industry is quite new, so we need to do some hand-holding and explain to investors especially our fund managers as to what they are getting into and what kind of competencies exist in this space, what kind of strategies to adopt and what kind of exit options exist as these kind of things are still fairly new issues for pension fund managers," added Mr Contractor.

"Know what your customer wants most and what your company does best. Focus on where those two meet." – Kevin Stirtz

SBI Life opens exclusive area office
'SBI Life Bhavan' in Aurangabad

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Mr Arijit Basu, MD and CEO, SBI Life Insurance, inaugurating "SBI Life Bhawan' in Aurangabad in the presence of Mr Anand Pejawar, ED , Marketing, SBI Life Insurance, Mr Dibakar Mohanty, General Manager Network-III, State Bank of India – Mumbai Circle and Dr. V. S. Kumar, Regional Director, Mumbai Region, SBI Life Insurance..  

AURANGABAD, MARCH 30 : " I never regret anything. Because every little detail of your life is what made you into who you are in the end."-Drew Barrymore

"No matter what are you are in life ,Llife insurance is definitely something to add to your financial portfolio."
And so SBI Life has strategically expanded its Aurangabad Area office, with an independent premises named as "SBI Life Bhavan" in Aurangabad .. The new building was inaugurated by Mr. Arijit Basu, MD and CEO, SBI Life Insurance, in the presence of Mr. Anand Pejawar, Executive Director, Marketing, SBI Life Insurance, Mr. Dibakar Mohanty, General Manager Network-III, State Bank of India – Mumbai Circle and Dr. V. S. Kumar, Regional Director, Mumbai Region, SBI Life Insurance..

Level, is spelled the same forward and backwards. Those on the upper level can always hit the bottom, and those on the bottom can always rank to the top. Envision your footprints up there already trailing, and your feet will soon follow suit." ― Anthony Liccione

And so uppbeat on its business in Aurangabad, this newly opened office is the 15th full services branch in Aurangabad and 71st in thye Mumbai region. Aurangabad Area contributed 21 per cent to new business premium of Mumbai region YTD December 2014 and has sustained its share of 21 per cent year on year.

Mr. Arijit Basu, MD and CEO, SBI Life Insurance, on the occasion, said "Our approach to being a customer centric organisation is further cemented with the inauguration of this new Area office at a dedicated premises, "SBI Life Bhavan". This new premises will offer all products and services to our customers under one roof and is projected to be the one stop shop for all Life Insurance needs in Marathwada area."

Speaking on the inauguration of this new branch office at Aurangabad, Mr. Anand Pejawar, Executive Director, Marketing, SBI Life Insurance said, "The opening of this Area office looking after the entire Marathwada operations is aimed to facilitate and provide better services to our existing customers, while offering unique Insurance solutions to potential clientele within the region."

"we rescue our tears from the sea
secure them by writ"
- M. Nourbese Philip, Zong!

CII roadmap to enable life insurance industry to grow at 12% CAGR

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"Insurance business is about promises and trust. It is about delivering to the customer in times of need and if this cannot be imbibed in a professional neither him nor the industry will succeed." - Tapan Singhel

The Indian insurance industry is currently the 16th largest market and expected to be one of the top 10 markets by 2025.

The last few years have been challenging for the industry with declining growth in life insurance premiums and significant challenges in non-life profitability. This was driven by a combination of macro-economic factors and structural challenges inherent in the insurance industry.

However, an improving economy with potential regulatory reforms and concerted action by the industry players can usher in an era of significant growth as well as value creation. Overall, the insurance industry in India (across life, general and health) can be as large as ~US$ 250 billion.

CII report on "India Insurance Vision 2025: Building a USD 250 billion customer centric and value creating industry" defines the long-term vision and aspiration for the insurance industry. Done in partnership with McKinsey & Company it contains a fact-based view on the current state of the industry, its evolution over a period of time, key trends that will shape the industry in the next decade and therefore, the potential evolution.

"The Insurance industry in India is at an inflexion point in its development. With Government's reformative drive and resolve, the industry can jointly achieve the vision of building a customer centric and value-creating industry over the next decade. The inclusive growth will enable India to become a global top 10 insurance market with a total Gross Written Premium (GWP) size of USD 250 Bn. However, to unlock this true potential, there needs to be a concerted action from all stakeholders.", said Mr Chandrajit Banerjee, Director General, CII.

The report recommends a inclusive, progressive growth for the industry over the next decade. This will enable life insurance industry to grow at 12% CAGR over next decade to reach USD 160 bn – USD 175 bn and general insurance to grow at 22% CAGR to reach a GWP of USD 80 billion.

The life insurance industry has around 380 million policies in force (among the largest globally) and pays claims for around 12 per cent of the total deaths in the country. It has a critical role given the limited social security avenues available and has also played a crucial role in inculcating the savings habit among a large mass of the population which has limited access to other forms of savings.

Over the last five decades, the industry has developed significantly on dimensions related to access (measured through growth and penetration), efficiency and structure. In particular, the industry progressed during the 2000's, post liberalisation and opening up of the industry to private and foreign competition. However, much of the gains of the first 10 years have been wiped out in the past 4 years as the industry has been impacted significantly by macro-economic, regulatory and internal structural challenges. The industry is at the crossroads today, with a real risk of losing its relevance if the status quo continues.

However, there is an alternative future that the industry can aspire to, one that will put on the path to sustainable value creation. In this "Vision 2025" scenario, the industry has the potential to reach a total GWP of around USD 175 billion by 2025, resulting in increased penetration (GWP to GWP of around 5 per cent and covering more than 700 million lives), with 3x growth in total AUM, superior efficiency (cost ratio of 50 to 55 per cent), significantly higher value for shareholders (3 to 4 per cent above cost of capital) and high loyalty and customer retention levels (persistency ratios at 80 per cent). This will require concerted action from all stakeholders.

For the Life Insurance industry to achieve its Vision 2025 aspirations, the various stakeholders will need to take concerted action. The current industry "break points" need to be converted into a virtuous cycle of benefits for all stakeholders.

Policy intervention by regulator: Incentivise long-term behavior; continue to push product reforms; deepen access and reach by promoting and enabling efficient business models; revisit distributor compensation norms; and strengthen supervisory approach to ensure a more healthy and stable industry structure.
Collected and coordinated action by industry: Raise the profile of Life Insurance for customers and distributors; invest in consumer awareness and education; define industry-wide performance standards for agency; and institutionalize skill building.

Individual player actions: Build customer centric business (moving away from distribution centric business that dominated till date)—product suite based on customer needs, fundamental shift in distribution model and focus on customer service and claims will become increasingly important.

The general insurance industry in India has witnessed a strong performance with 18 per cent growth between 2005 and 2014 and is now a USD 13 billion industry breaking into the top 20 industry globally. It currently provides cover of more than US$ 17,000 billion which is a testament of its importance. However, the interplay between various related elements – trust deficit between consumer and industry participants, large gaps in technical capabilities of players despite improvement in operating model, largely price driven competition as well as action of other stakeholders such as policy makers/regulators and other related stakeholders (e.g., reinsurers, Third Party Administrators, healthcare and motor insurance providers); has resulted in underperformance of industry across 3 core objectives:

Providing universal access and coverage: There is substantial scope to improve penetration and access across segments. For example, home insurance penetration is less than 1 per cent; there is significant under-insurance in segments such as two-wheelers and personal health; corporate (property and indemnity), SME and rural risk coverage are substantially lower than global benchmarks.

Delivering returns to shareholders: India has the highest combined ratio across developed and developing economies and time periods. This has been driven largely by substantially higher claims ratios. As a result, the industry has delivered poor returns to shareholders (pre- and post-detarrification adjusting for TP losses). While the average economics have been poor, there is huge spread in industry performance – a few players earn substantially higher returns compared to the rest of the industry, mainly due to their superior underwriting performance.

Customer experience and loyalty: The industry has improved customer service and experience (claims settled in 1 month are low at 56 per cent; however, customer grievances dropped from 2,800 per million policies in FY10 to 737 per million policies in FY13). Further, complaints have been lower compared to other financial services businesses.

The future direction of the industry will also be shaped by the interplay of these stakeholders – the individual insurers' efforts to upgrade their capabilities, industry conduct and level of collaboration, and external influence, policy actions in particular.

If the industry maintains status quo with only a few insurers building holistic capabilities and the policy environment continues to be conservative, then the outcome could be one of "unfulfilled" potential with GWP of USD 50 billion, CoR of 108-110 per cent and RoE of 6-8 per cent.

The upside case for the "Vision 2025" is substantial – GWP of ~USD 80 billion (CAGR of 17-19 per cent) by 2025 at a CoR of 99-101 per cent and ROE of 21-23 per cent.

To help the general insurance industry unlock its full potential and realise its ambitious vision, the various industry stakeholders will need to take a set of coordinated actions.

The regulator and policy makers will need to foster deeper penetration and enable use of common infrastructure; the industry will collectively need to build consumer awareness, co-sponsor common infrastructure, encourage appropriate market conduct and collaborate with other associated industries to create new market opportunities.

Individual insurers will need to build distinctive granular customer insight, upgrade to next gen technical capabilities and build operating models to drive better efficiency

An effective health insurance system is pivotal to ensure a "healthy" India; given rising Non Communicable Diseases (NCDs), unabated medical inflation (north of 10%), low government spend (around 30 per cent) and high out-of-pocket (OOP; 60 per cent+) expenditure.

The industry has witnessed rapid growth in the last decade (30 per cent CAGR versus 14 per cent life, 18% non-life). But, overall penetration is still low due to poor coverage of the "individual" through retail schemes, which is critical given the population structure (very high share of self-employed).

The government sponsored Rashtriya Swasthya Bima Yojna (RSBY) provides coverage to the population below the poverty line. The corporate business owners, mass affluent and above have more than 40 per cent penetration. However, 120 to 150 million households above the poverty line with annual income of USD 500 to 3,500 that work primarily in the informal sector have access to neither corporate nor government coverage. As a result, this segment has less than 10 per cent penetration. The small business segment (about 20 million HH) is also significantly under-penetrated at less than 5 per cent.

This under-performance is driven by an interplay across multiple stakeholders. Consumer awareness is low and there is significant trust deficit vis-à-vis insurers and providers. This is driven by the transactional nature of insurer-consumer relationship, and claims rejection on highly technical grounds that are not clearly communicated during the time of sale. Price is still the primary basis of competition with limited innovation by players. Further, the relationship between providers and payors remains transactional at best and hostile at worst. The absence of healthcare standards and protocols makes it difficult to measure quality and outcomes and control fraud and abuse.

The government has recently announced its intention to promote universal health coverage.

There are several learning from other markets which are relevant to India in this context. In many markets, the government has historically played an active role in healthcare coverage.

However, this is proving to be insufficient. Hence, there is an emerging trend of an increasing role for private insurers in conjunction with government schemes, e.g., Brazil with 53 per cent private spend in spite of an excellent universal health scheme, more than 40 per cent of which is covered via insurers. This reinforces the importance of private health insurance in the context of the broader healthcare ecosystem.

Similarly, in many countries, industry bodies have played an effective role in setting up standards and protocols and creating consumer awareness, e.g., the German Insurance Association (GDV) has worked closely with hospital providers to set up standardised treatment protocols and negotiate the right amount of discounts for insurers. It also articulates and represents the positions of the German insurance industry before society, politicians, businesses, the media and academia to ensure suitable brand-building and customer awareness. Great value can be gained if the regulator, industry bodies and players collaborate to drive standards, conduct and awareness.

The health ecosystem is quite complex with inter-linkages between various key stakeholders, i.e., insurers, government, regulator, corporates and providers. Going forward, we believe a collaborative push across all stakeholders for holistic innovation is essential to enable an increase in penetration across segments i.e., extending the infrastructure from the Below Poverty Line schemes to cover a large proportion of the Above Poverty Line/Deprived population (through simple covers, group/co-operative buying structures to reduce burden for individual consumers).

Driving innovation could increase overall health insurance penetration to more than 75 per cent (~1 billion lives covered) resulting in GWP of ~USD 25 billion and reduce the share of (OOP) expenses in healthcare (to less than 35 per cent). Further, the industry could also realise significant value by adopting better practices (in terms of pricing, underwriting, claims management, risk and fraud management). The combined ratio of the health insurance segment could be at a sustainable level of less than 100 per cent.

To ensure that the health industry achieves the holistic breakthrough situation, all stakeholders will need to make concerted efforts.

The regulator will need to accelerate distribution and product reforms; the government needs to expedite healthcare reforms across the complete value chain; providers will need to invest in public-private partnership to build rural and semi-urban reach.

The industry will need to build common infrastructure and individual players will need to continue investing in distribution and upgrading their technical capabilities.

CII is positive that all the industry stakeholders will work in a concerted manner to help to achieve the vision of building a value creating and customer centric insurance industry over the next decade.

Ministry of Railway signs MoU with
LIC to invest in Indian Railways

Thesynergyonline Economics Bureau

Indian Railways will set up a business transformation council (BTC) to enhance partnership with private sector investors and raise efficiency and speed in implementing the Rs 8.5 lakh crore projected investment in coming five years, Minister for Railways, Mr. Suresh P. Prabhu said at an ASSOCHAM event held in New Delhi on Wednesday.

Ministry of Railway has signed an MoU with the Life insurance Corporation (LIC) which will bring Rs. 25 billion to Indian railway in next 5 years at a very attractive rate of interest, said Mr. Prabhu while inaugurating International conference on Railways @ 2020 organized by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) here on Wednesday.

He revealed that the World Bank would also support the five year expansion plan besides "Other Multi-Lateral Agencies" like the Asian Development Bank (ADB) and the International Finance Corporation (IFC) and other source.

Mr. Prabhu invited industry involvement in the Rs 8.5 lakh crore railway plans. "Partnership with the private sector will be one of the thrust areas in operationalizing the MoUs and in opening up huge development in the railways", he pointed out. He assured transparency in the implementation of the plan. "Railways are the harbingers of growth in India" he said.

Describing the Railway's expansion and modernization programme as key to the success of the 'Make in India' scheme of the Prime Minister, the Minister referred to the ongoing coal mines auction that had fetched the government an 'Unimaginable' Rs 2 lakh crores. "Indian Railways have now to develop the capacity to haul all the additional coal that would be mined now".

The railway was implementing the plan to raise freight carried by it from 1 billion tonns to 1.5 billion tons and reach global standards in the system. For that it was getting most modern technologies from six to seven countries, in addition to the offers it had received from China, Czech Republic and France. The latest technology would also be obtained in design and manufacture of rolling stock, new locomotives. He recalled the decision to have a railway technology chair in Banaras Hindu University and the plan to set up more design and research centres.

Indian Railways is one of the largest railways systems in the world and has today emerged as the main vehicle for socio-economic development of the country. There is an urgent need to modernize the key revenue generating assets of the railways such as tracks and bridges, signaling, rolling stock and stations and terminals. The recent initiatives like larger role of the private sector in station up-gradation, rolling stock and bulk transportation would open new opportunities, added Mr. Parbhu.

The Country Director of the World Bank Onno Ruhl added that his institution was the largest contributor to the Indian Railways expansion programme, especially the Eastern High Speed Freight Corridor with assistance of 2.7 billion dollars. The World Bank was also supporting the multiple transport projects. He described the Minister's plan for IR as 'Inspiring' and 'Inclusive'. The IR had suffered so far due to under investment and was slow in implementation.

Minister of State for Railways Mr. Manoj Sinha in his special address assured that the railways would be made an "Investor-friendly" for which "we are talking with business leaders". Mr Sinha said "we will talk with an open mind". Answering questions about pilferage in the goods trains, the Minister said the role of the Railway Protection Force (RPF) in goods train protection would also be formalised with the proposed amendment to the RPF Act. Regarding encroachment in railway land he said the Centre would work with the State Governments to get the land cleared.

Mr. Rana Kapoor, President, ASSOCHAM and MD & CEO, YES BANK, said, "I commend the Union Railway Minister's decisive move to secure funding of USD 25 billion into Railways infrastructure. The move, which comes on the heels of a landmark transformational Railway Budget that stressed on customer experience, safety and operational efficiency; reinforces the Government's commitment to set the Railways firmly on track to be the unique integrator of modern India's Growth. Railways has the ability to significantly contribute towards addressing India's fiscal health and infrastructure growth in the next 4 to 5 years, thereby playing a mission critical role in our country's inclusive, socio-economic development."

Railway Board member Mr. Hemant Kumar also explained how the Railways was planning to raise the line and the per wagon freight carrying capacities.

Others who also spoke during the conference were Mr Francois Richier, Ambassador, Embassy of France, H.E. Mr Milosav Stasek, Ambassador, Embassy of Czech Republic, H.E. Mr Le Yucheng, Ambassador, Embassy of Peoples Republic of China, Mr Onno Ruhl, Country Director, World Bank, Dr A.K. Agarwal, Chairman, Rail Transport Committee and Mr D.S. Rawat, Secretary General, ASSOCHAM.

Retirement: It's nice to get out of the rat race, but you have to learn to get along with less cheese. - Gene Perret

Bajaj Allianz Life Insurance launches deferred pension plan Retire Rich

Thesynergyonline Insurance Bureau

"Hope your retirement is perfectly grand ,
With lots of good luck In the things you have planned
And hope that the years will bring happiness, too,
And all that is best Just especially for you!"


Life is a series of collisions with the future; it is not the sum of what we have been, but what we yearn to be. - Jose Ortega Y Gasset

And so Bajaj Allianz Life Insurance has launched Retire Rich, a non-participating individual unit-linked deferred pension plan with regular or single and limited premium options.

Keeping pace with the increasing life expectancy, Retire Rich has an increased maximum age limit at entry to help one live a worry-free post retirement life.

While the minimum entry age for the policy is set at 30 years, the maximum entry age has been capped at 73 years. The plan offers one fund option, the Pension Builder Fund which provides capital appreciation by investing in a suitable mix of debt and equities. On surviving till the vesting date, the fund value will be available as vesting benefit.The vesting benefit shall not be less than the Guaranteed Vesting Benefit of 101 per cent of the total premiums paid.

This plan also offers death benefit of higher of the total Fund Value or Guaranteed Death Benefit of 105 per cent of the total premiums paid.

"It's not time to worry yet” !

The product has a one-of-a-kind feature whereby the nominee can utilize the death benefit either by taking the entire death benefit as cash lump-sum or by using the entire or part of the death benefit proceeds to purchase an annuity from the Company at the then prevailing annuity rates.

Where preponderating worries are anathema !


Anuj Agarwal, MD & CEO, Bajaj Allianz Life Insurance, said:"In India, there has been a substantial change in retirement trends and an increase in life expectancy. Retire Rich has been launched to address a strong need for retirement planning by building an adequate corpus to sustain an individual's desired lifestyle after working years. This plan is best suited for customers looking for secure and stable returns over a long term horizon of 10-40 years. With this product, we have a well-rounded portfolio of pension products catering to the diverse needs of customers."

Bajaj Allianz Life Insurance is a joint venture between Allianz SE, the world's leading insurer, and Bajaj Finserv Limited. Allianz SE is a leading insurance conglomerate globally and one of the largest asset managers in the world. Bajaj Allianz Life Insurance is one of the leading private life insurance companies in India.

The company has developed insurance solutions that cater to every segment and age-income profiles. Currently, Bajaj Allianz Life Insurance has a strong product portfolio with adequate flexible products to cater to all kinds of customer needs from ULIPs to Child plans, from group insurance to health insurance. The Company began its operations in 2001 and today has a pan-India presence with 759 branches in India. Bajaj Allianz Life Insurance has been constantly expanding its operations to be close to their customers.

"Insurance companies sell what might happen tomorrow. Historians sell what certainly happened yesterday."  

United India pays Rs 106 crore dividend to govt \

Thesynergyonline Insurance Bureau

United India Insurance CMD presenting a dividend cheque for Rs 106 crore for the year 2013-14 to the Union Finance Minister Mr Arun Jaitley in New Delhi. 

NEW DELHI, JUNE 21 : The Chairman and Managing Director of United India Insurance Company Mr Milind Kharat, presented a dividend cheque for Rs 106 crore for the year 2013-14 to the Union Finance Minister Mr Arun Jaitley in New Delhi.

The dividend of Rs 106 crore declared amounts to 70.66 per cent of paid-up capital. The premium income of the company for the year 2013-14 stands at Rs 9709 crore with an accretion of Rs 443 crore over last year. The company earned a net profit after tax (PAT) of Rs 528 crore in 2013-14.

The investment income of the company stood at Rs 1857 crore as against Rs 1777 crore last year and market value of the company's total investment portfolio is Rs 21545 crore. The solvency margin as on March 31, 2014 is 2.54 as against the statutory requirements of 1.50 for the year 2013-14. The net worth of the company grew to Rs 5361 crore , showing an increase of 8 per cent over last year.

There's no joy even in beautiful Wisdom, unless one have holy Health. – Simondes of Ceos

IRDA chief for critical role of fair pricing of health insurance products

Thesynergyonline Insurance Bureau

By health I mean the power to live a full, adult, living, breathing life in close contact with... the earth and the wonders thereof - the sea - the sun. - Katherine Mansfield

Inaugurating FICCI Health Insurance Conference 2013- Health Insurance Vision 2020: 'From Regulation to Development', Mr.Vijayan said, "There is need for total transparency starting from the point of sale of the insurance products to the claim settlement and grievance handling; the complexity in the structure should be simplified to make the products appealing to the consumers."

He said that while scientific pricing is a must, the distribution of products must be such that there is no mis-selling. The seller, he said, has to take full responsibility and be totally answerable to the buyer after the sale of the product.

Such an approach, the IRDA chief emphasized, would instill confidence amongst the consumers and will automatically lead to growth of the industry.
Mr Vijayan was critical of the differential pricing formula that leads to treating individual and group consumers differently. "Each person who has bought the product from a company needs to be treated equally and fairly," he pointed out.

In his theme address, Dr Nandakumar Jairam, Chairman, FICCI Health Insurance Advisory Group opined that the road to universal health coverage makes it imperative for the government to clearly articulate its role as a payor or a provider of healthcare and develop relevant strategies accordingly.
FICCI, recommends a blended approach, one that strengthens the links of health insurance to healthcare providers (both public and private) but ties funding to performance.

The approach is well grounded in the current Indian reality and also draws on international experience. While there is a huge role for the public delivery system in promotive, preventive and primary care in India, health insurance could be a key enabler in terms of both financing and incentives for improved performance.

He said, "A major expansion in health insurance would come when we graduate to a pull strategy from a push strategy. This would mean that insurer have to look for product and distribution innovation. Insurers have to encourage management of health by policyholders and formulating target-oriented health insurance programs like those focused at the poor, the elderly and the disabled."

Mr Antony Jacob, co-chair, FICCI Health Insurance Advisory Group and CEO, Apollo Munich Health Insurance, pointed out that the Indian healthcare industry is poised to grow to US$ 250 billion by 2020. Even if health Insurance grows at a CAGR of 20 per cent from current level, healthcare spend unfunded by insurance will rise to well over US$ 200 billion by 2020.

Therefore, the development of the health insurance sector is a must to tackle the health care spends and needs of India today and in the future.
Mr Girish Rao, co-chair, FICCI Health Insurance Advisory Group and Chairman, Vidal Healthcare Services, said that lack of focus and product variety has led the industry to bleed. Hence innovation across the value chain of health insurance and corresponding structural changes is key to achieving FICCI Health Insurance vision 2020.

Dr A. Didar Singh, Secretary General, FICCI, in his remarks, said that affordability of quality healthcare indeed has been a key concern in India, primarily because almost 61 per cent of healthcare expenditure is through out of pocket. Hence, much needs to be done for people to accept health insurance more than a financial tool for medical emergencies.

He also noted that "… UHC, attained through a balanced and integrated approach that combines supply and demand side financing, building upon the existing health system in the country, shall ensure continuity of care at optimum cost and efficiency in a sustainable and feasible manner.

ICICI Lombard Q1 PAT more
than doubles to Rs. 203 crore

Premium income grows by 26.7% to Rs. 1,776 crore in Q1-FY14, outpaces industry growth of 17.2% . Market share increased to 9.4% in Q1 - FY14 as compared to 8.7% in corresponding quarter of FY 2013

Thesynergyonline Insurance Bureau

 ICICI Lombard General Insurance Company ., India’s private sector general insurance company, has increased its market share to 9.4 per cent in Q1 - FY14 as compared to 8.7 per cent registered in Q1 – FY13. Gross Direct Premium Income (GDPI) income for the company increased to Rs. 1,776 crore in Q1 - FY14 against GDPI of Rs. 1,402 crore registered in Q1 – FY13. This translates to a growth of 26.7 per cent, significantly higher than the industry growth rate of 17.2 perr cent.

In another milestone, the company’s profit after tax (PAT) increased  to Rs. 203 crore in Q1 - FY14 compared to PAT of Rs. 83 crore recorded in Q1 - FY13.

Mr Bhargav Dasgupta, CEO and MD, ICICI Lombard General Insurance said, “We are deeply encouraged by our performance in Q1-2014. This reinforces our customers’ confidence in our product proposition and claim servicing capabilities. As we progress through the year, we shall strive hard to further enhance our service capabilities and launch new initiatives to meet the constantly evolving needs of our customers”. 

L &T Insurance partners with E-Meditek

Thesynergyonline Insurance Bureau

L&T Insurance has partnered with E-Meditek Global to launch an innovative product called MediCash Card to facilitate Instant Cashless Claim Authorization.

The interface of the innovative technology has been configured over Visa prepaid card under an exclusive alliance between Ratnakar Bank, Visa and E-Meditek Global.

MediCash Card claims tp ensure quality healthcare and adding to customer convenience.

Currently it takes over 4 hours’ time for our corporate group health customers on an average, for a customer to receive the Cashless Approval after entering the Hospital. Sometime this delay can lead to unexpected and unpleasant situation especially in case of emergency and critical cases. To overcome this challenge E-Meditek Global has designed a platform, which is integrated with its claim application.

Mr Joydeep Roy, CEO and Wholetime Director, L&T Insurance, said, “ We were the first insurance company in India to offer the 6-hour service response guarantee for our retail customers and now we are the first insurance company in India to offer an instant cashless approval solution for our group medical insurance customers. The MediCash Card allows instant authorization and on-the-spot payment, making the crucial period of wait almost negligible. So, help and health are only a swipe away.”

Mr.Gopal Verma, Chairman, E-Meditek Global said, “At E-Meditek we constantly endeavor to enhance the customer experience through technology and overcoming the gaps in the processes. The “E” in E-Meditek signifies our approach and vision of concentrating on excellence in using technology to the advantage of every stakeholder including the end customer.”

“The card also enables insurers to introduce the Out Patient Insurance Plans rather than just the hospitalization insurance. This will pave the way for launch of genuine OPD or Dental insurance plans in the country”, he further added. 

Mr Vishwavir Ahuja, MD and CEO, Ratnakar Bank, shared “We are pleased to be an integral part of this first of its kind medical prepaid card solution in India. MediCash Card provides the cardholder with an easy-to-use, extremely secure and hassle free product. Our focus and endeavor is to launch innovative products like these which help build efficiency, convenience through electronic payments system.”

Mr. Uttam Nayak, Group Country Manager India and South Asia, Visa, said “At Visa we recognize that many customers are discouraged from buying insurance due to the anticipated complexity involved in settlement of claims. The Medicash Visa Prepaid Card provides tremendous value to insurance companies seeking a more efficient way to collect  and make payments to health care recipients or channelize  direct payments to the hospitals,  in facilitating medical treatment to policy holders.  Visa is proud to partner Ratnakar Bank, L&T General Insurance and E-Meditek Global to bring a very effective and low cost solution to improve healthcare in India.”

UTI Mutual Fund declares
bonus under three schemes

UTI-Children's Career Balanced Plan, UTI Unit Linked Insurance Plan and UTI Retirement Benefit Pension Fund declares 1:10 bonus

Thesynergyonline Corporate Bureau

UTI Mutual Fund has declared a bonus under three of its schemes viz UTI-Children’s Career Balanced Plan, UTI Unit Linked Insurance Plan and UTI Retirement Benefit Pension Fund in the ratio of 1 unit for every 10 units held of face value of Rs.10/- each. Pursuant to the payment of bonus, the NAVs of the said schemes would fall to the extent of bonus units allotted and statutory levy if any

The record date for the bonus under aforesaid schemes is May 30, 2013.

All unit holders registered under the UTI-Children’s Career Balanced Plan-Existing Plan & UTI Children’s Career Balanced Plan-Direct Plan, UTI Unit Linked Insurance Plan-Existing Plan & UTI Unit Linked Insurance Plan-Direct Plan and UTI Retirement Benefit Pension Fund –Existing Plan & UTI Retirement Benefit Pension Fund-Direct Plan as on the record date will be eligible for this Bonus.

The NAV of UTI-Children's Career Balanced Plan-Existing Plan and UTI Children’s Career Balanced Plan-Direct Plan on May 24, 2013 was Rs .15.0798 and  Rs.15.0924 respectively.

The NAV of UTI Unit Linked Insurance Plan-Existing Plan and UTI Unit Linked Insurance Plan-Direct Plan on May 24, 2013 were Rs.18.1476 and Rs.18.1833 respectively.

The NAV per of UTI-Retirement Benefit Pension-Existing Plan Fund and UTI Retirement Benefit Pension Fund-Direct Plan on May 24, 2013 was Rs.18.4861 and  Rs.18.5308 respectively.

UTI Children’s Career Balanced Plan

UTI Children’s Career Balanced Plan invests in equities, convertible and non-debentures/bonds of companies and money market instruments The scheme has an asset allocation limit of minimum 60 per cent in debt and maximum 40 per cent in equities/equity related instruments. UTI Children’s Career Balanced Plan offers two options viz. Growth and Scholarship Options. The minimum amount of investment is Rs.1000/- under both the options.

Mr Amandeep Chopra is the fund manager for the debt portfolio of UTI Children’s Career Balanced Plan and Mr Anoop Bhaskar is the fund manager for the equity portfolio of the scheme.

UTI- Retirement Benefit Pension Fund

UTI Retirement Benefit Pension Fund is an open-ended notified tax saving-cum-pension scheme with no assured returns. The scheme has been notified by the Central Government in the Gazette Notification dated November 3, 2005 as a Pension Fund eligible under sub-section (2), clause (xiv) of section 80C of Income- tax Act, 1961 for assessment year 2006-07 and subsequent assessment years.

Contribution made by individuals under UTI-Retirement Benefit Pension Fund qualifies for deduction of the whole amount paid or deposited subject to a maximum of Rs.1,00,000 under Section 80C of Income Tax Act, 1961 as provided therein (subject to prevailing tax laws)

The investment objective of the scheme is to primarily provide pension in the form of periodical income/cashflow to the members to the extent of redemption value of their holding after they attain the age of 58 years. The scheme invests minimum 60 per cent and maximum 100 per cent in debt and balance in equity.

Mr Amandeep Chopra is the fund manager for the debt portfolio of  UTI Retirement Benefit Pension Plan and Mr V Srivatsa is the fund manager for the equity portfolio of the scheme.

UTI Unit Linked Insurance Plan

UTI’s Unit Linked Insurance Plan is the first insurance linked mutual fund product in the country. It is an open-end tax saving cum insurance scheme. The investment objective of the scheme is primarily to provide returns through growth in NAV or through dividend distribution and reinvestment thereof. It is a unique product, which provides multiple benefits to its investors viz.  Life Insurance Cover without any medical examination, Accident Cover up to Rs.50,000/-, Tax benefits under Sec 80C of Income Tax Act, 1961, Easy Liquidity and Ability to time investments for payment of renewal contribution (subject to prevailing tax laws).

Mr Amandeep Chopra is the fund manager of the scheme.


Initiates project Swabhimaan with SOS Children's Villages of India

Thesynergyonline Insurance Bureau

HDFC Life, India's life insurance major on Tuesday extended its Corporate Social Responsibility (CSR) initiative, Swabhimaan, to SOS Children's Villages of India. The project will begin with supporting the education of 300 vulnerable children in 4 locations including Kolkata, Guwahati, Bhubaneshwar and Rourkela. It is expected to expand by covering more children in other locations across the country. Apart from providing financial support, the project will also have a holistic engagement involving HDFC Life employees and customers.

The company will engage with children and women beneficiaries of SOS India's projects to build capacities in areas of financial literacy and create awareness about cause with customers.

Mr Amitabh Chaudhry, MD and CEO, HDFC Life along with Mr. Rakesh Jinsi, Secretary General, SOS Children's Villages of India Project officially launched Swabhimaan in Kolkata. An event was held to mark the launch in the presence of senior officials from both HDFC Life and SOS India. A painting competition with the theme 'my school' was organized for the children and the best paintings were rewarded by the group.

Speaking on the occasion, Mr. Chaudhry said "At HDFC Life, we believe that business must go hand in hand with a sense of responsibility towards all stakeholders including employees and the society. As a brand that strongly believes in self respect through financial independence, our CSR effort's core theme is 'Financial Literacy' to contribute towards building a society of well-informed financially literate individuals. Our association SOS India helps us contribute towards this cause."

Mr Rakesh Jinsi expressed that "Long term care provided to abandoned and parentless children by SOS Children's Villages needs sustained support, especially from its corporate partners. The gift of knowledge & education is the best we can give to our children, which will come back to us in the form of a better next generation. I would like to thank HDFC Life for partnering with SOS India and help us achieve sustained development for the children.

Indian insurers to spend Rs 101 bln
on IT ptoducts , services in 2013

IT services overtakes telecommunications as the largest spending area for the first time

Thesynergyonline Digital Bureau

INDIAN insurance companies will spend  Rs 101 billion  on IT products and services in 2013, an increase of more than 9 percent over 2012 revenue of 92.5 billion rupees, according to Gartner, Inc. This forecast includes spending by insurers on internal IT (including personnel), hardware, software, external IT services and telecommunications.
IT services has overtaken telecommunications to become the biggest spending segment, and is forecast to reach 30.6 billion rupees in 2013, up from 27 billion in 2012. IT services is achieving the highest growth rate amongst the top level IT spending segments – forecast to exceed 13 percent in 2013, with growth of 23.4 percent forecast for business process outsourcing services. Consulting is also a high growth segment at over 18.2 percent in 2013.
“We are continuing to see Indian insurers lead the charge to outsourcing and business process outsourcing,” said Derry Finkeldey, principal analyst at Gartner. “The Indian insurance industry is experiencing huge growth in transaction volumes, and Indian consumers are quite progressive in terms of seeking online and mobile services. Insurers are turning to experienced IT vendors to help them navigate the inevitable complexity this is producing.”
“The Indian domestic market for IT services is dynamic and highly competitive – with many of the leading names focused on the insurance sector and offering their own proprietary solutions for the industry. This competitiveness is ultimately great for insurance buyers.”

Improve growth , penetration of
non-life insurance sector : FM

Thesynergyonline Insurance Bureau

THE Union Finance Minister Mr P Chidambaram said that the major challenges before the non life insurance sector is how to increase its reach to the maximum number of people along with growth of investment in this sector.

He asked the participating CEOs of both public sector and private sector non life insurance companies to express their concerns about various factors hindering growth of this sector as well as give suggestions to overcome the same. There is significant room for growth as the penetration in non life insurance sector (premium to GDP) is only 0.71  per cent in 2011 which is far below the international benchmarks and much geography in the country are still untapped.

Mr Chindambram was addressing a meeting of CMDs, CEOs and MDs of both the public and private sector non life insurance companies here on Monday. Along with Mr Chidambram, the Minister of State for Finance, Mr Namo Narain Meena, Secretary, Financial Services Mr D K Mittal, Additional Secretary, Financial Services  Mr Sunil Soni, Members of IRDA, Mr M Ram Prasad and Mr R.K. Nair, Secretary General, General Insurance Council Mr R. Chandra Sekaran, CMDs of public sector non-life insurance companies and MDs and CEOs of private sector non-life insurance companies were also present among others at the  meeting.

The participating CEOs of public and private sector companies expressed various difficulties being faced by this sector especially in the field of motor car insurance including third party insurance, health insurance, home, fire and group insurance among others. The motor vehicle insurance, which has 41 per cent  share in the non-life insurance sector, faces major challenges because of regulated tariff, unlimited liability, non-jurisdiction restriction for filing the claim and underinsurance among others. The participating CEOs of the insurance companies suggested de-tariffing of motor TP premium and cap on liabilities etc among others.

As regards health insurance, it was suggested that a proper mechanism be put in place whereby an appropriate pricing mechanism for group health insurance is adopted which takes into consideration the existing incurred claims ratio, management expenses, medical inflation, cost of under-writing the business and other associated problems.

Some of the participating CEOs raised tax related issues including non-applicability of MAT for non-life insurance sector at par with life insurance companies and zero rated service sector on crop insurance, tools, senior citizen policy, RSBY and other exempt categories.

Suggestions were also made to further improve the penetration in home insurance sector and to resolve agents and regulator related matters.

Simply insure yourself
with a term plan

By Aneesh Khanna , Head , Marketing and Product
Management, IDBI Federal Life Insurance

Thesynergyonline Insurance Bureau

IRRESPECTIVE of the city or town, many people are not yet aware of affordable alternative options available in life insurance policies. They may have only heard of the steep premium rates that are quoted to own a life insurance policy, hence believe they cannot afford life insurance, and consequently leave themselves uninsured and their loved ones uncovered.  

However, an affordable alternative does exist, and that is term insurance.
Term insurance is the simplest form of life insurance, where you pay a fixed premium every year and get a life cover for a specified sum assured for a specified period. A term insurance policy provides a life insurance cover against death.

Therefore, these policies are also referred to as pure life covers. A term insurance policy covers the risk to life, and associated risks of loss of income of the insured for their family in case the insured is the wage earner, such as repaying the debts of the insured, funeral costs, college education for dependents, etc.

While term insurance is suitable for everyone, it is ideal for those who are looking for a low cost life cover. It also works well for an individual who has dependents to look after — parents, siblings or spouse.

One must consider certain factors while deciding on the amount for which the cover (sum assured) must be taken. In most cases, life insurance is taken only for one purpose: income replacement. There are times when it is difficult to apply the rule of thumb, because the amount of life insurance you need depends on factors such as your sources of income, how many dependents you have, your debts, and your lifestyle. If the life cover is inadequate, it defeats the whole purpose of insurance. The general guideline is 12 times of the annual income, minus investment and plus liabilities.

Some factors to keep in mind before buying cover are:
  Your age
  Income needed by your spouse and children in the event of your death
  Number of years you would like to provide this income to your spouse or children
  Your spouse’s (if any) and your gross income annually
  Any outstanding debt, for example, mortgage, loans, credit cards
  Total amount of your existing life insurance (if any)
  Interest rate and inflation rate assumption
  Advisable to take the medical test – it will reduce any chances of claim being denied
Some term insurance policies come with riders. Riders cover risks that are beyond the scope of the main life insurance policy, resulting in a more comprehensive protection. The most common riders cover critical illness, accidental death or permanent disability. These add-ons step in during situations where the main life insurance policy may not come into play. Buying a rider means paying an extra premium for this supplementary benefit.

Normally, this premium is low because relatively little underwriting is required. When a claim for the benefits of a rider is made, it can result in the termination of the rider, while the original policy continues to insure you as usual. Hence, it is recommended to take a rider keeping your present and future insurance needs in mind.
It is always advisable to buy a term insurance early in life and for the maximum tenure possible. In your early life, you are healthier and hence your premium will be the lowest, which turns out to be beneficial in the long run. Also, by taking insurance for a large tenure, you are making sure that you are covered for a longer period (even post your retirement), though the premium will be marginally more. It is ideal to have the longest possible cover in order to support your family in your absence or to cover your after-life expenses.

Thus, it can be said that taking a 30 years term insurance once will be very cost efficient than taking a 15–20 years term insurance and extend it later.
Buying a term insurance is almost hassle-free except that you might be required to undergo a medical examination to assess your health condition. Even if medical tests are not mandatory, it is always better to take a medical test before buying the policy because it will iron out the chances of rejection of a claim.

The premium rates will also not change, unless you decide to increase the sum assured or add riders to the policy. As with any life insurance policy, the annual premium paid towards a term plan qualifies for tax deduction of up to Rs 1 lakh premium paid (per annum) under section 80C of the Income Tax Act.

Thus, Term insurance is the simplest and least expensive form of life insurance, where you pay a fixed premium every year and you get a life cover for a specified sum assured for a specified period.




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