Thesynergyonline Insurance Bureau

NEW DELHI, SEPTEMBER 01 :
WITH the opening of the insurance sector and entry of private sector companies, the competition has intensified. There is now a sense of benchmarking globally which is indeed a very healthy trend. This has resulted in development of new insurance products, reduction of premium, improved customer service, increased visibility through print & electronic media, discussions, symposia and seminars etc. ultimately benefiting the insuring public, said Mr Pranab Mukherjee, Union Finance Minister at Global Insurance Summit organised here by ASSOCHAM .

One of the important challenges before the insurance industry today is to generate the required level of awareness benefits of insurance to our people particularly living in semi-urban and rural areas. It should be our endeavour to take all necessary steps to ensure the reach of insurance to masses. As for meeting their rural and social obligation, the insurance companies are now increasingly tapping the semi-urban and rural areas to spread the message of protection of life and property through insurance cover, he said.

The Government of India has also introduced many special products aimed at the rural markets like Jan Shree Bima Yojana, Universal Health Insurance Scheme, Aam Admi Bima Yojana, Crop Insurance, etc. for the benefit of poor and needy populace in the country, Mr Mukherjee said..

One of the main objectives of promoting financial inclusion packages is to economically empower those sections of society which are otherwise denied access to financial services, by providing banking and credit services thereby focusing on bridging rural credit gap. Lack of protective elements may not serve the objective of promoting financial inclusion packages as the targeted section may fall back into the clutches of poverty in the event of unforeseen contingencies. Hence, to provide a hedge against these unforeseen risks, popularization of micro insurance is one of the essential ingredients of financial inclusion package, he pointed out.

The Government has implemented the Rashtriya Swasthya Bima Yojana for the benefit of poor people in the country. Many states have adopted this scheme. However, the health insurance still covers a very miniscule population of this country. The Insurers have to ensure further penetration of the health insurance. Simultaneously, there is a need to concentrate that the premiums are affordable for the insured, he added.

We in the past have seen the devastating consequences on life and property on account of natural disasters. There is immense need of disaster management in controlling risk in India. The insurance industry should pr pare to deal with any kind of catastrophic losses.

The insurance companies should concentrate on exploring the world reinsurance market, so that the impact of heavy losses can be mitigated. Indian insurers may learn from the global experience in order to come out with a model that will work for the country.

The skills of underwriting business which got lost with the introduction of tariffs in general insurance business have to be brought back into the non-life industry. Insurance is a knowledge based profession, and underwriting skills its key area. To be in the forefront, the companies constantly need to train their employees and keep themselves abreast with the new developments in the insurance field.

To achieve this, the insurance companies need to have continuous professional development proprammes, in-house specialize training programmes, advanced level training sessions, etc which can result in improved productivity of an employee. The investment by companies on skill up gradation of its employees is an ongoing process. The coming 10 years are expected to increase the insurance penetration in the country and companies that pay attention to this aspect will benefit greatly.

One of the crucial areas in the insurance sector is the adoption of new technology In the industry. It is an accepted fact that insurance business is technology driven. It has the potential to save cost and hence, the scope for reducing price of product. Coming years will witness a total revolution in the ways of doing business. I request you all to make maximum use of technology to extend your outreach and reduce costs.

Any business has to ensure customer satisfaction to survive in the long term. Protection of policyholders’ interest is possible through a fair dispute resolution and adjudication mechanism which is easily accessible. While ombudsmen provide a dispute resolution mechanism, it is essential that insurers themselves institute efficient in-house grievance redressal mechanism where the policy holder is the centre of attention. IRDA has also taken an initiative in setting up a grievance redressal mechanism with a toll free No. I hope all the insurers will work to make the grievance redressal system a success.

In the recent past, IRDA has come up with a number of and guidelines especially in the area of ULIPs . This initiative is in the interest of the policyholder and would help confidence of the prospective policyholders in the insurance products. I am happy to note that the insurers have adapted to he new regulations. I commend the regulator and the industry for taking this very positive initiative and am sure that this process of reforms shall continue.

With rising incomes in the country, the need for insurance is bound to rise and this provides opportunity for the insurance industry to tap this growing need and provide insurance cover both life an non-life to the large masses of this country. I am sure, the industry will rise to the occasion, Mr Mukherjee added. (editor@thesynergyonline.com)

Thesynergyonline Insurance Bureau

NEW DELHI , SEPTEMBER 01 :
DFC Standard Life, an insurance major has announced the launch of its new product - HDFC Standard Life Crest.  HDFC Standard Life Crest is a new insurance cum ULIP with highest NAV Guarantee.

The key highlights of this product are:
30 Day free look-in Period - It’s the first product of its kind in the industry to offer a 30 day free look-in period as against the mandatory 15 day free look in period. This has been done in view to help customers understand the new ULIP products better post the IRDA regulations. Henceforth, all HDFC SL products will offer a 30 day free look in period.

One year Assurance - an assurance that within one year if policyholders feel they have bought the wrong product, the company will work with them to help them select an existing product of the company that fits their needs at the minimum possible cost.

Other unique features of HDFC SL Crest:

 It offers the flexibility to opt for highest NAV backed with minimum guaranteed NAV of Rs 15 on maturity of the contract.
Alternately, it also offers free asset allocation option of investing in 5 non-guaranteed funds. In fact, HDFC SL Crest comes with both limited  underwriting and fully underwritten options.  (editor@thesynergyonline.com)

Thesynergyonline Insurance Bureau

NEW DELHI, SEPTEMBER 01 :
IFE Insurance Corporation (LIC) today launched its new product - LIC's PENSION PLUS , a new unit-Iinked deferred pension plan "LIC's Pension Plus with effect from September 2, 2010. This marks the 54th anniversary of the corporation.

LIC's Pension Plus is a unit linked deferred pension plan, which provides the customer a minimum guarantee on the gross premiums paid. The plan is without any life cover. The customer has a choice of investing the premiums in one of the two types of investment funds available. Premiums paid after deduction of allocation charge will purchase units of the Fund type chosen. Within a given policy year 2 switches are allowed free of charge.

September 1, 1956 witnessed the creation of India's premier life insurance company. Today, on September 1, 2010; Life Insurance Corporation of India is proud to celebrate 54 years of dedicated customer service.

Inaugurating the weeklong anniversary celebration of LIC of India by cutting a ceremonial cake at the ASSOCHAM Global Insurance Summit, Finance Minister Mr Pranab Mukherjee extended his best wishes to the corporation.

Thesynergyonline Insurance Bureau

NEW DELHI, AUG 29 :
THE Associated Chambers of Commerce and Industry of India (ASSOCHAM) and McKinsey&Company have projected that the size of Property and Casualty insurance (P&C) industry would exceed Rs 500 billion (US$ 11.2 billion) in total premiums by 2012-13 from current level of close to Rs. 370 billion (US$ 8 billion) in 2009-10.

However, the study has projected that profitability will remain low with RoEs (Rate of Return) at 7 per cent due to stiffer competition.
"Given the macro economic situation, the underlined demand for P&C insurance will continue to grow as players will compete aggressively for market share, resulting in low pricing levels across both personal and commercial segments", said Dr. Swati Piramal, President, ASSOCHAM while releasing the study.
Since deregulation of insurance industry in 2000, the P&C insurance sector has been growing steadily and has reached a size of Rs 370 billion (US$ 8 billion) in 2009-10.

This growth has been primarily driven by private sector players, whose premiums grew at 40 per cent between 2003-2004 and 2000-2010, as compared to 8 per cent for public sector players over the same period. However, both on an absolute and relative basis, compared to other markets and other financial asset classes, penetration levels are extremely low.

The paper further points out that as a result the sector has not yet been able to achieve its objective of deepening'. For example, P&C penetration in India (defined as premiums to GDP) has remained flat at 0.6 per cent between 2004-05 and 2008-09. In comparison, China's penetration has increased from 0.83 per cent to 1.14 per cent over the same period, with the corresponding figures for Brazil being 1.49 and 1.59 per cent and for Russia being 2.14 and 2.3 per cent respectively.

This low penetration in the Indian market is the result of a combination of low asset ownership levels, low usage levels of insurance and extremely low level of pricing of premiums. The rate of increase in penetration of P&C insurance is also extremely low as compared to other financial asset classes in India. Between 1994-1995 and 2008-09, the relative increase in penetration has been only 1.6 times for P&C, as compared to 1.8 for mutual funds, 4.2 for life insurance and 5.3 for mortgages.

The ASSOCHAM chief further said that the Indian general insurance consumer is fairly reactive when purchasing insurance and rarely drives the process of choosing insurance products. This is particularly true for retail buyers. In nearly 50 per cent of cases, buyers initiated the process of insurance policy renewal only after the policy expired.

Further, in over 80 per cent cases, renewal process is initiated by sales representative, rather than being self-initiated. This `inertia' and low involvement translates into high drop-off rates post the first time purchase of the products: correspondingly, penetration is low.

The paper, however, adds that there is a scope for improvement in business models adopted by Indian P&C players. The industry has driven several innovations in products, distribution channels and operations in the past few years. For example, new products were introduced in the motor, health and SME lines. However, the pace of innovation has not matched that in foreign markets: the product range in India remains limited; the share of alternate channels is low, with the balance of power resting with traditional channels. Underwriting practices have weaknesses that need to be addressed.

Further, operational efficiencies are also low with claims ratios in the industry being one of the highest in the world and expense ratios remaining high due to low productivities and lack of scale. The average combined ratios between 2006-07 and 2008-09 for Indian public sector players was over 120 per cent , while for the private sector it was over 100 during the same period. This compares to combined ratios of 84 per cent for Brazil and South Africa, in the low 90s for UK, Germany and Brazil, 97 per cent for the US and 106 per cent for China. (editor@thesynergyonline.com)

Thesynergyonline Insurance Bureau

NEW DELHI, AUG 27 :
LIFE Insurance Corporation of India (LIC) , life insurer, has crossed the mark of One crore Individual Policies for the current financial year, with First Premium Income of Rs. 15,917 crore in the fortnight ended August 14, 2010. In the previous year, LIC had crossed this landmark on August 31, 2009.

Among the largest contributors to this stupendous performance are LIC's Western Zone with more than 15.86 lakh policies, South Central Zone with 15.46 lakh policies, Northern Zone with 15.04 lakh policies, North Central Zone with 13.54 lakh policies, South Zone with 12.78 lakh policies and Eastern Zone with 12.29 lakh policies. East Central Zone with 9.52 lakh policies and Central Zone with 5.98 lakh policies also made valuable contributions.

During the previous financial year, LIC had completed a record 3.88 crore individual policies, with a market share of 73.02 percent. The Corporation's performance in the current financial year has been record breaking so far and as on 31.7.10 it has increased its market share in first year premium to 71.33 percent as against 64.86 percent as on March 31.

Besides having the largest customer base of about 27 crore policies, it has a conservation ratio of more than 90 percent . Currently it provides fully computerised and networked service through its 2,048 branch offices and 1,035 satellite offices in India .(editor@thesynergyonline.com)

Thesynergyonline Insurance Bureau

NEW DELHI, AUG 18 :
HDFC Standard Life registered    63.0 percent growth in first year premium received to Rs. 692.7 crore in Q1 2010-11 from Rs. 424.9 crore in Q1 2009-10 . The company posted     47.8 percent growth in total premium received to Rs. 1478.9 crore in Q1 2010-11 from Rs 1000.5 crore in Q1 2009-10 with a 51.3 percent share of renewal premium.

The renewal premium income rose by 38.3 percent to Rs. 758.9 crore in Q1 2010-11 from Rs. 548.8 crore in Q1 2009-10 . The conservation ratio (of individual business) improved to 83.5 percent in Q1 2010-11 from 61.9 percent in Q1 2009-10 .   Assets under management (AUM) as on June 30, 2010 registered 116 percent growth to Rs. 22,298 crore from Rs. 10,307 crore as on June 30, 2009.    Market share (of weighted received premium) increased to 12.0 percent in Q1 2010-11 from 7.4 percent in Q1 2009-10.

On the company’s growth, Mr. Amitabh Chaudhry, MD& CEO, HDFC Standard Life, said, “ We have been successful in significantly lowering our expense ratio to 23.1 percent in Q1 2010-11 from 30.4 percent in Q1 2009-10. With a skew in premium income towards the latter half of the year, the operating expense ratio is expected to reduce further during the course of the year. Our total commission ratio also fell to 6.8 percent from 8.2 percent with a corresponding fall in new business commissions to 12.2 percent from 15.9 percent. " investment vehicle. “

Mr. Chaudhry further added that the company ended the first quarter with an Indian GAAP loss of Rs 75.1 crore primarily due to new business strain caused by a strong growth in new business premium.

“We continue to focus on the industry’s long-term story. We would invest in nurturing new business channels, improving customer service and making our distribution channels more productive. While we would persist in rationalising resources deployed by us, we would also ensure that we retain our strengths of distribution, reach and a strong sales force,” concluded Mr. Chaudhry. (editor@thesynergyonline.com)

BHARTI AXA GENERAL, COFACE SIGN PACT FOR TRADE CREDIT INSURANCE

Thesynergyonline Insurance Bureau

NEW DELHI, JULY 28 :
BHARTI AXA General Insurance and Coface South Asia Pacific today signed an agreement to build and provide Trade Credit Insurance to customers in India.

The alliance will leverage the combined technical and product expertise of the two companies to develop solutions that suit the business environment in India. Coface will also provide reinsurance support, risk evaluation and underwriting expertise as a part of the agreement.

Credit Insurance is a financial risk management tool which covers the losses sustained by a firm because of the non-payment of a trade debt. The product enables companies to extend better credit terms to customers and increase exports to them. Amongst other covers it also protects against the risk of payment default which may affect profitability of businesses.

Under the product developed by Bharti AXA GI and Coface India, coverage is provided up to 90 percent of the invoice value and covers loss due to insolvency of a buyer, non-payment or protracted default by a private buyer, political risks such as war or riots, government measures that prevent performance of contractual obligations and cancellation of import license, amongst others.

On the alliance, Dr. Amarnath Ananthanarayanan, Managing Director & Chief Executive Officer, Bharti AXA General Insurance said, “We are glad to partner with Coface to provide credit insurance to our customers. Our product is specially designed to provide comprehensive protection against the risk of payment default for companies that are selling their goods or services on credit to both domestic and overseas buyers. It has always been our aim to provide the best services and solutions to our customers and we believe that with our joint expertise we can truly redefine the market with our innovative insurance solutions.”

Mr. Jean-Claude Speitel, Regional Managing Director of Coface South Asia Pacific comments that “Coface has a historic relationship with the AXA Group dating back to the time when they held substantial shares of Coface and we have on-going partnerships in the field of Trade Credit Insurance in Asia. In light of the above; we are pleased to be able to expand our relationship with Bharti-AXA in India by providing them technical support in the field of Trade Credit Insurance”.

He further mentioned that, “Coface has been present in India since 2000 and we have since seen a steady growth in the interest in Trade Credit Insurance and Credit Management Services which seemed to have increased during the Global Credit crisis in 2009. Bharti AXA and Coface will jointly offer Indian Companies world class services in the field of Trade Credit Insurance, enabling them to “Trade Safely” and expand their domestic and export sales.” (editor@thesynergyonline.com)

HDFC STANDARD LIFE UNVEILS PROTECTION PLAN WITH PREMIUM GUARANTEE

Thesynergyonline Insurance Bureau

NEW DELHI, JULY 02 :
HDFC Standard Life, India's private life insurance today announced the launch of HDFC Premium Guarantee Plan, a life insurance plan in its portfolio. HDFC Premium Guarantee plan comes with twin advantages of protection and payback of all premiums (paid throughout the term) at the end of the policy term.

Mr. Paresh Parasnis Executive Director and COO, HDFC Standard Life said on the occasion, "HDFC Premium Guarantee Plan is a very simple life insurance plan that addresses the needs of those individuals who are looking for a pure protection plan as well as enjoying the benefit of getting back their money paid by way of premium. "

"The affordability component makes it a potent product across all demographics. The product has been designed keeping in mind the customers who are not comfortable investing in a market-linked life insurance plan and are looking for a low premium paying protection product. The innate nature of the policy includes a premium payback to the customer at the end of the term, which makes it a win-win proposition for him," he added.

HDFC STANDARD LIFE BEST INSURANCE COMPANY TO WORK FOR IN INDIA

Thesynergyonline Insurance Bureau

NEW DELHI, JUNE 30 :
HDFC Standard Life, private life insurance major , has been adjudged one of the Best Companies to Work for in India in 2010.

The company participated in the Great Places to Work® study for the first time and ranked first in the insurance category. It ranked 34th on Top 50 Best Companies to Work for in India, 2010 list. The company was also awarded for its unique employee initiative - Mission -in-Genius national quiz.

On this success, Mr. Rajendra Ghag, Executive Vice President, Human Resources and Administration, "HDFC Standard Life said, "It is an immense honour to be featured in the Best Companies to Work list. We are extremely proud that we are ranked 1st in the insurance vertical. This appreciation is a testimony of our commitment to the growth and development of our employees through effective engagement and recognition initiatives."

The Best Companies to Work in India is a study conducted by the Great Place to Work® Institute, India in partnership with The Economic Times. The 2010 edition is the seventh study in India, which received overwhelming response from more than 400 companies, making it the largest such study in India. And only 50 companies made it to the Best Companies to Work list!

The study has shown that HDFC Standard Life conscientiously develops employee talent programmes to keep engaging and motivating its employees. The company provides some unique platforms such as 'Mission in Genius' national quiz. The management is accessible to all at all times and sincerely seeks feedback from its employees through programmes such as 'Sparsh', the study said. (editor@thesynergyonline.com)