Thesynergyonline Insurance Bureau

MUMBAI, JANUARY24 :
THE private sector insurer IDBI Federal Life Insurance on Tuesday unveiled its premier Child Plan, IDBI Federal Childsurance® Dreambuilder Insurance Plan, for parents of children aged one month to 17 years.

Childsurance® is a Unit Linked Insurance Plan with new features that ensure a perfect combination of optimum returns and safety.

The plan includes features such as Joint Life Cover, Lumpsum Payment of Future Premiums (on death), Guaranteed Loyalty Additions, Education Support Benefit, and Systematic Allocator option that help create a child plan that does not fail.

Announcing the launch of 'Childsurance Dreambuilder Insurance Plan', Mr. G V Nageswara Rao, Managing Director and CEO of IDBI Federal Life Insurance, said: "Children are the foundation of our future and therefore planning for them, needs to be done carefully and successfully. We at IDBI Federal Life Insurance have created yet another innovative product with Childsurance Dreambuilder Insurance Plan which manages the twin expectations of growth to counter rising education costs and financial protection to ensure the plan doesn't get derailed."

"The plan has five unique features for parents to ensure their child's future and education would remain unaffected under any circumstances or exigencies," he added.

Five unique features of the Plan are :

Systematic Allocator: Systematically transfers fund value from the Equity Growth Fund to the Income Fund over the policy term to protect the corpus from equity market volatility closer to maturity
Joint Life Cover: Since both parents are contributors to the household income, on death of any one parent, future premiums are waived. Sum insured being paid if both parents were to die
Lumpsum Payment of Future Premiums: In case of death of the parent, all future premiums are waived and invested in the plan as a lumpsum in the plan
Guaranteed Loyalty Additions: At the end of the 10th policy year and every five years thereafter to boost the child plan corpus
Education Support benefit: In case of death of the policy holder, this feature will ensure systematic withdrawals in the last 5 years of the plan to support child's education

The plan provides a wide range of fund options for investment with an option of a unique 'Systematic Allocator' that systematically allocates funds from an Equity Growth Fund to the Income Fund over the policy term to protect the corpus as it nears maturity. While Childsurance builds the corpus over a period of time, it also allows liquidity with partial withdrawals and surrender options in case of need for funds.

Emphasizing on the objective of a Child plan, Mr. Aneesh Khanna ,senior vice president, Head - Marketing and Product Management of IDBI Federal Life Insurance said, "Planning for a child's future is a challenging yet an essential task for every parent. Whatever their child decides, they will certainly need good quality education to succeed in their chosen line of work. Our Systematic Allocator and Lumpsum Payment of Future Premiums are features that combine the benefits of growth and protection for the customer."

The policy term can be chosen to coincide with the age when the child will require the corpus for his education, marriage or any other career goals, any policy term between 10 and 25 years is available.

The plan starts with a minimum annual premium of Rs 25,000 and maximum Rs 100,000. Additional top ups of minimum Rs 5,000 can be made at any time to help accumulate the child's education corpus faster.

The plan comes with dual tax benefits - premiums paid are eligible for deduction from taxable income under section 80C and the maturity amount is exempt from tax under section 10(10D).

Thus the benefits are fully available to meet the financial needs of the child or to take care of expenses as in the case of crisis.

 

Thesynergyonline Insurance Bureau

NEW DELHI, JULY 19 :
US insurance major American International Group is looking to sell part of its airplane-leasing business through an initial public offering, according to the Wall Street Journal report.

Investment bankers have told AIG that an IPO of International Lease Finance Corp (ILFC) could raise $1.5-$2 billion if market conditions are favorable, according to the Journal.

About 25 percent stake of ILFC could be offered in an IPO that could rank as one of the largest in the United States so far this year, the paper said.

Proceeds from the IPO will go to the U.S. government to help repay taxpayers for the AIG bailout.

 

Thesynergyonline Infotech Bureau

NEW YORK,MAY 12 :
AMERICAN International Group (AIG) and the Treasury on Wednesday said they will sell around $9 billion in AIG stock>., but according to sources the Treasury would pull the sale if it cannot be done profitably.

AIG shares have fallen by more than a third this year, bringing the stock close to the government's $28.72-a-share break-even point.

There has been speculation in recent days that the offering would have to be priced well below that in order to get done.

But the sources, said the Treasury was committed to making a profit on this and future offerings and would pull the deal off the table if it could not do so.

The offering is less than half of what had been contemplated by some people earlier this year. When Wall Street banks offered their services to manage the sale in January, there was talk among banking sources of an offering of more than $20 billion.

The Treasury and AIG only agreed in the last week on the size of the offer, the sources said, suggesting some of those expectations may have been inflated.

One of the few analysts still covering the stock said the shares were worth buying despite major headline risks.

"We still believe a high degree of execution risk remains, and while we would not rule out the need for future capital raises, we think the shares are undervalued versus peers and historical valuations," Standard & Poor's equity analyst Cathy Seifert said in a note on Wednesday.

AIG trades at about 0.65 times its book value, whereas other property insurers trade at an average multiple of 0.97, and other life insurers average 0.91, according to Thomson Reuters data.

Taking a loss on AIG would be a black eye for the Treasury, but the government is under pressure to exit its crisis-era investments in private companies. Some see the 2012 presidential election playing a role in that pressure, though the sources insisted the share sale is being managed independent of that influence.

The government turned a profit of $12 billion on its investment in Citigroup Inc but took a loss on its first sale of shares in automaker General Motors Co.

The prospectus filed on Wednesday said the Treasury would sell 200 million shares and AIG would sell 100 million. The Treasury has an option to sell an additional 45 million shares to cover excess demand.

Assuming the Treasury sells 200 million shares, the government stake in AIG would fall to 77 percent from the current 92 percent.

 

 

 

Thesynergyonline Insurance Bureau

ZURICH ,MAY 08 :
INSURER Swiss Life is unlikely to become the target of a takeover bid, particularly by its German rival Allianz , Chief Executive Bruno Pfister said on Sunday.

"The idea Swiss Life could be taken over by Allianz is totally unfounded," according to Swiss newspaper SonntagsZeitung.

Rumors the life insurer could become a target surface regularly but Pfister said this scenario was unlikely given Swiss Life's involvement in politically controlled businesses and the risks generally attached to a bid.

He said Swiss Life wanted to develop independently although independence was not in itself a strategy.

"If we failed to realize our projects in the mid and long term, the board would consider a sale. It would have to."

Swiss Life on Tuesday posted a 10 percent drop in first-quarter premium income as revenues from tax-efficient insurance policies to wealthy individuals plummeted.

Pfister also criticized tougher new capital rules for Swiss insurers introduced at the beginning of 2011.

He said Swiss Life met the new requirements, the so-called Swiss Solvency Test, but he did not see any reason why Swiss rules should be stricter than the ones in Europe. The EU's tougher new Solvency II rules will come into effect in 2013.

AIG TO SPEED UP METLIFE SALES, GOVERNMENT PAYMENT

Thesynergyonline Insurance Bureau

NEW YORK , MARCH 02 :
AMERICAN International Group (AIG) will sell off its stake in MetLife Inc months earlier than expected, speeding up its repayment of the US government and giving MetLife more control of what had been an overhang for its shares.

AIG's bailout at one point reached $182 billion. At this point, the government's investment is comprised of a 92.2 percent stake in AIG's common stock and preferred interests in two special purpose vehicles.

The MetLife deal will let AIG pay down the Treasury's interest in one vehicle, which held the MetLife shares. It may also let AIG pay down part of the interest in the second vehicle, which holds AIG's shares in AIA Group (1299.HK).

After the transactions, AIG will be able to pay down $6 billion to $7 billion of the $18.2 billion still owed on the vehicles. The value of the AIA shares in the second vehicle is expected to be enough to cover the balance owed.

AIG sold its international insurance business Alico to MetLife last year for $7.2 billion cash and $9 billion in various classes of securities. The deal included a nine-month lockup on share sales.

Under the terms of the deal the insurer will be able to sell its MetLife common stock and equity units in underwritten offerings now. MetLife will directly purchase preferred shares from AIG, using the proceeds of a common stock offering.

For AIG, it gets access to billions of dollars of capital months sooner than planned at favorable prices. MetLife shares are worth nearly $6 more now than when the Alico sale closed.

"We are taking advantage of the opportunity to monetize our interest in MetLife more quickly to continue our efforts to repay the government," an AIG spokesman said in a statement.

"We believe it'll provide for an organized sale of MetLife's securities," according to company's source.

 

Thesynergyonline Insurance Bureau

LUXEMBOURG , MARCH 01 :
INSURANCE majors cannot take gender into account when setting premiums and paying out benefits from annuities and retirement savings or accident cover, the European Union's top court ruled on Tuesday.

The ruling by the European Court of Justice could increase the costs of women's accident insurance and boost their retirement income, though it could also make men worse off, with major implications for the insurance sector.

"Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination," the court said in a statement.

"The rule of unisex premiums and benefits will apply with effect from December 21, 2012," it said.

The ECJ judges agreed with an interim opinion of Advocate General Juliane Kokott last September that an EU directive was invalid in allowing different premiums and benefits for men and women based on the use of their gender in assessing their statistical risks.

The transitional period would allow EU member states to decide what action to take on domestic laws and give companies a chance to adjust and find ways to mitigate the knock-on effect.

Insurance analysts say the ruling could boost women's retirement income by up to 10 percent.

Insurers currently pay retired men who have purchased an annuity more than women, on the basis that on average they die younger -- on average three years earlier.

Ending the gender disparity in annuities will affect insurers like Britain's Legal and General and Prudential, France's Axa and Allianz of Germany.

The ruling could also mean insurance providers would try to find alternative ways to discover an applicant's gender without asking directly, so they have a more accurate picture of their risks, according to one insurer who declined to be identified.

IDBI FEDERAL LAUNCHES RETIRESURANCE PENSION PLAN

Thesynergyonline Insurance Bureau

NEW DELHI, FEBRUARY 22 :
IDBI Federal Life Insurance on Tuesday unveiled Retiresurance Guaranteed Pension Plan, a unique retirement plan which comes with the twin benefits of guaranteed accumulation with attractive annuities.

The pension plan is a non- participating traditional deferred pension plan designed to help customers secure their lifestyle post-retirement.

Mr G V Nageswara Rao, MD and CEO of IDBI Federal Life Insurance, said,“It is difficult to predict the future. But with the increase in life expectancy, many Indians could be spending a good 20 to 25 years of their life in retirement. This could probably be the time for them to face the harsh reality of outliving their savings."

"There is a strong need to plan for a guaranteed corpus that can result in guaranteed regular income. We at IDBI Federal have designed Retiresurance to suit these definitive needs of people, post retirement. The product offers a guaranteed corpus for every premium paid; moreover if the customers continue the policy till maturity, the plan offers guaranteed loyalty additions," he added.

According to Mr Rao, " It is a unique product that not only helps accumulate money for a comfortable retirement but also guarantees a steady growth of investment. For every premium paid, the plan guarantees a return that helps build a corpus. Ensuring transparency, returns to this corpus are linked to the prevailing G-Sec rate and this allows the customer to know the exact maturity for every premium paid. Each installment premium paid has a guaranteed maturity value which is payable on the vesting date. "

The premium payments for the accumulation phase can be 10, 15, 20 or even 25 years. At the end of the policy, the plan also guarantees a further loyalty addition.

For every premium paid, the plan guarantees a maturity value on the retirement date that helps build a guaranteed corpus. To ensure full transparency, the guarantee amount is linked to the prevailing interest rates on government securities.

This allows the customer to know the exact maturity amount for every premium paid. The plan allows flexible premiums with choice of premium payment term.

Premiums can be paid just once by choosing single premium, or for a limited period, or for the full term until retirement.

The policy holder can receive part of the maturity benefit as a lump sum and invest the remaining in an annuity which will ensure a regular income for life. Alternatively, the customer could purchase an annuity with the entire maturity benefit and get a higher and regular income for life.

The plan also comes with a death benefit to ensure that the policy holder’s nominee gets money which could be the higher of either the premiums paid along with a 5 percent compounded interest or the special surrender value.

Besides Retiresurance, the company's product portfolio includes Wealthsurance, Termsurance, Bondsurance, Microsurance Incomesurance, Homesurance and Loansurance .

Thesynergyonline Insurance Bureau

NEW DELHI, OCTOBER 20 :
DONE it again! The Life Insurance Corporation of India (LIC) has crossed the Rs 1000- crore mark under the new ULIP plans, Pension Plus and Endowment Plus. The total premium income under these two plans as on October 18, 2010 was Rs 1282 crore approximately.  These new plans were introduced in September following new guidelines laid down by the IRDA.

“Pension Plus” was launched on September 2, during the LIC’s 54th anniversary celebrations and is a Unit Linked Deferred Pension Plan. About 150 crore of premium have been collected under the Plan from more than 30000 policies. This is the Unit linked pension product available in the market post the introduction of new IRDA regime.

“Endowment Plus” plan was launched on September 20 and was LIC’s 16th linked product. More than Rs 1000 crore have been garnered from Endowment Plus alone from more than 2 lakh policies, in merely 29 days.

As on September 30, 2010, the New Business Premium Income of the Corporation was Rs 23321 crore coming from 14507344 policies. The First Premium Income has registered a growth rate of 83.07 percent.

Thesynergyonline Insurance Bureau

Mr Pranab Mukherjee, Union Finance Minister of India, lighting diya at at Swavalamban Pension Scheme launch ceremony. Also seen is Mr T S Vijayan, Chairman, LIC welcoming Mr Pranab Mukherjee at the function.

NEW DELHI, SEPTEMBER 28 :
UNION Minister Mr Pranab Mukherjee today unveiled 'Swavalamban', a pension scheme for the unorganized sector at Raghunathganj under the Jangipur sub division of the Murshidabad District. This scheme is administered by the Pension Fund and Regulatory Authority and LIC is the facilitator.

The Scheme aims at covering the unorganized sector under this New Pension System from age 60 years. Members of unorganized sector aged between 18 years to 55 years shall be included under the scheme that provides for minimum monthly contribution Rs.100/- , minimum annual contribution Rs.1000 and maximum annual contribution Rs.12,000 per member.

Under the scheme Government contribution will be Rs 1000 per annum for financial 2010-11 and this scheme shall be available for another three years.

Mr Namo Narain Meena Minister of State, Mr R Gopalan Secretary Financial Services, Mr Rakesh Singh Additional secretary Financial Services Government of India, Mr Yogesh Agarwal Chairman PFRDA, Mr T S Vijayan Chairman LIC, Thomas Mathew T Managing Director LIC, Mrs Sunita Sharma Executive Director LIC and Mr R R Dash Zonal Manager, LIC Eastern Zone were also present at the function .

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The dignitaries included Members of Parliament including Mr Adhir Ranjan Chowdhury, Mr Mannan Hossain and Mr Moinul Hassan as well as Legislative Assembly.

Thesynergyonline Insurance Bureau

NEW DELHI, SEPTEMBER 25 :
HDFC Standard Life, private life insurer, has been accredited with the CIO 100 2010: The Agile Award. The company has also been awarded the CIO Hall of Fame award that recognizes CIOs who have won four CIO100 awards in the same company.

HDFC Standard Life was honoured for 'Pinnacle', which provides on-demand, easy-to-manage workflow management solution for its new business processes with the flexibility of aligning the processes to dynamic business conditions. Pinnacle eliminates manual intervention, centralizes partner-efficacy metric for performance measurement, and is a single application with scalable architecture for all its partners ensuring standardized processes, with real time monitoring of data-processing activities.

Mr. Sunil Rawlani, Executive Vice President, Information Technology said, "In today's highly competitive life insurance industry, Pinnacle assists us in staying ahead of the curve by providing a flexible system that allows alignment of business processes as per market dynamics. The company enables efficient data processing and workload management thereby ensuring better turnaround for policy issuance leading to improved operational efficiency. Pinnacle has been designed to achieve maximum possible automation, which results in high level of accuracy."

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"Pinnacle has helped to leverage human resource potential in the social and rural sector without comprising the traditional value system. It also helps to bridge the digital divide gap. Going forward, Pinnacle will be enhanced to provide straight through processing (STP) capability," added Mr. Rawlani.

The Award was conferred by the CIO Magazine for staying agile and producing results that qualify as 'the best of the best' in a year that has been tumultuous across the globe.

Thesynergyonline Insurance Bureau

NEW DELHI, SEPTEMBER 20 :
LIFE Insurance Corporation of India has introduced its ULIP plan under the new IRDA regime, following the launch of its Pension Plus which is the first Unit-linked Pension Plan under the new regime.

Endowment Plus is LIC’s 14th plan approved and the Corporation’s performance in all the ULIP plans to date has been commendable. Most of its policy holders have got handsome rewards on their investments through ULIPs besides its credible performance in Pension and Insurance.

Endowment Plus is a unit-linked product that offers investment-cum-insurance during the term of the policy. The Policy is available for people aged 7 years to 60 years for a policy term between 10 years and 20 years. The minimum annual premium under the policy is Rs 20,000 for regular modes. Under ECS mode it is Rs 1,750 per month and minimum single premium is Rs 30,000. The plan offers a risk cover of upto 11-30 times of annualized premium or 1.25 times of single premium. Critical illness and accident benefit riders are also the benefits available with this policy.

The policy holder has the option to choose any of the 4 funds namely:

Bond Fund
Secured Fund
Balanced Fund
Growth Fund

The option of switching within the funds is available any number of times during the duration of policy. The first four switches every year are free of charge and a charge of Rs.100 is levied thereafter per switch.

If the Policy is in full force, a policy holder can avail a loan under the policy after 3 years to the extent of 30% of the policy holder’s fund value and partial withdrawal is allowed after 5 years subject to conditions. Full risk cover will be available after two years from the date of partial withdrawal. Surrender value is available after 5 years incase of discontinuance of policy at any stage. Incase of withdrawal after 5 years full fund value is payable provided that the policy is in force.

Decreasing discontinuance charge upto a maximum of 10 percent for policies with annualized premium upto Rs 25,000 or 6 percent for annualized premium above Rs. 25,000 upto the end of the 4th year is applicable.

Another feature of this plan is that mortality charges are deducted only if the basic sum assured is less than that of the fund value of the units. There is also an option to encash fund in regular intervals spread over a period of 5 years from the date of maturity.

At maturity, the policy holder will be eligible for fund value under the policy. Incase of death, the nominee will get the higher of the sum assured under the basic plan and the policy holder’s fund value.

Premium allocation charges under the policy are 7.5 percent in the first year, 5 percent from 2nd to 5th year, and 3 percent thereafter. Single premium allocation charges are 3.3 percent, Fund management charges may vary from 0.5 percent for Bond Fund to 0.8 percent for Growth Fund. (editor@thesynergyonline.com)

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.