BIRLA SUNLIFE AUM CROSSES RS 15,000-CRORE MARK

Thesynergyonline Insurance Bureau

Vikram Kotak, Chief Investment Officer, Birla Sun Life Insurance

NEW DELHI, JAN 13 :
BIRLA Sun Life Insurance Company (BSLI), a life insurance giant , has achieved a new milestone, by crossing the figure of Rs. 15,000 crore in its Assets Under Management (AUM) in January 2010. This closely follows the 10,000 crore AUM mark that was achieved by BSLI recently in April 2009.

Mr. Vikram Kotak, Chief Investment Officer, Birla Sun Life Insurance, said on the occasion, "It is quite encouraging to cross the new milestone of Rs. 15,000 crore of AUM, registering a strong y-o-y growth of over 90 per cent as on January 2010."

"This growth is a reflection of the faith entrusted by our policyholders in us. This achievement is notable especially in a year of slow-paced growth on the back of global financial turmoil in fiscal 2009. During the year, we have further widened our fund offerings to meet various financial goals of policyholders with varying risk profiles. This has played an instrumental role in growing our AUM. Currently, Equity constitutes 56 percent of our ULIP AUM," he adds

He further adds, "Investment performance is a critical yardstick to measure a company's performance. All our funds have consistently outperformed their respective benchmarks over the last 1-5 year period. Our investment strategy remains focused on building a high quality portfolio by investing in companies that have strong management, strong financial performance, scalable business model and good growth visibility." (editor@thesynergyonline.com) .

ICICI LOMBARD GIC , DEVELOPMENT CREDIT BANK IN BANCASSURANCE PARTNERSHIP

Thesynergyonline Banking Bureau

NEW DELHI, JAN 06 :
ICICI Lombard General Insurance Company , the private sector general insurance company and Development Credit Bank , a new generation private sector bank, have signed a bancassurance agreement for the distribution of general insurance products through 80 branches of DCB across 10 states and 2 union territories.

Under this agreement ICICI Lombard GIC will make available its industry leading products in the General insurance space, to the customers of DCB. A bouquet of personal products such as health insurance, home insurance, travel insurance, motor insurance, and commercial line products such as fire insurance, marine insurance, industrial insurance, will be available through DCB’s branch banking channel.

DCB’s customers will benefit through this tie-up which offers best in class non life insurance products such as ‘Zero Depreciation add-on’ and ‘Health Advantage Plus’. Zero Depreciation add-on offers full claim on the value of parts replaced without any deduction for depreciation whereas Health Advantage Plus is a comprehensive health insurance policy that covers the policyholder’s outpatient department treatment (OPD) expenses.

On the partnership, Mr. Neelesh Garg, Director – Retail, ICICI Lombard GIC said, “Given its customer- centric orientation, ICICI Lombard's partnership with an organization like Development Credit Bank places the highest priority on customer service and satisfaction. Our partnership strengthens and enhances ICICI Lombard’s reach to provide innovative insurance solutions to a wide-spread customer base. ICICI Lombard and DCB will work towards launching some customized and co-branded products in the next financial year. DCB is an emerging bank and we see great potential in the relationship”

Mr. Murali M Natrajan , Managing Director and CEO of Development Credit Bank said, “Our mission is to provide the best of products and services to support our customers in their business and personal progress. The partnership with ICICI Lombard General Insurance gives us a big opportunity to bring value to our customers”

ICICI Lombard is a 74:26 joint venture between ICICI Bank with US$ 75 billion in assets and Fairfax Financial Holdings , a Canada- based US$ 27 billion diversified financial services company engaged in general insurance, reinsurance, insurance claims management and investment management. ICICI Lombard has a gross written premium (GWP) of Rs. 34,198.4 million for the year ended March 31, 2009.

The company presently has around 5,697 employees in 409 branches. In the financial year ended March 31, 2009, the company issued over 4 million policies and serviced over 33 lakh claims. The company has a claim disposal ratio of 97 percent (percentage of claims) settled against claims reported) as on March 31, 2009. (editor@thesynergyonline.com) .

ATOM - FUTURE GENERALI TIEUP FOR INSURANCE PREMIUM PAYMENTS OVER PHONE

Thesynergyonline Insurance Bureau

MUMBAI, DEC 16 :
ATOM technologies, a tele-Commerce solutions provider , implemented end-to end life and non-life insurance premium and renewal payments over phone

Future Generali, the insurance joint venture between India 's Future Group and Generali of Italy adopted Tele-commerce to offer its customers convenience to make premium or renewal payments in a hassle free and time saving manner just by using a phone and their credit cards. With this implementation Future Generali became the first insurance company in India to provide end-to end Life/non-Life insurance premium and renewal payment option over the phones.

"With a vast section of the Indian market still relatively uninsured and underinsured, Future Generali, as a total insurance Solutions provider, envisages a huge potential for growth and is looking at technology as a key enabler in achieving its objectives." said Anup Seth, Head - Mallassurance Channel - Future Generali.

He further added, "With the increasing penetration of cell phones, mobile commerce is set to witness tremendous growth over the coming years. With our IVR service, our customers can now make their premium payments using their mobile phone. atom's IVR platform also ensures that payments are secure, fast and convenient "

"It gives us great pleasure to partner with Future Generali, one of the leading insurance companies in India . We are confident that our solutions will help insurance companies in serving their customers better and ease their premium collection process. It will also reduce their cost overheads as cost per transaction will come down for them." said Dewang Neralla, Director - atom technologies.

To avail this service, a customer needs to dial in to a Future Generali call center and speak to the CSR (Customer Service Representative) for renewal of an existing policy or to buy a new policy. The CSR initiates the three way conference call between customer, atom and himself, as the call is connected the IVR prompts the customer to enter credit card details on the phone's key pad. The transaction is completed when the IVR reads out the successful authorization. (editor@thesynergyonline.com)

IDBI FORTIS UNVEILS INCOMESURANCETM ENDOWMENT AND MONEY BACK PLAN

Thesynergyonline Insurance Bureau

NEW DELHI, NOV 19 :
IN a bid for product enhancing transparency, IDBI Fortis Life Insurance on Thuesday unveiled its ‘IncomesuranceTM Endowment and Money Back Plan’ that declares in advance an additional guaranteed income on every premium paid.

A customer of IncomesuranceTM Endowment and Money Back Plan can get his income as a lump sum endowment or as an annual money back. The Premium is eligible for tax deduction under Sec 80C. Also, the Guaranteed Annual Payout and other benefits upon death are tax-free under Sec 10(10D).

“Incomesurance is designed to give a guaranteed income to our customers who can realize their dreams, like their child’s education, planning for daughter’s marriage, providing financial security to their loved ones, or for that matter ensuring a comfortable retirement income,” said Mr G V Nageswara Rao, MD & CEO of IDBI Fortis Life Insurance.

Elaborating on the transparency of IncomesuranceTM, Mr Rao said: “The most unique feature of this plan is that the customer gets to know the increase in guaranteed income at the time of each premium payment. One does not have to wait till the maturity of the plan or declaration of bonus.”

The company has expanded capital base from Rs 200 crore to Rs 450 crore. Its income from premium collection stands at Rs 193 crore.The company registered 27 per cent growth first half of the fiscal 2009-10. The company's breakeven target set for 7 years began last year.

IncomesuranceTMalso provides a death benefit. Moreover, if one chooses Lump Sum Cover option, the company will pay a lump sum upon death. If one chooses Waiver of Premium option, all future premiums will be waived in the case of an unfortunate eventuality on the customer and the guaranteed income will continue, just as one had envisaged. This insurance benefit ensures that the customer’s goals will be achieved even if something unfortunate were to happen.

Launched last year, IDBI Fortis is one of India’s fastest growing life insurance companies with a suite of innovative products like WealthsuranceTM, that can help you create an insured wealth plan, HomesuranceTM to create a protective cover for your home loan, BondsuranceTM, for guaranteed returns with life insurance cover, RetiresuranceTM for a comfortable life after retirement with lifelong pension and TermsuranceTM Protection Plan, for customers looking for a flexible protection plan and large insurance cover at an affordable cost. It also offers MicrosuranceTM for affordable life insurance cover to groups and TermsuranceTM Grameen Suraksha, a low cost life insurance plan for rural markets. (editor@thesynergyonline.com) .

M&A GUIDELINES FOR INSURANCE MAJORS ON CARDS : CHAIRMAN, IRDA

Thesynergyonline Insurance Bureau

NEW DELHI, JULY 25 :
INSURANCE Regulatory and Development Authority (IRDA) will in a couple of months finalise directives and detailed guidelines for Mergers & Acquisitions in the Insurance sector as also examine possibilities to hike existing insurance agent's commission rates to increase their productivity.

Disclosing this at ASSOCHAM organised National Summit on `Indian Insurance Industry; here today, Chairman IRDA, Mr. J. Hari Narayan said, "Insurance regulator and Securities & Exchange Board of India (SEBI) have commenced dialogues to finalise mergers and acquisition guidelines in insurance sector".

"Since the process is just begun between IRDA and SEBI, it would take couple of months before the IRDA unveils such guidelines to give a new dimension to insurance sector", said Mr. Narayan.
Expressing serious concern on issue of lower penetration of general insurance especially in the rural segment, Chairman IRDA said that insurance agents need to be motivated with increased commissioned facilities to generate larger business and the IRDA is examining possibilities to effect upwardly changes in insurance agent's present commission structure.

The IRDA Chairman even mooted the idea that insurance agents representation should be introduced in Boards of insurance companies to ensure that every segment of the society is lured to park their surpluses with insurance companies. He, however, did not specify if IRDA is examining this issue from regulator angle.

On a query if Life insurance also fell under purview of IRDA, the regulator answered in negative but emphasised that the growth rate of insurance which was earlier picking up has declined substantially in recent times because of fall in productivity of insurance agents.

Earlier Inaugurating the ASSOCHAM organised National Insurance Summit, Minister of State for Finance, Mr. Namo Narain Meena emphasised that one of the important challenges before Insurance industry today is to generate required level of awareness for insurance particularly in people living in semi-urban and rural areas.

"One of the criticism against the liberalisation in the insurance sector was that the private insurance companies might not cater to the requirement of rural and social sector on commercial consideration. It is, therefore, in the self interest of the insurance companies to find ways and means to explore rural sector because growth of insurance sector will crucially depend on the extent to which the vast potential in rural sector is tapped by companies", said the Minister.

According to him, micro insurance regulations issued by the IRDA have provided a fillip in propagating micro insurance as a conceptual issue. With the positive and facilitative approach adopted under the micro insurance regulation, it is expected that all insurance companies would come out with progressive business approach and carry forward spirit of regulations thereby extending insurance penetration to all segments of society.

Speaking on the occasion, Mr. M. Ramadoss, Chairman ASOCHAM Insurance Committee & CMD, Oriental Insurance Co. Ltd. said that the Insurance Bill is currently pending with Parliamentary Standing Committee would be passed sometimes in the year to facilitate people's participation in general insurance especially on health products.

The Minister on the issue of Insurance Bill reassured the participants that after the Parliamentary Standing Committee has cleared the Bill, the UPA government would ensure its smooth sailing at both houses of Parliament.

Among others who spoke on the occasion seeking introduction of larger reforms to insurance sector included Mr. S C Aggarwal, Chairman, ASSOCHAM Capital Market Committee, Mr. Krishnan Sitaraman, Director, CRISIL and Mr. D S Rawat, ASSOCHAM Secretary General.(editor@thesynergyonline.com) .

INDIA’S GENERAL INSURANCE PENETRATION LEVEL 0.60% OF ITS GDP

Thesynergyonline Insurance Bureau

NEW DELHI, JULY 22 :
DESPITE the fact that general insurance business has been growing at a healthy rate of 16 per cent annually between 2004-05 to 2008-09, its penetration level is just 0.60 per cent of India’s GDP against world average of 2.14 per cent, says a Joint Research Paper on Indian Insurance Industry brought out by CRISIL and ASSOCHAM.

“India ranks 136th on penetration levels and lags behind China (106), Thailand (87), Russia (86), Brazil (85), Japan (61) and the US (9). The penetration of general insurance in India remains low on account of low consumer preference, largely untapped rural markets and constrained distribution channels”, adds the Paper.

General insurance in India is a Rs 300 billion business in terms of annual premium. General insurance business in India grew by a healthy 16 per cent annually during the past 5 years. The growth was led by motor insurance and health insurance which grew by 16 per cent and 37 per cent, respectively, on an annual basis. Growth has been driven both by the increase in the value of underlying assets with rising GDP and personal incomes, as well as, by the increasing penetration across categories.

Releasing the Paper, ASSOCHAM president, Mr. Sajjan Jindal said, “one of the biggest constraints facing the general insurance business is the lack of reach beyond the cities. While life insurance players are struggling with the quality of insurance advisors, general insurance players face difficulty in getting intermediaries to distribute their products. The average ticket size and the commission rates are extremely low (compared to life insurance).

While the average ticket size of a life insurance product is around Rs 20,000, the average ticket size for a general insurance policy is lower at around Rs 5,000. Further, with commission rates for general insurance being at around 10-15 per cent, compared to life insurance which is around 35-40 per cent (in the first year), intermediaries do not prefer to distribute general insurance products”.

According to the Paper, over the past 5 years, the motor insurance segment has grown around 16 per cent annually during 2004-05 and 2008-09. This has been largely driven by growth in vehicle sales (annual growth of 12 per cent) as well as by the sharp increase in third party premium rates since 2007.

There are two types of auto policies - third party (TP) and own damage (OD). Under the third party insurance policy, the insurance company agrees to cover the insured person, if he is sued or held legally liable for injuries or damage done to a third party. The ‘own-damage’ policy covers physical damage to the vehicles in case of an accident. The product offerings can therefore be categorised as either third party policies or comprehensive policies (which include both TP and OD). The third party policy is mandated by law, whereas comprehensive policy is optional.

In India most of the motor insurance policies belong to the third party category. However customers are increasingly taking comprehensive policies, due to growing awareness and increasing sales of relatively expensive vehicles. The increasing sales of comprehensive policies have also contributed to the value growth of motor insurance premiums apart from the increase in third party premium rates and the growth in automobile sales.

Mr. Jindal pointed out that with India having a high number of road accidents (annually around 0.13 million), its claims ratio has been a cause of concern. The lack of road discipline and poor road conditions have been the main causes for the high incidence of accidents. In 2007-08 the overall claims ratio for motor vehicles was 92.3 per cent, being especially high for the third-party segment. (For private cars, the OD-incurred claims ratio was 65.4 per cent, while the TP-incurred claims ratio was 183.0 per cent in 2005-06.) This is also the reason why the private insurance companies prefer to provide comprehensive policies instead of standalone third-party policies.

Health insurance is the second-largest contributor to the general insurance space after motor insurance and has also been the fastest-growing segment. Health insurance as indicated by its premium, is a Rs 61 billion business annually and has grown at a 5-year CAGR of 37 per cent. Improving per capita income, rising healthcare costs, and increasing group cover by the employers has propelled its growth.   (editor@thesynergyonline.com)

AVIVA AMONG TOP 4 ' BEST PLACES TO WORK'

Thesynergyonline Insurance Bureau

NEW DELHI , JUNE 14 :
AVIVA Life Insurance has been ranked among the top 4 best employers by the Great Places to Work Institute (GPTW) in the
“Best Workplaces in India” study for 2009. As many as 373 Indian companies across diverse industries and sectors participated in the study.

This is the fifth consecutive year that Aviva has earned the recognition for being among the best places to work and is the only insurance company to be listed among the top 25 companies in this survey. Aviva Life shot up to 4th position making it to the list of dream jobs this year, up from the 23rd rank in 2008.

TR Ramachandran, CEO & MD, Aviva Life Insurance said, “It is indeed a proud moment for us to be rated among India’s best employers. Aviva’s culture is driven by customer and employee centricity. We have committed to deliver one distinctive experience for our customers and employees, wherever we are in the world – we want them each to feel that ‘No one recognises me like Aviva’.”

The annual study, which was conducted by the GPTW in association with The Economic Times, surveys organisations across India from various industries. Ranking are based on assessments by anonymous employees of the company.

Nearly 200 randomly chosen employees across Aviva India answered questions under five categories: fairness, camaraderie, credibility, pride and respect towards their employer. GPTW team called around 15, randomly selected, employees from the respondents and questioned them about their inputs to establish credibility.
 
Some of the key initiatives to encourage employee participation and recognition across Aviva include:
·         CEO Awards: A program that recognizes a team or an individual employee for delivering an innovative project with a clear RoI for the company. In addition, there are also separate reward platforms for Sales and Non-sales employees – Blue Riband
·         IDEAs: An interactive channel for inviting ideas from the employees on a business relevant issue. An example of this is the i-Save campaign which invited ideas on expense management and received over 800 responses
·         Talent Management: A process to identify, build and manage the strong performers as well as provide the necessary impetus, avenues and trainings for employees demonstrating high potential. The initiative ‘Talking Talent’ had close to 50 employees participating last year
·         Global Climate Survey: This is a common process of measuring employee engagement institutionalized by Aviva Plc. The inputs from the Global Climate Survey helped us strategize on the various organizational initiatives. Aviva India has among the highest engagement scores at 91% within the Aviva group of companies
 
In addition, the company has incorporated several other creative and interactive communication channels such as Fun@Work, townhalls, Coffee with the CEO, which are designed to facilitate expression of ideas and views irrespective of hierarchy or gender with a common goal of engaging people.  (editor@thesynergyonline.com)

INDIAN INSURANCE SECTOR LIKELY TO BE RS. 2000 BILLION SIZE BY 2011

Thesynergyonline Insurance Bureau

NEW DELHI, MAY 14 :
AN unprecedented growth of over 200 per cent is likely to be seen in Indian insurance business by 2010-11 in which private insurance business would grow @ 140 per cent in view of aggressive marketing technique adopted by them as against 35-40 per cent of state owned insurance companies growth rate, according to The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

The Chamber expects the total insurance business reaching a level of Rs.2000 billion in next 2 years from current level of Rs. 500 billion. The aforesaid findings are made by the ASSOCHAM on `Insurance Sector Futuristic Growth’, pointing out that in the last couple of years, the insurance sector has grown by CAGR of around 175 per cent and the trend will emerge still better because of potential factor.

The Chamber President, Mr. Sajjan Jindal said, “on account of intense marketing strategies adopted by private insurance players, the market share of state owned insurance companies like GIC, LIC and others have already come down to 70 per cent in last 4-5 years from over 97 per cent and more intense competition is likely to be witnessed in the near future”.

The private insurance players entry into insurance sector is still restricted since India has yet to open it up liberally. But even then, their rate of return (RoR) to their subscribers and policy holders is estimated at about 35 per cent as against 20 per cent of domestic insurance companies.

This factor is mainly responsible for hike in private insurance market and might grow further exceeding even 140 per cent.

Secondly, the state owned insurance companies have limited number of policies to offer to their subscribers while in case of private insurance companies, their policy numbers are many more and the premium amount as well as the maturity period is much competitive as against those of government insurance companies.

Interestingly, said Mr. Jindal, the private sector insurance players have started exploring the rural markets in which until recently the state owned companies had the monopoly.

The Chamber has projected that in rural markets, the share of private insurance players would increase substantially as these have been able to generate a faith among their rural consumers.

Estimating the potential of the Indian insurance market from the perspective of macro-economic variables such as the ratio of premium to GDP, ASSOCHAM says India’s life insurance premium, as a percentage of GDP is 1.8 per cent against 5.2 per cent in the US, 6.5 per cent in the UK or 8 per cent in South Korea.

ASSOCHAM findings further reveal that in the coming years, the corporate segment, as a whole will not be a big growth area for insurance companies. This is because penetration is already good and companies receive good services. In both volumes and profitability, therefore, the scope for expansion is modest.

The Chamber has suggested that insurer’s strategy should be to stimulate demand in areas that are currently not served at all. Insurance companies mostly focus on manufacturing sector, though, the services sector is taking a large and growing share of India’s GDP. This offers immense opportunities for expansion opportunities.

To understand the prospects for insurance companies in rural India, it is very important to understand the requirements of India's villagers, their daily lives, their peculiar needs and their occupational structures. There are farmers, craftsmen, milkmen, weavers, casual labourers, construction workers and shopkeepers and so on.

The rural market offers tremendous growth opportunities for insurance companies and therefore, should develop viable and cost-effective distribution channels to create consumer awareness and instill confidence. The ASSOCHAM found that there are 124 million rural households.

Nearly 20 per cent of all farmers in rural India own a Kissan Credit cards. The 25 million credit cards used till date offer a huge data base and opportunity for insurance companies. An extensive rural agent network for sale of insurance products could be established. The agent can play a major role in creating awareness, motivating purchase and rendering insurance services. (editor@thesynergyonline.com)