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LIC New Business Premium Collection Down 6.5% In FY’13

Posted on May 13, 2013 by
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LIC

Having witnessed a drop in new premium collections in financial year 2012-13, state-owned Life Insurance Corporation of India (LIC) aims to grow its business by 15% in current fiscal.

As per the LIC, the growth in new premium collections would be achieved by increasing insurance penetration in underserved areas.

In FY’13, LIC’s new premium collection declined by 6.5% to Rs 76,245 crores as against Rs 81,514 crores in FY’12.

The fall in new premium collection can be attributed to slowdown in economic growth and regulatory changes.

LIC also said that high penetration of ponzi schemes had an impact on the first premium income of many insurance companies.

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IRDA Planning To Tighten Product Approval Process Further

Posted on April 30, 2013 by
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IRDA

The Insurance Regulatory and Development Authority (IRDA) is planning to tighten the product approvals process further.

As per the new norms proposed by the IRDA and intimated to the insurers last week, an insurer will now have to demonstrate how its product complies with the regulatory norms.

Insurers need to justify the financial viability of the products and requirement of such a product in the market before filing the product.

Filing of the product will be permitted only after getting the first round of approval.

The scrutiny process may involve detailed examination of products, wherein an insurer will have to justify how the product is suitable for the targeted customers and whether it meets their genuine needs.

Insurers will also be asked to establish the reasonableness in the death cover and the premium charged for the product.

The main objective of this approach is to protect the interest of all stake holders.

The proposal for a new product will also include

Reinsurance arrangement, pricing assumptions, target segment and investment philosophy of the product.

This will be applicable for both life and non-life products.

IRDA believes that these steps will help expedite clearances – to a couple of weeks compared with as long as six months earlier.

These steps will ensure consistency in the products and make the product approval faster.

All this means that insurers will now have to be cautious on proposing the products. Insurers will have to do a lot of homework and market research before floating the product.

With the new mechanism in place, the insurers will have to disclose the amount of business generated in each category of existing insurance products before proposing a new product under a particular category. The regulator will take into account the previous track record of the product before giving a green signal for product filing.

Recently, IRDA put out an exposure draft requiring life insurers to submit a product planner before the beginning of every financial year. This will give the regulator an idea of the number and type of products that will come up for approval during the year.

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Group Health Insurance Premiums Reduced By 15%

Posted on April 17, 2013 by
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Severe competition among non-life insurance companies has helped India Inc secure a better deal in group health policies, despite this business reeling under losses for insurers. This year there has been an average 15% reduction on the premium paid by companies, compared with a year ago.

Every year in April, 60% of the corporate policies are renewed.

Group health insurance business was around Rs 7,000 crores in 2012-13 and has been growing at 15-18%.

The business is loss-making for non-life insurance companies with a total claims ratio of 120%. That means for every Rs 100 collected as premium, the total outgo on claims paid, agents commission, fee of Third Party Administrator (TPA) and other administrative costs results in a total cost of Rs 120 for an insurance company.

Over the past two to three years, insurers were increasing the premium on group health policies. But this year, insurers reduced the premium rates. Insurers say that there is competition in the market, so pricing pressure has increased. Due to this, the rates have been cheaper or have not increased to the extent required.

A year ago, the finance ministry had instructed the four public sector general insurers –Oriental Insurance, New India Assurance, National Insurance and United India Insurance – to not compete amongst themselves, and asked them to raise the premium on group mediclaim policies.

PSU general insurers say that they are not competing amongst themselves. However, the newly launched private insurers wanting to capture market share are quoting rates lower than them, forcing them to lower the rates further.

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General Insurer’s Premium Collection up 19.36% in April-January Period

Posted on March 20, 2013 by
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General insurers have seen a 19.36% rise in premium collection during April 2012-January 2013 period to Rs 56,110.45 crores as against Rs 47,002.41 crores in corresponding period last year.

Private General Insurer’s premium collection during the April-January period of current fiscal stood at Rs 24,181.77 crores, a growth of 22.9% over the corresponding period last year.

Public sector general insurers saw a growth of 16.7% in the same period to Rs 31,918.69 crores.

Among the companies, SBI General Insurance followed by Max Bupa saw the highest growth rate in the period.

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Liberty Videocon General Eyeing Rs 120 Crores Premium Income in 2013

Posted on February 26, 2013 by
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liberty videocon general insurance

Country’s 27th general insurer, Liberty Videocon General Insurance has set a premium target of Rs 120 crores for 2013.

The company has launched its operations. It received license to operate in the general insurance industry from Insurance Regulatory and Development Authority (Irda) in May 2012.

Company is planning a portfolio with equal mix of retail (motor and health) and commercial (fire, engineering and group health) products.

The company has commenced business with an initial capital of Rs 350 crores.

Liberty Citystate will provide the Indian arm inputs on technical functions and extend expertise on managing emerging markets.

On the other hand, Videocon will provide access to extensive distribution network across India and share knowledge on consumer behavior.

The company intends to expand business by following ‘set-up, stabilize, study and expand’ model.

The company is planning to take up its number of branches to over 25 in 2014. The company will add five more branches soon.

At present, company has a team of 150 professionals and is planning to have about 320 employees by the end of the year.

Besides Mumbai, the company has operations in Delhi and Bangalore.

Liberty Videocon General Insurance is a 74:26 joint venture between Videocon industries and Liberty Citystate holdings Pte Ltd, a part of U.S.A. based Liberty Mutual Insurance Group.

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Bharti Axa General Likely to Raise Premiums for Commercial Lines

Posted on February 12, 2013 by
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Bharti AXA Life

Private insurer, Bharti Axa General Insurance is expected to raise its premium for commercial lines insurance by 10-12%.

The company is aiming to boost its commercial lines market share from the current 8% to 24% in 2013.

The company is targeting a premium income of Rs 3.2 billion or $59.7 million, a three-fold rise from December 2012.

While, the general insurance industry is growing at 15-16% annually, Bharti Axa General expecting to grow by 35% in 2013.

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Religare Health Insurance’s Expansion Plans

Posted on January 30, 2013 by
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religare health insurance

Religare Health Insurance has collected Rs 23 crores as premium within seven months of entering the business in July 2012. So far, it has covered 94,000 lives. And going ahead, it has lined up slew of products and expansion in the coming 2-3 years.

Company has plans to introduce products in critical illness, maternity and life-style related categories.

Company is also planning to open about 30 branches across the country as a part of its expansion. At present, in Karnataka, company has four branches including one in Bangalore.

Company’s insurance cover extends to treatment undertaken at about 1,900 hospitals across 254 cities.

According to estimates, the health insurance market is about Rs 15,000 crores and growing at a compounded annual growth rate of about 25% annually.

According to the company, with healthcare costs going up by 15% in India every year, the overall market offers good growth opportunities. The growth of the market will also be fueled by increase in awareness in the next few years, as there is a definitive trend towards younger people taking to health insurance.

The average age of insured these days is between 35-40 years, which augurs well for health insurance in India.

Company’s loss ratio is relatively high in group insurance schemes, at almost 98%, while in the individual insurance segment, it is relatively lower at about 70%.

Religare Health Insurance is a joint venture among Religare enterprises, Union Bank of India and Corporation Bank.

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IRDA Invites Tender to Find Solution for Frauds in Health Insurance Segment

Posted on December 27, 2012 by
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IRDA

Insurance Regulatory and Development Authority (IRDA) has invited Request for Proposal from organizations for finding a solution for frauds in the health segment.

Insurers say that it would lead to a significant reduction in claims and would also mean reduction in premiums in long term.

In a notice, IRDA said that in order to reduce the cost of insurance inflicted by fraud, it is proposed to build advance detection and prevention systems at industry level to identify fraudulent claims before payment occurs and to improve the accuracy of fraud detection.

IRDA further said that initiative is intended to minimize cost at industry level by centralizing data without individual insurers having to necessarily resort to both software and hardware solutions for the purpose of fraud prevention, analysis and reporting.

Through this tender IRDA has proposed into a partnership with a bidder (company) to help detect, prevent, manage and control industry-wide frauds affecting the insurance industry.

Insurers say that this would lead to sharing of information about health insurance related fraud. The Consumer would also be benefited, since reduction in claims due to integrated repository of frauds would automatically lead to a drop in premium.

IRDA aims to enable the industry to underwrite the proposals effectively by getting up-to-date information, fraud alerts and medical history from the central database and also price products based on a reliable database.

IRDA is also looking to assist insurers to efficiently manage claims, so that genuine customers do not face hassles by getting relevant information on fraud and claim reporting patterns.

The last date for submission of the bid by the interested parties is 18 February 2013.

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SBI General Garnered Rs 425 Crores Premium in April-November

Posted on December 26, 2012 by
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SBI General Insurance

SBI General Insurance has collected a premium of Rs 425.47 crores during April-November 2012, which is a growth of 219% over the same period last year. Company is eyeing to cross a gross written premium level of Rs 700 crores in current financial year.

The company has expanded its presence to 30 cities and it will add another 10-15 cities to its network by the end of current financial year.

The rural sector accounted for 19% of its premium income during April-November 2012 amounting to Rs 80.02 crores.

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General Insurers Witnessed 25% Growth in Motor Insurance Segment

Posted on December 19, 2012 by
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Protected Car

Non-life insurance companies have witnessed a growth of 25.26% in motor insurance segment. Non-life insurance companies garnered Rs 13,626.6 crores during April-September 2012 from motor insurance segment compared with Rs 10,878.3 crores in corresponding period last year.

At present, there are 19 non-life insurance companies that are offering motor insurance.

Among the top private non-life insurers, ICICI Lombard General insurance topped the chart with 30.68% growth with their premium collection from motor insurance segment pegged at Rs 1,198 crores during April-September 2012 as against Rs 917 crores in the same period last year.

Bajaj Allianz General’s premium collection from motor segment for April-September 2012 stood at Rs 1,093 crores as against Rs 920 crores in corresponding period previous year, a growth of 18.75%.

New India Assurance reported a growth of 29.06%, highest among public sector non-life insurers. Its premium income from motor insurance segment stood at Rs 1,770 crores in April-September 2012 as against Rs 1,371 crores in corresponding period last year.

During April-September 2012, National insurance collected highest premium from motor segment of Rs 2,076 crores as against Rs 1,655 crores in corresponding period last year, a growth of 25.48%.

Meanwhile, health insurance segment has reported a modest growth at 11.39% in April-September 2012.

Out of the 23 general insurers who offer health insurance plans, five insurers have seen a negative growth.

ICICI Lombard General insurance has witnessed a negative growth of 10.45% in premium collection to Rs 687 crores during April-September 2012 compared with Rs 768 crores in the same period last year.

From health insurance segment, New India Assurance collected highest premium of Rs 1,529 crores in April-September 2012 as against Rs 1,304 crores in corresponding period last year, a growth of 17.23%.

Currently, New India Assurance has highest market share of 15% among general insurance companies. Followed by United India, National insurance and Oriental insurance which held 14.01%, 12.81% and 9.7%, respectively.

Among private sector non-life insurers, ICICI Lombard has captured 8.41% of the overall non-life insurance segment while Bajaj Allianz General represented 5.63%.

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