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GIC Re, New India Assurance soar 20% in range-bound market
Oct 16, 2019
Shares of general insurance companies were on a roll on Wednesday. Both General Insurance Corporation of India or GIC RE (Rs 258) and the New India Assurance Company (Rs 114) hit their upper circuit of 20 per cent on the BSE after a news report suggested that insurance sector posted a substantial growth rate in premiums.
In comparison, the S&P BSE Sensex was up marginally by 0.01 per cent at 38,510 points at 02:37 pm. The trading volumes on both these counters jumped by more than 10-fold, as compared to an average trading volumes in the past two weeks.
According to an Indian Express report, both life and non-life insurance segments saw robust growth in terms of premiums collected at least till the six-month period ended September 30 of FY20.
The general insurance industry in September grew by almost 40 per cent to Rs 19,047 crore. The public sector insurers have mopped up a premium of Rs 8,873 crore, up 43 per cent while the private sector companies have mobilised a premium of Rs 10,174 crore, up 37 per cent during September, the newspaper reported.
With a penetration level of just 0.9 per cent of GDP, the general insurance industry has multi-year growth headroom in India. Unlike life, general insurance is non-discretionary, making it virtually indispensable. But most contracts are annually renewable and switching costs remain low.
Analysts at HDFC Securities believe competitive forces will limit profitability of the motor-line and general insurers will be conservative in releasing reserves (only with better experience), reporting limited profit growth. They also risk regulatory action on commission payouts and third-party (TP) product pricing. The brokerage firm expects this to result in a tapering of growth for motor TP after the initial spurt.
Source: Business Standard
Four major cities face severe sea level rise threat
Oct 15, 2019
Four Indian coastal cities-Kolkata, Mumbai, Surat and Chennai-will be severely threatened by rising sea levels, says a UN body, the Intergovernmental Panel on Climate Change (IPCC), in its "Special Report on the Ocean and Cryosphere in a Changing Climate" released last month.
The four Indian cities are among 45 such coastal port cities globally where even an increase of sea level by 50cm will lead to flooding, says the report.
Sea levels, rising faster than ever before, are on course to rise one metre higher due to melting of ice in the business-as-usual scenario by 2100, severely affecting over 1.4bn people globally.
Sea level rise will increase the frequency of extreme sea level events, which occur for example during high tides and intense storms. Indications are that with any degree of additional warming, events that occurred once per century in the past will occur every year by mid-century in many regions, increasing risks for many low-lying coastal cities and small islands. Without major investments in adaptation, they would be exposed to escalating flood risks, the report states.
Hazards will be further be intensified by an increase in the average intensity, magnitude of storm surge and precipitation rates of tropical cyclones, especially if greenhouse gas emissions remain high.
“Various adaptation approaches are already being implemented, often in response to flooding events, and the report highlights the diversity of options available for each context to develop integrated responses anticipating the full scale of future sea level rise,” said Ms Valerie Masson-Delmotte, co-chair of IPCC Working Group I.
Source: Asia Insurance Review
Direct sales threatening brokers and agents in India – study
Sept 27, 2019
The rise of the direct sales channel is poised to weaken the traditional dominance of brokers and agents in the Indian general insurance industry over the next three years, a study by GlobalData has found.
The report, titled ‘Strategic Market Intelligence: General Insurance in India - Key Trends and Opportunities to 2022’, reveals that the share of direct sales in terms of total direct written premiums (DWP) will increase from 37% in 2017 to 42% by 2022 – at the expense of brokers and agents.
In 2017, DWP of India’s non-life insurance market was valued at INR1.1 trillion (US$17.1 billion), the report said. Agents held the largest share at 41.1%, followed by direct sales at 36.7% and brokers at 22.2%.
Direct sales recorded the fastest growth, increasing at CAGR of 21.0% during 2013 to 2017, mainly driven by a rise in online purchases. By 2022, DWP based on direct sales is projected to be valued at INR848.3bn (US$12.0bn).
In 2022, the study predicts that direct sales will be the largest channel with 42.4% of DWP, with agents shrinking to 38.7% and brokers down to 18.9%.
“Rising online purchase options, including social media and mobile-based payment applications, enable a wider scope for direct sales in general insurance products,” commented Sangharsan Biswas, senior insurance analyst at GlobalData. “Growing smartphone and internet penetration created a wider reach resulting in varied price points and product offerings. Insurers are deploying technology to further drive the growth of direct sales in India. They are now using artificial intelligence-based customer interface solutions such as chatbots for product queries, sales, and payment reminders. This has contributed to better customer relationship management, thereby supporting growth.”
Source: www.insurancebusinessmag.com
Upto Rs 5 lakh insurance free for Uber riders in India
Sept 26, 2019
The moment you board an Uber vehicle starting Wednesday, you will automatically be entitled to an insurance coverage of up to Rs 5 lakh, the ride-hailing giant said on Wednesday.
In case of an accidental death or disability, Uber riders will be able to claim a maximum of Rs 500,000. They will be able to claim up to Rs 200,000 for accidental hospitalisation, including maximum OPD benefit up to Rs 50,000 for per passenger free of charge.
Uber has partnered with Bharti AXA and Tata AIG for the insurance scheme which will cover all riders in cars, autos and two-wheelers.
"We are launching rider insurance for riders across our all modes transport which means cars, auto and moto (two wheelers). This insurance we are offering is completely free of cost and it is automatic. The moment you enter an Uber vehicle your insurance cover starts till the time your trip finishes," Pavan Vaish, Head of Central Operations (Rides) for India and South Asia, told IANS.
To report an accident to Uber, riders can go to the "Past Trips" section of the app and provide feedback on the ride. To navigate further, riders need to go to the menu and select "Help", then "Trip and Fare Review" and then "I was involved in an accident". Uber's 24x7 support team will then reach out to the rider and coordinate with the insurance partner to take them through the claim process.
"For smooth experience we have made the entire process cash-less and one needs to select the ride in the app, and fill a form with details. Soon after this, our team will get in touch with you for assistance," Pavan added.
The company recently rolled out free insurance for over 450,000 drivers registered on its ride-hailing app in India. The policy includes accidental death, disablement, hospitalisation and medical treatment.
The coverage offered includes Rs 5 lakh in the event of death, up to Rs 5 lakh for permanent disability, up to Rs 2 lakh in the event of hospitalisation, with a sub-limit of up to Rs 50,000 for outpatient treatment.
Source: Sify.com
Scooters, motorcycles, cars insurance premium increased from 16th June
June 12, 2019
Motorcycle and scooter sales have already been hit by the on-going slowdown in the auto industry and now increased third-party insurance rates may further dampen consumer sentiments. Increased third-party insurance rates were announced by Insurance Regulatory and Development Authority of India (IRDAI), a move that will help insurance companies to manage rising costs related to third-party claims settlements.
Revised third-party insurance rates will become effective from June 16, 2019. Anyone buying a new two-wheeler after June 16 or renewing their third-party insurance after this date will have to pay the increased rates.
However, IRDAI seems to have looked into consumer interests as well, as new rates are not too high. Revised rate for 75 cc to 150 cc two-wheelers, which is the largest segment, is Rs 752, which is just 4.44% more than Rs 720 earlier. New rate for two-wheelers below 75 cc is Rs 482, which is 12.88% more than Rs 427 earlier.
The highest increase in rates is for two-wheelers in the range of 150 cc to 350 cc. Third-party insurance rates for these bikes are up 21.11%, from Rs 985 earlier to Rs 1,193. The only segment spared from increased rates is above 350 cc segment.
At Rs 2,323, there is no change in third-party insurance costs for motorcycles exceeding 350 cc. Such bikes are fewer in numbers, so mathematically they have a lower probability of being involved in an accident.
IRDAI has also announced third-party insurance rates for electric two-wheelers, which are gaining momentum across the country. Rates for electric two-wheelers are based on their engine capacity, expressed in kW. For e-scooters below 3kW, the rate is Rs 410. For 3kW to 7kW, rate is Rs 639 and for those between 7kW to 16kW, rate is Rs 1014. Any electric two-wheeler above 16kW will be charged Rs 1975.
Federation of Automobile Dealers Associations(FADA) quote on Insurance regulation price hike – “The Automobile Industry is already going through a difficult phase with low sales & subdued customer sentiments. This sudden change in price hike of 3rd party insurance will again dent the pace of sales, specially the 2W category which is already reeling under price hike for mandatory 5 yrs insurance and ABS/CBD implementation.
We feel IRDAI should reconsider the price hike, as this increase would significantly impact the sales volume also affecting the insurance business. However, as the report says the proposed 15% discount on third party insurance on Electric Vehicles (private cars & two wheelers) is a welcome move through the sales of such vehicles are very minuscule.
Going forward, we would require substantial support from all quarters and specially the insurance industry to help the automobile industry to recover from the slowing demand affected by the uncertainty around NBFC and the previous regulation passed for collecting three and five years of premium for new cars & two-wheelers respectively.” – said Manish Raj Singhania, Hony. Secretary – F A D A.
Source: www.rushlane.com
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