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Delta Insurance to offer cyber insurance and security suite for SMEs
Aug 19, 2021
Delta Insurance Singapore has teamed up with IT managed services provider Stone Forest to provide cyber insurance and cybersecurity services for small and medium enterprises (SMEs) in Singapore.
Data from Singapore’s Cyber Security Agency showed that cyber crime accounted for 43% of all criminal activity in Singapore in 2020. Remote work arrangements fuelled a surge in ransomware attacks and phishing activities, with most of the victims being SMEs. The average cost of a cyber attack for a Singapore business stands at SG$1.7 million per breach, according to McAfee.
Delta’s SME cyber insurance product covers crisis-management costs including, but not limited to, data forensics, breach consultation services, restoration, breach response services and PR (including personal reputation), business interruption, network extortion, and third-party liability claims.
Stone Forest provides a range of business advisory services in accounting, payroll, IT, staffing and corporate secretarial. Its managed services offering, known as AvailEase, offers various workplace and IT services. AvailEase’s framework will provide due diligence in cybersecurity protection and its standardised IT processes eliminate the need for lengthy underwriting processes when obtaining cyber cover.
The insurer will also bundle its personal cyber insurance into its SME cyber insurance offering. This feature offers protection for individual key executives and employees against cyber risk on their devices. This includes personal risk assessment and monitoring services on the individual’s email addresses, credit card numbers and phone numbers for breaches and possible presence on the dark web.
“During the pandemic, most people are working remotely,” said Eugene Cheong, managing director of Delta Insurance Singapore. “This has led to an increase in the use of home or personal devices for work and as a result an increase in personal cyber risk. Our objective is to provide the most relevant and valuable solution to cater to the fast-changing cyber environment not just for businesses but for individuals as well.”
MG Astor is the first car in India to use blockchains to manage insurance fees, resale values
Aug 18, 2021
The upcoming mid-size SUV MG Astor has been mostly talked about for implementing level 2 autonomous technology, but perhaps a more interesting aspect of the car is in how the company is using blockchains on it. Like most connected vehicles today, the MG Astor also records information on the user’s driving prowess. MG has partnered with homegrown blockchain firm Koinearth, to record this data into something called a “Digital Passport".
For the customer, the digital passport is simply an interface on the app, which shows the data the car has recorded. However, Praphul Chandra, chief executive officer of Koinearth, explained that it is at the centre of a blockchain-based platform that connects various parties. In this case, the passport is created by MG Motors, but the data in it is owned by the user, meaning they will have to explicitly provide consent before someone else can access this data.
The platform will include the auto-maker, insurance firms and even resellers, to use this data for future decisions. For instance, insurance premiums for a good driver can be lower than that of someone whose Passport data shows that they drive more recklessly. Similarly, when the customer sells their car in future, service records etc. can be stored on the Passport to help determine the resale value.
MG Motors will work with multiple insurance and reseller companies, who will have to join the platform. Access to the Passport is recorded on the blockchain and the data can only be accessed once the user has provided their consent. The automaker hasn’t disclosed which insurance companies and resellers have joined hands with it at the moment.
Unlike the MG Astor’s autonomous tech touted by the company, the Digital Passport is actually a first of its kind feature automakers in India.
That said, similar technology has been used globally. Europe’s largest insurer, Allianz, had announced an enterprise blockchain platform in July, which allows the company to simplify the insurance claims process across its different legal entities across the continent. The company plans to deploy the solution in 23 of its European subsidiaries.
Similarly, KPMG and a company called IntellectU had partnered to develop a blockchain based solution that aims to reduce insurance fraud in March this year. The solution keeps users from committing fraud by filing insurance claims with multiple companies for the same incident. It does so by connecting these companies using a blockchain platform, which means filing a claim with one will automatically be seen by the other.
Insurers look to IRDAI to hike premium
Aug 17, 2021
Amid mounting losses facing general insurers, the insurance regulator is understood to be examining the proposal to increase the premium for Covid-specific cover, but a decision is yet to be taken.
According to sources close to the development, the Insurance Regulatory and Development Authority of India (IRDAI) is set to call a meeting of the actuaries to further discuss the issue of re-pricing of Corona Rakshak and Corona Kavach policies.
Non-life insurers, which had earlier also made a representation to increase the premium for these policies, have now pointed to their Q1, saying it is difficult to survive without a hike in the rates of these policies. “Non-life insurers are bleeding on the back of huge claims on health covers due to Covid. The combined ratios of many private sector general insurers are as high as 125 per cent.
“A review of the rates of these policies is much needed, especiallysince their premium is so low,” noted the head of a general insurance company.
Another insurance executive said companies are awaiting further word from the IRDAI to come out with revised rates. “There has been some discussion, but we are still waiting for further directions,” he said.
The Corona Kavach and Corona Rakshak policies were launched last year by all insurers to provide Covid-specific cover to customers.
Corona Kavach is a family health insurance policy for Covid-19, while Corona Rakshak is a defined benefit policy. Premiums for these policies are as low as ₹150 in some cases.
The third wave
The second wave of the pandemic led to a rise in claims by at least two to three times for health insurance compared to the first wave last year, and insurers are now preparing for a third wave as well.
Some companies have also indicated that they may increase premiums for health cover across the board this year.
Insurance companies have paid Covid-related health claims of over ₹15,000 crore since the start of the pandemic.
Crop Cover: Centre looks for new ways as states opt out of PMFBY
Aug 17, 2021
Since several states have opted out of the Centre’s flagship crop insurance scheme Pradhan Mantri Fasal Bima Yojana (PMFBY), the Union agriculture ministry has asked National Rainfed Area Authority (NRAA) to suggest alternative risk mitigation measures for high-risk areas/crops. The idea is that low risk crops could still be covered under PMFBY with reduced burden of premium on the states.
Already, Gujarat, Andhra Pradesh, Telangana, Jharkhand, West Bengal and Bihar exited the PMFBY scheme, citing the cost of the premium subsidy to be bore by them. Madhya Pradesh joined late in the current kharif season while Tamil Nadu opted out.
“Each of the 15 agro-climatic zones in the country is spread over a vast geographical area where many crops are recommended by the Indian Council of Agriculture Research. However, there is a need to identify low-risk crops in a particular cluster, comprising one or more districts, within a climatic zone,” a senior government official said.
Under PMFBY, premium to be paid by farmers is fixed at 1.5% of the sum insured for rabi crops and 2% for kharif crops, while it is 5% for cash crops. The balance premium is split equally between the Centre and states. Many states have demanded their share of the premium subsidy be capped at 30%.
Currently, there is no pan-India fixed actuarial premium rate under PMFBY and it varies from area to area and crop to crop. Actuarial premium rates charged by the insurance companies are determined through bidding conducted by the states. Most insurance companies adopt “experience method’ in which base premium is calculated based on the loss cost/burning cost — premium required to meet the claims based on the experience of past premium and claims. States also provide yield data of past 10 years and indemnity level to insurance companies to help them arrive at premium calculation before submission of bids.
So farmers are tempted to select crops based on monetary returns without assessing the associated risk factors as there is no such information available. The task before NRAA is also to recommend alternate crops for water-guzzling crops like paddy and sugarcane in view of depleting ground water resources, the sources said. For instance, the premium for paddy and sugarcane can be much higher in a water-scarce cluster, compared to their alternatives.
The NRAA has hired some professional agencies to conduct the nationwide survey and may submit its report in six months, the sources added.
The country has been divided into 15 agro-climatic regions, identified on basis of soil type, temperature, rainfall and water resources availability.
According to a report of the parliamentary standing committee on agriculture, submitted this week, the agriculture ministry has said that most of these states have opted out of the PMFBY due to their financial constraints and not because the scheme is unpopular among the farming community. The committee has also asked the ministry to change the guidelines that stipulated to disallow states in implementing PMFBY in next season if they fail to release of subsidy premium within deadline. The parliamentary panel has expressed apprehension that this provision “may lead to withdrawal of states from the scheme.”
“Withdrawal/non-implementation of PMFBY by more states in subsequent years will defeat the very purpose for which the scheme was launched. The Committee, therefore, recommend the Department to properly look into the reasons/factors leading to withdrawal/non- implementation of the PMFBY by Punjab, Bihar, West Bengal, Andhra Pradesh, Gujarat, Telangana and Jharkhand and to initiate suitable steps so that States continue to implement the Scheme and farmers reap the benefit of the Scheme,” the report said.
Last month, the Centre wrote to the state governments seeking their views on including the so-called ‘Beed formula’ as an option under PMFBY amid several states developing cold feet on the scheme. The Centre in February last year had changed the guidelines and allowed states option of three-year contract with insurers on the premium charged in crop insurance. States also can continue with the existing system of inviting bids for premium every year, as per the guidelines. Under the ‘Beed formula’, also known as the 80-110 plan, the insurer’s potential losses are circumscribed – the firm won’t have to entertain claims above 110% of the gross premium. The insurer will refund the premium surplus (gross premium minus claims) exceeding 20% of gross premium to the state government. Of course, the state government has to bear the cost of any claims above 110% of the premium collected to insulate the insurer from losses, but such higher level of claims rarely occur, so the states reckon the formula in effect reduces their cost to run the scheme.
Insurers have settled about 6 out of 10 Covid claims so far
Aug 2, 2021
The settlement of Covid-related health insurance claims is hovering around 60 per cent of the total claims made so far.
According to the latest industry data, as on July 19, 2021, total reported claims stood at ₹27,640 crore, of which, only claims worth ₹16,396 crore have been settled.
On an average, the settled amount ranges between 55 per cent and 65 per cent of the claim .
In the first wave of the pandemic (up to February 22, 2021), insurers reported claims worth ₹13,736 crore, of which ₹7,125 was settled. In the second wave – from February 23 to July 19 – general and standalone health insurers received claims worth ₹13,905 crore, of which ₹9,271 crore has been settled.
When contacted, the chief of a private general insurer said: “Settlement of Covid claims has been a challenge as most customers tend to claim much higher than what they are eligible for under various schemes.
“In some cases, claims are not supported by valid documents. In very few cases, we have detected fake documents, including Covid certificates.”
Intensity of second wave
The intensity of the second wave of the pandemic is also testified by the number of claims.
“The number of claims we received during the few months of the second wave are higher than the claims reported during the entire first wave of Covid-19,” said Sanjay Datta, Chief - Underwriting & Claims, ICICI Lombard said.
According to TA Ramalingam, Chief Technical Officer, Bajaj Allianz General Insurance, Covid claims constituted 45 per cent of the overall health claims during the first quarter of the current fiscal compared to 17 per cent in the same period last year.
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