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4 in 10 online health insurance buyers opt for US$6,800 minimum cover
Oct 05, 2018
Nearly four out of 10 Indians who purchase health insurance online prefer a minimum cover of INR500,000 ($6,800), a study by the Product and Innovation Centre (PIC) of Policybazaar.com has revealed. The study took into account the buying behaviour of more than 10,000 consumers purchasing health insurance online across 20 states.
The study also indicated that if Indian consumers buy less or more cover, then they have a preference for cover of INR300,000 or INR1m. While nearly 22% of consumers surveyed opted for the INR300,000 cover, more than 12% of the surveyed group chose cover of INR1m.
In terms of age-related findings, the study indicated that consumers in the age bracket of 26-45 years are the ones who are most active online in health insurance purchases, with nearly 75% of the survey audience belonging to this group, while 12% of the online sales were attributed to people between the ages of 45-60 year bracket.
"Healthcare costs are rising at an astronomical rate. Today, any lifestyle disease treatment costs anywhere between INR300,000-1m in a decent private hospital in the urban areas. As such, what was a INR200,000 average health cover bought 2-3 years back has become a INR500,000 cover today," said head of (PIC), Policybazaar.com, Mr Vaidyanathan Ramani.
"With growing awareness around the need for having a health cover and understanding of the existing treatment costs in hospitals, we expect the Indian consumer to opt for an even bigger umbrella to ensure a better protection for their family over the next few years," added Mr Ramani.
Another major finding of the study revealed that Delhi-National Capital Region consumers are the most active online, with nearly 25% of the purchases made by them in the overall digital health insurance landscape. Maharashtra came a close second, with almost 20% market share in health insurance purchases online. Other states featuring in the top five were Karnataka, 8%; Uttar Pradesh, 7%; and Gujarat, 5%.
Source: Asia Insurance Review
GIC Re gets top priority in reinsurance business
Oct 01, 2018
GIC Re, the sole Indian public sector reinsurer, will continue to retain the first right of refusal to reinsurance business in India.
The IRDAI in its board meeting on 28 September 2018 decided to continue with the current order of giving first preference to GIC Re. The long pending revised reinsurance regulations, now cleared, aim to ensure that the maximum possible reinsurance business is retained within the country.
According to a Bloomberg Quint report, the revised regulations would take effect from March 2019 when reinsurance contracts come up for renewal for the following 12 months.
The order of preference is as follows:
1. India’s largest reinsurer GIC Re;
2. Other Indian reinsurers that have been doing business for at least three consecutive years;
3. In case both GIC Re and Indian reinsurers refuse the business, preference will be given to foreign reinsurance branches in the country. Currently, GIC Re is the sole domestic reinsurer and nine foreign peers have opened local offices.
4. If at least four foreign reinsurance branches refuse to underwrite the risk, the business will go to insurance offices in the International Financial Services Centre, GIFT City—the tax-free hub set up in Prime Minister Narendra Modi’s home state Gujarat.
5. In case they refuse too, the insurer can then obtain best terms for reinsurance from cross-border reinsurers with a minimum credit rating of A- from S&P or equivalent rating from any other international financial and credit rating agencies.
Revised regulations based on Reinsurance Expert Committee (REC) report
The revised regulations are based on the recommendations of the REC which submitted its report in November 2017.
The REC, constituted by the IRDAI and headed by IRDAI former member (non-life) Mr M Ramaprasad, was set up in May 2017 to recommend steps to revamp existing reinsurance regulations and streamline reinsurance operations.
The IRDAI's order of preference has encountered objections from Insurance Brokers’ Association of India; Global Reinsurance Forum that represents over 67% of the world’s reinsurance capacity; and Global Federation of Insurance Associations representing insurance industry of 60 countries that account for around 87% of total insurance premiums worldwide. They had called the suggestions anti-competitive since they allowed GIC Re to maintain its monopoly.
Source: Asia Insurance Review
Kerala floods to have limited impact on strength of rated non-life insurers
Sept 28, 2018
Flooding in the southern Indian state of Kerala is not expected to have a significant impact on the balance sheet strength of rated Indian non-life insurers, says A.M. Best.
However, the losses may add to the unfavourable underwriting performance that the international credit agency has flagged as a negative rating factor for some of these insurers, says a new Best’s Briefing, titled, “Kerala Floods: Limited Impact on Rated Insurers’ Capital, May Add to Performance Issues”.
A.M. Best notes that Kerala represents a significantly smaller portion of the Indian non-life market and the international credit agency rated insurers’ overall gross premiums. Additionally, insurance penetration in India is low and insurance penetration in Kerala is estimated to be below the national average.
The cumulative rainfall this year during the 2018 summer monsoon period in Kerala was significantly higher than normal, and together with the release of waters from dams, created severe flooding in the region.
A.M. Best expects fire and motor to be the most impacted lines of business. Motor own damage is one of the leading sources of business, accounting for 30% of gross premiums in the state. Four large insurers, which wrote an estimated 70% of Kerala’s gross non-life premiums in 2017, are likely to absorb the majority of claims. The affected insurers rated by A.M. Best are expected to have adequate reinsurance protection, with deductibles that are small percentages of their premium base and capital sizes.
A.M. Best will continue to closely monitor developments at its rated insurers as more information becomes available on the ultimate gross and net impact of the floods on their profitability.
Asia Insurance Review
Insurance watchdog proposes regulatory sandbox
Sept 27, 2018
The insurance regulator IRDAI has mooted the idea of a regulatory sandbox for innovations in the FinTech and insurance space.
The IRDAI proposed a "regulatory sandbox approach" for a safe and conducive space to experiment with FinTech solutions where consequences can be contained, reports Times of India.
"In the recent past, new insurance companies and insurance intermediaries have carried out technological innovations in their products and services. The authority encourages companies to develop such new technologies to add value for customers, increase efficiency and better manage risks," said Mr S C Khunita, IRDAI chairman.
"Against the backdrop of a fast evolving financial technology landscape, where FinTech solutions are becoming more common and sophisticated, a responsive and forward looking regulatory approach will further enhance the ability of promising FinTech innovations to develop and flourish," he added.
In this regard, the regulator has formed a 10-member committee comprising IRDAI senior officials as well as representatives from insurance companies.
The IRDAI said that among the issues to be examined are: regulatory issues FinTech poses across the insurance value chain; developments in FinTech, practices followed in other financial sectors such as banking and capital markets, and practices followed in international jurisfictions such as Singapore, UK and Hong Kong. The committee would also seek feedback from industry participants and put a draft consultation paper in the next two months.
Source: Asia Insurance Review
Insurance market to be US$280bn industry by 2019-20, says Assocham
Sept 24, 2018
The Indian insurance industry is expected to grow to $280bn by the fiscal year ending March 2020 (FY2020), aided by the government's Ayushman Bharat health insurance scheme, industry chamber Assocham has said, citing a joint study conducted with research firm APAS.
Other growth drivers like rising disposable incomes, the presence of global players and easing of the regulatory regime, also help insurance penetration in the country, the study said.
“Several factors such as a growing middle class, young population and increasing awareness towards the need for protection and retirement planning will enable further growth," it said .
In a statement, Assocham said the study indicated insurance penetration in the country to have reached 3.7% in 2017, from 2.71% in 2001, and that gross premium had increased from INR3.2 lakh crore ($44 bn) in FY2012 to reach INR5 lakh crore in FY2018.
The government's ambitious Ayushman Bharat scheme covering 100m poor and vulnerable families with a cover of INR5 lakh per family of tertiary care and hospitalisation will be transformative for the insurance industry as it would have a major multiplier effect on a host of allied sectors and create lakhs of new jobs, it added.
According to the industry body, private sector companies, which presently hold close to 48% market share in the country's general insurance business and 29% in life insurance, will see a big growth in opportunities.
Source: Asia Insurance Review
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