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With e-wallets mushrooming, insurance companies move in

Jan 02, 2017

At a time when the government is pushing for cashless transactions and for use of digital payment platforms, the general insurance industry is exploring ways of developing products that will insure such transactions.

According to a top insurance industry executive, there have been preliminary talks on the process of insuring digital transactions and whether mobile wallets could be covered.

“There have been talks on protecting the loss when something happens on digital payments, whether there can be an insurance,” said R Chandrasekaran, secretary general of General Insurance Council, an industry association of insurance companies. You will find more and more insurance products to look at the financial loss, for instance, if a payment made via a mobile wallet doesn’t go through, it’s basically a financial loss,” he added.

A few days ago, mobile wallet company Freecharge launched a wallet protection plan for its users, in tie-up with Reliance General Insurance. Under this arrangement, the wallet balance of all the customers will be insured up to a limit of Rs 20,000, as long as the user is transacting at least once a month.

“Over the course of operations, we have realised that consumer perception of wallet safety is critical to drive both adoption and retention of our customers and hence we are offering this plan to our consumers free of cost,” said Govind Rajan, chief executive officer, Freecharge.

Rival Paytm is also insuring the last transaction conducted by a wallet user up to Rs 20,000, which is currently being underwritten internally.

“The original traditional lines of business like fire insurance, marine insurance, they continue to grow but their market share has gone down. The non-life insurance industry is moving from a traditional insurance to personal insurance to the next level of providing coverage for financial loss,” said Chandrasekaran.

For instance, the market share of fire insurance policies has gone down from 30% earlier to only 10% now as other products have grown.

For the year ending March 2017, premiums in the general insurance industry are expected to touch Rs 1.25 lakh crore, up 30% from Rs 96,000 crore last financial year. Between April-November, premiums had already touched Rs 81,000 crore.

The growth is also being driven by the government pushing schemes like the Prime Minister’s Fasal Bima Yojana (PMFBY), or crop protection scheme, which is expected to contribute around Rs 18,000 crore in premiums this financial year, and the Indian Railways insurance scheme for passengers.

The IRCTC launched optional insurance scheme from September this year, which allowed travelling passengers to get insurance cover up to Rs 10 lakh on booking train ticket online for 92 paise. Since earlier this month, this accident insurance cover is being given for free in the wake of the government’s drive to promote cashless transactions.

Source: The Hindustan Times

Health insurance: Hiding pre-existing diseases can lead to rejection of claims

Dec 09, 2016

IF you have ever bought a health insurance policy, you may have come across a section pertaining to pre-existing diseases while filling up the application. It is one of the most important disclosures that you make while purchasing a health plan. Based on this, the insurer decides on the pricing and whether you are eligible for the insurance cover. People often hide or provide incomplete information in this disclosure that results in rejection of their claims later.

Suppose you are a 35-year-old and have bought a health insurance policy in which you have declared that you have no pre-existing illness. A year before you purchased the policy, you had actually undergone a treatment to get rid of kidney stones but you didn’t bother to mention the same in your application because that medical condition has been taken care of.

Now, two years down the line, you are hospitalised due to some medical emergency. On sending the hospital bill to the insurer, your claim gets rejected. It’s because you did not disclose your pre-existing illness or the operation that you had to undergo to remove your kidney stones. Thus a pre-existing disease clause not only covers any existing medical conditions that you may be having at the time of buying insurance but also any such condition that you may have had before the policy purchase.

Policy denial

Most health insurers do not issue a health policy to an individual who has or has had a pre-existing illness. This is because the chances of falling sick in such cases are higher, thus increasing the risk for frequent claims for insurance companies. For instance, if you are a 40-year-old and suffer from a severe heart ailment, an insurer has the right to reject your request.

Most health insurers do not issue a health policy to an individual who has or has had a pre-existing illness. This is because the chances of falling sick in such cases are higher, thus increasing the risk for frequent claims for insurance companies. For instance, if you are a 40-year-old and suffer from a severe heart ailment, an insurer has the right to reject your request.

Premium loading

Your pre-existing illness has made you a high-risk customer, thus the insurer manages the increased risk by loading your premium. Premium loading is usually the scenario wherein the insurer increases your premium in order to cover additional costs that may arise due to your existing medical condition.

For instance, for a 35-year-old healthy male, a health cover of R5 lakh would be available at a premium of R4,000-10,000. However, the same cover for a 35-year-old individual with diabetes would cost R6,000-19,000 annually. The substantial increase in premium is called loading as the insurer has calculated the additional cost within the premium.

Waiting period

Unfortunately, policyholders with pre-existing medical conditions cannot depend on their health policies in case they have medical emergencies due to their existing illness. This is because insurers have a buffer period of two to four years, called waiting period, for pre-existing diseases. For a 35-year-old individual with diabetes, the waiting period is four years, which means that the insurer will cover his existing illness only after the policy is renewed in the fifth year.

To conclude, a pre-existing illness hikes your health insurance premiums substantiall. However, it does not mean that you should hide your medical history or condition from the insurer. After all, an insurer has the right to reject your claim if you have not been true to them. The only way to buy a health insurance policy at a cheaper price is to buy it early when the chance of falling ill is minimal. The writer is co-founder & CEO,

Source: The Financial Express

Increasing pollution underlines need for health insurance

Nov 22, 2016

A study by the Central Pollution Control Board (CPCB) has identified 41 Indian cities where the air quality is poor. Coupled with water pollution, the resultant health hazards are many. The cost of treating respiratory, cardio-vascular and waterborne ailments can be high and the need of the hour is health insurance.

“We have seen a 15-18% rise in water pollution-related claims and 12-15% rise in air pollution-related claims on a CAGR basis for the last three years,” says Abhijeet Ghosh, Head, Health Insurance, Bajaj Allianz General Insurance. The average claim size varies between Rs 25,000- 28,000 annually. At Future Generali India Insurance, respiratory/pulmonary disorder-related hospitalisation claims have risen from 4.30% to 7.5% in three years. ICICI Lombard General Insurance has also seen an increase in claims, mainly related to complications arising from consuming contaminated water. “Pollution has led to increase in diseases. The average cost that one incurs due to hospitalisation has increased from Rs 41,391 in 2015 to Rs 45,104 in 2016,” says Sanjay Dutta, Chief, Underwriting and Claims, ICICI Lombard.

According to Nikhil Apte, Chief Product Officer, Royal Sundaram General Insurance, the claims reported for communicable diseases are more than lifestyle-related diseases. “Severity and incidence have both gone up. Many diseases that could earlier be treated on OPD basis now require hospitalisation,” adds Mukesh Kumar, Executive Director, HDFC ERGO General Insurance Company.

You can opt for a comprehensive standard policy or an OPD cover. OPD cover wortks for patients who require frequent visits to doctor. “OPD cover is a better way to deal with pollution-related diseases because in this the patient need not necessarily be admitted to hospital,” says Dutta. For most cases, however, it is advisable to take a comprehensive, adequate standard plan for whole family.


Air pollution:
The fifth leading cause of death in India. It results in about 620,000 premature deaths triggered by stroke, chronic obstructive pulmonary disease (COPD), ischemic heart disease, lower respiratory infections and trachea, bronchus and lung cancer, among others.

Water and sanitation: About 37.7 million Indians are affected by waterborne diseases annually. Around 1.5 million children die due to diarrhoea alone.

Source: The Economic times

Reinsurer Lloyd's gets IRDA nod to operate in India

Nov 14, 2016

Insurance Regulatory and Development Authority has approved London headquartered specialist insurance and reinsurance market Lloyd’s application to provide onshore reinsurance services in India.

Lloyd’s, which secured R1 approval from IRDA, plans to set up a branch in India next year.

John Nelson, Chairman, Lloyd’s said it can bring unique benefits to India by providing both protection and new opportunities for many domestic insurance businesses.

“I believe that our presence will contribute to the development of a more diverse reinsurance market, which is fundamental to the stability and future growth of the Indian economy. This can help position India as a centre for insurance, reinsurance and associated services,” said Nelson who is in Delhi as part of the United Kingdom Prime Ministerial trade delegation.

The progress India is making in reforming reinsurance markets is encouraging and will bring lasting benefits to the Indian economy. A level playing field for all re-insurers will mean that domestic market can thrive and become a hub for innovative new products that meet the need of businesses, he said.

Lloyd’s filed application with IRDA in March for setting up a reinsurance branch in Mumbai. It appointed Shankar Garigiparthy as Country Manager for India in April. In 2011, Shankar joined Arun Agarwal as Lloyd’s General Representative in India.

Lloyd’s believes its market structure will bring additional underwriting expertise and capacity to the local market and working with brokers and clients to craft policies that meet specific needs and fill gaps in the market.

Lloyd's is often the first to insure new, unusual and complex risks, providing innovative insurance solutions for local, cross border and global risks. Its strength lies in the diversity and expertise of the brokers and managing agents working at Lloyd’s, supported by capital from across the world.

Source: The Hindu Business Line

Demonetization effect: Cash-carrying companies seek to double insurance coverage

Nov 14, 2016

Cash-carrying companies are seeking higher insurance cover after the government scrapped Rs 500 and Rs 1,000 notes.

Sanjay Kedia, country head and chief executive officr of Marsh India, said cash-carrying companies were expecting a spurt in liquidity and had ramped up storage facilities across India.

He added most cash-carrying companies were seeking to more than double their per-location insurance coverage. A few companies are asking for insurance limits as high as Rs 500 crore per location. Insurance industry executives said this was a temporary situation, only till customers had adequate cash.

Insurance companies provide coverage against theft and other contingencies to companies that manage cash and ATM machine functioning. Banks also take cover for ATM machines against theft or damage due to natural disasters and other causes. Industry sources said smaller banks that usually took cover of Rs 1-2 crore were now demanding cover as high as Rs 20 crore. This is because of the greater amount of cash being transported.

Public sector insurers are active in this segment and private players also offer cover for specialised needs. This specific cover is customised to individual needs and may cover cash in transit and personnel who are carrying the cash.

Sanjay Datta, chief, underwriting and claims, ICICI Lombard, said that higher cover was being sought because of the higher number of cash transits till the situation returned to normal.

K G Krishnamoorthy Rao, managing director and chief executive, Future Generali India Insurance, explained with more frequent replenishment requirements, the demand for insurance would go up.

Source: Business Standard

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