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General insurance industry misses Rs 1 lakh-crore premium target; garners Rs 96,400 crore in FY16

Apr 17, 2016

The general insurance industry has missed the ambitious target of crossing the Rs 1 lakh-crore mark in premium collection by a small margin at Rs 96,401 crore, up almost 14% in the just concluded fiscal.

In FY15, the general insurance industry had clocked a premium income of Rs 84,715 crore.

The growth this fiscal was driven by motor and health insurance segments, which are traditionally the largest segments of the industry.

The four public sector players notched up a premium income of Rs 47,717 crore while 18 private players garnered Rs 39,701 crore and the two specialised operators netted Rs 4,830 crore and health insurers added up with Rs 4,153 crore, a General Insurance Council data showed.

The general insurance industry has 30 players with four state- run players, one state-owned reinsurer GIC Re, two specialised government-run entities -- Export Credit Guarantee Corporation (ECGC) and Agricultural Insurance Company -- five standalone health insurers and 18 private players.

"We have achieved total premium of Rs 96,400 crore in FY16, falling short of our ambitious target of Rs 1 lakh crore by a small margin," General Insurance Council general secretary R Chandrasekaran said.

Blaming the late arrival of the relaxed norms on credit line insurance from the regulator Irdai, which issued the norms in February. He, however, maintained that taking into account inward (reinsurance) business, the industry has already crossed gross written premium of Rs 1 lakh crore-mark.

The industry has done well in 2015-16 with a growth of 13.8%, which is much higher than the previous year's 10%, New India Assurance Chairman and Managing Director G Srinivasan said.

"We are targeting a total premium collection at Rs 20,500 crore in the current fiscal as against Rs 18,300 crore in FY16," he added.

New India saw growth in all the segments -- retail sector (including a personal line of business comprising health and motor insurance) has grown much faster than the corporate segments like fire & engineering and marine in 2015-16, Srinivasan added.

At New India, which is the largest player, the ratio between retail and corporate conventional products stands at 65:35, he said.

Srinivasan expressed hope that the current fiscal will be better than the last year due to increase in premia in segments, like fire and engineering and third-party motor cover.

Engineering and fire are also likely to perform better in the fiscal due to new projects coming up and the revival of the country's economy, he added.

"Secondly, we believe FY17 should be a catastrophe-free year as we had to pay Rs 500 crore in claims due to the Chennai floods last year," he said.

The ‘Jan Suraksha Bima Yojana’ has contributed to the growth of personal accident insurance at New India, apart from creating awareness in the industry, he said.

National Insurance has closed the year with a total premium of Rs 12,000 crore and is targeting to close the current fiscal at Rs 14,000 crore, National Insurance chairman and managing director K Sanath Kumar said.

He also said the growth has been driven mostly by health and motor segments.

ICICI Lombard chief of underwriting and claims Sanjay Datta said: "In case the infrastructure sector does well, then the engineering segment is set to see a better growth in the current fiscal."

"Yes, ‘Jan Suraksha Bima Yojana’ has picked up well. Though the low-ticket segment didn't help much in getting premium income, still it did help get bigger coverage in the personal accident line," he said.

Source: DNA

Rs 5 Lakh Free Insurance With LPG Cylinder. Did You Know?

Apr 17, 2016

You buy different insurance covers to protect against various risks. But are you aware of the free insurance covers that you get with your LPG cylinder or an air ticket that you buy? Here are some of the insurance covers that you get for free:

Insurance cover for LPG users: All registered LPG (liquefied petroleum gas) or piped cooking gas consumers are covered for any mishap caused due to LPG cylinders at their registered address. The cost of insurance is borne by oil marketing companies. According to the website of Bharatgas, the distributor of LPG for Bharat Petroleum, a personal accident cover of Rs 5 lakh per person in case of death is provided. In case of an accident, medical expenses of Rs 15 lakh per event, with a maximum of Rs 1 lakh per person are covered.

The policy also covers the damage caused to the registered premises of consumers for a maximum sum of Rs 1 lakh per event. Piped gas consumers are also insured under this policy.

Insurance with bank deposits: Your money deposited in a bank account - both principal and interest - is insured up to Rs 1 lakh for any default by the bank. It covers all deposits such as savings, fixed and recurring.

However, for claim purpose, all the deposits made under these accounts will be added and a maximum of Rs 1 lakh cover will be given to each depositor. Even if you have deposited in different branch of the same bank, you will get a maximum cover of Rs 1 lakh.

However, banks accounts with different banks are insured separately with a maximum cover of Rs 1 lakh each.

Corporate Deposit Insurance: As per the new Companies Act, any company raising money via deposits will have to provide an insurance cover of up to Rs 20,000 to every investor against default of payment.

Both the principal and interest earned on a company deposit are insured under this cover. "But currently there is no product available in the market which provides corporate deposit insurance. There are no regulations from Insurance Regulator and Development Authority of India (IRDA) which allow insurance companies to provide insurance products for corporate deposit," says Sanjay Datta, chief underwriting and claims, ICICI Lombard General Insurance Company.

Baggage insurance with air ticket: In case of domestic travel, airlines provide an insurance cover of Rs 20 lakh each person in case of death and bodily injury while Rs 20,000 in case of loss of baggage.

Source: NDTV Profit

Insurance Company Told to Cover Tsunami Damages

Apr 07, 2016

The Madras High Court has overruled an insurance company that had denied the claims of a shipping company for losses caused by a tsunami to the shipping company’s barges.

SBK Shipping Private Limited, Cuddalore Harbour entered into a insurance contract with United India Insurance Company Limited, insuring its four barges. Clause IV of the contract states that the insurance covers loss or damage to the subject matter caused by perils of the seas, rivers, lakes or other navigable waters. It also covers loss caused by other actions such as fire, violent threat and piracy where as Clause V of the contract states that the insurance shall not cover loss, damage, liability or expenses caused by earthquake or volcanic eruption.

United India Insurance Company denied the claims for damage of barges suffered by SBK Shipping Private Limited stating the losses fall under the category ‘Perils of the Sea’ and since an earthquake (not the tsunami) was the ‘proximate cause’ (as distinct from ‘remote cause’), the losses suffered by the shipping company are excluded from insurance claims.

The division bench comprising Justice R Sudhakar and Justice S Vaidyanathan dismissed United India Insurance Company’s appeal saying, “We are unable to accept the argument of the Insurance company that the earthquake is the proximate cause for the damage of the vessel. On the contrary, it is the remote cause. If the tsunami, a peril of the sea, is the direct cause for the damage, there is no need to embark on further enquiry as to what is the proximate cause of tsunami. The proximity is in relation to the damage and if the claim answers the same it is maintainable,” the judges said.

“Scientifically it is stated that the earthquake was the cause of the tsunami, but for persons who suffered the wrath of the tsunami in TN, the earthquake is virtually a remote cause. The proximate cause for the damage caused to the property is giant tidal waves of tsunami, a ‘peril of the sea’ and not the earthquake,” the judges stated.

Source: The New Indian Express

Third party insurance to cost more

Mar 29, 2016

Come Friday, premium rates for the mandatory, third party insurance cover are set to increase for various categories of motor vehicles, including by a steep 40 per cent for private cars in the 1000-1500 cc segment.

Setting the stage for the hike was an order of the Insurance Regulatory and Development Authority of India (IRDAI) on Monday notifying the premium rates for 2016-17.

The order, which follows an exposure draft issued earlier this month mooting a 3 to 30 per cent hike in the rates for different vehicles, pegged the premium for private cars (not exceeding 1000 cc) at Rs.2,055.

This will be over 28 per cent more compared to the Rs.1,468 premium that such owners need to pay at present. The draft had proposed a premium of Rs.1,908.

For private, 1000-1500 cc cars, a segment which features some of the popular, fast moving models such as Maruti Swift, Honda Amaze and Ford Ecosport, the premium will be Rs.2,237.

The existing rate is Rs.1,598 while the draft had proposed Rs.1,998.

For the cars above 1500 cc, the new premium rate is Rs.6,164 or 25 higher compared to the Rs.4,931 that is levied now.

The draft had also proposed Rs.6,164. The new rates of third party premium for two wheelers is as follows, similar to what was the exposure draft had suggested: Not exceeding 75 cc – Rs.569 (existing Rs.519); 75 cc-150 cc – Rs.619 (Rs.538); 150 cc-350 cc – Rs.693 (Rs.554). There is a reduction in the premium for two-wheelers over 350 cc from Rs.884 to Rs.796.

IRDAI’s Senior Joint Director Suresh Mathur said some stakeholders had wanted the minimum increase in the rates to reflect the increase in Cost Inflation Index over the year.

The Authority, however, decided not to increase the proposed premium rates in such cases and keep the premium as proposed in the exposure draft.

No cancellation

Insurers, he said, are not permitted to cancel the current insurance policies and issue fresh policies to effect new premium rates.

While maintaining the existing rates for some category of goods carrying vehicles, public carriers (other than 3 wheelers), the regulator has notified an increase, ranging from 15-30 per cent for others.

Source: The Hindu

ARTICLE: "How health insurance policies and hospital malpractices take patients for a ride"

Mar 29, 2016

In January 2015, life took an unexpected turn for author Naina Rao (name changed) when she was diagnosed with ovarian cancer. Over the next year, in the midst of all the hospital visits, surgery, chemotherapy, physical pain and emotional turbulence, she had to contend with another unwanted beast: a health insurance company inexplicably rejecting her claim.

Rao and her husband had signed up for a health insurance plan with a private sector insurer in 2011. The policy, at a premium of Rs 50,000 for two years, offered “cashless” treatment at all major hospitals in Mumbai. In other words, the hospital bills would be settled directly by the insurance company at the time of discharge. When it was time to renew the policy in 2013, the agent offered the couple a better plan for the same premium amount, assuring them that the new plan would be considered “continuous” with the old plan of 2011 – they would not be considered as new clients...

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