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Health insurance for government staff renewed
Jul 8, 2016
The State government has enhanced the coverage under the health insurance scheme for government employees and extended the scheme to cover treatment for cancer and organ transplant surgeries.
The government has extended its insurance scheme for another four years, up to June 30, 2020.
The insurance scheme that was implemented in 2012 for four years through the United India Insurance Company expired on June 30 and was due for renewal.
Rs. 7.5 lakh-coverage
Government employees, who are beneficiaries of the Chief Minister’s Comprehensive Health Insurance Scheme, can expect to be covered for up to Rs. 7.5 lakh of the treatment cost.
A release said the government had extended the scheme to cover dependents of beneficiaries with 40 per cent disability, irrespective of their age.
Henceforth, accident victims admitted to a hospital that was not empanelled under the scheme would be covered, the government has announced. It had extended cover to hospitals not empanelled in the scheme if and when victims of accident were admitted to such hospitals for treatment.
Under the scheme, the employees had to pay a premium of Rs. 180 a month and the government would pay Rs. 17.90 crore to the insurance company.
According to the release, around 10.22 lakh employees and their families were expected to benefit from the scheme.
Source: The Hindu
Insurance penetration in India stays low at 3.44%
Jul 1, 2016
Insurance premium jumps 7.9% to $72 billion in 2015: study
Despite insurance premium collection in India witnessing a growth of 7.9 per cent, penetration of insurance in the country remained low at 3.44 per cent, says a global study by Swiss Re.
Insurance penetration, which is measured as a percentage of premiums to a country's gross domestic product (GDP), stood at 3.44 per cent in 2015, compared to the global average of 6.23 per cent. Advanced markets posted penetration of 8.1 per cent, led by Japan, which witnessed insurance penetration of 10.8 per cent, UK (10 per cent) and France (9.3 per cent).
Insurance penetration level in India was better against the emerging market at 2.9 per cent. However, Brazil and China have registered higher penetration at 3.9 per cent and 3.6 per cent, respectively.
“Insurance companies have seen their foreign partners increasing stake in Indian entities and taking the insurance business in the country seriously. Higher incomes and savings, coupled with changing lifestyles, are expected to drive rising insurance penetration in the country,” said Sandeep Patel, MD and CEO, Cigna TTK Health Insurance.
Total insurance premium in India grew by 7.9 per cent to $72 billion in 2015, compared to a contraction of 1.2 per cent in 2014. The improved performance was aided by stronger growth in both life and non-life premiums.
Life premium rose 7.8 per cent to $57 billion, compared to a contraction of 2.1 per cent in 2014. The recovery was underpinned by investment-linked products, which posted strong growth through bancassurance channels.
Non-life premium increased 8.1 per cent to $15 billion, compared to the growth of 2.2% in 2014. Growth was led by stronger health (including personal accident) and motor third-party liability premiums.
In India, insurance density, which is premiums per capita, stood at $55, against $281 in China and $332 in Brazil. The UK and the US posted insurance density of $4,359 and $4,096, respectively.
Global insurance premiums grew by 3.8 per cent in 2015, compared to 3.4 per cent gain in direct insurance premiums written in 2014. There was a slight slowdown in the life sector in 2015, with global premium growth dipping to 4 per cent from 4.3 per cent due to weaker performance in the advanced markets. On the non-life side, strong growth in the advanced markets of Asia and improvement in North America and Western Europe, contributed to a 3.6 per cent increase in global premiums, up from 2.4 per cent growth in 2014.
"Interest rates and the macroeconomic and financial market environments will continue to shape the outlook for the insurance industry," said Kurt Karl, chief economist at Swiss Re.
"With profitability under pressure, life insurers will continue to focus on improving capital management, lowering expenses and enhancing investment yields. Profitability in non-life will also remain subdued on still-low investment returns and soft pricing conditions," he added.
Source: Financial Chronicle
United India Insurance to go in for price rationalisation
Jun 24, 2016
United India Insurance Company Ltd. has decided to go in for rationalisation of product pricing to improve profitability, according to a top official.
“Our thrust will be on charging appropriate rates for our products,’’ United India Chairman-cum-Managing Director A. Hoda said in an interview here on Thursday.
Mr. Hoda said price rationalisation was a part of an exercise to beef up the profitability of the insurer.
A combination of factors such as wage arrears-related outgo and losses due to unprecedented floods in Chennai late last year had seen its profit after tax slip to Rs.221 crore in 2015-16 from Rs.300 crore in the year-earlier period.
Right pricing
Mr. Hoda said the focus this year would be on improving both the bottom and top lines. He asserted that right pricing of assorted risks was a key to this objective.
The insurer, he said, was also planning to make a foray into products for the agricultural sector even as it stepped up its focus on personal line business. All these initiatives would help considerably increase the bottom line of the company, he said.
The company had set itself a gross premium target of Rs.14,444 crore this year. The insurer wrote a gross premium of Rs.12,250 crore in 2015-16.
Mr. Hoda said property and marine insurance had been dwindling in importance. Though they continued to grow in absolute numbers, they had been declining in relative terms.
Consequently, the company, he said, was giving a big push to retail segment comprising motor and health insurance.
A host of factors – ranging from high cost of treatment to the increasing propensity of corporates to offer health cover to attract talent – had seen health insurance practices in India aligning with those in western countries, he said.
Going digital
With the market dynamics changing fast and modern youth driven by technology, he felt the public sector insurer had to quickly go the digital way.
According to him, online sales fetched less than Rs.100 crore in premium for the company last year.
The company was working to plug this gap by offering an end-to-end online solution. A pilot was on already in Chennai, he said.
A complete roll-out could happen in a few months, he said. He felt that digitisation would help the public sector insurer bring in more customers, save in distribution cost and offer low-premium products in segments that were hitherto untapped.
Mr. Hoda said the company was also in the midst of an exercise to improve its brand equity.
The objective was to increase the overall visibility of the company, he added.
Source: The Hindu
3 foreign re-insurers set to get IRDA approval
Jun 16, 2016
The Insurance Regulatory and Development Authority of India (IRDA) is likely to accord final approval to three foreign re-insurers to set up onshore branches for starting direct operations by the end of this month.
IRDAI sources told BusinessLine that the IRDA Board would take up the subject at its meeting towards the end of June. Four foreign re-reinsurance players — Germany’s Munich Re and Hannover Re, Switzerland’s Swiss Re and France’s SCOR — have already got the preliminary approval, called R1 in the insurance parlance.
This time around, “the final approval may be granted to a few — most likely to three”, said an insider in the domestic regulator.
The final approvals will formally open up the Indian market for major foreign re-insurers to carry out direct business.
Foreign re-insurers have so far been operating in India through offshore sites.
IRDA, after opening the door for all foreign re-insurers, except Lloyd’s, for registration and setting up branches in the country last October, also paved way for Lloyd’s entry into the country in a separate regulatory guideline in November.
Source: The Hindu Business Line
General insurers’ premium income grows 19.4% in May
Jun 16, 2016
Gross direct premium income of general insurance companies grew 19.4% year-on-year in May, with private players continuing to report higher growth compared with their public sector peers, data from the General Insurance Council showed.
In May, the general insurance industry saw gross premium income at R8,267.45 crore, against R6,923.96 crore in May last year. Private insurers’ gross premium income stood at R3,510.24 crore, up by 22% compared with the year-ago period. Public sector companies witnessed a Y-o-Y growth of 17.2% at R4,250.99 crore in May.
In the last few months, private players continued to perform better than public sector insurers. Market participants say despite profits made by public sector general insurers, their high combined ratio might spoil valuations if they plan
to list.
“If we look at the performance of public sector insurers, many of them are having an underwriting losses and their combined ratio is weak compared to private players. But currently, no private general insurance companies have announced their desire to list on the stocks exchanges. If we look at public sector players, they are trying to bring underwriting losses down and even improve their combined ratio,” said a top insurance player.
The combined ratio (expense ratio plus loss ratio) indicates a product’s profitability, and the ratio over 100% means it is not profitable.
Senior officials in the industry say on an average the combined ratio for private insurers is at 110%, while for a few public sector insurance companies, it is 115% or even more.
However, private insurers believe that they have worked hard to bring down underwriting losses and it is not only about high combined ratio.
Source: Financial Express
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