News . Views . Reviews

Regulator could liberalise mandatory auto insurance pricing in 2020

Dec 05, 2018

The insurance regulator has indicated that it would stop setting tariffs for compulsory motor third party liability (MPTL) insurance with effect from the fiscal year starting 1 April 2020.

MPTL is the only business line for which the IRDAI currently sets tariffs. IRDAI's decision would pave the way for insurance companies to set all their own pricing, reported Times of India. The rates could fall because of stiff competition.

Officials told the Times of India that stopping the fixing of MTPL tariffs came up for discussion last week when the Prime Minister’s Office held a meeting to discuss the demands of truckers who called on the government to roll back a steep increase of nearly 28% in their premium in the current fiscal year. Mr Piyush Goyal, who acted as finance minister from 14 May to 22 August, had assured truckers’ organisations that the premium hike would be lowered to 15%, but action is still pending on this.

Source: Asia Insurance Review

G Srinivasan appointed director of National Insurance Academy

Dec 03, 2018

Mr G Srinivasan, former chairman-cum-managing director of New India Assurance Company, India's largest general insurer, has been appointed the director of the National Insurance Academy (NIA) at Pune.

Mr Srinivasan’s appointment will be for a period of three years or until he attains the age of 65, whichever is earlier from the date of taking charge at his post.

Mr Sushobhan Sarker, the previous director of NIA had completed his tenure on 31 October this year. Mr Srinivasan superannuated from the post of chairman-cum-managing director of New India Assurance in July 2018.

NIA is a premier insurance academic institute sponsored by the Indian public sector insurance industry. Besides running the two-year flagship post-graduate diploma in insurance, it also conducts a variety of short duration courses in insurance for the Indian insurance industry.

A chartered accountant and fellow of the Insurance Institute of India, Mr Srinivasan has won many accolades from various organisations in the market. An active practitioner and lobbyist for the industry good, he served in many government committees in India as well as in the IRDAI during his career with the public sector general insurance industry in India.

Mr Srinivasan was also the winner of the Personality of the Year award at the 2016 Asia Insurance Industry Awards. He was also instrumental in successfully guiding in November 2017 the IPO of New India.

It is perhaps befitting that Mr Srinivasan with his impeccable career and over three decades of experience in insurance, would now guide the young insurance talent that would steer the Indian insurance industry in the years to come. Mr Srinivasan has always been active in drawing the “intelligent, confident tech-savvy: genY” into the insurance business. And to those in the business, he urges them to “keep constantly up to date”.

He cherishes the challenges and joy of meeting a variety of people, understanding so many businesses, coming to the assistance of people when they are in need and helping many to rebuild their lives when the chips are down.

NIA was established in 1980 jointly by the Ministry of Finance, Life Insurance Corporation of India, General Insurance Corporation of India, The New India Assurance, National Insurance, United India Insurance and Oriental Insurance.

Source : Asia Insurance Review

Life insurance to be cheaper while health insurance becomes more expensive

Nov 30, 2018

Buying life insurance is likely to get more affordable, while health insurance could get dearer. Improved life expectancy among the insured population will keep the cost of life cover down, but the cost of health covers is expected to move up because of various court directives asking insurers to cut out exclusions.

Mr Sanket Kawatkar, head of life insurance at actuarial consulting firm Milliman, said that there is an improvement of around 10% in the new mortality table, which is prepared by the Institutes of Actuaries of India, according to a report in Times of India.

According to Mr Kawatkar, insurers may choose not to reflect the new tables because life insurance premiums are already the lowest in the region.

Global reinsurers are bullish on India as it is seen as the market with the highest latent demand. “The protection gap in India is estimated at $9trn, making it one of the biggest markets in terms of potential,” said Mr Kawatkar, consulting actuary with Milliman.

Health insurance is expected to see an increase in rates. According to Mr Lalit Baveja, senior health management consultant at Milliman, the scope of health insurance in India is set to increase due to court interventions for covering hitherto excluded illnesses like HIV, mental ailments and congenital defects.

“Insurance companies will have to rework all their existing products to address these exclusions and file them with the insurance regulator with revised pricing,” said Mr Baveja.

Source : Asia Insurance Review

SBI General Insurance targets public listing in 2020

Nov 28, 2018

SBI General Insurance plans to launch an initial public offer (IPO) in 2020, the company's deputy CEO has said.

Ms Lisa Jeffrey told the Indo-Asian News Service that the insurer, which is a joint venture between State Bank of India (SBI) and Insurance Australia Group (IAG), aims to be among the top five non-life insurers in India by investing in technology and launching new products. The company also plans to boost the number of agents and other distribution channels, and focus on health insurance policies.

"We are investing in digital technology and looking at digital strategy. Now there are insurers that are purely into digital technology. The investment is part of our overall budget for information technology," Ms Jeffery said.

At a time when the industry is registering a 12% growth, SBI General Insurance is clocking about 30% business growth. "We hope to log about 35% growth in our gross domestic premium income (GDPI),” she said, adding that during the first half of the current fiscal year which ends on 31 March, the GDPI growth was about 30% at INR2,067 crore ($292m) and the net profit was INR270 crore. She said SBI General Insurance was one of the few players to have posted an underwriting profit.

Ms Jeffery said that IAG International was not planning to increase its stake in the company from the current 26% to the maximum permissible 49%. This overturns a stock exchange statement by SBI in 2015 that IAG would raise its stake to 49%. In September, SBI sold a 4% stake in SBI General Insurance at INR482 crore, in what was seen as a price discovery exercise. The sale valued the company at about INR12,000 crore. After the deal, SBI holds a 70% stake in the venture.

Source : Asia Insurance Review

Centre eases insurance claim rules for farmers

Nov 27, 2018

The Union government has introduced several norms tightening the Pradhan Mantri Fasal Bima Yojana (PMFBY), its flagship farm insurance scheme. One of the new rules taking effect on November 30, reviewed by Hindustan Times, says that claims of farmers not cleared by insurance firms within two months of harvest will be “automatically approved”.

As with any insurance policy, claims need to be approved by insurance firms for policyholders to get compensation.

The new rule means insurance firms will not be able to verify claims or carry out further checks to ascertain the validity of claims of farmers if they don’t do it within two months.

“Beyond the two-month deadline, all claims will be auto approved by the PMFBY portal (website),” an official said, requesting anonymity.

With this new “auto approval” guideline, the government hopes to deal with what a major reason of farmer angst concerning the scheme: delayed payments.

If farmers don’t get insurance payouts for one season in time, it affects their ability to invest in crops for the next season.

A centralized website governing the farm-insurance programme has been updated with an in-built feature to make this “auto approval feature” operational.

Among key changes to the politically important scheme, participating insurance companies will now have to spend 0.5% of the gross premium collected on raising “awareness about the scheme among farmers”.

State governments will have to devote 2% of their annual budget to a slew of measures tied to the farm insurance programme.

These include administrative expenses to speed up processing of claims. This 2% share will also go towards meeting expenses for yield and loss assessment, crucial for timely payouts.

The 2% share from the budget will also be used for purchase of smart phones through which yield losses need to be estimated via an android app developed for the purpose. Other expenses include setting up of state technical support teams.

According to Ashok Gulati, an economist with the think-tank ICRIER, if the Pradhan Mantri Fasal Bima Yojana scheme is to achieve its most critical goal — timely payouts to farmers — it can’t fly without a raft of highend technological fixes, from drones to even a new constellation of satellites for accurate crop damage assessments.

In an earlier round of changes, the government had decided to slap a 12% interest on insurance firms (to be paid to farmers) for delay of more than 2 months in claim settlement.

Moreover, a 12% interest must be paid by states too for delay of more than 3 months in releasing their state of subsidy. Under the Pradhan Mantri Fasal Bima Yojana, farmers have to pay between 1-2% of the total premium. The rest is shared between the Centre and states equally.

Source: Financial Express

[1]      «      4   |   5   |   6   |   7   |   8      »      [52]