Latest Updates from Industry

      
      

 

Canara HSBC Oriental Bank of Commerce Life Insurance is aiming for 30 % increase in its business this year. The focus is on addition of customers from tier-II and tier-III locations with network ...

 

 

India’s largest insurance company - LIC has acquired shares worth Rs 5,700 crore in State Bank of India’s Rs 15,000 crore qualified institutional placement (QIP).

LIC got 77 % of the shares ...

 

 

Mr. Raj Kumar joined as the Mutul Fund's whole time director with effect from April 28. He was working as Zonal manager for LIC's central zone. Prior to it, he was an executive director (HRD) ...

 

HDFC Life Max Life is the biggest merger in the country's insurance sector. The HDFC Life-Max Life deal, has been returned by the Attorney General (AG) to the Insurance Regulatory and Development ...

 

 

The total premium collected at the end of December showed a growth of 12.43% amounting to Rs 1.45 trillion from Rs1.29 trillion in the same period a year earlier.

Total assets also grew by ...

 

The significance of crop insurance is rising steeply at government-undertaken companies.

The change is being facilitated by the Pradhan Mantri Fasal Bima Yojna (PMFBY), which has triggered ...

 

 

Life Insurance Corporation of India has sown as impressive 68% jump in profits which amounts to about Rs. 16,000-crore, from equity sales in the first nine months of the financial year.

 

“We ...

 

Reliance General Insurance has released a campaign for home insurance that breaks the traditional way of communicating. In the campaign it urges people to stop locking themselves from the world ...

 

IRDAI has given its initial approval (R1) to another venture Fairfax Financial Holdings owned by Canada-based Indian billionaire Prem Watsa. IRDAI had given a provisional approval to the new ...

 

United India Insurance and Oriental Insurance have been without heads for quite some time, from June last year to be precise. Therefore, the government is taking steps to fill up the Chairman ...

 

Life Insurance Corporation of India’s premium in the first month grew 40% year-on-year (y-o-y) for the nine months ended December 2016. According to the data of LIC the single premium policies ...

 

 

There have been steady losses in general insurance segment due to large claim settlements and other negatives like falling interest rates. To even out the loss, non-life insurers are planning ...

 

 

 

1. What is the impact of demonetisation on the insurance industry?

Ans. Initially, there was a drop in our premium collection for a few days and that is natural to happen as priority of ...

 

 

The government has finally selected India Infrastructure Finance Co Ltd (IIFCL) as the lead promoter of a credit enhancement guarantee fund. The propaganda was announced in the February 2016 ...

 

After the tug of war between Tata group and the Infosys, fears of legal liability on the professionals have crawled up between the companies.   Now companies are turning towards insurance ...

 

Canara HSBC Oriental Bank of Commerce Life Insurance Company plans to launch a pure term insurance product, with return of premium, in April in the wake of the insurance regulator coming out ...

 

According to the general insurers, the steep hike in premium rates of motor third-party insurance proposed by IRDAI in some segments will help ease out losses, according to general insurers.

 

...

 Interview with Mr G. Srinivasan

Chairman & MD - THE NEW INDIA ASSURANCE CO. LTD.

 

He enjoys the distinction of becoming Chairman Cum Managing Director of United India Insurance Co. Ltd, ...

ETMoney of Times Internet has launched an exclusive data-led group term insurance plan in partnership with HDFC Life. It claims this is India’s first term insurance plan that is based on the spend ...

The Insurance Regulatory and Development Authority of India (IRDAI) has drafted a comprehensive framework for information and cyber security, which is likely to be finalised soon. According to the ...

 

Canara HSBC Oriental Bank of Commerce Life Insurance is aiming for 30 % increase in its business this year. The focus is on addition of customers from tier-II and tier-III locations with network of over 8000 branches. To achieve the target, the Company will expand its banc assurance and digital channels. New recruitment of 1000 relationship executives was made in last 2 years to held the company grow.

“We are strong in traditional products and as we increase our focus on urban markets, where the risk appetite is low, this will help us,” Gaurav Seth, Chief Financial Officer, Canara HSBC Oriental Bank of Commerce Life Insurance, told Business Line.

The insurer had posted a total premium income of about Rs. 2,300 crore during the year ended March 2017, including Rs. 983 crore of new business premium. “For the last two years, we have been growing at 35-40 % and hope to repeat the same this year,” Seth said. 

The insurer recently launched Jeevan Nivesh, a new product, and would be introducing another Point-of-Sale (PoS) plan.

Jeevan Nivesh is an endowment plan with whole life cover option, which helps build savings over a period of time. 

On the industry scenario, Seth said it is estimated to grow at 15-20 % in the next three years. The company has about 30 products as of now.

 


 

 

 

India’s largest insurance company - LIC has acquired shares worth Rs 5,700 crore in State Bank of India’s Rs 15,000 crore qualified institutional placement (QIP).

LIC got 77 % of the shares that it applied in the QIP issue. “We did not give LIC the full sum they asked for but 77 % of what they asked, which is 38 % of the total QIP,” SBI chairman Arundhati Bhattacharya said.LIC’s stake after this investment would be 10.4 %, up from 8.6 %. 

SBI Chairman said in the current fiscal the bank will be focusing on listing its life insurance arm. “We have plans of unlocking value by listing at least the life insurance subsidiary. So there will be some more (capital) that we (will) get through our non-core divestments,” she said. It may also consider some stake sale in its non-core assets including CCIL, NSE and UTI MF.

The lender issued 52.2 crore equity shares at a price of Rs 287.25 per share, it said in a stock exchange filing. SBI had originally planned to sell 54.4 crore shares in a price band of  Rs 275.76-287.25 per share.

 


 

 

 

Mr. Raj Kumar joined as the Mutul Fund's whole time director with effect from April 28. He was working as Zonal manager for LIC's central zone. Prior to it, he was an executive director (HRD) and executive director (estates and office services) at corporate office of LIC.


With an average assets under management at Rs 21,475 crore as on March 31, LIC Mutual Fund is currently ranked 17th in the industry. "I am extremely delighted to join LIC MF and looking forward to use my experience and insights gained through the life insurance industry in the mutual fund industry," Raj Kumar said in a statement. "We aim to reach new heights in the MF industry. Our endeavour has, always, been to deliver consistent performance to our investors under the trust of our brand LIC Mutual Fund and we are committed for that," he said.


 

HDFC Life Max Life is the biggest merger in the country's insurance sector. The HDFC Life-Max Life deal, has been returned by the Attorney General (AG) to the Insurance Regulatory and Development Authority of India (IRDAI) without any comment.
While both the companies did not confirm the development, in a joint statement, they said: "We have heard media reports about this development but don't have an independent confirmation. HDFC and Max Group remain strongly committed to conclude this proposed merger and will be working with the insurance regulator to do so."


The deal, which was announced in August 2016, ran into rough weather after the IRDAI sent it to the AG for approval. According to Section 35 of the Insurance Act 1938, no life insurance business of an insurer can be transferred to or amalgamated with the life insurance business of any other insurer, except in accordance with a scheme prepared under this Section and approved by the
Authority.


The three-stage deal had envisaged that Max Life was to merge with Max Financial Services, which would in turn merge with HDFC Life. The deal structure was designed in this manner so that HDFC Life would automatically get listed on the stock exchanges since Max Financial Services is already listed.


 

 

 

The total premium collected at the end of December showed a growth of 12.43% amounting to Rs 1.45 trillion from Rs1.29 trillion in the same period a year earlier.

Total assets also grew by 12.81% to Rs 24.42 trillion from Rs 21.65 trillion in the year-ago period. 

“Our performance is in line with our expectation. The corporation has recorded healthy results based on its strong fundamentals and core values,” LIC chairman V.K. Sharma told.

Talking about LIC’S expectation from new business for the current fiscal, he said, “We hope to achieve Rs 35,000 crore from new business on the individual basis from Rs 31,000 crore which has been achieved by us so far, whereas overall premium target remains unchanged by the fiscal-end.”

 


 

 

The significance of crop insurance is rising steeply at government-undertaken companies.

The change is being facilitated by the Pradhan Mantri Fasal Bima Yojna (PMFBY), which has triggered competition among general insurance companies. Almost all of them expect crop insurance to contribute close to a fifth of their premiums in the next three to four years, from close to nil last year. At present, motor and health insurance together account for close to half their premiums.

Till now, public sector general insurance entities were passive distributors of crop insurance schemes administrated by the state owned Agriculture Insurance Company of India (AIC). National Insurance has collected close to Rs. 750 crore as premium from the Kharif and ensuing Rabi season in 2016-17 under the scheme.

United Insurance has collected Rs 1,300-1,400 crore as premium from PMFBY in the earlier kharif season whereas Oriental Insurance could not bid for PMFBY in the earlier kharif due to non-availability of actuaries. 

 


 

 

 

 

Life Insurance Corporation of India has sown as impressive 68% jump in profits which amounts to about Rs. 16,000-crore, from equity sales in the first nine months of the financial year.

 

“We have booked profits of Rs. 16,000 crore in the year so far by selling about Rs. 38,000 crore of equity,” said V K Sharma Chairman LIC. He also added, “We are a contrarian player and we have deliberately taken this decision given the way markets have moved.” He said that equity is only 12% of their investible corpus.

 

LIC invested around Rs. 1.98 lakh crore in debt instruments, including Rs. 1.83 lakh crore in government services and state development loans.

 

Reliance General Insurance has released a campaign for home insurance that breaks the traditional way of communicating. In the campaign it urges people to stop locking themselves from the world and live a more carefree life. The campaign has been created by OgilvyOne, is a digital film produced by The Open Iris.

 

Group Creative Director at OgilvyOne, Burzin Mehta, explained, “Triggering a conversation on insurance is never easy, which is why we chose to talk about trust, which once formed the basis of a community’s existence but is becoming increasingly elusive, across society. Our intent is to go beyond the transactional exchange of buying home insurance and connect at an attitudinal level.”

 

Padmakumar N, Director of the film added, “Open Doors could well be a thought for the future of humanity – a movement away from the divisive and parochial direction we’re going in. I’ve always felt advertising could be a beacon and campaigns like this only raise its stature.”

 

 

IRDAI has given its initial approval (R1) to another venture Fairfax Financial Holdings owned by Canada-based Indian billionaire Prem Watsa. IRDAI had given a provisional approval to the new Indian joint venture established by Fairfax Holdings in India along with Oben General Insurance. Fairfax has a 49 per cent stake in the new Indian venture.

Lombard, a subsidiary of Fairfax, has an existing 17-year-old non-life joint venture — ICICI Lombard General Insurance — with India’s largest private sector bank, ICICI Bank. Lombard holds 36 per cent in ICICI Lombard General Insurance, the largest private sector general insurer.

However, Watsa’s Fairfax had decided to reduce its stakes in the existing venture ICICI Lombard General Insurance with little clarity on the reasons. It has recently decided to form a new general insurance venture with Oben General Insurance, a new company promoted by team of insurance professionals led by Kamesh Goyal.

 

United India Insurance and Oriental Insurance have been without heads for quite some time, from June last year to be precise. Therefore, the government is taking steps to fill up the Chairman position of these companies soon.

While interviews were proposed to be held last year for the CMD posts, the Finance Ministry subsequently canceled them without citing any reason.

Both Oriental Insurance and United India Insurance have appointed officiating chairpersons since the previous incumbents retired.

The final appointments could be made as early as mid-March, said officials. Executives from the public sector insurers who had applied earlier may be called for interviews. In the public sector entities, the appointments committee of the Cabinet (ACC) takes a final call on top management appointments.

 

Life Insurance Corporation of India’s premium in the first month grew 40% year-on-year (y-o-y) for the nine months ended December 2016. According to the data of LIC the single premium policies played an important part in this growth during the current fiscal.

The robust sales of LIC’s immediate annuity plan — Jeevan Akshay — was the key reason for the sharp jump in the company’s premium in November, according to sources in LIC 

In January, new business premium growth slipped to 30 per cent over the previous year, with single premium growing 40 per cent y-o-y.

While demonetisation and fall in rates triggered LIC’s November sales, the company’s growth until October was also driven by single premium policies.

 

 

There have been steady losses in general insurance segment due to large claim settlements and other negatives like falling interest rates. To even out the loss, non-life insurers are planning to increase the premium rates by 10-15 per cent in certain segments to protect their interest.

"I won't be surprised if the premia go up as the pricing has already reached rock bottom," IRDAI member (non-life insurance), P J Joseph told.

Insurers have zeroed in on over 10 such segments, including pharma, power and cement under property, and even group health insurance, where they are planning to increase the premia going forward. Premia may go up in the range of 10-15 per cent in these segments next financial year. 

 

 

 

 

 

1. What is the impact of demonetisation on the insurance industry?

Ans. Initially, there was a drop in our premium collection for a few days and that is natural to happen as priority of people was shifted. However, as LIC being prudent investor, and abiding with the laws and regulations of the land, necessary instructions regarding premium collection in the changed scenario were intimated to all the offices immediately. Even though the collection went down for initial few days, we were very proactive and vigilant to the needs of the customers, thereby increasing the grace period for the policies where premium have fallen due during the period. This brought relief to many customers and normalcy in collection was restored.

 

2. As large amount of cash was deposited by people in banks did you feel that it was

an opportunity for you to sell more policies.

Ans. In LIC we are very much conscious and concerned about compliance and corporate governance. We have already rules and regulation in place with regard to AML which precludes misuse of such situations. We have also ensured that the relaxation provided to the customers are not misused and for that matter  the action was to support and provide ease in payment of premium.

 

3. What has been the impact on Direct Selling after digitization, as Life Insurance

traditionally is sold by Agency Model.

Ans. Firstly, as of now, the digitized platform along with direct marketing is not more than 10% worldwide although there are companies, which are opting for purely digitized selling. The segment is growing and growing fast. Secondly, I feel, it is hi-tech and high touch business, which is more sustainable. You can attract a person online but you can give him the choice whether he wants to buy online or offline. The first online product sold by LIC was Pension Product (non-medical). But, in case of medical product you do need some handholding. We leave it on the customer choice. The market is expanding so is the space within.

 

4. What steps you have taken for Demat of  policies?

Ans.  We have digitized all our existing policies and the new policies are also being introduced in digital form. Customers can access the same through LIC’s Customer Portal and avail of Online services too.

 

 

5. How are Bancassurance, Brokers and Corporate Agency Model faring in

comparison to direct agency model?

Ans. Even now, 90% of our business is coming through tied-channels. However, of late Bancassurance as a model has been improving and it is doing better with companies having captive banks. We have tied up with public sector banks that have not ventured into insurance. However, public sector banks have their own concerns and core areas. I would say we have huge potential to be tapped in this distribution channel.

 

6. Do you have any plans to launch bank or hospital to leverage your customer

base?

Ans. Right now LIC has investments in Banks .We do not have any immediate plans to launch banks or hospital.

 

7. What are the efforts and initiatives of LIC in promoting ‘Consumer Awareness’?

Ans. I think if you want to create awareness in India, you have to start with young generation. Keeping this dimension in mind we have taken up various activities for awareness.

We have taken up school activities where we approach different schools and talk about insurance. We have also instituted ‘LIC Student of the Year award’ which is given to the top student every year.

We have also started college activities where we cover colleges across India and talk about benefits of insurance agency as a career option.

For rural area awareness, we have started mobile van activities where a mobile van is sent from local branches to far-off places to educate about insurance. 

We also teach about insurance through electronic, print and social media. Lot of awareness activities is thus taking place on the ground level.

 

8. How do you plan to manage the technology, which leads to disruptions?

Ans. I would say you do not have to manage disruptions; rather you have to observe disruptions and look for taking advantages of the disruptions. For instance, payment gateways – you have to take the advantage of it, e-wallets – you can integrate it in your online platforms. Month on month transactions have increased through online channel by almost 60-70 %.  If we observe any disruptions in any sector, we make sure to utilize it.

 

9. We are moving from customer relationship to customer engagement – How are

you going to leverage your technology?

Ans. We have approximately 300 million customers throughout India and with such a customer base, you cannot engage without technology. Personal touch does matter and our reach helps to retain our valued customers. We have 10 lakh agents, which act as backbone to keep personal relationship with the customers.

Once in a seminar I had asked one of the CEO’s whether he has visited our upgraded website. To this he answered, “I don’t have to go through your website. My agent is so good and knowledgeable; he approaches me whenever a new product is launched and explains it to me, he even visits me when my premium is due”. So many a times human touch is more important than technology. The customer doesn’t wants to leave trusted agents. In my opinion therefore, technology as well as personal touch co-exists.

 

 10. How does LIC differentiate from other companies?

Ans. The single most important factor for LIC is ‘Claim Settlement’. The claim settlement ratio of LIC is 99.74%. Timely Claim settlement is a passion for us and we endeavor that each and every claim is settled. Prompt claim settlement is the best publicity for LIC.

 

11. The penetration in Life Insurance is still far below in India if compared to

Western Countries. Even after 6 decades what is the reason we are lagging behind

in increasing penetration.

Ans. If you see the purchasing power parity, one should not compare India with the western countries where the purchasing power and disposable income is huge. Having said that, I still feel there is appetite for higher ticket size; people are underinsured or uninsured because of lack of awareness and reach. The Indian market is expanding, evolving, and schemes, such as Pradhan Mantri Jeevan Jyoti Bima Yojana are proving to be immensely beneficial for Indian population. Till now more than 3 crore people have been covered by this scheme. Penetration is bound to increase due to such Government initiatives. The younger generation has enough disposable income which they can certainly use to buy insurance products.   

 

12. What is the focus of LIC on health insurance products?

Ans. We shall be coming out with more innovative and simple health insurance products soon

 

13. Do you have any plans to open up one-man micro office to increase your reach?

Ans. We already have mini offices all throughout the country. We have covered all towns with population of over 10,000 with our presence in radius of 5 Kms.

 

14. Misselling of Insurance Products is creating a negative perception of insurance

policy in the market.  What are the efforts of LIC to prevent misselling.

Ans. One big step, which the regulator has introduced, is ‘cooling off period’. If the customer is not satisfied with the product he can surrender it within 15 days after receipt of policy and because it is a regulatory compliance, companies have to pay back to the customer. This is one way of stopping mis-selling.

Since companies have to reimburse the money, they take utmost care while selling. The data shows that mis-selling in LIC is negligible. LIC is very sensitive about mis-selling. In LIC agents are professional by and large and if any case comes to our notice we take action against it immediately. 

 

15. How LIC continues to be the trusted brand irrespective of having so many

competitors?

Ans. I think the reason for this trust is customer focus. We are totally focused on claim settlement where we do not tolerate delays and we have strong tracking system to prevent any delay. We are compliant, fair, ethical and possess value along with integrity that adds to our good name.  We also have a very strong Grievance Redressal System as a result, number of complaints are coming down with each passing year.

 

16. What are the initiatives that has enabled LIC to perform well and also to achieve

customer satisfaction.

Ans. Under CRM or customer relationship management initiatives LIC’s e-service was launched in early 2016. This was to ensure quick and prompt access to policy records, payment of premium, policy status, loan status, claim status etc., all these information is now accessible through digital platform.

In keeping with the Digital Revolution in India LIC has made life easy for those who want to transact digitally. The LIC portal and app help LIC policyholders and customers in more ways than one. Starting from locating the closest LIC centres, branches and offices to making payments or calculating premiums, to getting the latest news and updates on policies and news about LIC, it is all now at the touch of a button. The digital platforms are constantly updated keeping the customers and policyholders worldwide abreast with the latest developments in services and products of Life Insurance Corporation of India.

‘LIC Help’ is a simple SMS based feature where when your policy number is sent via SMS, an official will call back to answer your queries. Similarly, “Help Us Serve You Better” was launched in September 2016 where a policyholder contact details are captured to ensure continuous contact.

In addition to all this convenience, one can now make payments to LIC through E-Wallet. Digital payments to LIC through net banking, wallets and debit cards are free of transaction charges. LIC is also working on Online premium payment through Unified Payment Interface or UPI.

Continued focus on customer services, use of technology, reaching out to youth in particular and every segment of society, will help us to further strengthen our Brand.

 

 

 

 

The government has finally selected India Infrastructure Finance Co Ltd (IIFCL) as the lead promoter of a credit enhancement guarantee fund. The propaganda was announced in the February 2016 Union budget. The credit enhancement fund will be floated by a non-banking finance company (NBFC) with IIFLC holding an at least 26% stake, these people said, adding Life Insurance Corporation of India, or LIC, which was initially mooted to be the lead promoter, will hold up to a 15% stake. An IIFCL spokesperson confirmed that the company has been appointed as the lead promoter, but didn’t reveal further details.

 

After the tug of war between Tata group and the Infosys, fears of legal liability on the professionals have crawled up between the companies.   Now companies are turning towards insurance companies for individual cover for these professionals, so that they could be retained.

 

Corporate directors have already been on guard since the new Companies Act assumed directors and the key management personnel to be the sentinels of governance. The attribution of criminality to the “officer who is in default” is established under section 2(60) of the Companies Act, 2013, with individuals having been made liable to penalty or imprisonment. A mere awareness of any wrongdoing makes an official liable to penal action and/or individually liable, says the Act.

 

Anup Dhingra, senior vice-president, Finpro practice leader, Marsh India Insurance Brokers, said, “After the recent boardroom battles, the demand for individual cover under the directors and officers liability insurance has increased.”

 

These liabilities include cover for legal cost, the cost of actual settlement, payout, regulatory and civil fines. Globally, over 60 per cent of Marsh’s clients buy individual cover for directors, called ‘Side A’ cover, but in India it’s still limited to US-listed or very large Indian companies. In India, the leading global insurance broker has over 1,000 blended policies but only 15 of these have separate Side A policies.

 

 

 

Canara HSBC Oriental Bank of Commerce Life Insurance Company plans to launch a pure term insurance product, with return of premium, in April in the wake of the insurance regulator coming out with guidelines for the same.

 

Referring to IRDAI’s November 2016 guidelines on point of sale for life insurance products, Anuj Mathur, Chief Executive Officer, Canara HSBC OBC Life, said, “With term return of premium (ROP), if nothing has happened (no insured event — death — occurs during the policy tenure), whatever premium you have paid you will get it back.”

 

“In this particular product, the upper limit for sum assured is Rs 15 lakh. Moreover (there is) no underwriting. You just walk into the branch and give your particulars to the branch manager. So, this product will be technology driven, with online submission of particulars, online (Aadhaar-based) authentication and across the counter policy issuance. He added that no medical (test) is required because the company has that kind of risk appetite and the (policy) volumes will be big too.

 

According to the general insurers, the steep hike in premium rates of motor third-party insurance proposed by IRDAI in some segments will help ease out losses, according to general insurers.

 

The Insurance Regulatory and Development Authority of India (IRDAI) proposed an annual hike in motor third-party insurance in the 15-50 per cent range in different categories of private and commercial vehicles.

“There has been a moderate increase in the last three years and the proposed hike is slightly higher in comparison,” said Sanjay Datta, Chief of Underwriting Claims and Reinsurance, ICICI Lombard General Insurance.

 

According to S Thirunavukarasu, Country Head-Underwriting and Claim (Motor), Royal Sundaram General Insurance Co, the proposed hike is in line with the overall claims expectation of the industry.

 Interview with Mr G. Srinivasan

Chairman & MD - THE NEW INDIA ASSURANCE CO. LTD.

 

He enjoys the distinction of becoming Chairman Cum Managing Director of United India Insurance Co. Ltd, one of India’s leading PSU Insurance Company at a relatively young age in the year 2007. Prior to that also, he was Managing Director of The New India Assurance Co. (Trinidad & Tobago) Ltd., in the Caribbean island. Since 2012, he has been at the helm of affairs of The New India Assurance Co. Ltd., India’s largest non-life insurance company and has  taken the company to a all time new height(high) during his eventful stint.

Soft and suave and modest to the fault, Mr. G. Srinivasan, B.Com, FIII, AICWA, ACMA, pursues his mission with great fervour and passion. Behind the soft veneer, however, lie a steel determination and the attitude of a go getter - the mantra behind his   great success. An avid lover of carnatik music, Mr.Srinivasan is also a voracious reader.

 

In a candid and freewheeling interview, Mr.G.Srinivasan spoke to Dr. Rakesh Agarwal and Dr. A. K. Chattoraj. 

 


 

Q. New India has been a market leader for years and a market leader leads the market with innovative products. What has been New India’s contribution in product innovation...?

New India has launched many innovative policies (products). We launched Griha Suvidha Policy- a very simple product. The main highlight of the policy is its simplicity and ease to the customer in providing the details and description of the contents and also a simple and hassle free process of claims administration.

The Top up product of New India in health Insurance sector is also very popular. This product helps to meet the need of high sum insured in health insurance policies. The Pradhan Mantri Suraksha Bima Yojana launched by the government at a very low premium has been very successful. More than 10 crore policies have been sold. Since the premium collection is linked with banks with minimum hassle for customers, the policy has been able to create very positive and effective awareness among the common public about benefits of insurance.

Our company  has also  launched a high  premium  i.e. Rs 1 crore mediclaim cover for the higher echelon of the society , the first such plan by a public sector company. Besides being available for a high sum insured, the policy covers most treatments that are otherwise not covered under common  mediclaim policies  and provides concierge services. The sum assured under this policy ranges from Rs 15 lakh to Rs 1 crore. The policy can be taken by an individual as well as a family floater cover by the family. We have been conscious that there is a section which needs a high value policy with very few restrictions. This prompted us to come out with this policy. We continue to look for opportunities to introduce innovative products to maintain our leadership position.

 

Q. New India has received many awards. What reasons do you attribute behind these award & achievements..?

A. Success of the company depends upon its team. A good team that rises to the occasion to collectively achieve the goals and objectives of the company is bound to succeed.  There should be clarity of objectives and strategies. Our company has a very good team which works passionately in achieving the goals.

 

Q.  Cabinet has approved the plan to list the five state-run general insurance companies including only state-owned reinsurer GIC Re. What are your plans to launch IPO?

A. Our Company has already started the listing process. It will take a few months for us to hit the market as we will have to file the prospectus, and finalise the banker to the issue," 

New India has huge asset base and investment. It shall reflect in our valuations. Our Company has been rated A-(Excellent – Stable outlook) by AM Best and CRISIL has reaffirmed its ' AAA/STABLE ' rating. The size of IPO offer and structure shall be decided in consultation with the selected banker and legal advisers subject to regulatory requirements. Among the four non-life insurers, New India will be the first to hit the market.


Q.
Is your company also looking for Global Expansion?

We are already operating in 28 countries and we have got an office at Dubai and we are looking for a licence for the office to be converted to a branch. We are also looking for expanding in countries like Myanmar and Qatar.

New India has set up  a shop in GIFT City couple of months back and we were the first insurance company to open our office there. Here we plan to do reinsurance business from foreign countries both facultative and treaties, direct insurance in other parts of the world and also to provide reinsurance support to Indian market to the extent we are permitted.

 

Q. How focussed is your company in CSR Activities?

A. Our company believes in the philosophy of giving back to the society. In India, a large chunk of population is still uninsured. We keep on organising mass awareness programmes to educate the consumers. The opening up of micro and one-man offices is a step in that direction. We already have 1000 micro offices and we are further planning to increase the reach to serve the society.

We are working very seriously on our vision statement which strives to transform India into a risk aware society from being a risk averse society. Through our mission statement, we are trying to achieve our vision by integrating social, environmental and health concerns of the Indian society into Company’s overall CSR Policy and programmes. We have initiated employment enhancing vocational skills, promotion of rural development projects, rural based sports etc.to promote CSR activities. School connect and village adoptions are our major CSR initiatives. The whole idea is to reach the bottom of the pyramid.

 

Q. According to you what will help to create Financial Inclusion.

A. There are 2-3 major factors in financial inclusion. The first one being creating awareness, extending  the reach of micro office and  expanding  the network of Insurance agents. Second the launch of micro and small products, having low premium keeping in mind the needs of low income group people. And the third one, revolves around organising health care camps, creating awareness through mobile vans, mobilising opinion in villages etc.

 

Q. Do you think India has the potential to emerge as a Reinsurance Hub?

A.  Yes definitely India has the potentiality to become Reinsurance hub. Currently the regulations are little restrictive. IRDAI will take a call on this and as the Insurance market in India matures, the reinsurance activities will also increase. Many Reinsurers have already setup their offices in India.

 

Q Health and Motor Insurance are major portfolios but at the same time –they are bleeding as well. Your views?

A. Motor Insurance portfolio has high incidence of losses. Most of the losses in Motor Insurance are in Motor third  Party area. The third party premium is inadequate in comparison to the losses in this segment. There are huge numbers of uninsured vehicles –plying without mandatory liability insurance. Further in case of cashless settlement of Motor own damage claims, the claim ratio is rising at the dealers’ level. This is a cause of concern which needs to be addressed at the earliest.  

Health insurance has also been witnessing  huge losses. The losses are primarily due to high medical inflation . No regulations for service providers, lack of rate standardisation e.t.c are hurting the portfolio. For meeting up with the challenge, GIPSA has launched Preferred Provider Network (PPN). Under this programme public sector insurers have negotiated a special package rate from many hospitals across the country for common procedures/treatments. This will help us to limit the claims.

Public sector companies are going for their  own TPA- Health Insurance TPA of India promoted by all public sector non life insurers. This will help us to bring efficiency in claim settlement and also reduce turnaround time.

 

Q Do you think in this age of extreme competition, technology is going to play a major role in Insurance Marketing and servicing.

A.  Yes, technology is going to play a major role. Our company already has created online platform for purchasing policies online. Customers can get their policy document online in minutes. A large numbers of customers are using our online platform for buying as well as renewing old policies. Currently we are offering online facility for health, motor, rural segment and in some other chosen areas. In online, we are planning to launch more basic and simple products which can be readily bought online. We have equipped our marketing team also to issue online policies through our portal. We are also active in social media platforms. We are also offering 10% discount on first time purchase of policies online on some selective products.

 

Q. What are your initiatives in customer engagement?

A. We have a very good feedback system from customers. We get continuous feedback from our retail offices and marketing personnel on ground. We have a very sound Grievance Redressal management system where all complaints are dealt with promptly and if any customer is not satisfied, he can escalate his grievance. We ensure speedy and prompt disposal of claims.

 

Q. How has been your current year and what is your outlook for next financial year?

A. The financial year 2016-17 has been a year of high growth for the general insurance industry. The Insurance Industry in India is growing at about 27% to 28%. Our Company is also growing at that pace. This year, we have witnessed growth not only in the traditional lines like fire and marine but also in the retail lines like motor, health. The Government schemes  like Prime Minister’s Crop Insurance Scheme and Pradhan Mantri Fasal Bima Yojana have  really pushed the premium growth in the general insurance sector. We hope to cross business of  Rs.21000 crores this year.  

We are expecting Rs 25,000 crore in premium income for 2017-18. Our major drivers of growth will be health insurance, motor insurance and crop insurance.

We are also looking at increasing the share of our overseas business from the current 18 per cent to 25 per cent in next five years. Overall we have a very positive outlook for the company.

 

Q:-  What are your defining moments in life ?

A:-  I remember two such defining moments in my career. In 2007, when I took over the reins of United India Insurance co.Ltd.-the company was going through a bad phase –ridden with many prickly issues. I was able to bring about complete change in the organization with the help of dedicated workforce. During this period , United India Insurance moved on to become the largest insurer by profits, and also registered  lowest underwriting losses among public sector players. Similarly, when I took charge of New India, it was going through a phase of turmoil. Today New India has been able to establish itself as the undisputed market leader with market share surging ahead every year. In a way, I have a very satisfying feeling that I could play an important role in the turnaround of two of India’s well-known PSU companies.

 

Q:-  How do you unwind ...?

A:-  I love  listening  to carnatik music. I am very fond of listening to the likes of M.S.Subbulakshmi and M.Balamurali Krishna. I also enjoy reading books, particularly anything related to insurance.

 

Q:  Your humility touches us.... How could you remain so humble despite the fact you have to take tough decision at times?     

A:-  ( Smiles) I believe in inner peace and that keeps goading me. Humility comes from understanding the self. Positions cannot define individuals for they come and go with time. I always tell my fellow employees to take care of customers. We exist for them and, therefore, all our decisions should be customer focussed.  What can be more satisfying than finding our customers feel both safe and secure doing business with us...?

 

ETMoney of Times Internet has launched an exclusive data-led group term insurance plan in partnership with HDFC Life. It claims this is India’s first term insurance plan that is based on the spend pattern of the users.

 

“This plan will be offered as an exclusive benefit to more than 1 million ETMoney users and will provide coverage between Rs 25 lakhs to Rs 50 lakhs, calculated based on the user’s spend pattern”, officials having knowledge of this said.

 

“Young earners in India are significantly under insured. The term plan is designed grounds up for this segment and it acts as a simple, paperless & cost effective way to start their insurance journey. Partnering with an Industry leader like HDFC Life substantiates our data-led, mobile-first approach and we are proud to work with HDFC Life to design this digital policy" said ETMoney COO Mukesh Kalra.

The Insurance Regulatory and Development Authority of India (IRDAI) has drafted a comprehensive framework for information and cyber security, which is likely to be finalised soon. According to the proposed guidelines, insurers will have to focus on stringent data security, among a host of other issues.

 

“Cyber security in the financial sector has gained importance, more so with the advent of technological innovations. In this connection, IRDAI has planned to come out with a comprehensive information and cyber security framework,’’ AR Nithiyanantham, Chief General Manager (IT), IRDAI, said in a circular to insurers.

The proposed framework will cover all layers of security such as data, applications, operating systems and network layers, besides legal aspects pertaining to cyber crimes, the official said.

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