Manokamana Baid - Insurance Sector in India(1)

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2010

INSURANCE SECTOR IN INDIA
THE BURNING SECTOR...........!!!
The insurance sector in India has completed all the facets of competition –from being an open competitive market to being nationalized and then getting back to the form of a liberalized market once again………….!!!!!!

MANOKAMANA BAID
M.B.A. II SEM

Insurance sector in India

CONTEMPORARY ISSUE ON SEMINAR

INSURANCE SECTOR IN INDIA
Session: 2009–11
Presented at

Submitted By: Manokamana baid MBA II Sem.

Submitted To:Mr. Rajat Mendiratta

Insurance sector in India

Acknowledgement

The beatitude, bliss & euphoria that accompany successful completion any task would not be completed without the expression of appreciation of simple virtues to the people who made it possible. So, I take my immense pleasure in expressing a whole hearted thanks to all the faculty members who guided me all the way making this project successful. It is my privilege to express a deep sense of gratitude and thanks to Mr. RAJAT MENDIRATTA for providing us various information directly related to project. I am also thankful to Rajiv Sharma for his guidance & cooperation in this work. I extend my gratitude and thankfulness to Apex Institute of Management & Science.

Date:03-05-10 Place: Jaipur

Submitted By: Manokamana baid

Insurance sector in India

Preface

The underlying aim of the seminar on contemporary issue as an integral part of MBA program is to provide the students with practical aspects of the organization – working environment. Such type of presentation helps a student to visualize and realize about the congruencies between the theoretical learning in the premises of college and actual followed by the organization. It gives the knowledge of application aspect of the theories learnt in the classroom. The seminar project in INSURANCE SECTOR IN INDIA is a complete experience in itself, which provide me with the understanding. This has become as inspirable of my knowledge of management being learned in MBA program.

Insurance sector in India

CONTENTS
1.The Meaning Of Insurance 2.Indian Insurance - Major Companies 3.Basic functions of Insurance Primary functions of insurance Secondary functions of insurance Other functions of insurance 4. TYPES OF INSURANCE &GROWTH Life Insurance Credit Insurance Aviation Insurance Health Insurance Crop Insurance Home Insurance Medical Insurance Pet Insurance Two Wheeler Insurance Travel Insurance Weather Insurance

5.Challenges for insurance
6. References 7. Bibliography

Insurance sector in India

Executive summary
Insurance sector in India is one of the booming sectors of the economy and is growing at the rate of 1520 per cent annum. Together with banking services, it contributes to about 7 per cent to the country's GDP. Insurance is a federal subject in India and Insurance industry in India is governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. The US$ 41-billion Indian life insurance industry is considered the fifth largest life insurance market, and growing at a rapid pace of 32-34 per cent annually, according to the Life Insurance Council. Since the opening up of the insurance sector in India, the industry has received FDI to the tune of US$ 525.6 million. The government is likely to reintroduce the Insurance Bill which proposes to increase the FDI cap in private sector insurance companies from 26 per cent to 49 per cent. Insurance Corporation (LIC) posted a 50 per cent growth in new premium collection in the first nine months of the 2010 fiscal, increasing its market share to 65 per cent from 56 per cent a year ago. LIC’s new premium collection touched US$ 9.58 billion in the April -December 2009 period while the combined business of the 22 private insurers grew to US$ 5.07 billion from the previous year, as per data collated by the Insurance Regulatory and Development Authority (IRDA). Overall the industry grew at 29 per cent in the April-December period of the fiscal year 2010.

Insurance sector in India

The Meaning Of Insurance
The meaning of insurance: Insurance is a policy from a large financial institution that offers a person,

company, or other entity reimbursement or financial protection against possible future losses or damages.
The meaning of insurance is important to understand for anybody that is considering buying an insurance policy or simply understanding the basics of finance. Insurance is a hedging instrument used as a precautionary measure against future contingent losses. This instrument is used for managing the possible risks of the future. Insurance is bought in order to hedge the possible risks of the future which may or may not take place. This is a mode of financially insuring that if such a incident happens then the loss does not affect the present well-being of the person or the property insured. Thus, through insurance, a person buys security and protection. A simple example will make the meaning of insurance easy to understand. A biker is always subjected to the risk of head injury. But it is not certain that the accident causing him the head injury would definitely occur. Still, people riding bikes cover their heads with helmets. This helmet in such cases acts as insurance by protecting him/her from any possible danger. The price paid was the possible inconvenience or act of wearing the helmet; this ie equivalent to the insurance premiums paid. Though loss of life or injuries incurred cannot be measured in financial terms, insurance attempts to quantify such losses financially. Insurance can be defined as the process of reimbursing or protecting a person from contingent risk of losses through financial means, in return for relatively small, regular payments to the insuring body or insurance company. Insurance can range from life to medical to general (residential,commercial property, natural incidents, burglary, etc).


Life-Insurance It insures the life of the person buying the Life Insurance Certificate. Once a Life Insurance is sold by a company then the company remains legally entitled to make payment to the beneficiary after the death of the policy holder. Medical-Insurance This is also known as mediclaim. Here, the policy holder is entitled to receive the amount spent for his health purposes from the insurance company. General-Insurance This insurance type involves insuring the risks associated with the general life such as automobiles, business related, natural incidents, commercial and residential properties, etc..





India Insurance

Insurance sector in India

A history of almost two centuries and an important change in the sector after the gates of the market were thrown open for the private companies marks the scene of India Insurance industry. An open competitive market then a nationalized one and again a liberalized market the industry has witnessed many such developments. Public and private companies along with foreign companies in both the sectors of life and general aided to an immense growth of the industry. Generally focusing in the life insurance sector, the industry saw a change recently, when private companies came up with hosts of other forms of insurance like, automobile, health, property, and many other classes falling under the general category. Life insurance covers the insurer against death or disability. Non life insurance or general insurance covers the insurer against any risk of theft, natural disaster, accidents and many more. Indian Insurance Reforms The Malhotra committee formed in 1993 granted some reforms in the India insurance industry. The main idea behind forming this committee was to assess the function of the industry and to set the road of the future for the industry. It tried to improvise the industry in all facets and make it more efficient so that insurance gets more stability in Indian market. The committee recommended the set up of an independent regulatory body and the Insurance Regulatory and Development Authority Act (IRDA Act) of 1999 paved the way for establishment of Insurance Regulatory and Development Authority (IRDA) in 2000. The main aim of IRDA was to protect the concerns of insurer as well as the insured and to adopt new policies to keep up the growth of insurance in India. Indian Insurance Policies The India insurance companies provides a diverse range of insurance policies. Some of the most known are:
           

Loan Cover Assurance Policies Group Insurance Policies Joint Life Policies Whole Life Policies Term Life Policies Pension Plans, Endowment Policies Unit-Linked Insurance Plans General insurance policies are also provided to cover the following: Travel Insurance Health Insurance Motor Insurance

Indian Insurance Industry - Challenges New Comer poses threat - With more companies coming up everyday with the growing demand of the industry the markets very competitive. Until and unless the existing companies makes a mark and create their very own brand name it would be quite tough to sustain their position in the market. There is also a probability of big companies taking over the new emerging companies. Supplier Power: The people providing the capital don't act as big terror as opportunity always lies in the big hands and they can any day tempt good insurer from small companies to their own company. Buyer Power: Individual never stands a chance in front of big corporate sectors as they dominate the

Insurance sector in India

insurance industries with high potential of negotiation power. Presence of substitutes: The insurance industry is full of replacement option and the large insurance companies offers the same service as of others be it in any sector of home, commercial, auto, health or life. Indian Insurance - Growth Such a stupendous growth after along wait was well deserved for the insurance companies. Sharp and excellent market scheme along with wide product bandwidth proved to be a winner among the masses. A considerable growth rate was also recorded by the private companies. The India insurance sector is likely to put its foot forward towards more competition with growing importance and recognition. Indian Insurance - Major Companies The names of few of the major insurance companies in public sector are:
  

Life Insurance Corporation (LIC) of India Oriental Insurance Limited National Insurance Company Limited

The names of few of the major insurance companies in Private sector are :
         

Bajaj Allianz SBI Life HDFC Standard Life Tata AIG ICICI Prudential Life Aviva Life ICICI Lombard General ING Vyasya Life Royal Sundaram Alliance Peerlees Smart Financial

Functions Of Insurance
Concept of Insurance Insured, are you? The functions of Insurance will give you an idea on how to go ahead with the approach of insurance and what type of insurance to choose. In a layman's words, insurance means, ‘a guard against pecuniary loss arising on the happening of an unforeseen event’. In developing economies, the insurance sector still holds a lot of potential which can be tapped. Majority of the people in the developing countries remains unaware of the functions and benefits of insurance and it is for this reason that the insurance sector is still to grow. Tangible or intangible – an individual can insure anything! Be it a house, car, factory, or the voice of a singer, leg of a footballer, and the hand of an author.....etc. It is possible to insure all these as they have the possibility of becoming non functional by any disaster or an accident.

Insurance sector in India

Basic functions of Insurance
1. 1.Primary Functions 2. 2.Secondary Functions 3. 3.Other Functions

Primary functions of insurance




 

Providing protection – The elementary purpose of insurance is to allow security against future risk, accidents and uncertainty. Insurance cannot arrest the risk from taking place, but can for sure allow for the losses arising with the risk. Insurance is in reality a protective cover against economic loss, by apportioning the risk with others. Collective risk bearing – Insurance is an instrument to share the financial loss. It is a medium through which few losses are divided among larger number of people. All the insured add the premiums towards a fund and out of which the persons facing a specific risk is paid. Evaluating risk – Insurance fixes the likely volume of risk by assessing diverse factors that give rise to risk. Risk is the basis for ascertaining the premium rate as well. Provide Certainty – Insurance is a device, which assists in changing uncertainty to certainty.

Secondary functions of insurance


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Preventing losses – Insurance warns individuals and businessmen to embrace appropriate device to prevent unfortunate aftermaths of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc. Covering larger risks with small capital – Insurance assuages the businessmen from security investments. This is done by paying small amount of premium against larger risks and dubiety. Helps in the development of larger industries – Insurance provides an opportunity to develop to those larger industries which have more risks in their setting up.

Other functions of insurance


 

Is a savings and investment tool – Insurance is the best savings and investment option, restricting unnecessary expenses by the insured. Also to take the benefit of income tax exemptions, people take up insurance as a good investment option. Medium of earning foreign exchange – Being an international business, any country can earn foreign exchange by way of issue of marine insurance policies and a different other ways. Risk Free trade – Insurance boosts exports insurance, making foreign trade risk free with the help of different types of policies under marine insurance cover.

Insurance provides indemnity, or reimbursement, in the event of an unanticipated loss or disaster. There are different types of insurance policies under the sun cover almost anything that one might think of. There are loads of companies who are providing such customized insurance policies.

Insurance sector in India

List of Insurance companies in India
LIFE INSURERS Public Sector Life Insurance Corporation of India Private Sector Allianz Bajaj Life Insurance Company Limited Birla Sun-Life Insurance Company Limited HDFC Standard Life Insurance Co. Limited ICICI Prudential Life Insurance Co. Limited ING Vysya Life Insurance Company Limited Max New York Life Insurance Co. Limited MetLife Insurance Company Limited Om Kotak Mahindra Life Insurance Co. Ltd. SBI Life Insurance Company Limited TATA AIG Life Insurance Company Limited AMP Sanmar Assurance Company Limited Dabur CGU Life Insurance Co. Pvt. Limited GENERAL INSURERS Public Sector National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited Private Sector Bajaj Allianz General Insurance Co. Limited ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. www.bajajallianz.co.in www.icicilombard.com www.itgi.co.in www.nationalinsuranceindia.com www.niacl.com www.orientalinsurance.nic.in www.uiic.co.in www.allianzbajaj.co.in www.birlasunlife.com www.hdfcinsurance.com www.iciciprulife.com www.ingvysayalife.com www.maxnewyorklife.com www.metlife.com www.omkotakmahnidra.com www.sbilife.co.in www.tata-aig.com www.ampsanmar.com www.avivaindia.com www.licindia.com Websites

Insurance sector in India

Reliance General Insurance Co. Limited Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Limited Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation HDFC Chubb General Insurance Co. Ltd. REINSURER

www.ril.com www.royalsun.com www.tata-aig.com www.cholainsurance.com www.ecgcindia.com

General Insurance Corporation of India

www.gicindia.com

Top Insurance Companies in India
Following are some of the top insurance companies in India.

Life Insurance Corporation of India -

The Life Insurance Corporation of India (LIC) is undoubtedly India's largest life insurance company. Fully owned by government, LIC is also the largest investor of the country. LIC has an estimated asset of Rs. 8 Trillion. It also funds almost 24.6% of the expenses of Government of India. Established in 1956 and headquartered in Mumbai, Life Insurance Corporation of India has 8 zonal offices, 100 divisional offices, 2,048 branch offices and a vast network of 10,02,149 agents spread across the country.

Tata AIG Insurance Solutions-

Insurance sector in India

Tata AIG Insurance Solutions, one of the leading insurance providers in India, started its operation on April 1, 2001. A joint venture between Tata Group (74% stake) and American International Group, Inc. (AIG) (26% stake), Tata AIG Insurance Solutions has two different units for life insurance and general insurance. The life insurance unit is known as Tata AIG Life Insurance Company Limited, whereas the general insurance unit is known as Tata AIG General Insurance Company Limited. AVIVA Life Insurance AVIVA Life Insurance, one of the popular insurance companies in India, is a joint venture between the renowned business group, Dabur and the largest insurance group in the UK, Aviva plc. AVIVA Life Insurance has an extensive network of 208 branches and about 40 Bancassurance partnerships, spread across 3,000 cities and towns across the country. There are more than 30,000 Financial Planning Advisers (FPAs) working for AVIAV Life Insurance. It offers various plans like Child, Retirement, Health, Savings, Protection and Rural.

MetLife Insurance –

MetLife India Insurance Company Limited is another popular player in Indian insurance sector. A joint venture between the Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors and MetLife International Holdings, Inc., MetLife Insurance offers a wide range of financial solutions to its customers including Met Suraksha, Met Suraksha TROP, Met Mortgage Protector and Met Suraksha Plus etc. It has its branches situated over 600 locations across the country. More than 50,000 Financial Advisors work for MetLife. ING Vysya Life Insurance ING Vysya Life Insurance entered into the Indian insurance industry in September 2001. A joint venture between ING Group, Ambuja Cements, Exide Industries and Enam Group, ING Vysya Life Insurance uses its two channels, viz. the Alternate Channel and the Tied Agency Force to distribute its products. The first channel has branches in 234 cities across the country and has got 366 sales teams. On the other hand, the later one has more than 60,000 advisors. Currently, ING Vysya Life Insurance has tie ups with more than 200 cooperative banks. Birla Sun Life Financial Services -

Insurance sector in India

Birla Sun Life Financial Services is a joint venture between Aditya Birla Group and Sun Life Financial Inc, Canada. It has got an extensive network of more than 600 branches. More than 1,75,000 empanelled advisors work for Birla Sun Life, which currently covers over 2 million lives. MAX New York Life –

Max New York Life Insurance Company Ltd. is one of the top insurance companies in India. A joint venture between Max India Limited and New York Life International (a part of the Fortune 100 company - New York Life), Max New York Life Insurance Company Ltd. started its operation in April 2001. It currently has around 715 offices located in 389 cities across the country. It also has around 75,832 agent advisors. Max New York Life offers 39 products, which cover both, life and health insurance. Bajaj Allianz Bajaj Allianz is a joint venture between Bajaj Finserv Limited and Allianz SE, where Bajaj Finserv Limited holds 74% of the stake, whereas Allianz SE holds the rest 26% stake. Bajaj Allianz has been rated iAAA by ICRA for its ability to pay claims. The company also achieved a growth of 11% with a premium income of Rs. 2866 crore as on March 31, 2009. Bharti AXA Life Insurance Bharti AXA Life Insurance, one of the top insurance companies in India, is a joint venture between Bharti group and world leader AXA. Bharti holds 74% stakes, whereas AXA holds the rest of 26%. Bharti AXA has its branches located in 12 states across the country. It offers a range of individual, group and health plans for its customers. Currently more than 8000 employees work for Bharti AXA Life Insurance.

SOME PLAYERS IN MARKET OF INSURANCE

Insurance sector in India

Insurance Companies - International
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Allianz Life of North America GAN Insurance Company Limited Lloyd's of London Nationwide® Life Insurance Company

Insurance sector in India

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Virginia Surety Company, Inc. SIRIUS International Insurance Corporation The Insurance Company of the State of Pennsylvania ING Life Insurance and Annuity Company

TYPES OF INSURANCE & GROWTH
Life Insurance
India Life Insurance industry came into being with the establishment of Life Insurance Corporation (LIC)in India in 1956. Till the time Insurance Regulatory and Development Authority(IRDA) Act was implemented in the year 1999, private companies were controlled by the LIC of India. Since 1999 onwards the market was opened for operations of private companies also in the insurance sector. Growth Of Indian Life Insurance Sector The life insurance sector of India has added up to 4.1% of the GDP in 2009, a considerable growth was recorded since the time the sector was opened for the private companies. The contribution in FDI by the life insurance segment was recorded at US $ 1.3 billion, even though the government is likely to increase the FDI cap limit from 26% to 49%, a bill of which is pending at the Rajya Sabha. The year 2009-10 also saw private sector insurance company, Aviva Life Insurance establishing nine unitlinked plans, in line with the recent IRDA guidelines featuring enhanced and higher internal rate of return (IRRs). As per the data provided by the IRDA, the businesses of the life insurance companies had a growth of 22% at US$ 12 billion in April-November 2009-10, in comparison to the US$ 9.8 billion during the same period last year. Such a huge sale of single premium policies led the industry to record a raise of 53.25% in November 2009 alone. With the registration of IndiaFirst Life Insurance Company Limited, a joint stake life insurance company encouraged by Bank of Baroda and Andhra Bank of India and Legal & General Middle East Limited, UK, the total number of of life insurers registration with the Insurance Regulatory Development Authority (IRDA) has increased to 23. According to industry body, Life Insurance Council, The life insurance industry had earlier been anticipated to grow by 15% in the year 2009 - 10 and surpass the US$ 54.1 billion mark in total premium income by March-end. This growth in premium income includes new business as well as renewals, driven by increasing awareness on the value of getting insured. The US$ 41-billion Indian insurance industry made a grand return with better performances in the April-November 2009 period. Life insurance in India recorded the first year premium (inclusive of Single Premium) segment accounting to US$ 24 billion.

Insurance sector in India

FDI Policy in Indian Life Insurance Industry The FDI limit in the insurance sector has been capped at 26% for the foreign marketeers but the government is thinking to increase it to 49% and a bill of this offer is pending at the Rajya Sabha. The LIC is still the major company in the life insurance sector but with such an emergence of the private companies, providing a range of moneymaking policies and investment chances for people from all walks of life the situation is fast changing. The Unit Linked Investment Plans (ULIP) offering life cover as well as scope for savings and investment deserves extra acknowledgement in this issue. Furthermore, with minimum lock-in period of three years such plans are subjected to avoid miss usage of important tax benefits. Major Indian Life Insurance Companies In the public sector of the India life insurance, the Life Insurance Company of India functions solely. Some of the private companies operating in the life Insurance Sector are:
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ICICI Prudential Life Insurance Birla Sun Life SBI Life Tata AIG Life Aviva Life Insurance Kotak Mahindra Life Insurance Bajaj Allianz Life Ing Vyasya Life Insurance

Credit Insurance

Credit insurance takes care of the risk of payment of the organizations and not of the individuals. To get insured, the holders of the policy should have a credit limit on each of the buyers. For Credit insurance, the rate of premium is kept low. It combines both Credit Life Insurance and Trade Credit Insurance. Credit insurance involves trade with a single buyer. The concept of this insurance was first incepted in the nineteenth century. During the time of first and second World Wars, the idea was conceived in the Western Europe. The various companies that were developed during this time offered credit insurance to the individuals. If the borrower of the loan dies or gets disabled then the insurance will pay the loan off. Trade Credit Insurance covers the risk of the payment during the time of delivery of services and goods. Private individuals are not provided with the facilities of this product.

Insurance sector in India

Premium is charged monthly against the issuance of the credit insurance. This insurance is a business driven by broker, who helps in the creation of market competition among the policy holders for better premium and policy wordings. Credit Insurance is the best way to manage credit risk in a cost effective way for any organization. It provides financial assistance during the time of any credit risks and overdue payments during domestic trade or exports. Before granting covers for the insurance various terms and conditions need to be fulfilled. Credit insurance is one of the important types of insurance that covers risk against the following:
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Trade Receivables Portfolio Business-to-Business Transactions Short Term Credit Risk

Credit insurance offers a number of benefits, which are available in the form of
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Risk Mitigation Efficient collection of debts Complements credit management of the seller Enables development of new markets against protection provided Expert advice since buyers are analyzed for credit worthiness

Aviation Insurance
Last Updated on 05-03-2010 The Aviation insurance Sector was first launched in the early years of 20th century and its policies were laid down in the year 1911 by Lloyd's of London. The main target of this sector are the people victim to accidents or loss of life due to air crash or similar to any such calamity. In the year 1929, the Warsaw convention was signed keeping in mind the plights of the people flying by air. The convention had some particular terms and conditions along with some restrictions to stand by and was the first acknowledgement for the airline sector identified till date. Considering the fact that there should be a specialist sector, an aviation committee was formed by the International Union of Marine Insurance (IUMI) in the year 1933. By the following year International Union of Aviation Insurers was established with eight European aviation insurance organizations resolving to figure out the concept of Aviation insurance. Throughout the world, there are a number of insurance markets depending on the aviation activity, providing aviation insurance to the people of which the largest market is in London. The US also has a major share in the world's general aviation fleet and is a established market in this sector. Associated Risks of Aviation Insurance Hull "ALL Risks" The hull "All Risks" policy usually pertains to chances of physical loss or damage to the aircraft. These policies are subjected to a standard level of deductible (uninsured amount borne by the Insured)

Insurance sector in India

applicable in case of partial loss. This deductible presently ranges from US $ 50,000 (in case of Twin Otter) to US $ 1,000,000 (in case of Boeing 747). The term "all risks" can be misguiding and it should be cleared that the term is not subjected to any kind of consequential loss, or loss of use and delay. The term addresses to the restoration of the aircraft to its previous condition before the loss. Presently the bulk of airline hull "all risks" policies are formed on the basis of agreement between the insurers and the insured covering the policy period, the value of the aircraft and in any case of total loss the agreed value should be payable in full. There is no option for replacement under such an agreement. Exceptions to such risks are
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Wear and tear of the aviation craft are not to be included in the aviation insurance. Mechanical breakdown are usually compensated by this type of insurance. Ingestion damage - caused by stones, grit, dust, sand, ice, is also excluded. The hull "All Risks" policy will pertain to the exclusion of war damages. War here means any kind if civil war, strikes, riots, disturbances, confiscations, hi- jacking or any kind of political or terrorist attacks.

Liability Insurance Liability is basically categorized in two aspects
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In regard of passengers, baggage and cargoes carried on the aircraft. Aircraft Third Party Liability - the liability for any sort of property damage or to the people outside the aircraft

The exceptions of Liability insurance are:
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Any kind of loss incurred by the own property of the insured. War and allied risks associated with it. Noise and pollution unless resulted from crash, fire or any kind of explosions registered inside the air plane,

Hull Total Loss Only Cover Hull total loss only cover is subjected solely to total loss of the aircraft and is particularly formed for the old aircrafts as the condition of such are very poor and are insured for low amount the premium of which would also be very low. The proportion of partial losses to total losses in case of such aircraft is very inadequate.

Health Insurance

Insurance sector in India

Last Updated on 08-03-2010 Health insurance is the form of insurance that provides financial security against any unforeseen medical emergency. The insurance companies offering various types of policies, plans and schemes promises to pay back the ascertained amount to the insured depending on the premium deposited. Presently many companies have engaged themselves in providing a range of health insurance schemes suiting the needs of the people.

Insurance Companies providing health insurance schemes
The companies providing various kinds of health insurance schemes are: Max NewYork Life Insurance Max NewYork Life Insurance, one of the leading insurance company, has launched some health schemes suiting the needs and requirements of people. The health insurance schemes provided by the company are: Medicash Plan- This health insurance plan offers a fixed amount of cash benefit, covering expenses of all kinds from ICU admission to surgeries and recovery process on a daily basis throughout the period of hospitalization. Wellness plan - This scheme provides coverage to thirty eight severe or critical illness. Some of these are liver disease, cancer, heart ailment, alzheimer, deafness, etc. Safety Net - This scheme is a term plus health protection plan that would provide coverage against any loss of the insured in cases like accident, death, disability and critical illness. New India Assurance Company Ltd. The New India Assurance Company Ltd has come up with a health insurance scheme known by the name of Universal Health Insurance Scheme. Benefits of Universal Health Insurance Scheme Medical reimbursement - This plan particularly offers reimbursement of the hospitalization cases that amounts up to RS. 30,000 covering the expenses of ICU admission, surgeries, medical tests and other expenses of medicines, OT charges, etc.

Insurance sector in India

Personal Accident Cover - This particular plan provides coverage for death of the main earner of the family by accident amounting to Rs. 25,000. Disability Cover - This scheme aims to provide a compensation of Rs. 50 on a daily basis up to 15 days after a 3 day wait in case the main earner of the family gets hospitalized. Premium - The premium of this scheme is slated at Rs. 300 per year for an individual, Rs. 450 for a family of 5 per year and Rs. 600 per year for a family of 7. For families falling under the below poverty line a premium subsidy of Rs. 100 per family would be provided by the government. Apollo DKV Insurance Company Ltd Apollo DKV Insurance Company Ltd has come up with a range of health insurance scheme to offer better service to the people. The Schemes are Easy Health Insurance Plan - The easy health plan suits the needs of the people minus the heavy pocket cut. Available for individuals as well as families this plan aims to provide prevention with cure. The benefits of such plan are:
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It fives you the freedom to choose from a wide range of amount insured from Rs. 1 lac to 10 lacs. It covers the expenses borne before and after hospitalization. It provides incentives on every renewal after a claim free year. Provides tax benefits for the premium

Maxima Health Plan - This plan provides a range of benefits for the outpatient as well as the inpatient sector. From consultation to medical tests, cost of pharmacy, spectacles, contact lenses to annual check up a range is covered under the outpatient sector. In the inpatient sector from pre and post hospitalization expense to maternity expenses and emergency ambulance a host of expenses are covered. Individual Personal Accident Plan - This plan as conceived by the company comes with a range of benefits like
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Provides 50% of the amount to the insured dependent child for educational purpose in case of accidental death or permanent disability. Provides a major amount in case of accidental death. Provides allowance in a per week basis in case of temporary disability. Provides a major amount in case of bone fracture due to accident. Reimburses the medical expenses for in patient treatment in case of an accident.

Group Health Insurance for India's HIV afflicted population
Group Health Insurance for India's HIV afflicted population On independence day this year, Population Services International in partnership with Karnataka Network for Positive People and Star Health and Allied Insurance Company launched India's first

Insurance sector in India

group health insurance policy for over 250 PLHIV ('People Living with HIV'). This laudable and noble initiative has received support from USAID (United States Agency for International Development) under Project Connect. This unique project is a successful public-private partnership addressed to the needs of the PLHIV. Compliments have poured in from all quarters including the government for this unique public-private business model.


Life insurance for women SHGs PNB (Punjab National Bank) and LIC ( Life insurance Corporation of India) have launched a unique life insurance scheme on 18th August 2008. This scheme is meant for the women selfhelp groups, which are credit-linked. The scheme will provide permanent disability insurance and life insurance coverage. As per a speech by Finance Minister of India, Mr P Chidambaram, the above mentioned scheme is first of its kind in the country on a national scale. Mr JM Garg, PNB executive director launched this unique insurance scheme in Alwar. Initially the scheme will cover 5,000 members of PNB credit linked SHGs. The yearly premium sum is Rs 200. Half of which will be paid by the beneficiary, the remaining portion will come from the social security fund of the Centre. In case of death or permanent disability (due to an accident) of the insured, LIC would reimburse Rs 75,000. The amount receivable for normal death of the insured is Rs 30,000. For partial disability the insured would get an amount of Rs 37,500. Wealth Management Services from Union Bank of India On 18th August 2008, Union Bank of India launched its wealth management services. This service at present is targeted at the bank's clients, who have high net worth. Initially the services are being offered to the bank's Bangalore based clients. For this purpose, Union Bank of India has entered into a tie up with Wealth Advisors (India) Pvt Ltd. The latter is a leading wealth management company. It may be noted that, India is facing a rapid increase in its 'high-net worth' population. This segment is slated to record around 15% yearly growth in the coming decade. This has in turn projected a high demand for wealth management services. This latest offering from the bank will help it to ultimately emerge as a total financial solutions provider. It may be noted that, Union Bank of India is a prime Indian public sector bank. The bank possesses 2518 outlets country wide. It serves around 20 million customers at more than 1500 centers. At June 2008 year ending, the bank possessed a business mix worth Rs 1, 83,058 Crs. Total Deposits stood at Rs, 1, 07,248 Crores. Advances were to the tune of Rs 75,810 Crores. Wealth Advisors India in its turn is a wing of the J V Gokal Group. This group has business interests in 10 countries globally.

Crop Insurance
Crop insurance is one of the various types of insurance that are offered to the people. This insurance is directed to the farmers and agriculturists. This Crop insurance scheme has been going on since the time of Kharif 1985. This insurance offers financial assistance for risk management in agriculture. This insurance policy is a relief scheme for the farmers whose crops get spoiled during natural catastrophe. The insurance amount that is offered to the farmers is equal to the loan amount that has been disbursed to them. A certain amount of premium is charged against the crop insurance.

Insurance sector in India

The loss that is incurred due to natural calamities is met by the Government of India. It is to be noted that the insurance covers only one crop. The crop insurance does not cover financial assistance to multiple crops. Experimental Crop Insurance Scheme is offered to the marginal farmers. This was introduced during the 1997 to 1998 rabi season by the Government of India. Large numbers of farmers are included under this scheme. Financial security is offered to the farmers by this crop insurance. Crop insurance services are offered to the farmers for better production of the crops and introduction of modern technologies. Top quality services are rendered to the farmers and clients. The risk factor that is involved with the production of the crops has reduced much because of the introduction of this insurance policy.

India Home Insurance
India Home Insurance is about the protective coverage provided by the general insurance companies against the natural calamities and unforeseen hazards like gas cylinder explosion, fire due to electric short circuit as well as man-made disaster like burglary. The insurance companies under the India Home Insurance policies, provide its customers with instant home insurance quotes. Some factors calculates the required amount of home insurance cover needed, like, area of house (in sq. ft.) , location of property , approximate rate of construction (in Rs./sq. ft.) and type of construction (only Pukka/Permanent). However, 50 years and above old properties are exempt from insurance cover. According to the sum insured the customer has to pay the premium for every month/quarter/six months. India Home Insurance policies offer different policies to suit the unique needs of its customers, from policies having a standard/fixed cover to those with flexible package, including a basket of coverages. The premium for the latter is higher than the standard cover. The insurance companies also provide a 24 hours helpline and call centers to come up with better service to customers. There are appointed surveyors who reports about the loss to the company. Sometimes there are no surveyors, in that case the party needs to submit the required documents to the company. Home insurance policy of the India home insurance companies covers broadly two things:

Building structure - Insurance covers for a building structure includes compensations paid for losses due
to fire, storm, tempest, flood, riot, strike, lightning, explosion & implosion, landslides and rockslides, bursting or overflowing of water tanks, apparatus and pipes, earthquake and damages to the structure due to acts of terrorism. The market value of the home is not under the coverage of the India Home Insurance as the cost of the land and cost of the land are included within the price of the home and land cannot be insured. The insurance price is only for covering the construction cost of the building.

Contents inside the home - This coverage is for the loss or damage of the valuables inside the home like
the electronic and electrical goods, furnitures, clothing, jewelry and any other precious contents inside the home. The contents are covered on the market value of the items and in case of a loss the insurance claim is paid on the value of purchasing a similar new item exempting the depreciation value. Some of the leading insurance companies under India Home Insurance are:

Insurance sector in India

      

ICICI Lombard General Insurance Co. Ltd. IFFCO TOKIO National Insurance Company Ltd The New India Assurance Company Limited Tata AIG United Insurance General Insurance Corporation Of India

India Medical Insurance
The India Medical Insurance provides a cushion against medical exigencies. Insurance cover is provided in case of hospitalization, other medical expenses etc. For detailed understanding of India Medical Insurance it is mandatory to have a clear idea about the basic concept of insurance. The concept of insurance is intimately related to security. Insurance acts as a protective shield against risk and future uncertainties. Traditionally, a risk-averse behavior has been a characteristic feature of Indians who preferred a "low & certain" disposable income to a "high & uncertain" one. Hence, it goes without saying that the above proposition is even more justified when it comes to Medical Insurance. By virtue of various exogenous factors like rising medical expenses (comprising costs of medicines, consultation fees of Doctor's, hospital charges etc.), unavailability and exorbitant costs of patented drugs and emergence of diseases hitherto unknown. Bearing the above situations in mind and anticipating the rising prospects of India Medical Insurance , leading insurance companies of India , are coming out with new plans to meet the requirements of their customers. Such plans are especially formulated for the older generation who have retired or will retire in the near future. Companies belonging to private as well as public sector are urging the people belonging to younger generations to start planning early in their professional career for their life post retirement. Such strategic planning would lead them to enjoy an even level of disposable income throughout their lives barring unforeseen circumstances. The health-care policies offered by the leading medical insurance companies belonging to both public and private sector are coming up with a variety of lucrative offers as follows:




Cashless system, where the policy holder can get medical treatment and diagnostic assistance in the hospital entirely at the expense of the insurance companies (subject to the sum ensured and premium paid every year) In case if a policy holder has not received any above mentioned treatment, he/she will be entitled to a free medical check-up (again subject to the sum ensured and premium paid every year).

The leading medical insurance companies in India are: In Public Sector: New India Assurance Company Limited and United India Insurance Company Limited. In Private Sector: ICICI Lombard Plans ( Health Plans), Bajaj Allianz (Health Guard) and HSBC ( First Health).

Insurance sector in India

With the passage of time the India Medical Insurance promises to become one of the leading segments of the Insurance Sector in India.

Pet Insurance
Pet insurance is slowly but surely catching up in India. Pet Insurance schemes essentially pay for the veterinary costs in case one's pet falls sick or suffers an accident or injury. Some pet plan insurance products also make payments for loss or death of the insured pet. Pet medical insurance is essentially a risk mitigation strategy for guarding against significant medical expenditure for treatment of sick or injured pets. With the recent developments in the field of veterinary medicine the life expectancy of pets has increased, so did the cost of medical treatment. This has widened the market for pet insurance. Nowadays customized pet plan insurance programs are available for animals like cats and dogs. It may be noted that Claes Virgin wrote the world's first policy on pet insurance in 1890. Pet insurance policies worldwide are also available for livestock and animals like horses. Pet care insurance in India is still at a nascent stage. Most of the clients come from the super rich sections of society. However, the insurers foresee a huge untapped potential in this sector, in the coming years. Pet insurers put the number of pets at over 4 million, counted across 27 main Indian metros. The value of the Indian pet industry is estimated at above Rs 400 crore. Industry insiders in India expect pet insurance business to boom with the increased public awareness about the concerned schemes. Oriental Insurance, a premier Indian insurance company, provides insurance for dogs, horses and elephants. Currently the other key players in the Indian pet insurance market are United India Insurance Co, National Insurance Co, Bajaj Allianz General Insurance and New India Assurance Co. Usually the premium for pet insurance varies between three to five percent of the amount insured in India. Pet medical insurance plans in India normally provide coverage for death from disease, disability and sickness. Insurance coverage is also extended for public liability and accidental death of pets.

Property Insurance

Last Updated on 05-03-2010 Property insurance offers security and financial aid against any kind of property risks like natural disaster, theft and fire. The property contents are also covered under such insurance.

Insurance sector in India

Why do you need a property insurance?
  

Property insurance is basically required for the financial security it provides to the property in case of any loss suffered. The insurance pays off for the losses caused by any unfortunate disaster or for the particular cases listed on the policy. Such an insurance also covers up for the accommodation at the time of your property being renovated.

Lastly, such kind of insurance also offers coverage for any kind of unintentional loss caused by you on someone else's property. Types of property insurance Property insurance includes several forms of insurance like: Earthquake Insurance This is a kind of property insurance that compensates the insurer in case his property faces any kind of loss due to earthquake, but it is to be kept in mid that homeowners insurance does not provide security in case of damages caused by earthquake. Such type of insurance coverage comes with high deductible rates that gains if the property gets fully damaged and does not help much in case of small losses. Fire Insurance Fire insurance also falls under the forms of property insurance that offers protection to office, residences, hospitals, shops, industries and corporate offices. Damages caused by explosion, strike, riot, terrorist acts, landslide burst etc are all covered under this and damages caused by war, any electrical equipment or temperature change are not covered under such an insurance policy. Home Insurance Home insurance is the kind of property insurance that offers insurance coverage to the homes. This insurance also gives liability protection (for accidents occurring inside the home) and also property protection at the same time for a single premium. This insurance covers the home, its contents and personal possession. Flood Insurance This is also another type of property insurance that offers insurance coverage against any kind of damages suffered by the property in an event of a flood. Such type of an insurance is not very common in India as it is often covered under the home insurance and is not needed to separately adopt a policy as such. Boiler Insurance Boiler insurance is that form of property insurance that compensates for damages suffered by your home boiler or any kind of electrical equipment of your house with some exceptions attached to it. Methods to get property insurance

Insurance sector in India

There are mainly two ways to gain property insurance and they are
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Open Perils - Property insured through open peril policy offers coverage for all sorts of loss resulted from floods, act of terrorism, earthquakes and war. Named Perils - Property insured through named peril policy offers coverage for all sorts of loss that are particularly listed in the policy documents. The most common named includes range of loss cused by explosion, fire, theft and lightning.

Tip for you Full coverage of property is only possible through the best suited Insurance cover, so you must choose very wisely and one thing that should always kept into mind is that high deductible rates always gets low premium.

Car Insurance India

Auto Insurance in India deals with the insurance covers for the loss or damage caused to the automobile or its parts due to natural and man-made calamities. It provides accident cover for individual owners of the vehicle while driving and also for passengers and third party legal liability. There are certain general insurance companies who also offer online insurance service for the vehicle. Auto Insurance in India is a compulsory requirement for all new vehicles used whether for commercial or personal use. The insurance companies have tie-ups with leading automobile manufacturers. They offer their customers instant auto quotes. Auto premium is determined by a number of factors and the amount of premium increases with the rise in the price of the vehicle. The claims of the Auto Insurance in India can be accidental, theft claims or third party claims. Certain documents are required for claiming Auto Insurance in India , like duly signed claim form, RC copy of the vehicle, Driving license copy, FIR copy, Original estimate and policy copy. There are different types of Auto Insurance in India :






Private Car Insurance - in the Auto Insurance in India, Private Car Insurance is the fastest growing sector as it is compulsory for all the new cars. The amount of premium depends on the make and value of the car, state where the car is registered and the year of manufacture. Two Wheeler Insurance - the Two Wheeler Insurance under the Auto Insurance in India covers accidental insurance for the drivers of the vehicle. The amount of premium depends on the current showroom price multiplied by the depreciation rate fixed by the Tariff Advisory Committee at the time of the beginning of policy period. Commercial Vehicle Insurance - Commercial Vehicle Insurance under the Auto Insurance in India provides cover for all the vehicles which are not used for personal purposes, like the

Insurance sector in India

Trucks and HMVs. The amount of premium depends on the showroom price of the vehicle at the commencement of the insurance period, make of the vehicle and the place of registration of the vehicle. The auto insurance generally includes:
  

Loss or damage by accident, fire, lightning, self ignition, external explosion, burglary, housebreaking or theft, malicious act. Liability for third party injury/death, third party property and liability to paid driver On payment of appropriate additional premium, loss/damage to electrical/electronic accessories

The auto insurance does not include:
  

Consequential loss, depreciation, mechanical and electrical breakdown, failure or breakage When vehicle is used outside the geographical area War or nuclear perils and drunken driving

Some of the leading Insurance Companies offering Auto Insurance in India are: HSBC India - Auto Secure Bajaj Allianz - Bajaj Allianz's Motor Insurance ICICI Lombard - Motor Plans, Two Wheeler Package Policy United India Insurance Co. - Motor Package and Liability Only Policies The New India Assurance Co. - Motor Policy India Car Insurance is one of the modern diversifications in the insurance sector in India that has not only provided revenue to the insurance companies but also relieved the car owners across the country from the burden of incurring various unprecedented expenses. The Private Car Insurance Policy in India provides insurance coverage on any light motor vehicle which is used for domestic, social or commercial purposes. Individuals and corporate owners of private cars and the financiers of the car who have insurable interest in the vehicle are the ones who can reap the benefits on Car Insurance in India. The risks covered in Indian Car Insurance are:
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Loss or damage by accident, fire, lightening, self-ignition, external explosion, burglary, theft and malicious act. Riot and terrorism, strike and other natural calamities like earthquake, flood, cyclone. While in transit by road, rail, air or elevator. Liability of injury or death caused to third party or paid driver. Loss or damage of any electrical or electronic accessory of a car, PA cover for drivers, insured or any named person and other unnamed passengers (subject to payment of additional premium).

However all the above situations are subjects of legal verifications by the respective authorities on whose approval only, the claims may be realized. The claims will not be entertained under the following situations:

Insurance sector in India

     

Consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failure or breakage. When the insured car faces the aforesaid problems outside the geographical boundary of India. When the insured car is used contrary to its limitations as to usage mentioned in the agreements. When the insured car is driven by any person other than the driver stated in the "driver's clause". If the driver of the car is drunk at the time of the occurrence of aforesaid problems. During war and nuclear perils.

The Car Insurance Company will bear the following expenses on behalf of the insured.
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Actual amount spent on repairs and replacement of part(s ) of the car subject to depreciation and sum insured. Garaging and towing charges. Damage caused to tires. In case of complete loss, market value of the car at the time of loss or the sum insured whichever is less.

Today, car insurance is being provided by various private insurance companies like ICICI Bank, Kotak Mahindra,Bajaj etc. With growing demand for cars, the future holds good for Car Insurance in India .

India Two Wheeler Insurance
India two-wheeler Insurance is of 2 types, viz., Liability Only policy and Package Policy. Two wheeler insurance is obligatory in India and it is illegal to drive a two-wheeler in India without valid insurance. India two-wheeler Insurance procedures have been made convenient with the advent up of new insurance companies in India. The Motor Vehicles Act, 1988 has laid down the insurance policies for diesel and petrol driven automobiles. Insurance companies in India now also provide insurance for two-wheelers running on LPG or CNG. Two-wheelers used for personal, business, and social reasons are being successfully insured by insurance companies under a variety of schemes. The two-wheeler insurance policies have been briefly mentioned below:


Liability Only policy - Insurance against all the 'Acts Risks' in using a two-wheeler as covered under the Section 146 of Motor Vehicles Act, 1988 is covered by this policy. The party (or parties) other than the vehicle owner and the insurance company is known as third party. In the event of death, physical injury, and property damage of third party, compensation will be made. Additional premia need to be paid for risks of fire and theft. Package Policy - The scope of the policy covers risks associated with natural calamities and



Insurance sector in India

man-made disruptions, burglary, transit damages while on road, and third party risk. Some insurance companies include the pillion rider in the insurance cover as well. However, here are some claims that are not covered under two wheeler insurance:
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Damages due to general wear and tear Accident on account of drunken driving Vehicle used for unconventional reasons Accident caused but without valid license Depreciation, and losses due to war reasons and weapons

In the event of the two-wheeler being stolen, the owner must first lodge an FIR and present a copy of the insurance policy to the police. The claim is usually approved by the insurance company after due investigation. Thereafter, the two-wheeler keys will be taken from the owner and other necessary formalities will be carried out. For two wheeler accident claim, it is important to submit these documents - FIR (Third Party Injury or Damage), claim form and original estimate of needed repairs, insurance policy proof, motor driving license of driver, and registration certificate. Names of some companies dealing in two wheeler insurance are Bajaj Allianz, HSBC India, The New India Assurance Co., Oriental Insurance Company Limited, ICICI Lombard, and United India Assurance Company. India Two-wheeler Insurance is gradually becoming a quick, convenient, and hassle-free process for two wheeler buyers, especially since two wheeler manufacturers have been tying up with top insurance companies in India to offer attractive schemes to customers.

India Travel Insurance
India Travel Insurance is one of the latest introductions that have come about in the Insurance Sector of India . Before delving deep into Indian Travel Insurance, let us get to the very root of the topic. The concept of insurance is intimately related to security. Insurance provides protection against risk and future uncertainties. Traditionally, a risk-averse behavior has been a characteristic feature of Indians who have preferred a "low & certain" disposable income to a "high & uncertain" one. With the advent of a host of liberalization measures taken up by the Government of India in 1991, the insurance sector has expanded radically. The issue of licenses to private companies is seen as a major cause of such an expansion. It activated healthy competition between the various players (both public and private) who started emerging with new policies and ideas. Travel Insurance is a product of such a situation. Travel and tourism is one of the fastest growing sectors in India. With an improvement in the standard of living, domestic and international travel for business as well as personal purposes has become a widespread phenomenon. Coupled with this, both domestic and overseas travel has become increasingly unpredictable which has risen the need for services that would cater to traveling requirements in the event of occurrence of any such unprecedented consequences. Such an assurance is provided by Travel Insurance in India .

Insurance sector in India

Travel Insurance Policies cater to all worries related to traveling. It secures travelers in events such as:
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Cancellation or interruption of travel plans Damage or loss of luggage Travel delays Illness or accidents

Previously, any personal mishap faced by a traveler was compounded by a financial burden

Weather Insurance
Agriculture contributes 24% of the GDP of India. Therefore, even the slightest change in this sector can affect the economy. Weather insurance covers the losses that may be caused to this sector due to abnormal weather conditions including variations in temperature, wind speeds and humidity or excess of rainfall and shortage in rainfall. Weather insurance is now a common term in countries like US, Canada, UK and other western countries. It has come into use in various industries like agriculture, food leisure, processing, energy and reinsurance. In India, ICICI Lombard is the most popular company in the field of weather insurance. Weather insurance was developed in association with the World Bank. It was launched as a pilot scheme which was first used to insure groundnuts in Andhra Pradesh. Now, farmers and all those dependent on the weather conditions need not worry. There are several benefits of weather insurance. They include:
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High level of client comfort Low management expenses Scientifically developed objective

Weather insurance provides protection to the farmers, banks, micro-finance lenders and agro-based industries. This in turn results in boosting the entire rural economy. Some vital factors of Weather Insurance are:
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Peril Identification Index Setting Back testing for payouts Pricing Monitoring Claims Settlement

There are some examples of deals initiated by Weather Insurance. Oranges in Jhalawar, Rajasthan were not available for flowering. 782 farmers were aided by the Weather Insurance which provided a cover for 613 acres for a sum insured of Rs. 18.3 mn to them. Another example states various crops in Andhra Pradesh were provided cover when they faced losses due to deficit rainfall.

LATEST UPDATES RELATED TO INSURANCE

Insurance sector in India

AIG to sell Asian insurance biz to Prudential Plc Submitted by Harish Dhawan on Mon, 03/01/2010 - 18:00. Prudential has decided to buy nationalized US insurer - American International Group's Asian business for about $35.5 billion. This would be AIG's biggest largest asset sale since the US government offered approximately $182 billion in taxpayers' money to keep the insurer afloat and avoid any 'collateral damage'. Prudential Plc - UK's second-largest insurer has offered to pay about $35.5 billion of which $25 billion would in cash, which it would raise by issuing equity, and the remainder in stock, said the people familiar with the deal Mediclaim Cos cannot fool clients by playing with words: Court Submitted by Deepan Chawla on Wed, 03/03/2010 - 10:27. ‚The death of a portion of heart muscle as a result of inadequate blood supply as evidenced by an episode of typical chest pain, new ectrocardiaographic changes and by elevation of the cardiac enzymes. Diagnosis must be confirmed by a consultant physician.‛ This is not the description of a heart disease in a medical journal but definition of the now common heart attack in the policy of a prominent life insurance company. When St Stephen’s Hospital handed A. K. Jain a bill of Rs 1.91 lakh after heart surgery, he remained cool. AIG plans to sell the remaining stake in Transatlantic Submitted by Mark Menell on Fri, 03/05/2010 - 23:39. American International Group Inc. said on Friday in an announcement that the company is planning to sell the remaining stake in reinsurance company Transatlantic Holdings, Incorporation. Transatlantic Holdings is owned by American Home Assurance Company, a subsidiary of AIG. American International Group Inc. has 9.19 million, or around 13.8%, shares in Transatlantic Holdings. AIG said it will sell its remaining stake in Transatlantic Holdings Inc. in a public offering. The public offering is expected to begin by March 9 this year. This is the second time in last 10 months that AIG is selling its stake in Transatlanti

Comment [U1]:

Alico sold for $15.5 billion to MetLife

Insurance sector in India

Submitted by Harish Dhawan on Mon, 03/08/2010 - 23:24. MetLife Inc. finally sealed a deal with American International Group Inc. (AIG) to buy stake in American Life Insurance Co (Alico) for $15.5 billion. As per the deal, AIG would sell 20 per cent stake in Alico for $6.8 nillion in cash and another $8.7 billion in form of 78.2 million common stocks and 6.6 million shares of convertible preferred stocks. Post completion, the deal would make AIG the second largest shareholder in MetLife with 14 per cent stake in the company LIC may again act as a rescuer Submitted by Harish Dhawan on Fri, 03/12/2010 - 22:57. Life Insurance Corporation (LIC) is again expected to come and rescue the struggling FPO of NMDC. The fate of the NMDC offer, which is to be decided on Friday, will tell whether the largest insurer will have to underwrite the issue or not. And since the market has said that the FPO is overpriced, many of the FIIs have tried to stay away from it. In such a case, unless and until something substantial happens, NMDC may have to face the same fate as the REC FPO. Till now, said a government executive, LIC is the largest bidder for the issue. LIC eyes to sell half million credit card next year Submitted by Harish Dhawan on Thu, 03/18/2010 - 22:38. The LIC Cards has informed that it is targeting to sell half million credit cards in the upcoming year. The LIC Cards is the subsidiary of Life Insurance Corporation of India. The PSU firm is optimistic to generate an impressive sell of credit cards worth Rs. 5 lakh next year. However, the company has managed to sell 50, 000 cards since it has started IAG cuts its insurance margin second time in a month on Perth storm Fri, 03/26/2010 - 21:50.

Insurance Australia Group Ltd., the biggest car and home insurer in Australia, has again cut its 2010 insurance margin on rising claims form Perth's

Insurance sector in India

hailstorm and the cyclone in Queensland. This is the second time in this month when the insurance giant has cut its insurance margin. Insurance Australia Group, the owner of the NRMA, SGIO and CGU brands, said today that the company has again lowered its 2010 insurance margin and now expects the insurance margin between 9.5% and 11.0%.

Citi’s life insurance unit prices IPO above expectations Submitted by Harish Dhawan on Thu, 04/01/2010 - 23:34. Primerica Inc., the life insurance business of Citigroup Inc., has priced its IPO above the expected range. This was told by an underwriter, on Thursday, and has been possible because of the larger than expected turnaround for the IPO. It managed to sell 21.36 million shares with a face value of $15 each. At this rate, it can get $320.4 million. Earlier, it had planned to sell 18 million shares. The value of each share at that time was kept between $12 and $14.

Insurance companies instructed by consumer court to compensate mediclaim
Submitted by Shalini Kakkad on Fri, 04/02/2010 - 21:34.


Insurance Sector India

Insurance companies have been instructed by the Delhi State Consumer Commission to compensate medical expenses incurred by a patient within a year of taking mediclaim policy even though the exclusion clause is declared or not. The exclusion clause acknowledged that policy holders cannot claim their medical policy within a year of taking it. Talking in relation to exclusion clause government finds insurance companies at fault of not conveying this clause to the policy holders while policy is issued. » Insurance

companies instructed by consumer court to compensate

mediclaim
Submitted by Shalini Kakkad on Fri, 04/02/2010 - 21:34. Insurance companies have been instructed by the Delhi State Consumer Commission to compensate medical expenses incurred by a patient within a year of taking mediclaim policy even though the exclusion clause is declared or not. The exclusion clause acknowledged that policy holders cannot claim their medical policy within a year of taking it.

Insurance sector in India

IRDA asks insurance companies to ignore SEBI order
Submitted by Harish Dhawan on Sun, 04/11/2010 - 11:20. The Insurance Regulatory and Development Authority (IRDA) have asked insurance companies to disregard the order from the Securities Exchange Board of India (SEBI) regarding the sale of ULIPs. Earlier SEBI has permitted these companies to sell ULIPs (unit linked insurance policies). But now IRDA has tightened the screws and invoked its power under section 34(1) of the Insurance Act. It has asked the insurance companies to stop selling these ULIPs and instructed them to continue business as usual. Talking in relation to exclusion clause government finds insurance companies at fault of not conveying this clause to the policy holders while policy is issued.

ULIPs are safe: IRDA
Submitted by Harish Dhawan on Mon, 04/12/2010 - 13:13. As on the one end, market regulator has banned several insurance companies from selling Unit linked investment plans (ULIPs) in the Indian market, insurance regulator IRDA has recently confirmed the fact that the money of investors that have put in their hard earned money into the equity linked products are safe.

Government to thrash out on insurance scuffle
Submitted by Harish Dhawan on Mon, 04/12/2010 - 12:20.  The Finance ministry is expected to have a discussion on the recent tussle between the SEBI and IRDA over an insurance product linked to the stock market. Sale of ULIPs has become the bone of contention for the two regulatory bodies of the country. The Insurance Regulatory and Development Authority (IRDA) have asked insurance companies to disregard the order from the Securities Exchange Board of India (SEBI) regarding the sale of ULIPs. SEBI has permitted 14 companies to sell ULIPs (unit linked insurance policies).

Several ULIPs offer 50 times the cost of yearly premium

Insurance sector in India

Submitted by Harish Dhawan on Fri, 04/16/2010 - 18:15. While the investment in ULIPs is getting more criticism than other investment options by market regulator SEBI, but it has been noted then the money invested in the ULIPs may offer much more than the investor could have desired for. In fact, according to the past records, high mortality benefits that can be as high as 50 times the annual premium or may even jump higher as per the examples set in the industry.

SEBI order may not affect Insurers in short-run
Submitted by Harish Dhawan on Fri, 04/16/2010 - 18:19. While the ban on the sale of ULIPs and the rift between the two regulators IRDA and SEBI is getting heated up by the day. Experts are of a view that this fight may not affect the insurance companies in the short-run. Simply because of the fact that this order came in April and the busiest quarter of JanuaryMarch has been closed. Notably, people tend to invest a lot more money in the financial products due to the offered tax-breaks and hence April is more of a lean period for the insurance companies.

Reliance Life sells most number of policies
Submitted by Harish Dhawan on Thu, 04/22/2010 - 19:59. Reliance Life Insurance is the numer uno private player as it managed to sell the highest number of policies in the year 2009-10. The list includes names of 21 other private players. LIC, however, retained its position as the market leader in life insurance segment. Reliance Life is part of Anil Ambani's ADAG. The company sold 23.2 lakh policies in 2009-10 as against 22.1 lakh policies in the previous year. In the month of March alone, it sold 3.4 lakh policies.

Insurance sector in India

Five challenges for insurance companies in 2010.
As we begin 2010, insurers around the globe hope that business will return to normalcy after the 20082009 recession. It has been tough -- sales premia declined, policy counts dropped, and investment returns cratered. At the same time, the insurance industry has also had to grapple other changes-- complying with new government regulations, recalibrating business portfolios and dealing with changing customer behavior. On top of all of this, insurance companies have had to take a close look at product viability issues and new sales channels. From my experience, I foresee five challenges for insurance companies in 2010.

Consolidating savings: Historically, insurance companies were able to achieve cost savings
through product re-alignment, reduction in staff, and shutting down unviable lines of business. These resulted in easy savings but the recent economic downturn forced them to take steps that were far reaching, and it is time to consolidate the savings, further fine tune processes to cut out inefficiencies and equally focus on areas that would help them grow their business by focusing on new activities such as targeting niche market / product segments and developing new products.

Boosting sales and distribution: In 2009, the policy counts dipped significantly, impacting
worldwide revenues and generating one of most severe crises the insurance business has ever faced. The only way forward is to attract new customers by launching innovative products which are distributed through new and effective channels. However, new products require capital investment which is scarce. At the same time, without new and viable products, profitability will suffer. The challenge is therefore to launch new products through new channels as efficiently and cost-effectively as possible.

Preparing for mergers and acquisitions: Today’s insurance market is highly fragmented. I
expect that this will be the year that insurance companies evaluate M&A as part of a strategy to restructure and survive.

Leveraging new opportunities: As a result of the recession, companies simplified product
portfolios, increased pricing and avoided risky market segments. Many withdrew from some of their geographic markets and scaled back on some lines of business. This has given rise to new opportunities for companies still in the business. Players with a superior understanding of their risk will be in a better position to leverage potential opportunities, in 2010.

Handling Regulatory reform: Rule 151a which requires registration for equity-linked annuity
products is expected to take effect in two years’ time. Rule 151a is aimed at determining who runs the risk of making the investments underlying these products and dealing with how these products are marketed. This new rule will result in new compliance requirements as registrations become mandatory. In a larger context, the government’s plans for a federal Insurance office will bring in greater federal

Insurance sector in India

oversight and ultimately lead to a dual regulatory system. Insurance companies must carefully consider how best to tackle these challenges. They can either resort to the wait-and-watch approach or look at the challenges as an opportunity to bring about far-reaching changes.

Bibliography
1. Ecnomic times 2. Insurance sector india(icfai)

3. Business today

References
1. ^ http://www.irdaindia.org/regulations/TheInsuranceAct1938er126042004.doc 2. ^ History of Insurance in India, http://www.licindia.com/history.htm 3. Regulation of General Insurance in India, Insurance in India,

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