India Post Payments Bank formalises agreement with Bajaj Allianz to sell life-insurance (19-09-2018)
Recently launched India Post Payments Bank (IPPB) signed a five-year Corporate Agency Agreement with Bajaj Allianz Life Insurance Co. Ltd. to provide life insurance products to its consumers, here on Tuesday. The date of the launch and the details of the products on offer have not been announced yet.
Payments banks are a unique model of banking introduced by the RBI in 2015. These banks can accept deposits only up to Rs 1 lakh. While they can provide services like ATMs and debit cards, they cannot disburse loans or credit cards.
IPPB also has a tie-up with Punjab National Bank to provide loans to its customers.
(Read more at https// economictimes.indiatimes.com)
IRDAI makes long-term 3rd-party insurance must; car, bike purchase to cost more from Sep 1, 2018:
As per the Motor Vehicles Act, third-party insurance is mandatory. Now, as per the court order, it is mandatory for all general insurance companies to issue a three-year third party insurance cover for new cars and five-year third party (TP) insurance cover for new two-wheelers as a separate product or as part of a comprehensive insurance product.
IRDAI further said that after the introduction of long-term Motor TP Insurance, an insured should be given two options — Long-term package cover offering both Motor TP insurance and own Damage insurance for three years or five years as the case may be or a bundled cover with a 3/5 year term for the TP component and a one-year term for the own damage.
(Read more at: https://economictimes.indiatimes.com)
Title insurance makes little headway:
The Real Estate (Regulation and Development) Act [RERA] has taken effect since 1 May 2017 making it compulsory for developers to take title insurance, but to date, not a single state regulator has mandated it.
Section 16 of the RERA requires developers to adopt title insurance; however, the insurance will be mandatory only after the regulator of each state issues a notification about it, notes Press Trust of India. The new law covers residential and commercial construction. In addition, since the concept is new in India, not many insurance firms have introduced the product. HDFC Ergo launched title insurance in July, making it one of the first such products launched by private insurers. Title insurance provides coverage against financial loss arising from title defects and other irregularities pertaining to property acquisition.
(Read more at: http://www3.asiainsurancereview.com/)
Govt’s plan to provide universal health coverage to offer opportunities to insurers
The launch of universal health coverage is credit positive for India’s insurers because it will help grow health premiums and provide insurers with cross-selling and servicing opportunities, according to Moody’s Investors Service.
Recent article of notes that on 15 August, Indian Prime Minister Narendra Modi announced that the Ayushman Bharat, or National Health Protection Mission (ABNHBM), will launch on 25 September 2018. The AB-NHBM aims to provide more than 100m families up to INR500,000 ($7,100) of health insurance coverage each year and total INR50trn of coverage in aggregate.
However, 23 of India’s 29 states have chosen to run the scheme as a trust model, which will diminish insurers’ growth prospects.
(Read more at: http://www3.asiainsurancereview.com/)
Supreme Court auto order: Non-life insurers find going tough
Non-life insurers have pointed out to challenges in implementing the Supreme Court (SC) order asking them to issue three-year and five-year insurance policies for new four-wheelers and two-wheelers, respectively. Non-life insurers have recommended bifurcating the mandatory third-party insurance cover and the optional ‘own-damage’, or comprehensive insurance cover, which compensates for vehicle damage.
Last month, the SC ordered that no new vehicle could be sold without a three-year cover for four-wheelers and five-year cover for two-wheelers. The order comes into effect from September 1, 2018. The court order followed the recommendations of a SC-appointed committee on road safety. The objective was to reduce the number of uninsured vehicles on Indian roads.
Cabinet okays 51% stake for LIC in IDBI
The Union Cabinet on 01-08-2018 Wednesday gave its approval to the government’s decision to reduce its stake in IDBI Bank below 50%, with Life Insurance Corporation raising stake in the bank to 51%. The boards of IDBI Bank and LIC have both given their approval for the deal.
Constitution of working group for standardization of exclusions in Health Insurance Contracts:
(IRDAI Circular Ref. No: IRDAI/HLT/ORD/Misc/ 113/07 2018, Date: 24-07-2018)
Insurance regulator IRDAI has started an exercise intending that the insurance industry adopts a uniform approach while incorporating the ‘exclusions’ as part of product design as well as for the wordings of the ‘exclusions’ (under a Health Insurance Policy).
The regulator has set up a 10-members working group which has been asked to examine the following issues and submit their suitable recommendations in eight weeks. The panel is headed by Sh Suresh Mathur, ED (Health), IRDAI.
The issues/terms of reference for the working group shall be:
1) Examine the exclusions that are prevalent in the health insurance policies.
2) Rationalize the exclusions by minimizing the number, so as to enhance the scope of health insurance coverage granted.
3) Rationalize the exclusions that disallow coverage with respect to new modalities of treatments and technologically advanced medical treatments.
4) Identify the type of exclusions which shall not be allowed.
5) Study wordings/language of the exclusions and standardize the wordings of exclusions in a simple and easily understandable language.
6) Study the scope for allowing individual specific and/or ailment/disease specific permanent exclusions at the time of underwriting so that the policyholders are not denied health insurance claims unrelated to the exclusions.
7) Any other matter relevant to the subject of exclusions.
22nd Asia Insurance Industry Awards 2018 – 47 Finalists announced by Asia Insurance Review:
A total of 47 insurers, brokers, risk managers, service providers and industry leaders have made it to the list of the top finalists for the 22nd Asia Insurance Industry Awards (AIIA).
They will be in Singapore on 4 September for a face-to-face interview with the distinguished panel of judges who will then select the winners in a secret ballot. The winners will only be announced at the AIIA gala dinner on 29 Oct, 2018, to be held in conjunction with the 15th Singapore International Reinsurance Conference.
The Awards have been hosted annually since 1997 by Asia Insurance Review, the voice of the insurance industry of Asia for the past 27 years.
Out of 47, the Indian finalists are in the following categories:
- General Reinsurer of the Year
- General Insurance Corporation of India
- Digital Insurer of the Year
- Aditya Birla Health Insurance
- Bajaj Allianz General Insurance
- Young Leader of the Year
- Akshay Dhand, Canara HSBC Oriental Bank of Commerce Life Insurance Co Ltd
- Personality of the Year
- Tapan Singhel, Bajaj Allianz General Insurance
LIC seeks to own 51% stake in IDBI Bank
IDBI Bank has received a letter from insurance behemoth Life Insurance Corporation of India (LIC) for acquiring 51 per cent controlling stake in the bank as a majority promoter. LIC, which held 7.98 per cent stake in the bank as of June 30, would buy out 43 per cent more.
The bank will now seek government approval for the deal. In a BSE filing, IDBI Bank said, “The bank has received a letter dated July 16, 2018 from Life Insurance Corporation of India expressing their interest in acquiring a 51 per cent controlling stake in IDBI Bank, as a promoter through preferential allotment of shares/open offer.”
The bank’s board at its meeting held considered the letter and decided to seek approval from the Government of India in this regard.
The board of state-run LIC on Monday approved the acquisition of up to 51 per cent stake in the government-owned lender, Economic Affairs Secretary SC Garg said.
One major challenge for the insurance company while investing in the bank would be its humungous non-performing assets (NPAs).
However, concerned over the proposed investment by Life Insurance Corporation of India (LIC) in IDBI Bank, the All India LIC Employees Federation is examining the possibility of taking legal recourse to nix the move. (Source: https://www.thehindubusinessline.com/todays-paper/tp-money-banking/article24438650.ece)
Merger of 3 PSU non-life insurers may be delayed:
The merger of the three state-owned non-life insurance companies — National Insurance, Oriental Insurance and United India Insurance — is likely to be taken up only under the next government. The Centre has shortlisted chief executives for the three firms and has sought interest from consultants for advice on the merger.
According to industry insiders, the move to appoint chief executives for the individual firms is an indication that the Centre is not in a hurry to merge them. The government had originally indicated that it would like to complete the process by March 2019.
GIC Re’s Record Rs. 11,000 Crore IPO Fully Subscribed On Last Day: Should You Invest?
GIC Re IPO: The Rs. 11,372 crore IPO of General Insurance Corporation, the biggest public offer in last seven years after Coal India’s, is a mix of fresh issue and an offer for sale.
General Insurance Corporation of India (GIC Re), India’s largest reinsurer, which launched an initial public offer (IPO) of its shares on 18-07-2018, saw strong response to the issue. The IPO was subscribed 1.35 times as of 5:00 pm, on the last day. The Rs. 11,372-crore IPO of General Insurance Corporation, the biggest pubic offer in last seven years after Coal India’s, is a mix of fresh issue and an offer for sale by Government of India and the corporation itself. Priced in a band of Rs. 855-Rs. 912, the IPO will give a valuation of Rs. 80,000 crore to GIC Re.
Reviewing India’s growing insurance market by Lloyd’s
Following the opening of Lloyd’s India in 2017, using on-the-ground research and interviews with Indian cedants, insurers and brokers, the Market Intelligence team has recently published an Indian Class Review. The report is intended to support Lloyd’s market participants to identify opportunities within one of the world’s fastest growing (re)insurance markets (28% growth in 2016 to reach US$20bn GWP).
The Lloyd’s India Class Review explores this growth, analyses the Indian market by class, compares it to Lloyd’s own business portfolio in India and considers opportunities for Lloyd’s underwriters such as in agricultural insurance.
Macro factors are expected to drive growth in property insurance. With 2017 GDP growth of 6.7%, India is one of the world’s fastest growing economies, with increasing insurable assets, and a rapidly growing middle class. Over the next three decades more than 350 million Indians will move into cities, with a resultant change in risk profiles; Lloyd’s City Risk Index 2018 identified flooding as the top natural catastrophe to affect Indian cities, putting 8% of GDP at risk. These factors are expected to increase India’s very low insurance penetration rate of 0.77%.
PM’s National Health Protection Scheme: States puncture insurers’ hopes:
General insurance companies’ hopes of a great leap in growth came crashing down with as many as 23 states opting for the trust model for the Prime Minister’s National Health Protection Scheme (NHPS), instead of paying a premium to buy cover from insurance companies.
In the trust model, the claims would be settled from a corpus to be created from contributions from the central and state governments. With the government aiming to provide a health cover of Rs 5 lakh to more than 10 crore families, insurance companies were expecting huge business, though at a low premium.
(Read more at: https://economictimes.indiatimes.com/wealth/personal-finance-news/nhps-states-puncture-cover-firms-hopes/articleshow/65034399.cms)