Price: Rs. 10/- ! June 2006 Volume: 1 Issue: VIII 1 INDIA’S FIRST INSURANCE NEWSPAPER June 2006 RNI No. DELENG/2005/15654 POSTAL REGISTRATION No. DL(S) - 18/3248/2006-2008 Page 2 Page 4 Page 5 Page 12 Page 16 Health Insurance Features of New Policy We the Agents Liability “SARAL” Scenario In India Insurance LIC's Amulya Jeevan Ritu Nanda -Jagendra Kumar (Income Tax Return Form) Biyani’s Future Group, Generali JV soon Rural insurance business to touch $35 Escolife Bureau shareholders if the new entrants K ishore Biyani’s Future Group (formerly known as Pantaloon) can widen the JV’s reach. Sergio Balbinot, CEO, Generali Group, billion by 2010 and Italy’s largest insurer Generali said that the partners would soon be will set up joint venture life and non- submitting their application to set up life insurance companies. Generali the two companies to IRDA. The new will have a 26% stake in the JV and company would use a multi-channel the balance will be held by Future distribution strategy including selling Group (Pantaloon) and its associates. through supermarkets in addition to Escolife Bureau billion. The potential of rural India in India and nearly 20% of the farmers The latter will set up two special traditional agency force. Generali was R ural and semi-urban areas are is still untapped and according to the owned kisan credit cards. The 25 purpose vehicles (SPVs) to invest already selling through retail chains in paper, this is due to poor distribution, expected to overtake urban centres million credit cards offered a huge in the insurance businesses and will Philippines, where 15-20% of sales large distances and high costs in generating insurance business. By data base and opportunity for insurers. invest Rs 25 crore in the two SPVs. happened through such outlets. The involved. Vast opportunities are thus 175-year old group generated 70% 2010, life insurance business in these Estimating the prospective Indian Generali operates across 40 countries available to the insurers to improve the of its premium from outside Italy. areas is expected to touch $20 billion insurance market by macro-economic through 107 companies. It ranks 22 delivery mechanism and tap the vast In China, the group is the largest and non-life insurance business $15 variables, the paper reveals that India’s in the list of Fortune 500 companies market. The paper says that “Insurance foreign insurer. According to Kishore billion. life insurance premium as a percentage and is the largest corporation in Italy needs to be packaged in such a form Biyani, CEO, Future Group, the group According to a paper prepared by of GDP was 1.8% as against 5.2% with an asset base of over Euro 300 that it appears as an acceptable would expand its retail presence to ASSOCHAM, the overall growth in billion. Generali has in other parts investment to the rural people. In the in the US and 8% in South Korea. 80-90 cities and expected to have insurance business would also result of the world successfully tied-up near future, insurance will definitely According to the paper, the penetration over 200 million customers. “In just in further consolidation of business in with retail groups for distribution be one option that rural Indian is going level in the corporate sector is already 18 months, we have sold 3.5 lakh of urban areas. Life insurance business of insurance and other financial to accept.” The paper further said that high, and hence it will not be a big our credit cards,” said Biyani. The there is anticipated to reach $15 billion products. Apart from insurance, there are 124 million rural households and non-life insurance business $10 growth area in the future. Generali has significant presence in insurance venture would be called IRDA panel real estate and asset management Future Generali Life Insurance and businesses in Europe. Future Generali General Insurance, The partners may consider additional respectively. Fixing of limits likely in to formulate detariffed scenario guidelines Escolife Bureau motor accounts for around 40%. As for insurers W hen free pricing of select per the IRDA’s proposal, pricing Escolife Bureau I insurance products becomes either above or below the 20% limit RDA has constituted a committee the norm in January 2007, fire and must be justified to the Regulator. to look into the existing grievance engineering risks could be the first “While the IRDA has suggested fixing redressal systems in the PSUs. The risks to be detariffed. As a result, upper and lower limits against the committee will prepare guidelines the sources said that industry-wide tariffed rate, the proposal is yet to be finalised,” said M Ramadoss, CMD, for adoption by the insurance revenues could fall as much as 40%. Oriental Insurance Company. He companies and suggest modifications This was because competition in the fire and engineering risk cover also said that while such limits could to the regulations for protection portfolios could drive down premiums. exist for smaller policies, it would of policyholders’ interests. Vepa At present, IRDA through the Tariff not be possible for bigger policies as Kamesam, MD, Institute of Insurance Advisory Committee, administers the they are reinsurance driven. A senior and Risk Management, will be the premium rates in these portfolios. V IRDA official said the Regulator was Chairman of the committee. The Ramasaamy, Chairman and MD, awaiting suggestions from insurers other members of the committee National Insurance Company Ltd, on the issue. Insurers say the IRDA’s include H C Jain, ED, Life Insurance said, “There will be a fall in revenues suggestion is in line with the industry’s Corporation of India, Asha Nair, if tariffs drop. But how much, it is fear that price war may result in Deputy General Manager, New India difficult to hazard a guess.” Currently, crashing of premiums as it happened Assurance Company Limited and about 70% of the non-life insurance when marine and hull insurance got Pushpa Girimaji, a consumer activist. market, which generates premium detariffed. Insurers have been making The committee will submit its report of around Rs 18,000 crore, is under preparations in terms of data collection within the next three months, an order tariff. Among the tariffed businesses, and training of underwriters. from IRDA stated. IRDA calls for data on ULIPs Escolife Bureau generated a large-scale redemption of the situation before the redemption U LIPs have been a major contributor to new business premium income of life insurance ULIPs. IRDA feels that the fear among retail investors and consequential redemption pressure can result in a actually starts. Sources also added insurers have indicated that they have already received redemption requests companies. According to sources, the strain on liquidity for insurers. IRDA objective of the Regulator is to find from their policyholders, but not on a has acted proactively to collect the whether the equity market crash has data so as to have an assessment of very large scale.
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