Indian Chamber of Commerce. India Insurance Update April 2015

Transcription

1 Indian Chamber of Commerce India Insurance Update April

2 LIIFE IINSURANCE Life insurance posts robust growth in Jun-Dec 2014 period: First Year Premium of Life Insurers stood at INR crore in December 2014, recording 16 per cent growth from June The private insurers dominated in the Individual non-single premium category and the group nonsingle premium category. LIC led the market for the Individual Single Premium category and the Group single premium category commanding 71 per cent and 76 per cent of market share respectively. sector, which was a degrowth of 7 per cent. Sectoral growth was tepid for and FY. Premium underwritten for life insurance business increased from INR crore ( ) to INR crore ( ) for the public sector, registering 3 percent growth. The same declined from INR crore ( ) to INR crore ( ) in the same period for the private Life insurance claim settlement ratio records upward trend : Claim settlement ratio improved for the life insurance sector, with public sector claim settlement ratio standing at per cent and private sector claim settlement ratio being per cent in , which is a marked improvement over As per the IRDA Annual report , LIC lead the life insurance market in terms of claim settlement with claims paid being %. Out of the 24 life insurance companies in India, 11 life insurers had claim paid percentage above 90 % in , as per the report. Page 2

3 Number of offices of private life insurers declined in India from 2009 to 2014 : The insurance industry in India is driven by customer awareness, in which the insurance agents have a major role to play. Indians are heavily dependent on insurance agents for purchase, servicing and claim settlement of insurance policies. Augmenting the number of brick and mortar branches is not suffcient for increasing the insurance industry penetration. Building customer relationship is important. Offices of Life Insurers in India, Insurer Private LIC Industry The number of life insurance policies across categories was highest for the individual non-single premium category in December 2014 for both private insurers and LIC. Page 3

4 MARKET UPDATE Bank of India will dilute its stake in Star Union Dai-ichi Life Insurance in the next few months. Star Union Dai-ichi Life Insurance is a joint venture between Bank of India (48 per cent stake), Union Bank of India (26 per cent) and Tokyo-based Dai-ichi Life Insurance (26 per cent). LIC seeks level playing field in health at par with non-life insurance companies. Although life insurance companies are allowed to sell health plans, they have not made any significant inroads in this segment, as the products that they are allowed to sell are quite distinct from the popular mediclaim cover sold by non-life insurers. Nonlife companies can offer higher commission and they are allowed to revise their premium rates every year. REGULATORY UPDATE Cancellation or change in nomination in insurance policies now comes at a cost, as regulator IRDA has allowed life insurers to charge up to Rs 100 for any such modification. For policies obtained online, the fee is up to Rs 50. The Insurance Regulatory and Development Authority (Irda) has slapped a penalty of Rs 31 lakh on Canara HSBC Oriental Bank of Commerce (OBC) Life Insurance Company and Rs 5 lakh on Anand Rathi Insurance Brokers for violating regulatory norms. GOVERNMENT UPDATE The central government is expected to launch two new schemes Pradhan Mantri Jeevan Jyoti Bima Yojana (life insurance policy) and Pradhan Mantri Suraksha Bima Yojana (personal accident policy), which are not government-subsidised programmes are expected to increase the insurance penetration in the country. Under the life insurance policy, a person will be covered for Rs.200,000 for an annual premium of Rs.330. The personal accident insurance provides cover for Rs.200,000 for accidental death and full disability and Rs.100,000 for partial disability for an annual premium of Rs.12. Page 4

5 NON--LIIFE IINSURANCE Private non-life insurers recorded higher growth in premium underwritten in : Premium underwritten for non life insurance business has increased from INR crore ( ) to INR crore ( ) for the public sector enterprises, translating into 14 per cent rise. The same has increased from INR crore ( ) to INR crore ( ) for the private sector non life insurers in the concerned period, registering 25 per cent growth. Customer loyalty being a big issue, timely grievance redressal is an important prerequisite for the industry. Grievance resolved was 94 per cent for the public sector insurers in and nearly 99.9 per cent for the private non life insurers in the same time frame. Insurance Penetration (%) in India Year Life Non-life Industry Insurance industry penetration in India has been on a downslide since 2009, for both the life and non life segment. Non-life penetration has been abysmally low standing at less that I per cent in However, in the concerned period non-life density has increased from USD 6.7 to USD 11. Insurance penetration is measured as the percentage of insurance premium to GDP, insurance density is calculated as the ratio of premium to total population. Page 5

6 The non-life insurance market depicts high concentration of market share amongst the leading 5 insurers: New India Assurance led the non-life insurance market in India in terms of Gross direct premium underwritten for the May period. it was closely followed by United India Insurance, National Insurance, Oriental Insurance and ICICI-Lombard. The top 5 non-life insurers accounted for 62 percent of the market share, while the bottom 10 non-life insurers commanded 4 percent market share in the concerned period, in terms of gross direct premium under underwritten. Gross direct premium underwritten for the non-life insuance sector increased by 8.2 percent from May to May and stood at INR 6, crore in May

7 MARKET UPDATE State-owned reinsurer GIC Re, the largest international reinsurer in the Nepal market will bear the brunt of the Nepal earthquake that has caused widespread damage to industrial and commercial property. The Insurance Regulatory Authority of Nepal or Beema Samiti requires companies to cede 50% of insurance within the country. Global reinsurers make a beeline for India as FDI norms eases. So far, global reinsurers were operating through their service companies or representative offices, but are now gearing up to set up own their full-fledged operations in the country. According to industry sources, the second-largest global reinsurer Swiss Re is also in the process of appointing a CEO for its India operations. REGULATORY UPDATE Irda's new proposal allows all individual non-life insurance buyers, paying a premium of Rs 10,000 or more to have their policies in dematerialised form, while the cut-off amount for life insurance policies will be Rs 50,000. As a pilot project, the insurance regulator has mandated life insurance companies to issue a small portion of the policies in electronic form. IRDA draws up framework to widen health insurance reach. The review of health insurance guidelines follows the amended Insurance Act 2015 which recognises health insurance as an independent vertical, distinct from life and general insurance. It is proposed that long-term health policies could carry a tenure of 3-5 years and health savings account or corpus will create a fund over 5-15 years to finance insured's healthcare expenses during their post-retirement years. GOVERNMENT UPDATE A parliamentary panel has urged the government to extend sovereign guarantee for the creation of an adequate insurance pool to help General Insurance Corporation devise an insurance product for covering the risks associated with the generation of nuclear energy. Since the nuclear industry in the country does not have adequate capacity and resources to raise the nuclear insurance pool, DAE has requested Finance Ministry to provide assistance by extending a sovereign guarantee for Rs 750 crore. The rest of the fund target for the Rs 1,500-crore pool will come from the central government. 7

8 About ICC Founded in 1925, Indian Chamber of Commerce (ICC) is the leading and only National Chamber of Commerce operating from Kolkata, and one of the most pro-active and forward-looking Chambers in the country today. Its membership spans some of the most prominent and major industrial groups in India. ICC is the founder member of FICCI, the apex body of business and industry in India. ICC s forte is its ability to anticipate the needs of the future, respond to challenges, and prepare the stakeholders in the economy to benefit from these changes and opportunities. Set up by a group of pioneering industrialists led by Mr G D Birla, the Indian Chamber of Commerce was closely associated with the Indian Freedom Movement, as the first organised voice of indigenous Indian Industry. Several of the distinguished industry leaders in India, such as Mr B M Birla, Sir Ardeshir Dalal, Sir Badridas Goenka, Mr S P Jain, Lala Karam Chand Thapar, Mr Russi Mody, Mr Ashok Jain, Mr.Sanjiv Goenka, have led the ICC as its President. Currently, Mr. Roopen Roy is leading the Chamber as its President. ICC is the only Chamber from India to win the first prize in World Chambers Competition in Quebec, Canada. ICC s North-East Initiative has gained a new momentum and dynamism over the last few years, and the Chamber has been hugely successful in spreading awareness about the great economic potential of the North- East at national and international levels. Trade & Investment shows on North-East in countries like Singapore, Thailand and Vietnam have created new vistas of economic co-operation between the North-East of India and South-East Asia. ICC has a special focus upon India s trade & commerce relations with South & South-East Asian nations, in sync with India s Look East Policy, and has played a key role in building synergies between India and her Asian neighbours like Singapore, Indonesia, Bangladesh, and Bhutan through Trade & Business Delegation Exchanges, and large Investment Summits. ICC also has a very strong focus upon Economic Research & Policy issues - it regularly undertakes Macroeconomic Surveys/Studies, prepares State Investment Climate Reports and Sector Reports, provides necessary Policy Inputs & Budget Recommendations to Governments at State & Central levels. The Indian Chamber of Commerce headquartered in Kolkata, over the last few years has truly emerged as a national Chamber of repute, with full-fledged State Offices in New Delhi, Guwahati, Bhubaneshwar, Patna, Ranchi and Mumbai functioning efficiently, and building meaningful synergies among Industry and Government by addressing strategic issues of national significance. Indian Chamber of Commerce Head Office Dr. Rajeev Singh Director General-ICC 4 India Exchange Place Kolkata T: F: / 3377 E: [email protected] W: Page 8