India Market General Insurance Update

India Market General Insurance Update India Issue 32 September 2015 Introduction We are pleased to circulate our latest quarterly newsletter on some of the major developments in the General Insurance industry (i.e. non-life and health) in India for the period April to June 2015. We have included some high level key findings on the business mix and performance of major general insurers in FY 2014-15 based on data available on their websites by way of public disclosures. Business data pertaining to growth rate and market shares of various general insurers for the period April to June 2015 will be reported in our next issue. The industry s business (i.e. Gross Written Premium or GWP) grew by only 9.3 percent in FY 2014-15, lowest in the last 3 years, compared to 13 percent in FY 2013-14, mainly due to slowdown in sales for the automobile sector and limited fresh investments in new projects. However, it is estimated that the industry s annual growth rate for FY 2015-16 may touch 18 percent. The underwriting results of some general insurers active in the property class were adversely impacted due to losses from the two major natural catastrophes in FY 2014-15 - floods in Jammu & Kashmir and cyclone Hudhud in Andhra Pradesh. The country s insurance penetration in FY 2014-15 stood at 3.3 percent, dropping from 3.9 percent in FY 2013-14 but the insurance density increased from INR 3,498 (US$ 56) from INR 3,307 (US$ 53). In this issue Industry statistics April 2014 March 2015 Market update Insurers Mergers & Acquisitions Other market developments Appointments Awards Regulatory update Government update Distribution Products Contact details International reinsurance majors are gearing up to start their branch operations in India and have begun hiring for key positions. However, the regulatory framework is still awaited from the Insurance Regulatory and Development Authority of India (IRDAI). The expert working group appointed by IRDAI to review the extant health insurance guidelines has submitted several recommendations, mentioned subsequently in this newsletter, that have far reaching implications. These are currently under IRDAI s consideration. IRDAI s earlier exposure draft on regulations for licensing of corporate agents that placed caps on the maximum business that can be sourced from any one insurer has subsequently been changed to remove that restriction. Insurers promoted by Indian banks were opposing this restriction. Insurers are increasingly adopting technology for carrying out some of their day to day operational processes and reaching out to smaller locations. As always, we do hope that you would find the newsletter informative and look forward to your feedback. *The exchange rate used to convert all the INR amounts to USD is: 1US$=62.53INR Copyright 2015 Towers Watson. All rights reserved. towerswatson.com 1

Industry statistics FY 2014 2015 Net Incurred Loss Ratio Net incurred loss ratios of the select insurers for their overall business have been determined by considering the net earned premium and net incurred claims. Business data for FY 2014-15 has now been uploaded by general insurers on their respective websites as part of mandatory public disclosures. Based on the same, this section covers a few high level findings that compare all public sector companies or PSUs (but exclude the two specialised insurers, viz. Export Credit Guarantee Corp. or ECGC and Agriculture Insurance Company or AIC) with select private sector companies (i.e. the top eleven multiline insurers and the earliest two standalone health insurers). Product Mix There is some variation across select companies in the way they categorise their total business (GWP+ inward reinsurance) into different lines of business. Therefore, the compilation of product mix has been done at their common minimum level of categorisation. Gross Expense and Commission Ratio Expense and commission ratios of the select insurers in respect of their overall business have been derived based on their total business and their gross expenses and gross commission outgo. *Average Commission & Expense Ratio: average is calculated on selected companies as shown in the chart ** Source: Public Disclosure * Above charts are based on Gross Written Premium (Gross Direct Premium plus Reinsurance Accepted Premium) ** Source: Public Disclosure Copyright 2015 Towers Watson. All rights reserved. towerswatson.com 2

Market update Insurers Subdued premium generation of INR 84,715 crore (US$ 13.55 billion) in FY 2014-15 by India s general insurance industry, attributable to poor auto sales and lack of new projects have slowed down its growth rate to 9.3 percent, a three-year low, as against 13 percent growth in FY 2013-14 based on provisional data from General Insurance Council. GIC Re, India s national reinsurer and PSU has seen a 19.6 percent jump in profit after tax to INR 2,693 crore (US$ 0.43 billion) during FY 2014-15. It saw a 3.4 percent increase in its global premium of INR 15,183 crore (US$ 2.43 billion) during the fiscal. Nearly 46 percent of the premium is underwritten from overseas business. New India Assurance will focus on motor and health business in the current fiscal to drive its growth. Its top official was quoted as saying that they will target global business of INR 18,000 crore (US$ 2.88 billion) for FY 2015-16 including Indian business of INR 15,000 crore (US$ 2.4 billion). Further, it plans to have reinsurance operations in GIFT City in Gujarat where it will write business similar to what it does in its operations from its London branch where half its business is in the reinsurance space. United India Insurance (UII) has reported a 10 percent growth in premium in FY 2014-15, driven by higher business in Health, Motor and Fire compared to the previous fiscal. However, net profits dropped by 43 percent largely on account of major losses from two catastrophic events - floods in Jammu & Kashmir (J&K) and cyclone Hudhud in Andhra Pradesh amounting to INR 1200 crores (US$ 0.19 billion) approximately. Its solvency ratio was 2.36 as against the mandatory requirement of 1.50. For FY 2015-16, its premium target is INR 12,345 crore (US$ 1.97 billion), a growth of 15 percent growth Bajaj Allianz General Insurance has reported a net profit of INR 562 crore (US$ 90 million) for FY 2014-15 compared to INR 409 crore (US$ 65.41 million) in FY 2013-14. Its GWP recorded a growth rate of 16 percent in FY 2014-15 and stood at INR 5,305 crore (US$ 0.85 billion). It has settled claims totaling INR 962 crore (US$ 0.15 billion) on account of floods in J&K and Hudhud cyclone in Andhra Pradesh. Its underwriting margins in FY 2014-15 has increased sharply to INR 83 crore (US$ 13.27 million) as against a loss of INR 2 crore (US$ 0.32 million) in FY 2013-14. Future Generali Insurance reported a premium growth of 13.6 percent in FY 2014-15 with its GWP of INR 1,480 crore (US$ 0.24 billion) compared to INR 1,303 crore (US$ 0.21 billion) in FY 2013-14 while its net profit increased to INR 60.29 crore (US$ 9.64 million) for FY 2014-15 from INR 39.62 crore (US$ 6.34 million) in FY 2013-14. It has attributed its improved performance to prudent underwriting and careful selection of portfolios. It is reportedly eyeing 20 percent growth in FY 2015-16 and will focus on retail health, other retail personal lines of business and rural insurance in the microfinance segment. According to a statement made by their CEO, they will promote their online business in a big way through their advanced customer portal while also continuing to enhance support to their intermediaries through a simplified web portal. ICICI Lombard may face a claim of over INR 150 crore (US$ 24 million) under its commercial general liability issued to Nestle India. This is due to possible lawsuits following detection of higher levels of lead than the permitted limits, besides the presence of monosodium glutamate (MSG) in their popular instant noodle Maggi packets. The insurer apprehends that a case against Nestle may be filed by the consumer affairs ministry seeking compensation for damages for selling an unsafe product. Other market developments The Indian general insurance industry has set a target of more than INR 100,000 crore (US$ 16 billion) in annual premiums for the current financial year, i.e. FY 2015-16 which would be 18 percent higher than the INR 84,715 crore (US$ 13.55 billion) for FY2014-15 Insurance penetration, measured as a percentage of premiums to the country's GDP, continues to show a constant drop in India. According to a recent study by Swiss Re, India's insurance penetration in FY2014-15 was 3.3 percent, falling from 3.9 percent in FY2013-14, and the lowest since 2005-06, when it was at 3.14 percent. On the other hand, insurance density figures, measured as premium per capita, has risen to INR 3,498 (US$ 56) from INR 3,307 (US$ 53). The global average insurance penetration was 6.2 percent, while average density was INR 42,103 (US$ 673) for 2014. GIC Re is believed to have abandoned its quest to buy a Lloyd's of London syndicate member. It came very close to entering the Lloyd's arena by acquiring Antares, owned by Lightyear Capital, but lost out to Qatar Insurance Company. The company has now decided to seek membership of the syndicate instead. Industry experts say that GIC Re may lose out on the growth opportunities in about 50 countries for a long time as it could take 18 months to get a licence and then years to build a business. GIC Re has roped in Nuclear Risk Insurers (NRI), UK based Nuclear Pool to launch its INR 1500 crore (US$ 0.24 billion) Indian Nuclear Insurance Pool (INIP) comprising 11 Indian insurers for nuclear operators and suppliers. NRI will provide reinsurance support of INR 500 crore (US$ 80 million) which will replace the expected funding from the government. Sundaram Finance has received necessary approvals to acquire an additional 26 percent stake in Royal Sundaram Alliance Insurance Company for INR 450 crore (US$ 72 million). Reliance Capital is reportedly considering establishing a reinsurance company to do global business. As per media reports, they are also evaluating the options of becoming a syndicate of Lloyd s in London as well Copyright 2015 Towers Watson. All rights reserved. towerswatson.com 3

operating in GIFT City, a SEZ in Gujrat for international business. Reliance General Insurance is believed to have been in talks with Cigna TTK Health, the newest standalone health insurer to carve out its health business and then merge it with the latter. According to a recent media statement made by the company, it has succeeded in reducing the number of consumer complaints by over 30 percent through use of technology and automation, registering the lowest number of consumer complaints with a ratio of 41 per 1 lakh policy amongst the private sector non-life insurers for the nine-month period up to December 2014. Global French major AXA has received approval from the Indian government to raise its stake in two local insurance joint ventures with Bharti Enterprises from 26 to 49 percent. This is the first proposed stake hike approved by the Foreign Investment Promotion Board (FIPB) since Parliament amended the insurance law in March to raise the foreign ownership limit in insurance companies in India to 49 percent. AXA's stake hike will come after it has invested INR 859 crore (US$ 1.37 billion) in the life insurance venture and INR 431 crore (US$ 69 million) in the general insurance venture, India's Finance Ministry said in a statement. The US-based Liberty Mutual Insurance Group is not looking to increase its shareholding in Mumbai-based Liberty Videocon General Insurance at present, a top official of the Indian joint venture said. Liberty will not raise its shareholding in the JV till the next round of capital infusion which is expected only in 2016 end. Hannover Re, the world s third largest reinsurer will set up a branch in India. During a recent visit to India, their Chairman was quoted saying that they will be applying for branch approval and aim to it set up before March 2016. At present, Hannover Re has a service office in Delhi and Mumbai and writes cross-border business of about INR 812.89 crore (US$ 0.13 billion) annually from the Indian market. Currently, the overall market size for reinsurance in India is about INR 12,506 crore (US$2 billion). Swiss Re has said that it plans to set up branch operations in India and is awaiting IRDAI s final norms in that regard. It has reportedly offered close collaboration with the Indian government and IRDAI for health insurance, and to help them design better products and services for different customer segments. It had earlier supported the government-sponsored health scheme Rashtriya Swasthya Bima Yojana (RSBY) as well as other state government schemes. According to recent media reports, the well diversified Kirloskar Group is considering to enter the INR 85,000 crore (US$ 13.59 billion) general insurance market. Persons close to the development said the group has begun talks for a joint venture for this purpose. India s Motor own damage business may increase by 125 percent to INR 382 billion (US$ 6.11 billion) in FY 2016-17 from INR 170 billion (US$ 2.72 billion) in FY2012-13, according to a recent study. As a class, Motor has been the largest segment in the country s general insurance market, with a share of 47 percent. The study reveals that most customers no longer want just any insurance policy and are now increasingly looking for services-based insurance coverages like the zero depreciation motor insurance product. Unseasonal rains and hailstorms may result in crop insurance claims to the tune of INR 100 crore (US$16 million) as per a statement made by a senior official from Agriculture Insurance Company. Uttar Pradesh may top the list of states for crop insurance claims. Other affected states include Chhattisgarh, Odisha, Maharashtra, Madhya Pradesh, Gujarat, Bihar, Himachal Pradesh, Rajasthan and Haryana. As reported earlier, IRDAI had constituted an expert committee on health insurance to review the extant health insurance guidelines and recommend changes in to order to promote the business. The committee has made several recommendations that are being examined by IRDAI. Key recommendations include an automatic formula based annual increase in premium linked to Consumer Price Index-based (CPI) inflation, provision for launching pilot products for up to 5 years, incentivising policyholders through premium discounts for maintaining good health and taking up preventive care, wellness programmes and the like, encouraging younger people to opt for health insurance by linking entry age to premium, allowing general and health insurers to offer long terms health savings products, requirement of higher solvency margin for group health business, minimum paid-up capital of INR 5 crores (US$ 0.8 million) and working capital of INR 1 crore (US$ 0.16 million) for Third Party Administrators. The ongoing deadlock over cashless treatment for health insurance policyholders continues. The last meeting held recently between top ministry official, executives from insurance companies and hospitals representatives failed to yield a solution. However, the meeting helped in bridging the communication gap between city hospital owners and top officials, with hospital owners being able to air their grievances and demands. All the PSU general insurers had published notices last year clearly stating that cashless facility would be provided to emergency and trauma cases even at hospitals which are not part of the preferred provider network (PPN). General insurers are witnessing a spurt in interest for senior citizens' health insurance policies, as shrinkage in parental coverage offered by corporate employers and rising healthcare inflation prompt senior citizens to seek health cover. According to a recent survey on group health insurance carried out by a leading broker, 35 percent of the organisations polled offered parental cover on a voluntary basis, where the employee had to pay the premium. According to insurers Star Health and Bajaj Allianz, which offer products designed for senior citizens, the category has registered a growth of 20-25 percent in 2014-15. Insurers are increasingly adopting technology and are now connecting better with agents and customers and cutting down on their office infrastructure. This has led to faster penetration by them into smaller locations at lower cost. Most of the technology savvy insurers now manage many of their routine activities online like policy issuance, renewals and claim settlement. This has also enabled improved data dissemination and Copyright 2015 Towers Watson. All rights reserved. towerswatson.com 4

management for them. Industry experts believe that Indian insurers will be spending more than INR 13,000 crore (US$ 2.08 billion) on IT products and services in 2015, more than 10 percent higher than 2014. The top technology priorities of Indian insurers at present are mobility, business intelligence, business analytics, and digital marketing. Appointments Two senior level appointments have taken place in IRDAI recently. Mr. Nilesh Sathe and Ms. V.R. Iyer have been appointed as Member (Life) and Member (Finance and Investments) respectively. According to media reports, Mr. PJ Joseph may be also appointed as Member (Non-life). Bharti AXA General Insurance has appointed Deepak Iyer as its new Chief Executive Officer (CEO) and MD. He will take over from the Interim CEO and MD Milind Chalisgaonkar on receipt of IRDAI s approvals. Global reinsurance giants are in the process of setting up their top teams for their branch operations in India. The Reinsurance Group of America (RGA) of USA has appointed Mr Thomas Mathew, former Acting CMD of Life Insurance Corporation as the MD of its Indian operations, as per media reports. Munich Re has likewise appointed Mr Hitesh Kotak as the new CEO of its Indian operations, and has also shifted its India headquarters from Kolkata to Mumbai. Catlin s India country manager, Mr Joseph Augustine will continue to lead XL Catlin following XL s acquisition of Catlin. Others like SCOR and Lloyd s are expected to name their India CEOs soon. Regulatory update IRDAI has approved 'moderate' hike in the compulsory third-party motor insurance premiums by around 15 percent, much lower than the expectations of general insurers of 40-50 percent. The industry s average loss ratio at present is 140-150 percent in this class of business which is expected to continue to haunt the industry if pricing does not reflect the risk. IRDAI had released an exposure draft on licensing of corporate agents that, inter alia, placed ceilings on the maximum extent of business that it can place with any one insurer. This was being resisted by the banks and insurers having a strong bank partner or promoter. It was argued by critics of the proposal that many of the foreign insurers entered the Indian insurance market through joint ventures with Indian banks only due to the distribution strength that could be leveraged exclusively. Taking this into account, it was later proposed by IRDAI that banks would be allowed to choose between an open architecture and the existing tied agency model for its bancassurance operations. IRDAI has also proposed removing the cap on banks' business from a single insurer. The revised draft also states that corporate agents, including banks, may choose from one to a maximum of three insurers in a particular line of insurance business. IRDAI is expected to clarify whether an Indian entity (and promoter) must be fully owned and controlled by Indian investors to become eligible for the increase in foreign direct investment (FDI) limit to 49 per cent. Sector officials said the current definition would mean that foreign institutional investments would also have to be below 51 percent. According to these rules, the foreign equity investment cap of 49 percent will apply to all Indian insurance companies and they cannot allow the aggregate holdings by way of total foreign investment in their equity shares by foreign investors, including portfolio investors, to exceed 49 percent of their paid-up equity capital. They also have to ensure that ownership and control shall remain, at all times, in the hands of resident Indian entities, as referred to in these rules. IRDAI has mandated a minimum 26 percent equity holding by Indian promoter(s) in any Indian insurance company to ensure they do not make use of the new liberal foreign investment and listing policy to dilute their own accountability. IRDAI s view is that the mandatory 26 percent stake to be held by the Indian promoter will ensure that there is accountability and that the management does not rest with the foreign company alone in the event of a single block of holding falling below 25 percent, the public shareholding limit, when the company goes for listing. With promoters of Indian insurance companies looking at diluting stakes, IRDAI has come out with regulations on transfer of shares for investors. According to these norms, an Indian investor can hold up to 10 percent of the paid-up equity share capital of an insurer. In case of two or more investors, they can collectively hold up to 25 percent of the paid-up equity share capital. The new norms also state that in case of transfer of shares of more than 5 percent of paid-up capital of an insurer or more than 1 percent of the nominal value of shares, prior approval of IRDAI would be required. IRDAI has proposed prescribing a separate set of obligations for insurers pertaining to health insurance in its new Rural and Social Sectors Regulations 2015. This comes soon after the recent amendments in the Insurance Act that has now defined health insurance as a separate class of insurance business. As general insurers have a wider range of retail product portfolios like motor, household and shopkeeper, among others as compared to health insurers, IRDAI s view is that standalone health insurers obligations towards the rural sector should only be 50 percent of general insurers. This is going to make health insurance more accessible to people living in rural areas. IRDAI is mulling creation of an open architecture for insurance agents. Though the proposal is at an early stage, IRDAI has suggested having a pool of agents to industry stakeholders in recent discussions. Industry officials say that all agents could be trained and be part of a common pool for the industry. They say that it is not clear whether or not the entire tied-agent system would be done away with. However, a proposal has been mooted for a common pool of trained agents to improve penetration and for better distribution. Third Party Administrators (TPAs) in health insurance will not be permitted to take decisions for settlement of Copyright 2015 Towers Watson. All rights reserved. towerswatson.com 5

claims or to solicit business, as per draft guidelines of IRDAI. It has clarified that neither settlement of claims nor procurement of business, directly or indirectly, is part of TPA services. Government update The government is expected to decide by September this year on whether to continue Rashtriya Swasthya Bima Yojana (RSBY), its mega mass health insurance scheme. However, industry officials said that now only the four PSU general insurers have the mandate to continue with the scheme. Many private non-life insurers appear to be shying away from the Modi Government s Pradhan Mantri Suraksha Bima Yojana (PMSBY), the newly launched ambitious social security scheme offering INR 2 lakhs (US$ 3198) personal accident cover at an annual premium of just INR 12 (US$ 0.20), citing low pricing and the growing incidents of accidental deaths. Insurers that have signed up for the scheme include ICICI Lombard, Bajaj Allianz, Reliance General, Universal Sompo, Iffco-Tokio but some of the others including SBI General, HDFC Ergo, have kept away. Hannover Re, the world s third largest reinsurer, has decided to offer reinsurance cover for the Pradhan Mantri Suraksha Bima Yojana (PMSBY) to encourage insurance companies to join in the scheme. According to its top official, a strong reinsurance arrangement will encourage many more Indian insurance companies to join the PMSBY that is expected to improve insurance penetration in India. Karnataka will shortly launch the Chief Minister s Comprehensive Health Insurance Scheme. This will provide cover to accident victims for 48 hours in all the empanelled hospitals across the state on a cashless basis. The Platinum 10 Minutes trauma care offer in Karnataka is set to roll out Bike Ambulance / First Response Unit (FRU). As a rapid responder, bike ambulances are to provide service during emergencies such as accidents, heart attacks, brain haemorrhage, poisoning and fire accidents. The central government may hike its contribution to the nuclear insurance pool, as per media reports that have quoted the Union Minister. The government had earlier promised to contribute INR 750 crore (US$ 0.12 billion) to the INR 1,500 crore (US$ 2.4 billion) nuclear insurance pools. While the 4 PSU general non-life insurers and India s only state owned reinsurer GIC Re have committed to contributing INR 750 crore (US$ 1.2 billion) to the pool, private sector non-life insurers have so far committed to contribute INR 100 crore (US$ 16 million) to the pool. The government may consider setting up a natural calamity insurance pool, especially in the wake of the recent Nepal earthquake that caused heavy loss of life and property, and sparked warnings that India too is at risk. The proposed insurance pool will be an addition to the existing national calamity fund and the Prime Minister s Relief Fund. This comes after the general insurers had presented a concept paper along these lines to the National Disaster Management Authority (NDMA) in 2013. Several large Indian cities, especially in the Himalayan region and the states of Jammu and Kashmir, Uttar Pradesh, Uttarakhand, Gujrat, Assam, Delhi etc. fall in vulnerable seismic zones. The government has yet to receive any proposal from the PSU general insurers for funding their expansion through public issues. This was conveyed to the lower house of the parliament by the union Finance Minister. A large, untapped market to insure government owned immovable properties is about to open up. The aim is to cover all key assets of the government, including iconic structures like the Parliament. It is understood that the home ministry government has instructed all central ministries to consider buying insurance policies for all their "critical assets" against natural disaster. As reported earlier, the Ministry of Road Transport and Highways (MRTH) is reportedly planning to set a cap of INR 15 lacs (US$ 24,000) as the amount of the maximum compensation in case of death due to road accidents. The Ministry is in the process of introducing the Road Transport and Safety Bill (RTSB) to amend the existing Motor Vehicle Act of 1988. The relevant clause in the draft states: "Provided that the maximum liability for compensation to a victim by the insurer linked to the regulated minimum premium shall be a sum of fifteen lakh rupees or such higher amount as may be prescribed by the central government time to time. Similar to its recent decision to allow workers to opt for their chosen retirement saving plan, the labour ministry reportedly intends giving similar flexibility to workers on their health insurance scheme enabling them to opt for private health insurance plans. Distribution A recent survey was carried out across 18 cities with more than 3000 respondents in the age band of 22 to 55 years jointly by ICICI Lombard and Google India to study the extent of digital influence on insurance sales. Some of the important findings are that there is a very clear shift by potential buyers towards using internet for researching products, motor and health products are more likely to be bought online, renewal purchase is higher than first time purchase, there is almost equal usage of internet for insurance purchase in metro and non-metro locations, people in age bands of 25-35 and 46-55 are more likely than those in other age bands to use internet for insurance purchase. The study also estimates that by 2020, internet will influence buying of insurance of nearly INR 3,00,000-4,00,000 crore (US$ 48-64 billion) annually. Kerala based lender Federal Bank has decided to start offering health insurance of INR 1 lakh (US$ 1599) for all their new savings accounts under a tie-up with Max Bupa. The cover provides for in-patient treatment, and all day-care procedures up to the sum assured. The bank has also tied up recently with New India to offer Pradhan Mantri Suraksha Bima Yojana, the personal accident insurance scheme that was announced by the Government for savings bank account holders in the age group of 18 to 70 years. The scheme covers Copyright 2015 Towers Watson. All rights reserved. towerswatson.com 6

accidental death / permanent disablement for INR 2 lakhs (US$ 3198). United India Insurance has signed an agreement with Catholic Syrian Bank for the Prime Minister Suraksha Bima Yojana. Liberty Videocon General Insurance has tied up with Muthoottu Mini Group through a corporate agency alliance to sell its general insurance products in Kerala and other southern states like Karnataka, Telangana, Andhra Pradesh and Tamil Nadu where it already has a strong presence in. The company intends selling its full range of retail and commercial insurance products through its distributor network. Britain s multinational broker Jardine Lloyd Thompson (JLT) has opened its second India office in Pune. The CEO was quoted in media as saying that JLT will look to expand its India business by investing over INR 100 crores (US$ 16 million) over the next three years. JLT provides advisory services mainly in the areas of insurance and employee benefits. The company had set up a global shared services centre in Mumbai in 2007. Serious differences continue between overseas and Indian insurance brokers on the issue of higher foreign direct investment (FDI) in India s insurance broking industry. The Insurance Brokers Association of India (IBAI) has staunchly opposed the demand of oversees insurance brokers to raise FDI from 49 percent to 100 percent in the domestic insurance broking industry. Products According to a press statement issued by Star Health and Allied Insurance, it has recently started offering its modified Star Comprehensive Insurance Policy with additional features that include coverages for bariatric surgery, air-ambulance, second medical opinion, and has raised the coverage for congenital defects. These new features come without any increase in premium. popularity of assisted reproductive techniques. Other insurers who also cover new-born babies include ICICI Lombard, Max Bupa, and Religare. Religare Health Insurance is planning to introduce a separate suite of insurance products targeted at the senior citizens customer segment that will also cover pre-existing ailments. New India Assurance plans to launch four products - two each in the motor and health segments - during the current fiscal. These products have been filed with IRDAI and its approvals are awaited. Meanwhile, the insurer has already launched the country's first threeyear comprehensive cover for two wheelers, which is 30% cheaper than buying annual policies. It has also launched health insurance products for individuals and families in Dubai and Northern Emirates with a focus on treatment in the UAE. The coverage is extended to include cover maternity, pre-existing diseases as well as dental treatments. The demand for cyber liability insurance is increasing from companies with large technology-related and internet-related operations and those storing a large quantity of customer data. Cyber-crime rose 350 percent in the three years between 2010 and 2013, according to the National Crime Records Bureau. Until recently, only clients from the banking, financial services & insurance (BFSI) sector were active in the cyber and technology space, apart from IT and ITeS firms. However, now even sectors such as retail, hospitality, pharmaceutical and e-commerce are showing greater interest in taking insurance covers. Product liability covers and product recall covers might see a rise in claims with more risks set to come under inspection. Earlier, only auto makers were taking these covers. Nowadays, companies from pharmaceutical and consumer goods industries are looking for this cover. Subsequent to the recent Maggi instant noodles controversy, companies from the food industry are also seeking this insurance. There is an increase in demand for coverage of newborn babies that is partly attributable to the growing Copyright 2015 Towers Watson. All rights reserved. towerswatson.com 7

Contact details Towers Watson s Risk Consulting team covers the length and breadth of India with associates based in Gurgaon and Mumbai. Vikas Newatia Director and Practice Leader, General Insurance Consulting, India vikas.newatia@towerswatson.com Gautam Mazumdar Senior Consultant, General Insurance Consulting, India gautam.mazumdar@towerswatson.com Gurgaon Mumbai 2nd Floor, Tower B Unitech Business Park, South City-1, Sector-41 511/512, Solitaire Corporate Park Andheri-Kurla Road, Andheri East Gurgaon 122002 Mumbai 400093 Tel: 91 (124) 432 2800 Tel: 91 (22) 4232 9900 Fax: 91 (124) 432 2801 Fax: 91 (22) 2837 0700 The India General Insurance Update has been prepared by Towers Watson for general information purposes only and does not constitute professional advice. The information, opinions and projections contained in this Newsletter are derived from various sources and have not been independently verified by Towers Watson. If you require professional advice or require any further information please contact any of the above named individuals. For more information, please visit www.towerswatson.com ABOUT TOWERS WATSON Towers Watson is a leading global professional services company that helps organisations improve performance through effective people, risk, and financial management. With 16,000 associates around the world, we offer solutions in the areas of benefits, talent management, rewards, and risk and capital management. Copyright 2015 Towers Watson. All rights reserved. towerswatson.com 8