Expert Zone
Straight from the Specialists
Third-party motor insurance premiums fixed for new financial year
(Any opinions expressed here are those of the author and not of Reuters)
A motor insurance policy consists broadly of two parts — third-party cover, which is regulated; and an ‘own damage’ cover, the premium for which is left to market dynamics.
The premium for ‘own damage’ cover, which forms the larger chunk of the insurance premium, is based on risk and competitive pressures.
The third-party cover, which is compulsory, covers the risk for third parties in situations like damage caused to a person who was standing by the road and was injured or killed by an accident involving an insured vehicle, or damage caused to a wall after a vehicle crashed into it. The claim amount in this case can be unlimited and it is a sticky subject.
The Insurance Regulatory and Development Authority (IRDA) decides the premium that can be charged for different types of motor vehicles using elements like cubic capacity, types of activities being undertaken and tonnage as primary segregating tools.
Pension plans are making a comeback
(Any opinions expressed here are those of the author and not of Reuters)
Life insurance companies had all but exited the pension sector after tough regulations were put in place to guarantee returns for the investor. This is a vital sector for insurance companies and hit overall business.
In 2010/11, new business of 122 billion rupees was added in the pension sector. This fell to 111.7 billion rupees in the following fiscal year. Worse, deletions in the business increased from 68.9 billion rupees to 195.2 billion rupees last year — surely that would have hurt.
Parallel between cash transfer schemes and health insurance claims
(Any opinions expressed here are those of the author, and not necessarily of Reuters)
The more I think about it, the more I am convinced that the direct cash transfer scheme is a money saver for the government and the taxpayer. A direct parallel is the way insurance companies handle claims in health insurance plans.
Why online is the right way forward in life insurance
(The views expressed in this column are the author’s own and do not represent those of Reuters)
Insurance in India is divided into two broad categories — life insurance and non-life insurance (also called general insurance). For the record, most retail non-life products such as health insurance, car insurance and travel insurance are already sold completely online by most insurers.
Life insurance still struggling, non-life continues to grow
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The lean half of the financial year for insurance sales is behind us and the numbers for the life insurance vertical are not impressive. But the general insurance or non-life vertical has shown a healthy growth rate. Highlights are given below.
Banks as a shop for insurance
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The concept of insurance plans being sold through banks is called ‘bancassurance’ and there is a lot of interest in this distribution channel from all the stakeholders - customers, banks, insurance companies and the regulator.
Private life insurance companies still struggling
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The Life Insurance Corporation of India (LIC) has again come to the rescue of the industry in the financial year ending July 2012. While 23 private players together have a marginal dip in business (-1 pct), LIC has powered ahead with 23 pct growth in new business premium collection.
Selling insurance through kirana stores
(The views expressed in this column are the author’s own and do not represent those of Reuters)
India is considered to be a large untapped market for insurance products. There seems to be enough scope for improvement on the insurance density and insurance penetration counts for the country. While this is true, the challenge lies in reaching out to the large population in the rural areas where the traditional financial distribution channels just don’t make economic sense.
FDI in insurance — to hike or not to hike?
(The views expressed in this column are the author’s own and do not represent those of Reuters)
FDI in insurance might just be increased to 49 pct. This sounds way too familiar and has been the situation for quite a long time now. Or we could do some scenario building and even see it being delayed by a few more years.
Life insurance business remains almost stagnant
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The life insurance industry in India is still struggling on the growth front while the general insurance industry seems to be doing well. The life insurance industry grew by a marginal 1.4 pct while the general insurance industry grew by 18.3 pct. This is based on data released by Insurance Regulatory and Development Authority (IRDA) for the first two months of the financial year.
