New CEO!

Hemant Kaul, chief executive at private general insurer Bajaj Allianz General Insurance, has moved to global financial services firm Allianz SE with a mandate to develop the regional business after his successful stint at the country’s second largest private general insurer. Tapan Singhel, the current chief marketing officer, is going to the chief executive and managing director.

Tapan Singhel who was the chief marketing officer is elevated to the post of chief executive and managing director. He was earlier looking at agency, bancassurance and travel channels. He is one of the key members, known for setting up the retail business and has been with the company since inception. The appointment is, however, subject to regulatory approval

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Group Health Insurance Premiums Set to Rise

Premium rates of group health insurance policies are set to rise, as to curtail losses, Government has asked PSU general insurance companies to either increase premiums or stop renewing group health insurance policies.

At present, the combined ratio-claims paid plus other expenses as a percentage of premium earned-is close to 150%. The combined loss on account of such discounts of four state-run non-life insurers is expected to be around Rs 1,500 crore for FY’12. Therefore, government has issued a directive for PSU general insurers to curve losses.

Public sector general insurers are offering huge discounts to corporate customer to grab wider market share.

Since 2007 when prices were freed, PSU general insurers are facing huge underwriting pressure. The overall loss ratio of companies has been over 100%, which means companies are making profit only on their investments.

Government wants to make sure there is audit of individual portfolio so there is no segment vise loss.

Health insurance segment is one of the fastest growing segments of general insurers, accounting one-fourth of the total gross premium income. Hence, despite it is acknowledged as the product of inadequate pricing many insurers continue offering discounts for sustained premium inflows.

Government has also asked PSU non-life insurers to cap brokerage and commission at 5% of the premium.

Government has also asked PSU insurers to introduce co-payment ratio of 20% that means policyholder has to pay Rs 20 for every claim of Rs 100.

Government has also told insurers to acquire customers of lower age groups.

To curve competition-induced losses, government has also directed insurers to obtain No Objection nod from the chairman of the existing insurer before underwriting a new business.

Companies will have to share data on premium, claims and frauds among themselves.

The boards of state-run insurers will need to review their performance every quarter.

Intact and HDI-Gerling Top Contenders to Buy Stake in Reliance General

May 26th, 2012
Intact Insurance, Canada’s largest home, auto and business insurer and HDI Gerling International Holding, Germany’s third largest insurance group, have emerged as the top contender to buy 26% stake in Reliance General Insurance Company Ltd.

 Deal is likely to be around Rs 1,500 crore. Reliance General has appointed UBS Securities India as the adviser for the deal.

One year ago U.S.A. based Traveler Group was the top contender to buy the stake in Reliance General but recently it dropped this idea.

HDI-Gerling currently has non-life insurance joint venture in India with Magma Fincorp. Magma HDI General Insurance was formed in 2009 but yet it has to launch its products. And if HDI Gerling has to acquire stake in Reliance General than firstly it has to sell its stake in Magma HDI general, as foreign insurer can’t have stake in two insurers that are in same business.

As Last year Insurance Regulatory and Development Authority (IRDA) introduced regulations for amalgamation and transfer of general insurance businesses, it is not difficult for insurers to exit from one insurance joint venture and enter into another.

Reliance General is an arm of Anil Ambani led Reliance Capital. Reliance Capital is selling its stake in its general insurance arm to reduce its debt.

Earlier this, Reliance Capital had sold its stake in Reliance Life and Reliance Asset Management to Japanese company Nippon. And with that money that it had paid-off part of its debt.

Reliance General reported a loss of Rs 250 crore in the last quarter of FY’12 on account of third party motor claims. In April 2012 Company has underwritten gross premium of Rs 233.36 crore.

Premiums Increasing!

Premiums of Travel Insurance Likely to be Increased Soon

28th May, 012

It is expected that premium rates of travel insurance will be increased soon as leading general insurance companies are feeling the pressure of depreciating rupee.

The claims of outbound travel insurance are paid in foreign currencies while their premiums are collected in Indian currency. And as rupee depreciates it increases the cost for insurers.

Generally April-June quarter is considered as the best quarter for travel insurance, pegged at Rs 250 crore. And at this time it is expected that in near future rupee will touch 60 mark against dollar.

In current year Indian rupee has fallen more than 5% against US dollar, making it the worst performing Asian currency.

Depreciating rupee impacts the margins of insurers hence, it is expected that if this depreciation of rupee continues than insurers will increase the premiums of travel insurance.

27 Insurers!

MAGMA HDI GENERAL INSURANCE AND LIBERTY VIDEOCON GENERAL INSURANCE ISSUED R3 LICENSE

Written by Bimabazaar- Adminstrator
Friday, 25 May 2012 12:48
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IRDA has issued R3 licente to Magma HDI General Insurance and Liberty Videocon General Insurance.
Magma HDI General Insurance is a joint venture between Magma Fincorp Limited and HDI-Gerling International Holding AG, Germany. Magma Fincorp and HDI-Gerling entered the joint venture agreement on 28 July 2009 at Kolkata and decided to enter the general insurance sector in India. Mr. Swaraj Krishnan will head this joint venture between Magma and HDI.

Liberty Videocon General Insurance is a joint venture between Liberty Mutual Insurance of United States and Videocon Group of India. Mr. Roopam Asthana is CEO-Designate and Director at Liberty Videocon General Insurance Co. Ltd.

Weather Insurance

U.S. severe weather insurance losses breach $1.2bn in March

CHICAGO, April 5, 2012 /PRNewswire/ — Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc (NYSE:AON), today releases the latest edition of its Global Catastrophe Recap report, which reviews the natural disaster perils that occurred worldwide during March.

Published by Impact Forecasting, the firm’s catastrophe model development center of excellence, the report reveals that a significant severe weather outbreak impacted parts of the U.S. Midwest, the Tennessee Valley and the Southeast during the first week of March, killing at least 41 people.

The U.S. Storm Prediction Center (SPC) cited at least 65 tornado touchdowns, including two EF-4 tornadoes that caused extensive damage in parts of southern Indiana, Kentucky, Tennessee and southwest Ohio. Total economic losses were estimated at approximately USD2.0 billion, while insured losses are expected to breach USD1.1 billion amid more than 170,000 insurance claims.

Additional U.S. severe weather activity was recorded during the month, including a system that impacted the Great Lakes. In southeastern Michigan, an EF-3 tornado damaged or destroyed at least 207 homes in the town of Dexter. Total economic losses were estimated at USD275 million, while insurers received at least 20,000 claims with payouts expected to exceed USD150 million. Late in the month, another storm system resulted in at least 46 tornado touchdowns across parts of the Plains, Midwest and the Southeast. Tornadoes were also recorded in Indonesia and Australia.

Steve Jakubowski, President of Impact Forecasting, said: “Following an active 2011 U.S. severe weather season, the first quarter of 2012 has also proven itself to be markedly busy. Through the first three months of 2012, we have already sustained more than USD1.8 billion in insured losses from convective storm events as we enter the climatologically most active severe weather months of the year. Despite the heightened activity thus far, it is nearly impossible to forecast and project losses for the rest of 2012.”

Elsewhere during the month, a magnitude-7.4 earthquake rattled central and southern Mexico, killing at least two people. The Mexican Association of Insurance Institutions (AMIS) reported insured losses of around MXN2.07 billion (USD163 million), following damage to 44,000 homes, businesses, hospitals and schools.

In other earthquake activity, a magnitude-7.1 temblor struck central Chile, and was labeled an aftershock from February 2010’s magnitude-8.8 event. Total economic losses were expected to be below USD100 million.

Meanwhile, in China’s Xinjiang region, a magnitude-5.8 earthquake left 36,641 people homeless and caused direct economic losses of CNY523.5 million (USD82.7 million).

Flooding affected portions of Australia’s New South Wales (NSW) and Victoria between the end of February and the first half of March, killing at least two people. The Insurance Council of Australia declared a catastrophe for NSW Riverina, NSW Central West, and northern Victoria, as at least 8,914 claims were filed, with insured losses reaching  AUD108.2 million (USD112.5 million).

Additional flood events during the month were recorded in parts of the Philippines, Fiji, Ecuador, Chile, Colombia and the United States.

Cyclone Irina’s landfall led to the deaths of at least 84 people in Madagascar, Mozambique and South Africa. More than 78,000 were left homeless and wide swaths of agriculture were submerged.

Also in March, Cyclone Lua made landfall in Western Australia and caused minimal damage. Total economic losses of AUD217 million (USD230 million) came from lost business when Port Hedland briefly closed.