Reliance Life launches "Express Life" a service for instant cover

CHANDIGARH: Reliance Life Insurance today launched ‘Express Life’ – as the name suggests a new service to offer instant life insurance cover upto Rs. 10 lakh, within a processing period of three days.

This would do away with the hassles of long waiting period, follow-ups and medical checkups. It is customer friendly service wherein on submission of the duly filled application form, mandatory documents and the requisite premium cheque, customers are assured commencement of life insurance cover in three working days. The letter and the policy kit are handed to the customer over the counter.

Customers between the age group of 18 to 45 years and fulfilling the qualification criteria, would be eligible for the insurance plan.

The company also issued its first policy under the “Express Life” initiative to its first customer in Chandigarh today.

Speaking on the launch of Express Life, P. Nandagopal, CEO, Reliance Life said, “This unique process will redefine the way insurance is bought and sold in India. Express Life is a testimony of our constant endeavor to delight our customers with innovative and need based solutions promptly”.

The Express Life service is available under the Reliance Life Insurance Automatic Investment Plan, Money Guarantee Plan, Market Return Plan and Golden Years Plan.

Reliance Life Insurance plans major expansion for its life insurance business

Reliance Life Insurance, has major plans to expand its business and stregthen its position in the insurance sector. The company is looking at a investment of Rs 1000-1200 crore in the next couple of years to expand its insurance business. The company has plans to open 400 new branches, for which it has applied to Insurance Regulatory Development Authority (IRDA).

“We have already invested Rs 650 crore in the insurance business and plan to infuse fresh capital of Rs 1000-1200 crore to expand our operations.” said P Nandagopal, CEO of Reliance Life Insurance while speaking at the launch of its new service "Express Life" in Chandigarh.

The company has a distribution network of over 340 branch offices across India and intends to open 400 more branches. He said, “We have applied for licences from IRDA for opening 400 new branches across India. About 20 of these branches would be in Punjab and Haryana.”

The company is aiming to sell one million policies across the country in this financial year.

ING Vysya Life receives additional capital infusion. Paid up capital increases to Rs. 790 crores

ING Vysya Life today announced a capital infusion of an additional Rs. 25 crores, which increases the paid up capital to Rs. 790 crores. ING Vysya Life had entered the private life insurance industry in India in September 2000, and has sucessfully established itself in the insurance market with a pan India presence. To support its business expansion, the promoters of ING Vysya Life have further plans to infuse capital of Rs. 550 crores in the near future which will eventually raise the total paid up capital to Rs. 1,340 crores.

The company recently launched ING Positive Life, a Unit Linked Saving Solution, in line with the market trends and has received good success. The company currently has twenty one life insurance products including eight Unit Linked products, which are available through its diversified distribution platform.

More options in Health Insurance, with LIC to submit its proposed Health Insurance product to IRDA

Life Insurance Corporation of India would submit its proposed health insurance product to the insurance regulator IRDA this month said Mr D.D. Singh, Executive Director (Health), LIC, at a health seminar organised by CII.

Speaking more, he said the health insurance product will be a long-term policy and along with the hospitalization benefits will also factor in savings as one of the element.

The main features of the product be would be hospital cash, family-floater and unit-linked components. The premium for the product will increase progressively on an annual basis as the customer’s age increases.

Mr Singh said that the objective has been to keep the costs low.

A key difference in the health insurance policy from the existing tradional policies is that the premium rates would increase with age. The premium in the tradional policies remain constant throughout the term.

The other difference is expencted that the utilisation of the claim benefits will be decided bythe insured. LIC will release the funds to the policyholder through its banking partners.

The Health Insurance division of LIC is based in Hyderabad. The outfit will contain a team of 30 people managing the division. The division will have a centralised data repository. LIC has empanelled eight third party administrators (TPA's) for servicing the claims from Health Insurance. The payment of claims will, however, be made by banks, selected by LIC. “We haveselected Syndicate Bank, Axis Bank and Bank of America for the payment of claims,” said Mr Singh

The Health Insurance product will be marketed and distributed by LIC through its 10 lakh plus strong agency network.

The Health Insurance segment is mainly catered by Non-Life insurance companies with products like Mediclaim, Medicare and etc. Beginning a year ago, Life insurance companies have been allowed to market standalone health insurance products to increase the increase the penetration of health insurance in the country.

Among life insurance companies after Bajaj Allianz Life and ICICI Pru, LIC would be the third to launch a health insurance product.

Star Health and Allied Insurance is another company which focuses exclusively in Health Insurance segment with plans like Medi Classic, Medi Premier, Family Optima among its product range. Few more health insurance products are expected from other companies.

LIC in the process of electronic transformation

Madurai: The Madurai Division of Life Insurance Corporation (LIC) will phase out the use of paper slowly with the introduction of Enterprising Data Management System (EDMS), which would pave way for keeping records in electronic form.

S.Chandrashekar, Senior Divisional Manager of the LIC said the EDMS would facilitate LIC transactions by a policy holder from anywhere in the country.

The EDMS facility had been introduced in Madurai division as a pilot scheme in the south zone. It is the second division in the country to get it. The uploading of the data has already begun and the exercise would be completed in a year’s time, he said.

The LIC has also introduced Electronic Clearance System (ECS) in all its Madurai Branches to enable policy holders pay premiums using automatic debit facility from banks. There was also a plan to introduce credit card after the ECS.

Bajaj Allianz Life achieves milestone of 50 lakh policies

Bajaj Allianz Life Insurance crossed a major milestone 50 lakh individual policies, since inception in October 2001. Riding on a strong growth momentum this financial year, the insurer issued over 15 lakh polices and collected over Rs2,500 crore in premiums, a company release said.

“We have been focusing on reaching out to the masses across the country with wide range of flexible products and services to suit all segments of the society and this has helped us grow fast and build a strong brand name and customer franchise in a short span of time,” CEO Kamesh Goyal said.

“So far the company has issued 5,026,704 policies. Last year, the total number of policies issued were more than 20 lakh 79 thousand,” Goyal revealed.

The company entered into business in the second half of financial year 2001-02 after receiving license from insurance regulator IRDA and had issued 21,376 policies for the period.

Bajaj Allianz Life Insurance reported a profit of Rs. 63 crore for the financial year 2006-07. In the first quarter of the financial year 2007-08, the profit has been reported as Rs 30 crore.

ICICI Prudential Life introduces smart cards for policy-holders in rural areas

ICICI Prudential Life, in yet another innovative way to market their products and services has launched the biometric smart cards in the rural areas. The smart cards will store the policy details and enable the policy holder a hassle free way of maintaining his policy related activites.

Some of the features are as below:

• Carry all policy details without any papers
• Store transaction details
• Pay renewal premiums and service transactions (service to be launched)
• Help customers during the time of claim

Anita Pai, executive vice president, ICICI Prudential Life Insurance said, "As the company is expanding and reaching out to policyholders across the nation, it is critical for us to maintain our service experience amongst customers. The card will enable us to move away from the connectivity and infrastructure barriers and provide real time solutions to policyholders in the rural segment."

ICICI Prudential Life Insurance has launched this unique service in partnership with Financial Information Networks Operation (FINO) and policyholders can utilise this service at various FINO Fintech access points created across India’s rural areas. The biometric smart cards will be issued at no extra cost to the customer. The first set of the biometric smart cards will be handed to over ICICI Prudential Life policyholders in in Mahbubnagar district of Andhra Pradesh.

ICICI Prudential has 700 branches in 500 locations. "We are looking at setting up 500 FINO points across the country in next 7 to 8 points," said Pai.

Smart Cards Usage

A `smart card' is a plastic card with an IC (integrated) chip capable of storing and processing data stored in it. It is like a computer in your wallet. Smart cards have many applications, for example, in Telecommunications (SIM/Payphone cards), Transport segment (Vehicle registration, Driving licences), in Banking, Healthcare, Iinsurance, E-governance, besides physical and logical access control.

Depending upon the application and information storage capacity required, smart cards, besides having a microprocessor (in most cases) chip for secure information storage and processing, come with optional magnetic strips, bar codes, optical strips, holograms, etc, on a variety of card bodies

To use a smart card, either to get information from it or store data in it, you need a smart card reader, a small device into which you insert the smart card.

The first smart card was developed in 1974, by independent inventor Roland Moreno. Axalto (A Schlumberger Company) delivered the world's first commercial application of smart cards in 1980. These were pre-paid memory smart cards and smart card payphones.

The prime mover for smart card usage was to curb fraud, and technology has effectively contributed to this end. After public telephony, the banking industry followed the usage of smart card technology, which incorporated microprocessor-based smart card technology. The early 1990s again saw the telecom industry adopting smart cards in a big way and this time GSM was globally standardised on smart cards as SIM cards.

The mid-1990s saw the advent of Open Platform cards. The Java cards invented in 1996 gave a boost for multi-application cards. Technology and market requirements later adopted usage of complex cryptography in smart cards making them a favourite user media to store, carry and transact with digital signatures.

Applications based on contact-less technology and the invention of combi cards (contact + contactless) in 1996-97 opened up a whole new segment in smart technology. The invention of .NET technology in 2002 saw the memory capacity of smart cards growing further.

With the increasing need for security, smart cards are being viewed as the ideal medium for implementing national ID/citizen ID cards globally. Identification and e-Governance are seen as the largest consumers of smart card technology in the near future. In the transport sector, smart card-based driving licences, vehicle registration, mass transit and toll applications are expected to form yet another large segment of smart card usage. GSM SIM cards and wireless telephony applications are also expected to receive a boost as wireless technologies gain momentum.

Kotak latest product offering "Eternal Life Plans" based on whole life

Kotak Mahindra Old Mutual Life Insurance Limited (Kotak Life Insurance), has launched ‘Kotak Eternal Life Plans’ a new-generation participating whole life plans that provides enhanced protection till age of 99, even while bringing two significant benefits of wealth creation and protection.

The Company said that, the plans will provide a high cover at lower premiums, cash lumpsum benefits at the end of Premium Payment Term and increased choice through a range of plan options with two unique variants, the product has been packaged to suit different sets and needs of customers:

Eternal Life Premier Shield – Offering a Comprehensive Whole life cover till age 99 with premiums that match income and lifestyle.

Eternal Life Classic Shield – Offering a Comprehensive Whole life cover till age 99 along with guaranteed level premiums and flexible premium payment term.

The Premier Shield is a first-of-its-kind offering in the industry and offers a fixed 5% increase per year in the premium to a young policyholder allowing him to access high cover.

"How does the product work?"
Step 1: Choose your life cover - the basic Sum Assured, based on your existing insurance cover and needs.

Step 2: Decide the number of years you wish to pay premiums, based on your personal and financial goals.

Step 3: Choose a plan from two unique variants based on premium option preference.

Step 4: Receive a lump sum Cash Benefit at the end of your Premium Payment term.

Step 5: Get guaranteed protection till your 99th birthday and enjoy the potential for additional bonus boosts to your life cover along the way!

Speaking at the launch, Gaurang Shah, Managing Director, Kotak Life Insurance, said, "In today’s dynamic world, the importance of financial security is getting more pronounced with the transition from joint to a nuclear family structure. As lifespans increase; the need for Indian consumers to stay adequately protected throughout life becomes more acute. Today, along with adequate protection, customers also need a safeguard against major misfortunes in life such as Illness/Disease and Disability. Our latest product offering – Kotak Eternal Life Plans, are based on this reality of the changing Indian Consumer."

For more information, please contact Kotak Life at 60505000/1800228081 or email at lifeexpert@kotak.com

Max New York Life tie-up with District Cooperative Central Bank Ltd, Mahabubnagar, Andhra Pradesh

Max New York Life (MNYL) announced a strategic referral tie-up with District Cooperative Central Bank Ltd, Mahabubnagar in Andhra Pradesh on September 28, 2007. Max New York Life will utilize the branch network of the bank to sell its life insurance products. The tie up with District Cooperative Central Bank Ltd., Mahabubnagar will further strengthen Max New York Life’s rural presence in Andhra Pradesh.

Max New York Life’s insurance products will be sold through a network of 120 branches of The District Cooperative Central Bank Ltd., Mahabubnagar. This alliance enables Max New York Life to reach its customized life insurance solutions to more than 2.5 lakh customers of District Cooperative Central Bank Ltd, Mahabubnagar With deposit base of Rs. 71 crore and loans to the tune of Rs 356crores the bank has a paid up capital of Rs 33.5 crores (The key objective of the bank has been to serve the rural people by providing financial assistance and guidance for various developmental and productive activities in the district of Mahabubnagar.

Max New York Life has pioneered a unique hub and spoke model of distribution that has helped deepen its rural penetration. A first of its kind model for rural marketing of insurance products, Max New York Life has already opened 31 offices including 8 Hub (Area Offices--in Patiala, Bhatinda, Sangrur, Phagwara, Hoshiarpur, Gurdaspur, Nawashahar, and Moga) and 23 Spoke offices at the Tehsil level. The rural business has a strong team of over 385 employees and 2500 agents. This is the tenth rural bancassurance tie up in India apart from one rural corporate agency tie up.

Max New York Life launches SMART Steps - Unit linked Child Plans

To facilitate your child’s aspirations and goals Max New York Life, today launched SMART Steps - Range of Unit Linked Child Plans. Higher education, marriage, financial security of our children are some of the most important milestones that we all save for. However, with rising cost of living in today’s world, simple saving instruments would not be enough to meet the aspirations for one’s children. SMART Steps Unit Linked Child Plans are a range of smart plans that facilitate planning for children’s needs and provide financial protection.

The features of the plan are as below.



Complete surety for a secure future for your child

In case of unfortunate event of death of the parent (the life insured) the nominee/beneficiary is entitled to receive guaranteed 100% sum assured immediately. In addition, Max New York Life will continue to operate the Unit Account until maturity of the policy. All future premiums are funded to the policy by Max New York Life on behalf of the life insured until policy maturity thereby ensuring that the purpose for which the policy was originally purchased is accomplished.

The SMART Steps “Plus” plan has an additional inbuilt feature of Family Income Benefit, which ensures that the child’s recurring needs are taken care of by way of extra yearly payouts (5% of the Sum Assured) on the death of the parent (life insured) for rest of the policy term. A lump sum payout would also be given in the event of life insured being diagnosed with any of the 10 Dread Diseases covered under the policy.

Choice of Protection Levels & Flexibility

SMART Steps Range of plans - SMART Steps, SMART Steps Plus and SMART Steps Single Premium - provide customers the flexibility in financial planning by offering a choice to decide proportion of investment and risk cover.

Investment Flexibility

SMART Steps range of plans offer customers the choice of investing their premium in five investment funds offered by Max New York Life - Secure, Conservative, Balanced, Growth and Growth Super - to suit their risk appetite from investment in low risk asset such as government securities and corporate bonds to the ones investing in high risk assets such as equities. The plan empowers customers to manage their investments by free switching upto 6 times a year. It also offers premium redirection flexibility free of cost upto 3 times a year that enables the customer to proactively manage their investments and redirect their future premiums into new funds of their choice. The plans offer a top-up facility wherein a customer can invest lump-sum money into the policy as and when the funds are available. Liquidity is there by allowing partial withdrawals from the fund value to meet any unplanned expenses.

The Minimum Annual premium allowed in SMART Steps and SMART Steps Plus is Rs.20,000 and in SMART Steps Single Premium it is Rs.50,000. As the customer decides to pay a higher premium, the front end allocation charge reduces.

Gary Bennett, Managing Director & CEO of the company said, “Children’s education is one of the primary reasons for saving in majority of Indian Households. The recently conducted Max New York Life – NCAER India Financial Protection Survey reveals that 85% of Indian Households with children in 0-15 years of age group save for their children’s education. We at Max New York Life are dedicated towards understanding and satisfying our customers’ needs by offering them specially designed products to meet their requirements. SMART Steps child unit linked plan is a product that has been launched as a part of this customer centric philosophy.”

Debashis Sarkar, Director – Marketing, Product Management and Corporate Affairs, said, “The SMART Steps range of Unit Linked Child Plans are targeted at the parents who want to be absolutely sure about a secure future of their children whether they are there or not there. It provides control over uncertainties of life and inflation. With this launch, we now have a customised unit linked product to meet the need of children’s education planning for responsible parent. This further strengthens our comprehensive Unit Linked portfolio for customers with different financial risk profile and at different life stages.”

Max New York Life has sold well over 1.75 million policies with more than Rs. 53,656 crore in sum assured and has an agency force of more than 28,288 agents.

Target of 10 times growth for Kotak Life

Liife insurance major Old Mutual Plc is bullish on the Indian market and is targeting 10 times growth for its joint venture with Kotak Mahindra.

The London-based Old Mutual Plc has operations worldwide in life insurance, asset management, banking and general insurance and is present in India through a life insurance joint venture with Kotak Mahindra. Old Mutual Plc’s funds under management in the US and UK stand at £158 billion and £57 billion respectively, with South Africa close behind at £41 billion

"We are bullish on Indian markets and are targetting 10 times growth from the present level," Old Mutual's Chief Executive Jim Sutcliffe told reporters here today.

"We believe in offering simple, transparent products to our customers." Old Mutual has committed USD 110 million towards strengthening the distribution channel and product development in the joint venture Kotak Mahindra Old Mutual Life Insurance.

"We have a commitment of USD 110 million for Indian markets for building the distribution system and product development," Sutcliffe said.

Old Mutual, which entered the Asian markets quite recently, had an investment of USD 7 billion in Asia Pacific as compared total global investment of USD 263 billion as of June 30, 2007.

"Indian market is pretty competitive already but in US there were 2,100 insurance companies," he said in response to a question on the competition building up in the domestic market.

Source: Agencies

ICICI Bank launches the Probationary Officer Programme for Banking and Insurance

ICICI Bank, India’s second largest bank, today announced the “Probationary Officer Programme.” It is a first of its kind, nation wide initiative to attract bright graduate students to pursue a career in banking.

Applications will be invited from graduates across the country and aspirants who are selected under this programme will go through an intensive one-year residential training program. On successful completion of the program they will be awarded a Diploma in Banking & Insurance and absorbed in a managerial position at ICICI Bank. They will also have an opportunity to pursue an e-MBA while working. All the costs incurred on the training will be borne by ICICI Bank and the students will be paid a monthly stipend to take care of their expenses.

The selection will be through a multi stage selection process and those selected will be eligible for the requisite training. The training program will cover knowledge, skill and etiquette in various business areas, which will be delivered through identified training partners. The students will be trained in areas of Corporate Banking, Private Banking, Risk and Credit Management, Treasury, Branch Management and Relationship Management.

The course will involve one year of rigorous classroom training and internship. Mr. K. Ramkumar, Chief Human Resource Officer, ICICI Bank, said,” This is an attempt to provide an alternate career opportunity to aspiring graduates.”

He also added,” The Probationary Officer Programme, which is the first of its kind programme, will offer graduate students a professional qualification and a managerial job.”

ICICI Prudential Life SMS helpline services for policyholders

ICICI Prudential Life Insurance announced the launch of its SMS Helpline service, today. This innovative service will enable the company’s policyholders to receive instant update on their policies through a simple SMS to 56767.

ICICI Prudential Life’s policyholders can now know the policy status, due date for paying premium, policy NAV and portfolio fund value by sending a simple SMS from their mobile phones. Policyholders can get these details by typing PST followed by space followed by their policy number and sending an SMS to 56767.

Commenting on the new service, Ms. Anita Pai, Executive Vice President, ICICI Prudential Life Insurance said: “In tune with our philosophy of providing innovative products and services for customer convenience, we have now launched the SMS Helpline. Today, the mobile technology has reached far and wide and it was the apt time for us to leverage the technology and connectivity to our advantage. The SMS Helpline is a customer-friendly service that will benefit our policyholders for its sheer simplicity. Now, policyholders can avail of the desired information anytime anywhere, no matter where they might be.”

Policyholders should register their mobile numbers with the company to avail SMS Helpline service. To register, policyholders can type REG followed by space followed by their 8 digit policy number followed by their DOB in DDMMYYYY format and send the SMS to 56767.

LIC agents image make over to 'Customer Relation Manager'

The introduction of new economic policies and consequent financial sector reforms have brought number of changes in Insurance sector. The privatization of the insurance sector has seen setting up of shop by many companies with most of them in joint ventures with companies from the developed markets.

This has brought a huge change in the indian markets which till 2000 was monopolistic with Life insurance Corporatio of India (LIC) being the only player.To gain a share of the market the private companies have adopted aggressive tactics, including advertising campaigns, well-trained salesmen and modern selling ways.

The public sector giant Life Insurance Corporation of India (LIC) continues to lead in the market, but private players have been steadily improving its market share. LIC’s higher market share in the number of policies sold compared with premium income means private life insurers are cornering a larger share of high premium policies. The private players have been able to agressively penetrate the market with higher income bracket and sell policies with high premium. Where else the LIC agents have been identified as softer and lacking the modern confidence and skills.

For long, LIC as been mulling over the traditional image of an LIC agent of that of a government servant and is keen for transition of an agent to a more modern corporate image.




The insurance company is emphasising on changing the image of its agents due to increasing competition from private insurance companies. LIC had observed that the private insurance company’s agents are better equipped with laptops, and provide power point presentations to its prospective customers and are dressed in an executive style.

LIC has started training their agents to equip themselves with best methods and tools. Their first batch of training for 1000 agents would soon be completed and they would present themselves as 'Customer Relation Manager'.

They will storm the insurance market with a better image of the company. The major focus will on improving the lethargic government image of LIC into a modern and corporate image.

LIC is in the process of conducting interviews and select more agents that will be trained and designated as CRM. It is a one week training provided by the LIC at its Pune facility. The customer relation manager will also be provided with premium collection electronic devices.

PAN, a detterent for investments in MF vis-a-vis Insurance : AMFI chief

Association of Mutual Funds in India Chairman A P Kurian said on Saturday that canalising household money into mutual funds has become a challenge.

Income tax permanent account number requisite, know your customer norms, and lack of level playing field between insurers and mutual funds are the key reasons for the problem, he said.

“We need to see inflows increase from households into mutual funds. This is a constant challenge and struggle for the industry due to some policy framework,” he said.

Kurian was referring to the PAN requirement for investing in mutual funds, and the absence of the same requirement in the insurance industry.

From July 2, the Securities and Exchange Board of India has made it mandatory for existing as well as potential investors to submit a copy of the PAN or an evidence of having applied for the same until the year-end.

From January, no mutual fund applications without a copy of PAN card will be accepted. This has led to slowdown of retail participants in the equity funds and also hit the systematic investment plans and micro SIPs that are targeted at the lower end of the economy.

Amfi head said lack of financial literacy was a hindrance in reaching out to retail investors in remote areas. He voiced concern of low penetration of mutual funds in the country, saying only 4-5 per cent of India’s gross domestic savings go into mutual fund investments compared with as much as 50 per cent in other countries.

Source: Agencies

Pantaloon and Future Generali, Italy tie-up for JV in Life and Non-Life

IRDA has issued certificates of registration to Future Generali, the insurance joint venture of Pantaloon Retail India and Italian insurance firm The Generali Group.

Future Generali India Life Insurance Company Limited to transact life insurance business.
Future Generali India Insurance Company Limited to transact general insurance business.

Pantaloon will hold 74%, while the rest will be held by the JV partner. Future is the new brand name being promoted by Pantaloon Retail. Future Generali will have a start-up capital of Rs 2 billion.

Pantaloon and Generali are betting on a 15-20% growth in the insurance business in India. High savings and the opening up of the insurance industry are seen as positives for the insurance sector.

Said Kishore Biyani, Chief Executive of the Future Group that owns Pantaloon: "India is a very young country with 60 percent of the population below 30 years of age. These are the new insurance buyers of India tomorrow who spend a significant time at modern retail outlets (stores and malls)."

Generali is one of the largest insurance groups in the world, operating in 40 countries through 107 companies. It ranks 22 in the list of Fortune 500 companies and is the largest corporation in Italy with an asset base of over euro 300 billion. Both Generali and Pantaloon Retail are listed companies.

Private Cos have created a niche in Insurance

Insurance sector in India has attracted over 540 million dollar of FDI and is poised for tremendous expansion said Shri Pawan Kumar Bansal, the Minister of State for Finance while addressing a meeting of Insurance Australia Group on 21st September 2007 in Sydney.

Banks also have entered the insurance sector in the form of corporate agencies or under referral arrangements to utilize the extensive and broad reach for marketing of insurance products.

The private companies have created a niche for themselves, he said, adding they have been able to increase their share in the insurance market in competition with their counterparts in the public sector. As per the current regulation, foreign entity is allowed equity upto 26 percent in the sector.

The growth seen in insurance sector has been significant, and the sector has a great potential to unfold and create many opportunities and services. India ranks 78th in terms of insurance density and 54th in terms of insurance penetration. The world averages are US $ 469.6 in terms of insurance density and 8.06% in terms of insurance penetration. Against this, insurance density was US$ 19.70 and insurance penetration was 3.17% in India for the year 2003. However, these two indices have increased following the opening of this sector.

Insurance Regulatory and Development Authority has granted registration to 37 insurance companies, which include 17 life insurance (including on PSU), 19 non-life insurance (including four PSU, one AICL & one ECGC) companies and one re-insurance company. At present seventeen insurance companies are operating in the general insurance side and seventeen insurance companies on the life side.

IRDA has also notified Micro Insurance regulations facilitating insurers to tap the potential of rural markets. As per these regulations like Non-Government Organizations (NGO), Micro Finance Institutions (MFI) and Self Help Groups (SHG) have been recognized as micro insurance agents. It is envisaged that micro insurance would facilitate penetration of insurance to rural and remote areas. He said that Micro Insurance being an integral part of overall insurance system, attempts to offer the target specific insurance products at a relatively lower cost, for a lower coverage of amount.

Promoting the insurance sector, Bansal said that India offers a stable investment climate as well as a huge market with a growing middle class. A.T. Kearney in 'The FDI Confidence Index 2005' has ranked India as the 2nd most attractive investment destination just behind China whereas 'World Investment Report, 2005' ranked India as the 2nd most attractive investment destination among Transnational Corporations, he added.

SBI Life rated 'AAA/stable' by CRISIL

CRISIL has assigned ‘AAA/Stable’ to SBI Life Insurance Company Ltd, reflecting the highest degree of financial strength to meet policyholder obligations.

The rating is centrally based on the strong support that SBI Life derives from its parent, State Bank of India which holds a 74% stake. It also factors in the distribution advantages and distinctive product strategy of SBI Life, and the flexibility available for further capital infusion into the company. These rating strengths are, however, partially offset by SBI Life’s weak earnings profile and limited track record.

CRISIL’s rating factors in SBI Life’s flexibility to raise capital from its promoters, SBI and Cardif S.A. (Cardif). Cardif is the life insurance company of BNP Paribas, a European leader in banking and financial services.

SBI also extends operational support by allowing SBI Life to sell products through the SBI group’s vast network of more than 14,500 branches. This ‘bancassurance’ channel accounts for almost 40 per cent of SBI Life’s premium receipts.SBI Life also offers creditor guarantee protection products, addressing the bank’s large portfolio of borrowers. Moreover, the proportion of investment-linked products in SBI Life’s premium receipts, at 65 per cent, is significantly lower than that of the company’s peers; this contains the potential fall in premium levels if equity markets perform poorly. CRISIL believes that these factors position SBI Life favourably for gaining market share in the medium to long term.

The rating strengths are partially offset by SBI Life’s weak earnings profile, a situation that any recent entrant in life insurance faces. Going forward, the company’s product and distribution strategy is expected to play an important role in determining its profitability. The company’s success in managing growth over the long term will also be a key monitorable.

This is the first time that CRISIL has rated a life insurance company; in developed markets, majority of life insurers are rated. According to Mr. S Venkataraman, Director, CRISIL Ratings.

We see this rating as the first indication of what is clearly a positive trend. Life insurance is a critical element of life planning for an increasing number of people in India. As more life insurers come forward to get themselves rated, the public will be better informed in taking these vital long-term decisions.”

Source: CRISIL.

Bank of India in life insurance JV with Dai-Ichi of Japan

Public-sector "Bank of India" has formalised an agreement with Dai-Ichi of Japan for setting up a Rs 250-crore life insurance firm, and will have a 51 per cent stake in the joint venture, a top bank official said on Friday.

Dai-Ichi, the sixth biggest life insurer in Japan, will have a 26 per cent stake in the JV, while another partner Union Bank of India will hold 23 per cent, BOI Executive Director K R Kamath told a press meet here.

It has been reported the registration process was going on, and the name of the company, is likely to be 'Star Union Dai-Ichi'.

LIC reports surplus valuation, declares high bonus

Life Insurance Corporation (LIC), the country's largest life insurance firm, has reported a higher bonus for its policyholders on the back of a 22% rise in its valuation surplus.

After taking into account all claims and other expenses, a surplus of Rs 15,127 crore has been reported. The valuation surplus of Rs 15,127 crore has taken into account all claims and other expenses. LIC declared a bonus of Rs 70 per Rs 1,000 assured for its whole life type plan against Rs 66 declared last year. The bonus for `Jeevan Tarang' is Rs 48 for every Rs 1,000 assured against Rs 32 declared last year, while bonus on `Jeevan Anurag' is Rs 44 against Rs 35 last year.

LIC chairman TS Vijayan said that the life insurer has also met the solvency margin of 150% for March 2007, which amounts to Rs 36,472 crore. Until last year, LIC was probably the only insurance company to have a lower-than-stipulated solvency margin of 125%.

Mr Vijayan said that LIC has targeted a total investment of Rs 1,17,000 crore for the current fiscal compared with Rs 90,000 crore last year. Between April and August 2007, the bank invested Rs 50,900 crore in equities and debt. Of these, investment in equities aggregated to Rs 12,000 crore, while it was Rs 30,000 crore in debt.

The LIC chief said that the performance is in line with the targeted growth of 31% for the current year. LIC has collected an insurance premium of Rs 15,126 crore between April and August, up 31% over last year. Premium collected through bancassurance was Rs 134 crore from April to August compared with Rs 663 crore collected in the full fiscal ended on March 2007.

Mr Vijayan said that 80% of the new business has come from unit-linked plans. He indicated that a large number of people have shown a preference for growth fund, which is largely dominated by equities. About 4% of the policies have lapsed in 2006-07. “However, we are designing a new product that will take care of the lapses in a policy,” said Mr Vijayan. Meanwhile, LIC is gearing itself to launch its health insurance product by January 2008. Mr Vijayan indicated that the Corporation's health insurance products would offer senior citizens too.

“The product will be designed in such a way that it will cover persons of all age groups,” he stated when asked whether the health plan would cover senior citizens. The country's largest life insurer's new business premium grew by 118.64% to Rs 39,541 crore during the fiscal ended March 31, 2007. On future plans, he said that LIC is planning to open representative offices in the US, Australia and Singapore.

Source: Economic Times