Weekly Insurance Round-up Tuesday, November 9, 2021
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We're back with the latest edition of Beshak’s Weekly News Round-up, an analysis of all Insurance News & Updates from our in-house research team.
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- With underwriting norms being tightened by reinsurers due to Covid-19, term insurance premiums might increase from 25% to 40% (based on the insurer) in December this year.
- Life insurance companies faced huge losses due to Covid in FY2021, receiving 4-5 times the usual death claims, requiring this price hike.
- Owing to the claims burden, Munich Re decided to raise rates for the underwriting portfolio of pure protection plans by 40%.
- This is the second time in 2021 that the rates are being hiked by reinsurers. The first hike this year was in March 2021 when premiums increased by 4-5%.
- Beshak Take:
- Because of Covid, there was a huge rise in death claims received by life insurers. This and stricter and tighter underwriting rules are the main reasons behind the rates being hiked. And with the fear of the third wave of Covid, insurers don’t want to take any risks.
- While the increase in premiums won’t affect the existing customers, the new customers will be charged premiums as per the new rates.
Source: India TV
- ICICI Lombard has tied up with Vega helmets with an aim to offer personal accidental cover to all customers who’ll make an online purchase of Vega helmets.
- As per the YouGov International Automotive Report 2021, the intent of using public transport is low in urban areas of India. With the current demand for personal mobility increased, the purchase of two-wheelers is on the rise too. As a result - the number of road accidents too has seen an increase. As per the Ministry of Road Transport and highway Report 2020, 1.5 lakh people in India die because of road accidents annually
- In a statement, ICICI Lombard said that the tie-up is done with an intent to provide dual protection and safety to the customers through both helmet and personal accident cover. They will get an accidental death benefit of INR 1 Lakh and the cover will be applicable worldwide.
- According to the customer care of Vega Helmets, the policy is still in process and will be launched in the coming weeks.
- YouGov is a British international Internet-based market research and data analytics firm, founded in 2000 and headquartered in London, United Kingdom. Vega Auto Accessories Pvt. Ltd is one of the leading manufacturers of helmets in India.
- Beshak Take: This is a very holistic approach to risk management. The best way to prevent the financial impact of risks (in this case accidental injury) - is to reduce the possibility of the event itself. And helmets are crucial for this.
- Having said that, accidents still do happen - and can occur anywhere, not just on roads. This is where the personal accident cover can help the family of the insured person, to manage the financial impact.
- On 2nd November 2021, the Competition Commission of India (CCI) approved the acquisition by HDFC Life Insurance Company of 100% shareholding in Exide Life Insurance Co Ltd.
- CCI has the right to investigate all competition concerns including restrictive practices, abuse of dominance, exemptions from the application of the Act, and mergers and acquisitions. CCI approval is required for combinations where the parties involved exceed the assets/turnover thresholds set out in section 5 of the Competition Act.
- With this acquisition, HDFC Life will increase its presence in South India, specifically in the smaller towns as Exide life has a strong foothold in South India.
- The acquisition is subject to regulatory and other approvals and is expected to be completed by June 2022.
- The deal is structured in two stages - once the acquisition is completed, the merger process will be initiated.
- HDFC Life, in September 2021, had announced that it will be acquiring a 100 percent stake in Exide Industries-promoted Exide Life Insurance for Rs 6,687 crore, in a bid to enhance its proprietary channel.
Source: Live Mint
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