Weekly Insurance Round-up Tuesday, November 16, 2021
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Super excited to be back with the latest edition of Beshak’s Weekly News Round-up, a deep analysis of all the important insurance news articles from across the country! 🤓
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✴️ General Insurers taking steps to help Chennai flood victims 🌊
✴️ Covid recovered customers find it difficult to get top-up cover 😥
✴️ Centre & Insurers to settle payments of road accident victims 💸
✴️ 18% GST on insurance premium is atrocious: Former IRDAI member Nilesh Sathe 😲
✴️ LIC tops in individual life insurance sales, while private players dominate group sales 📊
✴️ Non-life insurance sector receives a premium of ₹17,679.98 Cr. in October 2021 📈
✴️ Bajaj Allianz Life Insurance to launch new products along with IPPB & Dept of Post 🆕
✴️ Liberty General Insurance + PhonePe to offer motor insurance 🤝🏻
✴️ ICICI Lombard joins the account aggregator system 💻
- On 9th November 2021, ICICI Lombard said it has taken many steps to help customers affected by the rains in Chennai.
- They took initiatives like:
- Launching SMS alerts to provide claim assistance.
- Setting up a fast-track claim settlement bench across the branches.
- Intimating their partner garages to prioritize the vehicles affected by the floods.
- The company also informed their customers to contact them if their vehicle is affected due to the floods either via their toll-free number or their app- ‘IL Take Care’.
- A similar initiative is taken by SBI General Insurance and Edelweiss General Insurance as well.
- SBI general insurance has set a task force to manage the queries and claims on fast track mode. Customers can either call their toll-free or drop a mail to their customer care.
- Edelweiss General insurers took the following steps to help the customers -
- Providing free pickup and drop facilities to the flood-affected vehicles which will be completely cashless. Customers can call their toll-free number and avail the services.
- Claims for vehicles with minor damages will be settled on the spot - the insurer will settle the claim and provide financial aid to the customers immediately.
- Customers can also get their inspection done via video streaming using Edelweiss’s video streaming app to ensure fast settlement of claims.
- Making 50% of the claim payment to customers if the vehicle is in a non-network garage.
- Physical RC verification is waived off for the time being and the verification will be done via RTO before the claim settlement.
- Sending SMS to their customers as a precautionary measure and asking them to park their vehicles in less risky places.
Sources: Money Control | The Economic Times | Live Mint
- Insurance demands have increased manifold post the pandemic, but getting an enhanced cover has become difficult for people who’ve recovered from Covid-19.
- While some insurance companies are denying the applications for a separate cover for those who were diagnosed with severe Covid, others are taking a lenient approach.
- The post-covid issues of people who were diagnosed with severe Covid like joint pain, high sugar levels, hypertension are being considered as underlying diseases. Insurers are including these under exclusions - which means any illness related to these conditions will not be covered for 3-4 years.
- Insurers also include self-declaration of Covid in the proposal forms, where customers have to declare that they were not diagnosed with Covid. Post this, proper investigation is done including medical tests, additional documents, etc., and only then a policy is issued.
- Some policies also get rejected if there are any co-morbidities under the covid protocol as the insurance company believes that it will be a serious complication should the customer be diagnosed with Covid.
- Beshak Take: Insurance companies have taken the brunt during the pandemic and have made huge losses. Hence, they are now a little extra careful while selling new policies as a measure to mitigate risk. An increase in premiums and strict underwriting rules are some steps that the insurers will take to avoid any complications at the time of claim.
Source: The Times of India
- The Centre and insurance companies have agreed to settle the compensation payments of victims of road accidents through mediation, which may take up to 3 months.
- A report prepared by ASG (additional solicitor general - a law officer of India and the third-ranking lawyer of the Government of India) Jayant Sud proposed the mechanism of mediation.
- The mechanism suggested having trained mediators between both claimant and insurer to arrive at a just, reasonable compensation and ensure an agreeable settlement.
- The proposed mechanism was informed to the supreme court when it was considering passing a direction for fast settlement of cases that are pending under the Motor Accidents Claims Tribunal (MACT).
- MACT deals with matters related to compensation of motor accident victims or their next of kin and claims relating to loss of life/property and injury cases resulting from motor accidents.
- Almost 25% of over 7.36 lakh MACT cases were in the trial stage for over 3 years according to the National Judicial Data Grid (A national repository of data relating to cases pending and disposed of in all district and taluka courts of the country) and of the total, almost 650 cases were delayed for over 2 decades.
- The report submitted by Mr. Sud threw some light on the alarming situation of pending claims and their impact on the entire justice system.
- It also mentioned that while fast settlement of these claims is important, it is also important to make sure that the settlement amount is received by victims quickly and without any deductions.
- Beshak Take: Buying insurance will make no sense if the claims aren’t received on time. This decision will come as a boon to many. As mentioned in the report, this process will require trained mediators who’ll be capable of taking an unbiased approach in concluding the compensation. Many claims remain pending, as very few people are aware of the process. It is necessary to educate such people about the process as well as their rights with regard to claiming compensation.
Source: Hindustan Times
- Mr. Nilesh Sathe, a former IRDAI member in the Business Standard BFSI Insight Summit, said that despite being a necessity, insurance is being charged with 18% of GST, which is not acceptable.
- He stated that insurance becomes an important factor when there is no social security and levying such heavy taxes on it is atrocious.
- He further stated that such heavy charges on insurance premiums are being charged nowhere in the world. And other financial services, like banking services or mutual services in India do not have any taxes as well.
- He even addressed the issues with the government not filling up the vacancies in the regulator. He opined that an institution weakens if it is not manned on time.
- He believed that the government will have to make sure that the GDP, employment growth, and the per capita income increases.
- Talking about insurance penetration, Mr. Sathe said that insurance penetration is the responsibility of all stakeholders, not just insurance companies. He also stated that educating and creating awareness about insurance is necessary.
Source: Business Standard
- The individual lives covered by the Life Insurance Corporation of India in October were way more than the private life insurance sector. However, 1.81 Cr. individuals were insured under group insurance schemes by the private insurers.
- As per IRDAI’s October 2021 report, only 5.5% of LIC’s individual policies (84,989) were bought through a single-premium mode, while the majority, 94.5% (14,52,851) plans were bought through non-single premium modes. A total of 15,37,840 policies were sold by LIC in October 2021.
- Private insurance companies have sold 4% (21,396) individual policies through single premium mode and 96% (514,095) of their policies through non-single premium mode, which makes a total of 5,35,491 individual policies.
- While LIC is ahead of private insurers with regard to individual policies, private insurers have sold more group insurance policies than LIC.
- In October 2021, LIC had sold 13,68,169 group policies whereas private insurers had sold 1.81 Cr. group policies.
- Collectively, life insurers have sold 20,73,331 individual policies and 1.95 Cr Group policies, of which LIC has sold 74.17% of individual policies and 7% of Group policies whereas Private life insurers have sold 26% of Individual policies and 93% of Group policies.
- The new business premium of October 2021 for LIC was 13.16% lesser than the new business premium of October 2020 (₹13,500.78 Cr. -Oct’21, ₹15,548.06 Cr. -Oct’20)
- The private insurer’s new business premium of October 2021 was 12.14% more than the new business premium of October 2020 (₹8,105.46 Cr - Oct’21, ₹7,227.96 Cr- Oct’20)
Source: Zee Business
- As per the monthly business figures released by IRDAI, non-life insurers have collected a premium of ₹17,679.98 Cr in October 2021.
- This is 11.14% more than the premium collected in October 2020, which was ₹15,906.71 Cr.
- The premium collected by the non-life insurers up to October 2021 is ₹126,385.37 Cr. which is 12.54% more than the premium collected ₹112,297.74 Cr. for the same period in 2020.
- The premium collected by general insurers increased from ₹14,272.75 Cr. to ₹15,651.67 Cr indicating a growth of 10% as compared to October 2020.
- The premium collected by the general insurers till October 2021 was ₹106,602.66 Cr. that was 10.7% more than the ₹96,297.96 Cr premium collected for the same period in 2020.
- Standalone private insurance companies collected a premium of 1609.37 Cr, which is 30.5% more than the premium collected in October 2020.
- The premium collected by specialized insurance companies also increased from 400.63 Cr. to 418.95 Cr. which was 4.6% more than the premium collected in October 2020.
Source: The Free Press Journal
- Bajaj Allianz Life Insurance has partnered with India Post Payment Banks (IPPB) and the Department of Posts (DoP) to launch insurance products in rural areas across the country.
- This partnership aims to provide financial security to customers in areas without any access to any banks or financial services.
- Customers will be able to access two products of Bajaj Life Insurance -
- Life Smart Protect Goal (a comprehensive and value-added term product)
- Life Guaranteed Pension Goal (an annuity plan for meeting post-retirement expenses)
- Both these products will be available along with Post Life Insurance and Rural Post Life insurance products of DoP.
- Customers can buy these products digitally as they’ll be available on all points of the sales platform (an intermediary via whom insurance can be purchased by customers directly and immediately).
- Bajaj Allianz has stated that they are confident that this partnership will help in adoption of life insurance across various customer segments.
- Beshak Take: The importance of insurance has increased post-pandemic and more and more people are looking for a secure financial tool. The demand for insurance might be on the rise, but there are still many who are not insured or are underinsured - especially in rural areas.
- It is important to tap such customers, educate them, and make insurance available to them. Extending insurance access to the rural areas is the need of the hour as people there are seldom aware of insurance and its benefits.
Source: The Economic Times
- Liberty General Insurance, to enable easy accessibility of its motor insurance, has partnered with Phonepe to offer motor insurance digitally.
- With this, Liberty Insurance aims to strengthen its tie-up with Phone pe and empower its customers with a protection cover.
- PhonePe entered the financial services sector in 2017 and started the distribution of insurance in 2020.
- Along with insurance, PhonePe also offers Mutual Funds, Tax Saving Funds, Liquid Funds, International travel insurance, and Corona-specific insurance products.
Source: Live Mint
- ICICI Lombard joins Sahamati, a non-profit industry alliance for the Account Aggregator system, and becomes the first non-life insurance company to join the account aggregator network.
- This will help ICICI Lombard to -
- Access the customer’s financial information with the customer’s consent.
- Assess the risk and make the underwriting process simpler, which in turn will improve the turnaround time of policy issuance.
- Sahamati will act as a common voice between the industry and the regulators and set some code of conduct and market guidelines for its members.
- Being a member of Sahamati, ICICI Lombard will be able to provide its input for shaping market guidelines and marketing norms.
- Individuals can digitally and securely share their financial information with any financial institution through the account aggregator system. With their consent, financial institutions will get direct access to this information.
- Max Life Insurance was the first life insurance company to join the Account Aggregator system.
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