Performance of Indian life insurance sector in 2007 -08
India's share in the global life insurance business rose to 1.97% in 2007 as compared to 1.68% in 2006.
However, the business volume in 'new life insurance products' have slowed down considerably in the 2007 to 2008 period.
But the overall business growth has been more than 36% (measured in dollar terms). One reason for this has been rupee appreciation (in terms of the US dollar). Another factor has been the premium renewal factor.
As per a report from Swiss Re, the global life insurance market experienced a real growth rate of 5.4%. This is the inflation adjusted growth. The comparable figure for India was 14.2% for the 2007-08 period. This was two-and-half times over the global average.
Swiss Re predicts a robust life insurance sector for 2008 but quite the opposite scenario for the non -life sector. A modest growth is fore-casted for 2008 in view of the stock market and capital market volatility.
Metlife study reveals only 20% of Indians go for independent retirement planning
MetLife India Insurance Company Limited is a leading life insurance company in India.
Results of two MetLife studies were announced on 25h June, 2008. The studies are “Inaugural Study of International Employee Benefits Trends” and “Sixth annual US study of Employee Benefits Trends”.
As per study reports, 71 per cent of employees in India were concerned about the possibility of outliving retirement money.
35 per cent of the sample confirmed about steps taken for determining their retirement needs.
A miniscule 20 per cent were found to have gone for actual retirement planning.
The findings of the survey were corroborated by Rajesh Relan, Managing Director of the company.
Stock brokers shift focus to insurance broking
Recent stock market volatility has forced some stock brokers to consider a change of vocation. Stock brokers are now considering insurance broking as a viable option.
The idea is that, this move will insulate brokers from market uncertainty and side by side will provide the clients with a portfolio of financial products.
Brokers like Religare, India Infoline, Anand Rathi, Emkay and Edelwiess have established insurance broking divisions. These entities are selling life as well as non-life insurance products of multiple companies.
Insurance brokers are required to possess a minimum capital of Rs 50 lakhs for entering the business and there are some other stringent regulatory guidelines for conducting business operation in India.
Insurance is unaffected by stock market volatility as observed by P Saravanan, Senior Vice-President of Sharekhan.
With share market volatility being the order of the day, insurance broking seems to be the way out.
Currently there exist around 250 insurance brokers in India. The market leaders being Aon and Marsh.
It is interesting to note that, both these are multinational companies who also provide reinsurance services.
Highest insurance coverage for Air India
National Aviation Co of India controlled state aircraft carrier, Air India is slated to take up a $6.5 billion insurance coverage from 30th June , 2008.
As per an airline official, by far this is the biggest insurance coverage taken by any airline in the subcontinent.
Insurance coverage will be extended to the aircraft fleet belonging to Air India, Alliance Air, Air India Express. A total of 140 aircrafts will receive the insurance coverage.
The insurance contract for the period 2007-08 for Air India went to a consortium. This consortium was led by New India Assurance Co Ltd. Lombard General Insurance Co Ltd belonging to ICICI was the co-insurer.
It may be noted that NACIL has already successfully bargained for a minimum 15 percent discount on existent rates of insurance for its non-aviation business wing for the year 2008-09. ICICI Lombard has bagged that contract.
Insurance coverage for terrorism
Indian insurance market has an innovative concept. Optima Insurance Brokers has announced first of its kind insurance coverage for individuals against acts of terrorism.
The special coverage of rupees one lakh is intended for the initial one lakh visitors registering at the company's website, in the designated proforma.
This insurance coverage is being extended in association with the New India Assurance company.
A full fledged policy product to this effect is still awaited though. It may be noted that till date personal accident policies excluded coverage for terrorist attacks.
