Health insurance industry holds a lot of promise. With a compounded annual growth rate of around 37 percent (FY 2002-08), health insurance industry in India is one of the fastest growing segments.
What also needs to be answered is whether it deserves to be classified as a different line of business, separating it from non-life insurance (as the present norm).
Tuesday, December 29, 2009
Banks must be allowed to sell insurance policies of multiple companies
Allowing banks to distribute insurance products of multiple insurance companies would be a step in the right direction for both the industry and consumers.
As per the present norm a bank can distribute one life and one general insurance product. This is restricting their area of activity and choice of offers to customers. Banks are thus handicapped in terms of product offerings and catering to customer needs.
Bancassurance across the globe is a significant distribution channel and enabling this channel to market and sell insurance policies of multiple companies would prove beneficial for banks, insurer and the customers. This way the customers would have more choices to make from which would suit their financial needs. This in turn would promote retailing in insurance.
IRDA is now contemplating on allowing banks to sell insurance products of more than one company.
As per the present norm a bank can distribute one life and one general insurance product. This is restricting their area of activity and choice of offers to customers. Banks are thus handicapped in terms of product offerings and catering to customer needs.
Bancassurance across the globe is a significant distribution channel and enabling this channel to market and sell insurance policies of multiple companies would prove beneficial for banks, insurer and the customers. This way the customers would have more choices to make from which would suit their financial needs. This in turn would promote retailing in insurance.
IRDA is now contemplating on allowing banks to sell insurance products of more than one company.
Indian Private Life Insurance Companies - Break-even point
Recently two private insurance companies have been giving positive indication of breaking even by 2012. ICICI Pru Life and HDFC Standard Life expect to break-even in 2-3 years.
Operating and distribution costs hold the key. An established infrastructure plays an very important role in cutting down on the costs and thus reaching break-even faster.
Operating and distribution costs hold the key. An established infrastructure plays an very important role in cutting down on the costs and thus reaching break-even faster.
Monday, December 21, 2009
Is life insurance only for the earning?
The main principle of insurance is to indemnify the risk. This risk would result in a loss in the event of it occurring. Life insurance in general are taken to make good the pecuniary loss suffered by the family in the event of the demise of the earning member. This in a way mitigates the economic loss and provides some relief in emotionally difficult times.
This brings us to an interesting question, is life insurance cover apt only for an earning individual / bread-winner / wage earner or does the non-working spouse / homemaker too deserve insurance? Economics, historically, has ignored the monetary contributions of a homemaker / housewife to the household.
As discussed above, while life insurance indemnifies any pecuniary loss, it does not do so for any emotional loss that an surviving individual or family suffers. One of the factors to be considered is that any emotional loss can be quantified if it has a financial bearing on the recipient. A homemaker too has a financial impact on the family and its well-being. While the debate continues on accounting a homemaker's contribution to the household, a life insurance cover would definitely not only protect the non-working spouse but also their family.
Some of the reasons why life insurance must be considered on a non-working spouse / homemaker is:
This brings us to an interesting question, is life insurance cover apt only for an earning individual / bread-winner / wage earner or does the non-working spouse / homemaker too deserve insurance? Economics, historically, has ignored the monetary contributions of a homemaker / housewife to the household.
As discussed above, while life insurance indemnifies any pecuniary loss, it does not do so for any emotional loss that an surviving individual or family suffers. One of the factors to be considered is that any emotional loss can be quantified if it has a financial bearing on the recipient. A homemaker too has a financial impact on the family and its well-being. While the debate continues on accounting a homemaker's contribution to the household, a life insurance cover would definitely not only protect the non-working spouse but also their family.
Some of the reasons why life insurance must be considered on a non-working spouse / homemaker is:
- To hire professional services / domestic help to take care of home and family while one copes with the emotional loss one would have just suffered and later to focus on one's career.
- To ensure adequate life and health cover for old age for a homemaker. It would prove beneficial to obtain a life insurance cover early as this would ensure better price and additional benefits during old age.
- This would also take care of any medical emergencies that may arise during the lifespan of the non-working spouse and render them incapable of any work either temporarily or permanently.
- If the homemaker decides to start earning or pursue one's interests later on in life, life insurance taken early in life would avoid buying insurance at higher premiums.
Monday, December 14, 2009
Motor Insurance Scope Widened
All occupants of a private car and the pillion rider on a motorcycle are now covered under a comprehensive insurance policy.
The Delhi High Court has ruled that the families of pillion riders of two-wheelers and car passengers who die in road accidents will now be eligible for monetary compensation from insurance companies.
In a circular to the general insurance companies, Insurance Regulatory and Development Authority (IRDA) has said that injury to or death of an occupant in an insured private car and pillion rider on a two-wheeler is liable to be covered by the standard motor package policy (also called comprehensive policy) under the liability for third parties (TPL).
Seventeen insurance companies providing such comprehensive insurance policy have agreed to implement the extended cover with immediate effect and comply with an IRDA circular of November 16 relating to the liability of insurance companies.
The Delhi High Court has ruled that the families of pillion riders of two-wheelers and car passengers who die in road accidents will now be eligible for monetary compensation from insurance companies.
In a circular to the general insurance companies, Insurance Regulatory and Development Authority (IRDA) has said that injury to or death of an occupant in an insured private car and pillion rider on a two-wheeler is liable to be covered by the standard motor package policy (also called comprehensive policy) under the liability for third parties (TPL).
Seventeen insurance companies providing such comprehensive insurance policy have agreed to implement the extended cover with immediate effect and comply with an IRDA circular of November 16 relating to the liability of insurance companies.
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