Union Finance Ministry has stepped in the war between Securities and Exchange Board of India (SEBI) and Insurance Regulatory Development Authority (IRDA) over new unit linked insurance plans.
Insurance companies cannot issue any fresh ULIP products awaiting a court decision. The restriction is also relevant on the Life Corporation of India (LIC) and 8 others companies which be not named in the previous SEBI order that barred 14 insurers from issuing any new ULIP.
But all ULIPs issued before April 9 will carry on. The Finance Minister had already asked the insurance and market regulators to keep status quo on the SEBI order banning new unit linked plan or products by insurance companies.
The market regulator had on April 12 lifted its ban order forced on April 10 on selling of ULIPs by the 14 insurance companies after a meeting with IRDA and Finance Ministry officials in New Delhi.
The IRDA had rejected SEBI's resolution and asked the insurance companies to carry on with business as normal. The insurance regulator had invoked its powers under Section 34 (1) of the Insurance Act to take on SEBI.
SEBI wants all financial products to move to no entry load. ULIPs at present charge entry load.
The insurance companies against whom SEBI passed an order were SBI Life, ICICI Prudential, Tata AIG Life Insurance, Aegon Religare Life, Aviva Life, Bajaj Allianz Life Insurance, Bharti AXA, Birla Sunlife, HDFC Standard Life, ING Vysya Life Insurance, Kotak Life Insurance, Max New York Life, Metlife India and Reliance Life Insurance.
Saturday, April 17, 2010
Friday, April 16, 2010
Tata-AIG Life Insurance unveils 'NAV guaranteed' pension plan
Tata AIG Life Insurance has announced the launch of Apex Pension Plans — 4 unit-linked pension plans that come with the ‘Guaranteed Maturity Unit Price’ (GMUP) characteristic, which enables the policyholders to earn income based on the highest NAV per unit achieved on the reorganize dates.
The policyholder’s premium is allocated in the individual ‘Investment Fund’ from where the money is transitioned to the relevant Return Lock-in Fund on the instant next reset date. According to the official release, while the investment fund’s objective is to provide capital defense through investment in quality short-term debt, the latter aims to invest in a diversified equity portfolio of large-cap companies to generate capital approval, and use debt instruments to lock in the same.
The NAV per unit of this fund will be noted at every reset date for calculating the GMUP. The policyholders can, depending upon their age,retirement plan age and financial requirement, choose from 4 plans — Apex Pen-sion, Apex Pension 10, Apex Pension 15 and Apex Pension 20. For all these variants, the minimum annualized premium is Rs 48,000.
The policyholder’s premium is allocated in the individual ‘Investment Fund’ from where the money is transitioned to the relevant Return Lock-in Fund on the instant next reset date. According to the official release, while the investment fund’s objective is to provide capital defense through investment in quality short-term debt, the latter aims to invest in a diversified equity portfolio of large-cap companies to generate capital approval, and use debt instruments to lock in the same.
The NAV per unit of this fund will be noted at every reset date for calculating the GMUP. The policyholders can, depending upon their age,retirement plan age and financial requirement, choose from 4 plans — Apex Pen-sion, Apex Pension 10, Apex Pension 15 and Apex Pension 20. For all these variants, the minimum annualized premium is Rs 48,000.
Many Ulips propose life cover of 50 time’s annual premium
While unit-linked insurance policies (Ulips) of life insurance companies have come under disapproval for their focus on investment rather than offering sufficient life cover, insurers point out that a number of ULIP offer very much high humanity benefits that can be as high as 50 times the annual premium or still higher in a few select instances.
The minimum sum assured (life cover) in Ulips is 5 times and most policies offer cover of between 5-10 times the annual premium. The life-cover multiple could also be the term of the policy or otherwise what is called as sum-assured several.
HDFC Standard Life offers up to 40 times life cover on all its Ulips, Aegon Religare Life’s Protect Gain and ICICI Prudential Life Insurance Lifetime Maxima offer up to 50 times humanity cover. Met Life Insurance’s Met Smart Life offers life cover up to 100 times the annual premium. Typically, in an Ulip, the higher the risk cover, the higher the mortality charges are and therefore the lower is the amount invested in equities.
Akshay Gupta, chief marketing officer, Bajaj Allianz Life Insurance, said, if a person buys an Ulip for investment point, they go for a low life cover multiples, which ranges from 5-15 times the annual cover. Those who look for extra humanity cover and at the same time also expect a certain quantity of money at the end of the term, go for high multiple life covers. He added “Unlike the general awareness, such policies are meant for retail customers and these are our bread and butter policies that are popular among our customers”.
Bajaj Allianz generally offers life cover in multiples of the term of the policy. However, some of its policies such as New Family Gain II and Unit Gain offer life cover up to 85 times the annual premium.
KS Gopal Krishnan, chief financial officer and appointed actuary, Aegon Religare, said, high multiple life cover products are made for retail investors, who have liabilities such as home loans, child’s education and marriage.
However, some experts believe Ulips are not the best options for higher life cover up to multiples of 50-60 times.
Rahul Agarwal, CEO, Optima Insurance brokers, said, when there are cheaper options available in terms plans, why would someone go for Ulips to get higher life cover? He added “People invest in Ulips because of the return on equity investments and if one opts for higher life cover, the investment section becomes limited and so do the returns.”
The minimum sum assured (life cover) in Ulips is 5 times and most policies offer cover of between 5-10 times the annual premium. The life-cover multiple could also be the term of the policy or otherwise what is called as sum-assured several.
HDFC Standard Life offers up to 40 times life cover on all its Ulips, Aegon Religare Life’s Protect Gain and ICICI Prudential Life Insurance Lifetime Maxima offer up to 50 times humanity cover. Met Life Insurance’s Met Smart Life offers life cover up to 100 times the annual premium. Typically, in an Ulip, the higher the risk cover, the higher the mortality charges are and therefore the lower is the amount invested in equities.
Akshay Gupta, chief marketing officer, Bajaj Allianz Life Insurance, said, if a person buys an Ulip for investment point, they go for a low life cover multiples, which ranges from 5-15 times the annual cover. Those who look for extra humanity cover and at the same time also expect a certain quantity of money at the end of the term, go for high multiple life covers. He added “Unlike the general awareness, such policies are meant for retail customers and these are our bread and butter policies that are popular among our customers”.
Bajaj Allianz generally offers life cover in multiples of the term of the policy. However, some of its policies such as New Family Gain II and Unit Gain offer life cover up to 85 times the annual premium.
KS Gopal Krishnan, chief financial officer and appointed actuary, Aegon Religare, said, high multiple life cover products are made for retail investors, who have liabilities such as home loans, child’s education and marriage.
However, some experts believe Ulips are not the best options for higher life cover up to multiples of 50-60 times.
Rahul Agarwal, CEO, Optima Insurance brokers, said, when there are cheaper options available in terms plans, why would someone go for Ulips to get higher life cover? He added “People invest in Ulips because of the return on equity investments and if one opts for higher life cover, the investment section becomes limited and so do the returns.”
Wednesday, April 14, 2010
Life insurance companies see latest selling premiums up 15%
Life insurance companies are pulling out all stops in the last combine of months before the close of the financial to cover the over 15% percent degrowth that it had to stand in the first 6 months.
Insurers are betting large on the February and March numbers for latest business premium to gather in an overall industry growth of around 15% percent in the current financial year.
While the first half of the year showed a separate degrowth, mostly among private insurance players, February growth statistics seem to show positive signs on the new business premium collected.
Data from the Insurance Regulatory & Development Authority (Irda) shows that the overall new business premiums grow by 16.5% percent between April and February.
While public-sector behemoth LIC grew by 24% percent, almost all private insurance companies registered good development in new business premium. SBI Life Insurance, Reliance Life Insurance, ICICI Prudential Life Insurance grew their new business premiums by 21.1% percent, 5% percent, 16.09% percent, respectively. HDFC Standard Life grew by 19.45% percent, Bajaj Allianz Life Insurance by 9.5% percent and Tata AIG Life Insurance grow 16.7% percent throughout April-February.
Amitabh Chaudhry, CEO, HDFC Standard Life, told DNA Money, “The economic recession took its toll and constant to have its result on the industry till the first few months of the current financial. Things are revolving around and February and March are the biggest months. A 15% percent growth for the industry can be expected.”
M N Rao, managing director and CEO, SBI Life, said, “We have posted a net profit of Rs 199 crore in the first 9 months and would positively improve it to at least Rs 225 crore. We are also looking at a 25% percent growth in the new business premium for the full year to around Rs 7,000 crore.”
Malay Ghosh, president, Reliance Life, said, “I expect the industry to grow at an average of around 10-12% percent and our increase rate should be around 15% percent for new business premium. We do be expecting a slight balancing of portfolios. For 2009-10, we expect an overall premium growth of 50% percent to around Rs 7,000 crore.”
Interestingly, however, the growth in weighted new received premium (WNRP), or real new business premium weighted for single and group premiums at 10% percent, equal to February 2010, over the previous equivalent period, is around 12.9%.
Alpesh Mehta and Parag Jariwala, analysts with Motilal Oswal, said in a recent report, “In February 2010, industry WNRP grew 4%....in January 2010, WNRP declined 25% month on month. On a year-to-date (YTD) basis, industry WNRP grew 13% due to a strong 25% growth posted by LIC. YTD, private players grew just by 4% (WNRP). Among big private players, only SBI Life reported a strong 35% year-on-year growth in WNRP, whereas for others it has been 10% to (-) 20%.
Insurers are betting large on the February and March numbers for latest business premium to gather in an overall industry growth of around 15% percent in the current financial year.
While the first half of the year showed a separate degrowth, mostly among private insurance players, February growth statistics seem to show positive signs on the new business premium collected.
Data from the Insurance Regulatory & Development Authority (Irda) shows that the overall new business premiums grow by 16.5% percent between April and February.
While public-sector behemoth LIC grew by 24% percent, almost all private insurance companies registered good development in new business premium. SBI Life Insurance, Reliance Life Insurance, ICICI Prudential Life Insurance grew their new business premiums by 21.1% percent, 5% percent, 16.09% percent, respectively. HDFC Standard Life grew by 19.45% percent, Bajaj Allianz Life Insurance by 9.5% percent and Tata AIG Life Insurance grow 16.7% percent throughout April-February.
Amitabh Chaudhry, CEO, HDFC Standard Life, told DNA Money, “The economic recession took its toll and constant to have its result on the industry till the first few months of the current financial. Things are revolving around and February and March are the biggest months. A 15% percent growth for the industry can be expected.”
M N Rao, managing director and CEO, SBI Life, said, “We have posted a net profit of Rs 199 crore in the first 9 months and would positively improve it to at least Rs 225 crore. We are also looking at a 25% percent growth in the new business premium for the full year to around Rs 7,000 crore.”
Malay Ghosh, president, Reliance Life, said, “I expect the industry to grow at an average of around 10-12% percent and our increase rate should be around 15% percent for new business premium. We do be expecting a slight balancing of portfolios. For 2009-10, we expect an overall premium growth of 50% percent to around Rs 7,000 crore.”
Interestingly, however, the growth in weighted new received premium (WNRP), or real new business premium weighted for single and group premiums at 10% percent, equal to February 2010, over the previous equivalent period, is around 12.9%.
Alpesh Mehta and Parag Jariwala, analysts with Motilal Oswal, said in a recent report, “In February 2010, industry WNRP grew 4%....in January 2010, WNRP declined 25% month on month. On a year-to-date (YTD) basis, industry WNRP grew 13% due to a strong 25% growth posted by LIC. YTD, private players grew just by 4% (WNRP). Among big private players, only SBI Life reported a strong 35% year-on-year growth in WNRP, whereas for others it has been 10% to (-) 20%.
Thursday, April 1, 2010
Pru Ace launches by ICICI Prudential Life
ICICI Prudential Life Insurance Company Ltd (ICICI Prudential Life) on Tuesday announced the launch of ICICI Pru Ace – a low charge, wealth making product.
The particularly low charge configuration of the product ensures that the customer gets an unbeatable rate of return over the tenure of the product, said the company.
Pranav Mishra, SVP & Head - Products & Sales, ICICI Prudential Life Insurance, said, “Ace delivers a significantly superior value proposition to the customer as there is 100% allocation of the customer’s funds. Our latest fund offering, the Dynamic P/E Fund is an added new fund option that our customers can utilize to create long term wealth creation.”
ICICI Pru ACE rewards customers who have a long term point of view through loyalty additions as well as additional allocation of units as under additional allocation of units: more than 100% allocation to funds on the premium payment from the 6th policy year onwards.
There is no premium allocation charge which results in results in 100% allocation of the customer’s funds at the time of premium payment. The policy administration charge is fixed at Rs. 60 per month for the term of the policy.
This negligible charge structure results in a very high NET YIELD for the customer.
The company has also launched a Dynamic P/E Fund along with this product that provides long term capital appreciation through dynamic asset allocation between equity and debt.
For More Information About Life Insurance
ICICI Pru Pinnacle
The particularly low charge configuration of the product ensures that the customer gets an unbeatable rate of return over the tenure of the product, said the company.
Pranav Mishra, SVP & Head - Products & Sales, ICICI Prudential Life Insurance, said, “Ace delivers a significantly superior value proposition to the customer as there is 100% allocation of the customer’s funds. Our latest fund offering, the Dynamic P/E Fund is an added new fund option that our customers can utilize to create long term wealth creation.”
ICICI Pru ACE rewards customers who have a long term point of view through loyalty additions as well as additional allocation of units as under additional allocation of units: more than 100% allocation to funds on the premium payment from the 6th policy year onwards.
There is no premium allocation charge which results in results in 100% allocation of the customer’s funds at the time of premium payment. The policy administration charge is fixed at Rs. 60 per month for the term of the policy.
This negligible charge structure results in a very high NET YIELD for the customer.
The company has also launched a Dynamic P/E Fund along with this product that provides long term capital appreciation through dynamic asset allocation between equity and debt.
For More Information About Life Insurance
ICICI Pru Pinnacle
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