There is the good sales pitch. And there is the bad sales pitch. And between them is the not- so-bad sales pitch. Before you start scratching your head on what we mean, allow us to clarify. When an insurance agent asks you to invest in a unit linked insurance plan (Ulip), promising that your money will triple in 5 years, that’s the bad sales pitch. The money may or may not triple in 5 years. There are no guarantees.
When a financial planner asks you to buy a term insurance to insure your life, that’s the good sales pitch. In case something was to happen to you, your family will be financially secure. In between these lies the not-so-bad sales pitch, which you might just knowledge while applying for a home loan to fund your dream home.
The marketing manager at the bank/housing finance company (HFC) will try to sell you an insurance policy along with the home loan. Now, this is the not-so-bad sales pitch. The manager will tell you that if you buy this insurance policy, known as the home loan protection plan (HLPP), along with the home loan, then in case of your unforeseen demise, the insurance company will pay the bank the principal amount of the remaining portion of your home loan. This, in turn, means that your family can continue living in the dream house.
Wednesday, November 24, 2010
I – genius scholarships declares by Max New York Life
The Max New York Life Insurance declared its first I-genius scholarships on Monday, last week. Delhi girl, Shruti Bhardwaj, won the highest prize of Rs 20 lakh in the junior category (class III to IV), while in senior group (class VI to VIII), there was a tie. Siddharth Yadav from Bulandsheher and Nityashree Ramakrishna from Bangalore, shared the prize money in this category of Rs 20 lakh with Rs 10 lakh each.
The scholarship program, launched in February, this year, by Max New York Life Insurance in association with The Times of India, rewards children with brilliance in both academics and extra-curricular activities to promote all-round development of the child.
Organisers said that over 10 lakh children from 500 cities were enrolled in the scholarship program and evaluation was done through a four-stage process increase over 10 months. "In addition to their performance in tests that evaluated their all round skills, the 3rd stage of the scholarship program entailed a live interaction with jury through video conference. Total 52 candidates appeared for the final evaluation at Siri Fort in the capital, of which three one from the junior category and two from the senior category - walked away with the prize. The 50 other finalists received scholarships worth Rs 1 lakh each,'' said the organiser. He added that jury included Derek O'Brien, Palash Sen and author Ruskin Bond.
Rajesh Sud, CEO and managing director of Max New York Life congratulated the winners at a glittering award ceremony. "The I-genius program was conceived to engage beyond business with the parent community to understand their needs and promote all round development of the children. We will continue to look at innovative engagement programs like this in future,'' Sud said.
Know more about Insurance
Child Plan
The scholarship program, launched in February, this year, by Max New York Life Insurance in association with The Times of India, rewards children with brilliance in both academics and extra-curricular activities to promote all-round development of the child.
Organisers said that over 10 lakh children from 500 cities were enrolled in the scholarship program and evaluation was done through a four-stage process increase over 10 months. "In addition to their performance in tests that evaluated their all round skills, the 3rd stage of the scholarship program entailed a live interaction with jury through video conference. Total 52 candidates appeared for the final evaluation at Siri Fort in the capital, of which three one from the junior category and two from the senior category - walked away with the prize. The 50 other finalists received scholarships worth Rs 1 lakh each,'' said the organiser. He added that jury included Derek O'Brien, Palash Sen and author Ruskin Bond.
Rajesh Sud, CEO and managing director of Max New York Life congratulated the winners at a glittering award ceremony. "The I-genius program was conceived to engage beyond business with the parent community to understand their needs and promote all round development of the children. We will continue to look at innovative engagement programs like this in future,'' Sud said.
Know more about Insurance
Child Plan
Thursday, November 18, 2010
New ULIP launched by Reliance Life
Anil Ambani Group Company Reliance Life Insurance launched a unit-linked insurance plan that will provide policyholders the advantage of regular savings with improved protection and market-linked returns.
The new unit-linked plan (Ulip), Reliance Life Insurance Classic Plan, would offer protection to policyholders in the age group of 7-65 years.
"The unique plan of Reliance Life Insurance Classic Plan is that it offers flexibility and triple benefit of savings, insurance and investment - all in one single plan," Reliance Life said in a statement.
The plan also offers liquidity through part withdrawals and loans, top-up payment option and rider benefits to increase protection cover, it added.
"The new Ulip offers multiple benefits and protection - from helping policyholders plan their finances wisely at different stages of life, to providing risk cover on loss of life," Reliance Life Executive Director and President Malay Ghosh said.
Under the plan, the recipient would get double the base sum assured plus total fund value in the event of accidental death, the statement added.
The plan is available under two minimum payment options - Regular option and the Single Premium option.
Under the Regular Option, the customers would have to pay Rs 20,000 annually -- which can also be paid in monthly, quarterly and half yearly options.
For the Single Premium option, customers will have to pay a minimum of Rs 50,000 only once at the beginning during the 15-year policy tenure.
"The flexibility offered to policyholders by the company allows liquidity through partial withdrawals after 5th policy anniversary, loan after the completion of 2nd policy year and top-up option to increase regular savings," Ghosh added.
This is the second Ulip scheme launched by Reliance Life after the insurance regulator Insurance Regulatory and Development Authority came out with its revised strategy on Ulips a few months ago.
In October, the company had launched the Highest NAV advantage Ulip plan, which offers guarantee on maturity with the highest NAV per unit achieved throughout the entire 15 years policy term.
The new unit-linked plan (Ulip), Reliance Life Insurance Classic Plan, would offer protection to policyholders in the age group of 7-65 years.
"The unique plan of Reliance Life Insurance Classic Plan is that it offers flexibility and triple benefit of savings, insurance and investment - all in one single plan," Reliance Life said in a statement.
The plan also offers liquidity through part withdrawals and loans, top-up payment option and rider benefits to increase protection cover, it added.
"The new Ulip offers multiple benefits and protection - from helping policyholders plan their finances wisely at different stages of life, to providing risk cover on loss of life," Reliance Life Executive Director and President Malay Ghosh said.
Under the plan, the recipient would get double the base sum assured plus total fund value in the event of accidental death, the statement added.
The plan is available under two minimum payment options - Regular option and the Single Premium option.
Under the Regular Option, the customers would have to pay Rs 20,000 annually -- which can also be paid in monthly, quarterly and half yearly options.
For the Single Premium option, customers will have to pay a minimum of Rs 50,000 only once at the beginning during the 15-year policy tenure.
"The flexibility offered to policyholders by the company allows liquidity through partial withdrawals after 5th policy anniversary, loan after the completion of 2nd policy year and top-up option to increase regular savings," Ghosh added.
This is the second Ulip scheme launched by Reliance Life after the insurance regulator Insurance Regulatory and Development Authority came out with its revised strategy on Ulips a few months ago.
In October, the company had launched the Highest NAV advantage Ulip plan, which offers guarantee on maturity with the highest NAV per unit achieved throughout the entire 15 years policy term.
Wednesday, November 17, 2010
E-Insurance launched by Kotak Life Insurance
The options for those looking to fulfill insurance needs on their own are widening. Kotak Mahindra Old Mutual Life Insurance launched its online term insurance product this month. As the company doesn’t incur expenses to reach out to a customer to sell the product, including the agent’s commission, it is priced 10% cheaper than the term insurance cover available during the company’s agents and distributors.
The buying procedure is almost related to the rest of the online products namely ICICI Prudential Life Insurance iProtect Term Insurance and Aegon Religare Life Insurance’s iTerm plan. While ICICI Prudential and Aegon Religare Life Insurance offer only yearly options of payment, Kotak has monthly, quarterly, half-yearly and yearly options of payment.
The maximum age at maturity under ICICI Prudential’s iProtect is 75 years, 65 years under Aegon Religare’s iTerm, but 70 years under Kotak Life’s e-insurance.
The company also offers a facility of tele-underwriting wherein customers are asked questions and in case answers are acceptable, then no medical tests are required. For sum assured of `30 lakh, no tests or tele-underwriting is valid. If you need medical tests, you will have to go to the hospital to get the tests done. Rest of the documents are picked up from your residence.
Though Kotak Life Insurance and ICICI Prudential offer a maximum term of 30 years, Aegon Religare Life offers a maximum term of 25 years. The premium for the lower term is higher for Aegon Religare than the other two players in the non-smoker category.
But is lower than the Kotak premium in case of a non-smoker. Aegon Religare does not differentiate between a smoker and a non-smoking female, while deciding the premium. Kotak Life actually prices premium for smokers higher than any of the online players.
Unique Option: One feature offered here is the step-up life cover, where you are in a position to pay higher premium and realise you need a higher sum assured, you can opt for it. However, there are charges for taking the step-up option, which is dependent on the premium and the term.
In case the policy is taken for less than 15 years, then you have to pay 3% of the basic premium, while 5% of the basic premium is levied in case the term is above 15 years.
No medical tests are required if you opt for the step-up option.
Why Go For it?: If you are a non-smoking woman, then the online term cover of Kotak Life is the cheapest in the market.
Why Not?: The policy pegs risk for smoking customers much higher than other similar options. Premium for smoking men and women is higher by 7-26% vis-à-vis other players.
The buying procedure is almost related to the rest of the online products namely ICICI Prudential Life Insurance iProtect Term Insurance and Aegon Religare Life Insurance’s iTerm plan. While ICICI Prudential and Aegon Religare Life Insurance offer only yearly options of payment, Kotak has monthly, quarterly, half-yearly and yearly options of payment.
The maximum age at maturity under ICICI Prudential’s iProtect is 75 years, 65 years under Aegon Religare’s iTerm, but 70 years under Kotak Life’s e-insurance.
The company also offers a facility of tele-underwriting wherein customers are asked questions and in case answers are acceptable, then no medical tests are required. For sum assured of `30 lakh, no tests or tele-underwriting is valid. If you need medical tests, you will have to go to the hospital to get the tests done. Rest of the documents are picked up from your residence.
Though Kotak Life Insurance and ICICI Prudential offer a maximum term of 30 years, Aegon Religare Life offers a maximum term of 25 years. The premium for the lower term is higher for Aegon Religare than the other two players in the non-smoker category.
But is lower than the Kotak premium in case of a non-smoker. Aegon Religare does not differentiate between a smoker and a non-smoking female, while deciding the premium. Kotak Life actually prices premium for smokers higher than any of the online players.
Unique Option: One feature offered here is the step-up life cover, where you are in a position to pay higher premium and realise you need a higher sum assured, you can opt for it. However, there are charges for taking the step-up option, which is dependent on the premium and the term.
In case the policy is taken for less than 15 years, then you have to pay 3% of the basic premium, while 5% of the basic premium is levied in case the term is above 15 years.
No medical tests are required if you opt for the step-up option.
Why Go For it?: If you are a non-smoking woman, then the online term cover of Kotak Life is the cheapest in the market.
Why Not?: The policy pegs risk for smoking customers much higher than other similar options. Premium for smoking men and women is higher by 7-26% vis-à-vis other players.
Tuesday, November 16, 2010
Under Irda scanner NAV-guaranteed Products
After life insurance products, the sector’s regulator is now rotating its attention to unit-linked insurance products (Ulips) that guarantee the highest net asset value over its term. Two life insurance companies that have filed for Ulips guaranteeing such NAVs have been questioned by the Insurance Regulatory & Development Authority (Irda).
“The regulator has asked us why they should allow us to sell such a product,’’ admitted a senior executive of a life insurance company. “It is not influenced about the idea of guaranteeing the highest NAV.”
Unlike regular Ulips that calculate payouts on the basis of NAV at the time of maturity, these policies guarantee the highest NAV over the first seven-year term.
NAV is the current market value of a fund’s net assets divided by the number of outstanding shares.
Insurance companies have to maintain additional reserves to offer such guarantees. Most firms set aside 0.5-1(%) per cent of investments as reserves. This extra capital is maintained over and above the solvency requirement prescribed by the insurance regulator.
These new products are also facing problems because of an additional layer of scrutiny. Products now have to go through actuarial, life and finance departments. Earlier, only actuarial and life departments use to approve products.
“New products are facing difficulty in getting clearance, since a new department has been added. If it is an investment-related product, then it goes to the finance department. The actuarial department use to go through the mechanism earlier,” explained G N Agarwal, appointed actuary at Future Generali.
Before the new department was added, a few insurers — including SBI Life Insurance and HDFC Standard Life — launched Ulips guaranteeing the highest NAV. While SBI Life’s product is called Smart Performer, HDFC’s is branded HDFC Standard Life Crest.
Life Insurance Corporation of India collected a record Rs15,000 crore from Wealth Plus, its guaranteed NAV product. The plan offers payment of fund value at the end of the policy term, based on highest NAV over the first seven years of the policy or NAV applicable at the end of the term, whichever is higher, according to LIC’s website.
“The regulator has asked us why they should allow us to sell such a product,’’ admitted a senior executive of a life insurance company. “It is not influenced about the idea of guaranteeing the highest NAV.”
Unlike regular Ulips that calculate payouts on the basis of NAV at the time of maturity, these policies guarantee the highest NAV over the first seven-year term.
NAV is the current market value of a fund’s net assets divided by the number of outstanding shares.
Insurance companies have to maintain additional reserves to offer such guarantees. Most firms set aside 0.5-1(%) per cent of investments as reserves. This extra capital is maintained over and above the solvency requirement prescribed by the insurance regulator.
These new products are also facing problems because of an additional layer of scrutiny. Products now have to go through actuarial, life and finance departments. Earlier, only actuarial and life departments use to approve products.
“New products are facing difficulty in getting clearance, since a new department has been added. If it is an investment-related product, then it goes to the finance department. The actuarial department use to go through the mechanism earlier,” explained G N Agarwal, appointed actuary at Future Generali.
Before the new department was added, a few insurers — including SBI Life Insurance and HDFC Standard Life — launched Ulips guaranteeing the highest NAV. While SBI Life’s product is called Smart Performer, HDFC’s is branded HDFC Standard Life Crest.
Life Insurance Corporation of India collected a record Rs15,000 crore from Wealth Plus, its guaranteed NAV product. The plan offers payment of fund value at the end of the policy term, based on highest NAV over the first seven years of the policy or NAV applicable at the end of the term, whichever is higher, according to LIC’s website.
Thursday, November 11, 2010
SMS-based service launched by SBI Life
SBI Life Insurance launched SMS Solve - a first of its kind initiative in the insurance industry allowing customers to resolve their grievances in simple, paperless and faster manner!
The new project enables customers to easily access SBI Life 24/7 and register grievances about the service by sending an SMS ‘SOLVE' to 56161. The message along with the customers' mobile number, date and time would be registered at the central processing centre. This would be followed by a call within 24 hours to the customer from VCare cell, a cell with personnel exclusively trained for the SMS service, which takes note of the grievance and addresses it. In case the grievance failed to be addressed across the line, the cell would take it to the higher level and customers would be intimated in 48 hours.
The Insurance Regulatory and Development Authority Chairman, J. Hari Narayan, launched the service and interacted with the VCare cell in the presence of SBI Managing Director and Group Executive Director R. Sridharan. This new approach is much appreciated and will provide much better and prompt service to SBI customers. This innovative mechanism is bound to revolutionize the dealings with the customers.
About the company:
SBI Life, leads with a market share of 19.03 % among private insurers and a total market share of 5.09 %, posted a net profit of Rs.217 crore during the first-half of the current financial year, up 87 % over the corresponding period last year, and the company's new business premium surged to Rs. 3,173 crore, registering 30 % growth. SBI Life's assets under management grew to Rs. 34,406 crore.
Click and apply to Life Insurance
The new project enables customers to easily access SBI Life 24/7 and register grievances about the service by sending an SMS ‘SOLVE' to 56161. The message along with the customers' mobile number, date and time would be registered at the central processing centre. This would be followed by a call within 24 hours to the customer from VCare cell, a cell with personnel exclusively trained for the SMS service, which takes note of the grievance and addresses it. In case the grievance failed to be addressed across the line, the cell would take it to the higher level and customers would be intimated in 48 hours.
The Insurance Regulatory and Development Authority Chairman, J. Hari Narayan, launched the service and interacted with the VCare cell in the presence of SBI Managing Director and Group Executive Director R. Sridharan. This new approach is much appreciated and will provide much better and prompt service to SBI customers. This innovative mechanism is bound to revolutionize the dealings with the customers.
About the company:
SBI Life, leads with a market share of 19.03 % among private insurers and a total market share of 5.09 %, posted a net profit of Rs.217 crore during the first-half of the current financial year, up 87 % over the corresponding period last year, and the company's new business premium surged to Rs. 3,173 crore, registering 30 % growth. SBI Life's assets under management grew to Rs. 34,406 crore.
Click and apply to Life Insurance
Wednesday, November 10, 2010
LIC for high premium | Aam Aadmi scheme
Faced with a high claim ratio for Aam Aadmi Bima Yojana in Andhra Pradesh, the Life Insurance Corporation of India (LIC) has sought an increase in premium to Rs320 from Rs 200.
The group insurance plan was introduced by the Centre for the landless agricultural labourers.
About 5.2 million are covered under the Aam Aadmi scheme in 2010-11 in Andhra Pradesh. For the 2 year period 2008-10, the state paid Rs76 crore premium for while the LIC disbursed claims, including scholarships, worth Rs281.25 crore for the scheme.
According to officials, the LIC has moved the plan for increasing the premium. However, this might not be possible. “This is a nationwide scheme. If they have to increase the premium, they should do across the country or not do it at all (in Andhra Pradesh),” said a senior government official.
Rural Development minister Vatti Vasantha Kumar said a call on increasing the premium would be decided soon. He, however, clarified that the matter was between state and central governments and would not impact the implementation of the scheme at the grassroot level.
Under the Aam Aadmi scheme LIC provides an insurance cover of Rs30,000 for natural death, Rs75,000 for accidental death, Rs37,500 for permanent partial disability and Rs75,000 for permanent total disability due to accident.
When contracted, LIC regional manager Thyagarajan declined to comment on the issue.
In another central-sponsored scheme Janashree Bima Yojana, where the premium of Rs150 per member is shared by the Government of India and the member on a 50-50 basis, LIC has developed claims worth Rs122.94 crore for the premium of Rs44.34 crore collected in the state in the last 2 years.
However, there is no request for increasing the premium in this case. LIC has 3.9 million under Janashree Bima in the state for 2010-11.
A free add-on scholarship benefit for the children of the members of Aam Aasmi Bima and Janashree Bima is also comprehensive. Scholarships of Rs100 a month is also extended to two children studying between 9 and 12 standard. It is paid on a half yearly basis - in January and July each year.
According to Society for Elimination of Rural Poverty (Serp) chief executive officer B Raj Sehker, the claim ratio for these two schemes is high due to community participation.
The data of all the enrolled members is on the Internet. Call centres at the district level have been established with trained personnel to register the claims. An immediate assistance of Rs 5,000 to the bereaved families through 1,000 Bima Mitras (community members) in 22 districts is given. This amount is taken from the social capital raised from active self-help groups, he said.
Serp plans to bring all SHG members and their spouses under insurance cover. It targets to cover 18 million lives by 2014, he said.
Click and apply to Life Insurance
LIC Policy
The group insurance plan was introduced by the Centre for the landless agricultural labourers.
About 5.2 million are covered under the Aam Aadmi scheme in 2010-11 in Andhra Pradesh. For the 2 year period 2008-10, the state paid Rs76 crore premium for while the LIC disbursed claims, including scholarships, worth Rs281.25 crore for the scheme.
According to officials, the LIC has moved the plan for increasing the premium. However, this might not be possible. “This is a nationwide scheme. If they have to increase the premium, they should do across the country or not do it at all (in Andhra Pradesh),” said a senior government official.
Rural Development minister Vatti Vasantha Kumar said a call on increasing the premium would be decided soon. He, however, clarified that the matter was between state and central governments and would not impact the implementation of the scheme at the grassroot level.
Under the Aam Aadmi scheme LIC provides an insurance cover of Rs30,000 for natural death, Rs75,000 for accidental death, Rs37,500 for permanent partial disability and Rs75,000 for permanent total disability due to accident.
When contracted, LIC regional manager Thyagarajan declined to comment on the issue.
In another central-sponsored scheme Janashree Bima Yojana, where the premium of Rs150 per member is shared by the Government of India and the member on a 50-50 basis, LIC has developed claims worth Rs122.94 crore for the premium of Rs44.34 crore collected in the state in the last 2 years.
However, there is no request for increasing the premium in this case. LIC has 3.9 million under Janashree Bima in the state for 2010-11.
A free add-on scholarship benefit for the children of the members of Aam Aasmi Bima and Janashree Bima is also comprehensive. Scholarships of Rs100 a month is also extended to two children studying between 9 and 12 standard. It is paid on a half yearly basis - in January and July each year.
According to Society for Elimination of Rural Poverty (Serp) chief executive officer B Raj Sehker, the claim ratio for these two schemes is high due to community participation.
The data of all the enrolled members is on the Internet. Call centres at the district level have been established with trained personnel to register the claims. An immediate assistance of Rs 5,000 to the bereaved families through 1,000 Bima Mitras (community members) in 22 districts is given. This amount is taken from the social capital raised from active self-help groups, he said.
Serp plans to bring all SHG members and their spouses under insurance cover. It targets to cover 18 million lives by 2014, he said.
Click and apply to Life Insurance
LIC Policy
Tuesday, November 9, 2010
IRDA: Keep watch for fake insurance Representative
The Insurance Regulatory and Development Authority (IRDA) has warned the public to watch out for corrupt persons selling insurance policies by claiming to be the regulator's representatives.
IRDA has asserted that it is a regulatory body not involved directly or indirectly in the sale of insurance and financial products. As such, it said complaints should be stiff against persons claiming to be its representative for the reason of selling insurance policies.
"Any person making any kind of contract with such individuals or agents will be doing the same at their own risk. If any member of the public notices such instances, he or she may lodge a police complaint in the local police station," IRDA said in a public notice.
It said it has experimental that the general publics are receiving calls from individuals claiming to be IRDA's representatives, who offer insurance policies of different insurance companies with various benefits.
Meanwhile, in view of the large quantum of unclaimed life insurance settlement amounts lying with the insurers, the IRDA has asked all insurers to reproduce such sums in its balance sheet under the head, 'current liabilities'.
At present, such unclaimed amounts are not disclosed independently.
These unclaimed amounts include claims settled but not paid to the policyholders or insured persons and excess premium or tax or any other charges that are refundable to the policyholders, among other things.
IRDA has asserted that it is a regulatory body not involved directly or indirectly in the sale of insurance and financial products. As such, it said complaints should be stiff against persons claiming to be its representative for the reason of selling insurance policies.
"Any person making any kind of contract with such individuals or agents will be doing the same at their own risk. If any member of the public notices such instances, he or she may lodge a police complaint in the local police station," IRDA said in a public notice.
It said it has experimental that the general publics are receiving calls from individuals claiming to be IRDA's representatives, who offer insurance policies of different insurance companies with various benefits.
Meanwhile, in view of the large quantum of unclaimed life insurance settlement amounts lying with the insurers, the IRDA has asked all insurers to reproduce such sums in its balance sheet under the head, 'current liabilities'.
At present, such unclaimed amounts are not disclosed independently.
These unclaimed amounts include claims settled but not paid to the policyholders or insured persons and excess premium or tax or any other charges that are refundable to the policyholders, among other things.
Tuesday, November 2, 2010
Bajaj Allianz Life Q2 net zoom 91(%) to Rs369 crore
Bajaj Allianz Life Insurance said its net profit increased 91% to Rs369 crore for the September 2010 quarter from Rs193 crore during the same period last year.
The company has cited reduction in fixed expenses and growth in assets under management (AUM) as the reasons for this rise.
During the first half to end-September, its new business premium increased to Rs1, 511 crore from Rs1, 441 crore, a year ago.
However, its gross written premium (GWP) fell to Rs4, 151 crore from Rs4, 521 due to dip in renewal premiums, a company's spokesperson said.
Bajaj Allianz General Insurance net profit increased 22% to Rs66 crore from Rs54 crore in the year-ago period. According to the company, strong auto sales, capital expenditure by corporates and strong economic conditions have lead to an increase in profits. The GWP collected by the company rose to Rs1, 420 crore from Rs1, 218 crore.
Click and apply to Life Insurance
The company has cited reduction in fixed expenses and growth in assets under management (AUM) as the reasons for this rise.
During the first half to end-September, its new business premium increased to Rs1, 511 crore from Rs1, 441 crore, a year ago.
However, its gross written premium (GWP) fell to Rs4, 151 crore from Rs4, 521 due to dip in renewal premiums, a company's spokesperson said.
Bajaj Allianz General Insurance net profit increased 22% to Rs66 crore from Rs54 crore in the year-ago period. According to the company, strong auto sales, capital expenditure by corporates and strong economic conditions have lead to an increase in profits. The GWP collected by the company rose to Rs1, 420 crore from Rs1, 218 crore.
Click and apply to Life Insurance
Cost-manage push up private insurers' profits
Private life insurance companies have posted robust profits in the second quarter of this fiscal aided by tight cost controls.
However, going forward, companies expect pressure on their profitability as the new regulations governing unit-linked plans could squeeze margins.
SBI Life Insurance posted a net profit of Rs 103 crore in the second quarter, against Rs 77 crore in the year-ago period, as the company reported one of the lowest expense to GWP (Gross Written Premium) ratio in the current fiscal. It brought down its expense to GWP ratio to 7.76 per cent from 9.18 per cent at the end of the first quarter. Mr M.N. Rao, Managing Director and Chief Executive Officer of SBI Life, said despite the challenging environment, the company could post good profits.
Bajaj Allianz Life Insurance reported a business profit of Rs 199 crore, against Rs 125 crore in the year ago period despite a slowdown in business in September.
Mr Sanjiv Bajaj, Managing Director, Bajaj Finserv, said the company focussed on cost rationalization measures to maintain its margins. “We brought down the total commission to GWP ratio to 7.52 per cent from 8.86 per cent. The ratio of operating expenses to GWP also came down to 16 per cent from 17.55 per cent,” he said.
New regulations
Kotak Life Insurance net profit increased to Rs 13.4 crore from Rs 4.4 crore. Mr G. Murlidhar, Chief Operating Officer, Kotak Life, said growth in new business premium along with stable expenditure helped the company register profits. “Our costs have always been under control as we have not been expanding much,” he said.
For most of the companies, new business premium growth slowed down in September after the new regulations came into effect. Going ahead, companies expect their profitability to be adversely impacted as sales slow down and margins get compressed.
Sales are likely to be sluggish for a few more quarters as agents get used to the new commission structures, said Mr Bajaj.
Margins will be adversely impacted in the new regulatory regime, said Mr Murlidhar.
However, going forward, companies expect pressure on their profitability as the new regulations governing unit-linked plans could squeeze margins.
SBI Life Insurance posted a net profit of Rs 103 crore in the second quarter, against Rs 77 crore in the year-ago period, as the company reported one of the lowest expense to GWP (Gross Written Premium) ratio in the current fiscal. It brought down its expense to GWP ratio to 7.76 per cent from 9.18 per cent at the end of the first quarter. Mr M.N. Rao, Managing Director and Chief Executive Officer of SBI Life, said despite the challenging environment, the company could post good profits.
Bajaj Allianz Life Insurance reported a business profit of Rs 199 crore, against Rs 125 crore in the year ago period despite a slowdown in business in September.
Mr Sanjiv Bajaj, Managing Director, Bajaj Finserv, said the company focussed on cost rationalization measures to maintain its margins. “We brought down the total commission to GWP ratio to 7.52 per cent from 8.86 per cent. The ratio of operating expenses to GWP also came down to 16 per cent from 17.55 per cent,” he said.
New regulations
Kotak Life Insurance net profit increased to Rs 13.4 crore from Rs 4.4 crore. Mr G. Murlidhar, Chief Operating Officer, Kotak Life, said growth in new business premium along with stable expenditure helped the company register profits. “Our costs have always been under control as we have not been expanding much,” he said.
For most of the companies, new business premium growth slowed down in September after the new regulations came into effect. Going ahead, companies expect their profitability to be adversely impacted as sales slow down and margins get compressed.
Sales are likely to be sluggish for a few more quarters as agents get used to the new commission structures, said Mr Bajaj.
Margins will be adversely impacted in the new regulatory regime, said Mr Murlidhar.
Subscribe to:
Posts (Atom)