Optima Insurance Brokers Pvt. Ltd.

Over a lakh books, magazines, stationery, DVDs and furniture were destroyed in a fire that broke out at the Crossword book store at Sohrab Hall, located behind the Pune railway station, on Sunday (27 Sept 2015) night.

Fire brigade said the cause of fire is not known, but store general manager Bhaskar Nighojkar issued a statement on Monday blaming short-circuit for the accident. The store is located in shops numbering 135 to 152 on the first floor. The fire broke out around 8.30 pm when the shop had shut down.The staff broke the lock and used three fire fighting equipment, but failed to control it. Fire tenders rushed to the spot on receiving a phone call from the police control room. The accident threw traffic out of gear for several hours on Sunday night as vehicles moved at snail’s pace. Chief fire officer Prashant Ranpise said, “Thick fumes were emanating from the store because of lack of ventilation. The situation prevented us from entering the shop for some time. The windows could not be opened because they were sealed with plywood and book racks.”

Two fire men sustained minor injuries when they tried to break the windows. “Finally, we had to use a JCB machine and a crane to break the windows, plywood sheets and enter through the balcony. We pressed in 13 fire tenders, 10 officers, 50 firemen and two water tanks. We could finally gain control by 5 pm. We kept spraying water till Monday afternoon because the goods were constantly catching fire at some or the other place. We also sprayed sufficient water on the nearby premises to ensure the fire does not spread.” Four people trapped inside the building were rescued. Three people on the terrace were brought down safely. “We used a snorkel to bring down another person stuck on the fifth floor. We don’t know why the store had sealed all the windows,” Ranpise said. Assistant divisional fire brigade office D N Nagalkar said, “Thick black fumes had engulfed the building when we reached the spot. We could not identity the source of fire. This made our task extremely difficult. We then pulled our men from Ganapati immersion duty and broke the wall to give an outlet to fumes. Meanwhile, our team had surrounded the building with six hose pipes.”

“The Sohrab hall has a fire fighting system but it could not be used because it was not properly maintained. We utilized the water stored on the premises. We will issue the hall management a notice to improve its fire fighting system,” Nagalkar said. The hall’s property manager Nikhil Madhur said, “Our staff broke store lock and used fire fighting equipment, but in vain. We then alerted the fire brigade which rushed to the spot. Nearly 100 shops and offices may remain close for one or two days. We have switched off four transformers, four elevators and a water pump for security reasons. The incident did not cause damage to other properties because of preventive measures taken by the fire brigade.” Meanwhile, the store’s general manager Nighojkar said, “We are in the process of calculating the losses. We will adopt safety measures to avert such incidents in future. The store will be renovated at the earliest.”

India’s insurance regulator has constituted a four-member committee to work on developing a revenue-sharing motor vehicle database for insurers and state-level entities.

The sharing of data in a seamless manner could bring efficiencies in insurance sales and services, reported Press Trust of India citing the Insurance Regulatory and Development Authority of India (IRDAI). General insurance companies would use the data to decide on billing and claim settlement frequency and processes.

The Insurance Information Bureau of India would be in a position to obtain data from various national-level entities such as the Ministry of Road Transport and Highways and state governments, IRDAI said in a statement. The Indian non-life insurance market is dominated by motor insurance business with a share of around 45% in the gross written premium. At the same time, estimates are that over 55% of vehicles plying on Indian roads are uninsured according to insurers.

India’s top 10 cities have US$179.8 billion GDP at risk from a series of threats over the next decade, according to new research for Lloyd’s, the specialist insurance market.

The Lloyd’s City Risk Index found the cities of Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kanpur, Kolkata, Mumbai, Pune and Surat together will generate an average annual GDP of $1.4 trillion in the coming decade. However, 12.6% of this economic growth is at risk from a combination of 18 man-made and natural threats. Catastrophes caused by natural events, such as extreme weather, pandemics and plant epidemics account for over half ($98.1 billion) of GDP at risk in the 10 cities.

Across the 10 cities combined, the largest economic exposure is to pandemic risk, which could put $39.65 billion of GDP at risk, followed by flood at $33.84 billion, market crash at $21.13 billion, oil price spike at $20.81 billion and terrorism at $16.07 billion. The immense density of populations in urban areas, large numbers of people commuting and access to health services are significant contributing factors in the vulnerability to a pandemic. Mumbai has the largest total GDP at risk with a $47.38-billion risk exposure. Almost one quarter of the city’s potential losses are related to pandemic risk, followed by terrorism at 16.77%, market crash at 12.94% and flood at 12.89%. Globally, Mumbai has the largest GDP exposure to terrorism in the Index at almost $8 billion and the second highest exposure to power outage with $1.92 billion of GDP at risk.

The Lloyd’s City Risk Index presents the first-ever analysis of economic output at risk (GDP@Risk) in 301 major cities from 18 manmade and natural threats over a 10-year period. Based on original research by the Cambridge Centre for Risk Studies at the University of Cambridge Judge Business School, the Index finds that a total of $4.6 trillion of projected GDP is at risk from manmade and natural disasters in these major cities around the world. Lloyd’s has produced this Index to help increase the understanding of, and shape the world’s response to, the shifting risk landscape.

While an overwhelming majority of employees – 73% – in India expect their employers to offer life cover under group schemes, only 30% employers actually provide the benefit, according to the PNB MetLife Employee Benefits Trend Study 2015. This indicates a mismatch between employee expectations and the benefits actually being offered by employers in India.

Commenting on another finding, Ms Maria Morris, Executive Vice-President of Global Employee Benefits at MetLife said: “From an employee’s perspective, only 39% want a critical illness policy but here, 85% employers are willing to offer it.” People prefer a life insurance over a critical illness policy. One solution to the expectation gap is for employers to offer employees a choice to customise their own personal benefits through flexible or voluntary benefit programmes. The study showed employees are willing to take up additional coverage on health, life and accidents either jointly paid by employers and employees or from employees’ own purses. 61% would buy life insurance without support from employers.

General insurer ICICI Lombard’s Head of Underwriting and Claims, Mr Sanjay Datta, said: “Entities that are able to distribute insurance products to bring down insurance under-penetration are welcome. These new distribution channels are also likely to bring our costs down as they will be working on a digital platform. We are looking at increasing our business in the low-ticket segment.”

According to the study, 70% of Indian employers feel highly challenged to retain employees; and only 51% of employees are satisfied with their current job with 47% saying they will look for another job within the next year. The study reveals a strong correlation between employees who are provided benefits and those employees who feel “a strong sense of loyalty to my employer”. Underscoring the importance of benefits, more than half (55%) of employees who are considering moving jobs said improving their benefits package would be a reason to stay.

Insurers see payments banks (PBs), a new form of banks to be established in the country, as a boon as they would give rise to cross-selling opportunities that would help deepen insurance penetration in rural areas.

The Reserve Bank of India, which is the country’s central bank, last week gave in-principle approval to 11 applicants to set up payments banks. With these licences, the differentiated banks can sell third-party insurance products and mutual funds. Designed to boost financial inclusion, payments banks will allow transfers and take deposits up to a limit of INR100,000 (US$1,504), and are expected to reach customers predominantly through mobile phones. “For any new network like payments banks, there will be an opportunity for us to grow our business and there could be some online sale opportunities,” SBI Life Managing Director and Chief Executive, Mr Arijit Basu, told the Press Trust of India.

General insurer ICICI Lombard’s Head of Underwriting and Claims, Mr Sanjay Datta, said: “Entities that are able to distribute insurance products to bring down insurance under-penetration are welcome. These new distribution channels are also likely to bring our costs down as they will be working on a digital platform. We are looking at increasing our business in the low-ticket segment.”

Mr Nageshwar Rao, Managing Director and CEO of National Securities Depository Limited (NSDL), which is among those entities that won a payments bank licence, said: “Once our payments bank becomes operational, it will enable our customers to make their premium payment directly from their bank accounts,” NSDL maintains electronic insurance account services where a policyholder keeps all insurance policies in a single online account.

“Confidentiality is the key to K&R covers. Bharti AXA Life Insurance CEO, Mr Sandip Ghosh, said: “Since most of the leading banks in the country already have their life insurance joint ventures, those banks are unlikely to distribute the products of other insurers.” Welcoming the new regulation, State Bank of India Managing Director, Mr Rajnish Kumar, said: “It is a good move as we as a bank will now be able to sell the products of nine insurers, including our own (existing) bancassurance partners. It will help us grow our business through commission fees.” .

“Confidentiality is the key to K&R covers. In most policies, the cover ceases if a company divulges that its employees are covered,” Mr Radhakrishnan said. The confidentiality clause is included to reduce moral hazard. Giving an idea of pricing, he said: “It’s possible to get a US$1-million K&R cover for a premium of US$5,000, depending on the profile of the client, region and other terms and conditions of the policy.” On Control Risks’s top 10 kidnapping hotspots in the world, four are in Asia. Apart from India, the Asian countries are Pakistan (ranked 3rd), Bangladesh (7th) and Afghanistan (8th).

The Indian Home Ministry has written to various ministries asking them to look at insuring critical assets. The insurance cover will help in reinstating the assets immediately after a natural disaster without the government having to arrange for unplanned expenditure. .

The ministries concerned include those overseeing the power, steel, water resources and aviation sectors, among others. At present, most government assets are not covered by insurance. This is because given the high total value, the assets would be uninsurable. Also, the cost of providing cover to iconic structures is high, reported The Economic Times. Given the limitations, the government is not seeking an “all risk” cover but rather insurance to compensate for the cost of reconstruction in the event of a natural disaster. .

“The Home Ministry has recently written to all central ministries asking them to explore the possibility of insuring their critical assets against natural disaster perils,” Mr R Chandrasekaran, Secretary General of the General Insurance Council, told The Economic Times. Some of these assets would include the Parliament building, electrical installations, water pipelines, ports, airports and railways. Many of these assets are large legacy assets which have never been valued. “In most natural disasters in India, the level of claims paid out is very low. This is because most losses are to government assets or to those living below poverty line,” said an insurance official. Sources said that several ministries have drawn up a list of assets and are estimating the cost of reconstruction.

More than 80% of Indians lack medical insurance cover, though there is expected to be increasing reliance on more expensive private healthcare for their medical needs..

Almost 86% of the rural population and 82% of the urban population are not covered by any scheme of health expenditure support, according to a report in the Deccan Herald citing the National Sample Survey Office which polled more than 333,000 people in a recent survey. The government was able to bring only about 12% urban and 13% rural population under its health protection scheme, the Rastriya Swasthya Bima Yojana and similar plans. .

In the absence of health insurance, 75% of people tap into their hard-earned savings while more than 18% borrow. “The private sector provides nearly 80% of outpatient and 60% of inpatient care. But the cost of private-sector health care is unaffordable for most Indians,” said Mr K Srinath Reddy, President of the Public Health Foundation of India. NSSO found that while private health care is four times more expensive than in government-run medical institutions, treatment of specific diseases costs four, five or even 10 times more in private hospitals.

The Competition Commission of India (CCI) has imposed a total penalty of INR6,710.5 million on the four state-owned general insurance companies for manipulating the bidding process initiated by the Kerala government for selecting a service provider for a government-sponsored health insurance scheme. .

The CCI acted following an anonymous complaint it had received against National Insurance, New India Assurance, Oriental Insurance and United India Insurance, alleging violation of the law, which deals with anti-competitive agreements, including bid rigging. A probe was carried out, that concluded that the four companies colluded with each other and manipulated the tendering process .

The insurers were alleged to have formed a cartel and quoted higher premium rates in response to the tender. The bid rigging was said to involve the Rashtriya Swasthya Bima Yojna (RSBY), a government-sponsored health insurance scheme for those living below the poverty line, for the 2010-11, 2011-12 and 2012-13 financial years. When deciding on the penalties, CCI noted that the case related to public procurement for social welfare schemes, the beneficiaries of which were poor families, and this was taken as an aggravating factor. .

CCI said that it would be appropriate to impose a penalty at the rate of 2% of the average turnover of the insurers for the last three financial years based on the financial statements filed by them. A penalty of INR1,628 million was imposed on National Insurance; INR2,510.7 million on New India Assurance, INR1,005.6 million on Oriental Insurance and INR1,566.2 million on United India Insurance. Sources said these insurers will offer their clarifications and appeal against the order.