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IRDAI to expand reinsurance market, overhauls regulations

Posted on: August 25th, 2023 by hema kashyap No Comments

India’s Insurance regulator, IRDAI has approved a wide-ranging overhaul of reinsurance regulations aimed at promoting a favourable business environment and inviting more reinsurers to set up business operations in India, to position India as a global reinsurance hub.

As per IRDAI, it recently approved amendments to the Reinsurance Regulations during its 123rd Authority Meeting, to harmonise and streamline existing regulations that apply to Indian insurers, Indian reinsurers, Foreign Reinsurance Branches (FRBs), and International Financial Services Centre Insurance Offices (IIOs).

The key focus areas are:
1. Increase reinsurance sector’s overall capacity to handle growing demand and manage larger risks.
2. Enhance industry’s technical expertise for encouraging excellence and innovation.
3. Reduce the compliance burden on various entities.
4. Minimum capital requirement for FRBs lowered from INR 1 Bn ($ 12.1 Mn) to INR 500 Mn, with the provision to repatriate any excess assigned capital.
5. Order of preference, previously at 6 levels, has been streamlined to 4 levels.
6. Simplified format for reinsurance programmes and rationalisation of regulatory reporting requirements.

Indian Public sector General Insurers’ combined market share slips

Posted on: April 10th, 2023 by hema kashyap No Comments

Four public sector general insurance companies of India have lost their combined market share by 1.75% year-on-year basis, capturing 32.27% share for the financial year ended on 31st March 2023 (FY2023). All leading public sector general insurers — New India Assurance, United India Insurance, Oriental Insurance Company and National Insurance Company — reported loss of market share in FY2023 in terms of gross direct premium underwritten, due to intense competition from private players in the non-life insurance business.

The weaker underwriting performance of the four public sector insurers has limited their overall profitability and solvency position. The high losses in underwriting along with extremely low solvency ratios allow limited headroom for them to underwrite new business.

Insurer Market Share Premiums
FY2023 Y-o-Y Change FY2023 (INR mn) Y-o-Y Change
New India Assurance 13.42% -1.33% 344,871.5 5.87%
United India 6.87% -0.25% 176,433.2 12.22%
Oriental 6.08% -0.13% 156,095.7 13.85%
National 5.90% -0.04% 151,557.6 15.47%

The premium income rose lesser than the average growth for the non-life market, for these 4 public sector general insurers. As per General Insurance council’s report, the total gross direct premium underwritten by non-life insurance companies in FY2023 grew by 16.36% to INR 2.57 tn ($ 31.4 bn) from INR 2.21 tn in FY2022.

IRDAI provides Insurers flexibility for expenses management with new payment rules on commission

Posted on: March 30th, 2023 by hema kashyap No Comments

The Indian insurance regulator has allowed Insurers an overall limit on expenses of management (EOM) by removing the individual cap on payments of commission for insurance products. As per the IRDAI (payment of commission) regulations, all life and non-life insurers (general and standalone health insurers) will be able to manage their expenses within the overall limits defined by their gross written premium.

Becoming operational with effect from 1st April 2023, regulations will be reviewed once every three years. It will help insurers to utilize their resources in an optimal manner and extend benefits to the policyholders. Insurance agents will be encouraged to explain policy features and sell insurance products to consumers, increasing insurance penetration in India.

Premium rates for fire insurance now linked with claims record by Insurers

Posted on: March 21st, 2023 by hema kashyap No Comments

Non-life insurance companies in India are linking the premium rates for fire insurance policies to the claims record, doubling the insurance price for those with reported claims of more than three times the premium paid. This linkage will enable companies to offer discounts to customers with good track record, as claims in property insurance are less frequent.

Industry experts are of the opinion that it is due to the IRDAI’s directive to not to treat the premium rates published by the insurance information bureau as minimum rates.

Turkey-Syria earthquake – Insurable losses exceed $ 4 bn

Posted on: March 15th, 2023 by hema kashyap No Comments

A high-intensity earthquake measuring 7.8 on the Richter scale devastated parts of Turkey and Syria on 6th February 2023. More than 33,000 people have died and innumerable losses on the economic front. Not just overall economic losses, it is very difficult to predict the economic losses which could have been covered with insurance, as on ground situation becomes clear. This earthquake has caused an estimated insurable economic loss of more than $ 4 bn, impacting the insurance sector.

Many structures and buildings in the region have been completely destroyed, with a good size of the population residing in temporary shelters or buildings prone to earthquake tremors. The Turkish Catastrophe Insurance Pool (TCIP) covers only residential buildings in the urban region, excluding commercial properties and loss of life.
Despite mandatory earthquake insurance cover, many residential properties are not insured, due to affordability. Presently, around 10.8 mn (53.90%) of about 20 mn residential properties in Turkey are covered for earthquake risk.
With insurable economic losses from the Turkey-Syria earthquake touching $ 4 bn or even more, the reinsurance part of TCIP could provide a little over $ 2 bn protection.

Further, local and international commercial insurers which provide insurance to industrial clients, for damaged factories and infrastructure like airports and ports are also majorly reinsured. The extent of claims is estimated to be insignificant for the global reinsurance market.

Indian Insurance Regulator to launch a platform for Information Exchange to tackle frauds in Insurance

Posted on: February 20th, 2023 by hema kashyap No Comments

The Insurance Information Bureau (IIB) of IRDAI is preparing to go live with ‘Beema Satark’ a B2B platform, to alert the general and standalone health Insurers about fraudulent medical insurance cases. All insurance companies will be able to exchange information and gain from this fraud analytics platform of the Indian general insurance industry. It will start with health insurance claims and add motor insurance claims later.

Insurance frauds are on the rise

As per a survey, about 60% of Indian private insurers think that frauds in the life and health insurance are rising significantly, while a minority of 10% think it increased marginally. This survey of insurance frauds was conducted in July-September 2022, with top level management responsible for compliance in leading private Indian insurers.
Frauds are on the rise owing to a higher level of digitization, post-COVID working from remote, and weakening of controls. Data theft is emerging as a big risk while traditional frauds like collusion between third parties and insurance mis-selling continues.

About 40% of the participants across the life and health insurance segments highlighted Fraud Mitigation as the top most priority for the Board and management.

The survey noted that there is an urgent need for Indian insurers to work pro-actively for Fraud risk management framework. Strategic intervention from top decision-makers to mitigate frauds is essential by reviewing and constantly monitoring the insurer’s operational model.

Property reinsurance pricing rises by up to 20%

Posted on: January 6th, 2023 by hema kashyap No Comments

The property reinsurance pricing on loss free risk and CAT programmes in ASEAN and China varies from +15% to +20% risk adjusted, and even larger increases are seen in Taiwan and Korea, as per the”1st View Market Report” released on 1 January.

The report, outlining market conditions at key reinsurance renewal seasons—1 January, 1 April and 1 July—which are based on the real-time observations, also says that there has been an inconsistent application of deductible increases, primarily imposed on loss impacted placements.

Other findings were:
• A common feature is all peril coverage and wordings in existing hours clause have been largely maintained.
• Hardly ever, shortfall terms have been imposed on proportional and excess of loss contracts.
• Limited changes in proportional placements renewal; commissions changed by low single digits. However, there was limited additional capacity.
• Regional Retro deductibles increased substantially (mostly dropping first layers) and pricing was up across the board, however, access remained to worldwide capacity and coverage.
• Risk covers with existing CAT coverage were renewed with no additional restrictions.
• Pre-paid reinstatements shifted to paid for both risk and CAT contracts.
The January 2023 report indicates the conditions in specific markets in Asia, including:
• Loss participation clauses are now commonly in place – most triggered at 100% loss ratio with cedant participation between 30% and 50%.
• Excess of loss pricing increased and was dependent on loss record.
• Overall, deductibles remained unchanged although some cedants chose to have them increased to manage costs.

4-7-8 Breathe

Posted on: June 9th, 2021 by hema kashyap No Comments

Breathe In Breathe Out is a phrase that we have heard many times by our friends and family in stressful times. The reason is simple, our breathe holds the powers to ease stress. When we deep breath, it sends a message to the brain to calm down and with that increased heart rate, fast breathing, and high blood pressure decrease making body feel relaxed.

The 4-7-8 breathing technique is a breathing pattern developed by Dr. Andrew Weil. The technique is based on pranayama and it helps practitioners gain control over their breathing.

How to do it?
Sit in a comfortable position and make sure to practice a good posture. Prepare for the practice by resting the tip of your tongue against the roof of your mouth, right behind your top front teeth. You’ll need to keep your tongue in place throughout the practice.

To use the 4-7-8 technique, focus on the following breathing pattern:
• empty the lungs of air
• breathe in quietly through the nose for 4 seconds
• hold the breath for a count of 7 seconds
• exhale forcefully through the mouth, pursing the lips and making a “whoosh” sound, for 8 seconds
• repeat the cycle up to 4 times

Dr. Weil recommends using the technique at least twice a day to start seeing the benefits sooner.
Benefits from consistent practice:
1. Stress Reduction
2. Better Sleep
3. Reduced anxiety
4. Decreased fatigue
5. Improved Digestion
6. Improved blood pressure
7. Improved symptoms related to breathing conditions such as asthma, COPD etc.


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Jeweller’s Block Policy

Posted on: November 13th, 2019 by shiv No Comments

This is a package policy specially designed for Jewelers & Diamontaires.

The policy comprises four sections which are optional except for section I which is compulsory.

Section I  – Covers loss or damage to jewelry, gold and silver ornaments or plates, pearls, precious stones, cash and currency notes whilst contained in the premises insured, by fire, explosion, lightning, burglary, house breaking, theft, hold up, robbery, riot, strike and malicious damage and terrorism.

Section II – Covers loss or damage to jewelry, gold etc. as described in Section I whilst it is in the custody of the insured, his/her partners, employees, directors, sorters of diamonds or whilst such property (excluding cash and currency notes) is in the custody of brokers, agents, cutters and goldsmiths.

Section III – Covers loss or damage to property described in Section I whilst in transit by registered parcel post, air freight or through angadia.

Section IV  – Covers loss or damage to trade and office furniture and fixtures in insured premises due to fire, explosion, lightning, burglary, house breaking, theft, hold up, robbery, riot, strike and malicious damage and terrorism. This is section can also cover Computer, fax machine and their parts/ accessories & data carrying material, Neon/illuminated signs, Hoardings installed on insured premises and trade equipment.

Some insurers can also extend the policy to cover the following additional risks:

  • Personal Accident for insured, partners and employees
  • Public Liability – Claims due to accidental injury to or death of any person other than insured and its employees & accidental damage to property of such persons
  • WC – Death of or Injury to any employee whilst on duty
  • Money in Transit  or In Premises

The policy is available to jewelers both wholesalers and retailers. The policy cannot be given to establishments whose work is predominantly manufacturing like cutters and goldsmiths. The policy also cannot be given to angadias, brokers or pawnbrokers etc.

The sum insured under Section I and II should represent the cost price of the jewelry items. The sum insured under Section III should represent the maximum loss likely, arising out of any one incident. The sum insured under Section IV should represent the market value of the property.

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