June 16, 2015
Hannover Re, the world’s third largest reinsurer, has decided to offer reinsurance cover for the Indian government’s low-cost accidental death and disability scheme, the Pradhan Mantri Suraksha Bima Yojana (PMSBY), to encourage insurance companies to participate in the scheme. .
The global reinsurer is in talks with several Indian insurers for this purpose, Mr Ankur Nijhawan, Managing Director of Hannover Re Risk Management Services India, told the Hindu Business Line. Having a reinsurance cover will encourage more Indian insurance companies to participate in the PMSBY scheme and improve its penetration in India, he said. Currently, state-owned general insurers are taking the lead in promoting PMSBY. .
The scheme offers a renewable one year accidental death-cum-disability cover of INR200,000 (US$3,120) and INR100,000 for partial permanent disability, to all savings bank account-holders in the 18-70 age group at a premium of INR12 a year per subscriber. This scheme is currently delivered through banks, including regional rural banks and co-operative banks. .
Asked about the viability for reinsurance given the low price of the cover, Mr Nijhawan said it would be viable given the size of the market. Hannover Re has also decided to set up a branch in India, its Chairman, Mr Ulrich Wallin, said on a visit to the country earlier this month. At present, foreign reinsurers operate service companies or representative offices in India. The insurance law, as amended in March, allows them to set up a branch.