State Bank of Hyderabad has entered an agreement with National Insurance Company Limited (NICL) for the implementation of Pradhan Mantri Suraksha Bima Yojana (PMSBY) initiated by the central government.

V Viswanathan,  Chief General Manager (RB), SBH, received the MoU document from  D Bhargava, Chief Regional Manager, NICL in the presence of V Sivasri, General Manager (HR&GA), T T M Tharakan, Deputy General Manager and M S Srinivas,  Asst General Manager. 

 The scheme will be available for the public across all the 1821 branches of the bank at a cost of Rs 12 per policy per year. All the SB Account holders of the bank in the age group of 18-70 can join the scheme and the risk cover for them is Rs 2 lakh.

Country’s largest lender State Bank of India today entered into a tie-up with the National Insurance Company (NICL) to offer non-life cover to its savings account holders under the Pradhan Mantri Suraksha Bima Yojana (PMSBY).

The bank will offer personal accidental death and disability cover of Rs 2 lakh under the scheme, it said in a release.

The customer will have to pay an annual premium of only Rs 12. All the savings account holders in the age group 18 to 70 years will be eligible for the cover.

The Insurance Regulatory and Development Authority of India has mandated a minimum 26% equity holding by the Indian promoter in any insurance company to ensure that the local investor does not use the liberalforeign investment and listing policy to dilute accountability.The regulator insists that the mandatory 26% stake to be held by the local promoter will ensure that there is accountability and that the management does not rest with the foreign company alone in the event of a single block of holding falling below 25% — public shareholding limit — when a company goes for listing.

"Indian investors jointly shall not hold more than 25% of paidup equity share capital of the insurance company," said Irda. As a result of this move, the insurance regulator aims to control transfer and dilution of ownership in insurance companies similar to what the Reserve Bank of India ( RBI) does with banks, to prevent financial investors from flipping investments for shortterm gains that may hurt longterm prospects.Irda has mandated no single entity or group of investors can hold more than 10% of paid-up equity capital in an insurance company. Amendment to the Insurance Bill had allowed all insurance companies to access capital markets.The government had started off with the process of listing some of the public-sector general insurance companies. "The regulator wants a promoter in an insurance company, as they have given the licence to a promoter and not just to investors," said Amitabh Chaudhry, managing director and CEO, HDFC Life.

HDFC Life, a joint venture with UK-based Standard Life, is likely to be the first of the insurance companies to list its shares on the stock exchanges."There seems to be no logic in restricting a single Indian investor's shareholding to 10% when a single foreign investor can own 26% under the automatic route and 49% under government approval route," said Nishchal Joshipura, partner, private equity and M&A at Nishith Desai Associates. "Some of these restrictive conditions will adversely impact the way foreign and domestic investments are structured in insurance companies going forward."

Large companies are expected to partially monetise their investment stake in their life insurance businesses as the foreign investment limit will increase to 49% from 26%. A quick calculation suggests that five large players could recognise capital gains of Rs 20,000 crore, assuming they reduce the stake in their life insurance subsidiaries to 51%, said a report by Kotak Institutional Equities.

(As per the draft norms, banks…)

MUMBAI: The insurance regulator is planning to relax the proposed corporate agency norms that mandate banks to sell a specified percentage of insurance policies of other companies.

Earlier, Insurance Regulatory and Development Authority(Irda) had said that banks must sell 50% of policies of other insurance companies over the next four years. Irda had proposed a mandatory open architecture, where one bank will have to sell the products of three life, three general and three health insurance companies.

As per the draft norms, banks were required to sell products of three companies, with one not exceeding 50% of the promoter company over the next four years.

"The regulator is planning to do away with the percentage limits that were prescribed in the draft," said an executive of a life insurance company. "They will open up the infrastructure to multiple insurers as was proposed in the draft." Irda has extended the deadline for giving feedback on the draft guidelines by a fortnight to April 24.According to the draft proposal, banks should cover 90% of the premium with any one insurer in the first year and the limit should gradually come down to 75% and 60% during the second and third years, respectively while the limit will not be more than 50% from the fourth year onwards. This could give some respite to bank-promoted companies which were staring at a dip in valuation due to the sharing of infrastructure with multiple insurers.

"No corporate agent shall place more than 90% of the premium solicited and procured either in life insurance or general insurance or health insurance with any one insurer of the same class in their first year of operation," Irda had said in the draft norms.

"The limit prescribed above shall gradually come down in a phased manner." This was seen as giving a boost to companies without a bank partnership such as Reliance Life, Bajaj Allianz and Birla Sun Life. There are nine bank-promoted life insurance companies and four in the general insurance sector.

Insurance is not only a form of risk management, but also a mechanism to protect our economy.

Even after liberalization in 1999, the insurance penetration is hovering around 3.9% of gross

domestic product, which is far behind the world average of 6.5%.

In India, insurance continues to be sold; not bought. Unless the population tastes the feel of

insurance, it cannot understand the importance of it. This may change thanks to the Narendra Modi

government’s initiative to introduce the Pradhan Mantri Jeevan Jyoti Bima Yojana that offers

insurance coverage of Rs.2 lakh at a premium of Rs.330 per annum for those aged between 18

years and 50 years, and the Pradhan Mantri Suraksha Bima Yojana, which is accident insurance

plan at a premium of Rs.12 per annum for age group of 18-70. The government has also introduced

Atal Pension Yojana, which offers fixed monthly income between Rs.1,000 toRs.5,000 during old

age depending upon the contributions.

Before these schemes, in 2014, to improve financial inclusion, the government had announced the

Jan Dhan Yojana with an objective of bringing many people under the banking fold. Many rules were

relaxed for enrolment. Motivational factors were attached to this account, such as subsidy credit,

loan credit, RuPay card with free accident insurance coverage of Rs.1 lakh, and more. Despite these

benefits, official statistics show that only 155.9 million accounts were opened and of these, 85 million

hold zero balance, as on 13 May 2015. This means that about 50% of these accounts are yet to be

operational. So, mere numbers does not mean financial inclusion.

A similar fate may befall the insurance schemes as well if some amount of flexibility is not exercised

at this point itself. For starters, these schemes do not have any great subsidy component, which

means that the premium may fluctuate year after year depending on experience. Also, the target age

group of 18-50 years for life insurance could be a cause of concern as people in this age group are

generally confident of higher normal longevity. But all would be unsure of accidental death and

hence want to get insurance for it. Statistics prove this. As on 20 May, 76.1 million insurance and

pension schemes were bought; 58 million for accident insurance, 18 million for life insurance and a

mere 7.8 million for pension. This means that people are already aware of accident cover and are

buying it, while policies for life insurance and for pension are not that popular.

Moreover, premium rate also depends upon continuity, lapses, new member enrolment, claims

made and other factors. The lapsation ratio in the industry in general is high. So, if 30% policies

lapse during the second year, the premium rates for continuing members will increase, which will

lead to further lapses in the following year. Also, the expense component charged in the premium is

very less, about 15%. It may not be enough to probe claims thoroughly and can lead to an increase

in the number of fraudulent claims. If that happens, it will indirectly increase premium. So, while

people may leave by lapsing, lack of control may motivate fraudsters to join, thus creating a double

blow. (Though the government foresees no upward revision of premiums in the first three years,

there is also a disclaimer “due to unforeseen circumstances”).

One way to avoid such a situation is to enrol more genuine people in the schemes. Studies indicate

that the insurable population in India is expected to be around 750 million in 2020, with life

expectancy reaching 74 years. Therefore, we need to have penetration of bank accounts to that

extent.

To bring more people under this net, extending the product design would be a good move.

According to Indian Assured Lives Mortality (2006-08) Table, effective 1 April 2013, the probability of

death compared with age of 50 (which is the current maximum age limit for enrolment) increases

multifold at the ages of around 58, 63, 67 and 70. Hence, charging extra premium for older

categories, without denying insurance, could be an option. Proper controls can cut losses.

Bringing higher age groups under insurance also has a sociological angle to it. These days many

families struggle with paying for themselves and taking care of their children’s needs such as

education and marriage. Big financial challenges come up after a person turns 55. Charge them

extra premium, but allow participation. This will increase the population base.

Frauds are prevalent to the tune of 15-20% in the insurance sector. To reduce this, make it

mandatory for claims to be settled only through processes such as using Aadhaar wherever

possible. In an era of statistical advancements in analytics at reasonable costs, use fraud analytic

techniques to spot possible fraud patterns and create a system of mobile phone alerts to avoid

frauds.

The insurers should understand that the government is enabling the population to experience

insurance. Hence, it is important for insurers to leverage more cross-selling and up-selling of regular

insurance schemes. For example, selling simple general insurance schemes such as home

insurance or jewellery insurance will help cross-subsidize any losses arising from the government

schemes in the long run.

In the past, many social insurance schemes have been launched but have failed to achieve their

objectives. Comparatively, the current government has taken good steps to make sure that its

policies work. Bridging gaps will make it bigger. As we are nearing the commencement date of 1

June, and the normal enrolment window is for three months up to 31 August, quicker changes would

help a lot.

National Insurance CompanyFrom Wikipedia, the free encyclopedia

National Insurance Company Limited

Type Public sector

Industry General insurance, Financial services

Founded 1906

Area served South Asia

Products Insurance

Total assets INR 88.67 Billion

Owner Government of India

Website www.nationalinsuranceindia.com

National Insurance Company Limited (NICL) is a state owned general insurance company in India. The company headquartered at Kolkata was established in 1906 and nationalised in 1972.[1]

[2] It's portofolio consists of a multitude of general insurance policies, offered to a wide arena of clients encompassing different sectors of the economy.[3] Apart from being a leading insurance provider in India, NICL also serves Nepal.[4]

History[edit]

After nationalisation in 1972, NICL operated as a subsidiary of General Insurance Corporation of India (GIC). NICL was spun off as a distinct company under the General Insurance Business (Nationalisation) Amendment Act in 2002.[5] In April, 2004, NIC signed an agreement with Nainital Bank for distribution of its general insurance products through the bank's branches in Uttarakhand, Haryana and New Delhi.[6]

Company profile[edit]

National Insurance Company Limited was incorporated in December 6, 1906 with its Registered office in Kolkata. Consequent to passing of the General Insurance Business Nationalisation Act in 1972, 21 Foreign and 11 Indian Companies were amalgamated with it and National became a subsidiary of General Insurance Corporation of India (GIC) which is fully owned by the Government of India. After the notification of the General Insurance Business and its India's largest gic company(Nationalisation) Amendment Act, on 7 August 2002, National has been de-linked from its holding company GIC and presently operating as an independent insurance company wholly owned by Govt of India. National Insurance Company Ltd (NIC) is one of the leading public sector insurance companies of India, carrying out non life insurance business. Headquartered in Kolkata, NIC's network of about 1000 offices, manned by more than 16,000 skilled personnel, is spread over the length and breadth of the country covering remote rural areas, townships and metropolitan cities. NIC's foreign operations are carried out from its branch offices in Nepal. Befittingly, the product ranges, of more than 200 policies offered by NIC cater to the diverse insurance requirements of its 14 million policyholders. Innovative and customised policies ensure that even specialised insurance requirements are fully taken care of. The paid-up share capital of National is  100 crores. Starting ₹off with a premium base of  50 crores in 1974, NIC's gross direct premium income has steadily ₹grown to about  9000 crores rupees in the financial year 2012-13. National transacts general ₹insurance business of Fire, Marine and Miscellaneous insurance. The Company offers protection against a wide range of risks to its customers. The Company is privileged to cater its services to

almost every sector or industry in the Indian Economy viz. Banking, Telecom, Aviation, Shipping, Information Technology, Power, Oil & Energy, Agronomy, Plantations, Foreign Trade, Healthcare, Tea, Automobile, Education, Environment, Space Research etc. As of 2010, NICL has a AAA rating from Indian rating agency, CRISIL, a subsidiary of Standard and Poor's Company.[7][8] The gross premiums from underwriting by the company grew by 32.22% to over  6,100 crores during ₹the Financial Year 2010-2011. And Gross Premiun grew up to 10,000 crores during the financial year 2013-2014.[9] With this, the company was ranked second among general insurance companies operating in India, behind New India Assurance, at the end of the 2014 Financial Year.[9]With about 1000 offices and 16,000 employees and agents, the company operates in all of India, and neighbouring Nepal.[1] In 2008, the company signed a deal with HCL Technologies worth almost  400 crores to outsource the company’s₹  information technologyrequirements over 7 years.[10]

Products and services[edit]

NICL has a range of coverage policies targeting different sectors:[11][12]

Personal Insurance policies include medical insurance, accident, property and auto insurance coverage

Rural Insurance policies provide protection against natural and climatic disasters for agriculture and rural businesses

Industrial Insurance policies provide coverage for project, construction, contracts, fire, equipment loss, theft, etc.

Commercial Insurance policies provide protection against loss and damage of property during transportation, transactions, etc.

Awards[edit]

The Enterprise has been the recipient of various awards and accolades including:

Business Leadership Award, 2012 by NDTV Profit, Digital Inclusion Awards 2012, Top 100 CISO Awards 2012, The Indian Insurance Awards 2013, 3rd Annual Edition, for -

Best Under-served Market Penetration, Industry Champion - General Insurance - NSR Chandraprasad, CMD, NICL.

Recognitions[edit]

Highest in Customer Satisfaction by JD Power Asia Pacific 2010 India Auto Insurance Customer Satisfaction Index Study,

Top PSU for Customer Service (HT - MaRS Survey of India's Best Medical Insurers).