General Insurance in India- What is new

Burning Cost prescription by Indian Regulator

To price Group health insurance, fire and engineering occupancies from 1st January 2015 

What is New - General Insurance in India
January 2015

1. Allianz is lead reinsurer to suffer third major aviation loss with tragic end of Air asia Flight QZ 8501.
2. To Push ahead economic reforms India raises FDI cap in Insurance sector from 26% to 49% through an Ordinance.
3. Reliance Group (Anil Ambani) initiates process to induct foreign partners.
4. Executive decree in Insurance FDI cap allows international reinsurers including Lloyds to set their shops in India.
5. Sunidhi group launches broking JV with JLT of London, one of the largest insurance & reinsurance brokerage to compete with Aon Global and Marsh global broking firms.
6. Currently there are 343 registered insurance brokers in India. Out of this only 5-6 have international backup.
7. India backed by strong electrol mandate joins Indonesia and China as top three preferred countries for economic reforms in Asia.
8. Japanese Non life insurers to tighten their management for catastrophic risks.
9. Pakistan Railways has decided to provides Rs 8 lac cover for death and Rs 3 lac cover for injuries for passengers and employees in rail accidents.
10. IRDA prescribes new prescription and advisory on burning cost to rate property insurance initially for Fire, Engineering and Group Health commercial insurance.
11. GI Council develops common disclosure format for Claims outgo for Group health business. Mandatory for all insurers from 1.1.2015
12. Insurance Ordinance makes it mandatory for all General Insurers (except standalone health insurers) to underwrite certain % of insurance business as Third Party motor premium. IRDA to come up with Operational guidelines. Existing Decline Risk Pool is considered as one of the methodology for the same.
13. Cyclone Phalin, the strongest cyclone to hit India in 14 years has caused economic losses at $ 700 million to $4.5 billion but the insured losses are only a fraction of this value. Damaged crops and most of the residential houses were not insured.
14. Hudhud has caused more than Rs 2000 crore losses to general insurers as it hit severely to commercial units, naval base as well as vizag airport. It also caused huge loss to crops. 
15. Kotak Mahindra Bank received approval of RBI to enter in General Insurance Market.
16. Government of India is assessing the possibility of Universal Health in the country. 
17. As per WHO there are 600 million people over 60 years in the world today. In India and China the percentage of older people living in multi-generational households with their adult children is 82% & 69% respectively.
18. IRDA to rein in insurers which exceed expense limit.

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2014

Portability in health insurance is available to individual policy holders if they approach 45 days before renewal and their policy is break-free.

IRDA (Health Insurance) (First Amendment) Regulation, 2014 notified.

1. IRDA may release a new set of guidelines on pricing of Group Health Products from January 2015, which at present are underpriced.
2. Parliamentary Committee may submit its Report on FDI cap in Insurance Sector on 8^th December 2014.
3. IRDA looking to have standardized protocols & standardized costing system to deal different pricing for similar treatment in different hospitals. To map hospitals across India on the  basis of latitude & longitude a geo-coding system is also envisaged.
4. Health insurance in India has almost 23% market share in total general insurance business in India. General insurers collected health premium worth Rs 17624 crore in 2013-14 against Rs 15,530 crore in 2012-13. This year health premium may cross Rs 20,000 crore. 28 non life insurers, including 5 standalone health insurers, are operating in India to underwrite health products. 
5. Insurance penetration of India i.e. Premium collected by Indian insurers is 3.96 % of GDP in FY 2012-13. Per capita premium underwritten i.e. insurance density in India during FY 2012-13 is US$ 53.2
6. IRDA introduced Long term Motor Third Party insurance policy with a three-year term. Third Party insurance for motor owners is mandatory in India.
7. The insurance regulator wants to incentivize the Agents by fixing a minimum wage to retain talent in the industry.

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