1273604 - Pritpal Chaudhary - F2 - Madhu - MBA F1

Ques 1 :-

http://youtu.be/rhHo2cJ_KhM

1273604 - Pritpal chaudhary - F2 - Q 11 Comment on Growth of life and non-life industry

Ques. 2 :                            
                                         Introduction

The Indian insurance industry has undergone transformational changes since 2000 when the industry was liberalised. With a one-player market to 24 in 13 years, the industry has witnessed phases of rapid growth along with extent of growth moderation and intensifying competition.

There have also been a number of product and operational innovations necessitated by consumer need and increased competition among the players. Changes in the regulatory environment also had a path-breaking impact on the development of the industry. While the insurance industry still struggles to move out of the shadows cast by the challenges posed by economic uncertainties of the last few years, the strong fundamentals of the industry augur well for a roadmap to be drawn for sustainable long-term growth.

Discussion

Growth life of insurance company:- The decade 2001-10 was characterised by a period of high growth (compound annual growth rate of 31 percent in new business premium) and a flat growth (CAGR of around two percent in new business premium between 2010-12), according to KPMG.

There was exponential growth in the first decade of insurance industry liberalization. Backed by innovative products and aggressive expansion of distribution, the life insurance industry grew at jet speed. However, this frenzied growth also brought in its wake issues related to product design, market conduct, complaints of management and the necessity to make course correction for the long term health of the industry.

New Product guidelines

The new guidelines for both linked and non-linked products will now come into force from the beginning of year 2014, an extension of three months from earlier specified date. These product guidelines are in line with the IRDA’s regulatory theme of customer orientation and long-term nature of the life insurance business. The guidelines follow two overarching themes of providing Guarantee and enhancing Transparency.

Non-life of insurance company:-

General insurance companies have willingly catered to these increasing demands and have offered a plethora of insurance covers that almost cover anything under the sun. 

Any insurance other than ‘Life Insurance’ falls under the classification of General Insurance. It comprises of :-

• insurance of property against fire, theft, burglary, terrorism, natural disasters etc

• personal insurance such as Accident Policy, Health Insurance and liability insurance which covers legal liabilities. 

• Errors and Omissions Insurance for professionals, credit insurance etc. 

• Policies that provide marine insurance covering goods in transit by sea, air, railways, waterways and road and cover the hull of ships.

All these above mentioned form a major chunk of non-life insurance business.

Conclusion

·         Solvency of a life insurer is heavily dependent on the returns received from total investible funds and the interest rate

·         The need for efficient investment decision and strictness from the part of the regulator with the insurers’ investment guidelines

·         The non-life insurers’ solvency is affected by the interest rate ... Are they more into short term investments?

·         One of the investment performance predictor, investment yield have the expected expected sign and strongly strongly suggests suggests that returns available from total investments or investment decisions contributes to overall non-life insurer solvency status.

·         Size of firms is significant and it contributes to higher income and hence contribute towards solvency for non-life insurers

·         Increase Increase in the number of non-life insurers insurers may help spreading spreading of risks.

1273636 - Sanjay Kumar – F2 – Asif Ali – MBA F1

https://www.youtube.com/watch?v=XoSx3-tLEMk&feature=autoshare

1273596; Parul Bajaj F2, Q.6 why India remains under - penetrated market for insurance?

INTRODUCTION

The Indian insurance industry seems to be in a state of flux. While there has been a perceptible change in the market dynamics since liberalisation and economic reforms, a considerable amount needs to be done for future growth and development of the market in an orderly and sustained manner.

DISCUSSION

The current issues and challenges faced by the insurance industry and the steps that could be taken to ensure that the industry achieves its potential.

Notwithstanding the strong improvement in penetration and density in the last 10 years, India largely remains an under-penetrated market. The market today is primarily dependent on push, tax incentives and mandatory buying for sales. There is very little customer pull, which will come from increasing financial awareness along with increasing savings and disposable income.

The business model for insurers has been changing continuously for the past couple of years on account of regulatory changes. While the regulatory changes were aimed at customer protection and increasing transparency in pricing and operations, it gave the industry very little time to adjust, leading to a lot of uncertainty in the market environment.

IN addition to challenges in growth, pricing and profitability, life insurers are also faced with significant challenges on the distribution front

The cap on commission and expense ratios further imposes restriction on the competiveness of insurers and limits the expansion of distribution channels.

.CONCLUSION

The stakeholders will have to strive for product simplification, increasing transparency of cost and pricing, effective distribution and improving customer servicing to drive salesThe claims and fraud monitoring process also needs to be simplified, strengthened by stricter guidelines for third party administrators. Despite strong growth, the non-life segment also faces stiff challenges in distribution, pricing and claims management and these issues need to be addressed on a priority to sustain the growth.

There is a requirement today for long-term assets, benefit and health policies to serve people till the time insurance in India . The pace of reforms needs to be increased especially in the areas of pricing and reinsurance.
The claims and fraud monitoring process also needs to be simplified, strengthened by stricter guidelines for third party administrators.

1273616-Rajat kumar-F2-Akhter Rashid- f1

Q1: Rajat kumar interviewing Akhter Rashid
       http://youtu.be/o5kFsQsMtn0

1273657, Sumit tyagi, F2, Q43 Indian insurance market is poised for strong growth in the long run. Comment?

Question 1 : sumit tyagi - f2 > Amandeep Attri f1

http://youtu.be/8EJa7jaTDtk 

question 2

Introduction

Brief Introduction

The future of the Indian insurance sector looks bright. The sector which stood at a strong US$ 72 billion in 2012 has the potential to grow to US$ 280 billion by 2020. This growth is driven by India’s favourable regulatory environment which guarantees stability and fair play. This environment has given rise to an insurance market which encourages foreign investors to tap into the sector’s massive potential.

Ever since the Indian government liberalised the insurance sector in 2000 and opened the doors for private participation, the sector has gone from strength to strength. The resultant competition has provided the consumer with a never-before-seen range of products and providers, and also enhanced service levels markedly.

The health of the insurance sector reflects a country’s economy. This sector not only generates long-term funds for infrastructure development, but also increases a country’s risk-taking capacity. India’s economic growth since the turn of the century is viewed as a significant development in the global economy. This view is helped in no small part by a booming insurance industry.

Discussion

 The insurance sector has witnessed a decline due to regulatory changes, industry leaders are optimistic about scope for growth.

The picture is not all gloomy, and though in the short run the industry may be undergoing a catharsis, the long-term picture is still compelling, and a stronger and better-founded insurance industry is likely to emerge from this challenging situation, a joint study by CII and leading global professional services organisations says.

Innovation is the first casualty in tightly controlled markets, leading to drying up of incentives for product manufacturers and decline in business activities, the report pointed out.

The report also said the market today is primarily dependent on push, tax incentives and mandatory buying.

"There is very little customer pull, which will come from increasing financial awareness along with increasing savings and disposable incomes. Till then the stakeholders will have to strive for product simplification, transparency of cost and pricing, effective distribution and improving customer servicing to drive sales," it said.

In the long run, it said, the insurance industry is poised for a strong growth, as the domestic economy is expected to grow steadily.

For the first time in 12 years, the life insurance industry witnessed a decline in the first year premium collected in FY12, from Rs 1,258 billion in FY11 to Rs 1,142 billion, a drop of approximately 10 percent.

Conclusion

More companies are now being forced to offer similar benefits, or better them – that too at very attractive prices.

With healthcare getting expensive and awareness increasing, more people are going in for sophisticated plans.

If we see changes in FDI rules as growth picks up in the coming years, we might see more specialised health insurance companies setting up shop in the country.

There is still a long way to go and with increasing competition among insurers, customers will get a lot of benefits

1273614 - Rahul Purohit - F2 - Q 18 comment on claim management

 

QUESTION 1 : 1273614 - Rahul Purohit - F2 - Mukesh Gautam - F1

 http://youtu.be/n9f4vEGug_I

QUE2-

 INTRODUCTION

A claims management is a type of business that offers claims management services to the public. Claims management services consist of advice or services in respect of claims for compensation, restitution, repayment or any other remedy for loss or damage, or in respect of some other obligation. Claims management services cover litigation, or claims under regulation schemes or voluntary arrangements. Simply stated, it's the transactional handling of a company's insurance claims.

At INSURICA, (insurance management network) define claims management a little differently. They view their role as "a partner in a company's profitability."

The industry may have specific claims experts are able to uncover often overlooked risks and opportunities that have a direct impact on reducing and controlling our claims costs.

As a workers' compensation Third-Party Administrator (TPA), they exceed their client’s expectations through timely and professional resolution of all claims.

When it comes to managing our claims, our hands-on approach promotes prompt reporting, early intervention, aggressive investigation and timely settlements. We do this by:

·         Reviewing claims for proper coverage when reported and forwarding to the appropriate insurer.

·         Promptly paying all claims which are payable within draft authority.

·         Facilitating investigative meetings and payments of bills by the carrier.

·         Negotiating with insurer on claims where coverage is questionable.

DISCUSSION

The Claims Management Services Regulator was created by section 11 of the Compensation Act 2006. The post of Regulator if occupied by the Secretary of State for Justice to authorise and regulate claims management companies and:

·         Set and monitor standards of competence and professional conduct;

·         Promote good practice, in particular as to the provision of information about charges and other matters to users;

·         Promote practices likely to facilitate competition;

·         Ensure that arrangements are made for the protection of users, including complaints handling.

The rules and procedure for authorisation are defined in the Compensation (Claims Management Services) Regulations 2006. The Regulator may investigate unauthorised trading and seek an injunction to prevent it or bring a criminal prosecution. It is a crime to obstruct the Regulator, punishable on summary conviction by a fine of up to level 5 on the standard scale.

A person may appeal a decision of the Regulator about authorisation to the Claims Management Services Tribunal and there is a further route of appeal to the Court of Appeal.

CONCLUSION

1)      Consumers protected from CMC malpractice.

2)      Reduced false expectations of compensation and fraudulent claims and disruption of CMCs engaging in other forms of criminality.

3)      Improvements in quality and professionalism of CMCs, of confidence in compliant providers and in the system.

4)      Increased transparency of the market, particularly in relation to charges, commission payments and the provision of information.

5)      Improvement in industry practices and processes providing consumers with genuine claims with more efficient and effective routes to redress.

1272614 - Rahul purohit - F2 - Mukesh Gautam - F1