Private insurer Kotak Mahindra old Mutual Life
Insurance (Kotak Life Insurance) has launched Assured Income Accelerator, a
plan which guarantees an increasing income every year during the payout phase,
irrespective of economic changes.
In a release, Kotak Life Insurance Managing Director Mr. G Murlidhar said,
“This product fulfils a long pending demand for a life insurance product which
offsets the ever-increasing cost of living and meaningfully addressed an
individual's lifecycle needs."
Assured Income Accelerator addresses a wide variety of customer needs ranging
from second income to planned lifecycle events such as child education and
retirement, Mr. Murlidhar added.
Under the plan, the minimum annual premium is Rs 15,000. The annual payout of
guaranteed income commences after premium payment term is over. At maturity,
guaranteed maturity benefit is also payable along with the last instalment of
the increasing guaranteed income.
In the case of unfortunate death of the person insured, the plan pays out a
guaranteed death benefit, irrespective of the payouts already given.
This new offering of Kotak Life Insurance also provides optional riders such as
Term Benefit, Accident Death Benefit, Permanent Disability Benefit, Life
Guardian Benefit and Accidental Disability Guardian Benefit.
Kotak Mahindra old Mutual Life Insurance is a joint venture between Kotak
Mahindra Bank and South Africa-based Old Mutual Public Limited Company, a
global investment, savings, insurance and banking group. Kotak Mahindra Bank
owns 74 per cent of the stake in the JV; while, Old Mutual holds the remaining
26 per cent.
The union budget presented recently by the Finance
Minister Mr. Arun Jaitely has promised to table the long awaited Insurance Laws
(Amendment) Bill, which proposes to raise foreign direct investment cap to 49
per cent from current 26 per cent, in the current session of the Parliament. It
is encouraging for the industry but has also created a state of confusion
within the industry on some points.
The budget proposals have imposed a withholding tax of 2 per cent on payment
made by insurance companies to their policy holders. The logic of imposing such
tax has not been defined.
Further, Mr. Jaitely announced that the composite FDI ceiling in the Insurance
sector is proposed to be increased up to 49 per cent from the current level of
26 percent, with full Indian management and control, through the FIPB route. In
which, terms composite ceiling, full Indian management and control are not
clearly defined.
The industry wants to know whether full Indian management and control would be
achieved through differential voting rights, or through compelling the insurers
to have their board majorly with Indians and the company to be headed only by
an Indian.
Also, the industry is apprehensive about routing the FDI proposals through
Foreign Investment Promotion Board (FIPB) instead of the current automatic
route.
“In the banking sector FDI up to 49 percent is under automatic route. There are
lots of checks and balances in the insurance sector. With stiff solvency norms
policy holders will not lose their monies. There need not be any differential
treatment between these two sectors,“ a senior industry official said.
Bajaj Finserv Limited (BFL), a leading financial
services company of the Bajaj Group, is considering selling part of its stakes
in insurance joint ventures to its foreign partner Allianz once the Insurance
Laws (Amendment) Bill is passed.
The Insurance Laws (Amendment) Bill, which proposes to raise foreign direct
investment (FDI) in insurance to 49 per cent from current 26 per cent, is
pending in Rajya Sabha, the upper house of the Indian parliament, since 2008.
Bajaj Finserv is present in insurance businesses through 74 per cent stake in
Bajaj Allianz Life Insurance and Bajaj Allianz General Insurance.
Both the life insurance business and the non-life insurance business were generating
funds to sustain themselves and no further capital infusion was required, said
Bajaj Finserv Managing Director Mr. Sanjeev Bajaj.
Two private sector insurance players - Exide Life
Insurance Co Ltd and Magma HDI General Insurance Co may not seek foreign direct
investment (FDI) flowing into their companies anytime soon even if the long
pending Insurance Laws (Amendment) Bill, which proposes raising FDI ceiling to
49 per cent, is passed.
“We are well-capitalised and not looking at any investments through FDI route
in our businesses in the short term. However, in the long term, Exide
Industries intend to induct a new foreign shareholder,“ said Exide Life
Insurance MD and CEO Mr. Kshitij Jain.
While Banglore-based Exide Life Insurance Company is fully Indian company with
100 per cent holding owned by Rahejas-controlled battery maker Exide
Industries, Magma HDI General Insurance is 74 per cent stake owned by Magma
Fincorp with remaining 26 per cent being held by Germany partner HDI-Gerling
Industries Versicherung.
The Modi-led NDA government has said that it will table Insurance Laws
(Amendment) Bill in the current session of the parliament. The foreign
investors are waiting for the bill to be passed.
Riding on the growth of internet reach in the country,
private sector leading insurer HDFC Life Insurance Company is expecting to
double its revenue from its online sales by 2016. It is seeing 10 per cent of
its new insurance business coming from the online sales in just about two
years.
“While the offline insurance premiums have a renewal rate of about 70 per cent,
we are seeing over 95 per cent renewals for online insurance,“ said Executive
Vice-President & Head (Strategy and Technology) for HDFC Life, Mr. Subrat
Mohanty.
The insurer has grown 20 folds to Rs 300 crore since 2012, when it started
online sales.
The online channel of insurance sales is more convenient as it does not require
any agent's involvement, and customers can themselves compare and choose best suited policies for themselves using different web aggregator present in the
market. Also, online policies comes 20-25 per cent cheaper as there is no
middleman involved in the transaction. Most of the websites selling online
insurance do not charge brokerage but just a small commission for passing on
the lead.
HDFC Life is facing resistance from agents for its offline business. The agents
fear loss of business to the online channel. However, the insurer is trying to
convince them to move online. The insurer is planning to launch a mobile
app by October this year to enable customers to buy and get information about
various product offerings from the company on the go.
HDFC Life Insurance is a joint venture between Housing Development Finance
Corporation (HDFC) Limited, one of India's leading housing finance institution
and Standard Life Plc, a renowned financial savings & investments services
provider of United Kingdom.
