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Health Insurance

2 years ago

Long-term comprehensive policy for two-wheelers to be an expensive affair

Long-term comprehensive policy for two-wheelers to be an expensive affair

Comprehensive motor insurance policies for two-wheelers and private cars may turn out to be an expensive proposition for policyholders, with premia expected to be as much as two-and-a-half times more than what it would cost on an annual basis.

While a three-year policy eliminates the need for annual renewals, it also means that the buyer is locked into the same premium amount for that period. Hence, insurers would price the product taking into consideration the future expected claims and inflation, if any.

Insurance Regulatory and Development Authority of India (Irda) had introduced long term third party motor insurance policy for two-wheelers with a three-year term in late 2014. Comprehensive motor policies include motor third party (TP) and motor own damage (OD) policies. 

“Pricing would be adjusted as per the market rates. The products would be priced at least 2.5 times higher than regular premiums for one-year products on an average. This is accounting for claims in that segment, historical data and other losses," said the head of claims in a private general insurance company.

Irda  had said that the total premium charged for the third party three-year coverage would be three time of the annual TP premium for two wheelers, which would be decided by the regulator. Motor TP premium is regulated by Irda and the regulator brings out revised rates for these policies every year, based on claims experience. TP motor insurance is mandatory in India.

The regulator also said that the premium would not be revised upwards or downwards during the period of the policy. While the regulator has begun with the two wheeler insurance segment for the long-term policy, it is expected that this will be extended to private cars, too. However, the pricing norms would still be the same.

 

New India Assurance, the country's largest general insurer has already got the regulator's nod for a comprehensive two-wheeler policy with a term of three years. This will be launched after few weeks. Here too, the pricing is expected to be twice or above that of the one-year product.

 

The regulator has said that since there is also a need to have long term comprehensive cover including own damage and TP covers, insurers can also file 3-year term comprehensive policy for two wheelers.

 

While the own damage motor segment covers losses to self during accidents, motor TP covers liability to a third party caused by a vehicle owner during an accident. 

 

[Source: http://www.business-standard.com/article/finance/long-term-comprehensive-policy-for-two-wheelers-to-be-an-expensive-affair-115021100232_1.html]

2 years ago

Know Your 2 Wheeler Insurance Policy

Know Your 2 Wheeler Insurance Policy

A two wheeler insurance policy plays an important role when your vehicle is damaged or stolen. Hence, it is important to know the basic terms of an Insurance policy. It helps while taking and renewing policy and passing the claim of vehicle. Let us have a look to some important points of a two wheeler insurance policy and its act.

The insurance policy premium is decided as per the guideline given in theIndia Motor Tariff Act 2002 which is in accordance with the provisions of part II B of the Insurance Act 1938. There are basically two types of insurance policy comes under this act.

  • Liability Only Policy: This covers Third Party Liability for bodily injury and/ or death and Property Damage. Personal Accident Cover for Owner-Driver is also included.
  • Package Policy: This covers loss or damage to the vehicle insured in addition to above.

These are the following factors which affect a rating of two wheeler insurance policy.
Insured’s Declared Value (IDV): It is the value of the vehicle for which is insured under the two wheeler insurance policy. It remains fix for the tenure of the insurance policy. IDV is fixed on the basis of manufacturer’s listed selling price. There is also IDV for side car accessories etc., the selling price of which is fixed in similar fashion if it is not listed with the manufacturer’s selling price. IDV is calculated after appropriate depreciation applied as applicable. Here is the table of depreciation.After five years the IDV depends on mutual understanding between buyer and insurance company.
 

CC (Cubic Capacity) of two wheeler engine
As the CC of two wheeler engine increases the rate of premium also increases. There are three kind of classification, according to India Motor Tariff which are not exceeding 150cc, Exceeding 150cc but not 350CC and 350CC and above. Further the minimum value insured for each category are Rs. 5,000, Rs.6,000 and Rs. 7,000 respectively.
 

Geography
India Motor Tariff has divided geography in two parts for India, Zone A and Zone B. Zone A includes cities such as Ahmedabad, Banglore, Chennai, Hyderabad, Kolkatta, Pune, Mumbai and New Delhi while Zone B includes rest of India. The premium rating is higher in case of Zone A compared to Zone B.
 

Transfer of Ownership

When there is transfer of ownership of a two wheeler, the insurance policy should also be transferred in the name of transferee. The transferee shall apply within fourteen days from the date of transfer in writing under recorded delivery to the insurer who has insured the vehicle, with the details of the registration of the vehicle, the date of transfer of the vehicle, the previous owner of the vehicle and the number and date of the insurance policy so that the insurer may make the necessary changes in his record and issue fresh Certificate of Insurance.
Change of Vehicle: A vehicle insured under a policy can be substituted by another vehicle of the same class for the balance period of the policy subject to adjustment of premium, if any, on pro-rata basis from the date of substitution.
 

Third Party Property Damage (TPPD) Cover:

The third party damage is limited to Rs. 1 lac in case of two wheeler insurance policy. However, the insured can at the inception of the policy, opt to restrict to the TPPD cover to the statutory limit of Rs. 6000/- as provided in the M. V. Act.

Please take care of following additional points for your two wheeler insurance policy.Do not forget to renew your policy on time to avoid extra hassle. No claim will be processed for the period when the vehicle is not covered.
 

Make sure that all the details on insurance policy are correct. Incorrect information may cause trouble in claim processing.If you are renewing your insurance policy after the term of insurance policy make sure your vehicle is in good condition while inspection. Any note in inspection may affect claim processing.
If your vehicle is damaged make sure to explain how it was damaged and the damage to the vehicle is due to accident only.
Make sure to claim No Claim Bonus if you have not raised any claim during the tenure of policy

[Source: http://autofarm.blogspot.in/2012/03/know-your-2-wheeler-insurance-policy.html]

2 years ago

Standardization in Health Insurance: Streamlined Business & Satisfied Consumers!

Health Insurance continues to be one of the most dynamic and fast evolving sectors of the Indian insurance industry. Gross written premiums by insurance companies has increased from Rs.17565 cr in FY’ 2005 to Rs.59898 cr in FY’2012 showing a very healthy 19% CAGR growth. The industry has shown significant improvement in operational parameters even as claims ratios continue to remain high. However, the growth is fraught with numerous challenges including efficiency, affordability and accessibility of health insurance. The efficiency in the health insurance system is also plagued by mistrust between providers and insurers due to non-standardized practices and formats in an evolving industry. Standardization therefore is critical to enhance quality delivery of health insurance, encourage innovation and greater penetration of health insurance in the country.

Health Insurance Guidelines 2013

The IRDA recently notified the health insurance guidelines 2013 to standardize health insurance in the country. The regulator has mentioned that the guidelines are meant to reduce ambiguity and enable all stakeholders to provide better services and enable customers to interact more effectively with insurers, third-party administrators and providers. The guidelines includes various facets of standardization including definitions of critical illnesses, definitions of commonly used insurance terms, list of excluded items in hospitalization indemnity policies, billing formats, discharge summary and standard contracts between TPA, insurers and hospitals. Undoubtedly, this represents a very important milestone in ushering standardization in the health insurance sector. Let’s dwell on each of these facets to appreciate the importance of this initiative.

The Guidelines aim to reduce the existing ambiguity between the insurer/reinsurer, provider and consumer due to varied critical illnesses definitions. The differences in the definitions of Critical Illnesses adopted by the different insurers have created confusion in the minds of consumers wherein products are difficult to compare and the industry especially at the time when insurers and re-insurers have to arrive at a point where lump sum payment is made. The availability of standard definitions would now ensure better comparability and uniformity in the understanding of critical illness definitions.

This is significant in the background of health ministry’s efforts to develop standards for making and maintenance of Electronic Health Records in the country being coordinated by FICCI. This is the single most standard tool which will help in data warehousing, monitoring and portability which would greatly reduce diagnostic time and help in creating a national health database. It should also pave the way for an all encompassing Health information portal which has detailed demographic data helping in periodic review of disease-wise, city-wise and region-wise information. Healthcare delivery would certainly be improved tremendously with all these measures.

 

 [Source : http://blog.ficci.com/health-insurance-india/3345/]

 

2 years ago

Universal Health Insurance in India: A way to go forward

Universal Health Insurance in India: A way to go forward

Health Assurance Mission (NHAM) is likely to be launched in coming days. This will bring much needed promise to the evolution of health insurance model in India. To be rolled out in phases, it may take a decade before the scheme can be actually offered to everyone.

 

National Health Assurance Mission (NHAM) is one example of Government-sponsored Health Insurance schemes (GSHISs). The Congress regimen in 2008 had launched an ambitious Rastriya Swasthya Bima Yojna (RSBY). It focuses on providing inpatient coverage to families living Below Poverty Line (BPL). With a mere registration fee of Rs. 30, RSBY provides cash-less health insurance to BPL families up to Rs. 30,000. The entire premium is paid by the state (25%) and central (75%) governments. With the introduction of NHAM, RSBY will be gradually merged into NHAM.

 

Government-sponsored Health Insurance schemes (GSHISs) are not new to India, but surely the evolution has been slow. Employees’ State Insurance Scheme (ESIS), Central Government Health Scheme (CGHS) schemes are in vogue since decades. ‘Mediclaim’ was a private voluntary health scheme launched in 1986 by government insurance companies. In the last decade, a few states have successfully launched health insurance schemes: AarogyaSri (Andhra Pradesh), Vajpayee Arogyashri (Karnatka), the Chief Minister Comprehensive Health Insurance (Tamil Nadu) and RSBY Plus (Himachal Pradesh). The most crucial advantage of government sponsored health schemes is that they are primarily targeted at poorer people, thus enabling a bottom up approach for health for all.

 

Compared to USA where 75 % of people have health insurance, the most common mode of payment for medical services in India is still ‘out of pocket’. Thus, there is ample scope for health insurance in India. With government’s push for universal health coverage, this market is likely to grow in coming years. Government sponsored Health insurance is likely to be the dominant theme, but private insurance companies can also play a crucial role. Not only they will bring in the much needed investment, their entry will bring better practices, competition and a global insight. Health insurance is currently limited to indoor treatment. There is a need of coverage being extended to outpatient treatment and procedures too.

 

Health insurance is not without challenges in India. In our country, there is already a high level of medical malpractice. The unfettered continuation of such unethical practices may bleed health insurance schemes. Then there is lack of standardization of medical treatment regimens and practices in India, creating challenges for the insurance companies when it comes to reimbursements.

Medicine cannot just continue as a private matter, it must evolve into a social institution wherein it can serve the basic needs of the society. Universal health assurance hopefully will accelerate the process for India in the direction.

[Source: http://indianexpress.com/article/blogs/universal-health-insurance-in-india-a-way-to-go-forward/]

2 years ago

More Joining The General Insurance Party In India

More Joining The General Insurance Party In India

Well, I don’t know if it should be called a party. But while there have been talks of a few exits (or shall we say strategic re-alignment) in the life insurance space, we have seen three new entrants in the general insurance space in the last few months.

 

We had Religare Health Insurance Company being formed a few months ago and just two days back, we had Magma HDI and Liberty Videocon general insurance companies getting their approval from IRDA.

 

That takes the count of general insurance companies in India to 27. Some developed countries have a much larger count of health insurance providers. If service levels can be ensured, the more the merrier it is for the consumer — more players, more competition, more innovation and hopefully better services would be offered as differentiators.

 

India is a big country with an extremely large spectrum of customer profiles and there is enough scope for differentiation to be created with niche products and services and maybe even on pricing. Clearly, some of the existing players have already started distancing themselves from the price-war-for-market-share game.

 

While the profitability of general insurance companies may not look all that attractive currently with most making mostly investment income, they definitely seem to be growing. The general insurance industry grew at a healthy 23 percent in the last year compared to the previous year. With increasing healthcare costs and awareness regarding the same, more and more of the population would start buying health insurance plans. We currently have only four (including the latest entrant Religare) specialist health insurance providers — we may see a few more wanting to tap this large market.

 

Even on the motor insurance side, better tracking and hence refinement would come in. This would result in much better risk-based pricing of motor insurance plans. Indicators suggest that motor insurance premiums too would rise, which again makes the market bigger and may increase the price-sensitivity as it is a relatively standard product offering. Market share too is split between a larger number of players, unlike the life insurance space where LIC has very dominant market share of 70 pct + of the annual market.

 

All this bodes very well for the general insurance industry even in the medium term. Greater competition will almost always create better products for the consumer. So cheers to this.

 

[Source: http://blogs.reuters.com/india-expertzone/2012/05/25/more-joining-the-general-insurance-party-in-india/]

2 years ago

Two-Wheeler Insurance Policies To Get Cheaper, Easier To Buy

Two-Wheeler Insurance Policies To Get Cheaper, Easier To Buy

 

Comprehensive two wheeler insurance policies would soon get cheaper once policies with three-year validity come into effect. Large insurance companies such as ICICI Lombard and Tata AIG General Insurance, apart from government-owned companies, are planning to launch policies with riders for customers.

To enable long-term motor insurance for two-wheelers, the Insurance Regulatory and Development Authority (Irda) has introduced a long-term motor third-party insurance policy for two-wheelers with a three-year term.

Irda said the total premium charged for the third-party coverage would be three times the annual third-party premium for two-wheelers as decided by the regulator. Motor third-party premium is regulated by Irda and the regulator brings out revised rates for these policies every year based on the claims experience. Third-party motor insurance is mandatory in India.

The insurance regulator also said that the premium would not be revised upwards or downwards during the period of the policy. According to insurance industry executives, two-wheeler owners would opt for these, since there would not be any premium fluctuations for the three-year term unlike one-year policies where the premium would be revised every year.

Sector officials said the firms would save costs by not having to renew policies every year. This, they said, would be passed on to customers in the form of discounts on the ‘own damage’ front. Customers would also get an option to stay with their one-year policy or opt for a three-year policy.

Third-party motor insurance includes two parts, own damage that protects the driver/owner from accidents and third-party cover that covers liability from third-party accidents. Third-party cover is mandatory, while own damage is optional.

General insurance companies have already planned to launch products. Madhukar Sinha, national head (personal lines) at Tata AIG General Insurance, said his company would file a product in tandem with the Irda guidelines.

He added add-ons could be offered with the policies, subject to Irda approvals.

"With respect to the pricing of the product, we are analysing the past trends for a suitable pricing mechanism."

From April 1, 2014, third-party premiums in the two-wheeler category were raised by 9-10 per cent, compared with the proposed 1-45 per cent across segments - sub-75cc, 75-150cc, 150-350cc, and more than 350cc.
 

Sanjay Datta, head of underwriting and claims at ICICI Lombard, had earlier said the insurer would launch a motor third-party policy for two-wheelers after filing the product with Irda. Thereafter, the company would file a comprehensive two-wheeler plan, he added.

Irda also said that the entire premium would have to be paid in one installment and insurers would not be able to cancel the standalone third-party cover in any circumstances except for ‘total loss’. In case of cancellation of policy under total loss, premiums for the full unexpired years would be refunded. Non-life companies wanting to introduce these policies will have to submit a letter of intent to Irda.

According to the regulator, since there is also a need to have long-term comprehensive cover including own damage and third-party covers, insurers can also file three-year term comprehensive policy for two-wheelers. While the ‘own-damage’ motor segment covers losses to self during accidents, motor third-party covers liability to a third-party caused by a vehicle owner during an accident.

 

[Source: http://www.business-standard.com/article/pf/two-wheeler-insurance-policies-may-get-cheaper-easier-to-buy-114082300506_1.html]