In an article, titled “Asia-Pacific Nonlife Insurance: Natural Catastrophes and Economic Factors Will Polarize Growth and Profit Potential,” S&P has downgraded its outlook on the Indian insurance industry to negative from stable
Credit rating agency Standard and Poor's (S&P) has published its outlook for the life insurance industries of various Asian-Pacific countries. In an article, titled "Asia-Pacific Nonlife Insurance: Natural Catastrophes and Economic Factors Will Polarize Growth and Profit Potential," that reviewed the sector in 12 countries S&P has downgraded its outlook on the Indian insurance industry to negative from stable. According the report, the negative outlook on India could change quickly if pricing improves and underwriting results significantly strengthen, given a low penetration rate.
The outlooks of Japan and New Zealand have also been changed from stable to negative. S&P review explained that, for Japan, the outlook factors in a likely deterioration in earnings and capital as insurers start to meet the costs of the recent earthquake and tsunami. The review believes that the Japan disaster could undermine companies' financial profiles, limit the availability of reinsurance, and constrain pricing. The negative outlook on New Zealand indicates that earnings and access to reinsurance are also likely to weaken, following recent earthquakes.
China and Malaysia were the only countries where the report showed an upgrade to positive from stable, reflecting their strong growth momentum.
Australia, China, Hong Kong, India, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand are the other countries that were included in the review of S&P.
Royal Sundaram Alliance Insurance Company has expanded its distribution network by opening three new branches in Tumkur (Karnataka), Cuddapah (Andhra Pradesh) and Dindigul (Tamil Nadu)
Royal Sundaram Alliance Insurance Company has expanded its distribution network by opening three new branches in Tumkur (Karnataka), Cuddapah (Andhra Pradesh) and Dindigul (Tamil Nadu). The company continues with its plan to expand its services to urban, semi urban, and rural areas. With this new addition the company's network has grown to 86 branches in India.
Ajay Bimbhet, managing director, Royal Sundaram said, "This move is a part of our geographic expansion strategy in tier II & tier III cities." The branch design follows a standard template developed by Royal Sundaram to provide customers' comfort and agents' convenience. The company's expansion strategy is based on the "Hub and Spoke" model, wherein a mature branch expands its reach deeper by sourcing business from the smaller adjoining locations. This is done by strengthening relationships with local dealers, agents and associates. Once these areas start generating substantial business, these are converted into standalone branches.
Royal Sundaram offers a wide range of covers for products such as motor, health, personal accident, home, home content and travel insurance.
The Department of Posts is in talks with various consultants to formulate a roadmap for its life insurance business with an aim to grow the customer base to about 100 million subscribers in next few years
The Department of Posts (DoP) is in talks with various consultants to formulate a roadmap for its life insurance business with an aim to grow the customer base to about 100 million subscribers in next few years, sources said. "But, the talks are still in the initial stages and nothing concrete has been done till yet," a source in the DoP said.
The department has about five million policies under postal life insurance (PLI) with an amount of Rs58,132 crore, while under rural postal life insurance (RPLI), it has about 13 million policies with an assured amount of Rs67,162 crore. The growth rate of RPLI was 60% in terms of premium income in 2009-10 over 2008-09. The Department is committed to expanding insurance cover to reach a target of about 100 million customers in next few years, the source said.
The department has already invited expressions of interest (EoIs) to receive responses from eligible interested firms for providing project consultancy on "Long Term Strategy for Life Insurance Business of Department of Posts".
Given the recent regulatory changes, government policies and the need for greater participation in the evolving but still growing life insurance market, DoP wants a thorough diagnostic re-look at its entire operating strategy including a structural framework in the insurance division and to develop a road map for the future.
In that regard, the consultants chosen shall focus on the following areas as a part of the assignment, including analysis of insurance market, future outlook for growth and profitability, scope for expansion of products and clientele and key success factors for an organisation to succeed.