December 2015Issue 102March 2017

Issue 117

NEWS AT JBB 3

J. B. Boda Premier League 3

ON “WRITE” SIDE 4-5

Budgetary boost for Crop Insurance,… Insurers find Budget positive 4-5

NATIONAL 6-9

Home insurance under-purchased product 6

Varishtha Pension Bima Yojana 2017 6

Hike in crop insurance, a blessing 7

Reinsurance Group of America opens India branch 7

Technology to drive insurance distribution 8

Motor insurance in the new world of connectivity 8

Travel insurers must clearly state policy conditions and exceptions 9

Grim diagnosis of govt health cover 9

INTERNATIONAL

Sri Lanka: Farm insurance plans net cover from reinsurance giants 10

J.B. BODA GROUP SERVICES 11

CONTENTS PAGE NOS.

2

NEWS AT JBB

3

And the winner is BLANC… mount BLANC…

We had organised a cricket match on the 25th Feb, 2017 for our employees and there

emerged four teams viz. Everest, Elbert, Kilimanjaro, Blanc… named after the mountains

of the world.

The team worked on their strategies and game plan to measure the heights while they

played the league games against each other. The game was exciting and enthralling for

each one of them to reach the finals… and there we have the winner the team Mount

Blanc…

Congratulations Captain and to the team to have put in the efforts and best show to amaze

us all!!!!! KUDOS…

Here are some memorable shots of the event… JBBPL (J. B. Boda Premier League…)

4

ON “WRITE” SIDE

Budgetary boost for Crop Insurance, Digital Payment & Cyber security,

Insurers find Budget positive

Though, majority of pre-Budgetary expectations on taxes and other benefits have remained

unfulfilled, Finance Minister, in his Budget 2017, has unveiled slew of measures to boost

crop insurance, digital payment and cyber security.

The disposable income for individuals earning between Rs. 0.25 – 0.50 million will

increase due to the reduction in tax to 5% from the current 10%. This will in turn

encourage the lower and middle income strata of people to invest in instruments such as

insurance, mutual funds, fixed deposits, say insurer.

`While there were expectations on more reforms around the life insurance sector, some of

the other announcements are definitely a step in the right direction. Doing away with 5%

TDS on insurance agents’ commissions is a great step forward in attracting and retaining

right talent in the sector,'' said Director & CEO, IDBI Federal Life Insurance.

Some of the other measures that have implications for the insurance are -

1)The government has accepted recommendations of a Supreme Court-constituted Special

Investigation Team (SIT), which had in July last year proposed imposition of a cap on

cash transactions above Rs 0.3 million,

2) 0.15 million health sub centres to be converted to Health Wellness Centres,

3) Rs 1000 billion corpus for railway safety fund over five years,

4) A scheme for senior citizens to ensure 8 percent guaranteed returns will be implemented

by the Life Insurance Corporation (LIC)

The Managing Director and CEO, HDFC Life said, overall it’s a good budget for the

economy which in turn will always have a positive impact on the insurance sector.

The President at Tata AIG General Insurance, said that the Budget 2017 focussed largely

on three themes – agriculture, digital revolution and emphasis on eliminating corruption

and black money, while also giving a huge impetus to small and medium businesses.

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`With a view to boost the agricultural sector, the government has increased the coverage

under the Pradhan Mantri Fasal Bima Yojana from 30% to 40% in 2017-18 and 50% in

2018-19 which will help farmers get insured. Farmers will also benefit further with the

government spending Rs 132.40 billion in FY 18 on crop insurance’ he said.

Also, with the government emphasising further on digital India and cyber security, the

Budget will help strengthen a transparent financial ecosystem.

`The slew of measures in the budget, especially the thrust on digital showcases the intent of

the government to shift money to formal financial channels and life insurance is a positive

- albeit over a longer time horizon. The proposal to abolish FIPB and liberalisation of FDI

signals that India remains open for business in a world rapidly shifting towards

protectionism,’ he added.

The CEO–Swiss Re India Branch, commented that increasing allocations for Fasal Bima

Yojana and targeting greater insurance coverage is a positive move to close the protection

gap in agriculture. A robust crop insurance framework is an important stepping stone

towards food security and financial stability for farmers.

`Finally, the health action plan is an important acknowledgment that the country needs to

improve access to health care,' said the CEO.

The Head of Economic Research & Consulting, India, Swiss Re, “It is a balanced budget

with several measures to ease the process of doing business. This will positively impact

economic growth. The initiatives to incentivise manufacturing, clear red tape for foreign

investment, institutionalise the dispute resolution mechanism for infrastructure projects,

higher allocation for highways, etc, are very positive steps.

The digital economy too will get a strong boost with high-speed broadband connectivity on

optic fibres, and encouraging digital transactions, he said.

The Director and Chief Investment Officer, Max Life Insurance said, "While there are no

dramatic items, there are incremental benefits for many constituents viz. taxpayers with

income below Rs. 0.5 million, affordable houses for the rural and urban lower-income

groups, small corporates with turnover less than Rs 0.5 billion, higher allocation to the

MNREGS scheme for the rural population. There's a modest growth in infrastructure

spending which in our view could have been higher”.

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NATIONAL

Home insurance under-purchased product

Even though there has been an increase in the number of homebuyers in the country over

the past few years, the number of buyers purchasing home insurance is fairly low. People

tend to not purchase home insurance policy mostly due to the lack of awareness and myth

surrounding it that it comes with high premiums and involves complex processes.

Considering the climatic changes and frequent occurrences of natural hazards (flood in

Chennai, cyclone in Andhra Pradesh and cloudburst in Uttarakhand) across country, it has

become all the more important right now to buy this product than ever before.

Purchasing a home insurance plan won’t prevent these natural calamities from happening.

However, such plans can ease the financial stress while restoring the damaged property. A

property worth Rs 5 million can be covered under home insurance (fire and allied perils)

for as little as Rs 2,000 for one year. One can buy long term policy which will still come

cheaper. The premium however will depend on sum insured, which will in turn depend on

the construction cost and the built up area of the property. Construction cost will, in turn,

depend on quality of construction and also locality to an extent. Also, premium rates for

earthquake rates do vary depending on which zone the property falls into.

Source : The Economic Times

Varishtha Pension Bima Yojana 2017

The Cabinet gave its approval to Varishtha Pension Bima Yojana (VPBY), 2017. It will

give an assured pension, offering an 8 percent per annum guaranteed rate of return for 10

years, with an option for pension on a monthly, quarterly, half-yearly or annual basis. The

scheme offered annuities in monthly, quarterly, half-yearly and annual modes, varying,

between Rs 500 and Rs 5,000 (monthly), Rs 1,500 and Rs 15,000 (quarterly), Rs 3,000 and

Rs 30,000 (half-yearly) and Rs 6,000 and Rs 60,000 (annually). Maximum purchase price

was Rs 6.67 million. The scheme offered an assured return of 9 percent on monthly

payment basis, which amounted to annualized return of 9.38 percent.

Source : Mint

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Hike in crop insurance, a blessing

The insurance companies have hailed the hike in crop insurance allocation in the budget as

they see this an opportunity to expand their business. The government has decided to

increase the coverage under the Pradhan Mantri Fasal Bima Yojana from 30 percent to 40

percent in 2017-18 and 50 percent in 2018-19. The government has increased its spending

on PMFBY to Rs 132.40 billion, which the industry believes will help bring more farmers

under the insurance cover. Indian farmers need risk mitigation mechanism in the form of

insurance and PMFBY will compensate them whenever they suffer crop loss during natural

disasters. New India has underwritten premium of Rs 11 billion under the scheme in the

current fiscal so far and it plans to increase it to Rs 20 billion in the next financial year.

The government has done more to promote insurance as a risk mitigation tool and the

decision to increase the coverage under the Pradhan Mantri Fasal Bima Yojana to cover 40

percent of crop area is a continuation of that approach. The budget aims at continuing with

the government’s agenda of pursuing an inclusive and long-term development of the

economy by focusing on the core enablers, including infrastructure, digitisation, rural

development, among others. New initiatives, such as a proposed model on contract

farming are a welcome move.

Source : Deccan Chronicle

Reinsurance Group of America opens India branch

Reinsurance Group of America (RGA) said its branch in India commenced operations

immediately from the month of February 2017 and maintained it sees a tremendous

potential to grow in Asia’s third largest economy. RGA is a US-based Fortune 500

company specialising in life & health reinsurance and has clients in more than 60

countries. RGA India is affiliated to RGA Life Reinsurance’s Canada unit. Apart from

RGA, the IRDAI has given its final approval to other foreign reinsurers like Munich Re,

Swiss Re, Hannover Re, French major SCOR and XL Catlin and domestic private sector

reinsurer ITI Reinsurance to kick off their branch operations in the country. As of now,

GIC Re is the only state -owned reinsurer in the country.

Source : The Financial Express

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Technology to drive insurance distribution

In the past half a decade or so, powered by the increasing penetration of internet and

smartphones, technology companies are dramatically disrupting industry after industry.

Customers have started expecting the same quality and speed from all service providers,

including insurance. Advent of on-demand marketplaces: On-demand technology

platforms are vigorously building service infrastructure, optimizing operations, logistics

and technology; and customers want similar levels of technology-led service experience

from other services as well. Rise of the millennials: Internet being a given to the

millennials, research studies have proven that these high-income individuals strongly

prefer platforms that allow them to interact at their own pace. But digital platforms of most

insurers today are designed to cater to conventional consumers, and are still reliant on toll-

free call centres to provide sales and customer service.

Source : Mint

Motor insurance in the new world of connectivity

If you use your car for the occasional weekend outstation drive every two months, should

you pay the same motor insurance premium as someone who drives over 50 km daily?

Motor insurance in India is primarily sold based on the make and claims record of the

vehicle model as well as its manufacturing year and registration. However, these factors

are largely generalised and an impersonal method way of determining premium. A slew of

connected devices which run on the Internet of Things (IoT) have been making their way

to improve everyday lives. Be it smart watches, TVs, telematics in cars, smart fridges,

fitness devices or smartphones, almost every device can be connected to the internet. They

monitor our habits and help us make smarter and healthier decisions. This phenomenon of

using sensors to detect behaviour and packing an internet connection into any physical

object has huge implications for the insurance industry. Actuaries can use these IoT

connected devices to assess individuals’ lifestyles/choices for better precision in pricing of

insurance policies. Telematics are popular in the car industry. Connected devices have been

fitted into millions of cars worldwide through which drivers can opt for telematics-based

insurance policies.

Source : The Hindu Business Line

9

Travel insurers must clearly state policy conditions and exceptions

The terms and conditions governing the policy continue to be convoluted and couched in

legalese, thereby discouraging consumers from reading it. In fact when one buys a travel

insurance online, no one even see the terms and conditions or the exemptions pertaining to

the policy. All one sees is a long list of travel eventualities that the insurance claims to

cover — loss of baggage, delayed baggage, missed flight connections, travel delays and

cancellation, bounced hotel/airline booking, personal accident, emergency medical

expenses including hospitalisation, emergency dental treatment, personal liability,

repatriation, evacuation. Sounds very reassuring, but the devil is in the detail. And you get

those details only with the insurance cover, after purchase. And even here, the tiny print

and the complicated sentences put off most people and it is only when they make a claim

and the insurer promptly points to the exclusion clause do they realise that the policy is not

as exhaustive as it seems!.

Source : Hindustan Times

Grim diagnosis of govt health cover

India's government-funded health insurance schemes have increased patients' access to

hospitalisation but failed to reduce their households' personal out-of-pocket healthcare

expenses, the most comprehensive review of the schemes so far has found. The review by

public health analysts has found increases ranging from 12 percent to 244 percent in

hospital-based services across the country since the schemes were launched a decade ago.

But there is no robust evidence to show that they are protecting patients' households from

financial risks of healthcare costs, the analysts said. The Centre and several state

governments have cumulatively spent over Rs 370 billions since 2007 on the Rashtriya

Swasthya Bima Yojana (RSBY) that pays up to Rs 30,000 each year in hospitalisation

costs for each covered household. The RSBY - which covers 41 million households and

other state-funded schemes, some of which pay higher hospitalisation amounts - accounts

for nearly 14 percent of the 15 percent of India's population protected by health insurance.

Source : The Telegraph

INTERNATIONAL

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Sri Lanka: Farm insurance plans net cover from reinsurance giants

The National Insurance Trust Fund (NITF - ) has procured a reinsurance programme for its

agriculture insurance schemes from reinsurers which rank among the world's biggest.

Hannover Re takes 50% and Swiss Re 40% of the programme, with three other global

reinsurers sharing the remaining 10%.

“The cover has been arranged on a stop loss basis which is typically the method adopted to

obtain reinsurance for agricultural insurance,” NITF said in a statement.

The placement was made through J B Boda & Co (S) Ltd., a leading reinsurance broker,

selected after a competitive procurement process.

NITF is the fourth largest contributor to the government treasury among state owned

enterprises.

Source : Asian Insurance Review

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J. B. BODA GROUP

J. B. BODA - First on Protection – 70 Years of Transformation.

Service with Commitment – Third Generation & Moving on …

24 Offices in India & 5 Offices Overseas in U.K., Singapore, Dubai, Nepal, Kenya.

Employs 1,000 + personnel.

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Insurance & Risk Management Consultants, Life Valuation, Life & Employee Benefit Schemes.

Actuarial Valuations.

Training Academy.

Valuation of Land, Building, Plant & Machinery.

Protection & Indemnity Insurance Services.

Fire, Engineering, Miscellaneous Accident Surveyors & Loss Assessors.

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Container Surveyors, Tank Calibrators, Samplers & Analysts.

International Reinsurance Brokers (Non-Life & Life).

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