Tag: insurance Business

Tata AIA Life Insurance bets on 40% growth over next 3 years

Banking & Finance

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Tata AIA Life Insurance expects a 30-40 per cent growth in business over the next three years backed by a strong push to protection and pension plans, ramping up of distribution network and with renewed emphasis on branding.

According to Naveen Tahilyani, MD and Chief Executive Officer, Tata AIA Life Insurance, pension as a category is currently a small part of their total portfolio. But the company plans to launch new products starting this month to tap into the potential growth in the segment.

The company will also continue its focus on protection plans, which currently accounts for nearly 25 per cent of its product mix.

“We grew by nearly 30 per cent in H1 and in Q2 of this fiscal. Our growth has been close to 40 per cent. We have had strong numbers in November. We are hopeful of 30-40 per cent growth over the next three years,” Tahilyani told BusinessLine.

In FY21, the total premium income grew by 34 per cent to ₹11,105 crore, compared with ₹8,308 crore in FY-20. The total renewal premium income also witnessed a 37 per cent growth at ₹6,961 crore (₹5,066 crore). Its 13th month persistency remained at 88.28 per cent despite the adverse impact of Covid-19 pandemic while the claim settlement ratio stands at around 98.05 per cent. The company claims to have registered 35 per cent CAGR in the retail protection business over the last two years.

Ramping up distribution

The company is looking to ramp up its distribution network both by opening new branches and entering into partnerships with health tech and fintech companies for ramping up sales.

As on March 2021, the company had around 215 branches. It has already added 100 branches so far this year and plans to add another 100 over the next six months taking the total to around 415 by June 2022.

The company has a strong presence in Maharashtra, Gujarat, West Bengal, Delhi NCR, Punjab and Haryana. It plans to ramp up presence in the southern markets by setting up new branches.

Distribution through agency network accounts for nearly 30 per cent of its total sales, while the remaining 70 per cent comes from non-agency network including bancassurance, broking partners and new age digital companies.

Branding and marketing

Tata AIA Life Insurance has on-boarded Olympic gold medallist Neeraj Chopra as its brand ambassador in a multi-year deal with a focus on enhancing its brand image. The move would help promote health and wellness among policyholders and penetrate deeper into the Tier-II and Tier-III markets.

“So far, we have been reasonably quiet on branding front. Now, we think it is time to invest in branding. The Neeraj Chopra campaign would be initially rolled out on the digital platform,” Tahilyani said.

The company plans to lay emphasis on the omni-channel network with the digital channel serving more as a feeder to the physical network.

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Ola Financial Services plans international expansion of its insurance business

Banking & Finance

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Ola’s subsidiary, Ola Financial Services (OFS) will expand its insurance business internationally to support the operations of Ola’s mobility business through innovative insurance products designed for the UK, Australia and New Zealand market.

According to Ola’s recent MCA filings, OFS will also be launching new capabilities to the pay-later instrument to make it more appealing for the users. Further, OFS will expand its suite of products by launching new lending products in the form of two- and four-wheeler loans and personal loans to offer a comprehensive financial product ecosystem to the customer.

During 2020-21, Ola Financial Services has had a turbulent year due to external factors such as Covid on the lending environment in general and the double impact on mobility business and its spillover to the Ola Money brand. Through these new growth avenues, OFS hopes to generate regular and sustainable financial results.

Ola is looking to go public by next year and is estimated to raise around $1 billion – $2 billion from the IPO. The company is expected to file its DRHP (Draft Red Herring Prospectus) soon, after the board reaches a consensus on the route of listing. BusinessLine has earlier reported in September that the company’s board is divided between no-promoter and promoter route of listing.

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LS okays amendment in General Insurance Business (Nationalisation) Act

Banking & Finance

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The Lok Sabha on Monday approved amendments to General Insurance Business (Nationalisation) Act, 1972. This will help the government shed its shareholding in public sector general insurance companies.

Meanwhile, Finance Minister Nirmala Sitharaman has assured that the amended Bill will not take away the rights of anybody. This remark is in response to the allegation that the government is privatising insurance companies that will be against the interest of employees and policyholders.

Also read: Govt moves to shed stake in a general insurance co

“All these allegations are baseless. The government is not taking away rights of anyone. Private sector insurance companies are raising money from public and with the help of that, providing insurance products at lower premium,” she said while responding to allegations on the Bill from the opposition bench. Later the Bill got passed with voice vote.

Earlier on July 30, while introducing the Bill, Sitharaman had categorically said that apprehensions mentioned by the members are not well-founded at all. “What we are trying to in this is not to privatise. We are bringing some enabling provision so that the government can bring in public participation, Indian citizens, the common people’s participation in the general insurance companies,” she had said.

The amendment is a follow-up to the Budget announcement in which Sitharaman proposed ‘privatisation’ of one general Insurance company in the current financial year. On July 30, she said a public-private participation in general insurance industry will help get more resources which will bring in better technology infusion and also enable faster growth of such companies.

Three amendments

The Bill proposes three amendments. First one aims “to omit the proviso to section 10B of the Act so as to remove the requirement that the Central Government holds not less than 51 per cent. of the equity capital in a specified insurer”. The second one will insert a new section 24B “providing for cessation of application of the Act to such specified insurer on and from the date on which the Central Government ceases to have control over it.”

And the third one will insert “a new section 31A providing for liability of a director of specified insurer, who is not a whole-time director, in respect of such acts of omission or commission of the specified insurer which has been committed with his knowledge and with his consent.”

“With a view to providing for greater private participation in the public sector insurance companies and to enhance insurance penetration and social protection and better secure the interests of policy holders and contribute to faster growth of the economy, it has become necessary to amend certain provisions of the Act,” statement of objects and reasons of the Bill said.

As on date, there are four general insurance companies in the public sector – National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited. Now, Besides these, there is one re-insurer, General Insurance Corporation and one specialised one for agriculture insurance.

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