6 insurance cos to raise FDI limit: IRDA

Has underlined the need for increasing general insurance penetration which is mere 7% now

Hyderabad: T S Vijayan, chairman, Insurance Regulatory and Development Authority (IRDA), on Wednesday said that about six insurance companies had showed interest in raising stake from overseas partners to 49 per cent from the current 26 per cent.

“These companies are from both life and non-life. However, there are various stages of approval for increasing the foreign direct investment (FDI) in insurance companies,” Vijayan told media here at the event organised by ICICI Lombard General Insurance Company Ltd to announce that it had issued one lakh policies of the long term two-wheeler insurance.

However, he declined to reveal names of the companies as they are yet to submit a formal application on stake increase. In March this year, the central government has enhanced cap on FDI in insurance sector from the earlier 26 per cent to 49 per cent. Replying to a query, he said that IRDA had formed a committee on health insurance which would look in long-term policies in this space.

“We expect the committee to submit its report soon. They have more or less finalised the report,” Vijayan said. “We have to look at it and also at solvency, claim settlement procedure,etc before proceeding ahead,” he said noting that often health insurance claims are settled by third party administrators.

“There is a demand for long term health insurance policies, health savings policies in the market,” he said. Earlier, the IRDA chief underlined the need for increased insurance penetration in the country, noting that in general insurance space in countries like the US, 80 per cent of assets are covered by some insurance company or the other, while it is hardly 7 per cent in India.

ICICI Lombard issues 1 lakh 2-wheeler policies

ICICI Lombard, one of the leading general insurance companies in the country, on Wednesday said it issued 1 lakh policies of its long-term two wheeler insurance plan. The company launched the product in April this year. ICICI Lombard is the first general insurance company to have launched such a long-term insurance product and reached this milestone. It celebrated the occasion with a special event here in which IRDA chairman T S Vijayan took part as chief guest.

“This innovative product addresses key customer issues in the two-wheeler insurance segment. Therefore, it has received overwhelming response from customers with online sales accounting for 40 per cent,” Bhargav Dasgupta, MD and CEO, told media at the event here. We look forward to providing adequate coverage to the millions of two wheeler riders in the coming months, he added. The long-term plan which is valid for three years makes life easier for people as they don’t have to worry about renewals, he added.

India is home to over 16 crore two-wheelers registered across the country. As per rough estimates, nearly 60 -70 per cent of them are plying on the roads without insurance. Incidentally, two-wheelers account for 26 per cent of road accidents in the country, according to statistics available with the Union Ministry of Road Transport and Highways. “Given the low product ticket size and distribution challenges in the case of one-year policies, it was critical that a solution has to be found. Our long-term policy is the solution,” Dasgupta added.