Page 45 - Insurance Times May 2019

Court uphelds rejection of false claims damage to the roads due to "abnormal rainfall and water
logging". The claim was rejected on the ground that the
The claim of an infrastructure company that sought com-
damage had been caused by defective workmanship and
pensation from its insurer alleging damage to road because
there was no rain on the days mentioned by the builder.
of excessive rainfall was rejected as meteorological data
showed that there was little rain on those days. In Mahavir
The dispute led to a complaint before the National Con-
Road & Infrastructure Ltd vs Iffco Tokio General Insurance
sumer Commission. The commission rejected the claim
Co, the infrastructure company had undertaken the resur-
relying on the survey report which stated that there was
facing, metalling and asphalting of roads in Nashik. It took
only surface damage and there was no washout due to rain.
out an insurance policy covering 'material damage' but
excluding 'normal were and tear'. On appeal, the Supreme Court again rejected the claim,
asserting that the evidence showed that the claim was
The company claimed compensation from the insurer for baseless.

Allianz in talks to buy L&G’s general insurance unit

Allianz is in talks to buy Legal & General’s general insurance business in a move that would boost the German
company’s UK presence. A deal to acquire the business, which sells home, travel and pet insurance to consumers
and has been on the market for several months, could be announced in the coming weeks. The operation, which
merely brokeeven last year, is worth £240m, according to analysts at investment bank Jefferies.

Allianz has made no secret of its desire for acquisitions, and chief executive Oliver Bäte has made general insurance
— also known as property and casualty insurance — one of its priorities. But the company has struggled to find
reasonably priced targets. In an interview Allianz chief financial officer Giulio Terzariol, said: “I like the retail [prop-
erty and casualty insurance] business because it is very stable and tends to be more profitable.” In 2017 Allianz
bought a 49 per cent stake in LV’s general insurance business in a £713m deal that created the number three in the
UK market. That stake is due to rise to 70 per cent this year. It has also bought out minority investors in Euler
Hermes, the Paris-based trade credit insurer. Mr Terzariol said that if Allianz could not find good targets, it would
buy back its own shares. The company this year announced a €1.5bn buyback.

Legal & General, meanwhile, has been selling off noncore businesses as it focuses on life insurance, investment and
asset management. In 2017 it sold its Mature Savings business to ReAssure, part of Swiss Re, for £650m and it has
also sold operations in Ireland and France in recent years. Last year the general insurance business generated £410m
in premiums but profits dropped from £37m to zero. The company blamed cold weather in the first quarter of the
year and hot weather in the summer, which caused a rise in subsidence claims.

Title insurance for realty sector fails to pick up

The concept of 'Title Insurance' aimed at protecting the promoters and customers of the real estate projects against
many risks, has failed to take off due to high pricing and lack of clarity on a host of technical issues despite being
made mandatory for real estate projects. The Real Estate Regulation and Development Act 2016 (RERA) mandates
the purchase of Title Insurance for all new and ongoing property developments registered with the regulatory body.
Though IRDAI has already approved seven products of the seven general insurers including, New India Assurance,
National Insurance Company, ICICI Lombard General Insurance, Bajaj Allianz General Insurance, HDFC Ergo General
Insurance, Tata AIG General Insurance and Liberty General Insurance, there are hardly any transactions for the Title
Insurance products with many of them seeing only two or three deals, said an industry official. "We are keen that
market for the title insurance picks up as the government wants to promote housing for all in the country. How much
premium the insurance companies can charge is left to them,'' said an IRDAI official.

The Insurance Times, May 2019 45