Page 9 - The Insurance Times July 2020

PSU insurers to get Rs. claiming that customers can get their lic. Instead, these could be among the
vehicles insured within two minutes. candidates for privatisation, once a
3,475 cr soon Other value-added services include strategic sector policy is approved by

After scrapping the merger proposal, three-day assured claim servicing and the Cabinet.
the Centre amended the General Insur- a one-year repair warranty in select "PSES play an important role in defined
ance Business (Nationalisation) Act, cities. areas. We will come out with a coher-
1972 so that the authorised capital of "We will offer a product which is very ent policy where the private sector will
three PSU general insurers - Oriental
competitively priced and easy to buy be allowed, but PSES will continue to
Insurance Company (OIC), National In- like our services on the e-commerce play an important role," she had said.
surance Company (NIC) and United In- side of things," said Vikas Bansal, direc-
dia Insurance (UII) - can be raised to
tor and head of financial services at Reinsurers reluctant to
improve their solvency ratios and facili-
Amazon Pay India.
tate the business expansion and prof- cover covid only policies
itability of these companies. For Acko, which primarily caters to The absence of the reinsurance option
motor insurance, the tie-up is expected
The government already gazetted the to bring scale and reduce dealership for covid 19 policies has been a chal-
amendments and it is expected that commissions, said Varun Dua, CEO of lenge for the insurance industry, said
these companies will get capital infu- representatives of both life and health
Acko General Insurance.
sion of Rs. 3,475 crore soon. insurers.
Earlier, while calling off the two-year- Centre may classify Insur- Prasun Sikdar, Managing Director and
old proposal to merge the three PSU Chief Executive Officer, Manipal Cigna
general insurers, the Union Cabinet ance as a 'strategic sector' Health Insurance Co. Ltd, said indem-
had also approved a rise in authorised The Centre may classify insurance as a nity covers do not present a huge re-
share capital of NIC to Rs. 7,500 crore 'strategic sector' under the new insurance need since most corona pa-
from Rs. 2,600 crore, and that of UII privatisation policy, according to gov- tients are asymptomatic or have mild
(Rs. 200 crore) and OIC (Rs. 250 crore) ernment sources. In other words, symptoms. But a benefit-based corona
to Rs. 5,000 crore, respectively. there will be a maximum of four state- policy will need reinsurance due to the
It had also approved capital infusion of owned insurance firms in the long run. uncertainty about the diagnosis rate.
Rs. 12,450 crore for the three insurers Other sectors that could get the 'stra- Bhargav Dasgupta, Managing Director
tegic' tag are railways, oil and gas,
that included Rs. 2,500 crore already and Chief Executive Officer, ICICI
defence, space and atomic energy.
infused in these companies in 2019-20. Lombard General Insurance, also em-
Banking is also likely to be in the club, phasized on the need for reinsurance
Amazon and Acko tie up to with the government considering put- in benefit-based policies, such as Co-
sell motor policy ting up some stateowned banks on the rona Rakshak, due to the higher possi-
block. bility of fraud.
Amazon has entered the insurance dis-
tribution business in India, tying up Based on the new privatisation policy IRDAI has allowed two covid-19 poli-
with general insurance startup Acko to announced by Finance Minister (FM) cies-Corona Kavach and Corona
sell motor vehicle policies on its Pay Nirmala Sitharaman as part of the Rakshak. Corona Kavach is an indem-
platform. Atmanirbhar Bharat package, the gov- nity product, wherein a patient is re-
Amazon's entry as a corporate agent ernment will come up with a list of stra- imbursed the actual cost of treatment,
tegic sectors. and non-life firms are mandated to
is in line with its plan to become a full-
fledged financial services platform. "Insurance is being considered as a offer the product.
Amazon Pay currently offers UPI, wal- strategic sector," said a senior govern- Corona Rakshak, however, is a benefit-
let and co-branded credit card services ment official. based policy wherein the patient is of-
to users. The Union Cabinet recently scrapped fered a fixed amount on being hospi-
Amazon, based in Seattle, promises to the long-pending proposal to merge talized for 72 hours for covid-19. For
offer competitively priced products on the three unlisted general insurers - such policies, the full amount has to be
both the standardised third-party and Oriental, National, and United India - paid if the beneficiary is diagnosed
own-damage motor insurance policies, and then take the merged entity pub- with covid-19. T
The Insurance Times, July 2020 9