Page 9 - Insurance Times July 2016

IRDAI gives approval to 23 cross-border reinsurers Online insurance is the
talk of the day for agents
IRDAI has granted special approval to The approved CBRs include Ingosstrakh
23 Cross Border Reinsurers (CBR) for Joint Stock Insurance Company (Rus- IRDAI is planning to put in place an
the year 2016-17. sia), Asian Reinsurance Corporation insurance self-
(Thailand), Trust Re (Bahrain), United network plat-
This will allow Indian insurers to make Overseas Insurance Company form which could
reinsurance placements with a large (Singapore), Equator Reinsurances Ltd be used by an
number of reinsurers. agent to sell and
Cross-border reinsurers (Bermuda), East Africa
are those who do not Reinsurance Company Ltd service products on behalf of regis-
have a physical presence (Nairobi), Vietnam Na- tered insurers.
in India but carry on rein- tional Reinsurance Corpo-
surance business with In- ration (Vietnam), CICA Re "The insurance self-network plat-
dian insurance companies. (Kenya), Arab Insurance form will be available as a regular
Group (Labuan) and Union Insurance internet website or as a mobile app
According to PJ Joseph, Member (Non- Company (UAE), among others. or both," Randip Singh Jagpal, Senior
Life), IRDAI, approvals were given on Joint Director, IRDAI, said.
the basis of submissions made by CBRs Reinsurance assumes significance as it
and the recommendations made by is important to maintain solvency of The objective is to promote e-com-
the insurers and GIC Re in line with the insurer and to ensure that the merce in the insurance space, which
the guidelines issued by the authority. claims/other clauses are honoured as will lower the cost of transacting in-
and when they arise. surance business and bring higher ef-
ficiencies and greater reach.
Heavy discounts raise brows of IRDAI
"E-commerce is seen as an effective
Heavy discounts in insurance segments Margin (ASM) is calculated as, the ex- medium to increase insurance pen-
such as group health would soon come cess of value of assets over the value etration and bring financial inclusion
under the scanner of the Insurance of liabilities. Solvency ratio means the in a cost-efficient manner," Jagpal
Regulatory and Development Author- ratio of the amount of ASM to the said.
ity of India (IRDAI). amount of required solvency margin.
All products approved under the
The regulator has come up The higher the solvency ratio, regulations will be allowed to be sold
with a new set of norms for the more financially sound a through these platforms and they
maintaining the solvency ratio company is considered to be. should be prefixed with the letter "i-
of insurance companies, The required solvency ratio, " to distinguish them from regular
based on each line of busi- according to IRDAI norms, products.
ness. For segments like currently is 150 per cent,
health, motor and liability, the which is the minimum From both the industry and consumer
insurer would be required to maintain amount to be maintained at all times. angles this move will have significant
a higher solvency ratio since not only implications. Till now, only insurers
the premiums, the incurred claims are "Bigger insurers have made pricing so and web-aggregators were allowed
also high. With the regulator asking in- tough that it is difficult for others to of- to sell online. But now, many others
surers to maintain higher solvency for fer such rates. Now with the in the distribution chain will also be
these segments, insurance companies regulator's command, these practices able to sell online, according to Sanjay
would be required to reinvent their would have to discontinue since addi- Tripathy, Senior Executive Vice-Presi-
business strategies. tional solvency has to be maintained if dent - Marketing, Product, Analytics
claims are high," said the head of un- Digital & E-commerce, HDFC Life.
According to IRDAI, Available Solvency derwriting at a mid-sized private gen-
eral insurer. "This is the first time that IRDAI has
recognised such a platform with ro-
IRDAI may introduce 'Title Insurance' bust security features. Even differen-
tial pricing of products will be permit-
Aiming to provide cover to people in case of defective property titles and re- ted," he said, adding that the move
lated issues, IRDAI has proposed introducing a new product in India, 'Title In- will help insurers cut costs.
surance'. The Insurance Regulatory and Development Authority of India (IRDAI)
has said that it has decided to constitute a 7-member working group to study
the scope of 'Title Insurance' in the Indian market.

The Insurance Times, July 2016 9