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The Monthly Insurance Newsletter

General Insurance Industry Snapshot

The general Insurance Industry has seen a robust growth of above 18% in the first 7 months of this

fiscal. Last year till Oct 2016, the industry had underwritten a total premium of INR 72,500 Crores.

Insurer Segment Premium Market Share

up to the October 2017

Growth over corresponding

period last year For October

2017 Up to

October 2017

Public Sector 6709.47 38267.66 44.45% 10.11%

Private Sector 5808.97 37571.71 43.63% 25.93%

Stand-Alone Health 569.95 3759.38 4.37% 42.99%

Specialized PSU Insurers 449.21 6498.5 7.55% 21.33%

Total 13537.6 86097.25 100.00% 18.63%

* All figures in INR Crores * Source : IRDAI

LifeInsurance Industry Snapshot

Please note that there are a total of 24 life insurers in the Indian market with 23 players comprising the Private sector and LIC representing the public sector. The below figures are for FYP (first year premium) of Life Insurers till October 2017

Insurer Segment

Premium Market Share upto October

2017

Growth over corresponding

period last year For the month of

October 2017 Upto October

2017

Public Sector 9753.43 77977.72 73.61% 24.30%

Private Sector 4120.92 27961.98 26.39% 13.63%

Total 13874.35 105939.7 100.00% 21.29%

* All figures in INR Crores * Source : IRDAI

Volume 2 Issue 6, Nov 2017

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Mrs Alice G Vaidyan, Chairman and Managing Director of GIC Re, has been ranked seventh on the Most Powerful Women in Business in India by Fortune India. The list is published in this month's issue of the business publication. In a transcript of her interview with Fortune India, Mrs Vaidyan said that she wishes to see GIC Re in the global Top 10 Reinsurers list. She said that the company is likely to achieve this by 31 March 2018. GIC Re is now the 12th largest reinsurer in the world, up from 14th position last year

The Insurance Regulator is considering a

proposal that will allow private equity funds to promote Indian insurers but with stricter long-term commitments so as to reduce risks as investor interest grows

All general, life and standalone health insurers must link existing and new policies with immediate effect to the Aadhaar, the unique identification number given by the government to every resident. The IRDAI announced the mandatory requirement in a directive issued in November 2017

A study published in The Lancet journal, is the first comprehensive analysis of the health of India’s 1.34 billion citizens. It estimates key drivers of ill health, disability and premature death in all 29 states, many of which have populations the size of large countries. Child and maternal malnutrition has continued to be the biggest health hazard in India since 1990, while deteriorating air quality is a close second, according to the report.

The Weather Company, an IBM Business,

has launched its weather business in India. The Weather Company offers hyper local weather advisory to help its customers take proactive decisions based on actionable weather data. It also goes beyond advisory and correlates business data with weather data to offer insights. IBM had acquired The Weather Company globally around a year and a half ago

The Finance Ministry has invited applications to fill up the post of IRDAI chairperson, which is set to fall vacant post retirement of Mr. T S Vijayan in February

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Air Quality Index

An air quality index (AQI) is a number used by government agencies to communicate to the public how polluted the air currently is or how polluted it is forecast to become. As the AQI increases, an increasingly large percentage of the population is likely to experience increasingly severe adverse health effects. Different countries have their own air quality indices, corresponding to different national air quality standards. The National Air Quality Index (AQI) was launched in New Delhi on 17thSeptember 2014 under the Swachh Bharat Abhiyan.

The Central Pollution Control Board along with State Pollution Control Boards has been operating National Air Monitoring Program (NAMP) covering 240 cities of the country having more than 342 monitoring stations. An Expert Group comprising medical professionals, air quality experts, academia, advocacy groups, and SPCBs was constituted and a technical study was awarded to IIT Kanpur. IIT Kanpur and the Expert Group recommended an AQI scheme in 2014. While the earlier measuring index was limited to three indicators, the new index measures eight parameters. The continuous monitoring systems that provide data on near real-time basis are installed in New Delhi, Mumbai, Pune and Ahmedabad.

The proposed AQI will consider eight pollutants (PM10, PM2.5, NO2, SO2, CO, O3, NH3, and Pb) for which short-term (up to 24-hourly averaging period) National Ambient Air Quality Standards are prescribed.

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Based on the measured ambient concentrations, corresponding standards and likely health impact, a sub-index is calculated for each of these pollutants. The worst sub-index reflects overall AQI. Associated likely health impacts for different AQI categories and pollutants have been also been suggested, with primary inputs from the medical expert members of the group. There are six AQI categories, namely Good,

Satisfactory, Moderately polluted, Poor, Very Poor, and Severe.

AQI Associated Health Impacts

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Lloyd’s of London

Lloyd’s of London is one of the most important constituents of insurance markets and we take a quick look at this historical and significant hot spot in Global Reinsurance market

Lloyd's of London, generally known simply as Lloyd's, is an insurance market located in the City of London, which exists inside London. Unlike most of its competitors in the industry, it is not an insurance company. Rather, Lloyd's is a corporate body governed by the Lloyd's Act 1871 and subsequent Acts of Parliament and operates as a partially-mutualised marketplace within which multiple financial backers, grouped in syndicates, come together to pool and spread risk. These underwriters, or "members", are a collection of both corporations and private individuals, the latter being traditionally known as "Names".

The business underwritten at Lloyd's is predominantly general insurance and reinsurance, although a small number of syndicates write term life assurance. The market has its roots in marine insurance and was founded by Edward Lloyd at his coffee house on Tower Street in 1686. Today, it has a dedicated building on Lime Street, which opened in 1986.

Its motto is Fidentia, Latin for "confidence", and it is closely associated with the Latin phrase uberrima fides, or "utmost good faith".

Businesses at Lloyd's

There are two classes of people and firms active at Lloyd's. The first are members, or providers of capital. The second are agents, brokers, and other professionals who support the members, underwrite the risks and represent outside customers (for example, individuals and companies seeking insurance, or insurance companies seeking reinsurance).

The 1986 Lloyd's building in Lime Street

is the current headquarters of Lloyd's

Founded 1686 (331 years ago)

Founder Edward Lloyd

Chairman John Nelson

CEO Inga Beale

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Source : Online / Wikipedia

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The information contained herein is based on sources we believe are reliable and genuine and

should be understood to be general risk management and insurance information only

Members

For most of Lloyd's history, rich individuals known as Names backed policies written at Lloyd's with all of their personal wealth and took on unlimited liability. Since 1994, Lloyd's has allowed corporate members into the market, with limited liability. No new Names with unlimited liability are admitted, and the importance of individual Names will continue to decline as they slowly withdraw, convert (generally into limited liability partnerships). In 2014, Names with unlimited liability provided just 2 per cent of the overall capacity in Lloyd's.

Managing Agents

Managing agents sponsor and manage syndicates. They canvas members for commitments of capacity, create the syndicate, hire underwriters, and oversee all of the syndicate's activities. Managing agents may run more than one syndicate, as borne out in the fact that in 2016 the 99 syndicates were operated by just 57 managing agents.

Members' Agents

Members' agents co-ordinate the members' underwriting and act as a buffer between Lloyd's, the managing agents and the members. They were introduced in the mid-1970s and grew in number until many went bust; many of the businesses merged, and there are now only four left (Argenta, Hampden, Alpha and LMAS, which has no active Names).

Lloyd's Coverholder

Coverholders allow Lloyd's syndicates to operate in a region or country as if they were a local insurer. This is achieved by Lloyd's syndicates delegating their underwriting authority to coverholders. A coverholder can have full or limited authority to underwrite on behalf of a Lloyd's syndicate. It will usually issue the insurance documentation and will often handle claims. The document setting out the terms of the coverholder's delegated authority is known as a binding authority.

Lloyd's Brokers Outsiders, whether individuals or other insurance companies, cannot transact business directly with Lloyd's syndicates. They must hire Lloyd's brokers, who are the only customer-facing companies at Lloyd's. They are therefore often referred to as intermediaries. Lloyd's brokers shop customers' risks around the syndicates, trying to obtain the most competitive terms