Insurance firms not impressed
New Delhi, Feb 28, 2013 (IANS)
Suresh Nandi, Feb 28, 2013, Mumbai, DHNS
Although the Union Budget 2013-14 proposals presented this morning appear to assist the insurance industry to widen its reach and distribution network -- like allowing banks to act as insurance brokers and introduction of the Insurance Bill in the Parliament - a large segment of insurance industry still feels it is a lost opportunity from the life insurance industry perspective.
Life insurance segment had hoped for tax exemptions in health and other segments, as the end customer will gain through the wider reach of Insurance in smaller towns and through banks’ distribution network.
HDFC Life MD & CEO Amitabh Chaudhry said Chidambaram has introduced several positive measures that would aid growth including a clear hope on passing of insurance and pension bills. "Increase of surcharge (from 5 to 10 percent) would result in a higher tax bill,” he added.
General insurance segment is happy as the Budget has some hidden positives for the non-life insurance sector, like unifying KYC norms for banks and insurers that will make the process of buying insurance hassle-free. Insurance companies will be empowered to open branches in Tier II cities without prior IRDA approval.
In this context, Bajaj Allianz General Insurance CFO Milind Choudhari said: "Simplifying the process of opening branches in non-metro areas will help boost penetration and reach out to the vast uninsured population in rural areas along with the steps of allowing banks to operate as brokers and banking correspondents to sell micro-insurance products. Setting up special adalats for TP (third party) claims will help in facilitating faster settlement of long pending TP claims.
Tata AIG General Insurance's CFO Miranjit Mukherjee said: "General Insurers will be able to offer insurance covers to customers in Tier II & III cities; whom we believe can gain much by protecting their home and assets from future unforeseen risks. The Regulator has always been supportive of the Insurance industry in its efforts to increase penetration and this move by the Government will aid the IRDA’s objective."
As Rashtriya Swastha Bima Yojana (RSBY) will be extended to cover autorickshaw pullers, taxi drivers, sanitation workers and rag pickers, it will augment the Governments’ objective of financial inclusion to the lowest strata of society, pointed out Mukherjee.
Bharti AXA General Insurance CEO & MD Dr Amarnath Ananthanarayanan said: “The consolidation of all government schemes like RSBY to extend coverage to rickshaw pullers, taxi driver, rag pickers and mine workers will increase the overall premium for the industry. The industry will look forward to the passing of the Insurance Bill in the budget session as an affirmative step for bringing FDI."