Insurance scheme may not see an uptick in demand this year too

Despite being badly affected by last year’s unseasonal rainfall, coffee growers in the country are still sceptical about the rainfall insurance scheme for coffee (RISC). “The first phase of receiving insurance applications for this year was held between February 23 and 28. It did not receive a great response as growers are a still a little unsure about the scheme,” said Sudarshan AC, secretary of the Coorg Planters Association.

The Coffee Board had late last year revised the coffee production estimates by 5.6% to 2,76,600 tonne for the current crop year and indications are that a further cut in estimates is expected in the coming days.

IT giant HCL Technologies has managed to bag an order worth Rs 393 crore from National Insurance Company (NIC) to provide information technology related services and operation management modules, necessary to equip NIC with cutting edge technology.

The company, for the project worth Rs 393-crore, is entitled to provide IT services and modernization of business process for a period of seven years to NIC.

HDFC Standard Life has decided to roll out health savings plan next fiscal.

From health insurance sector, the private life insurer targets a premium income of Rs 50 crore by the end of next fiscal.

Moreover, the company is eyeing a premium income of Rs 20 crore during the existing fiscal.

Health Minister Nicola Roxon announced that private health insurance premiums will go up by an average of 6.02% on April 1. She said she had written to several large funds in this regards and had challenged their request for larger premium rises.

"Without that close scrutiny, premium rises would have been higher for up to eight million Australians," she said.

"This year's increase is the result of increased benefits paid to patients, rising health service costs, and investment losses from the global financial crisis."

Inadequate or wrong information regarding insurance policies and consequent failure of consumers to get the benefits are major issues facing the Insurance Regulatory & Development Authority (IRDA), headquartered at Hyderabad.

The genesis of the problem arises out of the various Unit Linked Insurance Plans (ULIPs) sold by public and private insurance companies. With the insurance industry opening up to private players since 2000, there has been fierce competition for getting in as many people as possible to invest with the insurance industry with various incentives and promises, most of which are either false or misleading.

Insurance, like other financial businesses, is going through tough times. After a high growth phase over the last few years, the pace has tempered down, although the number of companies in the insurance business has increased along with fierce competition for the market pie. Jandhyala Hari Narayan, chairman, Insurance Regulatory & Development Authority (Irda), who took over six months ago, has been instrumental in bringing some changes during the trying times. He spoke to DNA Money's Nandini Goswami on the immediate concerns, growth prospects and challenges before the insurance sector. Excerpts:

How does global meltdown augur for the domestic insurance sector?