Tag Archives: insurance

An Open Letter to the Insurance Companies

A big Hi to all the Indian Insurance Companies 🙂 How are you all? I am okay.

Let me provide some space to share a Business idea with you all. It might seem bogus to you, but for me it’s a challenge. I am not an Insurance professional. Though I did some work with US insurance market. And I think this could be a great opportunity to share this with you people.

The Life Insurance Corporation of India is still enjoying the larger part of the market share both in the urban as well as in the rural areas. For the private players it is really a tough job to tap the rural segment with the health or life insurance components. As the awareness level and the faith for the company is concerned. People are not ready to hand over their hard earned money easily to the private players. Though the agents are working hard by day and night.

But here is an opportunity before the private biggies to tap that rural market. The idea has popped up to my mind from the last few days.

You all know that Bird Flu has struck the west Bengal and this is perhaps the second time in India in a large and destructive manner. Private Players can enter the rural segment with the help of livestocks Insurance. They can try out to make people understand that government compensation is not enough to outweigh the amount of loss. If they could avail some livestock or fisheries insurance, their loss would have overcome. In crisis, it is easier to crack.

Once the Companies have some client base with this kind insurance, they can extend their market share with life, health. The rest of the tapping process you people know better than me 🙂

This is a great opportunity. So don’t waste your time. Go, get the market. Beat the time.

By the way, Actuaries can start to calculate the compensation, financial costs, premium levels and the profitability of Companies.

Sekhar Saha.


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Future Business of Car Accessories

From now I would like to share some of the future businesses that I think will dominate the respective segment.

1. Small Camera or Close Circuit Camera specially designed for the Cars, Automobiles.

Manufacturer and producers can think of the product from now. The no. of cars and vehicles are increasing day by day. After TATA’s NANO, the no. is certainly going to rise. Motor Insurance is mandatory in these days here in India. So the no. of Insurance policies is also going to rise. So will be the number of claims. Contradiction and disputes are obvious and tug of war might be seen as to who’s insurance company will pay. Close camera could serve the purpose of eye-witness and accordingly cops can file the case.

Car accessories manufacturers could start to produce sophisticated car camera. This particular accessory has good market potential within 2 to 3 years.

On the other hand, Insurance companies can promote the insurance tutorials among the young and general mass as to how one can avoid a lower insurance score. As insurance score in turn determines the cost of insurance for an individual. The more you claim, lower will be the insurance score and higher will be the insurance premium. Through the tutorials, insurance companies can avoid the problem of moral hazard and raise the profitability of their business.

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Risks and Financial Cost of Insurance

Deregulation and the boom in the Financial Sector of the Indian Economy entails the prospect of the Insurance Business. World biggies are entering Indian to tap the market, population with the effort of Joint Venture with the existing large and capable financial houses. More than 75% of the population are yet to be tapped through the insurance coverage. Earlier Insurance policies were seen as a tax saving vehicle and a life-risk hedging technique to some extent. But in these days, the generation Y and X are quite concern with the usability of the Insurance policies, specially for the health insurance policy. Insurance also serves the purpose of the money management. The popular reasons to the boom in the Insurance sector in India are:

1. Growing cost of living – Emergence of General Insurances)
2. Increasing Medical expenditures (Health Insurance)
3. Declining overall rate of interest (So Equity linked plans are getting popular for the better returns)
4. A tax saving instrument
5. Vehicle of overall savings (Money Management)
6. Increasing Insurance awareness
7. Diversified Economy – Diversified needs

The Insurance companies are facing lots of difficulties in reimbursing the claims to the insureds in the face of Natural Calamities, Terrorism Attacks, Political risks and so on. And of course you can blame the Global warming directly or indirectly. As the loss as well as the no. of claims rises, the cost of insurance (the premium in fact) rises too. There are financial loss as well that might trickle down to the society in the following ways:

1. Too much loss for the Insurance companies results in job curtailing
2. This in turn  impact towards the expenditure level and the production – Slow growth rate of the economy
3. Fear of financial recession and stagflation with the appreciation of rupee – to save the export oriented sector, RBI buys Dollar in exchange of rupee – so inflation rises. Sterilization effort would have minimum as Govt. has to provide the interests
4. Increase in the cost of Insurance

Most of the Insurance companies are working hard to figure out the premium level for the different insurance policies incorporation the above factors.


Filed under Finance