Ensure that claims are settled in the shortest possible time frame

Dear All,

Following is an excerpt from the speech delivered by the Union Finance Minister Shri Pranab Mukherjee delivered during his meeting with the Chairmen of Public Sector Insurance Companies, recently held.

"" We have travelled a long distance since the time Insurance was nationalized in 1956.  The growth in premium underwriting has witnessed strong CAGR of 18.85% since 2001. Insurance penetration and density has improved since then. The public confidence in the industry is more positive today then it was earlier.  Asia, excluding Japan, will contribute nearly a quarter of global growth in next 5 years and within Asia, India will be the fastest growing general insurance market during this period with an average expected growth of 15%. 

I have few concerns in the General Insurance non-life sector where the insurance market is structurally challenged in terms of profitability. India is the only country in Asia with a combined ratio of 105 and above consistently during the last 5 years and all the four PSU General Insurance Companies have been largely responsible for such a trend. The combined ratio for four non-life PSU insurers, which was in the range of 136% to 140% during 2010-11, has come down and now is in the range of 120% to 129% for non-life general insurance companies.  There is a desire in general insurance PSUs to grow at a faster rate and be the market leader.  The growth rate in GDPI for all four companies, during last year was 21.39% with a market share of 55.76%.  While the emphasis on growth in premium is understandable, what is however concerning is the underwriting losses which stood at a whopping 6,134 crore during 2011-12. The overall profitability clearly is driven by the investment income, with continued deterioration in the core business of premium underwriting.  It is well understood that growth in top line cannot be at the cost of bottom line.  The Ministry has suggested certain welcome steps to curb the unhealthy competition in underwriting premiums and it will help restore the sustained business growth.

I complement the PSU insurance companies in reaching out to the people in far-flung areas. However, I have pointed out earlier in my Zonal Meetings the need to cover all the remaining un-served areas especially district headquarters.  You will agree that the per capita income has grown over the years and a large number of people in smaller towns are saving and are looking for insurance products.   It is in this regard that we have decided that LIC as well as PSU general insurance companies shall necessarily have a presence in all the towns up to Tier IV classification as per census.  Such an early foothold will be advantageous in business sense also to the PSU Insurance Companies and it should be done without any further delay. A reorganization of the existing loss making Branches, especially those of non-life general insurance companies and also de-congestion of branches which are concentrated in metros can help this expansion in un-served areas.
I would also like to highlight the need to ensure that claims are settled in the shortest possible time frame. I notice that large numbers of claims, especially in the General Insurance companies, are pending for final settlement. You may like to take up a drive to ensure that this pendency is minimized.
We have a long way to go if we have to grow on a sound footing. Policyholders trust is of utmost importance and all our functioning should be geared up with this philosophy. There is also a need to have a balance between growth and profitability and our strategy in coming years should be guided accordingly. I have full confidence in all of you and your team and hope that PSU companies will continue to be the leaders in their respective segments and in a financially sound and healthy manner. ""

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...... EDITOR

NEW INDIA COIMBATORE RO MANAGEMENT ATTITUDE TOWARDS RETIRING EMPLOYEES

DEAR MEMBERS,

A letter addressed to Mr. V. Devanathan, CRM of Coimbatore RO by our Madurai Unit Secretary, Mr. A.B.Venkata Subramanian, under GIC Emp.Union-Coimbatore Region is appended below about the attitude of the Coimbattore Regional Management. For further details if any, you may please contact Mr. Uma chandran at Coimbatore RO or Mr. AB Subrahmanian at our Madurai DO.

On behalf of GICEU-AP, we strongly condemn the un-ethical attitude of Coimbatore RO management towards fellow colleagues, who retire from services of the Company after playing their respective roles for a long long innings. It is very much shameful on the part of Management for such a mindset they have.

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GIC EMPLOYEES UNION (COIMBATORE REGION)

MADURAI DO UNIT

2^nd July, 2012

SRI V. DEVANATHAN

CHIEF REGIONAL MANAGER

THE NEW INDIA ASSU. CO. LTD

REGIONAL OFFICE

COIMBATORE

Sir,

You have conducted MBS memento award presentation function today at Rathna Residency Hall, Coimbatore, for all eligible members of all Dos under Coimbatore RO.

At this juncture, we wish to remind you that you have objected for conducting the Retirement cum farewell function  outside   the office premises for three of our employees retired at Madurai DO.  You have also strictly advised to conduct the functions within the office premises so as to curtail the management expenses.  Furthermore, you had also informed us during our discussion that if we conduct such functions outside  the office premises, it would set a wrong precedence.

So, we were constrained to conduct the functions   outside the office premises with  the contributions  made by  all the  employees  only and without causing a single pie expense to the Management.  The local management has also not taken any initiative to conduct such functions involving high HR values.

It is very much strange  that you have violated your own words and set a  precedence by your own deeds, by conducting MBS memento function outside the office premises, that too in a three star hotel.  

Though we are not unhappy over felicitating our employees in such a grand manner we expect the same honour for our retiring employees also.  This, we say, in no ill feelings but with a strong desire that no retiring employee feel the disparity in felicitations. But, by your gesture, we presume that you have given a message that any decision can be taken and sanctified at your office level.

Now, we take it rightly that henceforth such retirement functions can also be conducted in the above lines.

M GANESAN IYER                  A B VENKATASUBRAMANIAN

(PRESIDENT)                                   (UNIT SECRETARY)

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----EDITOR