Oct 2017

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The Monthly Insurance Newsletter

Dear All,

It gives me immense pleasure in informing you that we have

received our Reinsurance Broking License from IRDAI, our

insurance regulator.

With this approval, Zoom Insurance Brokers has begun its

journey as a Composite Insurance Broker which will act as a great enabler to support our Clients and Insurance partners. In the last 8 years, we have evolved as the "Broker of Choice" for many prominent business houses and customers.

For the coming years, our focus will be on Customer Centricity, Insurer

Relationships, Technology and establishing ourselves as Thought Leaders in

various disciplines and bring in Reinsurers who can share their global experience

with our clients and insurance partners.

Our Reinsurance Operations will include Analysis and placement of Treaty and

Facultative programs and our team will be handling both General and Life

Reinsurance placements.

I once again congratulate you all on this momentous occasion and may we all

look forward to an interesting journey ahead.

Volume 2 Issue 5, Oct 2017

Prashant Gupta, Founder & CEO

Oct 2017

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Meet : Our Head-Reinsurance

We are proud to introduce Mr B Balakrishnan, who has

recently joined as Head of our Reinsurance Practice.

Bala comes with more than 30 years of work experience in

the Indian and International markets having handled multi-

million dollar programs for General Insurers and Reinsurance

Companies. Bala’s core competencies lie across the

Reinsurance spectrum including Treaty Underwriting and

structuring, Retrocession placements and Technical

accounting. He brings with him great technical acumen

coupled with a transparent and honest approach. Bala is

based out of Mumbai and has various education certifications

from Insurance Institute of India and Chartered Insurance

Institute, London.

Brief History of Reinsurance

The Italian word ‘rasichurare’ (which literally means ‘to insure again an insured risk’)

appeared for the first time in a document from Florence in the fifteenth century. That

document was a part of the contract papers for shipment of wool worth 200 gold

florins from Southampton to Porto Pisano. In fifteenth and sixteenth centuries,

coinsurance practice was much in use in maritime trades. Reinsurance appeared

formally in the seventeenth century when the insurers first felt the need of setting up

capital reserves in order to comply with solvency margin norms.

First formal reinsurance contract dates back to 1813 between Eagle Fire Insurance

Company of New York and Union

Insurance. Reinsurance Company Limited

was the first sole reinsurance company in

the world set up in England in 1867, but it

became dysfunctional after a short span of

time. In 1907, Mercantile and General

Insurance Company was set up in

England and with the creation of this,

British reinsurance grew to such an extent

that it became a globally recognized

market.

Previous Appointments:

• ITI Reinsurance Ltd, Mumbai

• Trust Re, Bahrain

• Qatar Insurance Company,

Doha

• Dubai International Insurance

• United India Insurance

Company Ltd, Chennai

Oct 2017

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Reinsurance in India

Reinsurance before Nationalization

In India, the period from 1951 onwards was marked by a rapid growth of insurance business.

This was because of large-scale economic development in the country during the period. The

increased insurance business required the reinsurance protection. At that time reinsurance

was arranged from the foreign markets mainly British and Continental.

In 1956, Indian Reinsurance Corporation, a professional reinsurance company was formed by

general insurers operating in India and it started receiving voluntary quota share cessions from

member companies. In 1961, the government made it completely statute on the part of every

insurer to cede 20% in Fire and Marine Cargo, 10% in Marine Hull and Miscellaneous insurance

and 5% in Credit and Solvency business to approved Indian reinsurers, namely Indian

Reinsurance Corporation and Indian Guarantee and General Company. The mentioned

percentages were used to be allocated equally between the two reinsurers. Thus, the

reinsurance market was further strengthened by the addition of second professional

reinsurers. In 1966, Indian Insurance Companies Association initiated the formation of

Reinsurance Pools in Fire and Hull departments to increase the retained earned premium in

the country.

Reinsurance post Nationalization

At the time of Nationalization of general insurance business in 1971, there were 63 domestic

insurers and 44 foreign insurers operating in the country and each company had its own

reinsurance agreements.

In 1973, these companies were reconstituted into four companies: National Insurance

Company Limited; New India Assurance Company Limited; Oriental Insurance Company

Limited; United India Insurance Company Limited. These four companies were thus left to

operate in the country as subsidiaries of a holding company known as General Insurance

Corporation of India (GIC) as per General Insurance Business Nationalization Act (GIBNA), 1972.

After nationalization, in 2000, GIC was notified as India’s sole reinsurer in the domestic market.

In 2002, General Insurance Business Nationalization Amendment Act replaced earlier GIBNA,

1972. Subsequently, four subsidiaries got delinked from GIC and in March 2003, GIC officially

became “GIC Re”. After that, the outward reinsurance agreements of the Indian insurance

companies were rearranged to maximize domestic retention.

From 1st April 2003, it was mandated by law that each and every insurer in

India has to mandatorily cede every risk’s 5% to GIC Re.

Oct 2017

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Recent Updates and Developments

Two online nonlife insurers, Acko and Digit

Insurance, have received the final approval

from the insurance regulator to carry out

operations

The number of elderly people in India--

currently standing at 100 million--is set to

grow at the fastest pace among all

demographic groups. While India’s overall

population is likely to grow by 55% between

2000 and 2050, the corresponding figures

for the 60+ and 80+ age groups are 326%

and 700%, according to a report and thus

our country will require robust health

insurance programs to cater to this group

Max Bupa Health Insurance has launched

health ATMs - the first such innovation in

the country. The machines conduct non-

intrusive medical tests and issue health

policies for up to INR1 million (US$15,400)

without manual intervention.

BSE (Bombay Stock Exchange) has entered

into an agreement to set up a joint venture

with the world's largest insurance exchange

Ebix to establish a robust distribution

exchange platform for insurance products.

The new venture to be branded as BSE-Ebix

will launch the insurance distribution

exchange platform, that will allow

distribution outlets, stock brokers, wealth

management advisors and financial

institutions across the country to sell life

and non-life insurance products, reported

Press Trust of India.

Insurance claims cannot be rejected if the

reason for the delay in filing it is

satisfactorily explained, the Indian Apex

court has said in a recent ruling

General Insurance Corporation (GIC) got

listed in the stock exchange. The issue was

sold between 11th & 13th October and was

subscribed 1.38 times. GIC Re’s issue is the

third biggest in the history of the domestic

markets after Coal India and Reliance

Power. Coal India had raised Rs 15,470

crore in October 2010 and Reliance Power

raised Rs 11,700 crore in 2008

Star Health & Allied Insurance, the first

standalone health insurance company, has

formally kicked off a sale process. The

company is also the largest standalone

health insurer in the country that also offers

personal accident and travel insurance

covers.

Oct 2017

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Did you know

Apple is a popular fruit in the country grown mostly in Himachal and

Jammu Kashmir. Contrary to popular perception, Apple was introduced in

India in 1916 by Samuel Stokes in a place called Thanedar in Himachal

Pradesh.

Stokes was the heir to a really prosperous family in America.

His family was the owner of Stokes and Parish Elevator

Company which later merged with Otis Elevators.

Stokes heart lied with working for under-privileged (Leprosy

mission) and he also actively participated in the Indian

Freedom movement. The first apple trees bore fruit in 1926

and Stokes died in 1946. Next time, when you bite one of

your favourite fruit, remember it was Samuel Stokes who

brought this fruit to India

In 1932 he converted to Hinduism, taking the name "Satyananda" and was very active in India’s

freedom struggle for Independence from Great Britain. He was jailed for sedition and promoting

hatred against the British government in 1921, becoming the only American to become a political

prisoner of Great Britain in the freedom struggle. He died on 14 May 1946 after an extended illness

shortly before Indian independence.

Your feedback matters a lot, please do write to us at: feedback@zoominsurancebrokers.com

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