BEEMA BEEKSHAN A JOURNAL OF THE INDIAN INSURANCE INSTITUTE

APRIL 2019 # VOLUME 50 # ISSUE 8 (FOR PRIVATE CIRCULATION ONLY)

Editor:

Amar Kumar Goswami

Associate Editors:

Debarati Chakraborty

Gargi Singha Roy

Photography: Rakhi Bhowani

Sudipto Sarkar

Sukumar Mondal

THIS ISSUE CONTAINS:

� Life Insurance Business as

on 28th. February, 2019 � Events � Products � How term insurance is

popular � Insurance News � Insurance Penetration &

Density � Visit of officials of III,

Mumbai � Happenings � The Last Page

VALIDATING HAPPINESS!!! The World Happiness Report

2019 produced by the UN

Sustainable Development

Solutions Network list the

happiest countries. While

Finland topped the list

amongst 156 countries for

the second consecutive year,

the other two nordic

countries, viz., Denmark and

Norway occupied the second

and third places

respectively. India ranked

among the bottom 20

countries at 140.

Remarkably, the super

power counties, viz., UK, Germany, US, Japan and Russia do not figure within

the top ten. The second economic superpower China occupies 93rd. Position.

The key variables in deciding the list of happiness were Income, Freedom,

Trust, Health, Life expectancy, Social Support and Generosity. These might be

the features for ascertaining the happiness of a country, but, in present age,

whether these alone make individuals happy?

A recent statistics say that the world upload more than 1.8 billion photos each

day! And most of these photos say the same thing- ‘look at me; this is how I live,

this is where I dined, this is the places I visited.’ And if no one ‘likes’ it, it does

not bring happiness. Our happiness does not depend on the way we live, the

way we eat; rather it depends on the others’ likings and comments on social

media. Our degree of happiness depend on the number of people validating

our happiness. Whatever amount of happiness the moment might have given to

us, unless liked by substantial viewers, it reduces to unhappiness! Any happy

moment is now incomplete without getting validated by the outside world.

Happiness is not a matter of inner engineering now.

As Tarun Khiwal, the renowned photographer put it once: ‘we don’t know how

to really live happily in the moment any more. Instead of living it ourselves, we

are capturing on camera to show it to other people.’ The social media has negated the age old belief that happiness is a state of

mind, a sole domain of one’s own inner feeling based on his or her belief

system, a matter of inner satisfaction. Happiness is all about how one feels

about himself, regardless of what anyone else does or thinks. It’s a knowing

that we are human, we are flawed, and we are unique in our own way.

However, happiness is now about approval, getting likes, comparing our lives

to others. It’s unfortunate that we have allowed to reign the feelings of others

on us. We have leased out our innermost space to the outside world. Nothing

remains solely of us anymore.

The views expressed in this magazine are not necessarily those of the Indian Insurance Institute, Kolkata or its Editorial Board. Please send your suggestions and comments to our E-Mail ID: calcuttainst@gmail.com

Photo courtesy: Sri Somenath Pal

LIFE INSURANCE BUSINESS LIFE INSURANCE BUSINESS LIFE INSURANCE BUSINESS LIFE INSURANCE BUSINESS as on as on as on as on 28th28th28th28th.... FEBRUARYFEBRUARYFEBRUARYFEBRUARY, 201, 201, 201, 2019999::::

FIRST YEAR PREMIUM (in crores):

Individual:

Single Premium

Individual:

Non- Single premium

Individual:

Single + Non-single

Premium

Gross premium

including P&GS

Absolute volume

Market

share %

Growth

%

Absolute

volume

Market

share %

Growth

%

Absolute

volume

Market

share %

Growth

%

Absolute

volume

Market

share %

Growth

%

LIC 20813.25 77.37 -13.48 21936.40 40.25 7.89 42479.65 52.52 -3.69 117414.81 66.26 1.39

TOTAL 26900.87 -4.34 54500.27 9.60 81401.14 4.56 177213.57 7.60

No. 1 Private Life insurance company: HDFC Life Ins. Co. 12419.89 7.01 33.46

NUMBER OF POLICIES:

Individual:

Single Premium Policies

Individual:

Non- Single premium Policies

Total No. of Policies

(Single+ Non single)

Absolute volume

Market

share %

Growth

%

Absolute

volume

Market

share %

Growth

%

Absolute

volume

Market

share %

Growth

%

LIC 952836 81.20 -7.92 16058621 73.18 2.50 17011457 73.60 1.86

TOTAL 1173467 -4.72 21943562 3.42 23114029 2.98

No. 1 Private Life Insurance Company: SBI Life Ins. Co. 1311230 5.67 6.86

Source: IRDAI

EVENTS_______________ The Insurance Institute of India took coaching classes for agents of Postal Life insurance at Kolkata. Concurrent sessions were held at Yogayog Bhawan, Kolkata and Howrah Head post Office from 11.03.2019 to 20.03.2019. The last session was held only at Yogayog Bhawan from 25.03.2019 to 27.03.2019.

The list of faculties included S/Sri. Subrata Kumar Ghosh, Saroj Kanti Chakraborti, Sunil Kumar Das, Purna Gopal Saha and Amar Kumar Goswami.

Sri Dilip Kumar Ghosh was the course coordinator.

LIC’S NAVJEEVAN � NON-LINKED, WITH PROFIT, ENDOWMENT LIFE ASSURANCE PLAN. � Two Premium paying options:

• Single Premium

• Limited Premium payment term of 5 years

Single Premium

Payment

Limited Premium payment of 5 years

OPTION 1 OPTION 2

Absolute amount Assured to

be paid on DEATH

10 times of tabular Single

Premium

10 times of Annualised Premium 7 times of Annualised Premium

S.A. range 1,00,000 to 9,00,000

(multiples of 20,000)

1,00,000 to 9,00,000

(multiples of 20,000)

1,00,000 to 9,00,000

(multiples of 20,000)

Above 9,00,000

(multiples of 50,000)

Above 9,00,000

(multiples of 25,000)

Above 9,00,000

(multiples of 25,000)

Minimum Age at ENTRY 90 days (completed) 90 days (completed 45 years(nbd)

Maximum Age at ENTRY 44 years(nbd) 60 years (nbd) 65 years (nbd)

Minimum Maturity Age 18 years(completed) 18 years(completed)

Maximum Maturity Age 62 years(nbd) 75 years(nbd) 80 years(nbd)

Policy term 10 to 18 years

Rebate for Higher Basic S.A. BSA Reduction in

tabular S.P. per

1000 BSA

BSA Reduction in tabular S.P. per

1000 BSA

1,00,000 to

1,80,000

NIL 1,00,000 to 1,80,000 NIL

2,00,000 to

4,80,000

Rs. 20 2,00,000 to 4,80,000 Rs.5

5,00,000 to

9,50,000

Rs. 25 5,00,000 to 9,75,000 Rs. 7

10,00,000 and

above

Rs. 35 9,75,000 and above Rs. 9

MODAL Loading

N.A. Mode Rebate as % to tabular annual

premium

Yearly mode NIL

Half yearly mode 2%

Quarterly mode 3%

Monthly (NACH) & SSS 3.5%

Rebate for ONLINE SALE 2% of total tabular premium

5% of total tabular premium

Participation in Profit Loyalty addition at the time of exit in the form of DEATH during the policy term or MATURITY at such rate

and on such terms as may decided by the Corporation

OPTIONAL RIDER BENEFIT LIC’s Accidental Death & Disability Benefit Rider

OPTIONS available under the

base plan

Settlement option (for Maturity benefits):

Option to receive maturity benefits in instalments over the chosen period of 5 or 10 or 15 years under an

in force as well as paid up policy.

Option to take Death Benefit in instalments:

Option to receive death benefits in instalments over the chosen period of 5 or 10 or 15 years under an in

force as well as paid up policy.

BOTH THESE ARE SUBJECT TO CONDITIONS OF MINIMUM AMOUNT OF INSTALMENT

Surrender Value

& Loan

Available

Subject to terms and conditions

NOTE:

THIS IS ONLY AN OUTLINE OF SOME FEATURES OF THE PLAN, AND IS, FOR THE PURPOSE OF

INFORMATION ONLY. FOR DETAILS, OR BEFORE PURCHASING THE POLICY, OR PRSENTING TO

THE PROSPECT, PLEASE VISIT OFFICIAL WEBSITE OF LIFE INSURANCE CORPORATION OF INDIA

TO ASCERAIN THE TERMS AND CONDITIONS IN DETAILS AND THE CORRECTNESS OF THE

INFORMTION GIVEN ABOVE.

Some key takeaways of a survey conducted last month by Max Life Insurance and Kantar IMRB

India Protection Quotient stands at a low of

35: The India Protection Quotient is the degree to which

an individual feels protected on a scale of 0 to 100.

It measures among other things, awareness and

ownership of life insurance, level of preparedness

and preference for term plans.

Protection levels in urban India

are low

Few know of term insurance,

even fewer buy it CITY INDIA PROTECTION

QUOTIENT

(ON SCALE OF 0-100)

% AWARE OF

TERM PLAN

% WHO HAVE

BOUGHT IT

Delhi 46 64 34

Hyderabad 44 44 23 Ahmedabad 44 62 22

Chennai 42 51 28

Vishakhapatnam 41 57 35

Lucknow 40 66 35

Mumbai 39 51 19

Bhubaneswar 36 64 40

Patna 35 65 22

Jaipur 33 44 10

Bengaluru 28 28 11

Kolkata 28 31 12

Pune 27 36 11

Bhopal 25 32 11

Ludhiana 21 15 9

ALL INDIA 35 47 21

Age also plays a role in awareness and purchase of term insurance__________________________________

Age group % WHO HAVE LIFE INSURANCE

% AWARE OF

TERM PLANS

% WHO HAVE

BOUGHT THEM

25-30 years 59 44 17 31-35 years 65 43 21 36-40 years 69 48 23 Over 40 years 71 53 26

Reasons for not buying term plans 80% of respondents don’t think

they will die suddenly

And what makes people buy Actual result of purchase by peers

have biggest impact I have other investments 20% Positive results of term

insurance in known circle

65%

Don’t have enough money 18% Purchased in known circle 56%

Never thought about life

insurance

18% Was approached by agent/

bank officer

55%

High premiums have to be

paid

18% Recent mishap / death in

known circle

42%

Don’t like to think about

death

17% After they have a child/

children

28%

No/low returns on my

money

14% Onset of lifestyle diseases 28%

Family will get the money,

nothing in it for me

14% Post getting married 25%

God is there to protect us 13% High tax deduction from

salary

22%

Numbers will not add up to 100

because of multiple reasons

Near death experience 17%

The India Protection Quotient 2019 study had 4,566 respondents from five metros and nine Tier 1 cities.

Courtesy: The ET Wealth (February 25- March 3, 2019)

Insurance News

BNP Paribas sells 9.2% stake in SBI Life for Rs. 4,751 crore Mumbai: BNP Paribas Cardiff, the joint venture partner in SBI Life Insurance, has sold 9.2 per cent of its stake in the private life insurance company for Rs. 4,751 crore. This is one of the largest insurance deals in the country since 2016, when the first insurance company got listed. Of the 9.2 per cent stake sold by BNP Paribas Cardiff SA, CA Emerald Investments, a part of investment firm Carlyle Group, acquired a 9 per cent stake in SBI Life Insurance in the open market through stock exchanges. The equity for this investment of the Carlyle Group came from CA Emerald Investments. However, on average, with a sale price of Rs. 515.01 a piece, the stake was sold at an 11.3 per cent discount to Thursday’s closing price of Rs. 580.50. This is also lower than SBI Life’s IPO price. The insurance company had come out with an IPO in September 2017 at Rs. 700 a share.

The shares of SBI Life Insurance dipped 12 per cent to Rs. 510 on the BSE in intra-day trade on Friday, after over 9 per cent stake in the company changed hands through block deals. However, it recovered quickly and closed at Rs. 612.25, up 5.47 per cent from its previous day’s close. Similarly, other listed life insurance companies such as ICICI Prudential Life Insurance and HDFC Life Insurance also closed 0.97 per cent and 3.04 per cent respectively, above their previous day’s close. Due to market volatility, the ULIP sales of the life insurance companies have taken a hit and companies are focusing more on pure protection business, which will boost their margins. The protection mix of SBI Life is 11 per cent on the value of new business, while that of HDFC Life and ICICI Prudential Life is 16.6 per cent and 8.63 per cent, respectively, on annual premium equivalent (APE). Courtesy: Business Standard: 02.03.2019

General Insurers’ Claim Ratios Improve, but Gap Between Segments Persists. General insurers improved their record at claim management in government- sponsored and corporate group health segments in 2017-18, but the huge gap between incurred claim ratios of individual and group segments persists. Thanks to the increase in pricing and lower competition. General and standalone health insurers recorded an overall incurred claim ratio of 94% in 2017-18, compared to 105.6% in 2016-17, as per IRDAI’s handbook on Indian Insurance Statistics 2017-18. However, government and group businesses clocked ratios of 115% and 107% respectively, while the corresponding ratios of family floater and individual segments were far lower at 70% and 73% respectively. In the year ago period, incurred claims ratios for government and group segments stood at 122% and 125% , while family floater and individual segments recorded 73% and 79% respectively. Public sector companies’ retail health ratios are higher than those of private companies. “There is increase in pricing discipline from insurers which is leading to improvement in loss ratios,” said Shreeraj Deshpande, principal officer and CEO (officiating), Future Generali General Insurance. Incurred claim ratio represents claim paid out of net premiums earned during the year. A high claims ratio of over 100%, which the industry has been grappling with in the group segment for years, indicates that companies are paying out, more claims than the premiums they have collected. “Insurers consider group insurance as a low margin wholesale business that is driven for turnover growth targets, and the free financial float in the form of annual advance premium received from large clients than the conventional underwriting profits,” said Mahavir Chopra, director, life, health and strategic initiatives, Coverfox.com. This is why corporate group covers come with lower premiums, fewer exclusions and shorter waiting periods, unlike retail health. On the other hand, retail health business has consistently been a profitable proposition. From a policyholder’s point of view, a very high ICR can also point to an upcoming hike in insurance premiums, especially senior citizens. Within group insurance, private insurers have fared better than public sector insurers. “They have been able to get control over ICR, by selecting the right risks, and hardening premiums on group health insurance,” added Chopra. In the case of public sector companies, ICR remains high for individual segments too.

“In my view, this is largely due to increasing proportion of ageing population in their portfolio. This is the primary reason, most PSUs increased their premiums lately, and there is a likely increase of premium for select companies in the coming fiscal too,” he said. On the other hand, private sector and stand-alone health insurers are reaping benefits of sharper underwriting and risk selection, and a relatively young portfolio.

From policyholders’ perspective, a very low claims ratio may not be desirable. However, this ratio is different from claim settlement rate. “So, if an insurer has 50% incurred claim ratio it does not mean that claims are being rejected but could also be that the premium or acquisition costs are high. However, the incurred claim ratio is an important indicator in any case—if I were a customer I would want to buy insurances that have incurred claim ratios in the 70-100% band,” said an industry watcher. Courtesy: The ET: 01.03.2019

Life cos seek indemnity cover nod Kolkata: Life Insurance Council, the representative body of the life insurance companies, would request the Insurance Regulatory and Development Authority (IRDA) to allow life companies to offer indemnity health cover again. IRDA had barred the life insurance companies to offer indemnity health products from July 2016. Currently, the life insurers can only offer fixed-benefit health products. HDFC Life MD & CEO Vibha Padalkar pointed out that the council has formed a committee headed by her to deal with the issue. “In the next two-three weeks, we shall submit a proposal to IRDA for resuming health indemnity cover for life companies.” According to her, insurance remains a logical growth path for a life insurance company as the underlying risk remains the same. Being risk managers for a longer term, the life insurers are at a natural vantage position to offer better value proposition to meet the healthcare needs of their customers. “This is the primary reason that across the world, we see various examples where the same insurer is responsible for both life and health insurance covers. As per OECD Insurance Statistics 2017, there are many countries that allow life and health business under the same insurer,” she added. It is learnt that representatives of ICICI Prudential Life, Exide Life and other life companies are also in the committee. Samit Upadhyay, the chief risk officer and head product of Tata AIA Life, also feel that life companies should be allowed to offer indemnity health cover as ‘add on’. Padalkar also feel that a pure term product along with health indemnity rider could be a very good option. “Allowing life insurers to offer indemnity products would stimulate competition among insurers to offer innovative products with competitive benefits and costs resulting in a more comprehensive choice of the customers.”

The life companies claimed that according to IRDAI Annual Report 2017-18, general insurance penetration in India stands at 0.93% compared to life insurance penetration which is 2.76%. “With life insurance industry’s penetration at 3.3x of the general insurance industry, opportunity to distribute health indemnity for life insurers would help bring about a tectonic shift in the distribution and penetration,” an official of a life insurer said. Out of the 6.8 lakh crore health expenditure in India in 2016-17, only Rs. 30,000 crore was covered by health insurance (around 5%). This is abysmally low compared to high income countries, which cover 65-75% of the population (including government spend). According to recent WHO report, globally, governments provide an average of 51% of a country’s health spending while more than 35% comes from patients funds (called out- of- pocket expenses). Courtesy: The TOI: 06.03.2019

Regulator may Tweak Rules Governing ULIPS Mumbai: The insurance regulator is all set to revamp rules governing ULIP schemes for the first time in seven years as it tries to improve the product proposition. The regulator, Insurance Regulatory Development Authority of India (IRDAI), is likely to tweak ULIPs, pension plans and traditional products. It is likely to relax norms on buying annuity after the accumulation phase, do away with minimum capital guarantee, and allow partial withdrawal on pension plans. Similarly, insurers can be allowed to charge extra premium for buying riders with ULIPs. IRDAI has constituted a working group to consider the recommendations of the stakeholders and the Committee on Review of Product Regulations- Life before coming out with the final regulation. “Insurance companies will have an option to charge for riders by cancelling units, or by charging extra premium. However, companies will prefer to charge premium so that they can give commission to agents,” said an actuary who did not wish to be identified. At present, units are deducted from ULIPs if one buys riders with it. Insurance companies offer various riders with ULIPS such as critical illness and unit deduction is optional. In what would revive the pension insurance space, the regulator is likely to relax norms on buying annuity after the accumulation phase. Also, like other pension products including the PPF, partial withdrawal could be allowed for reasons such as illnesses, child marriage, education in insurance plans as well. Minimum capital guarantee would be made optional. Today, companies have to invest heavily in debt to offer minimum guarantee. “The big changes in pension products, including the option on capital guarantee, partial withdrawal and freeing up annuity norms will make pension plans attractive,” said Anil Kumar Singh, appointed actuary, Aditya Birla Sun Life Insurance. On traditional products, the surrender

value at present is paid on 10-year premium paying term if the policyholder has paid a minimum of two years, and for products above 10 years premium paying term, if one has paid premium for three years. The regulator has proposed to guarantee surrender value irrespective of the premium paying term if the policyholder has paid a minimum of two premiums. This will make companies responsible for right selling. “The regulator’s view is that companies have to take responsibility if a policyholder surrenders,” said another actuary of a life insurance company. The last changes were introduced in 2010. Earlier, ULIPs were front loaded in terms of charges. Courtesy: The ET: 11.03.2019

Prudential to sell 3.7% in I-Pru Life Mumbai: UK’s Prudential Corp, the joint venture partner for domestic banking major ICICI Bank, is selling up to 3.7% in ICICI Prudential Life Insurance (I-Pru Life) for about Rs. 1,600 crore through block deals on Tuesday. On Monday, the UK-based company mandated ICICI Securities to sell a little over 5.3 crore shares of the life insurer at a floor price of Rs. 300 a share. According to the terms of the deal, Prudential Corp is selling about 3.7 crore shares of I-Pru Life with the option to sell an additional 1.6 shares, in case there is excess demand. The price of Rs. 300 a share is at 6.9% discount to the stock’s Monday closing price of Rs. 322 on the BSE. In Monday’s weak market, the stock closed 2.3% lower. Courtesy: The TOI: 26.03.2019

We deeply mourn the sad demise of

Late SUDHIR KUMAR PAITH. He was

the General Secretary of the Indian

Insurance Institute, Kolkata from

1967-73 and again in 1974-75.

May HIS SOUL rest in peace.

INSURANCE NEWS IN HINDI MEDIA

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INSURANCE PENETRATION AND DENSITY IN INDIA

YEAR LIFE NON-LIFE INDUSTRY

Density (USD)

Penetration (percentage)

Density (USD)

Penetration (percentage)

Density (USD)

Penetration (percentage)

2001 9.1 2.15 2.4 0.56 11.5 2.71

2002 11.7 2.59 3.0 0.67 14.7 3.26

2003 12.9 2.26 3.5 0.62 16.4 2.88

2004 15.7 2.53 4.0 0.64 19.7 3.17

2005 18.3 2.53 4.4 0.61 22.7 3.14

2006 33.2 4.10 5.2 0.60 38.4 4.80

2007 40.4 4.00 6.2 0.60 46.6 4.70

2008 41.2 4.00 6.2 0.60 47.4 4.60

2009 47.7 4.60 6.7 0.60 54.3 5.20

2010 55.7 4.40 8.7 0.71 64.4 5.10

2011 49.0 3.40 10.0 0.70 59.0 4.10

2012 42.7 3.17 10.5 0.78 53.2 3.96

2013 41.0 3.10 11.0 0.80 52.0 3.90

2014 44.0 2.60 11.0 0.70 55.0 3.30

2015 43.2 2.72 11.5 0.72 54.7 3.44

2016 46.5 2.72 13.2 0.77 59.7 3.49

2017 55.0 2.76 18.0 0.93 73.0 3.69 Courtesy: IRDA Annual Report: 2017-18:

Source: Swiss Re, Sigma, Various Issues. 1.Insurance density is measured as ratio of premium (in US Dollar) to total population. 2.Insurance penetration is measured as ratio of premium to GDP

One day DREAM asked LIFE: When will we all come true..? LIFE smiled and replied: Never. Because, the day all of you come true, I’ll lose my meaning.

VISIT OF VISIT OF VISIT OF VISIT OF THE OFFICIALS OF THE OFFICIALS OF THE OFFICIALS OF THE OFFICIALS OF III, MUMBAI IN III, MUMBAI IN III, MUMBAI IN III, MUMBAI IN

OUR INSTITUTE:OUR INSTITUTE:OUR INSTITUTE:OUR INSTITUTE:

It was a pleasure and memorable moment for us at the III, Kolkata when Sri S. N. Gandhi, Secretary and Sri B. V. Vaidya, Asstt. Secretary, Insurance Institute of India, Mumbai, our apex body, paid a visit to our office in the evening of 28th. March 2019. After seeing the office, the library room and training hall of the

Institute, they spent some time with us interacting on various issues, viz., the role of the associated institutes, academic aspects concerning insurance studies and happenings in Insurance Institute of India, Mumbai. On behalf of us, Sri Subrata Kumar Ghosh, Working President, S/Sri Dilip

Kumar Ghosh, Prodip Dutta and Amar Kumar Goswami, Vice- Presidents, Sri

Sudipto Sarkar, General Secretary, Sri Suvasis Sengupta, Treasurer and Sri

Arunava Kundu and Smt. Rakhi Bhowani, Joint Secretaries took part in the

discussion. Sri Sudipto Sarkar, General Secretary, apprised of our activities in

the matter of Insurance awareness.

Sri S.N. Gandhi, Secretary, III, Mumbai stressed upon the need in spreading

insurance education. He gave valuable suggestions and told as to how we may

motivate more and more students for insurance studies.

HAPPENINGS

Cyber security has assumed tremendous importance for last couple of years. KOLKATA INSURANCE INSTITUTE has understood the immediacy in bringing the issues arising therefrom to add to the knowledge of the insurance professionals and particularly, the members of the Institute and arranged an international seminar on ‘CYBER SECURITY AND INSURANCE’ at Biswa Bangla Convention Centre, Kolkata on 8th & 9th March, 2019. Imparting education in this field was rightly felt as a major need for those who are associated with management of risk and insurance at various levels in their profession and discharge their responsibilities in their respective insurance companies. There is a lurking fear in our mind as nearly 60% of cyber crimes are in financial services.

Setting the tune of the seminar, Sri B. K. Nayak told in his introductory address that the subject itself is international and beyond the boundary of the country, albeit, it is at a very nascent stage now. Neither we know the quantum of risk, nor we know the insurance aspect of it. He termed information technology as the fourth industrial revolution. He added that this nomenclature was given by an eminent economist. According to him, we have to comfort the risk, manage the risk and go ahead. He gave serious thought to the issue of cyber defense and aired the view that we shall do well to know what kind of protocol we maintain from the behavioral angle. It is true that we have to maintain a behavioral pattern even in our personal level (i.e., security softwares, etc.)

Sri Malay Poddar, G.M., National Insurance Company Ltd. told that in future cyber insurance may not remain in the domain of miscellaneous branch of insurance. Landscaping its importance, he informed that presently the cyber risk is estimated at $2 trillion business globally. In his formal inaugural address, Sri John Pullinathan told that commercially the development of insurance started with general insurance; but in India, Life insurance is dominant. He informed that the first award of third party negligence was given in 1935 due to falling of tree. Aptly introducing with the technical part of the seminar, Sri B. K. Nayak spoke on the topic ‘Introduction to Cyber Risks and the Need for Insurance in a growing digital society.’ He told that we are in a digitally driven society. Giving the example of Estonia, the digitally managed country, he pictured as to how the technology is the main driving force of the country. During this, he referred to cyber hygiene and clause schwals. In this connection he also told that scope of cyber security insurance is immense. Emphasizing the need of technology he told that in a populous country like India, we need technology to effectively manage the quantity and quality. While talking on the threat aspect he talked about cyber terrorism. Sri Nabankur Sen addressed on the topic ‘Cyber Risks are fast evolving and dwell in your IT system- An analysis of the threat perception.’ In view of the fact that Sri Sen has spent nearly four decades in a major public sector bank as well as an important private sector bank, his experience coupled with his professional knowledge in Information Technology, made his valuable presentation largely touch upon cyber risk management in banks, although he made occasional reference to cyber risk insurance at appropriate places in his talk. He informed the House that cyber security systems can become vulnerable and thereby lead to damages which may cause national and individual level security issues. He informed the participants that cyber crime as a service is now available. He was afraid that the next war will be cyber war. In this connection he told about state sponsored cyber crime. Further, elaborating on the

subject, he told about risk mitigation. Patch management is one of the important aspect of controlling cyber crime, he explained. Telling about risk transfer through insurance, he concluded his address by telling that security is a journey, not a destination. Sri B. Suresh spoke on the topic ‘Risk Quantifications and the challenge- Best practices in Risk Assessment for Insurance Coverage.’ Interacting on the issue, he told that threats, controls, costs and damages are the important aspects of insurance coverage. Defining further, he told that the sector is prone to cyber attack. He concluded with a positive note by saying that cyber is not a natural event- it is a man-made event. The session was followed by a panel discussion on ‘Cyber Risk management- International best practices in managing IT infrastructure and its users.’ It was further followed by another panel discussion on the topic: “Insurance has the role to cover the residual Cyber Risks.Types of coverage available for the Individual Tech users and the Business Houses’. Deliberating on the topic ‘Cyber Coverage and Underwriting Considerations’ Sri B. K. Nayak viewed through a different angle when he observed that by asking questions for underwriting, the underwriter is playing an important role in educating the customer also. The Singapore based speaker Sri Ram Garg spoke on ‘Cyber Insurers role in cyber risk management, pre and post event.’ While delving in the topic, he told about pre-event risk management services. Deliberating on preventive issues, he told about cyber risk engineering services, security risks and assessment tools. He also talked about possible corporate responses to a cyber incident and insurer’s role. He defined the key pillars of a cyber insurance policy as Preventive, Assistance, Operations and Liability. The first speaker on the next day was Sri Manoj Kumar A S who addressed on ‘Claims procedures for First Party loss, Material Damages and TP Liability for Data loss, IP infringement and Personal Data’. He deliberated on cyber insurance claims and cyber claim statistics. He told that coverage for cyber risks include data liability, administrative obligations, reputational and response costs, multimedia liability, cyber extortion and network interruption.

This was followed by a panel discussion on ‘Market strategy for the Insurers to leverage from the growing threats and legislations’. Mrs. Archana Vaze, Assistant Professor (Non-Life) at III’s College of Insurance, Mumbai spoke on ‘Risk Modelling and placement scope & strategies.’ She told as to who are exposed to risks. The concluding session was taken by Sri Ram Garg on ‘Re-insurers views and placement support in India and in International Market.’ Sri Uttam Banerjee proposed the vote of thanks.

The session was followed by Convocation ceremony of Kolkata Insurance Institute.

The professor in the Management

class asked:

Give an example of the height of

mixed emotions?

A student replied: “When a man sees

his mother-in-law falling from the

7th. floor on his new Mercedes!”

Published by Sri Sudipto Sarkar, General Secretary, Indian Insurance Institute, Kolkata (FOR PRIVATE CIRCULATION ONLY)

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