Life Insurance Roundup, February 19, 2016


KKR bets on Indian life insurance with 10 percent stake in Max Financial | Reuters

KKR & Co LP (KKR.N) bought a 10 percent stake in India’s Max Financial Services (MAXI.NS) for about $140 million, the latest foreign investor to bet on the country’s booming life insurance market.

The investment was made from KKR’s Asian Fund II, the company said in a statement that did not disclose the value of the deal. The stake, purchased from a group of investors including Max Group founder Analjit Singh, would be valued at nearly $140 million, given the company’s market capitalisation of $1.35 billion.

KKR joins Singapore’s Temasek Holdings, Canada’s Sun Life Financial Inc (SLF.TO) and Japan’s Nippon Life Insurance Co to invest in India since the government last year changed regulations last year to allow higher foreign ownership in the $50-billion life insurance sector. 


Centre urged to withdraw service tax on life insurance premium

The Insurance Employees Union of Belagavi division has urged the Union government to withdraw service tax on life insurance premium, provide exclusive income tax rebate under Section 80 C of the Income Tax Act and extend tax benefit for short-duration policy contracts.

In a memorandum presented to the Union Finance Minister through Suresh C. Angadi, MP, here on Wednesday, union president G.V. Kulkarni and general secretary P.A. Joseph said that the service tax on the risk portion of the life insurance premium was acting as a disincentive now, as evidently seen in the huge drop in the sale of single premium policies.

It was unfair to levy a tax when a person bought a policy to cover the risk on his life to give a sense of security to the family, they said. 


BRIEF-New China Life Insurance plans bond issue | Reuters

Says board approves to issue up to 5 billion yuan ($767.31 million)bonds

Source text in Chinese: bit.ly/1U9PMJX

Further company coverage: ($1 = 6.5163 Chinese yuan renminbi) (Reporting by Hong Kong newsroom) 


Allianz Life Taps AIG Vet as New SVP of Enterprise Operations — Insurance Networking News

Allianz Life Insurance Company of North America has hired Stephen Kennedy as senior vice president of enterprise operations, the company recently announced.

In his new role, Kennedy will lead the insurer’s operations division, providing administrative services for annuities and life insurance across its distribution channels. This includes helping develop sourcing and digitalization strategies for customers and producers.

“We are excited Stephen has joined our team and look forward to the strategic and operational leadership that he brings,” said Allianz Life’s Chief Administrative Officer Cathy Mahone, in a press release. “Stephen’s experience will support Allianz Life’s continued efforts to provide increased value to our customers.” 


Record 2015 results show Northwestern Mutual is strong and growing — MILWAUKEE, Feb. 18, 2016 /PRNewswire/ —

Northwestern Mutual continues to grow, reporting record-level revenue, assets, operating gain and surplus in 2015, while expecting to pay an industry-leading total dividend of $5.6 billion in 20161, despite another year of historically low interest rates.

The results reflect Northwestern Mutual’s strong operating fundamentals. They also underscore the growing demand for the company’s distinctive approach to financial security.

“Clients need, want and deserve a financial plan that addresses a wide range of goals,” said John E. Schlifske, Northwestern Mutual chairman and CEO. “We help clients see their whole financial picture. Rather than focusing only on insurance or investments, we take a comprehensive planning approach that helps clients protect and grow their wealth.” 


Insurance Solutions powered by Affinion Announces New Simplified Issue Term Life Insurance Product | news.sys-con.com

Insurance Solutions, powered by Affinion, an industry leader in marketing and managing insurance solutions programs, is pleased to announce it is expanding its relationship with Minnesota Life Insurance Company, a member company of Securian Financial Group, Inc., to offer a new Simplified Issue Term Life Insurance product to the marketplace in 2016.  The new product enhances Affinion’s suite of industry leading life and accident insurance products and will be available through Affinion’s marketing partners.

Affinion’s partners will now enjoy the benefits of offering a product that: 


Govt’s low cost insurance schemes also drive financial inclusion | Business Line

By launching social security schemes last year– Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY), and Atal Pension Yojana (pension scheme) — the Centre has not only taken its financial inclusion drive a step further, but also tried to address the problem of very low penetration levels in insurance. Over the past year, about 3 crore policies have been issued under PMJJBY scheme (life insurance). This is more than the 2.6-odd crore new life policies issued in whole of 2014-15. The response under PMSBY (personal accident) has been stronger. More than 9.2 crore people have enrolled for the scheme. Until two years back, just 17 crore people were covered under personal accident insurance. Around 15.85 lakh people have registered for the Atal Pension Yojana so far. 


Charleston Gazette-Mail | Treasurer slams bill to overturn Supreme Court ruling

State Treasurer John Perdue expressed outrage Thursday over legislation intended to reverse a 2015 state Supreme Court ruling that concluded life insurance companies have an obligation to verify if a policyholder has died, and to turn over proceeds to the state Unclaimed Property Fund if no beneficiaries have come forward. “Now, they’re trying to find ways around the law so they can keep that money. It’s their gain and the family’s loss,” Perdue said of the bill (HB 4473), which would require insurance companies to pay life insurance benefits only after a claim is made, and proof of death is provided to the insurer. Perdue said that puts many beneficiaries in the impossible position of having to file claims for life insurance policies that they don’t know exist. “It happens all the time in the state,” he said. “They may not know that the life insurance policy is in a safe deposit box or a cigar box somewhere.” 


AXA Equitable Receives Accolades for Website Design | Business Wire

AXA Equitable, a leader in providing financial security and retirement products, received seven awards for its website www.axa.com. The recognition comes from Corporate Insight, a leading provider of competitive intelligence and user experience research to the financial services industry, via the Monitor Awards. AXA Equitable is recognized in two Monitor Awards categories: Life Insurance and Annuity.

“Over the last several years AXA has focused on our clients’ digital experience, understanding this is a core pillar of being a customer-centered company. We’re excited by this recognition – evidence that putting the customer first is making a difference,” said Saras Agarwal, Managing Director, Digital and Omni-channel Marketing at AXA US. 


Negative interest rates: BOJ policy hits homes as insurers halt sales, mortgage rates drop- Nikkei Asian Review

As Japan tries to make sense of the central bank’s negative interest rate policy, banks are beginning to cut interest on deposits while retailers offer alternative savings plans to attract consumers suddenly at a loss over where to park their money.

Fukoku Mutual Life Insurance said Wednesday that it will halt some sales of yen-denominated lump-sum whole life insurance policies at the end of February. Drastically depressed long-term bond yields mean the firm will find it difficult to maintain a guaranteed 0.75% rate of return for policyholders.

Taiyo Life Insurance is considering lowering its guaranteed interest on lump-sum whole life policies starting in April as well as raising premiums. The insurer also may discontinue selling the policy altogether when it makes its decision later this month. 


The lowdown | The Economist

FINANCIAL markets may be drawing breath after their recent falls, but one industry in particular has little reason to feel calm. The life-insurance industry has deeper problems than just temperamental markets. Years of doling out goodies from a seemingly bottomless sack are now catching up with these actuarial Santa Clauses, who in their worst nightmares did not imagine that the interest income from their investment portfolios could stay so low for so long.

Insurers tend to be prudent investors who like steady returns, which is why around 80% of their assets are in fixed-income securities. This served them well during the financial crisis, but today—with bond yields at historic lows, and even in negative territory—it hurts their investment income. This is particularly true for life insurers, which own over $21 trillion of the industry’s $28 trillion assets, and rely heavily on this investment income to pay policyholders. 


Some Japanese firms offering easier shifts for mothers with young kids | The Japan Times

Chihiro Nishijima’s cellphone rang one evening last May when she was away from Tokyo on a business trip.

It was from the day care center in Tokyo where her 1-year-old son was. They told her he had developed a fever and they needed her to come and pick him up.

Nishijima asked one of her friends to take care of him as well as her 6-year-old daughter until 10 p.m., as her husband was also away on a business trip.

Nishijima, 36, an employee at Sony Life Insurance Co., was preparing to go back to work full-time after giving birth to her son.

“Sometimes I feel nervous, but (my life is) fulfilling. I’m starting to feel like dedicating myself more to work,” said Nishijima. She resumed working full-time last October.

The number of women who choose to continue their career after taking child care leave has increased, mainly at major companies. In 2007, over 80 percent of working women took child care leave. 


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