New India Assurance sets premium target of Rs 14,500 cr

HYDERABAD: General insurance companyNew India Assurance has set a premium collection target of Rs 14,500 crore for the next financial year, a top company official said here today.

“We are expected to cross Rs 12,000 crore premium collection by the end of current financial year (2012-13). In the next financial year. Our target is to reach about Rs 14,500 crore,” the Chairman and Managing Director of New India Assurance, G Srinivasan, told reporters.

Speaking after inaugurating a micro office of the company at West Marredpally here this evening, he said, “In India, we hope to complete premium collection of Rs 12,000 crore and Rs 2,500 crore from overseas operation respectively in 2013-14.”

Reacting to a query on reports that the third-party insurance will be hiked by 85 per cent for cars below 1,000cc, Srinivasan said IRDA has come out with an exposure draft and invited comments from various stakeholders like insurers, customers.

“IRDA is expected to come out with its final decision at any moment and we are waiting for it. Normally, the increase will be done from April 1,” he said.

Asked about the likely increase, Srinivasan said the reports on 85 per cent hike is the initial draft.

Based on the feedback given IRDA will decide on what will be the real increase, he said adding, “The moment the IRDA decision comes out, we will know the exact increase…we can’t predict it now.”

“There will be a hike because motor third party losses are very high and insurance industry is making losses and so there is a need for price correction,” he pointed out.

“In fact, the insurance industry has been asking for a substantial price correction because the losses are very high, but we have to wait and see how the regulator takes the decision,” Srinivasan added.

New India Assurance registered a gross premium of over Rs 10,000 crore in 2011-12, Srinivasan said.

The state-run firm has 1,600 offices in the country, he said adding, “We are also operating in 22 countries and plan of getting into three more countries including Qatar, Myanmar and Canada by next financial year.”

From being preferred insurer of major industrial houses in the country, the company’s focus is now moving to retail lines of business which has great scope to develop in future, Srinivasan said.

“In this regard, we aim to increase our agency strength from 45,000 agents to 1 lakh agents in the next two years. We also have plans of opening micro office centres across the country. In the last four months we have opened 300 micro offices (one-man offices) across the country and we will be opening another 300 such offices in 2013-14,” he added.

The general insurance business in India has been growing at a good pace in the last three years with a growth of more than 20 per cent per annum, he said.

The industry last year collected Rs 55,000 crore premium and by 2015 the industry is likely to cross Rs 1 lakh crore premium collection and by 2020 the industry is likely to touch Rs 2.5 lakh crore, he said.

There is a huge potential waiting to be tapped and with increased awareness in the general insurance industry and this type of growth will continue for many more years, Srinivasan added.

Source :The Economics Times.
Date : 26/03/2013

JOB ROTATIONS, THE RIGHT TWIST? In order to capitalise on the varied skill-sets of employees, organisations have realised the increasing significance of job rotation

Training and development of employees has become one of the most complex and critical aspects in organisations. Not only are training practices expensive, but also time-consuming and vital in talent management. As a result, HR has been exploring many new avenues in training of employees and trying to study the benefits of using non-conventional methods for the same. One of the practices that is fast catching up among companies is job rotation. Not only is the method easy to implement, but also provides a wide base for learning within the organisation in the form of OJT (on-thejob training). The method has proved to be very effective and there are many companies today that have adopted it as an exclusive form of training for their employees as it promotes a wholesome development.
Ashwin Shirali, regional director, HR, Accor, India, tells us what job rotation is, “Job rotation is the practice of exposing an employee to different job roles and assignments over a period of time, each of which would have differing competency and skill-set requirements from the person performing such roles. Employees benefit significantly from job rotation by developing diverse competencies, skills and functional knowledge that are offered by the different job roles. It is a commonly known fact that over 70 per cent of learning occurs from ‘doing’ and the practice of job rotation draws heavily from this philosophy.” There are numerous advantages of job rotation for the employees other than the most obvious ones. Kamal Karanth, MD, Kelly Services India, elaborates on the same: It reduces the monotony of the job: It allows employees to break the everyday routine of their jobs, experience different type of tasks and motivates them to perform well at each stage of job replacement; It aligns competencies with an employee’s long-term developmental requirements and career goals; It fast-tracks one’s career as employees gain exposure to newer areas and this hones their skills further. Sriharsha Achar, chief people officer, Apollo Munich Health Insurance, tells us how non-conventional training practices have revolutionized training and development, “Over the past few years, we have found that the traditional teaching approaches have been largely trainer-directed and follow specific steps of activities and demonstrations, and have not been able to provide our trainees with valuable skills or even with a body of knowledge that lasts much beyond the end of such programmes. Hence, we are using a variety of strategies from the educational world that make training and development more participative and long-lasting for our employees across the country.” Thus, such innovations in training and development can go a long way in improving the present methods for employee learning.

Source : The Economics Times.
Date :26/03/2013

HDFC Ergo to focus on health, motor segment to sustain growth

MUMBAI: Private sector general insurerHDFC Ergo is planning to increase its focus on health and motor insurance segments to sustain its high growth, apart from weather segment, a top company official said.

“As we are reaching the scale, there is scope for growth in motor business along with health segment. We will also increase our focus on the weather segment,” HDFC Ergo General Insurance Marketing andStrategic Planning head Mukesh Kumar told PTI today.

As per the data furnished to the regulatorIrda, HDFC Ergo’s premium collection stood at Rs 1,998.16 crore during the April-December period of this fiscal, up 34.51 per cent over the corresponding period last year while the general insurance industry is estimated to be growing at around 19 per cent this year.

However, Kumar said it will be challenging for the company to sustain high growth after reaching the scale.

“It will be challenging to sustain such high growth, given the high base. But we are sure to grow better than the industry in the next fiscal,” Kumar said.

He also said the company will focus largely on the retail side of the business to grow in the future.

On the corporate business front, he said there are opportunities in the marine segment.

Meanwhile, the company today launched ‘Student Suraksha- Student Overseas Travel, which is designed for Indian students who are planning to pursue higher education abroad or for those already studying abroad.

“New product launches will not be many next financial year as we already have most of products in our portfolio,” he said.

HDFC Ergo is a 74:26 joint venture between HDFC and Ergi International, which is the primary insurance entity of the Munich Re Group.

Source :The Economics Times.
Date : 25/03/2013

Smart things to know about personal accident cover

1) A personal accident insurance policy covers a person against accidental death and permanent or temporary disability due to the mishap.

2) Though the medical expenses related to the accident are usually covered to a certain percentage of the cover, some insurance companies may charge an extra premium for it.

3) Insurance companies use the work conditions, nature of job and lifestyle of the insured to evaluate potential risk and calculate the sum assured and premium. Occupations with high risk, such as mining or adventure sports, attract a higher premium.

4) Family plans are also offered under the scheme. The cover in case of the death of a non-earning spouse or children is typically a percentage of the cover of the earning member.

5) The personal accident cover is typically available to individuals up to 70 years of age. The coverage under this policy is worldwide, but the claims are paid only in the Indian currency.

6) These policies are typically issued for a maximum of one year. There is no grace period for the continuity of insurance and expires on the last day of the policy.

Aegon Religare Life Insurance MD and CEO, Rajiv Jamkhedkar likely to step down

MUMBAI: Aegon Religare Life Insurance’s managing director and CEO, Rajiv Jamkhedkar, is likely to step down from the post, according to a person with knowledge of the development.

The company’s current appointed actuary, KS Gopalakrishnan, is likely to be elevated to the position, the person said. Aegon Religare Life, however, did not confirm the development.

The company is a joint venture between India’s Religare EnterprisesBSE 2.91 %, Dutch insurer Aegon and Bennett, Coleman & Company. It has, of late, witnessed a drop in income—for the April-February period, the company’s new business income premium was down 32.27%. Experts say shareholders are looking to change the top management of life insurance companies, which are likely to face challenges after the sector regulator tweaked norms of traditional products. Companies will have to focus on efficiency and manage expenses within a limit based on the nature of the product, they say.

Among the other recent top-level management changes in the sector, Anup Rau was appointed as MD of Reliance Life. He was earlier chief distribution officer at HDFCBSE 0.38 % Life.

Source :The Economics Times.
Date : 21/03/2013

E&Y’S RAJAN MAY JOIN Tata Group HR Head to Step Down

Satish Pradhan, executive vicepresident in charge of group human resources at Tata Sons, will leave the conglomerate in April, a move that is seen as part of changes initiated by Chairman Cyrus Mistry.
“Satish Pradhan has decided to pursue academic, environmental and social causes dear to him. Hence, he will be transitioning from his role of chief-group human resources by the end of April this year. He will continue his association with the Tata Group in a consulting/advisory role. His successor will be announced in due course,” said Tata Sons, the group’s holding company, in reply to an email query.Pradhan, 57, joined the Tata Group in 2001 after a stint with ICI Plc at their London head office as organisation design and development manager. He had earlier worked with Steel Authority of India, CMC and the Indian arm of ICI, among others. NS Rajan, 51, partner and global leader (people and organisation) at Ernst & Young, may take over from Pradhan, said people familiar with the matter. “There are talks of restructuring in the HR division at the conglomerate,” said a senior consultant at E&Y. Won’t Be Easy for Rajan to Exit E&Y 
And now with Cyrus Mistry as head, fresh infusion of talent from outside may be the call,” the consultant said.
In February, the Tatas appointed Mukund Rajan, who has worked in the group in various roles for over 16 years, as the group’s brand custodian, spokesperson and chief ethics officer. Madhu Kannan, former chief executive of BSE Ltd, is also part of Mistry’s core team.
E&Y, however, denied that Rajan was leaving.
Responding to an email query from ET, a company official said, “The information in the mail below is not correct.”
Rajan did not respond to calls. “NS Rajan is expected to join in April, but it will not be an easy exit for him,” said another HR veteran. This is because those in the rank of partner (and higher levels) at consulting and advisory firms invest in the companies and get a share of profits, which makes it tough for them to quit. Also, the notice period often ranges from 3-6 months.

 

Source : The Economics Times.

Date :21/03/2013

 

Budget 2013 to give a big boost to insurance sector

For its size and potential, India has an abysmally low level of insurance penetration and density. The levels of protection (insurance sum assured as a percent ofGDP) for India is only about 55% while it ranges between 150% and 250% in some emerging and mature economies. India is under insured and the sector represents a clear case of a “missing market”.

Economist and political scientist Joseph Schumpeter, in the early 20th Century, had argued that financial intermediaries, aimed at mobilizing savings including insurance, are essential for economic development. Using data from 80 countries over the 1960-89 period, economists Robert G King and Ross Levine have presented cross country evidence consistent with Schumpeter’s view that the role of financial systems in promoting economic growth is not “over-stressed”. It is in this regard that insurance related measures announced in the Budget assume greater significance.

One of the big reasons for the low penetration, especially in general insurance, has been the near absence of insurance offices in smaller towns. There isn’t a single office of any private general insurance companies in any town of tier II level and below. Of the four PSU insurance companies, only 6% of offices are located in Tier IV towns and below. Having an office of public sector general insurance as well as LIC in every town with a population of 10,000 or more will go a long way in increasing insurance penetration.

The insurance business through Bancassurance is only about 7.5% of the total insurance premiums and only about one-sixth of the existing 100,000 bank branches are engaged in selling insurance. Permitting Banks to be a broker will enable them to sell insurance policies of more than one company and as broker, will now represent the interests of the customers. Since they will merely be an agent, it does not involve any risk on the banks. Banks will not be required to open a separate subsidiary for this purpose and can use the existing branch network. The move will provide customers a wider range of insurance products.

Motor insurance is the largest portfolio of general insurance industry, in premium and claims outgo. The number of outstanding third party claims on date is more than a million and involves Rs 22,000 crore. What’s more worrying is that almost one-third of these claims are pending for more than five year. Another 21% and 27% are pending for a period ranging from 3-5 years and 1-3 years. Recourse to “Lok-Adalats” to expedite settlement through a campaign throughout the country should enable quick disposal.

Source : The Economic times
Date : 21/3/2013

Laser eye surgery not cosmetic, rules forum Rebecca Samervel TNN

Mumbai: The Maharashtra State Consumer Disputes Redressal Commission has rejected an insurance company’s contention that a laser surgery to correct one’s vision is a cosmetic surgery. Upholding a district forum order that held The United India Insurance Company Ltd guilty for repudiating a claim on this ground, the commission directed it to pay an Andheri-based senior citizen the insured amount of Rs 50,000 with a compensation of Rs 1,000.
“There is no documentary evidence led by the appellant (insurance company) to demonstrate that lasik surgery (a form of laser surgery) is not a corrective therapy, especially when the complainant was experiencing serious problem in the eye,” the commission said.
K P Desai (61) had regularly subscribed to the mediclaim policy issued by theinsurance company from 1990 till 1997. During the validity period of the last mediclaim, he underwent a corrective lasik surgery in one eye and the hospitalcharges amounted to Rs 50,000. He filed a claim for reimbursement of the hospital charges. However, the insurance company repudiated the claim on the grounds that the operation was purely cosmetic and aesthetic, and did not fall within the purview of the insurance policy. ‘Hosp cost admissible after 5 years of cover’
Mumbai: With The United India Insurance Company Ltd refusing to reimburse his hospital charges amounting to Rs 50,000 following a lasik surgery, Andheri senior citizen K P Desai filed a complaint in 1997. On April 19, 2004, the South Mumbai District Consumer Disputes Redressal forum ruled in Desai’s favour.
The company then filed an appeal against the order. It said the forum had erroneously held that the lasik therapy was not one of the procedures excluded in the terms and conditions of the insurance policy. Lawyer Sureshchandra N Chataule represented Desai in the commission, which pointed out that under the provisions of mediclaim, hospitalization expenditure, including for surgery, is admissible after the completion of five years of continuous insurance coverage. “We find that there is no statement by the company as to how the exclusion clause of the mediclaim comes into operation while denying reimbursement after the completion of the fifth year,” the commission said, dismissing the appeal. —Rebecca Samervel

Source : times of india
Date : 20/3/2013

This Isn’t Fiction: Literature Goes to B-School

Top institutes using old classics to teach leadership
When Sumedh Sen, a second year PGP student at the Indian Institute of Management-Calcutta, joined the programme, he had no clue the institute would turn to the 17th century novel Don Quixote for leadership lessons. But today, it’s not just Quixote, Sumedh reads the most influential works of the Spanish Golden Age, discusses with his peers and professors in his elective class and tries to learn some tenets of leadership by drawing parallels from day-to-day life and examples from the modern corporate set-up. At a time reading old literary masterpieces is a waning practice, several top B-schools, including the top three IIMs, are harking back to the Arthur Millers, Ibsens, Shaws and Gandhi to teach students how to lead in the challenging business environment of the modern times. The enthusiasm among students, mostly from engineering and commerce backgrounds, has prompted IIM-Calcutta to offer an elective this year on Organisational Leadership, Inspiration, Dilemmas and Action, which uses inputs from literature. Down south, IIM-Bangalore this year invited Sankaran Manikutty, faculty at IIM-Ahmedabad, to give leadership lessons. Teaching Classics a Growing Trend
Manikutty was invited to give leadership lessons to post-graduate management students at IIM-Bangalore through innovative use of literature.
Not only is the use of literary masterpieces to teach tenets of leadership becoming a growing trend among top business schools, several institutes are even offering final year electives that use literature to teach leadership.
Some of the new topics institutes are talking about include ethical dilemma in leadership and diversity, how leaders should have the ability to dream or have a vision and translate that into action, managing inter-personal conflict, search for identity and career choices, among other aspects of organisational behaviour, leading and team-building.
“This is a new and growing trend. That is why this year, for the first time, IIM-Bangalore invited me to teach leadership through literature, something similar to what I do in IIM-Ahmedabad,” says Manikutty. “Classics are great for trying to bring out various issues of leadership and connecting with organisational behaviour,” he adds.
Among the books that Manikutty used at IIM-B were TS Eliot’s Murder in the Cathedral, Arthur Miller’s All My Sons, Bernard Shaw’s Saint Joan and Girish Karnad’s play Tughlaq. He is currently on the lookout for more contemporary works of literature that he can use in his classes.
Agrees Chetan Joshi, professor at IIM-Calcutta: “Leadership lessons need not be confined to examples from the world of business. You can get leadership lessons from different facets of life. I have started using literature this year in my second year elective course where students can analyse the dilemmas the characters face, introspect, and write a reflection paper.”
“We offer this 20-session elective in the very last term of the second year so that students take it with them as future leaders and managers,” adds Joshi, who uses Ibsen’s play Doll’s House, Arthur Miller’s Death of a Salesman and Irawati Karve’s Yuganta, among other classics.
Globally, top management institutes such as Harvard Business School, The Wharton School of the University of Pennsylvania and Stanford Graduate School of Business use several innovative pedagogies, including art and humanities, to talk about leadership and leading. James G March’s pioneering use of literature to teach leadership at Stanford is an example.
Says Leena Chatterjee, professor of behavioral science at IIM-Calcutta: “(A) novel tells how protagonists change and develop through various events, and how they face challenges.”
Bharatidasan Institute of Management-Trichy’s Innovative Leaders and Leadership programme has this year introduced a module on Experiencing Leadership through Literature. The programme will discuss Man and Superman of Bernard Shaw that cultivates moral passion, and Ibsen’s Enemy of the People that underscores the need to maintain individual integrity against social and circumstantial pressures. The other two classics to be discussed are The Story of My Experiments with Truth by Mahatma Gandhi and the ‘If ’ poem by Rudyard Kipling.
Others such as IMI-Delhi also offer a three-month course on leadership that ties in literature to get future managers to read, talk and reflect on leadership.
“A study of literature develops acuter understanding of aesthetics and heroism, both critical to leadership,” says Abhishek Kumar, assistant professor, BIM-Trichy.
Adds Asha Bhandarkar, professor at IMI: “Literature provides a powerful method of engaging the complete person and enhancing the capability to learn.” She feels that a person who is taught leadership as a concept has the intellectual understanding, but literature helps engage values, emotions and the entire personality to convert the learning into practice. She uses The Difficulty of Being Good by Gurcharan Das in her leadership class to bring out the dilemma faced by managers through reading the predicament of major characters in Mahabharata as the novel puts forth.
According to Anil Gupta, professor, IIM-A: “People who have evolved as great leaders have dug deep into their spirits, which is not possible without art and literature.”
Gupta uses Sukumar Ray’s Abol Tabol, paintings and photographs of nature, among various modes of art, in his Creativity, Innovation, Knowledge, Network and Entrepreneurship course.
“Art brings out sensibilities and sensitivities in future leaders. Art generates compassion, which we need more in this world of ethical and moral dilemma,” says Gupta of IIM-A.
Managers also get enthused by the process as it makes the classes more participative and leads to open discussions. “It is very popular with the students,” says Chatterjee of IIM-Calcutta. The classes are centred around students learning on their own through group discussions under the guidance of the professor.
Professors say most students who come with an engineering background are usually enthusiastic about these classes which can be interactive with students acting out or making presentations. “People don’t get bored with such classes,” says Manikutty.

Source : The Economics Times.
Date : 19/03/2013

Tata AIG to offer new health productsTata AIG to offer new health products

MUMBAI: Tata AIG is mulling offering weather insurance and will also be launching new health cover products, a top company official has said.

“We are working on many variants on health insurancesegment after entering into this space in the recent past…We would also possibly look at weather insurance,” President- Insurance of Tata AIG General Insurance, M Ravichandran told PTI here.

He also said the company is planning to increase its portfolio in aviation space and introduce rail and road insurance in the future.

Talking about the premium growth in the current fiscal, Ravichandran said, “We expect to achieve a premium growth of 27-28 per cent in the current fiscal.”

According to IRDA data, Tata AIG has a gross written premium (GWP) collection of Rs 1,540.95 crore in the first nine months of the current fiscal (April-December), a growth of 26 per cent over the corresponding period last fiscal while for the industry, the premiums are growing at around 19 per cent per annum.

Referring to composition of the book, Ravichandran said that though the present ratio between corporate and retail stands at 55:45, it is likely to change in future with more retail contribution.

“We want to make every segment a profit centre… bottomline is better than topline for us,” he said.

The company also doesn’t require much capital support from the parent groups, which can be met with the internal accruals, he added.

Tata AIG General Insurance is a joint venture between Tata and US based insuer-AIG in which Tata holds the majority stake.

Source :The Economics Times.
Date :18/03/2013