Bajaj Finserv Q1 Net Up 43% onInsurance Show

Bajaj Finserv reported a 43% jump in net profit during the quarter to June due to growth in life and general insurance.
The company reported a net profit of . 279 crore against . 195 crore in the corresponding quarter last year. Bajaj Finserv is the holding company of Bajaj Finance, Bajaj Allianz Life Insurance and Bajaj Allianz General Insurance. Lower growth in new business income of life insurance business led to 55% increase in profit to . 115 crore from . 74 crore. Profit of large life insurance companies goes up when the sales slows down.
“Our idea is to grow new business by focusing on individual agents and bank,” said Sanjeev Bajaj, MD, Bajaj Finserv. “The slowdown is in line with the industry.”
The non-banking finance arm saw profits rise 27% to . 176 crore, driven by loan demand in consumer and SME segment. It saw the asset quality deteriorate during the quarter mainly due to stress from construction equipment and twowheeler segments. The gross nonperforming loans stood at 1.14%. It is looking to expand its rural footprint by opening six new offices and 30 spokes.

Source :The Economic Times.
Date : 19/07/2013
Writer: BUREAU MUMBAI

Know your recruiter Understand your recruitment consultant and the hiring process to get the job you want.

Are you looking for a new job and don’t know where to look, what to do and who to speak to? After having exhausted your professional and personal networks, it’s likely that you would have approached head hunters and recruitment consultants. With no results to show for your efforts, you are probably ended up depressed, and clueless. Here is what you can do to make the recruitment market work for you.
Be found
First things first. If people do not know you, you cannot get a job. So, make it easy for the recruiters and companies to know and find youwhen they need to. Post your resume on leading job portals like Naukri, Monster, Shine, and TimesJobs. Upload your profile on professional networking portals like LinkedIn. These are the first places that a prospective employer or a recruitment consultant will search. Make sure that your cell number and e-mail ID are updated even on networking portals. Do not fret about sharing your cell number since these portals are rarely the source for telemarketers.
On job portals, make changes to your resume at least once every three months. When a recruiter searches for an accountant in Mumbai, the recently updated profiles figure on top of the search. Include industryjargon and technical words related to your role in your resume since searches are based on keywords relevant to the role. Compare your profile with online ones of similar professionals. On networking portals, make friends and connect with people in your industry. Encourage people to post recommendations of your work. All of these make it easier for recruiters to find you when they have job opportunities.
Understand the CV
Your CV or resume does not get the job offer; it only helps you get shortlisted for an interview. However, it can cost you the job offer if any information provided in it is found to be incorrect during the background verification process. Thus, the focus of a good CV is to be truthful and convince the recruiter to shortlist you for the first interview.
Think of it as a marketing tool, whose primary aim is to appeal to the customer, the HR manager in this case. Since every job that you apply for is different, you cannot have a one-size-fits-all resume. Tailor it to the job description provided by the recruitment consultant and use words that are same or similar to this description while referring to your work experience.
Choose a standard layout borrowed from any leading job portal since the recruiter is used to scanning a resume in a few seconds todetermine a fit for a role. Do not make it an autobiography spanning six pages. The best resumes are often one page long obtained by compressing or cutting out portions that are not relevant to the job. Get inputs from at least two people before sharing your resume. They will help you increase the impact and eliminate inadvertent grammatical and spelling errors that could cast you in a bad light.
Master the communication
Whenever you receive an e-mail from a recruiter, respond within a day and always include your resume. Do not start a new e-mail thread otherwise it will not be read. If you are initiating a conversation, make sure that the subject line of the e-mail should contain the position you are interested in. Again, attach the CV. Often an unanswered e-mail or call makes the difference between a candidate who is called and interviewed for an urgent position versus another who is not. Recruiters have targets and deadlines and have a great sense of what works. A candidate who is fussy about interview timings and location, is late in responding to the communication and has too many queries at the first stage is likely not to accept the joboffer. Avoid giving the wrong impression to a recruiter who has other options. Showing extra interest in a job and following up with a recruiter are positive signs, so do not wait for a recruiter to keep you posted.
Interviewing for an offer letter
After your resume is shortlisted, you may have multiple rounds of interviews. Interviewers are senior people in the firm with a full calendar and are the main bottlenecks to completing the recruitment process. They are also impatient and take quick decisions. Try and accept interview schedules shared by your recruiter or else the job might go to someone who turned up on time. Speak to your recruiter in advance to figure out theexpected dress code, questions asked of the previous candidates and request for a profile of the interviewer and firm. The recruiter will only be too happy to oblige. Speaking to an employee of the firm works even better.
Interviews will contain technical and behavioural questions that you must prepare for. Your job offer will come from the final decision-makers’ judgement, which is often determined by behavioural cues and unspecified expectations.
After the interviews are done, e-mail a thank-you note to the interviewers and the recruiter. This increases your recall value. If you are fortunate enough to receive an offer letter, you may negotiate on the terms and conditions. Remember that the person negotiating for the employer is an HR manager, whose mandate is often limited and negotiating beyond those limits costs you the job. Often the job offer decision may rest on factors you cannot control or change at short notice, including your age, accent or personal biases of interviewers. Never pin your hopes on one vacancy. Move on and keep applying for other positions. Good jobs are always available even if they take some time to materialise.
What recruiters don’t tell you 1
You are not my customer
Companies are my customers. You are the product. If my customer needs the product, I will sell it and earn a commission. If I am slow, my competitor will sell the product before me and I won’t get paid. 2
When recruitment is slow
Sometimes your interview/offer letter is delayed interminably. This is because the client has chosen someone else and you are a back-up, or the client’s budget has run out, or the decision-maker is on leave. Iwill only tell you that the position is on hold and your interview/offer will be planned soon. 3
I do not find jobs for you
I do not have the time or resources to look for a job for you. My salary comes from finding the right profiles for my client’s vacancies. If your resume matches my client’s requirement, I will call you. Otherwise I will file your resume for the future. 4
I skim through your resume
I receive hundreds of resumes for every vacancy and need to work fast to earn revenue. I typically skim your resume for critical keywords, confirm if you are interested, and send your CV to the client. The more resumes I send, the greater the chances of a hit. 5
I am your last option
I am expensive. If you want to work for my client, I should be your last option. The client will try to fill the vacancy internally, and if it doesn’t work, through the reference of an employee. Only after both options fail will he look at my candidates.

Source :The Economic Times.
Date : 15/07/2013
Writer: DEVASHISH CHAKRAVARTY

LLOYDS MARKET LEARN THE TRICKS OF “ANGADIAS BUSINESS”

About six years ago, two Englishmen from Kiln, a member of the famed Lloyds reinsurance market in London, undertook an unusual journey in India. They joined a group of unassuming men in the crowded Mumbai Central railway station to board a sleeper coach in the evening train to Surat. Each carried a handful of uncut, rough diamonds tucked into concealed pockets in shirts and jackets. The next day, they took the train back to Mumbai carrying a consignment of polished stones. The guests were flummoxed by what they saw. Their companions, collectively carrying. 50-100 crore worth cargo, whiled away the time, chatting and playing cards, before taking the public transport to factories where trained craftsmen turned the roughs into more sparkling stones with the right colour and carat. No questions were asked. No armed guards escorted them. The men from Lloyds were trying to figure out the reinsurance risk of such consignments. “They wanted a feel of the operations. They couldn’t believe what they saw, but soon sensed that was the way business happens here.

For generations, men, many from Gujarat’s Mehsana district, have been ‘Angadias’ — unofficial, trusted couriers who ferry diamonds, jewellery and cash. Last week, when sleuths from the income-tax department, which for months had been probing a money laundering racket, confiscated the cargo of Angadias, there was panic in the diamond hub. An email from a Lloyds syndicate member enquired whether this was a one-off event or the very business was under threat? The fear dispelled within days after the tax office released most of the cargo.

But few outside the club of diamantaires know that what may have been a clincher for the trade and the ancient profession of Angadias is a sheaf of yellowing papers that outlined, 25 years ago, peculiar ways of the trade. At that point, a group comprising the then income-tax commissioners of Bombay, commerce ministry officials, senior chartered accountants and members of the trade had jointly agreed to certain rules of the game. The effort was aimed at explaining tax officials the intricacies of the trade and making life simpler for traders and couriers. The Angadias carry with them pieces of papers, better known as ‘jungad’ slips in trade parlance. These slips are kachcha delivery challans that are either handwritten or computer printouts. In March 1985, the guidelines framed by the group laid down that jungad slips would be accepted as “proof of ownership” of the goods if the details given in the slips tally with the entries made in outward registers of the owners of the goods “as well as the persons in whose custody the diamonds are found”. At that point, tax authorities were explained that there were times when the entire packet of diamonds could not be sold as a whole and the customer would pick some stones while the remaining are returned to the traders.

These transactions can be insured however “only specialised reinsurance companies understand the risk,” said KK Aggarwal, executive vice president, Iffco Tokio General Insurance, one of the few firms that meet insurance requirements of Angadias as part of a package cover called jewellers’ block policy. The Policy covers losses in all transits during the year up to the limit specified in the policy. “In fact, train journeys are considered safer going by experience… The key parameters in the evaluation are the standing of the customer, past experience, value exposure for a single journey, annual turnover, distance travelled, mode of journey and other precautions taken,” said Easwara Narayan, chief operating officer, Future Generali India Insurance Co, another firm (besides state-owned insurers) that sells such protection. Jewellers’ block business, he feels, would be in the region of Rs 60-70 crore in Mumbai and over Rs 100 crore in the entire country.
Source :The Economic Times.
Date : 10/07/2013

FinMin Seeks Irda Rethink on Bancassurance A proposal for banks, insurance cos’ region specific tie-up meets with resistance

In an unprecedented move, the finance ministry has directed the insurance regulator to suspend its proposed regulation onbancassurance and hold consultation with banks and insurers before framing the rules.
The draft Irda (Licensing of Bancassurance Entities) Regulation 2013, which was taken up for discussion in the last board meeting of the regulator on June 28, does accept an open architecture. It does suggest that banks must have exclusive tie-up in one geographic region. Even in the board meeting, concerns were expressed by the government nominees and other members of the board, said a top official in the regulatory authority. However, the regulator is expected to issue the final bancassurance guidelines next month, he said.
“The matter was subsequently discussed in the department of financialservices (DFS) and it was felt that the exact purpose and rationale for taking up bancassurance on the geographical basis need further discussion and clarity,” says the finance ministry letter dated July 3.
It further states, “…that the issuance of regulation may be put on hold till the wider consultations take place with all stakeholders, including banks andinsurance companies.”
“The strong stand taken by the finance ministry will force the Insurance Regulatory & Development Authority that was expected to come out with bancassurance guidelines next month to put it in abeyance,” said the official.
Irda chairman TS Vijayan told ET that the regulator will have wider consultations before finalising the regulations. “Some of the membersexpressed some concerns in the previous board meeting. We are going to havetalks with banks and other stake holders to figure out what is the best solution to increase the reach of distribution,” he said.
As against the current norm of a bank entering into an exclusive agreement with insurer for selling insurance products across the country, Irda has proposed that an insurer can tie up with a bank on exclusive basis in a particular region and cannot tie up with an individualinsurer for a pan-India footprint. It has suggested that the country needs to be divided into three zones, which will be further subdivided into 40 geographical entities. And, a bank can tie up with an individual insurance firm for a maximum of 10 regions on exclusivebasis. However, government official said that the possibility of increasingpenetration through bancassurance or through other means may be examined rather than disrupting the corporate agent arrangement on the zonal basis.
Banks are not in favour of multiple tie-ups and want to continue with exclusive arrangement with insurance firms as they make money by selling insurance products on exclusive basis.
Under the existing guidelines, bancassurance is similar to the corporate agent where banks are allowed to tie up with only one insurance firm exclusively. As a result, banks are charging huge upfront premium for entering into long-term exclusive contract with a single insurance firm. This is in addition to the regular commission.
Vijayan said that the regulator is looking into it and exploring various options. “One of the options that was suggested is to treat the bank as broker without going through the subsidiary route, which is currently not permitted. That will solve the exclusivity issue,” he said. Banks which are regulated by the RBI are not allowed to set up wholly owned subsidiary for insurance broking business, at the same time Irda does not allow banks to become insurance brokers since it needs separate capital.

Source :The Economic Times.
Date : 8/07/2013
Writer: ARUN KUMAR NEW DELHI

Who should replace me?

i
have been asked to pick someone for the top job as CEO, basically to replace me. The two candidates are my CMO and the CFO, and the problem is both are very good leaders with excellent track records and impeccable credentials, both have been with me for the last 8 years. While the CMO has helped carve out a very effective brand-led growth strategy that has worked for our company, the CFO has helped maintain the cost and organizational discipline that really made the strategy work. Each one wouldn’t have worked without the other. So help me decide the criteria for decision.
The Ramayana speaks of three sets of brothers: the sons of Dashrath (Ram and Bharat), the sons of Riksha (Vali and Sugriv) and the sons of Vishrava (Ravan and Kuber). The sons of Dashrath are willing to make the other king; the sons of Riksha have to share the kingdom but end up fighting over it; one son of Vishrava, Kuber, builds Lanka and the other, Ravan, usurps it. The sons of Dashrath are called manavas, or humans, because their only concern is Ayodhya. The other brothers are called vanars (monkeys) or rakshasas (demons) because they are not concerned about the kingdom, only themselves. Ultimately, it is about the organization, not the candidate.
Your concern should not be who is a better candidate, your concern should be who is good for the organization, the one who will enable the organization grow even in your absence and face challenges of the future. This can only happen if you have not been a Banyan tree, become so big that nothing has grown in your shadow. Yes, the CMO and CFO have done well in their respective domains. They have done what you feel should have been done. But will they be good in new roles, different roles, handling jobs beyond their respective domains. For example, does the CMO know anything beyond marketing: does he understand sales and finance and HR and admin and investor relations? Can he handle the board? And does the CFO know anything beyond discipline? Can he inspire people? Does he have a vision that will get the organization excited and aligned? Most critically, are either of them a yajaman?
A yajaman is proactive in decision-making and responsible for its consequences. Did your CMO do what he was told to do or was he taking independent decisions and responsibility? Did your CFO just do his job, but go out of his way to take decision and take responsibility, not just for success but also failure? Most critically, did you see any one of them groom people to take their respective job. If they don’t help people grow, if they don’t think beyond their domains, if they are unable to think future and take risks, they are probably not good to be leaders.
To be a yajaman, one has to take people along. Who amongst the two tries to take people along? This does not mean consensus all the time. Sometimes it requires force, a little pushing and pulling. Who can handle the consequence of losing the other? Who can find a replacement quickly enough? Who is capable of retaining the other?
You need to list all the things that you feel you did to be a good CEO and map if these qualities exist in some measure in either of the candidates. You need to check if either of them empathizes with the organization and understands the market and can handle change that even you cannot anticipate today. The CEO position cannot be a reward for a job well done. You never promote for performance; you always promote only if there is potential.

Source :The Economic Times.
Date : 05/07/2013

Get Active Punch Above Your Weight in Cos, Sebi Advises Insurers Capital markets watchdog urges IRDA to instruct insurers to help improve corporate governance standards in investee companies

India’s capital markets regulator, Sebi, is urging its counterpart in theinsurance sector to encourage insurers to become more vocal on issues of corporate governance. Insurance companies hold significant stakes in listed Indian entities, with LIC, the largest, alone managing assets worth over . 13 lakh crore.
“The Securities and Exchange Board of India has approached us to improve corporate governance practice in companies and the need for insurance companies to play an active role towards it. We are looking into the matter,” said a senior official of the Insurance Regulatory and Development Authority (IRDA).
Sebi is pressing the insurance regulator to come up with norms on improving corporate governance in listed companies, similar to the new rules governing the voting record for mutual funds, said the IRDA official.
Asset management companies, which run mutual funds, now have to disclose the voting record for their portfolio companies. Sebi has also asked fund houses to apply their mind rather than abstain or blindly back the promoter of a company.
A Sebi official said institutional investors should act collectively and make reasoned judgements as that would minimise any loss of shareholder value. He said institutional investors investing in equities should become more active in exercising their ownership rights without coercion. Sebi’s initiative comes in the backdrop of increased desire among regulators that institutional investors should collaborate to ensure better corporate governance in listed firms. In particular, these investors should ask the promoters more questions, thereby becoming a voice for small investors.
“India is a country where promoters hold a big sway, and it is important for small investors to have a voice. Institutional investors must lend their voice to small shareholders or act as counter-voices to promoters,” Sebi Chairman UK Sinha said recently. Institutional Investors Play Passive Role
Compared to developed nations, institutional investors often play a passive role in India. In the West, investors are known to voice their opinion. They also stall major corporate moves if the proposed action appears wrong. Besides, regulators such as the US Securities & Exchange Commission mandate that institutional investors disclose their voting record.
Shriram Subramanian, founder and managing director of InGovern Research Services, India’s first proxy advisory and corporate governance research firm, feels institutional investors have a fiduciary responsibility to unit-holders to actively monitor their investments and demand higher corporate governance standards in investee companies. In the process, the institutional investors will also contribute to increasing the depth and breadth of local capital markets.
The scenario, however, has started changing in India. In 2011, institutional shareholders questioned Crompton Greaves’ decision to buy an aircraft when the company’s profits were under pressure. And Satyam’s purchase of group firm Maytas Infrastructure had to be aborted because of opposition from institutional shareholders, leading to the eventual unraveling of the software services company. But such instances have been few and far between.
Even though the market regulator requires asset management companies to indulge in shareholder activism, most fund houses have been shying away from voting on corporate resolutions on behalf of large investors whose money they manage. In FY12, mutual funds abstained from 48% of proposals and the opposing votes were less than 1%.
“Corporate governance is not just about raising voice against event-based proposals, but also about routine developments such as the appointment of a director or an auditor. Institutional investors should have detailed voting policy norms,” Shriram added. Insurance companies are large stakeholders in companies. For instance, they hold a big block of shares in companies such as Larsen & Toubro and ICICI Bank. Interestingly, LIC’s assets under management of over . 13 lakh crore far exceed other domestic institutions. But the country’s largest life insurer is seen as a passive investor. In FY13, it had bought stocks worth . 17,630.39 crore, including shares of state-run units, in which the government had partly divested its stake.

Source :The Economic Times.
Date : 05/07/2013
Writer: REENA ZACHARIAH MUMBAI

Health covers to cost 30% more

Kolkata: The four public sector non-life companies, which have a 70% share of individual health policies, have received approval from the regulator to raise rates for individual mediclaim policies. Prices are set to rise by 20-30%, depending on the age group of the insured.
While Chennai-based United India brings into effect new rates from this month, Mumbai-headquartered New India Assurance will roll out the new policies from August. Kolkata-based National Insurance (NIC) will revise rates from October and Delhi-based Oriental is also looking at raising rates from the second half.
TOI had reported in its editions dated January 26, 2013, as well as November 22 and July 29, 2012, that general insurers were looking at raising health cover premiums.
National Insurance chairman N S R Chandraprasad said that his company has already got approval from the Insurance Regulatory and Development Authority (IRDA) to revise health insurance premiums.
“We are likely to increase the premium by 25-30% from October this year. Health premium was last revised in 2007. So it was due for long because hospital charges have multiplied many times in the last six years. In fact, the revision should have been more. United India has already revised the rates,” Chandraprasad added.
Sources in Oriental Insurance and New India Assurance also said that they have got approval from sector regulator IRDA for the hike in health insurance premium rates. “There will be an increase in health insurance premium rate by at least 25% from October,” an Oriental Insurance official added.
The health portfolio accounts for 25-28% of the total portfolio for PSU general insurers. Chandraprasad pointed out that there is no way out but to revise the premium upward as the claims ratio in health segment is very high.
The claims ratio for NIC in health is around 110%. This implies that for every Rs 100 premium income, it has to pay Rs 110 as claim. The average claims ratio in health segment for the general insurance companies is around 100%. “All the PSU general insurance companies are losing money in the health portfolio, so there is no other option but to hike rates,” Chandraprasad said.
In group health insurance, NIC general manager Subir Bhattacharyya pointed out that the claims ratio is even higher at 125% as this segment is more prone to claims. The health portfolio of NIC is around Rs 2,561 crore. Health insurers are already putting some loading in group policies in an attempt to bring down the claims ratio.
HIGH CLAIM RATIOS

• Sector regulator IRDA has allowed the four public sector general insurers to raise individual health cover rates

• Together, United India, New India Assurance, National Insurance & Oriental have 70% share of health mkt

• Insurers claim hike is necessary to cover rising costs of health services and high claims ratio in this segment

Source :The Times of India.
Date : 20/06/2013
Writer: Udit Prasanna Mukherji TNN