Non-life insurers see 13.1% growth in total premiums for April-Nov Private general insurers collected total premiums of Rs 22,132.70 crore

General insurance companies saw a 13.1% in premium collection for the April to November period, as compared to same period last year.
Non-life companies collected total premiums of Rs 50,307.56 crore as compared to Rs 44,451.27 crore in this period last fiscal. Private general insurers collected total premiums of Rs 22,132.70 crore, seeing a 17.54% rise compared to first quarter last year. Public general insurers, on the other hand, saw a 9.96% rise in premium collection for this period.

 

Source: Business Standard

Date: 19th December 2013

Train to engage THE L&OD DEPARTMENT HAS A MAJOR ROLE TO PLAY IN EMPLOYEE ENGAGEMENT, SAYS DR SANDEEP GANDHI

The one thing that creates sustainable competitive advantage over a period of time is an organisation’s workforce – the people who make a company. In pursuit of competitive edge where employees are the key differentiator, well-engaged employees are a key success parameter. 
Investing in employees generates a certain amount of loyalty from them in ways that include commitment to quality work and commitment to both internal and external customers, which are two indicators of the business’ ability to remain relevant. Employees are the brand ambassadors of the 
organisation. With continuous engagement through insightful and inspiring ways, organisations can mobilise their skills and energies to achieve specific business goals. 
 In organisations where training is considered a luxury, employees rarely see the value and will resist participating in training sessions. On the other hand, organisations that consider themselves ‘learning organisations’ have employees who expect them to invest in their development. These employees also expect to repay that investment by helping the business continue to grow and increase its position in the market. Thus, when training is viewed as a strategic and necessary investment, it is a win-win situation! 
If training and development is to make a significant impact on employee engagement, employees must see the benefits to themselves in undertaking training activities. The answer is to link training and development to specific objectives and the only way to make this work effectively is for managers to have one-on-one conversations with their people about the purpose of training and what’s in it for them. Asking people what they think they need and setting specific learning objectives is crucial at this stage. 
THERE IS NO ‘ONE SIZE FITS ALL’ APPROACH AND NO MASTER MODEL FOR SUCCESSFUL EMPLOYEE ENGAGEMENT. HOWEVER, THERE ARE FOUR COMMON THEMES THAT EMERGE: 

• PROVIDING A STRONG STRATEGY – EMPOWERING LEADERSHIP, PROVIDING A STRONG NARRATIVE ABOUT THE ORGANISATION WHERE IT’S COME FROM AND WHERE IT’S GOING; 

• EMPLOYEE VOICE – 
FOR REINFORCING AND CHALLENGING VIEWS, BETWEEN FUNCTIONS AND EXTERNALLY; 

• HIGH INTEGRITY – 
THE VALUES ON THE WALL ARE REFLECTED IN DAY TO DAY BEHAVIOURS.THERE IS NO ‘SAY–DO’ GAP; 

• FOCUS ON PEOPLE – 
ENGAGING MANAGERS WHO TREAT THEIR PEOPLE AS INDIVIDUALS AND COACH THEM. HUMAN RESOURCE DEVELOPMENT IS THE KEY.

 

Source: Ascent

Date: 18th December 2013

 

 

SMALL TOWNS: BIG OPPORTUNITIES Once, every professional worth his/her salt dreamt of a life in the big city. Today, the tables have turned. Ankita Shreeram tells you why professionals are more than willing to derive the ‘small town’ advantage

Given a choice, would you move to a smaller city, with the same job profile and a slightly lowered salary but a better work-life balance, shorter commute and lower standard of living? Not only is an overwhelming majority of Indian professionals answering in the affirmative to this question, organisations too are also more than happy to comply. 
 Most of us have colleagues who pine to be back to their hometowns, despite the charm and glamour of a metropolitan city. “We are witnessing an increasing trend where people want to move to smaller towns. The primary drivers are: it is their hometown; it is close to their family; cost of living is relatively lower and support systems are stronger. Plus with the proliferation of malls and entertainment options in Tier II and III 
cities, individuals can have the best of both worlds,” agrees Elango R, CHRO and head, emerging geographies business unit, Mphasis. One fourth of Mphasis’ total employee headcount is based out of Indian non-metros. The organisation has had employees move to Indore, Raipur and Bhubaneswar from bigger cities like Bangalore and Pune. 
As organisations find that business opportunities are getting saturated in the urban areas, they realise that the logical move is to explore the potential of smaller towns. “While the move to smaller towns has helped companies mitigate the risks arising out of the global economic upheaval, smaller cities with better infrastructure facilities and lower operating costs can make a viable business proposition and complement the overall business strategy,” explains Manuel D’Souza, director – HR, Serco Global Services. Out of their total task force of 47,000, 20,407 are based in nonmetros. Serco has been receiving lateral/vertical requests for movement from metros to smaller towns every month.  The other factor that is luring multinational corporations towards India’s smaller towns is the availability of a huge pool of untapped talent. “More and more people are keen to seize opportunities in their own towns instead of relocating 
to larger towns and moving away from their families. This becomes advantageous for organisations that are looking at hiring talented and efficient employees for smaller cities,” says D’Souza. Aurangabad, Pondicherry, Dehradun, Mohali and Guwahati are emerging Tier II and III cities. 
So if you’re a city-bred professional hoping to have a quieter life in a Tier II city, is your request for a transfer likely to be granted? “Keeping the business need and employee preference in mind, these decisions are taken on a case-to-case basis,” says Satish M, EVP, HR, Firstsource Solutions Ltd. He also reveals that in certain businesses, clients tend to be present in smaller towns and hence, it makes sense to operate closer to them. 
The rush towards smaller towns also presents an opportunity for the government to incentivise development in these areas. “I’d certainly move to a small town if required. But the chief concerns are the support available for professionals’ families in terms of education institutes, medical facilities, better infrastructure, good living environment and connectivity. If these are addressed proactively by the government or through Public Private Partnerships, it would make smaller towns equally attractive,” shares Ashok Reddy, president, global HR and corporate affairs, Infotech Enterprises. Out of their 11,600 employees, over 2,000 are based in cities like Kakinada, Vizag and Noida. 
Today, migration is multidirectional and that is great news for the Indian growth story. 
REDDY LISTS THE PROS AND CONS OF MOVING TO A SMALL TOWN: 
Pros:
 
Lesser commute time; Lower cost of living; Better work-life balance; Lesser competition for resources; Lower cost of operation. 
Cons: 
Limited professional network; Restricted access to quality education and medical facilities.

 

Source: Ascent

Date: 18th December 2013

 

Job market eyes a prosperous new year with double-digit hikes

After mostly disappointing trends in 2013, the job market is looking at promising prospects in the new year and experts believe that the worst may be over on hiring front and the employees can even look forward to double-digit salary hike of at least 10-12 per cent in 2014. 

Notwithstanding the continuing impact of global macro-economic situation and the concerns surrounding India, be it elections or economic slowdown, most of the experts and HR consultancy firms are unanimous that recruitment outlook for the country in 2014 looks bullish. 
The sectors that are likely to drive the job market include IT, healthcare, education, development sector moreover the new retail banking licences are also expected to give a decent hiring trend in year 2014. 
“Overall looks like the worst is over for the job market and we are entering a zone of another 2-3 years of positive growth if not more,” Naukri.com Business Head V Suresh said. 
Echoing similar sentiments, TeamLease Services Senior Vice President and Co-Founder Sangeeta Lala said “in 2013, hirings went slow across mid and senior levels, recruitments were done only to replace ‘key’ gaps. 
However, 2014 seems promising and many are forecasting elections to bring us out of this grey guessing phase.” 
Corporates should come out of the closet and take a stance to grow out of their shells and invest into business again, automatically leading to talent search, , she added.
In the year gone by, the job market in India was not driven by global economies, it was more domestic in nature and there was a cautious optimism among employers as hiring was more specific and need based. 
“Companies wanted a clear ROI on every hire, quality triumphed over quantity, selection ratios increased, candidates who could hit the road immediately were preferred, negotiations were hard and long drawn, bonus packages (joining bonus, notice period buy outs) were measured,” Lala said.

 

Source: The Economic Times

Date:17th December 2013

Insurers want mandatory term cover for salaried class Making insurance mandatory would be beneficial not only from insurance perspective but from a customer perspective also

Insurance firms have demanded the government make term insurance – the life insurance which provides coverage for a limited period of time – mandatory for all salaried employees in the country. According to industry sources, they asked the government to include the proposal in the Union Budget of 2014-15.

“Why is term insurance not mandatory when third-party automobile insurance is compulsory in India?” asked a senior executive of a private life insurance company.

The official said, “Making insurance mandatory would be beneficial not only from insurance perspective but from a customer perspective also.”

According to insurance officials, term insurance is a policy where a policyholder or a relative pays premium for a particular tenure. “If the insured dies within the tenure, the entire sum assured is paid to the kin. If the policyholder survives beyond the tenure, no money is paid. While some term products do allow moneyback at end of tenure, others don’t.”

Unlike other countries, India does not have a social security scheme to deal with insurance needs of individuals. In such a context, mandatory term insurance could be advantageous for the policyholder, insurance officials argued. The existing options provided by companies look solely at wealth accumulation and savings and not on individual life risks. While the proposal may help improve insurance penetration in the country, experts said it was very difficult to implement. “Companies already have provident fund and gratuity for employees. They may not be open to having another mandatory scheme for employees, since it would require them to put aside some funds for thistoo,” said the chief executive officer of a mid-sized life insurance company.

 

Source: Business Standard

Date: 16th December 2013

Good assets vital for banks to enter insurance’

The Reserve Bank of India (RBI) has said banks with weak capital base and net non-performing assets (NPAs) of more than three per cent of total loans will not be allowed to enter the insurance broking business.

In its draft norms on the criteria for banks to step into the insurance broking segment released on Friday, the central bank said such lenders must have a capital adequacy ratio of at least 10 per cent, compared with the regulatory mandate of nine per cent. Also, these banks should have recorded profits for three consecutive years. The net worth of such banks should be at least Rs 500 crore, RBI said.

Public sector banks have been reeling under asset quality pressure and most of these have NPAs of about three per cent.State Bank of India, the country’s largest lender, reported net NPAs of 2.91 per cent for the quarter ended September 2013. Its capital adequacy ratio, however, stood at a comfortable 12.09 per cent.

Banks will be allowed to conduct insurance broking departmentally; there is no need to form a subsidiary or a joint venture. “In order to avoid any conflict of interest, banks undertaking insurance broking cannot enter into agreements either for corporate agency or for referral arrangements for insurance, either departmentally or through subsidiaries/group companies,” RBI said, adding these guidelines would be reviewed after three years. The validity for the approvals granted would also be three years.

While vetting applications, the track record of banks’ performance in other joint ventures and subsidiaries will also be taken into consideration.

“A robust internal grievance redressal mechanism should be put in place, along with a board-approved customer compensation policy to resolve issues related to the services offered,” RBI said.

 

Source: Business Standard

Date: 3rd December 2013

 

Insurers not hopeful of banks entering broking business RBI’s draft guidelines prescribe that banks with a strong capital base and NPAs below 3% can become brokers

The Reserve Bank of India (RBI) has issued draft guidelines for banks to become insurance brokers, but insurers say there may not be too many takers because of the stringent capital requirements.
According to RBI’s draft guidelines, only banks with a strong capital base can become brokers. Plus, the banks’non-performing assets (NPA) should be below three per cent.
“The industry was not too hopeful of large private and public sector banks entering the insurance broking segment, but we had thought smaller public and private sector banks would see a business opportunity here. But with RBI putting stringent norms, these banks, too, will be dissuaded,” said the CEO of a new-age life insurance company. He added insurers would now have to tap into other areas of distribution such as agency and, online segment.
Another official with a general insurance firm said: “Though some smaller banks had expressed interest in exploring the broking channel, RBI norms will make it tougher for them.”
In its draft norms released on Friday, the central bank had also said the lenders must have a capital adequacy ratio of at least 10 per cent, compared to the regulatory mandate of nine per cent.
Also, these banks should have recorded profits for three consecutive years. The net worth of such banks should be at least Rs 500 crore, RBI said.
Even otherwise, industry players said it might not be viable for the large private and public sector banks to become insurance brokers, since they were promoters of insurance companies. Officials noted RBI had made it clear that the banks should focus primarily on their core businesses.
“While RBI has not said anything against banks promoting insurance companies to become brokers, their boards may notgive a nod to this arrangement. This clearly accounts for conflict of interest,” said a senior official of a non-bank- promoted private life insurance company.
RBI’s norms follow the regulation by Insurance Regulatory and Development Authority (Irda) on banks becoming insurance brokers. In its regulations on licensing banks as insurance brokers, Irda said each applicant (scheduled bank) should have obtained prior approval of RBI before applying for a licence to act as an insurance broker. The licence, once granted, would be valid for three years after which it will have to be renewed.
The banking regulator has also said that banks will be allowed to conduct insurance broking departmentally; there is no need to form a subsidiary or a joint venture. According to a senior executive of a mid-size bank-promoted private life insurer, a large part of their businesscomes from the bancassurance channel. “If this is opened up to other companies when a bank becomes a broker, this would mean serious competitionfrom others. Hence, insurers with large bank partners may not favour it, but the final decision will have to be taken by the bank,” the official added.
While RBI’s approval is required for banks to become brokers, Irda has maintained in any dispute arising out of insurance transactions, the jurisdiction of the authority (Irda) shall prevail.
The finance ministry has been in favour of banks becoming insurance brokers. In his Budget speech this year, Finance Minister P Chidambaram said banks would be so permitted. According to data for FY13, as much as 65-70 per cent of new premium of bank-led life insurers was generated from their bank partners.
For the life insurance sector as a whole, the bancassurance (corporate agency-bank) channel accounts for 30 per cent of total new business premium collection.

 

Source: Business Standard

Date: 3rd December 2013