Insurance Sector to Reach $250 b in 10 Years: CII

India’s insurance sector is expected to quadruple to about $250 billion over the next decade from around $60 billion now, according to a report by the Confederation of Indian Industry (CII).

The vision report, prepared by the trade body in partnership with consultancy firm McKinsey & Co. and unveiled by the Insurance Regulatory and Development Authority (Irda) chairman TS Vijayan in Hyderabad on Thursday , recommends an inclusive and progressive growth strategy for the industry . Such a strategy would enable the Indian life insurance industry to report 12% compounded annual growth rate (CAGR) over the next 10 years to reach $160175 billion from around $46 billion now, the report said. The non-life or general insurance part of the industry is estimated to see 22% CAGR during this period, expanding to $80 billion from around $13 billion now, it said.

Vijayan said the regulator has allowed foreign reinsurance firms to open branches in India. He also announced the regulator’s decision on allowing insurance firms to recruit agents on their own, instead of appointing them from those who have qualified in an Irda-organised examination. Vijayan said the upcoming insurance Ordinance has several measures that would support growth. “Our priority would be to protect the interests of the policyholders and we need to ensure the satisfaction of the customer for which we are bringing certain changes in the new Act,“ he said, adding that the sec . 50,000 crore of fresh capital to tor needs at least ` achieve coverage of 6% from the existing 4%.The life insurance segment would require more capital over general insurance, he said.

Analjit Singh, head of the CII national committee on insurance and pensions and chairman of Max India, said the industry has the potential to grow three to five times in size over the next decade. “For this to happen, policy action by the regulator, collaboration between players, individual player’s push to develop distribution and technical capabilities would be critical,“ he said.

Source: The Economic Times (Mumbai)

Date: 27th Feb,2015

NEWS ROUND UP – SALARY HIKE

A on Hewitt, a global HR consultancy, recently announced the results of its latest `Annual Salary Increase Survey in India’. The study, which analysed data from more than 580 companies, reports that Indian employees, on an average, will receive a 10.6 per cent hike in their salary this year.
Anandorup Ghose, rewards consulting practice leader, Aon Hewitt India said, “On the back of improving business confidence, a stable government and moderating inflation, there is a significant improvement in business confidence across companies.However, this confidence is not reflecting in salaries. The projected salary rise shows a subtle improvement over salary increases in the last three years. Companies across industries are continuing to take a cautious stance and are not going for aggressive pay increases.“
Sectors such as life sciences, engineering services, chemicals and media, which have consistently led the salary increase numbers since 2012, are projecting a higher increase than the market average.

Source : Mumbai Mirror
Date : 26th Feb 2015

INSURANCE BILL – What’s the Way Out for Modi-led NDA Govt?

Centre wants to withdraw insurance Bill from Rajya Sabha, Opposition isn’t allowing it. Here’s a look…

WHY THE INSURANCE BILL IS STUCK…
THE CENTRE
promulgated an ordinance after it failed to get RS to clear the Insurance Laws (Amendment) Bill 2008. Bill has to be passed in this budget session to prevent it from lapsing
SINCE THE NDA doesn’t have majority in RS, it wants to get the Bill introduced & passed in Lok Sabha, thus paving the way for convening a joint session to push the bill through. As per rules, if a Bill is passed in either House, govt can call a joint session. NDA has numerical superiority in a joint sitting
AS BILL
is already pending in RS, it remains the property of that House irrespective of the ordinance. That mandates govt getting leave of the House to withdraw the pending bill before rerouting it through LS
BUT GOVT can withdraw the bill only if that leave is granted by the House. So when government sought the leave for permission to withdraw the bill, the Opposition asked for a vote
KNOWING A trial of strength will lead to the defeat, Finance Minister Arun Jaitley avoided that embarrassment by `deferring’ the motion to withdraw the bill
WHILE WITHDRAWING,
he tactically claimed the rules allow the government to introduce `new bill’ straightaway in the Lok Sabha
WHAT HAPPENS NOW…
NDA HAS
the option of -just as it had in last session -continuing to negotiate with Oppn for a give-and-take formula or try to divide rival camps. The passage of Bill is crucial as no insurance company would be willing to put its money unless there is legislative backing for reforms in the sector

Source : The Economic times
Date : 26th Feb 2015

5 WAYS TO – Deal with Blues After Appraisal

For every employee happy with the outcome of their appraisals, there’s a bunch of others who end up feeling they’ve been shortchanged. Sreeradha D Basu shows how both employers and employees can deal with post-appraisal blues.

1 Seek Support

Don’t judge if you are not in agreement with the feedback. Ask for instances and data to support it, says Nishchae Suri, head of people and change, KPMG in India. “Appreciate the spirit with which the feedback is being given. Your manager and the organisation are interested in your growth and development. Ask for support which will help you address your areas of development,“ says Suri.

2 Introspect Dispassionately

Do some honest self-analysis, suggests Meeta Wasan Gujral, founder and director-salesprograms, Doon Consulting, a lead generation and market research firm. “If you were not able to perform to the expected level, where was the gap? Was there something lacking in the skills required at your end to perform the expected task? Then every effort should be made to acquire that new skill required to perform the job well,“ she says.

3 Keep your Cool

Avoid acting impulsively and allow a cool-off period. Wasan Gujral says it’s important to keep calm. “That, and not losing self confidence even after a difficult appraisal, are traits that can help anyone overcome difficult times. Also remember the good times as this will help you deal with the negativity that may emanate from the situation,“ she says.

4 Draw an Action Plan

KPMG’s Nishchae Suri advocates managers doing the appraisals to chalk out a specific action plan. “Managers can provide concrete and actionable development items that can support what may otherwise be perceived to be a generic assessment,“ he says.

5 Create the Right Environment

Organisations need to create a psychologically safe environment such that individuals feel that they can express concerns without feeling threatened, says Nishchae Suri. “They can provide post-appraisal counselling to combat insecurities, counter negativity and maintain an ongoing healthy dialogue,“ he adds.

Source: Economic Times

Date: 24th February 2015

Target GenNext: Future Group to Tweak HR Systems

Group to build more data-driven, customer-centric processes in line with changing consumer mindsets and behavior

Future Group is revamping its human resource process and systems to build a more consumer-centric and datadriven organisation and achieve strategic business goals for 2020.

Plans include attracting young management talent at top business schools across the country this year and building teams of customer experience, design experts, data scientists and social media managers. The company has also introduced Chairman’s Club, wherein group CEO Kishore Biyani will directly mentor the top 100 employees.

“Our Vision 2020 needs a new people strategy . We have to change with the times. It’s about how you include the new millenials in your system, and deal with changing customer mindsets and behaviour,“ says Biyani. With an omni channel retail strategy and digital payments, the organisation will have to deal with younger customers, he adds. The omni channel strategy is aimed at integrating offline and online retail models to make buying convenient.

To understand young customers better, the retail major, which has around 36,000 employees and a turnover of around . 15,000 crore, is eyeing young management ` talent at top business schools across the country. It hired management trainees from top B-schools like IIM Bangalore and IIM Calcutta for the first time this year and has hired close to 80 graduates so far with a target of hiring a total of 100. The trainees will be mentored for a year on different projects and roles, before being absorbed in specific departments in 2016.

“We have got an amazing response at campuses and we were present on day zero and day 1 at top B-schools. Our compensation may not match that of top recruiters but we have clicked with students because of the brand connect, our work and values,“ says Kaustubh Sonalkar, chief HR officer at Future Group.

The group launched Chairman’s Club four months ago. The employees, selected after being nominated by their respective managers and a group-based evaluation process which includes personal interviews and psychometric assessments, will directly work with Biyani in realising Vision 2020.

While the Chairman’s Club includes a group of business leaders along with the chairman, at any given time he will have 10 employees under him. If there’s a business goal, there has to be a people strategy and a total rewards strategy, says Sonalkar. “The total rewards strategy is not just about compensation but development plans and other benefits. It’s about assessing people for skills, attitude and knowledge and getting your people ready to meet those goals and targets,“ she adds.

While the group attributes the revamp to changing customer base and needs, changes in people strategies could also be a result of greater online competition and rising popularity of young and dynamic e commerce companies which are eyeing top talent.

Private investors pumped in $2.3 billion into India’s e-commerce companies last year, according to consulting firm Technopak, giving them the wherewithal to attract and entice shoppers and pay competitive hikes to lure top talent.

“The single biggest factor in the changing HR strategy of brick-and-mortar retailers could be e-commerce,“ says Arvind Singhal, chairman of Technopak Advisors.

In line with the changing business models, e-commerce companies will lead physical retailers to reorient their people strategy to understand digital customers better.Customer behaviours and profiles are changing drastically, and logistics and supply chains need to be restructured for an omni channel strategy.

Source: Economic Times

Date: 24th February 2015

Plan to Hire Private Sector CEOs for PSBs Put on Hold

The government has kept in abeyance its plan to hire chief executives for public-sector banks from the private sector, as it is yet to come up with a clear procedure for the appointment.

The original plan was to widen the search by inviting applications from the private sector for Canara Bank, Punjab National Bank and Bank of Baroda, where the positions of CEO have been vacant for several months. For the first time, the government had indicated at the Gyan Sangam -a two-day conference held in December on the future of public-sector banks -that it would advertise the vacancies.

But the government has recently made the senior-most executive directors at two banks as their CEOs. It named VS Krishna Kumar the managing director and CEO of Canara Bank until he reached superannuation in March 2015, while Gauri Shankar has recently been given the same positions for three months at Punjab National Bank. Sources say the government is set to appoint Ranjan Dhawan, the senior-most executive director of Bank of Baroda, as the lender’s MD and CEO.

The Department of Personnel & Training had previously proposed to engage an HR firm to screen all the applicants, which would then be followed by interviews by the appointment committee, sources said. “However, it appears that the government is not clear about the process of the appointment,“ said a senior bank official, who tracks people movement at PSU banks. “Due to lack of clarity and time, the appointment process is pushed behind and, as a result, the senior-most executive director is given the charge,“ he added.

For years, PSU bank chiefs -designated as chairman and managing director -were chosen from among the executive directors of all state-run banks. However, at the State Bank of India, the chief was selected within the bank by the government while SBI posted its deputy managing directors to head its associate banks.

Source: Economic Times

Date: 23 /2/2015

Foreign Job Offers Decline in Top Business Schools – Devina Sengupta & Sreeradha D Basu Mumbai

Excitement around India, fewer profiles in US & Europe prompt grads to work here
The placement report card of top B-schools in India shows them scoring poorly in one subject -international job offers.
Offers for foreign posts have dipped by 39% in IIM Bangalore and 40% in IIM Kozhikode.
Placement teams say the increased excitement around India and reduced US and Europe profiles have led to students opting to stay within the home turf.
“India is becoming a nerve centre for many companies. There were some cases where a student had a choice of two job locations; one abroad, and the student chose a domestic option,“ said Sankarshan Basu, chairperson, Career Development Services. “Also, no job offers have come in from Europe and that has also led to a decline,“ he added.
At IIM Bangalore, international offers have dropped from a high of 41 last year to 25 this time. In one of the prominent IIMs, Bank of America did not hire for their global postings this year. Two international firmsKadence International and NMC Healthcare that recruited nine students last year didn’t participate this year, said another IIM placement team member. They informed the campus that they did not have suitable requirements.
“The global economy is yet to pick up and those that hired last year would have realised that the market has not grown as fast as they had expected, so there is no aggressive hiring from India this time,“ said Rohin Kapoor, senior manager, Deloitte India who tracks the education sector.
Also, with India growing at 7.5% , opportunities to scale up or join startups is more in the domestic market. And given the competitive salaries offered, students will let go of global posts, added Kapoor.
At IIM Kozhikode, international offers have gone down from 25 to 15.AF Mathew, chairperson -placements said that there were firms which had decided not to recruit. “A couple of others showed interest but by the time they came, everybody on campus was already placed.“
“Global teams prefer to hire locally or have a job transfer from India than come to college campus for that one odd student,“ a placement team member of IIM Indore said. “Getting visa clearances and costs incurred are not worth all the trouble.“ The college managed to get five international offers, the same as last year.
Others including IIM Lucknow, XLRI, IIM Indore and MDI have managed to maintain status quo.Companies that have offered international placements in top B schools of India include Aditya Birla Group, Godrej Industries and Allied Companies, Avnash Group & Dott Test for roles in general management, HR and operations.
IIM Calcutta is on its final leg of placements and IIM Ahmedabad has just started. Offers for foreign posts are likely to be lower here too.

Source : The Economics Times
Date : 18th Feb 2015

MOVE TOWARDS OPEN ARCHITECTURE – IRDA May Ask Banks to Sell Policies of Multiple Insurers

Customers to get more choice, but cos which paid big for bank tie-ups may not cheer move

India’s insurance regulator is considering making it mandatory for banks to adopt open architecture under which they will have to sell products of multiple insurance companies.

The Insurance Regulatory and Development Authority (Irda) said this to the chief executives of about 50 insurance companies at a meeting last week. “The regulator has clearly said that they are going to make open architecture mandatory in order to give choice to customers and boost insurance penetration,“ said a private sector life insurance company’s CEO, who attended the meeting.

The share of banks in total individual new business went down to 15.62% in 2013-14 from 16.18% in 2012-13, according to Irda’s latest annual report. Confirming the move to make open architecture mandatory , an Irda official said, “Making open architecture mandatory was discussed during the meeting. As Irda can ask banks to sell products of more than one insurance company .“ The regulator may ask banks to sell products of three companies, with one not exceeding 50% for the promoter company , said the official, who did not wish to be named.

Under the corporate agency tie-up, banks sell one life insurance, one non-life insurance and one specialised insurance like standalone health insurance.

If Irda goes ahead with its plan, customers will get more choice. However, many companies that have paid hefty amounts for the bank partnership are unlikely to cheer the move. Recently, the Reserve Bank of India allowed banks to become brokers if they so chose. “The broking model could provide an opportunity to the banks to increase their fee-based income while providing a greater product choice and taking on the fiduciary responsibility towards the consumers,“ said Tarun Chugh, managing director and CEO of PNB MetLife India Insurance.

Broking is expensive as it involves training and educating staff. Banks will have to hire dedicated manpower since they are all ready short-staffed. In August 2013, Irda had released the final guidelines on bancassurance. According to the rules, business done with a promoter bank is capped at 25% while the bank can do 50% with another insurance company and 25% with the third company.

Large foreign banks have entered into long-term agreements as part of regional deals which are not available to insurance companies for a longer duration.

Source: The Economic Times

Date: February 17, 2015

Dealing with dilemmas

What do you do when faced with work situations that challenge your ethics? Your responses will not only affect your peace of mind but also show whether your career is at risk, says Devashish Chakravarty

Every day at work will call for decisions and actions from you. Most of them will be responses to rou tine situations. A few will chal lenge your values and ethics. Here are such situations that you may face.

Counter offer

You have accepted a good job offer with another firm. When you put in your resignation, your employer asks you to stay back and makes a counter offer. Having given your word to the new employer you are unsure of the next step. Know that your reputation will be harmed if you back out now. If you stay back, your employer will mark you as a person who will leave soon and make you dispensable. If you are planning to negotiate with your current employer, discuss the offer with your boss before you convey your acceptance to the new employer.

Misplaced credit

You are an analyst who has slogged alone for hours to create an outstanding report. However, your senior team mate or supervisor hogs the credit. Typically this is unacceptable in any organisation. For a senior colleague, ask for a meeting with your boss and show the evidence. You will get an apology and negative vibes subsequently. If the culprit is your boss, check whether your efforts will be recognised at increment or promotion time. If not, consider taking it up with management to get just recognition. Seek to be reassigned to another team.

Easy way out

You are a salesman missing your annual target. This will affect your bonus promotion.You know you can push a favourite client to drop an ambiguous email confirming next quarter’s purchase in advance which you can claim as an order closed this year. However, if the client is unable to keep his word, it will affect your chain of command and you will pay the heaviest price. Make sure that you have your team or boss’s sign off.

Complete obedience

Your boss has asked you to pay a bribe and submit false travel bills to claim it back. You will be miserable if this goes against your ethicsvalues. When such actions are discovered, the consequences are severe for everyone involved even if they were simply following orders. Instead of complete deference, share with your boss that perhaps you are not the right person for this task. Your boss will probably back off.

Personal stuff, company time

Are you using the company-paid telephone for long distance personal calls? Or using office internet to view popular videos? Personal stuff during office hours or using office resources is unethical since both your time and the resources are paid for by the employer.Know that your internet usage is recorded and your office cell has detailed call records.Your employer may turn a blind eye until things turn sour or it’s time for the appraisal.

Unwilling witness

Your team leader has alcohol on his breath.Your colleague is harassing the new intern who is too scared to take a stand. As an unwilling and uncomfortable witness to unethical behaviour, should you turn a blind eye or take up the matter? Ideally, you will share the matter with a supervisor or the HR. If you are concerned that this action will label you as a trouble-maker, then you are in the wrong organisation. In such cases, raise the issue with colleagues and express your discomfort. The matter will invariably escalate to the right level as the discussion gathers steam.

Right vs right

The toughest ethical dilemmas are when you are forced to choose between alternatives with competing ethical values. You have been tasked to fire two colleagues for underperformance and you want to give one of them an extra chance because he is the sole bread-earner for his family. Fairness requires both to be treated equally. Compassion urges you to help one individual. The correct solution is to check if the company is willing to sponsor a compassionate stance over a fair one. If not, go with employer policy and help the individual outside the workplace e.g. in finding a new source of income.

Borrowed assets

Your employer expects you to take the office laptop home to complete work. But unless stated, it does not mean that you can borrow office stationery for home use or pick free cans of Coke from the office get-together for your fridge. These actions rarely go unnoticed and you will be fired if your company is sensitive to such behaviour. Be cautious about how you treat office assets.

Leaked information

You have access to both employer and client information. It is often tempting to use such information while regaling friends at the bar with colourful stories. Since your employment terms and conditions forbid you to share data with people outside the company, your behaviour becomes a grave offence.Similarly be careful of the emails attachments you send, especially if you use the office laptop for personal work.

Source: Economic Times

Date: 16th February 2015

Law Commission Says Criminal Liability Clause is ‘Overbroad’

Corruption Bill provision could make entire board vulnerable to charges for failing to prevent bribery

The Law Commission of India, headed by former Delhi High Court Chief Justice AP Shah, has red-flagged a key provision in the upcoming Prevention of Corruption (Amendment) Bill which could potentially make the entire board of directors of a company vulnerable to criminal charges for failure to prevent its employees from bribing a public servant to obtain or retain business. The 50-page report submitted to law minister Sadananda Gowda on February 12 describes as “overbroad” the provision which ascribes criminal liability “to every person who is in charge of and responsible to the organisation for the conduct of its business” if the offence is proved to have been committed with the consent or connivance of the company, as it exposes the entire top leadership to a jail term. The proposed law, targeting the ‘supply side of corruption’, stipulates a 3-7 year jail term for that offence.

“The effect (of the provision) is that if an employee (P) of a company (C), sitting in Bangalore bribes a local official (R) to get its clearance on time, then the combined effect of the Bill is that all will be liable unless C can prove it has in place adequate procedures designed to prevent such conduct. However, the provision will operate to deem every single person in charge of, and responsible to C – thus, every director on the board of directors, who may be sitting in Delhi more than 2000 kms away – guilty, and the burden on proof will shift on each of these directors to prove they had no knowledge or had exercised due diligence,” the law commission report says.

“The situation could be even worse if, for instance, P had the high level clearance of one of the sitting directors to bribe R, because of which every other director will now be faced with the difficult task of discharging their high burden of proof,” the law commission report says. The new draft proposed by the Law Commission says only that official must be held liable whose consent or connivance is proved.

The report also criticises a provision which says that a company would have to pay a fine if it is unable to prevent acts of corruption. “This provision will lead to an immediate and significant impact on the conduct of business by corporations, especially in light of the fact that they will not have any clarity on what is expected of them and will not even know if the procedures and processes they adopt are in compliance or in possible breach,“ says the report.

The report also says the Centre cannot enforce the new law unless it first pub lishes guidelines, along the lines of the UK Bribery Act, describing proce dures that corporates can put in place so that there are “adequate systems“ to prevent their employees from bribing a public servant. The Law Commission says these guidelines must emerge through a consultation process initiated by the Centre in which the views of all the interested stakeholders are obtained through public notice. It adds that it should “be a defence” for the corporate if it proves it had in place adequate procedures designed to prevent persons associated with it from indulging in corrupt conduct.

The report says unlike the UK Bribery Act or the Foreign Corrupt Practices Act in the US which has detailed guidelines in place for corporates, the proposed amendment in the Indian law does not require any such guidance and “places no obligation” on the government in this regard. “In both countries thus, there are extensive guidelines on procedures, which commercial organisations may use on a voluntary basis to conform their conduct to the law and relevant government policy on enforcement,” the report says. In India, this is especially important given that the proviso places the “burden of proof ” on the commercial organisation, the Law Commission report has said. “This might also impede the efficient functioning of small businesses, which will not be able to determine the adequate standard themselves,” the report has added.

Finance minister Arun Jaitley, on November 12, 2014, in pursuance of the “informal decision” taken by the Cabinet, decided to obtain the views of the Law Commission of India on the issues relating to the proposed amendments to the Prevention of Corruption (Amendment) Bill, 2013, the Law Commission report says. The Bill was introduced in the Rajya Sabha by the erstwhile UPA government in 2013 and was referred to a standing committee that submitted its report on February 6, 2014.

Source: Economic Times

Date: 16th February 2015