What to Expect in Commercial Insurance Pricing in 2017

The marketplace for commercial insurance will continue to favor insurance buyers in 2017, particularly those with strategic risk management and risk transfer strategies, according to Willis Towers Watson’s 2017 Marketplace Realities report.

The report points to strong marketplace capacity as a key driver in market conditions and contends that this ample capacity will likely allow insurers to absorb any natural catastrophe losses in 2016, including those from Hurricane Matthew and the Atlantic hurricane season.

Overall, buyers’ individual risk profiles will determine their fate at the negotiating table, according to the report. But in general, downward or stable pricing will continue for most property and general liability risks, while certain lines such as cyber, auto liability and health insurance will see rate increases.

“The mix of increases and decreases, while subject to some change line by line, overall remains steady,” said Matt Keeping, Willis Towers Watson head of broking, North America. “The marketplace continues to offer opportunities for buyers, but as always, strategic planning yields the best results. The key point for buyers is to understand the nuances of the market so they can optimize their risk management programs.”

In property lines, the ongoing declining rate trend continues, according to the report. Catastrophe-exposed programs, having led the softening cycle last year, continue to lead the declines. Property rates are expected to decline 7.5 percent to 10 percent for companies without significant exposure to natural disasters and 10 percent to 12.5 percent for those more exposed.

For general liability, rates for 2017 are expected to be down 5 percent to flat, although buyers with recent claims can anticipate increases of 5 percent to 10 percent.

Workers’ compensation costs are forecast to remain steady, with small increases or decreases for most buyers.

In the auto liability line, an increase in the frequency and severity of losses is driving up rates as much as 10 percent. International casualty rates are predicted to remain flat or fall by up to 10 percent.

Cyber-renewals are facing primary premium increases of 5 percent to 10 percent for most buyers, and 15 percent to 20 percent for point-of-sale retailers and large health care companies with no loss experience. For organizations with strong risk controls, premium increases can be lessened. Organizations that operate in the middle-market space (annual revenues below $1 billion) can expect a very competitive cyber-market with aggressive pricing and broad policy language, as many carriers are eager to write these accounts, the authors of the report said.

In executive risk lines, buyers will continue to find a mix of modest increases and decreases, with rate increases driven largely by adverse risk profiles. For example, in the errors and omissions market, large technology companies with new media and service offerings can expect to see rate increases due to expanding global privacy laws. Meanwhile, the directors and officers liability market remains robust as insurers roll out coverage enhancements and buyers are obtaining unprecedented value in the trade-off between terms and price, according to the report.

In the health care and employee benefit space, uncertainty remains high after the government put the brakes on two proposed insurance carrier mega-mergers, and questions continue about the evolution of health care reform following the presidential election. Predicted rate increases are edging upward: 4 percent to 5 percent for self-insured plans and 7 percent to 8 percent for insured plans.

Source: Insurance Journal

Date: 27th October, 2016

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Insurance boost to Bajaj Finserv’s earnings

Bajaj Finserv profits for the September quarter have grown by 30.5% mainly because of the stellar performance of the general insurance business

 

For long Bajaj Finserv’s engine of growth in both revenue and profit had been its insurance business which changed as the finance conglomerate went full throttle on consumer financing from 2011-12 onwards.

Bajaj Finance, its consumer business arm, has increased its contribution to the parent’s profits and now accounts for about 40% of the total profit of the parent.

But Bajaj Finserv’s profits for the September quarter have grown by 30.5% mainly because of the stellar performance of the general insurance business.

Bajaj Allianz General Insurance reported a net profit of Rs173.5 crore, a rise of 30% from a year ago.

The insurer’s gross written premium rose 42% to Rs2,179 crore but its assets under management (AUM) grew by 3% to Rs10,360 crore. Much of the business growth seems to be coming from direct sourcing rather than intermediaries, while the contribution of brokers and individual agents has fallen sharply.

However, the life insurance business continues to flounder. Bajaj Allianz Life Insurance saw its net profit decline sequentially and from the year-ago period. The management has stated that the company’s profits would begin showing higher growth rate over the next two years.

The consumer business through Bajaj Finance continued to show strong AUM growth of more than 30%.

For the September quarter, profit rose 46% and as usual vehicle finance and consumer durables contributed the highest to growth.

The fact that the lender has reduced loan against property augurs well for an asset quality that is already strong. But on a sequential basis, there seems to be a slowdown in many parts for Bajaj Finance.

Given that the insurance business has now fired up, investors would want a clear valuation now more than before.

Talks of Allianz parting ways with the Bajaj group for both the life and general insurance business have been doing the rounds for quite some time.

While the company has been tight-lipped about the same, if a deal goes through, it would give investors a clear valuation benchmark.

Currently, investors arrive at a value for these businesses through various ways or proxies. While Bajaj Finserv’s shares have clocked an impressive 25% rise over the last three months, analysts are already terming Bajaj Finance pricey.

Source: LiveMint

 

Date: 28th October,2016

Mistry’s HR Steps may be Put on Hold

Initiatives include 18 parameters introduced in the past year to achieve Tata Quality of Life framework

The HR initiatives being rolled out at the Tata Group may be put on hold until there is more clarity on what the management wants after the sacking of Chairman Cyrus Mistry, said people in the know.

In the past year, the group under Mistry and Chief HR Officer NS Rajan had rolled out a series of initiatives for its over six lakh employees. These included a new competency framework to identify the next rung of leaders, long-term incentive plans via stock options, task force of CXOs to mentor the next line of leaders, as well as 18 parameters that would be essential to achieve the Tata Quality of Life standards.

“We have been told to wait for some time before implementing the parameters that will help achieve the Tata Quality of Life framework,“ a senior HR leader at one of the Tata companies said, speaking on the condition of anonymity.

Tata Sons, the group holding company, didn’t respond to an email seeking comment.

To achieve Mistry’s Vision 2025, the group had outlined a new range of competencies called `Tata Leaders-what defines us’, primarily a combination of knowledge, skills and attitude that would help it identify top potential employees. HR policies had become a key note in the former chairman’s address to his CEOs and was the main topic for the annual group leadership conference held two months ago.

A senior leader of an advisory firm that works with the group on HR said he was told that all bills for work done so far have to be cleared until there is clarity on further assignments. “Practically, some of the changes brought in were good and there is no reason to stop them,“ he said.

The advisory firm had suggested Tata group companies adopt a long-term incentive plan to retain senior managers. According to sources, some group companies have already adopted stock option plans.

“This is a normal response when leader ship styles change. Some policies may be retained, while others removed,“ said an HR veteran.

In a meeting on Tuesday Ratan Tata, the interim chairman, asked CEOs and MDs of group companies to focus on their respective businesses without being concerned about the change in leadership. “We will evaluate (current policies) and continue to undertake those that are required to. If there is any change, they will be discussed with you,“ Ratan Tata said in a press statement on Tuesday .

Source: Economic  Times

Date: 27th October 2016

Irda Asks LIC to Get Board Nod for SUUTI Stake Buy

Insurance regulator has put a spoke in the Life Insurance Corp’s bid to buy out SUUTI’s stake in engineering firm Larsen & Toubro and cigarette maker ITC where it is already the single largest stakeholder possibly to ensure that its board takes responsibility for the risk it would be taking, said two people familiar with the development.

The regulator kept aside the approval from the insurer’s investment committee which wants to buy the stakes valued . 45,000 crore and instead orat ` dered LIC to get an approval from its board of directors, said people who did not want to be identified.“They have sought permission to buy SUUTI’s stake in ITC and L&T,“ said an Irda official. “We have asked LIC to get approval from its board to raise stake in the companies and not just approval from investment committee.“ The insurer with faces shrinking options on good investment which could provide stable growth and returns, is keen on buying the stake of SUUTI, an organisation that the government carved out of the Unit Trust of India to save the mutual fund as part of a bailout in 2003.Now SUUTI owns some assets which belong to the government and it wants to raise . 56,500 crore through disin` vestment of such holdings.

The government started the process of selling SUUTI’s stake in various companies. It has stakes in 43 companies including BPCL, Grasim, Axis Bank, and NSDL. SUUTI holds 11.11% in ITC and 8.14% in L&T.8.14% in L&T.

Source: Economic  Times

Date: 27th October 2016

Hard at work, but on social media

Surfing During Office Hours Cuts Productivity By 13%: Study

Employees are spending on an average 2.35 hours on social media during working hours, much higher than the 1.15 hours being spent outside work, according to a survey conducted by HR service company TeamLease. The company says this results in huge loss of official resources, while about 13% of the total productivity of an employee is estimated to be lost.

The report, based on a survey of executives from companies across sectors like pharma, automobile,data analytics and engineering design, noted that the extensive use of social media was also resulting in an increase in loss of confidential information, defamation of companies, misinformation and employee solicitation.

More than 32% of the total time spent on social media was found to be used for personal work by the employees every day. “It is a time sink,“ the CEO of a learning and development company is quoted as saying in the report. “People get inafter lunch hours and then lose themselves on social media.We estimate to be losing aro und 20% productivity because of this juvenile behaviour.“

Facebook was the most visited social media platform.Out of the 62% employees who accessed social media during work hours, nearly 83% spend significant time on Facebook.

Kunal Sen, senior VP, TeamLease Services, said, “Social media comes with its own inherent merits and demerits. In fact, indulgence in social media and the resultant slacking is a testimony of pastimes getting more interesting than work.Rather than blindly instituting rules, organizations should get to the root cause of the misuse and devise policies that make work more challenging.“

An employee engagement manager at an advertising firm is quoted as saying, “ At first we thought creative minds need to be set free and not restrained by curbs on social media usage.However, two years down the road we have had to clearly lay out acode to govern the use of social media at work.“

But a senior manager at a tech startup differed: “By virtue of being a startup, with its high-pressure work environment, we leave it to our people to mix fun and work.“

Source : The Times Of India

Date : 19-10-2016

These sectors generated most jobs in 2015-16

Today, in our best of 2015-16 series we bring you the best employment sectors according to the TimesJobs RecruiteX.

 

Take a look

Healthcare
The sector has reported a 15% rise in talent demand in the last one year, reports TimesJobs RecruiteX. In August 2016 the industry reported a whooping rise of over 30% in talent demand. February 2015 was the other favourable month with a month-on-month rise of 12% in talent demand.


Architecture/Interior Design

The sector posted a year-on-year rise of 12% in the hiring activity in the past one year, reveals the TimesJobs RecruiteX. In August 2016 the industry registered a 27% rise in talent demand. January and February 2016 were the other favourable months with 7% and 14% rise in talent demand, respectively.


Real Estate

The sector reported a 6% rise in talent demand between 2015 and 2016, shows the RecruiteX data. It posted a 21% rise in hiring activity in August 2016 and 10% rise in January 2015. This year alone the sector has posted an average 2% rise in talent demand since May 2016.

 

Recruitment/Placement Agencies
The sector has reported a year-on-year rise of 1% in talent demand. It witnessed a 15% rise in hiring activity in May 2016 and 13% rise in August 2016. September and December 2015 were the other favourable months with 11% and 9% rise in talent demand, respectively.

Source:Timesjobs

Date:18th October 2016

JLT Independent acquires Vantage Insurance Brokers

Also, the JLT Group has hiked its investment stake in JLT Independent from 26 per cent to 49 per cent

JLT Independent Insurance Brokers on Thursday announced that it has completed the acquisition of Vantage Insurance Brokers.

 

Post this, Arvind Laddha (founder of Vantage) will take over as Deputy CEO of JLT Independent subject to regulatory approvals.

 

Sanjay Radhakrishnan, CEO of JLT Independent said that the addition of Vantage’s employee benefits insurance brokerage portfolio will open up a host of new services for their clients in India.

 

Further, JLT Group also has hiked its investment stake inJLT Independent from 26 per cent to 49 per cent. JLT Independent is ajoint-venture between Sunidhi Group of India and Jardine Lloyd Thompson (JLT) Group.

 

Laddha said that there is a strong strategic fit between the two businesses that will drive innovation in the marketplace.

 

Vantage was founded in 2004 as a specialist broker in employee benefits. They manage Rs 400 crore of employee benefits premium and have about 600 clients.

 

Date – 14- 10 -2016

Source – www.business-standard.com