Arth Capital, Relan Seek Nod for Health Insurance Co

After Birla, another company has filed an application to float a health insurance company. Rajesh Relan, former MD of PNB MetLife, has filed an application with the regulator to start a health insurance company along with private equity firm Arth Capital. The company, to be called Aspire Health Insurance, will sell products through multi-channel distribution with focus on online.

The company will have an initial capital of ` . 100 crore. The promo . 250 crore ters will put in a total of ` in the company. Relan will hold 26% of the company. Sumit Chandwan’s firm Arth Capital will hold 40%. Relan and Arth Capital will jointly hold 66% in a SPV and will be the largest shareholders and hence the promoters. The balance 34% will be held by a Hong Kong-based Mcquarie investment fund. Thefuture capital has been tied up and the company is expected to break even in the fourth year. Relan was responsible for PNB MetLife JV .

Relan refused to provide details of the deal or on the investors due to confidentiality reasons. Relan confirmed filing of the application with the regulator. “We are committed to build a formidable health-tech insurance company that will disrupt the current market through technology and will emerge as a leader in the standalone health insurance space,“ Relan said. Health insurance has been growing over 20% over the past several years supported by rising medical costs.

 

Source: The Economic Times

Date: 24th Feb, 2017

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“How to Successfully Negotiate a 50% Pay Raise”

In the summer 2014, Dakota Adams, then 26, decided she wanted to move on from her job for a number of reasons. One, she felt she was undervalued and underappreciated. Two, she was missing out on a good social life, racking up in debt and not getting paid enough. Perhaps, the biggest draws of being underpaid was missing out on the opportunity to make new connections through the course of her career, and all that a great job has to offer. But, that’s not what we’re going to discuss here.  In 14 months, she went from $46,000 to $85,000. Curious, how she could successfully negotiate a pay raise? Here’s how:

STEP 1: You’re undervalued? Prove it.

Conduct research on how much your title job is worth. For this, visit Salary.com, Glassdoor.com, Bureau of Labor Statistics, and Google. However, don’t settle on one single source.

Also, you’ll need to take into consideration the local job market in your city. For example, the entry-level journalist who do cultural reporting in New York cannot afford to live in New York. So, when you decide what the median pay is for what your job title, you also need to be a tad realistic. Dakota Adam’s median pay was $78,000. Meanwhile, her current job was paying her $46,000.

STEP 2: You need a new job, seriously.

Find places of employment in your area, doing what you want to do. Make profiles on Monster, Glassdoor, Indeed and CareerBuilder. Update your resume and start applying for your dream job. While you’re applying for jobs, you will get frustrated repeating the whole process over and over again on a dozen sites. You need to stay patient.

Tailor your resume: Also, make sure you tailor your resume with each and every job application. You can review the job description for insights on how to revise your resume. Review the information and make appropriate revisions to your resume by adding or removing information.

Don’t burn the bridge: You don’t want to damage your career in the long run. You should be on best behavior with your former-bosses and colleagues. Even if you were treated unfairly, the most respectable thing to do is to keep things civil and professional. I know of a young man who mouthed off his old boss when leaving the company found himself having to work with him four years later, as his new VP.

You’ll be amazed at how easy it could be to start getting calls for interviews. The best piece of advice I could give on how to interview is to research on what you have to say and how to say it. Learn how to accent your strengths, and don’t underestimate the power of persistence.

STEP 3: DRUMROLL – Negotiate a pay raise!

You’ll receive offers, both good and bad. One offer might be lower than you had expected. Another offer, could make you realize what you should be making right now. You’ll also receive an offer, where the numbers will look almost surreal to hear. This offer will only validate your earlier doubt that you’re undervalued. Be sure to thank everyone involved in the process, even when all your expectations are crushed.

There’s quite a lot you can negotiate on during the interview process. It’s not just about the salary, but the overall package. Don’t be afraid to tell your employer what you want. At the same time, I would suggest that you don’t go overboard with it.

To negotiate pay raise, you must know your worth. Now you can leverage each of the offers against one another. I would say, this works best when you know that a company wants you. Finally, you must go and tell your boss what’s happening. Be honest about the entire things, because you never know. Your boss may decide to counter offer.

Generally, counter offers are not seen as an ideal option. So, speak to your potential employer, the one place where you want to go and see if they decide to match the salary. At the end of the day, it’s all about knowing what you want and getting it.

The Bottom line

Don’t second guess yourself. You take the plunge and you’re going to be on the winning side either way. Adams spent more than two months negotiate for a better lifestyle. The entire process was nerve racking and anxiety inducing. At the end of the day, it was worth it!

 

Source: The HR Digest

Date: 19th February, 2017

 

Evolving nature of talent management in Indian SMEs

Here are the key points from People Matters SME HR Landscape Study 2017.

 

To understand the HR landscape and frames of references in the small and medium enterprises segment, People Matters conducted “The Small and Medium Enterprises HR Landscape Study 2017” that surveyed 135 unique companies across sectors — ranging from IT, healthcare and BFSI, with employee base ranging from below fifty to more than five thousand and analyzed the data that was generated. The study focused on three principal questions What are the talent-related business priorities of SMEs and how ready they to handle them?; What is the level of maturity of HR processes in SMEs and if there are any identifiable trends?; and What is the role of HR technology across multipleprocesses?

 

 

 

What’s Working, What’s Not

One of the starkestrevelations that the Study made was that most SMEs in India do have HR departments, contrary to the common expectation. And hiring and onboarding feature among the activities that most SMEs and their HR functions enlist as top priorities. 73 percent of the survey participants stated thatthey are “ready” to hire people for the right skills, knowledge and experience; 80 percent stated that they are prepared to onboard new hires; and 69 percent mentioned that they were ready to create and communicate workplace policies.

On the other hand, “Managing turnover and retaining high performing talent” is a critical challenge for most SMEs. 43 percent of the companies surveyed rated the challenge “urgent” whereas 45 percent of the companies considered themselves “unprepared” to tackle the challenge.

Another notable challenge that SMEs face pertains to “engaging and motivating employees” to go the extra mile. A total of 43 percent of surveyed organizations stated that they are not prepared to tackle the challenge, and 36 percent rated the challenge as urgent.

The state of HR Technology in SMEs

The most common function for which technology is used is HR Operations (including payroll, leave and attendance) — 40 percent of SMEs already use a fully automated technology solution, about 46 percent of themhave adopted some core technologies and 64 percent of the SMEs use technology solutions for recruitment. Other HR functions for which technology is used include communication and collaboration (63 percent), performance management (64 percent), and compensation and benefits (62 percent)

HR functions where SMEs are less reliant on technology include – Employee Engagement (56 percent), Strategic workforce planning (61 percent), Succession Planning (70 percent) and rewards and recognition (58 percent).

Developing key talent processes

According to the HR Landscape SME Study, about one-third of the organizations surveyed do not haveleadership development programs. And a half of those who do have a program, do not have a documented process, which means that most of their programs are time-based and adhoc. And while 41 percent of the SMEs rate their HR capability “good”, 26 percent of them believe that their HR function “needs work”. Clearly, there is much scope to take the existingprocesses a step ahead, in a way that is cost-effective and creates maximumimpact.

While it is clear that retaining good talent remains a challenge for SMEs, actionable strategies to counter it are still lacking. Most companies simply try to forecast attrition as accurately as possible, only 28 percentmaintain a healthy bench strength (perhaps most cannot afford to), and upto 30 percent depend on employee contracts to work for a stipulated time, which is not always a great strategy. Perhaps less implemented solutions like offering greater flexibility and hiring part-time staff and consultants could help improve the situation.

Source-People Matters

Date-14-02-2017

Irda Seeks Legal Opinion on Max-HDFC Merger

Insurance regulator had rejected the alliance as it doesn’t allow insurance firm and financial services co to consolidate

The insurance regulator has sought the opinion of the government’s top law officer, attorney general Mukul Rohatgi, on the legal side of the Max LifeHDFC Life merger plan.

The Insurance Regulatory and Development Authority (Irda) had initially rejected the two-way merger in the way the companies had proposed. As per the proposal, Max Financial Services was to be merged with Max Life, followed by a demerger of the life insurance business, which would then be merged with HDFC Life Insurance, creating the most valuable private sector life insurance com . 70,000 crore based pany at around ` on the agreed commercials and share-swap arrangements. Shares of HDFC Life would be listed on the stock exchanges post the mer ger. “We have sought legal opinion on the merger,“ said an Irda official. “We have written to the Department of Financial Services, which will take the attorney general’s vi ews through the law ministry .“

Section 35 of the Irda Act does not allow merger between an insurance company and a financial services company . There is also no provision under the Insurance Act to merge a financial services company with an insurance company .

Irda and the finance ministry didn’t comment. In November 2016, the two companies informed exchanges about reservations raised by Irda to accept the amalgamation in the form they had proposed. HDFC Life and Max Financial Services had announced the merger in August to create the country’s largest life insurance company with assets under management . 1.10 lakh crore. In the merof over ` ged entity , the HDFC group was to own a 42.5% stake, Standard Life 24% and the Max Group 6.6%.Other big shareholders included Mitsui Sumitomo with a 7.8% stake and Axis Bank with 1.2%.

“What we can allow is a merger between Max Life and HDFC Life,“ said an Irda official. “They will have to rework the plan, taking Max Financial Services out from the deal.“ As per the agreed valuation and exchange ratio, the relative valuation of HDFC Life and Max Life was decided to be 69% and 31%, respectively . Shareholders of Max Life were to get one share of Max Financial Services for every 4.98 shares held in Max Life. Shareholders of Max Financial Services were to get 2.33 shares of HDFC Life for each share held.
Source: The Economic Times
Date: 10th Feb, 20170

Five global reinsurers begin India operations today, another two to follow suit soon

After waiting long, five global reinsurers have kick-startedtheir operations in India on Wednesday. The top three global reinsurers, Munich Re, the largest reinsurance multinational, Swiss Re, Hannover Re along withFrench major SCOR and Reinsurance Group of America(RGA), the largest life and health global reinsurer have started their India operations after completing the regulatory formalities, as required by the regulator IRDAI, to set up branches in India.

GIC Re, the country’s official reinsurer, since 2000,  has been sole reinsurer in the $2.5 billion reinsurance domestic market.

Two more reinsurance multinationals, XL Catlin and Lloyd’s of London, who have also received their final approvals in the third week of January to set up operations in the country, are getting ready to start their operations shortly.

Also the first-ever private sector reinsurer ITI Reinsurance, promoted by the Sudhir Valia, one of the promoters of the India’s largest pharma company-Sun Pharma, has already started its operations a few days back.

All these global reinsurers, except RGA,  will be waiting for April 1 when $15 billion worth of non-life business are renewed in the Indian markets.

“Hannover Re is happy to announce the commencement of their Indian Branch operations with effect from 01 February 207 from Mumbai.  All lines of business will be underwritten from the branch with the support of experienced staff,’’ said GLN Sarma, chief Executive officer, Hannover Re, India.

Another two global insurers-Gen Re, Axa Re are waiting to clear two more approvals to start their operations.

All these reinsurers are already doing India business onoffshore basis and together with other  overseas reinsurers have a 50 per cent of market share.

According to the market sources,Swiss Re, the second largest global reinsurer has the maximum exposure of over $ 400 million and others are having portfolio between $100 million to $250 million.

However except GIC Re, none of the of the reinsurers are making profit out of the Indian market.

Analysts have pointed out that though these new reinsurers except ITI Reinsurance, may not be able to expand their business in near terms and would make efforts to retain the existing market share out of their offshore business in the country. In the medium term, Indian economy with reforms, improved infrastructure, rising middle class, increased private consumption will provide larger opportunities for the new reinsurers, said analysts.

The impact on reinsurance pricing out of the new competition will be clear on Apr1, said analysts.

IRDAI’s regulations stipulate that an Indian insurer should give preference to a foreign reinsurer. Only if this doesn’t work out, primary insurers can it approach those foreign reinsurers who have the requisite licence.

“We believe opportunities exist for foreign reinsurers with sophisticated product development and strong technical underwriting expertise that are willing to invest for the longer term,” said S&P Global Ratings credit analyst Philip Chung in the report, ‘ReinsurersFlock To India Despite An Uneven Playing Field’.

In the shorter run, however, India won’t be a walk in the park for foreign reinsurers, as the direct non-life insurance industry has been making underwriting losses for many years.

Source: Asia  Insurance Post

Date: 1st  February 2017

Budgetary boost for Crop Insurance, Digital Payment & Cyber security, Insurers find Budget positive

Though, majority of pre-Budgetary expectations on taxes and other benefits have remained unfulfilled, Finance Minister Arun Jaitley, in his Budget 2017, presented on Wednesday,  has unveiled slew of measures to boost crop insurance, digital payment and cyber security.

The disposable income for individuals earning between Rs. 2.5 – 5 lakh will increase due to the reduction in tax to 5% from the current 10%. This will in turn encourage the lower and middle income strata of people to invest in instruments such as insurance, mutual funds, fixed deposits, say insurer.

“While there were expectations on more reforms around the life insurance sector, some of the other announcements are definitely a step in the right direction.  Doing away with 5% TDS on insurance agents’ commissions is a great step forward in attracting and retaining right talent in the sector,” said Vignesh Shahane, Wholetime Director & CEO, IDBI Federal Life Insurance.

Some of the other measures that have implications for the insurance are –

1)The government has accepted recommendations of a Supreme Court-constituted Special Investigation Team (SIT), which had in July last year proposed imposition of  a cap on cash transactions above Rs 3 lakh,

2)1.5 lakh health sub centres to be converted to Health Wellness Centres,

3) Rs 1 lakh cr corpus for railway safety fund over five years,

4)A scheme for senior citizens to ensure 8 percent guaranteed returns will be implemented by theLife Insurance  Corporation(LIC)

Amitabh Chaudhry, managing director and CEO, HDFC Life said, overall it’s a good budget for the economy which in turn will always have a positive impact on the insurance sector.

M Ravichandran – President at Tata AIG General Insurance, said that the Budget 2017 focussed largely on three themes – agriculture, digital revolution and emphasis on eliminating corruption and black money, while also giving a huge impetus to small and medium businesses.

“With a view to boost the agricultural sector, the government has increased the coverage under the Pradhan Mantri Fasal Bima Yojana from 30% to 40% in 2017-18 and 50% in 2018-19 which will help farmers get insured. Farmers will also benefit further with the government spending Rs 13,240 Cr in FY 18 on crop insurancehe said.”

Also, with the government emphasising further on digital India and cyber security, the Budget will help strengthen a transparent financial ecosystem.

“The slew of measures in the budget, especially the thrust on digital showcases the intent of the government to shift money to formal financial channels and life insurance is a positive – albeit over a longer time horizon. The proposal to abolish FIPB and liberalisation of FDI signals that India remains open for business in a world rapidly shifting towards protectionism,’’ added Chaudhry

Kalpana Sampat, CEO, Swiss Re India Branch, commented that increasing allocations for Fasal Bima Yojana and targeting greater insurance coverage is a positive move to close the protection gap in agriculture. A robust crop insurance framework is an important stepping stone towards food security and financial stability for farmers.

“Finally, the health action plan is an important acknowledgment that the country needs to improve access to health care,” said Sampat,

Jonathan Anchen, Head of Economic Research & Consulting, India, Swiss Re, “It is a balanced budget with several measures to ease the process of doing business. This will positively impact economic growth. The initiatives to incentivise manufacturing, clear red tape for foreign investment, institutionalise the dispute resolution mechanism for infrastructure projects, higher allocation for highways, etc, are very positive steps.

The digital economy too will get a strong boost with high-speed broadband connectivity on optic fibers, and encouraging digital transactions, he said.

Mihir Vora – Director and ChiefInvestment Officer, Max Life Insurance said,” While there are no dramatic items, there are incremental benefits for many constituents viz. taxpayers with income below Rs. 5 lacs, affordable houses for the rural and urban lower-income groups, small corporates with turnover less than Rs 50 cr., higher allocation to the MNREGS scheme for the rural population. There’s a modest growth in infrastructure spending which in our view could have been higher.

“Overall, it continues with the theme of rationalization and continues towards preparedness for the GST regime,’’ he said.

Here’s- according to consulting firm E&Y- who will pay less and who will pay more personal tax following the finance minister’s personal tax proposals in Budget 2017. Once the FM’s proposals are implemented:

  1. A person with taxable income (after deductions such as Section 80C etc) of Rs 3.5 lakh will pay a tax of Rs 2575 as against Rs 5150 payable earlier.
  1. Persons with taxable income over Rs 5 lakh up to Rs 50 lakh will pay Rs 12875 less (including the cess saved).
  1. However, individuals with taxable income over Rs 50 lakh upto Rs 1 crore will be paying a flat surcharge of 10% on the total tax payable by them. For example, an individual earninggross total income of Rs 60 lakh will pay (after availing tax deductions asassumed in the table) Rs 1,45,024 additional tax due to the surcharge. As shown in the table a person with gross total income of Rs 60 lakh who was paying tax of Rs 15,91,865 would now be paying Rs 17,36,889 (after availing deductions and application of surcharge and cess).
  1. Those with income over Rs 1 crore would continue to pay the surcharge of 15% but would get the meagre benefit of saving Rs 12875 (including saving of cess but excluding the saving on surcharge). For example, a person with gross total income of Rs 1. 2 crore will pay (after availing deductions) Rs 39,65,706 as taxes including surcharge and cess as against Rs 39,80,512 payble earlier.

Jaitley has also proposed to provide relief to an employee subscriber of NPS.

The Budget has  proposed to amend the Section 10 so as to provide exemption to partial withdrawal not exceeding 25% of the contribution made by an employee under Pension Fund Regulatory and Development Authority Act, 2013 and regulations made there under.

This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-19 and subsequent assessment years.

Source: Asia  Insurance Post

Date: 1st  February 2017