Insurer HDFC Standard Life Insurance Company Ltd expects to break-even in the 2011/12 financial year, helped by an increase in premium income and reduction in operating costs, its chief executive said.
The joint venture between India's top mortgage lender, HDFC, and Britain's Standard Life, had posted a loss of 2.75 billion rupees ($62 million) in the year ended March 2010, lower than 5.03 billion a year ago and is expected to stay in the red this year.
"If the premium continues to see the growth we are seeing and if we are able to manage the costs well, we should be able to break-even next year," Amitabh Chaudhry said in an interview late on Wednesday.
HDFC Standard Life could launch an initial public offering in the second half of 2011 if an insurance bill, which proposes raising the foreign holding in insurance firms to 49 per cent from 26 per cent, is approved by the Indian parliament.
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Saturday, October 30, 2010
Friday, October 29, 2010
Listing daytime still away for insurers
Insurance companies will have to wait for some more time before listing, despite SEBI clearing disclosure rules, as the final guidelines from IRDA have not come and the Insurance Bill has not been passed.
Before insurance companies come out with IPOs, there are a couple of issues that need to be resolved: When will the 26 per cent FDI limit be increased to 49 per cent and two, will FII investments be included in the limit.
“There should be a clear idea on when the Insurance Bill is going to be passed,” said Mr Amitabh Chaudhry, Managing Director and CEO of HDFC Standard Life. “We would like to wait for the Bill before listing. But the final decision will depend on how much time it takes. It will take at least 9 more months for the companies to come out with an IPO.”
There is no clarification on the 25(%) per cent public shareholding clause, he added.
Companies that have evinced interest in listing include Reliance Life, HDFC Standard Life, ICICI Prudential and SBI Life.
Insurers said the SEBI disclosure requirements are on the lines of the recommendation of the SEBI-IRDA committee. The capital markets regulator had said that the SEBI (ICDR) Regulations, 2009, will also apply to insurance companies.
According to the recommendations of the committee, SEBI has asked insurers for additional disclosures, like risk factors specific to insurance companies and broad headings under which an overview of the insurance industry will be disclosed. However, companies were exempted exemption from appointing a monitoring agency.
Another stumbling block is that the IRDA may not relax the listing requirement that insurers have to be 10 years old for IPOs. The rule disqualifies Reliance Life Insurance.
Mr Malay Ghosh, Executive Director and President, Reliance Life Insurance, said: “As and when the guidelines come, and if they (the regulators) allow us, we will come out with an IPO.”
Insurance company officials say that most companies have seen some major changes in operating models in the last month after the new IRDA guidelines. “Investors will expect that some kind of an operating model be in place and will need to look at the emerging trends. But there is no trend currently due to the changes in the guidelines as there have been major changes in the operating model. It will take at least six months for a trend to emerge,” said Mr Chaudhry.
Before insurance companies come out with IPOs, there are a couple of issues that need to be resolved: When will the 26 per cent FDI limit be increased to 49 per cent and two, will FII investments be included in the limit.
“There should be a clear idea on when the Insurance Bill is going to be passed,” said Mr Amitabh Chaudhry, Managing Director and CEO of HDFC Standard Life. “We would like to wait for the Bill before listing. But the final decision will depend on how much time it takes. It will take at least 9 more months for the companies to come out with an IPO.”
There is no clarification on the 25(%) per cent public shareholding clause, he added.
Companies that have evinced interest in listing include Reliance Life, HDFC Standard Life, ICICI Prudential and SBI Life.
Insurers said the SEBI disclosure requirements are on the lines of the recommendation of the SEBI-IRDA committee. The capital markets regulator had said that the SEBI (ICDR) Regulations, 2009, will also apply to insurance companies.
According to the recommendations of the committee, SEBI has asked insurers for additional disclosures, like risk factors specific to insurance companies and broad headings under which an overview of the insurance industry will be disclosed. However, companies were exempted exemption from appointing a monitoring agency.
Another stumbling block is that the IRDA may not relax the listing requirement that insurers have to be 10 years old for IPOs. The rule disqualifies Reliance Life Insurance.
Mr Malay Ghosh, Executive Director and President, Reliance Life Insurance, said: “As and when the guidelines come, and if they (the regulators) allow us, we will come out with an IPO.”
Insurance company officials say that most companies have seen some major changes in operating models in the last month after the new IRDA guidelines. “Investors will expect that some kind of an operating model be in place and will need to look at the emerging trends. But there is no trend currently due to the changes in the guidelines as there have been major changes in the operating model. It will take at least six months for a trend to emerge,” said Mr Chaudhry.
Listing daytime still away for insurers
Insurance companies will have to wait for some more time before listing, despite SEBI clearing disclosure rules, as the final guidelines from IRDA have not come and the Insurance Bill has not been passed.
Before insurance companies come out with IPOs, there are a couple of issues that need to be resolved: When will the 26 per cent FDI limit be increased to 49 per cent and two, will FII investments be included in the limit.
“There should be a clear idea on when the Insurance Bill is going to be passed,” said Mr Amitabh Chaudhry, Managing Director and CEO of HDFC Standard Life. “We would like to wait for the Bill before listing. But the final decision will depend on how much time it takes. It will take at least 9 more months for the companies to come out with an IPO.”
There is no clarification on the 25(%) per cent public shareholding clause, he added.
Companies that have evinced interest in listing include Reliance Life, HDFC Standard Life, ICICI Prudential and SBI Life.
Insurers said the SEBI disclosure requirements are on the lines of the recommendation of the SEBI-IRDA committee. The capital markets regulator had said that the SEBI (ICDR) Regulations, 2009, will also apply to insurance companies.
According to the recommendations of the committee, SEBI has asked insurers for additional disclosures, like risk factors specific to insurance companies and broad headings under which an overview of the insurance industry will be disclosed. However, companies were exempted exemption from appointing a monitoring agency.
Another stumbling block is that the IRDA may not relax the listing requirement that insurers have to be 10 years old for IPOs. The rule disqualifies Reliance Life Insurance.
Mr Malay Ghosh, Executive Director and President, Reliance Life Insurance, said: “As and when the guidelines come, and if they (the regulators) allow us, we will come out with an IPO.”
Insurance company officials say that most companies have seen some major changes in operating models in the last month after the new IRDA guidelines. “Investors will expect that some kind of an operating model be in place and will need to look at the emerging trends. But there is no trend currently due to the changes in the guidelines as there have been major changes in the operating model. It will take at least six months for a trend to emerge,” said Mr Chaudhry.
Before insurance companies come out with IPOs, there are a couple of issues that need to be resolved: When will the 26 per cent FDI limit be increased to 49 per cent and two, will FII investments be included in the limit.
“There should be a clear idea on when the Insurance Bill is going to be passed,” said Mr Amitabh Chaudhry, Managing Director and CEO of HDFC Standard Life. “We would like to wait for the Bill before listing. But the final decision will depend on how much time it takes. It will take at least 9 more months for the companies to come out with an IPO.”
There is no clarification on the 25(%) per cent public shareholding clause, he added.
Companies that have evinced interest in listing include Reliance Life, HDFC Standard Life, ICICI Prudential and SBI Life.
Insurers said the SEBI disclosure requirements are on the lines of the recommendation of the SEBI-IRDA committee. The capital markets regulator had said that the SEBI (ICDR) Regulations, 2009, will also apply to insurance companies.
According to the recommendations of the committee, SEBI has asked insurers for additional disclosures, like risk factors specific to insurance companies and broad headings under which an overview of the insurance industry will be disclosed. However, companies were exempted exemption from appointing a monitoring agency.
Another stumbling block is that the IRDA may not relax the listing requirement that insurers have to be 10 years old for IPOs. The rule disqualifies Reliance Life Insurance.
Mr Malay Ghosh, Executive Director and President, Reliance Life Insurance, said: “As and when the guidelines come, and if they (the regulators) allow us, we will come out with an IPO.”
Insurance company officials say that most companies have seen some major changes in operating models in the last month after the new IRDA guidelines. “Investors will expect that some kind of an operating model be in place and will need to look at the emerging trends. But there is no trend currently due to the changes in the guidelines as there have been major changes in the operating model. It will take at least six months for a trend to emerge,” said Mr Chaudhry.
Monday, October 25, 2010
Bajaj Finserv Q2 net up 57 pc at Rs 69 crore
Bajaj Group's Financial services arm Bajaj Finserv reported a nearly 57 per cent jump in its consolidated net profit at Rs 69 crore, for the quarter ended September 30, over the same period last year.
The company had a net profit of Rs 44 crore in July-September quarter last fiscal, the company said in a statement.
The total income of the company rose to Rs 464 crore in the second quarter of the current fiscal compared to Rs 107 crore in the corresponding period.
Bajaj Finserv is a holding company, which operates through its subsidiairies and joint ventures. Bajaj Allianz General Insurance, Bajaj Allianz Life Insurance and Bajaj Finance Limited are its subsidiaries.
Bajaj Finance, the company's retail arm, has reported a profit after tax of Rs 53 crore in the second quarter of the current fiscal as compared to Rs 22 crore in the corresponding period last year.
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The company had a net profit of Rs 44 crore in July-September quarter last fiscal, the company said in a statement.
The total income of the company rose to Rs 464 crore in the second quarter of the current fiscal compared to Rs 107 crore in the corresponding period.
Bajaj Finserv is a holding company, which operates through its subsidiairies and joint ventures. Bajaj Allianz General Insurance, Bajaj Allianz Life Insurance and Bajaj Finance Limited are its subsidiaries.
Bajaj Finance, the company's retail arm, has reported a profit after tax of Rs 53 crore in the second quarter of the current fiscal as compared to Rs 22 crore in the corresponding period last year.
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Saturday, October 23, 2010
Auto Insurance Policy | Common Exclusions
The insurance policy jargon is such that most of us find it difficult to understand. In fact it is not surprising, that many people don’t even fully read their insurance policy. The reason is that all standard insurance policy contracts are long, boring, confusing, and actually, misleading. For example, in many cases a coverage is excluded in one section, only to be added back later on in the policy. It can get frustrating, that you need a lawyer or an expert, to help you understand what exactly is covered.
There are few common misconceptions about what is and what isn’t covered in an insurance contract, which can be cleared by understanding the policy exclusions.
1. Delivery for Commercial Purposes: If you pick up a job delivering pizzas a few nights a week, there will be no coverage from your personal auto insurance, if you happen to get in an accident while delivering. Commercial deliveries are excluded from the standard personal auto insurance policy.
Always check with the company you are working for, to see if they have a commercial auto policy, that will cover you, while you make deliveries.
2. Company Vehicles: The insuring agreement of personal auto policy excludes, “coverage for the use of a vehicle furnished or available for your regular use.”
For instance: Your employer supplies you a company vehicle. Suppose your spouse also has a car of their own, which is insured under a personal auto policy, which you are named under. If your spouse were driving your company car, she has no coverage under the commercial auto policy.
3. Vehicles not Considered Autos: Auto insurance doesn’t cover all things with a motor. Typical exclusions include boats, four wheelers, motorcycles, go carts, and golf carts.
Before adding this on to your auto policy, first check with homeowners insurance, to see if it’s covered through your policy. In most cases, you have to add a special endorsement, either to your home or auto insurance, or buy a separate policy.
4. Personal Contents: The gadgets we carry in our cars today are not cheap. The combined cost of even a cheap cell phone costs, your CD collection and iPod, you’re easily approaching Rs20, 000 of personal contents in the car. Unfortunately, if someone were to break into you car and steal these items, none of that is covered under your auto insurance policy.
However, personal contents are covered under your home/renters insurance policy.
Endorsements to Insurance Contracts: All of the above are excluded from the standard insurance contract. That doesn’t mean that individual carriers, can’t add them back in. Adding coverage to a policy is called an endorsement.
The next time you’re reviewing your insurance agreement, check to see what your policy is endorsed for. There are a lot of special perks, the better insurance companies will give, that often go unnoticed.
To conclude: It is a good practice to read your insurance contract. Set aside just a few minutes of your time, to get through your auto, home, life, and health insurance contracts. It is bound to prove beneficial and you will definitely learn a lot.
There are few common misconceptions about what is and what isn’t covered in an insurance contract, which can be cleared by understanding the policy exclusions.
1. Delivery for Commercial Purposes: If you pick up a job delivering pizzas a few nights a week, there will be no coverage from your personal auto insurance, if you happen to get in an accident while delivering. Commercial deliveries are excluded from the standard personal auto insurance policy.
Always check with the company you are working for, to see if they have a commercial auto policy, that will cover you, while you make deliveries.
2. Company Vehicles: The insuring agreement of personal auto policy excludes, “coverage for the use of a vehicle furnished or available for your regular use.”
For instance: Your employer supplies you a company vehicle. Suppose your spouse also has a car of their own, which is insured under a personal auto policy, which you are named under. If your spouse were driving your company car, she has no coverage under the commercial auto policy.
3. Vehicles not Considered Autos: Auto insurance doesn’t cover all things with a motor. Typical exclusions include boats, four wheelers, motorcycles, go carts, and golf carts.
Before adding this on to your auto policy, first check with homeowners insurance, to see if it’s covered through your policy. In most cases, you have to add a special endorsement, either to your home or auto insurance, or buy a separate policy.
4. Personal Contents: The gadgets we carry in our cars today are not cheap. The combined cost of even a cheap cell phone costs, your CD collection and iPod, you’re easily approaching Rs20, 000 of personal contents in the car. Unfortunately, if someone were to break into you car and steal these items, none of that is covered under your auto insurance policy.
However, personal contents are covered under your home/renters insurance policy.
Endorsements to Insurance Contracts: All of the above are excluded from the standard insurance contract. That doesn’t mean that individual carriers, can’t add them back in. Adding coverage to a policy is called an endorsement.
The next time you’re reviewing your insurance agreement, check to see what your policy is endorsed for. There are a lot of special perks, the better insurance companies will give, that often go unnoticed.
To conclude: It is a good practice to read your insurance contract. Set aside just a few minutes of your time, to get through your auto, home, life, and health insurance contracts. It is bound to prove beneficial and you will definitely learn a lot.
Friday, October 22, 2010
Reasons for cancellation of an Insurance Policy
There has to be a very good reason for an Insurance company to cancel a policy. The top five reasons for having your policy cancelled are discussed below:
1. Failing to pay on time.
The first and most obvious reason for cancellation would be failing to pay or paying late. This applies to all types of insurance. Each state has rules governing when an insurance company may drop your policy. Grace periods will also vary depending on which line of insurance you purchase (health, auto, home, life) and which insurance company you choose. Some car insurance companies may seize the opportunity to drop you if you’re only a few days late – especially if you're habitually behind on payments. However, many insurers value your business and won't drop you if you're a few days late.
Advice - Pay your bills on time. This usually means your premium must be received by the due date. Dropping the payment in the mail on the due date may not be good enough. If you’re worried about being late on your payments, check with your insurance company about its grace period. If you've been cancelled by your car insurance company, it may require that you to pay the balance due for the full term before they reinstate your insurance.
2. Falsifying the truth.
If you knowingly tell lies to your insurance company, it has the right to cancel your policy. To an insurance company, it’s bad business to give you a lower rate for lying. For example, lying to your auto insurer about the number of miles you drive annually can be cause for cancellation. Some insurers may simply increase your car insurance rates for this particular lie, but they can also cancel your policy and refuse to pay your claim — assuming you provided inaccurate information intentionally.
Life insurance companies may also cancel your policy if you lie. For example, if you lie about your deep-sea diving hobby and then die during a dive, your life insurance company could deny your beneficiaries’ claim. Any lie caught within the two-year contestability period of a policy can provoke the insurer to scale down the death benefit or even rescind the policy, depending on state law.
Advice - When applying for any type of insurance ‘honesty is the best policy’.
3. Your driver’s license has been suspended or revoked during the policy period
If your auto insurance company finds out that your license has been suspended or revoked, it will cancel your policy. This rule also applies to other members of your household. For example, if you have a child listed on your policy who has had his or her license revoked/suspended, your insurance company may cancel your policy if you fail to disclose this information. Car insurance companies often check your DMV record (and that of other members of your household) at renewal time. They will also find out about a license suspension if the person in question is involved in a car accident.
Advice - If someone in your household experiences problems with their license, notify your insurer. Your policy will not be cancelled (unless you’re the culprit). Your insurer may simply exclude coverage for that person.
4. You ignoring telephone calls from your insurance company
Ignoring your insurance company is never a good idea. If your insurer makes an effort to contact you – especially during a claims-settlement process – you’re obligated to comply. For example, if you get into a car accident, your insurance company will surely want to interview you or may even require you to attend a deposition if a lawsuit is involved. Failing to comply could be grounds for policy cancellation. A standard car insurance policy states that the insurer has “no duty to provide coverage” unless the insured is in full compliance with a number of duties. These include promptly notifying your insurer where, when and how the accident happened. A standard policy states that “a person seeking coverage must cooperate with us in the investigation, settlement or defense of any claim or suit” and “promptly send us copies of any notices or legal papers received in connection with the accident or loss.” This can include exams by physicians and medical records.
5. You commit suicide
Generally, life insurance policies have a contestability clause that says, among other things, the policy will not pay out if you commit suicide within the first two years of the policy. However, if you commit suicide two years and one day after you purchase the policy, your beneficiaries will be paid!
1. Failing to pay on time.
The first and most obvious reason for cancellation would be failing to pay or paying late. This applies to all types of insurance. Each state has rules governing when an insurance company may drop your policy. Grace periods will also vary depending on which line of insurance you purchase (health, auto, home, life) and which insurance company you choose. Some car insurance companies may seize the opportunity to drop you if you’re only a few days late – especially if you're habitually behind on payments. However, many insurers value your business and won't drop you if you're a few days late.
Advice - Pay your bills on time. This usually means your premium must be received by the due date. Dropping the payment in the mail on the due date may not be good enough. If you’re worried about being late on your payments, check with your insurance company about its grace period. If you've been cancelled by your car insurance company, it may require that you to pay the balance due for the full term before they reinstate your insurance.
2. Falsifying the truth.
If you knowingly tell lies to your insurance company, it has the right to cancel your policy. To an insurance company, it’s bad business to give you a lower rate for lying. For example, lying to your auto insurer about the number of miles you drive annually can be cause for cancellation. Some insurers may simply increase your car insurance rates for this particular lie, but they can also cancel your policy and refuse to pay your claim — assuming you provided inaccurate information intentionally.
Life insurance companies may also cancel your policy if you lie. For example, if you lie about your deep-sea diving hobby and then die during a dive, your life insurance company could deny your beneficiaries’ claim. Any lie caught within the two-year contestability period of a policy can provoke the insurer to scale down the death benefit or even rescind the policy, depending on state law.
Advice - When applying for any type of insurance ‘honesty is the best policy’.
3. Your driver’s license has been suspended or revoked during the policy period
If your auto insurance company finds out that your license has been suspended or revoked, it will cancel your policy. This rule also applies to other members of your household. For example, if you have a child listed on your policy who has had his or her license revoked/suspended, your insurance company may cancel your policy if you fail to disclose this information. Car insurance companies often check your DMV record (and that of other members of your household) at renewal time. They will also find out about a license suspension if the person in question is involved in a car accident.
Advice - If someone in your household experiences problems with their license, notify your insurer. Your policy will not be cancelled (unless you’re the culprit). Your insurer may simply exclude coverage for that person.
4. You ignoring telephone calls from your insurance company
Ignoring your insurance company is never a good idea. If your insurer makes an effort to contact you – especially during a claims-settlement process – you’re obligated to comply. For example, if you get into a car accident, your insurance company will surely want to interview you or may even require you to attend a deposition if a lawsuit is involved. Failing to comply could be grounds for policy cancellation. A standard car insurance policy states that the insurer has “no duty to provide coverage” unless the insured is in full compliance with a number of duties. These include promptly notifying your insurer where, when and how the accident happened. A standard policy states that “a person seeking coverage must cooperate with us in the investigation, settlement or defense of any claim or suit” and “promptly send us copies of any notices or legal papers received in connection with the accident or loss.” This can include exams by physicians and medical records.
5. You commit suicide
Generally, life insurance policies have a contestability clause that says, among other things, the policy will not pay out if you commit suicide within the first two years of the policy. However, if you commit suicide two years and one day after you purchase the policy, your beneficiaries will be paid!
Thursday, October 21, 2010
New Term Insurance product launched| MetLife
MetLife India Insurance has launched a term insurance product - Met Protect - the first such life cover plan (by the company) which is made available online.
• Met Protect would allow customers within the age group of 21-45 years to avail of life cover protection through the Internet.
• Met Protect would offer customers single and semi-annual premium payment option - the first of its kind amongst all the term products available online.
What is Term Insurance?
Term Insurance is a product that provides protection only for a specified period of time.
About the Company:-
MetLife currently has over 55,000 financial advisers and bancassurance distribution channel offering products to 17 million customers.
MetLife India is a joint venture between the US-based MetLife International Holdings, The Jammu and Kashmir Bank, M Pallonji and other private investors.
• Met Protect would allow customers within the age group of 21-45 years to avail of life cover protection through the Internet.
• Met Protect would offer customers single and semi-annual premium payment option - the first of its kind amongst all the term products available online.
What is Term Insurance?
Term Insurance is a product that provides protection only for a specified period of time.
About the Company:-
MetLife currently has over 55,000 financial advisers and bancassurance distribution channel offering products to 17 million customers.
MetLife India is a joint venture between the US-based MetLife International Holdings, The Jammu and Kashmir Bank, M Pallonji and other private investors.
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