Banks unlikely to take the insurance broking route

An open architecture of banc assurance could still be a distant phenomenon, since banks are unlikely to take the broking route.

While the Reserve Bank of India (RBI) has bought out final guidelines for banks to become insurance brokers, high liability and lower revenue from this model may dissuade banks from doing do.

In its final guidelines, RBI has said that banks may become insurance brokers and sell multiple products though it is not mandatory.

To facilitate an open architecture of bancassurance where a bank is enabled to sell products of all insurance companies, RBI had earlier brought out draft norms on the same.

Bancassurance, which refers to banks selling insurance products, now follows a corporate agent structure. This means that banks sell insurance as a corporate agent and these regulations allow each bank to sell insurance products of one life, one general and one health insurance company each. 

As per the final RBI norms, a bank can enter insurance broking only if their Capital to Risk (Weighted) Assets Ratio is 10% and above and their level of net non-performing assets is 3% or below. RBI said that the net worth of the bank should not be less than Rs 1,000 crore, compared to Rs 500 crore criteria mentioned in the draft guidelines of RBI.

Insurance players also agree that unless they are forced to do so, large banks are not likely to voluntarily become insurance brokers.
 

Amitabh Chaudhry, MD & CEO of HDFC Life said that unless mandated to do so, banks may not be interested in becoming brokers. He said it was easier to be a corporate agent than a broker especially since the bank would be liable for the policies sold in the latter model.

There was a call to have an open architecture of bancassurance in the insurance industry since there were several late entrants in the market which did not have a bank to tie-up with. 

Almost all the private and public sector banks either have JV agreements or are corporate agents of insurance companies. Banks like ICICI Bank, HDFC Bank, Axis Bank and YES Bank apart from State Bank of India, Punjab National Bank, Oriental Bank of Commerce, Canara Bank are corporate agents. 

An existing  JV agreement would restrain players from opting for the broking route, said the chief executive of a mid-size private life insurer. “Once these banks become brokers, they would not be in a position to push products of their group companies. Private insurers, which get almost 60-70% of their new business from these banks, may see a sudden slump if their parent bank becomes a broker. This is not something the shareholders would approve,” he said.

As banks have already tied-up with existing players, others like Reliance Life Insurance and Edelweiss Tokio Life Insurance do not have a bancassurance partner. On the other hand, players like Canara HSBC OBC Life Insurance that has three bank partners depends 100% on the bancassurance channel to procure business.

Rajeev Kumar, chief and appointed actuary at Bharti AXA Life Insurance said that the regulator could have a model wherein banks are able to earn higher revenues as brokers. “This will be an incentive for them to become brokers. While not all banks would want to become insurance brokers, even if one or two marquee players take this step, others may follow later,” he said.

Insurance Regulatory and Development Authority of India (IRDAI) had also favoured an open model of insurance distribution by banks. While proposals like one bank distributing insurance in certain geographies and others in other geographies was mulled, these were not favoured by the stakeholders. 

Sector experts said that there could also be newer models between the current corporate agency model and insurance broker model to help open up the sector. Here, a bank could be enabled to sell two policies of life, non-life or standalone health companies to begin with. 

On 20 December 2013, a letter from finance ministry, addressing the public sector bank chief executives, said that banks should become insurance brokers and leverage their branch network for insurance penetration.

Former finance minister P Chidambaram in his budget speech had also said that banks could become insurance brokers to boost insurance penetration, which stands at 4.1% of the Gross Domestic Product (GDP). 

However, banks that had a joint venture agreement with insurance companies had expressed their discontent with this proposal. This would have meant that they had to sell products of all insurance companies. 

As an insurance broker, the bank is liable to consumers with respect to an insurance policy, unlike the case with a corporate agent. The liability is high, especially since the bank will sell products of multiple insurers. 

This too, said the chief distribution officer of a private general insurer would be a deterrent for banks since they would not wish to take risks on the books, be it a subsidiary or a joint venture.

RBI has also said that the bank should have made a net profit for the last three continuous years and that the track record of the performance of the subsidiaries, if any, of the concerned bank should be satisfactory.

US Eyes Important Drone Deal With India for Barack Obama Trip

Washington, United States:  The United States aims to secure agreements with India to start pilot projects for joint production of drones as well as equipment for transport planes in talks next week ahead of a visit by President Barack Obama, a US industry source said on Wednesday.

Frank Kendall, US undersecretary of defense for acquisition, technology and logistics, will be making his fourth visit to India to promote collaboration on defense technologies and co-production of weapons systems in an effort to finalize the projects.

An industry source familiar with US-India discussions on the defense initiative said Mr Kendall aimed to finalize two pilot projects, one involving unmanned aerial vehicles (UAVs) and the other involving systems for the C-130 military transport aircraft built by Lockheed Martin Corp.

The source said the drone project involved the RQ-11 "Raven" built by AeroVironment Inc, a small US firm. Raven is the world's most widely used unmanned aircraft, a lightweight plane that can be used manually, or for autonomous operations.

The U.S. government strictly controls foreign sales of larger UAVs, but has approved sales of unarmed systems like the Raven, which are used purely for surveillance to a range of countries, including Uzbekistan, according to a US source.

The transport plane project involves manufacturing of roll-on, roll-off modules that allow C-130s to be used for surveillance, and as VIP transports or hospitals, according to the industry source, who did not want to be named due to the sensitivity of the discussions.

US and Indian officials have declined to comment publicly on the systems under discussion, but the industry source said the aim was to announce the pilot projects during President Obama's planned visit to India to attend the Republic Day holiday, which is marked by a big military parade.

The United States is keen to develop its political and strategic ties with India, with which it shares concerns about China's increasingly assertive territorial claims in the Asia-Pacific region.

Pakistan Players to Attend Counselling Sessions Ahead of World Cup

Karachi: The World Cup bound Pakistani cricketers will have two counselling sessions with a well-known sports psychologist before leaving next week from Lahore for New Zealand.

An official in the Pakistan Cricket Board (PCB) told PTI that sports psychologist Babri will hold two separate sessions with the players at the national cricket academy in Lahore. "The players are going to attend a four day conditioning camp from Wednesday and these sessions are part of the camp," he added.

The official said head coach, Waqar Younis had requested for the short camp in a bid to allow the players to start a bonding process and leave in high spirits for the World Cup campaign.

"Dr Babri has held sessions with other players in the past including the banned Muhammad Aamir and others like Umar Akmal and Ahmed Shehzad," the official said.

He said the purpose of the two sessions was to lift the confidence of the players and remove any fear or anxiety they might have before such a mega-event.

"Some top former players like Inzamam-ul-Haq and Javed Miandad who were part of the 92' World Cup winning squad have also been invited to share their experiences with the players.

"The Chairman of the board, Shaharyar Khan will also give the players one message at their farewell dinner to play positive and fearless cricket in the World Cup without any fear of defeat."

Meanwhile senior players, Misbah-ul-Haq, Muhammad Hafeez, Shahid Afridi all appeared for their fitness tests at the NCA on Monday and according to the official they passed the tests.

"Misbah is carrying a hamstring injury and he has shown remarkable recovery and appeared good in the fitness test. All indications are that he will be fit to lead Pakistan before the two one-day internationals against New Zealand later this month in New Zealand," he added.

Air India cuts fares by up to 50% to lure flyers

NEW DELHI: With the peak travel season ending and the lean one here to stay till April-end, airlines have begun cutting fares to fill their planes.

Air India on Monday cut domestic fares by up to 50% on tickets that are booked till next Monday for travel between January 16 and April 30. The special fares start at Rs 1,557 and the discount is for some sectors.

Mumbai-Delhi travel under this scheme will cost Rs 2,958, down from current level of Rs 6,000-9,000. A Delhi-Bangalore flight is available for Rs.1,800, Delhi-Lucknow Rs 1,558 and Delhi-Indore Rs 1,558.

3 Tips For Overcoming Job Loss

In recent weeks, I`ve spoken with several people who lost their jobs after 20 puls years with the same employer. One person is angry and bitter and takes every opportunity to vent about the unfairness of it all, another turned to drinking through the day` another is fighting the desire to hunker down in their `cave` and nurse their wound.

Some of these coping mechanisms might even be necessary in the short term as temporary relief. After all, this kind of job loss is often experienced like the death of a loved one. It`s serious stuff. In a previous post, I gave some examples of job losses and what your thoughts might be about it.

But life moves on. Learning to adapt to changing circumstances in life is a necessary skill. Lots of advice has been written about how to cope with job loss, and how to move on. Based on my 20 years experience, here`s what I`ve learned that works for most people most of the time:

1. Take care of yourself. Grieve your loss. Too many people don`t take enough time to let go of this major experience in their life. Think of all the time and energy invested in a job for 20 puls years. It takes much longer than most people realize to dis-engage from their work.

You have every right to be upset, so accept your feelings anger, hurt, rejection, panic, relief, whatever you feel, go easy on yourself. When you get up in the morning, take a pad of paper and write down everything you feel for 10 to 20 minutes, all the things you wished you`d said (or hadn`t said) to your former manager. Do this for as many mornings as it takes to dump your feelings. This is especially cathartic if your termination was handled in an insensitive way.

Then, if possible, take a vacation, get out of town, put some distance between you and the experience. It`s easier to process the emotions, the memories, when sitting on a beach, or in some other safe haven. Eat well, make time for regular exercise, practice stress relief exercises, stay positive.

If basic habits, such as eating or sleeping, are disturbed by the job loss, get professional help from a doctor, a psychologist, a counselor. Ask for the support you need. Don`t try to shoulder the stress of job loss and unemployment alone. Your natural reaction may be to withdraw, to resist asking for help out of pride, shame or embarrassment. Don`t isolate yourself and brood. You will only feel worse. Whatever it takes to accept the situation, get there. The sooner you do, the sooner you can get on with the next phase in your life.

2. Reaching out to others. Over the years, you`ve built up a goodwill network of family, friends, colleagues, acquaintances in your personal and professional life-now is the time to draw on that goodwill! Share what you`re going through with the people you trust, not necessarily the people closest to you, such as your immediate family, who also may be hurting from your termination. Join a job club or form one with former colleagues who may have been laid off at the same time. Commiserating, talking through your feelings, focusing on shared issues can be energizing and motivating. Personal and professional support will help keep you on track during your job search.

Networking is not rocket science but it is a skill and, like any skill, it can be learned and applied in the real world. It is a simple fact that most job openings are not posted as job vacancies but exist as job opportunities off the radar screen, and filled by word of mouth. That`s why networking is the best way to find a job. Basically, networking isn`t about using other people or aggressively promoting yourself-it`s about building relationships, and getting yourself in the right place so that when opportunities arise you are in the pipeline ready, willing and able to take on a task! Learn to network-if you persist, it will pay off!

3. Rethink your career goals, or rediscover what truly makes you happy. Not everybody needs to create a job search plan, career change resume or keep a regular routine, or list their positives. We all have talents and motivations that will kick in but now is the time to leverage your natural strengths into understanding how they correlate with specific jobs in specific work settings. This is the central message of JobJoy, so visit our site to find resources that can launch you into a new career or help you build on your existing one.

If you know anyone who has suffered a recent job loss, please pass this post along to them and remind them that you have an encouraging work, a listening ear, a helping hand, a shoulder to lean on whenever they need it!

About Author:
George Dutch is a certified Job Change Expert For 20 years, I`ve helped over 3000 people just like you who felt lost or confused or trappeda and wanted a better job fit! Are you ready to change your job or career? And start working naturally and effortlessly so that you get ENERGIZED by your job instead of drained, dumped out, dumped on, or dead-ended? For more information please Visit www.jobjoy.com

3 Steps to a Grand Ol’Time at Work

1. Find out what specific jobs are a good fit for you, and which specific work settings offer such jobs.

You probably have some ideas already about what you want to be doing, what you’re good at, what you liked and didn’t like about previous jobs, and what you like or don’t like in the cultures of those organizations.

But these ideas need to be supported with evidence. That is the purpose of a career assessment—to provide you with proof and clarity about what really works for you. Proof builds the confidence that you need to take actions that will move you from where you are now into that better fit through efficient and effective job change.

2. The faster and cheaper you validate this career hypothesis, the sooner you will find the right fit and start earning more with it. You can validate through first-hand experience by trying something (including bite-sized projects), or second-hand by visiting people already working in similar jobs and asking them specific questions that will help you evaluate a fit for yourself:

• How did you get into your field? Is that still a good way?
• What are the major responsibilities of your position?
• What is a typical workday or week like for you?
• What do you like and dislike about your position?
• What are the critical skills and personal characteristics needed in this kind of work?
• What are some of the major problems or issues that someone in your position faces?
• What are the prospects for someone entering your field today?
• What are the career paths of this profession? With experience in this field where can a person move?

If you get into a discussion about your background, you can ask:-

• Given my background, what do you think I need to do to become competitive for a job in this field?
• Can you suggest anyone else I might talk to?

3. Focus on a target or goal and use proven, effective actions to reach it. Your work is a sizeable chunk of your human experience—you are likely to spend 80,000+ hours in jobs, so finding and securing work should be a “grand” adventure.

I use the word “grand” in every sense of the word. Your work should tap into your highest aspirations and deepest values with a rank and appearance that announces who you are to the world and what you will do for it.

But we shouldn’t take it so seriously that we lose sight of living…when we say we had a grand day, we are using the world informally to indicate we had an enjoyable day…so we should also have a grand ol’time with the work we do.

And, like a grand piano, or a couple grand in your pocket, our work should have weight, or gravitas, something that adds value to us personally and to those around us…our work should enrich the world!

About Author:
George Dutch is a certified Job Change Expert For 20 years, I`ve helped over 3000 people just like you who felt lost or confused or trappeda and wanted a better job fit! Are you ready to change your job or career? And start working naturally and effortlessly so that you get ENERGIZED by your job instead of drained, dumped out, dumped on, or dead-ended? For more information please Visit www.jobjoy.com

How to choose a career with a 60/40 split between pleasure and pain

There is no such thing as a perfect job where you are 100% happy and satisfied all the time.  The world is just not organized that way!  The key to career success is to limit the downside of your job to 40% of your job duties.  The downside of your job is performing grunt work with `can do` skills that require much effort.  The more you do grunt work, the more it drains your energy.

Understand that, at best, 60% of work hours will be challenging and will provide a sense of growth and fulfillment.  Great work is when you are performing job duties that energize you.  This means the upside of your work should involve job duties organized around your natural talents.  This is work you do with a flair, naturally and effortlessly, and you need to be doing it at least 605 of the time in your job if you want job satisfaction. 

This 60/40 split becomes increasingly important as you grow older and have less energy available to you.  Career masters make it look so easy precisely because their core job duties are performed naturally and effortlessly.  However, you need to be aware of the likelihood that many times this ratio may slip to 40/60, in which case you may feel drained by brief periods of routine work.  This is nothing to be alarmed about as long as the ratio returns to 60/40 in due course; if it doesn`t, you`ll need to take action.

Achieving authenticity in your work with a midlife career change is about correlating your natural inclinations with specific job duties.  Keep your job description aligned with what makes you happy and productive in the workplace, so that you operate 60% of the time in a mode that comes naturally and effortlessly to you. This 60/40 split will energize you.  This is how to make a career change that will motivate and reward you over time.

Besides a good jobfit, career satisfaction is often a result of being in work circumstances that align with your values, priorities and preferences.  For example, numerous studies point to the following factors that influence satisfaction on the job: a lot of job security; relatively high incomes or university degrees; self-employment or how much say you have over what you do and the way you do it; small workplaces; the amount of time you spend commuting or working at home; dealing with people; who controls the pace of work is critical…tight deadlines and high-speed work are bad for satisfaction; small freedoms - such as being able to move your desk or change the lighting.

As you can see, jobfit and career satisfaction are influenced by many factors.  But, clearly, the only true security is in the authentic self.  In terms of a midlife career change, it is important to have a clear idea of who and what you are, then make a commitment to a core set of talents and values when making career decisions. In terms of job change advice--now may not be the time to settle on a career choice but to explore different career options until you have that `a-ha` experience of the right fit.

About Author: 

George Dutch is a certified Job Change Expert For 20 years, I`ve helped over 3000 people just like you who felt lost or confused or trappeda and wanted a better job fit! Are you ready to change your job or career? And start working naturally and effortlessly so that you get ENERGIZED by your job instead of drained, dumped out, dumped on, or dead-ended? For more information: www.jobjoy.com