In its quest to shore up premium income in a market marked by economic depression, cut-throat competition, and massive undercutting, the
general insurance segment ended up spending more on commissions and incurred higher management expenses than its proportionate rise in premium income during 2008-09.
According to latest data released by sector regulator Irda for 2008-09, the non-life cover segment saw a 16% rise in premium income while its outgo under commissions and management expenses rose by 24%. The entire segment spent Rs 19,700 crore under the head. This was around 35% of the total premium income which stood at Rs 24,411 crore.
Saturday, April 3, 2010
Thursday, April 1, 2010
PROFITS AFTER 10 YEARS
A decade after the life insurance industry opened up, only four companies — MetLife, Aegon Religare, Kotak Life and LIC have managed to
show profits in their shareholders’ accounts.
According to data released by the Insurance Regulatory Development Authority (Irda), total accumulated losses for the insurers’ shareholder account now stands at a whopping Rs 14,421 crore for the year 2008-09 while the total equity infused by all companies put together stood at Rs 18,253 crore till March 2009. This, in effect, means that all funds injected by promoters are yet to yield returns on investments for the promoters of these companies.
show profits in their shareholders’ accounts.
According to data released by the Insurance Regulatory Development Authority (Irda), total accumulated losses for the insurers’ shareholder account now stands at a whopping Rs 14,421 crore for the year 2008-09 while the total equity infused by all companies put together stood at Rs 18,253 crore till March 2009. This, in effect, means that all funds injected by promoters are yet to yield returns on investments for the promoters of these companies.
Wednesday, March 31, 2010
INSIGHT ON NFO'S LOW PRICING
Low net asset values (NAV) are not necessarily the best buys just because you are able to earn higher number of units. Let us assume you buy a mutual fund at an NAV of Rs 10 through a new fund offer (NFO) and your friend invests in another fund from the same AMC where NAV is Rs 100.
Both of you invest Rs 10,000, of which you get 1,000 units and your friend gets 100 units. Assuming the same fund manager generates 20% return on both funds, both of you would earn Rs 12,000 each. So, it’s the performance and the track record of the fund and not the NAV that matters. In an existing fund, you can see its track record, unlike an NFO.
Both of you invest Rs 10,000, of which you get 1,000 units and your friend gets 100 units. Assuming the same fund manager generates 20% return on both funds, both of you would earn Rs 12,000 each. So, it’s the performance and the track record of the fund and not the NAV that matters. In an existing fund, you can see its track record, unlike an NFO.
REVIEW ON THE FINANCIAL YEAR 2009-10
The year was particularly significant as the market regulator Sebi acted in favour of the investors and eased norms making it easier for them to invest in mutual funds. The key changes include abolishment of entry load on purchase of schemes and allowing MFs to be traded on the stock exchanges.
"Even though these are early days, both (regulatory changes) have deep potential for a positive impact. The abolition of entry load is a significant game-changer as it completely transforms the business model of the fund distribution industry. For fund companies as well as distributors, it throws up a challenge of managing a big change if they have to flourish," mutual fund tracking firm Value Research CEO Dhirendra Kumar said.
According to marketmen, the move for introduction of MFs on exchanges as well as an improvement in the state of the economy would increase reach of MFs across the country.
With high volatility in the stock market during the year, investors looked for avenues of mutual gains and lesser risk to reap returns on their investments. This was evident with the average AUM of the industry hitting an all time high of Rs 8,07,546 crore, an increase of Rs 3.86 lakh crore at the end of November, according to latest figures available on the Association of Mutual Funds in India (AMFI) website. (
Analysts believe that the improving economic conditions and relatively good performance of the Indian stock markets show the promise that lies ahead for the mutual funds and 2010 should be a better year.
"Even though these are early days, both (regulatory changes) have deep potential for a positive impact. The abolition of entry load is a significant game-changer as it completely transforms the business model of the fund distribution industry. For fund companies as well as distributors, it throws up a challenge of managing a big change if they have to flourish," mutual fund tracking firm Value Research CEO Dhirendra Kumar said.
According to marketmen, the move for introduction of MFs on exchanges as well as an improvement in the state of the economy would increase reach of MFs across the country.
With high volatility in the stock market during the year, investors looked for avenues of mutual gains and lesser risk to reap returns on their investments. This was evident with the average AUM of the industry hitting an all time high of Rs 8,07,546 crore, an increase of Rs 3.86 lakh crore at the end of November, according to latest figures available on the Association of Mutual Funds in India (AMFI) website. (
Analysts believe that the improving economic conditions and relatively good performance of the Indian stock markets show the promise that lies ahead for the mutual funds and 2010 should be a better year.
Monday, March 29, 2010
SAVING TAX BY CLAIMING MEDICAL INSURANCE
Mediclaim insurance provides a good avenue offering tax savings and medical cover. You can insure against medical expenses for yourself or your dependents. Mediclaim cover helps meet unanticipated medical expenditure.
Mediclaim policy provides insurance cover for the treatment of most ailments and hospitalisation. In addition to the basic cover, add-ons are available on payment of extra premium. In some cases, pre-existing ailments are also covered on payment of additional premium. The cover may be extended to ailments not normally covered, day care, and annual medical check-up as well.
It is tax deductible under sec 80 D. Around Rs.15000 and Rs.20000 for senior citizens.
Mediclaim policy provides insurance cover for the treatment of most ailments and hospitalisation. In addition to the basic cover, add-ons are available on payment of extra premium. In some cases, pre-existing ailments are also covered on payment of additional premium. The cover may be extended to ailments not normally covered, day care, and annual medical check-up as well.
It is tax deductible under sec 80 D. Around Rs.15000 and Rs.20000 for senior citizens.
Sunday, March 28, 2010
ADVANTAGE OF THE PPF
The PPF comes under the Exempt- Exempt- Exempt category currently. This means that the amount invested gets tax benefits, the interest is not taxed and this applies for the final maturity amount as well.
The investment gets benefits under Section 80C of the IT Act. The investment however is limited to a maximum of Rs.70,000/- per year per person. This limit of Rs.70,000/- includes the deposits made in the name of any dependent children.
The investment gets benefits under Section 80C of the IT Act. The investment however is limited to a maximum of Rs.70,000/- per year per person. This limit of Rs.70,000/- includes the deposits made in the name of any dependent children.
IT department to check tax-evaders with portable forensic labs
To outsmart tax evaders who resort to delete their financial data or hide it in password-protected devices during search operations, the
I-T department has started including portable forensic labs and experts in its team.
The department has unearthed links to more than Rs 1,000 crore money in the last few searches with the help of cyber forensics, according to sources.
The search teams now visit premises of assesses equipped with pre-wiped disks for imaging and cloning hard drives, portable labs for previewing computer hard disks, evidence bags and tags to pack, label and transport the imaged and cloned data to its labs.
Taxpayers and evaders have increasingly started using high-end softwares like 'logic bomb' which deletes all files as soon as investigators try to source information from the hardware.
I-T department has started including portable forensic labs and experts in its team.
The department has unearthed links to more than Rs 1,000 crore money in the last few searches with the help of cyber forensics, according to sources.
The search teams now visit premises of assesses equipped with pre-wiped disks for imaging and cloning hard drives, portable labs for previewing computer hard disks, evidence bags and tags to pack, label and transport the imaged and cloned data to its labs.
Taxpayers and evaders have increasingly started using high-end softwares like 'logic bomb' which deletes all files as soon as investigators try to source information from the hardware.
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