Impact 
Cigna TTK Health, the most recent entrant in the Indian health insurance space, plans to set up an innovative distribution network through which simple health insurance products would be sold over the counter. The company plans to leverage its network of pharmacies and physicians to sell its health insurance plans.
The buyer of the insurance will be able to get a kit across the counter while purchasing the health insurance. Essentially the product sold (health insurance) will be such that the medical tests for the same are not essential and the documents needed may be submitted online, once the customer reaches home. However, for complex products, these outlets would collect the data and information from interested customers and generate the lead for the company for follow-up procedure.
We believe that such an innovation in the health insurance segment is path breaking. Standard health insurance products would be available to the buyers without any hassles. Also, the cost of such products i.e., the premium would be low as there are no middlemen involved in the process.
However, there should be proper checks and balances in place to maintain the confidentiality of the data. Also, there should be proper grievance redressal cell maintained by such companies who wish to sell such products over the counter in order to protect the buyers from any mis-selling or false promises. | | | This Week's Poll !!!
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| | Impact
A combination of high interest rates and slow decision-making by the Government adversely affected the investments in the key infrastructure industries necessary to boost the overall economic growth. Gross fixed capital formation, a measure of investments, contracted 0.7% in the second quarter of the current fiscal from a year ago.
Considering these impediments, the Finance Minister – Mr. Pranab Mukherjee will make an attempt to nudge entrepreneurs to invest more by unveiling a raft of investor-friendly policies in the budget to be presented in March 2012, as the government looks to revive the economy without raising fiscal deficit. These policies include sops for infrastructure and labour-intensive industries and incentives to attract investment in sectors such as urea, a commonly-used fertiliser, and cold chains and supply chains that help maintain the quality of food produce. Mr. Mukherjee has also conceded that the government is likely to miss the fiscal deficit target of 4.6% of GDP in the current fiscal, increasing pressure to rein in spending.
We believe that the Government in power ought to announce major policy reforms to overhaul the investment environment in the country and make it more conducive for the investors. Lack of policy reforms has caused a lot of problems like acute fuel shortage, coal prices, delays in green clearances and funding.
Thus it will be interesting to see how the Budget 2012 takes shape and what sorts of reforms are made to make the economy bolster up growth. | | Impact
Grappling with lower automobile sales, the general insurance companies are adding a new teaser feature in the auto insurance policies. Towing and roadside assistance is an additional feature offered by general insurers (such as Oriental insurance and Bajaj Allianz among others) in their auto insurance policy, whereby one would be provided with a direct towing service from the insurer in case of a flat tyre, keys locked in or car running out of fuel. Thus if your vehicle is damaged, and cannot be driven to the repair shop, the insurance company will tow your car to the repair shop and also will foot the full cost of the towing service and labour involved.
Automobile Sales
(Source: SIAM, PersonalFN Research)
While in the last 7 financial years as revealed by the chart above, the auto industry had witnessed a steady growth; the last calendar year was not very enthusing for the Indian auto industry – especially the passenger vehicle segment, as they experienced dampening sales due to a high interest rate regime (on account of monetary policy stance taken by the Reserve Bank of India).
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| | | | Weekly Facts |
| Close | Change | %Change | | BSE Sensex* | 16,739.01 | 584.4  | 3.62% | | Re/US$ | 50.24 | 1.3 | 1.3 | Gold /10g | 27,430.00 | (260.0)  | -0.94% | | Crude ($/barrel) | 110.45 | (2.0) | -1.77% | | FD Rates (1-Yr) | 7.25% - 9.40% | Weekly change as on Janaury 19, 2012
*BSE Sensex as on Janaury 20, 2012 | | |
In an interview with the Economic Times, Mr. Jaspal Singh Bindra - Asia Chief Executive at Standard Chartered Bank shared his views on the ongiong Euro zone crisis, economic growth in India and China and the banking industry in India.
Mr. Bindra believes that the European overhang will stay for a while. He asserts that unlike the United States' issue which is a cyclical problem, Europe has a structural problem and there is a debate on whether the Euro will remain intact. Thus, he ruminates that irrespective of the future of the Euro, the standalone challenge is growth.
Speaking about India and China, Mr. Bindra is of the opinion that both China and India are going to moderate, but they would continue to grow around the 6-7% level which is the best of the peak the West has ever enjoyed. However, when compared with themselves (India and China), he says, growth will be a bit slower, but it's way ahead of the rest of the world. He further reiterates that, “The demographics are very favourable provided they are well utilised. Otherwise, the same benefit can be a curse. It is only the media which fixates that it is only policy reform that can drive growth. It is not the only way. The government can choose different ways. Obviously, we all hope that the pace is much faster. We hope the pace picks up after the UP elections. Growth has to be the ultimate agenda. Funding investment and growth will be the key. They just need to have far more incentive for both domestic and foreign investment.”
As far as the Indian banking sector is concerned, he believes that there will be some correction. “When you see a high growth for a long period of time and high interest rate compounded, and then you have trade aversion from banks. The combination of all of these would have some impact. We have had the worst crisis in financial terms in our lifetime and we have still not seen any corporate collapse. No corporate has fallen off the cliff. Governments have collapsed, financial institutions have collapsed, but we have had no corporate collapse. They have held up even if it is through restructuring of debt. That doesn't surprise me,” he said.
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Capital Formation:A term used to describe net capital accumulation during an accounting period. Capital formation refers to net additions of capital stock such as equipment, buildings and other intermediate goods. A nation uses capital stock in combination with labour to provide services and produce goods; an increase in this capital stock is known as capital formation.
(Source: Investopedia) | | | QUOTE OF THE WEEK
"Half of the failures in life come from pulling one's horse when he is leaping."
- Thomas Hood | | |