FM asks IRDA to check 'suicidal competition' among insurers

The unhealthy competition among the insurance companies in India has started impacting their account books, Finance Minister Pranab Mukherjee said

The government has asked insurance regulator IRDA to take steps to contain the tendency of "suicidal competition" among insurance companies, which are undercutting one another by offering policies at low premium to grab a bigger market share.

“To ensure prudent underwriting and curbing unhealthy and suicidal competition among the companies through undercutting premiums is something that the regulator will need to address suitably,” Finance Minister Pranab Mukherjee told the board of the Insurance Regulatory and Development Authority (IRDA).

The unhealthy competition among the insurance companies in India, he said, has started impacting their account books.

The Minister further said, “While de-tariffing (freedom to fix premium) has resulted in significant lowering of premiums for the consumers, the adverse impact is being felt on the insurance company's balance sheet.”

On low penetration of insurance covers in the country, Mukherjee said “There are few concerns that need to be addressed. Notwithstanding India's rapid growth...it has largely remained an under-insured market with financial vulnerability across most of the income segments.”

The Minister lauded IRDA's efforts to dematerialise accounts and set up grievance redressal mechanism said these would strengthen the sector.

“These efforts have to continue in the near future. IRDA has a crucial role at this moment to see that the sector develops in a healthy manner and the reach of insurance is maximised,” Mukherjee said.

The Finance Minister also said that the sector has been an important contributor to infrastructure development in the country by providing long-term funds.

Investments by the insurance industry in infrastructure as on 31 March 2011, were to the tune of Rs1.98 lakh crore, of which 78% has come from public sector insurers.

Post nationalisation of the insurance sector in 1956, insurance penetration improved to 5.1% in 2010, from 2.71% in 2001.

“The financial regulatory framework in India is evolving in a manner which is conducive to development of a robust financial sector, ensures the independence of the regulators and enables the sector to grow in a healthy manner in line with the requirements of a growing economy,” he said.

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HUL sells leasehold rights for Mumbai property for Rs452 crore

HUL and entities of Piramal Realty have signed an agreement for the assignment of HUL's leasehold rights of the land and building named 'Gulita' situated at Mumbai for Rs452.5 crore, HUL said in a filing to the BSE

HUL and entities of Piramal Realty have signed an agreement for the assignment of HUL's leasehold rights of the land and building named 'Gulita' situated at Mumbai for Rs452.5 crore, HUL said in a filing to the BSE

FMCG major Hindustan Unilever Ltd (HUL) said the company has sold its leasehold rights of a property in Mumbai for Rs452.5 crore to Ajay Piramal Group firm Piramal Realty.
 
HUL and entities of Piramal Realty have signed an agreement for assignment of HUL's leasehold rights of the land and building named 'Gulita' situated at Mumbai for Rs452.5 crore, HUL said in a filing to the BSE.

The consideration includes both fixed and variable components, it added.
 
According to sources, realty consultant Jones Lang LaSalle India negotiated the deal on behalf of Piramal Realty.
 
The property was taken on lease from Maharashtra government by HUL and used as a training centre, a source said, adding Piramal Realty will use the premises to develop a new residential complex.
 
In the past few years, HUL has been selling off some of properties it owns, including some in Gurgaon and Mumbai, to unlock value.

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SAIL hikes prices of some long products by 2.5%

According to SAIL's website, the company has hiked the price of TMT bar (8mm) by Rs500 a tonne to Rs41,000 a tonne. It also hiked the price of angle (65 x 65 x 6mm) and channel (200 x 75 mm) by Rs1,000 a tonne to Rs39,500 a tonne

State-run Steel Authority of India said it has hiked the price of some long products by 2.5% with effect from 1 April 2012.

“For some sections of structurals (light and medium), a marginal increase (2.5%) was taken. However, sales in these categories are about 3% of the total sales of SAIL,” the company said in a statement.

According to SAIL's website, the company has hiked the price of TMT bar (8mm) by Rs500 a tonne to Rs41,000 a tonne. It also hiked the price of angle (65 x 65 x 6mm) and channel (200 x 75 mm) by Rs1,000 a tonne to Rs39,500 a tonne.

The company, however, said, “For April, 2012, prices were rolled over for all flat and long products of SAIL, as they were prevailing during March. Thus, there is no such increase in the prices.”

Domestic steel makers raised the prices for both long and flat products by up to Rs 1,500 a tonne, to partially offset the inflated production cost due to hike in freight rates with effect from 2 April 2012.

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