Under Autolife, automobile buyers can now not only ensure their family’s happiness about also secure them from future uncertainties of life
IndiaFirst Life Insurance, a joint venture of two public sector banks—Bank of Baroda and Andhra Bank with UK’s leading risk, wealth and investment company Legal & General, has launched ‘Autolife’–a simple process of getting life insurance cover instantly at an affordable cost.
Under Autolife, automobile buyers can now not only ensure their family’s happiness about also secure them from future uncertainties of life. They can now avail the benefits of a life insurance cover at the same time and place as buying their new car and that too at an affordable cost. Autolife is a win-win proposition for all—the customer, dealer and the insurer.
It does not require any documentation/medicals or waiting period and assures speedy and empathetic settlement of claims. The company has entered into its first tie-up with Varun Motors of Andhra Pradesh to offer life insurance cover to its customers. IndiaFirst Life is planning similar tie-ups at a nationwide level across various untapped segments in the near future so that customers across the country can avail the benefit of a life insurance cover through a simple process.
Varun Motors caters to over 15000 customers every month. They are spread across Andhra Pradesh through 100 centers.
Under its first tie-up for Autolife, customers of Varun Motors (two wheeler/ four wheeler) besides availing vehicle insurance; will also be able to avail a life insurance cover of up to Rs20 lakh at an affordable cost. Customers have the flexibility of selecting from any of the four options - blue, silver, gold or platinum, which will provide life insurance cover of up to Rs3 lakh, Rs5 lakh, Rs10 lakh and Rs20 lakh respectively.
HSBC plans to launch another Fund of Funds scheme investing in foreign equities— another global fund with no track record
HSBC Mutual Fund plans to launch an open-ended Fund of Funds (FOF) scheme—HSBC China Consumer Opportunities Fund. The scheme would invest 95%-100% in its overseas fund—HSBC Global Investment Funds (HGIF) China Consumer Opportunities Fund. The rest would be invested in money market instruments and units of domestic mutual funds. The investment objective of the underlying fund is to invest for long-term total return in a diversified portfolio of investments in equity and equity equivalent securities of mid to large cap companies around the world, positioned to benefit from the growing middle class and changing consumer behaviour in China. The rationale behind the fund is that the growing population of middle class, gifting culture and liberalisation of tourism are upholding demand for international and local consumer goods. The fund does not have any track record as it has just been launched in September 2011. As on December 2011, the fund had invested in companies of 10 different countries. Around 51.2% of the investments are in stocks of United States, France and Switzerland; just 17% is invested in companies located in Hong Kong and China. Some of the companies in the top ten holdings include: Adidas, Louis Vuitton, Swatch, L’Oreal and Henkel.
This is the third FOF launched by HSBC which invests in its overseas fund. The other two funds are—HSBC Brazil Fund and HSBC Emerging Market Fund. (Read about what we said here: Avoid HSBC Brazil Fund new fund offer , Faith Investing ) There have been many such funds launched in the past by fund companies, inviting Indian investors to park money in their overseas fund. Apparently, most of these overseas funds do not have a long and proven track record of good performance. Moneylife has constantly been writing about such funds in the past years. These funds are pure fads.
We have had similar funds like the recent Mirae Asset India-China Consumption fund, which invests as much as 35% in companies from China and the rest in Indian equities and debt instruments. There are also FOF schemes like JPMorgan JF Greater China Equity Offshore Fund and Mirae Asset China Advantage Fund which invest in funds that primarily invest in companies domiciled in China. Here again, there is no long-term performance available for these funds. In the last two years these funds have returned around 2% whereas the Sensex was down by 2%, but in the last one year the returns have more or less tracked the Sensex.
Even if investing in such a fund tends to diversify one’s portfolio, how much should one plan to allocate to these funds? One needs to study the investment strategy and analyse the portfolio of the foreign fund. It’s clear these funds are not meant for individuals who do not even have a significant portion of his investments in Indian equity funds.
“Allowing FDI in multi-brand retail would serve India very well by bringing in the culture of discount stores,” VG Narayanan, a ‘Thomas Casserly professor’ of business administration at the Harvard Business School told media persons
Chicago: Although India has decided to put foreign direct investment (FDI) in multi-brand retail on hold, various experts feel that allowing foreign investments in this area will benefit domestic sectors more than the foreign players like Wal-Mart, reports PTI.
“In my opinion, allowing FDI in multi-brand retail would serve India very well by bringing in the culture of discount stores,” VG Narayanan, a ‘Thomas Casserly professor’ of business administration at the Harvard Business School, told PTI.
Mr Narayan, who spent the last month in India, said with large international players entering the country’s retail sector, logistics and supply chain management practices will improve considerably, which in turn, will benefit farmers and manufacturers and reduce waste.
“Multi-brand retailers such as Wal-Mart have played a very important role in keeping prices down, while delivering tremendous value to the customers. So, Indian consumers will benefit from lower prices,” he said.
This will also create a large number of jobs, not just in the retail sector but also in logistics, construction and manufacturing as well, he said.
The Union Cabinet cleared the proposal to allow 100% FDI in single-brand retail and 51% FDI in multi-brand retail in November last year.
Although, the proposal for single-brand was cleared by Parliament in the Winter Session, FDI in multi-brand retail was vehemently opposed by all opposition parties, including ruling United Progressive Alliance (UPA) ally Trinamool Congress, after which the decision was put on hold by the government.
The world’s largest retailer Wal-Mart, which is one of the most-awaited entrants in the event of FDI being allowed in multi-brand retail sector, has been neutral on the issue.
“We respect the Indian government’s decision and look forward to a consensus being reached on FDI in multi-brand retail,” Megan Murphy, international corporate affairs manager, said in a statement.
However, Lakshman Krishnamurthi, a ‘Montgomery Ward’ distinguished professor of marketing at Northwestern University’s Kellogg School of Management, said success of allowing foreign retail in India depends “on how you measure success”.
“Wal-Mart entered China in 1996 and it took more than a decade for the China operations to become successful. India in 2012 is a richer country than China was in 1996, on a per capita GDP basis, but the income distribution is skewed with a significant bottom tail. Wal-Mart is not a company that makes entry decisions without significant analysis.
“They see India as a huge market, and, if and when they enter, will play for the long-term, not the short-term,” he said.
Commenting on the reasons for holding the decision to allow FDI in multi-brand retail, he said: “At one level the problem is political.
There is somewhere between 10-13 million retail outlets in India dominated by the kirana stores. The worry is that the entry of large multinational corporations like Wal-Mart will affect these establishments and throw large numbers of people out of work”.
“The flip side of the argument is that entry of Wal-Mart will lead to increase in purchasing of goods. So farmers and goods manufacturers will benefit, and improvements will come in supply chain management and logistics infrastructure which will demand people with those kinds of skills, and so on,” Mr Krishnamurthi said.
Mr Krishnamurthi, who is writing a book on business practices in India and China, including the retail sector, with Sugandha Khandelwal of the Nielsen Company and Yuxin Chen, marketing management professor at Kellogg School of Management, claimed the vast majority of kiranas will be unaffected by the entry of Wal-Mart.
Only the ones in large metros could be affected, and even that is hard to see, he said.
“The positive is that entry of Wal-Mart will lead to increase in foreign investment, which should be good for the economy as a whole,” the professor said.
“Also, the entry of Wal-Mart will spur domestic retail players to improve their operations to compete with Wal-Mart.
The FMCG (fast-moving consumer goods) sector should benefit as it is more efficient to sell to modern retail partners than the unorganised sector,” he said.
“Indian farmers should, theoretically, benefit with better prices if a number of the intermediaries are removed and consumers should benefit as many of the channel mark-ups disappear,” Mr Krishnamurthi said.
“Nothing in India moves quickly, but the Indian retailing sector except for certain pockets is not very efficient and has to improve,” Mr Krishnamurthi said.
An interesting by-product of the entry of large foreign retailers could be the wooing of the kiranas by major brands in India because of the expected loss of power by these brands in dealing with companies like Wal-Mart.
“In addition, Wal-Mart will carry a line of their own branded products,” Mr Krishnamurthi said.