Templeton India Corporate Bond Opportunities Fund introduces facility to subscribe & redeem units through exchanges

Subscriptions of amount less than Rs1 crore only will be permitted through this facility

Franklin Templeton Mutual Fund has extended the facility to subscribe and redeem the units of Templeton India Corporate Bond Opportunities Fund through infrastructure of the NSE and BSE, with effect from 15 December 2011. Subscriptions of amount less than Rs1 crore only will be permitted through this facility.

Templeton India Corporate Bond Opportunities Fund is an open ended income fund which seeks to provide regular income and capital appreciation through a focus on corporate securities.

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‘Employees asked to contribute to cost of company benefit schemes’

Employers are beginning to respond to key health concerns with emphasis on wellness initiatives to help their employees improve their overall health and increasing medical costs

The increasing costs of medical insurance are forcing employers to make changes to the way they provide this benefit to their employees, with many companies asking them to contribute to the cost of provision, according to a recent study.

The average policy premium cost per employee has increased to Rs9,300 in 2011 from Rs6,800 in 2008-09, according to findings released in the 6th annual Employee Benefits Study: Employee Engagement, conducted by Marsh India, a subsidiary of leading insurance broker and risk advisor Marsh.

“Plan design changes provide immediate respite from premium increase but it is not a sustainable strategy,” said Marsh India CEO Sanjay Kedia said.

Understanding the underlying cost drivers and adopting appropriate measures such as employee engagement and wellness initiatives will result in greater long-term suitability, he added. The survey found that 92% employers want to align their benefits to the market compared to 58% in 2008-09.

Almost two-thirds of surveyed organisations have already made at least one change to their benefit plan design in the last two years by requiring employees to make a greater contribution to the company benefits scheme. The survey covered 1,800 employees in 188 organisations as well as five insurance companies, five third party administrators and five health and wellness solution providers.

The study also highlighted the need for improving employee communication as 76% of employees stated they have little or insufficient knowledge about their benefit plans. However, 70% of the employers believed that their existing communication efforts were clear and comprehensive.

Employers are beginning to respond to key health concerns with emphasis on wellness initiatives to help their employees improve their overall health and increasing medical costs, it said. Nearly 83% employers say that the use of wellness programs is a highly important benefits strategy to their organisation.

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88% of individual agency sales are from top 25% agents: Deloitte survey

According to the Deloitte survey, the top three priorities for insurers today is to manage channel costs, improve channel productivity and retain channels

Insurers are investing heavily in agency channel recruitment and training. However, the percentage of active agents is low. This has led to high expenses with regard to agency channel management. According to Deloitte’s Life Insurance Channel Management Benchmarking Study-2011 (which included seven participants from the life insurance industry) 88% of individual agency sales are from top 25% agents, which indicates high dependence on a few best performers and the need to improve agent’s productivity across layers.

While none of the insurers have achieved profitability in agency channel, a few have broken even in the bancassurance channel. “There are proven advantages that bancassurance brings from profitability and productivity perspective due the inherent partnering approach to channel management. On an average, each active branch sells premiums equal to three active agents. Bancassurance partners play a larger role across value chain of customer acquisition and claims processing. They are better integrated with insurers from the upfront strategy for product design to operational improvement across the customer life cycle. However, current level of utilisation of bancassurance branches for insurance sales is low, as reflected in the 80% of branches that are not actively selling insurance,” said Sachin Sondhi, leader, strategy & operations, Deloitte in India.

Insurance penetration (measured as premium underwritten to GDP) was only at 5.2% in 2010–significantly lower than Asian peers like South Korea, Taiwan, Japan and Hong Kong which had insurance density greater than 10% in the same year.

To attract customers, insurers in India have (especially in non-life insurance, post de-tariffing) resorted to heavy premium discounting which has impacted the profitability and quality of risks underwritten.

The report concluded that top three priorities for insurers today is to manage channel costs, improve channel productivity and retain channels. Most insurers have rationalised the external channel associations during the period to increase the focus on more productive relationships. “Challenges and initiatives identified by insurance players indicate that players wish to increase channel spread but balance that with improving productivity and hence, profitability of channels,” added Sachin Sondhi.

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