Indian insurance sector to get more global tie-ups

By now it has become evident that 2010 is going to be a boon for the Indian insurance sector and the reasons behind this are not hard to see. A number of insurance tycoons across the globe are getting interested to capitalize on this mounting (in terms of revenues) and certainly vibrant market and foremost of them happen to be the celebrated insurance companies hailing from Japan.

One of these is, without a shred of doubt, Mitsui Sumitomo, an exceedingly acclaimed insurance player in the realm of Japan, and the company, at the moment, is busy is exploring opportunities to enter the Indian insurance sector. What is its aim at the moment? Well, as far information goes, it is to set up shop in India. It has to be stated, in this context, Indian Government’s proposal to lift the FDI cap in the insurance sector from 26 per cent to 49 per cent has stimulated Japanese and Korean companies to a large extent.

Why shouldn’t the same be too? Recent studies suggest that India and China are among the fastest growing insurance markets following the recession. Is there any difference between the two? As indicated by industry analysts, even if China is a bigger market, India’s distribution system is more evolved and it is believed to be acting as the Unique Selling Proposition at this moment in time.

There have been other inspiring facts as well. As said by industry officials, global companies by and large prefer to have a presence in both India and China and the market grapevine has it that a couple of Japanese and Korean insurance players are looking at possible joint venture deals with some of the financial services firms having extensive distribution networks.

Bear this in mind. Mitsui Sumitomo Insurance (London Management) Ltd (MSILM*) is part of the Mitsui Sumitomo Insurance Group (MSIG). MSILM, through its subsidiaries, is one of the most innovative and forward thinking insurers in the market at present.

Indian insurance sector awaiting a showdown

There is no doubt in it that the New Year – 2010 is going to be the best in your life and will gratify your most of long-standing aspirations. Will the same be for everyone? Well, I am not so sure but surely it is not going to be for the Indian insurance sector. Reason? A bitter struggle between the insurance and markets regulators in the Indian scenario is imminent and the questioning of Securities and Exchange Board of India (SEBI) to HDFC Standard Life regarding the absence of life insurance cover under its pension plan has already initiated the scuffle.

Experts assume the market regulator looking for product details from a company which comes under the realm of the insurance regulatory and development authority is not unusual but the same development could intensify issue of regulatory turf. The only reason is that insurance companies are allowed to put up products for sale only after a rigorous approval process by IRDA.

Nevertheless, HDFC Standard Life Insurance has preferred to retain a strange silence over the issue thus far. But industry analysts are anticipating a bitterer development. As per the majority of them, IRDA may take the matter up with SEBI owing to the fact that the pension plan like all other products was cleared by the insurance regulator. It is to be noted that the launch of
unit-linked insurance plans has wakened the lines between a mutual fund and a life insurance company.

It has come to the knowledge, in order to distinguish the products the insurance regulator has prescribed minimum lock-in period for life companies. The approach, without a shred of doubt, is surprising since all life insurers sell similar pension plans without any life cover. HDFC Standard Life can’t be held culpable as a result.

We are waiting for a showdown.

Real estate woes tormenting Indian government much

Even though economic pundits in the realm of India are considering the indigenous realty sector as one of the most vivacious and prospective sectors (certainly in terms of generating revenues) known hitherto, the picture is perhaps getting bleak bit by bit owing to several unforeseen developments. What makes one issue such ruthless remarks?

Go through the following and I hope that you may also abide by my standpoints.

It is getting evident an increasing number of non-resident Indians (NRIs) is getting vulnerable to real estate woes and as per some of the preys, negligence of governance happens to be supreme. To cut a long story short, copious numbers of complaints of real estate deals getting sour, crooked and dishonest encroachment and unauthorized occupation of properties have flooded the ministry of Overseas Indian Affairs (MOIA).

What we can say is that this is nothing new but the recent saga of Satyam scam casting its shadow on Maytas Properties has made the situation out of the frying pan into the fire. There is hardly any doubt that apprehensions amid overseas investors, thanks to all these tainted events, have deepened.

What has been the response of Government of India? After all, it is the foremost authority and can’t leave us in the lurch. Well, it has expressed own views and as indicated by Vayalar Ravi, Overseas Indian Affairs Minister, "Property dispute is one of the most frequent complaints by NRIs. They are unable to protect their property due to long absences or lack of awareness of laws."

Bear this in mind too. The majority of complaints are from major real estate markets like Delhi, Mumbai, Bangalore, Andhra Pradesh, Kerala and Punjab.

What types of complaints are there then? The nature of the complaints, it has been found, are mostly protection of property that has been forcibly occupied or encroached, dispute relating to division of property or inheritance and cases where investors have been cheated by real estate developers.

On the word of the minister, following this deluge of complaints, he had written to state governments asking them to appoint nodal officers for civil, judicial and police matters. These nodal officers are free from NRI cells that are dedicated for issues related to financial or welfare interests of overseas Indians.

Wen Jiabao vows to retain "proactive" fiscal stance

China is in a real fix and the experts fear the real estate bubble may attain alarming proportions, if not restrained in time. All these have stimulated the Communist Government of China to get cognizant of each and every development in the pertinent area and the Chinese Premier has come out with a phenomenal assertion. In accordance with Wen Jiabao, the Chinese Premier, from this time forth the government will dampen down property prices, resist pressure for the yuan to appreciate and keep inflation at "reasonable" levels.

"Property prices have risen too quickly in some areas and we should use taxes and loan interest rates to stabilize" them, Wen said yesterday in an online interview with the official Xinhua News Agency. China will "absolutely not yield" to calls for currency gains, he stated in addition.

Take a look at some other crucial facts. Recent reports suggest elucidate that China's property prices climbed last month at the quickest pace ever since July 2008 and all these made industry analysts predict record lending and inflows of money will inflate asset bubbles in the world's fastest-growing major economy. What was the last statement of Fan Gang? Only on November 18 the Central bank adviser said that the nation needs to be on alert for stock, real-estate and commodity bubbles for the reason that global capital flows into emerging economies.

"It's difficult to see how serious the government is about cooling the property market," said Andy Xie, former Morgan Stanley chief Asian economist. "The issue isn't about introducing new measures but enforcing existing measures."

We must focus more on the statement of the Chinese Premier. China should anticipate inflation on account of factors including rising global commodity costs, Wen said, pledging to keep price increases in a "reasonable range." The government will leave no stone unturned to retain a "moderately loose" monetary policy and a "proactive" fiscal stance, Wen said, adding that it would be a mistake to extract stimulus measures too quickly.

Israel’s military triumphs strengthen own realty sector

This picture, without a shred of doubt, is contrary to the belief. We, at the moment, are dealing with Israel but more with its successes, instead of anguishes as usual. The whole of Jewish republic in southwestern Asia at eastern end of Mediterranean, at present, is enjoying a housing boom and the sole credit, in this context, goes to its political leadership. How? If you recall whilst Israel launched a massive offensive in the Gaza Strip a year ago, political leaders said the primary objective was to quench cross-border rocket fire against villages in southern Israel.

What is the current situation then? Well, all tensions have dissolved almost as the military mission has largely been accomplished. It must be taken into consideration that launches of short-range Qassam rockets plummeted 90 percent to a decade low in 2009. All these positive developments have stimulated the country-wide realty sector and there has been a upsurge in demand for homes in a region that people had been fleeing. There is hardly any doubt that most of Gaza remains in ruins thus far. Nonetheless, improved interest in real estate in Sderot, the main target of the Qassam rockets, has pushed home values up by as much as a 30 percent.

A sense of optimism is being witnessed in the kibbutz, or farming collectives, around Gaza, as well. On the word of leading real estate marketing executives in the region, sales of new homes have tripled while prices have risen 15 percent. As per the majority of them, the situation has changed drastically by now and the role played by improved security conditions, in this regard, can’t be belittled.

Is this the beginning of a new era? We surely would love to envisage in this way but some fears still continue to torment Israelis and according to the beliefs of majority, a new, worse flare-up is only a matter of time. If recent Israeli army intelligence assessments are relied upon, Hamas is learning the lessons of the war and stocking hundreds of missiles in preparation for another round of fighting.

But surely Israel is steadfast and this defiant attitude is being expressed through each aspect, the buoyant Israeli realty sector is one. Truly, it is unlike India, the Asian giant, mostly susceptible to terror strikes and getting lost in political squabbles bit by bit.

Can US leaders restrain subsequent healthcare legislation hurdles?

How can a struggle be won? Lots of pundits are there to express personal standpoints in this context but we, commoners remain in need of extremely explicit specimens to stimulate ourselves. US healthcare reform Bill – gallant struggle to set up the essence and to emerge victorious after a long, arduous struggle, if truth be told, is itself a specimen that will encourage the generations to come.

The history was created as soon as US Senate approved the ground-breaking legislation and by now it’s a reality that it would play a great role in extending healthcare for tens of millions of uninsured Americans. Now the question remains whether the victors can have a sigh of relief yet and the reasons are not hard to see.

As per a considerable section of pertinent analysts, substantial hurdles await the legislation to a large extent. It has come to the knowledge that the work will embark on in the New Year to reconcile the Senate legislation with a House of Representatives Bill that was passed last month, which is more left wing. Make a note of this as well. Potentially tough negotiations are likely all over January for the reason that the two Bills have significant differences.

Experts state that the Senate Bill does not include the "public option" - a government-backed insurance programme - which is a crucial part of the House legislation. The provision is likely to be hard fought for by liberals in the House. Nevertheless any public option risks losing the key votes of moderate Democrats in both the House and Senate.

Is this all? Perhaps not! Another conceptual separation between the two bodies is how the reforms will be financed. The House Bill would enforce a surtax on high-earning individuals and couples, whereas the Senate Bill applies a 40 per cent tax to be paid by insurance companies on alleged "Cadillac plans" or the health insurance premiums that cost above $8,500 a year for individuals and $23,000 for families.

South Korea firm to fortify own defense science and technology might

The political climate of Asia is changing fast with China and (to some extent) India getting belligerent than ever before. What should other nations do other than fortifying own boundaries and potencies? South Korea is doing the same and in accordance with the country’s Ministry of National Defense, it has unveiled revised plans on developing the country's defense science and technology from 2010 to 2024. Without a shred of doubt, the task is both humongous and intricate but what else can be done. One should not forget that South Korea shares border with the Democratic People's Republic of Korea, known for its uncanny approaches, dogmatism, and unwavering fealty to communist principles in the global arena.

Now let’s have some words regarding revised plans. As per the Ministry of National Defense, the revised design has set improving technologies for high-tech weapons system as a mid-term goal and securing independent technology for it as a long-term aim. Nevertheless, there shall be far-reaching consequences and it is likely that South Korea’s investment in research and development on national defense, at the moment at 5.6 percent of the total military spending, will climb up to 7 percent by 2012, and to 10 percent by 2020. This is not only a sharp rise compared to the original plan but is competent to make the nation more poised than ever before.

It is to be noted that South Korea, at this time, is the world's 18th largest weapons seller and also aims to increase its arms sales by 2024 to become the 10th exporter.

But there have been some other talks as well. Government records suggest that changes in plans are believed to be made every five years. What led to this bizarre development then? Experts state that the changes did surface in advance than standard following the latest revision in 2007 on account of policy changes on national defense under the Lee Myung-bak administration, which assumed office in February 2008.