Reliance General Insurance. 8 th February 2012

Transcription

1 Reliance general Mr Sam Ghosh, CEO Mr Vijay Pawar, Executive Director Mr Rakesh Jain, CEO Mr. Arvind Naaz, CMO, Mr Mukul Kishore, Sr VP Mr. Praveen Pathak, Dy VP Mr Rajat Dutt, Dy VP Mr Sumit Dutt, Sr VP, Reliance Composite Insurance Broking

2 Reliance General Insurance 8 th February 2012

3 Contents Reliance Group Opportunity for financial services and products in India Reliance Capital Indian Non-Life Insurance Landscape Market Outlook Reliance General Insurance Current & Future Insurance Needs Emerging Class Lloyd s Market Advantage & Challenges

4 The vision of one man If you can dream it You can Do it Our legendary founder Shri Dhirubhai Hirachand Ambani 28 th December Forever Confidential

5 Reliance Group Over 230 million customers 1 in every 5 Indians 10 million shareowners amongst largest in the world Group assets of over US$ 37 billion* Group net worth of US$ 19 billion* Flagship stocks included in Junior Nifty, MSCI and Futures & Options Reliance Group Financial Services Communications Power Media & Entertainment Infrastructure * - as on March 31, 2011 Confidential Amongst India s leading business groups

6 India A growth opportunity Robust GDP growth : Amongst top 5 and fastest growing^ Increasing per capita income : FY10 US$ 3,339* (PPP) Rising savings rate : >34% Young population : Median age 26.2 years^ Demand for financial products & services Infrastructure Investment: Rs. 45 tn envisaged in 12 th plan Financial services market set to grow exponentially ^ Source: CIA World Fact book *Source: IMF Estimate # CLSA report on Chindia Banking Confidential

7 Non-Life industry is growing at rapid pace. Industry likely to quadruple to INR 2,500 billion by FY 2020 at 20% CAGR. Penetration still to be lowest in peer comparison..but is still hugely under penetrated Confidential

8 Industry Profitability INR in mln Year Results Industry FY 2009 Underwriting 50,910 Investment Income 56,200 PAT 4,070 FY 2010 Underwriting 59,250 Investment Income 74,350 PAT 12,100 FY 2011 Underwriting 101,470 Investment Income 93,280 PAT 9,530 H Underwriting 41,600 Investment Income 38,380 PAT 230 H Underwriting 36,860 Investment Income 48,000 PAT 8,450 Industry moving towards profitability Confidential

9 Domestic Market Outlook - Reinsurance Due to large market losses & low original rates, results of proportional treaties continue to be depressed. Absence of event limit in the proportional treaties is a concern for many reinsurers. Thai Flood losses have affected some domestic treaties also in the market on account of coverage under Indian Interest Abroad. Increasing Motor TP Pool loss ratio provisioning will have impact on Net worth of the companies. Confidential

10 Domestic Market Outlook - Direct Overall GI Industry growth will be robust driven primarily by health & motor. Property & Engineering rates have stabilized Though there is no significant improvement in pricing. Market discipline in implementing increased deductibles. At General Insurance Council level industry level effort is being made for : Further improvement in deductible Agreement on a minimum rates for CAT perils. Marine Cargo portfolio is gradually improving post steep decline in property & Engineering premium rate. Health portfolio has seen significant improvement in pricing. Confidential

11 Amongst leading Indian private sector general insurers with private sector market share of over 8% in H1 FY12 100% Indian private sector insurance company Strong reinsurance program supported by leading global reinsurers 152 branches; over 5,200 intermediaries Amongst India s leading private general insurers Confidential

12 Reliance General- The Journey so far Licensed by the IRDA in October 2000 Only General Insurance Co in India which is ISO Certified for all Business functions Confidential * As on YTD Dec,2011

13 Sector wise premium contribution H1 FY12 FY11 Engineering 6% Others 9% Engineering 4% Others 10% Fire 8% Fire 6% Health 14% Motor 63% Health 15% Motor 65% Defocus from unprofitable segments with high combined ratios Confidential

14 Product Mix movement 15% +20% growth Confidential

15 Commercial Lines 41% annual growth Focus on property business, mix to increase to 25% in two years. Participation in Fire, Weather, Liability insurance backed by reinsurance program. Special focus on SME segment and package policies Critical evaluation of reinsurance program Confidential

16 Current & Future Insurance Needs Treaty Reinsurance Proportional Non-proportional Facultative Reinsurance Casualty/Financial Lines Energy Aviation Terrorism Marine - Project/Bulk/DSU Construction- EAR/ALOP Confidential

17 Emerging Class/ Product Opportunity Weather related Products State Sponsored Health Scheme Health & Travel Cover for High Networth Individual Art Insurance Casualty/Financial Line Confidential

18 Lloyd s Market Advantage & Challenges Advantages Challenges Large Capacity Financial Rating Specialized Products Competitive pricing Marine and DSU Terrorism PA Low deductible prevailing in Indian Market Thin original rates Minimum rate on line requirements higher than the regional reinsurers Confidential

19 Thank You

20 Essar group Dinyar M Jivaasha,Group Global Head & Sr. Vice President, Corporate Risk and Insurance Management Ms Jui Buch, Deputy General Manager, Corporate Risk & Insurance Management

21 Tata motors insurance broking and advisory services Anand Umarji, Senior Consultant Business Development Deepak Sharma, Head of Insurance & principle officer S. Gopalakrishnan, DVP Bhupesh Mittal Assistant VP

22 Tata Group An Overview Tata Motors Insurance Broking and Advisory Services Ltd

23 Our Group Chairman Statement "One hundred years from now, I expect the Tata s to be much bigger than it is now. More importantly, I hope the group comes to be regarded as being the best in India best in the manner in which we operate, best in the products we deliver, and best in our value systems and ethics. Having said that, I hope that a hundred years from now we will spread our wings far beyond India... Ratan N Tata Tata Motors Insurance Broking and Advisory Services Ltd 1

24 Tatas - India s largest business group Founded by Jamsetji Tata in 1868 Businesses in seven sectors- information systems and communications, engineering, materials, services, energy, chemicals and consumer products Operations in over 80 countries Product and services available in over 85 countries Over 425,000 employees Group revenues of : $83.3 billion International revenues : $48.3 billion Geographies 58% other than India Tata s contribution to India s GDP is nearly 5.5% and 60% of its revenue comes from foreign countries. Brand Finance, a UK-based consultancy firm, valued the Tata brand at $15.75 billion in Tata Motors Insurance Broking and Advisory Services Ltd

25 Leadership Tata Steel - Among the top ten steelmakers in the world Tata Motors - Among the top five commercial vehicle manufacturers in the world Tata Global Beverages - Second-largest player in tea in the world Tata Chemicals - World s second-largest manufacturer of soda ash Tata Communications - One of the world's largest wholesale voice carriers Indian Hotels- first property, the Taj Mahal Palace, in Bombay in 1903 Shareholder base million Number of companies - Over 100 operating companies Listed companies - 31 on the Bombay Stock Exchange combined market capitalisation of about $80.59 billion (as on January 19, 2012) Companies Listed on NYSE - Tata Motors and Tata Communications Tata Motors Insurance Broking and Advisory Services Ltd 3

26 Pioneering initiatives in India Established the first steel plant Introduced labour welfare benefits long before they were enacted by law Started the first power plant Pioneered civil aviation Brought insurance to the country Started the country s first chain of luxury hotels Largest commercial vehicle producer in India Pioneered software development Manufactured the country s first indigenous passenger car, the Indica and affordable, innovative such as the Tata Nano, Tata Motors Insurance Broking and Advisory Services Ltd 4

27 Risk Philosophy Tata Motors (Source Annual Report FY ) Risks Philosophy: All of the Company s operating plants in India have been certified to OHSAS and ISO standards and all the CVBU units have been conferred with the Golden Peacock Award on Safety & Health. Jamshedpur plant was adjudged first and was awarded by CII (Confederation of Indian Industry) Eastern Region in Safety, Health & Environment Practices. The Company took steps towards ensuring that every single individual working within its plant premises is protected from any harmful impact of his/her working and the inherent risks. Towards this end, the Company recently completed a diagnostic of the existing safety systems through DuPont and is taking steps to raise the safety standards to world class levels. Concern - Political instability, wars, terrorism, multinational conflicts, natural disasters, fuel shortages / prices, epidemics, labour strikes: The Company s products are exported to a number of geographical markets and the Company plans to expand international operations further in the future. Consequently, the Company is subject to various risks associated with conducting the business both within and outside the domestic market and the operations may be subject to political instability, wars, terrorism, regional and / or multinational conflicts, natural disasters, fuel shortages, epidemics and labour strikes. In addition, conducting business internationally, especially in emerging markets, exposes the Company to additional risks, including adverse changes in economic and government policies, unpredictable shifts in regulation, inconsistent application of existing laws and regulations, unclear regulatory and taxation systems and divergent commercial and employment practices and procedures. TCS Risks Philosophy: A comprehensive and integrated risk management framework forms the basis of all the de-risking efforts of the Company. Formal reporting and control mechanisms ensure timely information availability and facilitate proactive risk management. These mechanisms are designed to cascade down to the level of the line managers so that risks at the transactional level are identified and steps are taken towards mitigation in a decentralized manner. Legal risks Litigation regarding intellectual property rights, patents and copyrights is significantly high in the software industry. In addition, there are other general corporate legal risks. Tata Motors Insurance Broking and Advisory Services Ltd 5 1

28 Risk Philosophy (Source Annual Report FY ) Tata Steel Risks Philosophy: The Company s focus, at all times, is to identify the hazards, determine the risks and ensure that effective controls are in place to minimize the potential of a major incident. The Company assesses sites for potential risks and creates and implements effective process safety. The Group s philosophy is that all injuries can be prevented. Concern - Health, Safety & Environmental Risks: The manufacture of steel involves steps that are potentially hazardous if not executed with due care. The Group s businesses are subject to numerous laws, regulations and contractual commitments relating to health, safety and the environment in the countries in which it operates and these rules are becoming more stringent. In Europe, auction based proposals by the EU Commission for Phase 3 of the Emission Trading Scheme ( ETS ) could, as they currently stand, have a significant negative financial impact post Tata Chemicals Risks Philosophy: TCL s risk identification and assessment process is dynamic and hence the Company has been able to identify, monitor and mitigate the most relevant strategic and operational risks both during periods of accelerated growth and recessionary pressures. Concern - Safety and Environment related risks: TCL is conscious of its strong corporate reputation and the positive role it can play by focusing on social and environmental issues. Towards this, the Company has set very exacting standards in safety, ethics and environmental management. Tata Motors Insurance Broking and Advisory Services Ltd 6 1

29 Risk Philosophy (Source Annual Report FY ) Tata Power Risks Philosophy: As part of the Risk Management Process (RMP), during the year, the Company reviewed the various risks and finalized mitigation plans. These were reviewed periodically by the Risk Management Committee. Further, seven Risk Management Sub-Committees (RMSCs) closely monitored and reviewed the risk plans periodically. Employees contribute to the risk identification process through the web-based Risk Perception System. Concern India Scenario In view of the inherent risks and challenges in developing and executing new projects and rising fuel costs, the cost of generation is likely to increase. Tata Motors Insurance Broking and Advisory Services Ltd 7 1

30 Tata Group Premium output (approx) At present the overall premium output of the TATA Group is INR 500 crores Employee Benefits will be at 60% (approx) of the overall portfolio Property & Casualty will be at 40% (approx) of the overall portfolio Tata Motors Insurance Broking and Advisory Services Ltd 8 1

31 About Tata Motors Insurance Broking & Advisory Services Ltd Tata Motors Insurance Broking & Advisory Services Ltd was granted a Direct Broker License by the Insurance Regulatory and Development Authority (IRDA) in May 2008 for undertaking Direct Insurance Broking in Life and Non-Life insurance businesses. It has placed business with all public and private insurance companies to enable offering customized solutions to customers. As a Total Insurance Risk Solutions provider, Tata Motors Insurance Brokers plays an integral role in managing the portfolios of the customer through Risk Advisory & Risk Management. Tata Motors Insurance Broking and Advisory Services Ltd (TMIBASL) forms a part of Tata Motors Ltd as their wholly owned subsidiary. Tata Motors Ltd, is India s largest Automobile company with a consolidated revenues of Rs.1,23,133 crores (USD 27 billion) in Tata Motors Limited is a leader in commercial vehicles in each segment, and among the top three automobile manufacturers in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. Tata Motors Limited is the world's fourth largest truck manufacturer, and the world's third largest bus manufacturer. To provide world-class, cost-effective, performance-backed insurance products to automobile customers, valueadded insurance services to corporate and retail customers and spread awareness of insurance. Apart from being the insurance broker for the Tata Group companies, Tata Motors Insurance Broking and Advisory Services Ltd (TMIBASL) is also a insurance broker for Ford, Nissan & Rennault. We undertake to deliver world class broking services in compliance with IRDA Insurance Broking 2002 guidelines. Tata Motors Insurance Broking and Advisory Services Ltd 9 1

32 Portfolio Tata Motors Insurance Broking & Advisory Services Ltd Corporate Exposure (approx) Total Sum Insured - INR. 40,000 Crores Total Premium - INR. 86 Crores Retail Exposure (approx) Total Sum Insured - INR 15,000 Crores Total Premium - INR 650 Crores Total Policies issued - 5,00,000 Tata Motors Insurance Broking and Advisory Services Ltd 10 1

33 Thank You Tata Motors Insurance Broking and Advisory Services Ltd

34 Aditya birla Satish Deshpande, Priniciple Officer Dr. Sandeep Dadia, Executive Vice President & Business Head Mr Dipankar Chowdhury Mr Malay Mukherjee

35 Overview of Aditya Birla Group Presentation to delegation of Lloyd s 8 th February 2012 Aditya Birla Insurance Brokers Copyright Aditya Birla Insurance Brokers Ltd 2010

36 Vision and Values The Glue that Binds Us Vision and Values The Glue that Binds Us OUR VISION To be a premium global conglomerate with a clear focus on each business OUR MISSION To deliver superior value to our customers, shareholders, employees and society at large. OUR VALUES Integrity Commitment Passion Seamlessness Speed Aditya Birla Insurance Brokers Copyright Aditya Birla Insurance Brokers Ltd 2010

37 At a Glance Over 50 years of History 1850s s Procurement and Trading Trading and Basic Manufacturing A Conglomerate taking shape Going Global Set-up Grasim, Hindalco, Eastern Spinning Indonesia Thailand Acquired Indian Rayon Malaysia 1990s In 2011 Service Business Expansion Financial Services Telecom Egypt Copper Cement business of Indian Rayon demerged to Grasim Acquisitions Indal - Aluminium L&T - Cement Madura Garments PSI - IT Services Annapoorna Foils Carbon Black in China Copper mines in Australia Pulp mill in Canada Acrylic Fibre in Egypt (Greenfield) Growth and Consolidation Formation of Nuvo Increase in copper smelter capacity Cement and aluminum capacity addition Carbon Black expansion Entry into Retail Acquisition of Novelis and Minacs Pulp Mill in Canada Acquisition of Columbian Chemicals, Chemical Division of Kanoria Chemicals, & Domsjo Fiber Revenue US$ 35 bn 50 companies across 6 continents in 36 countries Over 60% revenues from international operations 133,000 employees belonging to over 42 different nationalities 24 BUYOUTS IN LAST 17 YEARS & REVENUE TARGET OF US$ 65 BN BY 2015 Aditya Birla Insurance Brokers Copyright Aditya Birla Insurance Brokers Ltd 2010

38 At a Glance Globally & in India Globally, the Aditya Birla Group is: A metals powerhouse, among the world s most cost-efficient aluminium and copper producers. Hindalco-Novelis is the largest aluminium rolling company. It is one of the three biggest producers of primary aluminium in Asia, with the largest single location copper smelter. No.1 in viscose staple fibre No.1 in carbon black The fourth-largest producer of insulators The fifth-largest producer of acrylic fibre Among the top 10 cement producers Among the best energy-efficient fertiliser plants In India, the Aditya Birla Group is: A top fashion (branded apparel) and lifestyle player The second-largest producer of viscose filament yarn The largest producer in the chlor-alkali sector Among the top three mobile telephony companies A leading player in life insurance and asset management Among the top two supermarket chains in the retail business Among the top 10 BPO companies Aditya Birla Insurance Brokers Copyright Aditya Birla Insurance Brokers Ltd 2010

39 Business Sectors onon Ferrous Metals ocement Grey & White otextiles (pulp, fibre, yarn, fabric, apparel) ochemicals oagribusiness ocarbon black omining oferro Chem owind & Solar power oinsulators otelecommunications Our Flagship companies: ofinancial Services (Life Ins, Asset Management, NBFC etc) oit ITeS oretail otrading Aditya Birla Insurance Brokers Copyright Aditya Birla Insurance Brokers Ltd 2010

40 About us We are a part of Aditya Birla Financial Services Group with a vision to be the leader and role model in broad based and integrated financial services business. ABFSG businesses include life insurance, mutual fund, private equity, stock broking, distribution and financing besides insurance broking. Aditya Birla Insurance Brokers is a leading General Insurance and Reinsurance intermediary in India. Expected to place premium ~ INR 3,500 mn (US$ 70 mn) during FY12 Headquartered in Mumbai, the Company also has offices in Delhi, Kolkata, Hyderabad, Pune, Bangalore, Chennai, Ahmadabad and Bhubaneswar more are planned. More than 180 employees across India dedicated to service. Technical expertise in insurance, reinsurance and risk management. Aditya Birla Insurance Brokers Copyright Aditya Birla Insurance Brokers Ltd of X

41 Group approach to risk management - Domestic Business Domestic Business is placed through ABIBL, which arranges all necessary risk management initiatives & inputs through coordination with all stakeholders. Most of the large businesses have their own Risk management / safety departments to address their requirements Major Group companies are Metal (Hindalco), Cement (Ultra Tech), Fertilizers (Indo Gulf), Fibre and Chemicals (Grasim), Textiles, Telecommunications (Idea) & Financial Services Value at risk of Property Insured is ~ US$ 20 bn Projects worth ~ US$ 6 bn are under construction Tailor made Property All Risks policies are structured for Metals, Cement and Fertilizer businesses Other businesses are structured as per standard Industrial All Risk policy form Property & Marine risk exposures are retainable in the Indian Insurance market Consolidated program structured to Insure Terrorism Risk which is reinsured in London Market Under Employee Benefits policies; 57,000 employees along with their dependents (Total lives 233,000) are covered EB program includes Health / Accident / Term Insurance policies Annual Premium towards Property & Marine Insurance ~ US$ 18 mn o Metal Business US$ 10 mn; Cement Business US$ 2.5 mn; Fertilizers US$ 1 mn; Telecom US$ 2 mn EB premium is ~ US$ 10 mn Total domestic business premium ~ US$ 32 mn Aditya Birla Insurance Brokers Copyright Aditya Birla Insurance Brokers Ltd 2010

42 Group approach to risk management - Overseas Business Metal Business Hindalco - Novelis (1 smelter & 29 rolling mills / recycling units in 11 countries across 4 continents) Handled by Novelis through their Central Risk Management Department in Atlanta. Carbon Black Business 5 different entities operating in 12 countries. It includes the latest acquisition of Columbian Chemicals whose insurances are centrally arranged from Risk management department in USA. Insurances of other units in Thailand, China and Egypt are placed separately. Pulp & Fibre Business Operating in 6 countries through different entities (4 pulp plants, 6 fibre plants in 6 countries) IT & BPO Aditya Birla Minacs Worldwide Limited (present across 35 global centres in 8 countries) whose Insurances are independently managed from Minacs HQ s at Toronto. Textile Business Thailand, Indonesia, Philippines, Egypt Insurances handled separately at the respective plant locations. Currently ABIBL is facilitating placement of textile, chemicals and carbon black businesses in South East Asian countries through reinsurance support from India Aditya Birla Insurance Brokers Copyright Aditya Birla Insurance Brokers Ltd 2010

43 Overseas Business Challenges Insurance & Risk management is carried out at each entity level Phased integration of acquired entities Compliance of Local regulatory requirements Affinity towards existing relationship with underwriters & brokers Worldwide presence & reach of ABIBL as a nodal agency Way forward To play major role in arranging insurance covers for overseas units on Business lines in a phased manner through corporate office involvement. Looking for global cover for Marine & Liability risks. Look for uniform terms for property insurances of different business units To evaluate feasibility of developing a Global Insurance program To evaluate feasibility of working with able partners in Underwriting & Broking HOW CAN LLOYDS HELP US IN THIS ENDEAVOUR YOUR SUGGESTIONS Aditya Birla Insurance Brokers Copyright Aditya Birla Insurance Brokers Ltd 2010

44 Thank You Aditya Birla Insurance Brokers Copyright Aditya Birla Insurance Brokers Ltd 2010 X of X

45 vedanta K.S. Vishwanth, Risk Management and Insurance Consultant

46 Lloyd s market visit to India K.S.Vishwanath Consultant-Insurance & Risk Management India Market Consultant for Dolphin Maritime & Aviation Services, London Author of Insuring Cargoes-A practical guide to the law and practice (Witherby UK)-2010 edition #69,, "Whispering Winds", Apartment No 303 (3 rd Floor),6th Main, M.S.Ramaiah City J.P.Nagar 8th Phase, Bangalore (Mobile) ( ) [email protected] Blog: marineinsurancebook.blogspot.com 46

47 Group overview its local and the global reach Group approach to risk management Perspectives on current insurance programme and the future needs Requirements and the challenges to cover Indian risks abroad the legal, regulatory, and any other issues 47

48 Group overview its local and the global reach Group approach to risk management Perspectives on current insurance programme and the future needs Requirements and the challenges to cover Indian risks abroad the legal, regulatory, and any other issues 48

49 Vedanta A London listed FTSE 100 diversified metals and mining major. Market capitalization of $11.5bn London listing since 2003, #41 in the FTSE 100 Revenues / EBITDA for FY 2009 of $6.6bn / $1.6bn 54% 17% 29% Strong and liquid balance sheet, cash of c.$6.8bn (31/12/09) Over 30,000 employees globally, including 8,000 professionals Sterlite listed on the NYSE/BSE/NSE, market capitalization of 25% 7% 6% 15% $15.3bn Industry leading organic growth pipeline half of capex 47% already spent Aluminum Copper Zinc Power Iron ore One of the World s Largest Diversified Mining Companies-Global metals and mining player with a major presence in India 2010, Vedanta Resources plc 49

50 Delivering India s mineral potential Zinc-Lead-Silver: to become world s largest integrated zinc player; top 10 producer of Sliver Aluminium: to become top 10 producer Copper 1.2+ mt refined copper to become top 3 producer India: 800 kt custom smelting Zambia: 400+ kt fully integrated Iron Ore: to become top 10 iron ore producer Power: one of India s largest power producers Exploration-A Key Focus Area 50

51 Vedanta group companies Konkola Copper Mines, Zambia-180kt integrated copper producing unit Copper Mines of Tasmania Pty Ltd, Australia Anglo American Group of Companies Lisheen (Ireland) Skorpion and Black Mountain (South Africa) Sterlite Energy, India Sesa Goa Ltd Sterlite Industries (India) Ltd Vedanta Aluminium Ltd Bharat Aluminium Ltd (BALCO) Hindustan Zinc Ltd Madras Aluminium Ltd (MALCO) Latest acquisition-cairns Energy and Cluster Ltd, Liberia Acquisition Philosophy-Vedanta adopts a very selective approach 51

52 Vedanta Group Structure Vedanta Resources (Listed on LSE) 79.4% 70.5% 54.6% 94.8% 55.1% 38.8% Konkola Copper Mines (KCM) Vedanta Aluminium (VAL) 29.5% Sterlite Industries (Listed on BSE, NSE and NYSE) 3.6% Madras Aluminium (MALCO) Sesa Goa (Listed on BSE and NSE) 20.2% Cairn India Ltd (Listed on BSE and NSE) 51.0% 64.9% 100% 74% 100% 100% 51% Bharat Aluminium (BALCO) Zinc-India(HZL) (Listed on BSE and NSE) Skorpion and Lisheen Black Mountain Sterlite Energy Australian Copper Mines Liberia Iron Ore Assets Zinc-International KEY Aluminium Copper Iron ore Power Zinc-India Oil and Gas 52 52

53 Group overview its local and the global reach Group approach to risk management Perspectives on current insurance programme and the future needs Requirements and the challenges to cover Indian risks abroad the legal, regulatory, and any other issues 53

54 Group approach to risk management Like many Indian Business Houses, Vedanta too is getting increasingly sophisticated in risk and risk management. An Enterprise Risk Management exercise is planned in Feb mining/smelter experts from Willis London coming to India for this purpose. There is a management commitment to : Sustainable Development Loss prevention 54

55 Group approach to risk management Contract Certainty in policies A commitment to increase deductibles/time excess progressively towards protecting balance sheet Robust MIS Enterprise Risk management Focus on Sustainability 55

56 Group overview its local and the global reach Group approach to risk management Perspectives on current insurance programme and the future needs Requirements and the challenges to cover Indian risks abroad the legal, regulatory, and any other issues 56

57 Perspectives on current insurance programme and the future needs Mega Policies (insureds with sum insured of US$ 500 million are entitled to this package policy)- covers Property, Machinery B/D and Business Interruption. Mega policy provides an All Risks cover which is otherwise not allowed by the Regulators for property risks. D&O-a Master Policy in London, local policies in various countries POSI Covers Emerging needs: Political Risks for assets acquired e.g. Liberia Kidnap and Ransom cover Mergers & Acquisitions-presently depending on London brokers 57

58 Emerging Risks/Requirements 1. If you are operating in emerging markets political risks including the risks of Nationalization are acute. The rise of entities like Boko Haram in Nigeria must be causing anxiety to promoters who have assets there. 2. Change in government polices- Indonesia recently brought in restrictions on the export of coal. Many companies invested in Indonesian coal mines. 3) Port Blockade 4) Blockade of a pit head, say in Angola, providing raw material to factories elsewhere may have to be addressed. 5) Global medical cover. 58

59 Group overview its local and the global reach Group approach to risk management Perspectives on current insurance programme and the future needs Requirements and the challenges to cover Indian risks abroad the legal, regulatory, and any other issues 59

60 Requirements and the challenges to cover Indian risks abroad the legal, regulatory, and any other issues 1. Lack of expertise within India of how to structure a global Property & Casualty programme 2. Restrictive wordings and complex File & Use guidelines which make it difficult to design a global property and casualty policy wording. 3. Lack of specialized experience in handling large Casualty programmes where layering becomes necessary. We do not presently have any excess casualty markets in India. 4. Lack of understanding of local conditions/regulations in countries where Indian MNC s may have physical presence-consulting local legal experts entails cost. 5. Lack of understanding/expertise to underwrite suitable DIC/DIL terms and limits. 6. Lack of adequate NATCAT cover in jurisdictions where event limits are in force. Can the DIC/DIL out of India take care of this? 7. Excessive softness of the Indian market will make such global programmes unviable as the Indian Corporate has come to expect such unsustainable rates and deductibles. Where will the DIC/DIL be funded from? 60

61 Indian Insurance Industry-Service Delivery Government Insurers (the four PSU s) have a broad brush underwriting appetite-however servicing of customers continues to be a challenge Cartelization-the four PSU s do not compete with each other for mega risks On the other hand, private Insurers often have underwriting appetite issues (e.g. mining industry) and/or capacity constraints to write businesses such as Vedanta Group Writing a global programme out of India does not seem feasible in the near future. 61

62 Thank you 62