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
8
thFebruary 2012
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
Confidential
The vision of one man
If you can dream it
You can Do it
Our legendary founder
Shri Dhirubhai Hirachand Ambani
Confidential
Reliance Group
Reliance Group
Communications
Financial Services
Power
Media & Entertainment
Infrastructure
Amongst India’s leading business groups
* - as on March 31, 2011
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*
Confidential
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^
Infrastructure Investment: Rs. 45 tn envisaged in 12
thplan
Demand for
financial
products & services
Financial
services market set to grow exponentially
^ Source: CIA World Fact book
Confidential
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.
Confidential
Industry Profitability
Industry moving towards 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
H1‐2011
Underwriting
‐41,600
Investment Income
38,380
PAT
230
H1‐2012
Underwriting
‐36,860
Investment Income
48,000
PAT
8,450
Confidential
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
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.
Confidential
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
Confidential
Licensed by the IRDA in
October 2000
Only General Insurance
Co in India which is ISO
Certified for all Business
functions
Reliance General- The Journey so far
Confidential
Sector – wise premium contribution
Motor 65% Health 15% Fire 6% Engineering 4% Others 10%
FY11
Defocus from unprofitable segments with high combined ratios
Motor 63% Health 14% Fire 8% Engineering 6% Others 9%
H1 FY12
Confidential
Product Mix movement
15% +20% growth
Confidential
Commercial Lines
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
41% annual growthConfidential
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
Emerging Class/ Product Opportunity
Weather related Products
State Sponsored Health Scheme
Health & Travel Cover for High Networth Individual
Art Insurance
Confidential
Lloyd’s Market – Advantage & Challenges
Advantages
Large Capacity
Financial Rating
Specialized Products
Competitive pricing
Marine and DSU
Terrorism
PA
Challenges
Low deductible prevailing in
Indian Market
Thin original rates
Minimum rate on line
requirements higher than the
regional reinsurers
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
Tata motors insurance
broking and advisory
services
•Anand Umarji , Senior Consultant –
Business Development
•Deepak Sharma, Head of Insurance &
principle officer
•S. Gopalakrishnan, DVP
Tata Motors Insurance Broking and Advisory Services Ltd
Tata Group – An Overview
Tata Motors Insurance Broking and Advisory Services Ltd
Our
Group Chairman Statement
1
"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...“
Tata Motors Insurance Broking and Advisory Services Ltd
2
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
2010-11:
$83.3 billion
International revenues2010-11:
$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 2011
Tata Motors Insurance Broking and Advisory Services Ltd
3
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 - 3.6 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
4
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
5 1
Tata Motors
Risks Philosophy:
All of the Company‘s operating plants in India have been certified to OHSAS - 18001 and ISO - 14001 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
6 1
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 2012.
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
7 1
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
8 1
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
9 1
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 2010-11. 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, value-added 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.
About – Tata Motors Insurance Broking & Advisory Services Ltd
Tata Motors Insurance Broking and Advisory Services Ltd
10 1
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
Thank You
Aditya birla
•Satish Deshpande, Priniciple Officer
•Dr. Sandeep Dadia, Executive Vice
President & Business Head
•Mr Dipankar Chowdhury
•Mr Malay Mukherjee
Copyright Aditya Birla Insurance Brokers Ltd 2010
Aditya Birla Insurance Brokers
Overview of Aditya Birla Group
Presentation to delegation of Lloyd‘s
Aditya Birla Insurance Brokers
Copyright Aditya Birla Insurance Brokers Ltd 2010
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
At a Glance | Over 50 years of History
1850s 1900-30 1930-70s 1970-90
Procurement and Trading
1990s 2000-2005 2005-2010
Trading and Basic Manufacturing A Conglomerate taking shape •Set-up Grasim, Hindalco, Eastern Spinning
• Acquired Indian Rayon
Going Global •Indonesia •Thailand •Malaysia 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
24 BUYOUTS IN LAST 17 YEARS & REVENUE TARGET OF US$ 65 BN BY 2015
In 2011
•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
Aditya Birla Insurance Brokers
Copyright Aditya Birla Insurance Brokers Ltd 2010
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
Business Sectors
o
Non – Ferrous Metals
o
Cement – Grey & White
o
Textiles (pulp, fibre, yarn, fabric, apparel)
o
Chemicals
o
Agribusiness
o
Carbon black
o
Mining
o
Ferro Chem
o
Wind & Solar power
o
Insulators
o
Telecommunications
o
Financial Services
(Life Ins, Asset Management, NBFC etc)o
IT – ITeS
o
Retail
o
Trading
Aditya Birla Insurance Brokers
Copyright Aditya Birla Insurance Brokers Ltd 2010
•
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.
About us
Aditya Birla Insurance Brokers
Copyright Aditya Birla Insurance Brokers Ltd 2010
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
oMetal Business – US$ 10 mn; Cement Business – US$ 2.5 mn; Fertilizers – US$ 1 mn; Telecom –
US$ 2 mn
• EB premium is ~ US$ 10 mn
Aditya Birla Insurance Brokers
Copyright Aditya Birla Insurance Brokers Ltd 2010
Group approach to risk management - Overseas Business
•
Metal Business – Hindalco - Novelis
(1 smelter & 29 rolling mills / recycling units in 11 countriesacross 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
Aditya Birla Insurance Brokers
Copyright Aditya Birla Insurance Brokers Ltd 2010
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
Thank You
vedanta
•K.S. Vishwanth, Risk Management and
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 (3rdFloor) ,6th Main, M.S.Ramaiah City
J.P.Nagar 8th Phase, Bangalore-560 076
(Mobile) +91 99 8011 1662 (Email) [email protected]
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
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
49
Vedanta
A London listed FTSE 100 diversified metals and mining major.
© 2010, Vedanta Resources plc
Market capitalization of $11.5bn
London listing since 2003, #41 in the FTSE 100
Revenues / EBITDA for FY 2009 of $6.6bn / $1.6bn
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
$15.3bn
Industry leading organic growth pipeline – half of capex
already spent
One of the World’s Largest Diversified Mining Companies-Global metals and
mining player with a major presence in India
29% 17% 54% 47% 25% 7% 15% 6% Zinc Copper
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
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
52
Vedanta Group Structure
52
Zinc-India Copper
Aluminium Iron ore Power
KEY Konkola Copper Mines (KCM) 54.6% Vedanta Resources (Listed on LSE) Madras Aluminium (MALCO) 94.8% 51.0% 64.9% 70.5% 100% 29.5% Zinc-India(HZL) (Listed on BSE and NSE) Australian Copper Mines Bharat Aluminium
(BALCO) Sterlite Energy
100%
Sterlite Industries (Listed on BSE,
NSE and NYSE)
Vedanta Aluminium (VAL) 79.4% Sesa Goa (Listed on BSE and NSE) 55.1% 3.6% 51% Skorpion and
Lisheen MountainBlack
100% 74% Zinc-International Cairn India Ltd (Listed on BSE and NSE) 38.8% 20.2% Liberia Iron Ore Assets
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
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 2012 -mining/smelter experts from Willis
London coming to India for this purpose.
There is a management commitment to :
•
Sustainable Development
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
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
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:
z
Political Risks for assets acquired –e.g. Liberia
z
Kidnap and Ransom cover
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.
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
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.