The bottomlines of insurance companies that have insured the terrorist-attacked hotels in Mumbai will not be affected by property damage claims as the loss will be met from a terrorism risk pool, managed by the state-run General Insurance Corp of India (GIC), say industry officials.
The claims for property damage as well as loss of profit will be met from the Rs.7.5-billion ($153 million) terrorism risk pool, they said.
However, insurers who have issued public liability policies to the Taj Mahal Palace and Tower Hotel and the Trident-Oberoi hotel, the targets of terrorists, and personal accident policies to employees with the risk of terrorism extension may have to face sizeable claims from the kin of the dead and the injured.
Though major portion of that could be reinsured, some part of the loss might have to be borne by the primary insures.
'Our liability policy covering the Trident-Oberoi hotel covers damage owing to acts of terrorism,' United India Insurance general manager A. Asthana told the media.
He said all these are reinsured with GIC.
The overall liability is around Rs.100 million ($2 million) and the risk is reinsured. The maximum net impact on the company will be around Rs.50 million, Asthana said.
Sitting comfortably among the insurers of the terrorist attacked hotels is the Mumbai-based New India Assurance that has insured only the properties of the Trident-Oberoi hotel.
Since the property damages will be met from the terrorism pool, New India would remain unscathed.
A long time insurer of Taj Mahal hotel property and employees, New India this year escaped as the account was bagged by three private insurers - Tata AIG General Insurance (65 percent share), ICICI Lombard General Insurance (30 percent) and IFFCO Tokio General Insurance (five percent).
According to industry officials, it will take at least two weeks for the insurance surveyors to assess the actual financial damage as the police and other investigating authorities have first to complete their job.
What will be tricky for the insurers are the liability claims that might be filed by the kin of the dead and injured guests at the hotels.
According to sources, the companies that will be in a spot are United India and Tata AIG, which have issued public liability policies covering terrorism risk respectively for Trident-Oberoi and Taj Mahal hotels.
The two insurers will have to deal with sizeable claims under this policy as hundreds of hotel guests and visitors were killed and injured.
While United India is the sole seller of the Hoteliers Liability Policy to Trident-Oberoi, it is unclear whether Tata AIG has a co-insurance arrangement with other non-life insurers for this risk. Tata AIG officials could not be reached.
Source: Agencies
Monday, December 1, 2008
Sunday, November 30, 2008
Industry welcomes Manmohan Singh taking FM charge
Industry on Sunday welcomed Prime Minister Manmohan Singh taking charge of the Finance Ministry after P Chidambaram was appointed Home Minister, saying Singh as Finance Minister is known as architect of reforms that transformed the Indian economy.
Prime Minister directly involved himself in tackling the impact of the global credit crisis on the Indian economy. Amidst pressure on the exchange rate and crash in the stock market in the wake of the developments in Wall Street, Singh had appointed a committee under his charge to find a way out of the economic challenges.
"At the recent HT Leadership Summit, the Prime Minister had listed several initiatives under consideration of the government. These include fiscal measures like expenditure on infrastructure and monetary steps such as interest rates. All these relate to the Finance Ministry, which has come under his charge directly," Federation of Indian Chambers of Commerce and Industry Secretary General Amit Mitra said.
Mitra said Singh is the only one in the government who has served as Finance Minister, RBI Governor and Chief Economic Adviser.
Singh was also Secretary (Economic Affairs) and Deputy Chairman of the Planning Commission.
Assocham Secretary General D S Rawat said the "industrial confidence would get a boost" with the Prime Minister retaining the charge of the Finance Ministry.
Singh had gone to Washington to attend the G-20 meeting called by US President George W Bush, where he sought increased role of the developing countries in the new financial architecture after the global downturn.
Source:PTI
Prime Minister directly involved himself in tackling the impact of the global credit crisis on the Indian economy. Amidst pressure on the exchange rate and crash in the stock market in the wake of the developments in Wall Street, Singh had appointed a committee under his charge to find a way out of the economic challenges.
"At the recent HT Leadership Summit, the Prime Minister had listed several initiatives under consideration of the government. These include fiscal measures like expenditure on infrastructure and monetary steps such as interest rates. All these relate to the Finance Ministry, which has come under his charge directly," Federation of Indian Chambers of Commerce and Industry Secretary General Amit Mitra said.
Mitra said Singh is the only one in the government who has served as Finance Minister, RBI Governor and Chief Economic Adviser.
Singh was also Secretary (Economic Affairs) and Deputy Chairman of the Planning Commission.
Assocham Secretary General D S Rawat said the "industrial confidence would get a boost" with the Prime Minister retaining the charge of the Finance Ministry.
Singh had gone to Washington to attend the G-20 meeting called by US President George W Bush, where he sought increased role of the developing countries in the new financial architecture after the global downturn.
Source:PTI
India's markets seen relieved; PM to caretake finance
India's markets will likely react positively on Monday when a cabinet reshuffle sees the prime minister take on the finance portfolio, just days after the nation was rattled by the deadly attacks on Mumbai.
India's economy showed its slowest pace of growth in nearly four years in the September quarter, and its rupee and stock markets have been pummelled by the global financial crisis.
Now, after three days of attacks by gunmen in the heart of its financial capital, Mumbai, in which nearly 200 people died, analysts say security and confidence will be the top priority.
With Finance Minister Palaniappan Chidambaram moving to the Home Ministry following the resignation of the home minister, analysts say Prime Minister Manmohan Singh, architect of early 1990s economic reforms, is probably the man for the job.
"There are serious concerns on the economy and the big challenge is going to be rebuilding confidence of investors," said Mahesh Rangarajan, political analyst in New Delhi.
"And there is a greater confidence in Singh because of his midas touch."
India's financial markets stayed shut on Thursday as security forces battled gunmen holed up in three locations in Mumbai's financial district.
The benchmark share index .BSESN gained 0.7 percent to 9,092.72 points when trading resumed on Friday, with expiry of options contracts leading investors to buy back shares.
BIG PICTURE
The index has plunged 55 percent this year, with foreign investors withdrawing a net $13.7 billion as the global market turmoil widened, and equity analysts criticised Chidambaram, saying he had not managed to keep the economy stable.
"But probably markets should open in the positive," said Deven Choksey, chief executive of brokerage KR Choksey.
Bond yields fell on Friday, as dealers anticipated interest rate cuts to shore up confidence and bolster the economy.
The central bank has slashed its key lending rate by 150 basis points to 7.5 percent since the global crisis swept through India's markets in October and the benchmark 10-year bond yield closed down 2 basis points at 7.07 percent.
"The market continues to anticipate rate changes," said Arvind Sampath, head of bond trading at Standard Chartered in Mumbai. "We are expecting the 10-year bond yield to trade in a 7.07-7.12 range."
Only the rupee came under pressure, shedding 1.2 percent to 50.09/12 per dollar, not far off a record low of 50.60 set earlier in November.
"Whatever has happened over the last few days is pretty serious. The first priority has to be that," A. Prasanna, analyst at ICICI Securities, said.
"I think the market will take a more big picture view and it is a positive development only. Nobody needs to second guess the PM's credentials, in his ability to run the ministry."
With only a few months likely to go before national elections, analysts were sceptical whether much could be done to shore up growth, which slowed to an annual 7.6 percent in the September quarter, a far cry from the 9 percent seen in the whole of the 2007/08 fiscal year.
Some expressed concern with the security issue and whether the prime minister's focus would be distracted, but others said Singh has already been more involved in running the economy as the financial crisis deepened.
Source: Reuters
India's economy showed its slowest pace of growth in nearly four years in the September quarter, and its rupee and stock markets have been pummelled by the global financial crisis.
Now, after three days of attacks by gunmen in the heart of its financial capital, Mumbai, in which nearly 200 people died, analysts say security and confidence will be the top priority.
With Finance Minister Palaniappan Chidambaram moving to the Home Ministry following the resignation of the home minister, analysts say Prime Minister Manmohan Singh, architect of early 1990s economic reforms, is probably the man for the job.
"There are serious concerns on the economy and the big challenge is going to be rebuilding confidence of investors," said Mahesh Rangarajan, political analyst in New Delhi.
"And there is a greater confidence in Singh because of his midas touch."
India's financial markets stayed shut on Thursday as security forces battled gunmen holed up in three locations in Mumbai's financial district.
The benchmark share index .BSESN gained 0.7 percent to 9,092.72 points when trading resumed on Friday, with expiry of options contracts leading investors to buy back shares.
BIG PICTURE
The index has plunged 55 percent this year, with foreign investors withdrawing a net $13.7 billion as the global market turmoil widened, and equity analysts criticised Chidambaram, saying he had not managed to keep the economy stable.
"But probably markets should open in the positive," said Deven Choksey, chief executive of brokerage KR Choksey.
Bond yields fell on Friday, as dealers anticipated interest rate cuts to shore up confidence and bolster the economy.
The central bank has slashed its key lending rate by 150 basis points to 7.5 percent since the global crisis swept through India's markets in October and the benchmark 10-year bond yield
"The market continues to anticipate rate changes," said Arvind Sampath, head of bond trading at Standard Chartered in Mumbai. "We are expecting the 10-year bond yield to trade in a 7.07-7.12 range."
Only the rupee
"Whatever has happened over the last few days is pretty serious. The first priority has to be that," A. Prasanna, analyst at ICICI Securities, said.
"I think the market will take a more big picture view and it is a positive development only. Nobody needs to second guess the PM's credentials, in his ability to run the ministry."
With only a few months likely to go before national elections, analysts were sceptical whether much could be done to shore up growth, which slowed to an annual 7.6 percent in the September quarter, a far cry from the 9 percent seen in the whole of the 2007/08 fiscal year.
Some expressed concern with the security issue and whether the prime minister's focus would be distracted, but others said Singh has already been more involved in running the economy as the financial crisis deepened.
Source: Reuters
Saturday, November 29, 2008
Dell likely to send more work to Asia
Since the beginning of the slowdown, IT firms have been maintaining that India will benefit if firms try to cut costs. Now, there is evidence that it actually may be happening.
In a conference call, Dell’s Asia-Pacific and Japan head Steve Felice said there is an opportunity to shift more work to Asia and Dell will do it. In its third-quarter results announced, the US-based PC manufacturer’s tight rein on costs helped it post better earnings despite a sales slump.
Dell has invested heavily in its India and China factories. From Bangalore, it has built systems management capability and software for enterprise activity. While in China, it does design work and R&D. In addition, in Malaysia’s Cyberjaya, it does software development. “Our intention is to grow these,” said Felice. Elsewhere, Dell has announced job cuts.
“We don’t just service Asia out of these locations. They have worked well globally to the extent that there are opportunities to shift more work to Asia arise, we will do it... We are happy with the performance of these facilities to serve global needs and will continue to invest them depending on market conditions,” Felice said.
However, he said the growth in Asia was not necessarily linked to the cost-cutting in the US and was in response to the growth in other parts of the world.
Felice said there was decline in overall IT spending in Asia-Pacific and Japan. Dell had weathered it and grown. Terming India’s growth as outstanding, he said the country had witnessed 77% growth in unit terms and 48% growth in revenues for Dell in the third quarter.
For China, growth was up 44% in unit terms and 18% in revenue terms. “We are extremely committed to India,” he added. The surge in growth has primarily come from consumers and the small.
Source: Times News Network
In a conference call, Dell’s Asia-Pacific and Japan head Steve Felice said there is an opportunity to shift more work to Asia and Dell will do it. In its third-quarter results announced, the US-based PC manufacturer’s tight rein on costs helped it post better earnings despite a sales slump.
Dell has invested heavily in its India and China factories. From Bangalore, it has built systems management capability and software for enterprise activity. While in China, it does design work and R&D. In addition, in Malaysia’s Cyberjaya, it does software development. “Our intention is to grow these,” said Felice. Elsewhere, Dell has announced job cuts.
“We don’t just service Asia out of these locations. They have worked well globally to the extent that there are opportunities to shift more work to Asia arise, we will do it... We are happy with the performance of these facilities to serve global needs and will continue to invest them depending on market conditions,” Felice said.
However, he said the growth in Asia was not necessarily linked to the cost-cutting in the US and was in response to the growth in other parts of the world.
Felice said there was decline in overall IT spending in Asia-Pacific and Japan. Dell had weathered it and grown. Terming India’s growth as outstanding, he said the country had witnessed 77% growth in unit terms and 48% growth in revenues for Dell in the third quarter.
For China, growth was up 44% in unit terms and 18% in revenue terms. “We are extremely committed to India,” he added. The surge in growth has primarily come from consumers and the small.
Source: Times News Network
Despite downturn VCs pour into India
The global economic downturn notwithstanding, venture capital investments have continued to flow into India and China, with both countries witnessing a significant surge in the third quarter this year.
According to a study by research firm Venture Intelligence, venture capital investment in India grew 36 per cent at 290 million dollars for the third quarter ended September 30.
Meanwhile in Mainland China, VC investments grew 22 per cent to 964 million dollars at the end of the third quarter, as per the data by Dow Jones VentureSource.
"It's clear that venture capital investors are still eager to put money into the emerging marketplace and, in many areas, they're actually accelerating the pace of their investments," Dow Jones VentureSource Global Research Director Jessica Canning said.
The increased investment by existing players and the entry of new funds contributed to the growth this quarter, the Venture Intelligence study stated.
"The pace of VC investments in India seems to be accelerating despite the turmoil in global financial markets," Venture Intelligence Founder and CEO Arun Natarajan said.
Meanwhile, as the number of VC deals nearly doubled in India to 49, China witnessed a saw the number dipping to 59 from 73 in the same period last fiscal.
"Larger deals drove investment in the third quarter as the median size of a venture deal in China remained at USD 10 million, which is the highest on record and the most out of any region we track, including the US," Canning said.
However, the venture capitalists shied away from investing in the Information Technology and IT-enabled Services (IT & ITeS) industry in China, the sector remained favourite among the VC firms invested in India.
Source: PTI
According to a study by research firm Venture Intelligence, venture capital investment in India grew 36 per cent at 290 million dollars for the third quarter ended September 30.
Meanwhile in Mainland China, VC investments grew 22 per cent to 964 million dollars at the end of the third quarter, as per the data by Dow Jones VentureSource.
"It's clear that venture capital investors are still eager to put money into the emerging marketplace and, in many areas, they're actually accelerating the pace of their investments," Dow Jones VentureSource Global Research Director Jessica Canning said.
The increased investment by existing players and the entry of new funds contributed to the growth this quarter, the Venture Intelligence study stated.
"The pace of VC investments in India seems to be accelerating despite the turmoil in global financial markets," Venture Intelligence Founder and CEO Arun Natarajan said.
Meanwhile, as the number of VC deals nearly doubled in India to 49, China witnessed a saw the number dipping to 59 from 73 in the same period last fiscal.
"Larger deals drove investment in the third quarter as the median size of a venture deal in China remained at USD 10 million, which is the highest on record and the most out of any region we track, including the US," Canning said.
However, the venture capitalists shied away from investing in the Information Technology and IT-enabled Services (IT & ITeS) industry in China, the sector remained favourite among the VC firms invested in India.
Source: PTI
Terror strikes; Is outsourcing safe?
Terror times; Is outsourcing safe?
large global firm runs its trading desk out of Mumbai. Bookings for a leading airline are happening out of another office in a neighbouring city, while the telecom infrastructure of an overseas operator is being remotely monitored from another location in the country.
A terror attack on any of these sites can have significant implications for corporations in the US and other parts of the developed world as India emerges as the world’s back-office.
For instance, if a trade is not squared off on time, the firm will have to carry higher liabilities. Wednesday’s attack raises questions about the vulnerability of these locations to terror threats and the preparedness of firms and authorities to tackle them.
The issue assumes importance as nearly seven out of every 10 outsourced processes come to India, according to industry estimates. While 6-7 years ago, business process outsourcing (BPO) mostly involved basic data entry, a number of mission critical processes such as airline bookings and investment research are now taking place out of offices in Mumbai, Pune and Bangalore.
In its strategic review, Nasscom, the apex industry body, notes, “Indian BPO has undergone significant transformation since its inception over a decade ago... The past few years have seen the scope of these services expand progressively to include more complex processes involving rule-based decision making and research requiring informed judgment and domain knowledge,” the apex industry body notes.
Indian firms also manage infrastructure worth over $3-4 billion remotely for clients. Damage to these locations can bring down desktops and servers, besides crippling entire sections of organisations outside India. “After 9/11, there is a greater appreciation of the risk arising from a terror attack,” admits KPMG executive director Akhilesh Tuteja.
“But the level of preparedness even for mission critical operations is below average,” he adds. The redundancy plan usually involves a backup and mutiple service providers to ensure connectivity. But process capability and an ability to swiftly execute the process at another centre are not a reality in most cases.
“Disaster recovery plans are like an insurance you may never use. There is now an awareness about the need to have them, but the decisions are usually postponed because this is not an investment that will result in growth. Firms usually make investments for growth,” says PriceWaterhouseCoopers managing consultant Nikhil Donde.
Companies are saving costs amid the slowdown, as every bit can eat into margins. Multinational parents are managing a majority of the mission critical operations by way of captives. Ideally, 70% of the process should be offshored and 30% retained at the onsite location to minimise the risks, according to Mr Tuteja. But again there is a trade-off on costs, with real benefits kicking in only when the process is completly offshored.
In client contracts with third-party firms, it is not uncommon to find clauses related to business process continuity (BCP). However, these clauses rarely go into specifics and are usually interpreted in terms of having a multi-locational presence, back-up capability and multiple connectivity providers. Rarely do they consider whether the alternate locations will have people with the necessary skills. And this is really the biggest threat in a terror attack, when people at one location can be killed, say the experts.
Source: Economic Times
large global firm runs its trading desk out of Mumbai. Bookings for a leading airline are happening out of another office in a neighbouring city, while the telecom infrastructure of an overseas operator is being remotely monitored from another location in the country.
A terror attack on any of these sites can have significant implications for corporations in the US and other parts of the developed world as India emerges as the world’s back-office.
For instance, if a trade is not squared off on time, the firm will have to carry higher liabilities. Wednesday’s attack raises questions about the vulnerability of these locations to terror threats and the preparedness of firms and authorities to tackle them.
The issue assumes importance as nearly seven out of every 10 outsourced processes come to India, according to industry estimates. While 6-7 years ago, business process outsourcing (BPO) mostly involved basic data entry, a number of mission critical processes such as airline bookings and investment research are now taking place out of offices in Mumbai, Pune and Bangalore.
In its strategic review, Nasscom, the apex industry body, notes, “Indian BPO has undergone significant transformation since its inception over a decade ago... The past few years have seen the scope of these services expand progressively to include more complex processes involving rule-based decision making and research requiring informed judgment and domain knowledge,” the apex industry body notes.
Indian firms also manage infrastructure worth over $3-4 billion remotely for clients. Damage to these locations can bring down desktops and servers, besides crippling entire sections of organisations outside India. “After 9/11, there is a greater appreciation of the risk arising from a terror attack,” admits KPMG executive director Akhilesh Tuteja.
“But the level of preparedness even for mission critical operations is below average,” he adds. The redundancy plan usually involves a backup and mutiple service providers to ensure connectivity. But process capability and an ability to swiftly execute the process at another centre are not a reality in most cases.
“Disaster recovery plans are like an insurance you may never use. There is now an awareness about the need to have them, but the decisions are usually postponed because this is not an investment that will result in growth. Firms usually make investments for growth,” says PriceWaterhouseCoopers managing consultant Nikhil Donde.
Companies are saving costs amid the slowdown, as every bit can eat into margins. Multinational parents are managing a majority of the mission critical operations by way of captives. Ideally, 70% of the process should be offshored and 30% retained at the onsite location to minimise the risks, according to Mr Tuteja. But again there is a trade-off on costs, with real benefits kicking in only when the process is completly offshored.
In client contracts with third-party firms, it is not uncommon to find clauses related to business process continuity (BCP). However, these clauses rarely go into specifics and are usually interpreted in terms of having a multi-locational presence, back-up capability and multiple connectivity providers. Rarely do they consider whether the alternate locations will have people with the necessary skills. And this is really the biggest threat in a terror attack, when people at one location can be killed, say the experts.
Source: Economic Times
Mumbai 26/11 ends after 60 long hours!
The war on terror in Mumbai was finally wrapped up 60 hours after a band of terrorists struck at various locations with three gunmen killed this morning at the landmark luxury Taj Hotel, bringing the operation to a close.
NSG commandos, who believed that a lone terrorist was holding out since yesterday, launched a final assault in the early hours of this morning and killed three terrorists to secure the old heritage area of the hotel opposite the Gateway of India.
"Three terrorists have been killed but the operations are still on. Until we search the entire hotel room by room and satisfy ourselves that there are no more terrorists I will not declare the operations are over.
"I don't know whether all of them have been killed. I can say only after completing the operations," Director General of NSG, J K Dutt, told reporters outside the hotel.
During the night, terrorists holed out in the hotel engaged in a fierce gun battle with security forces as some places in the first and the ground floors of the 565-room building set afire by terrorists amid explosions in the over 100-year-old heritage complex in the Colaba area.
Dutt said that the terrorists set on fire some rooms whenever they felt they were being cornered as a diversionary tactics.
An intense gun battle raged overnight at the Taj as commandos closed in on terrorists holed up in the heritage structure. Five huge explosions were also heard in the building in a span of 30 minutes.
The Marine commandos (Marcos) had surrounded the Taj where NSG personnel were carrying out the operation to flush out the terrorists. Multiple rounds of automatic gunfire and blasts from inside the building shattered several hours of relative calm.
The western metropolis witnessed unprecedented terror attacks, including on another luxury Trident-Oberoi hotel and a Jewish centre, on Wednesday night when heavily-armed terrorists struck killing over 160 people and injuring hundreds.
The might of the Indian security forces had to be brought in to rid these landmark in the country's financial capital of the heavily-armed suspected Pakistani terrorists, but the costs were heavy on both sides.
When the Oberoi was cleared of the terrorists yesterday, as many as 30 hostages were found dead.
Source: PTI
NSG commandos, who believed that a lone terrorist was holding out since yesterday, launched a final assault in the early hours of this morning and killed three terrorists to secure the old heritage area of the hotel opposite the Gateway of India.
"Three terrorists have been killed but the operations are still on. Until we search the entire hotel room by room and satisfy ourselves that there are no more terrorists I will not declare the operations are over.
"I don't know whether all of them have been killed. I can say only after completing the operations," Director General of NSG, J K Dutt, told reporters outside the hotel.
During the night, terrorists holed out in the hotel engaged in a fierce gun battle with security forces as some places in the first and the ground floors of the 565-room building set afire by terrorists amid explosions in the over 100-year-old heritage complex in the Colaba area.
Dutt said that the terrorists set on fire some rooms whenever they felt they were being cornered as a diversionary tactics.
An intense gun battle raged overnight at the Taj as commandos closed in on terrorists holed up in the heritage structure. Five huge explosions were also heard in the building in a span of 30 minutes.
The Marine commandos (Marcos) had surrounded the Taj where NSG personnel were carrying out the operation to flush out the terrorists. Multiple rounds of automatic gunfire and blasts from inside the building shattered several hours of relative calm.
The western metropolis witnessed unprecedented terror attacks, including on another luxury Trident-Oberoi hotel and a Jewish centre, on Wednesday night when heavily-armed terrorists struck killing over 160 people and injuring hundreds.
The might of the Indian security forces had to be brought in to rid these landmark in the country's financial capital of the heavily-armed suspected Pakistani terrorists, but the costs were heavy on both sides.
When the Oberoi was cleared of the terrorists yesterday, as many as 30 hostages were found dead.
Source: PTI
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