The freeing of tariff controls on fire and engineering insurance, which are among the most profitable areas in the general insurance business, from September is set to have a far-reaching effect on the entire general insurance sector, particularly health insurance, industry officials say.

In effect, profitable sectors that used to cushion bleeding sectors may get hit by competition, reducing the elbow room for insurance players to keep premiums low in risky areas such as health and car insurance.

Since the Insurance Regulatory and Development Authority (IRDA) regulates tariffs for motor insurance including the third party and owned damages, the insurance companies will not be able to increase the rates in this area.

Chief executives of general insurance companies feel that competition will drive down the premiums in sectors such as marine, fire and engineering, which were hugely profitable and used to cross-subsidise loss-making verticals like health and motor insurance.

Health insurance premiums could eventually go up.The biggest impact will be seen in health insurance (Mediclaim) particularly for the group health insurance, which is bleeding for the most of the companies. Some companies like Oriental Insurance increased the rate for Mediclaim policies for individuals last year and other public sector companies followed suit and increased rates earlier this year.

“In the case of group health insurance, the claim-to-premium ratio is around 120, which means a claim is Rs 120 against a premium income of Rs 100, which makes a case for a strong for upward revision of premium,” said M. Ramadoss, chairman and managing director of Oriental Insurance Company.

“With the entry of private players, the sector has become more competitive. As a result, profitable sectors such as marine, fire and engineering may witness a correction in prices,” said KA Somasekharan, CEO, Reliance General Insurance.

Ramadoss, however, said that there was not much of a loss in individual health insurance after the recent premium hike.

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Looking for methods to lower your insurance premiums?

An insurance company bases insurance premiums on the risks involved. To do this, they evaluate the situation to determine the risks, or potential for losses. The insurance company determines its rates on the results.

The steps you take today to lower your risks can not only help safeguard your business but may make you eligible for lower insurance rates. According to the Independent Insurance Agents of America, business owners should consider these steps:

* Maintain adequate lighting throughout your business premises.

* Keep electrical wiring, stairways, carpeting, flooring, elevators and escalators in good repair.

* Install a sprinkler system, smoke and fire alarms and adequate security devices.

* Keep only a small amount of cash in the cash register.

* Keep good records of inventory, accounts receivable and equipment purchases.

* Consider keeping a second set of records off-site, such as with your accountant, insurance agent or at home.

* Make sure your employees have good driving records.

* Make sure your employees know how to lift properly and use all necessary safety equipment, such as goggles, gloves and respirators.

* You should consider using the services of a risk manager. An outside consultant can advise you of any safety or environmental regulations you may have overlooked.

* Talk to your employees about safety practices.

You may also want to raise your deductible where appropriate to lower your premiums. How high to raise the deductible should be governed by how much you can afford to pay out of pocket. Be careful not to raise it so high that you cannot cover it should a loss occur.

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How is sales and trading different from investment banking?

There are several ways to compare and contrast the differences between investment banking and sales and trading. The first is the actual work that they do and the time in which this work is done. Investment bankers primarily help to raise money for clients through stock or bond offerings or advise clients on mergers or acquisitions. The endless flow of pitchbooks (PowerPoint presentations to clients), the detailed financial modeling and around-the-clock client schmoozing are all focused on achieving one result: a deal that will generate substantial fee income for the investment bank. This fee is calculated as a percentage of the deal (for example, a percentage of the money raised by an initial public offering). Investment bankers work for months — even years — to generate one deal, schmoozing comany execs until the company is ready to raise money or acquire a company. But when the company is ready and hires the bank to ehlp them, the reward for the bank is substantial.

Salespeople and traders also work on deals — every trade is a deal — and also entertain clients. Compared to investment banking, however, it takes much less time to consummate a transaction in S&T. Typical trades are consummated in seconds or minutes, and the average fee per trade is measured in cents per share traded rather than as a percentage of the deal’s proceeds.

Another big difference between S&T and I-banking is the lifestyle. Sales and trading professionals are the first-in-and-first-out in the investment bank. To get a jumpstart on the trading day, salespeople and traders normally take the earliest train into work. But they are the first ones out of the office, leaving shortly after the markets close. Salespeople and traders also never work weekends — trading desks are completely abandoned on the weekends. In contrast, investment bankers are expected to be their desks during the weekdays and weekends, at all hours and throughout major holidays. If you ever want to see a sad sight, go to one of the major investment banks on Christmas Day or Easter. Around lunch time, you’ll see investment banking analysts trickle down from their cramped bullpens to pick up their food orders from the delivery guy. Sales and trading is a sprint; investment banking is an endless marathon that rarely ever stops for anything.

Why do investment banks have sales and trading departments?

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Engaging India is a weekly online column analysing the issues, trends and forces behind the business and politics shaping India and its impact on the world, which appears on FT.com India, a dedicated online section on India. Engaging India appears every Thursday morning exclusively on FT.com India and is written by Jo Johnson, the Financial Times’ South Asia bureau chief; Amy Yee, New Delhi correspondent; and Joe Leahy, Mumbai correspondent.

One evening a few weeks ago, I popped into a small grocer’s shop on Peddar Road, a major thoroughfare in wealthy south Mumbai, to buy a carton of milk.

The lights in the shop were dim, presumably to save electricity, and the owner, while polite and helpful, did not even have any plain soy milk in the rusty fridge at the back of the store, let alone the dairy variety.

This in a neighbourhood that probably has one of the highest concentrations of millionaires and billionaires in India. Directly across the road, for instance, is the stately Jindal Mansion, the headquarters of the Indian steel family of the same name.

The experience caused me to reflect on what is becoming perhaps one of the most important debates in the modernisation of India’s economy: whether to allow large corporations to invest in India’s retail market even if this is at the expense of the country’s millions of “mom and pop” stores like the one on Peddar Road.

On one side of the debate are the domestic conglomerates led by Reliance Industries, the country’s largest company controlled by industrialist Mukesh Ambani, which has launched a $5bn push to set up a nationwide chain of stores selling fresh produce.

On the other are the millions of small shopkeepers and hawkers, who worry they will be crushed by the entry into the sector of Reliance and its peers, as well as foreign groups such as Wal-Mart, which plan to come in once the government eases restrictions on foreign investment.

At stake is a market worth $200bn in sales, according to KPMG, but of which organised retailing presently accounts for only 3 per cent.

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There’s a lot to talk about when it comes to insurance. Whether you’re renting or owning you’ll definitely need to have at least one insurance policy. I will write a set of posts in which I will outline different types of insurances and how they are related to real estate. I will also present some opinions that I have, which does not necessarily mean that they are advices or imply that they are correct nor that they are suitable for you. Actually, those opinions can be wrong, and can cause you harm - and sometimes can just work well and can save money.

Starting with opinions. I support the services that insurance companies give. In summary, the objective is to protect you against accidental loss or damage. There are many forms by which an insurance company can be established. Two of those forms: A. the form that we all know and exist around us is a profitable corporation that gains from people’s premiums and provides coverage against loss or damage. B. The infrequent form is a corporation owned by its investors, that invest their money and use the income to protect its investors against accidental loss. The second form is of course the more beneficial for people, and the least frequently seen. I like the second form.

I don’t like all the ways by which insurance companies advertise. Specifically, I don’t approve of putting the viewer in a mood of fear, out of which he or she decides to buy insurance. Buying insurance should not be an outcome of fear, it should be the result of needing the service.

To demonstrate what I mean, I will link to four commercials from three reputable companies. And I’m specifically commenting on the way of advertising and not the quality of service.

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If you’re an entrepreneur of any kind, there are certain things you have to worry about in regards to your business. And unfortunately, no matter what your size - Business Insurance should probably be at the top of your short list. It’s one of those things that you learn you need when you need it, and by then it’s too late. And just like car insurance which most of us are already used to, business insurance can save you tons of money if you’re ever unlucky enough to say, get sued for example.

Fortunately for us, there’s a place online where we can find help called 2Insure4Less.com If you’ve ever tried to buy insurance before, you know that it can be an overwhelming task…So many different kinds of insurance, so many options, and you don’t have a clue on any of them. Well on the site you’ll find a nice little learning center that not only strives to explain the different kinds of insurances and what they mean for you, but you’ll also find mini blogs there that point out recent developments as it relates to those same insurances.

And finally, in as little as 2 minutes, you can sign up to receive a free quote for your business. Could it get any easier?

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