Life cos on mortality tables

The much-awaited new mortality tables for the life insurance market, which have been pending for more than a year now, are likely to come out in the next six months.

These tables are almost a decade old and the industry, as a whole, has been asking for revised mortality tables to give an accurate picture of life graph on today's consumers.

LIC chief actuary GN Agarwal said, "We arrived at an agreement in today's meeting with the life insurance council and the Institute of Actuaries of India to form a governing committee. This committee will carry out the collection and procession of data, which would help in the computation of new mortality tables for the life insurance industry."

The agreement has been signed by both parties after having arrived at some consensus, he added. In recent years, there has been a move to have an industry-level body to compute life expectancy levels. This has resulted in the creation of the Mortality and Morbidity Research Institute (MMRI), an arm of the Institute of Actuaries of India.

This institute will collect data and relevant statistics from insurers. However, the data and insurers' individual experiences would be highly confidential. Every insurer can have an access only to its individual information and industry-related experiences.

"Everybody in the insurance industry welcomes this move. In fact, the confidentiality of information has comforted insurance players to share their experiences and data with the research institute," said sources.

One of the main reasons for proposing changes in mortality tables is the steady increase in longevity. As per industry estimates, the average life expectancy of Indian men has increased to 63.87 years from 59.7 in 1991 and that of women to 66.91 years from 60.9 in 1991. An increase in longevity usually prompts insurers to revise premium charges once in a few years. Prices are based on a `mortality table' which is computed based on historic data on life expectancy rates at different ages.

The research institute will carry out fresh calculation on mortality rates, life expectancy and relevant numbers for mortality tables in different consumer pockets in the country, said Life Insurance Council secretary general SV Mony. Mortality tables are used to calculate the premium of an insurance policy. For now, private insurers use LIC's mortality tables as a base and combine that with their own claim ratios for calculating the premium. One of the main reasons why insurers depend on LIC's mortality tables is that mortality calculations require some historical data. However, once the MMRI releases the revised mortality tables, insurers will use them as a base, along with their own claim ratios, to compute the premium.

Is India losing its IT edge?

High costs and high attrition could drive Indian software companies to set up shop in other countries. That's what Infosys CEO Gopalakrishnan believes.

Well, Malaysia could be one of them. The Malaysian government is gearing up to take advantage of India 's problems.

 

The information technology park in Kuala Lumpur could rival the dozens of India's IT parks. Called the Multimedia Super Corridor or MSC, this 15 kilometre wide IT park was set up by the Malaysian government a decade ago to herald its presence in the IT space.

 

And the initiative is starting to pay dividends. The IT park has attracted over 1800 domestic and multinational companies on the back of zero corporate tax, unrestricted employment of foreign workers, single window government clearance and of course, the world class infrastructure, both inside and outside the IT park.

 

The MSC strategy is to promote Malaysia as a low cost, low attrition center for outsourcing. MSC officials say the high costs in India are unsustainable, and the high attrition rates, unacceptable. The only problem here is the availability of local quality talent. And to address this issue, MSC has tied up with Infosys to train Malaysian graduates.

 

Dato Narayanan Kanan, Sr VP -  Industrial Development, Government of Malaysia said, "We are learning from the problems India is facing. That is why we do not encourage poaching. It then becomes a vicious cycle."

 

Satyam already has a presence in MSC. And it seems pleased with the experience so far.

 

P Kunda, Satyam Malaysia said, "The Malaysian government response, be it to infrastructure, or helping us out with resources, is just fantastic. It's a long term growth story."

 

And while the recent Frost & Sullivan survey still ranks India as the no.1 choice for outsourcing, experts believe this advantage could quickly disappear.

 

Aroop Zutshi, Sr Partner, Frost & Sullivan said, "We ourselves are facing 30-35% attrition. It's a huge issue and could lead to many companies looking at other countries."

 

It may be then be just a matter of time before Indian IT giants move to greener pastures.

Yahoo buys 35% stake in Tyroo Media

Yahoo Inc on Wednesday said it will buy over 35 per cent in Gurgaon-based Tyroo Media Pvt Ltd. Tyroo, a part of Smile Interactive Technologies Group (Smile Group), is an ad-network, which offers services for advertisers and publishers.

The investment is expected to enable Tyroo to access Yahoo's knowledge of Internet advertising and help Tyroo in expansion. Yahoo, however, did not divulge the quantum of the investment.

"Through this investment, Yahoo would act as a catalyst for the entire ad-network industry in India, which is still in a nascent stage. It would also signify our increasing focus in Indian online advertising networks," Mr George Zacharias, Managing director of Yahoo India, told reporters here.

The cash infusion by Yahoo would be used to invest in technology and sales network to reach out to small and medium sized advertisers and publishers in India. Tyroo plans to offer newer ad-formats, enhanced customer support and flexibility to advertisers and publishers in managing campaigns. Tyroo is planning to to set up sales offices across the country and recruit more people by the year end. Yahoo will get a seat on the board of the company.