Genesis Of MUTUAL FUNDS

The idea of pooling money for investment purposes was started unofficially in Europe in the nineteenth contury. However, the first officially pooled fund in the US was created in 1893 for the faculty and staff of Harvard University on March 21-1924. Called the Massachusetts investors Trust, the fund grew from $50,000 in assets to $392,000 with around 200 shareholders in just a year. The fundraisers, however,had no idea how popular their investment idea wuld become around the globe.

Today, there are over 10,000 Mutual funds in the US alone, totaling around $7 Trillion, with some 83 million ivdividual investors. However, the stock market crash of 1929 decelerated the growth of mutual funds. in response to the stock market crash, the Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require the a fund be registered with the SEC and provide prospective investors with a prospectus. The U.S. Securities and Exchange Commission helped create th investment Company Act of 1940 which provides the guidelines that all funds must comply with today.

With renewed confidence in the stock market, mutual fuands began to blossom. by the end of the 1960's there were around 270 funds in the US With $48 billion in assets. in 1976 , John C. Bogle Opened the World's first retail index fund called the first index investment trust. It is now called the Vanguard 500 index fund and by 2000 , it had become the largest mutual fuand ever with $100 Billion in aasets.
One of the largest contributors to mutual fund growth was Individual Retirement Account (IRA) Provisions made in 1981 , which allowed individuals (including those already in coroporate pension plans) to contribute $2,000 a year. Mutual funds are now popular in employer-sponsored defined contribution retirement plans around the world.

Reliance Life Insurance 

For More Detail :- Reliance Life Insurance Advisor :- Dhaivat Trivedi For More Detail :- ADDRESS RELIANCE LIFE INSURANCE CO. LTD. PERFECT POINT, 2nd floor, DR YAGNIK ROAD OPP RAM KRISHNA ASHRAM RAJKOT. - 360002 Tel : 0281 3018008 ,0281 3018009, 0281 3018010, 0281 3018012  

Anil Dhirubhi Ambani Group invest Rs 55,000 carror in Orissa

Bhubaneswar, July 21: Reliance Anil Dhirubhai Ambani Group today unveiled a grand spending plan of over Rs 60,000 crore in Orissa, which included an investment blueprint for the world`s largest pithead thermal power plant. The 12,000 mw coal-fired plant is expected to be set up at Hirma in Jharsuguda district in phases, ADAG Chairman Anil Ambani told reporters at the state secretariat here after a meeting with Chief Minister Naveen Patnaik.

"I have no doubt in my mind that Orissa with its coal reserves will be the power capital of the entire country. Over the next few decades, Orissa will have its rightful place (as a developed state) in India," he said. Ambani, who offered prayers at the Jagannath Temple at Puri earlier in the day, said the outlay for the power plant would be in excess of Rs 50,000 crore, while another Rs 10,000 crore would be invested for transmission and evacuation of the power generated. "It will represent the largest investment in power sector anywhere in the world," he said, adding a 4,300 mw coal-fired plant in South Africa was the largest thermal unit at a single location at present. ADAG`s spending plan is also the largest for any project by a group in the country and beats the Rs 52,000 crore investment proposal of South Korean steel giant POSCO and the Rs 30,000-40,000 crore steel plant plan of Mittal Steel -- both in Orissa. Besides Rs 60,000 crore for the power plant and allied works, the group would be investing in a health city, IT and IT related infrastructure in the state. The health city would comprise a hospital and infrastructure for medical education and research near the capital city, he said.Ambani said his company proposed to invest Rs 1,000 crore separately for communication and IT sector and another Rs 500 crore in the health sector. The company would first set up a 4,000 mw plant at Hirma which would be progressively expanded by adding 1,000 mw to the capacity. "This will be the engine of growth and catalyst for future industrial development... I am looking forward to working with the Orissa government," Ambani said. Asked to outline a timeframe for the Hirma Project, he said as the basic approvals including environmental clearance would take time, the work is expected to begin within six to 12 months. It would require about four to five years to set up the 4,000 mw plant. "No one has attempted this so far and we are pursuing a fast-track approach." Replying to questions, Ambani said his company was committed to work within the policy framework of the state. "We need a converged path to reach solutions," he remarked. As regards the question of displacement, he said the government had a comprehensive rehabilitation and resettlement policy in place as also a policy on environmental protection. As regards the question of displacement, he said, "We will explain to the people. We will not be able to move forward without the cooperation and appreciation of the people." When asked why REL was not harnessing atomic energy for power generation as coal is considered a serious pollutant, Ambani said his company was awaiting amendment to the comprehensive Atomic Energy Act. "But India`s energy solutions need a multi-track approach and one single track will not help. We have to tap hydro, thermal, atomic, wind and solar resources to meet the requirement," he said. Replying to a question about Reliance Industries Ltd having struck gas in off-shore Orissa, which could be used to generate energy, Ambani said the discoveries could be for future use. "When it becomes commercial, a large portion will be available to us to convert the gas to energy," he said. Elaborating on its foray into the IT sector in Orissa, he said R-ADAG proposed to set up the Dhirubhai Ambani Institute of Communication Technology similar to one at Gandhi Nagar in Gujarat. The joint communique for the power project was signed by REL`s Director, Business Development, Jayarama Chalsani and state Government`s Energy Secretary Asit Tripathy. Chalsani and Health Secretary R N Senapati signed the communique on the Health Sector Projects and Group Director for R-ADAG Rajesh Tiwari and IT Secretary S N Tripathy signed the communique for the IT projects. The Chief Minister said Orissa had become the preferred destination for investment both from within and outside the country. While South Korean steel major POSCO had already proposed to set up a 12 million tonne steel mill with investment of Rs 52,000 crore steel project --- the biggest ever single FDI --- at Paradip, Mittal Steel is contemplating setting up a 12 million tonne project in the state, he said.

Anil Ambani worships at Puri Temple Anil Ambani, Chairman of Reliance Anil Dhirubhai Ambani (R-ADA) Group today worshipped at the Sri Jagannath Temple here on his arrival from Mumbai. Ambani drove to the 12th century shrine early in the morning amid tight security but had to wait as the huge doors of the temple -- The `Lion`s Gate` -- was not opened at that time. He returned after sometime and went inside the shrine and was present when `mangala arati`, a ritual held early in the morning, was conducted. Ambani worshipped the deities before leaving for Bhubaneswar. R-ADA Group Chief had touched down in a private plane at the Biju Patnaik Airport in Bhubaneswar past midnight and then drove straight to Puri.

Reliance Life Insurance Advisor :- Dhaivat Trivedi For More Detail :- ADDRESS RELIANCE LIFE INSURANCE CO. LTD. PERFECT POINT, 2nd floor, DR YAGNIK ROAD OPP RAM KRISHNA ASHRAM RAJKOT. - 360002 Tel : 0281 3018008 ,0281 3018009, 0281 3018010, 0281 3018012  

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Reliance Life Insurance Advisor :- Dhaivat Trivedi For More Detail :- ADDRESS RELIANCE LIFE INSURANCE CO. LTD. PERFECT POINT, 2nd floor, DR YAGNIK ROAD OPP RAM KRISHNA ASHRAM RAJKOT. - 360002 Tel : 0281 3018008 ,0281 3018009, 0281 3018010, 0281 3018012  

Reliance Insurance Company in Liquidation

October 4, 2001 - Acting Commissioner of Insurance J. Robert Wooley announced today a Pennsylvania judge has placed Reliance Insurance Company into liquidation. Yesterday's action creates the largest insurance insolvency the nation has ever seen, according to Wooley and Allen Edwards, executive director of the Louisiana Insurance Guaranty Association (LIGA).
Reliance, a Pennsylvania-based company, was licensed to write business in all 50 states and the District of Columbia. The states with the largest number of policy holders include California, New York, and Texas. Wooley says Reliance mainly provided business and workers' compensation insurance in Louisiana. "Now LIGA, the state insurance guaranty fund, will have to pick up the bulk of these claims," Wooley says. Guaranty funds are triggered when there is a finding of insolvency and a final order of liquidation is signed by a judge, adds Wooley.
Reliance Insurance Company was established in 1817, according to Allen Edwards of LIGA. Edwards says the company had a long history of selling insurance but eventually ran into trouble. "This company had an A plus rating with A.M. Best as recently as 1998," says Edwards. "In late 1999, the company boasted a $1.7 billion surplus, but soon faced financial difficulties after taking on too much debt and by underwriting business that resulted in some pretty huge losses," according to Edwards.
So in May of this year, Wooley says the Pennsylvania Department of Insurance placed Reliance into rehabilitation. Since that time, Pennsylvania's Insurance Department has been working with other state regulators and the National Conference of Insurance Guaranty Funds in an effort to save the company. "Reliance ultimately could not generate a significant cash flow so the Pennsylvania Department of Insurance had to seek a final order of liquidation," says Wooley.
Edwards says nationally, Reliance has liabilities in excess of $7 billion. In Louisiana, the company's liabilities are approximately $225 million, of which around $175 million are LIGA covered claims, including nearly $55 million in unpaid workers' compensation claims which will be paid in full by the guaranty fund. LIGA does not cover life, health, fidelity and surety or ocean marine insurance.
The Pennsylvania liquidation order specifically provides for the continued payment in full of claims under workers' compensation policies for up to 90 days from the date of the order. "The plan is to have no interruption in workers' comp claims payments during the transition period," Edwards says. The order further provides for a 90-day stay of all proceedings against Reliance during the transitional period.
According to Edwards, Reliance's Louisiana losses are manageable by LIGA, whose primary source of revenue comes from an assessment of its member companies. "The guaranty fund receives no money from the state of Louisiana," he says. While LIGA has not assessed its member companies in the last four years thanks to stability in Louisiana's insurance market, Edwards contends that the Reliance insolvency will force the LIGA board to consider a new assessment of fees. He says LIGA's assessment capacity is around $88 million annually, based on year 2000 premium writings.
Wooley and Edwards say state regulators and guaranty funds will continue to work together with Pennsylvania liquidators to ensure a smooth transition. "We all share the common goal of protecting consumers," Wooley contends.

IRDA to monitor solvency of general insurance

IRDA will monitor the solvency status of general insurance companies on a quarterly basis once the free pricing of insurance products is allowed from next year.
Currently, IRDA inspects the books of insurance companies only once a year.
Mr C.S. Rao, Chairman, IRDA, said that after January 1, 2007, insurance companies will be competing on price as the terms of existing contracts would be maintained for about 15 months.
"We will be monitoring the solvency of general insurance companies on a quarterly basis, rather than an annual basis," Mr Rao said. He was speaking on the sidelines of the Asian Life Insurance Summit.
Around 70 per cent of the general insurance business such as fire and motor insurance are under tariff or a predetermined rate structure.
Insurance analysts say that if companies slash premium rates, it could erode their solvency. Mr Rao said that the IRDA held meetings with transporters' associations and that free pricing would also come into effect for motor insurance policies, including the commercial segment.
The transporters' lobby has opposed detariffing the motor portfolio and the regulator has so far been cautious about implementing a free-price regime in this line of business.
Since the claims ratio of insurance companies for commercial motor segment is above 200 per cent, transporters could expect a big jump in premium.
Mr Rao said at the seminar that the life insurance sector would see around 25-26 players in the next five to six years.
Companies that have so far expressed interest in setting up a life insurance joint venture include Punjab National Bank-Principal, IDBI-Federal Bank-Fortis, Pantaloon-Generali and Religare-Aegon.


Reliance Life Insurance Advisor :- Dhaivat Trivedi For More Detail :- ADDRESS RELIANCE LIFE INSURANCE CO. LTD. PERFECT POINT, 2nd floor, DR YAGNIK ROAD OPP RAM KRISHNA ASHRAM RAJKOT. - 360002 Tel : 0281 3018008 ,0281 3018009, 0281 3018010, 0281 3018012  

Reliance Life to target Reliance Comm subscriber base

Reliance Life Insurance plans to tap Reliance Communications' 2.5-crore telephony subscriber base to market its products.
The company is considering a series of options to leverage its relationship with Reliance Communications.
"We could have a joint marketing campaign, a joint product offering, or we may simply mine the data base to send mailers or make calls to Reliance mobile customers," said Mr K.V. Srinivasan, Chief Operating Officer, Reliance Life Insurance.
However, a joint product or a co-branded solution would require approval from the Insurance Regulatory and Development Authority, he added.
Customers of RWorld, the information and entertainment portal of Reliance Communications, would also be able to pay premiums through a bank account, provided the bank is listed on the network.
Reliance Life Insurance officials, however, offered no comment when asked whether there would be an arrangement for payment of commission to Reliance Communications.
As an alternative channel for distribution, insurance companies usually tie up with banks. In the case of bancassurance, where there is a corporate agency tie-up, the commission could range from 5 per cent to 40 per cent of first-year premium depending on the commission loaded on to the product at the time of registration with IRDA.
Mr P. Nandagopal, CEO, Reliance Life, said that the company hoped to break even by 2009-2010.
It registered a growth of 627 per cent in Q1 of the current fiscal, its new business premium touching Rs 132 crore.






Reliance Life Insurance Advisor :- Dhaivat Trivedi For More Detail :- ADDRESS RELIANCE LIFE INSURANCE CO. LTD. PERFECT POINT, 2nd floor, DR YAGNIK ROAD OPP RAM KRISHNA ASHRAM RAJKOT. - 360002 Tel : 0281 3018008 ,0281 3018009, 0281 3018010, 0281 3018012  

Reliance Connect 2 Life Plan

For More Detail :- Reliance Life Insurance Company Limited.

Reliance Life Insurance Advisor :- Dhaivat Trivedi For More Detail :- ADDRESS RELIANCE LIFE INSURANCE CO. LTD. PERFECT POINT, 2nd floor, DR YAGNIK ROAD OPP RAM KRISHNA ASHRAM RAJKOT. - 360002 Tel : 0281 3018008 ,0281 3018009, 0281 3018010, 0281 3018012  

Presenting Reliance Connect 2 Life Plan, a policy that exemplifies convenience. No medical test, no cumbersome paperwork and a unique step-up feature which allows you to upgrade your plan. Just answer 7 simple questions and discover the fastest and the easiest way to get insured!

Connect 2 Life Plan

Reliance Connect 2 Life Plan helps you build security & savings for a better tomorrow. As your income is likely to grow, you should also ensure that you have sufficient protection for your near and dear ones. Reliance Connect 2 Life Plan ensures that you have the option to upgrade your life cover to keep pace with your changing lifestyle.
Key Features & Benefits
Maturity Benefit: On survival of the life assured until maturity, the Plan pays the sum assured plus simple vested bonuses to the policyholder.
Death Benefit: In case of unfortunate death of the life assured before the maturity date, the Plan pays the sum assured plus simple vested bonuses to the nominee.
Choice of two plans: At the time of initial purchase of Reliance Connect 2 Life Policy, you have two kinds of plans to choose from namely, Gold Plan and Silver Plan.
The Reliance Connect 2 Life Gold Plan offers a life cover of Rs 2,00,000 initially. You may enhance your life cover to a maximum of Rs 10,00,000 in two stages by exercising your option. The Reliance Connect 2 Life Silver Plan offers a relatively lower life cover of Rs 1,00,000 initially. You may enhance your life cover to a maximum of Rs 5,00,000 in two stages by exercising your option. Options to enhance life cover: Under each of the above two plans, you have an option to enhance your life cover amount:
At the end of one year from the date of initial purchase of Reliance Connect 2 Life Gold / Silver Plan, you are entitled to enhance your life cover by exercising your option to purchase an additional Reliance Connect 2 Life Policy. Provided you have exercised your option to enhance life cover at the end of the first year, you are entitled to enhance your life cover again at the end of the second year by purchasing an additional Reliance Connect 2 Life Policy. For further details on options, please refer to the section on “Other Conditions”
Other Benefits: Reliance Connect 2 Life Plan comes to you with a host of other benefits:
No medical examination and minimal paperwork A profit plan High sum assured rebate for large life cover per policy Policy loan after 3 years Tax benefit under Section 80C & 10(10)D of IT Act Sample Illustration All figures in rupees Plan Types [a] Gold Silver Guaranteed sum assured at maturity [b] 2,00,000 1,00,000 Annual Premium [c] 1,3540 6,820 Non guaranteed benefit at maturity @ 6% p.a. [d] 55,500 27,750 Non guaranteed benefit at maturity @ 10% p.a. [e] 1,27,750 63,750 Total maturity amount @ 6% p.a. [b+d] 2,55,500 1,27,750 Total maturity amount @ 10% p.a. [b+e] 3,27,750 1,63,750 The above maturity benefits are calculated for an illustrative gross investment return of 6% & 10% per annum compounded as stipulated by Insurance Regulatory & Development Authority (IRDA).
Annual Premiums for life assured across different plan options and ages at inception.
Sum insured ------------------- * Age of Entry ------------------- 20 25 30 35 40 Silver Plan Rs 1 lakh 6,742 6,749 6,765 6,820 6,962 Gold Plan Rs 2 lakh 13,384 13,398 13,430 13,540 13,824 * as at last birthday
Maximum allowable sum assured at each enhancement
All figures in rupees Choice of two Plans Gold Plan Silver Plan Sum Assured under policy* at initial purchase 2,00,000 1,00,000 * Maximum additional sum assured under policy+ purchased at the end of one year from date of initial purchase – First enhancement 3,00,000 2,00,000 * Maximum additional sum assured under policy+ purchased at the end of two years from date of initial purchase – Second enhancement 5,00,000 2,00,000 Maximum sum assured allowed per life under all policies+ 10,00,000 5,00,000 * Minimum sum assured at any purchase is Rs 1,00,000. + Policy/policies refer to Reliance Connect 2 Life Policy
Who can buy Reliance Connect 2 Life Plan?
Minimum Maximum Age of entry 18 yrs (For first policy) 45 yrs (For first policy) Age of maturity 33 yrs 62 yrs Policy Term 15 yrs 15 yrs All ages pertain to age on last birthday
Other Conditions:
You have to sign a satisfactory Proposal Form at the time of purchasing each Reliance Connect 2 Life Policy. At the time of exercising your options to purchase additional Reliance Connect 2 Life policies, all previous Reliance Connect 2 Life policies purchased must be in force. If you have not availed of the maximum permissible sum assured in any option, you forfeit the un-availed amount and cannot carry forward the same to future options if any. Premium rates in force at the time of issuing the additional policies and corresponding to the age at the time of purchase, will apply for the sum assured under additional policies. The minimum sum assured under each Reliance Connect 2 Life Policy is Rs 1,00,000. The maximum sum assured under all Reliance Connect 2 Life Plans put together on one life at any time is Rs 10,00,000. The Company reserves the right to ask for further medical or financial information. Other FeaturesLoan against policy: You can take a loan against your policy up to 90% of the surrender value of the policy at the time of taking the loan (based on the terms and conditions at that time).
Built-in ease of pay: For your convenience, we have provided two premium payment modes: Yearly and Monthly. The monthly instalment premium will be 9% of the annual premium.
A multitude of payment methods are available too: Cash, Cheque, Demand Draft, Credit Cards, Electronic Clearing Services (ECS) and R-World (If you have the R-World facility on your mobile phone, you may pay your premiums through your bank account with the banks listed under R-World)
Grace Period: The Company allows a grace period of 30 days (15 days for monthly premium payment mode) from the due date for the payment of premiums.
More value for money (High Sum Assured Rebate): Reliance Connect 2 Life Plan offers an attractive premium discount for sum assured over and above Rs.1,00,000/- per policy at the time of purchase as mentioned below.
Sum assured under policy Rebate per 1000 sum assured Above Rs. 1 lakh; up tp Rs. 2 lakh Rs. 0.50 Above Rs. 2 lakh; up tp Rs. 3 lakh Rs. 0.50 Policy Term Rs. 0.50
Tax Benefit: Premiums paid are eligible for tax deduction under Section 80C of the Income Tax Act, 1961. Maturity & death benefits are tax free under Section 10(10) D of the Income Tax Act, 1961. Under Section 80C premiums up to Rs 1,00,000 are allowed as deduction from your taxable income.
Frequently Asked Questions
What if I do not want to opt for additional life insurance policy? You are eligible for two options to enhance your life cover. However, in case you do not want to enhance your cover, you will still enjoy the benefits of your basic plan. Note that if you do not exercise your first option, you automatically forfeit your second option as well.
What if I want to discontinue the policy?While we advise you against discontinuing the policy as you will be left without valuable insurance protection, we also understand that in situations of financial distress you may want to stop paying future premiums. You have three options:
Lapse the Policy: If less than three years' premiums have been paid and should you decide to stop paying further premiums, your policy will lapse and no benefit will be payable. All premiums paid will be retained by us.
Make the policy Paid up: If you discontinue paying premiums after paying premiums for three full years, then your policy will be converted into a paid up policy for a reduced sum assured determined in the same proportion as the amount of premiums actually paid bears to the total amount of premiums payable. The life insurance protection will continue to the extent of the paid up value until the end of the policy term.The vested bonuses attached to this policy will remain attached in full. Once this policy becomes “paid up”, no further bonuses will be attached to your policy. You will receive the “paid up” sum assured plus bonuses on the maturity date of the policy or in the event of loss of life before the maturity date.
Surrender the policy: Your policy acquires a surrender value after 3 years' premium have been paid and three years have elapsed. We guarantee a minimum surrender value of 30% of the total premiums paid subsequent to the first year premium.On surrender, the insurance protection provided under the policy will also cease.The Company may pay a special surrender value which will be higher than the guaranteed surrender value.
What if I want to revive a paid up or lapsed policy? A paid up or lapsed policy may be revived for full benefits within 5 years from the date of first unpaid premium before the date of maturity, at terms and conditions stipulated from time to time. Currently, you may revive a policy by paying the unpaid premiums with interest at the rate of 9% p.a compounded annually.
General ExclusionWe will not pay any claim on death if the life assured, whether sane or insane, commits suicide within 12 months from the date of issue of the policy or the date of any reinstatement of the policy.
15 Days Free Look PeriodYou are entitled to a free look period of 15 days. If during the 15 days period you do not wish to continue this policy, you may write to the Company to cancel your policy. The Company will refund the premium paid by you after deducting a proportionate premium for the cover provided up to the date of cancellation. The Company will also deduct any medical examination costs, stamp duty charges and other expenses incurred with respect to your policy.
Prohibition of Rebate: Section 41 of the Insurance Act, 1938 states:1) No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. 2) Any person making default in complying with the provisions of this section shall be punishable with a fine which may extend to five hundred rupees.
Reliance Life Insurance is a Fully Licensed Life Assurance Company registered with Insurance Regulatory & Development Authority (IRDA). Registration No: 121.

For More Detail

Reliance Life Insurance Company Limited,Reliance Life Insurance Advisor :- Dhaivat Trivedi For More Detail :- ADDRESS RELIANCE LIFE INSURANCE CO. LTD. PERFECT POINT, 2nd floor, DR YAGNIK ROAD OPP RAM KRISHNA ASHRAM RAJKOT. - 360002 Tel : 0281 3018008 ,0281 3018009, 0281 3018010, 0281 3018012  

Dhaivat Trivedi - Reliance Life Insurance Advisor

My Achievemants
(1) Got the award of the best performes of the month March 2006 - from Reliance Life Insurance Ltd
(2) Wthin a short span of time Membership of Elite Club is achieved successfully
(3) Selected as a trainee-advisor for Malasia from Reliance Life Insurance.

My Seles Maneger Yatinbhai Bhimajiyani sey :-

Mr.Dhaivat Trivedi - an Advisor in Reliance Life Insurance Co.ltd has begun the work with great Enthusiasm. He has won the best performance of the Month - March -2006 Award . with his hard work and he become the member of the elite club within a short period of time, he achieved these two awards from the company. he is a very confidet about his work.

Reliance Life Insurance Advisor :- Dhaivat Trivedi For More Detail :- ADDRESS RELIANCE LIFE INSURANCE CO. LTD. PERFECT POINT, 2nd floor, DR YAGNIK ROAD OPP RAM KRISHNA ASHRAM RAJKOT. - 360002 Tel : 0281 3018008 ,0281 3018009, 0281 3018010, 0281 3018012  

Reliance Life Take Over AMP Sanmar Group

Chennai: Even as the insurance vultures have started circling over the AMP Sanmar Life Insurance Company Limited, industry watchers are keenly watching the Sanmar group.
Will the group bite the bullet by buying out AMP's stake in the life insurance company and go solo with professionals at the helm, they wonder.
Interestingly, the group has not exercised its right of refusal to AMP's stakes in the life insurance company. Attempts are being made by some officials to convince the Sanmar top management to go it alone.
The Rs217.50-crore equity-based AMP Sanmar Life is a 74:26 joint venture between the Chennai-based Sanmar group and AMP ASAL Pty Ltd, part of the Australian wealth management group AMP. While the latter ran the show, Sanmar remained content with board memberships.
Recently AMP surprised the insurance sector by announcing its intention to exit the Indian joint venture to focus on its wealth management business in Australia and New Zealand.
Says AMP Sanmar Life's managing director, Graham Meyer, "In the past, as a traditional life insurance company, AMP earned revenues from premiums on policies and providing guarantees on the capital it had invested. Today AMP's revenues are increasingly driven by fees for services and the value of assets under management." According to him, AMP believes the time is now right to review its presence in India.
For AMP's size, its around Rs56.42-crore investment in the Indian life insurance venture is very small. And so will be the returns even if the venture gives the targeted rate of return. "Perhaps that doesn't deserve AMP's management time and, therefore, the decision to exit," remarks a source.
What really shocked policyholders as well as others in the insurance sector is Sanmar group chairman N Sankar's announcement that the group would exit along with AMP on the grounds of inexperience.
Explains Meyer, "Any Indian buyer of the joint venture would naturally look for the exit of Sanmar. Any foreign buyer would also probably have his own Indian partner. Keeping this in mind, and to facilitate the process, Sanmar is offering its stake for sale along with AMP's. However, if any foreign buyer is interested in Sanmar continuing as a partner, Sanmar will talk to them."
While the policyholders were shocked at the news of the exit of both the promoters, industry analysts are wondering why the Sanmar group had decided to call it as quits after investing around Rs160 crore.
According to Meyer, Sanmar has no direct experience in the life insurance business, and also does not have much of a footprint in the retail business. It exited its only exposure to retail business in the form of Overseas Sanmar Financial Services, some years ago. The group does not have the requisite knowledge of the life insurance industry to run the business on its own.
Others differ. According to consulting actuary, R Ramakrishnan, "It is better for the Sanmar group to go it alone instead of exiting the business or replacing one foreign partner with another."
Adding to that a senior manager of another private life insurer says, "The group can hire domain experts to run the show and seek expertise from consultantsand reinsurers in designing and pricing product." Several others from the industry share similar views and say if there is going to be a sale then Sanmar would end up losing.
First, with both the promoters openly announcing their decision to exit, potential buyers might view this as a distress sale. So it will be tough for the promoters to exit the business at a profit. As for as Sanmar is concerned, the investment loss will be higher than for AMP.
Second, it will be unwise for any promoter to exit a venture that is about to see a 'hockey stick' growth. AMP Sanmar Life has just started reaping the benefits of its wide branch network and its unit-linked policy. The company closed last fiscal with a total premium income of Rs105 crore (fresh Rs91.18 crore and renewal Rs13.82 crore), up from Rs31 crore earned in FY2004. The target for the current year is Rs250 crore.
Third, industry experts say that the financial strain on Sanmar will now ease as the insurance company has crossed the start-up phase. It is time for the company to consolidate the gains and grow by charting a new business strategy. The cost overruns could be controlled with effective management, they aver.
And finally, there is the pressure from the policyholders who are uncertain about the fate of their policies. According to sources, the company is experiencing increased policy surrenders — a bad sign at the time of enterprise valuations.
What is it worth?The AMP Sanmar Life case has aroused considerable interest within the industry, as it is for the first time that a private life insurer is on the block and, therefore, the mode of enterprise valuation is attracting immense interest as this may set the industry trend for further mergers and acquisitions or initial public offers.
According to Meyer, the premium collected by the company till May 2005 since inception is Rs153 crore and has been growing year-on-year 300 per cent. According to the Insurance Regulatory and Development Authority's (IRDA) annual report, the company's accumulated losses at the end of 2003-04 were Rs69.59 crore.
Normally, the value of a life insurer is arrived by calculating what is called the 'embedded value', which is the present value of future profits embedded in the policies already sold.
Rs. in croreYear First year premium Renewal & Single premiumpolicies Total Profit/(Loss) 01-02 0.28 - 0.28 2.06 02-03 6.32 0.15 6.47 6.16 03-04 21.56 9.50 31.06 (77.80) 04-05- 91.18 13.82 105.00 NA Source: IRDA and AMP Sanmar Life
Number of branches: 86 and Number of agents: Over 9,000
Given the small number of policies sold by AMP Sanmar Life (2004-05: 36,268; 2003-04: 46,282, the two major years for the company) experts say the embedded value is not a right measure here. The alternative is to value the company's distribution network of 86 branches and 9,000 agents. Says an AMP Sanmar Life employee, "Life insurers are finding it difficult to recruit new agents. With our branch network and agency force all that a new entrant has to do is to plug-and-play."
Here a prospective buyer would like to estimate the business potential that the distribution network / force would generate and not the cost that has been sunk.
It should be noted that from the beginning AMP Sanmar Life has followed a strategy of targeting semi-urban and rural markets in the southern region. In line with the strategy branches were opened in non-metro areas. Later the company went to the western and northern regions.
Industry experts do not find fault with this strategy of targeting the semi urban and small towns rather than the big cities. What was lacking, perhaps, was proper training for the agents and bancassurance tie-ups to back the corporate strategy, they say. While AMP Sanmar Life tied up with Shriram Chits for selling its policies, the tie up with New India Assurance Company Limited for cross-selling products was not permitted by IRDA. Similarly, attempts by the company to market its policies to Kerala-based cooperatives did not succeed.
AMP Sanmar Life saw a steep fall in the number of policies (around 11,000) sold during FY2005 as compared to FY2004, though the average premium per policy went up to Rs25,854 from Rs6,024. For a life insurer the number of policies and the average sum assured are important measure.
The big mystery now is would a buyer be ready to pay more than the Rs217.50 crore (the capital infused by the promoters of AMP Sanmar Life) for acquiring the distribution infrastructure.
"An existing or a new player can establish the distribution network at a lower cost," says Ramakrishnan.
Says another actuary, "The key aspects that I would look for, apart from the distribution network, are, one, the investment guarantees given on policies; two, the pricing assumptions and, three, the lapse ratio."
Requesting anonymity, the CEO of a large private insurer says, "Given the size of their operations and the kind of business they have done, I would value the company at 1.5 times of its last year's total premium of Rs105 crore."
He, however, hastens to add "No, we are not interested in AMP Sanmar Life as acquiring it does not add any value to us."
Another senior manager from another life insurer had similar views.
With large private insurers not showing interest, a potential buyer for AMP Sanmar Life could be an existing company of a similar or slightly larger size or a company with a presence in the north and the west that wanted to expand in the south or even a new entrant wishing to enter the sector. The latter could be a foreign insurer scouting for an Indian partner or a consortium of Indian companies.


Reliance Life Insurance Advisor :- Dhaivat Trivedi For More Detail :- ADDRESS RELIANCE LIFE INSURANCE CO. LTD. PERFECT POINT, 2nd floor, DR YAGNIK ROAD OPP RAM KRISHNA ASHRAM RAJKOT. - 360002 Tel : 0281 3018008 ,0281 3018009, 0281 3018010, 0281 3018012  

More About Dhirubhai Ambani

The second son of a school teacher, Dhirubhai was born in 1932 in the village of Chorwad inGujarat in circumstances that can best be described as modest. Driven by hardship and want, hehad to drop out of school early.In 1949, at the age of 17, he went to Aden (now Yemen) in search of opportunity, and worked asa dispatch clerk for A. Besse & Co. A couple of years later, the company became a distributor forShell products and Dhirubhai was promoted to manage the company’s oil-filling station at the portof Aden. It was here that he dreamed of setting up and owning a refinery, which he later realisedwith his petrochemicals venture.He returned to India in 1958 to launch his first business venture, a spice trading company namedReliance Commercial Corporation.In 1962, Dhirubhai identified an emerging opportunity in yarn trading and shifted to the newbusiness. Three years later, he changed the name of his company to Reliance Textile IndustriesLimited.In 1966, he purchased land in Naroda, Gujarat, to set up a textile mill. In 1975, a technical teamfrom the World Bank recognised the Naroda mill as one of the best composite textile mills in Indiaand certified it as ‘excellent even by developed country standards’.In 1977, the company went public.At the time of the Reliance Textiles IPO, participation in the Indian capital markets was largelylimited to a small but influential elite which dabbled in a handful of stocks. The great majority ofIndia’s middle class chose to stay away. Dhirubhai’s decision to prefer the capital markets overbanks as the primary source of funding for his ambitious expansion plans, was as daring as it wasunprecedented.In the event, The Reliance IPO was an unlikely success. Against all odds, Dhirubhai managed toconvince a sufficiently large number of sceptical middle class investors to put their money, andfaith, in what was then a small, relatively unknown company.The subsequent growth and success of Reliance and its philosophy of generously rewardingshareholders rapidly gave Dhirubhai an iconic status in the Indian financial markets.Under Dhirubhai’s charismatic leadership, the Annual General Meetings (AGM) of Reliance tookon the character of large public spectacles. Typically held in large public arenas, and attended bythousands of adoring shareholders, the Reliance AGM became a day to remember in the annualcorporate calendar of India. In 1986, the Reliance AGM held in Cross Maidan, Mumbai, wasattended by as many as 30,000 stockholders—a record in India’s corporate history.By the mid-80s, Dhirubhai had become something of a living legend, widely hailed by peers andcritics alike as one of the greatest corporate visionaries in the history of post-Independent India.But Dhirubhai was never one to rest on his laurels. In the early 80s, he had taken the firstimportant step in strategic backward integration for Reliance with the commissioning of thePatalganga plant which initially manufactured polyester filament yarn and polyester staple fibre.In 1991, he set up Reliance Hazira, for the manufacture of petrochemicals—the next link in thebackward integration chain. At the time, Reliance Hazira represented the single largestinvestment made by a private sector group in India at a single location.Meanwhile, Dhirubhai had firmed up plans of setting up a massive grassroots refinery—the nextbig leap in his overall strategic roadmap for Reliance. Conceived as the world’s largest grassrootsrefinery at the time, Jamnagar in Gujarat was to have an annual capacity of 27 million tonnes.In the face of formidable challenges, including a massive cyclone that flattened the project sitemid-way through construction, Reliance commissioned the Jamnagar facility in 1999. It was afully integrated refinery, complete with a dedicated port and a captive supply of power.The refinery was not only commissioned ahead of schedule, but also set up at a cost that wassignificantly lower than the prevailing global benchmark for a project of such magnitude.It was one of Dhirubhai’s great dreams in life to see ordinary Indians enjoy the enormouseconomic benefits of being able to access affordable yet world class telecommunicationsinfrastructure. He wanted Reliance to spearhead a communications revolution that woulddramatically cut down the cost of connectivity, and propel India into the digital age. His ultimateambition: To make the cost of a phone call cheaper than that of a post card. It was thereforeentirely logical for Reliance to enter the telecommunications space when the sector was openedup for private participation in the 1990s.The rest, as they say, is history.Today, Reliance Communications is India’s largest information and communications servicesprovider with over 20 million subscribers, and offers the full range of integrated telecomservices—at prices that are, by far, the lowest anywhere in the world.Dhirubhai left for his heavenly abode on July 6, 2002.

About Dhirubhi Ambani

Few men in history have made as dramatic a contribution to their country’s economic fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left behind a legacy that is more enduring and timeless.
As with all great pioneers, there is more than one unique way of describing the true genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud patriot, the leader of men, the architect of India’s capital markets, the champion of shareholder interest.
But the role Dhirubhai cherished most was perhaps that of India’s greatest wealth creator. In one lifetime, he built, starting from the proverbial scratch, India’s largest private sector enterprise.
When Dhirubhai embarked on his first business venture, he had a seed capital of barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he converted this fledgling enterprise into a Rs 60,000 crore colossus—an achievement which earned Reliance a place on the global Fortune 500 list, the first ever Indian private company to do so.
Dhirubhai is widely regarded as the father of India’s capital markets. In 1977, when Reliance Textile Industries Limited first went public, the Indian stock market was a place patronised by a small club of elite investors which dabbled in a handful of stocks.
Undaunted, Dhirubhai managed to convince a large number of first-time retail investors to participate in the unfolding Reliance story and put their hard-earned money in the Reliance Textile IPO, promising them, in exchange for their trust, substantial return on their investments. It was to be the start of one of great stories of mutual respect and reciprocal gain in the Indian markets.
Under Dhirubhai’s extraordinary vision and leadership, Reliance scripted one of the greatest growth stories in corporate history anywhere in the world, and went on to become India’s largest private sector enterprise.
Through out this amazing journey, Dhirubhai always kept the interests of the ordinary shareholder uppermost in mind, in the process making millionaires out of many of the initial investors in the Reliance stock, and creating one of the world’s largest shareholder families.

About Reliance Life Insurance Ltd

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services.

Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934.

Reliance Capital sees immense potential in the rapidly growing financial services sector in India and aims to become a dominant player in this industry and offer fully integrated financial services.

Reliance Life Insurance is another step forward for Reliance Capital Limited to offer need based Life Insurance solutions to individuals and Corporates.

Post By :- Life Advisor : Dhaivat Trivedi 

Reliance Life Insurance Advisor :- Dhaivat Trivedi For More Detail :- ADDRESS RELIANCE LIFE INSURANCE CO. LTD. PERFECT POINT, 2nd floor, DR YAGNIK ROAD OPP RAM KRISHNA ASHRAM RAJKOT. - 360002 Tel : 0281 3018008 ,0281 3018009, 0281 3018010, 0281 3018012