Web Aggregation in Insurance sector in India - concept, status and issues

Introduction to Web Aggregation:

In India, Insurance has usually been “sold” (depending upon the commission, the agent/broker gets) and not “bought”(depending upon the felt need of the customer). Insurance companies historically have relied on standard channels of distribution mainly agents who normally push the highest commission products. This often leads to post purchase dissonance and hence lapsed policies. The insurance policy contracts somehow are verbose, often have fine prints, and no proactive communication on negatives. No entity besides the regulator has an incentive in making the customer understand the contract he is actually entering into, as the focus is clearly on making the transaction happen. As a result, not only,there often is a mismatch between what a person needs and gets but also she/he doesn't get to exercise an informed choice option of price and insurance product by comparing neutrally various insurance policies of different companies. In a sense, she/he gets exploited for this lack of comparative information data.

 

Insurance aggregation is a process of finding multiple quotes of various Insurance Companies at one time so that the buyer can make an accurate comparison of insurance products based on his needs and budget. Insurance web aggregation in turn is finding this information on the web. It is an easy and consumer friendly display of prices, costs, features, service levels, consumer reviews, and sometimes the opinions of expertson different insurance options to a consumer, who voluntarily comes (he is actually buying)looking for such information. The information required by an aggregator from a customer is usually a superset of the information required by
all the insurers who provide a quote. Aggregators get traffic because customers
find value in the research they can do on their own on Insurance products, saving time, and in simple to understand language. This traffic is the key differentiator for a successful aggregator, and its advertising revenue potential. This implies there is a direct relationship between the accuracy and helpfulness of an aggregators comparison charts, and their success.

Aggregators are different from other channels, as they are designed to be a self-help tool for the customer. The focus is on education and information quality and richness. These results in deepening penetration of protection focused products which specifically cater to his needs some of which might be low cost products, products not typically sold through traditional intermediaries. For example pure term insurance products have been largely displayed and promoted by aggregators.

International Experience:

Web aggregators are standard tools for buying Insurance in most developed markets. The UK and US have 4 web aggregators who are publically listed. Other countries including Netherlands, Germany, France, Spain, Italy, Australia, Hong Kong, Ireland, South Korea, and Canada, among others have Web aggregators.

The UK has the most developed insurance aggregation business, supported by the FSA. For example, in UK, 63% of all motor insurance buyers compare before they buy.

Insurance Aggregation in India

Insurance Aggregation started in India in 2005 with two companies (i) Apnainsurance.com and (ii) Bimadeals.com. From 2005 to 2011 twenty other players joined this industry. Their importance can be gauged from the number of Unique Visitors to various leading insurance sites for instance the number of hits which was 344,000 in April 2010 became 1,900,000 in April 2011 for Policybazaar.com. Within a short span of time, these websites already account for over 50% of the 1st year premium collected via the Internet in India. For some companies, Aggregators can account for as much as 15% of their new business.

Regulations in India regarding Web Aggregation

IRDA vide circular No.IRDA/Admin/GDL/Misc./253/11/2011 have issued guidelines under section 14(1) of IRDA Act, 1999 which defines web aggregator, process of approval and eligibility criteria to be web aggregator, agreement between an insurer/ broker with web aggregator and conditions, contents to be displayed on website and remuneration caps on transmission leads and actual issuance of policies. The guideline prescribes a flat fee not exceeding Rs. 1 lac per year towards each product displayed by the web aggregator and an amount not exceeding Rs.10/- towards each lead transmitted by the web aggregator. An insurer shall pay a fee or remuneration to web aggregator not exceeding 25% of the commission payable or actually paid, if such leads get converted into actual sales, within the overall limits on commissions and expenses as provided u/s 40 (B) and 40(C) of the Insurance Act. The guidelines came in operations w.e.f.1st February, 2012.

The average charges till the lead stage which the WA has to pay to search engine sites such as Google is about Rs 100 or more (as voiced by some of the WAs and needs to be verified) and putting a cap of Rs 10 per lead has made it totally un-remunerative. As a result, out of 15 WAs, only 5 companies decided to apply for aggregator license, that too under protest on commercials and only 2 of these have received licenses.

It may be pointed out that in no other country, is there a remuneration cap between the WA and an Insurer.

Likely implication

The implication of Rs 10 per lead as stipulated by IRDA, given the fact that since its initial phase and not more than 25% of leads are actually getting converted into sales, implies that WA end up paying more to the service providers than what they receive from prospective customers and that is making the entire process a non-starter. A question arises therefore whether should it not be left for them (WA & Insurers) to decide mutually depending upon their volumes and economies, within the overall expense limit as defined under the Act?

The likely reach of internet in Indian scenario in the coming years is going to be phenomenal. Almost 50% of the total population will have access to internet in the next five years and we will thus be missing out in a major way if we ignore the power of internet and continue to stifle it with some short sighted guidelines. We need to look into the future and create an enabling environment which provides prospective customers a neutral unbiased web based platform to compare insurance policies and make a judicious choice.

IRDA has rightly put conditions to monitor the content of what’s displayed by a WA to ensure against misinformation and to maintain neutrality. Regarding the remuneration between an Insurer and the WA, IRDA‘s stipulation of it being within the overall limit u/s 40(B) & (C) of the Insurance Act for those leads actually getting converted into sales (ie lead charges +sales commission) is also within the justifiable as there is no separate definition of a WA under the Act and the expenses are to be covered within the meaning of Section 40 (B) & (C) of the Insurance Act.

There’s another related issue which is hampering the growth of insurance e-policies. IRDA has mandated that Insurance co. has to reapply for product approval if it proposes to put a product, already approved, as a e-policy based product too. There are large no. of products already approved and in order to increase the efficacy of web-based comparison of insurance products, it is desirable that all such products should be available as e-products. Otherwise, the basket of Insurance products available online gets severely restricted, depriving customers to make a meaningful comparison and choice. The logic of IRDA is that the regulator wants to examine the cost implication of a product being introduced as e-product and that no additional cost should be passed on to the customer. This, however, can be achieved by adding a certification from the insurance co that such an introduction doesn’t increase the premium nor changes any aspect of the policy in any manner. E-policies, by cutting down the other expenses, may actually lead to some cost savings for the insurance cos and that will act as an incentive for them to concentrate on issuance of e-policies in a major way duly harnessing the web based potential and reach.

In view of the growing importance of internet, the web based insurance business, whether issuance of e-policies or comparison sites on the web, need to be encouraged. Putting a cap of Rs 10 per lead, without any basis, is proving to be stifling and is restraining the propagation of Insurance policies through comparative sites in a major way and needs to be done away with. Similarly, asking the co to reapply for approval for a product already approved leads to delays and puts extra burden on the regulator which can be obviated by having a certification by the insurance co. regarding the price impact and status quo of product features.

Suggestions for making Web Aggregation more effective in India

(i)  the actual charges levied by the WA and payable by the insurers on a per click or per lead basis should be left to be decided by them which will vary depending upon the volume of business, the web-design of the WA and other such factors, subject to it being within the overall limits under Section 40(B) & (C) of the Insurance Act;
(ii) An insurance product, once approved by IRDA need not require re-approval if it is proposed to be introduced as an e-policy provided it doesn’t lead to increase in premium and there remains status-quo so far as product design is concerned. A certificate needs to be filed by the co. in this respect with the Authority who can take appropriate action in case of any violations.
(iii) There shouldn't be an entry fee prescribed (at present Rs 1 lakh) payable by an Insurance company to the WA for display of an insurance product on the web aggregator portal. It puts a cost for the insurance co. and may deter them from displaying low premium insurance products and thereby depriving customers from availing such products. In fact, I would suggest that enlisting of any insurance product should be free so that one can have as many products on such portals as possible which will give the intended customers a real time choice option.

 

Conclusion

Indian insurance market which used to be predominantly agent (including brokers and corporate agents) driven is changing with newer mode of distribution channels such as Bancassurance and web based individual insurance cos portals coming to play increasing role. The importance of web aggregation for insurance cannot be ignored. World over, especially in mature markets, majority of insurance policies in Motor, health and property insurance as well as life insurance are bought online through web aggregation. This is yet another effective and neutral platform providing comparative information on various insurance products of different companies to the intended customers and enabling them making an informed choice based on their specific need and budget. Web aggregation thus needs to be encouraged and shouldn't be curbed down with some short sighted ill-informed regulations. People have suffered tremendously since 2006-07 on account of large scale mis-selling and a time has come when they should "buy" insurance products rather than being "sold".

Budget 2013-14 -- Insurance sector benefits

Finance Minister presented the Budget for 2013-14 on March 1. Paragraph 90-93 of the speech refer to certain announcements pertaining to Insurance sector. I am reproducing these paragraphs here:

Insurance

90.       A multi-pronged approach will be followed to increase the penetration of insurance, both life and general, in the country.  I have a number of proposals that have been finalised in consultation with the regulator, IRDA. 

·       Insurance companies will be empowered to open branches in Tier II cities and below without prior approval of IRDA.

·       All towns of India with a population of 10,000 or more will have an office of LIC and an office of at least one public sector general insurance company.  I propose to achieve this goal by 31.3.2014.

·       KYC of banks will be sufficient to acquire insurance policies.

·       Banks will be permitted to act as insurance brokers so that the entire network of bank branches will be utilised to increase penetration.

·       Banking correspondents will be allowed to sell micro-insurance products.

·       Group insurance products will now be offered to homogenous groups such as SHGs, domestic workers associations, anganwadi workers, teachers in schools, nurses in hospitals etc.

·       There are about 10,00,000 motor third party claims that are pending before Tribunals/Courts. Public sector general insurance companies will organise adalats to settle the claims and give relief to the affected persons/families. 

91.       The Insurance Laws (Amendment) Bill and the PFRDA Bill are before this House. I sincerely hope that Government and the Opposition can arrive at a consensus and pass the two Bills in this session.
92.       The Rashtriya Swasthiya Bima Yojana covers 34 million families below the poverty line.  It will now be extended to other categories such as rickshaw, auto-rickshaw and taxi drivers, sanitation workers, rag pickers and mine workers.
93.       A comprehensive and integrated social security package for the unorganised sector is a measure that will benefit the poorest and most vulnerable sections of society.  The package should include life-cum-disability cover, health cover, maternity assistance and pension benefits.  The present schemes such as AABY, JSBY, RSBY, JSY and IGMSY are run by different ministries and departments.  I propose to facilitate convergence among the various stakeholder ministries/departments so that we can evolve a comprehensive social security package.

I did write a brief article which appeared in Economic Times dated March 21, 2013, on what each of these announcements entails for the sector.

A slightly detailed analysis is presented here.

India is among the top ten economies in terms of nominal GDP and fourth in terms of purchasing power parity. However, for its size and potential, India has an abysmal level of insurance penetration (insurance premium as percent of GDP) and density (per capita insurance premium). The penetration in the life sector actually came down to 3.4 % during 2011-12 while it continues to be at a low of 0.7% in the general insurance sector (including health). Much of the life insurance premium comes from the salaried and the organized sector including the self-employed and is largely driven by tax incentives. A worrying feature also has been the thin spread of per capita insurance cover (insurance density) even among those availing insurance, which @US$64.4 is much lower than the world’s average of US$627.3 and is lower than any of the other BRIC nations. While life sector density is US$55.7, the general insurance density is only US$ 8.7 which is among the lowest coverage in the world. Not surprisingly thus, the levels of protection (insurance sum assured as a percent of GDP) for India is only about 55% where it ranges from 150-250% in some of the other emerging and mature economies.

India is clearly under insured and the sector represents a clear case of a “missing market”.

As early as in 1911, Joseph Schumpeter had argued that services provided by financial intermediaries, aimed at mobilizing savings (including insurance), are essential for technological innovation and economic development. Using data on 80 countries over the 1960-89 period, Economists Robert G King and Ross Levine have presented a cross country evidence consistent with Schumpeter’s view that the role of financial systems in promoting economic growth is not “over-stressed”. A well developed insurance sector with increase access in far-flung areas, a wider bouquet of simple and easy to understand standard products and easier availability is thus a pre-condition for mobilization of savings and it is in this regard that insurance related measures (paragraph 90-93) announced by Finance Minister Shri P. Chidambaram in his budget speech for the year 2013-14 assumes great significance.

Let me try and elaborate what each of these announcements entails.

“Insurance companies will be empowered to open branches in Tier II cities and below without the prior approval of IRDA” and further “All towns with a population of 10,000 and more, will have an office of LIC and at least one of the four public sector general insurance companies by 31.03.14”.

One of the major reasons for the low penetration, especially in the general insurance has been the non –availability of insurance offices in smaller towns ie towns having a population of 10000 and above. The existing office infrastructure of LIC and the four public sector general insurance co. is:

 

Even though LIC has a system of premium collection centers through its agents network in most of the towns upto Tier V, the fact remains that presently, only 16% of its own offices are in tier IV level towns and below. Private life insurance companies especially SBI Life have started opening offices in tier II and III and a total of 1756 offices of private companies are in tier II level and below. The low penetration in general insurance is understandable as only 6% of offices of the four Public sector general insurance companies are located in Tier IV towns and below. The situation is almost alarming when it comes to the presence of private companies in the general insurance sector.  There isn’t a single office of any private general insurance companies in any town of tier II level and below (classified as “other” category by IRDA). The number of towns (tier wise as per census classification) thus not having any insurance offices are:

It is thus clear that insurance facility is yet to reach the critical mass and this would require both expansion in capacity and the geographical spread of the insurance facility. The number of towns in each of these tiers is going up continuously with the increase in population. There also has been a burgeoning middle class in each of these towns who save and are in need of insurance. So far, the insurance needs of these towns is met by the agents most of whom however cater to life insurance which also gets reflected in low penetration in general insurance sector.

The presence of offices of LIC and at least one general insurance company is each of these towns will enable availability of insurance services at the doorsteps of people in these towns and will specifically be useful in health and motor insurance segment. The opening of offices to such uncovered and under-covered areas will be based on the commercial considerations of these insurance companies and empowering these companies to open their offices without having to come to the regulator for case wise approval will also provide these companies a business opportunity who will also get an advantage of early foot-fall in these cities. Private insurance companies are likely to follow suit immediately. It is often missed out that insurance creates and sustains employment. As it penetrates in tier II level towns and lower, it will boost and nurture both direct and indirect employment. All these towns will have these offices functional by 31^st March 2014.

“the KYC for banks will be applicable for insurance policies”

Presently, a separate KYC (know your customer) is done every time an individual wants to buy an insurance policy. In order to bring down “on Boarding Cost” of insurance products, it has been decided that the KYC check done by banks will be made applicable for insurance policies. This will also facilitate customers for availing insurance policies without going through a multiplicity of KYC requirements by different agencies. For this purpose, a copy of the bank passbook containing KYC details and attested by the concerned bank official shall be an accepted document for the purpose of KYC for buying an insurance policy. Only additional information which is insurance policy requirement (such as health status of the individual etc) will be asked for separately. This will enable buying of an insurance policy easy and customer friendly and will bring down the cost for the insurance company. This announcement has been welcomed by the industry.

“in order to utilize all bank branches, Banks will be permitted to act as insurance brokers”

Insurance is a permissible form of business that could be undertaken by banks under section 6(1)(o) of the Banking Regulation Act, 1949. As per RBI circular dated July 12, 2012, Banks need not obtain prior approval of the RBI for engaging in insurance agency or referral arrangement without any risk participation subject to certain conditions. Bancassurance mechanism means selling insurance products through bank branches and presently all such Bank-insurance tie ups are where Banks act as corporate agent of an insurance company (one life and one non-life or health insurance company). IRDA during 2009-12 has issued a total of 362 corporate agency licenses including 203 licenses in the life sector and 159 licenses in the general insurance sector. However, the insurance business through Bancassurance is only about 7.5% of the total insurance premiums and only about 15000 of the existing 100,000 bank branches are engaged in selling insurance policies.  

In order to utilize the entire network of available bank branches, which will also help increase the insurance penetration, banks will be permitted to act as insurance brokers. This will not only enable availability of insurance products of several different insurance cos through banks branches but will also mean that banks will represent the customers as insurance brokers.  IRDA will notify banks as “broker” under regulation 2(j)(v) of the IRDA(Insurance Brokers) Regulations 2002.  There will not be any need to open a separate subsidiary by banks for this purpose and the existing branch network can be utilized.  Banks wishing to become an insurance broker will however require prior approval of RBI. The conduct of insurance business as a broker does not involve any risk participation by banks. It is expected that this move will help not only the utilization of all bank branches but also will provide customers a wider range of insurance products.

“All categories of banking correspondents shall be allowed to sell micro insurance products”

The high cost of distribution in rural areas coupled with availability of simple, standard and a product with low/flexible premium is one of the major reasons for a very low insurance presence and penetration in rural areas.  This announcement will go a long way in addressing this difficulty of higher distribution cost.  Micro insurance policies have an insurance cover ranging from Rs 5000 to Rs 50000 and cover health, dwelling, personal accidents in general insurance and term, endowment, health and accident under life insurance.  Micro-insurance policies, because of flexibility of premium payment terms, amount and coverage, cater to families in the informal sector who are in need of insurance and can’t afford higher premium in one go. 

These banking correspondents will be permitted to take up selling of ‘micro-insurance’ policies. The tie-up of banking correspondent as seller of micro-insurance policies will enable people in such unbanked and under-banked areas to avail insurance products at their doorstep and will help improve insurance penetration in a major way. IRDA presently permits only four categories ie. Non Governmental Organizations, Self Help Groups, Micro Finance Institutions and a company formed under Sec 25 of the Company Act to be a micro insurance agent. IRDA is in the process of expanding this definition to include banking correspondents as permitted by RBI. The banking correspondents will have to undergo an insurance training of 25 hours. However, they will be exempt from undertaking and clearing the Agent’s exam as mandated by IRDA for a regular agent.

“Group insurance products will be made available to homogeneous groups such as self help groups, domestic workers associations, aanganwadi workers, teachers and nurses etc”

Group Insurance products are offered to a group as a whole with a single master policy holder and individuals as members. A typical group saving product is an endowment policy and will have a component of both insurance and savings. The Group Products are expected to offer a more cost-effective product to the members of the Group by cutting down processing costs and risk sharing. Another advantage of group product is that it can be customized for each group depending upon the requirement, premium paying capacity and coverage required of its members. Such group products are presently permitted only for employer-employee groups where the employer is a master policy holder. 

There are a large number of groups which are non-employer- employee, are homogeneous in nature and have a commonality of interest. These groups include represent a particular profession/trade such as domestic workers, auto drivers and taxi drivers association, Anganwadi workers, Aasha workers, teachers of schools, Self help groups (SHGs) and cooperative societies. Such groups are in fact more deserving for a group based insurance product and are presently not able to have a product for them. It was felt necessary that group insurance products should also be available for these non-employer Non-employer-employee groups.

The inclusion of these groups under the group insurance products will help hitherto uncovered members of these groups to have an insurance as well as saving cover, will help mobilize their savings and will help increase insurance penetration immensely. These members could not afford an individual insurance product due to the higher premium and will now be able to avail a better customized product at a much lower premium.

 “There are about 10,00,000 motor third party claims that are pending before Tribunals/Courts. Public sector general insurance companies will organise adalats to settle the claims and give relief to the affected persons/families”

Motor insurance is the largest portfolio of General Insurance Industry both in premium accounting for about half of the total premium as also the claims outgo for the industry. The Motor Vehicle Insurance Policy is a contract between the Insurer and the vehicle owner (Insured) by which the insurer undertakes to pay the liability awarded against the owner of the Motor vehicle by the Tribunal or the Court in respect of any injury/ fatal accident or property damage claim filed by a Third Party or their Legal heirs. On receipt of a claim filed by a Third Party/ legal heir/s who has been injured in a road accident, the Motor Accident Claims Tribunals (“MACT”) and Courts, based on various factors like cause of accident, Insurer’s liability as per Policy Conditions, contributory negligence, if any, on the part of claimant, age and income of the claimant or deceased, dependents etc. pass an award of compensation.

However, due to various reasons, there are delays in claim settlements. The number of outstanding motor third party claims as on date is approximately 10 lakhs, involving an amount of Rs.22,000 crore. What’s worrying is that almost one-third of these claims are pending for more than 5 year and another 21% and 27% are pending for a period ranging from 3-5 years and 1-3 years and only about 20% are less than an year old. The long pendency has been causing misery and hardship to the affected persons and their families. Recourse to “lok-adalats” to expedite settlement of pending claims in a campaign mode throughout the country will enable quick disposal of all pending cases. All the four public sector general insurance companies as well as private companies will, under the guidance of National Legal Service Authority (NALSA) will participate in these “Lok-adalats” at various levels. .  It will provide a major relief to all the affected families and reduce pressure on the legal system.

“There is a need to have a comprehensive social security insurance for the informal sector which would include life and disability cover, health cover, maternity benefits, incentive for girl child education and pension benefits. The existing schemes such as AABY, JBY, RSBY, IGMSY and pension schemes are implemented by different agencies.

It is estimated that by 2020, India will have over 900 million people in the working age group of 15060 years and over 130 million dependents in the age group of 60 years and above.  Further, on the demography scale, India will begin to grey between 2020-35 and coupled with rising life expectancy which will be around 80 years, it is imperative that a sound pension system is in place and that the basic levels of health and life insurance cover is available during the working age.

The existing schemes aimed at providing social security such as life and disability cover (Aam Aadmi Bima Yojana and Janashree Bima Yojana administered by LIC), health cover (Rashtriya Swastha Bima Yojana by Ministry of Labour and Employment), maternity benefits (Indira Gandhi Matritva Suraksha Yoajana by Ministry of Women and Child Development and Janani Suraksha Yojana by Ministry of Health & Family Welfare) and pension schemes (a co-contributory ‘Swavlamban’ scheme administered by PFRDA) are administered by different departments and implemented by their respective agencies. As a result, there is little inter-linkage/integration of these schemes and as such intended beneficiaries or those getting presently covered are not able to get the overall comprehensive coverage. There is thus a strong need for providing a comprehensive social security insurance cover to all in the informal sector.

In order to provide certain basic level of a comprehensive minimum social security, which would include old-age income security, life & disability and health insurance, maternity benefits and incentive for girl students at the higher secondary level  of the families covered,  all such existing schemes will be dovetailed and converged into a single comprehensive scheme. The components of the scheme, coverage of beneficiaries, premium required and its sharing pattern and the overall funding requirements will be decided through a process of consultations with the state governments and various stakeholders. 

To sum up, The critical importance of insurance in an economy is well recognized and the series of measures as announced by Finance Minister in the budget speech will provide the necessary impetus in the insurance sector and will help arrest the deceleration in insurance sector at the earliest.

 

 

Learning Deutsch at my age !!

My desire to learn German language (Deutsch) dates back ever since I have been visiting Altlandsburg  (Germany) since 2002. Over the years, I have got a good set of Deutsch friends and the fact that the meaning of a sentence, especially jokes, gets lost while translating from Deutsch to English, kept reinforcing my resolve to learn the language. I had been postponing it partly ostensibly due to my work pressures but actually because of my sheer laziness. I finally decided to take the plunge in July 2012 and got myself enrolled in a six months, once a week (every Sunday from 8am till 12.30 pm) course at Goethe Institute Delhi.

I wasn’t exactly surprised when I went for the first class on 22^nd July, 2012 that I am a clear outlier as I realised that out of a class size of about 23 students, I was clearly the oldest and by a very clear margin of alteast 13 years from the next senior most student. Most of those enrolled were fresh pass-outs from class XII or at various levels in colleges. The average age of the class was around 22 and was 20 if I was excluded from the calculations!

I was a bit surprised when one of the girls did address me as “uncle” during the tea break in the second session! Well, even if I do look like an Uncle, she should have the decency not to label me as one! The introduction sessions went on for couple of weeks and I could boss around the class with my apparently heavily impressive qualifications and job profile.  Well, some advantages of being an uncle! I became “sir” since then thankfully. After we had picked up basics of Deutsch, it was finally " Herr Kumar" ( Mr Kumar). It's Herr (Mr) and Frau (Ms) which is put before the last name if somebody has to be addressed formally and with respect

It was an interesting and motley crowd of students from various walks of life. Almost all of them are exceptionally bright and I was very impressed with the kind of focus most of them have regarding their career and what sort of value addition can learning Deutsch bring to them. There were students from engineering, English and psychology honours courses. Almost one third of the class were working and it was heartening to see their self-motivation for coming to a class on Sundays despite having a heavy five days or even six days schedule. There were very interesting inter-personal dynamics in the class. There were budding romances and the related open gossip ! A situation came when the couple, out of sheer decency or frustration started to sit separately in the class. Then, there was a peculiar case of a budding hatred relation...the guy, a rustic haryanvi simpleton, who would otherwise just refuse to pick up even the very basic of the language and would just go on saying "fertig" (finished) for everything and the girl, a very nice, suave, self made, fun loving ostensibly but otherwise a very mature girl and she would just hate this guy and make it more then obvious. Last heard,the guy couldn't clear the exam ( I really feel bad for him)and the girl, with her grit is in A2! All the kids in the class were just amazing. There's this friend who did her graduation from Meerut (!) but otherwise a wonderful soul and a very dedicated person and someone with great sense of humour. Another friend from Faridabad is a sheer simpleton and a very nice soul. I was in fact very pleasantly surprised interacting closely with the generation next and realising they are far better than my generation. The guys in the class were very focussed and clear headed. An ostensible careless guy, a budding engineer had the most wonderful style of spoken German. He might actually have been speaking hindi which could easily pass off as Deutsch. Another guy, a very nice boy again had a simple name, nobody could correctly pronounce ( what's so difficult with " Vamsi" guys) and it was laughter all the way whenever he was called out loudly.

Almost none had any exposure to the language. The language learning in Goethe Institut, unlike how we first picked up our languages, didn’t start by learning the alphabets or numbers. It started with learning few sentences what we need to speak as a starter – wishing a person, telling our names and where we come from and other such communication required for self introduction.  The alphabets and numbers came in later. Our teacher is a very sincere and dedicated lady and she tried her best that we pick up language in the best possible manner. She used to make all of us speak in Deutsch in the class and it was very hilarious at times. Not only the incorrect pronunciations but some of the words and the way we used to construct sentences by transliterating from English that had us in splits in most of the classes and it ensured that nobody slept in classes. The word “English” has to be pronounced as “Aanglish”,  “young” in Deutsch is “jung” and “thick” in Deutsch is “dick”!  Imagine the sheer laughter when somebody would try and make a sentence in Deutsch for “he is thick and she is thin”! My immediate neighbour in the class (he unfortunately left in the middle of the course as he was going overseas on a posting) would burst into laughter loudly every time some such thing happened and that ensured each of us who were otherwise trying to look serious out of sheer decency and decorum too would smile.

Deutsch, to me, comes across as a very systematic and scientific language and in many ways, very similar to Sanskrit.  The verb in a sentence will always be at the second position.  There are three genders – masculine, feminine and neutral and the sentence formation depends upon whether the sentence has an object in addition to the subject and the verb.  Numbers are very easy to remember and pronounce.  Four is “feur” and forty is “feurzig” and forty-four is feurundfeurzig (four and forty). I used to watch some easy to learn basic Deutsch lessons on youtube and found couple of blogs very useful. Likewise, Vor (pronounced as ‘for’) is for before and “nach” is for after. Thus vormittag is before noon and nachmittag is afternoon.

Even though we had classes only on Sundays, we used to have twice a week web-chat, since it was a blended course. The web-chat timings were 9 & 10 pm on Tuesdays and Saturdays and would last for 45 mns and an hour and a half respectively.  This was also a fun place and there were some very clear trends in these web-chats. About one-fifth would not join the chat. About half of those who would join won’t participate and would perhaps be eating/singing/watching movie etc during that time. It was only about one-third who would actively participate. And some of these sentence formations at times were insanely crazy!

Then came the exam time. The exam consisted of (i) hearing (hören), (ii) reading (lesen)(iii) writing (schreriben) and (iv) an interactive oral session, each having one-fourth weightage of the total. The instructor conducted couple of mock test and I was surprised the way about one- third of the class dropped out even before the course could be completed. I am not sure whether it was the examination fever (“prufung fieber” ) or shortage of attendance but I felt a bit bad for those kids.  I wasn’t sure myself regarding my performance as I hadn’t done well in the mock tests. A stage came when the instructor started telling students to just learn things up if somebody is not able to understand! After all, she also had to ensure that a respectable number clear the exam! 

The exam is conducted both for internal students (like us who attend classes) and external students ( those who study on their own and take up the exam). On exam day, I was surprised to see a large number of girls (most probably from Punjab) along with their parents who were at the centre as external students. This also shows that Germany is the next big thing for Punjab!

I could, thankfully, clear the exam and would have liked to continue for A2 which commenced in January 2013. Most of my classmates were requesting, reminding, cajoling and selling me the idea of continuing with A2. I would have loved to but I realise that spending half of Sunday esp when I might be going to office on Saturdays was becoming a bit of constraint on my recharge. I have full intentions of learning the course content however and may appear for A2 as an external student!

Increasing Insurance coverage - catch them young!

Why should one insure? Well, as the name suggests, its an insurance against a particular peril covered under the insurance policy and provides, to the insured or his family a benefit coverage in case of any eventuality. We all do insurance in some form or the other. While the informal
insurance is our savings, social networks and kinship where we lean on others for assistance, the formal insurance means taking an insurance policy. The various segments where insurance cover is provided include life, health, personal accidents, fire and motor among others.
In the life sector, the extent of insurance cover is measured by sum insured which in turn depends on the nature and extent of cover and the sum assured determines the premium chargeable. Higher the sum assured, higher would be the premium. There are 3 broad and totally inter-related measures:
1.Insurance penetration – this means insurance premium as a percent of GDP. It is 4.1% in India last year and come has a long way from being around 2% in the year 2000 when the insurance sector got opened up in India. The world average in this regard is 3.1%. Given the saving habits of Indians and the younger age group bulge, it is however felt that India can reach a penetration level of 5.5-6% in next 5 years.
2. Sum assured as multiples of premium – this shows the intensity of insurance and shows, how much a person is willing to get a sum assured which is primarily determined by his capacity to pay the premium. The higher the sum assured, the higher will be the premium.
3. Level of protection in the country is also determined by the sum assured as a percent of GDP. Higher the sum insured, higher is the level of protections in the country. This is discussed in detail below.
The sum assured as a percent of premium collected shows, in a way, how people treat insurance products. On the one side of the spectrum is base policies providing life coverage at its minimum. The premium is low and the sum assured is low. An example is that of social security policies such as Aam Aadmi Bima Yojana and Janashree Bima Yojana. The premium is only Rs 200 pa and the maximum coverage is Rs 75000 in case of accidental death. On the other hand, we have life coverage which are in the multiples of millions and the premium also increases.

Lets look at sum assured as number of times of premium collected over the years..

LIC is obviously lower because it has social security policies. The sum assured as percent of premium collected is increasing, albeit slowly and it’s a sign of a maturing life market.
However, the sum assured as a percent of GDP in India is only 55% ( sum assured can cover only 55% of the GDP) whereas the world’s average is about 150% and some of the mature countries have more than 200%.In that sense, we have a long way to go to improve per policy sum assured. While penetration (insurance premium as percent of GDP) at 4.1% looks healthy, it can be increased. The saving habits in India, despite being decelerated a bit in recent past is still at a healthy 32% of GDP. What is worrisome however, is the fact that most of it is being invested in gold and real estate and the extent of household savings in insurance is only 17%. This needs to be improved and a conscious effort needs to be made to channelize people's savings into Insurace.
One way to improve sum assured (and insurance penetration) is to concentrate on younger generation. They will have a longer contributory span (a life policy of 25 years old versus 45 years old). Let’s look at what’s happening in LIC.
The average age of LIC’s policyholders is: This average age of 37 years is not very high considering that life insurance is a long term contract and the average in respect of in-force policies for a grown up and matured company like LIC, is bound to increase.However, the average age of LIC’s policyholders (risk weighted Sum Assured) in respect of New Business for the last five years is also worked out as and shown in the right side table. It is clear from the data that the average age of new business policyholder is not high and showing stagnation from last 3 years. Increase in New business average risk weighted age during last 5 years from 30 to 32 may be attributed to the higher saving capacity among older people. Following data which shows the NB policies sold for the last 3 years (not risk weighted) gives us some more insights: The table conveys that selling of new policies to the people below aged 35 years is constantly increasing from 47.28% of the total policies sold by LIC in 2009-10 to 53.66% in FY 2011-12. At present LIC is selling more than half of the policies to the people aged 35 years and below, which is a good indicator of the efforts taken by the corporation to be relevant for the young generation in changing business environment.

India has a demographic advantage with >50% of people in less than 30 age group. With increasing awareness about the insurance, the need to have an insurance cover is increasing. The average age of starting a job in India is between 23-25 years and it is here that we need to concentrate and have them insurance cover at the earliest. Its a win win situation as they get an insurance cover with a lower premium (because of their age, health profile being better) and the levels of protection improves in the country.

My experiments with horse riding & making sense of horses!

I learnt horse-riding, for the first time, as a part of mandatory training during the foundation course of IAS in Mussoorie Academy from 1991-93. It used to be extremely hilarious when we all struggled during those days and how some of the officers invented all sorts of excuses to avoid attending those training classes. When one of the officers, out of sheer fearful frustration asked the trainer in the Academy as to why should one be learning horse-riding, the reply was that one can control (administer) the District very effectively if one knows how to control a horse! And prompt came the retort that in that case, the riding instructor should be running the country!! There’s a saying, “A horse is the projection of peoples’ dreams about themselves-strong, powerful, beautiful-and it has the capability of giving us escape from our mundane existence”. The riding in the Academy was very user-friendly as most of the horses were well trained and all one needed to do was to balance oneself on the horse properly and the horse used to take care of the rest as they were trained to follow the horse in front and voice commands from the trainer. In that sense, the horse-rider had little control. It was enjoyable experience and gave all of us a sense of confidence. Even till day, not a single get-together of our batch mates passes off without discussing some interesting incidents of those horse-riding days.
Thanks to a friend, I took up horse riding after a gap of almost 20 years. We were having lunch one day when he informed that he has been horse-riding now for about six months and why shouldn’t I join him. It was an interesting offer. Of course, I have put on weight, rather sumptuously since the last time I rode and my instant thought was whether the horse can carry my weight! Well, i was not willing to take into consideration the age factor and whether my nerves can still be agile enough to take up horse riding. However, the comforting factor was sitting right in front of me, my dear friend with all his weight (his girth certainly is bigger than mine) and his age (well, he might not be colouring his hair)! And I went to Army Polo and Riding Club, Naraina along with him.
The riding here is very different from what I had supposedly learnt in my Academy days. The horses are bigger & independent and don’t go by the common voice command of the trainer. One has to take charge. I started slowly and was doing walking and a bit of trotting in first few days. Basic gaits of the horse include (1) Walk – a slow, flat footed gait with four beats, about 3-4 miles per hour. Walking is good to warm up the horse’s muscle before hard work; (2) the trot – the trot is a two beat gait in which the diagonal (opposite corners) front and hind legs move and hit the ground together as a pair. It has suspension meaning that there’s part of the time when the horse is off the ground. This is what gives the trot its bounce. The trot is about 6 miles per hour. Trotting is a good exercise for both horse and rider. The rider can ride posting, sitting or balancing in a two-point position. A good rider can do all three. The trot is the least tiring for the horse and they can cover long distances while trotting;(3) The canter – the canter is a three beat gait with suspension. The canter is a medium gait, about 8-10 miles per hour. The rider usually sits up tall in the saddle when cantering and should keep his seat deep and relaxed to follow the rolling movements of the horse’s back; (4) the Gallop – the gallop is a horse’s natural speed gait. It’s very much like a canter speeded up. The gallop has four beats instead of three and the suspension is longer. The horse pushes off harder, reaches farther with his legs and stays up in the air longer between strides than he does in the canter. I gradually moved to canter in my third week and have been doing cantering regularly since then mixing it with trot.
Horse riding, especially the way, we manage horses tells so much about the personality of the rider. One can easily make out when one is frightened by the manner one sits on the horse or rides. Its interesting how the same horse behaves differently with different riders depending upon the comfort level of the rider. Horses, I feel, are extremely intelligent and can make out in an instant about the experience, knowledge and comfort level of the rider within first few minutes and behaves accordingly. There are two categories in horses – ones which are like children and are naughty. When they find that the rider is new or not comfortable, they literally take him for a ride and try and unnerve him in every possible manner. They will skip, buck, canter on their own or will refuse to move. Basically they decide what they want to do. The second category is those horses which are matured and act like one. Once they observe the uncomforting newness of the rider, they treat him with care and try and give him confidence. They just give the impression of being an indulgent parent. I would like to mention a particular horse in this category of APRC – Alibaba. He is the first preference of any new comer and is a must for anybody entry in the world of riding in APRC. Likewise, there are few horses who are very disciplined and will take care of their riders especially if one is new. One such horse is “Romeo” and it’s almost hilarious how most of the kids keep requesting for Romeo every morning!
The riding hours are from 6-6.40 am in the first batch and 6.50-7.30 am in the second batch. It means getting up at 5 am and setting out by 5.30am. I have an advantage as my house falls in the way of my friend’s route who graciously picks me up in the mornings. The fact that i have to get up early , this implied that i started sleeping in time and which meant cutting down on social gatherings and social drinking. It has in a way brought so much of discipline in life and a time has come when friends have stopped inviting me for late evening gatherings knowing well where my priorities would be! I started as being a guest of my friend as i wasn’t sure initially whether I would continue with this adventure beyond first few sessions. But once i started cantering, I realised the feeling of freedom.

The feeling, when the horse is rhythmically cantering with his full glory, is that of being in control of almost the entire world (now I realise why riding is compulsory in IAS Academy). As they say “horses lend us the wings we lack”. I am reminded of an Arabian proverb, “The air of heaven is that which blows between a horse’s ears”. There’s nothing in the world which i feel can describe this feeling of sheer sense of completeness, with droplets of sweat making their way from the sides of one’s helmet, that wheezing sound of the wind as one is riding through the sky. It almost makes riding synonymous with freedom. As they say, a canter is the cure of every evil. One forgets all worries, tensions and all the routine pre-occupations and its one of the best forms of meditation in that sense. The saying “A horse in the wind, a perfect symphony” that way perfectly describes the exact feeling of a rider in control. I am now almost hooked to riding and have got a membership of APRC. Beryl Markham very rightly had said that “A lovely horse is always an experience... It is an emotional experience of the kind that is spoiled by words”.It’s not as if everybody has a safe riding. There are occasions when there have been falls and one of them was a bit fatal one. Horse sense is the basis of horsemanship. This is the ability of a person to understand horse and even to think like a horse. The better one understands horses, the more one can enjoy them and a better rider he will be. Horses are large and powerful animals but they are also timid and easily frightened. Isn’t this quality like a child? As Josephine Dermot Robinson said once “Horses and children have a lot of the good sense there is in the world”. Most horses are gentle and obedient if they are handled properly. Horses are among the most forgiving animals. There are certain rules such as that we should praise them often and punish them very seldom. Gentle treatment will gain horse’s respect. Harsh and cruel treatment makes him fear us. We should also never stand directly being or in front of a horse. A frightened horse may kick or run over us and i have seen somebody actually getting kicked once. Another interesting fact i was told was that horse should never be hand fed. Fingers may be mistaken for treats and be eaten. I smile every time I think of this warning.
I have since been observing and discussing “Horse sense” with other fellow riders. The following describe what’s meant by horse sense:
Fearful – horses are big and powerful but fearful creatures. If they are frightened, they will run away from whatever scares them. They are normally scared by loud noises, and things that move suddenly move towards them. If one acts frightened, his horse becomes more frightened as he feels that something must be wrong if his rider is frightened.
Habit and training- horses don’t know they are powerful, bigger and stronger. Otherwise, they would realise that they needn’t obey us! We should always handle horses using the same rewards and punishment they are used to.
Reward and Punishment – horses learn how to obey commands and to do or not to do certain things by connecting them with pleasant (reward) or unpleasant (punishment) feelings. A horse can pay attention to a reward or punishment for a maximum of about 3 seconds. It means that the pleasant or unpleasant feelings must come immediately after the horse has done something deserving it. Rewards are not always feed, carrots or apples. They can also be kind words & petting. Punishment, likewise, can also be a harsh, sharp voice or not allowing him to do what he wishes to do otherwise. Reward & punishment should fit the situation and must be fair. If he doesn’t know why he is being punished, he will look for ways to get away from a rider who hurts. I am reminded of a saying “ If your horse says no, you either asked the wrong question or asked the question wrong”.Horsemanship includes how to adjust one’s stirrups, mounting a horse and dismounting, sitting positions, holding reins, aids (natural – hands, voice, legs and weight and artificial – crops, spurs and whips) and how to use them. I have tried the ‘voice’ aids with my horse and it really works. They seem to listen to you and respond. My friend who is a Keraliate speaks to his horses in ‘malyali english’ and it’s at time a really hilarious sight. But it seems to work and all horses seem to getting used to that type of communication!
I have just begun this journey and realise that i have a long way to go. It brings in discipline, all the ingredients of management training and ultimately, makes one a better human being. I am loving it and intending to make it a long term affair! I have made some wonderful friends, both human beings and horses and am learning horse sense finally! As someone once said “ ask me to show you poetry in motion and i will show you a horse”.

So, are you Feeling down? Saddle up buddy!

Bancassurance - concept and issues

“Bancassurance” is not a term defined in Insurance laws in India. It broadly refers to sale of Insurance products by Banks (Bank + Insurance= Bancassurance). This was initially introduced in nineties in Europe and later spread to other countries. As Insurance business deals with monies received from policyholders against future promise of claims maturity or settlement, it is highly regulated and Bancassurance is no exception.

There are 3 models of Bancassurance in Europe:
(i) Straight contractual relation between a Bank & an Insurance co.for the distribution of their products.
(ii) Banks & Insurance cos form a specified Joint Venture (JV) which markets insurance products;
(iii) An Insurance co. is promoted by a Bank which has an exclusive distribution right to distribute its products.

Banks were prohibited to have any relation with Insurance cos. In USA & Canada. Laws were changed in USA in 1999 and Banks are slowly getting into Insurance space though not significantly.

The Indian life insurance market has been witnessing a slowdown post certain regulatory changes by IRDA since September 2010. However,the fundamentals for growth remain strong. Over the next decade, India will be one of the fastest growing life insurance markets in the world, with a compound annual growth rate of around 15 to 18 per cent and will account for around 10 per cent of global growth in gross written premiums. It is expected to grow from the fifth to the third largest life insurance market in Asia by 2020.

Bancassurance, is defined earlier is the insurance distribution model where insurance products are sold through bank branch network. The presence of several banking groups as promoters of insurance companies is of great significance to this model. With a network of over 80,000 branches spread across the length and breadth of the country, banks have the necessary potential to make bancassurance the most efficient way to achieve financial inclusion in insurance sector also. The bank customers with higher average premium per capita provide quicker means to grow for insurers. The complementary nature of insurance products towards the bank advances (e.g. credit life)provide synergies in operations to the entire financial sector. The ease of access to bank customers reduces servicing costs, contributes to lower lapsation of insurance policies and hence lower costs to the economy.

IRDA vide its notification dated 16.10.2002 on licensing of Corporate Agent authorized the following entities to become corporate agent which includes:
a) a Banking Company as defined in Clause (4A) of Section 2 of the Companies Act, 1956.
b) a corresponding new bank as defined under clause(d)(a) of sub-section(1) of section 5 of the Banking Companies Act, 1949 (10 of 1949)
c) a regional rural bank established under section 3 of the Regional Rural Banks Act, 1976 (21 of 1976)
d) a co-operative society including a co-operative bank,registered under the Co-operative Societies Act, 1912 or under any law for the registration of co-operative societies.

So far, the Regulator (IRDA) has granted 3261 corporate agency license out of which 266 have been granted to Banks to act as Corporate agents. While Banks have nearly 100,000 branches in the country, only about 15-20% of these branches have been utilized for distribution of Insurance Products.

The distribution channels in various countries is as under:-
As against an overall 8% in India, Bancassurance accounts for 26% in Japan, 27% in Singapore & 68% in here. Bancassurance accounts for 13% of gross premium in life and 2% in non-life as on 31.03.12 in India (IRDA).

While the overall market has stagnated over the last two years (and declined in several product in several pockets), bancassurance has continued to grow (from 19 per cent of new business premium [NBP] in FY 2008 to around 40 per cent in 2012 for private sector players). The share of bancassurance in India for private sector players is now almost as large as some of the other Asian and Western countries (many of which have share of bancassurance close to 50 per cent) and also almost as large as agency channel for private sector players in India (around 45 per cent share of new business premium in FY 12 for private sector players). The role of banks as primary investment counselors is rising. McKinsey proprietary personal financial survey indicates that now 16 per cent of customers choose a bank investment counselor as their primary advisor compared to only 7 per cent in 2007. The importance of Bancassurance thus becomes crucial.

Moreover,unlike other Asian markets, bancassurance economics in India is better compared to the overall industry (operating cost and commission is 15-25 per cent lower for bancassurance channel than overall industry). Further, bancassurance is significant contributor to third party fee income for banks (greater than 75 per cent of third party fee income for banks is through life insurance sales). The bancassurance channel therefore has the potential to be a win-win proposition for both banks and insurers. However, there are several gaps in the bancassurance business model in India driven by leakages in end to end value chain that constrain value capture.

Internationally, it has been observed that insurers with stronger Bancassurance have a faster growth trajectory:In view of the fact that the percentage of insurance business through Bancassurance hasn’t picked up in a manner expected and the fact that only about 15-20% of the Bank branches are being used for Bancassurance purpose, IRDA has come out, recently, with draft guidelines on Bancassurance and the key features are as follows:
i. Zonal Division: The States/UTs and major cities in the country have been divided into three zones based on which the guidelines for tie-ups between banks and insurers have been specified.
a.Zone A (13 States) - Kerala, Gujarat, Andhra Pradesh excluding Hyderabad, Tamil Nadu excluding Chennai, West Bengal excluding Kolkata, Karnataka excluding Bangalore, Maharashtra excluding Mumbai, Chandigarh, Hyderabad, Bangalore, Chennai, Delhi, Mumbai.
b. Zone B (9 States) – Rajasthan, Assam, Jharkhand, Haryana excluding Chandigarh, Orissa, Bihar, Punjab excluding Chandigarh, Madhya Padesh, Uttar Pradesh
c. Zone C(Rest of the country) – Lakshadweep, Dadra & Nagra-haveli, Daman & Diu, Andaman &Nicobar, Mizoram, Arunachal Pradesh, Sikkim, Nagaland, Meghalaya, Manipur, Pondicherry, Tripura, Goa, Jammu & Kashmir, Himachal Pradesh, Uttrakhand, Chattisgargh.

ii. Ceiling on number of tie-ups with banks:
No insurers other than the specialized insurer shall tie up with any bancassurance agent in more than nine states/ Union Territories in Zone A (out of 13) and six states/ Union Territories in Zone B (out of 9). There is no such ceiling in Zone C.

iii. Ceiling on number of tie-ups with Insurers:
No bancassurance agent shall tie up with more than one life, one non-life and standalone health insurance company in any of the states in addition to one each specialized Insurance companies.

These are draft guidelines and not yet formal. However, given the fact that the tie-up between an Insurance Company and a Bank, invariably has been on pan-India basis in almost all cases, the proposal of IRDA in restricting operations of such a tie-up on geographical basis (9 out of 13 in Zone A and 6 out of 9 in Zone B ) is causing apprehensions in their mind. The problems in slow take off in bancassurance, apart from being a teething one, are structural in nature and solution lies in sorting out those issues. Some of these issues are in (i) product offering where many partnerships lack basic /priority end to end practices in product development and marketing including availability of simple products, adequate bundles (>3) of core banking and insurance products and joint product development; (ii) Lead generation and sales conversion which has multiple hurdles. For most banks esp Public Sector Banks, the lead generation mechanism depends either on customer walk-ins or the frontline’s relation with the customer who often face capacity constraint. Private sector & foreign Banks generate leads effectively through their outbound sales force, analytics and alternate channels. The sales coversion process also suffers from several pitfalls as only 50-60% of the leads generated are actually converted. (iii) then there are several leakages in the Bancassurance channel post the log-in as much as 30% between log-in and policy issuance, the main cause being frontline’s inability to collect all relevant documents. (iv) there also are leakages, post sales service and persistency management.

To conclude,creating a focused program with close involvement of both Banks and Insurers can help make the model a win-win for both and capture full value from the partnership.



ps.I have taken inputs from the later report of Mckinsey & co, Financial Institutions Group on "Capturing the full value of bancassurance through end to end integration"

These are my personal views and no part of this blog can be quoted without my specific approval

Are we turning into a voyeuristic society?

Seeing the kind of news coverage, both in print and electronic media, I often wonder whether we are turning out to be a society of inconsiderate voyeurs?

Are we driven too much by “page 3” kind of news? Is the trend of ‘peeping into the lives of so-called glamorous newsmakers and celebrities becoming more of a habit? Are serious social issues (current affairs, policy issues and other such issues which affect all of us) been a thing of the past? Has cheap sensationalization of irrelevant and useless newsfeeds have become the order of the day?


Notice some of the news items appeared recently...

1. I was reading today’s Times of India (Sunday Times, New Delhi – late city edition, dated May 20th) was distressed to see the news coverage on Luke vs Zohal controversy occupying the top half of first page, entire 2nd page and most of the 3rd page. While those of you not aware of this “news of such national importance”, its about how an non-playing, never heard of IPL player of Australian origin Luke tried to molest Zohal, an allegedly American model and her manhandled her “fiancée” at 5 am in the morning at the top star hotel in the capital. A Delhi court on Saturday had granted bail to Royal Challengers Bangalore (RCB) player Luke Pomersbach who was arrested earlier for allegedly molesting her.

Not only this, you open any channel these days and you would notice Zohail all over. Wonder would it be the same coverage if any poor middle ages woman been molested somewhere and her fiancée /husband beaten up which incidentally keeps happening in almost various parts of the country with amazing regularity.

2. We are all aware of the Aarushi murder case and how it continues to grab the headlines in both print and electronic media even after four year. It's intriguing, if only in a forgettable voyeuristic way. A double-murder with both a teenage girl and the family's domestic help winding up dead. And the needle of suspicion being on the parents of the girl, .with an angle of likely sex-sleaze, parents discovering about it and involved in her killing not being able to accept such ‘socially unacceptable behaviour and so on. So why has the 'nation' been held captive by the Aarushi (and, yes Hemraj) case, four years on? What's so different about this murder that it involves candlelight vigils and 24/ 7 invasive news coverage? I wonder whether would we still know Aarushi's name if she lived in some remote non-descript village or came from a poor family? Are we going to be held hostage to society's (and our TV channels') relentless interest in the fate of this family? Is it not being voyeuristic?

3. It’s more like a chase of one’s own tail. A self-righteous, delusional Anna, ably exploiting the willing media sets out to stigmatise politics and in a way, ills of Indian democracy and the media, both electronic and print, salivating the situation and becoming a cheerleader of the slanging match. I have covered this issues in my blog elsewhere.

4. The Bhanwari Devi case reads like a B-grade sexploitation flick. A beautiful woman with a bevy of powerful lovers, sexual blackmail and political intrigue, culminating in a gruesome murder. Lost in the gory details, however, is Bhanwari herself. She is hardly the ideal victim, a  midwife with vaulting ambitions, willing to trade her body for money and status. More femme fatale than bharatiya naari, her death perhaps evokes more voyeurism and the manner in which a 'helpless woman belonging to a 'particular community' (& thereby being branded easliy by media) is being exploited by the system and somewhere she became a willing victim. There will be no candlelight vigils or rallies at India Gate if in the end her killers go free. Much as we pretend otherwise, there are tens of thousands of Bhanwari Devis in India. Poor women who leverage the only asset they possess to get ahead, unwilling to accept the paltry cards life has dealt them. Sexual exploitation is a routine part of life for many Dalit women – Bhanwari may have just been trying to even the terms of exchange. As a Tehelka story notes: One aspect of the Bhanwari scandal points to the political subjugation of women. Visram Meena of the All India Scheduled Caste Federation says often some women are transferred to remote areas and made to arrive at a compromise (to prevent the transfer) through various representatives. Once the woman gets caught in this mess, she falls victim to the very people she’d trusted to help her out.

5. Abhishek Manu Singhvi, resigned recently as the spokesman of the Congress party, after a video purportedly showing him having sex with a woman was distributed on YouTube and other websites. The former spokesman and prominent lawyer, Singhvi, said the video was fake and strongly denied news reports that he had offered to help the woman become a judge.

6. We still haven’t forgotten Jessica Lal murder case . Infact, a movie “nobody killed Jessica” cashed rich on the story .

7. Further, the case of princess Diana and the media sympathy and the public sympathy that follows continues despite it being more than a decade old issue.

Why do we, as a society, obsessed with such news, which at best, can be classified as individual crimes and when, crimes in each of these categories keep happening in plenty all over the country and with amazing regularity.? Why does media highlight cases involving glamorous victims who are often rich and from bigger cities?

They call it the Missing White Woman Syndrome (MWWS) in the US. The young, upper-middle class story gets spun into a tragic (TRP-grabbing) tale that exposes the horrors of our society, while those further down the socio-economic ladder are relegated to 'crime-in-brief' columns, if at all.

The question is why is there so much coverage of such news items, which otherwise, have little relevance and doesn’t also address the basic issues involved in them? Is it because people like to read such news or is it because its all media driven and people get what comes their way? Either way, the fact remains that we are all voyeuristic, deriving our little pleasures by watching voyeuristically in the gory details of such cases.

I guess It wasn't always like this. As society's fixation on celebrities turned to obsession, media became more willing to abandon common decency in exchange for “a juicy news”. But can we blame the media alone? They are only providing what people want. Whats tragic is that in this process, the ethical and journalistic standards have come down and so is the overall credibility of newspapers as well as electronic media. I remember growing up reading Times of India with so much of respect (early eighties) and where it has brought itself now!

I am not getting into the right of free speech guaranteed under article 19(1)(a) of the Indian constitution and whether citizen’s right of freedom of free speech is or should be available to institutions like media or the ongoing case of SIRECL vs SEBI in Supreme Court. Likewise, I am not commenting on the controversial “Print and Electronic Media Standards and regulation Bill 2012” or the IT (intermediaries guidelines) Rules 2011. There also is a fact that “paid news”, corporate cronyism ,libellous insinuation, blatant violation of privacy and all kind of subjectivities masquerading as journalistic objectivity threatens to unseat the moral high media claims to be clinging on for a long time. Also, most of the bigger media houses are now owned by big corporate, dictating thereby the kind of news and the kink it will have, that get published.

What I am incensed is at the aberration and trivialization in media where titbits of the flippant and the sensational get preference over stories of impinging social and economic reality that are crying to be told and will make a difference in the lives of people if told. There is a growing mismatch and disjuncture between journalism as a socially powerful calling and what’s turning out to be trivialization of real issues to accommodate the voyeuristic taste. Things do need to change and we are all responsible to act mature if it has to happen.

While the yellow journalism often becomes an area for stories that have the potential of scoops, it is the tendency of national dailies and electronic media to turn into yellow journalism that, according to me, is causing a stinking decay in the media standards, both in English and vernacular press.

Is it an Indian phenomenon or a disease spread world over and its varying degree needs to be debated. However, the point remains that serious policy issues of social relevance are gettting neglected as a result of media's and general public's obsession with voyeurism and it has to stop.