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Car Insurance: Comparing The Insurance Packages

Guest — Tue, 20 Sep 2011 11:35:49 +0000

Getting your own car insurance is very easy nowadays, especially with the multitude of insurance providers. However, the ubiquity of the options you have may sometimes become a little overwhelming, as it may cause you to become unsure of which insurance to get. To make this task less troublesome for you, the following are some of the pointers that you should consider.

1. Car insurance policies – Car insurance policies vary from one provider to another; hence, it is essential that you initially make an insurance comparison of the available options. What do you need to look for in an auto insurance policy? Considerations include ease in acquiring the insurance, the fees and payment terms, benefits of the insurance package, and terms and conditions of the particular insurance.

2. Release date – It is a priority to select the insurance that can be released in just a few days’ time; if the insurance were convenient enough to acquire, then it would be able to give you what you need without waiting for a long time.

3. Amount - Insurance comparison based on the fees and payment terms can give you an idea of what you would need to pay for and how you would pay for it. Usually, car insurance can be paid for on an installment basis – making it easier on your budget. Based on your regular income, you can evaluate the payment terms that would fit your paying capacity.

4. Benefits - The benefits of the insurance simply shows you what you would be getting from the insurance package. One important benefit is the garage tie-in. If you ever get involved in a car accident, whatever fees you need to pay for will immediately be covered by the insurance – either directly (where they pay the garage) or indirectly (where you reimburse the fees) In this regard, determining which one would benefit you the most would depend on your preferences in accordance with the available policies. You also need to think about which things you actually need. Each auto owner has individual needs based on the type of car and usage.

5. Company credibility – this is very important. However low the premium and whatever the benefits offered, you must never buy auto insurance without making sure of the company’s credibility. How long has the company been in business? How big is the company? Research about the company and who is behind it. It would be better if you can check their permits as well. You should also search the net for customer reviews. You can also ask the people you know and trust about their own experiences regarding their car insurance policies.

If you have very little time in your hands, you can always search the net for information. There are several websites offering car insurance comparisons for free. Car insurance policy comparison would help you determine if a specific insurance package would be best for you. In doing so, you can possibly save more than you would normally spend, and at the same time, get the benefits you deserve.

All about algorithmic trading

Guest — Mon, 29 Aug 2011 16:27:37 +0000

The new buzz word among the securities market enthusiasts is ALGORITHMS. Traders across the globe have been affected by the use of algorithms. Positively, if they are doing and obviously, on the negative side if they are not into it. Algo, or system trading (as is known by many in the market place) has been in vogue since quite some time in developed financial markets while developing ones (yes, I use this classification for capital markets as well) are awakening to this concept gradually. Not many participants still know what it is and how does it impact. I will try and answer some of the basic questions through this post.

What is Algorithmic trading

Algorithmic Trading is electronic trading where we implement various strategies or algorithms with the help of various advance mathematical models for taking transaction in financial market in a much faster way with low risk.

Here we use computer programs for executing orders following a selected algorithm or strategy and the order gets executed depending on different aspects such as timing, price or quantity of the orders and some times with out any human intervention.

What is an algorithm

Algorithms are actually a set of steps to perform a particular job or to solve a particular problem. Even if in our daily life we use algorithms to do everything. Similarly, in programming languages we at first implement algorithms depending upon what kind of job we need to do and implement the strategy by which we can perform the job step by step in a chronological order and instruct the computer through programming languages.

Let’s take a real life example:

When we need to go to a known place we at first decide in our mind how to reach the place spending less time so for this our memory implements an algorithm asking for how to reach the place by using a particular way and the particular road which road. Then we start from our place and easily reach the place.

Similarly in programming language to do different kind of job we implement different algorithms and depending upon that, we code a program in through various programming languages platform and through that we instruct the computer to do the particular job.

What type of strategies can be used through algorithm?

In financial markets, some popular strategies followed by the algorithmic traders are

Trend following- This is an investment strategy that tries to take advantage of long term moves that seem to play out in various markets.

Delta neutral strategies- In financial markets, delta neutral describes a portfolio of related financial securities, in which the portfolio value remains unchanged due to small changes in the value of the underlying security. Such a portfolio typically contains options and their corresponding underlying securities such that positive and negative delta components offset, resulting in the portfolio’s value being relatively insensitive to changes in the value of the underlying security.

Arbitrage – In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets.

Scalping- It is a method of arbitrage of small price gaps created by the bid ask spread.

Mean reversion- This is a mathematical methodology used in stock investment and other processes also. Here we calculate the average price of a stock and when the market price became less than the average price then the stock became attractive for buy and sell it on average price or above of it.

Transaction cost reduction – Here to reduce the transaction cost of large orders using high frequency trading wherein we break the transaction into several smaller orders and send to the market over time. We can name this as “iceberging” as well.

What are the abilities required to become an algorithmic trader?

To be an algorithmic trader, one needs in depth knowledge of any programming language and also interest on mathematical methods. Along with this knowledge, some behavioral skills like innovative attitude, ability to learn fast also with that interest on research jobs , risk taking ability , ability to take challenges etc. are also required to became successful in this profession

What is the scope of algorithmic trading in India

India has a competitive market for equities, futures and options, commodities, foreign exchange and currencies. But it was just two year ago that direct market access (DMA) to exchanges was allowed. Although official figures don’t exist, the consensus opinion is that about 5% of volume in equities is traded algorithmically and between 15% and 25% in future and options. Indian market is the third largest market only beaten by the US and CHINA and the growth rate is still very high so we can assume that, algorithmic trading is going to be lot more popular in Indian financial market.

Author: Bratin Mukherjee, Analyst, Kredent Group

IPO Note – SRS LIMITED

Guest — Mon, 22 Aug 2011 05:32:35 +0000

I have generally observed that during a bear phase in the market, companies defer their fund raising plans. I was going through the IPO column of NSE and came across 3 companies. Two of them had already announced their plans however, one, SRS Limited’s IPO will open on August 23. I found this company a bit interesting and hence thought of doing some research on the same. Here is what I found.

Company and business

SRS Limited is a diversified company with a business portfolio which includes cinema exhibition, food & beverages, retail & manufacturing and retailing of jewellery. SRS Limited was incorporated in August 2000 with the objective of becoming a FMCG company. Initially it came as SRS Commercial Company Limited and was later renamed to SRS Entertainment Limited in January 2005. The retail arm of the group is consolidated under two brands namely SRS Value Bazaar and SRS Fashion Wear. The Company has 23 retail stores in North India. SRS cinema operates in six cities with 11 properties having 30 screens and 7608 seats. SRS Food court runs under the SRS 7 dayz brands under the name “Punjabi Haandi” which runs 11 food courts across north and Central India.

Sectors’ summary

Film Exhibition has a huge scope of expansion. As per an industry survey, the screen density in India is less than 12 screens per million which is quite low compared to other developed countries.

Food & Beverage industry has grown significantly over the years. According to the industry source estimates, the industry will reach by $300-350 billion by 2015 from an estimated $150-200 billion in 2006-2007.

Retail Sector industry in India has grown at a CAGR of 10-12 per cent. Apart from this the industry was impacted by economic condition. In coming days it is expected to revive from the slowdown.

Gems & Jewellery market is one of the leading contributors to India’s export revenues. The Indian jewellery retail market was estimated to be about Rs. 973 billion in 2009-10. Gold jewellery accounts for around 80 per cent of the Indian jewellery market.

Objective of the issue

The company aims to raise Rs 203-227 crore through the issue of 3.5 crore equity shares of face value Rs 10 each with an issue price of Rs 58-65. Expansion across business segments being the primary aim. Various expansion plans are-

Setting up movie screens in 15 locations across India with 51 screens and approximately 13,840 seating capacity
Setting up of 29 new Retail stores in various locations across India
Setting up of 17 new jewellery retail outlets by the end of 2013
Setting up of 33 additional food & beverages outlets with an estimated area of 181,500 square feet by the end of 2013.

Risk factors

SRS Limited has had negative cash flow in the past three years. The Company’s cash flows from operating activities have been negative in the financial years ended 2009, 2010 and 2011 mainly because of increase in the Company’s operations which have resulted in substantial increase in working capital required by it. The promoters of the company are involved in certain proceedings which could affect the business. As per the financial statement as on 31 March 2011 of the company it has some contingent liabilities which may adversely affect the financial position of the company.

Key financials

Cash flow of the company for last three years:

Profit and Loss Summary of Last two years :

IPO GRADING

SRS Limited grading is done by ICRA and has been assigned ICRA IPO grade of ‘3’ to the proposed IPO reflecting average fundamentals.

OVERALL VIEW

It is advisable to subscribe to the IPO as there are huge expansion plans of the company. The company is clear about its objective and good scope of diversified sector gives a positive signal. Despite the negative cash flow, company earns a huge profit after tax which further puts a SUBSCRIBE to IPO.

Author: Satish Tayal, MBA (ISBM), is a intern at Kredent Group.

Ban on Gender Discrimination Will Cost Women Dear?

Guest — Fri, 19 Aug 2011 09:18:22 +0000

The European Court of Justice (ECJ) recently ruled that from the 21st December 2012 it will be illegal for insurance companies to discriminate on the grounds of gender when calculating premiums for consumers in European countries.

It is hoped that this will spell an end to the sky high car insurance premiums which are now being offered to young male drivers, with research by MoneySupermarket.com suggesting that 5% of drivers have already been forced off the road as a result of these price rises.

However, not everyone is happy about this ruling; with it expected that female car insurance premiums will rise by up to 50%. We therefore take a closer look at these regulations, which are expected to have a cross over impact on countries outside of Europe.

Mixed opinions
The ban on gender discrimination has been welcomed by prominent members of the European insurance community such as Martin Lewis from moneysavingexpert.com, who commented: “Why should one man pay more because others behaved badly?”

This once again raises the issue of discrimination, with Lewis adding that stereotyping people on the grounds of gender is actually no different from stereotyping on the grounds of race, as it doesn’t mean that everyone classed in a particular group will act in the same way. The head of car insurance at MoneySupermarket.com, Steve Sweeney, has supported this viewpoint “Ultimately, I think people should be treated fairly based on their own individual risk profile.”

However the ruling has not been welcomed by everyone, with the AA’s Simon Douglas claiming that the majority of young male drivers will not be paying enough to cover their costs following this ruling. This is due to the fact that young male drivers are statistically ten times more likely to be involved in an accident than motorists over the age of 35.

Insurance companies are ultimately forced to pick up the bill of any claims made by these young drivers, with the additional costs now set to be spread out amongst female motorists: “If insurers are not allowed to use such an important risk factor as gender, there is an increased risk that premiums won’t cover claims costs and they will need to increase prices in aggregate to compensate for the additional risk. This is bad news for motorists generally, although of course there will be winners and losers.”

A less considered viewpoint was offered by British politician Phillip Hollobone who merely stated: “we all know that women drivers are better than men”.

Cross Atlantic impact
As has been noted by Business academic Peter Dicken, we live in an increasingly globalised world. This means that financial and legal markets are becoming intertwined and that American legislators will therefore be likely to introduce similar rules in the interests of trade harmonisation. It should also not be forgotten that many insurers that operate within America also have operations in Europe, which increases the chances of trade harmonisation efforts being made.

American consumers should therefore take a close look at what happens in Europe over the coming years as a result of this ruling so that they can be better prepared in the event of it hitting America. Whether it will ultimately be a good or bad thing remains to be seen, with opinions on the morality of this case appearing to be split even amongst the most experienced car insurance experts. However, one thing which is certain is that female car insurance premiums are set to increase.

Author Bio- This is a guest post by Mark Martin. Mark is a motoring and insurance expert from the UK. He works for price comparison website MoneySupermarket.com and is therefore up to date with the latest developments within the market. Mark is a keen motoring racing enthusiast, and has followed Formula One for all of his life.