9 CHAPTER 2: BACKGROUND OF INSURANCE INDUSTRY Introduction This chapter begins with a brief description of the evolution of life insurance. The history and milestones of life insurance in India is described followed by the description of the emergence and growth of private insurance players in the Indian market. The competition that is prevailing in the insurance industry is explained and the need for insurance companies to become a learning organization is further discussed. The significance of the study to insurance companies is described and the chapter concludes with the profile of the insurance companies chosen for the study. Evolution of Insurance Some kind of life insurance was practiced in ancient Rome, where citizens used to form burial clubs that would meet the funeral expenses of its members. The code of ‘Manu’ that was in force during the Reign of Cholas in South India shows that there was the practice of marine insurance carried out by traders in India with those in Sri Lanka, Egypt and Greece. As the European civilization progressed, welfare practices also became more refined. With the discovery of new lands, sea routes and the consequent growth in trade, there was a need to protect the traders from loss on account of fire, shipwrecks and the like. As a result the need for insurance came into existence.
29
Embed
CHAPTER 2: BACKGROUND OF INSURANCE …shodhganga.inflibnet.ac.in/bitstream/10603/34304/10/10_chapter 2...CHAPTER 2: BACKGROUND OF INSURANCE INDUSTRY ... in the insurance industry is
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
9
CHAPTER 2: BACKGROUND OF INSURANCE INDUSTRY
Introduction
This chapter begins with a brief description of the evolution of life
insurance. The history and milestones of life insurance in India is described
followed by the description of the emergence and growth of private
insurance players in the Indian market. The competition that is prevailing
in the insurance industry is explained and the need for insurance companies
to become a learning organization is further discussed. The significance of
the study to insurance companies is described and the chapter concludes
with the profile of the insurance companies chosen for the study.
Evolution of Insurance
Some kind of life insurance was practiced in ancient Rome, where citizens
used to form burial clubs that would meet the funeral expenses of its
members. The code of ‘Manu’ that was in force during the Reign of Cholas
in South India shows that there was the practice of marine insurance
carried out by traders in India with those in Sri Lanka, Egypt and Greece.
As the European civilization progressed, welfare practices also became
more refined. With the discovery of new lands, sea routes and the
consequent growth in trade, there was a need to protect the traders from
loss on account of fire, shipwrecks and the like. As a result the need for
insurance came into existence.
10
Meaning of Insurance
Insurance is “a contract for reducing losses from accident incurred by an
individual party through a distribution of the risk of such losses among a
number of parties”. The definition goes on to say: “In return for a specified
consideration, the insurer undertakes to pay the insured or his beneficiary
some specified amount in the event that the insured suffers loss by pooling
both the financial contributions and the ‘insurable risks’ of a large number
of policyholders. The insured is typically able to absorb losses incurred
over any given period much more easily than would the uninsured
individual”.
History of Life Insurance in India
The insurance sector in India has come back to the square one from being
an open competitive market to nationalization and back to a liberalized
market once again. The business of life insurance started in India in the
year 1818, with the establishment of the Oriental Life Insurance Company
in Calcutta.
Milestones in the Life Insurance Business in India:
• 1912: The Indian Life Insurance Companies Act enacted as the first
statute to regulate the life insurance business.
• 1928: The Indian Insurance Companies Act enacted to enable the
government to collect statistical information both about life and non-life
insurance businesses.
11
• 1938: Earlier legislation consolidated and amended to by the Insurance
Act with the objective of protecting the interests of the insuring public.
• 1956: 245 Indian and Foreign Insurers and Provident Societies taken
over by the Central Government and nationalised. LIC formed by an
Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs.
5 crore from the Government of India.
• 1993: The Indian government constituted the “Malhotra Committee” to
suggest reforms in the Insurance Industry.
• 1994: “Malhotra Committee” submitted its report.
• 1999: the Insurance Regulatory Development Act (IRDA) was passed
in the Indian Parliament and the door was opened for private companies
with foreign equity.
Composition of Authority
The sec.4 of IRDA Act' 1999, (which was constituted by an act of
parliament) specify the composition of authority, who were appointed by
the Government of India. The authority is a ten-member team consisting of
1. A Chairman
2. Five whole-time members and
3. Four part-time members
Duties, Powers and Functions of Authorities in IRDA
Sec.14 of IRDA Act’, 1999 lays down the duties, powers and functions for
the authorities in IRDA. It is subject to the provisions of this act and any
12
other law for the time being in force. The authority shall have the duty to
regulate, promote and ensure orderly growth of the insurance business and
re-insurance business. The powers and functions of the authority shall
include:
1. Issue to the applicant a certificate of registration, renew, modify,
withdraw, suspend or cancel such registration;
2. Protect the interests of the policy holders in matters concerned with
assigning the policy, nomination by policy holders, insurable interest,
settlement of insurance claim, surrender value of policy and other terms
and conditions of contracts of insurance;
3. Specify the requisite qualifications, code of conduct and practical
training for insurance intermediaries and agents;
4. Specify the code of conduct for surveyors and loss assessors;
5. Promote the efficiency in the conduct of insurance business;
6. Promote and regulate professional organizations connected with the
insurance and re-insurance business;
7. Levy the fees and other charges for carrying out the purposes of this
act;
8. Control and regulation of the rates, advantages, terms and conditions
that may be offered by insurers in respect of general insurance business
not so controlled and regulated by the Tariff Advisory Committee under
sec.64U of the Insurance Act, 1938;
13
9. Specify the form and manner in which books of account shall be
maintained and statement of accounts shall be rendered by insurers and
other insurance intermediaries;
10. Regulate the investment of funds by insurance companies;
11. Regulate the maintenance of margin of solvency;
12. Adjudication of disputes between insurers and intermediaries;
13. Supervise the functioning of the Tariff Advisory Committee;
14. Specify the percentage of premium income of the insurer to finance
schemes for promoting and regulating professional organizations;
15. Specify the percentage of life insurance business and general insurance
business to be undertaken by the insurer in the rural or social sector;
and
16. Exercise such other powers as may be prescribed.
Growth of Life Insurance in India
Before the private players entered into the market, LIC was the only
dominant player in the public sector. LIC enjoyed over 98% of the market
share in the early stage of liberalization and private players suffered losses
in the first year of their operations. But LIC’s market share has drastically
reduced and now it is nearly 78% and 22% of the market share has been
gained by the private players. It could be seen that the Indian life insurance
industry is an underdeveloped one, as 80% of the Indian population is still
not under the insurance coverage. Therefore, there is ample scope for the
14
growth of the life insurance sector in India. Previously, customers were
insured with public insurance companies with no flexibility and
transparency in the products. They have visualized the life insurance as a
tax saving device only. As the private players entered, the change has taken
place in terms of offering flexibility and transparency. Customers are
looking for new and innovative products and are more interested to take
insurance from private players due to its attractive features and services.
Emergence of Private Insurance Players
The Government of India liberalized the insurance sector in March 2000,
which lifted the entry restrictions for private insurance players, allowing
foreign players to enter into the Indian market and start their operations in
India. Each foreign company needs to have a 26% equity capital to enter
into the Indian insurance market. Many foreign companies have joined
their hands with the Indian companies and started their operations in early
2001. Currently there are 26 life insurance companies that are operating in
the private sector. However, the private insurance companies have three
times more products than public insurance companies. Analysts found that
the private insurance players have established their own identities in the
Indian market within a short period of time. India has the world’s top
companies like AIG, New York Life, ING, Lombard, Aviva, MetLife, etc.;
competing in the same market. The private sector players have seen 200%
growth in the second year of liberalization. The current annual growth in
15
the average insurance premium in India has been 8.2% compared with the
global average of 3.4%.
Business Strategies
Innovative products, smart marketing, and aggressive distribution have
enabled the private insurance companies to sign up Indian customers faster
than expected. To retain their positions and to stand with the competition,
the private players are looking for various methods and are also following a
variety of strategies. The private players are mainly concentrating on
customer service. For this, they are looking at delivery channels like call-
centers, internet, telemarketing and direct marketing. By using these
approaches, companies are effectively marketing their products and
providing better service to their customers.
Distribution Channels
The distribution channel is one of the best ways to increase the growth of
the insurance industry. Channels like corporate agents, brokers and banc
assurance are playing a greater role in distribution. The general way of
selling insurance products is through agents and brokers. But the
companies are now looking at a new distribution channel “Work-site
marketing”, which is nothing but selling of financial products and other
services to employees through workplace participation and is entirely on a
voluntary basis. In this, the employee has to pay for the products through a
payroll deduction.
16
The private players are looking for alternative channels to market their
products as they are facing difficulty in training new agents with skill sets,
which is a time-consuming and costly activity. The private players are
mainly concentrating on banc assurance model; through this, they are
concentrating on providing the service to rural and semi-urban sector. In
the banc assurance model, the insurance companies have tie-ups with the
banks and sell their products to the bank customers. With the rise in
agricultural income, the potential for banc assurance has increased in
smaller cities. So the companies are moving to smaller cities and towns,
which have also increased the growth opportunity for insurance companies.
According to a Fitch report on the insurance sector, the banc assurance
channel has contributed about 20% of the total insurance business in the
financial year 2005, whereas all the alternative distribution channels
together have contributed 25-30% of sales in private insurance companies.
These distribution channels include corporate brokers, internet and
corporate agents.
Insurance Tomorrow
The insurance industry in India is undergoing a major change. As the
private players entered into the market, the competition has risen for the
public sector companies. The competition has also increased among the
private players and the main competition lies in the variety of products
provided to the customers, in the pricing of the products and in the service
17
that is provided by the insurance companies. Private insurers have further
improved their efforts to increase awareness among the customers about
the benefits and importance of insurance to attract more number of
customers. Several players are expected to enter India’s rapidly growing
insurance market in the next few years, especially, if the foreign direct
investment limit is raised to 49%.
Therefore, moving ahead of time will not only be compliance issue but also
will become an image issue. Stagnant companies will be forced to go out of
business, if they do not identify their core business activities and please the
customer with customized yet simplified insurance products and services.
Insurance is business, which necessarily involves huge funds and also
requires skilled workforce to manage funds effectively. There are liabilities
which have to be met on due dates and this requires that the employees are
thoroughly updated with the latest changes and are skilled at handling
critical issues such as asset-liability management, claims management, and
investment management. Apart from the expertise, the job also demands
that the personnel are honest, sincere and of unquestionable integrity
because the insurance business is one where the confidence of the clientele
and their faith in the organization must be of the highest level. This is
essentially of greater importance in a competitive regime as an
organization is bound to be at a disadvantageous position unless its
workforce is highly motivated and performing.
18
Above all, the workforce in the insurance companies is required to be in
line with the policyholder regarding the services required, in general and
claims management, in particular. All this demands a high degree of the
knowledge of systems and procedures; the ability to deal with the client in
a sympathetic and courteous manner; and above all, the confidence that the
organization is being run efficiently. No doubt, this calls for a proper
training and education, not just a one-time affair but also an ongoing
process, which gives the workforce the required knowledge to run the
organization efficiently.
Need for Insurance Companies to become a Learning Organization
As such it could be seen that the competition before insurance companies
are large. With rapid change in one’s environment, however the risk of
becoming obsolete – of no longer being relevant to one’s customer is
indeed real; clearly, rapid change leads to strong pressure to learn for both
individuals and organization (Peter Lorange, 1996)110. When it comes to
insurance industry, the markets are highly competitive and organizations
need to introduce new products or develop their current products
permanently. This means that innovation is a key part of their business
strategies and the only source of competitive advantage can be found in
continuous innovation of the insurance products. This can be achieved by
creating a learning environment where the employees are motivated to
learn about the changing needs and expectations of the customers,
19
competing products in the market and new trends in marketing, in order
that they may work more effectively in this complex and dynamic settings.
All of this means more change facing the insurance industry and thus there
is a need for the insurance companies to become more effective learning
organizations.
Significance of the Study to Insurance Companies
As noted above there is a need for insurance companies to become a
learning organization, but there is a clear deficiency of empirical research
that has been conducted to explore the variables that stimulate learning in
insurance companies and whether the learning influences the required
attitude change among the employees to achieve superior business results.
All these reasons have facilitated the need to study insurance companies as
a learning organization and to explore how organizational factors like
culture influences learning and ultimately organizational identification. The
results of this research study may help the insurance companies to
understand the importance of organizational learning and create a culture
that will enhance learning and identification, which may ultimately provide
more success to the organizations.
20
Profile of Insurance Companies taken for the Study
1. Bharti AXA Life Insurance
Bharti AXA is a joint venture between Bharti Enterprises, a trusted brand
name which is the largest in the telecom industry with a strong financial
base and AXA, world leader in financial protection and wealth
management and largest in the insurance industry (in terms of revenue).
Promoter
Sunil Bharti Mittal, Founder, Chairman and Managing Director of Bharti
Group can be labeled as the most ambitious telecom entrepreneur in India.
Bharti Cellular Limited (BCL) was formed by Mittal in the year 1995, to
offer cellular services under the brand name Airtel. Within a few years
Bharti became the first telecom company to cross the 2-million mobile
subscriber mark. Now Mittal heads a successful empire focused on
different areas of business with a market capitalization of approximately $2
billion, employing over 5,000 people and still growing.
Bharti AXA Life
Bharti AXA Life Insurance Company Limited started operations on 22nd
Aug, 2006. The company has sold 1, 65,703 numbers of policies as on 31st
Dec, 2008. The premium received by the company in the year 2008 was
Rs.183 crore and the growth rate was 263%. It was ranked 13th in 2008 as
against 15th
in 2007. The company is operating in 192 branches in India.
21
Professionalism, innovation, team spirit, pragmatism and integrity are
some of the values of Bharti AXA.
Strategies adopted in Bharti AXA Life:
• To achieve a top 5 market position in India through a multi-distribution,
multi-product platform.
• To adapt AXA’s best practice blueprints as a sound platform for
profitable growth.
• To leverage Bharti’s local knowledge, infrastructure and customer base.
• To deliver high levels of shareholder return.
• To build long term value with their business partners by enhancing the
proposition for their customers.
• To be the employer of choice to attract and retain the best talent in
India.
• To be recognized as being close and qualified by their customers.
2. HDFC
HDFC Standard Life, one of India’s leading private life insurance
companies, offers a range of individual and group insurance solutions. It is
a joint venture between Housing Development Finance Corporation
Limited (HDFC), India’s leading housing finance institution and Standard
Life plc, the leading provider of financial services in the United Kingdom,
with HDFC Ltd. holding equity of 72.43% and Standard Life (Mauritius
Holding) Ltd. holding 26.00%.
22
HDFC Standard Life’s product portfolio comprises solutions, which meet
various customer needs such as protection, pension, savings, investment
and health. Customers have the added advantage of customizing the plans,
by adding optional benefits called riders, at a nominal price. The company
currently has 32 retail and 4 group products in its portfolio, along with five
optional rider benefits catering to the savings, investment, protection and
retirement needs of customers.
HDFC Standard Life continues to have one of the widest reaches among
new insurance companies with 568 branches servicing customer needs in
over 700 cities and towns. The company has a strong presence in its
existing markets with a base of 2, 00,000 financial consultants.
As of 31st Dec 2008, the company's new business premium income stood at
Rs.1, 839.70 crore and it has covered over 8, 12,811 lives so far. The
corporate office is located in Mumbai and it has 32 branches across Tamil
Nadu.
Year of Installation
The Insurance Regulatory and Development Authority (IRDA) flags off
the first private sector life insurance company - HDFCSL on 23rd Oct 2000.
First investment of Rs.168 crore was funded by HDFC Limited and
Standard Life Assurance Company in the 1st week of Nov, 2000 and the
first branch was opened in Churchgate on 1st November 2000.
23
Turn over & Market share
HDFC Standard Life Insurance Company offers services in insurance with
an annual total turnover of Rs.2500-5000 crore and with employee strength
of 5001 & above.
Focus on Training
Training is an integral part of the company’s business strategy. Almost all
employees have undergone training to enhance their technical and
behavioral skills and also to improve their ability to deliver the service
standards that the company has set for itself. Besides the mandatory
training that financial consultants have to undergo prior to being licensed,
the company have developed and implemented various training modules
covering various aspects including product knowledge, selling skills,
objection handling skills and so on. The company provides sales training to
Financial Consultants, Senior Development Managers, Branch Managers,
Regional Managers, Territory Managers, Zonal Managers and non-sales
training to people working in Operations, HR, IT and Others.
3. Max New York
Max New York Life Insurance Company Ltd. is a joint venture between
Max India Limited, one of India's leading multi-business corporations and
New York Life International, a Fortune 100 company. In line with its
vision to be the most admired life insurance company in India, it has
developed a strong corporate governance model based on the core values of
24
excellence, honesty, knowledge, caring, integrity and teamwork. The
company has positioned itself on the quality platform.
Incorporated in 2000, Max New York Life started commercial operation in
April 2001. In line with its values of financial responsibility, Max New
York Life has adopted prudent financial practices to ensure safety of
policyholder's funds. The company's paid up capital as on 30th May, 2009
was Rs 1,968 crore. The company has 37 branches across Tamil Nadu.
Distribution Channels
Max New York Life has multi-channel distribution spread across the
country. Agency distribution is the primary channel complemented by
partnership distribution, banc assurance, alliance marketing and dedicated
distribution for emerging markets. The company places a lot of emphasis
on its selection process for agent advisors, which comprises four stages -
screening, psychometric test, career seminar and final interview. The agent
advisors are trained in-house to ensure optimal control on quality of
training. The company currently has around 68,229 agent advisors all over
the country. The company also has 36 referral tie-ups with banks, 24
partnership distribution and alliance marketing relationships. Max New
York Life has put in place a unique hub and spoke model of distribution to
deepen the rural penetration. This is the first time such a model has been
put in place for rural marketing of insurance. The company has 139 offices
dedicated to rural areas.
25
Insurance Products
Max New York Life offers a suite of flexible products. Now it has 25
products covering both life and health insurance and 8 riders that can be
customized to over 800 combinations enabling customers to choose the
policy that best fits their need. Besides this, the company offers 6 products
and 7 riders in group insurance business.
Turn over & Market share
Max India Group’s consolidated turnover for half year ended Sep, 2009
was Rs. 4166 crore. The consolidated operating revenue was Rs. 2543
crore, with a growth of 23% over the same period. The group is on a high
growth path, with over 700 offices across 400 locations in the country and
with employee strength of 100,000 as on 30th Sep, 2009.
4. ICICI Prudential
ICICI Prudential Life Insurance Company is a joint venture between ICICI
Bank, one of India's foremost financial services companies and Prudential
plc, a leading international financial services group headquartered in the
United Kingdom. Total capital infusion stands at Rs. 47.80 billion, with
ICICI Bank holding a stake of 74% and Prudential plc holding 26%.
The company began its operations in Dec 2000, after receiving approval
from Insurance Regulatory Development Authority (IRDA). Today, the
company’s nation-wide reach includes over 1,900 branches (inclusive of
26
1,074 micro-offices), over 210,000 advisors; and 7 banc assurance partners.
At present ICICI Prudential have 88 branches across Tamil Nadu.
For three years in a row, ICICI Prudential has been voted as India's Most
Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG
Marg Survey of 'Most Trusted Brands'. In spite of continuous growth in
distribution, product range and customer base, the company continues to
tirelessly uphold their commitment to deliver world-class financial
solutions to customers all over India.
5. Bajaj Allianz
Bajaj Allianz Life Insurance is a union between Allianz SE, one of the
largest Insurance Company and Bajaj Finserv. Allianz SE is a leading
insurance conglomerate globally and one of the largest asset managers in
the world, managing assets worth over a Trillion (Over INR. 55, 00,000
Crore). Allianz SE has over 119 years of financial experience in over 70
countries around the world. The company started its operations in India, in
the year 2001 and at present it has 40 branches across Tamil Nadu.
At Bajaj Allianz Life Insurance, customer delight is the guiding principle.
The company’s business philosophy is to ensure excellent insurance and
investment solutions by offering customized products, supported by the
best technology.
27
Business Performance
The company has retained the 3rd position amongst the private life insurers
on the basis of new business premium for the financial year 2009-10. It
wrote new business of Rs. 44.5 billion compared to Rs. 44.9 billion in the
previous year registering a marginal negative growth rate of 1%. The
market share of the company dropped to 4.1% compared to 5.2% in the
previous year. The company is at 2nd position among the private life
insurers on total new business policy basis and 3rd
in terms of new business
premium, with 2.23 million policies issued for the year 2009-10 as
compared to 2.59 million policies issued in the previous year. The gross
premium written for the financial year 2009-10 was Rs. 114.2 billion, as
compared to Rs. 106.2 billion in the previous year, registering a growth of
7.5%. The company earned a profit of Rs.4, 274 million during 2009-10, as
compared to a profit of Rs. 407 million in the previous year. The same has
been achieved due to focus on expense management, profitability
management and charges earned on policies in force.
Products
The company has a basket of 51 products comprising of 17 group products
& 34 individual products. During the year 2010, 20 new products have
been launched by the company. This includes the Unit Linked Insurance
Products modified and reintroduced as per the IRDA circular to comply
with the directives on cap of charges. Among the new products launched
28
by the Company, the product guaranteeing highest NAV over a 7 year
period (Max Gain) and single premium linked product guaranteeing 170%
of the original NAV (Shield Plus) were the most popular.
Office network
The company has a pan India presence in around 1,150 offices across all
geographies of India. The aforesaid office network also includes
Operations Hubs which have been formed in various locations of the
country in order to cater to the operational requirement including
underwriting of policies.
Customer Service
Considering the multi lingual diversity in the country and in order to
effectively reach and communicate with the customers, the company has
initiated the process of communicating with the customer’s preferred
language. The welcome letter, issued along with the policy bond is printed
in English as well as in 11 major regional languages. The company has a
dedicated cell for customer service which is titled “Customer Focus Unit”
(CFU). An E-servicing module, whereby customer requests pertaining to
policy servicing can be done electronically has been initiated. The
company has also developed an automated Interactive Voice Response
(IVR) for the benefit of customers for routine policy servicing matters. In
order to provide better service to the customers across the breadth of the
29
country, IVR options have been made available in various vernacular
languages.
6. Reliance Life
Founder
Few men in history have made as dramatic a contribution to their country’s
economic fortunes as did the founder of Reliance, Shri. 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. 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. Throughout
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.
Reliance Life Insurance
Reliance Life Insurance is an associate company of Reliance Capital Ltd., a
part of Reliance Group. Reliance Capital is one of India’s leading private
sector financial services companies, and ranks among the top 3 private
30
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 Group also has presence in Communications, Energy, Natural
Resources, Media, Entertainment, Healthcare and Infrastructure.
Vision
Empowering everyone live their dreams.
Mission
Create unmatched value for everyone through dependable, effective,
transparent and profitable life insurance and pension plans.
Goal
Reliance Life Insurance strives hard to achieve the 3 goals mentioned
below:
1. Emerge as transnational Life Insurer of global scale and standard
2. Create best value for Customers, Shareholders and all Stake holders
3. Achieve impeccable reputation and credentials through best
business practices
Achievements
• 3rd largest private player in a span of just 4 years, moved from 11th
position to 3rd.
• Amongst the fastest growing companies for 4 years in a row.
31
• Continuous increase in market share over 4 years; from 1.9% in
2005-06 to 10.26% in 2009 -10.
• RLIC has achieved a growth rate of 21% while the private industry
has grown at 13%.
• Fastest to reach the 5 million policy mark.
• Largest private insurer in terms of policy count in 2009-10.
• 1145 branches, 1, 95,000 Advisors and over 16,000 employees.
• RLIC continues to be amongst the foremost Life Insurance
companies in India to be certified ISO 9001:2000 for all the
processes.
• Awarded the Jamnalal Bajaj Uchit Vyavahar Puraskar 2007-
Certificate of Merit in the Financial Services category by Council
for Fair Business Practices (CFBP).
• The Company has also won the DL Shah Quality Council of India
Commendation Award in the services category in Feb, 2008 for its
work on promoting 'self help channels for service'.
7. Star Health
Star Health and the Allied Insurance Company Limited is the first stand-
alone health insurance company in India covering health, accident care and
overseas travel insurance. The company started its operation on May 2006
with the grant of IRDA License to do General Insurance Business. The
main motto of the company is Personal and Caring. Mr.V.Jagannathan is
32
the Chairman-cum-Managing Director of the company. As on March 2008,
the premium collected by the company was Rs.168 crore. The company
has 137 branches spread across the country and networked with over 4000
hospitals.
Exclusive features of the Company
• Cashless Service.
• Direct tie-up with hospitals on All- India basis.
• 24 hrs General Practitioner’s Advice and Medical Counseling.
• 24*7 in house call centre.
• Toll free telephone line assistance.
• Fully knowledge backed website.
• Individual ID card to each insured.
• Policies for individuals / Groups / Families to suit every needs of
insuring public.
Awards and Milestones
The Aarogyasri project of the company has been adjudged as the winner of
eIndia 2009 Awards in the category “EHealth Government / Policy
Initiative” of the year as well as “Civil Society / Development Agency” of
the year. Another milestone in Star Health history is an agreement with
Tamil Nadu Government for “Health Insurance Scheme” for “Below
Poverty Line” people, which covers crore of poor and marginally poor
people in the state of Tamil Nadu under the Kalaignar’s Life Saving
33
Treatment Insurance Scheme. Top performers of the company are
recognized and awarded STAR certificate and trips to countries outside
India like Singapore and Malaysia.
Star Health Growth
As on Oct 2009, the insurers of Star Health has clocked over 200% growth
in gross premium written at Rs. 510 crore in 2008-09 against Rs. 168 crore
in the previous year. In the near future, the company is planning to enter
group insurance segment as part of the substantial growth premium and
profit.
8. Met Life
MetLife India Insurance Company Limited was incorporated as a joint
venture between MetLife International Holdings, Inc., The Jammu and
Kashmir Bank, M. Pallonji and Co. Private Limited and other private
investors. MetLife is one of the fastest growing life insurance companies in
the country and has 8 branches across Tamil Nadu. It serves its customers
by offering a range of innovative products to individuals and group
customers at more than 600 locations through its bank partners and
company-owned offices. MetLife has more than 50,000 financial advisors,
who help customers achieve peace of mind across the length and breadth of
the country.
MetLife, Inc., through its affiliates, also reaches more than 70 million
customers in America, Asia Pacific and Europe. Affiliated companies,
34
outside India include the number one life insurer in the United States with
over 140 years of experience and relationships with more than 90 of the top
one hundred FORTUNE 500 companies. The MetLife companies offer life
insurance, annuities, automobile and home insurance, retail banking and
other financial services to individuals, as well as group insurance,
reinsurance, retirement and savings products and services to corporations
and other institutions.
9. Birla Sun Life
Established in 2000, Birla Sun Life Insurance Company Limited (BSLI) is
a joint venture between the Aditya Birla Group, a well known and trusted
name globally amongst Indian conglomerates and Sun Life Financial Inc,
leading international financial services organization from Canada. The
local knowledge of the Aditya Birla Group combined with the domain
expertise of Sun Life Financial Inc., offers a formidable protection for its
customers’ future.
With an experience of over 9 years, BSLI has contributed significantly to
the growth and development of the life insurance industry in India and
currently ranks amongst the top 5 private life insurance companies in the
country.
Known for its innovation and creating industry benchmarks, BSLI has
several firsts to its credit. It was the first Indian insurance company to
introduce “Free Look Period” and the same was made mandatory by IRDA
35
for all other life insurance companies. Additionally, BSLI pioneered the
launch of Unit Linked Life Insurance Plans (ULIP) amongst the private
players in India. To establish credibility and further transparency, BSLI
also enjoys the prestige to be the originator of practice to disclose portfolio
on monthly basis. These category development initiatives have helped
BSLI be closer to its policy holders’ expectations, which gets further
accentuated by the complete bouquet of insurance products (viz. pure term
plan, life stage products, health plan and retirement plan) that the company
offers.
Add to this, the extensive reach through its network of 600 branches,
1,75,000 advisors, domain expertise, product range, reach and ears on
ground, helped BSLI cover more than 2 million lives since it commenced
operations and establish a customer base spread across more than 1500
towns and cities in India. The company has 41 branches across Tamil
Nadu.
Turn over & Market share
The Aditya Birla Group has a turnover of close to Rs. 49,440 crore, with a
market capitalisation of Rs. 82,400 crore (as on 31st March 2007).
10. Future Generali
Future Generali is a joint venture between the India-based Future Group
and the Italy-based Generali Group. Future Generali is present in India in
36
both the Life and Non-Life businesses as Future Generali India Life
Insurance Co. Ltd. and Future Generali India Insurance Co. Ltd.
Generali Group
The Generali Group is one of the most significant participants in the global
insurance and financial products market. The Group is leader in Italy and
Assicurazioni Generali, founded in 1831 in Trieste, is the Group's Parent
and principal operating company. Characterized from the outset by a strong
international outlook and now present in 64 Countries, Assicurazioni
Generali has consolidated its position among the world's leading insurance
operators. It has in fact a strong position in Western Europe. Its main area
of activity, with significant market share covers Germany, France, Austria,
Spain, Switzerland as well as Israel. In recent years, the Group has made a
significant return to central-eastern European markets and has set up
offices in the principal markets of the Far East, among which China and
India. In the last decade, the Group has widened its product offerings from
only insurance to include the entire range of financial and real estate
services and asset management. Pioneering spirit, passion for clients,
flexibility, professionalism and transparency are some of the shared values
of Generali.
Credentials
Generali Group ranks among the top three insurance groups in Europe and
the 30th largest company in the Fortune 500 international ranking, with a
37
2007 premium income of over Rs.415,800 crore. The company has 476
subsidiaries present in 64 countries with over 84,000 employees (15,706 in
Italy) covering 60 millions clients worldwide and has an asset over €360
billion. The company has been assigned high rating by the international
rating agencies.
Conclusion
Chapter 2 has provided a brief description about the background of
insurance industry and the need for insurance companies to become a
learning organization. Having understood the significance of the study to
insurance companies, Chapter 3 provides an in-depth review of the
theoretical literature underlying the concepts Learning Organization,
Organizational Culture, Organizational Identification and their relationship.