A Training Project report On Life Insurance At TATA AIG Life Insurance Co. Pvt. Ltd., c-scheme, JAIPUR. Submitted in partial fulfilment of the requirement of Bachelor of Business Administration (BBA), Guru Jambheshwar University of Science & Technlogy, Hisar. Training Supervisor Submitted by Name & Designation SHIV KUMAR
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I owe my sincere & heartiest gratitude to Mr. Areejit Gupta (Branch Manager of
TATA AIG Life Insurance Corporation of India, c-scheme, Jaipur, Rajasthan) who
gave me the opportunity to work in TATA AIG Life Insurance Company as a
summer trainee & helped with whenever I needed him.
I also thank Mr .Amit Chouhan (Operation Manager, TATA-AIG Life InsuranceCompany, C-scheme, Branch)& Mr. kunal Dutta (Sales Manager of TATA-AIGLife Insurance Company, C-scheme, Branch) who helped to carry out the training
successfully.
I also thank management of insurance brokerage firms, banks & corporate agents
& many people to whom I visited during my training period.
Besides above I am grateful to everyone who has helped me in completing mytask to my satisfaction level.
Place allotted t me for my summer training in TATA AIG LIFE INSURNACE
COMPANY LTD as Jaipur. It is the place which needs no introduction to any
person in at least India. It is the capital of state Rajasthan. It is the largest city of Rajasthan and approx 35 lack people are living here. It is also a historical place.
Being a state capital all the big government office are situated here and all the
commercial activities are happen here. The main industries are Gems and
Jewellery, Printing and Tourism situated here. There are many Engineering,
Management and other Technology colleges situated. So the availability of trained
human resources is sufficient here.
In the recent past there has been a significant amount of investment had been done
by government to improve the basic infrastructure that is why the investors from
India as well as foreign are investing at Jaipur.
So there are plenty of scope for insurance business at Jaipur.
Historians believe that insurance first developed in Summer & Babylonia. The merchants &
traders of these societies transferred & pooled their money to protect themselves from pirates.
In the 18 th century BC, Babylonian king, Hammurabi developed a code of law known as the code
of specific rules governing the practices of early risk-sharing activities.
Insurance developed during the 1700’s in the North American colonies. In 1730, Benjamin Frank
contributed for the Insurance of Houses from Loss by Fire. The company collected contributions& this money went into an investment fund. Interest on this fund went towards paying claims
dividends to those who contributed money.
The Industrial Revolution in the US, in the early & mid 1800’s prompted dramatic group. During
this time, many companies were establishes to sell life insurance policies & annuities. Several
shared profits among policyholders, also developed. In addition, some life insurance companies
charged premiums according to age of people & health.
Life insurance, in its present form, came to India from the United Kingdom with the
establishment of a British firm, Oriental Life Insurance Company in Calcutta in 1818, followed
by Bombay Life Insurance Assurance Company in 1823, the Madras Equitable Life Insurance
Society in 1829, & the Oriental Government Security Life Assurance Company in 1874. Prior to
1871, Indian lives were treated as sub-standard & charged extra premium of 15% to 20%.
Bombay Mutual Life Assurance Society, an Indian insurer which came into existence in 1871,
was the first to cover Indian lives at normal rates.
The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life
insurance business. Later in 1928, the Indian Insurance Companies Act was enacted, to enable
the govt. to collect statistical information about both life & non-life insurance business transacted
in India by Indian & foreign insurers, including the provident insurance society. Comprehensive
arrangements were, however, brought into effect with the enactment of the Insurance Act, 1938.
Efforts in this direction continued progressively & the Act was amended in1950, making far
reaching changes, such as requirement of equity capital for companies carrying on life insurance
business, stricter controls on investment of life insurance companies, ceiling on the expenses of
management & agency commission etc.
By 1956, 154 insurers, 16 non-Indian insurers & 75 provident societies were carrying on life
insurance business in India. On 19 th January 1956, the management of the entire life insurance
business of 229 Indian insurers & provident insurance societies & the Indian life insurance business of 16 non-Indian life insurance companies then operating in India, was taken over by
the central govt. & then nationalized on 1 st September 1956 when Life Insurance Corporation
came into existence.
An ordinance was passed in 1968 to amend the Insurance Act to regulate/control non-life
insurance resulting in set up of GIC in 1973. Malhotra committee submitted its report in 1994 &
recommended means to reintroduce an element of competition by withdrawing the exclusivity of
LIC & GIC. In 1997, Insurance Regulatory Authority (IRA) was established which was later re-
styled as IRDA in 1999.
Liberalization of the Insurance Sector
Liberalization commitments of the country to help in disciplining future economic policies will
include the insurance reforms. When the world over, insurance, markets
replace risk with known costs- the costs of buying & maintaining insurance policies.
Insurance pools risks shared by many people, thereby, reducing the risks faced by a group.
People pay to buy insurance coverage (protection from risk). In exchange, all policy holders
(people who own insurance policies) receive a promise that the group of policyholders as
represented by the insurance organization will pay when any policyholder experience any kind of
loss.
Importance of Insurance
Insurance benefits society by allowing individuals to share the risks faced by many people. But it
also serves many other important economic & societal functions. Insurance provides the capital
that communities need to quickly rebuild & recover economically from natural disasters.
Insurance itself has become a significant economic force in most of the industrialized countries.
Businessmen buy insurance to cover their employees against work related injuries & health
problems. They also insure their assets against any kind of wear n tear by natural forces &
forcibly.
Insurance companies perform a type of monetary redistribution- they collect premiums &
eventually redistribute that money as payments. Depending on the type of insurance,
redistribution can take place anywhere from a month to many decades. Because of this delay
between collecting & paying out funds, insurance companies invest their funds to bring extrarevenue. Such investments help business & government finance their operations, & few profits
from these investments support the operations of insurance companies. With these investment
earnings, insurance companies can keep rates much lower than would otherwise be possible.
Advantages of Life Insurance
1.It is superior to an ordinary saving plan : Unlike other saving plans, it affords
2.full protection against risk of death. In case of death, the full sum assured is made available
under a life assurance policy; whereas under saving scheme the total accumulated savingalone will be available. The later will be considerably less than the sum assured, if death
occurs during early years.
2. Easy settlement & protection against creditors : The life assured can name person(s)
called Nominee to whom the policy money would be payable in the event of his death.
The proceeds of a life policy can be protected against the claim
of the creditors of the life assured by effecting a valid assignment of the policy.
3.Ready marketability & suitability for quick borrowing: After an initial period, if the
policyholder finds him unable to continue payment of premiums, he can surrender the
policy for a cash sum. Alternatively, ha can tide over a temporary difficulty by taking
loan on the sole security of the policy without delay. Further, a life insurance policy is
sometimes acceptable as security for a commercial loan.
4.Tax Relief: The Indian Income-Tax Act allows deduction of certain portion of the taxable
income, which is diverted to payment of life insurance premiums from the total income
tax liability. When this tax relief is taken into account, it will be found that the assured is
in effect paying a lower premium for his insurance.
The Tata Group (www.tata.com) is one of India's largest and most respected businessconglomerates, with revenues in 2006-07 of $28.8 billion (Rs.129,994 crores), the equivalent of about 3.2 per cent of the country's GDP, and a market capitalization of $72.2 billion as onDecember 6, 2007. Tata companies together employ some 289,500 people. The Tata Group hasoperations in more than 85 countries across six continents, and its companies export productsand services to 80 countries.
The Tata Group comprises 98 operating companies in seven business sectors: information
systems and communications; engineering; materials; services; energy; consumer
products; and chemicals. The Group was founded by Jamsetji Tata in the mid 19 th
century, a period when India had just set out on the road to gaining independence from
British rule. Consequently, Jamsetji Tata and those who followed him aligned business
opportunities with the objective of nation building. This approach remains enshrined in
the Group's ethos to this day.
The Tata Group is one of India's largest and most respected business conglomerates, with
revenues in 2006-07 of $28.8 billion (Rs129,994 crore), the equivalent of about 3.2 per
cent of the country's GDP, and a market capitalisation of $65.32 billion as on February 7,
2008. Tata companies together employ some 289,500 people. The Group's 27 publicly
listed enterprises — among them stand out names such as Tata Steel, Tata Consultancy
Services, Tata Motors and Tata Tea — have a combined market capitalisation that is the
highest among Indian business houses in the private sector, and a shareholder base of
over 2.9 million. The Tata Group has operations in more than 80 countries across sixcontinents, and its companies export products and services to 85 countries.
The Tata family of companies shares a set of five core values: integrity, understanding,
excellence, unity and responsibility. These values, which have been part of the Group's
beliefs and convictions from its earliest days, continue to guide and drive the business
American International Group, Inc. (AIG) , a world leader in insurance and financial services,
is the leading international insurance organization with operations in more than 130 countries
and jurisdictions. AIG companies serve commercial, institutional and individual customers
through the most extensive worldwide property-casualty and life insurance networks of any
insurer. In addition, AIG companies are leading providers of retirement services, financial
services and asset management around the world. AIG's common stock is listed on the New
York Stock Exchange, as well as the stock exchanges in Paris, Switzerland and Tokyo.
American International Group, Inc. (AIG) is a major American insurance corporation based in
New York City. It has its European HQ in Croydon in London, England, UK and its Asian HQ in
Hong Kong, China. AIG is the sixth-largest company in the world according to the 2007
Forbes Global 2000 list. The company became a component of the Dow Jones Industrial
Average on April 8, 2004. It is also the sponsor of Manchester United F.C. On December 11,
2006 it was announced that a division of AIG would purchase from Dubai Ports World disputed
North American ports.
History
AIG's history dates back to 1919 by when Cornelius Vander Starr set up an insurance agency in
Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance to the Chinese.
When his business was successful there, he expanded to Asia, Latin America, Europe, and the
Middle East.
In 1962, Starr gave management of the company's unsuccessful U.S. holdings to Maurice R."Hank" Greenberg, who shifted the company's U.S. focus from personal insurance to high-
margin corporate coverage. Greenberg focused on selling the insurance through independent
brokers rather than agents because Greenberg wanted to avoid selling insurance at prices which
occasionally became too low (to cover the future payouts) given marketplace competition; a
company with agents must pay their salary even while selling little to no insurance. Instead, with
At the moment, India is one of the best markets to be in. Over 75 per cent of its vast population
has no insurance. Global reinsurance major, Swiss Re, points out that the industry will touch a
growth of up to $50 billion in the next 10 years, with individual life insurance accounting for
almost $40 billion. Little wonder, then, that top global names such as AIG, Allianz, AMR Aviva,
ING, Metlife, New YorkLife, Old Mutual, Prudential, Standard Life and Sun Life are here in
joint ventures with eminent Indian companies such as TATA, Birla, HDFC, Kotak and ICICI,
among others. The Insurance Regulatory and Development Authority (IRDA) regulations too
encourage best practices in the marketplace.
The Indian customer, like his global counterpart, buys policies for tax benefits and to ensure
secure savings for the future. Although he is price sensitive, he still deserves value and sound
services for his money. This has not been available to him. To fill this void, many private players
have initiated education campaigns explaining the benefits and need for insurance.
In its first year Tata AIG sold 33,000 policies . This fiscal the company is expected to sell morethan 1 lakh policies . The success of private players has been attributed to their innovative
offers, customer-centric products, increasing awareness levels of consumers through a need-
based, structured approach of selling, sound risk-management practices, enhanced service
standards, reaching out to the customer through a number of distribution and communications
sector and policies. I made up the sharp observation and research on data.
Regulations - The Agency Laws
The basics of the insurance business in India are governed by the Agency Law, which is part of
the Indian Contracts Act, 1872. Further, after the industry got opened up the regulatory authorityhas been the Insurance Regulatory & Development Authority (IRDA).
Agent- The Definition.
According to the section 182 of the Indian Contract Act, 1872, “an agent is a person employed to
do any act for another or to represent another in dealing with a third person”. In the insurance
sector the term “Agent” is ordinarily applied to a person engaged by the insurer to procure new business.
The licensing of Insurance Agent Regulations, 2000 lays down a code of conduct for the agents,
which state that, the agent shall
1Disclose the license to the prospect on demand.
2Explain all available options to the prospect.
3Disclose the scales of commission, if asked for by the prospect.
4Impress upon the prospect need to disclose all information
5Inform the insurer about any adverse habits & materials facts of the person to be insured.
6Convey to the proper about the acceptance or rejection of the proposal.
7Render necessary assistance to policyholders or claimants or beneficiaries in complying
with the requirements, asked for by the insurer.
8Advise policyholders to affect nomination.
9Make every attempts to ensure remittance of premiums by the policyholders within the
stipulated time by giving notice orally or in written.
10Not induce the prospect to submit any wrong information.
11Not interfere with the proposal introduced by other insurance agents.
12Not demand or receive share of proceeds under an insurance contract. Not cause the termination of an existing policy with a view to effect a new proposal.
TATA-AIG Life Insurance Co. Ltd. aspires to provide state of the art of customers’ service &
opportunities & avenues for enterprising people to grow & prosper. The company wish to grow
exponentially that is backed by the latest technology, hence offering its customers:
5Complete & diversified product portfolio.
6Faster & more accurate service.
7Multi-channel distribution systems.
8Highly trained professional sales people offering quality pre & post sales service.
It is in the above mentioned areas of personal specialization where the importance of an advisor
clearly stands out the advisor not only contribute in brining in new business for the company, but
also plays an important part in offering world class pre & post sales service to the clients to the
clients with the support of the organization. But the company in its principles clearly states outthat an advisor to means “ much more than a salesman or a saleswoman, we at TATA-AIG
recognize our advisors as the ambassadors of our organization in the market place & we
consider the advisor force would be our biggest differentiating factor in the coming years”. The
advisor is an important asset not only for the organization from the business point of view but
also to the society on the whole as he/she is someone who provide valuable service to the
community be helping people attain financial security & build funds for their future needs
thereby assisting them in getting their financial freedom.
The company in its vision out the urge to become the dominant players in the players in the
industry. The company believes that a high level of self-motivation & a coherent teamwork for
the organization can only achieve this on the whole. The company stresses great emphasis on its
core values, which are:
1Integrity
2Customer first
3Boundary less
4Ownership
5Passion
These are the foundation on which the organization works & the base for the overall business
environment of the company. based on the above mentioned ‘Pillars’ of the company the
management has devised the basic principles for the program as a whole which are as following.
Recruit the best
Experts in knowing what exactly their customers wants is well versed in spotting the talents fromthe pools & recruiting only those who have the intellect, energy, drive & the passion to initiate
new beginnings & even a lot of changes if they feel so. The incumbents are treated as winners &
the ‘custom hiring’ principle necessitates the factor of having the right person at the right place
with the right work. And definitely no compromises on expertise & competencies.
The benefits have already been mentioned very often in the previous section but it’s necessary to
look into them as a comprehensive criterion. The main benefits & supports that an advisor would
be availing of are the distinct TATA AIG life advantages:
Rewarding career
The job profile as mentioned earlier is unlimited & an advisor will help people realize their
dreams & provide them the financial & psychological security & faith. The ultimate rewards will
be the differences made to all these lives & that would be most satisfying in the real sense.
Successful Team
Being at TATA-AIG gives the opportunity to be a part of India’s best team of life insurance
advisors. The company is numero uno among the private players in the industry & has won
numerous recognition & awards that give it the international edge.
Attractive remuneration
TATA-AIG offers the most competitive remuneration benefits at person in the industry, which
proves to be very useful from long term perspective of financial security. There is absolutely nolimit to one’s earnings & the added incentives just help as advisor to get more than what he/she
TATA AIG Life Insurance Company Limited is right now the market leader in Private Insurer
segment.
WEAKNESS
The company right now has lesser number of agents (i.e. financial advisors) than LIC of Indiawhich affects their sales in comparison to LIC of India.
OPPURTUNITY:
TATA AIG Life Insurance Company Limited can give LIC of INDIA agents an opportunity to
join TATA AIG Life Insurance Company Limited as TATA AIG has got more incentive packages & servicing quality better than LIC of INDIA. Doing this they can reduce their cost of
training and can exploit their experience.
THREAT:
Other big brand names like BIRLAS, ICICI PRUDENTIAL, HDFC, SBI, and AVIVA. etc.
1. TATA AIG LIFE INSURANCE COMPANY has great goodwill in market in liberalizedIndian market there are approximately 13 big companies in Indian market and TATA
AIG is the No.1 private insurance company. I found this fact in my recent survey.
2. There are lot of scope of life insurance in India only 2.5 people are secure with
life insurance so the insurance sector is it's booming stage this boom will more increase
in 2 or 3 years.
3. Good profile insurance advisor could do the better job. If TATA AIG mention the level
of advisor then they may give great sales to the company.
4. TATA AIG has tuff competition with LIC as well as ICICI PRUDENTIAL, BAJAJ
ALLIAZE, BIRLA SUNLIFE INSURANCE, SAHARA, ING VYSVA, OM KOTAK
MAHINDRA, HDFC INSURANCE AND SBI LIFE, MET LIFE, BHARTI AXA LIFE,
MAX NEW YORK LIFE.
5. If the company start to concentrate on village segment market. Then company can get
great business.
6. TATA AIG has interested and profitable planes for different age groups like smart kids
plan unit link insurance plane and pension plan.
7. I got the good profile people near by bank and share market. When I concentrated on the20-25 year age group people I found good result.
8. Within 20-25 year age group the sincerity level is high. They are career oriented and want