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.