SUMMER TRAINING PROJECT REPORT

ON RECRUITMENT & SELECTION PROCESS IN RELIANCE LIFE INSURANCE

Submitted By KAVITA C O!" UR#

I$ P%&ti%' Fu'(i''me$t )( t*e Re+ui&eme$t O( PG"M "e,&ee )( I$-titute )( C)m.ute& S/ie$/e & Te/*$)'),y 0ICST1 S*e.%2 3 V%&%$%-i3 A..&)4ed by AICTE3 Ne5 "e'*i

Se--i)$ 67891678: E$&)'me$t N); R)'' N); 121709

INSTITUTE OF COMPUTER SCIENCE & TEC NOLOG# 0ICST2 S EPA3 VARANASI S EPA CAMPUS3 NIBIA BAC C AON3 VARANASI 0APPROVE" B# AICTE NE! "EL I2

CERTIFICATE This is to certify that Ms. KAVITA C O!" UR# has completed her summer training project report entitled, RECRUITMENT & SELECTION PROCESS IN RELIANCE LIFE INSURANCE under my super ision and guidance in partial fulfillment of the re!uirement of "#$M degree of %&'T%T(T) *+ ,*M"(T)- ',%)&,) . T),/&*0*#1 2%,'T3. The summer training project report contains the o4ser ations made 4y student herself. The summer training project report su4mitted 4y Ms. KAVITA C O!" UR# is of the standard e5pected of an "#$M student of %,'T6'/)"7, 87-7&7'%.

'ignature of the 'uper isor $esignation 9 $ate 9

+or:arded 4y 2$irector, %,'T3

PREFACE 7ll students learn theoretical su4jects in their classroom, 4ut as :e are the management students, apart from theoretical studies :e need to get a deeper insight into the practical aspects of those theories 4y :or;ing as a part of organi<ation during our summer training. Training is a period in :hich a student can apply his theoretical ;no:ledge in practical field. 'o this training has high importance as to ;no: ho: 4oth the aspects are applied together. The study of management ac!uires most crucial position in the 4usiness administration. %n order to 4e successful, it is necessary to gi e priority to the management in an organi<ation. =ut it cannot 4e denied that the study of management :ould 4e more educational, materialistic and e en more interesting, if it is to 4e paired :ith the :or; in organi<ation as an employee. The training session helps to get details a4out the :or;ing process in the organi<ation. %t has helped me to ;no: a4out the organi<ational management and discipline, :hich has its o:n importance. The training is going to 4e a lifelong e5perience. 7 comprehensi e understanding of the principle :ill increases their decision6ma;ing a4ility and sharpens their tools for this purpose. $uring the curriculum of management programmers a student has to attain a practical e5posure of an organi<ation on li e project in addition to theory he>she studies. This "roject -eport has 4een completed in "artial fulfillment of my management "rogram in the company RELIANCE LIFE INSURANCE COMPAN# LT"; :hich is a LIFE INSURANCE COMPAN#. The o4jecti e of my project :as to ;no:, :hat is the recruitment and selection process of -eliance 0ife %nsurance.

ACKNO!LE"GEMENT This project has 4een prepared as a part of an internship re!uired during the completion of "#$M programme at %&'T%T(T) *+ ,*M"(T)- ',%)&,) . T),/&*0*#1 2%,'T3. 87-7&7'% 2(."3. % :ould li;e to than; my project guide M&; RAJEEV SING , S&; Ge$e&%' M%$%,e&1 R RELIANCE LIFE INSURANCE3 for continuous guiding me through my summer internship and research project. /is encouragement, time and effort are greatly appreciated. % :ould also li;e to than; M&; MA#ANK VERMA3 M%$%,e&1 R, for supporting and super ising me during this project and pro iding me an opportunity to learn outside the class room. %t :as a truly :onderful learning e5perience. *nce again my gratitude to the RELIANCE LIFE INSURANCE for their ;ind co6operation. 0ast 4ut not the least, % :ould li;e to e5press my gratitude to my parents :ho financed this project and ga e their continuous moti ation and ;ind support to me and also my than;s to those :ho :ere directly or indirectly responsi4le for the successful completion of the project.

$7T)9 1?>0@>201A "07,)9 $elhi

B78%T7 ,/*C$/(-1 -*00. &o. 121709

ii

TABLE OF CONTENTS
C APTER NO; <8= SUBJECT IN"USTR# PROFILE 08;82 08;62 08;92 08;: 2 08;>2 08;?2 08;@2 08;A2 <6= =-%)+ %&T-*$(,T%*& *+ %&$('T-1 'C*T 7&701'%' *+ T/) %&$('T-1 #-*CT/ *+ -)0%7&,) 0%+) %&'(-7&,) %& #-*CT/ %& '70)' *+ T/) %&$('T-1 #-*CT/ %& /(M7& -)'*(-,)' *+ +(T(-) "-*'"),T' %& T)-M' *+ #-*CT/ +%&7&,%70 7&701'%' *+ T/) %&$('T-1 "-*=0)M' =)%&# +7,)$ =1 -)0%7&,) 0%+) 16A9 G06G1 G26GA GA6GG GH6G7 G76G9 G96H1 H16HH H? H76H@ PAGE NO;

%&'T700)$ ,7"7,%T1

-)0%7&,) 0%+) %&'(-7&,) %& 700 "*''%=0) 7'"),T'

PRO"UCT PROFILE OF RELIANCE LIFE INSURANCE 06;82 &7M) *+ $%++)-)&T "*0%,%)' *+ -)0%7&,) 0%+) %&'(-7&,)

<9=

MAJOR COMPETITORS OF RELIANCE LIFE INSURANCE 09;82 09;62 09;92 M7D &)C1*-B 0%+) %&'(-7&,) %,%,% "-($)&T%70 0%+) %&'(-7&,) =7E7E 700%7&F 0%+) %&'(-7&,)

H9 ?06?2 ?26?A ?A6?G

iii

09;:2

B*T7B M7/%&$-7 0%+) %&'(-7&,)

?H6?? ?76?@ ?@6?9 ?9671 71672 7A 7G67H 7?677 7@610G 10H610? 10? 10? 10?6107 107 107 107610@ 10@ 10@6109 109

,*M"7&1 09;>2 T7T7 7%# 0%+) %&'(-7&,) ,*M"7&1 0%M%T)$ 09;?2 09;@2 09;A2 <:= =%-07 '(&0%+) %&'(-7&,) +(T(-) #)&)-70% %&$%7 0%+) %&'(-7&,) 78%87 0%+) %&'(-7&,) ,*. 0T$.

RECRUITMENT & SELECTION PROCESS IN RELIANCE LIFE INSURANCE 0:;82 0:;62 0:;92 0:;:2 0:;>2 0:;?2 0:;@2 0:;A2 0:;B2 0:;872 0:;882 0:;862 0:;892 /(M7& -)'*(-,) M7&7#)M)&T M1 -*0) I )D")-%)&,) %& -)0%7&,) 0%+) -),-(%TM)&T ')0),T%*& T-7%&%&# 7&$ $)8)0*"M)&T ,7-))- $)8)0*"M)&T ,*MM(&%,7T%*& %&,)&T%8)' ')-8%,)' ")-+*-M7&,) 7""-7%'70 *-#7&%F7T%*&70 +*-M 7&$ 'T-(,T(-) $)"7-TM)&T M7E*- /- ,/700)&#)' %& -)0%7&,) 0%+)

%&'(-7&,) ,*M"7&1 <>= FIN"INGS AN" SUGGESTIONS 0>;82 0>;62 0>;92 0>;:2 +%&$%&#' ,*&,0('%*&' '(##)'T%*&'> -),*MM)&$7T%*&' =%=%0*#-7"/1
iv

110 111 111 112 112

CHAPTER- 1
INDUSTRY PROFILE

BRIEF INTRO"UCTION OF IN"USTR#

0Fi,; 81% C S RI " IRUBAI AMBANI2 FOUN"ER +e: men in history ha e made as dramatic a contri4ution to their countryJs economic fortunes as did the founder of -eliance, 'h. $hiru4hai / 7m4ani. +e:er still ha e left 4ehind a legacy that is more enduring and timeless.

7s :ith all great pioneers, there is more than one uni!ue :ay of descri4ing the true genius of $hiru4hai9 The corporate isionary, the unmatched strategist, the proud patriot, the leader of men, the architect of %ndiaJs capital mar;ets, the champion of shareholder interest.

=ut the role $hiru4hai cherished most :as perhaps that of %ndiaJs greatest :ealth creator. %n one lifetime, he 4uilt, starting from the pro er4ial scratch, %ndiaJs largest pri ate sector enterprise.

Chen $hiru4hai em4ar;ed on his first 4usiness enture, he had a seed capital of 4arely ('I A00 2around -s 1G,0003. * er the ne5t three and a half decades, he con erted this fledgling enterprise into a -s ?0,000 crore colossusKan achie ement :hich earned -eliance a place on the glo4al +ortune H00 list, the first e er %ndian pri ate company to do so.
2

$hiru4hai is :idely regarded as the father of %ndiaJs capital mar;ets. %n 1977, :hen -eliance Te5tile %ndustries 0imited first :ent pu4lic, the %ndian stoc; mar;et :as a place patronised 4y a small clu4 of elite in estors :hich da44led in a handful of stoc;s.

(ndaunted, $hiru4hai managed to con ince a large num4er of first6time retail in estors to participate in the unfolding -eliance story and put their hard6earned money in the -eliance Te5tile %"*, promising them, in e5change for their trust, su4stantial return on their in estments. %t :as to 4e the start of one of great stories of mutual respect and reciprocal gain in the %ndian mar;ets.

(nder $hiru4haiJs e5traordinary ision and leadership, -eliance scripted one of the greatest gro:th stories in corporate history any:here in the :orld, and :ent on to 4ecome %ndiaJs largest pri ate sector enterprise.

Through out this ama<ing journey, $hiru4hai al:ays ;ept the interests of the ordinary shareholder uppermost in mind, in the process ma;ing millionaires out of many of the initial in estors in the -eliance stoc;, and creating one of the :orldJs largest shareholder families.

" IRUB AI AMBANI BIOGRAP # =orn 6 2@ $ecem4er 19A2219A261262@3 ,hor:ad, =ritish -aj $ied 6 ? Euly 20022200260760?3 2aged ?93 Mum4ai, Maharashtra, %ndia

Mum4ai, Maharashtra, %ndia &ationality L %ndian *ccupation 6 =usiness MagnateM ,hairman of -eliance %ndustries -eligion L /induism 'pouse 6 Bo;ila4en 7m4ani ,hildren 6 Mu;esh 7m4ani, 7nil 7m4ani CAREER

7t the age of 17 :ent to 7den 2no: part of 1emen3 and :or;ed for 7. =esse . ,o. 0td., the sole selling distri4utor of 'hell products. %n the year 19H@ returned to Mum4ai and started his first company, -eliance ,ommercial ,orporation, a commodity trading and e5port house. %n the year 19??, as a first step in -elianceNs highly successful strategy of 4ac;:ard integration, he started the te5tile mill in &aroda, 7hmeda4ad. %n the year 197H, a technical team from the Corld =an; certified that the -eliance te5tile plant :as Oe5cellent 4y de eloped country standards.O %n the year 1977, the company :ent pu4lic. ,redited :ith a num4er of financial inno ations in the %ndian capital mar;ets. Today, the -eliance #roup has one of the largest family of shareholders in the :orld. Cith an in estment of o er -s A?,000 crore 2('I 9 4illion3 in petroleum refining, petrochemicals, po:er generation, telecommunication ser ices and a port terminal in a three6year time frame, has steered the -eliance #roup to its current status as %ndiaNs leading te5tiles6petroleum6petrochemicals6 po:er6telecomplayer. AC IEVEMENTS

8oted %ndiaNs NTop =usinessmanN in the N=est of %ndiaN poll conducted 4y Fee &e:s, 7ugust 200A. "etrotech 'ociety conferred posthumously the N0ifetime 7chie ement 7:ardN for his outstanding contri4ution to $o:nstream "etroleum %ndustry in %ndia, Eanuary 200A. -ated as one of N%ndiaNs Most 7dmired ,)*sN for the fourth consecuti e year in the Business Barons 6 Taylor &elson 'ofres 6 Mode 'ur ey, Euly 2002. ,onferred the N0ifetime 7chie ement 7:ardN 4y %ndia /-$ ,ongress, +e4ruary 2002. ,onferred NThe )conomic Times 7:ard for ,orporate )5cellence for 0ifetime 7chie ementN, 7ugust 2001. +elicitated 4y the Municipal ,orporation of #reater Mum4ai :ith a citation at a ci ic reception, $ecem4er 2000.

,onferred the NMan of the ,enturyN a:ard 4y ,hemtech +oundation and ,hemical )ngineering Corld in recognition of his outstanding contri4ution to the gro:th and de elopment of the chemical industry in %ndia, &o em4er 2000.

,onferred the N%ndian )ntrepreneur of the 20th ,enturyN a:ard 4y +%,,% 2+ederation of %ndian ,ham4ers of ,ommerce and %ndustries3, for his meticulous scripting of one of the most remar;a4le stories of 4usiness endea our of the 20th century, March 2000.

Thrice 2in the years 2000, 199@ and 199?3 nominated as one of the N"o:er H0 6 the most po:erful people in 7siaN 4y Asiaweek maga<ine. 8oted as the most admired %ndian of the millennium in the field of =usiness . )conomics in N0egends 6 7 ,ele4ration of )5cellenceN poll audited 4y )rnst . 1oung for Fee &et:or;, Eanuary 2000.

8oted as N,reator of CealthN of the ,entury in The Times of India poll, Eanuary 2000. ,hosen as one of the three Nma;ers of e!uityN 4y %ndia Today in their special millennium issue entitled N100 "eople Cho 'haped %ndia in the 20th ,enturyN, Eanuary 2000. ,hosen 4y the %ndian MerchantsN ,ham4er as O7n *utstanding 8isionary of the 20th ,enturyO in recognition of his uni!ue achie ements and contri4ution in the de elopment of industry and capital mar;ets in %ndia, $ecem4er 1999.

8oted as N%ndian =usinessman of the ,enturyN in Business Barons #lo4al Multimedia "oll, $ecem4er 1999. 7mongst NThe "o:er H0 6 %ndiaNs H0 most po:erful decision6ma;ers in "olitics, =usiness . +inanceN, Business Barons, 7ugust 1999. $eclared NMost 7dmired %ndian =usiness 0eaderN 4y The Times of India, %ndiatimes.com poll, Euly 1999. 7:arded the $eanNs Medal 4y The Charton 'chool, (ni ersity of "ennsyl ania, for setting an outstanding e5ample of leadership, Eune 199@. ,hosen as N'tar of 7siaN 4y Business Week, ('7, Eune 199@. 0eading 4usiness maga<ine Business Barons placed him in its list of N%ndiaNs 2H Most %nfluential =usiness and +inancial 0eadersN, Eune 199@.

March, 2000 9 %ndian )ntrepreneur of the 20th ,enturyJ a:ard 4y +%,,%, for his meticulous scripting of one of the most remar;a4le stories of 4usiness endea or of the 20th ,entury.

&o em4er, 2000 9 PMan of the ,enturyJ a:ard 4y ,hemtech +oundation and ,hemical )ngineering Corld for his contri4ution to the gro:th and de elopment of the %ndian chemical industry.

7ugust, 2001 9 The )conomic Times 7:ard for ,orporate )5cellence and 0ifetime 7chie ement. +e4ruary, 2002 9 ,onferred the 0ifetime 7chie ement 7:ard 4y %ndia /-$ ,ongress. FAMIL# TREE OF AMBANIDS

0Fi,; 81b C " IRUBAI AMBANI AN" FAMIL# MEMBERS2 " IRUBAI AMBANI 1 T E STOCK MARKET KING

0Fi,; 81/ C T E AMBANI MAGIC2 T E AMBANI MAGIC

-eliance %ndustries :as listed in 1977 in one of the largest pu4lic stoc; offerings of its time and its annual shareholdersJ meetings :ere so :ell attended they had to 4e held in a foot4all stadium and $hiru4hai held his shareholders spell4ound, paying high di idends and 4onuses at a time :hen e!uities :ere seen as a lo:6return, ris;y in estment. This made $hiru4hai 7m4ani a hero to shareholders. *riginal in estors in the 1977 initial pu4lic offering ha e earned a compounded annual rate of return of GA per cent. ! AT IS INSURANCE %n la: and economics, insurance is a form of ris; management primarily used to hedge against the ris; of a contingent, uncertain loss. %nsurance is defined as the e!uita4le transfer of the ris; of a loss, from one entity to another, in e5change for payment. 7n insurer is a company selling the insuranceM an insured or policyholder is the person or entity 4uying the insurance policy. The insurance rate is a factor used to determine the amount to 4e charged for a certain amount of insurance co erage, called the premium. -is; management, the practice of appraising and controlling ris;, has e ol ed as a discrete field of study and practice. The transaction in ol es the insured assuming a guaranteed and ;no:n relati ely small loss in the form of payment to the insurer in e5change for the insurerNs promise to compensate 2indemnify3 the insured in the case of a large, possi4ly de astating loss. The insured recei es a contract called the insurance policy :hich details the conditions and circumstances under :hich the insured :ill 4e compensated. T#PES OF INSURANCE
AUTO INSURANCE

0Fi,; 81d C A !RECKE" VE ICLE2

7uto insurance protects you against financial loss if you ha e an accident. %t is a contract 4et:een the insured and the insurance company. 1ou agree to pay the premium and the insurance company agrees to pay losses as defined in the policy. 7uto insurance pro ides property, lia4ility and medical co erage9 1. "roperty co erage pays for damage to or theft of the car. 2. 0ia4ility co erage pays for the legal responsi4ility to others for 4odily injury or property damage. A. Medical co erage pays for the cost of treating injuries, reha4ilitation and sometimes lost :ages and funeral e5penses. 7n auto insurance policy comprises si5 ;inds of co erage. Most countries re!uire you to 4uy some, 4ut not all, of these co erages. %f youNre financing a car, the lender may also ha e re!uirements. Most auto policies are for si5 months to a year.%n the (nited 'tates, the insurance company should notify you 4y mail :hen itJs time to rene: the policy and to pay the premium.

OME INSURANCE

/ome insurance pro ides compensation for damage or destruction of a home from disasters. %n some geographical areas, the standard insurances e5clude certain types of disasters, such as flood and earth!ua;es, that re!uire additional co erage. Maintenance6related pro4lems are the homeo:nersN responsi4ility. The policy may include in entory, or this can 4e 4ought as a separate policy, especially for people :ho rent housing. %n some countries, insurers offer a pac;age :hich may include lia4ility and legal responsi4ility for injuries and property damage caused 4y mem4ers of the household, including pets.
CASUALT#

,asualty insurance insures against accidents, not necessarily tied to any specific property.

,rime insurance is a form of casualty insurance that co ers the policyholder against losses arising from the criminal acts of third parties. +or e5ample, a company can o4tain crime insurance to co er losses arising from theft or em4e<<lement.
9

"olitical ris; insurance is a form of casualty insurance that can 4e ta;en out 4y 4usinesses :ith operations in countries in :hich there is a ris; that re olution or other political conditions :ill result in a loss.

LIFE INSURANCE 0ife insurance pro ides a monetary 4enefit to a decedentNs family or other designated 4eneficiary, and may specifically pro ide for income to an insured personNs family, 4urial, funeral and other final e5penses. 0ife insurance policies often allo: the option of ha ing the proceeds paid to the 4eneficiary either in a lump sum cash payment or an annuity. 7nnuities pro ide a stream of payments and are generally classified as insurance 4ecause they are issued 4y insurance companies and regulated as insurance and re!uire the same ;inds of actuarial and in estment management e5pertise that life insurance re!uires. 7nnuities and pensions that pay a 4enefit for life are sometimes regarded as insurance against the possi4ility that a retiree :ill outli e his or her financial resources. %n that sense, they are the complement of life insurance and, from an under:riting perspecti e, are the mirror image of life insurance. ,ertain life insurance contracts accumulate cash alues, :hich may 4e ta;en 4y the insured if the policy is surrendered or :hich may 4e 4orro:ed against. 'ome policies, such as annuities and endo:ment policies, are financial instruments to accumulate or li!uidate :ealth :hen it is needed.%n many countries, such as the (.'. and the (B, the ta5 la: pro ides that the interest on this cash alue is not ta5a4le under certain circumstances. This leads to :idespread use of life insurance as a ta56efficient method of sa ing as :ell as protection in the e ent of early death.%n (.'., the ta5 on interest income on life insurance policies and annuities is generally deferred. /o:e er, in some cases the 4enefit deri ed from ta5 deferral may 4e offset 4y a lo: return. This depends upon the insuring company, the type of policy and other aria4les 2mortality, mar;et return, etc.3. Moreo er, other income ta5 sa ing ehicles 2e.g., %-7s, G012;3 plans, -oth %-7s3 may 4e 4etter alternati es for alue accumulation.
PROPERT#

10

0Fi,; 81e C A "AMAGE"

OUSE2

This tornado damage to an %llinois home :ould 4e considered an O7ct of #odO for insurance purposes."roperty insurance pro ides protection against ris;s to property, such as fire, theft or :eather damage. This includes speciali<ed forms of insurance such as fire insurance, flood insurance, earth!ua;e insurance, home insurance, inland marine insurance or 4oiler insurance.

7utomo4ile insurance, ;no:n in the (B as motor insurance, is pro4a4ly the most common form of insurance and may co er 4oth legal lia4ility claims against the dri er and loss of or damage to the insuredNs ehicle itself. Throughout the (nited 'tates an auto insurance policy is re!uired to legally operate a motor ehicle on pu4lic roads. %n some jurisdictions, 4odily injury compensation for automo4ile accident ictims has 4een changed to a no6fault system, :hich reduces or eliminates the a4ility to sue for compensation 4ut pro ides automatic eligi4ility for 4enefits. ,redit card companies insure against damage on rented cars. $ri ing 'chool %nsurance pro ides co er for any authori<ed dri er :hilst undergoing tuition, co er also unli;e other motor policies pro ides co er for instructor lia4ility :here 4oth the pupil and dri ing instructor are e!ually lia4le in the e ent of a claim.

7 iation insurance insures against hull, spares, deducti4les, hull :ear and ris;s.

lia4ility

=oiler insurance 2also ;no:n as 4oiler and machinery insurance or e!uipment 4rea;do:n insurance3 insures against accidental physical damage to e!uipment or machinery.

11

=uilderNs ris; insurance insures against the ris; of physical loss or damage to property during construction. =uilderNs ris; insurance is typically :ritten on an Oall ris;O 4asis co ering damage due to any cause. =uilderNs ris; insurance is co erage that protects a personNs or organi<ationNs insura4le interest in materials, fi5tures and>or e!uipment 4eing used in the construction or reno ation of a 4uilding or structure should those items sustain physical loss or damage from a co ered cause.

,rop insurance O+armers use crop insurance to reduce or manage :eather, hail, drought, frost damage, insects, or disease, for instance.O

arious ris;s

associated :ith gro:ing crops. 'uch ris;s include crop loss or damage caused 4y

)arth!ua;e insurance is a form of property insurance that pays the policyholder in the e ent of an earth!ua;e that causes damage to the property. Most ordinary homeo:ners insurance policies do not co er earth!ua;e damage. Most earth!ua;e insurance policies feature a high deducti4le. -ates depend on location and the pro4a4ility of an earth!ua;e, as :ell as the construction of the home.

+lood insurance protects against property loss due to flooding. Many insurers in the (.'. do not pro ide flood insurance in some portions of the country. %n response to this, the federal go ernment created the &ational +lood %nsurance "rogram :hich ser es as the insurer of last resort.

/ome insurance, also commonly called ha<ard insurance or homeo:ners insurance 2often a44re iated in the real estate industry as /*%3, is the type of property insurance that co ers pri ate homes.

0andlord insurance co ers residential and commercial properties :hich are rented to others. Most homeo:nerNs insurance co ers only o:ner6occupied homes.

'urety 4ond insurance is a three party insurance guaranteeing the performance of the principal.

Terrorism insurance pro ides protection against any loss or damage caused 4y terrorist acti ities.

12

8olcano insurance is an insurance that co ers olcano damage in /a:aii.

ISTOR# OF INSURANCE %n some sense :e can say that insurance appears simultaneously :ith the appearance of human society. Ce ;no: of t:o types of economies in human societies9 money economies 2:ith mar;ets, money, financial instruments and so on3 and non6money or natural economies 2:ithout money, mar;ets, financial instruments and so on3. The second type is a more ancient form than the first. %n such an economy and community, :e can see insurance in the form of people helping each other. +or e5ample, if a house 4urns do:n, the mem4ers of the community help 4uild a ne: one. 'hould the same thing happen to oneNs neigh4our, the other neigh4ours must help. *ther:ise, neigh4ours :ill not recei e help in the future. This type of insurance has sur i ed to the present day in some countries :here modern money economy :ith its financial instruments is not :idespread. Turning to insurance in the modern sense 2i.e., insurance in a modern money economy, in :hich insurance is part of the financial sphere3, early methods of transferring or distri4uting ris; :ere practised 4y ,hinese and =a4ylonian traders as long ago as the Ard and 2nd millennia =,, respecti ely. ,hinese merchants tra elling treacherous ri er rapids :ould redistri4ute their :ares across many essels to limit the loss due to any single esselNs capsi<ing. The =a4ylonians de eloped a system :hich :as recorded in the famous ,ode of /ammura4i, c. 17H0 =,, and practised 4y early Mediterranean sailing merchants. %f a merchant recei ed a loan to fund his shipment, he :ould pay the lender an additional sum in e5change for the lenderNs guarantee to cancel the loan should the shipment 4e stolen or lost at sea. 7chaemenian monarchs of 7ncient "ersia :ere the first to insure their people and made it official 4y registering the insuring process in go ernmental notary offices. The insurance tradition :as performed each year in &orou< 24eginning of the %ranian &e: 1ear3M the heads of different ethnic groups as :ell as others :illing to ta;e part, presented gifts to the monarch. The most important gift :as presented during a special ceremony. Chen a gift :as :orth more than 10,000 $erri; 27chaemenian gold coin3 the issue :as registered in a special office. This :as ad antageous to those :ho presented such special gifts. +or others, the presents :ere fairly assessed 4y the confidants of the court. Then the assessment :as registered in special offices.
13

The purpose of registering :as that :hene er the person :ho presented the gift registered 4y the court :as in trou4le, the monarch and the court :ould help him. Eahe<, a historian and :riter, :rites in one of his 4oo;s on ancient %ran9 OChene er the o:ner of the present is in trou4le or :ants to construct a 4uilding, set up a feast, ha e his children married, etc. the one in charge of this in the court :ould chec; the registration. %f the registered amount e5ceeded 10,000 $erri;, he or she :ould recei e an amount of t:ice as much. 7 thousand years later, the inha4itants of -hodes in ented the concept of the Ngeneral a erageN. Merchants :hose goods :ere 4eing shipped together :ould pay a proportionally di ided premium :hich :ould 4e used to reim4urse any merchant :hose goods :ere jettisoned during storm or sin;age. The #ree;s and -omans introduced the origins of health and life insurance c. ?00 7$ :hen they organi<ed guilds called O4ene olent societiesO :hich cared for the families and paid funeral e5penses of mem4ers upon death. #uilds in the Middle 7ges ser ed a similar purpose. The Talmud deals :ith se eral aspects of insuring goods. =efore insurance :as esta4lished in the late 17th century, Ofriendly societiesO e5isted in )ngland, in :hich people donated amounts of money to a general sum that could 4e used for emergencies. 'eparate insurance contracts 2i.e., insurance policies not 4undled :ith loans or other ;inds of contracts3 :ere in ented in #enoa in the 1Gth century, as :ere insurance pools 4ac;ed 4y pledges of landed estates. These ne: insurance contracts allo:ed insurance to 4e separated from in estment, a separation of roles that first pro ed useful in marine insurance. %nsurance 4ecame far more sophisticated in post6-enaissance )urope, and speciali<ed arieties de eloped. 'ome forms of insurance had de eloped in 0ondon 4y the early decades of the se enteenth century. +or e5ample, the :ill of the )nglish colonist -o4ert /ayman mentions t:o Opolicies of insuranceO ta;en out :ith the diocesan ,hancellor of 0ondon, 7rthur $uc;. *f the alue of Q100 each, one relates to the safe arri al of /aymanNs ship in #uyana and the other is in regard to Oone hundred pounds assured 4y the said $octor 7rthur $uc;e on my lifeO. /aymanNs :ill :as signed and sealed on 17 &o em4er 1?2@ 4ut not pro ed until 1?AA. To:ard the end of the se enteenth century, 0ondonNs gro:ing importance as a centre for trade increased demand for marine insurance. %n the late 1?@0s, )d:ard 0loyd opened a coffee house that 4ecame a popular haunt of
14

ship o:ners, merchants, and shipsJ captains, and there4y a relia4le source of the latest shipping ne:s. %t 4ecame the meeting place for parties :ishing to insure cargoes and ships, and those :illing to under:rite such entures. Today, 0loydNs of 0ondon remains the leading mar;et 2note that it is not an insurance company3 for marine and other specialist types of insurance, 4ut it :or;s rather differently than the more familiar ;inds of insurance. %nsurance as :e ;no: it today can 4e traced to the #reat +ire of 0ondon, :hich in 1??? de oured more than 1A,000 houses. The de astating effects of the fire con erted the de elopment of insurance Ofrom a matter of con enience into one of urgency, a change of opinion reflected in 'ir ,hristopher CrenNs inclusion of a site for Nthe %nsurance *fficeN in his ne: plan for 0ondon in 1??7. 7 num4er of attempted fire insurance schemes came to nothing, 4ut in 1?@1 &icholas =ar4on, and ele en associates, esta4lished )nglandNs first fire insurance company, the N%nsurance *ffice for /ousesN, at the 4ac; of the -oyal )5change. %nitially, H,000 homes :ere insured 4y =ar4onNs %nsurance *ffice. The first insurance company in the (nited 'tates under:rote fire insurance and :as formed in ,harles To:n 2modern6day ,harleston3, 'outh ,arolina, in 17A2. =enjamin +ran;lin helped to populari<e and ma;e standard the practice of insurance, particularly against fire in the form of perpetual insurance. %n 17H2, he founded the "hiladelphia ,ontri4utionship for the %nsurance of /ouses from 0oss 4y +ire. +ran;linNs company :as the first to ma;e contri4utions to:ard fire pre ention. &ot only did his company :arn against certain fire ha<ards, it refused to insure certain 4uildings :here the ris; of fire :as too great, such as all :ooden houses. %n the (nited 'tates, regulation of the insurance industry is highly =al;ani<ed, :ith primary responsi4ility assumed 4y indi idual state insurance departments. Chereas insurance mar;ets ha e 4ecome centrali<ed nationally and internationally, state insurance commissioners operate indi idually, though at times in concert through a national insurance commissionersN organi<ation. %n recent years, some ha e called for a dual state and federal regulatory system 2commonly referred to as the *ptional federal charter 2*+,33 for insurance similar to that :hich o ersees state 4an;s and national 4an;s.

! # SOMEONE NEE" INSURANCE

15

0ife insurance is a partial compensation for the pro4lems caused 4y untimely death. %t :or;s in the follo:ing ha<ardous situations9

"remature death of the 4read:inner lea ing the dependents to fend for themsel es. 'ur i ing old age :ithout any isi4le means of support.

'o, e en :hile you may thin; that you may not need life insurance, cast a thought o er the future of your family if they ha e to sur i e in your a4sence. 0ife insurance gi es them the financial security that they :ill need for the future. T E INSURANCE IN"USTR# IN IN"IA AN OVERVIEW %nsurance is a federal su4ject in %ndia. The insurance sector has gone through a num4er of phases and changes. 'ince 1999, :hen the go ernment opened up the insurance sector 4y allo:ing pri ate companies to solicit insurance and also allo:ing +$% up to 2?R, the insurance sector has 4een a 4ooming mar;et. /o:e er, the largest life6insurance company in %ndia is still o:ned 4y the go ernment. Cith the largest num4er of life insurance policies in force in the :orld, %nsurance happens to 4e a mega opportunity in %ndia. %tJs a 4usiness gro:ing at the rate of 1H620 per cent annually and presently is of the order of -s 1H?0.G1 4illion 2for the financial year 200? L 20073. Together :ith 4an;ing ser ices, it adds a4out 7R to the countryJs #ross $omestic "roduct 2#$"3. The gross premium collection is nearly 2R of #$" and funds a aila4le :ith 0%, for in estments are @R of the #$".) en so nearly ?HR of the %ndian population is :ithout life insurance co er :hile health insurance and non6life insurance continues to 4e 4elo: international standards. 7 large part of our population is also su4ject to :ea; social security and pension systems :ith hardly any old age income security 7 :ell6de eloped and e ol ed insurance sector is needed for economic de elopment as it pro ides long term funds for infrastructure de elopment and strengthens the ris; ta;ing a4ility of

16

indi iduals. %t is estimated that o er the ne5t ten years %ndia :ould re!uire in estments of the order of one trillion (' dollars. ISTORICAL PERSPECTIVE The history of life insurance in %ndia dates 4ac; to 1@1@ :hen it :as concei ed as a means to pro ide for )nglish Cido:s. %nterestingly in those days a higher premium :as charged for %ndian li es than the non 6 %ndian li es, as %ndian li es :ere considered more ris;y to co er. The =om4ay Mutual 0ife %nsurance 'ociety started its 4usiness in 1@70. %t :as the first company to charge the same premium for 4oth %ndian and non6%ndian li es. The *riental 7ssurance ,ompany :as esta4lished in 1@@0. The #eneral insurance 4usiness in %ndia, on the other hand, can trace its roots to Triton %nsurance ,ompany 0imited, the first general insurance company esta4lished in the year 1@H0 in ,alcutta 4y the =ritish. Till the end of the nineteenth century insurance 4usiness :as almost entirely in the hands of o erseas companies. %nsurance regulation formally 4egan in %ndia :ith the passing of the 0ife %nsurance ,ompanies 7ct of 1912 and the "ro ident +und 7ct of 1912. 'e eral frauds during the 1920Ns and 19A0Ns sullied insurance 4usiness in %ndia. =y 19A@ there :ere 17? insurance companies. The first comprehensi e legislation :as introduced :ith the %nsurance 7ct of 19A@ that pro ided strict 'tate ,ontrol o er the insurance 4usiness. The insurance 4usiness gre: at a faster pace after independence. %ndian companies strengthened their hold on this 4usiness 4ut despite the gro:th that :as :itnessed, insurance remained an ur4an phenomenon. The #o ernment of %ndia in 19H?, 4rought together o er 2G0 pri ate life insurers and pro ident societies under one nationali<ed monopoly corporation and 0ife %nsurance ,orporation 20%,3 :as 4orn. &ationali<ation :as justified on the grounds that it :ould create the much needed funds for rapid industriali<ation. This :as in conformity :ith the #o ernmentNs chosen path of 'tate led planning and de elopment. The non6life insurance 4usiness continued to thri e :ith the pri ate sector till 1972. Their operations :ere restricted to organi<ed trade and industry in large cities. The general insurance industry :as nationali<ed in 1972. Cith this, nearly 107 insurers :ere amalgamated and grouped into four companies6 &ational %nsurance ,ompany, &e: %ndia

17

7ssurance ,ompany, *riental %nsurance ,ompany and (nited %ndia %nsurance ,ompany. These :ere su4sidiaries of the #eneral %nsurance ,ompany 2#%,3. KE# MILESTONES 8B86C The %ndian 0ife 7ssurance ,ompanies 7ct enacted as the first statute to regulate the life insurance 4usiness. 8B6AC The %ndian %nsurance ,ompanies 7ct enacted to ena4le the go ernment to collect statistical information a4out 4oth life and non6life insurance 4usinesses. 8B9AC )arlier legislation consolidated and amended 4y the %nsurance 7ct :ith the o4jecti e of protecting the interests of the insuring pu4lic. 8B>?C 2GH %ndian and foreign insurers along :ith pro ident societies :ere ta;en o er 4y the central go ernment and nationali<ed. 0%, :as formed 4y an 7ct of "arliament6 0%, 7ct 19H?6 :ith a capital contri4ution of -s. H crore from the #o ernment of %ndia. IN"USTR# REFORMS -eforms in the %nsurance sector :ere initiated :ith the passage of the %-$7 =ill in "arliament in $ecem4er 1999. The %-$7 since its incorporation as a statutory 4ody in 7pril 2000 has fastidiously stuc; to its schedule of framing regulations and registering the pri ate sector insurance companies. 'ince 4eing set up as an independent statutory 4ody the %-$7 has put in a frame:or; of glo4ally compati4le regulations. The other decision ta;en simultaneously to pro ide the supporting systems to the insurance sector and in particular the life insurance companies :as the launch of the %-$7 online ser ice for issue and rene:al of licenses to agents. The appro al of institutions for imparting training to agents has also ensured that the insurance companies :ould ha e a trained :or;force of insurance agents in place to sell their products. INTRO"UCTION OF LIFE INSURANCE

18

LIFE INSURANCE 0ife insurance is a form of insurance that pays monetary proceeds upon the death of the insured co ered in the policy. )ssentially, a life insurance policy is a contract 4et:een the named insured and the insurance company :here in the insurance company agrees to pay an agreed upon some of money to the insuredJs named 4eneficiary so long as the insuredJs premiums are current. Cith a large population and the untapped mar;et area of this population insurance happens to 4e a ery opportunity in %ndia. Today it stands as a 4usiness gro:ing at the rate of 1H620R annually. Together :ith 4an;ing ser ices, it adds a4out 7R to country #$". %n spite of all this gro:th statistics of the penetration of the insurance in the country is ery poor. &early @0R of %ndian populations are :ithout life insurance co er and the health insurance. This is an indicator that gro:th potential for the insurance sector is immense in %ndia. %t :as due to this immense gro:th that the regulations :ere introduced in the insurance sector and in continuation Malhotra ,ommittee :as constituted 4y the go ernment in 199A to e5amine the arious aspects of the industry. The ;ey element of the reform process :as participation of o erseas insurance companies :ith 2?R capital. ,reating a more competiti e financial system suita4le for the re!uirements of the economy :as the main idea 4ehind this reform. 'ince then the insurance industry has gone through many changes. The li4erali<ation of the industry the insurance industry has ne er loo;ed 4ac; and today stand as one of the most competiti e and e5ploring industry in %ndia. The entry of the pri ate players and the increased use of the ne: distri4ution are in the limelight today. The use of ne: distri4ution techni!ues and the %T tools has increased the scope of the industry in the longer run.%nsurance is the 4usiness of pro iding protection against financial aspects of ris;, such as those property, life, health and legal lia4ility. %t is one method of a greater concept ;no:n as ris; management6 :hich is the need to manage uncertainty on account of e5posure to loss, injury, disad antage or destruction.

19

%nsurance is the method of spreading and transfer of ris;s. The fortunate many :ho are e5posed to some or similar ris; shares loss of the unfortunate. %nsurance does not protect the assets 4ut only compensates the economy or financial loss. %n insurance the insured ma;es payment called "remiums to an insurer, and in return is a4le to claim a payment from the insurer if the insured suffers a defined type of loss. This relationship is usually dra:n upon in a formal legal contract. %nsurance companies also earn in estment profits, 4ecause the ha e the use of the premium money from the time they recei e it until the time the need it to pay claims. This money is called the float. Chen the in estment of float are successful the may earn large profits, e en if the insurance company pays out of claims e ery penny recei ed as premiums. %n fact, most insurance companies pay out more money than they recei e in premiums. The e5cess amount that they pay to policyholders is the cost of float. 7n insurance company :ill profit if the in est the money at a greater return than their cost of float. 7n insurance contract or policy :ill set out in detail the e5act circumstances under :hich a 4enefit payment :ill 4e made and the amount of premiums. CLASSIFICATION OF INSURANCE The insurance industry in %ndia can 4roadly classify in t:o parts. The are. 1. &on 0ife 2general3 %nsurance 2. 0ife %nsurance NON LIFE0GENERAL2 INSURANCE Triton insurance co. ltd :as the first general insurance company to 4e esta4lished in %ndia in 1@H0, :hose shares :ere mainly 4y the =ritish. The first general insurance company to 4e set up 4y an %ndian mercantile insurance company ltd., :hich :as sta4ili<ed in 1970. The general insurance 4usiness :as nationali<ed after the promulgation of general insurance corporation 2#%,3 of %ndia undertoo; the post nationali<ation general insurance 4usiness.

20

LIFE INSURANCE 0ife insurance can 4e defined as life insurance pro ides a some of money if the person :ho is insured dies :hile the policy is in effect.%n 1@1@ =ritish introduced to %ndia, :ith the esta4lishment of the oriental life insurance company in ,alcutta. The first %ndian o:ned life insurance company is the =om4ay mutual life assurance society :as setup in 1@70.The life insurance act,1912 :as the first statuary measure to regulate the life insurance 4usiness in %ndia. %n 19@A, the earlier legislation :as consolidated and amended 4y the insurance act, 19A@, :ith comprehensi e pro isions for detailed effecti e control o er insurance.The union go ernment had opened the insurance sector for pri ate participation in 1999, also allo:ing the pri ate companies to ha e foreign e!uity up to 2?R . +ollo:ing the opening up of the insurance sector, 12 pri ate sector companies ha e entered the life insurance 4usiness. BENEFITS OF LIFE INSURANCE 0ife insurance encourages sa ing and forces thrift. %t is superior to traditional sa ing ehicles. %t help to achie e the purpose of life assured. %t can 4e enchased and facilitates !uic; 4orro:ing. %t pro ides alua4le ta5 relief.

Thus insurance is found to 4e ery useful in the li es of the person 4oth in short term and long term. PRESENT SCENARIO OF LIFE INSURANCE IN"USTR# IN IN"IA The life insurance industry in %ndia gre: 4y an impressi e G7.A@R, :ith premium income at -s. 1H?0.G1 4illion during the fiscal year 200?62007. Though the total olume of 0%,Ns 4usiness increased in the last fiscal year 2200?620073 compared to the pre ious one, its mar;et share came do:n from @H.7HR to @1.91R.

21

The 17 pri ate insurers increased their mar;et share from a4out 1HR to a4out 19R in a yearNs time. The figures for the first t:o months of the fiscal year 200760@ also spea; of the gro:ing share of the pri ate insurers. The share of 0%, for this period has further come do:n to 7H percent, :hile the pri ate players ha e gra44ed o er 2G percent. Cith the opening up of the insurance industry in %ndia many foreign players ha e entered the mar;et. The restriction on these companies is that they are not allo:ed to ha e more than a 2?R sta;e in a companyJs o:nership.'ince the opening up of the insurance sector in 1999, foreign in estments of -s. @.7 4illion ha e poured into the %ndian mar;et and 19 pri ate life insurance companies ha e 4een granted licenses. %nno ati e products, smart mar;eting, and aggressi e distri4ution ha e ena4led fledgling pri ate insurance companies to sign up %ndian customers faster than anyone e5pected. %ndians, :ho had al:ays seen life insurance as a ta5 sa ing de ice, are no: suddenly turning to the pri ate sector and snapping up the ne: inno ati e products on offer. 'ome of these products include in estment plans :ith insurance and good returns 2unit lin;ed plans3, multi L purpose insurance plans, pension plans, child plans and money 4ac; plans.

ABOUT RELIANCE

0Fi,; 81( C LOGO OF RELIANCE2

S#MBOL *ur sym4ol,P-eliance 7")DJ con eys the spirit of e5cellence,the human urge for progress, the desire to reach higher, resol e toPshape a 4etter futureJ.

22

213The 7")D is the highest point L the pinnacle 6 an a4iding sym4olof hope and optimism, achie ement and success. 223 The 4lue in -eliance 7")D represents the inner strength, the self4elief, the !uiet confidence, the sense of purpose that go into ma;ing of an epic journey. 2A3 The red in -eliance7")D represents the energy and dynamismthat propels one to the pinnacle of oneJs am4ition. -eliance 0ife %nsurance ,ompany 0imited is a part of -eliance ,apital 0td. of the -eliance 6 7nil $hiru4hai 7m4ani #roup. -eliance ,apital is one of %ndiaJs leading pri ate sector financial ser ices companies, and ran;s among the top A pri ate sector financial ser ices and 4an;ing companies, in terms of net :orth. -eliance 0ife %nsurance is another step for:ard for -eliance ,apital 0imited to offer need 4ased 0ife %nsurance solutions to indi iduals and ,orporates. FOR RELIANCE GRO!T IS CARE FOR GOO" EALT

-elianceNs occupational health centers carry out pre6employment and periodic medical chec;ups as :ell as other routine pre enti e ser ices. 'pecialised tests li;e 4iological monitoring, health ris; assessment studies and audits for e5posure to arious materials are also performed. /ealth education and a:areness form an integral part of the health care programme at -eliance GRO!T IS CARE FOR SAFET#

Ce 4elie e that the safety of each employee is the responsi4ility of the indi idual as :ell as of the :hole community of employees GRO!T IS CARE FOR T E ENVIRONMENT

-eliance 4elie es that a clean en ironment in and around the :or;place fosters health and prosperity for the indi idual, the group and the larger community to :hich they 4elong. )n ironmental protection is an integral part of the planning, design, construction, operation and maintenance of all our projects. GRO!T IS CONSERVATION
23

7t -eliance, energy conser ation efforts see; to reduce the unit cost of fuels and to impro e efficiencies in energy intensi e processes.

RELIANCE A"A GROUP

24

0Fi,; 81, C RELIACE GROUP STRUCTURE2

ORGANISATION HIERARCHY

DIRECTOR

VICE PRESI"ENT1 ACCOUNTSEOP ERATIONS

GM-

VICE PRESI"ENT1 R

VICE PRESI"ENT1 MARKETINGEIT

GM- HR

GM-

25

SM/ MGR./ AM SR. E EC!TIVES OTHERS- SA$

SENIOR MGR./ AM/ E EC!TIVES TRAINEES

REGIONA#/SR. AM./"DM/"DE/MT. ADVISORS

PRESENT C AIRMAN

0Fi,; 81* C S RI ANIL " IRUBAI AMBANI2 BOAR" OF "IRECTORS 'hri. 7nil $. 7m4ani :as 4orn to $hiru4hai 7m4ani and Bo;ila4en 7m4ani on Eune 0G, 19H9 at Mum4ai./e did his schooling and graduation in Mum4ai and thereafter pursued his Masters of =usiness 7dministration from Charton =usiness 'chool, ('7 7nil $hiru4hai 7m4ani is the ,hairman of all listed #roup companies, namely9 -eliance ,ommunications, -eliance ,apital, -eliance )nergy, -eliance /ealth, -eliance )ntertainment and -eliance &atural -esources 0imited. 7nil $ 7m4ani joined -eliance in 19@A as ,o6,hief )5ecuti e *fficer (nder his leadership, -eliance pioneered %ndiaJs first forays into o erseas capital mar;ets :ith international pu4lic offerings of glo4al depository receipts, con erti4les and 4ond Charton =oard of * erseers, The Charton 'chool, ('7. ,entral 7d isory ,ommittee, ,entral )lectricity -egulatory ,ommission =oard of #o ernors, %ndian %nstitute of Management, 7hmeda4ad =oard of #o ernors %ndian %nstitute of Technology, Banpur

26

 %n Eune 200G, he :as elected for a si56year term as an independent mem4er of the -ajya 'a4ha, (pper /ouse of %ndiaJs "arliament a position he chose to resign oluntarily on March 2H, 200?.

,onferred the P,)* of the 1ear 200GJ in the "latts #lo4al )nergy 7:ards -ated as one of P%ndiaJs Most 7dmired ,)*sJ for the si5th consecuti e year in the =usiness =arons L T&' Mode opinion poll,200G ,onferred PThe )ntrepreneur of the $ecade 7:ardJ 4y the =om4ay Management

7ssociation, *cto4er 2002 7nil $ 7m4ani joined -eliance in 19@A as ,o6,hief )5ecuti e *fficer, and :as centrally in ol ed in e ery aspect of the companyJs management o er the ne5t 22 years. A!AR"S & AC IEVEMENTS ,onferred the P,)* of the 1ear 200GJ in the "latts #lo4al )nergy 7:ards -ated as one of P%ndiaJs Most 7dmired ,)*sJ for the si5th consecuti e year in the =usiness =arons L T&' Mode opinion poll,200G ,onferred PThe )ntrepreneur of the $ecade 7:ardJ 4y the =om4ay Management 7ssociation, *cto4er 2002 7:arded the +irst Charton %ndian 7lumni 7:ard Charton %ndia )conomic +orum 2%3 in recognition of his contri4ution to the esta4lishment of -eliance as a glo4al leader in many of its 4usiness areas, $ecem4er 2001 'elected 4y 7sia :ee; maga<ine for its list of P0eaders of the Millennium in =usiness and +inanceJ and :as introduced as the only Pne: heroJ in =usiness and +inance from %ndia, Eune 1999
27

8oted PMT8 1outh %con of the 1earJ, in 'eptem4er 200A 8oted as %ndiaJs =usiness %con +or The 1outh in a pollconducted 4y %ndia Today maga<ine.6 7ugust 200?

-egarded as one of the foremost corporate leaders of contemporary %ndia, 'hri 7nil $ 7m4ani, H0, is the chairman of all listed companies of the -eliance 7$7 #roup, namely, -eliance ,ommunications, -eliance ,apital, -eliance )nergy, -eliance &atural -esources and -eliance "o:er. /e is also ,hairman of the =oard of #o ernors of $hiru4hai 7m4ani %nstitute of %nformation and ,ommunication Technology, #andhi &agar, #ujarat. Till recently, he also held the post of 8ice ,hairman and Managing $irector in -eliance %ndustries 0imited 2-%03, %ndiaJs largest pri ate sector enterprise. 7nil $ 7m4ani joined -eliance in 19@A as ,o6,hief )5ecuti e *fficer, and :as centrally in ol ed in e ery aspect of the companyJs management o er the ne5t 22 years. /e is credited :ith ha ing pioneered a num4er of path64rea;ing financial inno ations in the %ndian capital mar;ets. COMPAN#DS VISION; MISSION3 GOAL & OBJECTIVE 9 VISION C1 )mpo:ering e eryone li e their dreams. MISSION C1 ,reate unmatched alue for e eryone through dependa4le, effecti e, transparent and profita4le life insurance and pension plans. OUR GOAL C1 -eliance 0ife %nsurance :ould stri e hard to achie e the A goals mentioned 4elo:9

)merge as transnational 0ife %nsurer of glo4al scale and standard ,reate 4est alue for ,ustomers, 'hareholders and all 'ta;e holders
28

7chie e impecca4le reputation and credentials through 4est 4usiness practices

OBJECTIVE C1 7t -eliance 0ife %nsurance, :e strongly 4elie e that as life is different at e ery stage, life insurance must offer fle5i4ility and choice to go :ith that stage. Ce are fully prepared and committed to guide you on insurance products and ser ices through our :ell6trained ad isors, 4ac;ed 4y competent mar;eting and customer ser ices, in the 4est possi4le :ay. ISTOR# 08A8@18B?A2 -eliance :as founded in 1@17, officially incorporating in 1@20, as the +ire 7ssociation of "hiladelphia, organi<ed 4y H hose and 11 engine fire companies. (pon inception, -eliance 4ecame the nationJs first successful association of olunteer fire departments, :hich 4eforehand had 4een independent of one another and often engaged in inefficient competition, :hich at times e5tended to the destruction of ri alsJ e!uipment and the assault of ri al firefighters. %n addition to under:riting fire insurance, the association ser ed as mediator 4et:een its mem4er engine and hose companies to resol e the pro4lems of the past. The associationJs first policy :as 4ought 4y 'amuel =leight for his three6story 4uilding. *ne lasting sym4ol of the company adopted at the outset :as the fire mar; featuring a fireplug :ith a coiling hose and the initials +.7. on 4oth sides. The association :as granted a charter 4y the go ernor of "ennsyl ania on March 27, 1@20, and :rote 29 policies that year. =y 1@A2 the association :rote H@A policies and 4y 1@GG it had GG mem4er companies. %n 1@H0 it had a I100,000 surplus, all of :hich :as lost 4y the #reat +ire of "hiladelphia that year. The trustees, ho:e er, paid all resulting claims, :hich 4rought them good:ill and led to further e5pansion. %n 1@71 the city of "hiladelphia created its o:n fire department. %n response, the trustees chose to continue as a stoc; company under a ne: charter, :here4y they 4ecame solely an insurance company and 4egan :riting policies outside of "hiladelphia. The 4usiness continued to gro: o er the ensuing decades :ith the de elopment of a country:ide field of agents, e5panded forms of co erage including automo4ile insurance, and the formation
29

of arious su4sidiaries, one of :hich :as -eliance %nsurance ,ompany founded in the 1920s. %n 19H0 the association merged its su4sidiaries into the parent company, and on Eanuary 1, 19H@, The +ire 7ssociation of "hiladelphia officially changed its name to -eliance %nsurance ,ompany. The companyJs gro:th continued through ac!uisition and the esta4lishment of su4sidiaries. The #eneral ,asualty ,ompany of Cisconsin :as 4ought in 19H? and (nited "acific %nsurance ,ompany in May 19?7, pro iding the company :ith a solid presence in the Mid:est and Cest respecti ely. )ure;a %nsurance ,ompany :as started in 19H9. %ts name :as changed to "lanet %nsurance ,ompany in 19?A, and 4eginning in 197?, :rote -elianceJs commercial mass6mar;eting 4usiness. 8B?A18BBA T E SAUL STEINBERG ERA %n 19?@ the 4ro;erage firm of ,arter, =erlind and Ceill 2,arter3 sa: the potential in ac!uiring an insurance company, many of :hich had strong 4alance sheets and e5cess surplus, :hich could 4e used for other thing outside of the insurance 4usiness. They e5amined se eral insurance companies and e entually targeted -eliance as the most attracti e candidate 4ecause of its strong financial position and 4ecause a large percentage of the companyJs stoc; :as o:ned 4y ,arterJs institutional clients thus ma;ing them prime for a ta;eo er. 7fter ha ing approached and ha ing 4een rejected 4y many other financiers, such as 0a:rence Tisch, ,arter presented the idea of ac!uiring -eliance to 'aul "hillip 'tein4erg. Mr. 'tein4erg :as 4orn 7ugust 19A9 in =roo;lyn, &1, and recei ed a =achelor of 'cience degree in )conomics from the Charton 'chool of +inance at the (ni ersity of "ennsyl ania in 19H9. %n 19?1, at the age 22, he founded 0easco $ata "rocessing )!uipment ,orporation, a small office data6processing e!uipment firm that leased %=M computers. The company gre: rapidly, e5panded its capa4ilities, and in 19?H :ent pu4lic. 7s 0easco gre:, 'tein4erg sought to di ersify the company. %n 19?@ 0easco 4ought 91R of -eliance %nsurance ,ompany and its su4sidiaries 2'tein4erg 4ought the 4alance of the company in the :inter of 19@13. 7 year later in 19?9 'tein4erg attempted to ta;e o er the I9 4illion ,hemical =an;, then one of the nations largest financial institutions. The attempt failed and earned 'tein4erg the enmity of the &e: 1or; financial community and a reputation for 4rashness. Mr. 'tein4erg remar;ed at the time, % al:ays ;ne: there :as an esta4lishmentM % just thought % :as part of it. +ifteen years later
30

'tein4erg :ould ma;e another legendary run at another fa4led 7merican institution, The Calt $isney ,o. /e failed in this 4id too, 4ut forced $isney to pay him I?0 million in greenmail for his shares. %n the early 1970s under the direction of 'tein4erg, -eliance and its corporate parent 0easco, under:ent significant changes in structure and operation. 7 holding company called -eliance #roup /oldings :as formed, :hich through an intermediate holding company o:ned -eliance and its su4sidiaries and sister companies. %n 197A 0easco changed its name to -eliance #roup, %nc., to reflect a corporate strategy a:ay from computers ser ices to:ard financial ser ices and nota4ly insurance6related ones. &e: insurance su4sidiaries :ere spa:ned to handle the companyJs increasing e5pansion into selected specialty lines, including ,ommon:ealth 0and Title %nsurance ,ompany 2c. 197?3, -eliance %nsurance ,ompany of &e: 1or; 2197@3, -eliance 0loyds 219@03. %n the early 19@0s, the e5pansion included the incorporation of se eral ne: life insurance companies. Throughout this period of e5pansion and di ersification, -eliance %nsurance ,ompany continued to handle most of the standard lines of insurance :ith :hich most people are familiar, including personal automo4ile and homeo:ners. %n 19@1 'tein4erg, still chairman of the 4oard and chief e5ecuti e officer, ac!uired all outstanding shares of -eliance #roup, %nc. Thus the company :as no: pri ately6o:ned 4y 'tein4erg and his family. %n 19@?, ho:e er, the company again :ent pu4lic selling a4out 20R of its stoc; :ith 'tein4erg and his family retaining the rest. The companyJs stoc; alue plummeted follo:ing the stoc; mar;et crash of 19@7 and its

under:riting results suffered in the late 19@0s, in large part due to claims arising from hurricanes and the 19@9 'an +rancisco earth!ua;e. 7ll the :hile, ho:e er, -elianceJs gro:th strategy continued, e5panding into e er more di ersified insurance mar;ets, including surety and reinsurance. =eyond the e5pansion of its insurance mar;ets, -eliance #roup de eloped otherareas of 4usinessM among :hich, -eliance $e elopment #roup, %nc. handled real estate operations, and -eliance ,onsulting #roup pro ided consulting ser ices for energy, en ironment, and natural resources. 7s the company e5panded in one area through start6up and ac!uisition, it mean:hile sold off other interests. %n 19@9 the companyJs sale of $ays ,orporation, o:ner of the $ays %nn hotel chain, nearly tripling its initial 19@G in estment.
31

8BBA16778 T E COLLAPSE 7lthough it :as hushed at the time, 'aul 'tein4erg suffered a stro;e in 199H. 7cti e control of his financial empire :as assumed 4y his 4rother, -o4ert 'tein4erg. ,hanges :ere instituted ostensi4ly to:ard ma;ing -eliance more focused on insurance, and for a :hile, it loo;ed as if the company :as prospering. Many in estors :ho had long ago gro:n :eary of 'aul 'tein4erg :ere endorsing the company. -#/ stoc; reached a record high. The company reported in its 199@ annual financial statement, filed in March 1999, a I1.7 4illion statutory surplus, its largest in history, and a profit for that year of IH@H million. Cithin less than three years, ho:e er, the ,ommon:ealth ,ourt of "ennsyl ania :ould issue a court order placing -eliance into li!uidation. The company lost I177 million in net income in 1999 and another I19@ million in 2000. %n early 2000 -eliance agreed to 4e ac!uired 4y 0eucadia &ational for stoc; that amounted to only IAH9 million. The price represented a mar;et capitali<ation loss of I1.9G1 4illion since mid6199@ :hen -elianceJs mar;et alue reached a high of I2.A 4illion. The deal, ho:e er, fell through :hen 0eucadia &ational 4ac;ed out 4ecause of concerns o er -elianceJs financial health. "ennsyl ania insurance regulators sought to sal age the company in 2001, 4ut 4y *cto4er A rd of that year, follo:ing the undermining of the financial mar;ets in the :a;e of the terrorist attac;s of 'eptem4er 11, 2001, "ennsyl aniaJs insurance commissioner, $iane Bo;en, petitioned to ha e the company li!uidated. %t :as the largest insurer li!uidation in (.'. history according to the %nsurance %nformation %nstitute. The speed and si<e of -elianceJs collapse in turn caused uncertainty a4out the foremost insurance rating agencies, such as 7.M. =est ,o., :ho until Eune 2000 rated -elianceJs financial strength as an 76 2e5cellent3, and 'tandard . "oorJs, :ho had assigned the insurer an 72strong3 rating. The rating agencies, ho:e er, played an integral role in the companyJs collapse. *nce 7.M. =est do:ngraded -elianceJs rating in Eune 2000, due in part to the su4stantial de4t of the parent company, -eliance #roup /oldings, %nc., -eliance a4ility retain and attract 4usiness :as dealt a fateful 4lo:. 7nther factor causing the sudden do:nfall :as a complicated reinsurance pool of :or;ers compensation policies, du44ed (nico er, that :as a ery costly failure. (nico er, ho:e er, :as only one e5ample of the corporate mentality and ris;6ta;ing philosophy
32

that ultimately caused the companyJs demise. %n its eagerness to e5pand and gro:, policies :ere :ritten too cheaplyM e5cessi e di idends :ere paid to stoc;holders 2largely the 'tein4ergs themsel es3M and the company :as mismanaged. 7nd as a result it failed. 67781PRESENT T E LIFUI"ATION +ollo:ing the *cto4er A, 2001, court order placing the company in li!uidation, the "ennsyl ania %nsurance $epartment too; o er control of the )state of -eliance, :hich 4egan a long, complicated, and ongoing process of determining the full e5tent of the companyJs lia4ilities and distri4ution of all of its assets. %n the meantime, legal actions :ere instituted against the companyJs former officers and directors for 4reach of their fiduciary duties and negligence leading to the companyJs do:nfall. The actions :ere precedent6setting in nature and resulted in a 4etter understanding of :hat had contri4uted to -elianceJs pro4lems, as :ell as appro5imately I100 million in settlements to offset the companyJs lia4ilities. The order of li!uidation triggered the esta4lished statutory pro isions of arious state insurance guaranty funds, :ho too; o er the handling of many of the claims against the companyJs policies. Chether a stateJs guaranty association :ill assume responsi4ility for a gi en claim depends on se eral factors, nota4ly :hether the insurance company :as licensed to do 4usiness in the state and :hether there e5ists other insurance for the loss. The amount of assets of the policyholder, the date the claim is reported, and other aria4les also play a role in determining :hether a guaranty fund :ill accept the claim. ,laims payments made 4y a guaranty association are assessed against insurers licensed to do 4usiness in the state, :ho :ill ultimately pass along the cost to their policyholders. =y most any measurement, -eliance :as the largest insurance li!uidation in history. *nce such measurement, pro ided 4y the &ational ,onference of %nsurance +unds 2&,%#+3, is the total amount paid 4y all of the guaranty funds for each insol ency from inception to the present. The chart 4elo: from the &,%#+ lists the fi e largest insol encies through 200@ #e%& I$-)'4e$t /)m.%$y 2001 -eliance %nsurance ,ompany 2002 0egion %nsurance ,ompany 2000 ,alifornia ,ompensation P%yme$tI2,2?H,@GH,?12 I1,272,?9G,0?? %nsurance I1,0G9,7GH,G20

33

,ompany 2000 +remont %ndemnity %nsurance ,ompany 2001 "/%,* %nsurance ,ompany I@GA,G0H,7G? I?99,G20,1GG

COMPANIES -eliance %nsurance ,ompany 4ecame a su4sidiary of 0easco in 19?@ and of -eliance #roup in 197A :hen 0easco changed its name. %n addition to -eliance %nsurance ,ompany, -eliance #roup at arious times o:ned the follo:ing other corporations9

,anan:ill ,ommon:ealth 0and Title %nsurance ,ompany ,ommon:ealth Mortgage 7ssurance ,ompany ,ommon:ealth -elocation 'er ices, %nc. #eneral ,asualty ,ompanies /er4ert C. $a is . ,ompany -,# %nternational, %nc. -,#>/agler =ailly -,#>Moody6Tottrup -,#>8ectron -eliance $e elopment #roup, %nc. -eliance $irect %nsurance ,ompany -eliance &ational %nsurance ,ompany -eliance -einsurance ,orporation -eliance 'tandard 0ife %nsurance ,ompany
34

-eliance 'urety ,ompany (nited "acific 0ife %nsurance ,ompany (nited "acific -eliance 0ife %nsurance ,ompany of &e: 1or;

MO"ERN INSURANCE MARKET #lo4al integration of financial mar;ets resulted from de6regulating measures, technological information e5plosion and financial inno ations. 0i4eralisation and #lo4alisation ha e allo:ed the entry of foreign players in the %nsurance sector. Cith the entry of pri ate and foreign players in the %nsurance 4usiness, people ha e got a lot of options to choose from. -adical changes are ta;ing place in customer profile due to the changing life style and social perception, resulting in erosion of 4rand loyalty. To sur i e, the focus of the modern insurers shifted to a customer6 centric relationship.

1. LIBERALISATION AN" PRIVATISATION

%ndiaJs economic de elopment made it a most lucrati e %nsurance mar;et in the :orld. =efore the year 1999, there :as monopoly state run 0%, transacting life 4usiness and the #eneral %nsurance ,orporation of %ndia :ith its four 'u4sidiaries transacting the rest. %n the :a;e of reform process and passing %nsurance -egulatory and $e elopment 7uthority 2%-$73 7ct through %ndian parliament in 1999, %ndian %nsurance :as opened for pri ate companies. 0i4eralisation on the %nsurance sectors has allo:ed the foreign players to enter the mar;et :ith their %ndian partners. Most of the foreign %nsurers ha e joined :ithin the local mar;et. %ndia offers immense possi4ilities to foreign %nsurers since it is the :orldJs most populous country ha ing o er a 4illion people.%nsurance industry had ten and si5 entrants in life and non6life sector respecti ely in the year 200062001. The industry again sa: t:o and three entrants in the life and non6life 4usiness respecti ely in the year 200162002. *ne additional entrant :as made 4oth in the life and in non6life 4usiness in 200G and 200H respecti ely. 7t present there are fourteen companies each in 0ife and #eneral %nsurance. The +unds earlier generated 4y the state o:ned

35

insurers ha e 4een di ersified :ith other ne: insurers. Ce should :ait and see ho: the ne: players are going to 4oost up our economy.

2. COMPETITION
"ri ate and +oreign entrants in the %nsurance %ndustry made others difficult to retain their mar;et. /igher customer aspirations lead to ne: e5pectations and compel him to mo e to:ards the insurer :ho pro ides him the 4est ser ice in time. %t 4ecomes less ia4le for them e en to maintain the functional net:or;s or competiti e standards and ser ices. To sur i e in the %ndustry they analyse, the emerging re!uirements of the policyholders > insureds and they are in the forefront in pro iding essential ser ices and introducing no el products. There4y they 4ecome niche specialists, :ho pro ide the right ser ice to the right person in right time. 9; INFORMATION TEC NOLOG# %nsurers are the earlier adopters of technology. =ecause of the %nformation re olution, customers are free to choose from a :ide range of ne: and inno ati e products. The %nsurance companies are utili<ing the %nformation technology applications for 4etter customer ser ice, cost reduction, ne: product design and de elopment and many more. &e: technology gi es the policyholders > insureds 4etter, :ider and faster access to products and ser ices. The %nternet has pro ided 4rand ne: distri4ution channels to the %nsurers. The technology has ena4led the %nsurer to inno ate ne: products, pro ide 4etter customer ser ice and deeper and :ider insurance co erage to them. 7t present, %nsurance companies are gi ing customers a distinct claim id to trac; claims on6line, entertaining on6line enrollment, eligi4ility re ie:, financial reporting, 4illing and electronic fund transfer to its 4enefit clan customers. :; PRO"UCT INNOVATIONS

36

%nsurers are continuously inno ating ne: products 4ased on for:ard6loo;ing models. They ha e de eloped ne: products addressing the ne: challenges in society and products to address the ha<ards from ne: en ironmental issues. ,ompanies :ill need to constantly inno ate in terms of product de elopment to meet e er6changing consumer needs. (nderstanding the customer 4etter :ill ena4le %nsurance companies to design appropriate products, determine price correctly and to increase profita4ility. 7t present, %nsurance companies are gi ing customers a distinct claim id to trac; claims on6line, entertaining on6line enrollment, eligi4ility re ie:, financial reporting and much more. 'ince a single policy cannot meet all the %nsurance o4jecti es, one should ha e a portfolio of policies co ering all the needs."roduct de elopment is made possi4le 4y integrating actuarial, rating, claims and illustration systems. 7t present, the 0ife %nsurers are concentrating on the pension schemes and the &on60ife %nsurers on many inno ati e schemes of arious realms and there4y enriching their mar;et share. Moreo er, :ith increased commoditi<ation of insurance products, 4rand 4uilding is going to play a ital role.

>; "ISTRIBUTION NET!ORK Chile companies ha e 4een successful in product inno ation, most of them are still grapping :ith right mi5 of $istri4ution ,hannels for capturing ma5imum mar;et share to 4uild 4rand e!uity, 4uilding strong and effecti e customer relationships and cost effecti e customerser ice. Chile the traditional channel of tied up ad isors or agents :ould 4e the chief distri4ution channel, insurer should inno ate and find ne: methods of deli ering the products to customers. ,orporate agency, 4ro;erage, =anc assurance, e6insurance, cooperati e societies and panchayats are some of the channels, :hich can 4e tapped 4y the insurers to reach the appropriate mar;et segments.&o: days, the ur4an masses are tapped :ith the ne: techni!ues pro ided 4y %nformation Technology through %nternet. -ural masses are attracted 4y the consultati e approach adopted 4y the %nsurers. Moreo er, they attract the customers through telephone and mo4ile also. ?; CUSTOMER E"UCATION & SERVICES
37

%nsurance is a uni!ue ser ice industry. The ;ey industry dri ers are related to life style issues in terms of percei ing insurance as a sa ings instrument rather than for ris; co er, need 4ased selling, !uality of ser ice and customers a:areness. %n the present competiti e scenario, a ;ey differentiator is the professional customer ser ice in terms of !uality of ad ice on product choice along :ith policy ser icing. 'er icing focus is on enhancing the customerJs e5perience and ma5imi<ing his con enience. This calls the effecti e ,-M system, :hich e entually creates sustaina4le competiti e ad antage and ena4les to 4uild long lasting relationship.

RURAL MARKET L A BOON FOR RELIANCE INSURANCE %nsurance sector has one of the 4iggest potential in the upcoming scenario and the fact lies in the statement that only eight to 10 per cent of the rural households are co ered 4y life insurance. -ural in estments are limited to their a aila4le option 66 post offices and a fe: limited commercial 4an;s rural e5tension counters. The remaining 90 per cent offer a huge potential as such for the insurance companies.
T%& '(')* +)',&- i. vi/')0- )01 %2*1. -'&+&012(. 32-&0-i)* 42' 5'26-% 24 i0.(')07& /(.i0&..8 3)'-i7(*)'*9 /&7)(.& 24 -%& .-'205 .)vi05 %)/i-.. #IC %). ) -)'5&- 24 .&**i05 42(' +i**i20 32*i7i&. i0 -%& 7(''&0- 4i0)07i)* 9&)'.

38

0Fi,; 81i C RURAL INSURANCE2 RURAL INSURANCE The census of 2001 sho:s that the rural sector in %ndia comprises 72R of the population and generates 2?R of the #$". Thus, the rural sector is important 4oth politically and economically. &aturally, rural insurance has 4een emphasised since the nationalisation of life insurance 4usiness. The go ernment follo:ed a three6pronged strategy for life insurance. +irstly, it targeted the rural :ealthy :ith regular indi idual policies. 'econdly, it offered group policies to those :ho could not afford indi idual policies. Thirdly, for the ery poor, it offered go ernment6 su4sidised policies. +or non6life insurance in the rural sector, the go ernment has acti ely pursued specific strategies such as crop insurance and the insurance of farm implements such as tractors and pumps. %t :as noted in the section on regulation that, after fi e years of operation, e ery pri ate sector life insurance company has to achie e a certain proportion of their 4usiness in the rural sector. %t is a aria4le and rising proportion, :ith at least 1HR of 4usiness in the rural sector after fi e years. +or the 0ife %nsurance ,orporation of %ndia 20%,3, the re!uirement is 1@R. ! AT EGACTL# IS MEANT B# T E RURAL SECTORH The term rural sector is confusing 4ecause not all go ernment 4odies use the same definition.
39

'e eral distinct definitions 2:hich are rele ant for the insurance sector3 ha e 4een used in the past. S The -eser e =an; of %ndia 2-=%3 defines four different entities. 7ll definitions apply to the population si<e. The only rele ant factor is the num4er of people li ing in a :ell6defined geographical 4oundary. Thus, the density of the population or the acti ity of the population is of no rele ance for the definition of the -=%. The entities defined 4y the -=% are as follo:s. 213 7 gi en geographical area is called rural if it has less than 10,000 people. 223 7 gi en geographical area is called semi6ur4an if it has more than 10,000 4ut less than 100,000 people. 2A3 7 gi en geographical area is called ur4an if it has more than 100,000 4ut less than 1,000,000 people. 2G3 7 gi en geographical area is called metropolitan if it has more than 1,000,000 people. "opulation, according to the census definition in 1991 :as ?29 million. /o:e er, according to the %-$7 definition, it :as only A77 million L a reduction of o er G0R. +or the num4er of policies sold 4y the 0ife %nsurance ,orporation 20%,3, the reduction due to the change in definition is e en more dramatic. %n the 2001602 financial year, the 0%, sold 10,791,A1? policies 2or HH.HAR of the total policies sold3 in the rural areas according to the census definition. /o:e er, according to the definition used 4y the %-$7, the 0%, only sold A,HAA,?9G policies 2or 1@.1@R of the total policies sold3.HH This represents a reduction of o er ??R. These anomalies ha e caught the attention of la: reformers. %n 200A, an )5pert ,ommittee :as set up 4y the %-$7 to e5amine the remuneration system for insurance 4ro;ers and agents. The -eport of the )5pert ,ommitteeH? also made suggestions on some 4roader issues. *ne of the suggestions it made :as to change the definition of the term rural area as follo:s9 The definition of :hat constitutes a rural area should 4e 4ased on the census and should 4e re ised to an area :ith a population R1!ORL" IN LIFE INSURANCE

40

0Fi,; 81I C RELIANCE !ORL" LOGO2 -eliance su4scri4ers :ill no: 4e a4le to purchase insurance ser ices, $T/ recharges, mo ie tic;ets, 4oo;s . periodicals, consumer goods, holiday pac;ages as :ell as 4us . train tic;ets using their -eliance Mo4ile connection, these ser ices :ill also 4e a aila4le on -6:orld for all #'M customers. ,urrently atom technologies ha e o er 100 merchants registered for mo4ile commerce transactions. -eliance ,ommunications 2-,*M3 has entered into a strategic tie6up :ith atom technologies, the leading m6commerce solutions pro ider from the +inancial Technologies %ndia 0imited group. Cith this partnership -,*M :ill no: 4e a4le to offer a secure platform to conclude payment transactions using -eliance Mo4ile. atom :ill offer through -,*M, multiple 4an;s 2%ndian and +oreign3 as :ell as merchants on a common platform, there4y allo:ing it. -eliance su4scri4ers :ill no: 4e a4le to purchase insurance ser ices, $T/ recharges, mo ie tic;ets, 4oo;s . periodicals, consumer goods, holiday pac;ages as :ell as 4us . train tic;ets using their -eliance Mo4ile connection, these ser ices :ill also 4e a aila4le on -6:orld for all.

S!OT ANAL#SIS OF RELIANCE LIFE INSURANCE

41

0Fi,; 81J C S!OT ANAL#SIS2 STRENGT S C1

0Fi,; 81' C STRENGT S2 13 =rand &ame 23 -o4ust and $i erse "roduct portfolio A3 11GH 4ranches 1,9H,000 ad isors and o er 1?,000 employees. G3 'trong sol ency and financial sta4ility !EAKNESS C1

0Fi,; 81m C !EAKNESS2

13 0ac; of 7d ertising 23 &o foreign partner 4ringing in +$% A3 'udden e5pansion increased operations and administration e5penses due to :hich losses
incurred.

G3 ,ontro ersies related to -eliance ,apital may ha e a negati e impact.

OPPORTUNITIES

42

0Fi,; 81$ C OPPORTUNIT#2 13 *pportunities in the ne:er semi6ur4an and rural mar;ets 23 $e6Tariff 4y %-$7 A3 ,ustomers needs gro:ing :ith change in society G3 "remium collection gro:ing H3 8ast untapped mar;et. T REATS

0Fi,; 81 O C T REATS2

13 +ierce ,ompetition 23 7lready esta4lished 'trong pu4lic players A3 &e: )ntrants +oreign #iants :ith 0arge "oc;ets G3 )conomic crisis and glo4al financial pro4lems H3 )ntry of ne: &=+,s in the sector.
GRO!T OF RELIANCE LIFE INSURANCE IN INSTALLE" CAPACIT#

)yeing 4etter premium gro:th in the second half of current fiscal, leading pri ate sector insurer -eliance 0ife e5pects to 4eat the estimate of an o erall 10R industry gro:th in the entire financial year 201261A.The company is e5pecting its e5panded distri4ution net:or; and ne: customer6centric initiati es to help it achie e dou4le6digit o erall 4usiness gro:th during the current fiscal, -eliance 0ife %nsurance "resident and )5ecuti e $irector Malay #hosh said.
43

O&ot:ithstanding a challenging economic en ironment, :e are confident of achie ing a dou4le6 digit gro:th in our o erall 4usiness 4y the current financial year,O #hosh said. OCe e5pect higher gro:th in third and fourth !uarter of this fiscal and hopeful of ending 20126 1A on a positi e gro:th note,O he added. -eliance 0ife, part of 7nil 7m4ani6led -eliance #roupNs financial ser ices arm -eliance ,apital, is targeting a total premium income of -s ?,100 crore in 201261A. %t e5pects ne: 4usiness premium of -s 2,A00 crore in this fiscal, up from -s 1,@09 crore in the last fiscal, :hile the rene:al premium for the current fiscal is e5pected to gro: to -s A,@00 crore, from -s A,?@@ crore in 2011612. OCe e5pect significant gro:th in our ne: 4usiness premium coming from tier %% and %%% cities and a marginal gro:th in rene:als in the current fiscal,O #hosh said./e said that the company e5pects almost ?0R of its ne: 4usiness to come from non6ur4an areas, :hile AGR are e5pected from rural areas :ith su46H,000 population. #hosh said premium income is 4eing largely dri en 4y traditional products, rather than unit6lin;ed plans. OCe 4elie e long6term sustaina4le gro:th for the industry can come only 4y reaching out to more customers :hich is :hy our focus is clearly the indi idual 4usiness segment. +urther, :ithin indi idual 4usinesses, :e are focusing on regular premium 4usiness,O #hosh said. Chile agreeing that gro:th patterns may not 4e as aggressi e as they ha e 4een in the past, #hosh said there is still tremendous untapped potential in the country to ensure long6term gro:th of the domestic insurance industry. -eliance 0ife registered an o er three6fold surge in its net profit to -s A1 crore for the !uarter ended 'eptem4er A0, :hile its total premium 2net of reinsurance3 for the !uarter :as -s 1,00A crore.The company had recorded its first full6year net profit at -s A7A crore in the fiscal ended March A1, 2012. %t sold o er one million policies in 2011612 and garnered a total premium of -s H,G9@ crore in that year.The life insurer recently launched a Pcareer agencyJ format, offering a fi5ed stipend and aria4le commission payout for its 1.2H6la;h agents. -eliance 0ife, as a late entrant in the life insurance industry, does not ha e a 4ancassurance tie6 up 24an;s acting as corporate agents for distri4ution of insurance products3 :ith any 4ig

44

4an;.=ancassurance accounts for A0 per cent of the premium income for pri ate insurers. /o:e er, for -eliance 0ife it is miniscule on this account. (nder the current %nsurance -egulatory and $e elopment 7uthority 2%-$73 regulations, one 4an; can tie6up :ith only one insurance company for 4ancassurance. %n the (nion =udget this year, the finance minister announced that 4an;s :ill 4e allo:ed to 4ecome insurance 4ro;ers :hich :ill ena4le them to sell policies of multiple insurance companies. -eliance 0ife reported a profit 4efore ta5 of -s A@0 crore and mopped up total premium of -s G020 crore for the year ended March A1, 201A."ri ate sector insurer -eliance 0ife e5pects to maintain a 10 per cent gro:th in total premium income on the 4ac; of gro:th in regular premium policies and 4etter policy rene:als. =y ;eeping in regular touch :ith e5isting policyholders and charting out a gro:th path for agents, the company aims to achie e dou4le6digit 4usiness gro:th during the current fiscal, said ,hief )5ecuti e *fficer 7nup -au.,urrently, traditional life insurance products account for @0 per cent of its total product portfolio, :hile unit6lin;ed insurance products account for the rest. GRO!T IN SALES OF T E IN"USTR#

0eading pri ate sector insurer -eliance 0ife %nsurance ,ompany 2-0%,3 has recorded a four6fold jump in third !uarter net profit to -s G0 crore on the 4ac; of an impro ed product portfolio and distri4ution 4ase.%n the three6month period ended $ecem4er A1, 2012, -0%,, part of the 7nil 7m4ani6led -eliance #roupJs financial ser ices arm -eliance ,apital 0td, registered a net profit of -s G0 crore as against -s 10 crore in the year6ago !uarter. -eliance 0ifeJs total premium 2net of reinsurance3 in the *cto4er6$ecem4er !uarter :as -s 9A0 crore, :hile the total funds under management stood at -s 19,A?? crore in the !uarter ended $ecem4er A1, 2012, an increase of 17 per cent o er the corresponding !uarter a year ago. 7 change in the product 4as;et :ith a focus on traditional products, producti e agents, customer centricity and use of ena4ling technologies helped us reap higher profit. *ur num4er of policies has started gro:ing... 7s long as :e are selling more and more policies, :e are confident that going for:ard our profits :ill continue to increase, -eliance 0ife %nsurance ,)* 7nup -au told "T%.

45

-eliance 0ife has t:ea;ed its product 4as;et :ith @0 per cent of its 4usiness coming from traditional products and the rest 20 per cent from unit6lin;ed products. %n the last si5 months, the company has launched three alternate distri4ution channels, +ace6to6 +ace, 0ife "la<a and ,areer 7gent, and hired o er H,000 people under the ne: sales formats :ith a ie: to increase its reach and producti ity.-eliance 0ife %nsurance is the only company among the top 10 pri ate insurers to achie e higher profits :ithout ha ing a 4an; partner. The company has a distri4ution gap as it does not ha e any 4ancassurance. -au said, *ur focus continues to 4e on medium and smaller to:ns and cities, addressing the under and uninsured opportunity. %n spite of that, :e ha e 4een a4le to increase our a erage tic;et si<e to o er -s 1H,000 in the third !uarter from -s 1G,000 in T2 +1J1A. Cith -0%, focusing on producti ity, customer ac!uisition and retention, profita4ility and gro:th, the company aims at sho:ing further impro ement in profita4ility on the 4ac; of !uality products and ser ices. -eliance 0ife %nsurance recorded its first full6year net profit at -s A7A crore for the fiscal ended March A1, 2012. %t had sold o er one million policies in 2011612 and garnered a total premium of -s H,G9@ crore in that year. &ippon 0ife, 7siaJs largest pri ate life insurer and se enth 4iggest glo4ally :ith an asset si<e of I?H0 4illion, holds a 2? per cent sta;e in -eliance 0ife, :hich it had ac!uired for o er -s A,000 crore.-eliance 0ife :as the countryJs se enth largest pri ate life insurer in terms of total ne: 4usiness premium and si5th in terms of indi idual ne: 4usiness premium for the last fiscal ended March A1, 2012. ,urrently, the company has a mar;et share of G.9 per cent of the pri ate sector life insurance industry. GRO!T IN UMAN RESOURSE OF RELIANCE LIFE INSURANCE

46

0Fi,; 81. C years.

R GRO!T 2

-0%Ns talent 4ase, as on March A1, 2011, stands at 22,??1 :ith an a erage employee age of G1 %n +1611, the =usiness Transformation initiati e created high engagement and e5citement amongst the :or;force across all le els at -%0. 'ome ;ey accomplishments on people management front are illustrated 4elo:9 Le%&$i$, & "e4e').me$t %n +1611, -0% enhanced deli ery o er the last year 4y ensuring 1,H@9,A9H man hours of learning acti ities at its manufacturing di isions. #oing for:ard, -0% :ill focus on 4uilding specialist s;ills and multiple cadres in the organisation to support its goals and aspirations. 7dditionally, se eral thousand man6hours of de elopmental inter ention :as underta;en to train the leadership teams on de eloping the second6line, compensation and 4enefits, e5ecuti e coaching, re:ards and recognition programmes and inter ie:ing . selection.'i5 'igma deployment in +1611 :as focused on impro ing process capa4ility . relia4ility issues as per the needs of indi idual manufacturing sites. 7 total of @H projects :ere e5ecuted leading to financial 4enefit of -s. 2? ,rore for the year 2010611.7s a part of standardi<ation of training . de elopment of people :ith alidation of their s;ill le el, :e4 4ased e5amination module has 4een de eloped for certification of 'i5 'igma
47

#reen =elts. %n +1611, eight employees ha e 4een certified as -eliance ,ertified #reen =elt 2-,#=3. C)m.e$-%ti)$ & B%$di$, +1611, sa: a significant change in the ,ompanyNs compensation . 4anding management process. *n the aria4le pay front, efforts are afoot to mo e to:ards an accounta4ility and responsi4ility dri en aria4le pay programmes designed uni!uely for arious le els. T%'e$t A/+ui-iti)$ The 4elief in its people has 4een the foundation and corner stone of -0%Ns gro:th story. %t :as the youth in their 20s . A0s :ho 4rought -0% to this pedestal o er the last A decades and going for:ard the intent is to pass the 4aton on to young leaders o er the ne5t 2 to A years, to further propel this success story for the ne5t A decades. To:ards this end there has 4een a significant endea or in re6enforcing the e5isting talent 4ase of 22,??1. -0%Ns campus hiring programme from the engineering, finance and management institutes has 4een far more ro4ust, :ith :ider co erage to ensure higher cali4er as :ell di ersity. -0% has launched a specially tailored programme O-eliance 7ccelerated 0eadership "rogrammeO, in order to hire high cali4er young talent into the ,ompany and 4uild a talent pipeline for the future. R T&%$-()&m%ti)$ -0% is focused on 4uilding :hat :ould 4e the 4est OTo =eO *rganisation o er the ne5t 1@ to 2G months. %n order to achie e this o4jecti e, -0% focused on follo:ing initiati es9 "eople9 )nergising and engaging the e5isting :or; force, 4uilding a pipeline for the future and creating an e5citing :or; place. /- "rocesses9 To ensure that -0% continues to ha e the :orldNs 4est practice and processes, e5isting processes are 4eing reengineered and ne: processes are 4eing introduced. "olicies9 The focus in +1611 :as to ma;e the policies employee friendly ;eeping in ie: employee specific needs. The /- policies are 4eing re ie:ed and 4enchmar;ed :ith :orld class organisations. /- 'hared 'er ice ,entre9 The ,entre :as esta4lished last year to ensure efficient and effecti e deli ery of /- ser ices to -0% employees.
48

FUTURE PROSPECTS IN TERMS OF GRO!T

IN ALL POSSIBLE ASPECTS

%ndiaNs gro:ing economy, coupled :ith a significant rise in the young :or;ing population, has potential for de elopment of the life insurance sector. This is in addition to the large population that remains uninsured.Moreo er, of the insured population, a significant percentage remains under6insured. 'o, :hile premium as percentage of #$" is G.G7 per cent, sum assured as a multiple of #$" is just 0.A. %t is estimated that the sector :ill gro: at a compounded a erage gro:th Se/t)&Out'))J 'ince the life insurance sector :as opened up in 2000, it has no: gone through t:o clear cycles 6 the first of ery high gro:th 2,7#- of o er 12 per cent in num4er of ne: policies 4et:een 20006103 and then one of su4stanti e moderation 2,7#- of o er 9 per cent 4et:een 20106123. $espite this, long6term gro:th prospects for the industry remain intact.#uidelines for traditional and pension products, currently in the draft stage, :ill 4e standardised in the year ahead. Chile standard guidelines should reduce appro al time, and therefore time to de elop and mar;et ne: products, too much standardisation can stifle inno ation. ,ustomers ha e aried needs and insurers should offer products that cater to the specific needs of the distinct segments. 7 more open architecture 2utilising 4an;ing infrastructure and reach3, :hile li;ely to increase distri4ution costs in the short term, :ill ultimately ensure customers ha e the 4est options and increase penetration of life insurance.+inance 4udgets ha e al:ays had a significant impact on the shape of the %ndian industry. This time around, there is a clear need to announce measures that :ill help sustain momentum of gro:th and confidence in the economy. 7t the same time, the go ernment :ill need to contain the fiscal deficit and inflation. #o ernment spending :ill ha e to 4e efficient and sectors that :ill ha e a longterm impact on the economy, such as education, infrastructure and health, :ill ha e to 4e monitored.7ll these and ta5 incenti es for long6term protection products :ill fuel gro:th of the sector. The insurance sector L especially life insurance L in %ndia too; off on a gro:th trajectory after the industry :as opened up for competition a4out 10 years ago.

49

The life insurance industry has continued to gro:, despite the economic slo:do:n, as policy6 holders are realising the alue of insurance, says ' = Mathur, secretary general, 0ife %nsurance ,ouncil, an industry forum constituted under the %nsurance. %nsurance penetration is also increasing rapidly. 7ccording to the council, insurance penetration L measured as a ratio of total premium to the #$" L has shot up from 2.71 per cent in 2001 to G.7 in 2007. 0ife insurance penetration alone touched G per cent in fiscal 2009 and is e5pected to reach G.19 per cent in the current fiscal. %ndiaJs share of the :orld premium has also !uadrupled to 2 per cent o er the last decade, adds Mathur. 7ccording to the %-$7 figures, the life insurance sector has 4een one of the most 4uoyant in the financial ser ices sector in the current fiscal. $uring the 7pril to *cto4er period, life insurance premiums soared 4y 1@ per cent, touching ('I 21.9H 4illion. 0ife insurance premiums record huge jumps to:ards the end of e ery financial year, as ta56payers in est in ta56sa ing policies. %n fact, almost G0 per cent of premiums pour in during the last !uarter 2Eanuary6March3 of any gi en fiscal. "ri ate insurers are also e!ually 4ullish a4out the sectorJs prospects, despite the gro:ing competition. -ajesh -elan, managing director, Met0ife %ndia %nsurance ,o 0td, points out that the industry is on the threshold of a giant leap. The %ndian go ernment has introduced a 4ill in "arliament see;ing to increase the sectoral foreign direct in estment 2+$%3 cap in the insurance sector to G9 per cent from 2? per cent at present. This mo e is e5pected to result in huge capital inflo:s as many international players are ;een on raising their sta;e in the joint entures. *n their part, insurance companies are gearing up to meet the surge in 4usiness that is e5pected to 4e generated o er the coming years. %$=% +ortis 0ife %nsurance L a joint enture 4et:een $utch finance major +ortis and %ndian institutions %$=% =an; and +ederal =an; L plans to dou4le its headcount to 2,000, 4esides e5panding its 4ranch net:or; from AH to 100 in 2010. %t also plans to dou4le the num4er of insurance agents to 1H,000. Ce ha e seen a 7G per cent increase in premium incomes during the first6half of the current fiscal, :hich is a good indication, points out # 8 &ages:ara -ao, managing director and chief e5ecuti e, %$=% +ortis 0ife %nsurance. The insurance sector in %ndia is set to :itness continued gro:th o er the coming years as a:areness a4out the need to ta;e ris; co erage, at an early age, to protect oneself from a host of threats gro:s s:iftly, especially in semi6ur4an and rural areas.
50

FINANCIAL ANAL#SIS OF T E IN"USTR# R%i-i$, C%.it%' M7&1 insurance companies, including joint entures 4et:een %ndian firms and foreign partners, are e5pected to enter the capital mar;et in 2010, raising funds to finance their e5pansion plans. (nder the e5isting rules, an insurance company can opt for listing only after 10 years of operations. Therefore, insurance companies set up in 1999, :ould no: 4e eligi4le to raise funds and are conse!uently planning to go in for initial pu4lic offerings 2%"*s3. The industry is also e5pecting major changes in insurance la:s, including the clearing of a 4ill 4y "arliament that :ould allo: foreign partners to ha e a sta;e of up to G9 per cent in an insurance company. The industry has also sought the go ernmentJs appro al for cutting the minimum 106year stipulation for a pu4lic issue 4y a fe: years. . The company plans to raise ('I 7H million internally to 4oost capital, :hich is needed to help it accomplish e5pansion plans. Ce e5pect a gro:th of 10 to 1H per cent and :ill infuse capital as :e :rite ne: 4usiness, says "arasnis. %nternational insurance companies are also eyeing sta;es in firms that do not ha e foreign partners. *ne of them is -eliance 0ife %nsurance, :hich is loo;ing at the possi4ility of going in for a strategic placement of 10 to 1H per cent :ith an international insurer and an %"* as :ell. 7ccording to 'am #hosh, ceo, -eliance ,apital L the parent company of -eliance 0ife %nsurance L it has 4een approached 4y three to four international insurance companies and pri ate e!uity funds for a sta;e in its insurance operations. Im.&e--i4e St%ti-ti/T/) life insurance sector is gro:ing at an impressi e clip in %ndia, :hich has emerged as the fifth6largest life insurance mar;et in the :orld. The life insurance sector is gro:ing at almost AH per cent annually and the 2A life insurance companies L including state6o:ned 4ehemoth 0ife %nsurance ,orporation of %ndia 20%,3 L are stri ing to raise their mar;et share. 7ccording to the 0ife %nsurance ,ouncil, an industry forum, life insurance is a ('I G1 4illion industry. %t also ran;s num4er t:o, second only to 4an;s, for mo4ilised sa ings. The sector controls ('I H.A@ 4illion of deployed capital,
51

more than ('I 200 4illion of managed assets and has in ested ('I 2H 4illion in the infrastructure sector. Fi$%$/i%' i$/'u-i)$ %T is not just ur4an residents :ho are reaping the 4enefits of inno ati e insurance plans. 7 gro:ing num4er of rural L and poor L residents are also 4eing targeted 4y go ernment departments and are 4eing 4rought :ithin the am4it of insurance schemes. These schemes reflect the go ernmentJs desire to ensure financial inclusion, co ering e en the poorest of families, as part of its larger goal of inclusi e and sustaina4le gro:th. Many of these schemes ha e pro ed to 4e not just popular, 4ut e en successful in their implementation. +or instance, the num4er of indi iduals insured under the -aji #andhi 'hilpi ':asthya =ima 1ojana 2-#''=13, the first PcashlessJ health insurance initiati e for artisans in %ndia, has almost topped the t:o million6mar;. 7rtisans spread across 29 states and more than ?00 districts ha e gained from this comprehensi e health insurance scheme facilitated 4y the $e elopment ,ommissioner, /andicrafts, under the (nion Ministry of Te5tiles. 7ll artisans up to the age of @0 are eligi4le for co erage. The artisan, spouse and t:o dependants are co ered annually for hospitalisation e5penses up to ('I A2H, :hile the principal mem4er6 artisan is also co ered for ('I 2,1H0 for personal accident. F&)m b%$/%--u&%$/e t) m%''%--u&%$/e T/-)) years after the insurance sector in %ndia :as thro:n open to competition, the %nsurance -egulatory and $e elopment 7uthority 2%-$73 allo:ed 4an;s to sell insurance policies under the 4road la4el of P4ancassuranceJ. %t :as a :in6:in situation for 4oth the insurance companies and 4an;sM :hile the former did not ha e to spend huge amounts in setting up a distri4ution net:or;, The latter could earn handsome re enues as fee64ased income 4y selling policies through their 4ranch net:or;s. %ndeed, many 4an;s L including pu4lic sector ones L got dra:n to the insurance 4usiness, than;s to the popularity of the 4ancassurance model. 7 some:hat similar model has emerged of late, du44ed PmallassuranceJ, :here insurance policies are sold at shopping malls. The +uture #enerali #roup L :hich includes 4oth the life insurance and non6life entures L promoted 4y Bishore =iyaniJs +uture #roup and %talian insurance giant, the #enerali #roup, has pioneered
52

the concept in %ndia. The policies of the t:o companies :ould 4e mar;eted, among others, through o er 1H0 shopping malls spread across the country. The PmallassuranceJ model has :or;ed :ell for 4oth the insurance company and the retailer, indicating that it could soon 4ecome as popular as the P4ancassurance.

PROBLEMS BEING FACE" B# RELIANCE LIFE INSURANCE

0Fi,; 81+ C PROBLEMS FACE" B# RLI2 -eliance 0ife faced t:o pro4lems :hen it came to consumer communication. *ne :as that of ma;ing a mar; in the life insurance sector :here 4oth pri ate and go ernment 4odies are competing hea ily and second to de elop the -eliance 4rand in the life insurance sector, :here the player is already ad ertising hea ily for its other ser ices li;e telecom. Thompson +inancial is the ad ertising agency for -eliance 0ife %nsurance. *ne of the latest campaigns from the agency is P7l:ays up, &e er $o:nJ, :hich has 4een ta;en across medium. Thompson +inancial officials e5plain that the A?06degree approach :as needed to 4rea; the clutter in the life insurance segment. The campaign is the 4rainchild of Thompson +inancial ,reati e $irector 8ishal 'ingh. The production house is Beroscene and -ajesh 'aathi is the $irector.The campaign that 4ro;e on the 4ac; of the Corld ,up, has 4een e5ecuted across outdoor, print and T8,. 7long :ith this, -eliance 0ife %nsurance :ill also

53

use significant am4ient media. This :ould 4e supported 4y on6ground acti ities in shopping malls and other consumer touch points. )5plaining more on the thought process 4ehind the campaign, 'ingh informed, To connect :ith the consumer, it is most important to cut through the clutter. Ce :anted to ta;e a light6 hearted route and that is the main tool used in the latest communication. 7lmost e ery player in the segment is trying to do the same thing for their consumers and for a consumer to identify a 4rand :ith a 4enefit or a product is difficult. -eliance, :ith all its ad ertising, is an esta4lished 4rand name. The challenge for us :as to relate the 4rand :ell to the category, 'ingh reiterated. )la4orating more on the target group, 'ingh informed, =asically insurance is not for the older age group. %t is targeted to the young age. *ur T# is the youth that fall in the age category of A06AH ha ing a strong foothold in life. The approach :as to ta;e a:ay all the PscaryJ things of life insurance and gi e it a gar4 of an in estment option that is ris; free.'ingh also admits that the caption P7l:ays (p and ne er $o:nJ for a serious product li;e 0ife insurance :as a ris;. /e said, %t :as daring of the client to accept a line li;e that L it got us the attention, :e really o:e it to the client to let us try this. -eliance 0ife %nsurance has filed 172 +%-s at police stations across the country for a -s 106la;h loan. OCe ha e recei ed hundreds of !ueries from people :ho ha e recei ed such calls. Ce ha e run campaigns to inform the pu4lic that these are 4ogus calls and not to fall prey to them,O said 7nup -au, M$ . ,)*, -eliance 0ife %nsurance. 7ccording to -au, the company has filed complaints after ac!uiring information in respect of calling num4er and name of caller. These complaints ha e not made much head:ay since there :as no transaction. 7lso, people :ho recei e these calls are reluctant to 4e party to a police complaint. This ma;es it difficult for the police to pursue a case against the callers. follo:ing complaints against spurious call centres offering 4uyers a policy :hich :ould entitle the in estor

54

C ALLENGES FACE" B# RELIANCE LIFE INSURANCE IN ERA OF GLOBAL COMPETITION %ndiaJs rapid rate of economic gro:th o er the past decade has 4een one of the more significant de elopments in the glo4al economy. This gro:th has its roots in the introduction of economic li4eralisation in the early 1990s, :hich has allo:ed %ndia to e5ploit its economic potential and raise the populationJs standard of li ing. %nsurance has a ery important role in this process. /ealth insurance and pension systems are fundamental to protecting indi iduals against the ha<ards of life and %ndia, as the second most populous nation in the :orld, offers huge potential for that type of co er. +urthermore, fire and lia4ility insurance are essential for corporations to ;eep in estment ris;s and infrastructure projects under control. "ri ate insurance systems complement social security systems and add alue 4y matching ris; :ith price. 7ccurate ris; pricing is one of the most po:erful tools for setting the right incenti es for the allocation of resources, a feature :hich is ;ey to a fast de eloping country li;e %ndia. =y nature of its 4usiness, insurance is closely related to sa ing and in esting. 0ife insurance, funded pension systems and 2to a lesser e5tent3 non6life insurance, :ill accumulate huge amounts of capital o er time :hich can 4e in ested producti ely in the economy. %n de eloped countries 2re3insurers often o:n more than 2HR of the capital mar;ets. The mutual dependence of insurance and capital mar;ets can play a po:erful role in channeling funds and in estment e5pertise to support the de elopment of the %ndian economy. )arlier %nsurance :as sold 4y only indi idual agents, today lot of channels selling insurance, 4ut the 4enefits are not reach to the customers. They are selling for the 4enefits of the agents>4ro;ers>4an;s. $uring last year almost all the channels sold (lip policies to the entire cro:d, irresepcti e of the age and earning potential 4y gi ing miscalculations and mis information. some cases people not a:are :hat policy they :ere got throug the agent these mis selling resulted 4adly in the current 4ad economy. =et:een 19@H and 200A, economic losses in %ndia due to natural catastrophes a eraged around ('$ 1.2 4illion or 0.GR of #$" e ery year. +loods :ere the main peril, accounting for G0R of cumulati e losses o er the period, follo:ed 4y storms 2AHR3 and earth!ua;es 220R3 7fter adjustment for the effect of inflation, economic losses hit a recent pea; in 199@ :hen a series of summer floods caused damages e5ceeding ('$ ? 4illion 2at 200A constant prices3 or 1.HR of #$". The follo:ing three years continued to see

55

su4stantial losses from natural disasters caused 4y other ha<ards, most nota4ly the #ujarat earth!ua;e in Eanuary 2001. 'tarting in 2002, ho:e er, there has 4een a lull in 4oth the fre!uency and ferocity of such e ents, and related losses ha e fallen to a lo: for this historical range. Thus far, insurance products that are specifically lin;ed to natural disasters ha e 4een targeted mainly at the agricultural sectors. The state6o:ned #%, used to 4e a ;ey pro ider of crop insurance 4ut has transferred its portfolio to the 7griculture %nsurance ,ompany of %ndia, another ne:lyfounded pu4lic entity. *f late, pri ate sector players ha e also started offering their o:n solutions, :ith some companies li;e %,%,% 0om4ard and %++,*6To;io said to 4e test6mar;eting their o:n :eather6lin;ed products. 1et a 4roader challenge facing the industry is :hether it can adapt itself to fill the changing and gro:ing needs of a rapidly modernising economy. 7s %ndiaJs recent successful foray into the technology industry demonstrates, its economy is mo ing from traditional sectors li;e agriculture to more capital6 and ;no:ledge6intensi e industries. +urthermore, :ith gro:th comes a higher le el of ur4anisation and industrial specialisation that increases the potential economic alue at sta;e in any one e ent. +or e5ample, the capital $elhi has seen its population gre: from ? million in the early 19@0s. "oor ur4an planning as :ell as insufficient enforcement of construction standards and safety regulations could e5acer4ate the ris; of a disproportionately high loss in the e ent of a major disaster in a densely6populated region. TOP C ALLENGES FACE" B# RELIANCE LIFE INSURANCE IN T E ERA OF GLOBAL COMPETITION *ur economy going slo: so as insurance industry. this coming financial year :ill 4e full of many challenges li;e9 1. -e si<ing of distri4ution net:or;. 2. $ue to no more e5ponential gro:th, ha y pressure on cost. A. "olicy persistency :ill further add presure on re enue. G. %nno ation in product designing.
56

H. More proacti e approach to:ards fund mgt. to pro ide good returns to policy holder. ?. Mis6sale 7. consumer a:areness 6 There is ery lo: le el of consumer a:areness regarding insurance, there are so much 4enefits that a consumer can ha e :ith insurance, 4ut then :hene er a %nsurance guy approaches them they tend to say i already ha e insurance and i donNt :ant another one, so in this regard there is ery lo: le el of consumer a:areness :hich is a major challenge in the insurance sector. @. sales a challenge 6 %n the %ndian ,onte5t %nsurance is still ie:ed as a ta5 instrument and not as a need. ,ustomers are still not a:are of the ade!uate insurance they need. Most of the customers ha e purchased insurance to sa e ta5es and not for the reason that life is a pure ris; :hich needs to 4e co ered. $uring a slo: do:n sales staff should 4e gi en ade!uate support , sales training regarding arious types of insurance products :hich are a aila4le in the mar;et should 4e imparted at regular inter als especially a4out competitor products. Training to handle customer !ueries and moc; sessions should 4e conducted regularly. 9. +inding !uality manpo:er 6 %ts slo:do:n and jo4 mar;et is facing pressure. %ts essential in this period to find !uality manpo:er :ho not only a4le to a4sor4 the current pressure due to crisis 4ut also 4een a4le to get the ;no:ledge and impro e the producti ity. SOME OF T E MAJOR R C ALLENGES I OBSERVE" IN RELIANCE LIFE

INSURANCE "URING M# SUMMER TRAINING ARE AS FOLLO!SC1 1. Talent crunch. 2. Mounting attrition rate. A. $ifficulty in retention management. G. 'tressful jo4. H. 'tiff mar;et competition. ?. Managing :or;force di ersity. 7. -ising training . replacement cost. @. $etermining . designing appropriate training programs for agents and officers. 9. %ncreasing rate of jo4 dissatisfaction .
57

CHAPTER- 2
PRODUCT PROFILE OF RELIANCE LIFE INSURANCE

58

NAME OF "IFFERENT POLICIES OF RELIANCE LIFE INSURANCE INSURANCE PLANS

PROTECTION PLANS

"rotect your family e en :hen youJre not around 4y in esting in -eliance "rotection "lans. ,hoose a limited period plan or a lifetime protection plan depending on your needs. The latest "rotection "lans are as 4elo:U
1. -eliance Term plan 2. -eliance 'imple Term plan 3. -eliance 'pecial Term plan 4. -eliance ,redit #uardian plan 5. -eliance 'pecial ,redit #uardian plan 6. -eliance )ndo:ment plan 7. -eliance 'pecial )ndo:ment plan

@. -eliance ,onnect 2 0ife plan

59

9. -eliance Chole 0ife plan 10. -eliance Cealth V /ealth plan 11. -eliance ,ash +lo: plan

SAVINGS & INVESTMENT PLANS

-eliance 'a ings . %n estment "lans help you to set aside some money to achie e specific goals in life, :hich means that you can enjoy life and pro ide for your familyJs daily needs. The sa ings and in estment "lans are as 4elo:U
1. -eliance Total %n estment "lan 'eries % 6 %nsurance 2. -eliance Cealth V /ealth plan 3. -eliance 7utomatic %n estment plan 4. -eliance Money #uarantee plan 5. -eliance ,ash +lo: plan 6. -eliance Mar;et -eturn plan 7. -eliance )ndo:ment plan 8. -eliance 'pecial )ndo:ment plan 9. -eliance Chole 0ife plan 10. -eliance #olden 1ears "lan 11. -eliance #olden 1ears "lan 8alue 12. -eliance #olden 1ears "lan "lus 13. -eliance ,onnect 2 0ife plan

RETIREMENT PLANS

%n est today in -eliance -etirement "lans and sa e money to enjoy life e en after retirement. 1ou :ill ne er ha e to depend on another person or ma;e any compromises to maintain your current lifestyle. The latest -etirement "lans are as 4elo:U
1. -eliance Total %n estment "lan 'eries %% L "ension 2. -eliance #olden 1ears "lan 60

3. -eliance #olden 1ears "lan 8alue 4. -eliance #olden 1ears "lan "lus 5. -eliance Cealth V /ealth plan 6. -eliance 7utomatic %n estment "lan 7. -eliance Money #uarantee "lan

C IL" PLANS

'a e systematically and secure your childJs future needs 4y in esting in -eliance ,hild "lans. 1ou can al:ays 4e there for your child :hen he or she needs you. The ,hilds plans are as 4elo:U
1. -eliance ,hild plan 2. -eliance 'ecure ,hild plan 3. -eliance Cealth V /ealth plan

CHAPTER 3
MAJOR COMPETITORS OF

61

RELIANCE LIFE INSURANCE

MAG NE!#ORK LIFE INSURANCE

62

The Ne5 #)&J Li(e I$-u&%$/e C)m.%$y 2&10%,3 is the largest mutual life6insurance company in the (nited 'tates, and one of the largest life insurers in the :orld, :ith a4out I2@7 4illion in total assets under management, and more than I1H 4illion in surplus and 78-. The company ran;s W?G on the 2010 +ortune 100 list, ma;ing it the highest pri ately held insurance company on that list. %n 2007, &10%, achie ed the 4est possi4le ratings 4y the four independent rating companies 2'tandard . "oorNs, 7M =est, MoodyNs and +itch3. =y Eune 2009, the same four rating companies reaffirmed &e: 1or; 0ifeNs OsuperiorO financial strength, :hich 4ecame a selling point in national T8 ad campaigns that same year. The company is no: one of only three life insurers to hold the highest possi4le rating from all four major rating agencies, and one of a fe: to not recei e a ratings do:ngrade since the 200@ financial crisis. *ther &e: 1or; 0ife affiliates pro ide an array of securities products and ser ices, as :ell as institutional and retail mutual funds. ISTOR# The company :as founded in 1@GH as the Nautilus Insurance Company in &e: 1or; ,ity, :ith assets of just I17,000. %t :as renamed the &e: 1or; 0ife %nsurance ,ompany in 1@G9. %ts first head!uarters :ere at 112611G =road:ayM the first president :as Eames $e"eyster *gden. The current &e: 1or; 0ife head!uarters :as designed 4y noted architect ,ass #il4ert and completed in 192@. The &e: 1or; 0ife 4uilding, at H1 Madison 7 enue, :as constructed during the presidency of $ar:in ". Bingsley. /e e5panded the companyJs operations and de eloped ne: types of insurance. 7s :ith other early insurance companies in the (.'., in its early years the company insured the li es of sla es for their o:ners. %n response to 4ills passed in ,alifornia in 2001 and in %llinois in 200A, the company reported that &autilus sold G@H sla eholder life insurance policies during a t:o6year period in the 1@G0sM they added that their trustees oted to end the sale of such policies 1H years 4efore the )mancipation "roclamation. The company 4ecame ;no:n for inno ati e 4usiness practices. %n 1@?0, :ell 4efore state la:s re!uired it, &e: 1or; 0ife de eloped the non6forfeiture option, the predecessor to the guaranteed cash alues of modern policies, under :hich a policy remains in force e en if a premium payment is missed. %t :as also the first 7merican life insurance company to pay a cash di idend to policyholders, and the first (.'. company to issue policies to :omen at the same
63

rates as men. 'usan =. 7nthony :as one of their first female policy holders, and her father :or;ed for &10%,. %n 1@9?, &e: 1or; 0ife 4ecame the first company to insure people :ith disa4ilities and the first to issue a policy :ith a disa4ility 4enefit that presumes total disa4ility to 4e permanent after a predetermined period.%n the late 1990s &e: 1or; 0ife :as one of se eral large mutual life insurers to 4ac; a 4ill that :ould allo: demutuali<ation into a structure ;no:n as a mutual holding company 2M/,3. ,)* 'tern4erg himself argued strongly in fa or of the 4ill,:hich :as ultimately defeated. The &10%, 4oard of directors su4se!uently re ersed course, :ith the company strongly and pu4licly em4racing their mutual nature in a series of ad ertisements. FINANCIAL CRISIS OF EARL# 68ST CENTUR# 7ccording to their -eport to "olicyholders 2007, in early 2007 the companyNs managers 4ecame concerned a4out the state of credit mar;ets, so in +e4ruary 2007 O4ased on our 4elief that the mar;ets :ere acting irrationallyO &e: 1or; 0ife decided to mo e much of its cash flo: into safer in estments such as (' Treasury 4onds. O=y 7ugust 2007, the credit mar;et pro4lems :e had feared :ere front page ne:s,O the -eport notes.%n &o em4er 200@, the company announced it :ill not participate in the Trou4led 7sset -elief "rogram. OThe company can meet all of its strategic o4jecti es :ithout go ernment capital, its 4usinesses are strong and profita4le, and it is committed to remaining a mutual company operating for the sole 4enefit of its policyholders,O states a company press release. Theodore OTedO Mathas, president and ,)* in 200@, said at the time of the financial crisis that &e: 1or; 0ife is O4uilt for times li;e these.O This phrase 4ecame the title for the 200@ report to policyholders. Mathas succeeded 'tern4erg as company chairman on Eune 1, 2009. &e: 1or; 0ife maintains OsuperiorO financial ratings from 7.M. =est, +itch -atings, MoodyNs and 'tandard and "oorNs, all of :hich ha e reaffirmed the ratings since the financial crisis of autumn 200@.

ICICI PRU"ENTIAL LIFE INSURANCE

64

%,%,% "rudential is a joint enture 4et:een %,%,% =an; and "rudential plc engaged in the 4usiness of life insurance in %ndia. %,%,% "rudential is the largest pri ate insurance company and second largest insurance in %ndia after 0%,. %,%,% "rudential 0ife %nsurance ,ompany is a joint enture 4et:een %,%,% =an;, a premier financial po:erhouse, and "rudential plc, a leading international financial ser ices group head!uartered in the (nited Bingdom. %,%,% "rudential :as amongst the first pri ate sector insurance companies to 4egin operations in $ecem4er 2000 after recei ing appro al from %nsurance -egulatory $e elopment 7uthority 2%-$73. %,%,% "rudential 0ifeNs capital stands at -s. A7.72 4illion 2as on March, 200@3 :ith %,%,% =an; and "rudential plc holding 7GR and 2?R sta;e respecti ely. +or the year ended March A1, 200@, the company garnered -etail &e: =usiness Ceighted premium of -s. ?,?@G crores, registering a gro:th of ?@R o er the last year and has under:ritten nearly A million retail policies during the period. The company has assets held o er -s. A0,000 crore as on 7pril A0, 200@.%,%,% "rudential 0ife is also the only pri ate life insurer in %ndia to recei e a &ational %nsurer +inancial 'trength rating of 777 2%nd3 from +itch ratings. The 777 2%nd3 rating is the highest rating, and is a clear assurance of %,%,% "rudentialNs a4ility to meet its o4ligations to customers at the time of maturity or claims.+or the past se en years, %,%,% "rudential 0ife has retained its leadership position in the life insurance industry :ith a :ide range of fle5i4le products that meet the needs of the %ndian customer at e ery step in life.

ICICI P&ude$ti%' 5eb-ite 'ince the li4erali<ation of %ndian %nsurance sector, %,%,% "rudential 0ife %nsurance has 4een one of the earliest pri ate players. 'ince the time, %,%,% "ru 0ife has 4een the leader in terms of
65

mar;et share as indicated 4y the %-$7 2%nsurance -egulatory and $e elopment 7uthority, the regulator for %ndian %nsurance %ndustry3 at its :e4site. 7rgua4ly the most inno ati e %ndian 0ife insurer in terms of customer ser ices and products, %,%,% "rudential has one of the largest distri4ution and ser icing net:or; :ith o er 2,000 proprietary offices . customer touch points across %ndia. The A0,000 employee strong organi<ation has one of the largest agency distri4ution in the industry.Cith a gro:ing product range to match the comple5 needs of the demanding customers in a gro:ing economy, the organi<ation also has a history of successful.$uring 200760@, the organi<ationNs focus on rural 4usiness has pro ed its comple5 project e5ecution capa4ility and strong partnerships for customer ser icing.%n Eune, 2009 %,%,% "rudential 0ife %nsurance has decided to snap its tie up :ith TTB /ealthcare to settle insurance claims of its users. BAJAJ ALLIANK LIFE INSURANCE

=ajaj 7llian< 0ife %nsurance ,o 0td is a uni!ue joint enture among the glo4al giants 7llian< #roup 27#3 and =ajaj 7uto. 7llian< 7#Ns :orld ran;ing esta4lishes it among the top insurance companies in the :orld. =ajaj is the 4iggest t:o and three :heeler manufacturer in the :orld. =ajaj 7llian< 0ife %nsurance ,ompany 4oasts of a nation:ide presence :ith @7? offices and o er G million satisfied customers. The arious insurance products include %ndi iduals "lans (nit #ain %nsurances Term ,are "lans 0ifetime ,are %nsurance "olicy =usiness %nsurance "olicies 'a ings 7nd 'ecurity "olicies +or 1ou 7nd 1our +amily

66

-ural %nsurance "lan /ealthcare %nsurance +inancial %nsurance "ension "lus -etirement "lans ,hildrenNs "olicies )ndo:ment "lans and many more. #roup %nsurance 'chemes %nsurance +or )mployee6)mployer #roups )mployees $eposit 0in;ed %nsurance &e: #roup 'uperannuation 'cheme &e: #roup #ratuity ,are 'cheme 'pecial %nsurance "olicies for &-%Ns %n estgain )ndo:ment "lan

=ajaj 7llian< %ndia offers con enient premium payment and receipt options. The payments can 4e direct through che!ues, $$Ns or directly from your accounts or through credit card. The premiums can also 4e paid online. The insurance policy holders :ho also ha e an account :ith 'tandard ,hartered =an; can a ail the direct de4it mandate facility. The =ajaj 7llian< 0ife %nsurance :e4site offers human life alue estimator, child education cost calculator, retirement solutions and re!uired pension estimator and premium calculator online. The =ajaj 7llian< insurance agents :ill guide you a4out the general life insurance policies 4est suited to your needs. The insurance agent also 4riefs you a4out the insurance !uote and the terms on the policy !uotes.

KOTAK MA IN"RA LIFE INSURANCE COMPAN#

67

Bota; Mahindra *ld Mutual 0ife %nsurance 0imited or *m Bota; Mahindra %nsurance ,ompany 0imited is a joint enture 4et:een Bota; Mahindra =an; 0td., its affiliates and *ld Mutual. Cith Bota; Mahindra =an; pro iding the local ad antages :hile *ld Mutual pro iding the international strengths, Bota; Mahindra *ld Mutual 0ife %nsurance 0td. has made itself a prominent player in the field of life insurance in %ndia. %t offers an e5tensi e range of inno ati e life insurance products to its customers and helps them ta;e crucial financial decisions at e ery phase in life. %t also helps the customer 4ecome financially independent. Bota; Mahindra *ld Mutual 0ife %nsurance 0imited is one of the rapidly gro:ing insurance companies in %ndia :ith o er 197 4ranches across 1G1 cities. KOTAK MA INRRA GROUP 9 The Bota; Mahindra #roup, one of the partners of Bota; Mahindra *ld Mutual 0ife %nsurance 0imited, is a leading 4an;ing and financial ser ice pro iders in %ndia. %ts range of ser ices includes personal financial ser ices, life insurance, corporate and in estment 4an;ing, commercial 4an;ing, asset management, and stoc; 4ro;ing etc. %t ser es a4out H.9 million customers across the nation through its more than 1,A00 offices. %t also has its o erseas offices in &e: 1or;, 'an +rancisco, 0ondon, $u4ai, 'ingapore and Mauritius. *ld Mutual is an (B 4ased international sa ings and :ealth management company. )sta4lished in 1@GH in 'outh 7frica, *ld Mutual is considered one of the top 100 largest companies in +T')100. %t offers ser ices in #eneral %nsurance, =an;ing, life 7ssurance and 7sset Management in more than G0 countries. ,urrently, *ld Mutual has around HG,000 employees glo4ally.

OFFERINGS
68

*m Bota; Mahindra %nsurance ,ompany offers a range of products and ser ices for e ery sort of customers. FOR IN"IVI"UALS Bota; 0ife %nsurance offers follo:ing ser ices for the indi iduals9

PROTECTION PLANS
o o

Bota; 0oan "rotection "lan Bota; Term > "referred Term "lan

SAVINGS & INVESTMENTS

o o o o o o o o o o o

Bota; "latinum 7d antage "lus Bota; 'mart 7d antage Bota; 'afe %n estment "lan Bota; +le5i "lan Bota; )asy #ro:th "lan Bota; ,apital Multiplier "lan Bota; Money =ac; "lan Bota; )ndo:ment "lan Bota; "remium -eturn "lan Bota; #ramin =ima 1ojana Bota; 'ura;shit Eee an

RETIREMENT PLANS
o o

Bota; 'econd %nnings "lan Bota; 'ecure -etirement "lan

69

o o o o

Bota; -etirement %ncome 2(nit 0in;ed3 Bota; 0ong 0ife 'ecure "lus Bota; 0ong 0ife Cealth "lus Bota; -etirement %ncome "lan

C IL" PLANS
o o

Bota; /eadstart ,hild "lans Bota; ,hild 7d antage "lan TATA AIG GENERAL INSURANCE COMPAN# LIMITE"

Tata 7%# #eneral %nsurance ,ompany 0imited is an %ndian general insurance company, and a joint enture 4et:een the Tata #roup and 7merican %nternational #roup 27%#3. Tata #roup holds 7G per cent sta;e in the insurance enture :ith 7%# holding the 4alance 2? percent. Tata 7%# #eneral %nsurance ,ompany, :hich started its operations in %ndia on Eanuary 22, 2001, pro ides insurance to indi iduals and corporates. %t offers a range of general insurance products including energy, marine, property and casualty as :ell as se eral speciali<ed financial lines. The ,ompanyNs products are a aila4le 4an; through assurance arious tie channels ups3 and of direct distri4ution channels li;e agents, 4ro;ers, 4an;s 2through

li;e Telemar;eting, $igital Mar;eting, :or;site etc. /%'T*-1 Tata 7%# #eneral %nsurance ,ompany 0imited 2Tata 7%# #eneral3 is a4usiness ,olla4oration of the Tata #roup and 7merican %nternational #roup, %nc. 27%#3. Tata 7%# #eneral merges t:o
70

major finance organi<ations i.e. the Tata #roupNs prominent headship place in %ndia and 7%#Ns glo4al presence as the :orldNs leading international insurance and financialser ices *rgani<ation. This joint enture has started its operations in %ndia from 22nd Eanuary 2001. The company pro ides 4oth corporate and personal insurance ser ices. The organi<ation offers an array of general insurance co ers :hich are :ell thought6out under commercial and consumer demands. The commercial sector co ers )nergy, Marine, "roperty and se eralspeciali<ed +inancial co ers, :hile the consumer insurance ser ice offers a ariety of general %nsurance products such as insurance for 7utomo4iles, personal accident, casualty, home, health and tra el. The company has made the a aila4ility for its ser ices from end to end channels of distri4ution li;e agents, 4an;s 2through 4ancassurance tie ups3, 4ro;ers and direct channels li;e tele6mar;eting, e6 commerce, :e4site, etc. The head!uarters of the company is situated in Mum4ai. The company has pro ided the employment to more than 2000 !ualified professionals across the country in more than 1?0 locations. BIRLA SUNLIFE INSURANCE

=irla 'un 0ife %nsurance ,ompany 0imited 2='0%3 is a joint enture 4et:een the 7ditya =irla #roup, a :ell ;no:n %ndian conglomerate and 'un 0ife +inancial %nc, one of the leading international financial ser ices organi<ations from ,anada. Cith an e5perience of o er a decade, ='0% has contri4uted to the gro:th and de elopment of the %ndian life insurance industry and currently is one of the leading life insurance companies in the country. ='0% offers a complete range of offerings comprising of protection solutions, childrenNs future solutions, :ealth :ith protection, health and :ellness as :ell as retirement solutions and has an e5tensi e distri4ution reach o er H00 cities through its net:or; of around ?00 4ranches, o er 10?,79G empanelled ad isors and o er 200 partnerships :ith ,orporate 7gents, =ro;ers and =an;s. The 7(M of

71

=irla 'un 0ife %nsurance is close to -s 22,929crs and it has a ro4ust capital 4ase of o er -s. 2,GH0crs as on Mar A1, 201A. Ab)ut Adity% Bi&'% G&)u. 7 (' IAH 4illion corporation, the 7ditya =irla #roup is in the league of +ortune H00. %t is anchored 4y an e5traordinary force of 1AA,000 employees, 4elonging to G2 different nationalities. The group operates in A? countries across si5 continents L truly %ndiaNs first multinational corporation. Ab)ut Adity% Bi&'% Fi$%$/i%' Se&4i/e- G&)u. 0ABFSG2 7ditya =irla +inancial 'er ices #roup 27=+'#3 ran;s among the top H fund managers in %ndia 2e5cluding 4an;s and 0%,3 :ith an 7(M of X('$ I 17.H 4illion. /a ing a strong presence across the life insurance, asset management, &=+,, pri ate e!uity, retail 4ro;ing, distri4ution . :ealth management, and general insurance 4ro;ing 4usinesses, 7=+'# is committed to ser e the end6to6end financial ser ices needs of its retail and corporate customers. The se en companies representing 7=+'# are9 =irla 'un 0ife %nsurance ,ompany 0td., =irla 'un 0ife 7sset Management ,ompany 0td., 7ditya =irla +inance 0td., 7ditya =irla ,apital 7d isors " t. 0td., 7ditya =irla Money 0td., 7ditya =irla Money Mart 0td., and 7ditya =irla %nsurance =ro;ers 0td. %n +1 2011612, 7=+'# reported consolidated re enue from these 4usinesses at -s. ?,HH0 ,rores 2('$ I1.A 4illion3 and earnings 4efore ta5 at -s. ?00 ,rores. 7nchored 4y a4out 17,000 employees and trusted 4y a4out H.H million customers, 7=+'# has a nation:ide reach through more than 1,77H points of presence and a4out 2,00,000 agents>channel partners. Ab)ut Su$ Li(e Fi$%$/i%' 'un 0ife 7ssurance ,ompany of ,anada is a :holly o:ned su4sidiary of 'un 0ife +inancial %nc. and is a mem4er of the 'un 0ife +inancial group of companies. 'un 0ife +inancial is a leading international financial ser ices organi<ation pro iding a di erse range of protection and :ealth accumulation products and ser ices to indi idual and corporate customers. ,hartered in 1@?H, 'un 0ife +inancial and its partners today ha e operations in ;ey

72

mar;ets :orld:ide, including ,anada, the (nited 'tates, the (nited Bingdom, %reland, /ong Bong, the "hilippines, Eapan, %ndonesia, %ndia, ,hina and =ermuda. 7s of $ecem4er A1, 2012, the 'un 0ife +inancial group of companies had total assets under management of ,7$IHAA 4illion. 'un 0ife +inancial %nc. trades on the Toronto 2T'D3, &e: 1or; 2&1')3 and "hilippine 2"')3 stoc; e5changes under the tic;er sym4ol '0+

FUTURE GENERALI IN"IA LIFE INSURANCE

+uture #enerali is a joint enture 4et:een the %ndia64ased +uture #roup and the %taly64ased #enerali #roup. +uture #enerali is present in %ndia in 4oth the 0ife and &on60ife 4usinesses as +uture #enerali %ndia 0ife %nsurance ,o. 0td. and +uture #enerali %ndia %nsurance ,o. 0td. FUTURE GROUP +uture #roup, led 4y its founder and #roup ,)*, Mr. Bishore =iyani, is one of %ndiaJs leading 4usiness houses :ith multiple 4usinesses spanning across the consumption space. Chile retail forms the core 4usiness acti ity of +uture #roup, group su4sidiaries are present in consumer finance, capital, insurance, leisure and entertainment, 4rand de elopment, retail real estate de elopment, retail media and logistics. 0ed 4y its flagship enterprise, "antaloon -etail, the group operates o er 12 million s!uare feet of retail space in 71 cities and to:ns and ?H rural locations across %ndia. /ead!uartered in Mum4ai 2=om4ay3, "antaloon -etail employs around A0,000 people and is listed on the %ndian stoc; e5changes. The company follo:s a multi6format retail strategy that captures almost the entire consumption 4as;et of %ndian customers. %n the lifestyle segment, the group operates "antaloons, a fashion retail chain and ,entral, a chain of seamless malls. %n the alue segment, its mar!uee 4rand, =ig =a<aar is a hypermar;et format that com4ines the loo;, touch and feel of %ndian 4a<aars :ith the choice and con enience of modern retail. The groupJs specialty retail formats include sports:ear retailer, "lanet 'ports, electronics retailer, eFone, home impro ement chain, /ome To:n and rural retail chain, 7adhaar, among others. %t also operates popular shopping portal, :::.future4a<aar.com.
73

+uture ,apital /oldings, the groupJs financial arm, pro ides in estment ad isory to assets :orth o er I1 4illion that are 4eing in ested in consumer 4rands and companies, real estate, hotels and logistics. %t also operates a consumer finance arm :ith 4ranches in 1H0 locations. *ther group companies include, +uture #enerali, the groupJs insurance enture in partnership :ith %talyJs #enerali #roup, +uture =rands, a 4rand de elopment and %"- company, +uture 0ogistics, pro iding logistics and distri4ution solutions to group companies and 4usiness partners and +uture Media, a retail media initiati e. The groupJs presence in 0eisure . )ntertainment segment is led through, Mum4ai64ased listed company #ala5y )ntertainment 0imited. #ala5y leading leisure chains, 'ports =ar and =o:ling ,o. and family entertainment centres, +12A. Through its partner company, =lue +oods the group operates around 100 restaurants and food courts through 4rands li;e =om4ay =lues, 'paghetti Bitchen, &oodle =ar, The 'poon, ,opper ,himney and #elato.+uture #roupJs joint enture partners include, ('64ased stationery products retailers, 'taples and Middle )ast64ased 75iom ,ommunications.+uture #roup 4elie es in de eloping strong insights on %ndian consumers and 4uilding 4usinesses 4ased on %ndian ideas, as espoused in the groupJs core alue of P%ndianness.J The groupJs corporate credo is, P-e:rite rules, -etain alues.J T E GENERALI GROUP The #enerali #roup is a leading player in the glo4al insurance and financial mar;ets. )sta4lished in Trieste in 1@A1, today the #roup is one of )uropeJs largest insurance pro iders and the )uropean 4iggest 0ife insurer. %t is also one of the :orldJs top asset managers :ith assets totalling more than Y G00 4illion. Cith an employed sales force of more than 100,000 people ser ing 70 million clients in ?@ countries, the #roup occupies a leadership position in Cestern )urope and an increasingly important place in )astern )urope and 7sia. The #roup strategy aims to consolidate #eneraliJs pre6eminence on its ;ey mar;ets and achie e a premier position on mar;ets :ith high gro:th potential, esta4lishing its leadership in profita4ility. AVIVA LIFE INSURANCE CO; LT"

74

7 i a 0ife %nsurance is a com4ined effort of 7 i a #roup and $a4ur. $a4ur is one of the most esta4lished conglomerates of %ndia in terms of years in 4usiness as :ell as o erall si<e of operations. 7 i a #roup is one of the 4iggest insurers of the (B and has 4een associated :ith %ndia from 1@AG on:ards. The insurer has a commenda4le :or; force of more than 1G thousand +inancial "lanning 7d isers 2+"7s3. They ha e contri4uted to many of the ground4rea;ing sales strategies such as +inancial /ealth ,hec; ser ices and =ancassurance. %t is also among the insurers :ho came up :ith the unit lin;ed insurance products 2(0%"s3. +und management is one of the major areas of strength of 7 i a than;s to its e5perienced fund managers. The insurer has 1AG 4ranches and operates in almost thousand cities and to:ns across the country. 7 i a holds 2? percent shares in 7 i a 0ife %nsurance ,ompany. The insurer has a paid up capital of %&200Gcrores. AVIVAP%&t$e&-1 +ollo:ing are the partners of 7 i a %ndia9

%ndus%nd =an; 8idhar4ha Bshetriya #ramin =an; -oyal =an; of 'cotland #roup "rime ,ooperati e =an; $=' 'utlej #ramin =an; -ajasthan #ramin =an;

CORPORATE SOCIAL RESPONSIBILIT#

75

*ne of the major cornerstones of 7 i a 0ife %nsurance is the utmost faith on the alue of education. This is reflected in the arious initiati es it has ta;en since its inception li;e the7 i a 'treet to 'chool program and the 7 i a #reat Call of )ducation program. %t has also associated :ith entities li;e ,-1, '*' ,hildrenJs 8illages of %ndia and 'a e the ,hildren in this regard. 7 i a has recently come out :ith its mo4ile application named 7 i a Mo4ile. This facility is e5pected to assist customers in ;eeping a ta4 on their in estments. The application can 4e do:nloaded :ithout any cost on smartphones that ha e 7ndroid, =lac;4erry, or 7pple soft:are. Cith this application, customers :ill 4e a4le to chec; arious details of their policies and funds, pay their premiums and also as; for receipts of the same. %n addition, :ith this facility they can also get information on the products 4eing offered 4y 7 i a. The ,**, 'nehil #am4hir, has stated that customers can also locate 7 i a 4ranches and register their issues and complaints. They can also update the arious details of their policies and contact the insurer from any point in the :orld. This de ice is also e5pected to help 7 i a ma;e its policy management procedures free of pro4lems for their customers. . This program is part of the companyJs attempt to let people e5press their gratitude to:ards their fathers on the occasion of +atherJs $ay.

CHAPTER 4
RECRUITMENT & SELECTION PROCESS IN RELIANCE LIFE INSURANCE
76

UMAN RESOURCE MANAGEMENT +or any 4usiness to run one needs four MJs namely Man, Money, Machine and Material. Managing other three resources other than men, are easy to handle. Men are ery difficult to handle 4ecause no t:o human 4eings are similar in all :ay. /uman 4eings can thin;, feel and gi e response. /andling humans is more important for any 4usiness 4ecause human 4eing ha e crucial potential that may 4e ery profita4le for the 4usiness. 7nd these potential can 4e de eloped to an unlimited e5tent if they are pro ided :ith proper en ironment. 'o the function of managing men is as important as finance or mar;eting function in any 4usiness. RM refers to practices and policies framed for the management of human resources in an organi<ation, including -ecruiting, screening, re:arding and appraising. /uman resources ha e at least t:o meanings depending on conte5t. The original usage deri es from political economy and economics, :here it :as traditionally called la4or, one of three factors of production. The more common usage :ithin corporations and 4usinesses refers to the
77

indi iduals :ithin the firm, and to the portion of the firmNs organi<ation that deals :ith hiring, firing, training, and other personnel issues. This article addresses 4oth definitions. T*e )bIe/ti4e )( um%$ Re-)u&/e- i- t) m%LimiMe t*e &etu&$ )$ i$4e-tme$t (&)m t*e

)&,%$iM%ti)$N- *um%$ /%.it%'; T E SCOPE OF pur ie: of /-M. 'pecifically, the acti ities include are /- "lanning Eo4 analysis and design -ecruitment and selection *rientation and placement Training and de elopment "erformance 7ppraisal and Eo4 e aluation )mployee and e5ecuti e remuneration )mployee Moti ation )mployee Celfare RM is indeed ery ast. 7ll major acti ities in the :or;ing life of a :or;er6

from the time of his or her entry into the organi<ation until he or she lea es6 come under the

%t is the responsi4ility of human resource managers to conduct these acti ities in an effecti e, legal, fair, and consistent manner. O/uman resource management aims to impro e the producti e contri4ution of indi iduals :hile simultaneously attempting to attain other societal and indi idual employee o4jecti es.O 'ch:ind, $as . Cagar 2200H3.
78

R STRUCTURE

PRESI"ENT R

CEO

,*-"*-7T) /-

)&T%T1 /CIRCLE R

0Fi,; :1% C

R STRUCTURE2

M# ROLE & EGPERIENCE IN RELIANCE LIFE % started my training as /- Trainee. My jo4 profile :as to handle -),-(%TM)&T and ')0),T%*& in my project. The senior /- manager narrated me the :hole procedure. My jo4 profile :as to generate resumes from the arious jo4 sites such as &au;ri.com, Timesjo4s.com etc. according to the re!uirements of the company. 7fter generating the resumes from the sites the ne5t step is to shortlist the resume :hich 4est suite the re!uirements. &o: the short6 listed candidates ha e to 4e gi en a phone call in order to find out their interests and schedule them for inter ie: 4y personal or telephonic inter ie: process.Cith the help of my summer training % came to ;no: a jest of recruitment and selection process.% also learnt ho: to ta;e initial round of inter ie: 4y practically ta;ing an inter ie: :ith the help of /- Manager.My
79

manager also sho:ed me entire selection process in reliance life insurance. The :or;ing en ironment of reliance is ery safe and eco6friendly.The entire /- operation is di ided in a ery systematic :ay.$uring my training period % personally felt that no: a days insurance companies are gi ing their 4est attention on their recruitment process 4ecause -ecruitment has 4een regarded as the most important function of the /- department , 4ecause unless the right type of people are hired, e en the 4est plans, organi<ation chart and control system :ould not do much good.The main o4jecti e of reliance life insurance is to de elop an organi<ational culture that attracts competent people to the company. There are three types of sourcing done at -eliance 0ife %nsurance. 7fter the resumes of candidates are chosen then the same is sent to the department head :here the acancy arises. The department head :ill then shortlist the same and they as; the /- department to fi5 an inter ie: :ith the selected candidates. There are t:o type of inter ie: :hich is ta;en up at -eliance, firstly the +unctional inter ie: and then the +unctional /ead and /- /ead ta;es the inter ie: My reporting manager :as highly supporti e during my training.My manager arranged a t:o day demo session of recruitment and selection process to understand it in a right manner. The most important thing that % li;e in reliance is :ell maintained organi<ation structure and discipline./ere4y % am gi ing a complete jest of the recruitment and selection process in reliance life insurance that is as follo:s6 CORPORATE RC 7cti ities ta;en up 4y ,orporate /- are

"olicy ma;ing %mplementing suggestions 6 /)C%TT ,*&'(0T7&T 'trategic planning RC 7cti ities ta;en up 4y )ntity /- are

ENTIT#

)5ecution of policies and practices Targets for recruitment of ,ircle /RC 7cti ities ta;en up 4y ,ircle /- are
80

CIRCLE

-ecruitment 7ppointment Training "ayroll )mployees issues )5it full . final

R FUNCTIONS1 TALENT ACFUASITION 'ourcing acti ity

TALENT "EVELOPMENT "erformance management system Training ,arrier planning 'uggestion planning

TALENT MANAGEMENT *peration /-

81

RECRUITMENT -ecruitment is hiring of employees from outside. -ecruitment has 4een regarded as the most important function of the /- department , 4ecause unless the right type of people are hired, e en the 4est plans, organi<ation chart and control system :ould not do much good. -ecruitment is the disco ering of potential applicant for actual or anticipated organi<ational acancies. 7ccordingly the purpose of recruitment is to locate sources of manpo:er to meet the jo4 re!uirements and jo4 specification. %t is defined as Z a process to disco er the sources of manpo:er to meet the re!uirements of staffing schedule and to apply effecti e measures for attracting the manpo:er to ade!uate num4er to facilitate effecti e selection of an effecti e :or;force #)de& points out that recruitment is a process to disco er the sources of manpo:er to meet the re!uirement of the staffing schedule and to employee effecti e measures to attracting that manpo:er in ade!uate num4er to facilitate effecti e selection of an effecti e :or;force. Edwin B Flippo defines recruitment as Zthe process of searching for prospecti e employees and stimulating them to apply for the jo4s in the organi<ation. %t is the process of finding and attracting capa4le applicants for employment. The process 4egins :hen ne: recruits are sought and ends :hen their application are su4mitted. The result is a pool of applicants from :hich ne: employees are selected.

0Fi,; :1b C RECRUITMENT PROCESS2

82

MET O"S OF RECRUITMENT1 $unn and 'tephens summaries the possi4le recruiting methods into three categories, namely 19 $irect method 29 %ndirect method A9 Third party method "IRECT MET O" The direct method includes sending of the recruiters to different educational and professional institutions, employees contact :ith pu4lic, and mannered e5hi4its. *ne of the :idely used methods is sending the recruiters to different colleges and technical schools. This is mainly done :ith the cooperation of the placement office of the college. 'ometimes, firms directly solicit information form the concerned professors a4out student :ith an outstanding records. *ther direct methods include sending recruiters to con entions and seminars, setting up e5hi4its at fairs, and using mo4ile offices to go the desired centers. IN"IRECT MET O" %ndirect method in ol es mainly ad ertising in ne:spapers, on the radios, in trade and professional journals, technical maga<ines and 4rochures. 7d ertisements in ne:spapers and or trade journals and maga<ines are the most fre!uently used methods. 'enior post is largely filled :ith such methods. 7d ertising is a ery useful for recruiting 4lue color and hourly :or;er, as :ell as scientific, professional, and technical employees. 0ocal ne:spaper can 4e good sources of 4lue collar :or;ers, clerical employees, and lo:er le el administrati e employees. The main point is that the higher the position in the organi<ation the more dispersed ad ertisement is li;ely to 4e. The search for the top e5ecuti e might include ad ertisement in a national periodical, :hereas the ad ertisement of the 4lue color jo4s usually confine to the daily
83

ne:spaper.7ccording to the 7d ertisement tactic and strategy in personnel -ecruitment, three main points need to 4e 4orne in the mind 4efore an ad ertisement in inserted. +irst, to isuali<e the type of applicants one is trying to recruit. 'econd, to :rite out a list of ad antages the company offers, or :hy should the reader join the company. Third, to decide :here to run the ad ertisement , not only in :hich area, 4ut also in :hich ne:spaper ha ing a local, state or a nation6 :ide circulation.

T RI" PART# These include the use of commercial or pri ate employment agencies, state agencies, and placement offices of schools colleges and professional associations recruiting firms, management consulting firms, indoctrination seminars for college professors, and friends and relati es. "ri ate employment agencies are the most :idely used sources. They charge a small fee from the applicant. They speciali<e in specific occupationM general office help, salesmen, technical :or;ers, accountant, computer staff, engineers and e5ecuti es. 'tate or pu4lic employment agencies are also ;no:n as the employment or la4our e5changes, are the main agencies for the pu4lic employment. )mployers inform them of their personnel re!uirement, :hile jo4 see;ers get information for them a4out the type of jo4 are referred 4y the employer. 'chools and colleges offer opportunities for recruiting their student. They operate placement ser ices :here complete 4iodata and other particular of the student are a aila4le. "rofessional organi<ation or recruiting firms maintain complete information records a4out employed e5ecuti e. These firms maintain complete information records a4out employed e5ecuti es. These firms are loo;ed upon as the Zhead hunters , Zraiders, and Zpirates 4y organi<ation :hich loose their personnel through their efforts. ) aluation of the recruitment method
84

The follo:ing are the e aluation of the recruitment method 19 &um4er of initial en!uires recei ed :hich resulted in completed application forms 29 &um4er of candidates recruited. A9 &um4er of candidates retained in the organi<ation after si5 months. G9 &um4er of candidates at arious stages of the recruitment and selection process, especially those short listed. OBJECTIVE OF RECRUITMENT1 19 To attract :ith multi dimensional s;ills and e5perience that suite the present and future organi<ation strategies. 29 To induct outsider :ith ne: perspecti e to lead the company. A9 To infuse fresh 4lood at all le els of organi<ation. G9 To de elop an organi<ational culture that attracts competent people to the company. H9 To search or headhunt people :hose s;ill fit the companys alues. ?9 To see; out non6con entional de elopment grounds of talent 79 To de ise methodology for assessing psychological traits. @9 To search for talent glo4ally not just :ith in the company. 99 To design entry pay that competes on !uality 4ut not on !uantum. 109 To anticipate and find people for position that doesnt e5ists yet. -ecruitment represents the first contact that a company ma;es :ith potential employees. %t is through recruitment that many indi iduals come to ;no: a4out the company and e entually decide :hether they :ish to :or; for it. The recruitment process should inform !ualified indi iduals a4out the jo4 so that applicant can ma;e comparison :ith their !ualification and interest.
85

RECRUITMENT PROCESS STEP8CMANPO!ERPLANNING %n -eliance life, 7*" 27nnual *perating "lan3, this process is ta;en up e ery year. %t is ta;en up at "ersonal 0e el and )ntity 0e el. 'e eral points li;e -e enue generation, 7c!uisition num4er, etc. STEP 6C SOURCING ACTIVIT# There are three types of sourcing done at -eliance. 7fter the resumes of candidates are chosen then the same is sent to the department head :here the acancy arises. The department head :ill then shortlist the same and they as; the /- department to fi5 an inter ie: :ith the selected candidates. There are t:o type of inter ie: :hich is ta;en up at -eliance, firstly the +unctional inter ie: and then the +unctional /ead and /- /ead ta;es the inter ie: INTERNAL SORCING )mployee -eference -e6employment of former employee EGTERNAL SOUCING "lacement ,onsultant L -uchi;a, the 7ge, the 7 enue. Eo4 "ortals 6 Monster, &7(B-%. ,ampus -ecruitment

STEP 9C APPROVAL; The /- e5ecuti es :ill Ne,)ti%te t*e CTC :ith the candidate. The appro al is sent to the CRC 2,orporate -ecruitment ,ell3.
86

Then after it is sent to ECRC. Then the same is sent to CRL. The same is then sent to Management for SAP A..'i/%$t C)de. The applicant code is gi en to R CIRCLE.

OFFER is made to the candidate, :hich leads to the J)i$i$, P&)/edu&e.

AVERAGE TIME PERIO"C The process of recruitment ta;es a4out 10 L 1H days; ELIGIILIT# CRITERIAC )ducation Tualification L M=7 :ith any speciali<ation &ot fre!uent jo4 changes Tenure of last jo4 should at least 4e 1.H L 2 yrs

OT ER REFUIREMENTSC -eference chec; is usually done for /igh le el jo4 The recruitment may differ :ith the current position of the 4usiness

INTERNAL SOURCING %n the e ent of an open position in -eliance life insurance, suita4le candidates are first searched internally :ithin the organi<ation. This is 4ased upon in6house talent :hich could 4e redeployed. 7d ertisement for internal acant position is done 4y follo:ing t:o :ays9 Through sending mail to all -eliance %nfocomm employees across all locations including $7B, 2$hiru4hai 7m4ani Bno:ledge ,ity3 Through $7B, ,ircular

87

)mployees of -eliance life insurance :ho ha e completed more than 12 months of continuous ser ice only those employees can apply for position placed on %ntranet. %nternal candidates are considered in accordance :ith their a4ilities and potential. The process is coordinated 4y ,-, 2,entral -ecruitment ,ell3 at ,orporate *ffice. EMPLO#EE REFERENCE9 %n -eliance life insurance, )mployees can refer a candidate :ith :hom he> she ha e :or;ed in his> her pre ious employment. )mployees can chec; a aila4le acancies on %ntranet and can su4mit the resumes of prospecti e candidates :ho fit the Eo4 profile. RE1EMPLO#MENT OF FORMER EMPLO#EE9 -e /iring of an employee done in -eliance life insurance :ith a ie: to ta;e trained manpo:er 4ac; in the company. -e /iring is done as per the policy issued 4y ,entral -ecruitment ,ell at ,orporate *ffice EGTERNAL SOURCING PLACEMENT CONSULTANC#C The placement agencies call for resumes of prospecti e candidates, :hich act as a good source of recruitment for the companies. ,onsultantJs inter ie: candidates and shortlist those according to the criteria laid do:n 4y the companies. This helps the employer to inter ie: a limited num4er of potential candidates, the minimi<ing the time ta;en in recei ing and sorting applications, etc. -eliance life insurance chooses ,onsultants ha ing national presence. This sourcing option is only considered 4y the company :hen there is scarcity for candidates :ith re!uisite e5perience and s;ills. JOB PORTALC The spread of %nternet has ena4led employers to search for candidates glo4ally and has made recruitment easier. %f acancy arises, -eliance life insurance 4ro:ses the profile of candidates from the Eo4 portal li;e nau;ri.com, monsterindia.com and then candidates are accessed through e6mail or telephone. CAMPUS RECRUITMENTC -eliance life insurance goes for ,ampus recruitment e ery year for technical department. +or management le el recruitment, it goes for campus recruitment as per re!uirement.

88

+or filling up position for MT 2Management Trainee3, follo:ing procedure is follo:ed 4y -eliance life insurance9 /- representati e of -eliance life insurance candidates Critten Test i.e. 2M7T3 Mental 74ility Test is ta;en for those candidates :ho has got aggregate ?0R in all semesters. #$ 2#roup $iscussion3 is conducted for those candidates :ho had successfully pass M7T. 7t last "% 2"ersonal %nter ie:3 is conducted for those candidates :ho had passed out #$ and "ersonal %nter ie: is ta;en 4y respecti e head of department and /- /ead. +or filling up position for #)T 2#raduate )ngineering Trainee3, follo:ing procedure is follo:ed 4y -eliance life insurance9 /- representati e of -eliance life insurance gi es $escription a4out Eo4 to all candidates Critten Test i.e. 2M7T3 Mental 74ility Test is ta;en for those candidates :ho has got aggregate ?0R in all semesters. 7t last "% 2"ersonal %nter ie:3 is conducted and "ersonal %nter ie: is ta;en 4y respecti e head of department and /- /ead. MT position includes candidates ha ing )ducational !ualification in M=7 and #)T "osition includes candidates ha ing )ducational !ualification in =) 2).,, )lectronics3. MT is placed in either of the follo:ing departments9 "repaid "ostpaid ",* ,ustomer ,are ,ommercial /Ce4 :orld gi es $escription a4out Eo4 to all

#)T is placed in &et:or; $epartment.

89

INTERVIE! %nter ie: is the oral assessment of the candidates for employment. This is the most essential step in the selection process. %n this step the inter ie:er matches the information o4tained a4out the candidate through arious means to the jo4 re!uirements and to the information o4tained through his o:n o4ser ation during the inter ie:. %nter ie: gi es the recruiter an opportunity9 To si<e up the candidate personally To as; !uestions that are not co ered in tests To ma;e judgments on candidateJs enthusiasm and intelligence. To assess su4jecti e aspects of the candidate L facial e5pressions, appearance, ner ousness and so forth. To gi e facts to the candidate regarding the company, the policies, programmes, etc. and promote good:ill to:ards the company. MO"E OF INTERVIE! PERSONAL INTERVIE!9 "ersonal %nter ie: is a formal in6depth con ersation conducted to e aluate the applicantJs accepta4ility. %n a personal inter ie:, candidates are accessed on 4eha ioral and personality characteristics, functional and managerial competencies and other factors li;e education, e5perience etc. =ased on the candidateJs performance in the inter ie:, the inter ie: panel rates the candidate and ta;es the selection decision. VI"EO CONFERENCEC 7t -eliance 0ife, usually face to face inter ie:s are conducted 4ut for those candidates :ho are located at other state for them ideo conference inter ie:s are conducted. The use of ideo conferencing can add alue to the process 4y allo:ing real time, face6to6face interactions :ithout the costs associated :ith physically transporting candidates to the campus. RELIANCE LIFE INSURANCE USES VI"EO CONFERENCE FOR FOLLO!ING REASONSC Time sa ings +aster $ecision ma;ing
90

,ost sa ings in candidate tra el, lodging, etc. 7n opportunity to meet the candidates 4efore narro:ing the list

7n opportunity to see and con erse :ith candidates, e aluate their responses to !uestions and gauge their interest in the position. TELEP ONIC INTERVIE!C There are arious reasons to ta;e a telephonic

inter ie:. +or e5ample, in certain location -eliance 0ife does not ha e its Ce4:orld, so in that case the inter ie: of that candidate :ill 4e ta;en o er telephone. ) en if the inter ie: of a candidate cannot happen through ideo conference 4ecause of una aila4ility of any Ce4:orld timings, then telephonic inter ie: is ta;en. CAMPUS RECRUITMENTC +or #)T, %nter ie: is ta;en 4y respecti e functional head and /- head and for MT %nter ie: is ta;en 4y 26A functional heads, /- head and final inter ie: is ta;en 4y ,ircle ,)*. LEVELS OF "ESIGNATION & EGPERIANCE L8C 8%,) "-)'%$)&T, 'r. 8%,) "-)'%$)&T, "-)'%$)&T.20)7$)-'/%" "*'%T%*&'3 L6C EGPERIENCEC 17 L 20 V years $)"(T1 #)&)-70 M7&7#)-, #)&)-70 M7&7#)-.2M7#)-%70

"*'%T%*&'3 L9C EGPERIENCEC 11 L 1H V years 7''%'T7&T M7&7#)-, M7&7#)-, 'r. M7&7#)-.2)D),(T%8)

"*'%T%*&'3 EGPERIENCEC H L 11 V years

L:C )D),(T%8), 'r. )D),(T%8).2'(""*-T "*'%T*&'3

91

EGPERIENCEC 2 L G V years

GET3 MET3 "ETC Trainees EGPERIENCEC +resher

REFERENCE C ECK *nce the hiring decision is ta;en, the candidate is contacted and informed a4out the decision to conduct a reference chec; :ith the referees :hose names ha e 4een pro ided in the personal history form. Many employers re!uest names, addresses and telephone num4ers of references for the purpose of erifying information and perhaps gaining additional 4ac;ground information on an applicant. -eferences are chec;ed for follo:ing reasons9 [ [ To chec; :hether or not the applicant :as truthful a4out his or her employment history. To ;no: :ea;nesses, strengths of the applicant.

EVALUATION OF RECRUITMENT PROCESS The follo:ing are the e aluation of the recruitment process9 19 -eturn rate of application sent out. 29 &um4er of suita4le candidates for selection. A9 -etention and performance of the candidate selection. G9 ,ost of recruitment H9 Time lapsed data. ?9 ,omments on image projected. SELECTION "ECISION 7fter o4taining information through the preceding steps, selection decision is to 4e made. SELECTION 'election is a negati e process and in ol es the elimination of candidates :ho do not ha e the re!uired s;ills and !ualification for the jo4 proposed. 7lso it is a process of differentiating 4et:een applicants in order to identify and hire those :ith grater li;elihood of success in jo4.
92

The o4jecti e of selection decision is to choose the indi idual :ho can most successfully perform the jo4 from the pool of !ualified candidates. %t is the system of function and de ise adopted in a gi en company to ascertain :hether the candidates specifications are matched :ith the jo4 specifications and recruitment or not. 'election process or acti ities typically follo: a standard patter, 4eginning :ith an initial screening inter ie: and concluding :ith final employment decision. The traditional selection process includes9 preliminary screening inter ie:, completion of application form, employment test, comprehensi e inter ie:, 4ac;ground in estigation, physical e5amination and final employment decision to hire. ORGANIKATION FOR SELECTION (ntil recently the 4asic hiring process :as performed in a rather unplanned manner in many organi<ations. %n some companies, each department screened and hired its o:n employees. Many mangers insisted on screening their o:n employees as they thought no one else could do that as efficiently as they themsel es. centrali<ed department. 6 %t facilitates contact :ith applicants 4ecause issues pertaining to employment can 4e cleared through one central location. 6 %t helps operating managers to concentrate on their operating responsi4ilities. This is especially helpful during the chief hiring period. 6 %t can pro ide for 4etter selection 4ecause hiring is done 4y specialist trained in staffing techni!ues. 6 The applicant is 4etter assured of consideration for a greater ariety of jo4s. 6 /iring cost is cut 4ecause duplication of efforts is reduced. 6 Cith increased go ernmental regulation on selection process, it is important that people :ho ;no: a4out these rules handle a major part of the selection process. %deally, a selection process in ol es mutually decision ma;ing. The organi<ation decides :hether or not to ma;e a jo4 offer and ho: attracti e the jo4 offer should 4e. BARRIERS TO EFFECTIVE SELETION

93

The main o4jecti e of selection process is to hire people ha ing competence and commitment to:ards the gi en jo4 profile. =ut due to some reason the main purpose of effecti ely selecting candidates is defeated. These reasons are9 19 "erception or the /alo effect9 Many a times the inter ie:er selects a candidate according to the perception he has or he made up :hile tal;ing or loo;ing at the indi idual. This :ay he does not see through the cali4er or the efficiency of the indi idual and many times it leads to the selection of the :rong candidates. 29 +airness9 $uring the selection process the inter ie:er does not select the indi idual on the 4asis of his ;no:ledge and hence the right type of the candidates is not selected. A9 "ressure9 The people from the /- department and also ha e a lot of pressure from the top management and from other top class people for selecting the candidates they :ant. This :ays the purpose of effecti e selection process of effecti e selection process is defeated as they ha e to select that indi idual :hether or not he is capa4le of the jo4. that is 4eing offered. ESSENTIALS OF SELECTION PROCE"URE 6 'omeone should ha e the authority to select. 6 There must 4e sufficient num4er of applicants from :hom the re!uired num4er of employees to 4e selected. 6 There must 4e some standards of personnel :ith :hich a prospecti e employee may 4e compared. OT ER STAGES OF SELECTION The other stages of selection process ha e 4een used to narro: the num4er of candidates. The final decision is to 4e made from the pool of indi iduals :ho pass the tests, inter ie:s. ME"ICAL C ECK1UP %n -eliance 0ife %nsurance, all selected candidates are re!uired to undergo a pre6employment medical chec;6up as a part of selection process. 7fter the selection decision and 4efore the jo4 offer is made, the candidate is re!uired to undergo a Medical chec;6up. 7 jo4 offer is contingent upon the candidate 4eing declared fit after the Medical test. EMPLO#EE REMUNERATION

94

-emuneration is the compensation recei es in return for his> her contri4ution to the organi<ation.-eliance 0ife follo:s the cost to company 2,T,3 structure that reflects the total cost of an employee to an organi<ation. %t is designed to pro ide fle5i4ility to an employee to structure their 4enefit pac;age. P ILOSOP # OF CTC Cithin the committed salary of an employee, pro ide ma5imum fle5i4ility to an employee ,ost all per!uisites and 4enefits to an employee and ma;e the employee appreciate the total costs incurred 4y the company on such 4enefits )na4le the company reali<e and recogni<e the hidden payroll costs incurred on such 4enefits !*y CTC i- di4ided i$ t5) .%&t-H 7s per the %ndian %ncome Ta5 -ules the total =asic 'alary paid to the employee is ta5a4le. 'o ,hoice "ay can ma;e your ?0R salary non ta5a4le.

PLI 0PERFORMANCE LINKE" INCENTIVE2 1HR on +i5ed ,T, :ould 4e :ould the 4ase figure for "0%. &ormally "0% is paid once in a year depending on his performance during the assessment period. CTC SRUCTURE

C T C

BASE PAY ( 40 % O f C TC )
95

C H O IC E P A Y ( 60 % O f C TC )

0Fi,; :1/ C CTC SRUCTURE2 T*e ()'')5i$, %&e t*e m%i$ /)m.)$e$t- t) CTC -t&u/tu&e1 %n -eliance life insurance The ,T, structure includes costing of all components of ,ompensation and =enefits an employee is entitled to. BASE PA# This constitutes up to G0R o the total annual compensation and it includes =asic 'alary )mployerJs contri4ution to the "+ \ 12R of 4asic salary )mployerJs contri4ution to the companyJs gratuity fund \ G.@1R of 4asic salary

BASIC SALAR# =asic "ay ] =ase pay>pf V gratuity =ase "ay ] 100 =asic "ay ] 100>1.1?@1

PROVI"ENT FUN" "ro ident fund is to pro ide 'ocial 'ecurity =enefit to the employee after retirement. "+ is deducted from the first day of employment. The ,ompany deducts 12R of the employeeJs 4asic salary and ma;es an e!ual contri4ution. The employee can ta;e loans for specific purposes against his>her pro ident fund accumulation. The employee is also co ered under an %nsurance 'cheme, :hich pro ides for a payment of -s. A7,000 > 6 in case of his >her death. GRATUIT# (nder the scheme ,ompany contri4utes G.@1R of =asic 'alary of an employee to the #ratuity +und. 0ast dra:n 4asic salary>2? days^1H days^no. of completed years of ser ice ; )mployees :ho ha e completed H years continuous ser ice :ith the company are eligi4le to get gratuity on separation from the company. %n case of death, the minimum ser ice re!uirement of H years does

96

not apply. +or calculating #ratuity, periods of ser ice greater than ? months :ill 4e considered as e!ui alent to 1year and less then ? months :ill not 4e counted. 7s per %ncome Ta5 -ules, #ratuity is not ta5a4le up to A, H0,000 >6 . 7ny amount paid in addition to A, H0,000 >6 :ill attract ta5. 7ll employees :ho ha e completed 1 year continuous ser ice :ith the company are eligi4le to get gratuity on separation from the company. C OICE PA# This constitutes up to ?0R o the total annual compensation and it includes ,ompany 0eased 7ccommodation ,ompany *:ned 7ccommodation *ffice Cear 7llo:ance 0ea e Tra el 7llo:ance ,ompany 0eased ,ar ,hildren )ducation 7llo:ance #ift ,oupons ,on eyance 7llo:ance +ood ,oupons Medical )5pense /ouse -ent 7llo:ance 'uperannuation 'pecial "ersonnel 7llo:ance OUSE

COMPAN# LEASE" of the employee.

,ompany :ill arrange the house through an authori<ed real estate agent as per the choice 'ecurity deposit 4y company. 12R percent %nterest :ill 4e charged on deposit amount. The same :ill 4e de4ited in ,T,.
97

-ent :ould 4e e5empted from income ta5. 10R "er!uisite Ta5 :ould 4e charged to the employee on his ta5a4le income.

COMPAN# O!NE" ACCOMO"ATION &o deposit L no interest. -ent :ould 4e calculated \ 11 rupees per '!uare feet. Monthly rental :ould 4e charged to ,T, -ental 7mount :ill 4e e5empted from ta5 10R per!uisite ta5 :ould 4e charged on employee. 'ecurity $eposit /-7 L /ouse -ental 7llo:ance /-7 can 4e ma5imum G0R of =asic 'alary. $eposit and rent has to 4e paid 4y employee 4y self To get the ta5 e5emption the employee has to produce the rental agreements and rental receipts of the house. The employee canJt claim this 4enefit if /e>'he has his o:n house.

OFFICE !EAR ALLO!ANCE 7n amount of -s.1@, 000 ".7. is e5empted for income ta5. To get the e5emption original 4ills to 4e su4mitted. %tems co ered under this head are as follo:s9 7ttire 223 Ties 2A3 'hoes 2G3 'oc;s 2H3 Tailoring charges

LTA 1 LEAVE TRAVEL ALLO!ANCE 7n )mployee can 4loc; t:o months of =asic 'alary as 0ea e Tra el 7llo:ance. /e>'he should ta;e a minimum of H days lea e 2"03. %n case of air tra el6economy class fare is e5empted and in case of rail tra el second class 7, fare is e5empted. /e>'he can tra el :ithin %ndia only.

98

 CAR

/e>'he has to produce the original tra el tic;ets.

,ompany :ill arrange a car through a car lease agency. )mployee can choose any ma;e>model. The )M% that :ill 4e charged :ould 4e -s. 209H>6 per 0ac per month. The )M% amount per 7nnum :ould 4e e5empted from %ncome Ta5.

MAINTENANCE & RUNNING COST Maintenance and +uel ,ost :ill 4e e5empted as follo:s. Maintenance canJt e5ceed -s. 2H, 000 per annum. %f ,, of the car is less than 1000 L -s. 1, 11,000 per annum. %f ,, of the car is more than 1000 L -s. 1, H0,000 per annum. The per!uisite Ta5 charged :ould 4e -s. 1200 irrespecti e of the cc of the car The a4o e e5emption :ould 4e pro ided on su4mission of original 4ills. There :ould 4e no ta5 e5emption against if the employee has his o:n car. The +=T Ta5 2+ringe =enefit Ta53 for fuel and maintenance is ?.7AR on ho: much you ha e opted for. 7t the time of lea ing ,*. 4efore G@ months then the employee has to pay +,8 2+or ,loser 8alue3 to the company from :hom the loan is ta;en. %f the employee is still stays after G@ months then employee :ill 4e charged 20R on the alue of the car at that time for changing the name i.e. o:nership. C IL"REN E"UCATION ALLO!ANCE )mployee can claim e5emption -s. 2G00 per year. This e5emption is restricted up to t:o children. To pass the claim )mployee has to su4mit the original 4ills. To get this 4enefit child age should 4e greater then A.H years.

GIFT COUPONS
99

7 sum of -s. H000>6 :ould 4e e5empted against the #ift ,oupons. The company :ould pro ide coupons :orth -s. H000>6 during the months of *cto4er . &o em4er. 8alidity of this coupons is one year This coupon is accepted at major outlets in city. +=T Ta5 L 1?.?7R is charged.

CONVE#ANCE ALLO!ANCE %f the employee is not using companyJs car then and only then he can claim this option. To getting the e5emption 4ills are not re!uired. ,on eyance allo:ance is up to -s. @00>6 per month.

FOO" COUPONS The ,ompany gi es '*$)D/* passes in term of +ood ,oupons. +ood coupons are pro ided on monthly 4asis of -s. 1A00. 7 sum of -s. 1H?00 per annum :ill 4e e5empted from the income ta5. The employee gets an e5emption of -s. 1H000 p.a. =ut to get e5emption the employee must su4mit original 4ills.

ME"ICAL ALLO!ANCE

OUSE RENT ALLO!ANCE Ma5imum G0R of 4asic salary can 4e calculated as /-7. =ut if employee o:ns the house in another state then he>she can as; for /-7 and also opt for ,ompany 0eased /ouse. SUPERANNUATION 1A61HR of 4asic salary is transferred to trust. %t can 4e gi en to employee only after the completion of H years :ith the company. The money is collected 4y a trust.

100

To :ithdra: the money the employee has t:o options, either he can ta;e the money monthly or he can ta;e the money after Hyears.

SPECIAL PERSONAL ALLO!ANCE 7ny amount :hich e5ceeds the limits of each allo:ance can 4e transferred under this head. '"7 is fully ta5a4le as per income ta5 rules.

LEAVES There are four types of lea es a aila4le :ith the employees. PAI" LEAVE CASUAL LEAVE SICK LEAVE OPTIONAL LEAVE

Additi)$%' I$()&m%ti)$9 &o lea es can 4e clu44ed :ith another lea e. Minimum 90 days lea e should 4e in 4alance for the encashment of lea es. PAI" LEAVE There are A0 days "0 a aila4le :ith the employee after the conformation. The "0 is a aila4le after 1@0 days from the date of joining. The employee can ta;e only A6H "0 at a single time

CASUAL LEAVE There are H days ,0 a aila4le to an employee from the date of joining. The employee can ta;e 16A days ,0 at a time.

SICK LEAVE There are 10 days '0 a aila4le to an employee from the date of joining. The employee has to su4mit doctorJs certificate if the lea e e5tends to 2 days.
101

OPTIONAL LEAVE There are A days *0 a aila4le to an employee from the date of conformation.

JOINING FACILITATION Eoining $ay is the day :hen an employee recruited on the payrolls of the company. The /- -ep. should 4e in constant touch :ith the candidates till the date of joining. ,ollect the information from the candidate regarding the date and mode of arri al to the location of joining. 7rrange for pic;6up of the joinee . family from the station>airport and ta;e them to the hotel as per the re!uirement. %f pic;6up arrangement canJt 4e arranged then gi e complete address>directions to the hotel . the office to joinee. /- -ep. should gi e a 4rief introduction to the ne: joinee on the follo:ing9 #eography of the 0ocation>,ity>To:n. *rgani<ation 'tructure. 'tatus of the "roject>*perations of the circle. -ole of the employee.

RESI"ENTIAL & MOBILE TELEP ONE -esidential . ,ellular "hone are allotted to employee 4ased on the role and responsi4ility le el and should not 4e treated as "er!uisite. The -esidential . ,ellular "hone pro ided 4y the company :ill 4e on the name of company. ,ircle > =usiness )ntity /ead can ta;e any of the follo:ing decisions :ith respect to -esidential Telephone ,onnection9 *4tain the telephone connection on priority 4asis 4y paying higher amounts. "ro ision of 'T$ > %'$ +acility.

102

-eim4urse only Telephone -ental e5penses. -eim4urse the 0ocal ,all )5penses. -eim4urse e5penses related to only official calls. -eim4urse all e5penses including 0ong $istance ,alls.

ALLOTMENT OF "ESKTOP PC E LAPTOP 7ll full time permanent employees :ho :ill 4e a aila4le at their office des; for more than @0R of the :or;ing hours on daily 4asis :ill 4e pro ided :ith a des;top ", on their :or;station.The circle>=usiness )ntity head can ta;e decision to allotment of 0ap Top in lieu of des;top ", 4ased on the role of the employee. FORMS & LETTERS REFUIRE" IN T IS PROCESS Celcome 0etter. Eoining -eport. =rief "ersonal $etails +orm. &omination +orm. #ratuity &omination +orm. 'uperannuation Transfer +orm. 7pplication to join 'uperannuation 'cheme. ,hoice "ay +orm. "ersonal 7ccident %nsurance +orm. &omination for payment of the amount secured under personal accident %nsurance "olicy.
103

/ospitali<ation %nsurance +orm 27pplica4le for 0A . 0G 3 /ospitali<ation %nsurance ,o erage for dependent parents. /ealth $eclaration +orm /ealth ,ertificate ", %ndent +orm &e: Telephone )5tension +orm )lectronic Mail -egistration +orm -e!uisition for 8isiting ,ards.

IN"UCTION %nduction is also called orientation, :hich is designed to pro ide a ne: employee :ith the information he or she needs to function comforta4ly and effecti ely in the organi<ation. INEP IN"UCTION PROGRAM The /uman -esources $epartment structures an appropriate induction programmes to orient the ne: employees to arious 4usinesses and ser ices at -eliance 0ife %nsurance.7 t:o6day %nduction program 2iNEP1 I$()/)mm $e5 em.')yee- .&),&%m 3 is offered to all ne: employees. The company :hich ta;es the induction program for -eliance 0ife %nsurance is RELNIS NI SPARTA;The induction program helps the employee to integrate in the ne: en ironment and pro ide an o er ie: of the *rgani<ation as a :hole. %t also pro ides an opportunity to the ne: entrant to engrain the original alues and ethics as :ell as the style of functioning. T*i- .&),&%m i- %'' %b)utC

104

$e eloping a shared understanding of -eliance 0ife %nsuranceJs ision and mission. (nderstanding their organi<ation and 4usiness model. +amiliari<ation :ith leaders at -eliance 0ife %nsurance. &et:or;ing and integrating :ith -eliance 0ife %nsurance employees.

T*i- .&),&%m .&)4ide- i$()&m%ti)$ )$C The history of reliance group The fundamentals of telecom 4usiness %ntroduces technologies and ;ey concepts of the 4usiness. This program shares the companyJs strategic o4jecti es, organi<ation structure and processes and systems. "resentations are made from representati es from arious 4usiness units and functions.

EGITS "EPUTATION & TRANSFER "EPUTATION1 $ue to 4usiness re!uirements, employee may 4e re!uired to 4e posted to other location than your primary location. %f such posting re!uires you to relocate from your 4ase location 4eyond 29 days, then it is defined as deputation. %f such posting re!uires you to relocate from your 4ase location 4eyond A months, then it is defined as Transfer. $eputation letter is gi en and respecti e deputation allo:ance is paid to the employees as per policy.
105

TRANSFER =usiness needs may 4e re!uired an employee to 4e transferred on permanent 4asis *ne circle to another circle *ne location to another location

$epartmental head initiates the re!uest for transfer of an employee and for:ards the same to the circle /- -epresentati e. )mployee :ill recei e transfer letter from ,ircle /- -epresentati e of the primary circle>location. SEPARATION6 -/-' 4elie es in treating all employees separating from the company :ith utmost dignity. RESIGNATION -esignation means employee oluntarily lea ing the ser ices of company either for professional or personal reasons. )mployees must ser e a :ritten resignation, mentioning the relie ing date to his> her departmental head that :ill discuss and o4tain the appro al of the circle head. The accepted copy of resignation letter :ith the appro ed relie ing date must 4e for:arded to the respecti e /-.,onfirmed employees are re!uired to gi e A months notice in ad ance and employees on pro4ation are re!uired to pro ide 1H days notice in ad ance. JOB ABAN"ONMENT1 %f an employee remains a4sent :ithout lea e or remains a4sent 4eyond the period of lea e originally granted, he shall 4e considered as ha ing oluntarily terminated his> her employment :ithout gi ing any notice unless he> she9-eturns to :or; :ithin @ days from the commencement of such a4sence.The employee gi es an e5planation to the satisfaction of the management regarding such a4sence. TERMINATION Termination is an undesira4le outcome for employee as :ell as the company, 4ut may 4e necessary if the employee

106

8iolates the company policy %s una4le to meet companyJs performance standards

EGPIR# OF TRAININGE CONTRACT )mployee under training >contract :ill 4e e aluated at the end of specified period 4y /*$ and decision :hether to e5tend his> her ser ice :ill 4e ta;en. EGIT INTERVIE! 7n e5it inter ie: is typically a meeting 4et:een at least one representati e from a companyNs human resources 2/-3 department and a departing employee. The departing employee usually has oluntarily resigned. The /- representati e might as; the employee !uestions :hile ta;ing notes."rior to lea ing, an e5it inter ie: is conducted to gather feed4ac; and recommendations of the outgoing employee. )5it inter ie: is a one6to6one discussion :here oluntary ie:s and suggestions are ta;en from the outgoing employee on :hat his> her e5pectations had 4een at the time of joining the company and reason for lea ing the company. The circle /- arranges the e5it inter ie:. 0isted 4elo: are some of the e5it inter ie: !uestions that -eliance ,ommunication as;s to departing employees in )5it inter ie:. T) 5*%t eLte$t did *eE -*e eL.e/t t) eL.e&ie$/e ()'')5i$, (e%tu&e- )( 5)&J %t t*e time )( I)i$i$, t*e /)m.%$y Eo4 security ,areer prospects #ood compensation 'elf de elopment Celfare

107

*perational freedom

To :hat e5tent did he> she find that features of :or; in the company Re%-)$- ()& 'e%4i$, t*e /)m.%$y i$ te&m- )( &e'e4%$/e "ersonal "rofessional gro:th related 0ac; of challenge in :or; 0ac; of promotional opportunities

* erall opinion a4out company, ho: much hi;e and other 4enefits offered 4y ne: company compare the one he>she is lea ing, and is he> she is interested in rejoining the -eliance ,ommunication and on :hat conditions are collected. FULL & FINAL SETTLEMENT1 Chen the employee lea es his>her jo4 it is re!uired that all his>her financial o4ligations are settled. Fi$%$/i%' )b'i,%ti)$- 'iJeC *utstanding 7d ances>loans 7ny underta;ings he>she has gi en to the company in terms of ,ost of mo4ile as per company policy *pting for company lease car *r any other underta;ing gi en 4y him>her

7nd turn in his>her identification cards, ;ey and any other property, :hich he>she had issued. The full . final amount is paid to employee after reco ering all ad ance>outstanding dues. R SUPPORT S#STEM SAP O R
108

The -eliance 7$7 group is on the mo e to e6ena4le all /- functions and the employee interface. Ce are in the process of adopting state6of6the art )-" soft:are 6 '7", across all locations and 4usinesses. 7s a ser ice to the most alua4le assets, i.e. the employees, the #roup /- is upgrading its e5tensi e :e46ena4led ser ices into an internet ena4led employee portal :hich :ill ena4le employees from across the country to interact :ith /- . "ayroll for any re!uirement i.e. applying for and sanctioning lea e, information on policies and procedures, entering e5pense claims, updating their o:n data4ases, etc. ESS 0EMPLO#EE SELF SERVICE2 E 0EMPLO#EE SUPPORT S#STEM2 )'' :ill ena4le you to interact :ith the '7" data4ase, to ie: and maintain your personal data. )'' pro ides you :ith a host of ser ices in the follo:ing areas. PERSONAL INFORMATION )mployee can ie: and update their personal data such as )ducational details $etails of pre ious employers +amily related information ,hange of marital status ,hange of residential address etc.

PA#ROLL RELATE" INFORMATION )mployee can ie: their monthly updates on the follo:ing9 "ay slips

109

%ncome ta5 projections "+ 'tatements REIMBURSEMENT

)mployee can su4mit their claims of follo:ing reim4ursement online Telephone 4ills 0ocal con eyance Medical reim4ursement ENTITLEMENTS Medical insurance Tra el )ntitlements INCOME TAG RULES

-ecruitment is the process of finding and attracting capa4le applicants for employment. The process 4egins :hen ne: recruits are sought and ends :hen their applications are su4mitted. The result is a pool of applicants from :hich ne: employees are selected.%n this company the 'ales Manager, :ho recruits the ad isors>agents for selling the products of the company, does the recruitment. The ad isors should ha e at least passed the '.'.,. e5amination. They must pass the prerecruitment e5amination, :hich is conducted 4y the %nsurance %nstitute of %ndia, Mum4ai, or any other appro ed e5amination 4ody. 7fter clearing the e5amination the code :ill 4e pro ided to them and the license :ill also 4e gi en to them, the alidity the license :ould 4e A years. 7fter all these re!uirements, the person :ill 4ecome an insurance ad isor in the company.

SELECTION

110

'election is the process of pic;ing indi iduals 2out of the pool of jo4 applications3 :ith re!uisite !ualifications and competence to fill jo4 in the organi<ation. %n simple :ords, it is the process of differentiating 4et:een applicants in order to identify these :ith a greater li;elihood of success in a jo4.The =ranch Manager, :hich includes6, :ill conduct the process of selection of 'ales Manager 82 Pe&-)$%' I$te&4ie5C 1The first step of selection of 'ales Manager in the -eliance 0ife %nsurance ,ompany 0imited is to conduct a personal inter ie: of an applicant 4y the =ranch Manager. 62 P&)Ie/t :7 I$te&4ie5C 17fter clearing the personal inter ie:, the project G0 inter ie: :ill 4e ta;en 4y the =ranch Manager. %n this step, the applicant should ha e to ma;e a list of G0 and then start the 4usiness :ith them. 92 I$te&4ie5 5it* Re,i)$%' performance. :2 Ne,)ti%ti)$C 17fter clearing the inter ie: :ith -egional /ead, the negotiation :ill 4e pro ided to the applicant. >2 Medi/%' EL%mi$%ti)$C 17fter that, the medical chec; up should e made to the applicant. ?2 Se'e/ti)$C 17fter clearing all the a4o e steps the applicant should 4e appointed>selected as a 'ales Manager in the company. REFUIREMENTS OF SALES MANAGERC1 The 'ales Manager should possess the follo:ing things6 1. They should 4e an M.=.7.
111

e%dC 1 7fter clearing the project G0 inter ie:, the applicant should

4e inter ie:ed 4y the -egional /ead, :ho :ill chec; his>her

2. The age of them should 4e 4et:een 2H to AH years. A. They should ha e good communication s;ill. G. They should ha e at least sales e5perience of A years. H. They should ha e the capa4ility to handle the team. ?. Their jo4 profile includes recruitment, training, guiding, moti ating and in turn getting 4usiness out of a team. TRAINING AN" "EVELOPMENT96 Training and $e elopment is any attempt to impro e current or future employee performance 4y increasing an employeeJs a4ility to perform through learning usually 4y changing the employeeJs attitude or increasing his>her s;ills and ;no:ledge. The need for training and de elopment is determined 4y the employeeJs performance deficiency, computed as follo:s9 Training . $e elopment ] 'tandard "erformance L 7ctual "erformance They are pro iding 100 hours training to their ad isors, :ho are ne:ly recruited. They are also pro iding the product training to their ad isors and 'ales Managers, :ho are ne:ly recruited. The 100 hours training is to 4e conducted at &et =ios ,omputer 7cademy :hereas the product training is to 4e conducted at &%' '"7-T7. The &%' '"7-T7 %nstitute has more than 1H0 4atches and is trained o er A000 agents for most of the pri ate insurance companies. This institute is appro ed 4y %$-7 to train agents>ad isors. CAREER "EVELOPMENT They are also pro iding career de elopment plans, :hich :ill identify potential and create a enues for gro:th. COMMUNICATION1 ,ommunication is the process through :hich an indi idual can e5change
112

their 4eliefs, things, information, and e5perience to others. %n simple :ords, it is the process of e5changing the information from one person to another. They are pro iding an open en ironment, :hich ena4ling free interaction 4et:een all le els. The communication is flo: 4et:een =ranch to =ranch. Cithin a 4ranch, it flo:s 4et:een =ranch Manager to 'ales Managers and 'ales Managers to 7gents>7d isors, and then =ranch /ead to -egional /ead, then different -egional /ead to -egional /ead, then -egional /ead to ,hannel /ead, then to ,hief Mar;eting *fficer 2,M*3, then to ,hief )5ecuti e *fficer 2,)*3. INCENTIVES %ncenti es are monetary 4enefits paid to :or;men in recognition of their outstanding performance. They are pro iding an aggressi e re:ard and recognition plans, :hich are including sales incenti es. SERVICES They are offering follo:ing certain ser ices to their employees. 13 They are pro iding ;no:ledge sharing and certification practices. 23 They are planned team 4uilding and fun e ents. A3 They are creating -eliance 0ife %nsurance family, :hich includes employees, associates and their families. G3 -eliance 0ife %nsurance in a team 4uilding mode and is loo;ing for performance dri en, achie ement oriented and challenge lo ing performance. PERFORMANCE APPRAISAL "erformance appraisal is the systematic e aluation of the indi idual :ith respect to his>her performance on the jo4 and his>her potential for de elopment. "erformance appraisal is a formal, structured system of measuring and e aluating an employeeJs jo4 related 4eha iors and outcomes to disco er ho: and :hy the employee is presently performing on the jo4 and ho: the employee can perform more effecti ely in the future so that the employee, organi<ation and society all 4enefit.They are pro iding a 4alanced scorecard approach for strategy deployment and performance
113

measurement, :hich goals and measure financial, customer focused, process related and employee de elopment related initiati es. %n addition to this, the =ranch Manager should measure the performance of the 'ales Managers at e ery si5 months and the 'ales Manager should measure the performance of the ad isors>agents. %f the performance is 4est then he>she :ill 4e prompted. ORGANIKATION FORM AN" STRUCTURE

0Fi,; :1d C ORGANIKATION STRUCTURE2 "EPARTMENT They are pro iding follo:ing areas or departments9 13 -etail 'ales 23 (nder Criting
114

A3 7ctuarial G3 %nsurance *perations H3 ,ustomer 'er ice ?3 Tuality and "rocesses 73 /uman -esources @3 +inance MAJOR R C ALLENGES IN RELIANCE LIFE INSURANCE COMPAN#

0Fi,; :1e C 1. Talent crunch. 2. Mounting attrition rate. A. $ifficulty in retention management. G. 'tressful jo4. H. 'tiff mar;et competition. ?. Managing :or;force di ersity. 7. -ising training . replacement cost.

R C ALLENGES2

@. $etermining . designing appropriate training programs for agents and officers. 9. %ncreasing rate of jo4 dissatisfaction . decidingcompetiti e pay structure.

115

CHAPTER 5
FINDINGS & SUGGESTIONS

116

FIN"INGS 1. -0%, is facing a challenge of rising employee turno er rate and cost. 2. "oaching of talented employees 4y ri al companies. A. 7ttracti e pay pac;age and fast career gro:th help in employee retention. G.The analysis sho:s that /- practices is positi ely lin;ed :ith organi<ation producti ity not strongly lin;ed. H. The major reason for employee !uitting is to a oid highly demanding and target oriented jo4. ?. -0%, /- team need to ha e more focused and professional approach in order to compete in a mar;et. 7. 7part from good salary and career gro:th, /- team should maintain smooth industrial . interpersonal relationship 4et:een employer and employee. @. The la4or turno er rate in -0%, is comparati ely companies. CONCLUSION %nsurance industry is gro:ing at a faster pace after pri ati<ation and glo4ali<ation. The opening of pri ate players poses a serious threat for the 4usiness of -0%,. To sur i e as a mar;et leader -0%, need to inno ate . restructured its e5isting policies in order to attract and retain competent :or;force. The economic de elopment of a country should necessarily lead to mar;et de elopment particularly to those :ho are the essential participants of gro:th in a de eloping economy. These participants constitute ulnera4le section of the population due to su4sistence :ages, lo: le el of education, lac; of proper housing, etc. The technology of :or; inside the factories has 4een changing fast. 0a4our should 4e competent to :or; :ith the technology. %t is desira4le to recollect the ser ices of a typical :or;er in this conte5t. 7s a la4our helps through arious phases of mar;eting a product. The industrial :or;er is indeed a soldier safeguarding the social and economic factors of the industrial economy and their actions and interactions :ithin the industrial frame:or; :ill ha e a grate impact and influence on industrial de elopment. The social and economic aspects of the life of a :or;er ha e a direct influence on the social and economic de elopment of the nation. Therefore it is ery much re!uired to ta;e care of the :or;er in such a manner so that they can 4e a recourse to the company.
117

lo: than those in pri ate insurance

SUGGESTIONS 1. "roper communication :ithin the organi<ation. 2. =y offering attracti e and competiti e pay to the potential :or;force. A. =y offering e5cellent career opportunities :ithin the organi<ation. G. =y harmonious %ndustrial relationship 4et:een employer . employee. H. =y enhancing :or;erJs participation in management. ?. Top management should made efforts for strengthening /- department. 7. To facilitate healthy :or; culture in order to pre ent jo4 satisfaction. @. "roper implementation of stress coping measures :ithin organi<ation li;e counseling, meditation. 9. /- manager should gi e more attention to retain star performer employee. 10. -ight recruitment and selection of employees for consistent gro:th of the company. BIBILOGRAP # BOOKDS NAME 96 13 7run Monappa220003, Mir<a '. 'aiyadain, "ersonnel Management, 'econd edition,Tata Mc #ra: /ill "u4lishing company, &e: $elhi, 23 ,.'.8en;ata-athnam219993,, =.B. 'ri asta a,"ersonnel Management and /uman-esources, )le enth reprint, %nternational edition,$elhi BROUC ERS & MAGAKINES 13 7run Monappa , %ndustrial -elations, &inth print 2199H3, Tata Mc #ra: /ill "u4lishing ,ompany 0td., Tuality ,ontrol . Tool for Cor;er $e elopment, "age2H1 to 9H3. 23 -ole of /- maga<ines27-T%,0) &*. 2G$3 A3 )d:in =. +lippo, "ersonnel Management,%nternational edition219@G3, Mc #ra: ./ill %nternational )ditions, Management 'eries Maga<ine, "age 21?,213 INTERNET
1: :::.reliancelife.co.in 2: :::.google.com 3: :::.:i;ipedia.com 118

119