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