Executive Summary

The oriental General Insurance is a well established private general insurance company in India.as part of new india assurance compay Oriental life insurance company offers a range of products for the corporate and individual customers. Oriental currently offers insurance products including Health, Home, Motor, Travel, Fire, Engineering, Marine, Liability and Aviation. Reliance General Insurance Company has also introduced Indias first Over-The-Counter health & home insurance policies, thus encouraging innovation and enabling convenience to the customers. Oriental is amongst the leading general insurance companies in India, with a private sector market share of 7%.oriental had a distribution network composed of 126 branches and over 9,900 intermediaries at the end of December 2012. The company has been awarded the ISO 9001:2008 certification by Det Norske Veritas (DNV), a reputed global quality standards auditing organization, for its streamlines processes and speedy transparent claim procedures.

Oriental General Product Portfolio:

For Individuals
Oriental Health Insurance Plans: Oriental Car Insurance Plans: oriental Travel Insurance Plans: Student Travel Insurance Accident Cover Insurance Oriental Home Insurance Plans.

For Corporates
Fire Insurance. Engineering Insurance. Marine Insurance.
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Liability Insurance. Package Plans. Distribution Network: Oriental General Insurance has good reach with over 200 offices across 173 cities in 22 states. Most of oriental General products are available online.

Financial Information: The total premium earned for the half year ended September 30, 2010 was Rs 5,641 million. The profit before tax for the same period is Rs 668 million. A total of 169,710 claims were made during the period out of which 83,043 claims were settled and 5,379 were rejected.

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INTRODUCTION

The Oriental Insurance Company Ltd was incorporated at Bombay on 12th September 1947. The Company was a wholly owned subsidiary of the Oriental Government Security Life Assurance Company Ltd and was formed to carry out General Insurance business. The Company was a subsidiary of Life Insurance Corporation of India from 1956 to 1973 ( till the General Insurance Business was nationalized in the country). In 2003 all shares of our company held by the General Insurance Corporation of India has been transferred to Central Government. The Company is a pioneer in laying down systems for smooth and orderly conduct of the business. The strength of the company lies in its highly trained and motivated work force that covers various disciplines and has vast expertise. Oriental specializes in devising special covers for large projects like power plants, petrochemical, steel and chemical plants. The company has developed various types of insurance covers to cater to the needs of both the urban and rural population of India. The Company has a highly technically qualified and competent team of professionals to render the best customer service.

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Oriental Insurance made a modest beginning with a first year premium of Rs.99,946 in 1950. The goal of the Company was Service to clients and achievement thereof was helped by the strong traditions built up overtime. ORIENTAL with its head Office at New Delhi has 26 Regional Offices and nearly 900+ operating Offices in various cities of the country. The Company has overseas operations in Nepal, Kuwait and Dubai. The Company has a total strength of around 15,000+ employees. From less than a lakh at inception, the Gross Premium went up to Rs.58 crores in 1973 and during 2011-2012 the figure stood at a mammoth Rs. 4077.90 crores

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HISTORY
In India, insurance has a deep-rooted history. Insurance in various forms has been mentioned in the writings of Manu (Manusmrithi), Yagnavalkya (Dharmashastra) and Kautilya (Arthashastra). The fundamental basis of the historical reference to insurance in these ancient Indian texts is the same i.e. pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. The early references to Insurance in these texts have reference to marine trade loans and carriers' contracts. Insurance in its current form has its history dating back until 1818, when Oriental Life Insurance Company was started by Anita Bhavsar in Kolkata to cater to the needs of European community. The pre-independence era in India saw discrimination between the lives of foreigners (English) and Indians with higher premiums being charged for the latter. In 1870, Bombay Mutual Life Assurance Society became the first Indian insurer. At the dawn of the twentieth century, many insurance companies were founded. In the year 1912, the Life Insurance Companies Act and the Provident Fund Act were passed to regulate the insurance business. The Life Insurance Companies Act, 1912 made it necessary that. premium-rate tables and periodical valuations of companies should be certified by an actuary However, the disparity still existed as discrimination between Indian and foreign companies. The oldest existing insurance company in India is the National Insurance Company Ltd., which was founded in 1906. It is in business. The Government of India issued an Ordinance on 19 January 1956 nationalising the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The Life Insurance Corporation (LIC) absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies245 Indian and foreign insurers in all. In 1972 with the General Insurance Business (Nationalisation) Act was passed by the Indian Parliament, and consequently, General Insurance business was nationalized with effect from 1 January 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1, 1973.
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The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. Before that, the industry consisted of only two state insurers: Life Insurers (Life Insurance Corporation of India, LIC) and General Insurers (General Insurance Corporation of India, GIC). GIC had four subsidiary companies. With effect from December 2000, these subsidiaries have been de-linked from the parent company and were set up as independent insurance companies: Oriental Insurance Company Limited, New India Assurance Company Limited, National Insurance Company Limited and United India Insurance Company Limited.

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Corporate Mission
To contribute to the socio economic objectives of the nation by being a vibrant and viable organization catering to the growing insurance needs of the community. Towards this end we will strive for effective management of business operations.

Corporate Objectives
1.

To serve better the insurance needs of the entire community, keeping CUSTOMER as the focus.

2.

To strengthen our tradition of being CUSTOMER - FRIENDLY, in order to provide quality service.

3.

To manage Business profitably, manage funds judiciously and deploy investible funds for optimum yield.

4.

To optimise the retention of Indian business and conduct reinsurance and international operations in the best interest of the country.

5.

To work towards minimisation of losses and develop Risk Management Technologies

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RESEARCH METHODOLOGY
Research Methodology is defined as a highly intellectual human activity used in the investigation of nature and matter and deals specifically with the manner in which data is collected, analyzed and interpreted.

Types of Research Design

Exploratory Research

An exploratory study is undertaken when not much is known about the situation at hand or no information is available on how similar problem or research issues have been solved in the past. Descriptive Research Statistical study to identify patterns or trends in a situation, but not the cause-and-effect (causal) linkages among its different elements. Descriptive studies (such as a cross-sectional study) help in generating hypothesis on which further research may be based.

Types of Data Collection Primary Data

Primary Data is first hand information for a particular statistical enquiry and it is collected originally. The most popular and common tool is questionnaire/interview schedule to collect the primary data. Secondary Data

It refers to the statistical material which is not originated by the investigator himself but obtained from someone else's records.

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This type of data is generally taken from newspapers, magazines, bulletins, reports, journals etc. I AM USING A SECONDARY DATA

REVENUE ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2012 SN Particulars Schedule CY 31.03.12 ( 000) 1 Premium Earned (Net) Profit/Loss on 2 Sale/Redemption of Investments 3 4 Others Interest, Dividend & Rent -Gross TOTAL (A) 0 1501627 14703799 0 1284843 14059193 36 15186 1 13202136 PY 31.03.11 ( 000) 12759164

1 2

Claims Incurred (Net) Commission Operating Expenses

2 3

10257502 -2461462

9501464 -1310760

related to Insurance Business

411821

448041

Expenses related to Investments : a) Amortization of Premium on Investments 10406 16662

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b) Stock Holding Charges c) Bank Interest & Charges d) Cenvat Credit Input Claimed TOTAL (B) Operating Profit from Crop Insurance Business C=(A-B) APPROPRIATIONS Transfer to Shareholders Account Transfer to Catastrophe Reserve Transfer to Other Reserves TOTAL

854

866

1680

113

0 8220801

200000 8856386

6482998

5202806

6482998

5202807

0 6482998

0 5202807

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PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2012 SN PARTICULARS Schedule CY 31.03.12 ( 000) 1 OPERATING PROFIT/(LOSS) Crop Insurance Business 2 INCOME FROM INVESTMENTS a) Interest,Dividend & Rent-Gross b) Profit on Sale of Investments 3 OTHER INCOME a) Miscellaneous Receipts b) Profit on Sale of Assets c) Prior Period Income TOTAL(A) 4 PROVISIONS (other than Taxation) a) Dimunition in the value of Investments b) Provision for Doubtful Debts c) Provision on Standard Assets 5 OTHER EXPENSES a) Expenses other than those related to insurance business 0 0 0 0 12430 0 -13550 8391 45964 0 0 7466685 6288 163 0 5735310 937701 22 519907 6145 6482998 5202807 PY 31.03.11 ( 000)

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b) Amortisation of Premium on Investments c) Stock Holding Charges d) Bank Interest & Charges e) Loss on Sale of Assets f) Preliminary Expenses Written off g) Prior Period Expenses TOTAL(B) PROFIT BEFORE TAX PROVISION FOR TAXATION a) Income Tax (Current Year) b) Income Tax (pertaining to earlier years) c) Wealth Tax d) Fringe Benefit Tax e) Deferred Tax TOTAL(D) PROFIT AFTER TAX AVAILABLE FOR APPROPRIATION APPROPRIATIONS a) Interim Dividend paid during the year b) Proposed Final Dividend c) Dividend Distribution Tax (E=C-D) (C=A-B)

6498 534 1049 728 0 0 21239 7445446

10649 350 46 0 0 0 5886 5729424

2430000 5450 386 0 -11677 2424159

1914949 2836 358 0 8322 1926465

5021287

3802959

0 250000 40556
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0 200000 32446

d) Transfer to General Reserve TOTAL PROFIT AFTER TAX & APPROPRIATIONS Add: Balance of Profit/(Loss) b/f from last year BALANCE C/F TO BALANCE SHEET Basic Earning per Share Diluted Earning per Share Number of Equity Shares Nominal Value per Share

4730731 5021287 0

3570513 3802959 0

0 25.11 20,00,00,000 10/-

0 19.01 20,00,00,000 10/-

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BALANCE SHEET AS AT 31ST MARCH, 2012 PARTICULARS Schedule CY 31.03.12 ( 000) SOURCES OF FUNDS Share Capital Reserves & Surplus Fair Value Change Account Borrowings 7 5 2000000 2000000 9228283 38217 0 11266500 PY 31.03.11 ( 000)

6 13959014 -37935 0

TOTAL 15921079 APPLICATION OF FUNDS Investments Loans Fixed Assets Deferred Tax Asset (Net) Current Assets: Cash & Bank Balances Advances & Other Assets 11 12265140 12 5444394 8 20035484 9 10 11919 197678 31029

15648366 12469 234924 19352

16294625 4953470 21248095 19074289 6822417 25896706

Sub - Total (A) 17709534 Current Liabilities Provisions 13 14372045 14 7692520

Sub - Total (B) 22064565

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Net Current Assets (C) = (A) (B) Miscellaneous Expenditure (to the extent not written off or adjusted) Debit Balance in Profit and Loss Account

-4355031

-4648611

0 TOTAL 15921079

0 11266500

Contingent Liabilities Claims, other than against Policies, not acknowledged as debts by the Company 0 0

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CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012 (As per Direct Method )

SN

PARTICULARS

CY 01.04.11 to ( 000) 31.03.12

PY 01.04.10 to ( 000) 31.03.11

CASH FLOW A) FROM OPERATING ACTIVITIES 1 Cash receipts from Premium income Less: 2 Cash paid for Claims payment Cash paid for Reinsurance Premium (less Commission net of Reinsurance & Reinsurance claims) 4 Cash paid for expenses Cash generated from Operations 5 Miscellaneous 269370 20326782 376390 16294482 14355904 10519268 25751050 25751050 19533589 19533589

5701508

5398824

5424268 45964

3239107 6451
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receipts 6 Income Tax paid/refunds Cash Flow before extraordinary items (Increase) / Decrease in Loans given Net Cash from Operating Activities (A) CASH FLOW B) FROM INVESTING ACTIVITIES 9 Purchase of Fixed Assets Proceeds from sale of Fixed Assets Investments made Interest Income Expenses incurred (Increase) / Decrease 14 in Funds Advanced (Sch 12) Net Cash used in Investing Activities -4227561 -1397241 -771839 -396470 -15470 -26069 3889553 1582535 -1581229 -1663023

3889003

1582535

550

10 11 12 13

202 -5723843 2287506 -4117

0 -2809539 1836213 -1376

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(B) CASH FLOW C) FROM FINANCING ACTIVITIES 15 Issue of Share Capital Increase in Borrowings Dividend and 17 dividend distibution tax paid Increase / (Decrease) 18 in Liabilities (Sch 13 & 14) Net Cash from Financing Activities(C) Net increase in Cash & Cash equivalents: Cash & Cash 19 equivalents at the end of the period 201250 5475015 -5273765 5376486 -4935757 5191192 -4703312 5191192 -232445 0 0 0

16

Cash & Cash

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20

equivalents at the beginning of the period Net increase in Cash & Cash equivalents

5475015

98529

-5273765

5376486

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DATA ANALYSIS

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RATIO ANALYSIS
Analytical Ratios for Life Insurance Companies
Sr.No
1 Participating Individual Participating Pension Non - Participating Individual Non - Participating Group Non - Participating Health Linked Pension Linked Life Linked Group Gratuity 2 3 4 5 6 7 8 9 10 11 12 13 Net Retention Ratio Expense of Management to Gross Direct Premium Ratio Commission Ratio (Gross commission paid to Gross Premium) Ratio of policy holder's liabilities to shareholder's funds Growth rate of shareholders' fund * Ratio of surplus / deficit to policyholders' liability Change in net worth (Rs'000) * Profit after tax/Total Income (Total real estate + loans)/(Cash & invested assets) Total investments/(Capital + Surplus) Total affiliated investments/(Capital+ Surplus) Investment Yield (Gross and Net) (i) With realized gains /losses - Policyholders' Funds : Participating Non Participating Pension Participating Unit Linked - Shareholders' Funds : (ii) Without realized gains /losses - Policyholders' Funds : Participating Non Participating Pension Participating Unit Linked - Shareholders' Funds : 14 15 Conservation Ratio Persistency Ratio ** By annualized Premium 8% 9% 8% 8% 9% 64% 8% 9% 8% -19% 8% 104% 8% 9% 8% 3% 10% 8% 9% 8% -18% 8%

Particular
New business premium income growth rate - segment wise

June 30, 2012

16% -98% 163% -68% -19% -72% -59% 100% 96% 90% 4% 508% -22% -5% (446,657) -46% 0% 587% 5%

June 30, 2011

NA NA -3% -18% 51% -95% -17% NA 97% 127% 5% 251% -12% -11% (268,645) -97% 0% 328% 0%

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For 13th month For 25th month For 37th month For 49th Month for 61st month By no. of policies For 13th month For 25th month For 37th month For 49th Month for 61st month 16 NPA Ratio Gross NPA Ratio Net NPA Ratio

48% 63% 42% NA NA 49% 60% 28% NA NA Nil Nil

69% 49% NA NA NA 67% 39% NA NA NA Nil Nil

Equity Holding Pattern for Life Insurers

1 2

No. of shares Percentage of shareholding (Indian / Foreign) Indian Foreign % of Government holding (in case of public sector insurance companies) Basic and diluted EPS before extraordinary items (net of tax expense) for the period (not to be annualized) (Rs.) Basic and diluted EPS after extraordinary items (net of tax expense) for the period (not to be annualized) (Rs.) Book value per share (Rs.)

1,135,000,000 74% 26% NA (0.35) (0.35) 1.36

1,000,000,000 74% 26% NA (0.69) (0.69) 1.99

3 4 5 6

* The ratios are in comparison with corresponding previous period i.e June 30, 2011 ** Persistency numbers are calculated on annual premium basis, and the method of calculation can be defined as: Persistency for the respective period i.e. Quarterly & Year to date (YTD) is the ratio of enforce policies at end of reporting period to the policies issued for the investigation period. For example, 13 month persistency for the 4th quarter of the Financial Year 2011-12 (January to March 2012) represents the ratio of enforce policies as of March 31, 2012 to the policies issued during December 2010 to February 2011

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DATA ANALYSIS AND INTERPRETATION

NO 25%

YES NO

YES 75%

INTERPRETATION

75 % Employees are aware of the brochure that is provided to them by the organization while they commence their job. This is a simple way to make the employees learn and know the HR Policies of Oriental Insurance. And as the ratio suggest many of the employees are provided with the brochure except a few.

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INTERPRETATION 48 % of the total respondents suryed think that Life Insurance policy is important for themand 28.8% respondent think that it is very important and only 16% think that Life insuranceis not impotant for them.

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The company's operations in Nepal, Dubai and Kuwait yielded a Gross Direct Premium of Rs. 146.71 crores during the year 2011-12 as against Rs 112.55 crores during the previous year. The net premium on foreign operations stood at Rs. 128.03 crores as against this, the Net Incurred Claims during this year in respect of foreign operations were Rs.106.24 crores at 82.98%. The foreign operations have resulted in an overall deficit of Rs. 19.68 crores.

After taking into account the income from Interest, Dividend & Rent of Rs 859 crores and Profit on sale of Investments of Rs 751 crores, we have posted a pre-tax profit of Rs 366.34 crores & post-tax profit of Rs. 253.39 crores for the year 2011-12

As against the desirable Solvency Margin mandated by the Indian regulatory body, IRDA, the available Solvency Margin is 1.33 as at 31st March 2012.

The Company had issued 1,12,19,016 documents in the year 2011-12. The claims disposal ratio for non-suit claims settlement ratio was 85.53%.

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The Company is not only 'IT friendly' but also 'Technology Savvy'. We have our own website in place. An integrated Non-Life Insurance Application Software (INLIAS) has been implemented in all the offices. This will ensure that our Customer Service parameters grow by leaps and bounds.

No wonder, The Oriental Insurance Company has been enjoying the highest rating from leading Indian credit rating agencies CRISIL and ICRA. The Company has also been rated as B++(Very Good) by AM Best, an international rating agency.

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FINDING
Oriental Insurance insurance is not an old company , then too they have successfully framed their HR POLICIES which generally meet the overall requirements and in most cases follow the best practices. They have a friendly working environment. With only a few exceptions, arrangements for the Human Resource Policies, Practices and Procedures are adequately adopted to meet the companys and employees requirements. Oriental Insurance has a high disciplinary system , and the framed HR POLICIES give a sense of security to the current employees. Oriental Insurance employees are aware of the fact that their performance appraisal is based on their objective assessment and adequate information. With all the praises , still there is a scope for an improvement , like..: some of the policies are not clear to the employees despite the fact that they were given formal orientation program and the brochures as well. Some of the policies should be modified like Med claim policy , on the request of the employees and some of the policies should be formed like sexual harassment policy, and policies which would help the employees to raise their voice A large number of employees are not aware of the companys manual which outlines terms and conditions of employment and its policies. The policies are reviewed and modified by expert HR professionals as per requirements and according to the surveys conducted by them.

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RECOMMENDATIONS
Some of the policies like Sexual Harassment policy etc should be framed for the welfare of the employees. I believe that in order to form a professional environment , every employee should be asked to wear proper Formal wear. This would motivate the employees more faster. Need to develop consultation/awareness program to assist the employees for their better understanding of the policies. I would recommend that while dealing with the complaints anonymity need to be maintained. Except LTIP , more incentives should be offered to the employees who provide services to the organization for more than two years continuously . As seen from the survey that at present 70% of the customer are having insurance policy out of which 87.5% of the customer are planning for new investments. So it can be a good potential for the company and they should make an attempt to trap thesecustomers.43% of the customer is even ready to go for insurance if a service provider away fromtheir home is providing it. But intend they should provide good products and services.The company should try to convince these customers and get them in its favor

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CONCLUSION
Due to emergence of private insurance companies, the competition has increased many a fold and it provides much better and flexible schemes & policies than the existing insurance companies. Customer relationship should is the need of the hour and since private companies prime motive is the same, so naturally it would do much better with respect to insurance services. With then private company coming into the field the returns are going to be better and the services are also likely to get better.Since private insurance companies are known for their service & promptness they would do much better job in insurance sector than the existing ones. Oriental a life insurance company need more advertisement as being new in the field as they are new in the field.

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BIBLIOGRAPHY
Books
Business today, India Today Gupta S. P. and Gupta, M. P.

Websites
www.orientalinsurance.org.in www.sebi.com www.nse..com WWW.MONEY CONTROL.COM

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