Chapter 1.

BRIEF HISTORY OF INSURANCE SECTOR IN INDIA The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost 190 years. The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are: 1912 - The Indian Life Assurance 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 about both life and non-life insurance businesses. 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 nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.
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The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are: 1907 - The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957 - General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968 - The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972 - The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

Indian Insurance Industry: Learn about Insurance may be described as a social device to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of people associate themselves by sharing risk, attached to individual.

The risk, which can be insured against include fire, the peril of sea, death, incident, & burglary. Any risk contingent upon these may be insured against at a premium commensurate with the risk involved. Insurance is actually a contract between 2 parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party happening of a certain event. Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. With the help of Insurance, large number of people exposed to a similar risk make contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good.

Chapter 2: - Functions of Insurance The functions of Insurance can be bifurcated into two parts: Primary Functions Secondary Functions Other Functions The primary functions of insurance include the following: Provide Protection - The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. Collective bearing of risk - Insurance is a device to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. Assessment of risk - Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also Provide Certainty - Insurance is a device, which helps to change from uncertainty

to certainty. Insurance is device whereby the uncertain risks may be made more certain. The secondary functions of insurance include the following:

Prevention of Losses - Insurance cautions individuals and businessmen to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc. Prevention of losses cause lesser payment to the assured by the insurer and this will encourage for more savings by way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured. Small capital to cover larger risks - Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. Contributes towards the development of larger industries - Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery. The other functions of insurance include the following:

Means of savings and investment - Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance.
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Source of earning foreign exchange - Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways. Risk Free trade - Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover. The end of the year 2000 marks a significant change and growth of 'India Insurance' industry scenario. Monopoly of Public Sector Insurance company marks an end and Private companies makes inroad. Foreign companies, both Life and General flocked, collaborated and helped astronomical growth of 'Insurance Industry in India'. 'India Insurance' growth was long overdue. Within 1st 12 months of liberation of 'Indian Insurance Industry' 10 licenses for selling life insurance products and 6 licenses for selling non-life products were issued to private companies. The Public sector giant LIC started losing its market share at the cost of stupendous growth of private players. Now 'India Insurance' industry has more than a dozen private life insurance players and 9 private general insurance companies. Aggressive and penetrative marketing strategy coupled with wide product bandwidth was an instant success among the ignorant masses. Most of the private companies registered more than 100% growth till then and are still continuing with such monstrous growth figures. Although, 'Insurance in India' is not regarded as a basic
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need but it is getting popular among semi urban to rural masses. Top rank private companies like ICICI Prudential Life Insurance, Tata AIG, Bajaj Allianz etc are aggressively researching and innovating products for huge untapped rural 'India Insurance' market. Collaboration with micro finance companies, post offices, rural banks and village management authorities for selling insurance is doing wonders. Life insurance products covers risk for the insurer against eventualities like death or disability. Non-life insurance products covers risks against natural calamities, burglary, etc. They are not as popular as life products in the ' Insurance India's' portfolio. Until very recently it had only corporate buyers, but with natural disasters like, earth quakes, tsunamis, storms and floods becoming more frequent and damaging there has been a sudden spurt in sales of general insurance amongst individuals. Consumerism of life style goods and modern amenities has also contributed to its growth. With more awareness and wide bandwidth of insurance product portfolio the growth for 'India Insurance' story will only get more competitive and more affordable to all sections of Indian society.

CHAPTER 2: -PRESENT SCENARIO The Government of India liberalised the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity cap for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. In the private sector 12 life insurance and 8 general insurance companies have been registered. A host of private Insurance companies operating in both life and non-life segments have started selling their insurance policies since 2001. Non-Life Insurance Market In December 2000, the GIC subsidiaries were restructured as independent insurance companies. At the same time, GIC was converted into a national reinsurer. In July 2002, Parliamant passed a bill, delinking the four subsidiaries from GIC. Presently there are 12 general insurance companies with 4 public sector companies and 8 private insurers. Although the public sector companies still
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dominate the general insurance business, the private players are slowly gaining a foothold. According to estimates, private insurance companies have a 10 percent share of the market, up from 4 percent in 2001. In the first half of 2002, the private companies booked premiums worth Rs 6.34 billion. Most of the new entrants reported losses in the first year of their operation in 2001. With a large capital outlay and long gestation periods, infrastructure projects are fraught with a multitude of risks throughout the development, construction and operation stages. These include risks associated with project implementation, including geological risks, maintenance, commercial and political risks. Without covering these risks the financial institutions are not willing to commit funds to the sector, especially because the financing of most private projects is on a limited or non- recourse basis. Insurance companies not only provide risk cover to infrastructure projects, they also contribute long-term funds. In fact, insurance companies are an ideal source of long term debt and equity for infrastructure projects. With long term liability, they get a good asset- liability match by investing their funds in such projects. IRDA regulations require insurance companies to invest not less than 15 percent of their funds in infrastructure and social sectors. International Insurance companies also invest their funds in such projects. Insurance costs constitute roughly around 1.2- 2 percent of the total project costs. Under the existing norms, insurance premium payments are treated as part of the fixed costs. Consequently they are treated as pass-through costs for tariff calculations.

Premium rates of most general insurance policies come under the purview of the government appointed Tariff Advisory Commitee. For Projects costing up to Rs 1 Billion, the Tariff Advisory Committee sets the premium rates, for Projects between Rs 1 billion and Rs 15 billion, the rates are set in keeping with the committee's guidelines; and projects above Rs 15 billion are subjected to reinsurance pricing. It is the last segment that has a number of additional products and competitive pricing. Insurance, like project finance, is extended by a consortium. Normally one insurer takes the lead, shouldering about 40-50 per cent of the risk and receiving a proportionate percentage of the premium. The other companies share the remaining risk and premium. The policies are renewed usually on an annual basis through the invitation of bids. Of late, with IPP projects fizzling out, the insurance companies are turning once again to old hands such as NTPC, NHPC and BSES for business. Re-insurance business Insurance companies retain only a part of the risk (less than 10 per cent) assumed by them, which can be safely borne from their own funds. The balance risk is reinsured with other insurers. In effect, therefore, re-insurance is insurer's insurance. It forms the backbone of the insurance business. It helps to provide a better spread of risk in the international market, allows primary insurers to accept risks beyond their capacity, settle accumulated losses arising from catastrophic events and still maintain their financial stability.

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While GIC's subsidiaries look after general insurance, GIC itself has been the major reinsurer. Currently, all insurance companies have to give 20 per cent of their reinsurance business to GIC. The aim is to ensure that GIC's role as the national reinsurer remains unhindered. However, GIC reinsures the amount further with international companies such as Swissre (Switzerland), Munichre (Germany), and Royale (UK). Reinsurance premiums have seen an exorbitant increase in recent years, following the rise in threat perceptions globally. Life Insurance Market The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were under- insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed. The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income. The new business premiums of the 12 private players has tripled to Rs 1000 crore in 2002- 03 over last year. Meanwhile, state owned LIC's new premium business has fallen. Innovative products, smart marketing and aggressive distribution. That's the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected. Indians,

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who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The growing popularity of the private insurers shows in other ways. They are coining money in new niches that they have introduced. The state owned companies still dominate segments like endowments and money back policies. But in the annuity or pension products business, the private insurers have already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percent of the customers. The private insurers also seem to be scoring big in other ways- they are persuading people to take out bigger policies. For instance, the average size of a life insurance policy before privatization was around Rs 50,000. That has risen to about Rs 80,000. But the private insurers are ahead in this game and the average size of their policies is around Rs 1.1 lakh to Rs 1.2 lakh- way bigger than the industry average. Buoyed by their quicker than expected success, nearly all private insurers are fast- forwarding the second phase of their expansion plans. No doubt the aggressive stance of private insurers is already paying rich dividends. But a rejuvenated LIC is also trying to fight back to woo new customers. The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts.

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CHAPTER 3: -INSURANCE COMPANIES IRDA has so far granted registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are included, there are currently 13 insurance companies in the life side and 13 companies operating in general insurance business. General Insurance Corporation has been approved as the "Indian reinsurer" for underwriting only reinsurance business. Particulars of the life insurance companies and general insurance companies including their web address is given below:

LIFE INSURERS Public Sector Life Insurance Corporation of India Private Sector Allianz Bajaj Life Insurance Company Limited Birla Sun-Life Insurance Company Limited

Websites

www.licindia.com

www.allianzbajaj.co.in www.birlasunlife.com

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HDFC Standard Life Insurance Co. Limited ICICI Prudential Life Insurance Co. Limited ING Vysya Life Insurance Company Limited

www.hdfcinsurance.com www.iciciprulife.com www.ingvysayalife.com

Max New York Life Insurance Co. Limited www.maxnewyorklife.com MetLife Insurance Company Limited www.metlife.com

Om Kotak Mahindra Life Insurance Co. Ltd. www.omkotakmahnidra.com SBI Life Insurance Company Limited TATA AIG Life Insurance Company Limited AMP Sanmar Assurance Company Limited Dabur CGU Life Insurance Co. Pvt. Limited www.sbilife.co.in www.tata-aig.com www.ampsanmar.com www.avivaindia.com

GENERAL INSURERS

Public Sector National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited Private Sector
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www.nationalinsuranceindia.com www.niacl.com www.orientalinsurance.nic.in www.uiic.co.in

Bajaj Allianz General Insurance Co. Limited ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. Reliance General Insurance Co. Limited Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Limited Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation

www.bajajallianz.co.in www.icicilombard.com www.itgi.co.in www.ril.com www.royalsun.com www.tata-aig.com www.cholainsurance.com www.ecgcindia.com

REINSURER

General Insurance Corporation of India CHAPTER 4: -TRAINING

www.gicindia.com

Training is basically the management of learning. The objective of training and development is to raise the level of performance in one or more aspects. This is achieved either by providing new knowledge and information relevant to a job or by teaching new skills or by imbibing an individual with new attitudes, values, motives, and other personality characteristics. According to Edwin Flippo, training is the act of increasing the knowledge and skill of an employee for doing a particular job

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Goldstein describes the training process as The systematic acquisition of attitudes, concepts, knowledge, roles, or skills that result in improved performance at work. Training prepares employees to perform their present job even better and more efficiently. It also prepares the employees to perform their present job even better and more efficiently. It also prepares the employee for higher positions with increase responsibilities. The benefits of employee training How training benefits the organization Leads to improved profitability and/or more positive attitudes towards profit orientation Improves the morale of the workforce Helps people identify with organizational goals Helps create a better corporate image Fosters authencity, openness and trust Improves relationship between boss and subordinate Aids in organizational development Learns from trainee Helps prepare guidelines for work Provides information for future needs in all areas of the organization Organization gets more effective decision making and problem solving skills Aids in development for promotion from within
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Benefits to the individual which in turn ultimately should benefit the organization Helps the individual in making better decisions and effective problem solving Aids in achieving self-development and self confidence Helps a person handle stress, tension, frustration and conflict Provides information for improving leadership, knowledge, communication skills and attitudes Increases job satisfaction and recognition Moves a person towards personal goals while improving interactive skills Satisfies personal needs of the trainer (and trainee) Provides the trainee an avenue for growth and say in his/her own future

Benefits in personnel and human relations, intragroup and intergroup relations and policy implementations Improves communication between groups and individuals Aids in orientation for new employee and those taking new jobs through transfer or promotion
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 Provides information on equal opportunity and affirmative action Improves interpersonal skills Makes organizational policies, rules and regulations viable Improves morale Builds cohesiveness in groups Provides a good climate for learning, growth and co-ordination Makes the organization a better place to work and live

IMPLEMENTATION OF THE TRAINING PROGRAMME

Once the training programme has been designed, it needs to be implemented. Implementation is beset with certain problems. In the first place, most managers are action-oriented and frequently say they are too busy to engage in training efforts. Secondly, availability of trainers is a problem. In addition to possessing communication skills, the trainers must know the companys philosophy, its objectives its formal and informal organizations, and the goals of the training programme. Training and development requires a higher degree of creativity than, perhaps, any other personnel speciality.

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Scheduling training around the present work is another problem. How to schedule the training without disrupting the regular work? There is also the problem of record keeping about the performance of the trainee during his or her training period. This information may be useful to evaluate the progress of the trainee in the company.

Programme implementation involves action of the following lines:

1. Deciding the location and organizing training and other facilities. 2. Scheduling the training programme. 3. Conducting the programme. 4. Monitoring the progress of trainees.

Needs for training: To improve the current job performance of employees To familiarize employees with the policies and procedures of the organization.

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 To enhance the creativity, adaptability and versatility of the employees and to facilitate learning at the work place To prepare employees for future job. To change the skills, knowledge and attitudes of the employees on a permanent basis. To help employees manage their careers. To maintain knowledgeable work force. To gain competitive advantage through a knowledgeable work force. To promote organizational growth through individual growth.

Areas of training: Company policies and procedures Human relations training Skill based training Problem solving training Onsite Workshops for Leadership Team

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Employees need more than bosses... They need mentors: Professionals skilled at assessing employee development needs and committed to guiding employees toward professional success. Team Leadership Workshop provides managers with proven techniques for effective personnel management. By helping leaders understand and address their employees' requirements, this interactive seminar offers significant benefit to managers at all levels. New supervisors gain a solid grounding in the concept of ''leadership,'' while more experienced managers refresh their commitment to teaching and coaching their team members. This training program provides healthy perspectives for managers at all levels, making it an ideal morale-boosting leadership development experience for mixed groups of front-line supervisors and senior staff members.

Leadership Training for Success All managers need methods. Leaders need to know the most effective techniques for guiding teams, mentoring individuals, and validating the results. Without solid methods, managers will revert use a one-size-fits-all approach to leadership that reflects the leader's personality, rather than the employees' needs. Committed, mentoring leadership is essential to employee morale, productivity, and retention.
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A Results-Oriented Training Program Team Leadership Workshop provides proven methods and procedures for successful people management. Participants receive a step-by-step plan for guiding each employee toward success.

This workshop includes elements of Frank Whyte's nationally respected Team Building Workshops expanding upon that foundation to help leaders: Recognize each employee's personality preferences and supervisory needs, Align their leadership style with those of their bosses, colleagues, and subordinates, Develop competent and committed employees by mentoring and guiding their employees toward success, Schedule their management responsibilities to ensure that nothing is left to chance, and Use practiced, real-world scenarios to resolve challenges and remove barriers.

IMPORTANCE OF TRAINING AND DEVELOPMENT Organizational training programs are very costly. When an employee is being trained, not only is the organization spending the money on him but is also loosing in terms of manpower as the employee is away from the work. However despite this loss, good organizations spend a considerable amount of time, effort and money to train their employees. They feel that training of employees is an
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investment which will reap benefits and profits for the organization in the future. Higher productivity and profits: - training improves the knowledge and skills of employees and hence leads to greater efficiency in the work place. The more efficient an employee, the higher will be the production which in turn will contribute to greater profits for the organization.

Optimum Utilization of Human Resources Training and Development helps in optimizing the utilization of human resource that further helps the employee to achieve the organizational goals as well as their individual goals. Development of Human Resources Training and Development helps to provide an opportunity and broad structure for the development of human resources technical and behavioral skills in an organization. It also helps the employees in attaining personal growth.

Development of skills of employees Training and Development helps in increasing the job knowledge and skills of employees at each level. It helps to expand the horizons of Human intellect and overall personality of the employees. Productivity Training and Development helps in increasing the productivity of the employees that helps the organization further to achieve its long-term goal. Team spirit Training and Development helps in inculcating the sense of team work, team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn within the employees.

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Organization Culture Training and Development helps to develop and improve the organizational health culture and effectiveness. It helps in creating the learning culture within the organization. Organization Climate Training and Development helps building the positive perception and feeling about the organization. The employees get these feelings from leaders, subordinates, and peers. Quality Training and Development helps in improving upon the quality of work and work-life. Healthy work environment Training and Development helps in creating the healthy working environment. It helps to build good employee, relationship so that individual goals aligns with organizational goal. Health and Safety Training and Development helps in improving the health and safety of the organization thus preventing obsolescence. Morale Training and Development helps in improving the morale of the work force.

Training and Development aids in organizational development i.e. Organization gets more effective decision making and problem solving. It helps in understanding and carrying out organizational policies. Training and Development helps in developing leadership skills, motivation, loyalty, better attitudes, and other aspects that successful workers and managers usually display.

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Typical Reasons for Employee Training and Development Training and development can be initiated for a variety of reasons for an employee or group of employees, e.g.

When a performance appraisal indicates performance improvement is needed To "benchmark" the status of improvement so far in a performance improvement effort As part of an overall professional development program As part of succession planning to help an employee be eligible for a planned change in role in the organization To "pilot", or test, the operation of a new performance management system To train about a specific topic

IMPORTANCE OF TRAINING IN INSURANCE COMPANIES Insurance business is very different from other type business and financial services. The following features of insurance make it standout from other businesses: 1) Insurance is a contingent project whose utility is tested only in the event of an accident or disaster. In contrast, in most other businesses the benefits of purchase are often immediately realized.

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2) Insurance usually has negative connotations (implications) in the mind of the buyer. 3) Often insurance products have a lot of legal jargon which makes it difficult to understand. 4) Insurance products have to be resold annually to the same buyer. 5) In insurance both the contractual parties are silent unless an unfortunate claim arises. 6) The claim amounts vary substantially and often both the parties look at each other interests, motives and actions with suspicion. These unique features of the insurance business highlight the need for a well trained workforce. Not only do they need to have sound knowledge of the products and services offered by their organization but the right attitude while dealing with the customer assumes utmost importance. Gaining credibility and winning trust of the customer is vital.

METHODS OF TRAINING

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A multitude of methods of training are used to train are used to train employees. I. II. On-the job training method. Off-the job training method.

On-the job training method: The most frequently used method in smaller organizations that is on the job training. This method of training uses more knowledgeable, experienced and skilled employees, such as mangers, supervisors to give training to less knowledgeable, skilled, and experienced employees. OJT can be delivered in classrooms as well. This type of training often takes place at the work place in informal manner. This method refers to methods that are applied in the workplace, while the employee is actually working.

Some key points on on the job Training: On the job Training is characterized by following points: It is done on ad-hoc manner with no formal procedure, or content

At the start of training, or during the training, no specific goals or objectives are developed Trainers usually have no formal qualification or training experience for training Training is not carefully planned or prepared
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 The trainers are selected on the basis of technical expertise or area knowledge The procedure of formal on the job training program is:
1. The participant observes a more experienced, knowledgeable, and skilled

trainer (employee) 2. The method, process, and techniques are well discussed before, during and after trainer has explained about performing the tasks 3. When the trainee is prepared, the trainee starts performing on the work place 4. The trainer provides continuing direction of work and feedback
5. The trainee is given more and more work so that he accomplishes the job

flawlessly

The four techniques for on the job development are:

1. COACHING 2. MENTORING 3. JOB ROTATION 4. JOB INSTRUCTION TECHNIQUE (JIT)

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1.

COACHING: -

Coaching is one of the training methods, which is considered as a corrective method for inadequate performance. According to a survey conducted by International Coach Federation (ICF), more than 4,000 companies are using coach for their executives. These coaches are experts most of the time outside consultants. A coach is the best training plan for the CEOs because It is one to one interaction It can be done at the convenience of CEO It can be done on phone, meetings, through e-mails, chat It provides an opportunity to receive feedback from an expert It helps in identifying weaknesses and focus on the area that needs

improvement This method best suits for the people at the top because if we see on emotional front, when a person reaches the top, he gets lonely and it becomes difficult to find someone to talk to. It helps in finding out the executives specific developmental needs. The needs can be identified through 60 degree performance reviews.

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Procedure of the Coaching The procedure of the coaching is mutually determined by the executive and coach. The procedure is followed by successive counseling and meetings at the executives convenience by the coach. 1. Understand the participants job, the knowledge, skills, and attitudes, and resources required to meet the desired expectation 2. Meet the participant and mutually agree on the objective that has to be achieved 3. Mutually arrive at a plan and schedule 4. At the job, show the participant how to achieve the objectives, observe the performance and then provide feedback 5. Repeat step 4 until performance improves For the people at middle level management, coaching is more likely done by the supervisor; however experts from outside the organization are at times used for up and coming managers.

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2. MENTORING: -

Mentoring is an ongoing relationship that is developed between a senior and junior employee. Mentoring provides guidance and clear understanding of how the organization goes to achieve its vision and mission to the junior employee. The meetings are not as structured and regular than in coaching. Executive mentoring is generally done by someone inside the company. The executive can learn a lot from mentoring. By dealing with diverse mentees, the executive is given the chance to grow professionally by developing management skills and learning how to work with people with diverse background, culture, and language and personality types.

Executives also have mentors. In cases where the executive is new to the organization, a senior executive could be assigned as a mentor to assist the new executive settled into his role. Mentoring is one of the important methods for preparing them to be future executives. This method allows the mentor to determine what is required to improve mentees performance. Once the mentor identifies the problem, weakness, and the area that needs to be worked upon, the mentor can advise relevant training. The mentor can also provide opportunities to work on special processes and projects that require use of proficiency.

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Some key points on Mentoring

Mentoring focus on attitude development Conducted for management-level employees Mentoring is done by someone inside the company It is one-to-one interaction

JOB ROTATION: For the executive, job rotation takes on different perspectives. The executive is usually not simply going to another department. In some vertically integrated organizations, for example, where the supplier is actually part of same organization or subsidiary, job rotation might be to the supplier to see how the business operates from the supplier point of view. Learning how the organization is perceived from the outside broadens the executives outlook on the process of the organization. Or the rotation might be to a foreign office to provide a global perspective. For managers being developed for executive roles, rotation to different functions in the company is regularly carried out. This approach allows the manger to operate in diverse roles and understand the different issues that crop up. If someone is to be a corporate leader, they must have
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this type of training. A recent study indicated that the single most significant factor that leads to leaders achievement was the variety of experiences in different departments, business units, cities, and countries. An organized and helpful way to develop talent for the management or executive level of the organization is job rotation. It is the process of preparing employees at a lower level to replace someone at the next higher level. It is generally done for the designations that are crucial for the effective and efficient functioning of the organization.

Benefits of Job Rotation Some of the major benefits of job rotation are:

It provides the employees with opportunities to broaden the horizon of knowledge, skills, and abilities by working in different departments, business units, functions, and countries Identification of Knowledge, skills, and attitudes (KSAs) required It determines the areas where improvement is required Assessment of the employees who have the potential and caliber for filling the position

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JOB INSTRUCTION TECHNIQUE: Job Instruction Technique (JIT) uses a strategy with focus on knowledge (factual and procedural), skills and attitudes development. JIT consists of four steps: Plan This step includes a written breakdown of the work to be done because the trainer and the trainee must understand that documentation is must and important for the familiarity of work. A trainer who is aware of the work well is likely to do many things and in the process might miss few things. Therefore, a structured analysis and proper documentation ensures that all the points are covered in the training program. The second step is to find out what the trainee knows and what training should focus on. Then, the next step is to create a comfortable atmosphere for the trainees i.e. proper orientation program, availing the resources, familiarizing trainee with the training program, etc. Present In this step, trainer provides the synopsis of the job while presenting the participants the different aspects of the work. When the trainer finished, the trainee demonstrates how to do the job and why is that done in that specific
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manner. Trainee actually demonstrates the procedure while emphasizing the key points and safety instructions.

Trial This step actually a kind of rehearsal step, in which trainee tries to perform the work and the trainer is able to provide instant feedback. In this step, the focus is on improving the method of instruction because a trainer considers that any error if occurring may be a function of training not the trainee. This step allows the trainee to see the after effects of using an incorrect method. The trainer then helps the trainee by questioning and guiding to identify the correct procedure. Follow-up In this step, the trainer checks the trainees job frequently after the training program is over to prevent bad work habits from developing. Off-the job training method: This training method refers to the training methods which are used away from workplaces. They include the following. 1. SENSITIVITY TRAINING 2. TRANSACTIONAL ANALYSIS 3. STRAIGHT LECTURES/ LECTURES 4. SIMULATION EXERCISES

1.

SENSITIVITY TRAINING: -

Sensitivity training is about making people understand about themselves and

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others reasonably, which is done by developing in them social sensitivity and behavioral flexibility. Social sensitivity in one word is empathy. It is ability of an individual to

sense what others feel and think from their own point of view. Behavioral flexibility is ability to behave suitably in light of understanding.

Procedure of Sensitivity Training Sensitivity Training Program requires three steps: Unfreezing the old values It requires that the trainees become aware of the inadequacy of the old values. This can be done when the trainee faces dilemma in which his old values is not able to provide proper guidance. The first step consists of a small procedure:

An unstructured group of 10-15 people is formed. Unstructured group without any objective looks to the trainer for its guidance But the trainer refuses to provide guidance and assume leadership Soon, the trainees are motivated to resolve the uncertainty Then, they try to form some hierarchy. Some try assume leadership role which may not be liked by other trainees Then, they started realizing that what they desire to do and realize the alternative ways of dealing with the situation.

Development of new values With the trainers support, trainees begin to

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examine their interpersonal behavior and giving each other feedback. The reasoning of the feedbacks are discussed which motivates trainees to experiment with range of new behaviors and values. This process constitutes the second step in the change process of the development of these values. Refreezing the new ones This step depends upon how much opportunity the trainees get to practice their new behaviors and values at their work place.

2. TRANSACTIONAL ANALYSIS: Transactional Analysis provides trainees with a realistic and useful method for analyzing and understanding the behavior of others. In every social interaction, there is a motivation provided by one person and a reaction to that motivation given by another person. This motivation reaction relationship between two persons is a transaction.

Transactional analysis can be done by the ego states of an individual. An ego state is a system of feelings accompanied by a related set of behavior. There are basically three ego states: Child: It is a collection of recordings in the brain of an individual of behaviors, attitudes, and impulses which come to her naturally from her own understanding as a child. The characteristics of this ego are to be spontaneous, intense, unconfident, reliant, probing, anxious, etc. Verbal clues that a person is operating from its child state are the use of words like
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"I guess", "I suppose", etc. and non verbal clues like, giggling, coyness, silent, attention seeking etc.

Parent: It is a collection of recordings in the brain of an individual of behaviors, attitudes, and impulses imposed on her in her childhood from various sources such as, social, parents, friends, etc. The characteristics of this ego are to be overprotective, isolated, rigid, bossy, etc. Verbal clues that a person is operating from its parent states are the use of words like, always, should, never, etc and nonverbal clues such as, raising eyebrows, pointing an accusing finger at somebody, etc. Adult: It is a collection of reality testing, rational behavior, decision making, etc. A person in this ego state verifies, updates the data which she has received from the other two states. It is a shift from the taught and felt concepts to tested concepts. All of us evoke behavior from one ego state which is responded to by the other person from any of these three states.
3.

STRAIGHT LECTURES/ LECTURES: It is one of the oldest methods of training. This method is used to create understanding of a topic or to influence behavior, attitudes through lecture. A lecture can be in printed or oral form. Lecture is telling someone about
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something. Lecture is given to enhance the knowledge of listener or to give him the theoretical aspect of a topic. Training is basically incomplete without lecture. When the trainer begins the training session by telling the aim, goal, agenda, processes, or methods that will be used in training that means the trainer is using the lecture method. It is difficult to imagine training without lecture format. There are some variations in Lecture method. The variation here means that some forms of lectures are interactive while some are not. Straight Lecture: Straight lecture method consists of presenting information, which the trainee attempts to absorb. In this method, the trainer speaks to a group about a topic. However, it does not involve any kind of interaction between the trainer and the trainees. A lecture may also take the form of printed text, such as books, notes, etc. The difference between the straight lecture and the printed material is the trainers intonation, control of speed, body language, and visual image of the trainer. The trainer in case of straight lecture can decide to vary from the training script, based on the signals from the trainees, whereas same material in print is restricted to what is printed. A good lecture consists of introduction of the topic, purpose of the lecture, and priorities and preferences of the order in which the topic will be covered. Main Features of Lecture Method Some of the main features of lecture method are:

Inability to identify and correct misunderstandings

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Less expensive Can be reached large number of people at once Knowledge building exercise Less effective because lectures require long periods of trainee inactivity.

4.

SIMULATION EXERCISES: Games and Simulations are structured and sometimes unstructured, that are usually played for enjoyment sometimes are used for training purposes as an educational tool. Training games and simulations are different from work as they are designed to reproduce or simulate events, circumstances, processes that take place in trainees job. A Training Game is defined as spirited activity or exercise in which trainees compete with each other according to the defined set of rules. Simulation is creating computer versions of real-life games. Simulation is about imitating or making judgment or opining how events might occur in a real situation. It can entail intricate numerical modeling, role playing without the support of technology, or combinations.

Training games and simulations are now seen as an effective tool for training because its key components are:

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Challenge Rules Interactivity

These three components are quite essential when it comes to learning.

The various methods that come under Games and Simulations are: BEHAVIOR-MODELING BUSINESS GAMES CASE STUDIES EQUIPMENT STIMULATORS IN-BASKET TECHNIQUE ROLE PLAYS

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CHAPTER 5: - COMPANY PROFILE OF MAX NEW YORK LIFE INSURANCE

Max New York Life Insurance

Max New York Life wants people to view insurance as a financial protection and wealth creation instrument and not just a tax-saving tool. Max New York Life Insurance Company Ltd. is a joint venture between New York Life, a Fortune 100 company and Max India Limited, one of India's leading multi-business corporations. The company has positioned itself on the quality platform. 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 excellence, honesty, knowledge, caring, integrity and teamwork.
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The strategy is to establish itself as a trusted life insurance specialist through a quality approach to business. New York Life is a Fortune 100 company that has over 160 years of experience in the life insurance business. Max India Limited is a multi-business corporate dealing in Clinical Research, IT and Telecom Services, and Specialty Plastic Products businesses. Max New York Life Insurance started its operations in India in 2000. It is the first life insurance company in India to be awarded the IS0 9001:2000 certification. Max New York offers customized products tailored to suit individual's needs. With its various Products and Riders, there are more than 400 product combinations to choose from. Today, Max New York Life Insurance has a network of 57 offices spread over 37 cities all over India. 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 is Rs. 657 crore, which is more than the norm laid down by IRDA. Max New York Life has identified individual agents as its primary channel of distribution. The Company places a lot of emphasis on its selection process, 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. Max New York Life invests significantly in its training program and each
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agent is trained for 152 hours as opposed to the mandatory 100 hours stipulated by the IRDA before beginning to sell in the marketplace. Training is a continuous process for agents at Max New York Life and ensures development of skills and knowledge through a structured program spread over 500 hours in two years. This focus on continuous quality training has resulted in the company having amongst the highest agent pass rate in IRDA examinations and the agents have the highest productivity among private life insurers.

It has established a wide agency distribution network with 172 offices and representatives across 120 cities in India. The company has established additional channel with 22 bancassurance relationships, corporate tie-ups and a strong Direct Sales Team. Through its wide network of highly competent life insurance agent advisors, flexible product solutions and strong customer focus, Max New York life is creating a partnership for life with its customers in India. Max New York Life, one of Indias leading life insurance companies, expanded its presence in the southern region by opening its first general office in the city of Mysore. Max New York Life now has established a countrywide network of 172 offices and representatives across 120 cities in India. Max New York Life, which has till date sold over 1.53 million policies and recorded a sum assured of over Rs. 46,000 crore, has positioned itself on the quality platform. The company has developed a strong corporate governance model based on defined core values of caring, knowledge, excellence and honesty. Its strategy is to establish itself as a trusted life insurance specialist on the bedrock of quality of advice. The company has over 25,300 agent advisors, who are widely
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considered the best in the business. Max New York Life aspires to be the "life insurance brand of first choice" amongst Indian consumers. To achieve this the company will draw on New York Life's demonstrated competence in developing and managing a superior personal sales network. For the last 46 years consecutively, the largest number of agents qualifying for membership to the Million Dollar Round Table (MDRT) have been from New York Life. The MDRT is the industry's most prestigious organization comprising the world's most successful insurance agents. Max New York Life, a merit oriented and equal opportunities employer, is looking for a few good men and women who will spearhead the effort to realize this vision. Max New York Life wants people to view insurance as a financial protection and wealth creation instrument and not just a tax-saving tool. Since the launch of our operations, our focus has always been on providing risk protection and long-term wealth creation solutions to our customers. With a diverse product portfolio to meet customer requirements, it is evident that we are setting benchmarks in the marketplace and are well on course of realizing our vision to become Indias most admired Life Insurance Company. An ever expanding presence of Max New York Life offices across India reinforces our commitment to serving the nation. We are extremely pleased with our progress in the region and feel that opening an office in Mysore would help us educate people about the true potential and benefits of life insurance. As life insurance specialists, Max New York Life will continue to help consumers make the right choices to meet their financial goals, both for the short and long-term, through sound quality advice offered by our agent advisors and a right mix of product offerings. he added.
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Max New York Life has been instrumental in changing the paradigm of life insurance in India. It is the first life insurance company in India to introduce cause related marketing. Children are at the very heart of Max New York Life's strategy. SOS Children's Villages of India is internationally recognized for its work in giving underprivileged children a wholesome life. The mission of SOS is "to help orphaned and abandoned children, by providing them with a family, a permanent home, education and strong foundation for an independent life." It's mission ties in with Max New York Life's philosophy of helping people secure the future of their near and dear ones.

Vision:
Vision statement is Most Admired Life Insurance Company in India".

Mission:
Become one of the top quartile life insurance companies in India Be a national player Be the brand of first choice Be the employer of choice Become principal of choice for agents

Max New York Life Values and Beliefs

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Excellence "In every aspect of work. Ranging from the in-house training institute to the detailed Personal Insurance Plan. Max New York Life is focused on achieving the highest Honesty "Is the heart of the Life Insurance business. Max New York believes that above all, Life Insurance is based on trust. Transparency, Dependability and Integrity will form the cornerstones of the Max New York Life experience." Knowledge "Is what makes experts. Max New York Life is focused on the Life Insurance business. Perfectly combining global expertise with local knowledge, Max New York Caring "For the customer. Max New York Life is redefining the Life Insurance paradigm to focus on the needs of the customers. The Max New York service process is responsive, personalized, humane and empathetic." Culture: Our "in house culture recipe" has some of the finest ingredients going into its making. Some of the more prominent aspects of our culture are stated below: Customer comes first Do it right the first time
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standards

of

quality

in

every

aspect

of

their

business".

Life

is

the

Indian

Life

Insurance

specialist."

 Bias for result oriented action Financial strength and discipline Clarity of purpose International quality standards Inclusive Meritocracy Learning opportunities Fun at work Commitment to published value system

CHAPTER 6: -THE TRAINING AND DEVELOPMENT PROCESS AT MAX NEW YORK LIFE

The process of training and development starts only after the successful recruitment and selection of the candidates. Here is a brief insight into the recruitment and selection process at max New York life: The Company places a lot of emphasis on its selection process, which Comprises four stages Screening, Psychometric test, Career seminar Final interview

FOUR CRITERIAS FOR AA SELECTION

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1. 25 plus years of age: This age shows attainment of maturity and responsibility. People are more consistent in this age. 2. Married: Married people are more eager to earn money. Family pressures increases responsibility and secondly customers are convinced more by the stability of a married AA. 3. Staying in the same city for more than 5 years: Person who stays more than 5 year has huge natural market which helps him to get more business in short period. 4. Graduate: Graduate people have basic skills like communication skills, numerical ability, I.P relation, convincing abilities etc. so it is easy to teach them further.
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 OTHER CRITERIA FOR AA SELECTION:

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1. Financial stability: MNYL is focuses on classes and not on masses thus they select strong agent advisors. 2. To have a rich and active social circle: It helps to get higher case rate and case size. Also the chances of policy lapsing can be less and renewals can be more.

3. Greed for money: Firm selects advisors who understand the language of commission. Because people who want fix amount as their earnings are not suitable for this business. 4. Independent: MNYL select people who want to be entrepreneur. Housewives or brokers who want flexible hours for work are prospective person for this business. 5. Persuasion: He should be persuasive in nature because the AA needs to follow up on regular basis with prospective and new clients without being a nuisance value. 6. Excellent interpersonal skills: Because developing and maintaining good relations can get policies. Secondly since most of the insurance companies provide a plethora of similar products, sales depend on the convincing ability of the AA and the rapport the AA is bale to build.
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Also results in C of Is. 7. Excellent communication skills: Since AA needs to communicate about the organization, products, career as AA, about why insurance is important, which product will suit his requirement etc.

Here are a few desirable candidates:

Housewives
Employees having VRS CAs

Tax Consultants Businessma n

DESIRABLE CANDIDATES

Doctors Travel agents Lawyers

Mutual Fund Brokers. NSC brokers

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Now looking into the training and development at various levels:

The agent advisors are trained in-house to ensure optimal control on quality of training. Max New York Life invests significantly in its training programme. Each agent is trained for 152 hours as opposed to the mandatory 100 hours stipulated by the IRDA before beginning to sell in the marketplace. Training is a continuous process for agents at Max New York Life and ensures development of skills and knowledge through a structured programme spread over 500 hours in two years. This focus on continuous quality training has resulted in the company having amongst the highest agent pass rate in IRDA examinations and the agents have the highest productivity among private life insurers. 201 agent advisors have qualified for the Million Dollar Round Table (MDRT) membership in 2005.

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Areas of training:
Company policies and procedures Human relations training Skill based training Problem solving training

Onsite Workshops for Leadership Team Employees need more than bosses... They need mentors: Professionals skilled at assessing employee development needs and committed to guiding employees toward professional success. Team Leadership Workshop provides managers with proven techniques for effective personnel management. By helping advisors understand and address their employees' requirements, this interactive seminar offers significant benefit to managers at all levels. This training program provides healthy perspectives for managers at all levels, making it an ideal morale-boosting leadership development experience for mixed groups of front-line supervisors, advisors and senior staff members. Leadership Training for Success All managers need methods. Leaders need to know the most effective techniques for guiding teams, mentoring individuals, and validating the results. Without solid methods, managers will revert use a one-size-fits-all approach to leadership that reflects the leader's personality, rather than the employees' needs. Committed, mentoring leadership is essential to employee morale, productivity, and retention.

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A Results-Oriented Training Program Team Leadership Workshop provides proven methods and procedures for successful people management. Participants receive a step-by-step plan for guiding each employee toward success. This workshop includes elements of Frank Whyte's nationally respected Team Building Workshops expanding upon that foundation to help leaders: Recognize each employee's personality preferences and supervisory needs. Align their leadership style with those of their bosses, colleagues, and subordinates. Develop competent and committed employees by mentoring and guiding their employees toward success. Schedule their management responsibilities to ensure that nothing is left to chance. Use practiced, real-world scenarios to resolve challenges and remove barriers.

Training Program done by Max New York Life Training is must for every individual when he enters into the organization. Even though the candidate has experience he also should get training. Why because the organization culture, values and beliefs are different from one organization to other. Thats why the training program plays a key role in every organization. Training program following by Max New York Life Insurance is different at various levels. Mainly in training program the company concentrates on sales managers, agents, operations executives and telecallers.

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TRAINING PROGRAM FOR SALES MANAGERS:

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Training program for Advisors:

The training program duration of I.R.D.A is 15 20 days They get training on product knowledge How to convince the people. Objection Handling Training program for operations executives: They will get training on customer database files Taking care of the customer files Well trained in product information and documentation Renewals will be informed periodically. Required skills for employees in Max New York Life Insurance: Interpersonal skills Excellent communication skills Understanding nature Aggressiveness Convincing skills Ability to motivate others Interest to learn

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THE REWARD AND RECOGNITION SCHEME AT MAX NEW YORK LIFE:

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1) Premium Leader Qualifying Criteria- Rs. 1 Lakh AFYP in a month Reward and RecognitionMention in leaders Report, Lunch 2) Ten-A-Monther Qualifying Criteria- 10 applications in a month and Rs. 30,000 AFYP Reward and Recognition- MNYL Crystal Glass, mention in Leaders Report, Lunch. 3) Hi-Flier Qualifying Criteria- 20 applications in a month Reward and Recognition- MNYL Silver Medal, MNYL Crystal Glass, Mention in leaders Report, Lunch 4) Career Success Award Qualifying Criteria- 15 paid cases & Rs. 40,000 FYC at the end of month 3 Reward and Recognition- Recognition Award 5) Career Producer Award Qualifying Criteria- 25 paid cases & Rs. 80,000 FYC at the end of month 6 Reward and Recognition- Recognition Award 6) Career Foundation Club Qualifying Criteria- 50 paid cases & Rs. 1.8 lakhs FYC in July- June For Recruits during this period. Reward and Recognition- Attend CFC meeting to be held at Zone level

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7) Paid Case, FYC, Persistency, rider, Referral and CEIP Leader Qualifying Criteria- Top Agent in each category in each GO Reward and Recognition- Recognition Plaque 8) Agent of the Year Qualifying Criteria- Highest Points in each GO Reward and RecognitionRecognition Award 9) Centurion Qualifying Criteria- 100 net paid cases in a year Reward and RecognitionCenturion Trophy 10) Paul Colgan Trophy Qualifying Criteria- Highest FYC with 100 or more paid cases and 95% Or more 13th month persistency Reward and Recognition- Recognition Trophy 11) Executive Council Qualifying Criteria- July 2006 to June 2007: 4,30,000 Council Credits January 07 to June 07: 1,60,000 Council Credits 40 paid cases in the Council Period. Reward and Recognition- Trip to Malaysia to attend the Executive Council Meeting. 12) MDRT (Million Dollar Round Table) Qualifying Criteria- MDRT FYC Rs. 7,19,800 Premium Rs.14,39,600 Reward and Recognition- MDRT dues for all qualifiers. Top 35 by FYC Will bear domestic travel and visa costs. Next 15 will bear Registration fees, domestic travel and visa costs. Rest All will bear international airfare, domestic travel and Visa costs.

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13) CEOS Council Qualifying Criteria- July 2006 to June 2007: 8,00,000 Council Credits Jan 2007 to June 2007: 3,20,000 Council Credits Reward and Recognition- Trip to Amsterdam to attend the CEO Council meeting.

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