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A REPORT

ON

ORGANIZATIONAL STUDY IN

Birla Sun Life Insurance Limited


Submitted in partial fulfillment of the requirements of
the M.B.A Degree Course of Bangalore University
By

Mr. Rama Krishna Raju T


Register Number: 06XQCM6101

Under the Guidance and Supervision Of


Mr. Rudra Murthy
Professor

M.P.BIRLA INSTITUTE OF MANAGEMENT


Associate Bharatiya Vidya Bhavan
# 43, Race Course Road
Bangalore-560001
July - August 2007

M P BIRLA INSTITUTE OF MANAGEMENT 1


PRINCIPAL’S CERTIFICATE

This is to certify that the organization study on Birla Sun Life Insurance,
Bangalore has been prepared by Mr. Rama Krishna Raju T bearing the
registration no. 06XQCM6101 under the guidance and supervision of Mr.
Rudra Murthy, Professor, MPBIM, Bangalore.

PLACE: Bangalore Dr. N S Mallavali


DATE: (Principal)

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GUIDE’S CERTIFICATE

This is to certify that the organization study on Birla Sun Life Insurance,
Bangalore, prepared by Mr. Rama Krishna Raju T bearing the
registration no.06XQCM6101 is a bonafide work done, carried under my
guidance and supervision during the academic year 2006-08 in partial
requirement for the award of MBA degree by Bangalore University. To the
best of my knowledge this report has not formed the basis for the award of
any other degree or diploma.

PLACE: Bangalore Mr. Rudra Murthy


DATE: (Professor)

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COMPANY CERTIFICATE

Birla Sun Life Insurance Limited

This is to certify that Mr. Rama Krishna Raju T has completed his
project, under my guidance during Jul& Aug 2007on the topic titled
“Organization study”
His Conduct was Good during this period.

Place: BANGALORE
Date: Signature
Name
Designation
of the guide

Office Seal

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DECLARATION

I hereby, declare that this internship report entitled. An Organization Study


at Birla Sun Life Insurance Limited, Bangalore submitted in partial
fulfillment for the award of Master of Business Administration of
Bangalore University is a record of independent work carried out by me
under the guidance of Prof. Rudra Murthy faculty member, M. P. Birla
Institute of Management Studies, Bangalore.

I also declare that this report is a result of my own effort and has not been
submitted earlier for the award of any degree or diploma of Bangalore
University or any other University.

Place: Bangalore Rama Krishna Raju T


Date: REGD.NO: 06XQCM6101

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Acknowledgement

At the outset, I would like to express my deep sense of gratitude and sincere
thanks to Dr. Mallavali, Principal, M.P.BIRLA INSTITUTE OF MANAGEMENT,
Bangalore, for providing an opportunity to discover the corporate world, from a
close perspective.

Prof. Rudra Murthy, my professor and internal guide for this project to whom I
am deeply grateful for his constant support and guidance without which it would
not have been possible for me to complete this project in time.

I take this opportunity to extend my sincere gratitude to Mr. Ranjan Anand,


Agency Manager, BSLI for giving me an opportunity to undertake internship
training and the project on the topic .Competency Mapping. in the esteemed
organization.

I would also like to express my heartfelt wishes to BSLI, for making these 2
months a stepping-stone for my career.

I convey my gratitude to all the staff members of Marketing Division for their
kind cooperation through out my project.

Finally, I thank my dearest Parents for their continued support.

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Executive Summary
Birla Sun Life Insurance pioneered the unique Unit Linked Life Insurance
Solutions in India. BSLI has cemented its position as a leading player in the
private life insurance industry within 4 years of its inception. Its main focus
on investment linked insurance products supported its leadership in product
innovation. Its multi-dimensional channels offered convenient channels for
sale of the products to customers. It had been maintaining corporate
governance and a high degree of transparency in all business practices and
procedures. It had a strong fundamentals based on Aditya Birla Group’s
local insight and sun life financials global expertise.

The company chosen was Birla Sun Life Insurance ( BSLI) . The reason
behind this was to understand the expertise it has developed and skills it has
owned, especially in the field of marketing its products as it is the booming
industries in India.

Learning really takes place outside the classroom. I stand a witness to this
statement. The in sight of knowledge that I acquired in the two months of
internship with BSLI was quite impressive. The opportunity I received to
apply my knowledge and skills in the organization gave me a practical view
point to the whole system of learning.

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The main objective of the internship was to imbibe a practical approach in
the students towards the knowledge gained at the classroom level. The
internship at BSLI has given me the right perception and has had a positive
effect on the kind of learning that I got at the M.P. Birla Institute of
Management, Bangalore.

It was a very good experience for me to work during this tenure. I am glad
that I have learnt so much in such little time. It has boosted my confidence
and has raised my spirits. I can confidently say that my knowledge has
improved in a very short time I would like to thank the entire Marketing
department at the BSLI for their constant support.

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Contents

CHAPTER-1 THEORYTICAL SETTING


CHAPTER-2 ORGANISATION STRUCTURE
CHAPTER-3 OPERATIONAL FUNCTIONAL
DEPAREMENTS AND
PERFORMANCE EVALUATION
CHAPTER-4 AWARDS AND ACHIVEMENTS
CHAPTER-5 RECOMMENDATIONS AND
SUGGESTIONS
CHAPTER-6 CONCLUSIONS

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Chapter 1
INTRODUCTION
Organization structure involves formal and recognized
structure where in each and every individual and group
have a definite relationship with each other, have a
specified area to exist, function to perform, authority to
mobilize resources, obligation to act, responsibility for
achieving the objective and accountability for their
performance. It is arrangement of activities and
assignment of personal to their activities in order to
achieve the organizational goal.
Organization structure encompasses six
Major areas with in organization. These are
Work specialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Objectives of the study:
1) To understand the organization structure/hierarchy of
the company
2) To identify various departments in the organization
and the functioning of the same.
3) To understand the various responsibilities and duties
carried out by each department.

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4) The study is aimed at understanding how an
organization practically works in the real situation.
5) To undertake a small assignment in order to know
the perception and attitudes of the people towards Birla
sun Life Insurance policies.
6) To offer suggestions based upon the findings.
Scope of the study:
The study is limited to Birla Sun Life Insurance
Company Limited Bangalore branch.
Source of data:
Primary data: One to one interviews with departmental
heads and few subordinates.
Secondary data: Secondary data are collected from the
company’s website, newspaper articles and magazines.
LIFE INSURANCE
Life insurance is a contract providing for a payment of a
sum of money to the person assured or failing him to
the person entitled to receive the same on the
happening of certain event. Uncertainty of death is
herent in human life. It is this risk, high gives rise to the
necessity for some form of protection against the
financial loss arising from death. Insurance substitutes
this uncertainty by certainty. The objective of insurance
is normally to provide: a. Family protection and
b. Provision for old age.

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THERE ARE 3 TYPES OF LIFE INSURANCE POLICIES:
i) Term insurance plans:
Pure life covers where policy holder pays for the risk
cover and do not expect to receive anything else in
return. Term insurance is now available in India. Opting
for such policy will improve the efficiency of the policy
premium and enable policy holder for a bigger risk
cover for the same cost. These are term insurance
plans without interest.

ii) Whole life insurance plans:


Whole life policies require the policy holder to pay
premium throughout his/her life and cover risk for the
whole life. The policies without profits are cheaper.

iii) Endowment insurance plan:


Endowment policies are costliest and among this group,
money back policies involve paying highest premium.
They give customers maturity benefits (normally, sum
assured) and additional profits by way of bonus,
guaranteed additions, loyalty bonus, etc

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D E F I N I T I O N O F S O M E T Y P E S O F P O L I C I E S:
1) Annuity
An annuity is a steady stream of equal payments that
one receives every year, or every month either for life
or a fixed number of years, as return after making an
investment either as a lump-sum or through installments
paid over a certain number of years, specific sum Upon
the death of the annuitant, or at the expiry of the period
fixed for annuity payments, the invested annuity fund is
refunded usually along with a small bonus. Annuities
differ from all other forms of life insurance in one
fundamental way. They do not provide any insurance
cover but offer a guaranteed income for a certain period
or for life.
Typically annuities are bought to generate income
during one’s retired life, which is why they are also
called Pension Plans. Annuities provide a solution to
the biggest financial insecurity of old age after one
retires and the income from salary ceases.

2) Endowment:
Endowment policies cover the risk for a specified period
at the end of which the sum assured is paid back to the
policyholder along with the bonus accumulated during

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the term of the policy. The payment of the endowment
to the policy holder depends upon the completion of the
policy’s term which rightly accounts for the popularity of
endowment policies. Typically, one’s responsibility for
the financial protection of the family reduces
significantly once the children are grown up and
independently settled. The focus then shifts to
managing a smaller family perhaps only oneself and
one’s spouse after retirement. This is where the
endowment. The original sum assured and the
accumulated bonus, received back comes handy.

3) Money back:
Unlike endowment plans, in money back policies, the
policyholder gets periodic survival benefits during the
term of the policy and a lump sum amount on surviving
its term. In the event of death during the term of the
policy, the beneficiary gets the full sum assured,
without any deductions for the amounts paid till date,
and no further premiums are required to be paid.

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Industry Profile
A b r i e f h i s t o r y o f t h e i n s u r a n c e i n d u s t r y:

The insurance sector in India has become a full


circle from being an open competitive market to
nationalization and back to a liberalized market again.
Tracing, the developments in Indian insurance sector
reveals the 360-degree turn witnessed over a period of
almost two centuries.
Life insurance industry:
The business of life insurance in India in its
existing form started in the year 1818 with the
establishment of the Oriental life insurance company in
Calcutta.
Important milestones in the life insurance business
in India:

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

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1938: Earlier legislation consolidated and amended to
by the insurance act with the objective of protecting the
interest of the insuring public.
1956: 245 Indian and foreign insurers and provident
societies taken over by the central government and are
nationalized. LIC formed by an act of parliament, which
is LIC Act, 1956, with a capital contribution of Rs. 5
crore from the government of India.

Insurance Sector Reforms:

In 1993, Malhotra committee, headed by former


Finance secretary and RBI governor Mr. R.N. Malhotra,
was formed to evaluate Indian insurance industry and
recommend its future direction.

The Malhotra committee was setup with the


objective of complementing the reforms initiated in the
financial sector, the reforms were aimed at “creating a
more efficient and competitive financial system suitable
for the requirements of the economy keeping in mind
the structural changes currently underway and
recognizing that insurance is an important part of the
overall financial system were it was necessary to
address the need for similar reforms…”

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V) Customer service:
1. LIC should pay interest on delays in payments
beyond 30 days.
2. Insurance companies must be encouraged to
set up unit linked pension plans.
3. Computerization of operation and updating of
technology to be carried out in the insurance
industry.
The committee emphasized that in order to improve
the customer services and increase the coverage of the
insurance industry should be opened up to completion.
But at the same time, the committee felt the need to
exercise caution as any failure on the part of new
players could ruin the public confidence I the industry.
Hence, I was decided to allow competition in a
limited way by stipulating the minimum capital
requirement of Rs. 100 cores, The committee felt the
need to provide greater autonomy to insurance
companies in order to improve their performance and
enable them to act as independent companies with
economic motives .For this purpose, it had proposed
setting up an independent regulatory body.

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Life Insurance Industry: Present context :
The life insurance industry has rebound,
demonstrating a growth rate of 51% in new business
premium in the third year of privatization.
Life insurance premiums rose to Rs 18,710 core
(Rs 187.10 million) in fiscal 2006 from Rs 12,300 core
(Rs 123 billion) in 2004-05.
The massive growth comes chiefly on the back of
sales of unit-linked plans, group polices and pension
plans.
The Indian insurance sector has witnessed new
premium income of Rs 34,828 core (Rs 348.28 billion) in
fiscal 2006. This reflects a growth rate of 33% over
fiscal 2005’s aggregate figure of Rs 26,203.8 core (Rs
262.03 billion). Against a growth rate of 51% for life
insurance business, non-life insurance premiums rose
by 16% to Rs 16,118 core (Rs161.18 billion) in fiscal
2006.
A significant share of the new business has come
on the back on sale of group policies.
The Life Insurance Corporation of India, LIC, alone
mopped up Rs 2,332.85 crore (Rs 23,32 billion) as it
insured over 30 lakh lives under the various group
schemes. LIC’ s group business reached new heights
during the year, recording a 119% growth in new

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premium income and 50% increase in the number of
lives covered.
Today, the total foreign direct investment in the
Indian insurance sector is pegged at Rs 1,021 crore (Rs
10.21 billion) while the paid-up capital of the insurance
sector stands at Rs 5,518 crore (Rs 55.18 billion).
Presently there are 13 Life Insurance companies in
the Indian market, out of which, only LIC and SBI Life
Insurance are government organizations and the
remaining are private players.
The following is the list of life insurance companies
in the Indian market:
1) Life insurance Corporation of India
2) Allianz Bajaj Life Insurance
3) HDFC Standard Life Insurance
4) TATA AIG Insurance
5) ING Vysya Life Insurance
6) ICICI Prudential Life Insurance
7) Birla Sun Life Insurance
8) Met Life India Insurance
9) AMP Sanmar
10) SBI Life Insurance
11) Aviva Life Insurance
12) Max New York Life
13) OM Kotak Mahindra life Insurance

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The Insurance Regulatory and Development
A u t h o r i t y:
Reforms in the insurance sector were initiated with
the passage of the IRDA Bill in Parliament in December
1999. The IRDA since its incorporation as a statutory
body in April 2000 has fastidiously stuck to its schedule
of framing regulations and registering the private sector
insurance companies.
The other decisions take simultaneously to provide
the supporting systems to the insurance sector and in
particular the life insurance companies were the launch
of the IRDA’s online service for issue and renewal of
licenses to agents.
The approval of institutions for imparting training to
agents has also assured that the insurance companies
would have a trained workforce of insurance agents in
place to sell their products, which were expected to be
introduced by early 2001.

Since being set up as an independent statutory


body the IRDA has put in a framework of globally
compatible regulations. In the private sector 12 life
insurance and 7 general insurance companies have
been registered.

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Company Profile:

Birla Sun life Insurance Company is head quartered


at Mumbai and has established a strong presence in the
cities of Ahmedabad ,Baroda, Bangalore Chandigarh,
Chenni, Gurgaon, Hyderabad, Indore, Jaipur,
Kanchipuram, Kanpur, Kolkata, Lucknow, Meerut,
Mysore, New Delhi, Noida, Patna, Pune, Rajkot, Surat,
Varanasi and Visakhapatnam.

Background and inception of company:


Sun Life Financial

Sun Life Financial is a leading international


financial services organization. With a history that dates
back to 1871, Sun Life Financial has evolved from a
single mutual life insurance to one of the most highly
rated insurance and wealth management institutions in
the world, Sun Life Financial knows its value lies in
more than assets and history, It also lies in the culture
of integrity and the pursuit of excellence that have
marked all of the organization’s endeavors. Today, the
sun life financial Group of companies and partners are
represented globally in Canada, the United States, the
Philippines, Japan, Indonesia, India and Bermuda.

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Sun Life in India:
Sun life’s Indian insurance operations with the the
A.V. Birla group may be just four years young, but it
was more than100 years ago---110years to be precise—
that sun life insurance appointed its first agent in
Mumbai (then of course known as Bombay), a
gentlemen by the name of Ira B. Thayer. In May 1892,
Sun Life issued its first policy, therein the policy
number 23200, and soon opened its first office on
Esplanade Road. The Canadian Company has never
looked back ever since.
The foundation of the aesthetic Canada Building
was laid in May 1902, when the board of Directors
approved the purchase of a building to house Sun Life’s
operation in the subcontinent. A year later, Lot 71 on
Horns by Road was purchased to build the structures. A
popular architectural firm, Gostling, chambers and
Fritchely, was pressed in to action and Canada Building
with its awe-inspiring yellow and white stone façade
came into being in 1905.intricacies like the maple leaf,
beaver and rising sun logo couples with the chariot of
the Sun logo added to the beauty of this grand
structure.

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Expansion Times :
When the Prince of Wales visited in 1921 it was the
Canada Building that greeted the royalty in regal
splendor – the officials had illuminated the building at a
cost of Rs.1000. In 1925, Sun Life expanded operations
by setting up district offices in Calcutta and Madras, in
addition to the Bombay branch. Two years later, the
Lahore office into being, following which operations at
Dacca were kicked off.1929 saw an office in Luck now,
followed by Colombo a year later. It was only in 1952
that the New Delhi office was established.

Aditya Birla Group – The Indian MNC:


Aditya Birla Group is India’s second largest
business house. It enjoys a dominant position in all the
sectors in which operates. The Aditya Birla Group is
- The worlds largest producer of viscose staple
fiber
- The largest single location refiner of palm oil,
- The world’s largest producer of carbon black.

In India the group is the single largest producer of


- Viscose filament yarn
- Aluminum
- Grey cement

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- White cement and
- Rayon grade pulp
- Petroleum (HINDALCO)

The group is also


- The only producer of linen in the textile
industry in India.
- The leader in the ready-to-wear branded
apparel.
For several decades now, the Aditya Birla Group
has won the trust and respect of its 72,000 employees
and 8 lakh investors. The group’s turnover exceeds
Rs.260 billion and has an asset base, which is in
excess of Rs.257 billion.
The Aditya Birla group has over 75 business units
in India and overseas. It has operations in Canada,
U.S.A; U.K, Thailand, Philippines, Malaysia and Egypt.
Its international operations contribute greatly to India’s
growth and to that of South East Asia, making it India’s
first truly multinational conglomerate.
The flagship companies of the Aditya Birla Group
include some of the largest and well known companies
in India such as Grasim Industries Ltd;
Hindalco Industries Ltd; Indian Aluminum Company
Ltd; Indian Rayon Industries Ltd, Indo Gulf Corporation

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Ltd, Global Finance Ltd. The group has forged power
relationships with large corporations like Hindustan
Petroleum, Tata and powergen PC and AT & T.

Growing Financial Services Clout:


Birla Sun Life joint venture partner, Sun Life
Financial is one of the largest global insurance and
wealth management organizations. Sun Life has been
offering life insurance in Canada since 1871, while MFS
its subsidiary created the first US mutual fund in 1924.
Sun Life has operations around the world in United
States, United Kingdom, Canada, Philippines, Hong
Kong, Bermuda and Indonesia and offices in 21 key
markets throughout the world.
It has total assets under management CDN$328 billion
as on December 31, 2002. It has employees world wide
and global distribution network of over 1,00,000
distributors.

Sun Life has a global reputation as top


insurers with high profitability, persistency And
productivity ratios, which in turn reflect the underwriting
expertise of the company.

The turnover of the group is growing at a steady


rate and is currently estimated to be in excess of

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Rs.260 Billion. The group has a strong asset base
valued at Rs.180 billion. The group is well respected in
the financial markets and all the group stocks command
a healthy market valuation – the total market
capitalization being nearly Rs.150 billion.

Nature of business carried:


While the Aditya Birla Group contributes its
knowledge of the Indian market, Sun Life Financials
offers its global expertise in the areas of protection of
wealth management services. Both the partners are
already engaged in the business of asset management,
retail distribution and stock broking. This partnership
has been now extended to Life Insurance after
Privatization of this sector.
A joint venture between the Aditya Birla Group and
Sun Life financial, Birla’s sun life insurance forayed into
the life insurance and retirement planning business by
pioneering the unique unit-linked solutions in India. In
just 2 years of its launch the company has catapulted to
second position in new business premium in the highly
competitive private life insurance industry based on its
strategy of unit-linked plans.

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V i s i o n , M i s s i o n , Q u a l i t y P o l i c y:

Vision:
“To be provider of financial security to individuals and
corporate”.

Mission:
To be the first preference of our customers as a leading
integrated insurance provider of Insurance solutions
superior value creation and technology.

Quality Policy:
Birla Sun Life has put in carefully designed strategies to
move to the leading position in the life insurance
industry through product innovation, customer focus,
and cutting edge technology.

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Product Profile:
Birla Sun Life insurance was the first in India to
introduce Unit –Linked Life Insurance plans.
INDIVIDUAL LIFE PLANS
1) Flexi Life Line Plan
2) Flexi Save plus Endowment Plan
3) Flexi Cash Flow Money Back Plan
4) Birla Sun Life Term Plan
5) Classic Life Premier

1) Flexi Life Line Plan:


Unique Features:

a) The plan is a unit linked non-participating plan which


gives efficient earnings in the long term.

b) Lifelong Insurance cover till age 100 years in addition


to other durations available.

c) A choice of three Investment Fund Options: Protector,


Builder and enhancer, with the freedom to switch
between the Investment Fund options anytime during
the policy tenure.

d) Flexibility to make additional lump sum investments


(top ups) to increase the savings portion of policy.

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e) Minimum Guaranteed returns of 3% p.a. on premium
and any top up amounts, net of all Policy Charges.
More importantly the entire upside in the performance
of the Investment Fund is passed on to customer.

f) Options to make tax free Partial Withdrawal from fund


Value anytime after three years.

g) Surrender the policy without penalty any time after 4


policy years.

h) Increase the Sum Assured during the premium-paying


period depending on life insurance requirements.

i) Convenient premium payment options: Short or


Regular paying period.

2) Flexi Save Plus Endowment Plan:


Unique Features:
a) The plan is a unit linked non participating plan giving
efficient earnings in the long term.

b) A choice of three Investment Fund Options:


Protector, Builder and Enhancer, with the freedom to

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switch between the Investment Fund Options anytime
during the policy tenure.

c) Flexibility to make additional lump sum investments


(top ups) to increase the savings portion of policy.

d) Minimum Guaranteed returns of 3% p.a. on premium


and any top up amounts, net of all Policy Charges. More
importantly the entire upside in the performance of the
Investment Fund is passed on to customer.

e) Options to make tax free Partial Withdrawals from


fund Value, any time after three years.

f) Surrender the policy without penalty any time after 4


policy years.
g) Increase the Sum Assured during the premium paying
period depending on your requirements.

3) Flexi Cash Flow Money Back Plan:


Unique Features:
a) The plan is a unit linked non-participating plan to give

efficient returns.
b) Tax free lump sum pay-outs, to take care of recurring
needs.

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c) A choice of three Investment Fund Options:
Protector, Builder and Enhancer, with the freedom to
switch between the Investment Fund Options anytime
during the policy tenure.
d) Flexibility to make additional lump sum investments
(top ups) to increase the savings portion of policy.

e) Minimum Guaranteed returns of 3% p.a. on premium


and any top up amounts, net of all Policy Charges. More
importantly the entire upside in the performance of the
Investment Fund is passed on to customer.

f) Options to make tax-free Partial Withdrawals fund


Value anytime after three years.

g) Surrender the policy without penalty after 4 policy


years) Increase the Sum Assured during the premium
paying period any time depending on needs.

4) Birla Sun Life Term Plan:


Unique Features:

a) The plan has been designed for people who want to


avail of the benefits of life insurance at low cost. It is a
low premium, pure risk coverage plan which takes care

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of financial commitments towards family or dependants,
should anything unfortunate happen to customer.

b) Riders - Accidental Death & Dismemberment Rider,


Critical Illness Rider, Waiver Of Premium Riders
available along with the plan, one can avail of riders
even in the case of Single Premium Policy.

c) Favorable Term - Favorable Premium Rates for


Female Clientsd) Age Benefit - Maximum age for
maturity is 70 years

5) Classic Life premier:


Unique Features:
a) The plan is a unit linked non participating plan
b) One has the choice of six Investment Fund Options
with the flexibility to allocate the premiums in varying
proportions into the different Fund Options or even
switch from one or more Investment Fund(s) to other
Investment Fund(s).
c) One can top up Fund Value whenever one has
additional savings. The minimum amount of top ups
will be Rs. 10,000
d) The plan offers further benefits in the form of
additional units, which will be added to the Fund

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Value at the end of the 10th policy year and at the ed
of every 5th year thereafter
e) There is high liquidity in the form of Partial
Withdrawals and surrender benefits. f)
Death benefits, which will be higher of the Fund Value
or Sum Assured, reduced by the applicable partial
withdrawals

Areas of Operation:

Birla Sun life Insurance is present in India and


spread across 1000 towns in India. Apart from this it’s
doing business even in the rural segment.

Ownership pattern:
The Aditya Birla group holds 74% of the equity in
Birla Sun Life Insurance while the Sun Life group holds
the balance 26%. Both the companies are committed to
enhance the capital of the plan projections.
Competitors’ information:
The company faces two types of competitors:

• Direct Competitors

• Indirect Competitors

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Directly the company shall have to face the
onslaught of LIC, the large customer base, accumulated
funds, well-established marketing machinery etc.
This is just one half of the story; there would be
the recently “off – the- block insurers” who would be
coming out with a variety of product variations and
many of them with parallel financial activities and
similar products. Just to name few: ICICI – Prudential,
HDFC-Standard Life, TATA-AIG, OM-Kotak, Max-New
York, SBI Life, etc.
These newer competitors are likely to be
aggressive and innovative. This direct competition, on
the flip side, could result in market expansion. The
Company shall also be facing competition is more
damaging. Indirect competition shows up in terms of
other financial instruments like Bank FSs, PPF, NSCs,
ULIP, Stocks land other similar savings instruments.
In view of the changing scenario as well as the
nature of the market we operate in, the task of
establishing a dynamic, progressive and a successful
company is both quite daunting and challenging. Some
of the challenges currently faced and to be faced in
future are:
1. Finding a suitable, motivated team
2. Tailoring an innovative product mix
3. Identifying a potential market niche’

M P BIRLA INSTITUTE OF MANAGEMENT 34


4. Servicing the client to the client’s complete
satisfaction
5. Designing a highly efficient system of controls,
analysis and trouble-shooting
6. Managing the funds better to consistently outperform
the market

Infrastructure Facilities :
1. All branches are computerized and linked in a wide
area network
2. There is inter branch connectivity a well as
connectivity with the head office
3. The main back and policy administration is a
Rs.6000 based COBOL-java system running on AIX with
DB2 database and a HTML front end
4. The sales illustration system is an interface system
with Java classes. The accounting system used is Sun
Accounting system, which interfaces with the Rs.6000
5. Birla Sun Life would provide Sales Illustration
Systems to every distributor and it can be loaded on
laptops also.
6. BSLI would be harnessing the IT advantage for
improving the effectiveness and efficiency of its
distribution channels.

M P BIRLA INSTITUTE OF MANAGEMENT 35


Chapter 2
Organizational structure:
ORGANISATION CHART
CEO

VP VP VP CHANNEL
MKT DSF CFO GROUP SALES

REGIONA
L
MANAGE BRANCH BRANCH BRANCH
R MANAGER MANAGER MANAGER

MARKETING MARKETING MARKETING


MANAGER MANAGER MANAGER

AGENCY AGENCY AGENCY


MANAGER MANAGER MANAGER

M P BIRLA INSTITUTE OF MANAGEMENT 36


Work Flow Model:

APPLICATION

ADDITION OF RIDERS

REQUIREMENT

ADDITION OF RIDERS

CHEQUE DISHONOUR

DISPATCH

REFUND

CLIENT SERVICES ID

COMMUNICATION CELL

M P BIRLA INSTITUTE OF MANAGEMENT 37


1) Application:

It contains all the information of proposer.

2) Addition of riders:

The customer if needed can take additional


insurance cover by taking a term rider, if he wants extra
coverage for accidents he could take accidental rider
and if he wants to be covered for critical medical
operations he could take critical illness rider. This is
termed as addition of rider.

3) Requirement:

It is the job of the underwriter that whenever a new


application is received by him, he evaluates the
customer based on the information provided by him
through the application and decides whether he could
be given insurance coverage or not. The information
which he would closely observe is sum assured and
premium proposes medical history, his habits, kind of
organization he is working etc .If the underwriter is not
satisfied with the available information he could demand
for additional information before issuing the policy.

M P BIRLA INSTITUTE OF MANAGEMENT 38


4) Cheque Dishonor:
If due to insufficient funds or due to signature
mistake or due to difference between words and
figures ,if the cheque given by the customer bounces
then organization can not proceed with issue of policy.
Then in that case a new cheque needs to be issued by
customer along with certificate of insurability.

5) Dispatch:
When the underwriter is fully satisfied with the
customer, he decides that he could be given insurance
cover. Then the policy document stating that client is
insured by Sun Life is sent to the clients mailing
address. This is termed as dispatch.

6) Refund:

Once the client receives the policy document he is


given 15 days of time called “Free look period” ,during
which he could give a second thought for his decision
and if he thinks that he doesn’t require the policy ,he
could return back the policy document .Then his entire
money that he ahs paid to the company would be
returned to him .This is termed as refund.

M P BIRLA INSTITUTE OF MANAGEMENT 39


7) Client Services ID :

If the customer doesn’t return the policy document


within the free look period, then it means that he has
accepted the policy and therefore his login ID and
password required to access his policy details online is
sent to his mailing address.

8) Communication Cell:

Birla Sun Life has a call center which the customer


can call anytime to get any information regarding his
policy.

Future Growth and Prospects:

The Birla Sun Life Company is expanding itself all


over India through its branches. Its already present in
more than 1000 towns in India. It has a huge
recruitment plan to meet its growing demand for
manpower. Through the kind of business that the
company has done till now, it is becoming the first
insurance company in India to achieve break even point.

M P BIRLA INSTITUTE OF MANAGEMENT 40


Chapter 3
Operational Departments &
Performance Evaluation
Performance evolution of concerned departments

FUNDAMENTAL DEPARTMENTS OF THE


ORGANISATION:

ACTUARY:
An efficient and successful life insurance business
is dependent on key functions of risk management. Our
team of professional actuaries is among the best in the
industry and is dedicated to create sound risk
assessment and pricing structure.

MARKETING AND COMMUNICATION:


Its objective is to bring the latent need of life
insurance into the conscious awareness of the Indian
Diaspora and building a brand that people of India can
trust and invest in.

M P BIRLA INSTITUTE OF MANAGEMENT 41


UNDERWRITING:
The underwriting team performs the key function of
assessing the risk on world class underwriting
standards. The team along with a nationwide panel of
Medical Evidence Providers acts as the backbone of the
company.

CLIENT SERVICING:
It services an existing base of over 1 lakh
policyholders which is constantly growing at a
compounding rate. The team is continuously evolving
efficiency levels n order to meet its committed
standards.

PRODUCT DEVELOPMENT:
A team dedicated to conceptualizing, product
features, set up the implementation and lead it to the
product launch with the active support of the other core
functions.

HUMAN RESOURCE:
In an ever growing and expanding company the key
role of recruiting and retaining the right talent and
efficient performance management system is a crucial
differentiator between a leader and any other company.

M P BIRLA INSTITUTE OF MANAGEMENT 42


IMPLEMENTATION ADMINISTRATION & CONTROL:
BSLI is the first company in the insurance industry
to implement “BCP – Business Continuity Plan” to take
care of any disaster which can strike the organization.
Under this plan, all the critical business data is mapped
off-site to another Birla Sun Life Insurance location in
another city. In case of any disaster, the BSLI team can
be up and running in less than 12 hours.

INFORMATION TECHNOLOGY:
BSLI boasts of the most advanced software
technology in the Life Insurance industry. Being a unit
linked product offering with customization, the
technology and back- end processing is done on the
universal platform on the world class ingenious system.
With this technology, customers can even track their
policy and fund details on the internet.

INVESTMENT:
The unit linked products offer the flexibility of
choosing from various investment options. An efficient
investment strategy within the frame work of the IRDA
guidelines is a crucial factor contributing to the success
of unit linked products in the market place.

M P BIRLA INSTITUTE OF MANAGEMENT 43


LEGAL AND COMPLIANCE:
Being a good corporate citizen and being complaint
is a work standard at BSLI. The compliance Process is
embedded in the work flow across the company.

FINANCE AND PLANNING:


A team dedicated to handle the day to day Finance
& Accounts operations of BSLI, in addition to the crucial
function of MIS and strategic planning enabled by the
top three private life insurance companies in India.

Skill:
Off the job training:
In Insurance industry it’s the customer who is
supreme and company’s revenue would directly depend
on it. So it requires the Direct Sales force of the
company to have good communication skills, since they
directly interact with the customer. To cater to this need
the organization provides for exclusive communication
skill improvement training from reputed organizations so
that their Direct Sales Force would interact in a better
way with the customers and emerge successful in
getting business from him.

BSLI would be harnessing the IT advantage for


improving the effectiveness and efficiency of its

M P BIRLA INSTITUTE OF MANAGEMENT 44


distribution channels. At the same time it uses IT
technology to meet the people. This requires its direct
sales force to be well versed in usage of computer and
Microsoft office products .Hence a complete training
catering to the IT needs of Direct Sales force is
provided by the organization.

On the job training:


After completion of off the job training, the
advisors would accompany agency managers for a few
meetings with the customer, so that the advisor could
understand the way he needs to put forth the product to
the customer. In the same way the new agency
managers would accompany the senior managers in
their client meetings to know how best they could sell
the product.

Style:
Top down Participative Decision Making:
In Birla Sun Life the decision regarding products,
company policies etc. is taken by the top level
management which will have to be followed by the low
level management namely branch mangers, agency
managers and advisors in all the branches. The
decision could be taken at the start of every financial

M P BIRLA INSTITUTE OF MANAGEMENT 45


year and also whenever a crisis arises in any
department.
In Birla Sun Life the top level management, before
taking the decision would conduct a lot of meetings
involving employees from all departments which would
be affected by the decision. From all these meetings
they would gather as much information as possible and
later only top level management would come up with a
final decision.
Strategies:

Birla Sun Life has put in carefully designed


strategies to move to the leading position in the life
insurance industry through continuous product
innovation, customer focus, cutting edge technology and
pricing strategy.

A. Product Innovation:

a) New product to be launched: Birla Sun Life is


planning to Launch a product which as 100% equity
exposure.
b) Customization of products: Birla Sun Life has
undertaken Customization of products to meet the
varying needs of diverse customers.

M P BIRLA INSTITUTE OF MANAGEMENT 46


B. Customer Focus:

a) Medical underwriting: It comes under the basis of


sum assured, premium, age, habit, medical history
of the customer. Company may ask customers to go
for medical check up.

b) Automatic premium loan: Before 1st July, 2006


automatic premium loan was there. But now
according to new IRDA guidelines this feature has
been removed.

c) Anytime premium: During the first 3 years of the


policy period the customer has to pay premiums
regularly. But after 3 years he could pay premiums
for every 2 years to keep the policy in force.

d) Web based services: Birla Sun Life has its own


website namely www.Birla Sun Life.com which
contains all the information regarding its insurance
products, the norms in the insurance industry, daily
unit values of its various funds etc. Every customer
is provided with a login id and password through
which he could get to know his policy status any
time any where in the world.

M P BIRLA INSTITUTE OF MANAGEMENT 47


e) Call center based services: Birla Sun Life has their
own call center known “TRANS WORKS” which
handles all types of queries which could come from
customer or office administration. This call center
could be reached by dialing 1800227000.

f) Free look period: Birla Sun Life was the first


company in India to introduce the concept of free
look period in which the customer upon receiving
the policy document is given time of 15 days,
during which he could return the policy to Birla Sun
Life, if he changes his mind .In that case the entire
money what the customer had paid to company will
be paid back to him.

g) Sales process safeguarding against wrong selling:


Whenever an advisor from Birla Sun Life would
meet the customer, he is expected to reveal all the
information to the customer regarding the product,
its charges, medical norms etc. He is also expected
to show the policy illustration to the customer
Later, the Agency Manager ,would check up with
the customer to know whether his advisor has
revealed him all the details or not. This is the
measure taken to prevent wrong selling from the
advisor.

M P BIRLA INSTITUTE OF MANAGEMENT 48


C. The technology edge:

a) All branches are computerized and linked in a wide


area network

b) There is inter branch connectivity a well as


connectivity with the head office

c) Birla Sun Life would provide Sales Illustration


Systems to every distributor and it can be loaded
on laptops also.

d) BSLI would be harnessing the IT advantage for


improving the effectiveness and efficiency of its
distribution channels.

D . P r i c i n g s t r a t e g y:

a) Birla Sun life has introduced a new product


called “Classic Life Premier” which has the least
policy charges among all its competitors and
hence the return from this product is very good.

b) Birla Sun life products have the least mortality


charges in the market.

M P BIRLA INSTITUTE OF MANAGEMENT 49


c) Birla Sun life has the least Fund Management
charges in the market.

Systems in BSLI:
Inventory control System in BSLI:
From the head quarters situated at Mumbai, to
every branch in India, inventory like product brochures,
applications, etc., are dispatched. At the local level a
count of all these is maintained to minimize wastage.
Merit Rating System in BSLI:
For each individual in the organization there is a
particular team in Human Resource Department which
monitors every individual performance on certain
parameters. Based on that the individual is promoted or
demoted.

Underwriting System in BSLI:


Introduction:

To underwrite means to assess and approve an


application for coverage thus accepting liability should
a loss occur?

The first stage of Underwriting begins with class


selection, which means the insurance company decides
to whom it is prepared to sell its products or how it

M P BIRLA INSTITUTE OF MANAGEMENT 50


sells. For example the company may decide that it
would canvass business from high net worth individuals
or employees of corporate bodies. The second stage is
when the agent approaches a potential client and
completes the application for coverage which would
include personal details of the proposed client, plan and
amount applied for; details of occupation, avocation,
income beneficiary, plus medical information such as
build family history and medical history. The third stage
is when the insurance company actually receives the
application forms. The company may obtain detailed
information about the life to be insured, his age, family
history of illness to find any hereditary disorders,
personal health history and financial information to
check the appropriateness of the chosen life cover
amount and other benefit cover sought.

Based on the information, the insurance company may


take the following decisions –

1. Accept the proposal at the company’s published


rates for the plan and term OR

2. Accept on modified terms subject to additional


financial or more detailed medical examination
OR

M P BIRLA INSTITUTE OF MANAGEMENT 51


3. Postpone the consideration of the insurance
proposal OR

4. Decline the case.

Staff in BSLI:
ACTUARY:
An efficient and successful life insurance business
is dependent on key functions of risk management.
Out team of professional actuaries is among the
best in the industry and is dedicated to create sound
risk assessment and pricing structure.
UNDERWRITING:
The underwriting team performs the key function of
assessing the risk on world class underwriting
standards. The team along with a nationwide panel of
Medical Evidence Providers acts as the backbone of the
company.
CLIENT SERVICING:
It services an existing base of over 10 lakh
policyholders which is constantly growing at a
compounding rate.

PRODUCT DEVELOPMENT:
A team dedicated to conceptualizing, product
features, set up the implementation and lead it to the

M P BIRLA INSTITUTE OF MANAGEMENT 52


product launch with the active support of the other core
functions.

HUMAN RESOURCE:
In an ever growing and expanding company the key
role of recruiting and retaining the right talent and
efficient performance management system is a crucial
differentiator between a leader and any other company.

IMPLEMENTATION ADMINISTRATION & CONTROL:


BSLI is the first company in the insurance industry
to implement “BCP – Business Continuity Plan” to take
care of any disaster which can strike the organization.
Under this plan, all the critical business data is mapped
off-site to another Birla Sun Life Insurance location in
another city. In case of any disaster, the BSLI team can
be up and running in less than 12 hours.
INFORMATION TECHNOLOGY:
BSLI boasts of the most advanced software
technology in the Life Insurance industry. Being a unit
linked product offering with customization,
the technology and back- end processing is done
on the universal platform on the world class ingenious
system. With this technology, customers can even track
their policy and fund details on the internet.

M P BIRLA INSTITUTE OF MANAGEMENT 53


INVESTMENT:
The unit linked products offer the flexibility of
choosing from various investment options. An efficient
investment strategy within the frame work of the IRDA
guidelines is a crucial factor contributing to the success
of unit linked products in the market place.
LEGAL AND COMPLIANCE:
Being a good corporate citizen and being complaint
is a work standard at BSLI. The compliance Process is
embedded in the work flow across the company.
FINANCE AND PLANNING:
A team dedicated to handle the day to day Finance
& Accounts operations of BSLI, in addition to the crucial
function of MIS and strategic planning to enable BSLI in
the top 3 private life insurance in India.
Shared Value:
Birla Sun Life Insurance was the first private life
insurer in India to introduce Unit-Linked life insurance
plans. A Unit-Linked plan is an auspicious coming
together of security from life insurance and earnings
from investments. Which means, apart from securing
one’s future, it offers efficient returns.

M P BIRLA INSTITUTE OF MANAGEMENT 54


4) Swot Analysis:

Strengths:

1) Birla Sun Life Insurance is the only company to give


3% guarantee on investments in ULIPS.
2) The large product line of BSLI catering to the needs
of customers of different age and risk appetite has been
strength of BSLI For example,
a) People who are looking for more returns can invest
maximum percentage in equities.
b) People who are looking for safe returns can invest
into govt. securities and nominal percentage of
equities.
c) As BSLI invest their fund in diversified portfolio so
the risk is low.

3) Birla Sun Life is the only company to give ULIP


policy for term of 100 years.

4) Birla Sun Life Insurance is the only one company in


INDIA to ask CRISIL to rate its funds.

M P BIRLA INSTITUTE OF MANAGEMENT 55


5) The name “BIRLA” is a house hold name in India and
hence people have trust over here.

6) BSLI would be harnessing the IT advantage for


improving the Effectiveness and efficiency of its
distribution channels. All branches are computerized
and linked in a wide area network.
There is inter branch connectivity a well as connectivity
with the head office. This gives the company an added
advantage to service its large customer base.

Weaknesses:
1) In this industry customer is supreme and revenues
are directly dependent on the number of customers BSLI
can get insured. This requires BSLI to have very
effective advertising strategy so as to popularize their
products among the masses. BSLI is found lacking in
this domain where even though their policies are as
powerful as any other competitors, their advertising
strategy is not at all effective.

2) The company should extend their services to


corporate employees where it is found to be lacking.

3) Birla Sun Life doesn’t have a fund that invests 100


percent into equities. So a customer who would like to

M P BIRLA INSTITUTE OF MANAGEMENT 56


take maximum advantage of equities would find it hard
to invest here.

Opportunities:

1) Only 7% of Indian population is insured till now. This


means that there is a great opportunity for the company
in coming years to capture the market.

2) The growing IT sector of INDIA would provide for an


excellent opportunity for BSLI to increase its sales

3) The growing knowledge about ULIPS among people


would only mean that BSLI has grater opportunities to
grow in coming years.

Threats:
1) Directly the company shall have to face the onslaught
of LIC.The large customer base, accumulated funds,
well-established marketing machinery etc.
2) This is just half of the story; there would be the
recently “off – the- block insurers” who would be coming
out with a variety of product variations. Many of them
with parallel financial activities and similar products.
Just to name few: ICICI – Prudential, HDFC-Standard
Life, TATA-AIG OM-Kotak, Max-New York, SBI Life, etc.

M P BIRLA INSTITUTE OF MANAGEMENT 57


These newer competitors are likely to be aggressive
and innovative. This direct competition, on the flip side,
could result in market expansion. The Company shall
also be facing competition is more damaging. Indirect
competition shows up in terms of other financial
instruments like Bank FSs, PPF, NSCs, ULIP, Stocks
land other similar savings instruments

M P BIRLA INSTITUTE OF MANAGEMENT 58


Learning Experience:
The in plant training gave me an opportunity to
know about money saving instruments in INDIA,
especially INSURANCE INDUSTRY.I could learn about
formation of LIC, its hold on Indian market till year
2000.I came to know about the formation of IRDA and
subsequently the advent of private players into India in
2001.In particular I came to know much about Sun Life
Financial Inc., it’s operations around the world etc. I
could also learn much about Birla Group, the various
fields into which they have entered and become market
leaders in those fields etc. In particular I could develop
a very good understanding of Birla Sun Life Insurance,
its emergence in Indian market and also came to know
that it was the first company to introduce ULIPS into
Indian market. I could have a thorough understanding of
how ULIPS operate and how they give better returns
than traditional policies by taking the advantage of
share market. I could gather a lot of information about
the various products offered by Birla Sun Life to its
customers, the features of those products. I came to
know that many of the features introduced by Birla Sun
Life to its products like:

M P BIRLA INSTITUTE OF MANAGEMENT 59


Chapter 4

Achievements:

1) Best Private Sector Life Insurer-outlook


money awards
2) Among Tops 5 Contenders for Life Insurance
Company of the year’ of 8 Asia Insurance
Industry awards
3) Ranked 23rd in the best employer’s survey by
Hewitt Associates among top 25 best places to
w o r k f o r 2 n d ye a r .
4) Among top 3 Contenders for `Strategy to
Execution’ of the 5th Aditya Birla Awards for
outstanding achievements, 2006.

M P BIRLA INSTITUTE OF MANAGEMENT 60


Microscopic Study Of
Human Resource
Department

M P BIRLA INSTITUTE OF MANAGEMENT 61


HUMAN RESOURCE
Human Resource Department has multiple goals. These
include employee competency and employee motivation
and organizational climate development. Employees
require a variety of competencies to perform different
tasks or functions required by their jobs. The nature of
jobs is constantly changing due to changes in the
environment, changes in organizational priorities, goals
ands strategies, changes in the profiles of fellow
employees, changes in technology, new opportunities,
new challenges, new knowledge base etc., such
changes in the nature of jobs require continuous
development of employee competencies to perform the
job well.
Human Resources Department also aims at preparing
people for performing roles, jobs, tasks, functions which
they may be required to perform in the future as they go
up on the organization hierarchy or as the organization
takes up new tasks through diversification, expansion,
modernization, economization etc.
Human Resource Department tries to develop potential
of employees for future likely jobs in the organization.

M P BIRLA INSTITUTE OF MANAGEMENT 62


The success of any organization in the long run
depends very much on the quality of its human
resources. Human Resources comprise the aggregate of
employee attributes including knowledge, skill,
experience and health, which are presently and
potentially available to an organization for the
achievement of its goal. Of all the prime resources of an
organization, men, materials, money and machine the
human resources is recognized as the most vital and
the most valuable .For it is the quality of manpower that
ultimately determines the success of an organization.
HRD provides the platform for superior performance in
organization since the success of organization depends
upon its employees and its relation with its internal and
external customers, So HRD must keep all such factors
insight before formulating any strategy.
Human Resource Department is one of the core
departments of an organization and it also plays a vital
role in the development of the organization ICICI
Prudential considers its human resource as the most
valuable asset of its organization.

Human resource policies:


Policy is a course of action or statement of intention
committing the management to general course of action
when the management drafts a policy statement to

M P BIRLA INSTITUTE OF MANAGEMENT 63


cover some features of its personal programme’s of the
statement may often contain an expression of
philosophy and principle as
Well ICICI has several policies regarding the fulfillment
of goals set by the management such as:

1) Recruitment policies:
The recruitment is carried out from both external &
internal are:
1. Present employees
2. Employee referrals
3. Former employees.
External Sources:
The following external sources are:
1. Campus recruitment
2. Print media
3. Electronic media

2) Selection
Selection is carried out in three major stages:
1. Preliminary interview
2. Selection test
3. HR Interview

M P BIRLA INSTITUTE OF MANAGEMENT 64


3) REMUNERATION AND INCENTIVES
The organization offers attractive remuneration and
incentives to attract the budding youngsters and to
maintain its present employees.

4) SALARY
Attractive salaries and other extra incentives based on
their performance.

5) Reimbursement policy
Reimbursing the telephone and , electricity bills etc.

6) Leave policy
Giving leaves in certain occasions and even tour offers
to employees to foster interest in them for organization.

OTHER HUMAN RESOURCE POLICIES


Goal setting
Medi claim policy
Company accommodation policy
Mobile Phone policy
Credit card policy
Travel policy

M P BIRLA INSTITUTE OF MANAGEMENT 65


Human Resource Planning
Human Resource Planning includes the estimation of
how many qualified people to carry out the assigned
task, how many people will be available, and what if
anything ,must be done to ensure that personnel supply
equals personnel demand at the appropriate point in
future. Specifically Human Resource Planning is the
process by which an organization ensures that it has
the right no. and kind of people, at the right place, at
the right time, capable of effectively and efficiently
completing those tasks that will help the organization to
achieve its overall objectives. Human Resource
Planning translates the organizational objectives and
plans into the number of workers
Needed to meet those objectives .Without a clear-cut
planning and estimation of organization’s human
resource need is reduced to more guesswork

Recruitment process
Right people at the right place at the right time plays a
major role in the recruitment process in any
organization. Because of extreme competition in today’s
world, organizations need to have a very efficient and
effective recruitment process, which saves time and in
turn results in reducing the cost of recruitment process.

M P BIRLA INSTITUTE OF MANAGEMENT 66


Many Internal and External Factors govern the
recruitment process.
Five stages of recruitment process: are
1 Planning
2 Strategy Developments
3 Searching
4 Screening
5 Evaluations and Control
Methods of recruitment process like Web recruitment,
Applicant Tracking system and Outsourcing can be used
to cut down the cost and time involved.
According to the review of literature successful
recruiting involves three steps:
1 Defining the needs
2 Spreading the word
3 Using the Internet.
It is possible to improve the current status of the
recruitment cycle time by
1. Conducting all the interview rounds in two or three
rounds
2. Making candidates to join early.
3. Improving the various steps in the process.
4. removing the non- value adding activities.

M P BIRLA INSTITUTE OF MANAGEMENT 67


Type of recruitment:
How to look How to look refers to the methods or
sources of recruitment. These are several sources and
they may be broadly categorized into
1) Internal
2) External

Internal recruitment
Internal recruitment seeks, applicants for the positions
those who are currently employed. Internal sources
include present employees, employee referrals, former
employees and former applicants.
There are three major advantages of internal
recruitment.
1 Firstly, it is less costly that external recruitment.
2 Secondly, organizations typically have a better
knowledge of the internal candidate’s .skills and
abilities than the ones acquired through external
recruiting.
3 Thirdly, an organization policy of promoting from
within can enhance employee’s morale, organizational
commitment and job satisfaction. Good performance is
rewarded

There are few disadvantages of internal recruitment.

M P BIRLA INSTITUTE OF MANAGEMENT 68


1 One theory is that the method simply perpetuates the
old concept of doing things that creative problem
solving may be hindered by the lack of new talents.
2 Some organizations complain of unit raiding in which
divisions compete for the same people.
3 Thirdly, politics probably has a greater impact on
internal recruiting and selection than does external
recruiting.
4 Candidate’s current work may be affected.
External recruitment
External sources far outnumber the internal methods.
Specifically sources external to an organization are
professional or trade associations, ads, employment
exchanges, college/university/institute placement
services, walk ins and write ins, consultants,
contractors, displaced persons, radio and television,
acquisitions and mergers and competitors.

There are three advantages of external recruitment:


1 Benefits of new skills and new talents and new
experiences to organizations
2 Compliance with reservation policy becomes easy
3 Scope for resentment, jealousies and heart bum are
avoided
There are few disadvantages also of external
recruitment as:

M P BIRLA INSTITUTE OF MANAGEMENT 69


4 Better morale and motivation associated with internal
recruiting is denied to the organization
5 It is costly
6 Chances of creeping in false positive and false
negative errors. Adjustment of new employees to the
organizational culture takes longer time.

Orientation
Orientation is also called induction, is designed to
provide a new employee with the information he or she
needs to function comfortably and efficiently in the
organization.
Purpose of orientation
Organizations are often known to spend few weeks or
even months on orientation programme the idea is to
make the employee feel at home. In the new
environment it is well known fact that employees feel
anxious on entering in organization, induction is a
method to reduce this anxiety.

Training and development


It will be company’s endeavor to recognize the value of
its human resources for their growth. The company is
committed to provide adequate opportunity to
employees to neigh their knowledge skills attitudes,
contributing to steady growth of the company and

M P BIRLA INSTITUTE OF MANAGEMENT 70


feeling proud of working for the company. Methodically
identifying needs for employees to upgrade their
knowledge sharpen skills and improve attitude for
improving performance at their present and future
function.
Imparting such training to employees after assessing
their capabilities and potentials, various types of
training techniques are employed
FEEDBACK is one significant method for evaluation.

Training may be undertaken on the basis of career


development plans. Training can be part of Quality of
Work Life programmers and organization Development.
Training can be used as a reward.
Inputs in training and development are
1 Skill
2 Educations
3 Developments
4 Business Ethics
5 Attitude change
6 Enhancement of decision-making and problem -
solving skills.
Methods of training:
1. Lecture
2. Audio-visuals
3. On-the-job training

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4. Programmed instruction
5. Computer assisted instruction simulation
6. Case study
7. Role playing
8. Vestibule training
9. Sensitive training, etc.

Human Resource Development:


Human Resource Development is said to be the core of
a larger system known as Human Resource System
(HRS), wherein Human Resource Development is mainly
concerned with providing learning experience for the
people associated with an organization through a
behavioral approach adopting various processes. In a
broader sense, the term Human Resource Development
means those learning experiences, which are organized
for a specific time and designed to bring about the
possibility off behavioral change.

Human Resource Development goals include


1) Develop the individual to realize his potential as an
individual to the maximum extent;
2) Develop the individual’s capabilities to perform his
present job better;
3) Develop the capabilities to handle future likely roles;

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4) Develop and maintain a high motivation level of the
employees; strengthen superior. Subordinate
relationships;
5) Strengthen team spirit among different teams;
6) Promote inter team collaboration: and promote
climate development and organizational health
development.
7) Human resource management views people as an
important source or asset to be used for the benefit
of organizations, employees and society. It is
emerging as a distinct philosophy of management
aiming at policies that promote mutuality, mutual
goals, mutual respect, mutual rewards and mutual
responsibility. The belief is that policies of mutuality
will elicit commitment, which in turn will yield both
better economic performance and greater human
resource development. Though a distinct philosophy,
human resource management cannot be treated is
isolation. It is being integrated into the overall
strategic management of business.

HRD Instruments, Processes and Outcomes

There are many instruments that can be used to


facilitate Human Resource Development. These
instruments may be called sub-systems or methods or

M P BIRLA INSTITUTE OF MANAGEMENT 73


techniques or aids. Each instrument or sub-system
focuses on some aspects of human Resource
Development. To have a comprehensive HRD many of
these instruments may needed to be used
simultaneously. Human Resource Development in the
organization context refers to the process whereby the
employees are continuously helped in a planned way to:
Acquire or sharpen capabilities required to perform
various tasks and functions associated with their
present or future expected roles;
Develop their general enabling capabilities as
individuals so that they are able to discover and exploit
their own inner potential for their own and or
organizational development purposes;
Develop an organizational culture where superior.
Subordinate relationships teamwork and collaboration
among different sub-units are strong and contribute to
the professional well being, motivation and pride of
employees.

Human Resources Information System


Human resources information or Management
Information systems (MIS) helps in determining
organization’s major human resources needs strategies
and philosophies.

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The instruments of Human Resources Development are
many. Human Resource Development instruments
should lead to the generation of Human Resource
Development processes like role clarity, performance
planning, and development climate, risk-taking and
dynamism in employees. Such a Human Resource
Development process should result in more competent
satisfied and committed people who, by their
contributions, would make the organization grow. A
model explaining the linkages between Human Resource
development instruments, processes outcomes and
organizational effectiveness is presented.

HR PRINCIPLES
The organization believes that development of employee
is in its own interest. The organization will provide
opportunities and conditions for the development and
optimization of human resources.
1. The management is willing to invest adequate time
and resources for the development of the employees
and personally participate in the development.
2. Managers have concern for growth of subordinates.
3. Employees are willing to avail of given opportunities
for growth and receive such help from the managers as
may be necessary for this development and improving
performance.

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The main objective of the HRD department is to create a
learning environment and development climate in the
organization. By learning environment is meant a
culture where employees continuously learn from their
own experience and the various learning opportunities
the organization provides. The HRD department should
create an .enabling Culture called Appolo Culture where
the employees are able to make things happen and in
the process discover and utilize their potential.
The most frequently used instruments are the following:

Performance Appraisal
Performance Appraisal data forms basis for decisions
for developing the potential employee for higher. Level
jobs and is basis for feedback and counseling.
Performance Appraisal data indicates the job training
needs of each individual the main appraisal method
used by Birla Sun Life is 360 degree
There are two major ways of performance appraisal
1) Past-oriented methods
2) Future-oriented methods
Each group has several techniques. Some of them are
explained in the following Section.
The term used to describe a performance rating that
focuses on specific behaviors or sets as indicators of
effective or ineffective performance, rather than on

M P BIRLA INSTITUTE OF MANAGEMENT 76


broadly stated adjectives such as "average, above
average, or below average". Other variations are:
1) Behavioral observation scales
2) Behavioral expectations scales
3) Numerically anchored rating scales

System of appraisal

In 360 degree system of appraisal, rating is done by the


employee’s immediate supervisor, his or her immediate
subordinates etc., Arthur Anderson survey reveals that
20% of the organizations use the 360 degree system to
assess the talents, behavioral aspects, values, ethical
standards, temper, loyalty by the people who are the
best placed to do it.

Employee benefits:
Employee benefits and services include any benefits
that an employee receives in addition to direct
remuneration. Employee benefits embrace a broad
range of benefits and services that employees receive
as a part of their local compensation package. Pay and
directly compensations it is based on critical job factors
and performance. Benefits and services, however, are
indirect compensation because they are usually
intended as a condition of employment and or not

M P BIRLA INSTITUTE OF MANAGEMENT 77


directly related to performances. Few benefits are as
follows:
1) Leally required payments as unemployment payment
and worker’s compensation
2) Continent and deferred benefits as pension plans,
group life insurance, prepaid legal plans, and military
leave and pay.
.
Potential Appraisal Development (PAD)
Potential Appraisal Development is based on career
plans and career plans are prepared by using Potential
Appraisal Development data.
Training may be provided to develop candidates with
potential.
Feedback Performance Coaching (FPC)
Feedback and Performance Data can be used to monitor
individual development and the data can be used for
identifying training. Career counseling and verbal
rewards can be part of feedback.

Career Planning (CP)


Career Planning data are used for human resources
audits and career planning and help in conducting
research on promotion patterns for Organization
Development programmers.

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Employee Welfare and Quality of Work Life
Group efforts can be rewarded through quality of work
life measurers. Quality of work life improvements can be
part of organization Development activities.

Rewards
Performance Data is used for rewards and reward data
are entered for development

Grievance
Grievance procedure is one of the techniques of
resolving disputes. All labor agreements contain some
form of grievance procedure. And if people follow it
strictly any dispute can be resolved very easily. Terms
which give rise to grievances is:
1) Violation of law
2) Violation of company rules
3) Violation of health and safety measures
4) A change in working condition or past company
practices
5) Violation of the intent of the parties as stipulated
during contract negotiations.
There are few other techniques available as collective
bargaining and code of discipline.

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Challenges faced by Human Resource
In and organization like Birla Sun Life; it is a very big
challenge to handle all the HR related issues. Here the
role of a HR manger and his personal insight to tackle
situation comes into picture. There are few challenges
faced by the HR manger in Birla Sun Life
1) Department outsourcing HR activities
2) BPO and call centers
3) To balance workers work-life
4) To make HR activities ethical
5) To manage diversity
6) Attitude towards different work groups
7) Globalization
8) Organizational restructuring
9) Changing demographics of work-force
10) Changed employee’s expectations
11) challenges

PERFORMANCE APPRAISAL
Performance appraisal may be defined as a structured
formal interaction between a subordinate and
supervisor, that usually takes the form of a periodic
interview (annual or semi-annual), in which the work
performance of the subordinate is examined and
discussed, with a view to identifying weaknesses and
strengths as well as opportunities for improvement and

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skills development. In many organizations - but not all -
appraisal results are used, either directly or indirectly
to help determine reward outcomes. That is, the
appraisal results are used to identify the better
performing employees who should get the majority of
available merit pay increases, bonuses, and promotions.
By the same token, appraisal results are used to
identify the poorer performers who may require some
form of counseling, or in extreme cases, demotion,
dismissal or decreases in pay. Whether this is an
appropriate use of performance appraisal - the
assignment and justification of rewards and penalties -
is a very uncertain and contentious matter.

Basic Purposes
Effective performance appraisal systems contain two
basic systems operating in conjunction: an evaluation
system and a feedback system.
The main aim of the evaluation system is to identify the
performance gap (if any).
This gap is the shortfall that occurs when performance
does not meet the standard set by the organization as
acceptable. The main aim of the feedback system is to
inform the employee about the quality of his or her
performance.

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(However, the information flow is not exclusively one
way. The appraisers also receive feedback from the
employee about job problems, etc.)
One of the best ways to appreciate the purposes of
performance appraisal is to look at it from the different
viewpoints of the main stakeholders: the employee and
the organization.

Employee Viewpoint:
From the employee viewpoint, the purpose of
performance appraisal is four-fold:
(1) Tell me what you want me to do
(2) Tell me how well I have done it
(3) Help me improve my performance
(4) Reward me for doing well.

Organizational Viewpoint:
From the organization's viewpoint, one of the most
important reasons for having a system of performance
appraisal is to establish and uphold the principle of
accountability.
For decades it has been known to researchers that one
of the chief causes of organizational failure is "non-
alignment of responsibility and accountability."
Nonalignment occurs where employees are given
responsibilities and duties, but are not held accountable

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for the way in which those responsibilities and duties
are performed. What typically happens is that several
individuals or work units appear to have overlapping
roles. The overlap allows - indeed actively encourages -
each individual or business unit to "pass the buck" to
the others.
Ultimately, in the severely non-aligned system, no one
is accountable for anything. In this event, the principle
of accountability breaks down completely. Rganizational
failure is the only possible outcome.

Formal versus Informal appraisal


Formal appraisals usually occur at specified time
periods-once or twice a year. Ormal appraisals are most
often required by the organization for the purpose of
employee evaluation. Informal performance appraisal
can occur whenever the supervisor feels the needs for
communication. Many organizations encourage a fixture
of both formal and informal appraisals. The formal
appraisal is most often seed as primary evaluation.
However, the informal appraisal is very helpful for more
performance feedback. Informal appraisals should not
take place of formal Performance evaluation

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Whose performance should be rated?
To the question as to whose performance should be
rated, the answer is obvious employees. When we say
employees, is it individuals or teams? Specifically, the
team may be defined as the individual, work group,
division, or organization. It is also possible to define
the rate at multiple levels. For example, under some
conditions, it may be desirable to appraise performance
both at the work-group level for merit-pay increases and
at the individual level to assess training needs.

Who are raters?


Raters can be immediate supervisors, specialists from
the HR department, department, subordinates, peers,
committees, clients, self .appraisals, or a combination
of several.

Problems of rating
Performance appraisals are subject to a wide variety of
inaccuracies and biases referred to as .rating errors..
These errors occur in the rater’s observations,
judgments, and information processing, and can
seriously affect assessment
Results: The most common rating errors are
1) Leniency or severity
2) Central tendency

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3) Halo effect
4) Rater effect
5) Primacy and Regency effects
6) Perceptual set
7) Performance dimension behaviors
8) Spill over effect
9) Status effect

Solving raters problems


The best way to overcome these problems is to
providing training to the raters. From a practical point of
view, several factors, including the extent to which pay
is related to performance ratings, union pressure,
turnover rates, time constraints and the need to justify
ratings may be more important than training, influencing
the ratings that raters actually give. This means that
improving rating systems involves not just training the
raters but rectifying outside factors such as union
pressure. And it means that a rater training, to be
effective, should also address real-life problems such
as the fact that union representatives will try to
influence supervisors to rate everyone high. Training
helps to improve the appraisal system by overcoming
distortion that occurs due to the raters, errors such as
halo, leniency, central tendency and bias. Training of
raters must help strengthen the factors that tend to

M P BIRLA INSTITUTE OF MANAGEMENT 85


improve accuracy of ratings and weaken those that
lower the accuracy of the performance measurement.

W h a t s h o u l d b e r a t e d?
One of the steps in designing an appraisal programme
is to determine the evaluation criteria. It is obvious that
the criteria should be related to the job. The six criteria
for assessing performance are:
1) Quality
2) Quantity
3) Timeliness
4) Cost effectiveness
5) Need for supervision
6) Interpersonal impact

Methods of Appraisals
The last to be addressed in the process of designing an
appraisal programme is to determine method(s) of
evaluation. Numerous methods have been devised to
measure the quantity and quality of employee’s job
performance.

Each of the methods discussed could be effective for


some purposes, for some organizations. None should be
dismissed or accepted as appropriate except as they

M P BIRLA INSTITUTE OF MANAGEMENT 86


relate to particular type of employees. Broadly all
approaches can be classified into:
1) Past-oriented methods
2) Future-oriented methods
Each group has several techniques. Some of them are
explained in the following section.

Behavioral Anchored Rating Scales


The term used to describe a performance rating that
focuses on specific behaviors or sets as indicators of
effective or ineffective performance, rather than on
broadly stated adjectives such as "average, above
average, or below average". Other variations are:
1. Behavioral observation scales
2. Behavioral expectations scales
3. Numerically anchored rating scales
Checklists
The term used to define a set of adjectives or
descriptive statements. If the rater believes the
employee possessed a trait listed, the rater checks the
item; if not, the rater leaves him item blank. Rating
score from the checklist equals the number of checks.

Critical Incident Technique


The term used to describe a method of performance
appraisal that makes lists of statements of very

M P BIRLA INSTITUTE OF MANAGEMENT 87


effective and very ineffective behavior for employees.
The lists are combined into categories, which vary with
the job. Once the categories are developed and
statements of effective and ineffective behavior
provided, the evaluator prepares a log for each
employee. During the evaluation period, the evaluator
records examples of critical behaviors in each of the
categories, and the log is used to evaluate the
employee year end.

Forced Choice Method


This appraisal method has been developed to prevent
evaluators from rating employees to high. Using this
method, the evaluator has to select from a set of
descriptive statements, statements that apply to the
employee. The statements are weighted and summed to
at, effectiveness index.

Forced Distribution
The term used to describe an appraisal system similar
to grading on a curve.
The evaluators are asked to rate employees in some
fixed distribution of categories. One way to do this is to
type the name of each employee on a card and ask the
evaluators to sort the cards into piles corresponding to
rating.

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Graphic Rating Scale
The term used to define the oldest and most widely
used performance appraisal method. The evaluators are
given a graph and asked to rate the employees on each
of the characteristics. The number of characteristics
can vary from one to one hundred. The rating can be a
matrix of boxes for the evaluator to check off or a bar
graph where the evaluator checks off a location relative
to the evaluators rating.
Narrative or Essay Evaluation
This appraisal method asks the evaluator to describe
strengths and weaknesses of an employee's behavior.
Some companies still use this s method exclusively,
whereas in others, the method has been combined with
the graphic rating scale.
Management by Objectives
The management by objectives performance appraisal
method has the supervisor and employee get together to
set objectives in quantifiable terms. The appraisal
method is worked to eliminate communication problems
by the establishment of regular meetings, emphasizing
results, and by being an ongoing process where new
objectives have been established and old objectives are
modified as necessary in light of changed conditions.

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Paired Comparison
The term used to describe an appraisal method for
ranking employees. First, the names of the employees
to be evaluated are placed on separate sheets in a
predetermined order, so that each person is compared
with all other employees to be evaluated. The evaluator
then checks the person he or she feels has been the
better of the two on the criterion for each comparison.
Typically the criterion is the employees over all ability
to do the present job.

Ranking
The term ranking has been used to describe an
alternative method of performance appraisal where the
supervisor has been asked to order his or her
employees in terms of performance from highest to
lowest.

Weighted Checklist
The term used to describe a performance appraisal
method where supervisors or personnel specialists
familiar with the jobs being evaluated prepared a large
list of descriptive statements about effective and
ineffective behavior on jobs.

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Performance Interview
Performance Interview is another step in the appraisal
process. Once the Appraisal has been made of
employees, the raters should discuss and review the
performance with the rates, so that they will receive
feedback about where they stand in the eyes of the
superiors. Feedback is necessary to effect improvement
in performance, especially when it is adequate.
Specifically Performance Interview has three goals
1) To change behavior of employees. Whose
performance does not meet Organizational
requirements or their own personal goals?
2) To maintain the behavior of employees who perform
in an acceptable manner,
3) To recognize superior performance behavior so that
they will be continued.

Use of appraisal data


The final step in the evaluation process is the use of
evaluation data. The HR department must use the data
and information generated through performance
evaluation. In one way or the other, data and
information outputs of a performance appraisal
programme can critically influence employer-employee
reward opportunities.

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Specifically the data and information will be useful in
the
1) Following areas of HRM
2) Remuneration administration
3) Validation of selection programs
4) Employee training and development programs
5) Promotion, transfer and lay-off decisions
6) Grievance and discipline programs
7) HR planning

Performance Management verses Performance


Appraisal
The shift from performance appraisal to performance
management requires a shift in focus from a single
event to a continuous process. The process provides
employees with direction and support via a detailed
performance plan composed of goals, action steps,
measurements, and coaching throughout the yearlong
cycle. Performance management is different from the
single appraisal because it:
1) Begins with planning at the beginning of the year to
clarify job expectations and accountabilities between
employee and manager
2) Eliminates current employee concerns that
expectations are vague or not articulated

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3) Turns the appraisal document and appraisal meeting
into the year-end feedback summary and previous
meetings on performance

Findings of the Study


1) It can be inferred by the study that the employees are
aware of the present Performance appraisal System
followed in the company.
2) Most of the executives are satisfied with the
performance appraisal system followed in the
company. This shows that the present performance
appraisal system is satisfactory
3) Further improvement in the system can be made in
order to attain full satisfaction of the
employees/executives of the company.
4) Greater part agrees that the performance standards
set are clear and achievable..
5) Majority of the employees favored training for the
appraisers to carry appraisal programme..
6) In response to the company spending of considerable
time and attention for the performance appraisal
system, most of the employees felt that the company
spends the necessary time and attention in following
the Performance appraisal System,

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7) Most of the executives surveyed are satisfied with the
Self-Appraisal process being followed in the
company.
8) It can be said that the present system of performance
appraisal is effective in bringing out the performance
feed back by the reviewing and reporting officers.
9) Most of the employees agree that the help and
guidance provided is sufficient indicating that the
management spends considerable time on providing
employees with help and guidance.

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Chapter 5
Recommendations & Suggestions:

¾ IRDA use traditional mode of training and


marketing which should be replaced with the use of
latest emerging technologies.
¾ Regular feedback is recommended to know the like
& dislike and also expectations of the Customers.
¾ Proper weightage should be given to improve the
communication skill of the advisors so as to
improve customer relations.
¾ During training to advisors importance should be
given to provide the most important information to
them like making well aware about the products of
their organization.
¾ Marketing materials received before the advisor
reaches the customer should add value to the
product preparing more awareness in customers.

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Chapter 6
Conclusion

In present scenario, there is a cut-throat competition


among the companies to get more and more prospects
to buy their various products. The only way to achieve
the target is train the insurance advisors in the best
possible way.

Birla Sun Life Insurance uses all those possible


tools and latest techniques like software for calculating
premiums, etc which helps their insurance advisors to
sell more of their products. They have shown a lot of
creativity and innovation in their training programs and
have succeeded in achieving the desired outcome.

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BIBLIOGRAPHY
1. COMPANY BROUCHURES AND PAMPHLETS
2. COMPANY ANNUAL RECORDS
3. www.birlasunlife.com
4. www.google.com

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