RECRUITMENT PROCESS IN INSURANCE COMPANY

EXECUTIVE SUMMARY P r o je c t s t u d y r e p o r t c o n s i s t s o f b r i e f d e s c r i p t i o n o f c o mp a n y S B I L I F E INSURANCE CO. LTD., SIKAR, the special focus on the human resources. My topic was Recruitment Process in Insurance Company along with significant findings & suggestions that give idea how many the employees in the company are satisfied and not satisfied with welfare facility of the company. Recruitment is the process of searching the candidates for employment a n d s t i m u l a t i n g t he m t o a p p l y f o r jo b s i n t h e o r g a n i z a t i o n . I n t h e o t h e r wo r ds recruitment is the activity that links employers and job seekers. Recruitment procedure of SBI Life Insurance is very easy. A person with high educating and well experience can be recruited after a personal interview a n d g r o u p d i s c u ss i o n . A f t e r t h e t r a i n i n g p r o g r a m i s c o mp l e t e d t h e i n s u r a n c e agent has to appear for the pre-examination conducted by IRDA. As he clear the exam he provides a license, which is the proof of a legalized insurance agent, which permits him to deal in his insurance business. Recruitment of candidates is the function preceding the selection, which h e l p s c r e a t e a p o o l o f p r o s p e c t i v e e mp l o ye e s f o r t h e o r g a n i z a t i o n s o t h a t t h e management can select the right candidate for the right job from this pool. The main objective of the recruitment process is to expedite the selection process. Recruitment is a continuous process whereby the firm attempts to developa pool of qualified applicants for the future human resources needs even though specific vacancies do not exist. Usually, the recruitment process starts when a manger initiates an employee requisition for a specific vacancy or an anticipated vacancy. Chapter 1 Introduction to the Industry Introduction Insurance Industry Life Insurance Life Insurance in India

INTRODUCTION TO THE INDUSTRY 1.1 Introduction

The insurance sector was opened up in the year 1999 facilitating the entry of private players into the industry. With an annual growth rate of 24.31 percent and the largest number of life insurance policies in force, the potential of the Indian insurance industry is huge. The year 1999 saw a revolution in the Indian insurance sector as major structural changes took place with the ending of Government monopoly and the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. According to the CSO, the insurance and banking services contribution to the countrys GDP is 7.1 percent out of which the gross premium collection forms a significant part. Life insurance penetration in India was less than 1 percent till1990-91. During the 90s, it was between 1 and 2 percent and from 2001 it was over 2 percent. In 2003-04 it was 2.4 percent. In 2007-08 it was 14percent.The impetus for increase is due to the active role played by IRDA in licensing private players and taking positive steps in increasing the insurance awareness among the people. Besides, the insurance companies in general and private insurance companies in particular, are reaching out to untapped potential in rural areas with aggressive campaigns. Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Life insurance is viewed as a tax saving device. People are now turning to the private sector for providing them with new products and greater variety for their choice. The improvement in FDI flows reflected the impact of recent initiatives aimed at creating an enabling environment for FDI and for encouraging infusion of new technologies and management practices. The Governments proposal to increase the FDI cap in the insurance sector from the present 26 percent to 49 percent has raised expectations among the international insurance companies.

1.1.1Definition Insurance is a contract in which sum of money is paid to the assured inconsideration of insurers incurring risk of paying a large sum upon a given contingency. --- Justice Tindall Insurance is a contract by which one party for a compensation called in the premium assumes particular risks of the other party and promises to pay to him or his nominee a certain sum of money on a specified contingency. ---E.W. Fitterson Insurance may be described as social device whereby a large group of individuals, through a system of equitable contribution, may reduce certain measurable risk of economic loss common to all members of the group. --- Encyclopedia Britannica The above definitions clearly shows that insurance is a cooperative device to spread the loss caused by a particular risk over a member of persons who are exposed to it and who agree to insure themselves against risk. Insurance does not eliminate risk but only reduces the financial burden, which may be very heavy. 1 .1.2Evolution of Insurance In the days of yore insurance was in its crude form and was cooperative and voluntary in nature. When, where and how it originated is still a matter of research in one way or the other was prevalent in olden days. We can trace its history from the evolution society from hunting stage to the modern industrial age. A word YAGCHHEM occurs in the worlds most ancient Hindu Scripture Rig Veda. The word YAGCHHEM means insurance. It clearly indicated that about four thousand years ago insurance was prevalent in its crude form. It was cooperative and voluntary in nature. People formed different groups of organizatio ns to share the loss among themselves in case of a particular risk.Each member contributed some amount to a common fund to meet theunforese en losses. Sometimes they also contributed equally to compensateperson as and

when he suffered a loss. Traces of insurance in the ancient world are also found in the form of marino trade loans or carriers contracts which included an element of insurance. Evidence is on records that arrangements embodying the idea of insurance were made in Babylonia and India at quite an early period. References were made to the concept of insurance in Manus code Manu Smrity. It was akin to Yagakshemo of Rigveda in which the well being and security of the community was aimed at. However, there is no evidence that insurance in its present farm was practiced prior to twelfth century. 1.1.3Nature of Insurance The insurance has the following characteristics which are observed in cases of life, marine, fire and general insurance. Sharing of risks: Insurance is a cooperative device to share the financial losses which might befall on an individual or his facility on the occurrence of specified event such as sudden death of the bread winner, marine perils in marine insurance, fire in the fire insurance and theft insurance etc. in the case of general insurance. 2. Cooperative device: A large number of persons agree to share the loss arising sue to a particular risk. Thus, insurance is a cooperative device. 3. Value of risk: The risk is evaluated before insuring to charge the amount of share called premium. 4. Payment made at contingency: The payment is made at a certain contingency insured. The Contingency may be death, fire, marine perils etc. 5.Amount of payment: The amount of payment depends upon policy insured.

1.1.4 Functions of Insurance A) Primary Functions 1) Insurance provides certainty: Insurance provides certainty of payments at the uncertainty of losses. The element of uncertainty is reduced by better planning and administration. 2) Insurance provides protection: The risk will occur or not, when will occur and how much loss will be there. There are uncertainties of happening of time and amount of losses. The main function of the insurance is to provide protection against the losses. 3 ) Ri s k s h a r i n g : Risk is uncertain and therefore, the loss arising from the risk is also uncertain. All business concern faces the problem of the risk and if the concern is big enough the handling of riskbecomes a specialized function. Insurance, as a device is theoutc ome of the existence of various risks in our day to day life. It spreads the whole losses over a large number of persons who are exposed by a particular risk. B) Secondary Functions 1) Prevention of loss: Prevention is always better than cure. Prevention is by far the best solution to the problem of risk. It ismore effective and cheapest method to avoid the unfortunateconsequence. But sometimes prevention is not always possible and Effective. 2) Provides capital: It provides the capital to the society. For plan development of country there is a great need for huge amountof capital. Now days, the insurance companies are renderingpositive help in the development of trade, commerce and industry of the country. 3) Improves efficiency:

Achievement of goals, it improves not only his efficiency of the masses is also advanced. The insurance eliminates worries and miseries of losses as death and destruction of property care free person can devote his energies for better. 4) Ensures the welfare of society: Insurance is a saga of service and security to thee society. Security of the life andproperty given by insurance bring peace of mind to the insured. The investment in LIC in welfare schemes like electricity, housing, water supply, agro industry estates are able to solve many problems in India. 5) Helps in economic progress: Insurance provides an initiative to work hard for the betterment of the masses. Life insurance involves the element of saving investment through small savings. And which has been growing in recent years at an annual rate of about Rs. 400 crs. Life insurance is not a mere businessorganization; it has n obler welfare responsibilities in the development of the economy.

1.2 1.2.1Introduction

INSURANCE INDUSTRY

Wi t h a n a n n u a l g r o wt h r a t e o f 1 5 - 2 0 % a n d t h e l a r g e s t n u mb e r o f l i f e insurance policies in force, the potential of the Indian insurance industry is huge. To t a l v a l u e o f t h e I nd i a n i n s u r a n c e ma r k e t ( 2 0 0 4 - 0 5 ) is e s t i ma t e d at R s .4 5 0 b i l l i o n ( US $ 1 0 b i l l i o n ) . A c c o r d i n g t o g o v e r n me n t s o u r c e s , t h e i n s u r a n c e a n d banking services contribution to the country's gross domestic product (GDP) is7% out of which the gross premium collection forms a significant part. The funds available with the state-owned Life Insurance Corporation (LIC)f o r i n v e s t m e n t s a r e 8 % o f G D P . T i l l d a t e , o n l y 2 0 % o f the total insurablepopulation of India is covered under vari

o u s l i f e i n s u r a n c e s c h e m e s , t h e penetration rates of health and other non-life insurances in India is also wellb e l o w t h e i n t e r n a t i o n a l l e v e l . T h e s e f a c t s i n d i c a t e t h e o f i m m e n s e g r o w t h potential of the insurance sector. The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place with the ending of government monopoly and 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. Though, the existing rule says that a foreign partner can hold 26% equity in an insurance company, a proposal to increase this limit to 49% is pending with t h e g o v e r n me n t . S i n c e o p e n i n g u p o f t h e i n s u r a n c e s e c t o r i n 1 9 9 9 , f o r e i g n investments of Rs. 8.7 billion have poured into the Indian market and 21 private companies have been granted licenses. Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster t h a n a n yo n e e x p e c t e d . I n d i a n s , wh o h a d a l w a ys s e e n l i f e i n s u r a n c e a s a ta x saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. T h e l i f e i n s u r a n c e i n d u s t r y i n I n d i a g r e w b y a n i mp r e s s i v e 3 6 % , wi t h premium income from new business at Rs. 253.43 billion during the fiscal year 2 0 0 4 2 0 0 5 , b r a v i n g s t i f f c o mp e t i t i o n f r o m p r i v a t e i n s u r e r s . R NC OS s r e p o r t , Indian Insurance Industry: New Avenues for Growth 2012, finds that the market s h a r e o f t h e s t a t e b e h e mo t h , L I C , h a s c l o c k e d 2 1 .8 7 % g r o wt h i n b u s i ne s s a t Rs.197.86 billion by selling 2.4 billion new policies in 2004-05. But this was still not enough to arrest the fall in its market share, as private players grew by 129%to mop up Rs. 55.57 billion in 200405 from Rs. 24.29 billion in 2003-04. Though the total volume of LIC's business increased in the last fiscal year (2004-2005) compared to the previous one, its market share came

down from8 7 .0 4 t o 7 8 .0 7 %. Th e 1 4 p r i v a t e i n s u r e r s i n c r e a s e d t h e i r ma r k e t s h a r e f r o m about 13% to about 22% in a year's time. The figures for the first two months of the fiscal year 2005-06 also speak of the growing share of the private insurers. The share of LIC for this period has further come down to 75 percent, while the private players have grabbed over 24 percent. T h e r e a r e p r e s e n t l y 1 2 g e n e r a l i n s u r a n c e c o mp a n i e s wi t h f o u r p u b l i c s e c t o r c o mp a n i e s a n d e i g h t p r i v a t e i n s u r e r s . Ac c o r d i n g t o e s t i ma t e s , p r i v a t e i n s u r a n c e c o mp a n i e s c o l l e c t i v e l y h a v e a 1 0 % s h a r e o f t h e n o n - l i f e i n s u r a n c e market. Though the focus of this market research report is on the potential growth o n t h e I n d i a n I n s u r a n c e S e c t o r , i t a l s o t a l k s a b o u t t h e ma r k e t s i z e , ma r k e t segmentation, and key developments in the market after 1999. The report gives a n i n s t a n t o v e r v i e w o f t h e I n d i a n n o n - l i f e i n s u r a n c e ma r k e t , a n d c o v e r s f i r e , marine, and other non-life insurance. The data is supplied in both graphical and tabular format for ease of interpretation and analysis. This report also provides company profiles of the major private insurance companies.