LABOUR ECONOMICS

MR. AWALE

ASSIGNMENT 1

STUDENT’S NAME: JAI TREHAN

ROLL NUMBER: 15

COURSE/CLASS: MBA/1 D

SEMESTER: 2

DATE SUBMITTED: 28 JAN 2010

ASSIGNMENT GRADE:

COMMENTS OF FACULTY:
 SUMMARY AND ESSENTIAL STATISTICS

• In the past two years, companies’ contribution towards group insurance has
increased over 2.5 times to Rs 17,979 crore in the first nine months of the
current fiscal from Rs 7,477 crore in the same period in 2007-08.

• Companies are increasingly seeking professional help and engaging life

insurance firms to manage certain savings-linked pay components of
employees to maximise benefits.

• Salary hikes, in both public and private companies, in the past couple of
months.

• As per the insurance regulator, new premium collection in the group insurance
category, between April and December 2009, grew 63% to Rs 17,979 crore
from Rs 11,059 crore in the year-ago period.

• Private players recorded a 23% jump in group insurance to collect Rs 3,740

crore this fiscal, against a marginal negative growth in the individual life
insurance category.

• Private insurers, Bajaj Allianz, HDFC Standard and Birla Sunlife grabbed
good business in the group insurance category. However, LIC retained its
dominant position with 80% market share.

• LIC collected Rs 14,238 crore from sale of group insurance policies in the first
nine months of 2009, a 78% growth over the corresponding period last fiscal.
 GENERAL SCENARIO TODAY

• India Inc is increasing its focus on employee welfare and is forking out large
sums to buy insurance cover for its employees’ security.

• This substantial surge in contribution towards group insurance is to enhance

protection.

• Corporates have started the process of outsourcing our group insurance

schemes and have initiated talks with a host of life insurers for the same.

• Salary hikes, in both public and private companies, in the past couple of
months, too, have boosted gratuity and superannuation amounts in employees’
pay packet.

• To keep their bottomlines companies are outsourcing these pay components to

life insurance firms.

• Companies either have the freedom to manage these components on their own
or subscribe to a group insurance scheme.

CONCLUSION

Post 91 banking and insurance sector reforms are bearing fruit in the labour welfare
scenario in corporate India. Good competition in the insurance sector has lead to the
availability of several players and consequently feasible offers for bulk corporate
orders at an inviting price.

Majority of employers choose to outsource pay component management to companies

specialising only in the aforesaid field. Instead of developing expensive in-house
infrastructure, the employers simply outsource it to companies giving tailormade
solutions.

It may be noted that the ever increasing competition has lead to a customer oriented
approach by banking and insurance firms.