PROJECT PROPOSAL

ANALYZING THE INSURANCE POLICIES AT BHEL

S UBMITTED T O K RISHNA M OHAN MANAGER (F INANCE )

PROJECT PROPOSAL
1. SYNOPSIS
Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. [1]1 The project will be done in BHEL. Since BHEL is a manufacturing firm, Safety is a big part of manufacturing, as the firms want to focus on making their facility safe for everyone involved at the facility. The heavy equipment use can be incredibly dangerous for the employees as the moving parts and other things can cause severe injuries to occur. Keeping employees safe is the important for a manufacturing company to remain in business and to keep the company's reputation higher. On the other side protecting the property plant and equipment is also the major concern of the manufacturing firms, because without these property plant and equipments, for which crores together is invested, if they catch fire or some damage happens then the business would cease to exists. There are two types of insurance, Life insurance and General insurance. Human life is subject to risks of death and disability due to natural and accidental causes. When human life is lost or a person is disabled permanently or temporarily, there is a loss of income to the household. 2An individual can protect himself or herself against such contingencies through life insurance. Life insurance is insurance on human beings. Though Human life cannot be valued, a monetary sum could be determined which is based on loss of income in future years. [2] Insurance other than Life Insurance falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary etc, personal insurance such as Accident and Health Insurance, and liability insurance which covers legal liabilities. [3] The objective of the project is to understand why there exist current insurance polices in BHEL and can BHEL take up any better insurance polices to help them benefit more over the existing ones. The project involves a study under Insurance policies of Bharat Heavy
1. Source: Wikipedia 2 http://www.irdaindia.org/iac/whatislifeinsurance.htm 3. http://www.irdaindia.org/iac/whatisgeneralinsurance.htm

Electricals Ltd (BHEL), electronics division. This will involve knowing the top players in the Indian insurance sector who gives cover manufacturing firms and what is the companys policy for insuring. Studying various polices of BHEL like, re-insurance, claim settlement, life insurance, general insurance and different players in the market for life insurance and non-life insurance. Then analyzing if BHEL can take up any better type of insurance polices, so that they can be benefited to the maximum. The study would be carried out with analysis of the secondary data available. Since BHEL is a public company, studying through their annual reports would also give a lot of data. For the primary data the method would involve knowing from the company guide about various polices followed in BHEL. The study would be limited to, first only manufacturing firms, second limited only to BHEL, restricted only to BHELs electronics division in Bangalore.

2. Objective

a. Studying all the insurance polices that exists in market for a manufacturing firm. b. Studying, understanding and analyzing the current policies that exists in Bharat Heavy Electricals Ltd (BHEL). Like re-insurance, claim settlement, life insurance, general insurance and different players in the market for life insurance and non-life insurance. c. Understanding what are the effects of insurance companies holding shares in BHEL. d. Understanding the state and the national insurance regulations. e. Under Life insurance knowing the split BHEL has for accident policies and health insurance. f. Understanding weather premium paid for insurance is on accrual basis or payment basis. g. Knowing who are the actuaries and surveyors in BHEL. h. Suggesting the company if they can take up any better polices.

3. Limitation of the Study:

a. The study will be limited only to manufacturing firms. b. Under manufacturing it will be limited only to Heavy Electricals. Since BHEL has its business in heavy electrical.

4. Proposed Methodology
The information needed can be collected through the company annual reports, IRD journals and through net. This study would be an exploratory research, because very little is known about the insurance in

BHEL. The study would be used to develop tentative explanations. It would be particularly carries out through Literature search, experience surveys, focus group, analysis of selected cases, and analysis of newspaper articles. This exploratory research would involve formulating problems more precisely, developing hypothesis, establishing priorities, eliminating impractical ideas and clarifying concepts. The study method would be primarily through secondary data, available on goggle and through the annual reports of the company, through IRD journals. The primary data could be collected through interviewing the company guide on various issues and others expert in that area. Then data would be analyzed to see if BHEL can take any other better policies or the determining weather the existing ones are the best available.

5. Schedule:

a. 1st April 2011- joined the company. b. 5th April 2011- went on a work shop visit around BHEL to learn what actually is manufactured and how it is done. c. 7th April 2011- Assignment of the company guide. d. 12th April 2011- finalizing the project to be carried out under the assigned company guide. e. 14th April 2011- submission of the joining report to the college guide with the details of company guide and contact details. f. 21st April 2011- Preparation of the project proposal and sending the same to the company guide for the approval. g. 21st April 2011 to 24th April 2011- Analysis of BHEL, its top competitors, analysis of the industry in which it operates. h. 25th April 2011- Submission phase 1 report, which includes finalized project proposal and the company and industry analysis to college guide. i. 26th April 2011 to 15th May 2011-Collecting the necessary data through the proposed methods. j. 16th May 2011 to 26th May 2011- Analysis of the collected data. k. 31st May 2011 Sending the final report to the college guide.

6. References:

a. Annual reports of BHEL b. IRD journals