Organizational Culture The Life Insurance Sector of India

By Group II Section B 2011 - 13

Abstract
The Objective of the Project is to understand the work culture of the organizations in the Life Insurance Sector in India. Three firms were chosen in the industry, these companies are differentiated from each other with respect to their work culture; therefore MetLife India, ICICI Prudential Life Insurance and Max New York Life Insurance were selected.

This project is a combined effort of 5 members of Group - II (section: B). Each member has specifically focused on a different areaand then the individual analysis was discussed at great length to finally arrive at an integrated report.

We were lucky to get in touch with a few industry peoplein person, working in different organizations in the Life Insurance Industry. Various inputs were taken from them regarding the working style and prevalent culture in the organization under consideration.

Contents
Introduction to Life Insurance Industry of India ....................................................................................... 5 History & Transformation .................................................................................................................... 5 Risk, Perception and Evaluation ........................................................................................................... 5 Marketing ............................................................................................................................................ 6 Selling of the Products ......................................................................................................................... 6 About the Companies .............................................................................................................................. 7 Objective Factors of Organizational Culture............................................................................................. 8 Aggressiveness .................................................................................................................................... 8 Attention to Detail ............................................................................................................................... 8 Outcome Orientation............................................................................................................................ 9 People Orientation ............................................................................................................................... 9 The Socialization Process ...................................................................................................................... 10 Pre-arrival Stage: ............................................................................................................................... 10 MetLife Indias Training &Induction Programs: .................................................................................... 12 MetLifeManagement Induction School .............................................................................................. 12 CST: Compliance and Sales Training ................................................................................................. 12 Employee Growth & Motivation ........................................................................................................ 13 The R&R includes Monetary and Non Monetary benefits such as:...................................................... 13 Max New York Lifes Training and Induction Program: ........................................................................ 14 New Employee Orientation [NEO] Program....................................................................................... 14

ICICI Prudentials Induction Program .................................................................................................... 16 UDAAN - Life Insurance Fundamentals for Executive Trainees ......................................................... 16 LIFE - Life Insurance Fundamentals for Executive Trainees ........................................................... 16 The Stepping Stones program ............................................................................................................ 16 ET Alternate Channels ....................................................................................................................... 16 Employee Growth and Motivation: .................................................................................................... 17 Tools for Career Growth (ICICI) ........................................................................................................ 17 Performance Appraisals ..................................................................................................................... 17 Factors of Spirituality ............................................................................................................................ 19 MetLife India Value System .............................................................................................................. 19 Max New York Life Values and Beliefs ............................................................................................. 19 ICICI Prudential Life Insurance Value System ................................................................................... 20 References: ............................................................................................................................................ 21

Introduction to Life Insurance Industry of India

The requirements of an Industry shape the work culture of the organization present in the industry.The Indian life insurance industry is a highly competitive and hostile one in nature. This leads to a dynamic environment around any organization in the sector. Currently almost all companies have all plans and / or products at hand, thanks to the rigid guidelines by the IRDA.Thus the onus for performance lies on the individual marketing and selling inputs of the various products and services on offer. All of whichends up making it a highly target oriented sector. History & Transformation The Life Insurance Corporation of India (LIC) was established way backin 1956 and has been the sole corporation to be present in the life insurance business in India. The Indian insurance industry saw a new sunrisein August 2000, when theIRDA allowed the private sector to invest in the sector. Thanks to liberalization, the industry has been presented with avery promising future. Thischange in regulation has resulted increation of new opportunities for certified financial planners and various other professionals. The Indian Insurance industry has the following characteristics: y y y y Low market penetration; Rapidly growing middle class. Growth of consumerism; (highly professionalized service) Inadequate and / or poor IT application.

The companies need to keep a keen eye on these characteristics of the Indian market and formulate strategies so as to entail maximum overall profitability.

Risk, Perception and Evaluation The fundamental function of an insurer is to provide cover against the unforeseen, to the insured.These unforeseen events are specific happenings,which have been previously discussed and agreed upon. Thus, prior to providing such a cover through an insurance policy, the insurer has to assess carefully assess the risk element prevalent in the concerned industry and / or a particular unit. After the identification and categorization of the perceived risks, the probability of the mishap, severity of the loss bothneed to be assessed.

Marketing The core function of the marketing teamin an insurance company is to generate awareness and sufficient interest,to ensure a saleof the companies insurance related products and / or services in the given target market. In the Indian scenario however, where the insurance penetration in general is way too low as compared to the developed nations. The marketing team needs to perform a verypro-active role in developing aculture, which actually insists on buying insurance. It is through the long-term efficiency of the sales team of an insurance company that the desirability and the success of the company as a whole is sustained. In Indian insurance market, this function is, performed primarily by the agents or advisors. Individuals interested to work as an insurance agent have to obtain a license from the IRDA to act as one. The agents approach prospective buyers and apprise them about the various products and / or services on offer. In order to carry out their duties effectively, the agents need to possess knowledge about the insurance industry, products, services and the modalities attached. Further, the marketing personnel should be provided adequate backing by her or his respective reporting branch.

Selling of the Products The term selling in the context of the insurance industry connotes the issuance of a policy to the applicant known as the proposer. In the Indian life insurance industry, thisis done by the by the insurer. In addition, the insurance companies have a dedicated operations department to look after the post sales support for the sales team so as to ensure timely issuance of the insurance contract. They receive the proposal documents, verify them, under-write1them for financial, medical and / or lifestyle inconsistencies and then after fully satisfying the given norms and issuance criteria give the go ahead for the contract by way of a placement conformation mail.

Sign and accept liability under (an insurance policy), thus guaranteeing payment in case loss or damage occurs.

About the Companies

COMPANY

MISSION Build financial freedom for all, through leadership in providing financial advice and building long-term relationships through innovative protection, accumulation &retirement products, robust underwriting processes and creating a world-class customer service experience for our customers y Amongst the top 5 private life insurance companies National Player Brand of choice Employer of Choice Principal of Choice for Distribution & Suppliers

VISION We want to pr ovide customers in India with world-class solutions for financial security, and in the process add significant value to our shareholders, associates and society.

MetLife India

Max New York Life Insurance

y y y y

To become the most admired Life Insurance Company in India for all stakeholders

We will leverage our people, technology, speed and financial capital to:
y

y y

ICICI Group

y y y

Be the banker of first choice for our customers by delivering high quality, world-class products and services. Expand the frontiers of our business globally. Play a proactive role in the full realization of Indias potential. Maintain a healthy financial profile and diversify our earnings across businesses and geographies. Maintain high standards of governance and ethics. Contribute positively to the various countries and markets in which we operate. Create value for our stakeholders.

To be the leading provider of financial services in India and a major global bank.

Objective Factors of Organizational Culture

There are many objective factors, which form the various elements of perception of organizational culture. Such as Innovation and Risk Taking, People Orientation, Attention to Detail, Outcome Orientation, Aggressiveness, etc. We have tried to analyze the life insurance companies on the basis of some of the abovementioned objective factors.

Aggressiveness In MetLife, the degree of aggressiveness is at a lower level. The employees are encouraged, their efforts supported. As an organization, employees in general tend to be calm and relaxed due to the qualitative focus of the top management. Quality is given greater weightage over quantity, which allows employees to focus on fulfilling the needs of each individual client to the best of their abilities. For Max New York Life India, the degree of aggressiveness is at a comparatively moderate level. The employees are encouraged, but performance is important. The organization follows a more balanced approach; quality and quantity both are given an almost equal weightage. In certain tricky situations, however if one needs to choose between quality and quantity, then quality is certainly given preference. At ICICI Prudential Life Insurance, the degree of aggressiveness is very high. The employees are pushed to perform. Quantity is given the maximum amount of focus under almost all circumstances. Collections at the end of the month in terms of NOPs2 and the collected premium3 both matter. Attention to Detail At MetLife India, attention to detailis given a lot of importance. This can be gauged from one of the companys branding and advertising related activities. An employee told us, that an entire batch of billboards was rejected, because a wrong shade of blue was being used in the background. For Max New York Life, attention to detail is also at the upper end of the spectrum. Minute details are taken care of. Being on time, attending all stipulated training sessions, using the given support tools and packages as prescribed are all given a lot of importance. For employees as an organization, the tendency is to take as much care of as many things as possible.

2 3

NOP, Number of policy Collected Premium, Its the actual collected premium. E.g. In a half yearly policy, the premium amount actually received.

At ICICI Prudential Life, attention to detail is low. As long as an employee is getting business, nothing much concerns the management apart from that. Minute and little nothings dont really count that much at ICICI.

Outcome Orientation In MetLife the outcome orientation is high, but that clearly doesnt mean that the techniques methodologies and approach used to achieve that outcome arent important. Being honest, fairand ethicalare all very important while one tries to achieve the given targets. For Max New York Life, the ends and means both are important. But the means used need to be similar to what is being done in the organization i.e. If a particular protocol is being followed then it must be followed to the T. Deviations are generally not accepted, ways and methods of doing things are highly standardized and everyone needs to follow suit. At ICICI Prudential life insurance results matter, the end goal is the most important. At ICICI, little consideration is given to the means used. As discussed above NOP and collected premium are of paramount importance.

People Orientation The people orientation at MetLife& Max New York Life both seemed to be high. With most employees being interviewed telling us that the management was pro-people and that the decisions that were taken by the senior management were more or less in the approval zone of the employees in general. At ICICI on the other hand, the interviewed employees felt that this was not the case and the primal focus of the organization isachieving targets and sustaining growth. Popular opinion on the managements decisions is that people orientation is the second or third most important priority.

The Socialization Process

Pre-arrival Stage: In general, the selection process followed by almost all life insurance companies is highly similar; this is so due to the very nature of the industry in which these companies operate. Most of the managers and associates are selected for the various positions on the basis of their marketing and selling expertise. Other areas of concern are: y y y y y People Skills Relationship Management Enterprisingness4 Tactfulness Ability to handle new and difficult situations

The Training & Induction Program:

In the Insurance sector, the attrition rate is on a higher side, as the job is demanding and placed in a very higher-pressure environment. Also one is providing the sales and service,not for a product but a promise. It takes a lot of effort from an employees perspective to balance her or his ethical commitment towards a client and her or his professional commitment towards her or his employer.This alone is the single biggest contributing factor towards the high attrition rate.

Now, On the basis of the aforesaid, it comes as no surprise that induction programs in the life insurance business are short in duration and crisp in nature. They are conducted in stages based on the time spent by an employee in the organization and the route she or he has taken to reach a particular position.

embark on bold new ventures (Source:http://ardictionary.com/enterprisingness/8803)

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For employees who have been promoted from within the organization, there is a different format followed, as compared to those employees who directly join at a slightly higher position.

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MetLife IndiasTraining &Induction Programs

The company takes ample measures to train and retain its employees in the organization so as to enable the company to grow holistically. MetLife India uses the following induction and sales training programs respectively.

MetLife Management Induction School MetLife introduced the MetLife Management Induction School, so as to train all new employees. The program uses a different nomenclature for different positions, apart from MetLife Management Induction School; the name of the program for the next hierarchical level is Agency Manager Development School. The company also has another program, which is mandatory for all sales employees:

CST: Compliance and Sales Training

Its a short training program. The aim of the Program is focused on development of the selling and marketing capabilities of the new employees and associates of the company. MetLife always initiates training requirements and supports the employees. The main aim of MetLife is to equip its employees to be all - round sales professionals by the use of appropriate training, coaching and guidance. The induction training consists of the following modules:

y y y y

Product and Process training Sales Personality development Skills training Professional courses

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Employee Growth & Motivation In order to incentivize each one of the employees, a whole new Recruitment Rewards and Recognition Program (R&R) was launched.

The R&R includes Monetary and Non Monetary benefits such as: y y y y y Free training camps Free coupons for the Month end Free service (free life and or health insurance) Awards and certificates Medal of honor for the best performing employee of the year

The goal sheets have been simplified in order to provide the employees with an opportunity to aspire for better and higher achievements. The agency structure has also been simplified to enable faster decision-making and career progression. MetLife India conducts monthly meetings with all its employees and managers for discussing the current issues faced by them in the organization. This is done so as to establish transparency in the working of the organization Job rotation is done on an employee and / or organizational need basis. It works for the mutual benefit of the employees as well as the management. The hierarchical structure is becoming quite narrow and a manager hardly needs to handle about 4-5 employees in a row, this speeds up the decision-making process and makes the employees happy, as they dont need to report to many managers at one point in time. The incentive-based structure is highly flexible. When the number of clients handled by a manager increases, the monetary benefits also jack up to the next level.

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Max New York Lifes Training and Induction Program:

New Employee Orientation [NEO] Program The NEO program is conducted for all the new Joiners at MAX New York Life Insurance. It is basically a 2-weekprogram, which includes the following: Day 1: HR Session, Day 2: Quality and Personality Development, Day3 & 4: Products and Riders of Max New York Life Insurance, Day5 & 6: Insurance Concepts Day 7 & 8: Functional Training, a SPOC5 from all departments comes and delivers a session on how their respective department works Day 9 & 10: System Training, i.e. to make them aware of MAX Core and Satellite Systems. A few details of some of the sessions that take place during the NEO program have been provided below: y HR Training: HR Training takes care of MDP's - Management Development Programs. They also take care of the Behavioral concepts of training. y Agency Training: Agency Training takes care of training for Sales Managers and Agents. y System Training: Systems Training takes care of training on Max New York life's core and support system

Special Point of contact is a person who is an expert in a particular domain

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Operations Training: Operations Training takes care of the operational needs, provisions, etc.

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ICICI Prudentials Induction Program

UDAAN - Life Insurance Fundamentals for Executive Trainees The agency model of business has several challenging roles with true entrepreneurial flavor wherein one needs to set up ones own distribution channel by identifying and recruiting a passionate team of insurance advisors. The ET would be leading the team (including joint sales calls) to achieve sales and business objectives with ongoing organizational support in terms of regular training, assistance in recruitment and brand increasing the brand pull of ICICI Prudential. The ET is also expected to focus on Sales Efficiency parameters viz. Advisor Activation, Average Premium and on market development for new products and / or services, which ICICI Prudential may choose to offer in the future, post feasibility studies off course. This profile presents a unique opportunity to lead people, develop business and inculcate entrepreneurial skills.

Upon joining ICICI Prudential, the ET will go through a comprehensive induction program called: LIFE - Life Insurance Fundamentals for Executive Trainees Then they take charge as a Unit Manager. The LIFE program is followed by: The Stepping Stones program This program guides career progression. It is an objective program driven by meritocracy and transparency. Moreover, Stepping Stones offers great flexibility to make ones career progression rewarding and commensurate with ones aspirations. ET Alternate Channels As an Executive Trainee in Alternate Channels, the individual would take charge as an Associate Financial Services Manager (AFSM) post the induction program. Here, the individual may be absorbed in any of the Alternate Channels, based on organizational requirement and the capability / capacity of the given individual.

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Employee Growth and Motivation: People are considered to be the most valued asset at ICICI Prudential. Therefore, the organization has an environment wherein the Employees tend to gain a level of freedom, which provides satisfaction, and most importantly, a sense of professional fulfillment.

They have created a performance driven work culture with a focus on creating leaders. It follows meritocracy and elevate solely based on an individuals performance and ability to take on higher roles and responsibilities.

Since over 90% of all recruitments are done at the entry levels, elevations are made from within the organization. Which in turn acts as a great motivating factor for all employees, they provide the employees with opportunities to move into different functions and get cross-functional exposure thereby improving skill set and knowledge base of its employees.

There is a lot of autonomy at ICICI Prudentials work environment; it provides a platform to enhance an employees individuality. The average age of employees is 27 years making the work atmosphere vibrant and full of enthusiasm.

Tools for Career Growth (ICICI) Performance Appraisals Performance appraisals are carried out twice a year. They serve as an opportunity for two-way discussion between managers and employees. Thusproviding a chance to review accomplishments and set new and higher business objectives and goals.

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Training & Development Apart from the prescribed Training programs, various other training sessions are conducted along with the job, by the use of e-learning modules and instructor-based classes. The aim of these training sessions is to enhance the skills and enable employees to carry out their roles and duties in the most effective and efficient manner possible.

Internal Career Opportunities It is a non-hierarchical organization that believes in flexibility and having the right person for the right job. An employee can apply for other positions within the company internally thereby having internal opportunities to grow in any field she or he is best suited for and / or desires for.

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Factors of Spirituality
The factors of Spirituality include the value system of the organization, These values are those which an organization tries to inculcate in their employees and thus they end up forming the dominant culture of the given organization.

MetLife Indias Value System Personal responsibility They expect employees to perform in an efficient and effective manner, they want successful leaders, who can take decisions independently so as to get the desired results. Team Work The organizational focus is on functioning in an effective, efficient and productive manner in teams so as to achieve the common purpose. Financial Strength The company operates efficiently,trying to minimize costsand still strive for strong business results. Integrity and Honesty The management is committed to conducting all business transactions in an ethical, truthful, sincere and fair manner. Innovation Continuously creating and introducing new and original ideas, ways of doing things, etc. They focus on collective power of diversified work-groups, which in turn is a very important factor for innovation. Max New York Life Values and Beliefs Excellence Max New York Life focuses on achieving the highest possible standards of quality in every aspect of their business, it starts from in-house training to productand service delivery to the end client. Honesty Transparency, Dependability and Integrity form the cornerstones of the Max New York LifeInsurance, as claimed by the organization.

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Knowledge Focus is always onspecialization, which requires knowledge and domain expertise. Theybelieve bin the combining global expertise, technical know how and local experience, knowledge. Caring Caring for the client, Max New York Life is attempting to refocus the life insurance sector on the needs of the client, in a highly specialized and specific manner. They want theirprocesss to be responsive, personalized, humane and empathetic in nature.

ICICI Prudential Life Insurance Value System Transparency Total transparency in all channels of communication (internally and externally) and complete accountability in customer deliverables. This value helps push their employees to build trust on their customers, which in turn helps in brand building for ICICI Prudential.

Empowerment ICICI Prudential providesa platform of opportunity, from an employee to a partner in progressive growth. Passion The passion to excel with customer focus in mind is what motivates ICICI Prudential to attain even greater milestones.This inherent principle drives employees to set even higher benchmarks of excellence and performance.

Integrity Integrity is about honesty, sincerity, sound moral principles, keeping promises and fulfilling expectations. ICICI Prudential Life Insurance Company focus on integrity so as to exceed beyond the organization's capacity to not onlyfulfill the needs of the stakeholders but also consider and cater to the vision and values of everyone involved.

Humility True leadership in the service industry requires humility to keep one's ego sublime and to serve others.ICICI Prudential looks for Humility in their employees; those who can keep the interests of the customer and the organization before theyre own and work efficiently and effectively as a team.

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References:
www.maxnewyorklife.com www.metlife.co.in www.iciciprulife.com www.ebscohost.com

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Document Revision History Version 1.0 1.1 1.2 2.0 Reviewer Vipul Bajaj Souvik Roy Boby Sebastian Rahul Bedi Comments First final draft Proof reading and analysis Modified all the alignments Spelling, grammar, cover-page font and overall alignment (Final)

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