CHAPTER:3 INTRODUCTION OF COMPANY

THE HISTORY OF INDIAN INSURANCE INDUSTRY

The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years.

Life Insurance In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life Insurance Company. First attempts at regulation of the industry were made with the introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the power given to the Government to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. When the Act was changed in 1950, this meant far reaching changes in the industry. The extra requirements included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in such companies to prevent dominant control (to protect the public from any adversarial policies from one single party), stricter control on investments and, generally, much tighter control. In 1956, the market contained 154 Indian and

16 foreign life insurance companies. Business was heavily concentrated in urban areas and targeted the higher echelons of society. Unethical practices adopted by some of the players against the interests of the consumers then led the Indian government to nationalize the industry. In September 1956, nationalization was completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It was felt that nationalization has lent the industry fairness, solidity, growth and reach. Some of the important milestones in the life insurance business in India are: 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. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: The market contained 154 Indian and 16 foreign life insurance companies.

MetLife (India)

MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors. MetLife is one of the fastest growing life insurance companies in the country. It serves its customers by offering a range of innovative products to individuals and group customers at more than 600

locations through its bank partners and company-owned offices. MetLife has more than 50,000 Financial Advisors, who help customers achieve peace of mind across the length and breadth of the country. MetLife, Inc., through its affiliates, reaches more than 70 million customers in the Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include the number one life insurer in the United States (based on life insurance in force), with over 140 years of experience and relationships with more than 90 of the top one hundred FORTUNE 500 companies. The MetLife companies offer life insurance, annuities, automobile and home insurance, retail banking and other financial services to individuals, as well as group insurance, reinsurance and retirement and savings products and services to corporations and other institutions.

VISION: To be formidable player in the industry in the Indian Life Insurance Industry

Present Scenario The Government of India liberalized the insurance sector in March 2000 with 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. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. In the private sector 14 life insurance and 8 general insurance companies have been registered. A host of private Insurance

companies operating in both life and non-life segments have started selling their insurance policies.. Life Insurance Market The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were under- insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed. The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income. The new business premiums of the 12 private players has tripled to Rs 1000 crore in 2002- 03 over last year. Innovative products, smart marketing and aggressive distribution. That's the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The private insurers also seem to be scoring big in other ways- they are persuading people to take out bigger policies. Buoyed by their quicker than expected success, nearly all private insurers are fast- forwarding the second phase of their expansion plans.

FACT SHEET Founded Started Operation Headquarters World Wide Web Address Managing Director Employees Financial Advisors Bancassurance Tie-Ups Number Of Products Presence Through MetLife Offices Presence Through Bank Partners 2001 FY 2001-02 Bangalore, India www.metlife.co.in Rajesh Relan 7688 56,072 5 (J&K Bank/Axis Bank/Dhanalakshmi Bank/Karnataka Bank/Barclays) Over 20 products 192 offices in 131 cities 1910 offices in 686 cities

MetLife Worldwide: Financially strong company A recognized brand name Serves 90 of 100 Fortune 500 companies Largest life insurer by sales A Fortune -39 company A 140 year old financial giant Assets> USD 580 Billion Trustworthy company -70 Million customers world wide Highest ratings by external agencies.

3.4 SWOT ANALYSIS:

PARTNERS:-

Since inception in 1895, PNB has always been a "People's bank" serving millions of people throughout the country and also had the proud distinction of serving great national leaders like Sarvshri Jawahar Lal Nehru, Gobind Ballabh Pant, Lal Bahadur Shastri, Rafi Ahmed Kidwai, Smt. Indira Gandhi etc. amongst other who banked with us.

PNB is a Banking giant with 100% brand equity and is one of the most credible banking brands with a network of 5600 branches all over the country. With over 60 million satisfied customers and more than 5100 offices including 5 overseas branches, PNB has continued to retain its leadership position amongst the nationalized banks. The bank enjoys strong fundamentals, large franchise value and good brand image. Besides being ranked as one of India's top service brands, PNB has remained fully committed to its guiding principles of sound and prudent banking. Apart from offering banking products, the bank has also entered the credit card, debit card; bullion business; life and non-life insurance; Gold coins & asset management business, etc. PNB has earned many awards and accolades during the year in appreciation of excellence in services, Corporate Social Responsibility (CSR) practices, transparent governance structure, best use of technology and good human resource management.

Jammu and Kashmir Bank Limited was incorporated on 1st October, 1938 and commenced its business from 4th July, 1939 at in Kashmir (India). The Bank was the first in the country as a State owned bank. According to the extended Central laws of the state, Jammu & Kashmir Bank was defined as a govt. Company as per the provision of Indian companies' act 1956. In the year 1971, the Bank received the status of scheduled bank. It was declared as "A" Class Bank by RBI in 1976. Today the bank has more than 500 branches across the country and has recently become a billion Dollar Company

Mangaloreheadquartered Karnataka Bank, a leading private sector Bank having a network of 433 branches across 19 States and 2 Union Territories, is more than 84 years old. The Bank is a technology savvy, customer centric progressive bank with a national presence, driven by the highest standards of corporate governance and guided by sound ethical values. All the 433 branches of the Bank are under the umbrella of core banking solution.

The Bank has a host of customer friendly deposit and advances products meeting the varied needs and preferences of its customers. The Bank offers a plethora of technology driven products like Internet Banking facility, Demat services, Mutual Fund products of reputed companies, Life and General Insurance services, Visa enabled Debit Card with wide acceptability across the globe. The Bank has an ambitious business turnover target of Rs. 35000 crores for the year 2008-09 with a branch expansion plan to reach the tally of 460 branches and additional ATMs to take the total to 180 by end-March 2009

Geojit Securities was founded by Mr.C.J George in 1987 as a Proprietorship for doing Broking business in Cochin Stock Exchange. In 1994, the business was taken over by Geojit Securities Ltd, a Joint Venture between Mr.C.J George and the Kerala State Industrial Development Corporation Ltd. In the following year, the company came up with an IPO and the shares were listed in various Stock Exchanges in India in 1995.

ORGANISATION STRUCTURE AT METLIFE:

MANAGING DIRECTOR

ACTURIAL

COMPLIANCE

AGENCY

HUMAN RESOURCES

MARKETING

STATUTORY VALUATION

INERNAL CONTROL

REGIONAL AGENCY SALES

REWARDS AND PERFORMANCE

BRAND MGMT

INDIVIDUAL PRICING

BOARD AFFAIRS

CORE AGENCY

REGIONAL HR

CHANNEL

MKTG
INTERNAL COMM.

GROUP BUSINESS

IRDA

AGENCY STRATEGY

RECRUITMENT

GAAP

RBI

SALES TRAINING

PAYROLL SERVICES

GOVT. RELATIONS

Major Insurance Players Licenses have been issued for the following companies ICICI Prudential Life Insurance Limited ICICI Prudential Life Insurance Company Limited HDFC Standard Life Insurance Company Limited Birla Sun Life Insurance Company Limited TATA AIG Life Insurance Company Limited Max New York Life Insurance Company Limited SBI Cardiff Life Insurance Company Limited ING Vysya Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited MetLife Life Insurance Company Limited Aviva Life Insurance Company Limited AMP Sanmar Life Insurance Company Limited Sahara India Life Insurance Limited Sri Ram Life Insurance Limited

METLIFE CORE VALUES:

INTEGRITY AND HONESTY INNOVATION PARTNERSHIP

METLIFE VALUES:

"Coming into your own",performing as a Leader to be really effective and successful by acting and making decisions independently to get results.
It's all about People, MetLife's key resource. MetLife will succeed because we are winning from within.

Continuously creating and introducing new and original ideas and ways of doing things.

Functioning productively in teams towards a common purpose; realising the collective power of diverse workgroups.

Continuously creating and introducing new and original ideas and ways of doing things.

Conducting all business endeavors with truth, sincerity and fairness.

BANCASSURANCE OR BANCA: MetLife is a pioneer in offering life insurance solutions through banks and alliances. Within a short span of two years, and with nearly a large number of partners, B & A has emerged as a vital component of the companys sales and distribution strategy, contributing to approximately one third of companys total

business. The business philosophy at B&A is to leverage distribution synergies with their partners and add value to its customers as well as the partners. Flexibility, adaptation and experimenting with new ideas are the hallmarks of this channel. The business philosophy at B&A is to leverage distribution synergies with its partners and add value to the business of both.

Bancassurance Team include: Banks: The Jammu and Kashmir Bank Axis Bank Dhanalakshmi Bank Karnataka Bank Corporate Agents: Karvy Consultants Limited Geojit Securities Way2wealth Consultancy Mini Muthoottu Bank AGENCY:-Agency is the largest distribution channel of MetLife comprising a large advisor force that targets various customer segments. The strength of agency lies in an aggressive strategy of expanding and procuring quality business. With focus on sales & people development, agency has emerged as a robust, predictable and sustainable business

model. Generally this advisors works under the leadership of sales manager, who motivate them in every step by providing training and guidance to them, usually each sales manager have 20 to 30 advisors under them. Branch Sales Manager (BSM)/ Area manager Agency Manager(AM) Sales Manager (SM) Advisors:- Advisors are the people who are the regular employees of the METLIFE, Commissioned agents are also a part of agency but they are not the regular employees of the company and are being paid for insuring peoples with MetLifes traditional and non-traditional insurance policy.

PRODUCTS OF METLIFE
CHILD PLAN MET BHAVISHYA MET JUNIOR ENDOWMENT MET JUNIOR MONEY BACK MET SMART CHILD RURAL MET VISHWAS MET SUVIDHA RURAL MET GRAMEEN ASHRAY SAVINGS MET SUKH MET SUVIDHA MET SARAL MET 100 PROTECION MET SURAKHSHA MET SURAKHSHA TROP Met SURAKHSHA PLUS MET MORTGAGE HEALTH PROTECTOR MET HEALTH PLUS

INVESTMENT MET SMART PLATINUM MET SMART ONE MET EASY SUPER

CARE MET HEALTH CASH

MONTHLY INCOME MET MONTHLY INCOME PLAN MET Retirement MONTHLY MDMIP INCOME PLAN 7 PAY MET MONTHLY INCOME PLAN 15 PAY

RETIREMENT MDMIP