TRAINING REPORT ON RECRUITMENT AND SELECTION PROCESS In TATA AIG Life Insurance Co. Ltd.

Submitted to

MAHARSHI DAYANAND UNIVERSITY, ROHTAK

in partial fulfillment of the requirements for the award of the degree of

MASTERS OF BUSINESS ADMINISTRATION (INDUSTRY INTEGRATED) (III Semester)

Submitted by
Name: Manisha Regn. No.:1073901271 Roll No.:1090210018

DELHI INSTITUTE OF HIGHER EDUCATION

Community Centre, Sector-3, Rohini, Delhi-110085

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STUDENTS DECLARATION
I hereby declare that the Training Report conducted at

TATA AIG Life Insurance Co. Ltd., Asaf Ali Road

Under the guidance of

(Ms. Ruchi Sharma)

Submitted in Partial fulfillment of the requirements for the Degree of

MASTER OF BUSINESS ADMINISTRATION (Industry Integrated)

TO MAHARSHI DAYANAND UNIVERSITY, ROHTAK

is my original work and the same has not been submitted for the award of any other Degree/diploma/fellowship or other similar titles or prizes.

Place: Date:

MANISHA Regn. No.:1073901271 Roll No.:1090210018

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ACKNOWLEDGEMENTS

My experience of working in TATA AIG Life Insurance Co. Ltd.was a great learning experience and for this I am really grateful to my mentor Mr.Rajeev Sood Branch Agency Managerand Mr. Maneesh Narula Location Head who did not just support me and guide me in my endeavours but also showed great confidence in me and gave me wonderful opportunities to work on. I am also thankful to all my seniors of TATA AIG Life Insurance Co. Ltd. For their support and their supervision in understanding various HR functions. My Faculty Guide Ms. Ruchi Sharma has been a great mentor and I am highly indebted to her for all her support.Her vision inspired me and her approach made me strive harder. And lastly I would like to state that its the constant love and support of my family, friends and colleagues which is the one source of my dedication and determination.

Manisha

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TABLE OF CONTENTS CONTENTS Chapter 1 Introduction

1.1. General Introduction about the sector 1.2. Industry Profile a. Origin and Development of the industry b. Growth and present status the industry c. Future the industry

Page Number 10-21

Chapter 2 -Profile of the Organization

2.1. Origin of the Organization 2.2. Growth and Development of the Organization 2.3. Present status of the Organization 2.4. Functional Department of the Organization 2.5. Organization Structure and Organization Chart 2.6. Product and Service profile of the Organization/ Competitors 2.7. Market Profile of the Organization

22-36

Chapter 3 -Discussions on Training

3.1. Students work profile (Roles and Responsibilities) 3.2. Key Learnings

37-42

Chapter 4 - Study of Selected Research Problem

4.1. Statement of Research Problem 4.2. Statement of Research Objectives 4.3. Research Design and Methodology

43-47

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Chapter 5 Analysis
5.1. Analysis of Data 5.2. Summary of Findings

48-59

Chapter 6 - Summary and Conclusion

6.1. Summary of Learning Experience 6.2. Conclusions and Recommendations

60-62

ANNEXURES

BIBLIOGRAPHY

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LIST OF GRAPHS AND CHARTS

Sl. No. 1. 2. 3. 4. 5. 6. 7. 8.

Graph/Chart No. 2.1 2.2 2.3 5.1 5.2 5.3 5.4 5.5

Graph/Chart Title Business Sectors of the organization Functional Departments Organization Structure Sources of Recruitment and Selection preferred Internal Source of recruitment mostly preferred External Source of recruitment mostly preferred Factors on which the candidate is assessed Techniques used to gauge the capabilities and aptitude of candidates Rate of employees about referral policy Form of interview preferred for initial screening Test which is more effective while selection process Reason behind candidates not going to join after selection Rate of employees for present methodology of recruitment and selection

Page No. 24 29 31 49 50 51 52 53

9. 10. 11.

5.6 5.7 5.8

54 55 56

12.

5.9

57

13.

5.10

58

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LIST OF TABLES

Sl. No. 1. 2. 3. 4. 5. 6.

Table No. 2.1 5.1 5.2 5.3 5.4 5.5

Table Title Product Table of the organization Sources of Recruitment and Selection preferred Internal Source of recruitment mostly preferred External Source of recruitment mostly preferred Factors on which the candidate is assessed Techniques used to gauge the capabilities and aptitude of candidates Rate of employees about referral policy Form of interview preferred for initial screening Test which is more effective while selection process Reason behind candidates not going to join after selection Rate of employees for present methodology of recruitment and selection

Page No. 34 49 50 51 52 53

7. 8. 9.

5.6 5.7 5.8

54 55 56

10.

5.9

57

11.

5.10

58

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CHAPTER-1 INTRODUCTION

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1.1 GENERAL INTRODUCTION ABOUT THE SECTOR

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 defined 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 insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the mends in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per cent to the countrys GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation Malhotra Committee was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform.
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Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to the existence of LIC. Since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run.

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1.2 INDUSTRY PROFILE

a. Origin and Development of the Industry
The origin of insurance is very old. The time when we were not even born; man has sought some sort of protection from the unpredictable calamities of the nature. The basic urge in man to secure himself against any form of risk and uncertainty led to the origin of insurance. The insurance came to India from UK; with the establishment of the Oriental Life Insurance Corporation in 1818 The Indian life insurance company act 1912 was the first statutory body that started to regulate the life insurance business in India. By 1956 about 154 Indians, 16 foreign and75 provident firms were been established in India. Then the central government took over these companies and as a result the LIC was formed. Since then LIC has worked towards spreading life insurance and building a wide network across the length and the breath of the country. After the liberalization the entrance of foreign players has added to the competition in the market.

Life insurance had its origins in ancient Rome, where citizens formed burial clubs that would meet the funeral expenses of its members as well as help survivors by making some payments.

As European civilization progressed, new sea routes for trade, social institutions and guilds, in particular with many welfare and protective measures were also introduced.

With increased protection that revolved around the concept of insurance, trade flourished. In 1347, in Genoa, European maritime nations entered into the earliest known insurance contract and decided to accept marine insurance as a practice. Insurance owes its existence to 17th century England. In fact, it began taking shape in 1688 at Lloyd's Coffee House in London, where merchants, ship owners and underwriters met to discuss and transact business. By the end of the 18th century, Lloyd's had enough business to become one of the first modern insurance companies.

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In 1693, astronomer Edmund Halley constructed the first mortality table to provide a link between the life insurance premium and "the average life spans based on statistical laws of mortality and compound interest. In 1756, James Dodson a British mathematician, actuary and innovator in Insurance Industry reworked the table, linking premium rate to age.

The first stock companies to get into the business of insurance were chartered in England in 1720. The year 1735 saw the birth of the first insurance company in the American colonies in Charleston, SC.

In 1759, the Presbyterian Synod of Philadelphia sponsored the first life insurance corporation in America for the benefit of ministers and their dependents.

However, it was after 1840 that life insurance really took off in a big way. 19th century saw huge developments in the field of insurance. Two years after the infamous New York Fire in 1835, Massachusetts became the first state to insist by law on fund reserves to meet emergencies. The great Chicago fire of 1871 caused huge losses which brought in the practice of reinsurance, wherein the risks are spread among several insurance companies, in such situations.

In 1897, the British government passed the Workmen's Compensation Act, ensuring employees against industrial accidents. With the advent of the automobile, public liability insurance, which first make its appearance in the 1880s, gained importance and acceptance.

In the 19th century, many societies were founded to insure the life and health of their members. Many employers sponsor group insurance policies for their employees, providing not just life insurance, but sickness and accident benefits and old-age pensions. Employees contribute a certain percentage of the premium for these policies.

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Insurance in India can be traced back to the Vedas. For instance, Yogakshema, the name of life Insurance Corporation of India's corporate headquarters, is derived from the Rig Veda. The term suggests that a form of "community insurance" was prevalent around 1000 BC and practiced by the Aryans. Bombay Mutual Assurance Society, the first Indian life assurance society, was formed in 1870. Other companies like Oriental, Bharat and Empire of India were also set up in the 1870-90s. It was during the Swadeshi movement in the early 20th century that insurance witnessed a big boom in India with several more companies being set up.

As these companies grew, the government began to exercise control over them. The Insurance Act was passed in 1912. followed bv a detailed and amended Insurance Act of 1938 that looked into investments, expenditure and management of these companies' fund.

By the mid-1950s, there were around 170 insurance companies and 80 provident fund societies in the country's life insurance scene. However, in the absence of regulatory systems, scams and irregularities were almost a way of life at most of these companies. As a result, the government decided, to nationalise the life assurance business in India. The Life Insurance Corporation of India was set up.in 1956 to take over around 250 life insurance companies.

For years thereafter, insurance remained a monopoly of the public sector. It-was only after seven years of deliberation and debate - after the RN Malhotra Committee report of 1994 became the first serious document calling for the reopening up of the insurance sector to private players and the sector was finally opened up to private companies in 2001.

Insurance Regulatory & Development Authority (IRDA), an autonomous insurance regulator set up in 2000, has extensive powers to oversee the insurance business and regulate in a manner that will safeguard the interests of the insured.

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Today, In India there are more than 15 Private Insurance Companies apart from Public Insurance Companies. Insurance Penetration in India is about only 2% compared to other countries on an average of about 10%.

b) Growth and present status of the industry

The government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) bill. Policies come under the purview of the government appointed Tariff Agency Committee. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also restructuring and revitalizing of the public sector companies. A host of private insurance companies operating in both life and non life segments have started selling their insurance policies since 2001.

Indias life insurance market has grown rapidly over the past six years, with new business premiums growing at over 40% per year. The premium income of Indias life insurance market is set to double by 2012 on better penetration and higher incomes. Insurance penetration in India is currently about 4% of its GDP, much lower than the developed market level of 6-9%. In several segments of the population, the penetration is lower than potential. For example, in urban areas, the penetration of life insurance in the mass market is about 65%, and its considerably less in the low-income unbanked segment. In rural areas, life insurance penetration in the banked segment is estimated to be about 40%, while it is marginal at best in the unbanked segment. The total premium could go up to $80-100 billion by 2012 from the present$40 billion as higher per capita income increases per capita insurance intensity. The average household premium will rise to Rs 3,000-4,100 from the current Rs 1,300 as will penetration by the existing and new players. Indias ratio of life insurance premium to its GDP is around4 per cent against 6-9 per cent in the developed world. It could rise to 5.1-6.2 by 2012 in tandem with the countrys demographic profile. India has 17 life insurers and the state owned Life

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Insurance Corp. of India dominates the industry with over 70 percent market share, though private players have been growing aggressively.

Considering the worlds largest population and an annual growth rate of nearly 7 per cent, India offers great opportunities for insurers. US based online insurance company ebix.com plans to enter the Indian market following deregulation of its insurance sector. Online insurerebix.coms expansion into India is a major step for the company to become a global supplier of internet-based insurance tools for consumers and insurance professionals. In a diverse country such as India it is imperative that a universal insurance infrastructure be created to maximize efficiency in the insurance industry. Online insurer ebix.com can offers the Indian market a business-to-consumer internet portal where consumers have more choice while purchasing insurance and an internet-based agency management system that will help agents work more efficiently with multiple carriers. Foreign holding in Indian insurance companies is limited to 26 per cent. The government wants to increase the cap to 49 percent, but its communist allies oppose such a move. The market is moving beyond single-premium policies and unit linked insurance products which are easier to sell. The agency model is the dominant sales channel accounting for more than 85 per cent of fresh premiums but overall in activity and attrition is much higher at 50-55 per cent than the global average of 25 per cent.

Opportunities include health insurance and pensions, the report said; adding only 1.5-2 percent of total healthcare expenditure in India was currently covered by insurance.

A life insurance policy covers ones personal self. Unlike with general insurance, it is not like insuring a vehicle. Having said that, if we consider that Indias population is over one billion and growing, we get a picture of the true potential of the life insurance sector in India. LIC has been in business for 50 years now and has not covered the entire population base yet.

About 250 to 300 million Indians are still insurable. LIC has issued about 120 million policies till now, with new premium income of US$ 1 billion. Its assets have been
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estimated at $37billion and in the last quarter it reported a 60 per cent growth in new business. LICs business is growing at the rate of 20 per cent every year. That is the kind of potential one is talking about in life insurance in India. It would not be wrong to say that a lot of the advantage of advertising by new private sector insurance companies has by default gone to LIC. While they have created a lot of awareness through private insurers advertisements, LIC has benefited. Why? Because LIC has a much wider branch network, and buyers are surer of LIC because it has been in existence for long; they are more comfortable about its safety. Some LIC agents continue to follow the unethical practice of offering discounts from their commissions to new policy buyers; this makes a difference.

c) Future of the industry

The Indian insurance industry is set to grow in future on the back of improving education level, tax exemptions and high growth in economy.

Wage and salary employment in the insurance industry is projected to increase 8 percent between 2002 and 2012, more slowly than the 16 percent average for all industries combined. While demand for insurance is expected to rise, downsizing, productivity increases due to new technology, and a trend toward direct mail, telephone, and Internet sales will limit job growth. However, some job growth will result from the industrys expansion into the broader financial services field, and employment in the medical service and health insurance areas is anticipated to grow. Also, thousands of openings are expected to arise in this large industry to replace workers who leave the industry, retire, or stop working for other reasons.

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Medical service and health insurance is the fastest-growing sector of the insurance industry. In recent years, increasing health insurance premiums and relatively high unemployment have left some unable to afford health insurance, but over the long term, significant growth is expected. As the share of the elderly population rises, more people are expected to buy health insurance and long-term-care insurance, as well as annuities and other types of pension products sold by insurance sales agents. If legislation is passed to make health insurance affordable to more people, demand should increase further for this type of insurance. Population growth will stimulate demand for auto insurance and homeowners insurance. Population growth also will create demand for businesses to service the needs of more people, and these businesses will need insurance as well. Moreover, large liability awards are motivating growing numbers of individuals and businesses to purchase liability policies to protect against lawsuits brought by people claiming injury or damage from a product. Many successful insurance companies will recognize the Internets potential as a powerful marketing tool. Not only might this reduce costs for insurance companies, but it also could enable many clients to turn to the Internet first to get information on their policies, obtain quotes, or submit claims.

As insurance companies begin to offer more information and services on the Internet, some occupations, such as insurance sales agent, could experience slower employment growth.

Sales agents working in the property and casualty market, particularly in auto insurance, will be most affected by increasing reliance on the Internet. Auto policies are relatively straightforward and can be issued more easily without the involvement of a live agent.

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Also, auto premiums tend to cost more per year than do other types of policies, so people are more likely to shop around for the best price. The Internet makes it easier to compare rates among companies.

Insurance companies will continue to face increased competition from banks and securities firms entering the insurance markets. As more of these firms begin to sell insurance policies, increasing numbers of insurance sales agents will be employed in them, rather than in insurance companies. In order to stay competitive, insurance companies have begun to expand their financial service offerings or to establish partnerships with banks or brokerage firms.

Productivity gains caused by the greater use of computer software will continue to limit the growth of certain jobs within the insurance industry. For example, the use of underwriting software that automatically analyzes and rates insurance applications will limit the employment growth of underwriters.

Also, computers linked directly to the databases of insurance carriers and other organizations have made communications easier among sales agents, adjusters, and insurance carriers, so that all have become much more productive. Furthermore, efforts to contain costs have led to an increasing reliance on customer service representatives to deal with the day-to-day processing of policies and claims. In addition, the Internet has made insurance investigators more productive by drastically reducing the amount of time it takes to perform background checks, allowing investigators to handle an increasing number of cases, but limiting their employment growth.

Sales agents and adjusters still are needed to meet face-to-face with clients, many of whom prefer to talk directly with an agent, especially regarding complicated policies. Opportunities will be best for sales agents who sell more than one type of insurance or financial service.

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Adjusters will still be needed to inspect damage and interview witnesses, and although the number of available jobs for actuaries will be limited due to the small size of the occupation, employment opportunities should be good as stringent qualifying requirements resulting from the examination system limit the number of new entrants.

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CHAPTER-2 PROFILE OF THE ORGANIZATION

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2.1 ORIGIN OF THE ORGANIZATION

Tata AIG Life Insurance Company Limited:

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company which is formed by Tata Sons and AIA Group Limited. Tata AIG Life merges Tata's incredible leadership position in India and AIA's presence as the largest, self-governing and listed pan-Asia life insurance group in the world spanning 15 markets in Asia Pacific. A majority stake in this merger (i.e., 74%) is held by Tata Sons while AIA holds the remaining 26% through an AIA Group company. This insurance firm got its license to operate in India on February 12, 2001 and finally started operations on April 1, 2001.

ABOUT TATA GROUP

Tata Group is one of India's largest and most respected business groups. Tata Group's name is synonymous with India's industrialization. The Group gave India her first steel plant, hydro-electric plant, inorganic chemistry plant and created a reservoir of scientific and technological manpower for the country. Its Trusts have instituted the Tata Institute of Social Sciences in 1936; India's first cancer hospital, the Tata Memorial in 1941, and in 1945, the Tata Institute of Fundamental Research, which became the cradle of India's Atomic energy program. Today, Tata Group comprises 96 operating companies in seven business sectors: information systems and communications; engineering; materials; services; energy; consumer products; and chemicals. The Group has operations in more than 54 countries across six continents, and its companies export products and services to 120 nations. Jamsetji Nusserwanji Tata laid the foundations of Tata Group when he started a private trading firm in 1868.The total revenue of Tata companies, taken together, was $83.3 billion (around Rs3,796.75 billion) in 2010-11, with 58 per cent of this coming from business outside India. Tata companies employ over 425,000 people worldwide. The Tata name has been respected in India for more than 140 years for its adherence to strong values and business ethics.

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Board of directors

Ratan N Tata, Chairman Cyrus P Mistry, Deputy Chairman Farrokh K Kavarana R Gopalakrishnan Ishaat Hussain, finance director RK Krishna Kumar Arunkumar Gandhi

Business Sectors

The TATA Group operates business in seven key industry sectors. The chart below illustrates how, in percentage terms, TATA companies in each of these sectors contribute to the overall makeup of the group. The table follows the group's sector wise financial performance.

CHART-2.1

Distribution Network:

The company is headquartered in Mumbai and has some 200 offices in the country. Tata AIG life has also tie ups with corporate agents for distribution. Tata AIG products like Mahalife Gold, Nirvana and Health First are available online.

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Financial Information:

The total premium earned for the half year ended September 30, 2010 was Rs 17,767 million. The profit after tax for the same period is Rs 526 million. A total of 1,105 claims were made during the period out of which 909 claims were settled and 170 cases were rejected.

Marketing Campaigns: Tata AIG began its campaign with corporate slogan of With You Always. Tata AIG life signed up with popular TV commentator Harsha Bhogle and Bollywood icon Naseerudin Shah to be its brand ambassadors. In a changing environment, slogan was shifted to A new look at life which meant that Tata AIG would be proactive and anticipate the requirements of customers. In 2009, in an attempt to stand out, Tata AIG created two animated characters- Sukhi & Dukhi to communicate their products. Dukhi voices the concerns in the customers mind while Sukhi answers those issues.

Distinctions:

Tata AIG Life Insurance Company (Tata AIG Life) has been awarded the LOMA (Life Office Management Association) award for outstanding professional life insurance education of its employees. ( 2004)

The globally renowned Life Insurance Marketing and Research Association (LIMRA) awarded the prestigious International Quality Agent (IQA) award to 61 Tata AIG Life Insurance Company Ltd. (Tata AIG Life) advisors. Tata AIG Life Insurance is the only company in India whose advisors have been awarded this unique distinction.

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VISION

To be the fastest growing Life Insurance Company in India,measured by annualized premium growth, procuring persistent business, delivering first class customer service, adding shareholder value by 2014.

ABOUT AIG

American International Group, Inc. (AIG) is an international insurance organization, serving customers in more than 130 countries. AIG companies serve commercial, institutional and individual customers through property casualty networks of any insurer. In addition, AIG companies are providers of life insurance and retirement services in the United States. AIG operates in three segments: Chartis, SunAmerica Financial Group (SunAmerica) and Financial Services. As of December 31, 2010, the Companys other operations included AIG Parent, United Guaranty Corporation (UGC) and American International Reinsurance Company Limited (AIRCO). On March 31, 2010, AIG, through a Chartis International subsidiary, purchased additional voting shares in Fuji Fire & Marine Insurance Company Limited. In November 2010, the Company sold American Life Insurance Company (ALICO) and American General Finance, Inc. (AGF). In February 2011, it sold AIG Star Life Insurance Co., Ltd. (AIG Star), and AIG Edison Life Insurance Company (AIG Edison).

TATA AIG VISION To be the most trusted life insurance company that values customers financial wellbeing, consistently delivering best-in-class solutions and respected by all.

TATA AIG MISSION Enhance our customers well-being.

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2.2 GROWTH AND DEVELOPMENT OF THE ORGANIZATION

Organizational Development

In many other Indian insurance companies, micro insurance products are developed by one department and then sold and serviced by another. The separation of these functions meant significant lags in processing customer feedback. Tata-AIG took a different approach by having a department focused solely on micro insurance, so a single team managed the entire process. The rural and social team of Tata-AIG is headed by Vijay Athreye (the co-author of this study). Athreye was hired by the CEO in 2001 to help Tata-AIG meet its Rural and Social Sector Obligations. For the first two years, Athreye ran Tata-AIGs rural and social team by himself. In the first year (Dec 01- Nov 02), he was responsible 7 742 social policies. These were marketed with the help of The Bridge Foundation (TBF), a microfinance wholesaler, which became a corporate agent for Tata-AIG and promoted these policies through its network of microfinance institutions. Some of these policies were pilots and many lapsed. In the second year (Dec 02 - Nov 03), Tata-AIG had an additional 2 941 social policies again through TBF network. During this year, Athreye secured a grant from DfIDs Financially Deepening Challenge Fund (FDCF) and began to develop the micro-agent model as an additional distribution channel.

By June 2005, less than 14% of the policies marketed by TBF were still active. Many of the policies lapsed because some MFIs fell out of TBFs microcredit programme. The other reason for the high lapse rate was that the micro insurance products were of a different length than the microloans. This meant that the servicing costs of the micro insurance products were a burden on the MFIs that no longer received assistance from TBF. Finally, the Tata-AIG insurance products have 5 to 15 years terms. A client may receive a single loan and may either not apply for another or be granted another at which point the link between the loan product and the insurance product severs as does the
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servicing. A further complication (unrelated to TBF) was that, initially claims payments were slow, which heavily affected client persistency.

After this initial experience, the rural and social team grew rapidly. In the third year (Dec 03 to Nov 04), the team launched the micro-agent model in four states and received resources to hire two additional staff members, for a total of 5 employees (in all including the staff outsourced to NGO partners on the DfID project). In the first half of 2005, the microinsurance programme received resources to hire 7 additional staff members.

2.3 PRESENT STATUS OF THE ORGANIZATION

The Tata group comprises over 90 operating companies in seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. The group has operations in more than 80 countries across six continents, and its companies export products and services to 85 countries. The total revenue of Tata companies, taken together, was $83.5 billion (around Rs380,663 crore) in 2010-11, with 57.8 per cent of this coming from business outside India. Tata companies employ over 425,000 people worldwide. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics. Every Tata company or enterprise operates independently. Each of these companies has its own board of directors and shareholders, to whom it is answerable. There are 28 publicly listed Tata enterprises and they have a combined market capitalization of about $74.15 billion (as on October 5, 2011), and a shareholder base of 3.5 million. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Indian Hotels and Tata Communications.

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2.4 FUNCTIONAL DEPARTMENTS OF THE ORGANIZATION

The company is divided into 4 functions:-

Finance

Operation s

Departmen ts

Human Resource

Sales and Marketing CHART-2.2 Finance Department

Employment claim. Petty cash. Vendor bill. Purchase. Making budgets. Dealing with commercial activities.

Human Resource Department

Recruitment and selection of employees. Training and Development. Performance appraisal.

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Payroll. Human Resource Planning. Grievance handling.

Sales and Marketing Department

Selling insurance policy. Making new agents. Survey about Financial Health Check. Promoting the financial product.

Operation Management

Form filling Administration Verification of documents Handling of customers

2.5 ORGANIZATION STRUCTURE AND ORGANIZATION CHART

An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment.

Many organizations have hierarchical structures, but not all.

Organizations are a variant of clustered entities.

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An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs.

Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and individual.

Organizational structure affects organizational action in two big ways. First, it provides the foundation on which standard operating procedures and routines rest. Second, it determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organizations actions.

Organization Structure

CHART-2.3

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2.6 PRODUCT AND SERVICE PROFILE OF THE ORGANIZATION / COMPETITORS

Tata AIG Life has vast portfolio of insurance products:

Retirement Plan: Better known as Pension plan, this plan takes care of financial needs after retirement by investing a part of your savings for limited period. With rising inflation, its absolutely necessary to make provisions for the future which makes retirement plan an important financial decision. Pension plan provides steady income after retirement and takes care of daily needs. The pension plans offered by Tata AIG Life are Nirvana, Nirvana Plus, Assure Golden Years, Life MahaLife Gold and Easy Retire.

Child Plan: Parenthood brings responsibilities and no one is better judge of that than you. Child Plan is a plan specifically designed to take care of financial needs of your child. Child plan provides with necessary funds that will take care of childs education, marriage etc. By investing small portion of your savings you secure the financial end of your child. Child plans of Tata AIG Life are called StarKid, Assure Career Builder, Assure Educare, Tata AIG Life Assure 21 years Money Saver Plan, MahaLife Gold and Assure 10/20/30 years Security & Growth.

Term Plan: A risk plan which provides comprehensive cover for your family in the unfortunate event of untimely demise. A term life insurance plan provides good cover at relatively nominal cost and has no survival benefits. Tata AIG Life term plans are Raksha, LifePlus and Assure Lifeline Plans.

Investment Plan: Popularly known as ULIP, an investment plan invests part of your savings in equity or debt market as per your preference. The objective of investment plan is to give you returns which easily beat the rising costs since the usual returns in a bank are extremely low. ULIPs offered by Tata AIG Life are Maha Guarantee, Maha Guarantee Flexi, Assure 10/20/30 Security & Growth, Assure Golden Years, Assure 21
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years Money Saver Plan, ShubhLife, Lakshya Supreme, InvestAssure Flexi Supreme, InvestAssure Plus Supreme and United Ujjwal Bhawishya Supreme.

Health Plan: Slightly different from health insurance, health plan provides cover for surgery costs, critical illness. A lump sum is paid irrespective of actual hospital bill. Health First, Health Protector, Health Investor and Hospi CashBack are Tata AIGs health plan.

Distribution Network:

The company is headquartered in Mumbai and has some 200 offices in the country. Tata AIG life has also tie ups with corporate agents for distribution. Tata AIG products like Mahalife Gold, Nirvana and Health First are available online.

Tata AIG Life Product Table:

Retirement/Pension Plan Retirement/Pension Plan Retirement/Pension Plan Retirement/Pension Plan Retirement/Pension Plan Child Plan Child Plan Child Plan Child Plan Child Plan

Tata AIG Life Nirvana Tata AIG Life Nirvana Plus Tata AIG Life Assure Golden Years Tata AIG Life Life MahaLife Gold Tata AIG Life Easy Retire Tata AIG Life StarKid Tata AIG Life Assure Career Builder Tata AIG Life Assure Educare Tata AIG Life Assure 21 years Money Saver Plan Tata AIG Life MahaLife Gold

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Child Plan Term Plan Term Plan Term Plan Savings & Investment Plan Savings & Investment Plan Savings & Investment Plan Savings & Investment Plan Savings & Investment Plan Savings & Investment Plan Savings & Investment Plan Savings & Investment Plan Savings & Investment Plan Savings & Investment Plan Health Plan Health Plan Health Plan Health Plan

Tata AIG Life Assure 10/20/30 years Security & Growth Tata AIG Life Raksha Tata AIG Life LifePlus Tata AIG Life Assure Lifeline Plans Tata AIG Life Maha Guarantee Tata AIG Life Maha Guarantee Flexi Tata AIG Life Assure 10/20/30 Security & Growth Tata AIG Life Assure Golden Years Tata AIG Life Assure 21 years Money Saver Plan Tata AIG Life ShubhLife Tata AIG Life Lakshya Supreme Tata AIG Life InvestAssure Flexi Supreme Tata AIG Life InvestAssure Plus Supreme Tata AIG Life Insurance United Ujjwal Bhawishya Supreme Tata AIG Life Health First Tata AIG Life Health Protector Tata AIG Life Health Investor Tata AIG Life Hospi CashBack TABLE-2.1

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COMPETITORS:
Bajaj Allianz Life Insurance Company Limited HDFC Standard life Insurance Co. Ltd ICICI Prudential Life Insurance Co. Ltd. ING Vysya Life Insurance Company Ltd. Max New York Life Insurance Co. Ltd SBI Life Insurance Co. Ltd Reliance Life Insurance Company Limited. Aviva Life Insurance Co. India Pvt. Ltd. Sahara India Life Insurance Bharti AXA Life Insurance

2.7 MARKET PROFILE OF THE ORGANIZATION

TATA AIG Life Insurance Company has said that it aimed to be the number-two private player in the life insurance industry with a market share of 20 per cent by 2007.

Mr. Ian Watts, Managing Director, Tata AIG, estimated that by 2007, private players would have about 40 per cent of the total life insurance market; currently dominated by the Life Insurance Corporation.

Mr. Watts told newspersons here that the company intended to add about 3,000 new jobs under its aggressive expansion plan. Apart from the direct jobs, the company would also triple its agency force to about one lakh. It is aiming at a total premium of Rs 4,000 crore and a customer base of 30 lakh, Mr. Watts said.

Tata AIG calls the three-year plan "Operation Quantum Leap".

According to Mr. Watts, the company has over the past couple of years built the platform and product suite necessary to boost future business.
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While he expected the company to break even by the end of 2006, he estimated that the company's growth would require a total capital of about Rs 1,000 crore. It is currently capitalized at about Rs 276 crore.

CHART-2.4

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CHAPTER 3 DISCUSSION ON TRAINING

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3.1 STUDENTS WORK PROFILE (ROLES AND RESPONSIBILITIES)

The work done at TATA AIG Life Insurance is described as follows:

Done Market Survey

In TATA AIG I have done market survey in which financial health check up of working population was done in Moti Nagar.

Recruitment of Advisors
In TATA AIG I have to recruit the advisors for part time. Process of recruitment is as follows-

Search the applicants

Form filling

Interview

IRDA Exam

4 Days training

Document verification

6 Days training

Issuance of license

Agent code from company

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SOURCES OF RECRUITMENT Natural Market

I have to recruit the advisors from natural market i.e from our friends, relatives and neighbors etc. Market survey

Data can also be collected by market survey in which the financial health check up of people is done.

Job Description of Advisors

I also have to look in advisors whether they satisfy eligibility criteria as per IRDA or TATA AIG which is as follows-

Premier agent selection criteria

Applicant should be atleast 25 years of age Applicant should have atleast 2 years of work experience Applicant should have stayed in the same city/town for atleast 2 years continuously

Extended Premier Agent selection criteria

Under this housewife and applicant less than 25years of age are permitted to be recruited subject to following condition:

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1. Housewives: Applicant should be atleast 25 years of age Applicant should have stayed in the same city/town for atleast 2 years continuously

2. Applicant less than 25 years of age: Applicant should have atleast 2 years of work experience Applicant should have stayed in the same city/town for atleast 2 years continuously.

Documents required from Advisors at the time of interview:

PAN card is mandatory as per IRDA guide lines Proof of date of birth 12th mark sheet (photocopy) Voter ID card Work experience certificate

3.2 KEY LEARNINGS

Recruitment is the heart of HRM. Because if you dont have anyone to fill the positions in your organization, for whom are you going to devise the policies, or train or manage compensation for?

Working extensively in the Recruitment gave the opportunity to learn to interact with people with business sense.

Build up the foremost quality of HRM professionals of Interpersonal and negotiating skills:

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Each step in recruitment helped to sharpen interpersonal, negotiating and convincing skills. Right from interacting the candidates to join the company, required many convincing skills.

a) Virtue of Patience and Perseverance:

Working for the Recruitment department taught the valuable virtues of patience and perseverance. Recruitment is not a job that yields results instantly. Working in it helped to understand the importance of patience and a constant hard work. Even steps like convincing to the candidates were not easy. There were times when the candidate was to be interacted four to five times.

b) Understanding the inner details like job description and person job fit:
Constant interaction with the branch head about the job description, helped to understand the job description and its importance in detail. Also in cases of some applicants, firstly meeting can be arranged with managers so that they clearly understand their job profile and then after offer was made. This helped to understand the person job fit.

c) Importance of Follow-up and Communication with the prospective advisor:

The importance of follow-up in the recruitment process was understood deeply. Followup during the time of interaction as well as during the time period when the candidate is yet to complete the training and till issuance of licenseis essential. It helps to keep him motivated to come for the training as well as online exam. Talking at length with the candidate would actually help in knowing whether the candidate is really interested or it is a time pass for him.

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d) Joining Formalities
It also helped to follow closely the joining formalities that the company followed right from all the documents required at the time of documentation, generation of employee code as well as the joining kits.

e) Company Policies
During the recruitment process, opportunity was received to familiarize with the company and its business, policies and procedures, compensation and benefits and other inside information.

f) Honed marketing skills:

Day in and day out, questions were answered to the prospective candidates. This is how the sales part of the job was learnt by selling the company and the job, by just giving the right USP for the job/position or the company.

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CHAPTER-4 STUDY OF SELECTED RESEARCH PROBLEM

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4.1 STATEMENT OF RESEARCH PROBLEM

In TATA AIG the major problem in recruitment of advisors may be as follows: Age Limit

The problem in recruitment which I had faced was of age as in TATA AIG the minimum age required is 25 and at this age almost all persons are working so it will not possible for them to attend training. Work Experience

Work Experience may also be a problem as for non working people such as students who are interested to join Co. are not eligible as they dont have 2 years experience certificate. Training Problem

The major problem which I have faced was of training. Mostly to whom I had approach are working peoples and it is very difficult for them to attend training.

4.2 STATEMENT OF RESEARCH OBJECTIVES

To study the process and sources of recruitment and selection procedure followed in Tata AIG. To search or headhunt people whose skill fits into the companys values. To Identify issues not possible or difficult to ascertain through interview or issues related to job satisfaction, productivity and tenure.

To Provide invaluable insight into how to best motivate and manage a new advisors

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4.3 RESEARCH DESIGN AND METHODOLOGY

The purpose of the methodology is to describe the research procedure. This includes overall research design, the sampling procedure, the data collection method, and analysis procedure. Out of total universe 25 respondents from TATA AIG have been taken for convenience. The sample procedure chosen for this are statistical sampling method.

Here randomly employees are selected and interviewed. Information, which I collected, was based on the questionnaires filled up by the sample employees.

Under secondary method I took the help of various reference books which I have mentioned in bibliography and also by way of surfing through the company website.

Primary Data
Questionnaire: Corresponding to the nature of the study direct, structured questionnaires with a mixture of close and open-ended questions will be administered to the relevant respondents within the Personnel and other Departments of the organization.

Secondary Data
Organizational literature: Any relevant literature available from the organization on the Company profile, recruitment &selection procedures, Job specifications, department-wise break up of manpower strength and the organizational structure.

Other Sources:

Appropriate journals, magazines such as Human Capital, relevant

newspaper articles, company brochures and articles on www sites will also be used to substantiate the identified objectives.

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Sampling Plan and Design

A questionnaire will be used for the purpose of research:

Questionnaire: To test the validity and effectiveness of the recruitment and selection procedures within the organization and to test the validity and effectiveness of the policies and procedures within the organization.

The basic rationale of Questionnaire is to ascertain the perception of the non-HR departments in terms of the validity and effectiveness of the policies and procedures used by the organization. It is also in line with the assessment of any suggestions /recommendations that the respondents from these Departments might have in terms of the use of an alternative source/device of recruitment and selection, than what already forms the current practice of the HR Department.

Sample Size-25 Respondents Sample Area-Tata AIG (Asaf Ali Branch) Sample Time-2 Months

Questionnaire would be administered to 25 respondents, holding a senior designation within the Personnel Department at the Tata AIG branch Asaf Ali road. It will also be administered to at least 25 respondents belonging to typical Departments within the organization and holding senior designations within their respective Departments.

Sampling Element
For the purpose of administering the Questionnaire, the respondents would comprise of personnel holding senior designations within the Personnel Department of the organization. The respondents for the Questionnaire will also be preferably being panel members of the Recruitment &Selection Board of the organization.

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Sampling Technique
In this study Non-Probability Sampling is used and for the purpose of choosing the sample for the purpose of administering Questionnaire out of Non-Probability sampling Judgmental Sampling is used. The identified expert would have a thorough knowledge about all the respondents within the Personnel Department of the organization. Thus his/her expertise would be incorporated in locating, identifying and contacting the required respondents. Judgmental sampling is a non-probability sampling technique where the researcher selects units to be sampled based on their knowledge and professional judgment.

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CHAPTER-5 ANALYSIS

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5.1 ANALYSIS OF DATA

1. Which sources do you prefer most for recruitment and selection? Internal sources External sources Both

Response No. of Respondents % of total respondents Internal Sources 8 32% External Sources 8 32% Both 9 36% Total 25 100% TABLE-5.1

36%

32% Internal Sources External Sources 32% Both

CHART-5.1

Interpretation

From the study it is concluded that 32% prefers internal sources most for recruitment and selection and again 32% persons prefers external sources most for recruitment and selection and 36% persons prefers both sources for recruitment and selection.

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2. Which is the most effective internal source of recruitment in the organization? Promotion Transfer Employee Referral

Response Promotion Transfer Employee Referral Total

No. of Respondents % of total respondents 6 24% 3 16 25 TABLE-5.2 12% 64% 100%

24% Promotion 64% 12% Transfer Employee Referral

CHART-5.2

Interpretation

From the study it is concluded that 24% says promotion is the most effective internal source of recruitment and only 12% says transfer and 64% says employee referral is the most effective internal source of recruitment in the organization.

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3. Which is the most effective external source of recruitment in the organization? Consultants Job Fair Job Portal

Response No. of Respondents % of total respondents Consultants 17 68% Job Fair Job Portal Total 6 2 25 TABLE-5.3 24% 8% 100%

8% 24% 68% Consultants Job Fair Job Portal

CHART-5.3

Interpretation

From the study it is concluded that 68% says consultants is the most effective external source of recruitment and 24% says job fair and only 8% says job portal is the most effective external source of recruitment in the organization.

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4. On what factors the candidate is assessed best fit for a job? Education Experience Career Experience All the Above

Response Education Experience Career Expectation All the above Total

No. of Respondents % of total respondents 4 16% 15 6 0 25 TABLE-5.4 60% 24% 0% 100%

0% 24% 16% Education Experience 60% Career Expectation All the above

CHART-5.4

Interpretation

From the study it is concluded that 16% says on education basis the candidate is assessed best fit for a job and 60% says on experience basis and 24% says on career expectation basis the candidate is assessed best fit for a job.

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5. What techniques are used to gauge the capability & aptitude of candidates? Written test Trade test Interview All the Above

Response Written Test Trade Test Interview All the above Total

No. of Respondents % of total respondents 9 36% 4 10 2 25 TABLE-5.5 16% 40% 8% 100%

8% 36% 40% 16% Written Test Trade Test Interview All the above

CHART-5.5

Interpretation

From the study it is concluded that 36% says written test technique is used to gauge the capability & aptitude of candidates and 16% says trade test technique and 40% says interview technique and only 8% says all techniques are used to gauge the capability & aptitude of candidates.

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6. How do you rate the referral policy practiced in your organization? Good Average Below average

Response Good Average Below Average Total

No. of Respondents % of total respondents 16 64% 9 0 25 TABLE-5.6 36% 0% 100%

0% 36% Good 64% Average Below Average

CHART-5.6

Interpretation

From the study it is concluded that 64% rate good to the referral policy practiced in their organization and 36% rate average and no one rate below average.

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7. What form of interview do you prefer for initial screening? Personal interview Telephonic interview Video conferencing

Response Personal Interview Telephonic Interview Video Conferencing Total

No. of Respondents % of total respondents 18 72% 6 1 25 TABLE-5.7 24% 4% 100%

4% 24% Personal Interview 72% Telephonic Interview Video Conferencing

Interpretation

From the study it is concluded that 72% prefers personal interview for initial screening and 24% prefers telephonic interview and only 4% prefer video conferencing for initial screening.

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8. Which test do you think is most effective while selection process for competency assessment in all levels of the organization? Aptitude Intelligence Personality Psychometric Any other

Response Aptitude Intelligence Personality Psychometric Any other Total

No. of Respondents % of total respondents 4 9 3 7 2 25 TABLE-5.8 16% 36% 12% 28% 8% 100%

8% 28% 12%

16% Aptitude Intelligence 36% Personality Psychometric Any Other

CHART-5.8

Interpretation

From the study it is concluded that 16% think aptitude test is most effective and 36% think intelligence test and 12% think personality test and 28% think psychometric test and only 8% think any other test is most effective while selection process for competency assessment .
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9. What is the major reason behind candidate not going to join after selection? Personal Salary problem Not interested Got other opportunity Other

Response Personal Salary Problem Not interested Got another opportunity Other Total

No. of Respondents % of total respondents 3 12% 11 3 7 1 25 TABLE-5.9 44% 12% 28% 4% 100%

4% 28% 12% Personal Salary Problem 12% 44% Not Interested Got another opportunity Other

CHART-5.9

Interpretation

From the study it is concluded that 12% says personal problem is the reason behind candidate not going to join after selection and 44% says salary problem is the reason and 12% says that candidates are not interested in job and 28% says that candidates got another opportunity and 4% says there may be other reason for not joining.
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10. How do you rate the present methodology followed in the organization for recruitment & selection? Very good Good Average Below average

Response Very Good Good Average Below Average Total

No. of Respondents % of total respondents 12 48% 10 3 0 25 TABLE-5.10 40% 12% 0% 100%

0% 12% 48% 40% Very Good Good Average Below Average

CHART-5.10

Interpretation

From the study it is concluded that 48% rate very good to the present methodology followed in the organization for recruitment & selection and 40% rate good and only 12% rate average .

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5.2 SUMMARY OF FINDINGS

1. Tata AIG preferred both internal and external sources for recruitment and selection. 2. Employee Referral is the most effective internal source of recruitment in the organization. 3. Consultants are the most effective external source of recruitment in the organization. 4. On experience factor the candidate is assessed best fit for a job. 5. Interview technique is used to gauge the capability & aptitude of candidates. 6. The referral policy practiced in the organization is good. 7. Mostly people preferred Personal interview for initial screening in Tata AIG. 8. Intelligence Test is most effective while selection process for competency assessment in all levels of the organization. 9. Salary Problem is the major reason behind candidate not going to join after selection in the organization. 10. The present methodology followed in the organization for recruitment & selection is very good.

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CHAPTER-6 SUMMARY AND CONCLUSIONS

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6.1 SUMMARY OF LEARNING EXPERIENCE

Learn everything you can, anytime you can, from anyone you can-there will always come a time when you will be grateful you did. -Sarah Caldwell (American Impresario)

Understanding the inner details like job description and person job fit: Constant interaction with the branch head about the job description, helped to understand the job description and its importance in detail. Importance of Follow-up and Communication with the prospective advisor: The importance of follow-up in the recruitment process was understood deeply. Followup during the time of interaction as well as during the time period when the candidate is yet to complete the training and till issuance of license is essential. Joining Formalities It also helped to follow closely the joining formalities that the company followed right from all the documents required at the time of documentation, generation of employee code as well as the joining kits. Company Policies During the recruitment process, opportunity was received to familiarize with the company and its business, policies and procedures, compensation and benefits and other inside information. Honed marketing skills: Day in and day out, questions were answered to the prospective candidates. This is how the sales part of the job was learnt by selling the company and the job, by just giving the right USP for the job/position or the company.

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6.2 CONCLUSIONS AND RECOMMENDATIONS

Conclusion
On the basis of the study it is found that Tata AIG Life Insurance co. ltd. follows the recruitment process in a very smooth manner. It considers its employees and advisors as its assets. Employees working in the organization are committed and loyal towards their work. Tata AIG encourages and protects the interest of its employees. It also provides the information through the various training programs conducted time to time. For the purpose of recruitment of the advisors, company depends on internal sources and it is difficult to convince people to become the advisors.

Recommendations
After understanding closely the recruitment processes at TATA AIG, the following proposals were made:

Training time should be reduced or should be conducted on Saturday and Sunday for working people. Online training facility should be introduced. Job portals can be used to get more data.

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ANNEXURE

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QUESTIONNAIRE
Q1. Which sources do you prefer most for recruitment and selection? (i) Internal sources (ii) External sources (iii) Both

Q2. Which is the most effective internal source of recruitment in the organization? (i) Promotions (ii) Transfer (iii) Employee Referral

Q3. Which is the most effective external source of recruitment in the organization? (i) Consultants (ii) Job Fair (iii) Job Portal

Q4. On what factors the candidate is assessed best fit for a job? (i) Education (ii)Experience (iii) Career Expectation (iv)All the above

Q5. What techniques are used to gauge the capability & aptitude of candidates? (i) Written Test (ii) Trade Test (iii) Interview (iv) All the above

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Q6. How do you rate the referral policy practiced in your organization? (i)Good (ii)Average (iii)Below Average

Q7. What form of interview do you prefer for initial screening? (i) Personal Interview (ii)Telephonic Interview (iii)Video Conferencing

Q8. Which test do you think is most effective while selection process for competency assessment in all levels of the organization? (i) Aptitude (ii) Intelligence (iii) Personality (iv) Psychometric (v) Any Other

Q9. What is the major reason behind candidate not going to join after selection? (i) Personal (ii) Salary Problem (iii) Not Interested (iv) Got another opportunity (v) Other

Q10. How do you rate the present methodology followed in the organization for recruitment & selection? (i)Very Good (ii) Good (iii) Average (iv) Below Average
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BIBLIOGRAPHY

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BIBLIOGRAPHY
BOOKS REFERRED Ivancevich John M, Human Resource Management, 10th edition,2008 , Tata McGraw Hill, New Delhi. Kothari, C.R, Research Methodology, 5th Edition, 2006, New Age International Publishers, India.

WEB SITES REFERRED www.tata-aig-life.com wwwcitehr.com www.scribd.com www.recruitment.naukrihub.com www.humanresources.hrvinet.com

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