INTRODUCTIONLO

Assurance industry has always been a growth-oriented industry globally. On the Indian
scene too, the assurance industry has always recorded noticeable growth vis--vis other Indian
industries
The new India assurance Co. Ltd. was the first general assurance company to be
established in India in 1850, which was a wholly British-owned company. The new India
assurance company to be set up by an Indian was Indian Mercantile assurance Co. Ltd., which
was established in 1907. There emerged many a assurance player on the Indian scene
thereafter.
The general assurance business was nationalized after the promulgation of General
Insurance Business (Nationalization) Act, 1972. The post-nationalization general assurance
business was undertaken by the assurance Corporation of India (GIC) and its 3 subsidiaries
CHARSTRUCTURE OF THE ASSURANCE INDUSTRY
The structure of the assurance industry comprises of the Operating department,
Administrative department and the finance department. The Operating Department generally
performs the basic functions pertaining to the designing of products, marketing thereof,
servicing the insured, the insured, management of portfolio, etc.
The Administrative Department looks after the day-to-day affairs of the company. The
Finance Department backs the operations and administration of the company by accounting for
the transactions, streamlining the flow of funds, materializing the management decisions, etc.
The Administration Department as well as the Finance Department, usually, functions
through in-house setup. The Finance Department functions in the areas of accounting, financial
and management reporting, budgeting and controlling, etc. and thus renders enormous scope
for finance professionals. The new entrants in the assurance sector are likely to call for the
services of the Chartered Accountants for their financial setup requirements. The Chartered
Accountants have engaged themselves in the audit of assurance Companies since long. With
the transition in the insurance sector, the horizons for their contribution have broadened.

COMPANY PROFILE

About - New India Assurance Company Limited

New India Assurance Company is a leading global insurance group, with offices and
branches throughout India and various countries abroad. The company services the Indian
subcontinent with a network of 1068 offices, comprising 26 Regional offices, 393 Divisional
offices and 648 branches. With approximately 21000 employees, New India has the largest
number of specialist and technically qualified personnel at all levels of management, who are
empowered to underwrite and settle claims of high magnitude.
New India has been rated "A-" (Excellent) by A.M.Best Co., making it the only Indian
insurance company to have been rated by an international rating agency. Rating based on
following factors:
Superior Capital Position
Strong Operating Performance
Only Company to develop significant International operations, long record of
successful trading outside India.
Shri M. D. Mallaya, Chairman & Managing Director, Bank of Baroda, has been
appointed as Director The New India Assurance Company limited.
Since its inception in 1994, has emerged as TATA Financial Services Inc. One of
India's leading financial managing assets of a large investor base. The fund offers a range of
investment options, which include diversified and sector specific equity schemes, fund of fund
schemes, hybrid and monthly income funds, a wide range of debt and treasury products and
offshore funds.
New India Assurance Company Limited follows a long-term, fundamental research
based approach to investment. The approach is to identify companies, which have excellent
growth prospects and strong fundamentals. The fundamentals include the quality of the
company's management, sustainability of its business model and its competitive position,
amongst other factors TATA Financial Services Inc. Company has one of the largest team of
research analysts in the industry, dedicated to tracking down the best companies to invest in.
TATA Financial Services Inc. Strives to provide transparent, ethical and research-based
investments and wealth management services.
International presence
Overseas operations commenced in 1920. Operations in 24 countries in the year 200405. Network of 19 Branches, 12 Agencies, 2 Associate companies and 2 Subsidiary companies
in the year 2004-05. Overseas Premium of Rs. 892.35 cores in the year 2004-05, which
accounts for more than 80% of total overseas premium in India.

Company Strengths

Largest number of Offices - In India and Abroad Trained and technically qualified staff
1068 fully computerized offices across India. "A-" (Excellent) rating by A.M.Best & Co
(Europe) First domestic company to be rated by an International Rating Agency Rating based
upon following factors: Superior capital position Strong operating performance Strong market
position Only company to develop significant International operations, long record of
successful trading outside India

Pioneers

First company to set up an Aviation Insurance Department in 1946.

First company to handle the Hull Insurance requirements of the Indian Shipping Fleet.

First company to establish its own Training School.

First company to introduce the concept of 'Model Office Training'.

First company to create department in Engineering insurance.

Vision
To be the most trusted name in investment and wealth management, to be the preferred
employer in the industry and to be a catalyst for growth and excellence of the asset
management business in India. The vision is to make assurance Company the dominant new
insurer in the life insurance industry. This it hopes to achieve through our commitment to
excellence, focus on service, speed and innovation, and leveraging our technological expertise.

BASIC FUNCTIONS OF THE ASSURANCE INDUSTRY

1. Risk Perception and Evaluation:
The fundamental function of an insurer is to provide a cover against the detriment caused
to the insured due to the happening of certain specified and agreed events. Thus, prior to
providing such umbrella through a product, the insurer has to assess the risk involved in the
transaction. The insurer has to identify the element of risk prevalent in the concerned industry
or a particular unit. The perception of risk requires the study of variables through various
methods including the application of scientific and statistical techniques and correlation thereof
with the industry or unit under study in light of their basic environmental and infra-structural
characteristics.

2. Designing the Insurance Product:

On the basis of the risks perceived, the insurer develops a product to cover the stipulated risks.
While designing an insurance product, an insurer decides its cost to be charged from the
insured in the form of premium, reduction thereof in certain cases like not lodging any claim
during the previous covered period(s), suggesting the implementation of risk-mitigating
measures, etc.

3. Marketing of the Product:

The core function of the marketing force of an insurance company is to generate
awareness about the insurance products among the target market. But in the Indian scenario,
where the insurance penetration is too low as compared to the other nations, the marketing
force needs to perform the pro-active role in developing an insurance culture. It is through the
efficiency of the sales force of an insurance company that the desirability and the success of a
product are determined.
Adequate knowledge of the insurance industry, products and the modalities attached
therewith. Further, the marketing personnel should be adequately backed by the back-office
setup.

4.

Selling of the Products:

The term selling in the context of Assurance industry connotes the issuance of policies
to the applicant proposer. The Assurance basically embodies the covenant between the insurer
and the insured wherein the former agrees to indemnify the latter for the loss caused to him on
the happening of the certain agreed events up to a specified limit. The life insurance policy
generally contains the agreement whereby the insurer agrees to pay to the insured or the
beneficiary of the policy an agreed amount on the expiry of the term of the policy or in the
event of the death of the insured respectively. The additional benefits in the shape of Riders
viz. Accidental Death Benefit, Double Sum Assured, Critical Illness benefits; Waiver of
Premiums, etc. can also be appended with the policy on the payment of an additional

5.

Management of Portfolio:
The management of the portfolio includes the assessment of requirement of funds,
identification of various sources of finance, the evaluation of the sources in the light of their
cost, availability, timing, etc., reconciling the features of various sources with the needs of the
company and the selection of appropriate conjunction of sources. The insurer possesses huge
amount of funds, which need proper management. The management of the portfolio of an
insurance company requires the identification of investment avenues, evaluation thereof and
the selection of the most appropriate mix of alternatives where the funds of the company can
be invested. The selection requires the knowledge of finance related functions and techniques
apart from the in-depth know of the patterns of requirement of funds in the company as well as

TYPES OF ASSURANCE SCHEMESThere are a wide variety of assurance schemes that cater to your needs, whatever your
age, financial position, risk tolerance and return expectations. Whether as the foundation of
your investment programmed or as a supplement, assurance schemes can help you meet your
financial goals?

(A) By Structure
Open-Ended Scheme
These do not have a fixed maturity. You deal with the assurance for your investments
and redemptions. The key feature is liquidity. You can conveniently buy and sell your units at
Net Asset
Value (NAV) related prices, at any point of time.

Close-Ended Schemes
Schemes that have a stipulated assurance period (ranging from 2 to 15 years) are called
close ended schemes. You can invest in the scheme at the time of the initial issue and thereafter
you can buy or sell the units of the scheme on the stock exchanges where they are listed. The
market price at the stock exchange could vary from the schemes on account of demand and
supply situation, unit holders' expectations and other market factors.
One of the characteristics of the close-ended schemes is that they are generally traded at
a discount to NAV; but closer to maturity, the discount narrows. Some close-ended schemes
give you an additional option of selling your units to the assurance company through periodic
repurchase at NAV related prices. SEBI Regulations ensure that at least one of the two exit
routes are provided to the investor under the close ended schemes.

Interval Schemes
These combine the features of open-ended and close-ended schemes. They may be
traded on the stock exchange or may be open for sale or redemption during predetermined
intervals at NAV related prices.

(B) By Investment Objective

Growth Schemes
Aim to provide capital appreciation over the medium to long term. These schemes
normally invest a majority of their funds in equities and are willing to bear short term decline
in value for possible future appreciation.
These schemes are not for investors seeking regular income or needing their money
back in the short term.

Ideal for:

Investors in their prime earning years.

Investors seeking growth over the long term.

Income Schemes
Aim to provide regular and steady income to investors. These schemes generally invest
in fixed income securities such as bonds and corporate debentures. Capital appreciation in such
schemes may be limited.

Ideal for:

Retired people and others with a need for capital stability and regular income.

Investors who need some income to supplement their earnings.

Balanced Schemes
Aim to provide both growth and income by periodically distributing a part of the
income and
Capital gains they earn. They invest in both shares and fixed income securities in the
proportion indicated in their offer documents. In a rising stock market, the NAV of these
schemes may not normally keep pace or fall equally when the market falls.

Ideal for:

Investors looking for a combination of income and moderate growth.

Money Market / Liquid Schemes

Aim to provide easy liquidity, preservation of capital and moderate income. These
schemes generally invest in safer, short term instruments such as treasury bills, certificates of
deposit, commercial paper and interbank call money. Returns on these schemes may fluctuate,
depending upon the interest rates prevailing in the market.

Ideal for:

Corporate and individual investors as a means to park their surplus funds for short periods or
awaiting a more favorable investment alternative.

Other SchemesTax Saving Schemes (Equity Linked Saving Scheme - ELSS).

Special Schemes

Fixed Maturity Plans

Exchange Traded Funds (ETFs)

Capital Protection Oriented Schemes

Gold Exchange Traded Funds (GETFs)

Product Profile
A. Products & Policy
1. Commercial Products Policy
1.1

Jewellers Block Policy

1.2

Bankers Indemnity Policy

1.3

Shopkeepers Policy

1.4

Marine Cargo Policy

1.5

Plate Glass Insurance

1.6

Special Contingency Policy

1.7

Neon Sign Insurance

1.8

Multi Peril Policy for L.P.G. Dealers

1.9

Fidelity Guarantee Insurance Policy

1.10

Marine Hull Policy

1.11

Aviation Insurance

2. Personal Products Policy

2.1.

Pravasi Bharatiya Bima Yojana Policy

2.2.

Personal Accident Policy

2.3.

Householders Policy

2.4.

Motor Policy

2.5.

Money Insurance

2.6.

Rasta Apatti Kavach (Road Safety Insurance)

2.7.

TV/VCR/VCP Insurance

2.8.

Mobile/Cellular Phone Insurance

2.9.

Other Personal Insurance

3. Liability Policy
3.1.

Public Liability Policy

3.2.

Products Liability Policy

3.3.

Professional Indemnity Policy

3.4.

Directors and Officers Liability Policy

3.5.

Lift (Third Party) Insurance

3.6.

Employers' Liability Policy

3.7.

Carrier's Liability Insurance

3.8.

Liability Insurance Act Policy

3.9.

Golfers Indemnity Insurance

4. Industrial Policy
4.1.

Fire Policy

4.2.

Burglary Policy

4.3.

Machinery Breakdown Policy

4.4.

Electronics Equipment Policy

4.5.

Consequential Loss Policy

4.6.

Contractors All Risk Policy

4.7.

Marine cum Erection / Storage cum Erection Policy

4.8.

Advanced Loss of Profit / Delay in Startup Policy

4.9.

Contractor Plant and Machinery Policy

4.10.

Mega Package Policies

5. Social Policy
5.1.

Universal Health Insurance Scheme

5.2.

Jan Arogya Bima Policy

5.3.

Raj Rajeshwari Mahila Kalyan Yojana

5.4.

Bhagyashree Child Welfare Policy

5.5.

Janata Personal Accident Insurance

5.6.

Student Safety Insurance

5.7.

Ashrya Bima Yojana

5.8.

Rural Insurance

THE TOTAL PRODUCT CONCEPT

The Total Product Concept (TPC), which implied that a product had three levels of
features and the consumption, was in totality.

LEVEL 1:
Core Product:
In the Insurance Industry the core product is the policy that provides protection to the
consumers against the risks. This is the main reason for which the Insurance Company is in existence.
It provides protection by way of various riders viz. Accidental Death Benefit, Double Sum Assured,
Critical Illness benefits, Waiver of Premiums, etc.
On the basis of the risks perceived, the insurer develops a product to cover the stipulated risks.
While designing an insurance product, an insurer decides its cost to be charged from the insured in the
form of premium, reduction thereof in certain cases like not lodging any claim during the previous
covered period(s), suggesting the implementation of risk-mitigating measures, etc. The features of a
product should be flexible enough to provide for the determination of premiums, rebates, additional
premiums,

etc.

depending

upon

the

risk

benchmarks

as

determined.

LEVEL:2
Formal Product:
When the customers expectations grow synchronized with increased competition the marketer
offers some tangibility to the existing core product to differentiate itself from the competitors.

1. Brand:
In order to distinguish itself from the competitors, the Insurance Company gives a brand name
to its policy. This brand name gives an identity to the product (policy) offered by the insurance
company.

2. Attributes:
Just giving a brand name to the policy may not be enough for the insurance company to
distinguish its offerings. The product offering must also have attributes that will attract the consumers
to take the policy. The attributes must suit and satisfy the needs wants and desires of the various types
of consumers that the company is targeting at.
Thus ICICI's investment plans suit the consumers who want to secure their family through
insurance or invest money for growth. And its retirement plans suit the ones who want to enjoy their
fruits

of

labor

after

retirement

or

want

to

go

for

dream

vacation.

3. Instruction Manual:
To make the service consumption easier for the consumers, the instruction manual with the
policy becomes very important. The instruction manual gives an overview to the consumers as to how
to go on with the filling of the application form. It also gives information about the various formalities
that

have

to

be

adhered

to

at

the

time

of

submission

of

the

application

form.

LEVEL-3

augmented product:
With further expectation of the consumer again synchronized with intense
competition marketers offer more and more intangible features.

1. Post-sales service:
The insurance company must not consider it as the end of the service providing the consumer
has taken once the policy. The functions of an insurance company include the provision of the Postsales services to the consumer. Among the services rendered by the insurance company is the service of

processing and release of claims. The insurance company needs to verify the accuracy of the facts
presented in relation to the insurance claim and the documents produced in support thereof.

2. Delivery points:
The delivery points can be the branches that the insurance company has at the discretion of the
of the consumers' location. The delivery points can also be mobilized with the presence of the
insurance agents. The agents can cover a wide area and get in contact with the consumers to provide
the service to him.

3. Customer education and training:

The customer education and training is very important for the insurance company. The agents
play a vital role in this context. The customer can be educated on various benefits that can be accrued
in his future life by taking a policy. This is where the agents' communication skills come into the
picture. The insurance company has to play an active role in enabling the agents to impart the best
customer

education

through

appropriate

training

given

to

the

agents.

4. Customer complaint management:

Customer complaints management with regards to delay in discharge of claims must be
effectively handled by the insurance company to have competitive edge over its competitors. The
complaint management will help the company to get the consumers closer to the organization as the
consumers feel that their grievances are taken care of.
Thus LIC has an online feedback system where the consumers of the policy can register their
grievances.

5. Payment options:
The insurance company can offer payment options to the consumers with regards to payment of
premium the mode of payment and the period within which the premium amount has to be paid.

HUMAN RESOURCES DEPARTMENT

Definition
The department or support systems responsible for personnel sourcing and hiring,
applicant tracking, skills development and tracking, benefits administration and compliance
with associated government regulations
A human resources department is a critical component of employee well-being in any
business, no matter how small. HR responsibilities include payroll, benefits, hiring, firing, and
keeping up to date with state and federal tax laws.
A Professional Employer Organization (PEO) assumes full responsibility for your
company's HR administration. It becomes a co-employer of your company's workers by taking
full legal responsibility of your employees, including having the final say in hiring, firing, and
the amount of money employees make. The PEO and business owner become partners,
essentially, with the PEO handling all the HR aspects and the business handling all other
aspects of the company.
Business Process Outsourcing (BPO) is a broad term referring to outsourcing in all fields, not
just HR. A BPO differentiates itself by either putting in new technology or applying existing
technology in a new way to improve a process. Specifically in HR, a BPO would make sure a
company's HR system is supported by the latest technologies, such as self-access and HR data
warehousing.

HR Functions
Employee benefits, including health, medical and life insurance, 401(k) plans and
cafeteria plans.
HR management, including recruiting, hiring and firing. This also includes background
interviews, exit interviews and wage reviews.
Hiring
Promotions
Reassignments
Position classification and grading
Salary determination
Performance appraisal review and processing
Awards review and processing
Personnel data entry and records maintenance
Consultation and advisory services to management and employees

HR In charge
To manpower planning against to the dispatch schedule.
To recruit the correct person to the organization on the basis of required competency
level.

 To employee shift schedule, weekly off and holidays as per legal requirements
To maintenance of attendance and OT registers through computerized (Punching card

system) and manual systems.

Maintenance of PF, ESI registers PF accounts, ESI ID cards as per legal requirements.
To filing of Various PF forms, Various ESI declarations,
Personnel data entry and records maintenance.
To Security /Guards Guideline and controlled
To canteen issues & plan and execute the same.

ACCOUNTS DEPARTMENT
The account is the head of the account department. For maintaining uniformity in
accounting he adopts various accounting procedures. The account are being prepared in
accordance with accounting with accounting principles generally accepted in India and in line
with the required of section209,the companies act 1956.

Function of accounts department

Maintaining the records in an orderly manner.

Submitted record to the management
Checking and passing of bills for payment
Checking the lorry receipts
Submission records to the auditors.
Making payment of wages to the employees

Cash Book
The cash book is maintained to record all cash transactions,i.e cash receipt and cash
payment. The credit transactions do not find and place in the cash book. Cash sales, cash
purchases and other expenses are recorded in cash book. Receipt of cash is debited and
payment of cash in credited.

Purchase Book
The purchase book is maintained to record all credit purchase of goods made by the
company cash purchases do not finds any place in this book.

Sales Book
In sales book only the credit sales are done by company. Cash sales do not find any
place in this book

Ledger Account

The day-to-day transaction like office expenses, printing, stationary expenses and other
expenses are posted to the general ledger account. The transaction are posted from all
subsidiary books namely cashbook, bank book, purchase journals, sales journal, and general
journal entries are posted to this known as trial balance. From the trial balance every month
profit and loss account and balance sheet is prepared for his purpose.

Debit Note
It is prepared for the following reasons, purchases return, excess debited by the party,
interest or commission earned, rent and other charges to be recovered from the parties ect

Credit Note
It is prepared for following reasons, sales return, commission wrongly debited to parties
account, excess collection of tax, excess invoice ect., particulars like, brief deep description on
transaction amount, data, parties name, signature, are entered in the debit and credit notes.

Demand Draft Notes Book

The payment of forgine parties are made by cheque and payment to outstation parties
are made by draft, after deduction banking commission. The demand draft requisition slip
should be sent to bank manager requesting him to issue for the draft to party.

Invoice
The main purpose of invoicing is quite simply inform the customer of his debtness in
respect of goods supplies supplied, but invoice system today invariably incorporates the
preparation of the other documents

Preparation of Salary Books

In this company the salary of the administration staff, technical staff has been prepared
here. The head office had prepared the work salary only

Trial Balance
After preparing ledger account then the trail balance is prepared. The postings are from
ledger account.

Profit and Loss accounts

This shows the current economic status of the concern.

Balance Sheet
This is prepared to know the accurate financial position of the company. This statement
sets out the assets and liabilities of the company. Normally final account is prepared at the end
of the financial year and balance sheet done every year.
The estimates are also made regarding the working capital, production and sales ect. for
the duration of one year. The projected working capital requirement, profitability statements,
balance sheet, source and disposal of funds are also being prepared.

Conclusion-

Competition will surely cause the market to grow beyond current rates, create a bigger
"pie," and offer additional consumer choices through the introduction of new products,
services, and price options. Yet, at the same time, public and private sector companies will be
working together to ensure healthy growth and development of the sector. Challenges such as
developing a common industry code of conduct, contributing to a common catastrophe reserve
fund, and chalking out agreements between insurers to settle claims to the benefit of the
consumer

will

require

concerted

effort

from

both

sectors.

The market is now in an evolving phase where one can expect a lot of actions in coming days.
The current impediments for foreign participation like 26% equity cap on foreign partner, illdefined

regulatory

role

of

IRDA

(Insurance

Regulatory

development.