Project on Tata

Executive summary This project has been a great learning experience for me; at the same time it gave me enough scope to implement my analytical ability. Tata Group is one of the India's largest and most respected business groups.
Tata Group's name is synonymous with India's industrialization. Tata AIG Insurance Solutions is one of the leading insurance companies that provide both life insurance as well as general insurance. This pioneer company is a joint collaboration between the American International Group, Inc. (AIG) and Tata Group. They own the company in the ratio of 26:74. It is a leading financial institution that has carved a niche for itself all over the world. Tata AIG Insurance Company is having different insurance policies. At the end of the project people will be knowledgeable about various insurance organizations and different products taking into considerations hundred sample sizes in Ahmedabad city. Project is on the market potential study of Tata AIG Insurance Company in Ahmedabad city. To get to know a questionnaire has been prepared which contains open ended and close ended questions. Firstly pilot study has been done through hundred questionnaires. For collecting the data field survey method, personal interview technique has been used. Secondary data has been collected from the company. The data collected are represented into suitable tabular forms for drawing inferences. Quantitative techniques like averages, percentages, range, two-way tables, chi- square tests analysis has been applied as per the requirement. The level of preference, perception of the customers about the product and company were identified by means of a scoring scheme. For the representation of data various charts and graphs are used as per requirement. . Introduction
CHAPTER 1
INTRODUCTION TO INSURANCE
1.1. INTRODUCTION
"Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event." Insurance may be described as a social device to reduce or eliminate risk of life and property.
Under the plan of insurance, a large number of people associate themselves by sharing risk, attached to individual. With the help of Insurance, large number of people exposed to a similar risk makes contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good. Insurance is a tool by which fatalities of a small number are compensated out of funds collected from plenteous. Gradually as competition increased benefits given by industry to its customers increased by leaps and bounds. Insurance is a basic form of risk management which provides protection against possible loss to life or physical assets. Person who seeks protection against such loss is termed as insured, and company that promises to honor claim, in case such loss is actually incurred by insured, is termed as Insurer. In order to get insurance, insured is required to pay to insurance company a certain amount called premium. Premium is collected by insurance companies which acts as trustee to pool created through contributions made by persons seeking to protect themselves from common risk. Any loss to the insured in case of happening of an uncertain event is paid out of this pool. Insurance business is divided into four classes:

· Life Insurance
· Fire
· Marine
· Miscellaneous Insurance.
· Insurance provides:
· Protection to investor.
· Accumulation of savings.
· Channeling these savings into sectors needing huge long term investment.

1.2. FUNCTION OF INSURANCE:
Provide protection: The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others.

Collective bearing of risk: Insurance is an instrument to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid.

Assessment of risk: Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also.

Provide certainty: Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain.

Small capital to cover larger risk: Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty.

Contributes towards the development of industries: Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery.

Means of savings and investment: Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing incometax exemptions also, people invest in insurance.

Source of earning foreign exchange: Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways.

Risk free trade: Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover.

1.3. LIFE INSURANCE:
Life insurance is a contract under which the insurer (Insurance Company) in Consideration of a premium paid undertakes to pay a fixed sum of money on The death of the insured or on the expiry of a specified period of time Whichever is earlier. In case of life insurance, the payment for life insurance policy is certain. The Event insured against is sure to happen only the time of its happening is not known. So life insurance is known as „Life Assurance‟. The subject matter of insurance is life of human being. Life insurance provides risk coverage to the life of a person. On death of the person insurance offers protection against loss of income and compensate the titleholders of the policy.

1.4. ROLES OF THE LIFE INSURANCE:
Life insurance as an investment: -
Insurance products yield more than any other investment instruments and it also provides added incentives or bonus offered by insurance companies.
Life insurance as risk cover: -
Insurance is all about risk cover and protection of life. Insurance provides a unique sense of security that no other form of invest can provide.
Life insurance as tax planning: -
Insurance serves as an excellent tax saving mechanism

1.5. IMPORTANCE OF THE LIFE INSURANCE:
Protection against untimely death: -
Life insurance provides protection to the dependents of the life insured and the family of the assured in case of his untimely death. The dependents or family members get a fixed sum of money in case of death of the assured.
Saving for old age: -
After retirement the earning capacity of a person reduces. Life insurance enables a person to enjoy peace of mind and a sense of security in his/her old age.
Promotion of savings: -
Life insurance encourages people to save money compulsorily. When life policy is taken, the assured is to pay premiums regularly to keep the policy in force and he cannot get back the premiums, only surrender value can be returned to him. In case of surrender of policy, the policyholder gets the surrendered value only after the expiry of duration of the policy.
Initiates investments: -
Life Insurance Corporation encourages and mobilizes the public savings and canalizes the same in various investments for the economic development of the country. Life insurance is an important tool for the mobilization and investment of small savings.
Credit worthiness: -
Life insurance policy can be used as a security to raise loans. It improves the credit worthiness of business.
Social Security: -
Life insurance is important for the society as a whole also. Life insurance enables a person to provide for education and marriage of children and for construction of house. It helps a person to make financial base for future.
Tax Benefit: -
Under the Income Tax Act, premium paid is allowed as a deduction from the total income under section 80C.

1.6. INSURANCE CYCLE:
Policy Renewal/Change Options/Application:-
The Insurance Cycle begins each year with the insurance offer. Actuarial documents are published annually by the Risk Management Agency (RMA). The actuarial documents list the plan of insurance, crop, type, variety, and practice that may be insured in a state and county, and show the amounts of insurance, available insurance options, levels of coverage, price elections, applicable premium rates, and subsidy amounts. The Special Provisions of Insurance list program calendar dates, and general and special statements which may further define, limit, or modify coverage.
Sales Closing/Cancellation/Termination Dates:-
Insurance applications must be completed and signed no later than the sales closing date specified in the crop actuarial documents. Applications signed after the crop sales closing date may be rejected by the insurance provider.
Insurance coverage is continuous and can be cancelled by either the insurance provider or the policyholder for the following crop year by providing a written notice to the other party no later than the cancellation date specified in the crop policy. For a policyholder insured the previous crop year, any changes he or she wishes to make to the policy coverage must be made on or before the crop sales closing date. The policy will automatically renew for the subsequent crop year unless the policyholder cancels the policy in writing on or before the crop cancellation date. Insurance coverage may be terminated by the insurance provider for the following crop year for nonpayment of outstanding debt by providing a written notice to the policyholder no later than the termination date specified in the crop policy. The insurance provider may terminate coverage on a crop if no premium is earned for three consecutive years.
Acceptance:-
Upon receipt of a properly completed and timely submitted insurance application, the insurance provider will accept and process the application, unless the applicant is determined to be ineligible under the contract or Federal statute or regulation. The insurance provider will issue a summary of coverage and the appropriate policy documents to the applicant. After the application is accepted, the policyholder may not cancel the policy for the initial crop year.
Insurance Attaches: -
For annual crops, insurance attaches annually when planting begins on the insurance unit. The crop must be planted on or before the crop's published final planting date unless late or prevented planting provisions apply. If prevented planting provisions apply, and the crop cannot be timely planted due to the causes specified in the crop provisions, such acreage may be eligible for a prevented planting payment.
Acreage Reports:-
The policyholder must annually report for each insured crop in the county the number of insurable and uninsurable acres planted or prevented from being planted if prevented planting is available for the crop, the date the acreage was planted, share in the crop, the acreage location, farming practices used, and types or varieties planted to the insurance provider on or before the applicable acreage reporting date specified in the crop actuarial documents.

Summary of Coverage:-
The insurance provider will process a properly completed and timely filed acreage report, and issue to the policyholder a summary of coverage that specifies the insured crop, the insured acres and amount of insurance or guarantee for each insurance unit. The policyholder may make changes to the filed acreage report, if permitted by the insurance provider.
Premium Billing:-
The annual premium is earned and payable at the time insurance coverage begins. The insurance provider shall issue a premium billing based upon the information contained in the acreage report no earlier than the premium billing date specified in the crop actuarial documents. The premium billing will specify the amount of premium and any administrative fees that may be due. If the premium or administrative fees are not paid by the date specified in the actuarial documents or policy, the insurance provider may assess interest on the outstanding premium balance.
Notice of Damage or Loss: -
A written notice of damage or loss for each unit is to be filed by the policyholder within 72 hours of the policyholder's initial discovery of damage or loss but not later than 15 days after the calendar date for the end of the insurance period unless otherwise stated in the individual crop policy. The policyholder should refer to the individual crop provisions for additional requirements in the event of damage or loss. These notifications provide the opportunity for the insurance provider to inspect the crop and determine the extent of damage or potential production before the crop is harvested or otherwise disposed of.
Inspection:-
After the insurance provider receives the written notice of damage or loss, it will be processed and, if necessary, a loss adjuster will be sent to inspect the damaged crop and gather pertinent information concerning the damage. If the policyholder wishes to destroy or not harvest the crop,the loss adjuster will gather the appropriate information, conduct an appraisal to establish the crop's remaining value and complete any forms needed. If the crop has been harvested or will not be harvested by the end of the insurance period, and the policyholder wishes to file a claim for indemnity, the loss adjuster will gather the appropriate information and assist the policyholder in filing the claim for indemnity. It is the policyholder's responsibility to establish the time, location, cause, and amount of any loss.
Indemnity Claim:-
After the claim for indemnity is processed by the insurance provider, an indemnity check and a summary of indemnity payment will be issued showing any deductions to the amount of indemnity for outstanding premium, interest, or administrative fees.
Contract Change Date:-
Changes to the insurance program may be made by RMA from one year to the next. The insurance provider will notify the policyholder in writing of any changes to the policy, actuarial documents, or the Special Provisions of Insurance prior to the calendar date for contract changes specified in the crop policy. The policyholder will have the opportunity to review the changes and, if he/she desires, continue the insurance coverage for the following crop year, change the policy coverage, or cancel the insurance coverage. Any changes to the policy coverage that the policyholder makes must be made no later than the crop sales closing date. If the policyholder wishes to cancel the policy, a written notice must be submitted to the insurance provider on or before the crop cancellation date. CHAPTER 2

Company profile

TATA AIG INSURANCE COMPANY
Tata Enterprises with 82 companies, spread over seven sectors and with an annual turnover exceeding US $ 8.8 billion, employs more than 262,000 people. Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance, aviation, iron and steel. In terms of capital market performance as many as 40 listed Tata companies account for nearly 5% of the total market capitalization of all listed companies. The Group has had a long association with India's insurance sector having been the largest insurance company in India prior to the nationalization of insurance.
TATA GROUP IN INSURANCE:
Tata AIG General Insurance Company Ltd, and Tata AIG Life Insurance Company Ltd., (collectively "Tata AIG") are joint venture companies between the Tata group India's most trusted industrial house and American International Group, Inc. (AIG), the leading U. S. based international insurance and financial services organization. The Late Sir Dorab Tata, was the founder Chairman of New India Assurance Co. Ltd., a group company incorporated way back in 1919. Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972. Not deterred by the move, Tata group have ventured into risk management services having tied up with AIG group, back in 1977, with the incorporation of Tata AIG Risk Management Services Pvt. Ltd. The Tata Group is one of India's largest and most respected business conglomerates, with revenues in 2006-07 of $28.8 billion (Rs129,994 crore), the equivalent of about 3.2 per cent of the country's GDP, and a market capitalization of $72.2 billion as on December 6, 2007. Tata companies together employ some 289,500 people.
AIG:
American International Group, Inc. (AIG), is a major American insurance corporation based at the American International Building in New York City. The British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG was the 18th-largest company in the world.

Company Background: AIG’s history dates back to 1919, when Cornelius Vander Starr established an insurance agency in Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance to the Chinese. • In 1962, Starr gave management of the company's less than successful U.S. holdings to Maurice R. "Hank" Greenberg, who shifted the company's U.S. focus from personal insurance to high.1969. American International Group, Inc is the leading U.S. based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States. Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world. AIG's Life Insurance operations comprise of the most extensive worldwide network of any life insurer. AIG's global businesses also include financial services and asset management, including aircraft leasing, financial products, trading and market making, consumer finance, savings products.

THE JOINT VENTURE:
Tata AIG Life Insurance Co. Ltd. is capitalized at Rs. 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in the balance 26 per cent. Mr. George Oommen has been named managing director of Tata AIG Life. Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups. The company headquartered in Mumbai, with branch operations in Delhi,Chennai, Hyderabad, Bangalore Calcutta, Pune and Chandigarh.
3.5. ABOUT TATA-AIG:
Tata AIG Insurance Solutions is one of the leading insurance companies that provide both life insurance as well as general insurance. This pioneer company is a joint collaboration between the American International Group, Inc. (AIG) and Tata Group. They own the company in the ratio of 26:74. It is a leading financial institution that has carved a niche for itself all over the world. Tata AIG Insurance provides facilities to both corporate and individuals. Starting its operations on April 1, 2001, it seeks to serve different categories of people. It acquired its license for carrying out operations in India on February 12, 2001. Tata AIG Insurance Solutions is one of the most prestigious organizations in the business world. It employs thousands of employees and offers various opportunities to people to build a prospective career. As a leading name in the financial world, it identifies the potential and experience of the individual. This insurance company identifies the clients‟ needs and works accordingly. It stresses on innovative aspect and opening of new markets. It believes in new economy and latest Internet technology. Tata AIG Insurance offers a number of products for the General Insurance holders.

General insurance products include:
· Individual insurance
· Small business insurance
· Corporate insurance
Tata AIG Insurance offers flexible life insurance to the individuals, business organization and other association. For the corporate, there are various insurance products like group pensions, employee benefits, work place solutions and credit life. For the individuals, Tata AIG Insurance offers various products for adults, children and for retirement planning.

SWOT ANALYSIS

STRENGTHS:
1. No. 1 Private Player in the insurance industry in India.
2. Life Insurance linked with Investments
3. Tax benefits
4. Security against loans
5. Helps in future planning and provides financial consultancy.
6. Covers risk.

WEAKNESS:
1. Negativity relating insurance and ‘Agents’.
2. No fixed Salary.

OPPORTUNITIES:
1. High Network Individuals (HNI)
2. A clear career path
3. All round support through exclusive advertising, own in house consultant, and world-class training.
4. A comprehensive benefit package.

THREATS:
1. Dynamic environment
2. Increasing Competition
3. Non-creativity
4. An Unfocused approach
5. Complacency and arrogance

Chapter 4

Objectives of the study:
The only purpose of undergoing this topic is to find out the details research on market of TATA AIG. * To know the awreness of the insurance product of TATA AIG IN AHEMDBAD. * To study of career path for business associates.

Research METHODOLOGY
Data can be classified under the two main categories, depending upon the sources used for the collection purposes, i.e., ‘Primary data’ and ‘Secondary data’. The validity and accuracy of final judgement is most crucial and depends heavily upon how well the data is gathered in the first place. The methodology adopted for data gathering also affects the conclusions drawn there from.

Primary data: Primary data are those data, which are collected by the investigator himself for the purpose of a specific enquiry or study. Such data are original in character and are generated by surveys conducted by individuals or research institutions. Thus we can say that the data that is being collected for the first time is called primary data. Methods that can be used for collection of primary data are as follows:
§ Direct personal observation: Under this method, the investigator presents himself personally before the informant and obtains first hand information. This method provides greater degree of accuracy.

§ Telephone survey: Under this method the investigator, instead of presenting himself before the informants, contacts them on telephone and collects information from them.

§ Indirect personal interview: Under this method, instead of directly approaching the informants, the investigator interviews several third persons who are directly or indirectly concerned with the subject – matter of the enquiry and who are in possession of the requisite information. This method is highly suitable where the direct personal investigation is not practicable either because the informants are unwilling or reluctant to supply the information or where the information desired is complex or the study in hand is extensive.
§ Questionnaire method: Under this method, the investigator prepares a questionnaire containing a number of questions pertaining to the field of enquiry. Under this method, the investigator directly contact the person and collect the information through questionnaire related to the data. The aims and objectives of collecting the information, and requesting the respondents to cooperate by furnishing the correct replies and fill the questionnaire with correct information. The success of this method depends upon the proper drafting of the questionnaire and the cooperation of the respondents.
Secondary data: When a person uses data, which has already been collected by someone else, then such data is known as secondary data. Secondary data should be used with extra caution since someone else has collected it for his/her use. Before using such data the investigator must be satisfied with regard to the reliability, accuracy, adequacy and suitability of the data to the given problem under investigation. Methods that can be used for collection of secondary data are as follows:
§ Published sources: There are a number of nationalorganisations and international agencies, which collect and publish statistical data relating to business, trade, labour, price, consumption, production, etc. These publications of the various organisations are useful sources of secondary data.

§ Unpublished sources: The records maintained by private firms or business houses who may not like to release their data to any outside agency are known as unpublished sources of collection of secondary data.
Both ‘Primary data collection methods’ and ‘Secondary data collection methods’ have various advantages as well as limitations. Thus it would be prudent to use both these methods to one’s advantage.

More of the primary data has been used in this project.

INSURANCE ADVISOR

IRDA TRAINING
The Insurance Act, 1938 lays down that an insurance agent will be issued a license under section 42 of the Act, by the IRDA of an officer authorized by it in this behalf.
Tata AIG offices and approved by INSURANCE REGULATORY AND
DEVELOPMENT AUTHORITY (IRDA). A licence issued by the IRDA will be valid for three years. The licence may be to act as an agent for a life insurer, for a general insurer or as a “Composite Insurance Agent” working for a life insurer as well as a general insurer.
An Insurance agent have undergone practical training for at least 100 hours in life or general insurance business. He should have also passed the pre-recruitment examination conducted by the Insurance Institute of India.An Insurance Agent have to give a demand draft for Rs. 1000 payable in favor of Tata AIG Life Insurance Co. Limited.

sources... scribd.com