“The Study of Emerging Trends of HRM in Insurance Sector”

Prof. Pooja Acharya

Karmaveer Bhaurao Patil College,

Department of BMS (BACHELOR OF MANAGEMENT STUDIES)

poojaacharya05@gmail.com

Abstract

Competitive advantage of a company can be generated from human resources (HR) and

company performance is influenced by a set of effective HRM practices. In this study, we

intended to assess the HR practices in insurance companies .Every organization is composed

of people and utilizing their services, developing their skills, motivating them to enhance

their levels of performance and ensuring that they remain committed to the organization are

essential for the accomplishment of organizational objectives.

This is true for all types of organizations - government, business, education, health, recreation

or social action. Organizations that can do this will be both effective as well as efficient.

Inefficient or ineffective organizations face the danger of stagnating or going out of business.

Human Resource Management (HRM) consists essentially of four functions – acquiring,

developing, motivating and retaining human resources. The acquisition function starts

with planning for the number and categories of employees required, and end with staffing. The

development function has three dimensions – employee training, management development,

and career development.

The motivation function includes identifying the individual motivational needs of employees

and finding ways to motivate them. The retention function is concerned with providing a

work environment conducive to the employees and nurturing them to make them feel committed

and attached to the organization. Human resources are the most valuable and unique assets of

an organization.

Keywords: Innovation, HRM, Economy, retention function, Human Resource

Introduction

HRM IN INSURANCE

Under present market forces and strict competition, the insurance companies are forced to be

competitive. Contemporary companies must seek ways to become more efficient, productive,

flexible and innovative, under constant pressure to improve results. The traditional ways of

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gaining competitive advantage have to be supplemented with organizational capability i. e. the

firm’s ability to manage people. Organizational capability relates to hiring and retaining

competent employees and developing competencies through effective human resource

management practices. Indeed, developing a talented workforce is essential to sustainable

competitive advantage. High performance work practices provide a number of important

sources of enhanced organizational performance. HR systems have important, practical

impacts on the survival and financial performance of firms, and on the productivity and quality

of work life of the people in them.

Factors Underlying Increased Interest in Human Resource Planning

Undoubtedly, there are many factors that account for the increased attention directed to

human resource planning, but environmental forces-globalization, new technologies,

economic conditions, and a changing work force seem particularly potent.

These create complexity and uncertainty for organizations. Uncertainty can interfere with

efficient operations, so organizations typically attempt to reduce its impact; formal planning

is one common tactic used by organizations to buffer themselves from environmental

uncertainty.

The Emerging Process of Human Resource Management Planning:

The human resource planning process, demands the HR manager to first understand the

business requirement. Only if he comprehends the nature and scope of the business, will he

be able to employ those who will deliver the required performance.

When it comes to engaging the manpower, the manager should have a keen eye for spotting

the talent. It ensures that the workforce is competent enough the meet the targets.

Additionally, the existing 'talent pool' in the workplace should be taken into consideration, so

that people with complementary skills can be employed.

The functions of the HR manager are varied; he has to assess the currently employed

workforce and their shortcomings. Identifying these shortcomings goes a long way in

choosing an efficient workforce. Human resource planning process, thus, can be considered

as one of the strategic steps for building the strong foundation of an efficient workforce in an

organization

STEPS IN HUMAN RESOURCE MANAGEMENT PLANNING

1. Determining the numbers to be employed at a new location: If organisations

overdo the size of their workforce it will carry surplus or underutilized staff. Alternatively, if

the opposite misjudgment is made, staff may be overstretched, making it hard or impossible

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to meet production or service deadlines at the quality level expected. So the questions we ask

are:

• How can output be improved your through understanding the interrelation between

productivity, work organization and technological development? What does this

mean for staff numbers?

• What techniques can be used to establish workforce requirements?

• Have more flexible work arrangements been considered?

• How are the staffs you need to be acquired?

The principles can be applied to any exercise to define workforce requirements, whether it be

a business start-up, a relocation, or the opening of new factory or office.

2. Retaining your highly skilled staff : Issues about retention may not have been to the fore

in recent years, but all it needs is for organizations to lose key staff to realize that an

understanding of the pattern of resignation is needed. Thus organizations should:

• monitor the extent of resignation

• discover the reasons for it

• establish what it is costing the organization

• compare loss rates with other similar organizations.

Without this understanding, management may be unaware of how many good quality staff is

being lost. This will cost the organization directly through the bill for separation, recruitment

and induction, but also through a loss of long-term capability.

Having understood the nature and extent of resignation steps can be taken to rectify the

situation. These may be relatively cheap and simple solutions once the reasons for the

departure of employees have been identified. But it will depend on whether the problem is

peculiar to your own organization, and whether it is concentrated in particular groups (e.g. by

age, gender, grade or skill).

3. Managing an effective downsizing programme

This is an all too common issue for managers. How is the workforce to be cut painlessly,

while at the same time protecting the long-term interests of the organization a question made

all the harder by the time pressures management is under, both because of business

necessities and employee anxieties. HRP helps by considering:

• the sort of workforce envisaged at the end of the exercise

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• the pros and cons of the different routes to get there

• how the nature and extent of wastage will change during the run-down

• the utility of retraining, redeployment and transfers

• what the appropriate recruitment levels might be.

Such an analysis can be presented to senior managers so that the cost benefit of various

methods of reduction can be assessed, and the time taken to meet targets established.

If instead the CEO announces on day one that there will be no compulsory redundancies and

voluntary severance is open to all staff, the danger is that an unbalanced workforce will

result, reflecting the take-up of the severance offer. It is often difficult and expensive to

replace lost quality and experience.

Need for HRD and Its Management in insurance sector:

1. There are many changes in the insurance sector on account of changes in the industry

due to the entry of new insurance companies. Therefore, it has become a necessity to recruit,

train and deploy people at all level efficiently, for better performance and success. This is the

basic function of HRD, which includes the concept of HRM.

2. In view of the changes in the political scene in the recent past, seeping changes are

expected to take place in the insurance industry. It is expected that only a few insurance

companies will remain after a series of amalgamations and mergers, not only in the Indian

insurance industry, but also at the international level.

3. Emergence of new private sector insurance companies, competition and self-regulation

has necessitated efficient Human Resources Management in insurance companies. HRM is a

continuous process, involving selection, recruitment and training on an "on going basis" for

the staff and their deployment in the right place. The activity is called HR development.

EFFICIENCY IN INSURANCE SECTOR WITH HRM:

1. The crucial factors behind successful insurance companies will be continuous and

sustained build up of skills, knowledge, education and attitudes among people working in the

companies, particularly the frontline staff, working in the branches.

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2. It is possible through professionalization, which is an internal part of HRM. The staff

should be motivated and encouraged to practice professionalism for their personal growth and

thus contribute to the organization's growth.

3. Building efficiency is, therefore largely dependent on the best selection process

adopted by the HR department. There is imperative need to build up skills within an

organization for the successful managing of available HR.

4. Insurance companies have vast human resource specialized in multiple disciplines like

technology, law, sales, underwriting, administration, risk management etc.

The basic function of HR is to manage them efficiently for continuous success.

For building up better efficiency in insurance sector, HRM have to follow the below two

functions:-

1) Emphasis on job description and job Assignment.

2) Response to challenges in future.

OBJECTIVE OF THE STUDY

To study current emerging HRM practices in insurance sector.

To analyze how HRM practices influenced performance of organization.

To study the functions of HRM.

NEED AND IMPORTANCE OF THE STUDY

The need to make profits:

Profits are essential for the survival and growth of every commercial organization.

Increasing emphasis on profitability:

The profitability aspect of the insurance companies has gotten a lot of attention in the recent

years.

Employee satisfaction:

Along with the increasing emphasis on profitability, employee satisfaction has also been

generating considerable interest. This study has thus been undertaken to examine the

importance human resource management in insurance companies.

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Review of Literature

1) Aditya Nath Jha, (2018) studied proper analysis of various distribution channels in life

insurance industry in India has been done. Before privatization only individual insurance agent

was allowed to sell life Insurance. But After the IRDA Act, distribution channel further

expanded.

2) Anand Thakur, (2017) studied critical review of present marketing strategies in health

insurance sector has been availed and useful marketing ideas has been suggested. Health

insurance has vast potential in Indian insurance market. But at present, there are limited

products and less awareness resulting in poor penetration.

3) Anshuja Tiwari, (2016) evaluated bancassurance model of distribution of insurance

services has been discussed with reference to lift insurance industry. Insurance sector was

opened up in the year of 2000. Before that only individual insurance agent was allowed to sell

life insurance products But catering the need of industry IRDA introduced several other

distribution option like corporate agent, broker, direct selling and bancassurance.

4) Arvind Kumar Singh, (2015) studied the current scenario of life insurance sector has been

taken up. At present the market is moving rapidly and aggressively. There is competition and

force to more ahead. The features of this expansion strategy is hunting for new business looking

up for potential and grabbing it.

5) Arup Mazumdar, (2014) analyzed the broking system, challenges & opportunities are

discussed and new marketing concept as Relationship Model approach has been argued. Indian

insurance industry is growing fast after privatization and moving ahead.

6) Arnika Srivastava, (2013) studied the review of life insurance industry in the country has

taken up. Life insurance is the backbone of economy. LIC i.e. Life insurance Corporation has

monopoly in life insurance sector. But after the IRDA Act, the sector is opened up for private

Sectors.

7) Bidyadhar Padhi, (2012) emphasized the role and performance of private insurance

companies in Indian Insurance Sector after opening up of the sector in 1999 has been examined

and studied. Before liberazation, LIC & GIC had monopoly over the Sector. But in the period

of 2001 to 2012. 23 private insurance companies in life insurance sector and 28 private

companies in General insurance sector started the business.

DISCUSSION

CASE STUDIES:

1) FUTURE GENERALI INDIA LIFE INSURANCE

The company chosen for the project is “FUTURE GENERALI INDIA LIFE

INSURANCE”.

The head office of the company is located in Mumbai.

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ABOUT COMPANY:

Future Generali India Life Insurance Co. Ltd. is one of the rapidly growing Insurance

companies in India. The Company is a joint venture between the India-based Future Group and

the Italy-based Generali Group. Future Generali group is present in both the Life and Non-Life

businesses in India as Future Generali India Life Insurance Co. Ltd. and Future Generali India

Insurance Co. Ltd.

Generali Group was established in Trieste on December 26, 1831. It is an international group

working in more than 40 countries with insurance companies, financial companies and real

estate sectors. After doing business in Central Eastern Europe, Generali Group has started to

develop business in the principal markets of the Far East, including China and India. Generali

Group ranks among the top three insurance groups in Europe and the 30th largest company in

the Fortune 500 international ranking.

RECRUITMENT & SELECTION PROCESS

Their recruitment process includes both internal and external methods.

INTERNAL METHODS: The company uses: -

EMPLOYEE REFERRALS- It is a recruitment method in which the current employees are

encouraged and rewarded for introducing suitable recruits from among the people they know.

The logic behind employee referral is that “it takes one to know one”. The post for which they

prefer this process is SALES MANAGER, SENIOR SALES MANAGER, and ASSISTANT

SALES MANAGER. Benefits of this method are as follows:

• Quality Candidates

• Cost savings

• Faster recruitment cycles.

• Incentives to current employees

On the other hand it is important for an organization to ensure that nepotism or favoritism

does not happen, and that such aspects do not make inroads into the recruitment process.

JOB POSTING-

For job posting they use ‘Intranet’.

Job Posting is an arrangement in which a firm internally posts a list of open positions (with

their descriptions and requirements) so that the existing employees who wish to move to

different functional areas may apply. It is also known as Job bidding.

It helps the qualified employees working in the organization to scale new heights, instead of

looking for better perspectives outside. It also helps organization to retain its experienced and

promising employees.

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EXTERNAL METHODS:

1. FORMER EMPLOYEES- The company hires back its best ex-employees especially

for Senior Sales Manager post.

2. COLLEGES- From colleges they recruit candidates for Sales Manager & Sales

Executives posts. The minimum salary package for the freshers is 1.8 lacs for Area

Sales Manager,2.5 lacs for Sales Manager,3.5 lacs for Senior Sales Manager.

3. JOB FAIR -Recruiting method engaged in by a single employer or group of

employers to attract the large number of applicants to one location for interviews.

4. ADVERTISING-Advertisements are the most common form of external recruitment.

They can be found in many places (local and national newspapers, notice boards, recruitment

fairs) and should include some important information relating to the job (job title, pay package,

location, job description, how to apply-either by CV or application form, etc). Where a

business chooses to advertise will depend on the cost of advertising and the coverage needed

i.e. How far away people will consider applying for the job. Advertising can be through both

PRINT and ELECTRIC MEDIA.

The company uses PASSES technique for selection.

P-Prospect

A-Approach

S-Seminar

S-Screening

E-Evaluation

S-Selection

• PROSPECT-They check whether the candidate is fit for the job or not.

• APPROACH-The Company approaches with the candidates through emails or

telephone.

• SEMINAR-The Company then conducts seminar. For major seminars they hire

hotels but for small ones they prefer company’s training room.

• SCREENING-They communicate the job profile to the filtered candidates.

• EVALUATION-They give them basically the sales target, or evaluate them on the

basis of experience, age factor, communication skills. This is a kind of WORK

SAMPLE TESTING.

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• SELECTION-Finally they select the candidate on the basis of the results of

evaluation.

SELECTION

INTERVIEWS:

They prefer STRUCTURED INTERVIEWS in which they prefer questions regarding family

background, work experience and interpersonal skills.

METHODS OF INTERVIEWS:

ONE-ON-ONE INTERVIEW-Applicant meets one by one with the interviewer.

Interview process takes place as follows:

• INITIAL BRANCH LEVEL INTERVIEW-Branch manager takes such interviews

mainly to select the localities and decide who are best suited for the job.

• REGIONAL BRANCH INTERVIEW-Regional branch manager takes the

interview & his decision to select or reject the candidate is final.

2.) MAX NEW YORK LIFE INSURANCE:

Max New York Life Insurance Company Ltd. is a joint venture between Max India

Limited, one of India's leading multi-business corporations and New York Life International,

the international arm of New York Life, a Fortune 100 company. The company has

positioned itself on the quality platform. In line with its vision to be the most admired life

insurance company in India, it has developed a strong corporate governance model based

on the core values of excellence, honesty, knowledge, caring, integrity and teamwork.

Incorporated in 2000, Max New York Life started commercial operation in April 2001. In

line with its values of financial responsibility, Max New York Life has adopted prudent

financial practices to ensure safety of policyholder's funds. The Company's paid up capital as

on 30th April, 2018 is Rs 1,786 crore.

Max New York Life has multi-channel distribution spread across the country. Agency

distribution is the primary channel complemented by partnership distribution, bancassurance,

alliance marketing and dedicated distribution for emerging markets. The Company places a

lot of emphasis on its selection process for agent advisors, which comprises four stages -

screening, psychometric test, career seminar and final interview. The agent advisors are

trained in-house to ensure optimal control on quality of training. The company currently has

around 71,229 agent advisors at 715 offices across 389 cities.

The company currently has more than 10,494 employees.

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The SIX Differentiators

1) SELECTION PROCESS:

The selection process of Max New York Life is designed to help the candidate and the

organization make a decision in mutual best interest.

The first step in the process is an initial interview

This is followed by a test of numerical ability. Candidates who make the cut are invited to

attend a career seminar. The procedure facilitates a process of discovery, as both sides

develop an understanding of each other’s profile and requirements.

The final stage in the selection process is an assessment of the candidate's natural market and

potential for growth.

2) TRANING PROCESS:

Max New York Life has the finest training program for agents in the industry. They run

training and development programs for agents throughout their career.

The training consists of a two-year formal classroom based program. Max New York

Life has two full-time professional trainers in each office whose sole job is to train and

guide new agents.

The success of their training programs owes a lot to the strength of their partner, New

York Life. The training program developed by New York Life in the United States is

widely recognized as the best in the insurance industry. They have customized this

outstanding program for the Indian market.

In the United States, New York Life had more members in the Million Dollar Round

Table, the worldwide organization of top professionals in the insurance industry, for 50

consecutive years. Since 2001, Max New York Life has had more qualifiers for the

prestigious Million Dollar Round Table than all the other private sector insurance

companies taken together.

3) MANAGEMENT LOYALTY:

One of the many advantages of working with Max New York Life is that managers are

not allowed to sell insurance products to their own customers.

Compensation in management is derived entirely from the success of agents and the

overall growth of the organization.

Managers at all levels are totally committed to the success of agents and do not pursue

any conflicting goals.

Work Profile:

This is an entrepreneurial opportunity with flexible working hours and the potential to earn

unlimited income without any capital investment. As an agent with Max New York Life,

you are a financial advisor, businessperson and your own boss. The only limit to your

growth is your own imagination and drive.

The Role:

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• Identify prospects and conduct need analysis

• Provide customized solutions for long term financial protection and wealth creation

• Close sales

• Deliver the policy

• Provide after sales service and build references for future sales

Benefits

A career at Max New York Life has innumerable advantages. With low start up investment

you can become a part of a world-class organization and make a positive difference to

people’s lives.

Our agents sell more policies and make more money than agents of any other life insurance

company. The financial rewards are in the form of

• Commissions on new sales

• Ongoing renewal commissions

• Performance linked bonus

• Referral commissions

• Training reimbursement

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CONCLUSION

As it can be seen from the data collected and from the case studies that majority of the

insurance companies believe that investing in HRM is necessary in order to strengthen the

insurance sector. Investing in HRM practices allows companies to strengthen their human

resources.

Human resources are one of the most important resources in any organization. Efficient

management of human resources is necessary for the success of an organization.

Efficient HRM practices leads to employee satisfaction. Employee’s performance improves

which benefits the entire organisation.Employees are motivated and they perform better. This

will in turn lead to increase in customer satisfaction and the organization will be able to

increase its customer base.

Emerging HRM strategies include managing change, creating commitment, achieving

flexibility and improving teamwork. The other processes representing the overt aspects of

HRM, viz. recruitment, placement, performance management are complementary.

HRM has a crucial role to play in insurance sector. It acts as backbone for the insurance

sector, because it only lays the structure for the organizations operations, functioning and

working. Even with the advent of high technology it will have a prominent role to portray.

BIBLIOGRAPHY ;

1.) Human Resource Management Text and Cases by K. Ashwathappa

WEBLIOGRAPHY:

2.) www.google.com

3.) www.wikipedia.com

4.) www.futuregenerali.in

5.) www.maxnewyorklife.com

6.) http://business.mapsofindia.com

7.) http://scrid.com/

8.) http://humanresources.about.com

9.) http://www.buzzle.com

10) http://traininganddevelopment.naukrihub.com

11) http://openpdf.com

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