Certificate

This is to certify that Ms Snavy Loon of T.Y.I.T Class has satisfactorily completed the case study on ERP FOR LIFE INSURANCE CORPORATION OF INDIA as the Prescribed by University of Mumbai for the year 2011 to 2012

Professor in-charge Head of the Department

Date College Stamp

AcKnOWledgSEMENT

We express our case study sincerely thanks to all those who helped to making this case study a reality. and all the student and teachers for giving help. In this case study we have added sufficient information for each and every topic and we include diagram also where necessary. The use of ERP is growing most rapidly in market. It is also an effective medium for achieving the goal of organization of gaining more and more profit . Finally, I wish to thanks Jaynish sir for bringing at the case study at correct time.

CONTENTS:
1.INTRODUCTION 2. WHAT IS INSURANCE 3. DEFINITIONS OF INSURANCE: 4.ERP FOR LIFE INSURANCE CORPORATION OF INDIA 5.MODULES OF LIC OF INDIA POLICIES FOR CUSTOMERS Child Life Insurance PolicY Term Insurance Plan Whole Life Insurance Money Back InsurancePolicy

EMPLOYEES HUMAN RESOURCE DEPARTMENT OF LIC Recruitment Decision Forecasting Of Requirements For Personnel Facility For The Former Employees AGENCY DEPARTMENT LOCATION FINANCE BENEFITS OF ERP IN LIFE INSURANCE CORPORATION OF INDIA Reducing the procedures Rectifying Information Flow Performance of the Agents are Checked

Enterprise resource planning (ERP) integrates internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application. Its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.[1] ERP systems can run on a variety of hardware and network configurations, typically employing a database as a repository for information. ERP systems typically include the following characteristics: An integrated system that operates in real time (or next to real time), without relying on periodic updates. A common database, which supports all applications. A consistent look and feel throughout each module.

WHAT IS INSURANCE

FORECASTING IS HARD, PARTICULARLY WHEN IT IS ABOUT FUTURE: Life is the name of uncertainty and risk. We are quite sure about our present and past but God knows what our future will be. Therefore people living in the society have to device some way to reduce this uncertainty and risk. People suffer not only mentally but also financially. Financial crises are so bad that they can lead somebody easily towards social evils. So one method to avoid all these complications is to help people financially. The Origin of the word insurance is assurance both words have the same meaning. DEFINITIONS OF INSURANCE: Insurance is an agreement by contract to pay money to someone if something especially a misfortune, such as illness, death or an accident or a mishap happens to him. It is a contract in which a person agrees to pay some cost for the compensation of any misfortune occurring in future. There are two terms frequently used in insurance, which are the INSURER (an insurance company, which enter into contract with the policyholder to compensate in case of any mishap to him, and the INSURED (who seeks the insurance coverage on the payment of premium).

Government-owned corporation Industry Founded Headquarters Insurance 1 September 1956 Mumbai, India

D. K. Mehrotra, T.S.Vijayan(Chairman), Key people Thomas Mathew, Ashok Chawla, R Gopalan, Yogesh Lohia, S. Sridhar, and A.K.Dasgupta (MD) Life insurance Products Pensions Mutual funds Total assets Owner(s) Employees 13.25 trillion (US$295.48 billion) Government of India 115,966 (2010) LIC Housing Finance Limited LIC Cards Services Limited Subsidiaries LIC Nomura Mutual Fund LIC(Nepal)Ltd LIC(Lanka)Ltd LIC(International)BSC(C) Website www.licindia.in

MODULES OF INDIA:

LIFE INSURANCE CORPORATION OF

1:POLICIES FOR CUSTOMERS Nothing is more important to a person than the feeling that their family is financially secure - at all times. Though frightening, the thought that your family will not be financially burdened in case of your un-timely death, gives you and your family some respite to know at all times that YOU have planned for such an event too. Hence it is very important that you get the best life insurance policy for yourself - both in terms of price and features. LIC display the list of life insurance plans that are available based on your requirements. You can compare life insurance policies - both price and the features and select the life insurance policy that suits your requirements the best. Life insurance quotes from different life insurance companies are displayed - the policies with the cheapest premiums being displayed on top. We do not sell insurance and hence we do not have any incentive to push any particular insurance policy to you. We take pride in the fact that we could help you select the best life insurance policy. Life Insurance Policy As the name suggests, child insurance policy or children plans means an insurance policy on the lives of children, who are not majors. Since the age of child is below 18 years, the proposal will have to be made by a parent or a guardian. One of the advantages of child insurance plans is that the premium which will be considered at the commencement of the policy is relatively lower because of the young age. Usually, a child insurance plan can be purchased when the child is 3 months old (or 91 days of age). However, the risk cover on the life of the insured child will commence only when the child attains a specified age. This clause is according to the rules of IRDA (Insurance Regulatory and Development Authority). Such a time gap between the date of commencement of the insurance policy and the commencement of the risk is called the Deferment period. The date, on which the risk will commence, at the end of the deferment period is called the Deferred Date. Let us explain the basic concept of a child plan with Ranjans example. He is 27 years old, married with a 2-year old daughter. He purchases a child plan for his daughter Sameera. Ranjan has now covered his daughter under the child insurance plan but her life cover doesnt start till she is 7 years old. However, the plan continues as usual and no mortality charge is deducted till Sameera reaches 7 years
.Child

of age; this is because her life cover doesnt start till such time. The day her life cover starts, i.e. the first policy anniversary after her 7th birthday, is called the Deferred Date. From this day onwards the life cover of the child Sameera starts, i.e. if she dies after the deferred date her family would get the entire sum assured. But if she had died before the deferred date, her family would only get back the premiums paid and no sum assured would be payable. When Sameera attains 18 years of age or any later date as may be chosen, the title of the policy automatically passes on to her name. This process is called as Vesting. Therefore, the day on which the policy contract is transferred from Ranjan to Sameera, i.e. the first policy anniversary after her 18th birthday, is called the Vesting Date. After vesting, the insurance policy becomes a contract between the insurance company and Sameera. This life insurance policy covers the risk of the childs life. This is a distinctive plan as the entire amount payable gets transferred in the name of the child once he/ she is 18 years old. Thus it becomes a big asset for the childs future to take care of various financial commitments and pursue higher education, professional courses, develop skill sets, travel places, plan other investments and many others. Child Plans from LIFE INSURANCE CORPORATION LIC Jeevan Anurag LIC CDA Endowment Vesting At 21 LIC CDA Endowment Vesting At 18 LIC Jeevan Kishore LIC Child Career Plan LIC Child Fortune Plus LIC Komal Jeevan LIC Marriage Endowment Or Educational Annuity Plan LIC Jeevan Chhaya LIC Child Future Plan Term Insurance Plans Term insurance plans are commonly known as pure protection plans. This is a pure insurance cover where only the risk of death is covered for a specified period. If the insured does not die within the specified period, then no payment is made under the term insurance plan. This is also the cheapest form of life insurance as mortality charges and administration expenses incurred in booking the policy are the only components of the premium.

Being the cheapest life insurance policy, one can get a substantially high life cover (sum assured) with a nominal premium amount. Therefore, a person gets to protect his family's financial security at a very low cost. By paying an amount as low as Rs.6000 per year, one can secure their family's future to the tune of 50 lakhs. Experts believe that term insurance is the best and the most important form of insurance and one should take as high a cover as possible as early in life. At MyInsuranceClub.com we give you an un-biased term insurance comparison. LIC Amulya Jeevan 4,026

Whole Life Insurance Whole life insurance policies are very similar to term insurance plans. This is a term plan with an unlimited term. As the name suggests, a whole life policy is an insurance cover against death, where the sum assured is payable only on death, whenever it may occur. Under this plan, the policyholder pays regular premiums until his death (till a claim arises), following which the payment is made to the nominee or the claimant. Although, in the case of Whole Life policies, the sum assured is payable only on death, many insurance companies pay the sum assured, when the life insured reaches a particular age. Earlier a lot of insurance companies used to make this payment at the age of 100 years and recently many have dropped it down to 75 years. Premium is usually paid till the sum assures becomes payable but many insurers provide an option to pay premiums for a limited period. Such policies would be called as Limited payment policies. People who are skeptical of the consistency of their earnings and expect it to discontinue or drop substantially over a period of time may prefer limited payment policies. This is often the case with professionals like sports personalities, skilled artists and armed forces personnel. Many a times, a person has or receives a lump sum amount from somewhere and is not sure whether he will be able to pay the same amount every year. For such customers, there is an option to pay the premium only once. Such a policy where the premium is payable only for one year at the beginning of the policy is called as a single premium policy.

The premium for a whole life insurance policy would surely be higher than a pure term insurance plan and unlike a term plan where the cover is for a specific period, a whole life insurance policy doesnt attach a policy term and is valid till the death of the policy holder, whenever it may occur. Whole Life Insurance Plans from different Insurance Companies LIC - The Whole Life Policy LIC - The Whole Life Policy- Limited Payment LIC - The Whole Life Policy- Single Premium LIC - Jeevan Tarang Money Back Insurance Policy In the insurance terminology this is called Anticipated Endowment Plan, meaning that the customer can anticipate when the sum assured would be paid to him. In money back insurance policy, a certain percentage of the sum assured comes back to the policy holder on survival after say every 3 or 5 years, as pre-determined. This is also referred to as a survival benefit. The common example used is, consider 20% of the sum assured is paid every 5 years and 40% on survival for a 20-year term and full sum assured is paid in case of death at any time during the 20 years. If the policy holder dies before the policy matures, then the entire sum assured is paid to the family as death benefit, irrespective of the survival benefits paid or not. It is effectively a combination of a term insurance plan for 20 years for full sum assured and 4 different pure endowment plans, that is, 20% sum assured for 5 years, 20% sum assured for 10 years, 20% sum assured for 15 years and 40% sum assured for 20 years. The plan can be best explained with the help of an example. Rahul who is 27 years old has taken a money back plan of sum assured Rs. 25,00,000 for a term of 30 years. According to the terms of the plan, he would get 15% of sum assured, i.e. Rs. 3,75,000 every 5 years and on maturity of the policy he would get 25% of the sum assured, i.e. Rs. 6,25,000. Thus following is his illustration: On completion of 5 years, when Rahul is 32 yrs old: Rs. 3,75,000 is due. On completion of 10 years, when Rahul is 37 yrs old: Rs. 3,75,000 is due. On completion of 15 years, when Rahul is 42 yrs old: Rs. 3,75,000 is due. On completion of 20 years, when Rahul is 47 yrs old: Rs. 3,75,000 is due. On completion of 25 years, when Rahul is 52 yrs old: Rs. 3,75,000 is due. On completion of 30 years, i.e. on the day of policy maturity, when Rahul is 57 yrs old: Rs. 6,25,000 is due.

Now, Rahul needs to be alive to get the survival benefits, as the name suggests. Somehow, if Rahul happens to die when he is 55 years old, he would have received Rs. 18,75,000 already. However the entire sum assured of Rs. 25,00,000 would then be paid to Rahuls family as he died before the policy matured. This is the uniqueness of the policy. This policy could be taken by someone who might require liquidity at regular intervals for purposes like childrens education, wedding, purchase business equipment, buy an asset or some other planned expense. Also the fact that the death benefit is guaranteed irrespective of the survival benefits already paid makes it a compelling insurance policy to buy. So compare from the several money back insurance plans available from the life insurance companies in India and calculate the life insurance quotes meeting your requirements. Money Back Plans from different Insurance Companies LIC The Money Back Policy-20 Years LIC The Money Back Policy-25 Years LIC Jeevan Surabhi-15 Years LIC Jeevan Surabhi-20 Years LIC Jeevan Surabhi-25 Years LIC Bima Bachat
.

2.EMPLOYEES

SOME IMPORTANT DESIGNATIONS OF LIC S. R. (Sales Representative) S. O. (Sales Officer) S. M. (Sales Manager) M. (Assistant Manager) M. M. (Marketing manager) G. M. (Assistant General Manager) G. M. (General Manager) Requirement for Selection of Sales Representative F. A. or F. Sc. (Education) At least two policies Identity card

3.HUMAN RESOURCE DEPARTMENT OF LIC RECRUITMENT Recruitment Decision Basically for top management level post, it is centralized procedure (i.e. at principal office competent authority, executive director gives approval and than they start procedure). For other jobs, recruitment decision depend upon the nature of vacancy e.g. 1. For field oriented job sales officers and sales managers are employer of agent i.e. sales representative. 2. For office lower level job, head office can transfer and delegate power to region and zone. Forecasting Of Requirements For Personnel For field business, there is always requirement of personnel. Because if we increase our sales force, our business will increase. Therefore, if there is more business, more administrative professionals are needed to handle it i.e. strength of office depends upon number of policies which are active e.g. for 100,000 policies record, standard zone strength of employees should be 200. Considerations in Selection Decisions For Office Job Person, to whom you are calling for created job, whether he meets the criteria (i.e. appropriate according to criteria), also check background (screen him at the spot and evaluate educational record and personality at the time of recruitment). For Marketing Job Ultimately check the marketing aptitude and other qualities for selection e.g. for I. S. R. (Insurance Sales Representative) established criteria for urban is (F. A.) and sub-urban is (Matriculation). Maximum people are invited for the fulfillment of requirement, evaluation through in depth interview, explore whether person is in need, to raise salary packages, extrovert or introvert (multidimensional personality). Facility For The Former Employees No such policy in the organization. If they come upto criteria, they should be recruited.

Equal Employment Opportunity There is no discrimination, always follow the rule of equal employment opportunity, and all applicants are treated equally. But there is some quota for disable people. Privacy Of Employee Record State Life Insurance Corporation always follow the privacy of employee record and peoples access is always denied. Selection Standards It depends upon nature of job i.e. for underwriting job, the requirement standards are in that applicant must be MBBS doctors and well aware of medical procedures.
.

4.AGENCY DEPARTMENT Service provided by the LIC are intangible and therefore are not acquired at the counter by the people, who need it, so it must be sold them through persuasive method. Field force of LIC plays an effective role in selling of intangible products (Insurance Plants). In order to maintain the record of the field force agency department was established. The main function of this department includes recruitment, promotion, and termination of the field force, allied and medical facility for field force. This department is also responsible for issuance and renewal of licenses to the field force 5.LOCATION 1. Headquartered in Mumbai, financial and commercial capital of India the Life Insurance Corporation of India currently has 8 zonal Offices and 113 divisional offices located in different parts of India, around 3500 servicing offices including 2048 branches, 54 Customer Zones, 25 Metro Area Service Hubs and a number of Satellite Offices located in different cities and towns of India and has a network of 13,37,064 individual agents, 242 Corporate Agents, 79 Referral Agents, 98 Brokers and 42 Banks (as on 31.3.2011) for soliciting life insurance business from the public. 2. The slogan of LIC is "Zindagi ke saath bhi,Zindagi ke baad bhi" .which means "during life and after life"

Some of the locations of Life Insurance Corporation of India according to their zone and along with their addresses are as listed beow: Northern Zone
Place Ajmer Address E-MAIL-ID Jeevan Prakash Ranade Marg Alwar gate Ajmer RAJASTHAN 305008 bo_G101@licindia.com Jeevan Prakash Post Box No 42 Sector 17-B Chandigarh CHANDIGARH Chandigarh bo_G102@licindia.com 160017

Eastern Zone:
Asansol Jeevan Prakash West EndG T Road Asansol WEST BENGAL 713304 Kolkata LIC of India,P&GS Unit Jeevan Prakash,Calcutta Chittaranjan Avenue Kolkata WEST BENGAL 700072 Metro DO-I 16

bo_G401@licindia.com bo_G402@licindia.com

Western Zone:
Ahmedabad Amravati

Jeevan Prakash GHB Complex, 2nd Floor,Opp.to Rupal Park, Behind Ankur Bus stop, bo_G701@licindia.com Naranpura,Ahmedabad UJARAT 380013 LIC of India, bo_G702@licindia.com P&GS UnitJeevanPrakash, Near Daffrin Hospital ShriKrishna Peth Amravati MAHARASHTRA 444601

North Central Zone

Gorakhpur

Prathiba Complex Jubilee Road Post Box No 21 Gorakhpur UTTAR PRADESH 273001 Jeevan Vikas 16/98 M G Road Post Box No 170 Kanpur UTTAR PRADESH 208001

bo_G205@licindia.com

Kanpur

bo_G206@licindia.com

6. FINANCE The Life Insurance Corporation of India (LIC) is the largest state-owned life insurance company in India, and also the country's largest investor. It is fully owned by the Government of India. It also funds close to 24.6% of the Indian Government's expenses. It has assets estimated of 13.25 trillion (US$295.48 billion). It was founded in 1956 with the merger of 243 insurance companies and provident societies. Life Insurance is the fastest growing sector in India since 2000 as Government allowed Private players and FDI up to 26%. Life Insurance in India was nationalised by incorporating Life Insurance Corporation (LIC) in 1956. All private life insurance companies at that time were taken over by LIC. In 1993 the Government of Republic of India appointed RN Malhotra Committee to lay down a road map for privatisation of the life insurance sector.

While the committee submitted its report in 1994, it took another six years before the enabling legislation was passed in the year 2000, legislation amending the Insurance Act of 1938 and legislating the Insurance Regulatory and Development Authority Act of 2000. The same year that the newly appointed insurance regulator - Insurance Regulatory and Development Authority IRDA --started issuing licenses to private life insurers. List of Life Insurers (as of Sept, 2008) Apart from Life Insurance Corporation, the public sector life insurer, there are 22 other private sector life insurers, most of them joint ventures between Indian groups and global insurance giants. Life Insurer in Public Sector 1. Life Insurance Corporation of India Life Insurers in Private Sector 1. SBI Life Insurance 2. Metlife India Life Insurance 3. ICICI Prudential Life Insurance 4. Bajaj Allianz Life 5. Max New York Life Insurance 6. Sahara Life Insurance 7. Tata AIG Life 8. HDFC Standard Life 9. Birla Sunlife 10. Kotak Life Insurance 11. Aviva Life Insurance 12. Reliance Life Insurance Company Limited - Formerly known as AMP Sanmar LIC 13. ING Vysya Life Insurance 14.Shriram Life Insurance 15. Bharti AXA Life Insurance Co Ltd 16.Future Generali Life Insurance Co Ltd 17. IDBI Fortis Life Insurance 18. AEGON Religare Life Insurance 19.DLF Pramerica Life Insurance 20. CANARA HSBC Oriental Bank of Commerce LIFE INSURANCE 21.India First Life insurance company limited 22.Star Union Dia-ichi Life Insurance Co. Ltd Foreign Direct Investment (FDI) Policy in Insurance Sector As per the current (Mar 06) FDI norms, foreign participation in an Indian insurance company is restricted to 26.0% of its equity / ordinary share capital. The Insurance Regulator has stipulated that foreign investment in Indian Insurance companies be limited to 26% of total equity issued (FDI limit) with the balance

being funded by Indian promoter entities. The limit to foreign investment includes both direct and indirect investment and has been a cause of significant lobbying by foreign insurance companies for a change in regulations to increase the FDI limit to 49% of equity issued. The Indian government has supported an increase in the FDI limit, which requires a change in the Insurance Act. The Union Budget for fiscal 2005 had recommended that the ceiling on foreign holding be increased to 49.0%. A change in the Insurance Act requires a passage of the bill in both houses of Parliament. The Indian government has tabled the bill in the Upper House of Parliament in August 2010. [edit] Initial Public Offer (IPO) rules for Indian Life Insurance Companies A key piece of legislation impacting on the Life Insurance industries capital raising abilities is the lock-in period of 10 years for investment to be limited to promoter group equity investments. Under the Insurance Guidelines, Indian Life Insurance companies can opt for a public issue of equity through an Initial Public Offer (IPO) after 10 years of operations. In October 2010, the securities market regulator, Securities and Exchange Board of India (SEBI), issued disclosure norms for Indian Life Insurance Companies seeking to make an initial public offer for sale of equity shares to the public. Indian life insurance industry overview All life insurance companies in India have to comply with the strict regulations laid out by Insurance Regulatory and Development Authority of India (IRDA). Life Insurance Corporation of India (LIC), the state owned behemoth, remains by far the largest player in the market. The private companies have come out with products called ULIPs (Unit Linked Investment Plans) which offer both life cover as well as scope for savings or investment options as the customer desires. These type of plans are subject to a minimum lock-in period of three years to prevent misuse of the significant tax benefits offered to such plans under the Income Tax Act. Comparison of such products with mutual funds would be erroneous. Commission / intermediation fees The maximum commission limits as per statutory provisions are: Agency commission for retail life insurance business: 7- 90% for 1st year premium if the premium paying term is more than 20 years 7- 10% for 1st year premium if the premium paying term is more than 15 years 7- 10% for 1st year premium if the premium paying term is less than 10 years

 7% - yr 2 and 3rd year and 3.5% - thereafter for all premium paying terms. In case of Mutual fund related - Unit linked policies it varies between 1.5% to6% on the premium paid. Agency commission for retail pension policies 7.5% for 1st year premium and 2.5% thereafter Maximum broker commission - 30% Referral fees to banks Max 55% for regular premium and 10% for single premium. However in any case this fee cannot be more than the agency commission as filed under the product. However, the above commission may be further subject to the product wise limits specified by IRDA while approving the product.

Benefits of ERP in Insurance Sector

PLANS FOR CUSTOMERS | HUMAN RESOURCE

CENTRAL DATABASE
FINANCE AGENCY

EMPLOYEE

LOCATION

With the arrival of the globalization, the industry which is booming is the insurance industry. Many companies from all over the world are venturing into this insurance business. In developed as well as underdeveloped countries there are lots of scope in this sector. The contribution of ERP is great in the sector of insurance for simplifying the big and the small operations. Especially in three areas which are very vital this Enterprise resource planning has played an important role in this business sector. For the betterment and interest of the business ERP has facilitated coordination between the insurer and agents by solving the problems of both the fields. ERP has provided the insurer and the agent a common platform. By this, now it has become possible to keep eyes on the agents and the ERP has eased the transaction process also. Insurance sector is famous for inefficiencies and procedural delay. ERP has helped this sector to curb this problem. ERP has helped the insurance sector on various issues. Some of them are An integrated system that operates in real time (or next to real time), without relying on periodic updates. A common database, which supports all applications. A consistent look and feel throughout each module. Installation of the system without elaborate application/data integration by the Information Technology (IT) department. They eliminate the need to synchronize changes between multiple systems consolidation of finance, marketing and sales, human resource, and manufacturing applications

 They provide a comprehensive enterprise view (no "islands of information"). They make realtime information available to management anywhere, any time to make proper decisions. They protect sensitive data by consolidating multiple security systems into a single structure. Reducing the procedures-:It was very difficult for the insurance companies prior to ERP to go ahead with procedures in time. It compiles the assessing damages, settling claims, difference between insured value and loss in time besides litigations. With the help of Enterprise resource planning software the data of different departments are integrated in one common data base. This has solved the problem of the tedious job. In insurance company the different departments like settling claims and litigations do not depend on each other due to which efficiency is improved in their departments Rectifying Information Flow:In insurance sector executives are responsible for receiving the details of each and every minute process. If the processing information is delayed the executives cant go ahead and do the needful. Insurance companies are always at the courts mercy and in a helm. Many claims of the insurance are at the courts intervention. They have to pay the cost of litigation even if the claims are in their favor. ERP is able to solve these entire problems very easily and it also saves the money, and cost of information of the company. Insurance sectors are thereby helped by the ERP to remove all the set backs of the company. Performance of the Agents are Checked:The important part of the insurance sector is the agency. Selling, marketing and giving service are the important aspect of an insurance agent. After the intervention of ERP each and every transaction is updated. This step has helped the insurer also. So after the intervention of the ERP now, there is a transparency in the insurance sector. Every one is getting the opportunity to know each and every thing about the insurer and the agent.

Bibliography
www.google.com www.wekipedia.com www.mypptsearch.com www.wikiAnswer.com www.licindia.in www.liclifeinsuranceindia.com