organization without managers

8/11/2019 organization without managers

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Organisational Structure and Design

Group ssignment I

on

Group 4 Members

Abhaya Chaddha (MS14A001)

Anurag Jha (MS14A013)

Anirban Das (MS14A009)

Gokul D Anand (MS14A027)

Keval Patel (MS14A034)Nasa Venkata Sudeepta (MS14A039)

Shakeel Mohammed Hanif.S (MS14A053)


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ContentsINTRODUCTION ....................................................................................................................................... 4

History ................................................................................................................................................. 4

Vision ................................................................................................................................................... 4

Mission ................................................................................................................................................ 4

Values .................................................................................................................................................. 4

ORIENTAL INSURANCE PRODUCTS .......................................................................................................... 5

Motor Insurance Policy ....................................................................................................................... 5

Personal Accident Policy ..................................................................................................................... 6

Individual Mediclaim Policy ................................................................................................................. 6

Overseas Mediclaim Policy .................................................................................................................. 6

Shopkeepers Policy .............................................................................................................................. 7

Householders Policy ............................................................................................................................ 7

Happy Family Floater Policy ................................................................................................................ 7

Other policies ...................................................................................................................................... 7

ANNUAL REPORT AND ANALYSIS ............................................................................................................ 7

VALUE CREATION MODEL ....................................................................................................................... 9

Value Creation Model .......................................................................................................................... 9

Value Creation ................................................................................................................................... 10

Organization Structure ...................................................................................................................... 10

PROBLEMS AND CHALLENGES ............................................................................................................... 11Problems Pertaining To Insurance Sector ......................................................................................... 11

Problems Specific to Oriental Insurance ........................................................................................... 12

CONTROL, INNOVATION AND EFFICIENCY ............................................................................................ 12

VUCA ...................................................................................................................................................... 13

Inflation ............................................................................................................................................. 13

Distribution ........................................................................................................................................ 13

Increasing Competition ..................................................................................................................... 13

Increase in FDIa potential threat for the local players .................................................................. 14Insurance Density: ............................................................................................................................. 14

CONCLUSION ......................................................................................................................................... 15

REFERENCES .......................................................................................................................................... 15


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Table of Figures

Figure 1: Motor Insurance ....................................................................................................................... 5

Figure 2: Personal Accident Insurance .................................................................................................... 6

Figure 3: Five Year Performance ............................................................................................................. 8

Figure 4: Value Creation Model ............................................................................................................... 9

Figure 5: Organization Structure ........................................................................................................... 10

Figure 6: Average Money spend by the customer on Insurance in different countries ....................... 14


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INTRODUCTION

Indian insurance business is one the most significant players in the financial services.

Insurance, in simple language, promises a compensation of monetary loss sustained by a particular

person, due to the damage or destruction of a particular piece of property owned by him, provided it

happens due to certain courses. It covers two dimensions viz. Life insurance and General insurance.

The Oriental Insurance Company Ltdis one such company that handles both life and general

insurance.

Oriental with its head Office at New Delhi has 30 Regional Offices and nearly 1800+

operating Offices in various cities of the country. The Company has overseas operations in Nepal,

Kuwait and Dubai. The Company has a total strength of around 14,000+ employees. From less than a

lakh at inception, the Gross Premium went up to Rs.58 crores in 1973 and during 2013-14 the figure

stood at a mammoth Rs. 7282.54 crores.

History

The Oriental Insurance Company Ltdwas incorporated at Bombay on 12th September 1947.

The Company was a wholly owned subsidiary of the Oriental Government Security Life Assurance

Company Ltd and was formed to carry out General Insurance business. The Company was a

subsidiary of Life Insurance Corporation of India from 1956 to 1973 ( till the General Insurance

Business was nationalized in the country). In 2003 all shares of our company held by the General

Insurance Corporation of India has been transferred to Central Government.

Vision

To be the most respected & preferred non-life insurer in the markets we operate.

Mission

Orientals mission is

To contribute to the socio economic objectives of the nation by being a vibrant and viable

organization catering to the growing insurance needs of the community

Towards this end we will strive for effective management of business operations.

Values

Oriental tries to create following values

Highest priority to customer needs.

High standards of public conduct.

Transparency in operations.

High standards of professional ethics


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ORIENTAL INSURANCE PRODUCTS

Oriental offers insurance products under various categories at affordable prices. Few insurance

products available from Oriental are as follows

Motor Insurance Policy

Figure 1: Motor Insurance

Motor insurance is insurance purchased for cars, trucks, motorcycles, and other road

vehicles. Its primary use is to provide financial protection against physical damage and/or bodily

injury resulting from traffic collisions and against liability that could also arise there from. It also

provides cover for liability, death or property damage of third parties.

Motor Insurance plans can be broadly categorized into two major categories:

i. Motor Package Insurance Policy For Two Wheeler

ii. Motor Package Insurance Policy For Car

In general all Motor insurance has a period of Insurance of 1 year. Policies needs to be renewed each

year to avail the benefits. Motor Insurance is available for both private as well as commercial vehicle

owners.

Different types of plans are available to meet the needs of customers like Motor Cycle Package

Policy, Private Car Package Policy, etc.


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Personal Accident Policy

Figure 2: Personal Accident Insurance

Oriental Personal Accident Insurance plans are policies which covers a person from

accidental death, accidental disability and several other features. There can be very bad

consequences of meeting an accident like death or pause in income, ranging from few weeks,

months to even years. Some of these policies also offers accidental riders.

Different types of plans available under this category areGramin Accident Insurance,NagrikSuraksha

Policy,etc.

Individual Mediclaim Policy

Oriental mediclaim insurance policies are those policies which covers hospitalization

expenses for the treatment of illness / injury as per the terms and conditions of the policy. These

policies may also cover pre-hospitalization expenses for few days prior to hospitalization and post

hospitalization expenses for the specified days as per policy terms. Premium for these policies are

mostly dependent on age and health condition of the individual.

Different types of plans available under this category are Group Mediclaim Policy, Individual

Mediclaim Policy, etc.

Overseas Mediclaim Policy

Overseas Mediclaim Policy gives comprehensive cover for you and your family when you

globe trot. We want your trip to be stress-free so we cover you against medical and other financial

emergencies that may incur during your travel. Policy covers the medical expenses while the

beneficiary is outside the Republic of India. It covers medical expenses both as inpatient as well as

outpatient while in a foreign country. The sum insured available ranges from Rs.50000/- to

Rs.500000/-

Cashless settlement is also provided through Oriental Overseas Services Provider.
http://www.orientalinsurance.org.in/Gramin-Accident-Insurance.htmlhttp://www.orientalinsurance.org.in/Nagrik-Suraksha-Policy.htmlhttp://www.orientalinsurance.org.in/Nagrik-Suraksha-Policy.htmlhttp://www.orientalinsurance.org.in/Nagrik-Suraksha-Policy.htmlhttp://www.orientalinsurance.org.in/Nagrik-Suraksha-Policy.htmlhttp://www.orientalinsurance.org.in/Gramin-Accident-Insurance.html


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Shopkeepers Policy

To ensure that one can focus on this primary activity, it is necessary that the mind should be

free from other worries not related to trading such as accidents, which could hamper the business

activity.

Shopkeeper Insurance Policy covers all the probable risks and perils faced by small to medium sized

shop owners. It provides protection for the property and the interests of the Insured in the business

venture.

Householders Policy

Householder Insurance Policy offers protection for your home (residential building) and its

contents against a variety of risks. This policy covers various kind of damages like fire, theft, domestic

appliances, baggage, etc.

Happy Family Floater Policy

Floater policy are policies for entire family residing in India which includes Self, Spouse,

Children, Parents and Parents in laws. It is available in two plans Silver and Gold. In Silver sum insured

is from 1 to 5 lacs while Gold sum insure is from 6 to 10 lacs.

Other policies

Other policies from Oriental are aimed at following industries:Professionals: Policies for CA, Financial Accountants, doctors, architects etc. against Indemnity Errors

and Omissions.

Marine: Policies covering sailing vessels, hull and other related items of marine.

Aviation: Policies covering aircraft, personal accident of crew members and other such machineries.

Animals/Birds: Policies covering pets like Dogs, cattle, etc.

Agriculture/Sericulture/Poultry: Policies covering well, hut, water fish, farmers crop, etc.

Engineering/Industry: Policies covering machinery items such as boiler, plant, etc.

Office/Traders: Policies covering burglary, contract default, etc.

ANNUAL REPORT AND ANALYSIS

The annual report of the Oriental insurance company for the financial year 2012-13 which

was available for public discourse has been studied and the facts given in the report has been used as

parameter to identify the performance and the quality of the organization undertaken. The annual

report for the past few years have also been used for comparing with the annual report analysed in

order to get a view on the growth of OICL. The findings of the meticulous annual report analysis have

been made in a brief manner in the following paragraph.


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Despite stiffer competition, The Oriental Insurance company Limited had shown a growth

rate of 8.77% in 2012-13 which is very good when compared to Industry growth. Also, in the year

2012-13 the company had recorded highest ever profits in the history with profit before tax and after

tax values of 794.74 crore rupees and 533.89 crore rupees respectively. The Company has also

maintained its consistency of having a very good CRISIL and IRDA Ratings. But the Company has

incurred underwriting losses due to unfortunate circumstances beyond control ( Natural calamities

and Catastrophic losses). The Company aims to curb the underwriting losses and also improve the

claim ratio to generate more profits. As a plan to penetrate the market, the Company introduced the

concept of Extension counters and Micro offices, about four years ago, intending to get into closer

proximity to the insuring public. In 2012-13, they had set up 275 such Extension counters and Micro

offices and have proposed to set up 300 more in the next couple of years. OICL had paid a dividend

amount totalling 106 crore rupees to the shareholders and estimated themselves to grow at 19%

rate for the next few years. OICL is planning to expand its wings in untapped territories to counter

the highly competitive market rivals. OICL has also grown from strength to strength and has managed

to keep its stock alive by going with the trend and future thinking. One such initiative was the

building of IT infrastructure services to cater to the needs of general public and improve the

efficiency in providing services. The grievance re-dress mechanism prevailing in OICL is one of a kind

principle employed by the Company wherein any customer can raise his grievance to the highest

authority of the company.

Figure 3: Five Year Performance


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VALUE CREATION MODEL

Value Creation Model

Figure 4: Value Creation Model

The value creation model of Oriental Insurance as can be seen in the process flow diagram

starts with the designing of the product, the products here include all the insurance policies offered

to the desired users. After the designing of the product is the Front Office work where all the

customers are dealt with and managed using various methods including personalization of products,

providing services being the main focus.

After providing various product services is the administration of policy, under which all the

premiums and services are maintained billing compliances also being a part of these. Later comes the

claims, where the policy holders claim their grant. Under this comes risk management, fraud

management, loss management etc.


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Also, the support functions include finance and accounts, HR functions, Legal settings,

Infrastructure and support, Asset management. All these factors Contribute equally to the

functioning of the complete process.

Value Creation

Oriental specializes in devising special covers for large projects like power plants,

petrochemical, steel and chemical plants. The company has developed various types of insurance

covers to cater to the needs of both the urban and rural population of India.It provides customized

insurance products for all sections of the society at affordable prices

Organization Structure

Figure 5: Organization Structure

Head Office (HO) : The Head Office is the supreme entity in the organization structure of The oriental

Insurance Company Limited. The Head Office is an advisory authority for major decision making of

business issues such as investments, dividend decisions, premiums, claims, Human Resource

management, monitoring statutory provisions, complying with rules and regulations formulated by

IRDA and the Central government. The Head Office of OICL is located in New Delhi.

Regional Office (RO) : The Regional Offices are the controlling entity for the region-wise operations

and decision making of Divisional Offices and other Lower Offices. There Head Office and the

Regional Office are administrative bodies and generally no business transactions (Premium

accounting and claims disbursement) take place here. There are 30 Regional Offices all over India

covering almost every nook and corner of the country.


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Divisional Offices (DO) : The Divisional Offices control the Branch Offices, Extension Counters and

Micro Offices. They are headed by Senior Divisional Manager or Divisional Manger who are

considered to be middle level management personnel. The Divisional Offices are the literal business

transaction heading centres since the higher two levels of HO and RO are more of administrative

nature.

Branch Office (BO) : The Branch Offices are liable to report directly to the divisional offices. Small

Level Targets are fixed for the Branch Offices as they have been set up with the intention of

penetrating deep into the market. The BO are headed by Senior Branch Managers and Branch

Managers. These Offices are provided with limited staff strength keeping in mind the need for

optimal human resource utilization.

Micro Offices and Extension Counters (MO & EC) : The Micro Offices and Extension Counters are

relatively newer entities in the Organizational Structure of OICL created with the motivational

guidelines laid down by the IRDA and Ministry Of Finance a few years back. These were primarily

meant for premium procurement alone and disbursements do not take place in these offices. They

are generally One-Man headed Offices intended to reach out to Insuring public

PROBLEMS AND CHALLENGES

Problems Pertaining To Insurance SectorExcessive Market Dilution: Too much market dilution of the Insurance Sector in the past 2 decades

has become a major issue of concern for all the PSU Insurance companies, and in particular, The

Oriental Insurance Co. Ltd. It has become a serious threat to long term visionary planning.

IRDA Regulations: The rules and regulations pertaining to the Insurance sector are controlled and

monitored the Insurance Regulatory and Development Authority (IRDA).

Brokers Intervention: The brokers have proved to be a bane to the Insurance sector as they act as an

intermediary and tend to proceed in a manner without proper risk analysis.

Global Market Threat: The Global Market has become more competitive and challenging. Competing

in such a huge competitive environment has become a real challenge in the Insurance sector. An

unfortunate minor error in policy may cause severe consequences.

More Catastrophic Loss: The Natural disasters are unavoidable and including them in the Accident

cover policies is a double-edged sword which may cause huge expenses. These losses are also cannot

be estimated and hence deciding the premium at a competitive quote is difficult.

Stiff Competition: A very stiff competition within the PSU's and the other Private players has resulted

in highly competitive market pricing. Proper scientific pricing could not be exercised due to very


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unhealthy discounting and other concessions. This competition lacks long term thinking and

planning.

Legal Difficulties: Some of the policy claims cannot be processed speedily due to certain portfolios

such as Third Party claims being handled by the courts (MACT Tribunal).

Fraudulent & Exaggerated Claims: Some of the claims made by policy holders are fraudulent and in

certain cases they make exaggerated claims than the losses incurred.

Problems Specific to Oriental Insurance

Decision Delay: The delay in decision making is attributed to the government style of functioning

wherein the authorities who are vested with the power of taking crucial decisions generally tend to

take prolonged time. This causes a glitch in a competitive environment as delaying timely decisions

may be costly.

Association/Union Intervention: As in any PSU in India, the associations/unions play a very major

role in the functioning of the organization. Sometimes, the associations/unions are prone to place

unacceptable demands and threaten to strike thereby hampering the company's growth.

Unwanted/Un-required Transfer & Mobility: The Government Employees are liable for a transfer

depending on a transfer policy framed by the PSU's. The transfer policy is a great hindrance as the

employees currently working on a particular area of work has to relocate to a new work in a new

place and the work continuity is difficult to be maintained.

Hierarchical Control: The conventional hierarchical control is strikingly different from the flat

hierarchy observed in IT industries. The hierarchy results in the ideas of low level workers being

suppressed.

Indifferent Attitude: Due to non-accountability of work in PSU's, some of the employees pretend to

display and indifferent attitude resulting in work paralysis.

CONTROL, INNOVATION AND EFFICIENCY

Oriental insurance has the largest integrated non life insurance application softwareand

pioneer in insurance sector to have such system integration. Such integration of the system helps

in controlling the complete process more effectively as it has a centralized system of managing

database as well as updating various new offers and insurances that are floated in the market for

the consumers. This not only helps us to manage the complete system but also helps us to

compile any useful information in a single place instead of the tedious work to be done

otherwise, for example providing data to regulators or Government for any particular purpose.

Different insurers provide innovative combination of various covers. One of the covers that

oriental provides is Nagrik Suraksha , which is a combination of personal accident and medical


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expenses as well. Such combination of covers is not only beneficial to the organization but to the

consumers as well where they do not have to buy two different policies but opt for a single policy

that covers two parameters.

Also, the use of different nomenclatures attracts the users to know more about it , it creates an

interest among the users and which in turn enhances the policy selling.

Some special products are filed with Insurance Regulatory Authority to suit the needs of insuring

public. Insurance Regulatory and Development Authority (IRDA) is anautonomous apex statutory

body which regulates and develops theinsurance industry in India. It was constituted by

aParliament of India act called Insurance Regulatory and Development Authority Act, 1999 and

duly passed by theGovernment of India.

Not only the policies but also the experienced personnel in the industry are the greatest assets of

this company. All the personnel add to the value of the company and manage and control their

assigned tasks to utmost efficiency.

VUCA

One word describes what the Oriental Insurance Company has experienced over the last four years:

uncertainty. For an organization that positions itself around helping individuals and families mitigate

the challenges thrown at them by uncertainty, it has been a humbling experience. Many of the

changes were forced by regulatory changes and macroeconomic conditions. Some of them are

explained below.

Inflation

Insurance products tend to perform better in low-inflation scenarios. Unless there is respite on that

front and households start to save more, flows into insurance plans may not increase significantly. As

the Inflation rate was extremely high for the last few years in our country, its become very difficult

for not only the Oriental Insurance but the whole Insurance Industry to get rid of this, which indeed

led to Volatility and Uncertainty.

Distribution

Over the last few years, Bancassurancehas been the industry's growth engine. This is not to say the

model has achieved its true potential in case of Oriental Insurance due to poor distribution channels.

Increasing Competition

The number of private players in life insurers sector has more than doubled from 10 in FY01 to 24 in

FY14 with expansion of existing as well as new players continuing to rise. The number of offices of

the Life insurers has also increased dramatically during the year FY08 from 5,373 at the beginning of
http://en.wikipedia.org/wiki/Autonomoushttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Parliament_of_Indiahttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Parliament_of_Indiahttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Autonomous


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the year to 9,713 by the end of the year, showing a tremendous growth in this sector. A major

portion of this expansion was in the private sector whose offices more than doubled from 3,072 to

6,391. This huge expansion indeed pushed the market share of Oriental Insurance from 21% to just

9.48%.

Increase in FDI a potential threat for the local players

The government decided to hike the FDI cap from 26 percent to 49 percent in the insurance sector.

Though nobody knows whether itll prove to be a remarkablestep ahead or not but one thing that

most of them are agreed with, is, itll create a huge existence problem for the Indian insurance

companies like Oriental Insurance.

Insurance Density:

Per capita income of consumers plays a vital role in determining the amount an average consumer

spends on insurance. By this measure, India is among the lowest-spending nations in the world in

respect of purchasing insurance. Economic Crisis, Recession are the major reasons for that. Another

important factor that has been slowing down the improvement of insurance density is Indias

relatively high population growth rate, which has averaged 1.7% over the past ten years. This creates

a huge insecurity for not only the Oriental Insurance but for the whole industry as well. Though the

scenario is changing slowly but it really needs some time to become at par with the developed

nations.

Figure 6: Average Money spend by the customer on Insurance in different countries


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CONCLUSION

Oriental Insurance is a professionally managed independent Board-run Company to act as a

financially sound corporate entity with high business ethics, implement best human resource

development practices to build a highly efficient, dedicated and motivated workforce with high

morale and moral values. It optimally utilizes the information technology infrastructure and provides

excellent customer service.

REFERENCES

1.

http://www.policybazaar.com/car-insurance/motor-insurance-plans.aspx

2. http://www.jagoinvestor.com/2011/12/accidental-insurance-policies-in-india.html

3.

http://www.orientalinsurance.org.in/4. http://en.wikipedia.org/wiki/Life_insurance_in_India
http://www.policybazaar.com/car-insurance/motor-insurance-plans.aspxhttp://www.policybazaar.com/car-insurance/motor-insurance-plans.aspxhttp://www.jagoinvestor.com/2011/12/accidental-insurance-policies-in-india.htmlhttp://www.jagoinvestor.com/2011/12/accidental-insurance-policies-in-india.htmlhttp://www.orientalinsurance.org.in/http://www.orientalinsurance.org.in/http://en.wikipedia.org/wiki/Life_insurance_in_Indiahttp://en.wikipedia.org/wiki/Life_insurance_in_Indiahttp://en.wikipedia.org/wiki/Life_insurance_in_Indiahttp://www.orientalinsurance.org.in/http://www.jagoinvestor.com/2011/12/accidental-insurance-policies-in-india.htmlhttp://www.policybazaar.com/car-insurance/motor-insurance-plans.aspx

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