International Journal of Management (IJM)

Volume 10, Issue 6, November-December 2019, pp. 571- 579, Article ID: IJM_10_06_055
Available online at https://iaeme.com/Home/issue/IJM?Volume=10&Issue=6
ISSN Print: 0976-6502 and ISSN Online: 0976-6510
DOI: https://doi.org/10.17605/OSF.IO/ZJ976

© IAEME Publication Scopus Indexed

ROLE OF HUMAN RESOURCE DEVELOPMENT

PRACTICES IN INSURANCE SECTOR
Vanaparthi Chittibabu
Research Scholar (PT), Department of Commerce and Management Studies,
Andhra University, Visakhapatnam, India
Lecturer in Commerce, Government Degree College, Narsipatnam, Andhrapradesh, India

Prof R Satya Raju

Research Guide, Department of Commerce and Management Studies,
Andhra University, Visakhapatnam, India

Prof G Satyanarayana
Co-guide, Department of Commerce and Management Studies,
Andhra University, Visakhapatnam, India

ABSTRACT
Today, more importance is being given to “people” in organizations. This is mainly
because organizations are realizing that human assets are the most important of all
assets. This emphasis can also be partly attributed to the new emerging values of
humanism and humanization. Moreover, with the increased emphasis on creativity, and
autonomy, which people are increasingly acquiring and enjoying in the society, the
expectations of people are fast changing. People cannot be taken for granted any more.
In the past, people working in organizations were given attention merely in
administering the necessary conditions of work. The traditional concept of personnel
management was based on a very narrow view of human motivation. The basic
assumption underlying with view that human beings are primarily motivated by
comforts and salary, and necessary attention may be given to rationalize these, so that
people do not get dissatisfied. Most of the attention, therefore, was on administration of
salary and other benefits. It is now being increasingly realized that people working in
organizations are human beings. They have their own needs, motivation and
expectations, and that their contribution to the organization is much more than that of
any other resource being used. This paper explains about Role of Human Resource
Development Practices in Insurance Sector.
Keywords: HRD Practices, LIC of India
JEL Codes: E15, E16, E17, E18

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 Role of Human Resource Development Practices in Insurance Sector

Cite this Article: Vanaparthi Chittibabu, Prof R Satya Raju and Prof G Satyanarayana,
Role of Human Resource Development Practices in Insurance Sector, International
Journal of Management (IJM), 10(6), 2019, pp. 571-579.
https://iaeme.com/Home/issue/IJM?Volume=10&Issue=6

1. INTRODUCTION
Human life is a most important asset and life insurance is the most important type of insurance
which provides financial protection to a person and his family at the time of uncertain risks or
damage. Life insurance provides both safety and protection to individuals and also encourages
savings among people. Life Insurance Corporation of India plays a vital role in the welfare of
human well-being by providing insurance to millions of people against life risks such as
uncertain death or accident. Life insurance system is as much a subject of evolutionary
development and change as any other social system. There has been a vast scope of
experimentation all over the world in the area of the insurance sector. India is no exception to
this also the institution of life insurance in India, over the years, has received only a little
awareness and acceptance and has attained only a small degree of maturity. As a result, the LIC
of India, a public sector giant, assumed a dominant and monopolistic role in life insurance
which helped to accelerate the growth of insurance business in India. From the community
standpoint life insurance may be defined as that social device for making accumulations to meet
uncertain losses through premature death which is carried out through the transfer of the risks
of many individuals to one person or a group of persons.3Although life insurance serves as a
method of individuals’ risk management against death risk, most of the life insurance products
are saving instruments4. It includes the primary burden of direct losses like damage due to fire
and indirect losses like loss of production following such damage. It also includes secondary
burden like physical and mental strain caused by anxiety of probable losses and the cost of
maintaining reserves to mitigate such losses, if they occur.
The insurance sector in India has completed all the facets of competition from being an
open competitive market to being nationalized and then getting back to the form of a liberalized
market once again6. Government made a paradigm shift in the economic policy by adopting
the process of liberalization, privatization and globalization at the end of previous decade. The
government usually takes steps to protect its citizens against these risks but it has found it
necessary, in some cases, to take the help of employers, to ease the financial and administrative
burden7 As a result of this, the benefits which LIC was enjoying out of its monopoly in the
market were taken away and it had to face tough competition from the private companies but
due to this LIC had to bring changes in its working. The early insurance companies in India
issued policies in sterling on the lives of Europeans who were engaged in the services of the
East India Company and later on in those of the Government of India9. Today's world is a world
of problems; every were we see the competition, dishonesty, threatens mainly in business world,
but all the problems cannot run for ever, these problems can be controller with the help of close
study, also concentrated efforts are required to increase the coverage and penetration level
through a wide range of actions in the areas of strategic business planning, product innovation,
management accountability,

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 Vanaparthi Chittibabu, Prof R Satya Raju and Prof G Satyanarayana

2. REVIEW OF LITERATURE
• W. Unas and S. Ram Kumar (2015): were explores to reveal the policyholder level of
satisfaction towards services of LIC and their attitude towards private life insurance
companies. This Study highlights key areas, which the policy makers in LIC have to
improve their customer satisfaction. Their study analysis, finding, suggestions and
conclusion proposed by the researcher will also helpful in future studies in the insurance
sector. The significance of this study is that, it brings out the difference in various
parameters like awareness level, service quality and the satisfaction levels of policyholders.
• Abhishek Bondia (2015): identified in his research article over several decades and across
countries, we have seen that a government owned-Government delivered model is not full-
proof. Take the example of food, according to government figures, in India around 43% of
children under the age of five years are malnourished and more than half of all pregnant
women aged between 15 and 49 years suffer from anemia. Despite the massive Public
Distribution System, government has not been able to provide food security to the poor.
Taking a cue from such models in the past, we should look at universalizing health insurance
through active private sector participation.
• Amar Kumar Chaudhary and Snigha Ghosh (2017): based on their literature review and
research finding the said that appropriate incentive system encourages employees to achieve
their best performance. Work performance as a consequence of job satisfaction, and job
satisfaction can be obtained from various incentives as employee motivation. Their result
showed a significant effect of both monetary and non-monetary incentives for better job
performance. The selected participants expressed in different job dissatisfaction toward the
non-availability of certain incentives, which significantly affected their overall work
performance. The majority of the interviewees reported that they are satisfied with their
incentives for their performance.
• Anju Verma and Renu Bala (2015): reviewed Indian is a huge country with big untapped
potential with special reference to semi-urban or rural area. Increasing demand, enhancing
insurance awareness, rising income, increasing size of population and improving
infrastructure creates lots of opportunities in life insurance sector in upcoming India. This
could be proved by gazing the insights of past decades. With the light of his, present
research is conducted two universally accepted indicators are taken to measure the growth
of life insurance in a company also two more indicators have also taken for the study
namely: total life insurance premium and number of new life insurance policies issued.
• Annual Report (2013-14): noticed that IRDA that certain unscrupulous elements are
engaged in making calls indicating that they are officials of IRDA and making offers of
bonus, high returns and other such fictitious benefits thereby forcing members of public to
make payments to unregulated entities or to insurance companies for issuance of life
insurance policies. Such calls not only cause members of public to lose money through
payment to unregulated entities or invest in policies that they do not need thereby affecting
not only the policyholders’ interests but also tarnish the image of the life insurance sector
at large.
• Anshu Thakur (2014): identified in his research article employee satisfaction describes
how content an individual is with his or her job. It is a relatively recent term since in
previous centuries the jobs available to a particular person were often predetermined by the
occupation of that person’s parent. There are a variety of factors that can influence a
person’s level of job satisfaction. Some of these factors include the level of pay and benefits,
the perceived fairness of the promotion system within a company, the quality of the working
conditions, leadership and social relationship, the job itself.

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 Role of Human Resource Development Practices in Insurance Sector

• Aswathi Nair & Karanam Nagaraja Rao (2015): narrated that for the disasters may
drown us in Tsunamis or batter us with battalions of woes. Thus disaster management can
and should be both preventive as well as curative. The role of insurance sector both in
preventive as well as curative aspects of disaster management is vital since it is this sector
that has to share the cost of claim settlement operations. The catalytic role of insurance
companies cannot be underestimated in this major task.
• Avinash Singaraju (2014): argued in research paper that the controversies related to claims
take root at the very beginning of the contractual obligations; and as such, have to be tackled
as a part of the organizational culture. Any insurance professional acknowledges the fact
that Claims management is one of the core domains which every insurer relies upon to
maintain high consumer satisfaction, simultaneously safeguarding the company’s financial
outgo. The service becomes critical as the consumer approaches the insurer upon the
incidence of an unfortunate incident expecting monetary solace and any deviation from their
expectations leads to conflict.
• Azad Singh and Rajneesh Ahlawat (2016): were identified high turnover may be
destructive to a company’s efficiency it expert employees are frequently going and contains
a high proportion of novice workers. The financial charge of employee churn rate for-profit
organizations has been estimated to be between 30% to upwards of 15% of the employees’
remuneration packages. There are two types of costs include in employee’ attrition that is
direct costs and indirect costs. Direct costs communicate to the leaving costs, substitute
costs and transitions costs, although indirect costs speaks about to the loss of the production,
reduced performance levels, needless overtime and low morale.
• B. K. Shau (2015): his report published by FICCI; medical tourism is emerging as one of
the largest sectors from economic financial point of view in India. There is news carried by
times of India Hyderabad edition same date, that basic health care and health care in totality
is the biggest challenge facing India for its citizens. This is as per a nationwide online survey
conducted by one of the agencies connected with TATA Group as per the said Reporting.
What a contrast, rather diversity in both the above news which reminded of a famous
proverb-“Water, Water every but not a drop to Drink”. The reality is somewhere in between
as far as Health care in our country is concerned which is the Focus of this article

4. STATEMENT OF PROBLEM
Human factor plays an important role in every industry, more so in service industry like
insurance industry. Human beings are indispensable in insurance industry. Life Insurance
Corporation (LIC) of India is one of the biggest service organizations with huge manpower. Its
units are spread throughout the length and breadth of the country. The scope of HRD is broad
and hence, the main focus of present study is HRD climate, training and development and
performance appraisal system prevailing in the Life Insurance Corporation (LIC) of India. The
climate of any organization gains priority over other HRD sub systems. Training and HRD
complement each other since the former is one of the effective tools of achieving the latter. In
view of its importance, modest attempt is made to study the training and development
extensively

5. OBJECTIVES OF THE STUDY

• To Study Role of HRD Practices in Insurance sector
• To identify effectiveness of HRD Polices in LIC of India.

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 Vanaparthi Chittibabu, Prof R Satya Raju and Prof G Satyanarayana

6. RESEARCH METHODOLOGY
Research Design:
The primary data has been supplemented by the secondary data. The secondary data are drawn,
classified and studied from the government publications, monthly bulletins annual reports of
LIC of India. Wherever necessary reference is made to different issues of journals namely, HRD
Times, Yoga Shema, Indian Journal of Training and Development, Indian Journal of Labour
Management etc.

Primary Data:
Primary data has been collected with the help of two separate structure schedules which include
employees and agents. Employees comprise managers and field personnel representing the
development officers and sales agents of the organization. The researcher has held discussions
with the officials and staff of the organization. Prior appointments have been taken from the
respondents to make the interview convenient. The perceptions that have been brought
approached mainly at the branch office during their visit and the information has been elicited
from them through a personal interview. During numerous visits to the organization, I had a
chance to observe to work culture and customer behavior which have been very valuable to
carry out the study.

Secondary Date:
The secondary data has been collected from the records of LIC Annual Reports and from the
report of IRDA Various Journal thesis, academic books. Literature has been collected by
visiting a number of libraries of various universities and research institutes at various place of
the country. The secondary data has been utilized to review and highlight some aspects of
Human Resources management in Life insurance of Indi.

7. SCOPE OF THE STUDY

The performance appraisal is considered as a significant tool for any organization. It helps in
making decisions regarding, various performance measures, and links information decisions
making processes which provide a basis for judging the effectiveness of personnel subdivisions
such as recruitment, selection, training and compensation.

8. LIMITATIONS OF THE STUDY

A total of twenty branches offices of LIC have been operating in the Visakhapatnam Division.
Hence, in the present study, the respondents from all the twenty branches have been taken into
account. Since, the operations in all these branches and uniform; the infrastructure facilities and
the scope of Human Resource Management practices of LIC at each branch have been observed
to be uniform in nature. Hence the differences among the branches with regard to their HRM
practices have not been included in the present study.

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 Role of Human Resource Development Practices in Insurance Sector

9. RESULT AND DISCUSSION

To Study Role of HRD Practices in Insurance sector

Evolution of the Insurance Sector:

The Indian insurance industry emerged almost two hundred years ago. The first life insurance
company started its operations as soon as 1818, while the first general insurance company was
established in 1850.The industry demonstrated in both sectors a rapid growth. After
independence by the year 1956 and 154 Indian insurers and 16 non-Indian insurers were
operating in the life sector. At about the same time, 170 insurance companies, both Indian and
foreign, were operating in the non-life sector. Bipin Behari Dasgupta and others. Its primary
target market was the Europeans based in India, and it charged Indians heftier premiums.
Surendra Nath Tagore (son of Satyendra Nath) had founded Hindustan Insurance Society,
which later became Life Insurance Corporation. The Bombay Mutual Life Assurance Society,
formed in 1870, was the first native insurance provider. Other insurance companies established
in the pre-independence era included.
Life Insurance is one of the fastest growing and emerging markets in India and its penetration
in the country is low mainly in rural area. Insurance Companies are focusing on customer
satisfaction through increased customer choice and lower premiums, while ensuring the
financial security of the insurance market. Insurance companies are targeting upon the
customers by giving them a basket of returns with a mission to make them delight and satisfied.

To identify effectiveness of HRD Polices in LIC of India.

Data Analysis of Respondents Sample on the basis of Demographic Variables.

No of
Demographic Variable Category Percentage
Respondents
Below 30 37 12.3
31-40 37 12.3
41-50 152 50.7
Age Above 51 74 24.7
Total 300 100
Male 202 67.3
Female 98 32.7
Gender Total 300 100
Below
54 18
Intermediate
Undergraduate 99 33
Postgraduate 134 44.7
Educational Qualification
Technical 13 14.3
Total 300 100
Below 5 43 14.3
6 - 10 48 16
11 - 20 95 31.7
Experience In Years 2 1& Above 114 38
Total 300 100
Below 3 44 14.7

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 Vanaparthi Chittibabu, Prof R Satya Raju and Prof G Satyanarayana

No of
Demographic Variable Category Percentage
Respondents
3 to 5 38 12.7
Salary in Lakh per Anum 5 to 8 132 44
Above 8 86 28.7
Total 300 100
Class I 50 16.7
Class II 45 15
Class III 176 58.7
Level of Management Class IV 29 9.7
Total 300 100
Married 158 52.7
Marital Status Unmarried 142 47.3
Total 300 100
Rural 92 30.7
Urban 208 69.3
Place of Work Total 300 100
This chapter explains the analysis and interpretation of data that were collected from the
employees at the time of study and it is used clearly to make meaningful information from the
first hand information. In order to analyze the objective of the study, several statistical methods
and tests were used. The methods and tests were selected on the basis of the requirement of the
problem.
Table 4.1 gives the age group of the employees. About 12.3 per cent of employees belong
to the age group of bellow of 30 years. And about 12.3 per cent of employees belong to the age
group between 31 – 40 years. Employees with the 50.7 per cent belong to the age of 41 – 50
years. 24.7 per cent employees were belonging to the age group of above 51
To a large extent of representing 67.30 percent were male and female percentage is 32.67.
This shows most of employees are male. The educational qualifications of the employees in the
insurance company large extent representing 18 per cent of employees have below intermediate.
About 33 per cent of employees are under graduates. About 44.67 per cent were having post
graduation and 14.3 per cent of employees were from technical background. The details about
length of service rendered by the employees. Employees of 14.3 percent served the organization
less than 5 years whereas about 16 per cent of employees have put up service between 6 – 10
years. Representing about 31.7 per cent of employees has rendered service between 11 – 20
years. About most of employees served the organization more than above of 21 years and the
percentage is 38.

Reliability test Interpretation

Reliability Statistics
Cronbach's Alpha N of Items
.866 59
Cronbach’s alpha (á) was computed to check the reliability of data collected for each
moderating variable to assess the effectiveness of HRM practices in Life insurance Corporation
of India.

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 Role of Human Resource Development Practices in Insurance Sector

The reliability of a measure indicates the stability and consistency of the instrument used in
measuring a concept and it helps to assess the goodness of a measure, The HRM scale was
found to be a reliable for analysis with the present sample, as the value of coefficient of
Cronbach’s alpha displayed was 0.866. Thus, the data is ready for factor analysis to explore the
determinants of HRM Practices in Life insurance Corporation of India in Visakhapatnam
division the present study

Human Resource Planning

KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .598
Bartlett's Test of Sphericity Approx. Chi-Square 96.757
df 6
Sig. .000
Factor analysis is an excellent statistical technique to explore the determinants of the
underlying structure of a questionnaire. Those items that refer to the same dimension or share
the same dimension should correlate highly with one another. Factor analysis uses this to
uncover those factors or dimensions. The steps involved in data reduction through factor
analysis are indicated below: Factor Analysis is a data reduction technique. It also helps in
structure detection among the variables and further helps in studying the underlying crucial
factors that cause the maximum variation. Before we proceed to factor analysis first the
researcher tested the eligibility of the data by checking KMO- Bartlett's test which is a measure
of sampling adequacy. The KMO value is 0.598 >0.5 indicates multivariate normality among
variables. The further significance value is less than.005 the researcher proceeds with factor
analysis

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