Roll no. 3550
Mrs . Swati Mittal
I Undersigned the student of M.com – 3
SEM by declare that the project
report is my own work and has carried out under the guidance and
supervision of Prof. Swati Mittal mam . Further I declare that it has not
been submitted to any other university of examination.
Date: Sign. Of Student
In this age of neck to neck competition, there is much importance given
to practical knowledge. The theorical knowledge is not sufficient to
understand the boundless field of business management.
Today every person wants to be a master in the field they are in. The
practical training is a life of management student. In modern world the
importance of management is increasing day by day. Industrial training
provide a student sufficient knowledge to develop an education to
connect theory and practical.
So to fulfill our purpose I have done training at “BHARTI AXA LIFE
It is my great pleasure to present this report before you. I sincerely would
like to show my gratitude towards all those persons who have helped me
throughout my project work
I am heartily thankful to Miss. Gurmeet kaur mam , Company guide,
Bharti Axa Life lnsurance Ltd., Moga for giving me his valuable
guidance for preparing this report. He has been an exceptional mentor
during these two months of SIP. It has been a great learning experience of
being a trainee under him.
I would like to express my special thanks to all the another official who
has helped me a lot during this SIP. Their critical advices helped me to
make this report more effective.
Moreover, I thanks to prof. Swati Mittal mam who guided me before and
after the industrial training. He gave me great support to prepare this
project, too. And all who directly or indirectly helped me in preparing
i. Introduction Insurance Sector
ii. Brief History
iii. Insurance Sector in India
iv. Scenario Insurance Industry in India
v. Contribution to GDP
vi. Status of Insurance Industry
vii. Insurance Sector Before Privatization
viii. Insurance Sector After Privatization
ix. Future of Insurance Sector
x. Life Insurance
INTRODUCTION TO INSURANCE SECTOR
In India, the concept of insurance was never given a serious thought, as compared to
other countries. Life insurance premium to Gross Domestic Product (GDP) ratio is a
mere 1.4% as compared to a healthier rate of 8% amongst other developing countries.
The reason being lack of awareness and opportunities combined with poor state of
Presently in India, the insurance sector is nationalized; Life Insurance Corporation of
India (LIC) and General Insurance Company (GIC) render services along with its 4
subsidiaries. While LIC provides life insurance, GIC is concerned with non life
insurance like - motor, marine, fire, health and personal accident insurance.
LIC has been one of the pioneering organizations in India, which ushered in the use of
information technology in their business on a very large scale to deliver more value
and satisfaction to the policyholders. LIC has fully computerized most of its branches
all over India. Metropolitan Area Network (MAN) has enabled policyholders to pay
premiums or to get their status report, surrender value quotation and loan quotation
online. The Zonal Offices and MAN centers are connected through a Wide Area
Network (WAN). Interactive Voice Response Systems have been made functional in a
number of centers all over the country.
The insurance industry in our country is on the threshold of a new era of rapid
expansion. A more competitive environment is expected to emerge with new private
participants being allowed to enter the insurance industry. The need for private sector
participation in this sector is justified on the basis of enhancing the efficiency of
operations, achieving a greater density and penetration of life insurance in the country
and for a greater mobilization of long-term savings for long gestation infrastructure
projects. In the wake of emerging competition, LIC, with its more than four decades
of experience and wide reach, is equipped to face the challenges emanating from the
entry of new players. Insurance is a federal subject in India. The primary legislation
that deals with insurance business in India is:
Insurance Act, 1938, Insurance Regulatory & Development Authority Act,
Composition of Authority under IRDA Act, 1999
The origin of insurance is very old .The time when we were not even born; man has
sought some sort of protection from the unpredictable calamities of the nature. The
basic urge in man to secure himself against any form of risk and uncertainty led to the
origin of insurance.
The insurance came to India from UK; with the establishment of the Oriental Life
insurance Corporation in 1818.The Indian life insurance company act 1912 was the
first statutory body that started to regulate the life insurance business in India. By
1956 about 154 Indian, 16 foreign and 75 provident firms were been established in
India. Then the central government took over these companies and as a result the LIC
was formed. Since then LIC has worked towards spreading life insurance and building
a wide network across the length and the breath of the country. After the liberalization
the entrance of foreign players has added to the competition in the market.
INSURANCE SECTOR IN INDIA
The insurance sector in India has witnessed almost a 360-degree turn over a period of
almost two centuries. It has come a full circle from being an open competitive market
to nationalization and back to a liberalized market again.
DEVELOPMENT OF I NSURANCE I N I NDI A
The business of life insurance in India started in the year 1818 with the establishment
of the Oriental Life Insurance Company in Calcutta. Some of the important
milestones in the life insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to
collect statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies taken over by the
central government and nationalized. LIC formed by an Act of Parliament, viz. LIC
Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.
Despite all these the insurance market is currently underdeveloped in India. This is
mainly because of the following reasons.
The large-scale of operations, public sector bureaucracies and cumbersome
The highest paid employees of the nationalized insurance companies are
characterized by abysmal productivity, utter ignorance of the basic principles of
the insurance business, endemic corruption, gross indiscipline and sheer
Dominating the inevitably weak management of the nationalized insurance
companies, the militant and strongly unionized employees of the nationalized
monopoly insurance companies have transformed Indian insurance from
volume-driven into class-based business.
SCENARIO OF INSURANCE INDUSTRY IN INDIA
India with its large population does provide an immense potential for the insurance
industry to flourish. Below given are some of the statistics pertaining to Indian
I NDI A AT A GLANCE:
Population: 1 Billion
Economy: 5th largest in the world in terms of Purchasing
Power Parity (PPP)
GDP growth Rate: Over 6% per year on an average for the
Savings Rate: Around 26% of GDP
Estimated middle class population: 300 Million
Insured population: 70 million only
Estimated business (2008): $6.6 Billion
This characteristic of their business makes insurance companies the biggest
investors in long-gestation infrastructure development projects in all developed and
The insurance sector in India has come up a full circle from being an open
competitive market to nationalization and back to a liberalized market again.
Tracing the developments in the Indian insurance sector reveals the 360-degree turn
witnessed over a period of almost two centuries.
By any yardstick, India, with about 200 million middle class households, presents a
huge untapped potential for players in the insurance industry. Saturation of markets
in many developed economies has made the Indian market even more attractive for
global insurance majors. The following table reflects the low percentage and per
capita penetration of insurance in India compared to other developed and
developing countries. With the per capita income in India expected to grow at over
6% for the next 10 years and with improvement in awareness levels, the demand for
insurance is expected to grow at an attractive rate in India.
CONTRIBUTION TO GDP
Insurance sector‟s contribution to GDP of different countries are as follow:,
Status of Indian Insurance Sector
The insurance industry in India is estimated to be of US $ 66-70 million & is
expected to grow to US $ 377 million by 2005. With the opening of this sector it
was felt that LIC would lose its hold on the Indian market. But LIC still
continues to dominate the market with its strong 800,000 task force. Its
incremental market where is 97% & is growing at a pace of 13%. In fact, some
of its agents are the members of MDRT (Million Dollar Round Table). The
growth of LIC can also be attributed to its presence in the US, UK where it
functions as a corporate agent. Amongst private life insurers ICICI Prudential
topped the list & in non-life insurers TATA-AIG has emerged stronger followed
by Reliance General.
Insurance in India before 2000 meant only LIC (Life Insurance Corporation) &
GIC (General Insurance Corporation). These two players signified the entire
insurance sector in India. No doubt they were an amalgamation of as many as
351 private insurance companies i.e. LIC was formed by nationalizing 245
private insurance firms in 1956 & GIC by nationalizing 106 firms in 1970.
Contribution to GDP
(Premium as % of GDP)
South Africa 14.04
South Korea 9.89
I ndia 1.77
INSURANCE SECTOR BEFORE PRIVATIZATION
The Indian Insurance sector before privatization was based on the following factors:
Lower penetration & more direct business due to lack of intermediaries.
Though the domestic savings in India is 25% only 5 per cent of it is insured. The
Gross Insurance Premium in India is as low as 0.3% compared to Japan which is
31%, European Union =25%, Canada = 1.3%. Which is 51
in the world?
But with the Vajpayee government coming to power in 2000 for a brief period,
the way for privatization of insurance sector was paved. & lobe hold, now we
have as many as 26 private players in this field i.e. 13 life-insurers & 13 non-life
insurers. The reinsures function under the umbrella of GIC & are required to
reinsure 30% of their business with it. GIC has allowed Indian exporters to
secure liability insurance from outside the country, which has facilitated its
entry into SAARC.
In various segments of Indian Insurance industry, health care presents a huge
potential. The total expenditure on health in India is 6 per cent of the GDP. The
government spending is less than 25% compared to 30-40% of developed
countries. The health insurance industry in India can be valued at more than
90,000 core rupees. This means that in a population of 1 billion only 2340
million people are insured. It is estimated that this number will grow to 650
million by 2005.
The opening up of this sector has led to heightened activity. To increase
penetration both national & private players are now using conventional means.
However, both the private & national players are reluctant to actively participate
in the motor insurance segment, as the losses in this sector are more than 100%.
Moreover the motor insurance premium is as low as 2.5 per cent of the vehicle
cost compared to international standard of 6 per cent.
The privatization of insurance sector in India has encouraged the government to
go in for more such moves. The track record of LIC has shown that even
national players can function in a competitive environment & still dominate the
Why Private Insurance companies came to India?
In India, the laws & practices have changed significantly, since the 1950‟s. The
amendments made in 1952, to the Insurance Act, 1938, did away with the system of
Principal agents, Special agents & chief agents, who were till then permitted to
procure proposals from the market for insurance companies. Restrictions were also
imposed on managing agencies, as well as on the nature of remunerations that could
be paid to agents.
As at the end of 1998, only the following organizations were transacting life insurance
business in India.
Life Insurance Corporation of India (L.I.C.)
Postal Life Insurance (P.L.I)
All others who were transacting life insurance business in India were prevented from
doing so by the Nationalization Act of 1956, & all their business was taken over by
the L.I.C. It is expected that there could be significant changes in the following years;
if & when new rules are enacted, enabling more private companies to transact life
insurance business in India. LIC came into being on 1
September, 1956 as a result of
the nationalization of life insurance business. It transacts business throughout India &
also in the U.K., Mauritius, Fiji & Bahrain.
LIC of India was the only player in the market from 1956 & even after 40 years of
existence it was not possible for them to cover all the population for life insurance.
They were hardly able to cover 10-15% of the population even after having so many
branches & employees. So for covering each & every individual under insurance,
government allowed private players to get into this business in 1999.
LIC came into being on 1
September, 1956 as a result of the nationalization of
life insurance business.
LIC was hardly able to cover 10-15% of the population even after its 40 years
of existence in market
Now in all there are 17 players in Life insurance business including LIC & they are
1. Bajaj Allianz Life Insurance Co. Ltd.
2. Birla Sun Life Insurance Co. Ltd. (BSLI)
3. HDFC Standard Life Insurance Co. Ltd. (HDFC STD LIFE)
4. ICICI Prudential Life Insurance Co. Ltd. (ICICI PRU)
5. ING Vysya Life Insurance Co. Ltd. (ING VYSYA)
6. Max New York Life Insurance Co. Ltd. (MNYL)
7. MetLife India Insurance Co. Pvt. Ltd. (METLIFE)
8. Kotak Mahindra Old Mutual Life Insurance Co. Ltd.
9. SBI Life Insurance Co. Ltd. (SBI LIFE)
10. TATA AIG Life Insurance Co. Ltd. (TATA AIG)
11. Reliance Life Insurance Company Ltd.
12. Aviva Life Insurance Co. Pvt. Ltd. (AVIVA)
13. Sahara India Life Insurance Co. Ltd. (SAHARA LIFE)
14. Shriram Life Insurance Co. Ltd (SHRIRAM LIFE)
15. Bharti AXA Life Insurance Co. Ltd. (BHARTI AXA)
16. Future General India Life Insurance Co. Ltd.
17. IDBI Fortis Life Insurance Company
What were these private players supposed to do?
All these private players were focusing on two things:
Geographical Expansion :
First of all the private players were concentration on the reach. They opened number
of branches in the country so that they can compete with the insurance giant LIC.
Because insurance is such a cake, more the persons
In service sector when we are talking about capacity building we are not talking about
procuring sophisticated equipments /machines but about manpower. So in insurance
sector the capacity building i.e. recruiting personnel is done in two ways: a)
Recruiting employees i.e. Sales Manager /Sales officer b) Recruiting Life Insurance
Insurance Industry After Privatization
Reforms have marked the entry of many of the global insurance majors into the Indian
market in the form of joint ventures with Indian companies, which have responded to
the competition in an admirable fashion by launching new products and improving
service standards. In India there are 17 players in insurance sector. One is LIC and
others are as below:
Date of Reg.
Name of the company
1 23.10.2000 HDFC Standard Life Insurance Company Ltd.
2 15.11.2000 Max New York Life Insurance Co. Ltd.
3 24.11.2000 ICICI Prudential Life Insurance Company Ltd.
4 10.01.2001 Kotak Mahindra Old Mutual Life Insurance Ltd.
5 31.01.2001 Birla Sun Life Insurance Company Ltd.
6 23.10.2001 Reliance Life Insurance Company Ltd.
7 30.03.2001 Tata AIG Life Insurance Company Ltd.
8 02.08.2001 ING Vysya Life Insurance Company Ltd.
9 03.08.2001 Bajaj Allianz Life Insurance Company Ltd.
10 06.08.2001 Metlife India Insurance Company Pvt. Ltd.
11 14.05.2002 Aviva Life Insurance Co. India Pvt. Ltd.
12 06.02.2004 Sahara India Insurance Company Ltd.
13 30.07.2006 Bharti AXA Life I nsurance Co. Ltd.
14 3.01.2002 Shriram Life Insurance Co. Ltd
15 4.09.2007 Future General India Life Insurance Co. Ltd.
16 30.03.2001 SBI Life Insurance Company Ltd
17 19.12.2007 IDBI Fortis Life Insurance Company
MARKET SHARE OF LIFE INSURANCE PREMIUM
Sr.No. Company Name 2006-07 2007-08
1 HDFC Standard Life Insurance Company Ltd
2 Max New York Life Insurance Co. Ltd.
3 ICICI Prudential Life Insurance Company Ltd.
4 Kotak Mahindra Old Mutual Life Insurance Ltd
5 Birla Sun Life Insurance Company Ltd.
6 Reliance Life Insurance Company Ltd
7 Tata AIG Life Insurance Company Ltd.
8 ING Vysya Life Insurance Company Private Ltd.
9 Bajaj Allianz Life Insurance Company Ltd.
10 Aviva Life Insurance Co. India Pvt. Ltd
11 Sahara India Insurance company Ltd
12 Bharti Axa Life insurance
13 Shriram Life Insurance Co. Ltd
14 SBI Life insurance
15 Met life insurance
16 Future Generali
17 IDBI Fortis Life
Graphical Presentation of this data is as below;
Market Sherefor primium Collaction of
0% 0% 0%
HDFC Standard Life Insurance
Max New York Life Insurance
ICICI Prudential Life Insurance
Kotak Mahindra Old Mutual
Life Insurance Ltd
Birla Sun Life Insurance
Reliance Life Insurance
Tata AIG Life Insurance
ING Vysya Life Insurance
Bajaj Allianz Life Insurance
Aviva Life Insurance Co. India
Sahara India Insurance
Bharti Axa Life insurance
Shriram Life Insurance Co. Ltd
SBI Life insurance
Met life insurance
IDBI Fortis Life
Market Shere for Primium collaction
of Insu.Co.in 2007-08
HDFC Standard Life Insurance
Max New York Life Insurance Co.
ICICI Prudential Life Insurance
Kotak Mahindra Old Mutual Life
Birla Sun Life Insurance Company
Reliance Life Insurance Company
Tata AIG Life Insurance Company
ING Vysya Life Insurance
Bajaj Allianz Life Insurance
Aviva Life Insurance Co. India Pvt.
Sahara India Insurance company
Bharti Axa Life insurance
Shriram Life Insurance Co. Ltd
SBI Life insurance
Met life insurance
IDBI Fortis Life
FUTURE OF INSURANCE SECTOR
Job opportunities are likely to increase manifold. The number of people working
in the insurance sector in India is roughly the same as in the UK with a population
India‟s; the US with a population ¼ the size of India has nearly 4 times
the number. In the emerging markets, the picture is no less encouraging. In South
Korea, the number of full time employees more than doubled over a ten-year
period. Thailand added 50 per cent more jobs in four years.
The liberalization of the insurance sector promises several new jobs opportunities
for those employed in the finance sector that are equipped with degrees in finance.
Finance professionals who had witnessed a slump in the job market would be
much-relieved lot to hear about the privatization of the insurance sector.
There could be a huge inflow of funds into the country. Given the industry‟s huge
requirement of start-up capital, the initial years after opening up are bound to see a
strong inflow of foreign capital. Moreover, given that the breakeven, typically,
come much later than in the case of other sectors, odds are those first remittances
of dividend will not happen before a good 10-15 years.
Apart from pure re-insurance activities, which is providing insurance protection, a
revolution will come in service related fields like training, seminars, workshop,
know how transfer regarding risk assessment & rating, risk inspection, risk
management & devising new policy cover, etc. also, with more player in market,
there will be significant increase in advertising, brand building, & keep pricing not
ridiculous pricing & this will whole lot of ancillary industries.
Substantial shift in the distribution of insurance in India is likely to take place.
Many of these changes will echo international trends. Worldwide, insurance
product move along a continuum from pure service products to pure commodity
products. Initially, insurance is seen as a complex product with high advice &
service component. Buyers prefer a face-to-face interaction & place a high
premium on brand names & reliability.
As product become simple & awareness increases, they become off-the-shelf,
commodity products. Seller move to remote channels such as the telephone or
direct mail. Various intermediaries, not necessarily insurance companies, sell
insurance. In UK for example retailer Marks & Spencer now sell insurance
products. In some countries like Netherlands & Japan, insurance is marketed using
post office‟s distribution channels. At this point, buyers look for low price. Brand
loyalty could shift from the insurer to the seller.
In other markets, notably Europe, this has resulted in banc assurance: banks
entering the insurance business. The Netherlands led with financial services firms
providing an entire range of products including bank accounts, motor, home & life
insurance, & pensions. Other European markets have followed suit. In France over
half of all life insurance sales are made through banks. In the UK, almost 95% of
banks & building societies are distributing insurance products today.
In India too, banks hope to maximize expensive existing networks by selling a
range of products. Various seminars & conferences on banc assurance are taking
place & many bankers have clearly shown their inclination to enter insurance
market by leveraging their strengths in the areas of areas of brand image,
distribution network, & face to face contact with the clients & telemarketing
coupled with advanced information technology systems. The
Mergers of Citibank with Travelers in USA & of Winterthur, the largest Swiss Co.
with Credit Suisse are recent examples of the phenomenon likely to sweep India
Insurers in India should also explore distribution through non-financial
organizations. For example, insurance for consumer items such as refrigerators
can be offered at the point of sale. This piggybank on an existing distribution
channel & increases the likelihood of insurance sales. Alliances with
manufacturers of retailers of consumer goods will be possible. With increasing
competition, they are wooing customers with various incentives, of which
insurance can be one.
Another potential channel that reduces the need for an owned distribution network
is worksite marketing. Insurers will be able to market pensions, health insurance
& even other general covers through employers to their employees. These
products may be purchased by the employer or simply marketed at the workplace
with the employer‟s co-operation.
The major elements that will be Critical in shaping the future of the insurance
market can be broadly outlined as:
Building Trust & Customer Confidence
Training & Education
A small, happy family – husband, wife and two cute kids. One bread winner and four
mouth to be fed. Things are doing well, BUT.... What next if something goes wrong
with bread winner?????? Life insurance is a contract payment of some money to the
person assured on the happening of the event issued against. Usually the specified
date at periodic intervals or on unfortunate death, if any occurs earlier.
The Head or the breadwinner of the family generally supports the family for
their basic needs, such as, food, clothing & shelter, by bringing income at a regular
interval. So long as he or she lives & the income is received steadily, the family is
secure; but untimely death or disability of that person puts the family in a very
difficult situation, and sometimes in stark poverty. Uncertainty of death is inherent in
It is the uncertainty that is the risk, which gives rise to the necessity for some
form of protection against the financial loss arising from death. Insurance substitutes
this uncertainty by certainty.
The primary purpose of Life Insurance is the protection of the family.
Insurance in its various forms protects against such misfortunes by having the losses
of the unfortunate few paid by the contribution of the many that are exposed to the
same risk. This is the essence of insurance- the sharing of losses and substitution of
certainty for uncertainty.
HISTORY LIFE INSURANCE
Almost 4,500 years ago, in the ancient land of Babylonia, traders used to bear
risk of the caravan trade by giving loans that had to be later repaid with interest
when the goods arrived safely. In 2100 BC, the Code of Hammurabi granted legal
status to the practice. That, perhaps, was how insurance made its beginning.
Life insurance had its origins in ancient Rome, where citizens formed burial clubs
that would meet the funeral expenses of its members as well as help survivors by
making some payments.
The first ….
Insurance as we know it today owes its existence to 17th century England. In
fact, it began taking shape in 1688 at a rather interesting place called Lloyd's
Coffee House in London, where merchants, ship-owners and underwriters met
to discuss and transact business. By the end of the 18th century, Lloyd's had
brewed enough business to become one of the first modern insurance
Insurance and Myth...
Back to the 17th century, in 1693, astronomer Edmond Halley constructed the
first mortality table to provide a link between the life insurance premium and
the average life spans based on statistical laws of mortality and compound
interest. In 1756, Joseph Dodson reworked the table, linking premium rate to
The first stock companies to get into the business of insurance were chartered
in England in 1720. The year 1735 saw the birth of the first insurance
company in the American colonies in Charleston, SC.
In 1759, the Presbyterian Synod of Philadelphia sponsored the first life
insurance corporation in America for the benefit of ministers and their
However, it was after 1840 that life insurance really took off in a big way. The
trigger: reducing opposition from religious groups.
The growing years...
The 19th century saw huge developments in the field of insurance, with newer
products being devised to meet the growing Needs of urbanization and
In 1835, the infamous New York fire drew people's attention to the need to
provide for sudden and large losses. Two years later, Massachusetts became
the first state to require companies by law to maintain such reserves. The great
Chicago fire of 1871 further emphasized how fires can cause huge losses in
densely populated modern cities. The practice of reinsurance, wherein the
risks are spread among several companies, was devised specifically for such
There were more offshoots of the process of industrialization. In 1897, the
British government passed the Workmen's Compensation Act, which made it
mandatory for a company to insure its employees against industrial accidents.
With the advent of the automobile, public liability insurance, this first made its
appearance in the 1880s, gained importance and acceptance.
In the 19th century, many societies were founded to insure the life and health
of their members, while fraternal orders provided low-cost, members-only
Even today, such fraternal orders continue to provide insurance coverage to
members as do most labour organizations. Many employers sponsor group
insurance policies for their employees, providing not just life insurance, but
sickness and accident benefits and old-age pensions. Employees contribute a
certain percentage of the premium for these policies.
WHY LIFE INSURANCE?
In this entire world, people live and people die. No one is immortal. Everybody
who borne has to die, it is the rule. We all know it, but human beings do not think
much about it, infect we do not want to think about it. Everyone in the world is
very optimistic about his life. No one knows when he/she is going to die and
fortunately it is right also. We all know our Date-of-birth, but we don‟t know our
date-of –Death. Here the man is very possessive about his life and wants to live
more and more in what so ever condition is. He wants to live till ripe old age. He
wants to do very last for his parents and watch his children stand on their feet.
But, what if fate cuts life shorts? Who would pay for his children‟s education,
their marriage? Ensures life continuity for them? What if sudden disability or
illness puts us out of action? Who would pay the mounting household bills? Have
we ever thought of it? If these adversities occur, are we equipped to face the
Let us look at the entire concept from a different way. During our life time we are
supposed to deal with three probabilities and two priorities as shown next page:
Dying too soon Living Death Living too long
FIGURE 1.1 Priorities and Probabilities of a Human Life
As shown in the figure a person has got three probabilities – Dying too soon,
Living death and Living too long – and two probabilities – Children‟s Education
and Marriage and Wealth Creation. We look in to each of them one after another.
Dying Too Soon:
As just discussed above that everybody KNOWS about it but NO one FEELS about it.
We all know about uncertainty of our life but we still are so optimistic about it. Today‟s
stressful and hectic life style increases its uncertainty. It is found that only 3 out of 4
people reach age of 60* and we always consider ourselves among rest of the 3. A
person‟s family will need his/her income to maintain the same lifestyle.
Don’t we want them to be happy, not only as long as WE live but as long as THEY live?
* Statistical Survey of I ndia
6 out of 10 people suffer a life-threatening illness before they reach the age of 60.
Critical illness or disability can
shatter your dreams for your loved
ones. Not only you suffer but you
also have to watch your family
suffer. When unfortunate event
occurs, your income should not
Your Children’s Bright Future:
Don‟t we know that education and marriage require a lot of money?
There are certain times in a person‟s life when he/she would want his love to be
available to his/her children in form of hard cash.
This is one area where you don‟t want to compromise, isn‟t it? You are the source of
your children‟s happiness-protect it!
Don’t you want a house of your own? A comfortable bank balance?
All of life‟s comforts, be it a car or a vacation
Life Insurance” – “Jeene Ki Azaadi”
To answer these questions, we have to plan prior for the uncertainties of our life and
the planning will result in the answer.
In short we can say that the total service package of life insurance is as in above
What Is Bharti Axa?
Bharti Axa Life Insurance is collaboration between Bharti Enterprises and AXA
Bharti AXA Life Insurance is a joint venture between Bharti, one of India‟s leading
business groups with interests in telecom, agri business and retail, and AXA, world
leader in financial protection and wealth management. The joint venture company has
a 74% stake from Bharti and 26% stake of AXA.
The company launched national operations in December 2006. Today, we have over
5200 employees across over 12 states in the country. Our business philosophy is built
around the promise of making people "Life Confident".
VALUE AND VISION
Vision and Values of Bharti Axa Life Insurance is as follow:
To be a leader and the preferred company for financial protection and wealth
management in India.
About the Promoters
It is one of India‟s leading business groups with interests in telecom, agri. business,
insurance and retail. Bharti has been a pioneering force in the telecom sector with
many firsts and innovations to its credit. Bharti Airtel Limited, a group company, is
one of India‟s leading private sector providers of telecommunications services with an
aggregate of 60 million customers, spanning mobile, fixed line, broadband and
enterprise services. Bharti Airtel was ranked amongst the best performing companies
in the world in the Business Week IT 100 list 2007. Bharti Teletech is the country‟s
largest manufacturer and exporter of telephone terminals. Bharti has a joint venture
with ELRO Holdings India Ltd. – „FieldFresh Foods Pvt. Ltd‟ - for global distribution
of fresh fruits and vegetables. Bharti also has a joint venture - „Bharti AXA Life
Insurance Company Ltd.‟ - with AXA, world leader in financial protection and wealth
AXA Group is a worldwide leader in Financial Protection. AXA's operations are
diverse geographically, with major operations in Western Europe, North America and
the Asia/Pacific area. AXA had Euro 1,315 billion in assets under management as of
December 31, 2006. For full year 2006, IFRS revenues amounted to Euro 79 billion,
IFRS underlying earnings amounted to Euro 4,010 million and IFRS adjusted
earnings to Euro 5,140 million.
AXA Asia Pacific Holdings Ltd (AXA APH) is listed on the Australian stock
exchange and is 52.3% owned by AXA SA. AXA APH is responsible for AXA SA‟s
life insurance and wealth management businesses in the Asia-Pacific region. It has
operations in Australia, New Zealand, Hong Kong, Singapore, Indonesia, Philippines,
Thailand, China, India and Malaysia. AXA APH had A$106.4 billion in total funds
under management and administration at 30 June 2007 and reported profit after tax
before non-recurring items of A$374.0 million for the six months ended 30 June 2007
Bharti AXA has one of the largest distribution networks amongst private life insurers
in India. As of March 31, 2007 the company has over 934 offices across the country
and over 10,016 advisors. Distribution strategy of Bharti AXA is as follow:
Distribution Strategy of Bharti AXA
Tied Agency Bancassurance & Alliances
Bharati AXA Life Insurance Co. Ltd., Product Line is as follow:
Pure Protection Protection, Saving
Traditional Secure Confident Save Confident
ULIP Future Confident Wealth
Future Confident ll Invest
Aspire Life Dream Life
Structure of sales department
Bharati AXA Life Insurance Company Ltd.‟s sales department structure is as follow;
Branch Sales Manager
Asst. Sales Manager
(DYNAMICS OF AGENCY RECRUITMENT)
Meaning of Agency recruitment
Agency recruitment is all about recruiting financial advisor for the company.
The financial advisor is the person who can guide the people in making proper
investments regarding their life………………
Now the question comes is that “ how can he/she be the advisor of the
Financial advisor is the person who has been issued the government authorized
IRDA license which is valid for three years and in those 3 years he/she can tap
into an unlimited income and reinvent their life.
As a Life Advisor a person‟s role would go beyond selling policies. His/her role
would be to explain life insurance and its benefits to potential customers and help
them decide which plan suits them best after analyzing their financial needs.
Hence, life insurance offers one with an opportunity for:
An exciting / challenging career.
Flexible work hours.
Regular income for years till the policies sold by one is in force.
SUPPORT AND BENEFITS
As a Life Advisor with Bharti Axa Life Insurance one would enjoy the following
1.Enriching training program: An intensive training program before one commences
his/her new career. This would equip one with all the information and knowledge
about life insurance, its benefits and our products. This would help one to perform
his/her job better and meet his/her goals. One would also enjoy the benefits of
continuous training and mentoring programs that are designed to update one, apart
from enhancing one‟s selling skills
2.Mentoring: Training and support from the Company to meet one‟s goals.
Opportunity to learn from industry professionals.
3. Flexibility: Decide one‟s own working hours and earning goals.
4. Satisfaction: One will help people manage their assets and plan their financial
security, and experience deep satisfaction from making a positive difference in others
lives. One acts as a strategist in annuities, business insurance, estate planning and
personal investment, providing both short and long term solutions to financial risks.
5. Freedom:Continue with your present job occupation if you so desire and treat this
as a parallel source of income. This allows you time to decide if you want to take the
job of a Life Advisor as a full time activity.
6. Earnings Entitlement to a percentage of the premium as commission till the time
the policies sold by you are in force.
7. Attractive additional benefits for high-performers: Palmtops, Planners, Leather
portfolio bags, Offsite conferences, Foreign trips and Sales promotional schemes.
Learning From the Executive Training
Provides an opportunity to apply the concepts learn t in real –life situations.
It sensitizes us about nuances of work place by the time-bound projects assigned
by the company.
It creates awareness about the strengths & weaknesses in the work environment
It provides a platform to develop a network while OJT (On-the-job-Training),
which would be useful in enhancing career prospectus.
Know the day-to-day functions of the company.
It provides a unique opportunity to get exposed to corporate culture, professional
experience & professional behavior & putting the theoretical concepts learnt in the
classroom for developing managerial skills.
To gain a deeper understanding of the work culture, deadlines, pressure etc. of an
It gives a flavor of teamwork, organization culture, team dynamics, result
orientation, organizational pressures, complexities in achieving the desired results
It provides direct exposure to the execution & support functions of the
It provides a good scope for developing necessary managerial skills &
“To protect the interests of the policyholders, to regulate, promote & ensure orderly
growth of the insurance industry & for matters connected therewith or incidental
After liberalization of the insurance sector in 1999, private players have entered both
life & non-life business in India. The Insurance Regulatory & Development Authority
(IRDA) was constituted in April 2000, as an autonomous body to regulate & develop
the business of insurance & reinsurance in the country in terms of the IRDA Act
Duties, Powers & Functions Of IRDA :
Licensing & regulating the insurance sector by acting as an independent &
Specifying requisite qualifications, code of conduct & practical training for
insurance intermediaries & agents.
Protecting the interest of the policyholders in matters concerning assigning of
policy, settlement of insurance claims etc.
Regulating investment of funds by insurance companies.
Calling for information from undertaking, conducting enquiries & investigations
including audit of insurers & other organizations connected with the insurance
Regulating maintenance of margins of solvency of the insurer.
Adjudication of disputes between insurers & intermediaries.
Supervising the functioning of the Tariff Advisory Committee.
CRITERIA FOR SELECTION
Criteria for the selection of the Financial Advisor are as follow;
Age: 18 or above for both Male and Female
Educational Qualification required:
o Rural Area*: 10
o Urban Area*: 12
* Areas are bifurcated according to the population.
For getting license to work as an agent of any company a person must complete 100
hours training and pass exam of Indian Institute of Insurance (III). If a person is
already holding license for General Insurance than he will have to complete only 50
All the above criteria are common for all the companies, they have to follow it. In
practice, because of competitive environment many companies decide their own
criteria apart from all above. Different criteria used by companies are shown in the
d for at
least 3 yrs
LIC - -
- - -
TABLE 5.2 Criteria for Selecting Agents by different Companies.
FUNCTIONS OF THE AGENTS
Life insurances agent has the unique role of such a person, who enjoys the trust of
two parties - the prospect and the insurer - simultaneously in the same transaction.
To simplify, functions of a life insurance agent could be divided into two parts,
Function Before Sales:
Study their insurance needs
Completion of formalities for proposal of new insurance viz,
Filling of form
Arranging for Medical Examination
Collection proofs of age and income
Any other information required by the underwriters
Function After Sales:
Ensure payment of renewal premiums.
Assist policyholder for nomination / or change thereof.
Assist the policyholder in case he wants to get loan against the policy
Assist the policyholder or the claimant to comply with the requirement for
getting timely settlement of claims.
The Target customers of the company are :
BHARTI AXA LIFE INSURANCE, Private leader also take into consideration
most of the criteria. They also focus on quality rather than quality. Further, they
also opt to recruit LIC agents. Logic behind this may be that person won‟t require
the training (Elimination of Training Cost), moreover his experience and
Established network can be encased easily. Thus, BHARTI AXA has also adopted
competitive strategy because the LA is a major source of business.
Executive Task Assigned & Task Achieved
Graphical Representation of The Task Assigned and Achieved
Strategies applied for achieving the task assigned
Cold calling means to approach the customers with out taking prior appointments. I
have done lots of cold calling as I visited different shops and malls I got a great
experience as I interacted with different kind of peoples. Even I learned lots of things
regarding convincing the customers.
Role play is a kind of play or say drama which is been
presented in front of a group of peoples and that is even in rural areas where people
don‟t understand the face to face interaction or any another explanation. Role play is
done basically in local language and we are planning to do the same as our role play is
all set to do.
My third strategy is to collect data as many as possible from different sources. So for
this data collection I have visited different colleges and even to different banks to get
the data of retired people. I went to colleges to get the data of the graduate students
who would the good prospect for our company.
Canopy is the kind of activity in which we do arrange a small Business
Opportunity Presentation. We select particular area and in this area we give
invitations to the people residing in this area and than we arrange the
presentation. We did our canopy in the areas like Navarangpura, Gurukul,
Vijay Cross Road and tried to cover as many areas as possible.
The strengths of BHARTI AXA are:
Offers greater relationships and more face to face contacts with the customers.
Cross-selling ability of its highly trained agents.
BHARTI AXA has marketing, research and development and the competing
Ability to serve multiple segments
Higher market share growth in private sector Life insurance companies
Adaptable management structure
Multiple product lines
Higher premium growth
Increasing network in semi urban and rural markets
The weaknesses for BHARTI AXA are:
Higher cost for insurer and consumer because of high commission rates.
Strong Competing brands of other players with almost the same features
Presence of other players in multiple segment
The Direct Marketing and other promotional efforts done by other players
increases the competition
Lower believability in BHARTI AXA brand than Life Insurance Corporation
Low coverage in Semi-urban and Rural market Segments
Focus on high net worth individuals who prefer relationship over price
Continually look for new sales opportunities
High market growth provides opportunity for the company to increase their
role in increasing Premium collections.
Large number of prospective customers has provided opportunity for the
company to increase their operation to wider customer base.
Higher awareness of insurance products attracts customers to use insurance
services and products
Insurance companies are becoming more and more self-regulated
Because of the large customer based, the company can have the benefit of
economies of scale in providing services.
Transformation of people across countries increases efficiency and effectively
in the company‟s operation.
Speeding up of the technological adoption in insurance companies has
provided opportunity for them to provide services to a larger customer base at
Collaboration with supplier of back office and front office technological
development has increase the quality and effectively of the operation.
Increasing computer literacy and quality of education has increased the
efficiency of operation through advanced technology.
The move towards retail customers has access the banks to the rural
Tie up with other banks to increase ATM networks has lowered the
operational cost of the company.
Higher foreign investment in insurance business has increased the
technological development, branch expansion and wider network abilities.
Foreign companies also merge with other banks to increase the networks and
customer services within the nation and internationally.
Population is becoming ageing which may hamper the effectively of providing
Large number of Insurance companies has increased the rivalry in the
Lower switching cost for customers can be a threat for the company to convert
other company‟s customers to its products.
Standardization of insurance products and services has lowered the profit
margins for the company.
A higher premium to the agents is one of the biggest cost disadvantages to the
The legal regulation from IRDA may affect particular company negatively.
The scams of co-operative banks have affected the image of private companies
in the mind of the people, which may affect the image of private insurance
Higher inflation rate can increase the cost for the company in providing
I personally believe that BHARTI AXA requires promoting their very strongly
as in day on day the competitive companies are increasing and to be in the
race it has to promote its products continuously. Their Brand awareness –
specifically in Life Insurance – is high compare to competitors. They should
aggressively promote on media like Television, newspaper like Times of India
and Economics Times.
BHARTI AXA should expand their distribution network in Semi Rural and
Rural areas to target market having huge potential.
Their Motivation Strategy for Life Advisors is very effective during Training
and even after training; they should stick to it and even try for innovative
Build trust upon customers through services and transparency in investment
and other policy.
Focus on marketing strategy which can appeal mass in chunk.
I have faced lots of problem in generating data base as I have used different sources to
generate it, e.g. I visited different colleges to generate data of fresher students and even
visited to different call center to get the data base of the customers but the problem I faced
was they didn‟t provided me the data as they told me that it is confidential.
Appointments at improper timings:
My second limitation was the appointments at improper timings as the customers call us at
any of their convenience time and it can be in the early morning or it can be in the late night
To be an advisor in BHARTI AXA the fees is Rs. 825 so this is quite a huge amount as
compare to the competitors, because in L.I.C it is 450 Rs, in MAX LIFE it is 500 so when a
customers get ready to be advisor he basically stuck to the fees.
What BHARTI AXA ask from is to recruit quality advisors, they to maintain the Q
Score but it is very difficult to get that quality customers.
Questionnaire used for survey is as follow;
We are conducting this research to measure ethnocentrism level
of Insurance Companies. Our objective behind this study is to find our some concrete
outcomes for ethnocentrism. Which help the management students. By filling-up this
questionnaire you can help us in transformation of our efforts in to worth findings.
Whatever data you have to provide it is purely confidential and we have to use this
information for our academic purpose only.
Please tick against the following questions.
A) Male _______ B) Female ________
A) Below 30 _____ C) 40-50 _______
B) 30-40 _____ D) Above 50 _______
Q.3 Marital Status
A) Married _______ B) Unmarried _
A) Financial Investors ________
B) Students ________
C) CA ________
D) Tax Consultant ________
E) Housewife ________
F) Teachers _______
G) LIC Agents _______
H) Advocates _______
Q.5What kind of business would you like to do?
A) Insurance _________
B) Investment/stock market _________
C) Multilevel marketing _________
D) Dealership _________
E) Other _________
Q.6 What Criteria do you consider for selecting a business?
A) Very low investment _______
B) Low risk & high return _______
C) Flexible working hours _______
D) Support & guidance based business _______
E) Business under reputed brand name _______
Q.7 How many hours would you like to spend on a part time business?
A) Less than 2 hours ________
B) 2-4 hours ________
C) More than 4 hours ________
Q.8 Your expected income from part time business?
A) Less than 5000 ________
B) 5000-10000 ________
C) More than 10000 ________
Q.9 What skill do you have which you consider will be an assets in BHARTI AXA
A) Relationship skill ________
B) Communication skill ________
C) Leadership ________
D) Convincing Power ________
E) Any other Please Specify ________
Q.10 What motivate you to enter the field of selling (Please rank order them in order
to perform your performance i.e.1,2,3,4,5)
A) Opportunity to earn more money ________
B) Desire to be one‟s own boss ________
C) Desire to meet people ________
D Dislike of office jobs _______
E)Desire to build life long relationship ________
Q.11 Do you or your family member has taken any life insurance?
A) YES B) NO
If YES, did you take insurance through
A) Insurance agent ________
B) Some ones recommendation ________
C) Own interest ________
Q.12 Are you self employed or salaried?
A) Self employed ________ B) Salaried _________
Q.13 How did you learn about this opportunity?
A) News paper ________
B) Friends ________
C) Magazine ________
D) Any other ________
Entry of Private players in Insurance Industry has changed the entire scenario of the
Industry. Industry has shown Revolution of 360* starting from 1956. Private players
have challenged the LIC and compelled to face the competition. This cut-throat
competition has been a boon for customer. He has been more informed and getting
better services. Negligence to the Insurance is decreasing day by day. Thus, total
scenario of the Industry has changed from as it was in 1956 – a Monopoly Market.
On account of increased competition, companies have to compete to grab the market.
Tied channel is perhaps the best alternative to reach maximum target customers. So to
have best results companies are required to have best people, who can work for the
efficiently and give best results. So, as a result now a days companies have become
more choosy in recruiting agents.
Effective Sales required to be carried out in a way starting from Prospecting and
Qualifying to Follow-up and Maintenance. Each step in effective selling process is
required to be taken care. In BHARTI AXA, LAs are trained in such a manner that
they are able to carry effective sales process. Sales Managers do them lot of help in
this context. They use Need-Satisfaction approach (Mostly) and also Formulated
approach for this and it works
"Insurance Vision 2000", The Insurance Times, Calcutta.
Cooper Donald & Schindler Pamela, " Business Research Methods", Sixth
Edition, New Delhi, Me. Graw Hills, 1999.
Kotler Philip, "Marketing Management", Eleventh Edition, New Delhi,
www.Bharti Axa life insurance.com