Dynamics of Agency Recruitment Project

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INDUSTRIAL TRAINING PROJECT REPORT UNDER TAKEN @

ON DYNAMIC OF AGENCY RECRUITMENT Prepared by:
MBA - 3rd SEM. Roll no. 8 Seat no.

Name of the Institution
T.N.Rao College of Management Studies University Road, RAJKOT Year: 2008-09

Submitted to Saurashtra University

DECLARATION
MBA – 3rd SEM. T.N.Rao COLLEGE, RAJK OT. I Undersigned the student of MBA – 3rd SEM by declare that the project report is my own work and has carried out under the guidance and supervision of Prof. ABHAY RAJA and other Prof. of T.N.Rao College, RAJKOT. Further I declare that it has not been submitted to any other university of examination.

Date:

Sign. Of Student

PREFACE

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 INSURANCE”

ACKNOWLEDGEMENT
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 Mr. Samson Pinto, Company guide, Bharti Axa Life lnsurance Ltd., Ahmedabad 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. ABHAY RAJA 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 this report.

INDEX
1. 2. 3. 5. 6. 7. 8. 9. Sector’s Profile Company Profile Executive Training Introduction Insurance Advisor Executive Task Assigned & Achieved Methodology Analysis of performance v/s Target SWOT Analysis

4.Introduction to IRDA ACT

10. Suggestion 11. Limitation 12. Questionnaire 13. Conclusion 14. Bibliography

Sector’s Profile

INDEX
i. ii. iii. iv. v. vi. vii. viii. ix. x. Introduction Insurance Sector Brief History Insurance Sector in India Scenario Insurance Industry in India Contribution to GDP Status of Insurance Industry Insurance Sector Before Privatization Insurance Sector After Privatization Future of Insurance Sector 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 services provided. 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.

As per the Government guidelines, LIC invests a major portion of its funds in Central, State Governments and other approved securities including special deposits with the Government of India. Besides, LIC extends assistance to develop infrastructure facilities like housing, rural electrification, water supply, sewerage and provides financial assistance to the corporate by way of term loans and underwriting & direct subscriptions to shares and debentures. LIC also provides resource support to financial institutions through subscription to their shares, bonds and by way of term loans. 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

BRIEF HISTORY
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 INSURANCE IN INDIA 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. Earlier LIC and GIC used to rule the market with a Lion’s share. LIC with its pure monopoly and virtual prerogative in establishing premiums, evolved as a monolith. With over more than eight laces agent’s allover India it has created an enviable brand name, particularly among the rural population of India. It boasts of $40 billion life fund and a strong financial player in the financial sector. 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 procedures.  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 laziness.  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 volumedriven into class-based business. This is because the agents targeted the affluent class of people and neglected the middle class segment.
 Similar is the case with pensions. The lack of a comprehensive

social security system combined with a willingness to save, means that Indian demand for pension products will be large.

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 insurance Industry.
 INDIA 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 last decade Savings Rate: Around 26% of GDP Estimated middle class population: 300 Million Insured population: 70 million only Estimated business (2008): $6.6 Billion

Insurance sector is of vital importance to every modern economy. First because it provides a safety net to rural and urban enterprises and productive individuals, second because it encourages the savings habit And perhaps most importantly it generates long-term investment funds for infrastructure building

This characteristic of their business makes insurance companies the biggest investors in long-gestation infrastructure development projects in all developed and aspiring nations.

The insurance sector in India has come 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. An independent consulting company, The Monitor Group has estimated that the life insurance market will grow from Rs.218 billion in 1998 to Rs.1003 billion by 2008 (a compounded annual growth of 16.5%).

CONTRIBUTION TO GDP
Insurance sector’s contribution to GDP of different countries are as follow:,

Countries
UK Japan US South Africa Australia South Korea India China Malaysia Indonesia Brazil

Contribution to GDP (Premium as % of GDP)
12.71 8.70 4,48 14.04 6.04 9.89 1.77 1.12 2.13 0.54 0.36

Status of Indian Insurance Sector
 The insurance industry in India is estimated to be of US $ 6670 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.

INSURANCE SECTOR BEFORE PRIVATIZATION
The Indian Insurance sector before privatization was based on the following factors:  Simple products.

 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 51st 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 market.

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)
LIC came into being on 1st 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

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 1st 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 1015% 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. 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 • Capacity Building 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 Capacity Building:

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 Advisors.

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. 1 2 23.10.2000 15.11.2000

Name of the company HDFC Standard Life Insurance Company Ltd. Max New York Life Insurance Co. Ltd.

3 4 5 6 7 8 9 10

24.11.2000 10.01.2001 31.01.2001 23.10.2001 30.03.2001 02.08.2001 03.08.2001 06.08.2001

ICICI Prudential Life Insurance Company Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd. Birla Sun Life Insurance Company Ltd. Reliance Life Insurance Company Ltd. Tata AIG Life Insurance Company Ltd. ING Vysya Life Insurance Company Ltd. Bajaj Allianz Life Insurance Company Ltd. Metlife India Insurance Company Pvt. Ltd.

11 12 13 14 15 16 17

14.05.2002 06.02.2004 30.07.2006 3.01.2002 4.09.2007 30.03.2001 19.12.2007

Aviva Life Insurance Co. India Pvt. Ltd. Sahara India Insurance Company Ltd. Bharti AXA Life Insurance Co. Ltd. Shriram Life Insurance Co. Ltd Future General India Life Insurance Co. Ltd. SBI Life Insurance Company Ltd IDBI Fortis Life Insurance Company

MARKET SHARE OF LIFE INSURANCE PREMIUM COLLECTION

Sr.No. Company Name
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

2006- 2007-08 07
1220 752 3925 499 699 689 518 418 3027 656 19 8 87 1198 302 00 00 23899 2201 1280 6643 943 1708 1820 788 656 5568 980 71 105 124 2531 764 0.41 4.36 23583

HDFC Standard Life Insurance Company Ltd Max New York Life Insurance Co. Ltd. ICICI Prudential Life Insurance Company Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd Birla Sun Life Insurance Company Ltd. Reliance Life Insurance Company Ltd Tata AIG Life Insurance Company Ltd. ING Vysya Life Insurance Company Private Ltd. Bajaj Allianz Life Insurance Company Ltd. Aviva Life Insurance Co. India Pvt. Ltd Sahara India Insurance company Ltd Bharti Axa Life insurance Shriram Life Insurance Co. Ltd SBI Life insurance Met life insurance Future Generali IDBI Fortis Life LIC

Graphical Presentation of this data is as below;

Market Sherefor primium Collaction of Insu.Co.2006-07

3% 2% 10% 1% 2% 2% 1% 1% 8% 63% 2% 0% 3% 1% 0%

HDFC Standard Life Insurance Company Ltd Max New York Life Insurance Co. Ltd. ICICI Prudential Life Insurance Company Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd Birla Sun Life Insurance Company Ltd. Reliance Life Insurance Company Ltd Tata AIG Life Insurance Company Ltd. ING Vysya Life Insurance Company PrivateLtd. Bajaj Allianz Life Insurance Company Ltd. Aviva Life Insurance Co. India Pvt. Ltd Sahara India Insurance company Ltd Bharti Axa Life insurance Shriram Life Insurance Co. Ltd (SHRIRAM LIFE) SBI Life insurance Met life insurance Future Generali IDBI Fortis Life LIC

Market Shere for Primium collaction of Insu.Co.in 2007-08

4% 3% 13%

2% 47% 3% 4% 2% 1% 11% 0% 0% 2% 5% 2% 0% 0% 0%

HDFC Standard Life Insurance Company Ltd Max New York Life Insurance Co. Ltd. ICICI Prudential Life Insurance Company Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd Birla Sun Life Insurance Company Ltd. Reliance Life Insurance Company Ltd Tata AIG Life Insurance Company Ltd. ING Vysya Life Insurance Company PrivateLtd. Bajaj Allianz Life Insurance Company Ltd. Aviva Life Insurance Co. India Pvt. Ltd Sahara India Insurance company Ltd Bharti Axa Life insurance Shriram Life Insurance Co. Ltd (SHRIRAM LIFE) SBI Life insurance Met life insurance Future Generali IDBI Fortis Life LIC

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 that is
1/7

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 too.  Insurers in India should also explore distribution through nonfinancial 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: • Distribution • Competition • Building Trust & Customer Confidence • Product innovation • Health Insurance • Training & Education • Information Technology

LIFE INSURANCE
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 human life. 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 companies.

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 age 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 dependents. 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 industrialization. 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 situations. 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 insurance. 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 situation? 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:

Children’s Education And Marriage

Wealth Creation

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 India



Living Death:

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 stop.

 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!

 Wealth Creation:

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.

Peace of Mind

RiskCover

Tax Benefits

Office Service

Forced Savings

CORE
Pre and Post Sales Service Liquidity Safety Return

In short we can say that the total service package of life insurance is as in above diagram.

Company Profile

What Is Bharti Axa?
Bharti Axa Life Insurance is collaboration between Bharti Enterprises and AXA Group.

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". As we expand our presence across the country to cater to your insurance and wealth management needs with our product and service offerings, we continue to bring 'life confidence' to

customers spread across India. Whatever your plans in life, you can be confident that Bharti AXA Life will offer the right financial solutions to help you achieve them.

VALUE AND VISION

Vision and Values of Bharti Axa Life Insurance is as follow:

Vision To be a leader and the preferred company for financial protection and wealth management in India. Values
• • • • •

Professionalism Innovation Team Spirit Pragmatism Integrity

About the Promoters


Bharti Enterprises
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 management. Bharti has recently forayed into the retail business under a company called Bharti Retail Pvt. Ltd. It also has a joint venture – ‘Bharti Wal-Mart Private Limited’ – with Wal-Mart, for wholesale cash-and-carry and back-end supply chain management operations.



AXA
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. The AXA ordinary share is listed and trades under the symbol AXA on the Paris Stock Exchange. The AXA American Depository Share is also listed on the NYSE under the ticker symbol AXA. 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 a profit after tax before non-recurring items of A$374.0 million for the six months ended 30 June 2007

Distribution

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 Bancassurance 20% Corporate Agency/Brokers 10% Direct Marketing Agency Force 70%

PRODUCT LINE
Bharati AXA Life Insurance Co. Ltd., Product Line is as follow:

Pure Protection

Protection, Saving &Wealth Creation Save Confident Future Confident Future Confident ll Aspire Life

Wealth Creation and Protection Wealth Confident Invest Confident Dream Life Pension

Traditional Secure Confident ULIP

Structure of sales department

Bharati AXA Life Insurance Company Ltd.’s sales department structure is as follow;

Regional Manager Branch Sales Manager Territory Manager Sales Manager Asst. Sales Manager Senior Manager Unit Manager Advisors

Corporate structure.

CORPORATE STRUCTURE

TIED AGENCY VICE PRESIDENT REGIONAL MANAGER BRANCH SALES MANAGER

ALTERNATE DISTRIBUTION COURNTRY HEAD

RELATIONSHIP MANAGER

SALES MANAGER SALES MANAGER ASSI SALES MANGER

UNIT MANAGER

BANCASSURNCE

CORPORATE AGENCY

FINANCIAL SERVICE

..
TRAINESS CUSTOMER SERVICE REPRESENT

TEAM LEADER

20

Executive Training
(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 company” ???????

Financial Advisor
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. Unlimited income. 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 benefits: 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-thejob-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 organization.  It gives a flavor of teamwork, organization culture, team dynamics, result orientation, organizational pressures, complexities in achieving the desired results etc.
 It provides direct exposure to the execution & support functions

of the departments.
 It provides a good scope for developing necessary managerial

skills & positiveattitude

Introductio n to IRDA Act

Mission: “To protect the interests of the policyholders, to regulate, promote
& ensure orderly growth of the insurance industry & for matters connected therewith or incidental thereto.” 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 1999.

Duties, Powers & Functions Of IRDA

:

 Licensing & regulating the insurance sector by acting as an

independent & regulatory body.
 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 business.
 Regulating maintenance of margins of solvency of the insurer.  Adjudication of disputes between insurers & intermediaries.  Supervising the functioning of the Tariff Advisory Committee.

Introductio n Insurance Advisor

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*: 10th Pass o Urban Area*: 12th Pass

* 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 hours training. 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 following table:

At least Graduat e Person KLI
1

Living in Ahmedaba d for at least 3 yrs

Networ k/ Society group

High Net Income (HNI)*grou p

Married and have dependent s

Age group 25-50 yrs

ICICI Prudential2 LIC Birla life Bajaj Allianz 3 ING Vysya4 Bharti Axa Aviva
6

 
-

 
-

      
NA -

 
-

  
-


-

Sun

 
-

 
-









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, viz.  'Pre-sale functions';  'Post-sale functions' Function Before Sales:  Contact prospects
 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 assignment.  Assist the policyholder or the claimant to comply with the requirement for getting timely settlement of claims. The Target customers of the company are :  Housewives  Students  Businessman  Brokers  Retired persons 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

Week 1 2 3 4 5 6 7 8

Target 1 1 2 2 2 3 3 3

Achievement 0 1 1 1 2 2 2 3

Graphical Representation of The Task Assigned and Achieved

Task assigned and Task achieved
W eek Target Achievem ent

9 8 7 6 5 4 3 2 1 0 2 11 0 1 2 3 4 5 6 11 4 3 2 1 2 1 22 3 2 6 5

8 7

3 2

33

7

8

METHODOLOG Y

METHODLOGY

Strategies applied for achieving the task assigned
 Cold Calling:

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 Plays:

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.



Data Collection: 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:

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.

Swot Analysis

STRENGTHS
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 products  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

WEAKNESSES
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

OPPORTUNITIES
 Focus on high net worth individuals who prefer relationship over price  Continually look for new sales opportunities  Embrace technology  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 operationally.
 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 lower cost.
 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 population.  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 insurance business

THREATS
 Large number of Insurance companies has increased the rivalry in the industry.  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 company.  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 companies negatively.  Higher inflation rate can increase the cost for the company in providing services

SUGGESTIONS

 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 ways.  Build trust upon customers through services and transparency in investment and other policy.  Focus on marketing strategy which can appeal mass in chunk.

LIMITATION

Generating Database: 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 also. High Fees:

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. Quality Customers:

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.

QUESTIONAIRE
Questionnaire used for survey is as follow; Dear Respondent, 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. Qualifying Questions: Please tick against the following questions. Name:___________________________________________ Q.1 Gender: A) Male _______ Q.2 Age: A) Below 30 _____ B) 30-40 _____ Q.3 Marital Status A) Married _______ Q.4 Occupation: A) Financial Investors B) Students C) CA D) Tax Consultant E) Housewife B) Female ________ C) 40-50 _______ D) Above 50 _______ B) Unmarried _ ________ ________ ________ ________ ________

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 ________ ________ ________ ________

CONCLUSION

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

BIBLIOGRAPHY

Books referred
 "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, 2006.

Websites
   

www.Bharti Axa life insurance.com www.irdaindia.org www.irda.orq.com www.indiainfoline.com

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