APROJECT REPORT

ON  

RECRUITMENT OF FINANCIAL ADVISOR AND OPERATIONS MANGEMENT 

 

TRAINING UNDERTAKEN AT 

 

BIRLA SUN LIFE INSURANCE COMPANY LTD. 

     

Submitted By: BINOD KUMAR KAPOORFOR –M.B.A(Executive Programe)VINAYAK MISSION OPEN UNIVRSITYSALEM, TAMIL NADU 

Table of contents 

Preface 

   Chapter-1 Introduction to the project

1.Basic theoritical concepts 2.Literature review 3.Need of the study 4.Objective of the sudy 5.Research hypothesis adopted 6.Scope of the study

 Chapter-2 2.1  Company profile2.2  Indian insurance industry & life insurance2.3  Recruitment of financial advisor Chapter-3 3.1  Research design and methodology Chapter-4 

1.Data presentation,analysis and interpretation Chapter-5 5.1  Swot analysis5.2  Recommendations5.3  Conclusion  BIBLIOGRAPHYQUESTIONNAIRE        

PREFACE 

 

This report relates to the recruitment process in the birla sunlife insurance company ltd.. These days the

corporate sector is booming aggressively and there are many new entrants in the market in almost every

segment like telecom, insurance, technical telecom, banks etc. and they are very much aggressive in

finding the best authenticated human resource from the market. So for this purpose apart from doing

the recruitments on self basis these companies had made the provision of hiring people as financial

advisors who willl play a role of intermediary between company and customers. So by recruitment 

they can fulfill the need of the right person, at right place, at right time, which is the most important

thing for any company.  

 

 

 

 

 

 

 

 

 

1. INTRODUCTION TO THE PROJECT  

1.1 BASIC THEORETICAL CONCEPTS: -

Life insurance: - is a contract of life assurance is that in which one party agrees to pay a given sum on the happening of a particular event contingent upon the duration of human life in consideration of immediate payment of a smaller sum by another.

Life insurance industry: - a financial service industry dealing with various products and plans of life insurance being provided by 22 life insurance companies in the Indian market.

Financial Advisor: - a person contracted with Life Insurance Company is authorized to sell various life insurance products of the said company.

Recruitment: - the process of choosing best candidate among applied.

Procedure of Recruitment: - step by step procedure of the recruitment of advisors.

Training to advisor: - Inducing the necessary skills and knowledge in selected candidates as advisor regarding company and its products so as to sell them in the market confidently.

Operations Management: - The management process dealing with the operations section of the company.  

 

1.2 LITERACTURE REVIEW : -

Life insurance is a service stream of finance industry which is concern with providing the human value in the form of risk cover to be indemnified in the case of any uncertainty of fatal cause to the life insured. There are various types of life insurance but they all have some or more common attributes. The individual has to pay premiums to an insurance company. The sector is growing and so is significant to analyze and judge the relative financial stability, growth prospects as well as soundness of various life insurance products in the growing market where not only risk cover but also a good return value is provided at the maturity of product plan thereby not considering merely as a risk covered plan but a return based plan too.  

Therefore, recruitment of potential financial advisors is essential for the rising performance of the business and company objectives as a whole as only the advisors can sell the products of life insurance. The industry is gaining importance rapidly so the title seems to be worth it.   

1.3 NEED OF THE STUDY

1. The title is being taken since I am dealing in finance stream and it becomes imperative for me to adopt a title concerning with finance industry such as life insurance is. Also Life insurance is an upcoming industry and growing since after

the privatization. 2. To understand the concept of financial advisors along with life insurance and their

recruitment in present scenario.  3. The challenges being faced by me in appointing and recruiting the potential

financial advisors have been summarized in the report itself.

 

1. The work in operations management where I undertook calling to the people for becoming financial advisors, to judge their viability for the company and how feasible they will be in selling the plans in the existing market and to ease the common man.

2. To analyze how feasibly they are being offered in BIRLA SUNLIFE which claims to be No.1 private company in Life insurance market.

 

” 

1.4 OBJECTIVE OF THE STUDY1. The prime objective of the study of project work is to recruit and to gain the

conceptual knowledge of financial advisors to the life insurance who sells life insurance products to the common man and how vital they are in the present scenario.

2. Secondly, to find out the effectiveness of financial advisors in dealing with life insurance products to the common man financially.

  

1.5 RESEARCH HYPOTHESIS ADOPTED:

1. Questionnaire pertaining to the objective of the study is being framed. 2. Would be put before the financial executives, managers and employees in the

organization and general public outside the organization in order to frame out the necessary conclusions.

3. Data will be formulated for deriving valid interpretations and fulfilling the objective successfully.

4. Sampling technique adopted will be Systematic (for internal organization i.e. financial, sales, marketing managers, subordinates, employees etc.) as well as Random Sampling (external to the organization i.e. general public) where the respondents will be questioned randomly.

 

1.6 SCOPE OF THE STUDY1. Life insurance is unique among financial instruments. It is not only a financial

instrument that is based on caring and love but there can be personal advantages to having life insurance. It is the real impetus having love for those who cares most about – to make sure they are taken care of. So, one can feel pleasure in taking the time to learn about this subject whether through the company or the organization of anyone’s choice. 

2. In fact if one knows that he is having sufficient life insurance he won’t feel that he is lowering the inheritance by spending some of his principal. Under the scheme of insurance one individual actually “pays down principal” to some degree, especially if he has lifetime permanent than the life insurance becomes as a backup. Thereby it makes necessary to obtain the financial viability and feasibility for these life insurance products.

 

CHAPTER – II

2.1 PROFILE OF THE ORGANISATION

2.2 INDIAN INSURANCE INDUSTRY & LIFE INSURANCE

2.3 RECRUITMENT OF FINANCIAL ADVISORS & PROCEDURE

 

 

2.1 PROFILE OF THE ORGANISATION

BIRLA SUNLIFE INSURANCE: -

Established in 2000, Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between the Aditya Birla Group, a well known and trusted name globally amongst Indian conglomerates and Sun Life Financial Inc, leading international financial services organization from Canada. The local knowledge of the Aditya Birla Group combined with the domain expertise of Sun Life Financial Inc., offers a formidable protection for its customers’ future.

With an experience of over 9 years, BSLI has contributed significantly to the growth and development of the life insurance industry in India and currently ranks amongst the top 5 private life insurance companies in the country.  Known for its innovation and creating industry benchmarks, BSLI has several firsts to its credit. It was the first Indian Insurance Company to introduce “Free Look Period” and the same was made mandatory by IRDA for all other life insurance companies. Additionally, BSLI pioneered the launch of Unit Linked Life Insurance plans amongst the private players in India. To establish credibility and further transparency, BSLI also enjoys the prestige to be the originator of practice to disclose portfolio on monthly basis. These category development initiatives have helped BSLI be closer to its policy holders’ expectations, which gets further accentuated by the complete bouquet of insurance products (viz. pure term plan, life stage products, health plan and retirement plan) that the company offers.

Add to this, the extensive reach through its network of 600 branches and 1,75,000 empanelled advisors. This impressive combination of domain expertise, product range, reach and ears on ground, helped BSLI cover more than 2 million lives since it commenced operations and establish a customer base spread across more than 1500 towns and cities in India. To ensure that our customers have an impeccable experience, BSLI has ensured that it has lowest outstanding claims ratio of 0.00% for FY 2008-09.

 

Additionally, BSLI has the best Turn Around Time according to LOMA on all claims Parameters. Such services are well supported by sound financials that the Company has. The AUM of BSLI stood at Rs. 8165 crs as on February 28, 2009, while as on March 31, 2009, the company has a robust capital base of Rs. 2000 crs.

Vision

To be a leader and role model in a broad based and integrated financial services business.

Mission

1. To help people mitigate risks of life, accident, health, and money at all stages and under all circumstances

2. Enhance the financial future of our customers including enterprises

 

 Values

Integrity Commitment Passion Seamlessness Speed

A US $28 billion corporation, the Aditya Birla Group is in the league of Fortune 500 worldwide. It is anchored by an extraordinary force of 100,000 employees, belonging to 25 different nationalities. The group operates in 25 countries across six continents – truly India's first multinational corporation.

 

Aditya Birla Group through Aditya Birla Financial Services Group (ABFSG), has a strong presence across various financial services verticals that include life insurance, fund management, distribution & wealth management, security based lending, insurance broking, private equity and retail broking. The seven companies representing ABFSG are Birla Sun Life Insurance Company, Birla Sun Life Asset Management Company, Birla Sun Life Distribution Company, Birla Global Finance Company, Birla Insurance Advisory & Broking Services, Aditya Birla Capital Advisors and Apollo Sindhoori Capital Investment. In FY 2008-09, the consolidated revenues of ABFSG from these businesses crossed Rs. 4763 crores, registering a growth rate of 36%.

SUNLIFE: -

Sun Life Financial is a leading international financial services organisation providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of December 31, 2008, the Sun Life Financial group of companies had total assets under management of $381 billion.

ABOUT PARENT COMPANY:

THE ADITYA BIRLA GROUP

The group is India's leading business house

Amongst the largest and most reputed industrial houses in India Domestic market leaders in most of our product areas Operations across 18 countries Anchored by 82000 strong workforce employed in 90 locations globally belonging

to over 20 different nationalities Trusted by 800,000 shareholders Aggregate revenue -US $ 8.3 billion Market Capitalisation–US $ 12.5 billion ORGANISATIONAL BOARD

Management Team

Mr. Ajay Srinivasan -Managing Director

Mr. Mayank Bathwal - Chief Financial Officer

Mr. Amitabh Verma - Chief Operating Officer

Mr. Fabien Jeudy - Chief Actuarial Officer & Appointed Actuary

Mr. Vikram Kotak - Chief Investment Officer

Mr. Chander Chellani - Chief Distribution Officer

Mr. Rahul Sinha - Chief Marketing Officer

Ms. Vinni Soni - Head Group Business

Ms. Anjana Grewal - Senior Vice President Health Business

Mr. Saurov Ghosh - Vice President Human Resources

Mr. Lalit Vermani - Vice President Risk and Internal Audit functions

Mr. Bhalachandra Nayak - Vice President Strategy & Projects

Mr. Puneet Bansal - Legal & Company Secretary

Board of Directors

Mr. Kumar Mangalam Birla - Chairman, The Aditya Birla Group

Mr. Ajay Srinivasan - Chief Executive – Financial Services Aditya Birla Group

Mr. Bishwanath Puranmalka - Director – Financial Services Aditya Birla Group

Mr. Donald Stewart - Chief Executive Officer Sun Life Financial

Mr. Venkatesh Mysore - Country Head – India Sun Life Financial, Asia

Mr. Gian Gupta

Mr. Stephan Rajotte - President –Sun Life Financial, Asia

Mr. Suresh Talwar

Business Continuity Plan

Birla Sun Life Insurance is one of the few Indian companies to have a fully operational Business Continuity Plan (BCP) to ensure minimal impact to the organisation, its people, and most importantly, its customers. Our Business Continuity Planning (BCP) Program is a response plan which would ensure that in the event of a disaster we would be able to restore and recover operations for critical processes within a predetermined time after the disaster.

Why Business Continuity Plan?

A Business Continuity Plan ensures continued operation at agreed level in the event of:

Natural disasters such as floods, earthquake, etc.

Hostile situations

Operational breakdowns

Employee malevolence

Damage to critical information technology and telecommunication systems, etc.

It is important to counter these threats as it may result in loss of critical data, damage to assets, cause human injuries, and loss of life.

At Birla Sun Life Insurance, our Business Continuity Plan has been designed based on international best practices and global industry standards. It is an integral part of our Risk Management activities that will ensure effective recovery of our critical business processes within an acceptable time frame in case of disruption to our business due to any disasters.

Programme Overview

As part of our Business Continuity Plan, we have a documented crisis response and recovery procedure for quick response and stabilisation of the situation, and a business continuity procedure to ensure recovery.

 

Highlights of our Plan Document:

Crisis Management & incident response

Data back-up, data and system recovery

Recovery of all mission-critical business functions and supporting systems

Alternate recovery sites if primary location is unavailable

Communication with customers, employees and other stakeholders

Assurance to customers that they will continue to receive optimum customer services at all times

 

Our Commitment

Risk Assessment & Business Impact Analysis (BIA) annually.

Business Continuity Plan for HO & its Critical branches.

Crisis Management Plan & Pandemic Response Plan at a corporate Level.

Business Continuity Plan Testing ensuring viability of all its plans.

The activities set forth above may evolve as business and regulatory needs require.

 

PRODUCTS & SERVICES:

Individual Solutions

At Birla Sun Life Insurance, we look at life from your perspective.  Hence, no matter what

your dreams are - be it long term protection, wealth creation, health, retirement security or your children’s education, we provide you customised insurance solutions to meet all your Life needs successfully. 

1. Our Protection Solutions  for your family's life insurance needs.

Protection Solutions

As the primary breadwinner of the family, you are responsible for shouldering the grand dreams you have envisioned for your family. In the eventuality that your family is forced to adapt to a world without you, they should be free of any additional burden of financial worries at the time.

Life insurance assumes your responsibilities of providing for your family, as planned, even in your absence. Your family’s financial security should be assured under all circumstances.

All you need to do to secure your family’s future is:

Work out the amount of life cover you need considering your income, your family’s living expenses and your financial commitments towards your family.  Estimate the time period over which your family would be financially dependent on you

Term plans are suitable if you:

Wish to separate your insurance and investment needs

Have the discipline and knowledge to tailor your own independent investment plan

Have good clarity on the time horizon of your financial responsibilities

Seek an insurance plan without large premium commitments

Have a specific time-bound liability to cover

Do not intend to use insurance as a tool of wealth transfer to your next generation

Term plans are designed to fulfil the most basic and fundamental function of life insurance, which is the provision of life cover. A no-frills product that does not have any saving element or survival benefits, a typical term plan offers the benefits of getting a high life cover at a low cost. You also have the option of premature termination of the cover, if you feel that you have achieved your financial goals and do not require the cover anymore.

We have three different plans under this category: 0-

BSLI Term Plan BSLI Premium Back Term Plan BSLI High Net Worth Term Plan

 

1. Our Children’s Future Solutions To take care of your children's need.

Children’s Future Solutions

As parents, we aspire to give the best that life has to offer to our children. While children enrich our lives, it is no secret that they also need funding for their considerable expenses. Since most of us have relatively fixed sources of income, financial planning for a child’s benefit becomes an essential part of the entire family’s budget.

  “Education is the best provision for old age.” – Aristotle

Aristotle’s maxim still holds true. Unfortunately the cost of education has risen far beyond the Greek philosopher’s wildest imagination. Every child deserves the best opportunities and options. So whether it is a foreign degree or a specialised training course, most parents would not like to deny their children any opportunity due to the lack of funds. Marriage is another expense that can just creep up on you and in India marriages are quite expensive.

It is therefore prudent that you carefully plan your finances for your child’s benefit. You should ensure that you have the required funds ready, when they are needed but at the same time your plan should also build in risk management so even if you were not around you would have insured your child’s happy future. As a careful investor your investment plan for your child should consider the following few pointers:

As a careful investor your investment plan for your child should consider the following few pointers:

Saving regularly

Secure investment

Insurance cover

Flexibility

Guaranteed return

Above all keep in mind that it is never too early to plan for your child's future. The earlier you begin the more you can gather for your child’s needs.

Children’s Future Plan offers you market linked returns with insurance cover. These are designed in a way that enables you to take care of your child’s future financial needs. A carefully planned investment today can ensure that you don’t have to worry about funding concerns in case of requirements.

Products name: - BSLI Children's Dream Plan

 

1. Our Wealth & Protection Solutions To help you create long term wealth & protect your family.

Wealth & Protection Solutions

Saving Plans

Saving is all but instinctive for the most of us, and the important role that time plays when it comes to saving for your future is also lost on most people. If you do not start early, chances are that you may miss the savings train.

Insurance as savings

Life has its own set of risks, and while insurance has often been viewed strictly as a risk mitigation tool, it can also be a big help in saving for your future. Consider these few pointers while saving for your future:

Start early

Save regularly

Invest in a plan that offers you flexibility

Try to make your investments tax efficient

By choosing a right plan, you can make your funds work harder for you and provide returns higher than just the bare minimum. Whether covering life’s challenges or covering the risks that come with it, these insurance policies that have a saving component that will give you the carefree existence you deserve. The policy will cover your life risk for your loved ones while its savings component will ensure that you always have a healthy corpus awaiting you when you reach the end of your saving plan for your nest egg.

Products name are: -

BSLI Money Back Plus Plan BSLI Platinum Plus BSLI Gold-Plus II BSLI Saral Jeevan Plan BSLI Supreme-Life BSLI Dream Plan BSLI ClassicLife Premier BSLI SimplyLife BSLI PrimeLife Premier BSLI PrimeLife BSLI Guaranteed Bachat Plan BSLI Flexi Cash Flow BSLI Flexi Save Plus BSLI Flexi Life Line BSLI Single Premium Bond

 

1. Our Health & Wellness Solutions To cover you & your family's current & future health need.

Health & Wellness Solutions

A sudden medical emergency has the potential to derail even a well made financial plan and throw your finances into complete disarray. Lack of instant access to funds could, at times, force you to compromise on the quality of medical treatment, which would be an unfortunate but easily avoidable situation.

 

Health costs are rising at alarming rates and consuming a larger share of your monthly expenses than ever before. It is then, only wise to have a plan to ensure that you and your family are never left in the want of funds, when a contingency arises.

Things to remember while buying a health insurance policy

Insure yourself and your family for an adequate amount

Make sure you are insured against major illnesses and injuries.

Go for those policies that offer you cash less facility

Health is one of the fundamental determinants of your family’s happiness and shouldn’t you strive to give them the best?

BSLI Health Plan

BSLI Universal Health Plan

 

1. Our Retirement Solutions To financially secure a happy retired life.

Retirement Solutions

With the change in social structure it is uncommon for people to live together in joint families. The growing trend is for retired people to live by themselves. Living independently in your retirement can mean incurring monthly expenses but without no monthly income from a job.

So whether you have planned a hectic retirement where you will start the business venture of your dreams or a leisurely retirement just tending to your backyard garden; you do need the resources to ensure that your golden years are the best part of your life.

 

The cost of retirement can be considerable, a cost that you need to start planning as early as

possible. Each year the cost of living increases and as you get older this cost will only get higher. You need to account for the price rise so that your savings can support you in your retirement.

In India it is routine for most people to fund their own retirement. Planning for life after work is not so difficult once you follow a few simple steps:

Determine an amount that is required

Determine how much additional is needed

Allocate investments

Wait, review and reallocate

Retirement planning is all about knowing what you want and being disciplined towards achieving it. These days, with life expectancy being higher, life’s goals being wider, you need to ensure that you have enough in your account to take care of you in those days of leisure.

Unit linked retirement plans offer you flexibility to choose the investment tenure, investment portfolio (fund options) and the amount that you pay regularly. You should choose your investment portfolio depending on your risk appetite and years remaining in your retirement. Ideally as you get nearer to the day when you would quit working you should reduce your exposure to risky investments for example equity and equity associated funds. Choosing the right retirement fund ensures that you can remain worry free when the time comes to enjoy your golden period.

 

    Group Solutions

We believe that employee benefit plans provided by employers to their employees play a very important role in increasing employee loyalty and productivity. Birla Sun Life uses its vast expertise in helping organizations and groups design customized solutions to their employees.

Retirement Solutions

Our employee benefit solutions are designed to enable organizations and groups to offer superior benefits to their employees to meet both statutory requirements like gratuity and retirement solutions.

Gratuity

While Gratuity is a statutory obligation it is also a very important tool today to create employee loyalty. A comprehensive gratuity plan can help organizations reduce both business costs and corporate tax. Birla Sun Life’s gratuity solution manages your gratuity liability effectively and also helps you release resources for other business activities.

SuperAnnuation

Today while there is a high awareness of the impact of inflation and its affect on retirement savings among employees, very few would have adopted a systematic and disciplined savings plan to counter its effect. Organizations can play a key role in helping employees to build the desired retirement corpus while at the same time increasing employee loyalty. Birla Sun Life’s solutions can be customized to effectively meet both employer and employee requirements.

Leave Encashment

Leave encashment liabilities for organization keep growing with time thus straing the organizations resources. These liabilities can bee effectively met through the management of a dedicated fund for leave encashment. Birla Sun Life vast experience in effectively managing funds and delivering superior returns can help organizations effectively manage these liabilities

 

    

Protection Solutions

Birla Sun Life Insurance Group Protection Solutions provide the benefit of an insurance cover to an entire group of people as a single unit. This can be Employer – Employee Groups, Affinity Groups and Mortgage Groups

Employer employee

At Birla Sun Life Insurance (BSLI), our goal is to help you ensure your employees’ well being so that they can enhance their performance & potential. Our protection solutions combine new innovations in organizational benefits with the traditional strength of employee assistance to help you: Protect your investment in your people Reduce the liability, cost and negative impact of mental ressures in the work place Maintain your position as employer of choice; and Incorporate employer protection & wellness into your core business practices

Affinity

An affinity group is a group consisting of persons who assemble together with a commonality of purpose or engaging in a common economic activity. n Insurance parlance Non-employer-employee groups like employee welfare associations, borrowers of a bank, professional associations or societies may also be treated as affinity groups provided the president/ secretary/ manager/ group organizer in his capacity as organizer of the group has an authority from majority of the members of the group to arrange insurance on their behalf.

 

 

    Rural Solutions

   A large population of India lives in the rural areas with. The impact of risks associated with life and health are far more severe on this population as compared to the urban population with higher levels of income.

   Birla Sun Life launched its rural program in 2001 to provide insurance to the rural populace of India. This includes the endowment product that provides life cover and guarantees returns to the insured on maturity. By virtue of the benefits it provides, this product has been very well accepted and has gone on to become the most popular product in the rural areas.

   With changing times and with increasing disposable incomes in rural areas, we improved our solutions to the rural population and launched two Micro Insurance Products in 2008 which include a pure term and return of premium products. One of the unique features of these products is that they provide a grace period of 180 days as opposed to 30 days for other similar plans in the market. This gives policyholders the flexibility to pay premiums.

   Birla Sun Life Insurance Bima Dhan Sanchay

   Birla Sun Life Insurance Bima Dhan Sanchay apart from providing the security of life insurance cover also guarantees the refund of premiums paid by you on maturity.

   Birla Sun Life Insurance Bima Suraksha Super

   Birla Sun Life Insurance Bima Suraksha Super provides you life insurance cover for which you have to pay regular premium

   Birla Sun Life Insurance Bima Kavach Yojana

   It is more than an insurance product, it is a chance to protect the lives we seek to improve

 

   NRI Solutions

In today's globalized work environment we often find ourselves staying away from our loved ones in a different country. However, our hopes, dreams and aspirations to provide them the best of life do not change. Birla Sun Life's unique NRI solutions can help you ensure that your dreams and aspirations are not compromised even while you stay away from your family. Our solutions can help you plan and fulfil all your goals like planning for your child's education,  planning for your retirement, building a house, caring for your parents back home and more.

 

 

   2.2.1 INDIAN INSURANCE INDUSTRY

The insurance sector is one of the most promising sectors in India. The market size went up to US$ 47.89 billion in 2007, from US$ 21.71 billion in 2000, increasing at the rate of 120 per cent. Between 2000 and 2007, overall premiums sustained an average growth rate of 11.96 per cent. This was one of the most steady growth patterns witnessed amongst emerging economies in Asian as well as global markets. Increasing from just one company a decade ago, there are 22 life insurers in the country presently. In fact, according to Insurance Regulatory & Development Authority (IRDA), the number of registered general insurers has gone up to 21. As a major portion of the business comes from urban markets, the next step for these firms would be to tap semi-urban and rural markets.

Further, the country's insurance sector is likely to grow 17 per cent in the current financial year if the economy continues to expand at the pace as it did in the September quarter of 2008. India’s economy grew at 7.6 per cent in the July-September period."If GDP grows 7.6 per cent, premiums would grow 17 per cent, according to Mr J Hari Narayan, IRDA Chairman. Life insurers, which constitute the bulk of the Indian insurance market, grew their business by 23.3 per cent to US$ 18.94 billion in 2007-08, while general insurers posted growth of about 14 per cent in premium income to US$ 6.07 billion, according to IRDA data.

Higher per capita income, domestic savings and availability of more instruments for parking surplus funds have facilitated growth in the activities of financial services. With the largest number of life insurance policies in force in the world, the penetration of insurance in India as a percentage of gross domestic product (GDP) stood at 4.8 per cent, as on February 2008, against 1.2 per cent in 1999–2000. Of this, life insurance accounted for 4.1 per cent and non-life insurance for 0.6 per cent. Also, as per industry estimates, out of 78 per cent Indian households that are aware about life insurance, only 24 per cent own a policy.

A combined ICICI Prudential Life Insurance and IMRB survey, conducted in three metros—Delhi, Mumbai and Chennai—takes into account households having average monthly income of US$ 816.51 per month. Such households on an average have two policies. Further, 79 per cent people prefer life insurance over other tax saving instruments like post office savings, Equity-Linked Saving Schemes and fixed deposits.

In the month of November 2008, 16 general insurance companies, both public and private, together collected US$ 452.83 million, against US$ 452.57 million in the same month last year. 12 private sector players clocked a marginal growth of 1.2 per cent in the premium collection, according to IRDA data. However, April-November premium collection stood at US$ 4.23 billion compared to US$ 3.77 billion, up by 9.57 per cent.

During the first eight months of the current fiscal, premium collection by private players recorded a growth of 15 per cent at US$ 1.73 billion. Private players witnessed 31 per cent growth in first premium income (FPI) and 27 per cent growth in sales of number of policies (NoP).

The insurance giant, LIC, has already mopped up over US$ 407.68 million ending

December 2008 and it is expecting to garner around US$ 50.9 billion, from its newly launched product, Jeevan Astha, depicting a trend where people are putting money in safe and long-term investments along with the added life cover. State-owned Life Insurance Corporation of India, the country’s largest life insurer, is also leading the way in expansion plans. The corporation is planning to recruit 10,000 employees and around 250,000 insurance agents across the country this year.

Growth of private insurance companies

SBI Life Insurance is planning to raise the number of branches to 250 branches this financial year. Further, ICICI Prudential Life Insurance has stated that in the last two years, the company had expanded the distribution network by increasing the number of branches to over 2,090 from 177.

 

Aegon Religare Life Insurance, in its first year of operations is actively scaling up to open 51 branches, of which 48 are already operational across 39 cities. Max New York Life Insurance is planning to increase the number of branches to at least 250 every year going forward.

This will expand Max New York Life’s distribution network from 311 offices in June-end 2008 to almost 900 agency offices and 700 rural offices by FY 2012. A report - 'Insurance Sector Futuristic Growth'—released in August 2008, by ASSOCHAM revealed that bolstered by intense marketing strategies, private insurance players have rapidly increased their market share. The share of state-owned insurance companies like General Insurance Corporation (GIC), Life Insurance Corporation (LIC) and others is about 70 per cent currently.

It is estimated that its growth rate could even exceed 140 per cent. State-owned insurance companies are now coming out with variations and new policies now that IRDA has given approval for launch of new products. Private insurance companies however, have a larger number of policies on offer, with more competitive premium amounts and maturity periods. The private sector insurance players have now also made inroads into the rural markets which, till recently, were dominated by the state-owned companies.

Private insurance companies with innovated customised policies for different sections such as offering life cover along with investment opportunities with a long-term perspective or a women-oriented policy targeting the increase in the number of working women has led to a demand for life insurance policies, which in turn has helped women through a micro-entrepreneurship initiative offering them moreflexibility.

Children's products such as ICICI Prudential Life's 'SmartKid', Birla Sun Life's 'Children's Dream Plan', or HDFC Standard 'Life's Young Star Plus', are on a consistent growth path.

  

According to industry estimates, currently, 20–30 per cent of business of many companies comes from children-specific insurance policies alone. A Pricewaterhouse Coopers report, 'Healthcare in India: Emerging market report 2007' stated that valued currently at US$ 34 billion, the Indian healthcare sector is likely to grow to around US$ 40 billion by 2012. The health insurance sector which is offered by both life and general insurers is growing currently at 50 per cent and is being promoted by the IRDA. Health insurance is expected to grow to US$ 5.75 billion by 2010, according to a study by the New Delhi-based PHD Chamber of Commerce and Industry.

Only a miniscule 10 per cent of the Indian population has some kind of health insurance, therefore there is a huge potential market for health insurance. A joint report by McKinsey and CII has estimated the number of potential insurable lives at around 315 million. In 2006–07, the rapidly burgeoning Indian health insurance business grew 40 per cent to touch US$ 812 million. In some states, the government is partnering with the private sector to offer coverage at low costs. Life Insurance Corporation (LIC) has now entered the health insurance market and has mobilised premium income of US$ 21.23 million in the last two months of 2007–08.

Birla Sun Life on January 7, 2008 also announced its plans to enter into the US$ 40.75 billion health insurance business with the launch of two plans nationally. ICICI Prudential Life on January 5, 2008 launched Health Saver, to help consumers meet their current healthcare expenses and also invest for future healthcare expenses.

The current focus on health insurance business will also further boost the third party administrator (TPA) business. A third party administrator in an entity that processes insurance claims for the general insurers that issuing health and medical insurance covers. TPAs offer the much needed in-between services to the customers and insurance companies by managing the claims. By 2012, the Indian TPA industry is likely to grow to US$ 3.18 billion in size.

 

With approximately 30 players, the present size of the TPA sector is around US$ 934 million and is growing at 40 per cent. Further, IRDA has constituted a committee in January 2009 to evaluate the performance of the third-party administrators (TPAs) in health services.

Bancassurance segment

The bancassurance segment has been growing consistently pace and is competing with the traditional sale of insurance by agents owing to the keenness of banks to augment other income (fee-based income). Global insurance consulting firm, Watson Wyatt Worldwide in 'India Bancassurance Benchmarking Study 2006-07', had said that both life and general insurers were bullish about prospects of insurance penetration in the rural markets. According to the study, about 30 per cent of the life insurers have indicated that by the year 2010, rural insurance business will constitute between 16-20 per cent of their total bancassurance new business premium.

Bankers and insurers are both upbeat about the future of the bancassurance segment and it is expected to contribute about 50 per cent or more in the life insurance segment by the year 2010. It has also contributed significantly to the business of major insurance companies like Life Insurance Corporation (LIC) and SBI Life.

The growth in the bancassurance for insurance companies wholly depends on the number of bank branches that actively dispense these products. According to industry sources, private and foreign banks are biggest mobilisers of insurance premium despite public sector banks having a wider reach. In August 2008, bancassurance accounted for 35 per cent of the premium collected by private players. In 2006–07, that figure was about 17 per cent.

 

Rural insurance

The Indian rural market offers tremendous growth opportunities for insurance companies. According to a survey 'India Invest Incomes and Savings Survey 2007' by IIMS Dataworks (a Noida-based retail finance research firm), 58 per cent of India's 105.4 million insured people were from the rural areas.

Yet, urban India was ahead in terms of penetration (47 per cent), or the number of policyholders compared with the total population. This meant that almost one out of every two paid workers in urban India was insured, while it was only 27 per cent in rural areas. With increased IRDA focus on the sector, growth rate in the rural sector has been picking up. Reliance Life Insurance recorded a growth of 150 per cent in rural policies against 140 per cent growth in urban policies, in 2007–08.

According to international consultancy firm Celent's report—'Selling Life Insurance in Rural India—India's rural market revenues are expected to grow as much as four times to reach US$ 2.9 billion by 2015. Over 70 crore people reside in the rural areas of the country with insurance penetration rate as low as three per cent providing a huge opportunity for life insurance firms.

An analysis of data from seven life insurers for 2007–08 reveals that insurance firms have exceeded their individual targets laid down by IRDA in rural India. ICICI Prudential Life, for instance, covered 117,000 customers in rural areas in 2007–08, as against its target of 25,000.

SBI Life sold 22 per cent against its expected target of 18 per cent. Life Insurance Corporation of India (LIC) has set a target of four million policies in rural areas in 2008–09. R P Singh, Executive Vice President & Head, Emerging Markets for Max New York Life reveals that about 74 per cent of the national population falls under rural category and there is huge scope for exploring this market.

  

According to him, overall about 500,000 policies have been sold to the rural sector so far."We plan to ramp up the scale to 100 hubs and spokes by the end of this year by launching our services in other states like Gujarat, Maharashtra," he added. Kotak Life

Insurance is adding 3 new branches in Ambala, Karnal and Hissar to take the total number of branches to 17, according to Yog Raj Sharma, national sales head (Tied channel), Kotak Life Insurance."We are ramping up our distribution significantly to reach up to the Tehsil level and plan to launch branches in the rural areas to increase our present market share of 20 per cent in northern states.

With new branches coming up, we will be able to take our services to other semi-urban and small towns like Kalka, Pinjore, Ramgarh etc. Overall Kotak Life Insurance sold 25 billion new premium policies till September end and recorded a growth rate of 114 per cent in the first year premium income.

Global companies

The booming domestic insurance market along with saturation of markets in many developed economies has made the India a very attractive destination for global insurance majors. Major global names already having a presence in the Indian market though JVs with Indian firms including French life insurance company Sogecap, US-based American Int. Group (AIG) Max, Tokio Marine and Fire of Japan, Cardiff SA of France, and UK-based Prudential, IAG which has tied up with SBILife.

Some of the other major joint venture companies in this industry are Bajaj Allianz, ING Vysya, AMP Sanmar Assurance Limited, HDFC Standard, Birla Sunlife, Aviva Life Insurance, Kotak Mahindra Old Mutual, Met Life, Royal Sundaram, and ICICI-Lombard among others.

 

Many more are to soon enter the Indian market:

The latest entrant has been QBE Holdings (AAP) Pty Limited, a wholly owned subsidiary of QBE, Australia which has tied up with Raheja QBE General Insurance Company Limited, a joint venture general insurance company promoted by Prism Cements Limited, India.

US health insurers, Aetna (a 158-year old company with total revenues for the calendar year 2007 at US$ 27.6 billion and net income at US$ 1.8 billion, is interested in setting up stand-alone health insurance companies.

CIGNA, another US-based company (a health insurer, and it also provides life, accident, health and expatriate employee benefits insurance coverage in a few international markets) is interested in setting up stand-alone health insurance company.

UK-based company, Bupa, is also interested in setting up stand-alone health insurance company.

American company Ace, a leading global commercial property and casualty insurance group, is looking at entering the life and non-life sectors.

US-based Travelers Group (Travelers is a big underwriter of property and casualty insurance in the US and reported a net written premium of US$ 21.1 billion in 2006 is interested in the non-life sectors. It is planning to sign an agreement with Indian engineering major L&T.

 

Major investments

Reliance Capital is planning US$ 432.26 million as investment for its insurance business over the next three to five years.

Max New York Life Insurance has announced a strategic business alliance with ALEgION Insurance Broking wherein, the latter would sell Max Vijay in Kerala and Tamil Nadu. Under the first of its kind distribution initiative, ALEgION will distribute 'Max Vijay' through a fleet of Maruti vans, which would be used as mobile financial service distribution offices.

The largest insurer in the country would also be investing another US$ 3.67 billion in government securities. This would take LIC’s total investments in the remaining period of the current fiscal to around US$ 10.19 billion, over and above the US$ 20.87 billion it has already invested in the first eight months of the current financial year.

Bharti AXA General Insurance (a JV between the Bharti Enterprises and AXA) is planning to invest US$ 152.92 million spread over the next five years.

Ranked among the top five life insurance companies, Birla Sun Life Insurance is planning US$ 274.30 million as investment for further expansion. It is presently the fastest growing life insurer in 2008–09, with a 187 per cent growth in new business during the first quarter.

In the first quarter of 2008–09, insurance companies have invested US$ 3.18 billion in equities, which is four times of what was invested a year ago.

 

Government Initiatives

The Government has taken many proactive steps to give a boost to this sector:

The Insurance Regulatory and Development Authority (IRDA) will announce guidelines for mergers and acquisitions (M&A) in the insurance sector by the end of March 2009. The regulator is formulating the guidelines in consultation with the Institute of Actuaries, IRDA Chairman, Mr J Hari Narayan. IRDA has cleared 288 new insurance products this year (2008).

Earlier in December 2008, IRDA has allowed insurers to acquire up to 20 per cent debt and equity in an infrastructure-related company, compared with 10 per cent earlier.

 

According to IRDA, the move is aimed at enhancing the flow of insurance funds to meet the present needs of infrastructure financing. Relaxing the investment norms further, IRDA has allowed insurers to invest an additional 5 per cent in debt instruments of infrastructure and housing companies, over and above the 20 per cent ceiling, with a prior board approval. The country's largest insurer, LIC, already holds over 10 per cent in a host of companies, which is likely to increase further.

IRDA has constituted a panel that will monitor the role of TPAs and evaluate their performance in current health insurance market and make suitable recommendations clarifying their utility to the future growth of the health insurance industry.

Government is planning to ease restrictions on foreign investments in insurance, banking and pensions, and allow foreign direct investment (FDI) investment of 49 per cent from the present 26 per cent.

IRDA has removed administered pricing mechanism, i.e., de-tariffing in respect of fire and engineering along with motor insurance of general insurance for premium, effective from January 1, 2007.

The control rates on fire, engineering and workmen's compensation insurance classes have been

removed from September 1, 2007. Several states aggressively offering public health insurance schemes to their rural poor. A host

of private players are rushing with their offerings, sensing huge opportunity in this segment some state governments have also taken a dynamic role in this sector. In an arrangement with the regional rural banks (RRBs), the West Bengal government is planning to extend insurance facilities to farmers in the 60–70 years' age bracket through a tie-up with IFFCO-TOKIO General Insurance.

The Haryana State Co-operative Supply and Marketing Federation Limited (HAFED) facilitated weather-based insurance coverage to contracting farmers through AIC. 50 per cent of the premium for this insurance, which is US$ 5.863 /acre, was paid by HAFED. 25 farmers having 145 acres availed this opportunity in 2008.

The Government of Andhra Pradesh after piloting the 'Arogya Sri' health insurance scheme in three districts plans to issue health cards to 18 million BPL (below the poverty line) families. As a result, about 60 million of the State's 80 million people will have insurance cover.

The Karnataka Government has partnered with the private sector to provide coverage at a low cost in the Yeshaswini Insurance scheme to provide for major surgical operations, including those pertaining to pre-existing conditions, to Indian farmers.

 

2.3 LIFE INSURANCE

Life insurance is unique among financial instruments. It is not only a financial instrument that is based on caring and love but there can be personal advantages to having life insurance. It is the real impetus having love for those who cares most about – to make sure they are taken care of. So, one can feel pleasure in taking the time to learn about this subject whether through the company or the organization of anyone’s choice.)

Interestingly, while insurance is taking care of the financial needs of an individual/group and wants to pass on the benefit to spouse or the next generations, life insurance can also develop and build one’s personal financial goals including security while living. For example, because one has sufficient life insurance, he may be able to use more of  his  assets to enjoy life after retirement. In fact if one knows that he is having sufficient life insurance he won’t feel that he is lowering the inheritance by spending some of his principal. Under the scheme of insurance one individual actually “pays down principal” to some degree, especially if he has lifetime permanent than the life insurance becomes as a backup.

There are various types of life insurance but they all have some common attributes.  The individual has to pay premiums to an insurance company. At the time of insurer’s death, the life insurance company pays an amount to the people whom name is nominated or mentioned in the policy, who is called beneficiaries. Also it’s interesting that if the policy holder named a beneficiary(ies) they’d receive the insurance amount free of income tax. Some types of life insurance have cash benefits available while the insurer is living. In these types, a portion of premium goes into a cash reserve and builds on a tax-deferred basis. The insurer can access this money, called cash value. Some people use it to help education costs, enhance retirement cash flow or for any reason. Two of the most common types of “permanent life insurance” are called whole life insurance and universal life insurance.

 

Combined with investments, retirement and estate planning, a life insurance policy is a cornerstone of a sound financial plan. By looking into this area, the insurer is making an intelligent and caring financial decision for his family. It is important to have life insurance and must have enough to protect those one cares about. Thus it is the object of the company to provide insurance cover to each and every person who cares his successors.

 

REQUIREMENT OF LIFE INSURANCE: -

Life Insurance is a contract by which you can protect yourself against specific losses by paying a premium over a period of time. Since each one of us, during our lives are faced with numerous risks – failing health, financial losses, accidents and even fatalities, our instinct drives us to cover ourselves against those risks.

Though an insurance cover can’t protect you against the emotional losses arising out of these risks, it softens the economic crisis that usually accompanies these losses.  Life Insurance gains much more value if you are a nuclear family. Unlike in the traditional joint family system, in a nuclear family, support from the extended family cannot be counted upon. So it is vital that you have an insurance cover as the protective shield against unfortunate losses. 

And it’s not only your life you could insure against those risks. With the Insurance Industry going through positive changes in the last few decades, now, you have a variety of risk coverage options. For instance, products in the market range from whole life insurance to covering risks associated with home loans. 

What’s more, now you could choose life insurance as an investment option, the returns of which you can enjoy at the most critical phases of your life – for instance, at the time of your child’s admission into one of those dream institutes. 

 

And the insurance industry is constantly evolving. So, you now have a wider option of insurers – presenting you with products that not only cover those risks, but also act as wealth accumulation or investment avenues, which, you should definitely avail of.  Whether you are new to insurance, or an informed customer, you could always get valuable information from us.

We have attempted to cover this site with some comprehensive information on life insurance. However, do not hesitate to leave a note for our Financial Advisors. Not only they could provide you with the additional information you might be looking for, they can also help you assess your life insurance needs and invest wisely.

 

MYTHS OF LIFE INSURANCE: -

There are some myths that are associated with Insurance. To choose insurance as a good investment, you need to be informed about these myths. 

Insurance is for saving tax 

The primary function of life insurance is to cover you against sudden losses arising out of sudden death or liability. Unlike other investment options like the Public Provident Fund that offers 20% tax rebate under Section 88 of the Income Tax Act, 1961or other small savings schemes like post office deposits and national savings certificates, Insurance isn’t a tax saving investment vehicle.

Insurance, primarily offers you complete security arising out of risk coverage against the uncertainties of life. And secondarily serves you as a good investment option and tax saving tool. Hence, as an instrument, life insurance offers you the ideal blend of risk cover, returns and tax benefits. 

 

 

Insurance does not give good returns

It’s true that there are other investment options that could give you more returns than life insurance. If returns are evaluated in isolation, a fixed deposit option offering you 6% interest definitely looks good in a depressed market. However, life insurance offers you other benefits, in addition to returns. 

For example, say, you invest Rs.5000/- in fixed deposit. You would ideally get back the money at the end of the year with marginal interest. Whereas, if you decide to pay a premium of Rs.5000/- per annum on a life insurance policy, you could buy an insurance cover of Rs.50,000/- to Rs.2 lakhs depending on your age and type of policy. And if, the unfortunate happens during the tenure, your near and dear ones get to receive the amount for which you are insured. If not, you get back the entire sum at the end of the tenure.

Insurance products are not flexible

Insurance products have become more flexible with the introduction of riders that allow you to customize your plan. Riders allow you to tailor your insurance policy to suit your unique needs. They are attached to your base policy when it is purchased and are available at nominal rates. For example, there is the Critical Illness Rider, which provides for payment of an amount based on the diagnosis of a critical illness condition of the life assured. The illnesses covered include critical conditions such as heart attack, stroke, cancer, kidney failure and major organ transplant.

Flexibility is also provided through different premium payment options. By utilizing these payment options, you need not get tied down to paying the premiums through out the term of the policy. With Limited payment option, you can complete your premium payments in short intervals, while enjoying the benefits of the policy for a longer term.

 

My money gets tied down in Insurance

The withdrawal facility available with select insurance policies makes it possible for you to withdraw your accumulated money any time when you need it. There are also loan options available on most policies that enable you to utilise your returns much earlier than the completion of the term of the policy. In essence, life insurance offers you risk coverage, tax benefits and returns on investment.

 

   The Nature of Insurance

The insurance has the following characteristics which are observed in cases of life, marine, fire and general insurance.

1. Sharing of risks

Insurance is a cooperative device to share the financial losses which might befall on an individual or his facility on the occurrence of specified event such as sudden death of the bread winner, marine perils in marine insurance, fire in the fire insurance and theft insurance etc. in the case of general insurance.

1. It is a cooperative device

A large number of persons agree to share the loss arising sue to a particular risk. Thus, insurance is a cooperative device.

1. Value of risk

The risk is evaluated before insuring to charge the amount of share called premium.

1. Payment made at contingency

The payment is made at a certain contingency insured. The Contingency may be death, fire, marine perils etc.

1. Amount of payment

The amount of payment depends upon policy insured.

 

2.3 PROCEDURE OF RECRUITMENT OF FINANCIAL ADVISORS

Licensing pre-requisites of agents: -

All agents, in order to obtain a license, have to go through a training program and appear for an examination to be conducted by the IRDA. The following is the text of Agents' course for Life as well as Non-life.

4 week training from the insurance institution as recognized and prescribed in IRDA guidelines. (Designed to prepare individuals to pass Insurance Agent licensing examinations)

The syllabus is designed for practical training for Life Insurance Agents, as specified in Licencing of Insurance Agents Regulations (herein after called Agents' Regulations). It provides a foundation of knowledge, and concepts upon which an individual can build a successful career as a Life insurance agent.

 

Necessities for becoming an life insurance agent:

Proof of all these have to be provided to the authority before registration as an agent. Section 42(4) of the amended Insurance Act, 1938 states that a person taking licence to act as an insurance agent shall be one who is not:

1. A minor 2. Found to be of unsound mind by a court of competent jurisdiction 3. Found guilty of criminal misappropriation or criminal breach of trust or cheating or forgery or

an abetment of or attempt to commit such offence by a court of competent jurisdiction 4. Found guilty of having knowingly participated in or connived at any fraud, dishonesty or

misrepresentation against an insurer or an insured. 5. He must possesses the minimum qualification of a pass in 12th standard (10th standard for rural

agents) 6. He shall have completed from an approved institution (An Agents Training Institution approved

by the Insurance Regulatory and Development Authority) at least 100 training hours spread over to three to four weeks; and (period of training can be reduced under certain circumstances. Please see the Agents' Regulations).

7. He has passed in the pre-recruitment examination conducted by the Insurance Institute of India, Mumbai, or any other approved examination body.

The expectations of the agency system are:

Good service and advice : Agent should offer consumers good service by responding to customer's needs in terms of grant of cover, advice, conduct, etc.

Good conduct : Agent should be willing to promote products in personal lines market making the best use of their professional ability

 

Purpose of training:

To impart him(her) complete knowledge of products, To imbibe in him(her) the importance of Pre-and-Post sale service to customers, To equip him(her) as a trusted professional capable of advising persons on "Insurance"; To make him(her) as an efficient salesperson ; To enable him(her) to master various techniques in the area of sale of insurance products; To instill in him(her) an ethical code which will inform all his(her) dealings.

Training schedule and structure

1. Practical Training Methodology:

The classroom training may be by means of lectures, discussions, speeches/ seminars, question - answer sessions, case studies, role playing, exchange of experiences, team training, replication of real life situation in the classroom, open house, self-study, etc.

The use of various audio-visual devices while taking the lectures like slides, overhead projectors, computers, markers, etc. may be encouraged

The training institute may ask the faculty to give handouts/ written material on the proposed lecture to the participants in advance.

The training institute will arrange to supply every agent an agents manual, service manual, list of all the products available in the market, a handbook containing specimen copies of proposal form, policy form, claim form, etc. from the insurance company who has nominated the agent for the training course.

1. Examinations for Agents:

1. All agents on completion of their training will have to appear in a written examination.

2. The exam will consist of objective type questions only. 3. The exam will be of maximum 100 marks. 4. The time for examination will be 2 hours. 5. 10% of Questions will be numerical. 6. This will be followed by an interview of 25 marks, conducted by the insurance

company. 7. Every agent will have to score atleast 50% marks in the written exam and 60% in

the interview for qualifying in the agent's examination and for award of a certificate.

1. Practical Training:

Every person aspiring to take up agency as a career will have to undergo on the job practical training with the designated company where he will work under the supervision of a sales functionary.

The sales functionary will teach the trainee the nuances of creating the need in the mind of the customer, understanding the wants of the clients, proposing 2 or 3 solutions for satisfying the want and finally helping him decide the best option and closing the deal.

In addition administrative matters, documentation, etc. will also be taught to the trainee.

 

Features of good insurance agent

Insurance sales agents must obtain a license from IRDA after undergone a thorough period of training for the effective carrying out of operations of business of life insurance.

Separate licenses are required for agents to sell life and general insurance. Licenses are issued only to applicants who complete specified pre-licensing courses and who

pass IRDA examinations covering insurance fundamentals and insurance laws. Minimum qualifications for the candidates to become life insurance agents is Senior secondary

(XIIth) must be passed out or more. Insurance sales agents should be flexible, enthusiastic, confident, disciplined, hard working, and

willing to solve problems. They should communicate effectively and inspire customer confidence. Because they usually work without supervision, sales agents must be able to plan their time well and have the initiative to locate new clients.

 

An insurance sales agent who shows ability and leadership may become a Development Officer in a Branch Office. A few advance Assistant Branch Manager (Sales) and higher marketing positions. However, many who have built up a good clientele prefer to remain in sales work.

For insurance sales agent jobs, most companies and independent agencies prefer to hire college graduates—especially those who have majored in business or economics. High school graduates are occasionally hired if they have proven sales ability or have been successful in other types of work. In fact, many entrants to insurance sales agent jobs transfer from other occupations.

In selling commercial insurance, technical experience in a particular field can help sell policies to those in the same profession. As a result, new agents tend to be older than entrants in many other occupations. College training may help agents grasp the technical aspects of insurance policies and the fundamentals and procedures of selling insurance.

Many colleges and universities offer courses in insurance, and a few schools offer a bachelor’s degree in the field. College courses in finance, mathematics, accounting, economics, business law, marketing, and business administration enable insurance sales agents to understand how social and economic conditions relate to the insurance industry.

Courses in psychology, sociology, and public speaking can prove useful in improving sales techniques. In addition, because computers provide instantaneous information on a wide variety of financial products and greatly improve agents’ efficiency, familiarity with computers and popular software packages has become very important.

A number of organizations offer professional designation programs that certify one’s expertise in specialties such as life, health, and general insurance, as well as financial consulting. Although voluntary, such programs assure clients and employers that an agent has a thorough understanding of the relevant specialty.

 

Agents are usually required to complete a specified number of hours of continuing education to retain their designation. Employers also are placing greater emphasis on continuing professional education as the diversity of financial products sold by insurance

agents increases. It is important for insurance agents to keep up to date on issues concerning clients.

Changes in tax laws, government benefits programs, and other State and Central Government regulations can affect the insurance needs of clients and the way in which agents conduct business. Agents can enhance their selling skills and broaden their knowledge of insurance and other financial services by taking courses at colleges and universities and by attending institutes, conferences, and seminars sponsored by insurance organizations.

IRDA also has mandatory continuing education requirements focusing on insurance laws, consumer protection, and the technical details of various insurance policies.

Performance:

Most insurance sales agents are based in small offices, from which they contact clients and provide information on the policies they sell. However, much of their time may be spent outside their offices, travelling locally to meet with clients, close sales, or investigate claims. Agents usually determine their own hours of work and often schedule evening and weekend appointments for the convenience of clients. Although most agents work a 40-hour week, some work 60 hours a week or longer. Commercial sales agents, in particular, may meet with clients during business hours and then spend evenings doing paperwork and preparing presentations to prospective clients.

Employment  Insurance sales agents held about 11,00,000 jobs in 2005. Although most insurance agents specialize in life or general insurance, a growing number of “multi-line” agents sell all lines of insurance.

 

     

 

CHAPTER – III

3. RESEARCH DESIGN & METHODOLOGY

 

 

3.RESEARCH DESIGN & METHODOLOGY

3.1 Research: - is a process of collecting, analyzing, interpreting and summarizing in a significant manner for the purpose of framing out necessary conclusion and findings of data perceived and formulated for deriving out the meaningful information. To carry our research necessary telephonic calls needed to be done, suitable appointments were to be fixed and therefore market survey is to be followed.  

3.2 Objective of training: - “RECRUITMENT OF FINANCIAL ADVISORS & OPERATIONS MANAGEMENT”

3.3 Process: Methodology or process involving in the Research followed during the course of summer training is as follows: -

a. Collection of data : - This is an important aspect in formulating the objective of research process where the data is collected via two process: - i) Primary Sources and ii) Secondary sources

i. Primary sources : - Where the data is collected primarily by interviewing and personal observation and is original in nature and accurate to the considerable extent.

ii. Secondary sources : -Where the data is obtained from some published and printed sources such as newspaper, magazines, websites and so on. 

b. Analyzing of collected data : - The data collected through market survey and published sources is then processed to obtained necessary inferences and findings for the purpose of achieving the objective as well as to derive necessary conclusion. A considerable skill and knowledge is involved in analyzing the data for the purpose of interpreting thereof.

c. Interpreting of data : - it is the significant step where the data collected and analyzed is interpreted in the forms of graphs and figures is depicted in the report called Project report.

d. Summarizing of data : - Thereby necessary summary is prepared which is essential in the project report of the summer training being done under an organization. 

 

3.4 Questionnaire: - Questionnaire is a set or group of questions being framed for the purpose of obtaining market perspective about a particular aspect or topic.

There are two types questionnaire bing carried necessary for the market survey of the summer training being undertaken and put for the by the trainee to the sample people taken as a base for entire population:

a. Open ended Questionnaire : - where the people (also called respondents) are required freedom to present their views and suggestions for the benefits and success of the organization.

b. Close ended questionnaire : - where the respondents is limited to the choice of answer being delivered by the interviewer itself so that quick and fast means of responses be derived out without wasting much time. Here close ended questionnaire being followed by me during the course of the summer training market survey.      

 

3.5 Sampling: - Sampling is a process of obtaining a number of individuals taken a base for the entire population since entire population can not be asked about the necessary objective upon which a questionnaire is put forth needed for the responses to be derived for the purpose of generation of facts and customer view point regarding their perception of particular product or services.

There are two type of sampling – i) Random Sampling and ii) Systematic sampling.

i. Random sampling : - Random sampling is a process of selecting the sample size randomly and no choice or preference to be made about the selection of respondents for the market survey and questionnaire to be put forth against him. Here, Random sampling being adopted by me.

ii. Systematic sampling : - it is a sampling where the limited number of selected respondents is figured out based on some criteria so that only those respondents can be asked for the purpose of filing questionnaire.

3.6 Sample Size: - 60 respondents.

3.7 Limitations of the study: -

The primary data used for present study is very time consuming. The primary data obtained consists of personal biases of the respondents and even

the non- response factor was observed. To obtain the secondary data which is sufficiently accurate and which exactly Fits the needs of study is difficult to find. The data collected by using a questionnaire, involves uncertainty about the response

given by the respondent and hence the accuracy of the answers given is difficult to presume.

 

    

  

CHAPTER - IV

4. DATA PRESENTATION, ANALYSIS AND INTERPRETATION

  

Figure 4.1 4. 1. From the survey conducted, it was inferred from the 60 respondents that 27 of them were Working Professionals while 16 were businessmen/persons, 11 were students and remaining were retired and housewives as was inferred from the survey during the summer training.

Tabular representation of respondents views for Q.1A.   Working professional 27B.    Businessman 16C.   Students 11D.   Other/Retired 6

Table 4.1

Figure 4.2

4.2. It was depicted from the survey conducted that to 55 of the total 60 respondents know the term life insurance while 5 don’t have any knowledge about life insurance.yet a need to educate and be aware about products and plans is desired.

Tabular representation of respondents views for Q.2A.   Yes 55B.    No 5

Table 4.2

Figure 4.3

4.3. Furthermore, from the survey conducted and questionnaire pertaining to life insurance when asked whether they are insured with their life, a considerable portion of the 36 respondents said ‘NO’ while 24 respondents said that they are insured but with minor risk coverage as compared to what they should have been. 

Tabular representation of respondents views for Q.3A.   Yes 24B.    No 36

Table 4.3

 

Figure 4.4

4.4. 45 respondents have shown a disagreement with the business they are carrying out presently due to low warning and recognition and would like to have something change in their life. They have been undertaken as a good prospects who are having a strong urge to earn and work hard for better recognition in their life.

Tabular representation of respondents views for Q.4A.   Yes 45B.    No 15

Table 4.4

       

Figure 4.5

4.5. Out of total 60 respondents surveyed during the course of training, 34 respondents perceive insurance industry as a good one due to better and sound knowledge whereas 15 considered it as a viable and fair industry but still 11 considered as unsuitable due to lot of criticism being faced.

Tabular representation of respondents for Q.5A. Good 34B. Fair 15C. Unsuitable 11

Table 4.5

    

Figure 4.6

4.6. Following table and above represented pie depicts how respondents view a life insurance agent as a career is:-

Tabula representation of Respondents data  for Q.6A.   Unlimited potential of earning 18B.    Respect with freedom to work 17C.   No overruling 12D.   All of the above 15

Table 4.6

 

Figure 4.7

4.7. It was inferred from the survey of 60 potential respondents that almost 40 respondents did show interest in getting aware regarding life insurance as a golden opportunity to opt it as a career while 20 denied and said NO.

Tabular representation of Respondents data response for Q.7A.   Yes 40B.    No 20

Table 4.7

Figure 4.8

4.8. Respondents have ranked the life insurance agency career with the Birla Sun Life insurance as follows depicted in the table mentioned below:

Tabula representation of Respondents data  for Q.8A.   Better and more recognized 5B.    Good but not earning 12C.   Less recognized 9D.   Boredom and monotonous 34

Table 4.8

 Figure 4.9

4.9. 42 of the respondents foresee the explosive growth in the insurance industry in the years to come and this would be the only industry who will grow like anything and several other company will see as their future business diversification prospects.

Tabula representation of Respondents data  for Q.9A.   Yes 42B.     No 18

Table 4.9

 Figure 4.10

4.10. due to increasing growth however I manage 36 respondents who agreed to hear about the fascinating business opportunity of becoming an life insurance agent and join this noble cause business and serve the community. While others havn’t directly said no rather they have made to consider it in future.

 Tabula representation of Respondents data  for Q.10Yes 36No 24

Table 4.10 

     

  

CHAPTER – V

5.1 SWOT ANALYSIS

5.2 RECOMMENDATIONS

5.3 CONCLUSION

 

 

5.1 SWOT ANALYSIS

 

1. STRENGTHS:

Birla Sun Life Insurance pioneered the unique Unit Linked Life Insurance Solutions in India.

Within 4 years of its launch, BSLI has cemented its position as a leading player in the Private Life Insurance Industry

Multi Distribution Channels- Direct Sales Force, Alternate Channels and Group offering convenient channels of purchase to customers.

Web-enabled IT systems for superior customer services. First to have issued policies over the Internet. First to have an operational Business Continuity Plan. Strong fundamentals based on the Aditya Birla group's local insight and Sun Life Financials's

global expertise.

 

1. WEAKNESSES:

People trust LIC presently as it is a Government concern.

Agents are not professional and well being. 

 

1. OPPORTUNITIES:

Low competition, as only 15 insurers in the Indian market exists.

A vast untapped market of over 100 crores of population. Near about 20% of overall insurance has been done in the past 50 years, so a large scope exists. 

 

1. THREATS:

Frequency of new entrants in life insurance is raising competition.

Mutual Funds, Securities, Bankingsc are posing a great challenge. Low awareness and adherence to LIC

 

 

5.2 RECOMMENDATIONS

Following are recommendations for the benefits of the company:

Proper awareness with respect to Licensing of Agencies and people to opt it as a great career approach.

The plans and policies of the company shouls be flexible and there should be transparency in it. In each and every district there should be one branch of BIRLA SUNLIFE. There should not be the territory restrictions. Company should put stress on rural market also. Company should provide new advisors training program time to time and motivate them by

regular meetings and give them awards according to their performance. Company should publish its weekly review of internal and external competitive business. Company should invites the potential customers who invests more money in the plans and

generates their interest to invest more in new modified plans.

 

 

5.3 CONCLUSION

There was a great experience working for the recruitment of the life insurance advisor and delighted to serve for the company which is working for a noble cause service. In the due course of my summer training I met with around 50 people in the course duration.

I come to the conclusion that most of the people are having an urge to earn more than their current status, but they are not getting any kind right of opportunity they desire, in which mode they earn; what they need in a legal and better way.  Many of them as and when they know about the beneficial aspects of becoming an insurance advisor they grab this opportunity in one way or other.

In my study I draw the conclusion that people getting frequently associated with the business of life insurance. Also life insurance business is growing at a very rapid pace and more and more multi corporates are forming joint ventures with leading foreign insurance players to start the business of life insurance with the legal approval from IRDA. Even AIRTEL has been entered into the business of life insurance with AXA life insurance.

 

 

BIBLIOGRAPHY

BOOKS:

KOTHARI C.R.: Research Methodology Management, 3rd Edition

KOTLER PHILIP: Marketing Management”  11th Revised edition ,2002

GUPTA S.P.: Statistical Methods “ Thirteen revised edition, 2001

 

REFERENCES

Websites: -

www.birlasunlife.com

www.irdaindia.org

www.liccouncil.org

www.businessconnect.com

 

APPENDICES - QUESTIONNAIRE

Name: -………………………………………………………………

Occupation: - …………………………………………………………

Date of Birth: - ………………………………………………………

Resident location: - …………………………………………………

Q.1 Are you a:

A. Working professional

B. Businessman

C. Students D. Other/Retired

Q. 2 Do you know Life insurance?

A. Yes

B. No

Q.3 Have you been insured with life insurance?

A. Yes B. No

Q.4 Are you satisfied from the present working profession?

A. Yes

B. No

 

Q.5 How do you perceive Insurance industry?

A. Good

B. Fair

C. Unsuitable

Q.6 How you view Life insurance agent as an career?

A. Unlimited potential of earning

B. Respect with freedom to work C. No overruling D. All of the above

Q.7 Would you like to be know about the golden opportunity of career making in life insurance that may change your life?

A. Yes   B. No 

Q.8 How do you value your profession?

A. Better and more recognized B. Yield yet unsatisfied C. Less recognized    D. Boredom and monotonous

Q.9 Do you foresee the explosive growth in Insurance industry in the years to come in the nation of over 100 million people living?

A. Yes

B. No

 

Q.10 Would you like to know more about the significance of Licensing of agents via BIRLA SUNLIFE and like to join it as a good career approach?

A. Yes

B. No

Yours Suggestions: -

1. ………………………………………………………………

1. ……………………………………………………………… 2. ……………………………………………………………… 3. ……………………………………………………………… 4. ………………………………………………………………