rasna-developing a chain of advisor
DESCRIPTION
summer training report on reliance for bbaTRANSCRIPT
SUMMER TRAINING REPORT
ON
DEVELOPING A CHAIN OF ADVISOR WITH SPECIAL REFERENCE TO HDFC
STANDARD LIFE INSURANCE COMPANY
Submitted in partial fulfillment
For the requirement of the award of
Bachelor of Business Administration BBA (Gen)
Under the guidance of:
Ms. ABCD
Assistant Professor
FIMT
Submitted by:
Rasna Sharma
Enrolment No.: 10990101711
BBA(GEN)5th semester
FAIRFIELD INSTITUTE OF MANAGEMENT AND TECHNOLOGY
Affiliated to Guru Gobind Singh Indraprastha University, Delhi.Kapashera, New Delhi- 110037
CONTENT
Acknowledgment
Certificate
Student Decleration
Chapter 1: Rationale for the study
Chapter 2: objective of the study
Title of the project
Objective of the study
Scope of study
Chapter 3: Profile of the Company
Chapter 4: Review of literature
Chapter 5: Research methodology
Research Design
Data collection method
Sampling technique
Chapter 6: Data analysis
Chapter 7: Findings
Chapter 8: Limitations
Chapter 9: Recommendations
Appendix
ACKNOWLEDGEMENT
2
It is pleasure to acknowledge many people who knowingly and unwittingly helped me, to
complete my project. First of all let me praise god for all the blessings, which carried me through
all those years. I am thankful to Director R.K.Garg, FIMTfor providing me an opportunity to
gain both theoretical and practical knowledge in the field of Insurance and extending their full
support.
First and foremost, I would like to express my regards to Ms. XYZ for her constant
encouragement and support and for providing the invaluable knowledge, guidance,
encouragement extended during the completion of this project. I would also like to thank my
faculty for sharing with me the valuable inputs. I’m also grateful to my college library, computer
facility and all those who I might not have mentioned, though not intentionally, without their
support this project would not have been possible.
Last but not the least,I am grateful to my parents, my sister, my brother, my friends and all well-
wishers for their moral support and encouragement during the entire period of time.
Signature of the Student
CERTIFICATE
3
This is to certify that the project entitled “Developing a chain of advisor with special
reference to HDFC STANDARD life insurance company” in “HDFC” is an academic work
done by “Rasna Sharma” submitted in the partial fulfillment of the requirement for the award of
the Degree of “Bachelor of Business Administration” from “Fairfield Institute of Management
and Technology, New Delhi”under my guidance and direction. To the best of my knowledge
and belief the data and information presented by him/her in the project has not been submitted
earlier.
Name & Signature of the Guide:
Ms. xxx
Assistant Professor
FIMT
STUDENT DECLARATION
4
I hereby declare that the project entitled “Developing a chain of advisor with special reference
to HDFC STANDARD life Insurance company” under the guidance of Ms. xxxxxxxx,
Assistant Professor FIMT submitted in the partial fulfillment of degree of Bachelor of Business
Administration (Banking and Insurance) from “Fairfield Institute of Management and
Technology, New Delhi”. This is my original work and this project work has not formed the
basis for the award of any Degree to the best of my knowledge.
Rasna Sharma
Roll no: 10990101711
[Signature of student]
Place:Delhi
Date:
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Chapter-1
Rationale of the study
As a partial fulfillment of the MBA Course in which eight week training has been
incorporated in the curriculum, during which a study is to be done in an
organization mainly to extract the practical knowledge & skill from the actual
environment. This project provided me an opportunity to gain profound insight
into a practical applicability of management concepts and developing better ability
to analyze problems and decisions that has contributed significantly for better use
of resources available to the management.
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To understand and to apply the concepts of the curriculum, I have undergone
summer training in HDFC STANDARD, Gurgaon in the title of the project
“Developing a chain of advisors to enhance marketing channels”. For which
the report have been prepared with suggestions and opinion of the respective
subject given by me.
In the report every possible step that had been taken in the project are shown as a
glimpse, with a hope that it will be a tool to help the organization through the
findings and opinion given in the report.
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Chapter-2
Title of the project
“Developing a chain of advisors to enhance marketing channels”
OBJECTIVE OF THE STUDY
The main objective of this project is to have complete knowledge about Life
Insurance and life insurance plans of Hdfc standard life insurance company.
Secondly to make a chain of financial advisors so as to enhance marketing channel
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of the company and to understand how does channel development work for
insurance company.
The following are primary objective of study:
To have complete knowledge of life insurance.
To make a chain of consultant of company.
To understand what channel development is and to understand how does he
work.
To understand the importance of channel development.
To know the role of financial consultant in life insurance industry.
To understand the functioning of life insurance industry.
To know the origin and history of life insurance companies.
To gain experience in different environment with different people.
SCOPE OF THE STUDY
Every life insurance company wants to provide better and quick service to its
customers. For this it needs some channels in order to enable customers to interact
easily with the company.
Financial Consultants bridge the gap between company and the customer by
imparting them the right kind of information.
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So, the persons those who could bear this responsibility are constantly searched by
the insurance company. The main purpose of this study was to make a chain of
financial consultants so as to enhance marketing channel.
Secondly, the motive behind this study of mine was to have practical knowledge of
recruitment by adopting various kinds of strategies and to learn new things.
EXECUTIVE SUMMA RY
Executive summary
As in current scenario when there are so many players in life insurance sector, each
is having tough competition with other. Each company is opting best possible
strategy to spread its wings and attracting customer towards it by providing
uninterrupted services.
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HDFC Standard Life Insurance is also giving better services to its customers
through the channel of financial consultant. My project was to recruit financial
consultants. First of all I was explained about the importance of a financial
consultant in the company, their functions and then, how and where to find them.
My study included the follow-up of procedures used for the recruitment of an
insurance advisor who can sell the products of the company. For this I performed
market research by using various kinds of activities like meeting persons
individually in the market, convincing people by tele-calling and through canopy
activity to join HDFC as a financial consultant. I had to introduce them with the
benefits of becoming a financial consultant and if they agree for it then doing their
further documentation.
I conducted my research in Gurgaon and Delhi the areas close to it to know the
public response and conducting analysis part. I got questionnaires filled with
various customers to know their opinion and awareness about insurance sector.
This study gave me immense opportunity to enhance my inter-personal skills and
to have practical exposure of dealing with the customer directly. It was a
delighting experience to engage myself in this summer internship because it taught
me the ways of approaching and convincing the customer and finally recruiting
them for the organisation in which I worked.
Finally, interesting conclusions were drawn from the collected data.
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Chapter-3
Profile of Company
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INDUSTRY PROFILE
Incorporated in 1977 as a public limited company
To specialize in provision of housing finance to individuals, co-operative
societies & the corporate sector
First private sector retail housing finance company
HDFC is listed on both BSE and NSE
Market capitalization (June 2007) - Rs. 95 billion (US $ 1.6 bn)
COMPANY PROFILE
Company Name: HDFC Standard Life Insurance Co.
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Indian Partner: HDFC Bank
Foreign Partner: Standard Life (U.K.)
Equity Ratio: 74:26
Commencement Date: January 1995
Field Of Operation: Life Insurance
CEO Of the Company: Deepak Satawalekar
CEO and MD-HDFC SL
About summer training department of company
HDFC possesses a separate but important department for the extension of the
number of financial consultants as Channel Development Department (CDD).
Activities that are followed by it to search financial consultants are:-
Cold Calling
Visiting market
Placement Consultancies
Interacting people personally
The purpose of every activity undertaken is to make chain of financial consultants
who could sell policies of the company.
COMPANY PROFILE
Introduction
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“Helping Indians experience the joy of home ownership”.
HDFC Standard Life Insurance Co. Ltd. is a joint venture between HDFC Ltd.,
India's largest housing finance institution and Standard Life Assurance Company,
Europe's largest mutual life company. It was the first life insurance company to be
granted a certificate of registration by the IRDA on the 23rd of October 2000.
Standard Life, UK was founded in 1825 and has experience of over 180 years.
Companies. The company is rated as "very strong" by Standard & Poor's (AA)
and "excellent" by Moody's (Aa2).
Background of company
HDFC was incorporated in 1977 with the primary objective of meeting a social
need - that of promoting home ownership by providing long-term finance to
households for their housing needs. HDFC was promoted with an initial share
capital of Rs. 100 million.
Business Objectives
The primary objective of HDFC is to enhance residential housing stock in the
country through the provision of housing finance in a systematic and professional
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manner, and to promote home ownership. Another objective is to increase the flow
of resources to the housing sector by integrating the housing finance sector with
the overall domestic financial markets.
Organizational Goals
HDFC's main goals are to :
a) Develop close relationships with individual households,
b) Maintain its position as the premier housing finance institution in the country,
c) Transform ideas into viable and creative solutions,
d) Provide consistently high returns to shareholders, and
e) To grow through diversification by leveraging off the existing client base.
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HDFC Founder
MAN WITH A MISSION
If ever there was a man with a mission it was Hasmukhbhai Parekh, our
Founder and Chairman-Emeritus, who left this earthly abode on November
18, 1994.
Born in a traditional banking family in Surat, Gujarat, Mr. Parekh started his
financial career at Harkisandass Lukhmidass - a leading stock broking firm.
The firm closed down in the late seventies, but, long before that, he went on
to become a towering figure on the Indian financial scene.
In 1956 he began his lifelong financial affair with the economic world, as
General Manager of the newly-formed Industrial Credit and Investment
Corporation of India (ICICI). He rose to become Chairman and continued so
till his retirement in 1972.
At the ripe age of 60, Hasmukhbhai started his second dynamic life, even
more illustrious than his first. His vision for mortgage finance for housing,
gave birth to the Housing Development Finance Corporation - it was a
trend-setter for housing finance in the whole Asian continent.
He was a true development banker. His building up HDFC without any
government assistance is itself a brilliant chapter in financial history. His
wisdom and warmth drew people from all walks of life to him, for advice,
guidance and inspiration.
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He was also a writer in his own right. There are over 200 published articles
by him, full of incisive comments on finance and economics. In 1953 he
brought out a volume called: The Bombay Money Market. It detailed the
intricate working of the Indian money market. His works in Gujarati -
Hirane Patro, Hirane Vadhu Patro - occupy pride of place in Gujarati
literature. In 1992, the Government of India honoured him with the Padma
Bhushan Award. The London School of Economics & Political.
More about HDFC SLIC.
The road to success is a tough and challenging journey in the dark where
only obstacles light the path. However, success on a terrain like this is not
without a solution.
As we found out nearly three decades ago, in 1977, the solution for success
is customer satisfaction. All you need is the courage to innovate, the skill to
understand your clientele and the desire to give them your best.
Today, nearly three million satisfied customers whose dream we helped
realise, stand testimony to our success.
Our objective, from the beginning, has been to enhance residential housing
stock and promote home ownership.
Now, our offerings range from hassle-free home loans and deposit products,
to property related services and a training facility.
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We also offer specialized financial services to our customer base through
partnerships with some of the best financial institutions worldwide.
Organization & Management
HDFC is a professionally managed organization with a board of directors
consisting of eminent persons who represent various fields including
finance, taxation, construction and urban policy & development. The board
primarily focuses on strategy formulation, policy and control, designed to
deliver increasing value to shareholders.
SUBSIDIARY & ASSOCIATE COMPANIES
HDFC Bank
HDFC Mutual Fund
HDFC Standard Life
Intelenet Global Services Ltd.
HDFC Chubb General Insurance Company Ltd. 20
HDFC Reality
Other Companies Co-Promoted by HDFC
HDFC Trustee Company Ltd.
HDFC Developers Ltd.
HDFC Venture Capital Ltd.
HDFC Ventures Trustee Company Ltd.
Credit Information Bureau (India) Ltd
Home Loan Services India Pvt. Ltd.
Vision and Values
Vision Statement
“The most successful and admired life insurance company, which mean that
we are the most trusted company, the easiest to deal with, offer the best
value for money, and set the standards in the industry. In short “The most
obvious choice for all.”
INTEGRITY
What is it?
Honest and Truthful in every action.
Transparency
Stick to principles irrespective of outcome.
Be just and fair to everyone.
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Why?
Integrity is the bedrock on which the company and the expectations of
the customer and employees are built.
Integrity establishes the creditability of the person defines the
character and empowers one to do justice to the job.
Enables building confidence and trust, achieving transparency and
laying a strong foundation for building relationship.
Guiding principle for all walks of life.
.
CUSTOMER CENTRIC
What is it?
Understand his expectation by keeping him as the centre – point.
Listen actively.
Understand customer needs and deliver solution.
Customer interest always supreme.
Why?
Reinforce brand loyalty by complete transparency.
Customer is the source of revenue for the company.
Customer is the reason for our existence.
Ensure that customer chooses our company to do business with.
Customers’ goodwill alone can bring more business and more
customers.
Will contribute retention.
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PEOPLE CARE
What is it?
Genuinely understanding the people we work with.
Guiding their development trough training and support.
Helping them develop requisite skills to reach their true potential.
Known them on a personal front.
Create an environment of trust and openness.
Respect for the time of others.
Why?
People are the most valuable assets of the company.
Motivate individual to give his/ her best.
Establish a valuable relationship with them to create a joyful orking.
Job satisfaction.
TEAM WORK
What is it?
Whole team takes the ownership of the deliverables.
Consult all involved, understand and arrive at a common objective.
Co-operate and support across departmental boundaries.
Identify strengths and weaknesses accordingly allocate responsibility
to achieve common objectives.
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Why?
Together Everyone Achieves More :- TEAM
It adds joy at work place.
Team work generates synergy and provides a focused approach.
An idea or activity performed in a group has a greater acceptability.
“One for all and all for one”.
Key Strengths
Financial expertise
As a joint venture of leading financial services groups, HDFC Standard Life
has the financial expertise required to manage your long-term investments
safely and efficiently.
Range of Solutions
HDFC have a range of individual and group solutions, which can be easily
customized to specific needs. Our group solutions have been designed to
offer you complete flexibility combined with a low charging structure.
Track Record so far
HDFC’s gross premium income, for the year ending March 31, 2008 stood
at Rs. 4,859 crores and new business premium income stood at Rs. 2,685
crores.
The company has covered over 9, 59,000 lives year ending March 31, 2008.
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The various products by HDFC Standard Life include:
INDIVIDUAL PRODUCTS:
HDFC Standard Life realizes that not everyone has the same kind of needs.
Keeping this in mind, we have a varied range of Products that you can
choose from to suit all your needs. These will help secure your future as well
as the future of your family.
Protection Plans :
You can protect your family against the loss of your income or the burden of
a loan in the event of your unfortunate demise, disability or sickness. These
plans offer valuable peace of mind at a small price Term Assurance Plan
Loan Cover Term
Assurance Plan
Investment Plans:
HDFC’s plan is well suited to meet your long term investment needs. We
provide you with attractive long term returns through regular bonuses.
Single Premium Whole Life Plan
Pension Plans:
HDFC’s Pension Plans help you secure your financial independence even
after retirement.
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Personal Pension Plan
Unit Linked Pension Plan
Unit Linked Pension Plus
Savings Plans:
HDFC’s Savings Plans offer you flexible options to build savings for your
future needs such as buying a dream home or fulfilling your children’s
immediate and future needs.
Unit Linked Young star Plus
Endowment Assurance Plan
Unit Linked Endowment
Unit Linked Endowment Plus
Money Back Plan
Children's Plan
GROUP PRODUCTS
One-stop shop for employee-benefit solutions
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HDFC Standard Life has the most comprehensive list of products for
progressive employers who wish to provide the best and most innovative
employee benefit solutions to their employees. We offer different products
for different needs of employers ranging from term insurance plans for pure
protection to voluntary plans such as superannuation and leave encashment
Group Term Insurance
Group Variable Term Insurance
Group Unit Linked Plan
OTHER PRODUCTS Rural Products
Social Development Insurance Plan
Tax Benefit Schemes
The premium payment options available to the customers vary from online
payment to direct desk payments at the HDFC Standard Life Branches, by
courier services or in drop boxes provided. You can also pay by ECS or
Automatic Debit System or credit cards or standing instruction mandate.
HDFC Standard Life Insurance Company is a customer oriented corporation
and aim at complete customer satisfaction.
The lapsation and renewal policy of HDFC Standard Life are clearly defined
on the official website. Online renewal forms are also available. For any
change in personal details like the contact details or the nominee of the
policy or policy benefits, online servicing is also available. Even the claim
procedure has been simplified since affect of the loss life is irreparable and
is thus fully understandable at HDFC Standard Life. A completely hassle-
free process has been formulated to provide maximum convenience.
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Selecting financial consultants
"HDFC's finest investment is in its Human Resources. It draws its
personnel from many disciplines. They are the building blocks on which
the company's performance & productivity is based". Mr. H T Parekh
Founder-Chairman, HDFC Ltd.
HDFC Standard Life is one of the leading life insurance companies having a
track record of declaring bonuses every year since inception. We attribute
this success to our people, who are our most important asset. We believe
they are a key facet of the company and it is their contribution that has
enabled us to achieve our current status. Since they deserve the best, our
efforts have been to provide them with the best environment, best culture
and best development opportunities possible.
Be HDFC’s certified financial consultant.
Here’s is the unique opportunity to put your career path on the fast track.
Join HDFC SLIC as a financial consultant and help you analyze yours
customer‘s financial needs, provide customized financial solutions to each
one and conduct reviews on a regular basis to keep your customer on track.
Along with being a great career move you get associated with HDFC SLIC.
India’s most respected private life insurance company. We at HDFC SLIC
also offer you unmatched support with various training programmes to help
you excel in your endeavor.
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A great career move in every way
Zero investment.
There is no start-up. You have unlimited earning potential.
Flexible work timings.
You can work full-time or part-time, depending on your convenience.
Sunrise industry.
Only 25% of the insurable population in India is insured. And, those insured
need higher insurance cover.
Support every step of the way.
At HDFC STANDARD LIFE, training is an inherent element of our support
system – at no extra cost – for our new financial consultants. Some of our
training, guidance and support initiatives are as follows:-
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Basic training and induction
Perfects your knowledge about the insurance industry as well as our
products.
IRDA Training
Prepares you for your career as a financial consultant and enables you to
pass the IRDA examination easily.
Disha Training
Hones you selling skills, enables you to understand customer needs and
provide need-based insurance solutions.
Advanced Training
Upgrades your capability and knowledge through sophisticated training programs
customized for the changing world of financial products and markets.
Endless earning possibilities
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Decide your own salary amount. Your income is directly proportional to the
effort put in by you. The more you sell, the more you earn. And our commission
structure (as per IRDA guidelines) has the ability to give you the maximum
benefits for every policy you sell.
Long term earning potential
The policies sold by you will give you a renewed income every year. So every
year your income keeps increasing steadily even if you sell the same number of
policies.
Regular income
The company pays the commission you earn every 15 days. This ensures
that you get a regular income when you associate with us.
SWOT Analysis of “HDFC Standard life insurance”
(HDFC)
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Strengths
Localized branches.
Strong brand name
Big budget & Willingness to invest in market.
Highly educated & well-experienced top management.
Huge resources as compared to those of rivals.
HDFC maintains high quality of their products.
Glamorous, attractive & effective campaigning.
Wide brand variety to face the competitor’s variety to face the
competitors & to serve the masses.
High demand of the product
Weaknesses
More individuality in staff than conformity with the company’s goal.
Lack of advertising material in some areas of region.
Focusing on bulk orders rather than small ones.
Opportunities
Increase market share by improving services.
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Target consumers increase in remarkable percentage every year.
Threats
Loosing market share due to inefficient workforce.
Decline in the market reputation due to ineffective & delaying.
Heavy investment.
Relevance of Swot analysis.
The Swot analysis makes us aware of the strengths which will
serve as pillar to take strategic decision.
The weakness tells us about the problems confronted by the
company and accordingly the future step to be taken to overcome
them.
Swot analysis projects an idea about the investment area which
will yield more profit as well as the risk concerned.
COMPANY’S MISSION:
To be the top life insurance company in the Insurance market.
This not only means being the largest or the most productive company
in the market, but a combination of several things like-
Customer service of the highest order
Value for money for customers
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Professionalism in carrying out business
Innovative products to cater to different needs of different customers
Use of technology to improve service standards
Increasing market share
THE PARTNERSHIP:
HDFC and Standard Life first came together for a possible joint venture, to
enter the Life Insurance market, in January 1995. It was clear from the
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outset that both companies shared similar values and beliefs and a strong
relationship quickly formed. In October 1995 the companies signed a 3 year
joint venture agreement.
Around this time Standard Life purchased a 5% stake in HDFC, further
strengthening the relationship.
In October 1998, the joint venture agreement was renewed and additional
resource made available. Around this time Standard Life purchased 2% of
Infrastructure Development Finance Company Ltd. (IDFC). Standard Life
also started to use the services of the HDFC Treasury department to advise
them upon their investments in India.
Towards the end of 1999, the opening of the market looked very promising
and both companies agreed the time was right to move the operation to the
next level.
MARKET POSITION
HDFC Standard Life Insurance Company Ltd.
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In the total market share, LIC has reduced its share from 91% to 70%. This
means that private insurance players have got more margins in their hands
which have increased from 9% to 30% in last 2years only.
In the private market share, HDFC SLIC leads with 39% of the market share
in its hand followed by ICICI PRUDENTIAL 18% shares and then comes
Birla Sun Life with 15% market shares.
HDFC SLIC has been maintaining its No. 2nd position since last 5 years
because of its prolific product range and commanding brand equity. It has a
highest capital base of Rs. 925 crores and a team of more than 56,300 well-
trained advisors. It enjoys a brand recall rate of 92% and gives credit of its
success to the 5 core values-
Integrity
Customer
Boundary Less
Ownership
Passion
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COMPETITOR PROFILING
Main competitors of HDFC SLIC
LIFE INSURANCE CORPORATION OF INDIA (LIC)
The Life Insurance Corporation (LIC) was established about 52 years ago
with a view to provide an insurance cover against various risks in life. A
monolith then, the corporation, enjoyed a monopoly status and became
synonymous with life insurance.
Its main asset is its staff strength of 1.24 lakh employees and 2,048 branches
and over six-lakh agency force.
At the industry level, along with the Government and the GIC, it has helped
establish the National Insurance Academy. It presently transacts individual
life insurance businesses, group insurance businesses, social security
schemes and pensions, grants housing loans through its subsidiary; and
markets savings and investment products through its mutual fund. It pays off
about Rs 6,000 crore annually to 5.6 million policyholders.
Training activities for agents/advisors:
As per IRDA, 100hrs training is compulsory for 17 days.
Only classroom training is available.
Only full-time training is given.
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(ICICI Prudential advantage: - Part time option available.)
Training activities for agents/advisors:
As per IRDA, 100hrs training is compulsory for 17 days.
Only classroom training is available.
Only full-time training is given.
Commission Structure:
Depends on the plan or the product / policy which the advisor sells to the
customer. Every policy has a commission amount fixed on it as per
specifications of IRDA.
Modes & ways through which the company recruits agents:
- Through development officers.
- Through corporate agencies (Bankers and Brokers).
- Carrier agent branch (i) rural carrier agent
(ii) Urban carrier agent.
Current agent forceAround 30000-35000 agents in Delhi
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Top 5 USP’s (Unique Selling Proposition) Of LIC
TRUST (since 1956), ORG marks survey has rated LIC most trusted
branch in life insurance
Having a vast network of 2050 branches and nearly 10 lakh agents.
Best claim performance in the world by Depth and Maturity claim.
A government-undertaken company ensuring safe and corruption free
insurance.
Variety of plans available to match the customer’s needs.
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ICICI PRUDENTIAL
ICICI Limited is a multi-business corporation that has business interests
in telecom services, bulk pharmaceuticals, electronic components and
specialty products. It is also the service-oriented businesses of healthcare,
life insurance and information technology.
Training activities for agents/advisors:
As per IRDA, 100hrs training is compulsory.
Only classroom training is available.
Only fulltime training is given.
(HDFC Standard Life advantage: - Part time option available.)
Commission Structure:
Minimum - 2%
Maximum – 40%.
Varies from product to product- 25%, 7.5%, 10% & 15%.
Modes & ways through which the company recruits agents: Reference (only)
ICICI PRUDENTIAL recruits agents only on basis of reference.
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Current agent force:
Around 2000-3000 in Delhi.
Top 5 USP’s (Unique Selling Proposition) Of ICICI
PRUDENTIAL: Training, which is compulsory for every agent/advisor so that they
work according to the company’s working style.
Emphasizes on whole life products.
Flexibility of the product to adapt to customers changing needs in
future.
Believes in healthy competition with other life insurance companies.
Agent is the power.
GOVERNANCE OF INDIAN INSURANCE SECTOR
REGULATORY BODY
Insurance is a federal subject in India. The primary legislation that deals
with insurance business in India is: Insurance Act, 1938, and Insurance
Regulatory & Development Authority Act, 1999.
The Insurance Regulatory and Development
Authority (IRDA)
Reforms in the Insurance sector were initiated with the passage of the IRDA
Bill in Parliament in December 1999. The IRDA since its incorporation as a
statutory body in April 2000 has fastidiously stuck to its schedule of framing
regulations and registering the private sector insurance companies.
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The other decision taken simultaneously to provide the supporting systems
to the insurance sector and in particular the life insurance companies was the
launch of the IRDA’s online service for issue and renewal of licenses to
agents. Since being set up as an independent statutory body the IRDA has
put in a framework of globally compatible regulations.
MISSION-IRDA
“To protect the interests of the policyholders, to regulate, promote and
ensure orderly growth of the insurance industry and for matters connected
therewith or incidental thereto.”
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Insurance
Basically, life insurance is nothing but a contract where the insured party or
the purchaser of insurance pays a premium that protects him against specific
losses. When planning ones life insurance portfolio, one must consider his
family's recurring needs like medical expenses, house rent, provision costs
for instance as well as long-term needs that involve family's set standard of
living and their future such as higher education and marriages.
Throughout our living existence, we are faced by numerous risks - failing
health, financial losses, accidents and even fatalities. Insurance addresses all
these uncertainties on financial terms.
Whatever kind of asset a person posses, remains productive for a certain
period of time. Its life to provide benefits is restricted to a short span and
when this span finishes, its capability to give benefits also ends. The owner
is aware of this fact, he arranges a substitute of it so that in case, if asset gets
damaged the benefits of it do not go futile. For instance, a person gets lost
his car in an accident; he is deprived of the benefits if any substitute of it is
not available. In such cases, insurance is the key to protect the person from
the losses incurred and reduce its ill effects. Insurance promises to pay an
assured sum to the owner to reduce the losses.
Why Life Insurance?
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We think twice before taking the plunge into buying insurance. Is buying
insurance a necessity now? Spending an 'extra' amount as premium at
regular intervals where we do not see immediate benefits does not seem a
necessity at the moment. May be later.
Well we could be wrong. Buying Insurance cannot be compared with any
other form of investment. Insurance gives us a life long benefit and the
returns will definitely come but only when we need it the most i.e. at the
right time. Besides buying insurance early in life is one of the wise decisions
we could take. Because the premium we would be paying would be
comparatively lower.
Insurance is not about how much more it can offer us when the stock market
is at its peak. It may not be an attractive investment option. But weigh the
pros and cons and consider how much more it offers at a small price.
Most important of all it provides us with that unique sense of security that
no other form of investment provides. It gives us a sense of financial support
especially during that time of crisis irrespective of the fluctuations in the
stock market. Insurance provides for our career goals right from your
childhood years.
If the earning member of the family is no more our child's educational needs
will not suffer. In fact his higher education too will be provided for. We
need not spend sleepless nights thinking about how to save for our child's
marriage. Life Insurance will take care of that typical once-in-a-life-time
spending on marriages.
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An accident or a disability may be devastating but an insurance policy can
be of utmost support for the family during such times too. Besides it
provides for additional benefits such as bonuses. We need not worry about
our retirement years. The rising prices, taxes, and our lifestyle will be taken
care of easily. And we can relax and spend our old age in comfort and peace.
Life insurance today plays a major role in ones life at various stages.
Considering the benefits it offers one cannot but give a thought to buying an
insurance policy at the earliest.
45
Chapter-4
REVIEW OF LITERATURE
My Contribution in HDFC SLIC as a project trainee
The task of mine was to make a chain of quality insurance advisors for the
company to enhance its marketing channel. It included the use of different kinds of
strategies to convince the persons to join the company. Activities were
a.) cold calling, in this I used to call people on the data provided by my SDM and
telling them the benefits of being a financial advisor.
b.) meeting people face to face and convincing them to be a financial consultant.
c.) taking part in the canopy activity conducted by the company for the extension
of chain of insurance advisors.
For convincing the person I had to provide him the detailed information of the
benefits of becoming an insurance advisor, discussion of the current reputation of
HDFC as a brand and the reasons for joining HDFC only. I used to tell them from
the side of company that-
We are partners in your growth and provides you-
1. Attractive payments and benefits
2. Strong reputation
3. High quality Management Support
4 Superior Products
5. Excellent customer service
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6. High quality Management Support
After giving all this information I used to raise their confidence by saying them
that they have the potential to perform the duty of a financial consultant and make
use of the opportunity to-
1. To be part of a world-class sales team.
2. Work from his/her (advisor) own office or residence.
3. Work full time or part time.
4. Earn commission, bonus and incentives.
5. No upper limits on earnings.
6. Flexible career.
If the person used to give their consent to be a financial consultant then asking
them to complete required formalities by bringing needed documents.
Main hurdle that I faced while approaching the people to listen to me was their
indifferent attitude towards insurance sector and reluctance to give some time to
me. It was very much difficult for me to make them ready to give their attention
towards my business proposal.
Role of an insurance advisor
47
Advisor provides ongoing financial advice to his /her client/prospect. In official
term prospect is a person who can buy life insurance. Advisor studies the prospects
needs and persuade them to buy a policy.
Completes all formalities for proposal of new insurance, including filling up forms,
collecting premium, arranging medical examination, collecting proofs (of
age/income), reports and information required by the underwriter.
After having sold a new insurance policy, the advisor has to ensure that the policy
continues without a lapse till it becomes a claim. For that reason an advisor has to
do the following:-
1. Keep in touch with the policy holder to make sure that renewal premiums are
paid in time.
2. Ensure that nominations are made or changed, if necessary.
3. Assist in collecting claim amounts.
An insurance advisor acts as a link between the clients and the company. A lot
depends on it to bring new business for the company But an advisor to us means
much more than a salesman or a, saleswoman. They are regarded as an ambassador
of the company and considered as a biggest strength of the company. So, the
recruitment and development of an insurance advisor needs a great attention.
Opportunities in front of a financial consultant
1. No start up capital is required to becoming an advisor.
2. Flexible working environment.
3. To be his/her own boss.
48
4. Unlimited earning potential.
5. To be part of world class team
Benefits of being a financial advisor-
Commission:- Different products will have different commission structures. This
commission varies between 7.5% to 40%.
Renewal Commission:- It is paid at the following rates:
2nd yr: onwards.
Bonus: - Every year company declares bonus in favor of financial advisors
depending upon the company’s over all profit.
Incentives:- Financial advisors are provided incentives when they achieve certain
targets.
Company rates for financial consultants
Basic 1st year commission for conventional plans (for policies issued prior to
21st march 2007)
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Firs year commission for conventional plans (for policies issued on or after 21 st
march 2007)
First year premium conventional policies issued on or after 21 st march 2007.
Name of the plan 1st year commission
Name of the plan Premium paying term
of 15 years & above
Premium paying term
of less than 15 years
Endowment assurance
plan
25% 20%
Money back plan 25% 20%
Children’s plan 25% 20%
Term assurance plan 20% 15%
Loan cover term
assurance plan
20% 15%
Personal pension plan 7.5% 7.5%
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Endowment assurance plan 40%
Money back plan 40%
Children’s plan 40%
Term assurance plan 25%
Loan cover term assurance plan 25%
Personal pension plan 7.5%
Basic commission payable on single premium conventional policies:
Name of the plan Basic commission as a percentage
of single premium received
Single premium whole of LIC 2%
Term assurance plan 2%
Loan cover term assurance plan 2%
Personal pension plan 2%
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Chapter-5
RESEARCH METHODOLOGY
The term methodology refers to the way to systematically solve the research
problem. In this various steps are followed to find the solution of the problem.
Certain steps are :-
1.) Identification of problem
2.) Analysis of problem
3.) Choosing the method to solve the problem
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4.) Collection of data
5.) Analysis of data
6.) Conclusion
Research Objective
To make a chain of financial advisors so that they can work as insurance advisor
for the HDFC Standard Life Insurance Limited.
Type of Research
Exploratory in nature-
Type of research was exploratory in nature because the study included the tapping
of different areas to find the suitable financial advisor for the company.
Data Collection
Primary data
Secondary data
PRIMARY DATA
Sample unit: -
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The research process was done by interacting with number of customers during the
activities performed, which included, markets, cold calling, canopies, etc. Sample
Design consists of Simple Random Sampling.
Sample size: - 100 people
Method of collection: -
Field procedure for gathering primary data included interview schedule in which
the questionnaires were filed by the interviewer.
Research Instrument:
Questionnaire
The questionnaire was formulated by keep in mind the following Points: -
Giving the respondents clear comprehension of the question.
Inducing the respondents to co-operate.
Giving instructions as to what is wanted.
Identifying the needs to be known.
Limitations:
The following were the limitations that were there during the course of the study:
1. Limited time period.
2. Less number of respondents.
3. Biasness of the respondents.
SECONDARY DATA
54
Method of collection data:-
Secondary data was collected from the various second hand data collection
sources like, magazines provided by HDFC Standard Life Insurance Company,
Secondary data was also provided by company executives, from Internet,
Companies annual report etc.
Sources of secondary data:-
Magazines,
Newspapers,
www.google.com (Internet search engines)
And the data provided by the external guide.
55
Chapter-6
Data analysis and Interpretation
Data Analysis is done by taking sample size of 100 respondents who were
approached for being financial advisor for the company. It has been shown
with the help of following graphical presentation.
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1. Occupation
Error:
Reference
source not
found
Interpretation:-
25% people are in govt. job.
30% people are in private job.
The percentage of students is 25%.
20% people are engaged in other kinds of jobs.
2. Marital status
Error: Reference source not found
Occupation No. of people %
Govt. 25 25
Private 30 30
Student 25 25
Other 20 20
Total 100
Married
No. of
people %
Yes 65 65
No 35 35
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Interpretation:-
35% people are married.
65% people are not married.
3. Pan Card Holders
Pan
Card
No. of
persons %
Yes 60 60
No 40 40
Error: Reference source not found
Interpretation;-
The percentage of pan card holders is 60%.
40% people do not possess pan card.
4. Household income
58
Household
income No. of respondents
.>2 lakhs
48%
2 to 4 lakhs 30%
< 4 lakhs 22%
Error: Reference source not found
Interpretation;-
The persons having annual household income less than 2 lakhs are
48% ,between 2 to 4 lakhs are 30% and more than 4 lakhs are 22%.
5. Job satisfaction
Job
satisfaction %
yes 55%
No 45%
Error: Reference source not found
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Interpretation;-
Among all respondents 55% persons are satisfied with their current job while
rest 45% are not.
6. People known by respondents
No. of people known by respondents
0 to 4010%
40 to 8027%
Above 8063%
60
Interpretation:-
Out of 100 people, 10% people know persons between0 to 40, 27% says that
they know 40 to 80 persons and 63 % are familiar with more than 80 persons.
7. If offered a chance to earn extra income
Chance to earn extra income No. of
respondents
%
Yes 88 88
No 12 12
Chance to earn extra income
88%
12%
YesNo
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Interpretation:-
88% respondents would like to earn extra while rest 12 % were not bothered to
earn extra income.
8.If agrees to earn extra, then how much?
Income No. of
people
%
> 50,000 45 45
50,000 to
2lakhs
36 36
< 2 lakhs 19 19
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No. of people to earn within the given range
45%
36%
19%
45%
36%
19%
> 50,00050,000 to 2 lakhs
< 2 lakhs
Interpretation:-
The percentage of people is 45, those who would like to earn more than
50,0000.
36% people would like to earn between 50,000 to 2 lakhs and the intensity to
earn more than 2 lakhs is possessed by 19 % people.
8. Time devoted for extra income
Time devoted to earn
extra income
No. of
respondents %
< 4 hours 36 36
2 to 4 hours 52 52
> 2 hours 12 12
63
36
52
12
36
52
12
0 20 40 60 80 100 120
< 4 hours
2 to 4 hours
> 2 hours
No. of rspondents %
Interpretation:-
36 % respondents could devote more than 2 hours, 52% could give their 2 to 4
hours and the capacity to give more than 4 hours is possessed by 36%.
Chapter-7
FINDINGS
INSURANCE SECTOR:-
Generally people are not interested in joining the insurance sector
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People are still unaware of the benefits of the private insurance
sectors, they still believe that LIC is the most reliable one.
The craze for becoming an agent has gone down because of the so
many insurance companies in the market and all of them aiming to
increase their agents.
Rural people are not fully aware of the commission of the agents.
If offered 88% respondents would like to earn extra while rest 12 %
were not bothered to earn extra income.
Only 25% of the insurable population in India is insured. And, those
insured need higher insurance cover.
HFDC SLIC :-
The company is too much flexible in considering the qualifying score
of its candidates who they select to become financial consultants.
65
The fee charged by the company for financial consultant is a bit high
in comparison to the other insurance companies.
HDFC’s ratio of the candidates becoming a consultant and getting
licensed is just 25% which is low in comparison of the other insurance
companies.
Though the input output ratio of the company in terms of becoming
consultants for the company is low, then also company is growing
their as their EPI is good enough to cover up their losses in channel
development.
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Chapter-8
Limitation of project
It was not possible to understand thoroughly about the
different marketing aspects of the Financial
Consultant within 60 days.
As stipend, money was not given it was difficult to
continue the project work.
All the work was limited in some limited areas of
Gurgaon so the findings should not be generalized.
67
Chapter-9
Suggestions
Try to make them aware as much as possible regarding product profile
which is best in the market like life time, life time pension and smart kids.
Convince them by saying that we also have an evening class or on
line training program so that; that person can easily afford this time.
If the person will make one policy he/she will be able to earn that
much of money by means of commission.
In N.C.R average fixed salary is 2500/-3500/ But from this kind
of job profile if person is eligible then he/she can earn at least 5000,'
on words.
I observed that people in general have the perception that insurance is
only for upper class people. And it is useful in case of tax saving.
People should be made realize that it is a great way of saving for the
future too. There is a high need for education and awareness of the
benefits that insurance policies provide.
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BIBLOGRAPHY
The various source from where I collected data’s are as follows.
Internet Sites:
www.hometrade.com
www.hdfcslic.com
www.indiahousing.com
News paper:
The Economic Times
Times of India
Business standard.
Magazines:
Business Today
Insurance World
Money
Books:
Marketing Management (Philip Kotler)
Research Methodology,
(C.R.KOTHARI)
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Questionnaire
HDFC Standard Life Insurance
Name- ______________________________________
Qualification- ________________________________
Occupation- Govt. Pvt. Student other
Married- Yes No
Address- __________________________________________
__________________________________________
Contact No. - Mobile ________________________
Land line ______________________
Pan card- Yes NO
1) Currently working with which company- __________________________
2) House hold income- ___________________________________________
3) Are you satisfied with present job- Yes No
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4) Number of people known by you-
a) 0-40
b) 40-80
c) Above 80
5) Given a, chance, would you like to make extra income- Yes No
6) How much extra income would you like to earn _________________________
7) How much time would you like to devote to earn extra income
______________
8) Your suggestion about HDFC as a brand
__________________________________________________________________
____________
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