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Transcript of Bharti axa agents final (modified)
A SUMMER TRAINING REPORT ON
COMPARATIVE STUDY ON DOCUMENTATION PROCESS OF
RECRUITMENT & SATISFACTION LEVEL OF AGENT
IN
BHARTI AXA LIFE INSURANCE
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF BACHELOR OF BUSINESS ADMINISTRATION (BBA)
GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY
(G.G.S.I.P.U)
1
TRAINING SUPERVISOR SUBMITTED BYMR. SAMEER ANAND JYOTSNA KHANNA SALES MANAGER ENROL. NO. 1622151708
SESSION 2008-2011
ACKNOWLEDGEMENT
I am grateful to Mr. Sameer Anand of Bharti Axa Life Insurance for giving me this opportunity of conducting
the survey, recruitment of financial advisor and giving me very
good Project. I am highly obliged to him for the support and
consideration he has given to me. He has given his level best to
support to me in times.
At last I would also like to thanks all those who have given me
their precious time and information for conducting my survey
and helping me for the recruitment.
2
JYOTSNA KHANNA
3
PREFACE The objective of this project was to assist the to documentation
process of insurance company of Recruitment and to judge the
satisfaction level of Agents.
This was achieved through four pronged efforts. The first
objective of study is Data Collection of Documentation process
of recruitment in insurance company.
The second objective of the project was work culture of
organization according to agent’s expectation
The third objective of the project was satisfaction level of agents
if they are not satisfied what the reason behind it is.
Fourth objective of the projects was job profile of the agents.
Fifth objective of the projects was to know the why the agents
want to change in recruitment process.
The research methodology consists of a survey using simple
questionnaire with the insurance company and insurance advisor
based in Delhi .the questionnaire used in given at the end of
report.
4
TABLE OF CONTENTS
S.NO. TITLE PAGE NO.1. INTRODUCTION
1.1 Overview of Insurance Sector
1.2 Indian Insurance Industry
1.3 Life Insurance Scenario in India
1.4 Liberalization of insurance sector
2. COMPANY PROFILE 2.1 Mission, Vision, Values, Strategy
2.2 Product of Bharti Axa
2.3 Problems of the organization
2.4 Competitive Information
2.5 SWOT Analysis
3. RESEARCH METHODOLOGY3.1 Objective
3.2 Significance
3.3 Managerial usefulness of the study
3.4 Scope of the Study
3.5 Methodology Adopted
3.6 Limitation
4. COMPETITIVE ANALYSIS 5. FINDINGS AND ANALYSIS6. CONCLUSION 7. RECOMMENDATIONS 8. ANNEXURE 9. BIBLIOGRAPHY
5
INTRODUCTION1.1 OVERVIEW OF THE INSURANCE SECTOR
The project is assigned, which is related with the Comparative
Study on Documentation Process in Insurance Company &
Satisfaction Level of financial advisor. As we know that
documentation is one of the key and important processes of
recruitment & to judge the Satisfaction level of Agent are also
important things for the agent. In case of advisors recruitment it
is an integral part of the entire process because it is makes a
proper base upon which is the entire process proceed.
So being a management trainee this project is helpful a
achieving our goal. With the comparative analysis of the
recruitment procurer& Satisfaction Level of Agent we can
enhance our entire knowledge.
We can also get enough idea about the basic difference of this
process among the all private rivals& Satisfaction Level of
Agent.
Through proper analysis we can also get actual idea as well as
information about which ground the process documentation is
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different our esteem organization& how many percentage
Advisors are satisfied with the Documentation process.
This project also helpful in the clear understanding of the role
and responsibilities of advisor. It provides advisor scope to
judge entire scenario this project is not important for us but also
beneficial for our organization because it creates awareness’
regarding the entire prosier not only in our mind but also in the
mind of prospect.
LIFE INSURANCE AS "INVESTMENT"
Insurance is an attractive option for investment. While most
people recognize the risk hedging and tax saving potential of
insurance, many are not aware of its advantages as an
investment option as well. Insurance products yield more
compared to regular investment options, and this is besides the
added incentives (read bonuses) offered by insurers. You cannot
compare an insurance product with other investment schemes
for the simple reason that it offers financial protection from
risks, something that is missing in non-insurance products. In
fact, the premium you pay for an insurance policy is an
investment against risk. Thus, before comparing with other
schemes, you must accept that a part of the total amount
invested in life insurance goes towards providing for the risk
cover, while the rest is used for savings.
7
In life insurance, unlike non-life products, you get maturity
benefits on survival at the end of the term. In other words, if you
take a life insurance policy for 20 years and survive the term,
the amount invested as premium in the policy will come back to
you with added returns. In the unfortunate event of death within
the tenure of the policy, the family of the deceased will receive
the sum assured. Now, let us compare insurance as an
investment options. If you invest Rs 10,000 in PPF, your money
grows to Rs 10,950 at 9.5 per cent interest over a year. But in
this case, the access to your funds will be limited. One can
withdraw 50 per cent of the initial deposit only after 4 years.
The same amount of Rs 10,000 can give you an insurance cover
of up to approximately Rs 5-12 lakh (depending upon the plan,
age and medical condition of the life insured, etc) and this
amount can become immediately available to the nominee of the
policyholder on death. Thus insurance is a unique investment
avenue that delivers sound returns in addition to protection. Life
insurance as "Investment"
Insurance is an attractive option for investment. While most
people recognize the risk hedging and tax saving potential of
insurance, many are not aware of its advantages as an
investment option as well. Insurance products yield more
compared to regular investment options, and this is besides the
added incentives (read bonuses) offered by insurers. You cannot
8
compare an insurance product with other investment schemes
for the simple reason that it offers financial protection from
risks, something that is missing in non-insurance products. In
fact, the premium you pay for an insurance policy is an
investment against risk. Thus, before comparing with other
schemes, you must accept that a part of the total amount
invested in life insurance goes towards providing for the risk
cover, while the rest is used for savings.
In life insurance, unlike non-life products, you get maturity
benefits on survival at the end of the term. In other words, if you
take a life insurance policy for 20 years and survive the term,
the amount invested as premium in the policy will come back to
you with added returns. In the unfortunate event of death within
the tenure of the policy, the family of the deceased will receive
the sum assured. Now, let us compare insurance as an
investment options. If you invest Rs 10,000 in PPF, your money
grows to Rs 10,950 at 9.5 per cent interest over a year. But in
this case, the access to your funds will be limited. One can
withdraw 50 per cent of the initial deposit only after 4 years.
The same amount of Rs 10,000 can give you an insurance cover
of up to approximately Rs 5-12 lakh (depending upon the plan,
age and medical condition of the life insured, etc) and this
amount can become immediately available to the nominee of the
9
policyholder on death. Thus insurance is a unique investment
avenue that delivers sound returns in addition to protection
OBJECTIVES OF PROJECT
Projects are basically carried out to find out any appropriate
solution of any particular problem. It helps in the proper
grooming of our analytical skill. While dealing with any project
we can understand various aspect of any case
The main objectives behind the projects are such as :
To improve our analytical skill.
To make a comparative analysis of documentation process.
To find out the area where Bharti Axa Life Insurance can get
competitive age in their documentation process.
To conduct a deep research for getting and appropriate out
comes.
To judge the satisfaction level of agents.
How much percentage Advisors are satisfied with the
Documentation process.
Why they are not satisfied from Documentation process of
Recruitment process.
10
INDUSTRY PROFILE
Insurance may not be the sexiest industry, but there’s a steady
demand for its products—and it’s a good industry if we are
looking for a relatively stable career.
Some 1,800 U.S. insurance companies offer personal and
commercial product lines including basic health/life and
property/casualty protection as well as a long list of other
coverage ranging from automobiles to mortgages to insurance
for insurance companies (known as reinsurance). These
products protect customers from losses resulting from illegal
actions, medical needs, theft, earthquakes and hurricanes, and a
variety of other causes. Insurance companies calculate the likely
cost of a given loss, divide it by the number of people who want
protection against it, add something for profit, and reach an
amount that they charge each customer for a policy guaranteeing
compensation should the loss occur. Insurance companies also
mount huge marketing campaigns to convince customers that
they need protection in general and the company's products in
particular. They also function as financiers, deriving a large part
of their revenues from investments. Insurance companies must
maintain enormous reserves of capital to back up potential
claims obligations. They invest those reserves in stocks, bonds,
and real estate, within the United States and overseas, providing
11
an enormous amount of liquidity to financial markets and giving
the industry an influence on the national economy far out of
proportion to its size. That can be a risk as when industry wide
over investment in Latin America. During the 1970’s led to
huge losses for the industry and repercussions far beyond the
insurance industry
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OVERVIEW OF THE INSURANCE SECTOR
The business of life insurance in India in its existing form
started in India in the year 1818 with the establishment of the
Oriental Life Insurance Company in Calcutta. Some of the
important milestones in the life insurance business in India are:
1912:The Indian Life Assurance Companies Act enacted as the
first statute to regulate the life insurance business.
1928:The Indian Insurance Companies Act enacted to enable the
government to collect statistical information about both
life and non-life insurance businesses.
1938:Earlier legislation consolidated and amended to by the
Insurance Act with the objective of protecting the interests
of the insuring public.
1956:245 Indian and foreign insurers and provident societies
taken over by the central government and nationalized.
LIC formed by an Act of Parliament, viz. LIC Act, 1956,
with a capital contribution of Rs. 5 crore from the
Government of India. The General insurance business in
India, on the other hand, can trace its roots to the Triton
Insurance Company Ltd., the first general insurance
13
company established in the year 1850 in Calcutta by the
British.
Some of the important milestones in the general insurance
business in India are:
1957:The Indian Mercantile Insurance Ltd. set up, the first
company to transact all classes of general insurance
business. General Insurance Council, a wing of the
Insurance Association of India, frames a code of conduct
for ensuring fair conduct and sound business practices.
1968:The Insurance Act amended to regulate investments and
set minimum solvency margins and the Tariff Advisory
Committee set up.
1972:The General Insurance Business (Nationalization) Act,
1972 nationalized the general insurance business in India
with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies viz.
the National
Insurance Company Ltd., the New India Assurance Company
Ltd., the Oriental Insurance Company Ltd. and the United India
Insurance Company Ltd. GIC incorporated as a company.
14
REVIEW OF INSURANCE SECTOR
India is having population of 1 Billion with a middle class
population estimated upto 300 million. It being the 5th largest
economy in the world in terms of Purchasing Power Parity
(PPP) has a GDP growth rate of over 6% per year on an average
for the last decade. The saving rate is estimated to be about 26%
of the GDP. In the total population, the insured population is
estimated to be about 70 million.
1.2 INDIAN INSURANCE INDUSTRY
The Indian Insurance market has a grand history. The
development of insurance dates back to the 19th century when
the Europeans started the Oriental Life Insurance Company,
Calcutta in 1888. The first Indian Insurance Company Bombay
Mutual Life Insurance came into existence in 1870 to cover
Indian lives at normal rates. The year 1870 is also important in
the sense that the British Government enacted for the first time
act that year. Four years later Feroz Shah Mehta one of the
doyens of Indian Financial Sector, Oriental government
established the Oriental Government Security Life Assurance
Company and after that, many Insurance companies in surfaced
on Indian soil. However, the first Indian Insurance act was
passed on 1912, again in 1938 and an amendment in 1950, when
15
it was nationalized however the sector was once again thrown
open to the private sector in December 1999 followed by the
establishment of IRDA (Insurance Regulatory and Development
Authority) in April 2000. The Indian Insurance Industry was
dominated by two states Insures i.e.,
THE LIFE INSURANCE CORPORATION IN LIFE
INSURANCE
The General Insurance Corporation in general insurance before
2000 which were created after the nationalization of the Life and
Non-Life sectors in 1956 and 1972 respectively. In Dec’99, the
IRDA Act was passed which limited foreign investors to a 26%
cap on equity participation, and minimum capital requirement of
$20 million. At present, more than 12 private players are in the
market and some are still in the pipeline. The advent of the new
kids poses to LIC to somewhat extent, for which LIC will have
to change its current policies regarding marketing and product
management. All the certificate /Diploma/ Degree course of all
the Recognized Boards / universities which are considered
eligible for admission to Three year Degree course of respective
university are equivalent.
IRDA is formed as an authority to protect the interests of
holders of insurance policies, to regulate, promote and insure
orderly growth of insurance industry and for matters connected
16
there with or incidental there to. With the Insurance Regulation
and Development Authority, the focus shifted to the following: -
The Insurance Regulation and Development Authority
(IRDA) should give priority to health insurance while issuing
certificate of registration.
Policyholder fund will be invested in the social sector and
infrastructure. The Insurance Regulation and Development
Authority (IRDA) may specify the percentage and such
regulation will apply to all insurers operating in the company.
Insurer may be expected to undertake certain percentage of
business in the rural or social sector and provide policies to
persons residing in rural areas; workers in the unorganized
and informal economically back.
In case the insurer fails to meet the social sector obligation a
fine of rupees 2.5 would be imposed for the first time.
Subsequent failure would result in cancellation of license.
The government has appointed Mr. N. Rangachary as the
chairman of the new regulatory. Authority and he has been
entrusted with the task of insuring a level playing field for all
players that is both public and private player in the insurance
sector. Under the Insurance Regulation and Development
Authority (IRDA) act, an “Indian Insurance company “will be
17
allowed to conduct business provided it satisfies the following
conditions: -
It must be formed and registered under companies’ act
1956.
The aggregate holding of equity shares by a foreign company,
either by itself or through its subsidiaries or its nominees,
should not exceed 26 percent paid up equity capital of the
Indian insurance company.
Its sole purpose must be to carry on the life insurance
business or general insurance business or re insurance
business.
No insurer will be allowed to carry on the life insurance and
general insurance business in India, unless it has a paid up
equity capital of Rs.1 Billion. For carrying on reinsurance
business, the minimum paid up capital has been prescribed as
Rs. 2 Billion.
The Reserve Bank of India has also issued guidelines for
banks entry into the insurance business. The RBI would be
given permission to the banks on a case-by-case basis and the
banks having minimum net worth of Rs. 5 Billion and
satisfying other criteria in respect of capital adequacy,
profitability, non performing asset level and tract record of
18
existing subsidiaries can undertake insurance business
through joint ventures subject to certain safeguards.
1.3 LIFE INSURANCE SCENARIO IN INDIA
Since 1956, with the nationalization of insurance industry, the
state-run Life Insurance Corporation of India (LIC) has held the
monopoly in country’s life insurance sector. General Insurance
Corporation of India (GIC), with its four subsidiaries, was its
counterpart in the casualty sector. Over the time, taking
advantages of its monopoly and virtual prerogative in
establishing premiums, LIC has evolved into a monolith. With
around 60,000 agents in every nook and corner of the vast
country, it has created an enviable brand name, particularly
among the rural population of the country. It has around $40
billion as its financial sector. However, on the qualitative side, it
has every little to take pride in. And there lies the potential for
players to challenge this behemoth.
As is typical with monopolies, the premium rates charged LIC
are among the highest in the world, and its track record in
customer service can at best be called shabby. With a huge
unionized, rigid workforce mostly in the clerical category, LIC
run the risk of high fixed cost, which will be the deciding factor
productivity in the competitive scenario. While boasting full-
scale automation of its operation, the truth is that its technology
19
is outdated. The new players, with the state-of-the –art
technology under the belt, will be in advantageous position.
80% of LIC’s business is procured by 20% of its ill-trained
agent force. The foreign player, with the domestic partner’s
string band value, can test the unconventional distribution
channels like brokers, the Internet, the banking distribution
system etc., although foreign players may be tempted to keep
their operations in big cities for the ‘cream layer’ of the society,
the real market lies in rural India, which accounts for the lion’s
share of LIC’s present business.. The foreign companies need to
know the “ground realities” to the details.
PRIVATIZATION OF INSURANCE
The Indian Insurance sector has finally opened up and it is with
much anticipation that new players are awaiting their share of
market. License have been issued to both Indian and foreign
players- Reliance, HDFC-Standard Life, Max India-New York,
Royal Sundaram Alliance, Bharti Axa Life Insurance, IFFCO-
Tokyo Marine, Bajaj Allianz, Birla Sun life, Tata AIG, AVIVA
Life Insurance, SBI Life, OM Kotak Mahindra are some of the
entrants into the newly liberalized Indian Insurance market.
ICICI Prudential Life Insurance and HDFC-Standard Life have
issued their life policies-the first from the private sector after 45
years.The first move for the liberalization came with the
20
Malhotra Committee Report in 1993 which recommended the
privatization of insurance, setting of an insurance regulatory
authority and restructuring the government monopoly LIC and
GIC and its subsidiaries. IRDA Act passed in November 1999
had set ball rolling for the entry of private players in domestic
sector.
IRDA
The insurance sector has been opened up in India, as there was
an urgent need. The international experience indicates those
country with a liberalized insurance sector have witnessed a
rapid growth in premium volumes enhancing the domestic
saving rate. This happened in China, Malaysia and Singapore
where a competitive market has led to improvement in services
and quicker settlement of claims.
It is also important to note that competition will bring about
advancement in information, communication and technology.
And rightly therefore a decision was taken by the Government
of India to open up insurance sector. The establishment of IRDA
in the month of April 2000 has been important development in
this direction, making the end of monopoly in the insurance
sector.
21
The IRDA Governs the critical aspect of insurance sector
including:
The number and role of Private sector operates including-
Roman area intermediaries.
Regulate covering investment, solvency norms etc.
Product range.
Accounting practices.
Consumer protection norms.
Ensuring the rural and health insurance are developed.
Fixing of license fee.
Perhaps of all the most critical regulation is the 26% equity
Capital for foreign Insurers. This regulation bring in issues
regarding management control and one of the reasons for joint
venture breaking up Cubb-Kotak, Liberty-Dabur, All State-
Dabur, Manu Life-UTI are some of the broken up alliances.
22
1.4 LIBERALIZATION OF INSURANCE SECTOR
Liberalization commitment of the country to help in disciplining
future economic policies will include the insurance reforms.
When world over insurance market has been opened up. India
cannot remain in isolation. History has shown that it is very
difficult to prosper in isolation.
Globalization is the new economic reality, which is here to stay,
heralding a new era of insurance in India.
With the opening of the insurance industry, India stands to gain
with the following major advantages.
Globalization will provide opportunities to the customer for
the better production. With more reasonable and affordable
pricing.
The customer will get quicker services.
It will enhance the saving rate.
Long term funds for infrastructure development will be
available to the country.
It will secure for India larger inflow of foreign capital need to
sustain our GDP growth.
23
ADVANTAGES OF LIBERALIZATION
The opening up will enable the country to save more and
invest more for the development in infrastructure.
With new insurance intermediaries and more distribution
channels the market is bound to develop by leaps and bounds.
In the next few years it is established that the Indian
insurance sector will develop a better understanding of
consumer requirement leading to more satisfaction of
consumers.
The world class technology will be available in the market
bringing about tremendous improvement in servicing.
Choice of price will be available to the customers.
Lead to increase in employment.
Social and rural obligations will also be served as IRDA has
come out with clear regulation in this regard, which makes
the development in this area mandatory.
Global competitors will help in building expertise with their
global practice.
24
Unlike west, in India, insurance is sold as the instrument of
saving. About 18%of the policies are sold as death risk
consideration. Impression about LIC is that they are not
meant for the market requirements. They are only intended to
find customers. Insurance awareness is therefore low. Unit
linked insurance products are not available. Insurance covers
are expensive and returns are low. Turn over the agent is
high. The choice available to the insuring public is inadequate
in terms of services, products and prices. These are the areas
of weakness, which may act as opportunities for new players
who may work to offer policies to the customer with the
value additions at a competitive premium with much
improved servicing.
25
INSURANCE IN INDIA
Only 22% of the insurance population has been extended cove r.
Market penetration is low and the potential to exploit is high.
Insurance premium per capita is very low. Lack of
comprehensive social system benefit and welfare means that
demand for pension products is high. Huge middle class of
approximately 300 million.
EXISTING INSURANCE COMPANY SCORE LOW
ON CUSTOMER SERVICE FRONT
The insurance market registered growth in the Asian region
even though India’s share in global insurance premium is less
than 0.5% (1998) as compared to USA (24.2%) and Japan
(21%). Studies have revealed that in an emerging market, as
disposable income rises, Insurance premium as a ratio of GDP
shoots up. The confederation of Indian Industry projected a
growth of life insurance premiums from Rs. 350 billion at
present to Rs. 140 billion. The growth of non-life insurance
premium is expected to increase from 75 billion to 375 billion.
Out of which, only 10% is tapped by the existing insurer.
Insurance even more than banking is a volume game. A very
exclusive approach in view is unlikely to provide meaningful
numbers. Currently, insurance is bought for the purpose of tax-
26
benefits. A higher percentage of business is in the rural market.
The share of rural new business insurance total new business is
55% in terms of policies and 47% in terms of sum assured.
However, this needs to be viewed in the light of some recent
issues that have been raised regarding as to what constitutes the
rural market. Therefore, private insurers will be best served by
middle market approach, targeting the customer segments that
are presently unexploited.
How many Indians are aware that LIC has more than 60
products and GIC has more than 180 products. Not only there is
a reduction in the premiums of life insurance products have long
overdue since Indian mortality rate has decreased three folds in
the last 50 years. There is also scope to increase the yield on life
insurance policies (presently 6%) with proper risk management
in place.
It is been debated that insurance business does not produce
profit in the first five years cross subsidization is a feature of
Indian market. Even the first portfolio vote that is considered
profitable, cross subsidizes the other departments. Tariff
reduction is likely to reduce profits, further insurers have to
institute proper claims management progress in order to extract
efficiencies. At present life insurance business in the country is
taxed at 12.5% of the profit in financial year. The government is
27
soon to present a new model of taxing life insurance companies
at international rates.
New entrants should be well advised to look ahead to the stage
where brand strength will be a competitive advantage and sketch
their alliances accordingly. In fact, we believe that alliance
related to distribution rather than to products and technology
will prove most valuable.
The stages where brand strength will be competitive advantage
and sketch their world accordingly. In fact we believe that
alliance related to distribution rather than to produce or
technology will prove most valuable in the long run.
Banks and financial companies will emerge, as attractive
distribution channel for this insurance trend will be led by two
factors, which already apply in other world markets. First
Banking food insurance, fund management and other financial
services companies are being to increase their profitability and
provide maximum value to their customers. Therefore, they are
themselves looking for a range of products to distribute.
In other market notably Europe; this has resulted in bank
assurance. Bank entering into the insurance business in India to
bank hope to maximize expensive existing network by selling a
range of products more of a loss alliance between insurance and
28
bank than a formal ownership. Some Indian entrants like ICICI,
HDFC, Bharti Axa and reliance hope to ride their existing
network and customer bases.
29
COMPANY PROFILEBharti AXA Life Insurance is a joint venture between
Bharti, one of India’s leading business groups with interests in
telecom, agri business and retail, and AXA, world leader in
financial protection and wealth management. The joint venture
company has a 74% stake from Bharti and 26% stake of AXA.
The company launched national operations in December 2006.
Today, we have over 5200 employees across over 12 states in
the country. Our business philosophy is built around the promise
of making people "Life Confident".
As we expand our presence across the country to cater to your
insurance and wealth management needs with our product and
service offerings, we continue to bring 'life confidence' to
customers spread across India. Whatever your plans in life, you
can be confident that Bharti AXA Life will offer the right
financial solutions to help you achieve them.
30
2.1 MISSION, VISION, VALUES AND STRATEGIES
VISION
To be a leader and the preferred company for financial
protection and wealth management in India
VALUES
Professionalism
Innovation
Team Spirit
Pragmatism
Integrity
STRATEGY
To achieve a top 5 market position in India through a
multi-distribution, multi-product platform
To adapt AXA's best practice blueprints as a sound
platform for profitable growth
31
To leverage Bharti's local knowledge, infrastructure and
customer base
To deliver high levels of shareholder return
To build long term value with our business partners by
enhancing the proposition to their customers
To be the employer of choice to attract and retain the best
talent in India
To be recognised as being close and qualified by our
customers
STRATEGIC DIFFERENTIATORS
Strong partner Bharti - provides access to customer base of
more than 20 million
Multi channel execution capability
Current Asia product range which is a strong match to
products sold to the mass and mass affluent
Global scale providing cost effective and speedy re-use of
systems, products and business capability
Strong AXA and Bharti brands which can be leveraged to
attract and retain a high quality management team
32
2.2 PRODUCTS
Bharti AXA Life Dream Life Pension
Dream Life Pension, Bharti AXA Life Insurance’s unique
pension product ensures that your retirement life is your Dream
Life.
Live your Dreams! Be Life Confident.!
Key Benefits:
Unmatched flexibility for retirement wealth creation
o Pay one time lump sum or regular premiums
o At the inception systematically increase your
premiums by 5 % or 8% each year with the
Accumulator Option
o Increase/decrease premiums any time after the 2nd
policy year
o Add top up premiums any number of times after the
1st policy year
33
Dream Life Pension enhances your retirement kitty by
providing special addition, starting from the end of 10th
policy year
Change your planned retirement age any time during the
policy term
Obtain tax benefits as per the prevailing tax laws on the
premiums paid and the benefits received under the policy.
ANNUITY – RETURN OF CAPITAL
Bharti AXA Life Insurance presents “Immediate Annuity”
product, to help secure your golden years. At your vesting age,
you have an option to buy annuity from Bharti AXA Life
Insurance or any other annuity provider in India.
Bharti AXA LIFE ASPIRE LIFE
Aspire Life helps you create a pool of wealth to meet your long-
term needs, while also providing you adequate protection in case
the need arises.
Key Benefits:
Allocation rates as high as 100% i.e. no allocation charges
for premiums greater than or equal to Rs.50,000 on your
34
investment in the unit-linked fund from year 2 - to
maximize your investment returns.
Up to 175% of the first year premium paid by you is
returned as Guaranteed Special Addition, at maturity of the
policy or on unfortunate event of death of the Life Insured.
3 investment fund options as per your investment
preferences.
Flexibility of partial withdrawals after fifth Policy Year,
premium holiday option after seven policy years and
facility to switch amongst the investment funds as per your
investment objectives.
Protection benefit which provides high Sum Assured for
longer policy terms.
Tax benefits under section 80C and 10(10D) of Income
Tax Act.
INVEST CONFIDENT
Presenting Invest Confident, a unique single premium, unit
linked investment and protection product which not only strives
to maximise your investment returns but also gives you an
enhanced flexibility to suit it according to your protection needs,
35
because we at Bharti AXA Life Insurance, believe that your
hard earned money deserves nothing but the best.
Key Benefits:
Convenient single premium product with policy benefit
period till the age of 70.
Unique special additions starting from the end of 5th
policy year and thereafter at the end of every 5 years till
the maturity date.
3 investment fund options as per your investment
preferences.
Basic Sum Assured of five times the single premium.
Unique option of investing additional amount at your
convenience through Top Up Premiums.
Flexibility of partial withdrawals after the third Policy
Year
Additional benefit of Rs.5,00,000 in the event of death due
to an accident.
Tax benefits under section 80C and 10(10D) of Income
Tax Act.
36
Bharti AXA LIFE WEALTH CONFIDENT
Wealth Confident, a unit-linked investment cum protection
product, with its limited period premium payment facility of 5
years, premium payment flexibility, higher allocation of your
premium for investment, unique special additions and life
insurance benefit, not only makes your money grow but also
provides your investment the special treatment that it deserves.
Key Benefits:
Pay premium for five years, while your policy continues
for ten years.
Higher allocation of your premium up to 88% for
investment.
Special additions of units added every year from 6th Year
for incremental wealth creation.
Choose from four different investment funds to meet your
financial objectives.
Five times the life cover of your annual premium.
Tax benefit under 80C and 10(10D).
37
FUTURE CONFIDENT
"Future Confident is a complete financial solution that serves
you in building wealth for your long-term needs, but most
importantly, provides comprehensive financial protection to
your loved ones, against all odds."
Key Benefits:
Life insurance benefit of up to 420 times the monthly
premium.
Comprehensive overall protection through "Protection
Enhancers" in the form of riders.
Wealth creation for your long term financial needs.
Special additions at regular intervals, starting from 7th
year, to enhance your wealth.
Four different investment funds to meet your financial
objectives.
Tax benefit under 80C and 10(10D).
38
FUTURE CONFIDENT II
"Future Confident II is a complete financial solution that serves
you in building wealth for your long-term needs, but most
importantly, provides comprehensive financial protection to
your loved ones, against all odds."
Key Benefits:
Build Wealth for your long term financial needs with
enhanced financial protection.
Sum assured up to 420 times the monthly premium.
Life insurance benefit as Sum assured PLUS Policy fund
value.
Four different investment funds to meet your financial
objectives.
Comprehensive overall protection through "Protection
Enhancers" in the form of riders.
Special additions at regular intervals, starting from the end
of 7th year, to enhance your wealth.
Tax benefit under sections 80C and 10(10D) of Income
Tax Act.
39
SAVE CONFIDENT
Save Confident, a traditional money back insurance product,
offers you a perfect combination of liquidity, long term savings
and life insurance benefit.
Save Confident with its unique liquidity feature of guaranteed
payment for 10 continuous years, annually compounded bonus
accumulation, and a guaranteed life insurance benefit offers a
perfect three-in-one solution for your financial needs.
Key Benefits:
Traditional money back product with payment term of 10
years.
Get guaranteed amount back on specified intervals,
starting from 6th policy year till maturity.
Amount equal to 110% of Sum Assured paid across 10
years.
Secured growth on savings with Annual Reversionary
Bonus, if declared, every year.
Savings enhanced by Terminal Bonus, if any, payable at
maturity.
40
Total protection for your family with guaranteed sum
assured plus accrued bonuses.
Added protection in the event of death due to an accident
with payment of additional amount equal to the basic Sum
Assured, subject to maximum of Rs 10 Lakh.
Tax benefit under sections 80C and 10(10D) of Income
Tax Act, 1961.
SECURE CONFIDENT
All of us desire to maximise the happiness for our family at all
times, irrespective of the circumstances. The thought of
unfortunate events befalling us may cause us anxiety about
providing a secured happiness to our loved ones. Insurance can
help you ease your worries. Now, Bharti AXA Life Insurance
Company Limited presents Secure Confident, a simple long-
term life insurance product that aims to ensure that the dreams
that you aspired for your family in your lifetime, don’t remain
unfulfilled by the financial void which might get created due to
unfortunate event of death.
Key Benefits:
Term Assurance for 5,10,15,20,25 years.
41
Financial protection against unfortunate event of death at
an affordable cost.
Comprehensive overall protection with help of riders.
Tax benefit under section 80C and 10(10D) of Income Tax
Act.
Bharti AXA LIFE MORTGAGE CREDIT SHIELD
Presenting 'Mortgage Credit Shield' from Bharti AXA Life, a
group product designed for the customers of Institution/Bank –
which protects the family of the borrower in the event of death
by paying an amount to settle the outstanding loan.
2.3 PROBLEMS OF THE ORGANIZATION
Service delivery / Logistics perception is weak
Negative Environment
Top management takes large amount of time to approve high
value loan borrowers.
42
2.4 COMPETITIVE INFORMATION
LIBERALISATION OF INSURANCE SECTOR IN INDIA
Life Insurance in India was nationalized by incorporating Life
Insurance Corporation (LIC) in 1956. All private life insurance
companies at that time were taken over by LIC.
In 1993 the Government of Republic of India appointed RN
Malhotra Committee to lay down a road map for privatization of
the life insurance sector.
While the committee submitted its report in 1994, it took
another six years before the enabling legislation was passed in
the year 2000, legislation amending the Insurance Act of 1938
and legislating the Insurance Regulatory and Development
Authority Act of 2000. The same year that the newly appointed
insurance regulator - Insurance Regulatory and Development
Authority IRDA -- started issuing licenses to private life
insurers.
Life Insurer in Public Sector
1. Life Insurance Corporation of India
Life Insurers in Private Sector
1. Bajaj Allianz Life
2. ICICI Prudential Life Insurance
43
3. HDFC Standard Life
4. Birla Sunlife
5. SBI Life Insurance
6. Kotak Mahindra Old Mutual Life Insurance
7. Aviva Life Insurance
8. Reliance Life Insurance Company Limited
9. Tata AIG Life
10. Metlife India Life Insurance
11. ING Vysya Life Insurance
12. Max Newyork Life Insurance
13. Sahara Life Insurance-Now they are not into
business
14. Shriram Life Insurance
2.5 SWOT ANALYSIS
Bharti AXA Life Insurance one of the most powerful, world
class Life Insurance Co., gaining appreciation for their strong
work ethics, excellent performance , professionalism and team
work which led them to progress in today’s challenging
environment . Though with its excellence performance and
every efforts has been made to present the most authentic and
truly representative finding, but some uncontrollable factors do
affect the performance and thus bring about some deviation and
44
hurdles in progress . So with its strengths and good quality, the
company is having some weaknesses, and threats and
opportunities . its SWOT analysis is as below:
STRENGTHS
Excellent services.
Customization of Product as per customer’s needs
Brand Image
Business Experience.
Strong financial Base.
Innovative products, Technology & Organization culture.
The company has a large network of branches, which is
helpful to customer for the payment.
WEAKNESS
Target only higher income group whereas other companies
are trying to catch middle – lower level people.
Lot of competitors are in the market offer same product by
the title difference in the premium and offering .
Higher premium as compared to the other companies.
45
Clients face problems to get insured due to large number of
formalities.
OPPORTUNITIES
Huge market is literally untapped. Out of 320 million
insurable markets only 20% of the population is insured.
In a conservative society of India where people are more
inclined towards risk free investment such as bank Fad’s
and saving rather than equity and high risk investments
insurance offers the best of both worlds – the security with
high returns. So there exist high potential for insurance
company like Bharti Axa Life Insurance.
In the pension field where people want good life after their
retirement.
Indian people are more emotional towards their child that’s
why children plans are selling like hot cakes.
Health insurance and pension schemes, an estimated market
potential of approximately $15 billion.
THREATS
Week perception of private players in the minds of sIndian
people due to frequent financial scams.
46
Large number of insurance players.
Existing wrong business practices of companies like LIC
first premium is paid by their agents where –as IRDA
suggests that even forms to be filled by the clients
themselves.
Players like Allianz Bajaj and Birla sun life low premium
for the similar plan
Entry of many other private companies with equally strong
experience and financial strength of foreign partners making
the competition difficult and saturating the urban markets
LIC has woken up from sleep and is following competitive
strategies. Its huge surplus in life fund gives a capability to
lodge price war.
Current government policies do not encourage gross
domestic saving. If the tax liability of the service class rises,
the customer will have little money to invest.
47
RESEARCH METHODOLOGY3.1 OBJECTIVES
Comparative Study on Documentation Process of
Recruitment
Satisfaction Level of Agent
3.2 SIGNIFICANCE
The main significance of the project to find the Documentation
Process of Recruitment for different insurance companies.
3.3 MANAGERIAL USEFULNESS OF THE STUDY
This project is useful to the company's Documentation Process
of Recruitment & Satisfaction Level of Agent.
3.4 SCOPE OF THE STUDY
48
The employee’s works are been recognized by the
management and appreciated. It can be maintained in such a
way that the employee morale will be improved.
3.5 METHODOLOGY ADOPTED
Data has been collected both from primary as well as secondary
described below.
PRIMARY SOURCES
The primary sources of data were interview conducted as part of
survey .this data forms the backbone pf the analysis of the
customer’s requirements. The survey is described in detail in the
following section.
The sample sized for the survey was 100 Insurance Advisors
and 3 Insurance companies. In addition, data about Bharti Axa’s
services was collected through Discussion with the Bharti Axa
Life Insurance employees and proper Questionnaire.
SECONDARY SOURCES
The secondary sources of data were the various websites and
insurance manuals. This mainly provided information about the
insurance sector and the company profile. These helped in
49
gaining knowledge about the industry. These sources are listed
in References.
SECTOR ANALYSIS
The Indian life insurance industry is rapidly evolving and
growing. It recorded the second highest growth in Asia in 2000-
01, posting an inflation-adjusted growth rate of 21.3%. This is
more than double the world's growth rate of 9%.
The total Indian insurance market in 2002 was valued at Rs
67,500 crores (US$15 billion) with the life insurance sector
accounting for 80% of the market at Rs 54,000 crores (US$12
billion).
With largest number of life insurance policies in force in the
world, Insurance happens to be a mega opportunity in India. It’s
a business growing at the rate of 15-20 per cent annually and
presently is of the order of Rs 450 billion. Together with
banking services, it adds about 7 per cent to the country’s GDP.
Gross premium collection is nearly 2 per cent of GDP and funds
available with LIC for investments are 8 per cent of GDP.
Yet, nearly 80 per cent of Indian population is without life
insurance cover, health insurance and non-life insurance
continue to be below international standards. And this part of
the population is also subject to weak social security and
50
pension systems with hardly any old age income security. This it
is an indicator that growth potential for the insurance sector is
immense.
A well-developed and evolved insurance sector is needed for
economic development as it provides long term funds for
infrastructure development and at the same time strengthens the
risk taking ability. It is estimated that over the next ten years
India would require investments of the order of one trillion US
dollar. The Insurance sector, to some extent, can enable
investments in infrastructure development to sustain economic
growth of the country.
With a large capital outlay and long gestation periods,
infrastructure projects are fraught with a multitude of risks
throughout the development, construction and operation stages.
These include risks associated with project implementation,
including geological risks, maintenance, commercial and
political risks. Without covering these risks the financial
institutions are not willing to commit funds to the sector,
especially because the financing of most private projects is on a
limited or non- recourse basis.
Insurance companies not only provide risk cover to
infrastructure projects, they also contribute long-term funds. In
fact, insurance companies are an ideal source of long term debt
51
and equity for infrastructure projects. With long term liability,
they get a good asset- liability match by investing their funds in
such projects.
IRDA regulations require insurance companies to invest not less
than 15 percent of their funds in infrastructure and social
sectors. International Insurance companies also invest their
funds in such projects. Insurance is a federal subject in India.
There are two legislations that govern the sector- The Insurance
Act- 1938 and the IRDA Act- 1999.
The Indian life insurance market is expected to grow at 17-22%
between 2002-07.
The industry in India has become fiercely competitive with the
entry of several new private companies, including major
multinational insurers, after the deregulation of the sector. It has
opened up a range of untapped opportunities for the new
entrants into the industry, as the potential market for buyers is
high since the emerging market in India has a low insurance
penetration and high growth rates.
India has traditionally been a high savings oriented country with
an enormous middle class that can afford to buy life, health, and
disability insurance as well as pension plan products. Just the
52
middle-income segment of the population is estimated at 31.2
crores (312 million).
Only 6.5 crores (65 million) of Indians have been introduced to
insurance, which works out to an average of 1.5 policies per
person. This reflects a penetration of just 6%. In countries such
as South Africa and the U.K., life insurance premiums account
for over 50% of Gross Domestic Savings (GDS) while they
account for over 25% of GDS in the US, Japan and France. In
India, premiums account for less than 6% of GDS.
The average annual insurance spending of an Indian is Rs 445
(US$9.9) against Rs 1.87 lakhs (US$4,154) for a Swiss citizen
or Rs 1.79 lakhs (US$3,973) for Japanese. Even Thailand with
an average insurance spending of US$49.3 per person has
insurance per capita nearly five times that of India.
India is ranked 27th in terms of mobilizing savings in the form
of insurance. This clearly shows that there is considerable scope
to raise per capita premium if the market is effectively tapped.
According to some estimates, it is expected that in three years
10% of the population in India would be under some form of
insurance cover; a significant increase from the current 6%
coverage.
53
A recent Swiss Re study on the insurance sector in India makes
the following key observations on national economic growth
that has a bearing on the sector:
India's productivity has been growing steadily with low
variability.
Institutions for propelling economic growth are already in
place—a stable democratic polity, reasonable rule of law, and
protection of property rights.
Thus, conservative estimates project that the economic growth
due to hard economic factors will be at least 8% a year over a
sustained period of time (to 2020+).
Based on the above projected economic growth, the size of the
life insurance market in India would reach about Rs 6,30,000
crores (US$140 billion in today's dollars), by 2020.
Estimate of general insurance demand in 2020 would be about
Rs 2, 70, 000 crores (US$60 billion in today's dollars). These
estimates do not include pension or health.
Conservative estimates of 3% of GDP in life and general
insurance each will lead to another Rs 10,80,000 crores
(US$240 billion).
54
Thus, the total market by 2020 is conservatively estimated at Rs
19,80,000 crores (US$440 billion).
To put this into context, the current market is smaller than
Ireland's but it will become as big as the Japanese market
(today) conservatively.
3.6 LIMITATIONS
The geographical area was very much limited to residential
area & so the results are not particularly reflection of the
current behavior.
Biases and non-cooperation of the respondents.
Due to limited time period and constrained working hours for
most of the respondents, the answers at times were vague
enough to be ignored.
Most of the people in India take their policies in the period
preceding March(for tax saving purposes) & so the response
to initial contacts were not all encouraging and that has been
the primary reason in the inability to quantify the results large
enough so as to deduce any relevant outcomes.
People are not interested in giving personal opinion.
55
COMPETITIVE ANALYSISFINDING BASE ON DOCUMENTATION PROCESS
OF RECRUITMENT
Bharti AXA LIFE INSURANCE
Documents required for Licensing of Agents
FIRST SET OF DOCUMENTS
1. Main Agent Application Form
2. 4 Passport sized photographs.
3. Age proof (certified as a True copy by the applicant)
4. Education Proof (certified as True copy by the applicant)
5. Proof of change of name (if required )
6. Advisor Recruitment Form.
SECOND SET OF DOCUMENTS
1. Q-Score Card Form
2. Advisor Recruitment Form
56
3. Insurance Advisor Application Form (Individual)
4. Form IRDA – Agents-VA Form
5. Examination Form
6. Sponsorship Form
7. Insurance Advisor Agreement Form.
GUIDELINES FOR FILLING THE FIRST SET OF
DOCUMENTS
Main Agent Application Form should be filled up in
BLOCK LETTERS.
All fields in the main Agent application Form should be
completely filled up.
Any corrections / alteration should be countersigned by the
applicant .
The agency coordinators to ensure that the Main agent
Application form contains the name & signature of the
SM/MP in the respective fields.
In case an existing agent has referred the candidate then the
name and the agent code of the referring agent must be
filled up in the relevant fields.
57
On the last page of the application form the system ID of
the SM/AP Agency Associate to whom the agent would
report to must be mentioned.
The Reporting Office field on the last page of the
application must be mandatory.
In case a candidate signs the form in vernacular language
the following sentence needs to be mentioned at the bottom
of the application form.
The contents of the Application form have been explained to me
and have been understood fully by me and alongside the
signature of the candidate are required to be obtained.
AGE & EDUCATION PROOF
The candidate needs to submit photocopy of the age &
education proof. The candidate should attest these proofs as true
copy.
Minimum Age Required for grant of fresh Agency License
An applicant must be at least 18 years of age on the date of
application. the needs to submit a proof of Date of Birth to
satisfy the Age proof requirement
Documents that is acceptable as Age proof
(a) License
58
(b) Passport
(c) Certificate issued by school authorities like 10th certificate
school leaving certificate
(d) Pan card
(e) Date of Birth certificate issued by Municipal authorities
(f) Date of Birth certificate issued by Defense authorities.
MINIMUM EDUCATION QUALIFICATION FOR
GRANT OF FRESH AGENCY LICENSE
Documents acceptable as equivalent of class 12th
(a) Higher SECONDARY Examination (11th class)/ PUC (pre
university certificate). Passed in the year till it has been
considered as the eligible class for getting direct admission
to the Three Year Degree course of the respective
university, may be treated as equivalent.
(b) All the certificate /Diploma/ Degree course of all the
Recognized Boards / universities which are considered
eligible for admission to Three year Degree course of
respective university are equivalent.
ICICI PRUDENTIAL LIFE INSURNACE
59
Documents required for Licensing of Agents
FIRST SET OF DOCUMENTS
1. Main Agent Application Form
2. 8 Passport sized photographs.
3. Age proof (certified as a True copy by the applicant
4. Education Proof (certified as True copy by the applicant
5. Proof of change of name (if required )
6. Approval from Zone vice president (in case candidate scores
2 or less than 2 on the 5 point system)
7. Advisor Recruitment Form.
SECOND SET OF DOCUMENTS
(a) Q-Score Card Form
(b) Advisor Recruitment Form
(c) Insurance Advisor Application Form(Individual)
(d) Form IRDA – Agents-VA Form
(e) Examination Form (yellow form)
(f) Sponsorship form (for online training)
(g) Insurance Advisor Agreement Form.
GUIDELINES FOR FILLING THE FIRST SET OF
DOCUMENTS
Main Agent Application Form should be filled up in
BLOCK LETTERS.
60
All fields in the main Agent application Form should be
completely filled up.
Any corrections / alteration should be countersigned by the
applicant .
The agency coordinators to ensure that the Main agent
Application form contains the name & signature of the
SM/MP in the respective fields.
In case an existing agent has referred the candidate then the
name and the agent code of the referring agent must be
filled up in the relevant fields.
On the last page of the application form the system ID of
the SM/AP Agency Associate to whom the agent would
report to must be mentioned .
The Reporting Office field on the last page of the
application must be mandatory.
In case a candidate signs the form in vernacular language
the following sentence needs to be mentioned at the bottom
of the application form .
The contents of the Application form have been explained to me
and have been understood fully by me and alongside the
signature of the candidate are required to be obtained.
AGE & EDUCATION PROOF
61
The candidate needs to submit photocopy of the age &age
education proof . these proofs should be attested as true copy by
the candidate.
PROOF OF AGE
Passport
Municipal Record
School/ College Leaving Certificate
LIC Policy (with date of commencement after 1st Jan 98
Driver’s License
Defence I card
PROOF OF EDUCATION
Post Graduation &above
Graduate
Diploma
12th pass
10th pass (for rural area)
PROFESSIONAL
Non- Practicing CA
ICWA/CFA/CS(I)
MBA
DOCTOR
Engineer
62
L.L.B. (L).
MAX NEW YORK LIFE INSURANCE COMPANY
Documents Required For Licensing Of Agents
FIRST SET OF DOCUMENTS
1. Main Agent Application Form
2. 4 Passport sized photographs.
3. Age proof (certified as a True copy by the applicant
4. Education Proof (certified as True copy by the applicant
5. Proof of change of name (if required )
6. Original License (in case of candidate holding a General
insurance License.
7. License Copy (in case of candidates holding a life insurance /
composite License)
8. Original NOC (In case of previous {Life /General /
composite} license holders)
9. Approval from Zone vice president ( in case candidate scores
2 or less than 2 on the 4 point system )
10. Agent Referral From (in case the candidate has been
referred by an existing Agent)
63
11. Initial screening form
12. Agent Recruitment Interview File
13. Numerical ability answer sheet.
SECOND SET OF DOCUMENTS
(a) From IRDA – Agents –va
(b) License Exam Score Card
(c) Certificate of Training
(d) Examination and License Fee Deposit Slip
The documents need to be sent to HO as per the order
mentioned above.
GUIDELINES FOR FILLING THE FIRST SET OF
DOCUMENTS
Main Agent Application Form should be filled up in
BLOCK LETTERS.
All fields in the main Agent application Form should be
completely filled up.
Any corrections / alteration should be countersigned by the
applicant .
The agency coordinators to ensure that the Main agent
Application form contains the name & signature of the
SM/MP in the respective fields.
64
In case an existing agent has referred the candidate then the
name and the agent code of the the referring agent must be
filled up in the relevant fields.
On the last page of the application form the system ID of
the SM/AP Agency Associate to whom the agent would
report to must be mentioned.
The Reporting Office field on the last page of the
application must be mandatory.
In case a candidate signs the form in vernacular language
the following sentence needs to be mentioned at the bottom
of the application form.
The contents of the Application form have been explained to me
and have been understood fully by me and alongside the
signature of the candidate are required to be obtained.
AGE & EDUCATION PROOF
The candidate needs to submit photocopy of the age &age
education proof. The candidate should attest these proofs as true
copy.
Minimum Age Required for grant of fresh Agency License
An applicant must be at least 18 years of age on the date of
application. the needs to submit a proof of Date of Birth to
satisfy the Age proof requirement
65
Documents that is acceptable as Age proof
(a) License
(b) Passport
(c) Certificate issued by school authorities like 10th certificate
school leaving certificate
(d) Pan card
(e) Date of Birth certificate issued by Municipal authorities
(f) Date of Birth certificate issued by Defense authorities.
MINIMUM EDUCATION QUALIFICATION FOR
GRANT OF FRESH AGENCY LICENSE
Documents acceptable as equivalent of class 12th
(a) Higher SECONDARY Examination (11th class)/ PUC (pre
university certificate). Passed in the year till it has been
considered as the eligible class for getting direct admission
to the Three Year Degree course of the respective
university, may be treated as equivalent.
(b) All the certificate /Diploma/ Degree course of all the
Recognized Boards / universities which are considered
66
eligible for admission to Three year Degree course of
respective university are equivalent.
DISTRIBUTION CHANNELS
Today’s Indian insurance market, the challenge to insurers and
intermediaries is two-pronged:
Building faith about the company in the mind of the client
Intermediaries being able to build personal credibility with
the clients
Traditionally tied agents have been the primary channels for
insurance distribution in the Indian market; the public sector
insurance companies have their branches in almost all parts of
the country and have attracted local people to become their
agents. The agents are from various segments in society and
collectively cover the entire spectrum of society. A person who
has lived in the locality for many years sells the products of the
insurance company with a local branch nearby. This ensures the
last mile touch point being closer to the customer. Of course, the
profile of the people who acted as agents suggests they may not
have been sufficiently knowledgeable about the different
67
products offered, and may not have sold the best possible
product to the client. Nonetheless, the customer trusted the agent
and company. This arrangement worked adequately in the
absence of competition.
In today's scenario agents continue as the prime channel for
insurance distribution in India, as is the case in most markets,
supported by call centers to a small extent. Almost all the new
players follow this model primarily because the regulations for
other channels are yet to be put in place.
However there is great excitement in the industry over the
impending broker regulations and companies are planning
possible channels in their enthusiasm to increase volumes. The
belief that all these channels will grow and seamlessly integrate
to bring in business seems a fallacy.
What have emerged is a much more difficult and evolving
market scene with existing players, more new players coming
in, and global marketing practices and ideas being tested. But
none of this has changed the fundamental character of the
market, which we believe will take more time than expected.
What should the companies look at?
68
Basically companies have to take a look at the intermediaries
they are using, whether it is optimal to use them, and what are
the alternatives?
The new companies have attempted appealing only to the
middle, upper middle and elite classes in the major cities.
Contrasted with Public sector insurance companies, with their
offices across the country, the new companies have miles to go
before they reach anywhere. They must overcome the mindset
of the customer that life insurance is Life Insurance Corporation
of India (LIC) and general insurance is General Insurance
Corporation of India (GIC) if they hope to grow in the market.
Meanwhile, the public sector companies are going to great
lengths to revamp their image to look and feel more
contemporary. Both the public and new private sector
companies are fighting their own battles from the perspective of
customer perception management:
Public Sector Companies
Private Sector Companies
69
Identity is well established, but the
perception of “poor service
providers" is a stigma.
Have to build their identity in a
market where the public does not
distinguish them.
Products are not attractive and
flexible enough but expensive.
Remove the perception that
anything that looks good is
expensive
To retain their creamy layer clientele
who are the most likely to be wooed
by the new companies
Work against the people's mindset
that they are not here for the long
term
Retain and attract good
intermediaries
Attract intermediaries especially
agents with the requisite
qualifications and attributes who
can market the company and the
product.
Match the aura created by the new
companies in the urban market
Run the risk of tapping an already
insured market for repeat insurance
instead of tapping new virgin
pockets in the market
In this process all are targeting the same market --the existing
pie is being cut up further, but no attempt is being made to
increase the size of the pie. For example, while attempts are
made to complete the quota of rural insurance in percentage
terms, the rural market potential is yet to be tapped, as the new
insurers are not able to attract the right kind of talent into their
70
distribution force to address this. Intelligent segmentation of
distribution channels to match the market segmentation is what
will help the companies to move in this direction.
NEED FOR ALTERNATIVE DISTRIBUTION
CHANNELS
FINANCIAL
Gender of agents is another relevant feature in the rural context
that makes a difference, especially for the female population.
Women to whom the customers can relate --e.g., nurses, gram
sevikas -- can target the female segment of the population more
effectively. What is applicable for the rural women and children
health programs and population control programs is equally
applicable for insurance selling also. Max New York Life has
adopted a version of this strategy by appointing gram sahayaks
to sell and service the rural customers.
With this kind of segmentation of intermediaries the challenge
for the insurance company lies in training and educating these
people to become effective sales persons. But this in no way
diminishes the benefits of intermediary segmentation.
71
BANKS
Banks in India are all pervasive, especially the public sector
banks. Can they also become the foremost channel for
distribution of insurance? Perhaps in the future. The public
sector banks, with their vast branch networks, are also plagued
by a rigid unionized workforce and archaic systems, and lack
vision of a broader service spectrum encompassing non-banking
products. The newer banks are constrained by their lack of reach
and meager branch strength. For banks to become a predominant
channel for selling insurance will require a paradigm shift.
But the encouraging fact for insurance companies waiting for
banc assurance to take off is that bank branches are here to stay,
and customers do want them. A customer survey by Deloitte
Consulting5 in the western developed markets found that for
banking activities, customers place high importance on having
convenient branches in their banking relationships. This is good
news for the Indian banks with their many branches, and also
makes a strong case for taking up banc assurance. The major
lines of business that can be sold through banc assurance
successfully are term insurance, creditor insurance, and non-life
products like Property, Motor and Personal accident, Home
owners comprehensive insurance etc.
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An example is SBI Life, which is waiting for the broker
regulation to be put in place in order to move ahead aggressively
with the banc assurance model. One of their major product lines
is creditor insurance, and they have launched their first creditor
insurance product, which covers the liabilities of the creditor in
case of death of debtor.This model has high relevance in the
Indian context with far-flung villages where the insurance
potential is in volume and not in high per capita premiums.
Some advantages and disadvantages are:
Advantages of bank assurance
Disadvantages of bank assurance
High credibility (as trustworthy
caretakers of money) with the
public
Economic viability for the banks
to take up as banc assurance is a
volume business
A ready customer base Training of people and lack of
vision and awareness
Low cost channel for selling
simple vanilla products
Useful for selling only certain
lines of products
Extensive reach including the
rural pockets
Initial investment in systems and
processes and people training
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The strategy should be to use multiple banks according to their
presence in different regions. Success would come by using
bank assurance where it will be most effective – i.e., selling
simple, cheap products to the masses at a low cost. This
awareness is growing and is evident from the fact that nearly
every insurance company has partnered with one or many banks
to implement bank assurance.
BROKERS
With the broker regulation under review and expected any time,
this could be the next hope, especially for the urban market.
This will be a new experience for the insurance customer,
accustomed to brokers in financial services, real estate, and
travel and tourism. For historical reasons the image that 'broker'
carries in the minds of the customer is not very favorable. Thus
the new breeds of insurance brokers face the challenge of
establishing credibility.
The positives are that brokers in the urban arena can attract the
elite and the upper middle class customer. Brokers represent the
customer and will sell the products of more than one company.
They seek to determine the best fit for the client and can
effectively address the mind block faced by the public about the
various companies. This is applicable in the case of life
insurance for the high-end and corporate/group segment.
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In the non-life segment, broking is not entirely new, as
reinsurance brokers were arranging exotic covers. For individual
customers also, with a wide range of competitive products, the
broker can get a good deal. The corporate broking companies
will have to play a prominent role.
If NGOs based in rural areas can be attracted into the rural
sector cooperatives arena, they stand a good chance of
succeeding and can help the new players get a foothold in the
rural market. These are the players with the potential to make
the difference, as they have the trust of the people. We envisage
scenarios like that in Bangladesh's micro lending growth and the
milk co-operatives7 in Gujarat selling insurance in addition to
milk production and distribution. It would be a new dawn in
Indian insurance distribution! With the right impetus the Indian
rural insurance scenario could be one with high business volume
and tremendous growth potential.
However, the challenge lies in establishing regulations that
protect the customer and attract the right players into the
brokerage market rather than creating another middlemen
segment eroding the premium.
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WORK SITE MARKETING
This area needs to be tapped, as in any country one of the
biggest markets is through the worksite. With changes in
human resources management polices and compensation
packages, group products or work site products do have a
definite market that cannot be ignored.
Here the advantages would be:
Captive customer base
Potential to sell individual insurance and group insurance
High trust factor
High hit ratio for the intermediaries
The challenges would be the cost effectiveness, product
customization and efficient post sales servicing, which would
determine continued business. Technology has a key role to
play in worksite marketing to ensure cost benefits. Banks and
financial institutions have been successfully marketing credit
cards and other financial products using this channel. If not an
identical model a similar approach can be used for selling
insurance.
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INTERNET
Though India is joining the fast growing breed of net users,
using net for transactions has not yet caught up. Though a few
banks provide online banking, the usage is still a small
fragment. The insecurity associated with transactions over the
net is still an inhibiting factor. At present most of the insurance
companies have product information and/or illustrative tools on
the web.
We do not see the web evolving into a means for direct selling
of insurance in the current scenario. In the Indian market, where
insurance is sold after considerable persuasion even after face-
to-face selling, the selling over the net, which must be initiated
by the client, would take some more time.
While the technology capability is there, improvements in
bandwidth and infrastructure are needed. Also needed are
simpler products where auto-underwriting is feasible.
Automobile insurance, one of the segments of insurance
purchased "off the shelf" in India, would be the ideal segment to
start with. On the life side, term assurance for standard lives
with simplified underwriting is a possibility.
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These channels by themselves will not be able to overcome the
mindset of the people, but rather can only be enablers for the
human channels.
INVISIBLE INSURER
In this model, the insurance company or its representative is not
the entity marketing the products. The insurance cover is sold by
an automobile /credit card company as an add-on product
leveraging the brand of the retailer. The risk is carried by the
insurance company, which underwrites it. . Products like
creditor insurance, automobile insurance, and credit card related
insurance could be distributed using this channel. This model
can be adopted in all market segments for the lines of business
mentioned. It is already prevalent in some areas like credit card
insurance and crop insurance for agricultural loans.
The new players are also attempting this model. The venture of
Maruti 9 into insurance by setting up two subsidiaries MIDS10
and MIBL11 to sell automobile insurance is a case in point.
These firms will largely arrange insurance cover for Maruti's
captive customer base. MIDS has been registered as a corporate
agent with an exclusive arrangement with Baja Allianz General
Insurance, while MIBL has linked up with state-owned National
Insurance Company Limited.
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What makes these arrangements attractive is the low distribution
cost and captive customer base. However, repeat business or
renewal of business cannot be assured. In the life segment,
group creditor insurance may be the most suitable product for
this channel.
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CONCLUSION
The current state of insurance distribution in India is still in flux.
On one hand, insurers are awaiting regulations to be approved
for brokerages and banc assurance to be truly launched. On the
other hand they are trying the corporate model of intermediaries
in addition to the traditional models in the market.
There is no right and wrong in all this. The success of marketing
insurance depends on understanding the social and cultural
needs of the target population, and matching the market segment
with the suitable intermediary segment.
In addition a major segment of the Indian population has low
disposable income, meaning that every penny won will be
obtained after a lot of persuasion and the expected value for
money is high.
All intermediaries can't sell all lines of business profitably in all
markets. There should be clear demarcation in the marketing
strategies of the company from this perspective. Clients should
also receive price differentials for using different channels. This
is not a new concept, as the Public sector Property Casualty
companies are giving discounts in lieu of agency commission.
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The channel composition should not be homogeneous but
should reflect the larger society.
For Example:
Agents from different economic, social strata and different
age and gender.
Bancassurers ranging from multinational banks to micro
credit lending agencies.
Brokers stretching from corporate to NGOs to milk co-
operatives
These intermediaries need to be empowered with the right
learning, training and sales tools and technology enablers.
Coupled with the right product mix, this will help the insurers to
survive and flourish in this competitive market.
Let us conclude with a story of a retired postal clerk who
became a success story for selling postal savings and insurance
in his village in Punjab in Northern India. The person is the
father of our colleague, who is a retired postal employee and
took up agency for postal savings and insurance to supplement
his meager retirement earnings
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Today -- 10 years later -- he is one of the top agents selling
postal savings and insurance in his village, assisted by his
illiterate wife and grandson (a seven year old computer literate)
doing all the administrative work from home on a small
Personal computer using a package (developed by our friend
who is a programmer) to handle his client portfolio!
The entire village population trusts him with the investment
advices that he doles out and has no qualms in handing over
small amounts of cash to him for depositing in the post office.
He is their trusted customer care or financial consultant. This we
feel is the essence of distribution of financial products in India.
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FINDINGS & ANALYSISDATA ANALYSIS
1).Are you interested in products offered by the Bharti
Axa Life Insurance?
Yes 61% No 22% Will think 17%
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INTERPRETATION
The good thing is that atleast the corporates were quite eager to
find out what Bharti Axa Life Insurance has to offer whereas the
major 39 % of the corporates were not even interested in the
products as they are quite satisfied by the LIC and they are not
in breaking their long relationship with them. The private
players will have to play a long battle in order to ensure that
they are serious player in the market.
2). Are you satisfied with your present insurer?
YES 95%
No 5%
95%
5%
YesNo
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3). Where would you like to insure if given chance?
LIC - 60
BHARTI AXA - 15
ICICI - 10
BAJAJ ALLIANZ - 5
HDFC - 8
KOTAK MAHINDRA - 2
0
10
20
30
40
50
60
LIC Bharti Axa ICICI BAJAJALLIANZ
HDFC KOTAKMAHINDRA
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4).What is people’s main concern while taking an
insurance policy?
A) Security 70%
B) Returns 10%
C) Tax rebate 20%
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Q.5 Please express your opinion for the premiums
paid for the above policy?
a) Very high ( )
b) High ( )
c) Moderate ( )
d) Low ( )
e) Very Low ( )
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INTERPRETATION
The good thing is that atleast the corporate were quiet eager to
find out what Bharti Axa Life Insurance has to offer whereas
39% of corporate were not even interested in the products as
they are quiet satisfied by the LIC. The private players will have
to be very procative and in this regard since LIC is the leader
and Bharti Axa Life Insurance is lagging behind its competitors
in the terms of competitions.
The people invest in insurance because of mainly security
concern. Firstly they see from which investment their future
should secure and after that they invest. And in this time the
Bharti Axa Life Insurance mostly satisfies their customers. An
area of great concern is the level of ostentatious expenditure on
weddings and other family events. Such vulgarity inserts the
poverty of the less privileged, it is socially wasteful and it plants
the seeds of resentment in the minds of the have - note.
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CONCLUSION 1. LIC enjoys credibility over other private players in the
industry
2. People look for security over returns in market insurance
plans
3. Lifetime is the most popular product among the people who
are aware about Bharti Axa Life Insurance products.
4. People are now showing more interest in ULIP as compared
to some of the traditional plans.
5. Bharti Axa Life Insurance has to counter the distribution
network of LIC
6. The product profile of Bharti Axa Life Insurance is not very
comprehensive
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RECOMMENDATION
More emphasis should be on promotional activities.
Plenty of advertisement should be done through T.V,
Newspaper and Radio as these media’s are having maximum
recall value.
Total financial planning and advice should be given to every
customer.
More business opportunity seminars should be conducted to
make people aware of the offer given.
The company should quite frequently send their agent to the
customer so that they should be aware of the latest offer.
The company should attempt to open more and more of its
branches in the country so as to promote their product
publicity.
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ANNEXURE Q.1 Do you have any life insurance policies?
YES ( ) NO ( )
If Yes : -
Name of the Company ______________
Name of the plan ______________
Annual Amount of premium ______________
Term of plan ______________
Are you satisfied with present insurer?
A) YES ( ) B) NO ( )
Q.2 Which are the main issues that you take into
consideration while purchasing any life insurance policy?
A) SECURITY ( )
B) RETURNS ( )
C) TAX SAVINGS ( )
D) OTHERS(please specify)_________
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Q.3 Are you aware of Unit Linked Insurance Plans offered by
various companies in India?
A) ICICI ( )
B)OM KOTAK MAHINDA ( )
C) TATA AIG ( )
D) BAJAJ ALLIANZ ( )
E) LIC ( )
F) BHARTI AXA ( )
G) MAX NEW YORK ( )
Q.4 Do you have a life insurance policy from Bharti
Axa Life Insurance? A) YES( ) B) NO( )
Q.5 If yes, which policy have you taken? _________________________________________________
Q.6 Does this policy satisfy your financial needs?
(Please rate on the scale of 1 to 10 with one
being least satisfied)
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Q.7 Please express your opinion for the premiums
paid for the above policy?
A) VERY HIGH ( )
B) HIGH ( )
C) MODERATE ( )
D) LOW ( )
E) VERY LOW ( )
Q.8 How do you come to know about this policy?
A) ADVERTISEMENT ( )
B) FRIENDS & RELATIVES ( )
C) DIRECT SELLING AGENT ( )
D) OTHERS _____________________.
Q.9 Are there any incentives (tax benefits or
Bonuses) associated with this policy? (Please give
appropriate details about it).______________________________________________________
______________________________________________________
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10. Are you satisfied with the incentives associated
with your policy?
A) HIGHLY SATISFIED ( )
B) SATISFIED ( )
C) MODERATE ( )
D) UNSATISFIED ( )
E) HIGHLY UNSATISFIED ( )
Q.11 If you are given a choice, which one you take:
A) ICICI ( )
B) OM KOTAK MAHINDRA ( )
C) TATA AIG ( )
D) BAJAJ ALLIANZ ( )
E) LIC ( )
F) BHARTI AXA ( )
Q12 What other plans or flexibility you expect from
Insurance companies?
A) MORE RETURNS ( )
B) COMPLEMENTORY GIFTS ( )
C) INVESTMENT PATTERNS ( )
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BIBLIOGRAPHY BOOKS
Kotler Philip, Marketing Management, Prentice Hall of India
Pvt. Ltd.
Valatie A. Zeithaml, Mary Jo Bitner, Service Marketing,
TMH.
Insurance Post Asia –Journal, Apr ’05- Jun ’05.
Marketing Mastermind –Journal, May ’05.
Gupta S. P. and Gupta, M. P., Business Statistics, Sultan
Chand and Sons, New Delhi, 1997.
MAGAZINES & NEWSPAPERS
Reliance Life Insurance Brochure & Magazines.
Times of India.
Hindustan Times.
Other various magazines.
INTERNET WEBSITES
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www.bharti-axalife.com.
www.kampusonline.com.
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