TABLE OF CONTENT
EXECUTIVE SUMMERY……………………………………………04 INTRODUCTION…………………………………………………….10
PURPOSE OF STUDY………………………………………………..28 COMPANY PROFILE……………………………………………….31
OBJECTIVE OF STUDY…………………………………………….49
RESEARCH METHODOLOGY……………………………….52
DATA COLLECTION………………………………………………..72
LIMITATION…………………………………………………………76 FINDING……………………………………………………………..78 RECOMMENDATIONS&SUGGESSIONS…………………..89 CONCLUSION……………………………………………………….91 ANNEXURE………………………………………………………….93
1
Introduction: My project was on doing marketing marketing for reliance reliance insurance and had to make the agent for the company who can provide them with the business for which I had to meet the persons and had to make them the agents as they have large social network and are influencing in there approach .As these
people
as meeting many people in day
today life they have the opportunity opportunity to talk to people and convince convince them for the life insurance policy. We also have done some studies about the agent such as who are more willing to be agent of the company such as male or female or married or unmarried, educational qualification etc This project gave us a lot of opportunities to learn in this competitive envir environm onmen ent. t. We came came up with with bette betterr learn learning ing of the the insu insuran rance ce industry. On the basis of our research and learning we have made some recommendations, which can be helpful to insurance company.
Some important definitions used in the project: Before starting my project on life insurance I had to know what is life insurance, what are the merits of life insurance why person need it and who can busy life insurance policy, as we meet any persons for
2
making him an advisor these are basic question people ask as they are not much aware of these things. What is Life Insurance? A policy that will pay a specified sum to beneficiaries beneficiaries upon the death of the insured. Or An agreement that guarantees the payment of a stated amount of monetary benefits upon the death of the insured. Why Insurance? Insura Insuranc nce e is the the prote protect ctio ion n of life life and asse assets ts again against st unfor unfores eseen een circumstance. Whether it is a general accident policy, a Med claim policy or a pension policy, an insurance policy helps you to scope with uncertainty and insecurity. Ever thought about why you should take an insurance policy. For one, it helps you to hedge risks against unforeseen circumstances and save more. If that's not all, it is: Superior to an ordinary savings plan as it provides full protection against risk of death. Enco Encoura urages ges and forc forces es compu compuls lsory ory savi savings ngs unlik unlike e othe otherr savi saving ng instruments, wherein the saved money can be easily withdrawn. Provi Provides des loan loan to tie tie over over a tempo temporar rary y diff diffic icul ultt phase phase and is also also acceptable as security for a commercial loan. Offers tax relief to policyholders. Hedges risk against uncertainty.
3
For a policy taken under the MWP Act 1874, (Married Women's Property Act), a trust is created for wife and children as beneficiaries.
Based on the concept of sharing of losses, the society will benefit as catastrophic losses are spread globally. Who can buy a life insurance policy? Any person above 18 years of age, who is eligible to enter into a valid contract, can go for an insurance policy. Subject to certain conditions, a policy can be taken on the life of a spouse or children.
How is a life insurance policy useful? Planning for the financial consequences of a premature death is an essential part of every financial plan. Generally, the consequences are simply too large to ignore and cannot be totally covered with your own resources. Life insurance is nothing but a contract with an insurance company under which the insured (purchaser) pays a premium in exchange for coverage of specified losses. Life insurance protects your family against the risk of the premature death of you (or your spouse). Life insurance planning should consider your family's short-term needs (for example, medical expenses) and long-term needs (for example, replacing your income).
In the course of our life we are accosted by risk-that of failing health,
4
financial losses, accidents and so on. Insurance is a means by which life's uncertainties are addressed in financial terms. It offers a monetary compensation against those losses. Insurance is
considered more as a hedging mechanism rather than a true investment avenue. Life insurance, in particular is essentially acknowledged as a mechanism that eliminates risk-substituting certainty for uncertainty primarily by transferring risk from the insured to
the
insurer.
Is life insurance a saving instrument? Life insurance is mainly considered as a saving instrument rather than an investment avenue as it promotes compulsory savings besides reducing tax burden on the policyholder and protect the family of the policyholder in the event of unforeseen happening. It is the only saving instrument, which covers the life risk besides giving tax concession both at entry (premium paid) and at exit points. The section 10 (D) of the income tax act totally exempts payment of tax on any amount received as bonus against life insurance policies. Identifying different profiles of the people and giving them a Business Opportunity to join reliance life insurance company limited as an advisor/agent. (Detailed study on advisors/agent). Our project was to recruit agent for the company for which we had to move around in the market and had to find out the persons and had to convince them to be an agent for reliance life insurance .and we
5
also did some basic study in the insurance field on agents and advisors. Insurance industry is growing rapidly day-by-day. India itself has a population of 1.2billion out of which roughly 2.32% people are
insured. This clearly shows that most of the people are not insured just because they don’t know much about insurance. Which provide the insurance companies with lots of business opportunity to youngsters to make and there carriers in the field of marketing. This is also why these big companies are entering into this market as there is lot of scope in the market as they can see a huge business insurance market in India and huge prospective customers.
6
INTRODUCTION
7
INDUSTRY PROFILE INSURANCE IN INDIA The insurance sector in India has come a full circle from b e in g a n o p en c o mp e ti t iv e m ar k et t o n a ti o na l is a ti on a n d back
to
a
liberalised
market
again.
Tracing
the
developments in the Indian insurance sector reveals the 360 degree
turn
witnessed
over
a
period
of
almost
two
centuries. A brief history 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. S om e o f t he i mp or ta nt m il es to ne s i n t he l if e i ns ur an ce business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.
8
1 92 8: T he I nd ia n I ns ur an ce C om pa ni es A ct e na ct ed t o e n ab l e t h e g o ve r nm e nt t o c ol l ec t s ta ti st i ca l i n fo r ma ti o n about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by t he I nsu ra nc e A ct wi th t he o bj ect iv e o f p ro te ct in g th e interests of the insuring public. 1 95 6:
2 45
so cie ti es
Ind ia n
ta ke n
an d
o ver
fo re ign
by
th e
in sur er s ce ntr al
a nd
pr ovid en t
go ve rn me nt
a nd
nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1 95 6, w it h a c ap it al c on tr ib ut io n o f R s. 5c ro re f ro m t he 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 company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are:
9
1907: The Indian Mercantile Insurance Ltd. set up, the first c om pa ny
to
tr an sa ct
a ll
c la ss es
o f g en er al
i nsu ra nc e
business. 1957: 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. 1 9 72 : T h e G e ne r al I n su r an c e B u si n es s ( Na t io n al i za t io n ) A ct , 1 9 72 n a ti o na l iz e d t he g e ne r al i n su r an c e b u si n es s i n 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.
10
Insurance sector reforms I n 1 9 93 , M a lh o tr a C om m it te e , h e ad e d b y f or m er F i na n ce Secretary and RBI Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. T h e M a l h o t r a c o m m i t t e e w a s s e t u p w i t h t h e o b j e c t i ve o f complementing the reforms initiated in the financial sector. The reforms were aimed at “creating a more efficient and competitive financial system suitable for the requirements of t he
e co nom y
ke ep in g
in
min d
th e
str uctu ra l
ch an ges
c u rr e nt l y u n de r wa y a n d r e co g ni zi n g t ha t i n su r an c e i s a n important part of the overall financial system where it was necessary to address the need for similar reforms…” I n 1 9 9 4 , t h e c o m m i t t e e s u b m i t t e d t h e r e p o r t a n d s o me o f the key recommendations included:
11
i) Structure · G ov er nm en t s ta ke i n th e i nsu ra nc e Co mp an ie s t o b e brought down to 50% · Government should take over the holdings of GIC and its subsidiaries
so
that
these
subsidiaries
can
act
as
independent corporations · A ll t he i ns ur an ce c om pa ni es s ho ul d b e g iv en g re at er freedom to operate ii) Competition · P ri va te C om pa ni es w it h a m in im um p ai d u p c ap it al o f Rs.1bn should be allowed to enter the industry · No
Company should
deal
in
both Life and
General
Insurance through a single entity · Foreign companies may b e a l l o w e d t o e n t e r t h e i n d u s t r y i n c o l l a b o r a t i o n wi t h t h e domestic companies · Postal Life Insurance should be allowed to operate in the rural market· Only one State Level Life Insurance Company should be allowed to operate in each state
12
iii) Regulatory Body · The Insurance Act should be changed · An Insurance Regulatory body should be set up · Controller of Insurance (Currently a part from the Finance Ministry) should be made independent iv) Investments · M a nd a to r y I n ve s tm e nt s o f L IC L i fe F u nd i n g o ve r nm e nt securities to be reduced from 75% to 50% · GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time)
v) Customer Service · LIC should pay interest on delays in payments beyond 30 days · Insurance companies must be encouraged to set up unit linked pension plans.
13
Computerization of operations and updating of technology to be carried out in the insurance industry The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 c ro re s. T he c om mi tt ee f el t t he n ee d t o p ro vi de g re at er autonomy to insurance companies in order to improve their p er fo rma nce
a nd
e na ble
th em
to
a ct
as
i nd ep en de nt
companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body. The Insurance Regulatory and Development Authority R ef or ms i n t he I ns ur an ce s ec to r w er e i ni ti at ed w it h t he passage of the IRDA ill in Parliament in December 1999.
14
The IRDA since its incorporation as a statutory body in April 2 00 0 h as f as ti di ou sl y s tu ck t o i ts sc he du le o f f ra mi ng r e gu l at i on s a n d r e gi st er i ng t h e p r iv at e s e ct or i n su r an ce companies. T h e o th e r d e ci si o ns t a ke n s im u lt an e ou s ly t o p r ov id e t he 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. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year. Since being set up as an independent statutory body the I RDA
h as
p ut
in
a
fr ame wo rk
of
g lo ba lly
comp ati bl e
r e g u l a t i o n s . I n t h e p r i v a t e s e c t o r 1 2 l i f e i n s u r a n ce a n d 6 general insurance companies have been registered.
15
Life insurance made its debut in India well over 100 years ago. Its salient features are not as widely understood in our country as they ought to be. What follows is an attempt to acquaint
readers
with
some
of
the
concepts
of
life
insurance, with special reference to LIC. It should, however, be clearly understood that the following narration is by no means
an
exhaustive
description
of
the
terms
and
conditions of a LIC policy or its benefits or privileges. For more details, please contact our Branch or Divisional Office. A ny L IC A ge nt w il l b e g la d t o h el p y ou c ho os e t he l if e i ns ur an ce p la n to m ee t y ou r n ee ds a nd r en de r p ol ic y servicing.
What is Life Insurance ? Life Insurance is a contract for payment of a sum of money t o t he p er so n a ss ur ed ( or f ai li ng h im /h er , t o t he p er so n entitled to receive the same) on the happening of the event
16
i ns ur ed
a ga in st . U su al ly
th e c on tr ac t p ro vi de s f or
t he
payment of an amount on the date of maturity or at specified dates at periodic intervals or at unfortunate death, i f i t o c c u r s e a r l i e r . A m o n g o t h e r t h i n g s , t h e c o n t ra c t a l s o p r ov id e s f or t h e p a ym e nt o f p r em i um p e ri o di ca l ly t o t h e C o rp o ra t io n b y t h e a s su r ed . L i fe i n su r an c e i s u n iv e rs a ll y acknowledged to be an institution which eliminates 'risk', s ub st it ut in g c er ta in ty f or u nc er ta in ty a nd c om es t o t he timely aid of the family in the unfortunate event of death of the breadwinner. By and large, life insurance is civilisation's p ar ti al s ol ut io n to t he p ro bl em s c au se d b y d ea th . L if e i ns ur an ce , i n s ho rt , i s c on ce rn ed w it h t wo h az ar ds t ha t s ta n d a cr o ss t he l i fe - pa t h o f e ve r y p e rs o n: t ha t o f d y in g prematurely leaving a dependent family to fend for itself and that of living to old age without visible means of support.
17
Life Insurance Market The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population.The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were under- insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed. The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income. The new business premiums of the 12 private players has tripled to Rs 1000 crore in 2002- 03 over last year. Meanwhile, state owned LIC's new premium business has fallen.
18
Innovative products, smart marketing and aggressive distribution. That's the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The growing popularity of the private insurers shows in other ways. They are coining money in new niches that they have introduced. The state owned companies still dominate segments like endowments and money back policies. But in the annuity or pension products business, the private insurers have already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percent of the customers.
19
The private insurers also seem to be scoring big in other wa ys-
th ey
a re
p er su ad ing
p eo ple
to
ta ke
ou t b ig ge r
policies. For instance, the avaerage size of a life insurance policy before privatisation was around Rs 50,000. That has risen to about Rs 80,000. But the private insurers are ahead in this game and the average size of their policies is around R s 1 . 1 l a k h t o R s 1 . 2 l a k h - w a y b i g g e r t h a n t h e i n du s t r y average. Why is it superior to other forms of Savings ? Protection: Savings through life insurance guarantee full p rot ecti on
a ga in st
r isk
o f d ea th
o f th e sa ver . In
l ife
insurance, on death, the full sum assured is payable (with b o nu se s w he r ev er a p pl ic a bl e ) w he r ea s i n o t he r s a vi n gs schemes, only the amount saved (with interest) is payable. Aid to thrift: Life insurance encourages 'thrift'. Long term s av in g c an b e m ad e i n a
r el at iv el y ' pa in le ss ' m an ne r
because of the 'easy instalment' facility built into the
20
sch eme
( me th od
of
p ayin g
pr emi um
e it he r
mon th ly,
q ua rt er ly , h al f y ea rl y o r y ea rl y) . T ak e, f or e xa mp le , o ur S al ar y S avi ng
S ch em e p op ul ar ly
k no wn
a s S SS . T hi s
scheme provides a convenient method of paying premium each month by deduction from one's salary. The deducted premium is remitted by the employer to the LIC. The Salary S av in g S ch em e ca n b e i nt ro du ce d i n a n i ns ti tu ti on o r establishment subject to specified terms and conditions. Liquidity: L o a n s c a n b e r a i s e d o n t h e s o l e s e c u r i t y o f a p ol ic y w hi ch h as a cq ui re d l oa n va lu e. B es id es , a l if e insurance policy is also generally accepted as security for even a commercial loan. Tax Relief: T a x r e l i e f i n I n c o m e T a x a n d W e a l t h T a x i s a va il ab le fo r a mo un ts p ai d b y w ay o f p re mi um fo r l if e insurance subject to Income Tax rates in force. Assessees can avail themselves of provisions in the law for tax relief.
21
In such cases the assured in effect pays a lower premium for his insurance than he would have to pay otherwise. M o n e y w h e n y o u n e e d i t : A suitable insurance plan or a c o mb in a ti o n o f d if fe r en t p l an s c an b e t a ke n o u t t o m e et specific needs that are likely to arise in future, such as children's education, start-in-life or marriage provision or e ve n p er io di ca l n ee ds f or c as h o ve r a s tr et ch o f t im e. Alternatively, policy moneys can be so arranged to be made available at the time of one's retirement from service to be used for any specific purpose, such as for the purchase of a house
or
for
other
investments.
Subject
to
certain
c o nd i ti o ns , l o an s a r e g r an t ed t o p o li cy h ol d er s f or h o us e building or for purchase of flats. Who can buy a Life Insurance Policy ? A ny p er so n w ho h as a tt ai ne d m aj or it y a nd i s e li gi bl e t o e nt er i nt o a v al id c on tr ac t c an t ak e o ut a l if e i ns ur an ce policy for himself and on those in whom he has insurable
22
interest. Policies can also be taken out, subject to certain c o n d i t i o n s , o n t h e l i f e o f o n e ' s s p o u s e o r c h i l d r e n. W h i l e underwriting proposals, factors such as the state of health of the life to be assured, the proponent's income and other relevant factors are considered by the Corporation.
23
Insurance on Women . Pr io r
to
n atio na lizat io n
( 19 56 ),
m an y
of
th e
pr iva te
insurance companies used to offer insurance to female lives with some extra premium or on restrictive conditions. After nationalization of life insurance, the terms under which life i n s u r a n c e i s g r a n t e d t o f e m a l e l i v e s h a v e b e e n r e v ie w e d from time to time. At present, women with earned income a re tr ea te d o n p ar with ma le live s. In ot he r ca se s, a restrictive clause is imposed and that too only if age of the female is up to 30 years and if she does not have an income attracting Income Tax. Medical and Non-Medical Schemes . Life
insurance
is
normally
offered
after
a
medical
examination of the life to be assured. However, to facilitate g re at er sp re ad o f i ns ur an ce a nd a ls o a s a m ea su re o f relaxation, LIC has been extending insurance cover without any medical examination, subject to certain conditions.
24
PURPOSE OF STUDY
25
PURPOSE OF STUDY 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 nonlife 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 nationalised. 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 insurance landscape in India is undergoing major change. Closed to foreign competition since nationalization in 1956, the life insurance industry had been protected from competitive pressures. Now, with the re-opening of the sector, several new players have entered the scene. The game is old but the rules are new and still developing. Ensconced in a monopoly run from the nationalization days beginning
26
in 1956, the insurance industry has indeed awakened: to a deregulated environment in which several private players have partnered with multinational insurance giants. However, despite its teeming one billion population, India still has a low insurance penetration of 1.95 per cent, 51st in the world. Despite the fact that India boasts a saving rate of around 25 per cent, less than 5 percent is spent on insurance. The first company to foray in this sector was LIC, which was set up on 1st sept 1956. Since then it is enjoying monopoly until the recent entry of the private players in this sector. The private companies in their five years of operation had continuously suffered by the established leadership and monopoly of LIC. Although for the last 50 years LIC has been the only company to cater the consumer needs in the insurance sector but in the past 5 years 12 insurance companies have emerged in the scenario which are: ICICI Prudential Life Birla Sun Life Bajaj Allianz Max New York Life Met Life ING Vyasa Om Kotak Mahindra Tata AIG Aviva HDFC Standard Life SBI Life Reliance life insurance New players need to recognize the limitations of their rival and decide upon the right mix of distribution channels in their business. 27
COMPANY PROFILE
28
Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services. Anil Ambani's Reliance Life Insurance Company Limited, a subsidiary of Reliance Capital Limited, has concluded a much awaited deal in the life insurance sector. Even before selling a single life insurance policy, Reliance Life, a part of the Anil Dhirubhai Ambani Enterprises, has snapped the Chennai-based private life insurer AMP Sanmar Life Insurance Company Limited. AMP Sanmar is a 26:74 joint venture between AMP, Australia and Sanmar group. Interestingly, only recently, the Reliance Life had approached the Insurance Regulatory and Development Authority (IRDA) to revive its business licence that had been cancelled by the regulator for non commencement of business. Though the three parties to the deal — Reliance Capital, AMP and
29
— are keeping the deal size secret, figures ranging between Rs225-400 crore are being talked about as being the final price. What is clear is that Reliance Life has clearly outbid other suitors like Aviva, ICICI Prudential Life Insurance Company, etc. This acquisition makes Reliance Life the first private sector life insurer to start business without a foreign partner The Insurance Regulatory and Development Authority (IRDA) has approved the change in the name of AMP Sanmar Life Insurance Company Limited to Reliance Life Insurance Company Limited. The change was necessitated after the acquisition of the holdings of AMP Australia and the Sanmar group in AMP Sanmar by Reliance Capital for Anil Ambani's proposed life insurance venture, now called Reliance Life Insurance (See: Anil Ambani snaps up AMP Sanmar ) for an undisclosed sum. Subsequently, a fresh certificate of incorporation was issued by the Registrar of Companies, Tamil Nadu, changing the name of the company on January17, 2006. Accepting the change in the name of the company in its registers, the IRDAhas permitted Reliance Life to carry on life insurance business subject to the condition that the company should honour the commitments to the
30
policyholders of the AMP Sanmar without altering any of the terms and conditions of the original policy. After the acquisition of the stake of the two promoter companies, Reliance Capital has been busy chalking aggressive growth plans for the life insurance company. It plans to have one million policyholders by this year end. The company under the new ownership has been selling policies at a faster pace than ever before. For the nine month ended 31 st December 2005, AMP Sanmar / Reliance Life has a fresh premium income of Rs114.48 crore, selling 41,488 policies with the average premium per policy of Rs27,593. http://www.domain b.com/scripts/recommend/recommend.aspAs AMP Sanmar, the company had earned fresh premium of Rs61.04 crore from the 23,328 policies it sold during April-December 2004 at an average premium per policy of Rs26,166. Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934. Reliance Capital sees immense potential in the rapidly growing financial services sector in India and aims to become a dominant player in this
31
industry and offer fully integrated financial services.Reliance Life Insurance is another step forward for Reliance Capital Limited
to offer need based Life Insurance solutions to individuals and Corporate. Which was started with the mission and vision-
Reliance insurance vision To be recognized as a professional and dependable business entity committed to play a meaningful role in the development of insurance industry in Pakistan and to safeguard the legitimate interests of all stakeholders, namely policy-holders, share-holders, reinsurers, employees and all other business associates/partners Reliance insurance mission To provide quality service and protection to its clients aiming at achieving a respectable volume of business and become a prominent player through good governance and sound professionalism focusing to become a wellknown and respected Corporate entity in the eyes of Society and Government.
32
It has its Registered office;
Reliance Life Insurance Company Limited, Regd. Office: The Trapezium, First Floor, #39 Nelson Manickam Road, Chennai - 600 029 Phone No: +91-44-30588200 Fax No: +91-44-30588220 Email:
[email protected]
33
REVIEW OF LITERATURE Indian Insurance Industry - Introduction I nd ia i s the lar ge st d em ocr acy in th e wo rld h avin g a population more than one billion. It is 5th largest in the world in terms of purchasing power parity (PPP). India GDP g r o w t h r a t e i s o v e r 6 p e r c e n t p e r y e a r o n a v e r a g e fo r t h e last decade and saving rate is around 26 percent of GDP. T hr ou gh I nd ia 's e co no mi c d ev el op me nt , i t b ec om es t he most lucrative insurance markets in the world. Before the year 1999 there were monopoly of state run Life Insurance C or po ra ti on o f I nd ia ( LI C) i n l if e i ns ur an ce s ec to r a nd General Insurance Corporation of India (GIC) with its four s ub si di ar ie s i n g en er al s ec to r.
I n t he
w ak e o f r ef or m
process and passing Insurance Regulatory Development Act (IRDA) through Indian Parliament in 1999, Indian Insurance was opened for private companies.
34
I ns ur an ce i nd us tr ie s i n I nd ia h av e a l on g h is to ry. L ife insurance in existing form came in India from UK in 1818 w it h O ri en ta l L if e I ns ur an ce C om pa ny . T he I nd ia n l if e Assurance companies Act, 1912 was the first measure to regulate life Insurance business. Later in 1928 the Indian Insurance Companies act was enacted, which was amended in 1938. Finally this act was amended by Government of India in 1950. Life
Insurance
Se pte mbe r
corporation
1 95 6
of
India
b y pa ssin g L IC
Act,
was 19 56
formed in
in
In di an
parliament. T he
f ir st
g en er al
i ns ur an ce
c om pa ny , T ri to n I ns ur an ce
Company Ltd. was established in Calcutta in 1850. In 1957 the
General
Insurance
Council
a
wing
of
Insurance
Association of India formed a code of conduct. In 1961 an insurance act was passed to form General Insurance
35
Co mpa ny
Ltd .
wh ich
wa s
ame nd ed
in
196 8.
G en er al
Insurance business was nationalised with effect from 1.1.73 b y t h e G e ne r al I n su r an c e B u si n es s A ct . f ro m 1 9 73 , T h e G e n e r a l I n s u r a n c e C o m p a n y ( G I C ) a s a h o l d i n g c o m p a ny divided in four subsidiaries as: National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental I nsur an ce
Co mpan y
L td .
an d
Th e
Un it ed
Assu ra nce
Company Ltd. What is Insurance? Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum c al le d p re mi um s, t o p ay t he o th er p ar ty h ap pe ni ng o f a certain event. Insurance is a protection against a financial loss arising on the
happening
of
an
unexpected
36
event.
Insurance
Companies collect premium to provide for this protection. A loss is paid out of this premium collected from the insuring
p ub li c. T he i ns ur an ce C om pa ny a ct a s a t ru st ee t o t he amount collected through premium. Insurance is generally classified in three main categories, ( i ) L i fe I n su r an c e, ( i i) H e al th i n su r an c e a n d ( i ii ) G e ne r al Insurance T o g et i ns ur an ce a n i nd iv id ua l o r a n o rg an isa ti on c an a pp ro ac h
to
an
i ns ur an ce
C om pa ny
d ir ec tl y,
t hr ou gh
I ns ur an ce A ge nt o f t he c on ce rn ed c om pa ny o r t hr ou gh Intermediaries. Benefits of Insurance Insurance is the instrument of Security, saving and peace of mind. It provide several benefits by paying a small amount of premium to an insurance company as:
37
S af eg ua rd s o ne se lf
a nd
o ne 's
f am il y f or
f ut ur e
requirements. Peace of mind-in case of financial loss.
Encourage saving. Tax rebate. Protection from the claim made by creditors. S e cu r it y a g ai n st a p e rs o na l l o an , h o us in g l o an o r other types of loan. Provide a protection cover to industries, agriculture, women and child.
Insurance Regulatory Authority: On
the
recommendation
of
Malhotra
Committee,
an
Insurance Regulatory Development Act (IRDA) passed by I n d i a n P a r l i a m e n t i n 1 9 9 3 . I t s m a i n a i m i s t o a c t i va t e a n i nsur ance
re gu lato ry
a pp ar atu s
38
e sse ntia l
for
pr op er
monitoring and control of the Insurance industry. Due to this Act several Indian private companies have entered into the
i n su r an ce m a rk et , a n d s om e c o mp a ni e s h a ve j o in e d w it h foreign partners. In this economic reform process the Insurance Companies w i ll b o os t t he s o ci o- e co n om i c d e ve l op m en t p r oc e ss . T h e h ug e a mo unt o f fu nd s th at wi ll b e a t th e d isp osa l o f Insurance Companies will be directed as desired avenues l ik e
h ou si ng ,
s af e
d ri nk in g
w at er ,
e le ct ri ci ty ,
p rim ar y
education and infrastructure. The growth of the debt market will also get a boost. Above all the policyholders will get b et te r
p ri ci ng
of
p ro du ct s
fr om
companies.
39
co mp et it iv e
i ns ur an ce
GOVERNMENT POLICIES Present Scenario The Government of India liberalised the insurance sector in March 2000 with the passage of the Insurance Regulatory a nd D ev el op me nt A ut ho ri ty ( IR DA ) B il l, l if ti ng a ll e nt ry restrictions for private players and allowing foreign players t o e nt er t he m ar ke t wi th s om e l im it s o n d ir ec t f or ei gn o wn er sh ip . U nd er t he c ur re nt g ui de li ne s, t he re i s a 2 6 p er ce nt e qu it y c ap f or f or ei gn p ar tn er s i n a n i ns ur an ce company. There is a proposal to increase this limit to 49 percent. Premium rates of most general insurance policies come under the purview of the government appointed Tariff Advisory Commitee. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may a ls o i nc lu de r es tr uc tu ri ng a nd r ev it al iz in g o f t he p ub li c sector companies. A host of private Insurance companies
40
o p e r a t i n g i n b o t h l i f e a n d n o n - l i f e s e g m e n t s h a v e st a r t e d selling their insurance policies since 2001. Duties,Powers and Functions of IRDA Section 14 of IRDA Act, 1999 laysdown the duties,powers and functions of IRDA..(1)
Subject to the provisions of
this Act and any other law for the time being in force, the A ut ho ri ty s ha ll h av e t he d ut y t o r eg ul at e, p ro mo te a nd e n su r e o r de r ly g r ow th o f t h e i n su r an ce b u si n es s a n d r e insurance business. (2)
Without prejudice to the generality of the provisions
contained in sub-section (1), the powers and functions of the
Authority shall include,
-
( a ) i s su e t o t h e a p pl i ca n t a c e rt if i ca t e o f r e gi st r at io n , renew,
modify,
withdraw,
suspend
or
cancel
such
registration; ( b ) p r o t e c t i o n o f t h e i n t e r e s t s o f t h e p o l i c y h o l d er s i n matters concerning assigning of policy, nomination by policy
41
holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance; (c) specifying requisite qualifications, code of conduct and practical
training
for
intermediary
or
insurance
i nte rme dia rie s a nd a ge nts; (d) specifying the code of conduct for surveyors and loss assessors; ( e) p ro mo ti ng e ff ic ie nc y i n t he c on du ct o f i ns ur an ce business; (f) promoting and regulating professional organisations connected with the insurance and re-insurance business; (g) levying fees and other charges for carrying out the purposes of
this Act;
(h) calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organisations connected with the insurance business;
42
(i) control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the I n su r an c e A c t ,1 9 38 ( 4 of 1 93 8 ); ( j) s pe ci fy in g t he f or m a nd m an ne r i n w hi ch b oo ks o f a cc ou nt s ha ll b e m ai nt ai ne d a nd s ta te me nt o f a cc ou nt s shall
be
rendered
by
insurers
and
other
insurance
intermediaries; ( k)
r egu la ti ng
in ve stme nt
of
fun ds
by
in sur ance
companies; ( l) r eg ul at in g m ai nt en an ce o f m ar gi n o f s ol ve nc y; ( m)
a dj ud ic at io n
intermediaries
or
o f d is pu te s insurance
b et we en
i ns ur er s a nd
intermediaries;
( n ) s up e rv i si n g t h e f u nc ti o ni ng o f t h e T a ri ff A d vi so r y Committee; (o) specifying the percentage of premium income of the
43
i n su r er t o f in a nc e s ch e me s f o r p r om o ti n g a n d r e gu l at i ng professional organisations referred to in clause (f); (p) specifying the percentage of life insurance business ] and general insurance business to be undertaken by the insurer in the rural or social sector; and (q) exercising such other powers as may be prescribed
44
AREA BUSSINESS HEAD
BRANCH DEVELOPMENT MANAGER
SALES
SALES
SALES
MANAGER
MANAGER
MANAGER
25-30 ADVISOR UNDER EACH SALES MANAGER
45
OBJECTIVE OF STUDY
46
OBJECTIVES OF THE STUDY The basic objectives of my project was basically aimed at helping the reli relian ance ce life life insu insura ranc nce e in incr increa easi sing ng its its advi adviso sor/ r/ag agen entt base base by targeting targeting the people who had large social and professional circle. circle. my objectives ere divided into two categories re: MAIN OBJECTIVE Recru Recruit itmen mentt of the tied tied agent agents s (lif (life e insu insuran rance ce advis advisors ors)) for for the company. SUB OBJECTIVE 1) To look for all segments of the people with good profile who are willing to act as an advisor for the companies.
2) Providing company with the suggestions in respect to Improvement in the recruitment methods and Making recruitment convenient for the company.
47
Financial structure
Fund Name
NAV per Unit
Capital Secure Fund
10.8082
Balanced Fund
11.8413
Growth Fund
12.9010
Equity Fund
16.9326
48
RESEARCH METHODOLOGY
49
RESEARCH DESIGN Quantitative research :T he
ob jecti ves
of
th e f ir st
p ha se
of
th is
pr oje ct
le nt
t he ms el ve s v er y w el l t o a s tr uc tu re d s ur ve y a pp ro ac h. Se ve ra l
op en -en de d
qu estio ns
wer e
a lso
in clu de d
to
explore why consumers hold particular attitudes. T he a im o f th is p ha se o f th e r ese ar ch was t o ga in an understanding of the attitudes of the general community, so t h e t a r g e t p o p u l a t i o n w a s d e f i n e d a s a l l p e o p l e a g ed 1 8 years or older. A s ho rt q ue st io nn ai re w as d es ig ne d i n c on ju nc ti on w it h Insurance industry.
50
A n h y po t he s is e d m ed i at o r o f c o ns um e r a t ti t ud es t o L i fe insurance company & its policies. That is, it was felt that, if c on su me rs h ad a b as ic u nd er st an di ng o f s ome o f t he factors influencing the cost of life insurance premiums, they would be more likely to agree that life insurance companies
should be able to gain access to pertinent information such as results of genetic tests. To this end, a random 50 percent of respondents were read a
br ie f
d escr ip ti on
of
life
in sur ance
r isk
procedures at the beginning of the interview.
51
a sse ssme nt
Qualitative research :The exploratory nature of the second phase of the research m e an t t h at a q u al i ta t iv e g r ou p d i sc u ss io n a p pr o ac h w a s most appropriate. Details of the groups were as follows: The groups contained a mix of males and females. A research was designed to study perceptions of consumers a bo ut L if e I ns ur an ce m ar ke t. A ls o s ec on da ry d at a w as collected from Liberaries and news papers and websites. In the absence of such a working hypothesis or theory, How do we acquire a more fundamental understanding of why the p i e ( o r p y r a mi d o r a n y o t he r ) i s s h a p ed t h e w a y i t i s — i n other words, why do consumers in the category behave the wa y th ey do? Wh at i s th eir st an ce o r men ta l at titu de towards the category itself? What motivations, expectations and behaviours are seen in particular with respect to the Insurance by the relevant sub-groups? Here the emphasis
52
on building numbers is very little. My suggestions regarding a proposed method follow. Survey Interview Interview surveys -- face-to-face -- offer distinct advantages o v er s e lf - re p or t ed d a ta c o ll e ct io n . T h e " pr e se n ce " o f a n i nt er vi ew er c an i nc re as e c oo pe ra ti on r at es a nd m ak e i t possible for respondents to get immediate clarifications. The main requirement for good interviewers is an ability to a pp ro ac h s tr an ge rs i n p er so n o r o n th e t el ep ho ne a nd persuade
them
to
participate
in
the
survey.
Once
a
respondent's cooperation is acquired, the interviewers must m a i n t a i n i t , w h i l e c o l l e c t i n g t h e n e e d e d d a t a - - d at a t h a t must be obtained in exact accordance with instructions. For high-quality data to be collected, interviewers must be carefully trained through classroom instruction, self-study, or both. Good interviewer techniques are stressed, such as
53
... how to make initial contacts ... how to conduct interviews in a professional manner ... and how to avoid influencing or b i as i ng
r e sp o ns e s.
T r ai n in g
g e ne r al l y i n vo l ve s
p r ac ti ce
interviews to familiarize the interviewers with the variety of situations they are likely to encounter. Time must be spent going over survey concepts, definitions, and procedures. A question-by-question approach is needed to
be
sure
the
interviewers
can
deal
with
any
misunderstandings that may arise. In most reputable survey organizations, the interviewers are also required to take a strict oath of confidentiality before beginning work. S ur ve y ma te ri al s m us t b e p re pa re d a nd i ss ue d t o t he i n te r vi e we r s. F o r t r ad i ti o na l p a pe r a n d p e nc il i n -p e rs on i nt er vi ew s,
a mp le
c op ie s o f
th e
q ue st io nn ai re ,
p lu s a
reference manual, information about the identification and
54
location of the households, and any cards or pictures to be shown to the respondents must be given to the interviewers. Before
conducting
in-person
interviews,
survey
o rg an iz at io ns f re qu en tl y s en d a n a dv an ce l et te r t o t he sample respondents, explaining the purpose of the survey and that an interviewer will be calling soon. In many surveys, especially those sponsored by the federal government, information must be given to the respondents regarding the voluntary or mandatory nature of the survey and how the answers are to be used.
55
After Data Collection No matter what type of data collection is used, there are a number of "back-end" processes that may be needed to get the data in a form so that aggregated totals, averages, or other statistics can be computed. F or
ma il
su rve ys
an d
co nve ntio na l
pa pe r
a nd
p en cil
interviews, this may involve coding after the questionnaires h av e b ee n c om pl et ed . C od ed p ap er q ue st io nn ai re s a re entered into a computer (e.g.,being keyed onto a disk) so that a computer file can be created. At this point, most of the remaining back-end steps are common to all surveys, w he th er o r n ot a c om pu te r wa s u se d i ni ti al ly f or d ata collection. O nc e
a
co mp ute r
f il e
h as
b ee n
g en er at ed ,
a dd it io na l
c o mp u te r e d it i ng , s e pa r at e f ro m c le r ic al e d it in g , c a n b e accomplished to alter inconsistent or impossible entries.
56
D e ci si o ns a r e u s ua l ly n e ed e d o n h o w t o h a nd l e m is si n g items -- cases in which the respondent did not know the answer ... refused to provide one ... or in which the question was simply not asked. Preferred practice for missing items is to provide special codes indicating why the data are not included. When resources are available, the "filling in" or imputation
of
these
missing
data
items
should
be
undertaken to reduce any biases arising from their absence. When there is a "clean" file the survey data are ready for analysts to begin summarizing what has been learned. It is a
go od
id ea
to
u se
co mme rcia lly
a va ila ble
so ft war e
packages to carry out this step rather than using your own specially written computer programs. O ft en t he b es t w ay t o s ta rt t he a na ly si s i s w it h s im pl e counts and related percentages for each question. Next, it is common to produce tables of growing complexity.
57
Eventually,
there
may
be
a
need
for
even
more
s o ph i st i ca t ed f o rm s o f d a ta p r es e nt a ti on t o a d dr e ss t he concerns outlined when the survey was initially conceived
58
SAMPLE DESIGN Sample Selection: Who Interviews were conducted in a manner to target about the same proportion of both sex within all age groups. After qualifying as a possible survey candidate, the person was asked the question related to car market. When & Where Interviews for survey were conducted during June 2006 with 100 randomly selected male and female residing within the City Limits. How Of those contacted, a 10- to 12-minute interview included questions about what they have, factors that might affect their decision latest features of car, their service options, were asked. Demographic data for the respondent was also collected.
59
Interviews were conducted on basis of Consumer opinion. Afterwards the computer tabulation of the survey responses w as d on e. P ro fe ss io na l T ut or g ui de d t he q ue st io nn ai re d es ig n, c oo rd in at io n o f t he d at a c ol le ct io n a nd c od in g, analysis of the data, and preparation of this report. The sample of respondents was obtained using a random system to select people in a cinema hall or buying Malls in markets.
M a ny q u es ti o ns w er e a s ke d i n a n c l os e -e n d f o rm a t w it h suggested responses supplied by the interviewers. Thus, the responses for many of the questions accurately reflect what was on peoples’ minds at the time they were surveyed, as they were aware of all possible options ready in their minds. People were allowed to answer the questions without a ny
p ro mp ti ng
o r s ug ge st io ns . R es po ns es
based upon the patterns in the answers.
60
w er e c od ed
61
DATA COLLECTION
Data collection in Social Sciences often involves surveys or e xp er im en ts , questions.
wh er e
r es po nd en ts
Researchers
should
a re
a sk ed
have
to
ability
a ns we r to
run
questionnaires or experiments via the computer. It has easy w a ys t o c r ea t e d i ff e re n t e x pe r im e nt a l c on d it io n s, b r an ch questions, record answers to both open-ended and closed questions, use previous answers to set up later questions, r an do mi se Au th or war e accessible,
m an ip ul at io ns , is
visu all y
also
for
i mp or t
o rien te d,
p ic tu re s, wh ich
researchers
a nd
make s without
so it
o n. ver y
strong
programming skills. It should be noted that it is not very well s ui te d f or r ea ct io n t im e r es ea rc h o r s ub li mi na l p ri mi ng , where very short time intervals are involved.
62
No matter how trivial the volume of data we generate with a survey or experiment, we are unlikely to be able to make sense of it by looking at all the data. Whenever we collect s ig ni fi ca nt
q ua nt it ie s
of
d at a
it
b ec om es
e ss en ti al
to
summarise the data in some way. Why is summarising data important? One subtle but important reason is that when we look at data in the raw we give too much emphasis to extreme values, which in statistics are called outliers. If you look at 20 numbers and all but one are between 20 and 23, and the other is 47, you will give too much weight to the 47. In interpreting the data it is much more important that all the others are very similar to each other, but we say 'Why is that one 47?' and focus on that instead of the others. When we summarise this set of values the mean is going to be (say) 21.9, not 46, so the emphasis is shifted to the mass of the data.
63
RESEARCHMETHODOLOGY Defining Research Problem How to define a research problem was a Herculean task thatrequired effective guidance to avoid the perplexity encountered in a research project operation. Our team followed the usual approach by poring questions to ourselves.Initially we began with-------------
Why the performance of the LIC is much higher than the reliance life insurance limited?
This problem was later recognized as comprising of no of amenities such as: what sort of performance is being referred to?
What period of time and what performance is being talked about? What is the environment, which is being considered?
64
Rethinking, discussions and rephrasing by our team placed the problem on a still better operational basis after no. Of steps— To what extent did sales performance in (pine period) of completes differ with that of I-pry in respect of Delhi? What factors were responsible for performance differentiates between the companies? In such a fashion, the ambiguities were resolved thinking and rethinking resulted in a more specific problem so that it might be realistic one in team of available data and resources and in also analytically meaningful. The outcome was not only meaningful from an operation point of view but was equally capable of solving the problem itself.
65
Research Instruments Used For our research purpose instruments used were extensive literature survey and Internet surfing. The idea was to gain enough insight into the insurance phenomenon and analyzing the characteristics of the population under study. We adopted sample survey because it was not possible to examine every item in the population. It was possible to capture sufficiently acquit result by studying only a portion of the total population which is the true representative of the population under study. The sample survey was divided into 2 phases viz,Insurance Market Survey (competitor survey) General Mass Survey Insurance Market Survey The phase one of study corresponded to the collection of data from insurance agents of our competitors who are in better personal contact with their customer so as to analyze the demand of the customers, their working environment and satisfaction level with their respected companies.
66
General Mass Survey The objective of this survey was to tap those people who can prove to be potential insurance advisors for the company. So, the questionnaire aimed at finding the basic mind set of the people like whether they will be interested in earning extra income and if yes then what method out of various options provided to them like MLM or Investments in property etc. they will prefer. It also aimed at finding out that if given a chance whether they would prefer to join reliance life insurance as an insurance advisor.
Sampling techniques used and the sample size Simple random sampling technique was used to collect data from the population. This technique gave each item an equal probability of being selected.
67
Sample size --For insurance market survey, the data was collected from the 80 insurance advisors who are working in the different life insurance companies. For general mass survey, the data was collected from 100 people who were either businessmen or retailers.
Field Work Done As soon as the problem has been defined and research has been designed about the method of the data collection, we kept in mind the two type of data: Primary Secondary The Primary Data was collected by performing the surveys o f t he c om pe ti to rs a nd t he c ust om er s. T he g ro up w as d ivid ed i nto 4 pa rts o f 2 ea ch to su rve y th e d iffer en t branches of all the insurance companies all over Delhi and NCRs, which include Gurgaon, Gaziabad, and noida. Regarding the Secondary Data Company’s websites were surfed, monthly performance reports were analyzed, trade,
68
j o ur n al s, m a ga zi n es a n d o t he r v ar i ou s p u bl i ca t io n s w e re consulted. Research project objectives The purpose of our project was to discover answers, solutions to question problems through the application of scientific procedures. The objective was to search and hunt for the solution to our research problem so that our company might use the same in over coming its weakness if any and assist the company in planning future strategies. Related Sub- Objectives Besides attaining the above objective efficiently, a number of rotated sub-objectives were also involved, viz. {1} Acknowledging brand awareness of first purpose {2} The purpose of insurance [life] {3} Analyzing competitors work environments and their satisfaction level {4} Analyzing competitors and business and seeking, making, earning {3} Analyzing competitors work environments and their satisfaction level {4} Analyzing competitors and business and seeking, making, earning 69
DATA COLLECTION
70
FIELD WORK Advisor: As my project was to recruit advisors for the company so we must know who are advisors and what they actually do? An agent is the representative of an insurance company who sells different policies or product to its clients. Today in life insurance companies’ advisors are known to be the backbone of the whole system. Advisors/agents do not work on monthly payroll basis; they receive a certain commission on the policies they sell to the clients. The eligibility of advisors The eligibility required to become an advisor/agent is that he/she should be 12th pass to operate in urban area and 10th pass for rural areas. Before a person becomes an advisor/agent he/she has to undergo 100hrs training according to IRDA norms, which is compulsory. How can a person can be advisor for the company? A person who wants to be an advisor has first to fill a recruitment form and has to pay a fee of Rs. 200/- in favor of reliance life insurance private limited. Then, he has to pass a test for which company gives proper training to his advisors. there are two mode of training
71
1) Classroom training: - it is a Full Time Training with a period of 17 days regular between 9 am to 5pm at the training centers allotted to the advisor. 2)Online training: - it is another mode of training where the company provides CD’S and books to the advisor for his own study. After this test person appears in exam conducted by IRDA, after passing the exam the person is awarded a license. And after getting the license the person can work as an advisors of the company. Advisor Role. To provide ongoing financial advice for his/her clients: Identify future clients -
Making appointments
-
Conduct financial review meetings with prospects/clients.
-
Close sales
-
Get referrals
-
Provide service to clients.
-
Follows internal sales and reporting system
Working Environment of an advisor/agent. -
To be a part of world-class sales team.
-
Work from your own office or residence.
-
Work full time or part time (an advisor can work part time by undergoing only 50hrs of training and 100hrs training is for full time advisors.)
-
Earn Commission, Bonus & Incentives.
-
No upper limits on earnings.
-
Flexible career. 72
Opportunities for an Advisor/agent. -
No startup capital required.
-
Flexible working environment.
-
Be your own boss.
-
Unlimited earning potential.
-
To be a part of a world-class team.
Most preferred profiles to recruit as Advisors/agents. -
CA’S
-
Doctors
-
Lawyers
-
Retired Defense officers
-
Government employees
-
Bankers and brokers.
-
Agents of other life insurance companies.
-
Executives working in call centers.
-
House wives.
73
LIMITATION
74
LIMITATION
The random sample of 100 provides data that is project able to the total population from which it is drawn, with an error range of +/- 5% with a 95% confidence. For sample sizes of 50 (for certain population segments compared in this report), the responses will be accurate, at the same confidence level, with an error range of +/- 7.1 percent. Where data is reported based on sample sizes of less than 50, care should be taken in drawing conclusions, as the error range increases sharply as the sample size drops below 50.
75
FINDING
76
Findings • M o s t o f t h e p e o p l e b e l i e v e i n L I C b e c a u s e i t i s s e mi
government corporation. • Reliance in new insurance corporation so there should
be needed better management. • Influence of Media is low on Reliance product. • Relience can do better improvement in future. • Management of Reliance is good than LIC
77
Challenges faced in insurance market survey The first and the foremost challenge faced was taking the life advisers into confidence that what we are doing is that we have included nearly all the private life insurance players operating in Delhi. The agents were aware of the rising competition among the different players so many refused to fill questionnaire presuming us to be the employees of one of the companies. Some agents had difficulty in understanding what it means by net annual productivity. Some agents did not reveal their true annual productivity which was evident from the club membership they were holding The LIC had ego in accepting that private companies have broken their monopoly. Most of them answered as “no competitor” and “no effect” on LIC. The questions:“ are you holding any life/non life agency” and “is any member of your family interested in holding an agency” made many agents feel that we are interested in offering them an agency of the firm. Purpose of insurance had six options and agents found difficult to prioritize them since they were of the opinion that all the options together describe the purpose of insurance
78
ANALYSIS AND FINDINGS: INSURANCE CONSULTANT SURVEY Gender of the respondent Table 1 Valid
1 to 5 5 to 10 More than 10 Total
Frequency 11 6
Percent 16.9 9.2
Valid Percent 16.9 9.2
48
73.8
73.8
65
100.0
100.0
Cumulative Percent 16.9 26.2 100.0
customer size per month of the respondent
50
40
y c n30 e u q e r F 20
10
0 1 to 5
5 to 10
more than 10
Inference-On an average an insurance advisor deals with more than 100 customers in a month and out of them he converts 80% of the calls i.e. he sells policies to them. 73.8% of the respondents had a customer base of more than 10 which was the minimum figured option included in our questionnaire. And these were the advisors who had been in this field for the last 5 to 8 years or more than that. Contacting the customer by the respondent 79
Table 2
Valid
Personal meeting & telephone Telephone & references All Total
Frequency Percent
Valid Percent
Cumulative Percent
9
13.8
13.8
13.8
10
15.4
15.4
29.2
46 65
70.8 100.0
70.8 100.0
100.0
contacting the customer by the respondent
personal meeting & telephone telephone& references all 9
10
46
Inference-When respondents were asked that what are the ways they use for contacting the clientele base they are having then 70.8% of them named telephone calls, personal meetings and references as the major means of keeping in touch with their customers while only 15.4% named telephone calls and references as their sources. Frequency of visiting the customer by the respondent
80
Table 3:
Valid Once a month Twice a month More than that Total
Frequency
Percent
Valid Percent
Cumulative Percent
10
15.4
15.4
15.4
49
75.4
75.4
90.8
6
9.2
9.2
100.0
65
100.0
100.0
frequencyofvisitingthecustomerbytherespondent
50
40
y c n e30 u q e r F 20
10
0 once a month
twice a month
more than that
Inference-75.4% of the advisors were find to visit their customers almost twice a month for various purposes like updating the customers for new policies and products company is introducing etc. and only 15.4% visited their clients once a month. Annnual productivity of the respondent
81
Table 4:
Valid
Below Rs. 50,000 Rs. 50,000 -1,00,000 Above Rs. 1,00,000 Total
Frequency
Percent
Valid Percent
Cumulative Percent
4
6.2
6.2
6.2
15
23.1
23.1
29.2
46
70.8
70.8
100.0
65
100.0
100.0
a n n n u a lp r o d u c tiv ityo fth e re s p o n d e n t
5 0
y40 c n e u30 q e r F 2 0
1 0
0 b e lo w R s .5 0 ,0 0 0
R s .5 0 ,0 0 0--1 ,0 0 ,0 0 0
a b o v eR s .1 ,0 0 ,0 0 0
Inference The commission earned by the advisors on the policy they sell to their customers is called the premium or the productivity. 70.8% of them had an annual productivity of more than 1 lac due to the large amount of business they gained via insurance only while 23.1% were earning between 50,000 to 1,00,000 because either they were new to this business or they were not able to devote much time to this field. Source of information of the customer
82
Table 5: Valid Frequen Percen Percen Cumulativ cy t t e Percent Valid Newspapers 15 23.1 23.1 23.1 Television 14 21.5 21.5 44.6 and radio Relatives/fri 24 36.9 36.9 81.5 ends Other 12 18.5 18.5 100.0 sources Total 65 100.0 100.0 s o u r c e o fin f o r m a t io n o ft h e c u s t o m e r
2 5
y c20 n e u q 15 e r F 1 0
5
0 n e w s p a p e rs
te le v is io n a n d ra d io
re la tiv e s /f rie n d s
o th e rs o u rc e s
Inference-As per the point of view of the 36.9%advisors, the customers usually get to know about the policies and products of any insurance company via their relatives or friends while 23.1% advisors gave the credit to the advertising in the newspapers as the source of information to the people. TV and Radio had 21.5% of the advisors favoring them. Parameters Demanded in insurance policies
83
Table 6:
Valid
Service Quality Product features Brand Total
Frequency 14 18
Percent 21.5 27.7
Valid Percent 21.5 27.7
Cumulative Percent 21.5 49.2
11
16.9
16.9
66.2
22 65
33.8 100.0
33.8 100.0
100.0
parametersdem andedininsurancepolicies
service quality product features brand
21.54
33.85
27.69
16.92
Inference-33.8% advisors feel that while buying a policy what customer looks is the brand name associated with it. Like for selling a LIC, which is a generic brand you don’t need to do that much hard work because customer knows it. 27.7% favored quality of the product they are selling as the top priority of the customer.16.9% advisors gave their consent to the product features as one of the enticing factor for the customers in buying into a policy. Purpose of getting insurance
84
Product of reliance life insurance
Individual plans
Savings(endowment)
Reliance endowment plan
Reliance special endowment plan
Reliance cash flow plan
Reliance child plan
Reliance hole life plan
Pension
Reliance golden year plan
Investment
Reliance market return plan
Risk/protection
Reliance term plan
Employee benefit plan
Reliance group term assurance policy
Reliance EDLI scheme
Pension
Reliance group gratuity policy
Reliance group superannuation policy
FNDNG 85
COMITITORS OF RELIANCE IN THIS FIELD ARE.
ICICI Prudential Life
Bajaj Allianz
Max New York Life
Met Life
ING Vyasa
Om Kotak Mahindra
Tata AIG
Aviva
HDFC Standard Life
SBI Life
Birla
sun-life insurance company limited
AMP
Sanmar Assurance Company Limited
Dabur
CGU Life Insurance Co. Pvt. Limit
86
Recommendations & Suggestion
87
Recommendations&Suggestion • Re li an ce
g iv es
m or e
e mp ha si ze
on
a dv er ti si ng
media. • R el ia nc e
s ho ul d p ro vi de
e ff ec ti ve p ol ic ie s, f ro m
investment point of view. • Reliance should give training and motivation their
agent and customers. • L I C s h ou ld a d op t p r of e ss io n al a p pr o ac h f o r s ta ff
and management. • R el i an ce s ho u ld g i ve m o re e m ph a si s o n c re a ti n g
Reliance in the financial products.
88
CONCLUSION
89
CONCLUSION Due to emergence of private insurance companies, the competition has increased many a fold and it provides much better and flexible schemes & policies than the existing insurance companies. Customer relationship should is the need of the hour and since private companies’ prime motive is the same, so naturally it would do much better with respect to insurance services. With then private company coming into the field the returns are going to be better and the services are also likely to get better. Since private insurance companies are known for their service & promptness they would do much better job in insurance sector than the existing ones.
90
Reliance
as
a
life
insurance
company
need
more
advertisement as being new in the field as they are new in the field.
ANNEXURE
91
Bibliography Books:
`Kothari,C.R,Quantitative Techniques new Delhi:Vikas publishing House Pvt. Ltd,1978.
Sharma ,D.D. Marketing Research, New Delhi Vikas Publishing House Pvt. Ltd,1978.
Kotler Philip &Pearson Publishing House Ltd,1968 (80-85),test 05
Search engine used: www.google.com
92
QUESTIONNAIRE Study of consumer perception about Life Insurance market (Please Mark ( ) in the box of your choice)
1. Name ___________________________ 2. Sex: a) Male 3. Occupation: a) Student Businessman e) House wife 4. Age: a) Below 20
b) Female b) Professional
c) Serviceman
d)
f) Other specify………….. b) 21-30
5. Income (per month): a) Below 5000/- b) 5001-10000 20000
c) 31-45
d) above 45
c) 10001-20000
d)
Above
6. Do you understand what ‘Life Insurance’ is? Yes No 7. Which different Insurance companies are you aware of? Companies I am aware LIC ICICI HDFC Birla Tata SBI-Life
93
New me
for
Allianz Bajaj Life Kotak Mahindra AMP Sanmar Aviva Life ING Vysya Max Newyork Matlife
8. Have you you ever ever taken taken any Life Insuranc Insurancee policy? policy? Yes No Please also specify company? Companies LIC ICICI HDFC Birla Tata SBI-Life Allianz Bajaj Life Kotak Mahindra AMP Sanmar Aviva Life ING Vysya Max Newyork Matlife
Yes
Will you take Life Insurance policies from the same company in future? Yes No 9. What type of policy do you have? (Put tick mark) Endowment [ ]
Money Back [ ]
]
Whole Life [ ]
Single Premium [ ]
Other, specify……..……………… 94
Term Policy [
10. What do you look for, while opting for a Life Insurance Company? (Put tick mark) Return on Investment [ ]
Goodwill [ ]
Additional Benefits [ ]
Security [ ]
Others, specify …………………………
11. What do you look for, while opting for a Life Insurance policy?
Tax Saving [ ]
Income Security [ ]
Old Age Benefits [ ]
Savings [ ]
Other, specify………………….
12. Do you think insurance is superior to other forms of savings? Yes [ ]
No [ ]
13. Is price an important im portant consideration while opting for an insurance policy? Yes [ ]
No [ ]
14.Are you planning to take Life Insurance in near future? Yes No
95
15.If you neither have taken nor are you planning to take Life Insurance, then why so? Reason We don’t need life insurance So many legal formalities to avail claim Its not a good investment of money Life Insurance is too costly for us Life Insurance policies were confusing
That’s true
Not actually
16.Di 16.Did d any any repr repres esen enta tati tive ve from from Insu Insura ranc ncee Comp Compan any y visi visitt you you for for business? Yes
No
If yes, was he able to fully explain the different life insurance policies of his company? Yes
No
17.Do you feel it’s hard to fully understand so many terms used in Life Insurance policies? Yes
No
96
18.While choosing an Insurance company, what factors are important for you?
Different factors
We Preferable but We don’t will not think it is go for compulsory important it
Trustworthy insurance agent Mouth Advertising Suitable policy available Premium rate Benefits offered Service offered Financial strength of company Reliability of company How long company exists Certified reports about companies 19. Any suggestions to improve the services offered by various insurers?
Thank you for Your Valuable Time and Inputs.
97