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.

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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

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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.

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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

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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

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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.

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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

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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

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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.

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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

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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

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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

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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

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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

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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

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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.

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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.

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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.

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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.

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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.

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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-

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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.

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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

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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

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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

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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

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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,

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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




3. Age proof (certified as a True copy by the applicant

4. Education Proof (certified as True copy by the applicant


6. Approval from Zone vice president (in case candidate scores

2 or less than 2 on the 5 point system)

7. Advisor Recruitment Form.


(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.


DOCUMENTS


BLOCK LETTERS.

60




applicant .





name and the agent code of the referring agent must be




report to must be mentioned .





of the application form .





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




3. Age proof (certified as a True copy by the applicant

4. Education Proof (certified as True copy by the applicant


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.


(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.


DOCUMENTS


BLOCK LETTERS.




applicant .




64


name and the agent code of the the referring agent must be




report to must be mentioned.





of the application form.





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.

72

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

73

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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