Max newyork life

1.1. OVERVIEW OF THE INDUSTRY

Life is very fragile and death is a certainty. We cannot control the uncertainties of life.

But, we can cover the risks surrounding us. Life insurance, simply put, is the cover for

the risks that we run during our lives. It protects us from the contingencies that could

affect us.

Life insurance is not for the person who passes away, it for those who survive. It is the

responsibility of every bread earner to guard against the events that could affect the

family in the unfortunate circumstance of his / her demise. Thus, having a life insurance

policy is very vital. Before going for a life insurance policy it is imperative that you know

about various types of life insurance policies.

Life insurance is an essential part of financial planning. The main purpose of purchasing

life insurance is to ensure that your dependents are financially protected in the event of

death. Life insurance is a way to plan for the future so you need to be sure that the

coverage you purchase fits your needs.

There are many options available to you when purchasing life insurance. Some policies

provide coverage for your lifetime and others provide coverage for a specific number of

years. With certain policies, you are able to combine different kinds of insurance and

even build up your cash value. Your choice should be based on your needs and what you

can afford.

Different Policies

Term Life Insurance

Term life insurance is an insurance policy that is in effect for a specific period of time. If

the insured dies within that timeframe, the beneficiary of the policy receives the death

payment. However, if the insured survives that period of time, the beneficiary receives

nothing and the policy is closed. Term life also provides the ability to convert to a

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permanent kind of coverage at a later time. The main reasons people buy term life

insurance include:

Coverage for a specific amount of time until they are able to build up their assets.

Coverage for the amount of time the mortgage is for so in the event of an

untimely death, the mortgage is taken care of.

Coverage for those that cannot afford a permanent policy, especially newlyweds

and new parents.

Permanent Life Insurance

Permanent life insurance covers a longer period of time than term life or for the entire life

of the insured. This kind of insurance combines death benefits with a savings component.

The amount of money that is not used to cover the amount of the insurance is invested by

the company and builds up a cash value that may be used in a variety of ways. You may

borrow against a policy's cash value by taking a policy loan. If you don't pay back the

loan and the interest on it, the amount you owe will be subtracted from the benefits when

you die or from the cash value if you stop paying premiums and take out the remaining

cash value. The cash may also be used to increase your retirement income or to help pay

for needs such as a child's tuition without canceling the policy. However, to build up this

cash, you'll pay higher premiums. There are several types of permanent life insurance,

including whole, universal, variable universal, and survivorship universal.

Whole Life Insurance

A whole life insurance policy remains in full force and effect for the life of the insured,

with premium payments being made for the same period. Some whole life policies let

you pay premiums for a shorter period such as 20 years, or until age 65. Premiums for

these policies are higher since the premium payments are made during a shorter period of

time.

Universal Life Insurance

The premiums of a universal life insurance policy are split in two ways. The premium

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you pay goes toward covering the cost of the insurance policy and the remaining balance

is invested and earns interest on a tax deferred basis. With this type of life insurance you

also receive a guaranteed minimum interest rate on the balance that is invested.

Variable Iife Insurance

Variable life insurance is an investment-oriented whole life insurance policy that

provides a return linked to an underlying portfolio of securities. The portfolio is a group

of mutual funds including common stocks, bond funds, and money market funds. This

type of life insurance offers fixed premiums and a minimum death benefit. The better the

total return on the investment portfolio, the higher the death benefit or value of the

variable life policy.

Variable Universal Life Insurance

Variable universal life insurance is a combination of universal life insurance and variable

life insurance in that excess interest credited to the cash value account depends on

investment results of separate accounts (equities, bonds, real estate, etc.). You have a

choice as to how the cash value is invested -- stock and bond mutual funds. However,

there is no guaranteed minimum interest rate with a universal life insurance policy.

SURVIVORSHIP UNIVERSAL LIFE INSURANCE

Survivorship universal life insurance provides a policy in which two people are covered

on one policy. The death benefit is paid upon the second death. The premiums for this

joint life policy are significantly lower than a regular policy. Many people take this type

of life insurance to help pay estate taxes after the deaths of both a husband and wife.

A BRIEF HISTORY OF THE INSURANCE INDUSTRY

The origin of insurance is very old. The time when we were not even born; man has

sought some sort of protection from the unpredictable calamities of the nature. The basic

urge in man to secure himself against any form of risk and uncertainty led to the origin of

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insurance. The insurance came to India from UK; with the establishment of the Oriental

Life Insurance Corporation in 1818. The Indian life insurance company act 1912 was the

first statutory body that started to regulate the life insurance business in India. By 1956

about 154 Indian, 16 foreign and 75 provident firms been established in India. Then the

central government took over these companies and as a result the LIC was formed. Since

then LIC has worked towards spreading life insurance and building a wide network

across the length and the breadth of the country. 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. In

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. In 1972 The

General Insurance Business (Nationalization) Act, 1972 nationalized the general

insurance business in India with the effect from 1st January 1973. it was after this that 107

insures amalgamated and grouped into four companies viz. the National Insurance

Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a

company.

LIFE INSURANCE BASICS

We buy life insurance because we want to make sure that our loved ones, especially

dependents, remain financially secure after we die.  Income replacement is the number1

reason why people buy life insurance.  Non-working caregivers also have an important,

and oft overlooked economic value that should be covered by life insurance.  Life

insurance is also purchased by those interested in achieving specific business or estate

transfer goals.

There are several choices when it comes to buying life insurance and there are huge

pricing differences in the market among different companies offering identical coverage. 

Policies are now available from more than 1,500 life insurance companies in the United

States.  Most financial planners recommend that each family income provider carry no

less than ten times their annual income in life insurance.

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Here’s an orderly way to go about shopping for life insurance:  1) assess your life

insurance needs, 2) decide on the most appropriate policy type, 3) set high standards for

the financial stability ratings of your insurance company and, then 4) shop until you drop

to find the best price.

Life insurance is a long-term proposition, which means that you should pay particular

attention, at time of purchase and throughout the life of the policy, to the financial

stability ratings of your life insurance company.  While the average U. S. adult shops for

life insurance once every seven years, it’s not uncommon for people to keep life policies

in force for decades.

ASSESSING YOUR LIFE INSURANCE NEEDS

The first step in life insurance planning is to analyze your life insurance needs or,

rather, the economic needs of the dependents left behind:

← Before purchasing a life insurance policy, you should consider your financial

situation and the standard of living you want to maintain for your dependents or

survivors.  For example, who will be responsible for your final medical bills and funeral

costs?  Would your family have to relocate or otherwise change their standard of living? 

The assumption of immediate death is necessary to determine the current life insurance

needs for the family or individual.

← Beyond the initial readjustment period, consideration has to be given to the longer

term financial needs of the remaining family members.  Items of consideration should

include dependency period income for children, income for the surviving spouse,

mortgage and other debt payoffs, college education funds and an additional emergency

fund.

Because life insurance needs change over time, your life insurance program

should be reevaluated periodically.  We recommend a review at least once every five

years or whenever you experience a major life event such as change income or assets,

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marriage, divorce, the birth or adoption of a child, or purchase of a major item such as a

house or business.

The Illinois Department of Insurance points out the reasons you might buy life insurance

will vary, depending on your age, financial situation and other factors.  Listed below are

some examples:

Single person with no dependents:  Funeral expenses; medical bills; debts, such as

credit cards or student loans; elderly parents who may be dependent upon you for

support.  Note: Buying life insurance at a young age is cheaper. As you get older or

possibly incur a serious health condition, it will be more expensive or difficult to buy a

policy.

← Single person with dependents: Funeral expenses; medical bills; outstanding debts;

caretaker expenses for your surviving dependents; education costs for surviving children.

← Couple with no children: Funeral expenses; medical bills; outstanding debts, especially

mortgage or car payments.

←

← Couple with children: Funeral expenses; medical bills; outstanding debts, especially

mortgage payments; child-rearing expenses; education costs. Note: Even if one partner

does not work outside the home, you may want to consider life insurance to help pay for

childcare or other services performed by that partner.

←

← Older couple: Funeral expenses; medical bills; impact on spendable income; outstanding

debts, such as a new home, second vacation home, or recreational vehicle; impact on

assets you may want to leave for children or grandchildren

In theory, you should have a declining need for life insurance as you age because fewer

people remain dependent upon you for income support.  Exception to this rule would be

for circumstances in which you want to protect a business entity or pay estate taxes for

heirs.  If the purpose of buying life insurance is to pay estate taxes, then you’ll only want

coverage that is guaranteed for the remainder of your life and that of your spouse as well.

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1.2 PROFILE OF THE ORGANIZATION

Max New York Life Insurance Company Ltd. is a joint venture between New York Life,

a fortune 100 companies and Max India Ltd. one of India’s leading multi-business

corporations. The strategy is to establish itself as a trusted life insurance specialist

through a quality approach to business.

In line with its values of financial responsibility, Max New York Life has adopted

prudent financial practices to ensure safety of policy holder’s funds. The company’s paid

up capital is Rs. 587 crore, which is more than the norm laid by IRDA.

Max New York Life has identified individual agents as its primary channel of

distribution. The company places a lot of emphasis on its selection process, which

comprises of four stages – screening, psychometric test, career seminar and final

interview. The agent advisors are trained in-house to ensure optical control on quality of

training.

201 agent’s advisors have qualified for the Million Dollar Round Table (MDRT)

MEMBERSHIP IN 2005. MDRT is an exclusive congregation of the world’s top selling

insurance agents and is internationally recognized as the standard of excellence in the life

insurance business.

Having set a best in class agency distribution model in place, the company is

spearheading a major trust into additional distributions channels to further grow its

business. The company is using a five –pronged strategy to pursue alternative channels of

distribution. These include the franchisee model, rural business, direct sales force

involving group insurance and telemarketing opportunities, banacassurance and corporate

alliances.

Max New York Life offers a suite of flexible products. It now has 22 life insurance

products and 8 riders that can be customized to over 400 combinations enabling

customers to choose the policy that best fits their need.

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DIFFERENT INSURANCE PLAN

Individual Insurance Plan

Group Insurance Plan

Others

INDIVIDUAL INSURANCE PLAN

Protection

Whole Life Participating Policy

Life Protector Policy

Life Protector Plus Policy

Life Partner Plus Plan

Savings

Life Gain Endowment Policy

Life Pay Money Back Plan(Participating) Policy

Life Gain Endowment(Participating) Policy

20 year Endowment(Participating) Policy

Unit Linked Plan

Life Maker

Children

Children Endowment Policy 18 & 24

Stepping Stones Child Money Back Plan(Participating) Policy

Retirement

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Easy Life Retirement Plan(Participating) Policy

Riders

GROUP INSURANCE PLAN

Group Term Life

Employee Deposit Linked Insurance

Group Gratuity

Credit Shield

Unit Linked Group Gratuity

OTHERS

Rural

Max Suraksha Policy

Easy Term Policy

Max Mangal Endowment(Participating) Policy

Bancassurance

Amsure

Amsure Bonus Builder Policy

Amsure Business Builder Policy

Amsure Family Money Back Policy

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Amsure Future Builder Policy

ACHIEVEMENTS

MAX New York Life is the first insurance company in india to be awarded the ISO 9001:

2000 certification.

Max New York Life was among the top 25 companies to work with in India, according to

2003 Business World magazine, “Great Workplaces in India”, Max New York Life was

ranked at the 20th position. This survey is the local version of the “Great Places to Work”

survey carried out every year in 22 countries.

With 201 agents becoming members of the MDRT in 2005, Max New York Life has

moved up in the top 50 MDRT global list.

VISION AND MISSION

Vision – To become the most trusted and reliable life insurance company in India.

Mission –

Become one of the top quartile life insurance companies in India.

Be a national player

Be the brand of first choice

Be the employer of choice

Become principal of choice for agents

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SOCIAL RESPONSIBILITY

The company donates a part of the total money collected on all policies sold, to SOS

Children's Villages of India at the end of the year.

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Max New York Life employee visits to SOS Villages are

organized regularly to generate a sense of ownership and

involvement among employees.

Max New York Life has also instituted the David Allen

trophy for the Most Socially Responsible Student at SOS

Children's Villages. David Allen, an employee of New

York Life, has donated Rs. 50,000 towards the rolling

trophy, which will be awarded to a student, of the Herman

Gmeiner (SOS) School at Faridabad, who displays and

shows caring and a social responsibility towards his/her

schoolmates or on a larger stage.

Shortly after inception, Max New York Life saw Gujarat

being devastated by a ruinous earthquake. The Max India

Family and New York Life International contributed

Rs.86.25 lakh towards the permanent care of children

affected by the earthquakes in Gujarat.

MNYL employees at a painting competition at SOS

Village

Anuroop 'Tony' Singh, making an annual commitment to

SOS

Tsunami

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More recently, in March 2005, New York Life made a

donation of Rs. 17 lakh to SOS Children’s Villages of

India for the long-term rehabilitation of survivors of the

Tsunami disaster in Tamil Nadu. The funds will be used

by SOS Children’s Villages of India for the reconstruction

of permanent dwellings for fishing communities severely

affected by the Tsunami waves in December 2004. A few

weeks earlier, New York Life joined its joint venture

partner Max India in making a donation of Rs. 75 lakh to

the Prime Minister’s National Relief Fund. The Chairman

of Max New York Life, Analjit Singh, met Prime Minister

Manmohan Singh to personally hand over the cheque.

Shortly after inception, Max New York Life saw Gujarat

being devastated by a ruinous earthquake. The Max India

Family and New York Life International contributed

Rs.86.25 lakh towards the permanent care of children

affected by the earthquakes in Gujarat. 

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BOARD OF DIRECTORS – MAX INDIA LIMITED

Dr. Bhai Mohan Singh Lifetime Chairman Emeritus, Max India

Mr. Analjit Singh Chairman, Max India

Dr. S S Baijal Former Chairman, ICI Ltd.

Mr. N C Singhal Former Vice Chairman & MD, SCICI

Mr. N Ranagachary Former Chairman, IRDA

Mr. Nitin Sibal Vice President, Warburg Pincus India Pvt.

Ltd.

Mr. Piyush Mankad Former Secy., Ministry of Finance, Govt.

of India

Mr. Ashwani Windlass Former Managing Director, Hutchison Max

Telecom Ltd.

Mr. Bharat Sahgal Managing Director, Warburg Pincus India

Pvt. Ltd.

Mr. B Anantharaman Jt. Managing Director, Max India

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NEW YORK LIFE INSURANCE COMPANY

A Fortune 100 company founded in 1845 is the largest mutual life insurance company in

the United States and one of the largest insurers in the world. Headquarter in New York

City, New York Life’s Family of companies offer Life Insurance, annuities and long –

term care insurance. New York Life Investment Management and retirement plan

services. Other New York Life affiliates provide an array of securities products and

services, as well as institutional and retail mutual funds.

The mission of New York Life is to maintain its superior ‘financial strength’, adhere to

the highest standards of ‘integrity’ and demonstrate ‘humanity’ by treating its customers,

agents and employees with compassion, consideration and respect.

New York Life is one of the largest and strongest life insurance companies in the world

with more than USD$215 billion assets under management and has received among the

highest ratings got financial strength from the Life Insurance industry’s principle rating

agencies: A.M. Best (AA+). Standard & Poor’s (AA+), Moody’s (Aa1), Fitch (AAA).

According to Moody’s, “New York Life’s rating reflects the company’s good quality

investment portfolio, ample liquidity, and sound capitalization, as well as the good

growth potential of its international business.”

As a leader in the insurance industry, New York Life continues to bring to its operations

new management concepts, advanced technologies, new distribution and training systems

and innovative insurance products.

QUALITY PORTFOLIO

Max New York Life aims to be a quality player selling true life insurance products in a

market where people are grossly under – insured and where life insurance has

traditionally been viewed as an investment and tax saving device. 96 % of the company’s

business portfolio is made up of Whole Life and long – term endowments. The average

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tenure of policies is over 30 years and the average age of people insured is around 28

years.

THE YEAR AHEAD

In 2005 – 2006, Max New York Life will further consolidate its market presence by

extending its reach to more cities and aggressively grow its agency operations and

diversify into alternative distribution channels. The company will continue top play a

thought leadership role in focusing attention on key industry issues. Max New York Life

will continue to espouse the cause of Indian Life insurers to move towards a maturity

level where self – regulation becomes possible. This, the company believes, will come if

all companies come together on a common platform to adopt best business practices

where the customer’s interest is paramount. The company will also continue to focus on

pensions, which are an extension of the financial relationship life insurance companies

have with customers. Max New York Life will further build on its present strengths and

will continue to map its progress according to stakeholder expectations. That is the way

to grow and continue the company’s journey towards becoming India’s most admired

life insurance company.

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1.3 PROBLEMS OF THE ORGANIZATION

CHALLENGES

The biggest challenge faced by the Government today is that of a regulator with the

prospect of about 30 or 40 players, each represented by thousands of agents, brokers and

intermediaries. To evolve a free and fair method of assessing the companies, to ensure

fair play between the competitors and to safeguard the interests of the largely uninformed

customers are the main tasks ahead. The other and equally serious aspect is to ensure that

the vast amounts collected by the insurance and pension funds are utilised for the welfare

of the people. Though the Government itself would not be the guarantor of the policy

monies, nevertheless, it is accountable through its regulatory mechanism, to put in place

prudential norms of investment and accounting, revenue recognition, fair valuation of

assets and liabilities, determining necessary margins towards any contingencies and

proper reserves for shrinkage of investments will have to be made. Nevertheless, care has

to be taken to see that there is not too much of control and regulation. A certain degree of

autonomy in the functioning of insurance companies has to be allowed so that they get

necessary freedom and space to perform and excel. The IRDA, along with the advisory

committee constituted recently, is eminently qualified to undertake these tasks. In

addition, a proposal has also been mooted to constitute a federation of insurance

companies analogous to the Indian Banks’ Association. Such an institution will provide

guiding principles, lay down a code of insurance ethics and generally act as a facilitator

for both the life and non-life industry.

    As for the existing player, the public sector giant, the Life Insurance Corporation of

India, the challenge is one of sustaining the huge growths it has shown in the recent

times. It has to face competition for the first time in its history, particularly in the urban

centres. It has to manage its huge operations more efficiently than at any other time in the

past. It has to think of equipping its personnel (staff and agents) to face competitors and it

may have to think of diversifying its activities to achieve economies in some areas.

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    As far as the prospective entrants are concerned, the greatest challenge is to establish

their presence in the minds of the public. Insurance, particularly life insurance, it is said,

is never bought but sold. To convince a large population, which is comparatively not well

informed about the intangible benefits of life insurance is indeed an onerous task. On top

of that, to establish the brand equity of a new name in a new field is quite a challenge.

The second most important challenge facing a new entrant is that of setting up

infrastructure and to reach out to as many areas as possible, since life insurance is based

on probability and the wider the spread, the greater are the chances of success in

maintaining the expense ratios at a reasonable level.

    Modern life perhaps offers challenges that will be common to all the above.

Improvements in health and longevity, the recent breakthroughs in the mapping of the

human genome and the frequent changes in the economy may have far-reaching effects

on life and health insurance. Devising products that match the changing needs of the

people and managing the funds in a volatile scenario are two problems that will have to

be tackled by every player in the days to come.

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1.4 COMPETITION INFORMATION

Insurance Companies in India

Before insurance sector was opened to the private sector Life Insurance Corporation

(LIC) was the only insurance company in India. After the opening up of Insurance sector

in India there has been a glut of insurance companies in India. These companies have

come up with innovative and flexible insurance policies to cater to varying needs of the

individual. Opening up of the Insurance sector has also forced the Lic to tighten up its

belt and deliver better service. All in all it has been a bonanza for the consumer.

Major Life insurance Companies other than LIC in India are:

Max New York Life Insurance

Bajaj Allianz

Aviva Life Insurance

Birla S un Life Insurance

HDFC Standard Life Insurance

ICICI Prudential

ING Vysya

Kotak Mahindra

Metlife India Insurance

Max Life Insurance

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Bajaj Allianz General Insurance Company Limited

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto

Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and

strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and Development

Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General

Insurance business (including Health Insurance business) in India. The Company has an

authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining

26% is held by Allianz, AG, Germany.

In its first year of operations, the company has acquired the No. 1 status among the

private non-life insurers. As on 31st March 2003, Bajaj Allianz General Insurance

maintained its leadership position by garnering a premium income of Rs.300 Crores.

Bajaj Allianz also became one of the few companies to make a profit in its first full year

of operations. Bajaj Allianz made a profit after tax of Rs.9.6 crores.

Aviva Life Insurance,India

Aviva Life Insurance Company India Pvt. Ltd. is a joint venture between Aviva of UK

and Dabur, one of India's leading producers of traditional healthcare products. Aviva

holds a 26 per cent stake in the joint venture and the Dabur group holds the balance 74

per cent share.

Aviva is UK's largest and the world's sixth largest insurance Group. It is one of the

leading providers of life and pensions products to Europe and has substantial businesses

elsewhere around the world.

Aviva pioneered the concept of Banc assurance in India. Currently, Aviva has Banc

assurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank,

Centurion Bank of Punjab, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank, 11

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Co-operative Banks in Gujarat, Rajasthan, Jammu & Kashmir and Maharashtra and one

regional Bank in Sikkim.

Aviva has 40 Branches in India (including rural branches) supporting its distribution

network. Through its Banc assurance partner locations, Aviva products are available in

378 towns and cities across India.

Aviva Life Insurance has also launched two individual products – Pension Plus and

Secure Life. Aviva is the fifth private insurance player to introduce a pension product.

Birla Sun Life Insurance

Birla Sun Life Insurance Company Limited is a joint venture between Aditya Birla Group

and Sun Life Financial of Canada. Aditya Birla Group is an Indian multinational

conglomerate with presence in India, Thailand, Indonesia, Malaysia, Philippines, Egypt,

Canada, Australia and China.

Sun Life Assurance, Sun Life Financial's primary insurance business, is one of the

leading insurance companies of the world and ranks amongst the largest international

financial services organizations in the world. The Group has presence in several countries

such as Canada, United States, Philippines, Japan, Indonesia, India and Bermuda.

HDFC Standard Life Insurance

HDFC Standard Life Insurance Company Ltd. is one of India’s leading private life

insurance companies, which offers a range of individual and group insurance solutions. It

is a joint venture between Housing Development Finance Corporation Limited (HDFC

Ltd.), India’s leading housing finance institution and one of the subsidiaries of Standard

Life plc, leading providers of financial services in the United Kingdom. Both the

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promoters are well known for their ethical dealings and financial strength and are thus

committed to being a long-term player in the life insurance industry – all important

factors to consider when choosing your insurer

ICICI Prudential Life Insurance

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a

premier financial powerhouse and prudential plc, a leading international financial

services group headquartered in the United Kingdom.

ICICI was established in 1955 to lend money for industrial development. Today, it has

diversified into retail banking and is the largest private bank in the country. Prudential plc

was established in 1848 and is presently the largest life insurance company in the UK.

ICICI Prudential is currently the No. 1 private life insurer in the country. For the financial

year ended March 31, 2005, the company garnered Rs 1584 crore of new business

premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies.

ICICI Prudential has launched the unit-linked variant of its regular policy for children,

Smart Kid. It provides three scheme options: Maximiser, which has a skew towards

equities; Protector, which is biased towards debt; and Balancer, a blend of the Maximiser

and Protector. Withdrawals can be made after five policy years; a total of five

withdrawals can be made over the policy term. On the death of the parent, the sum

assured is paid out immediately; payment of all future premiums is waived and the policy

benefits remain in force.

ICICI Bank has decided to offer `Life Time Pension Triple Advantage' exclusively

designed life insurance product from ICICI Prudential Life Insurance to its high net-

worth credit cardholders across the country. The product is a flexible unit-linked pension

plan gives the customers the advantage of reducing their tax burden along with

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safeguarding their post-retirement years. Besides the tax advantage, the product also

offers to provide the cardholders regular pension, guaranteed for life.

ING Vysya Life Insurance

ING Vysya Life Insurance Company Limited is a joint venture between Vysya Bank and

ING Group of Holland, the world's 4th largest financial services group, with presence

across 50 countries, and a heritage of over 150 years.

ING Vysya Life Insurance Company Private Limited entered the private life insurance

industry in India in September 2001. With in a short span of time ING Vysya Life

Insurance has registered an impressive growth. The company currently has over 10,000

active advisors working from 75 branches (in 30 cities) across the country and over 2300

employees.

ING Vysya Life has launched "conquering life critical illness plan", a total protection

plan combining a term life cover and a unique critical illness benefit. It plan covers the

basic need for protection and also provides for cover against 10 major critical illnesses.

Kotak Mahindra Old Mutual Life Insurance Limited

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak

Mahindra Bank Ltd. (KMBL), and Old Mutual plc. Kotak Mahindra is one of India's

leading financial institutions and offers a range of financial services such as commercial

banking, stock broking, mutual funds, life insurance, and investment banking.

Old Mutual was established more than 150 years ago and offers a diverse range of

financial services in South Africa, the United States and the United Kingdom. The

company is listed on the London Stock Exchange with a market capitalization and has its

headquarters in London.

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OM Kotak Mahindra Life has launched an investment-cum-protection plan - the Kotak

Safe Investment Plan -- that offers safety of capital while permitting the policyholder to

benefit from investment opportunities in the equity, debt and money markets. This unit-

linked insurance plan is unique in that the various funds give the policyholder access to

growth markets while the plan guarantees the sum assured – on maturity or death —

regardless of the performance of the funds.

MetLife India Insurance

MetLife India Insurance Co. Pvt Ltd is a joint venture between MetLife Group and its

Indian partners. The Indian partners include J&K Bank, Dhanalakshmi Bank, Karnataka

Bank, Karvy Consultants, Geojit Securities, Way2Wealth, and Mini Muthoothu.

Met Life Group has presence in America and Asia and has an experience of over 137

years in providing financial services. The MetLife companies are the number one life

insurer in the U.S. with approximately US $2.8 trillion of life insurance in force. MetLife

serves 88 of the top one hundred FORTUNE 500 companies. MetLife entered Indian

insurance sector in 2001.

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1.5 S.W.O.T. ANALYSIS

Both Strengths and Weaknesses are inherent with the company while Opportunities and

Threats are usually outside factors, which affect the existence of the company at large.

Let us make the SWOT Analysis for Max New York Life Insurance Company:

STRENGTHS

Max New York Life is a young vibrant

company proud of the excellent track

record it has created for itself in a relatively

short period of time. MNYL has today

become one of the most aggressive players

in the Insurance services domain. A key

factor in our success has been our ability to

attract some of the most talented people in

any industry.

Excellence

"In every aspect of work. Ranging from the

in-house training institute to the detailed

Personal Insurance Plan. Max New York

Life is focused on achieving the highest

standards of quality in every aspect of their

business".

Honesty

"Is the heart of the Life Insurance business.

Max New York believes that above all,

Life Insurance is based on trust.

WEAKNESSES

Max New York Life: Limited Pay

Endowment Plan

MAX New York Life's new endowment

policy allows you to pay premiums for a

limited term and enjoy risk cover for the

entire term. Moreover, it comes with a

built-in double risk cover and a guaranteed

addition of 10 per cent of the sum assured

on maturity, besides the regular non-

reversionary bonuses. You can choose a

policy term of 20 or 25 years. The premium

payment depends on the term chosen.

Though premiums are paid for a limited

term, bonuses accrue for the full period.

27

Transparency, Dependability and Integrity

will form the cornerstones of the Max New

York Life experience."

Knowledge

"Is what makes experts. Max New York

Life is focused on the Life Insurance

business. Perfectly combining global

expertise with local knowledge, Max New

York Life is the Indian Life Insurance

specialist."

Caring

"For the customer. Max New York Life is

redefining the Life Insurance paradigm to

focus on the needs of the customers. The

Max New York service process is

responsive, personalized, humane and

empathetic."

OPPORTUNITIES

    Recent experience has shown that

wherever an industry has been thrown open

to competition, the size of the market has

grown and the existing players have

retained nearly 80% of the market share.

The size of the insurable population in

India is indeed vast and the existing player

has managed to cover about one-fourth of

it. The opportunities before the players are

THREATS

Main threat is from LIC

As the number of agents are

considerably huge, efficient

management of all the field force

need greater strain and effort

More and more companies are

coming into the field and the

existing ones have to struggle hard

to keep the customers loyal and to

28

therefore aplenty in terms of target

audience.

    The falling interest rates, the collapse of

many small-time financial institutions, the

scope for entering related areas like

banking and pensions in a bid for synergy

and the promise of e-commerce are some

of the other opportunities knocking at the

doors of the insurance majors.

    There is a probability of a spurt in

employment opportunities. A number of

web-sites are coming up on insurance, a

few financial magazines exclusively

devoted to insurance and also a few

training institutes being set up hurriedly.

Many of the universities and management

institutes have already started or are

contemplating new courses in insurance. It

also augurs well for greater development of

professionalism of the trade and expansion

of opportunities for everyone concerned.

The pension market, which perhaps has not

been very vibrant in the country, is also

likely to witness a sea change with huge

expansion in terms of premium and number

of policies. Health insurance, which is still

in its infancy, is also likely to get a major

boost, ultimately leading to improvement

in the quality of medical treatment and

get more customers

Now as India is on the brim of

emerging out as an economic power

center, stringent laws can be

expected in the coming future.

29

facilities in the country.

    The opening of the insurance sector will

throw open a huge array of opportunities,

many of which will be in unrelated fields

and may give a bigger push to the

development of the national economy as a

whole.

    Life insurance has today become a

mainstay of any market economy since it

offers plenty of scope for garnering large

sums of money for long periods of time. A

well-regulated life insurance industry

which moves with the times by offering its

customers tailor-made products to satisfy

their financial needs is, therefore, essential

if we desire to progress towards a worry-

free future. (PIB Features)

30

OBJECTIVE & METHODOLOGY

2.1 SIGNIFICANCE

The Max Life Insurance site is historically significant: It is the location of what may be

the first reported archaeological site in Indian, and it is certainly the site of the first

excavation in the state to collect archaeological materials. Moreover, the site is

archaeologically significant for the information it can yield about one of the four main

villages of the Caborn-Welborn culture, and about how inter-community relationships

may have changed over time.

For the long-range goal of understanding the development and decline of the Caborn-

Welborn culture, it is essential to know the site-specific characteristics of each of the

remaining main communities. Because the archaeological deposits at Max Life Insurance

sites retain integrity on both the ridge crest and in the buried midden deposits along the

swale and slough, we can recover some of the kinds of materials and associations needed

to characterize this community.

The key questions for Max Life Insurance are: What practices distinguished the Bone

Bank villagers from their contemporaries; did they decorate their pottery, or weave their

fabrics, in a distinctive manner, compared other villages? Or were the techniques, motifs

and embellishments common among most communities? What is the evidence for long

distance trade? Was Bone Bank a fortified village, as would be indicated if a stockade

wall is present around the remaining southeast village segment on the ridge crest?

31

2.2 MANAGERIAL USEFULNESS OF THE STUDY

Helps to have sale experience

Helps to deal with different customers

Helps to overcome the objections of the customers

Helps to understand the problems of agents in a broader prospect

It provides a platform where managerial role can be played effectively and

efficiently

2.3 OBJECTIVES

The summer internship program was carried with two prime objectives in mind. The

entire internship program was divided into two parts,

The recruitment of the insurance advisors

A survey conducted on the agent advisors of Max New York Life.

The recruitment of agent advisors is the most important responsibility of a sales manager

in any insurance organization. If the manager is able to recruit quality agent advisors half

of his work is done then and there.

During this internship program I was involved in the recruitment of insurance agent and

the advisors under the supervision of the sales manager. This enabled me to get a first

hand experience and learning of this important function which will be very helpful in my

future.

The survey was conducted on the agent advisors of Max New York Life. The main

objective behind the survey was to find out the factors which motivated the advisors to

perform their maximum potential. The survey also aimed at finding the factors within the

organization which would help them work more efficiently.

32

2.4 SCOPE OF THE STUDY

1) To study the present recruitment and selection process in the organization at

various levels,

2) To find the awareness level of employees vis-à-vis recruitment and selection

policy and

3) To compare the company’s recruitment and selection policy with the best HR

practices in recruitment and selection process.

2.5 METHODOLOGY

THE RECRUITMENT FUNNEL

Names 60

Screening Interview 20

NAT/ARIF 16

Career seminar 8

P200 & market survey 6

Career interview 4

Agents 2

33

INITIAL SCREENING

It is the first interaction of the recruiter with the prospect agent and the first step towards

the entire interview process. There are primarily two objectives of the initial screening.

First: to literally screen the candidate and to determine whether to go ahead with the

other recruitment processes. If the candidate fits in the scheme of the things then the

second objective is to be achieved

Second: to inspire and motivate the candidate to consider this as a career option. Here

care has to be taken to maintain the interest of the candidate with the presentation. It is

important to maintain a right degree of professionalism and be well prepared for the

interview.

The Interview Structure

The meeting has three phases

1) The Introduction: this should be no more than 15 minutes and here the manager

should give the candidate enough opportunity to tell about himself.

2) Describe the opportunity: One the manger has enough information about the

candidates background he/she should briefly describe the opportunity.

3) Have the candidate complete the company profile.

1. The Introduction And Screening Question :

Here the manager should start by briefly describing the structure of the meeting, the

purpose of the interview and the process that would be followed and the payoff for both

the candidate and the company. Then the manager should ask general questions about the

candidate and listen to him carefully. This dialogue provides important information about

34

the candidate to the manager. The manager should use a structured series of questions

and record the answers in the candidates recruitment file.

Discussing The Career Opportunity:

The manager should take approximately 10 minutes to explain the career opportunity to

the candidate. And the manager should use the “push – pull” technique here. One should

avoid selling too much. Quality candidates will become suspicious about the standards if

the manager seems to hire the candidate on the spot.

The manager should also stat that it is an outstanding opportunity and the selection

process is a challenge that most candidate do not successfully complete. This way the

manager can make his/her presentation more attractive with the push pull technique. Also

this will help you avoid the following problem . if you have wasted too much time selling

the career and then the candidate fails the numerical ability test , you have wasted a lot of

your time. So during the initial screening interview, be professional, minimize

distractions, and use the push pull technique.

The career presentation should cover five areas.

A brief discussion of the insurance industry

The benefits of being associated with Max New York Life.

The general benefits of a career in life insurance business, explaining the

opportunity of becoming sales managers or agency associates.

The benefits of being associated with that particular General Office.

The selection process.

Provide an overview of the steps of the process and clearly stat that our objective is to

encourage and promote only candidate with a strong probability of success.

35

Primary Objectives(s)

The primary objective is to study, understand and analyze various aspects related to

recruitment and selection procedure at Max Life Insurance.

Hypothesis and Research

A research Methodology defines the purpose of the research, how it

proceeds, how to measure progress and what constitute success with respect

to the objectives determined for carrying out the research study.

The appropriate research design formulated is detailed below.

Exploratory research: this kind of research has the primary objective of

development of insights into the problem. It studies the main area where the

problem lies and also tries to evaluate some appropriate courses of action.

The research methodology for the present study has been adopted to reflect

these realties and help reach the logical conclusion in an objective and

scientific manner.

The present study contemplated an exploratory research

The methodology adopted in concluding this study was quite simple. First there was

collection of data from various sources including business and personal interview. Then

after scanning and properly and analyzing and interpretation the information available on

hand, a final report was prepared.

Sources of data

Data is collected from Primary as well as secondary source. For primary data customers

were personally intervened and for secondary data, journals, Internet and books.

36

a. PRIMARY DATA: Primary data was collected from the sample by a self-

administered questionnaire in presence of the interviewer.

b. SECONDARY DATA: The chief sources of secondary data were magazines,

newspapers, journals etc.

SAMPLE SIZE

The survey is conducted among 100 respondents.

37

CONCEPTUAL DISCUSSION

RECRUITMENT PROCESS

3.1 THE RECRUITMENT PROCESS

The insurance industry grows on the shoulders of the insurance agents and advisors. It is

because of this reason that recruitment of quality agent advisors becomes a prime job of a

sales manager which is the only possible means to ensure success on both personal level

and for the organization as a whole.

Max New York Life says managers are very important for company. As a manager they

will play a critical role in managerial corporate by means of recruiting quality agent

advisors and developing them to do their job effectively.

A key MAX New York Life objective is profitable growth at a competitive cost. To

achieve that goal the managers must continually select and develop high quality new

advisors while building, nurturing and supervision an established sales force. Success in

field management therefore requires an unusual blend of sills and talents –some of ethic

one may already have, and some which one will need to develop.

38

Recruitment Process Map

Name gathering

Initial screening interview

Selection interview

Purpose: To build steady pipeline

Outcome : rule of 31

Purpose : Does he meet the initial target

Outcome : fill in interview file .sell the career

Purpose : Testing the conviction & sustainability of a careerOutcome: short listing

NAT & reference check

Career seminarP-200

Purpose : screen the candidate and to fit him to the closest successful profile

Outcome : profile of the candidate and list of probes

Purpose : evangelize insurance and sell it as a career

Outcome : I want to do it (higher conversion ration)

Purpose : get him to feel his initial market

Outcome: list of probable buyers

Evaluate P-200/market

survey

Career interview

Application form

Purpose : candidate to assess his market and get referred leads

Outcome : readiness to accept this career

Purpose : review of all which has been done and check on motivation, dream & longevity

Outcome: candidate ready to join

39

3.2 What is a sales managers job.

As Max New York sales manager one will have to be an effective leader. This is a

challenging work. They find that recruiting is much more than selling a career

opportunity, it is a commitment to help new agents make good transition, new meeting

etc from the previous career to the profession of sales.

Throughout their work they will always lead by example .They cannot expect their agents

to meet high standards if they do not demand the same standards of themselves. Max

New York life expects that they will develop the knowledge and habits that had made

them successful in the past, and dwell upon the enhancement of the personal development

of the agent advisors with a personal dedication to self discipline and high standards of

ethics. They must ensure that the agent advisors realize that to succeed they must have a

passion for helping others, and an unwavering commitment to developing a winning

team.

This commitment will help them persevere in difficult circumstances and do the right

thing when tough decisions are required as a steward of the M N Y L, there will be an

obligation to generation of agents past, present and future.

There are tremendous and varied rewards to this work- emotional, financial and

professional. As a MNYL manager, the opportunities for emotional and financial rewards

are similar, but they will come from different sources for example they may derive

enjoyment as a manager from –

Leading and teaching :

Being a role model and a source of guidance for the people with whom you work. This

often includes helping people who are “under employed” reach their full potential by

your coaching and encouragement.

40

Team building :

Bringing together a group of individuals and molding them into a cohesive team that

provides mutual encouragements, support and achievements.

The sales manager’s role

There are two basic roles that need to be effectively full filled by a sales manager, viz,

recruitment of quality agent advisors and their development. While the recruitment

activity would be explained in greater detail in the later articles, the development part is

beyond the scope of this project.

It is because of the importance of this activity that a well defined process has been laid

down by the company. It is said that “Becoming an outstanding recruiter won’t guarantee

your success but not being able to recruit for whatever reason will definitely guarantee

failure.”

The fundamentals of recruiting involves having

A philosophy of consistent and continual recruitment.

An ideal candidate profile.

A recruiting process

Clearly defined goals

A sales manager’s primary objective is to master the art of prospecting new agents. Here

arises the question as to who are the quality agents. With years of experience and

expertise in the business the company has laid down that a quality agent advisor is one

who has

A history of success pattern

A well defined natural market

41

An income history at a level equal to executive council or higher

Work habits that indicate high energy and leadership potential

Good self esteem and a competitive nature

Adequate personal financial reserves.

Some demographic factors which must be considered while recruiting an insurance agent

advisor are

Time in area

Income history

Education level

Leadership experience

Sales background

Community involvement

Employment background

Professional background

Keeping in mind the above mentioned factors there are certain laid down by the company

which the sales manager has to abide by while recruiting an insurance advisor?

The prospect should be above the age of 25

The prospect should be a graduate

The prospect should be living in the area for more than 5 year

The prospect should be married

42

To be successful in his primary job a sales manager should follow the recruitment process

that has been laid down. Strict adherence to the process will definitely guarantee greater

success. The recruitment process is as follows.

Name gathering -------

Initial screening day 1

Test and reference check day 3

Career seminar/ administering P-200 day 6

Evaluation of P-200 and survey day 10

Career interview day 11

Additional interview day 12

NAME GATHERING

The importance of this activity cannot be said too often “prospecting is the single most

important skill required a manager’s future success”. If a manager is able to generate

enough quality candidate names, he/she will be able to select and hire top quality

candidates. Industry studies have proven the importance of prospecting. Studies of high

retention and high productivity agencies have found only one major discriminator

between these agencies and those with poor retention and productivity. That the

discriminator is simply that good offices interview more candidates per hire. “On an

average these agencies conduct 20 screening interview and administer 15 numerical

ability test for each agents hired. Conversely the low productivity and retention agencies

conduct only 12 screening interviews and administer 7 numerical tests per hire. Clearly

effective prospecting is the answer. A manager will be better able to select out unsuitable

candidate and to let go of agents who are not performing to standards. Without

confidence in his/her prospecting skills he/she will be inclined to appoint candidates who

are significantly less than ideal and to hang on to poor performers long after they should

have resigned.

43

EFFECTIVE SOURCES OF NAME GATHERING

The sources of name gathering can be broadly divided into two categories

a) primary sources

Agent referrals

Centre of Influences

Nominators

Personal Observations

Policy Holders

Friends and Family

b) supplement sources

Newspaper Advertising

Direct mail/ Pre-Approach Letters

Employment news

Seminars

Campus Recruitments

Personnel Directors.

AGENT REFERRAL PROGRAM ( ARP )

Agent Referral Program (ARP) is a unique tool in sourcing quality new names from

successful advisors. It can also act as an additional income opportunity for the advisors.

The existing agent advisors in the team are required to give references of prospective

names. As they are in the business they know the requirement better and so they are the

best source of quality names. In order to get quality names from the agent advisors the

sales manager should

Ask for references in every Performance review and planning (RPP)

Ask after every successful field demonstration

44

Take Advisors out for dinner and use the opportunity to ask for referrals.

But in turn there is a need to reward and encourage the agent advisor so that this becomes

an ongoing habit.

Centre of Influence

A centre of influence can be defined as people with whom you already have an

established relationship for referrals as an agent. Your centers of influence for recruiting

will include friends business and civic contacts and your clients.

Because these people respect you as a professional they will want to help you succeed.

Ultimately they will most likely be your second most productive source of candidate

referrals. Referrals from agents have consistently proven to be the best source for quality

names. We begin with Centre Of Influence at this point because you will have few of

your own agents to ask.

To cultivate your Centers of Influence you will need a well organized presentation of the

career opportunity and a description of the type of candidate you seek. Your existing

Centre of Influence may be thinking of a very different profile or people that you have in

your mind. Therefore your presentation must direct their focus to a different set of

qualities and characteristics for agent’s candidate’s referrals.

NOMINATORS

A prominent people in the community who may be in a position to recommend

prospective agents. Development of nominator can be a very useful practice for sales

managers as they can also be a very good source of quality names. With constant

communication with the nominator he/she can be developed into a Centre of Influence.

So this practice if done religiously can be a very good source of quality names. For better

45

results the companies has laid down certain scripts which a sales manager should use

while communicating with the nominator.

While talking to a nominator a manager should keep in mind that he/she should always

take permission before speaking to the nominator and always insure that by helping

hi,/her the nominator would also help other people. Also the sales manager should not

forget to maintain regular contact and thank and acknowledge the efforts of the

nominator and develop him as a centre of influence.

WHAT SHOULD THE COMPANIES LOOK AT ?

The new companies have attempted appealing only to the middle, upper middle and elite

classes. 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 LIC and general insurance is

GIC if they hope to grow in the market.

Public Sector Companies Private Sector Companies

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.

46

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 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.

NUMERICAL APTITUDE TEST

This test focuses on the comfort level of the agents in simple mathematical calculations

and basic finance questions like simple interest , compound interest etc, as they would be

generating illustrations while they sell.

The numerical ability test has 20 questions each carrying 1 mark , there is negative

marking of 0.25 marks for every wrong answer. The time allowed for the test is 30

minutes. The agent has to obtain a minimum of 50% marks which is 10 marks to pass the

test. Calculators are not allowed. The test has to be administered and checked by the

agency coordinator and the results are published on the same day.

The room which is used to conduct the test will also make an impression on the

candidate. The managers should make sure that the room in which the test is being

conducted should be quite and free from all distractions. Borrowing an office , or putting

the candidate in an empty office may send the wrong signal to the potential peak

performer.

47

CAREER SEMINAR

So far in the recruitment process the manager has tried to access the ability of the

candidate. But the candidate should also be given an opportunity to know about the

company and the career opportunity; he/she should be able to access for himself/herself

the worth of the company and the opportunity given to him/her. In order to help the

candidate know about the company and the opportunity the company conducts a career

seminar every Friday in the evening. The career seminar is usually conducted by the

Partner/ Associate Partner or the

Sales Manager. In the seminar a very illustrative presentation is made. The candidates

who have been screened by the sales managers over the week are invited to attend the

seminar. In the seminar the presentation starts with a general description about the

insurance company followed by an introduction to Max New York Life, giving a lot of

emphasis on its reputation and credibility. The invitees are then informed about the nature

of the work which has been offered to then, the method in which the work has to be

carried out etc in great details. Also they are told about how they would earn in this

business and are given a brief illustration of how much they can earn in this business. The

presentation then has a guest speaker which is usually an exiting successful agent advisor

who discusses his success story with the invitees. This illustrative presentation then

draws a lot of attention and then the invitees clarify their doubts and ask any kind of

question they have. They person who is conducting the seminar is more that happy to

answer the question. In this manner the career seminar imprints an image of the

organization and the career opportunity in the minds of the prospects and they are now in

a better situation to take a decision about this offer.

48

EVALUATION OF P-200

After attending the career seminar the candidate is given a project called the P-200. in

this the candidate is required to write down the names of 200 people that he/she knows

along with some of their details. A sample copy of the P-200 is attached in the

appendices. Once they have filled the P-200 with the names, then an evaluation is done

on those names. This has a two fold benefit.

The company would know about the natural market of the candidates which

would largely be responsible for his/her initial success.

The candidate will have a database and can make an effective use of it.

In order to judge the natural market of the candidate , the manager picks up names

randomly form the P-200 list and call then. It is expected that the person who has been

called recognizes the candidate and give due attention to the call.

P-200 also helps a manager to categorize the natural market of the candidate under

various parameter like average annual income , age, etc. as insurance is sold as per the

needs and the spending ability of any individual, this categorization can help the

candidate in streamlining his approach while doing business.

The manager can also know if the market base of the candidate shows any tendency

towards any particular type of profession. The manager can also ask the candidate to

make calls to the names listed in the P-200 to try and sell them the product and evaluate

the candidate on this. This will help the manager is knowing the shortcomings which can

be eliminated later.

49

CAREER INTERVIEW

After the completion of the career seminar and the evaluation of P-200, the candidate and

the company know about each other and can make a call. Therefore the last part pf the

recruitment process is the career interview which is conducted by the Managing Partner/

Partner. The main purpose of this interview is to review all the previous activities of the

recruitment process, and top check the motivation level and the dreams and aspirations of

the candidate. The Managing Partner/ Partner would also look to know about the

expectations of the candidate and his intentions about a association with the company.

This ideally is the last past of the recruitment process after which the candidate is finally

invited to join the training program. But in case there is any disconnect between the

views of the sales manager and the MP/Partner, then there is another interview, the

additional interview to take a final call on this.

After completion of these rounds of interview and assessment the candidate is finally

invited to join the training program for a period of one month, during which he is

awarded the license to work with Max New York Life Insurance Company as an agent

advisor.

50

DATA ANALYSIS

4.1 PERSONAL OBSERVATION

It can be defined as a face to face contact made on an impromptu basis in order to secure

an appointment for a recruiting interview.

Effective recruiting requires consistent activity. Personal observation is a method of

prospecting that enables you to be always recruiting and taking advantage of every

opportunity that arises. These opportunities usually occur when you are in the midst of

some other activity or event. You may be having lunch with an agent attending a child’s

sporting event, working out in the gym or running errands on the weekends.

As you use personal observation, you will notice more and more the caliber of the

individual you meet daily. Ideal candidate are impressive people, and you will want to

approach them if you have not been introduced.

These are some of the most effective sources of gathering names. There are other very

important sources like newspaper advertisements, seminars, college interns etc. but these

sources should be used as supplementary means to the once discussed earlier for greater

result and consistency.

Once sufficient names have been gathered and after having qualified the names to suit the

requirement, the next obvious step is the initial screening.

The importance of name gathering can be seen form the recruitment funnel. The funnel

says that in order to recruit 2 quality agents the sales manager should have 60 qualified

names. Out of those 60 qualified names there should be at least 20 initial screening, and 8

career seminars and 4 career interview. This shows how important getting enough

51

qualified names is .also since the Max New York Life works on a quality model ,

therefore it is important to screen good number of well qualified names before recruiting

agents. It is because of this reason that M N Y L has a highly respect and efficient agent

advisors team amongst all other insurance companies in India

4.2 SURVEY

The aim of the survey was to find the out what are the factors that motivate an insurance

agent advisor and also to find out how the organization can help the agents in improving

their performance. The survey was carried out on a sample size of 30 agents advisors of

Max New York Life. It was questionnaire based survey in which I personally sat with

each and every sample and discussed the various question. This practice though time

consuming help me in bringing out the best results as I could not get the most intriguing

answers and also the agents and advisor felt more comfortable in giving their genuine

feedback and suggestions. The survey was carried over a period of one month and each

say was an enriching experience as each day the agent advisors had some enriching

experience to share. During the duration of one month I tried to cover agent advisors

from various demographics. For example I tried to cover equal number of tenured agents

and the newer once. I also made a point to cover the agents advisors of all age groups and

I was happy to observe that different age groups had different view about the various

aspects covered in the survey. The survey also gave me an opportunity to interact with a

good number of agent and advisors which was a very rewarding experience. In the

subsequent pages I will share with u the finding of the survey.

This survey revealed some interesting facts about the motivational needs and

expectations of the agent advisors. More than 60% of the advisors who work with

MNYL currently have their own business or other job and the primary reason why they

have joined MNYL is extra money.

52

Q. 1 Motivating factor which affects agent of Max New York Life

Insurance?

0

2

4

6

8

10

12

motivating factor

money

recognition

association withan organisaation

influenced byothers success

had freet ime

From the graph it is evident that most of the agent advisors working with MNYL are

motivated by the kind of money that they can make in the business. The other factors

which motivate them are recognition and association with a multi national organization.

There are few who motivate themselves by the success of the other agents. A handful of

people do not actually have any thing to motivate them, they are working with MNYL to

spare time.

53

Q. 2 What factor should be considered while communicating with

potential customers?

The agents and advisors have also given some important feedback about the important

characteristics which an MNYL agent’s advisor should possess. The results are shown

with the help of a graph below.

0%

5%

10%

15%

20%

25%

30%

1

characteristics

patience

comunication

relation building

persistence

hardworking

The agents feel that communication is the most important characteristics that an advisor

should possess, followed by patience and the ability to work hard. Therefore the

management of MNYL should give emphasis on developing the communication skills of

the agents. Also as an advisor makes most of his appointments over the phone, there

should be greater emphasis on soft skill development in the training module.

Most of the MNYL agents advisor feel that they are growing with the as rate as which the

insurance industry is growing which is a very good sign, how ever there are a few

percentage who feel that they are not growing as fast as the industry is and they feel that

the reason for not growing is their lack of time devotion and hard work.

The feedback of the agent advisors regarding the recruitment interview has been very

positive with the majority of the agent advisors saying that they are very pleased with the

entire recruitment process.

54

Q. 3 What percentage of customers are satisfied with the service of

Max New York Life Insurance?

0%

20%

40%

60%

80%

comfortable notcomfortable

comfort with screening interview

comfortable

not comfortable

Some of the agents felt that the presentation of the managers during the screening

interview is very impressive and that the way they project this career is very effective.

The fact that the manager had treated them like guests rather than an individual who is

seeking a work opportunity left a lasting impression. The advisors also feel that the career

seminar had helped in making up their mind to a great extent. However a good

Percentage of the agents surveyed had not attended the career seminar which means that a

number of prospect do not get an opportunity to attend the seminar and therefore the

company might lose a potential top performer.

55

Q. 4 What percentage of customers are influenced by the agent?

0%

10%

20%

30%

40%50%

60%

70%

1

influence of the career seminar

influenced

not influenced

did not attend

Those there were mixed reaction about other things but a majority of the advisors had a

similar opinion about the training program. This can be seen in the graph given below.

56

Q. 5 What percentage of customers are satisfied by the training

programme of the agent?

0%

20%

40%

60%

80%

100%

satisfied unsatisfied

satisfaction with training program

satisfied

unsatisfied

The agent and advisors also feel that the success of the advisor in bringing good business

is also due to the world class training program. On a question regarding the product range

of MNYL, there was a mixed response from the advisors. Where 60% of the advisors feel

that the products are enough while he remaining 40% say that the products are not

enough.

57

FINDINGS AND RECOMMENDATION

5.1 FINDINGS

The greatest motivating factors for the agents and advisors are money followed by being

a part of a Multi national organization.

Most of the agent advisors feel that good communication is important to be successful in

this business and therefore the company should train them in developing good

communication skills.

The agents and advisors find that the career seminar is a very important tool in selling the

agency as a career and most of them have been influenced by this.

The agents and advisors are very satisfied with the training program at

MNYL and believe that is it one of the reason for their success.

A good number of agents feel that there should be more policies for the

children

A good number of agents are not satisfied with the facilities provided by the

management. They would like the company to increase the number of

telephone in the agent area and also make the camp shop more efficient

The agent advisors also felt that the y are not given regular updates on the

position of the application that they have submitted.

The agents are happy with the kind of support they are getting from the

management, but some feel that the management should be more supportive

towards non productive agents.

58

5.2 RECOMMENDATIONS

The survey has made it evident that the agents and advisors are by and large satisfied

with the organization and are happy to be a part of this esteemed company. However

there are few areas where the agent advisors feel that there is some scope of

improvement.

Most of the agents and advisors feel that communication is the most important

characteristics that an advisor should possess. And as the agents take most of their

appointments over the phone, the training module should contain program which would

train them on soft skills and telephone etiquette.

Most of the agents and advisors are not satisfied with the working of the camp shop,

therefore some measures should be taken to make it more effective and spontaneous.

Since money is the most important motivating factor, the company should make regular

updates in the reward and recognition program, as many agents and advisors feel that the

rewards and recognition system are not enough remuneration for their hard work and

commitment.

There is a need for refreshment for the clients who visit the office. Unable to do so might

leave a bad impression in the minds of the client about the organization.

59

ANNEXURES

INVESTOR RELEASES

MAX NEW YORK LIFE INSURANCE

Operating cash profit of Rs. 112.31 crore earned in FY 04-05 against Rs. 4.34

crore in FY 03-04.

Annualized First Year Premium (AFYP - new sales) value at Rs. 241.51 crore for

the year ended March 2005, grows 65% year-on-year.

Unit Link in place: contributes 32% of total sales for the company for the period

Jan – Apr 2005.

Long tenor products and young customer base builds up strong business

fundamentals for MNYL. With clear focus on whole life segment the average age

of insured as well as the balance tenor of the policy is around 29 years.

Average case size per active agent at Rs. 15976 for the quarter ended March 2005,

grows 68% from Rs. 9496 for quarter ended March 2004.

MAX NEW YORK LIFE INSURANCE

MNYL maintains high agent productivity. Ranked No. 1 in annualized first year

premium (AFYP) per agent per month and Case Rate per agent.

Number of policies sold during the year ended March 2005 increases to 216,671

from 145,582 in the previous year. Number of Individual policies in force

increases from 153,995 as of March 2004 to 375,085 as of March 2005.

Sum assured in force increases 50% from Rs. 112 billion as of March 2004 to Rs.

167 billion as of March 2005.

60

35% growth in agency force in FY 04-05, 1959 agents added in 12 months and

659 in quarter ended March 2005.

MAX NEW YORK LIFE INSURANCE

MNYL maintains a persistency rate of around 80% throughout the year, higher

than the industry average of around 70%.

Geographic coverage increases to 38 offices – future plans to cover 62 offices.

Corporate agent coverage extends to an additional 100 towns.

Strong Co-operative Bank relationships created during the year, partnership from

inception with Yes Bank.

MAX NEW YORK LIFE INSURANCE

Key Business Driver Unit Quarter Ended Year Ended

Mar-05 Mar-04 Dec-04 Dec-03

a) Sales Value (Annualized first year

premium) zx

Rs. crore 76.87 47.28 214.40 111.70

b) Average case size per active agent Rs. 15,976 9,496 1,224 1,185

c) Case rate per active agent per month No. 3.22 3.27 2.16 1.86

d) Number of agents No. 7,567 5,608 6,908 5,070

e) Net agents added No. 659 538 1,838 1,916

f) Overall persistency rate % 76.70 82.10 82.90 81.10

g) Gross written premium income Rs. crore

First year premium 56.85 39.88 192.40 95.30

Renewal premium 60.83 22.21 143.90 64.30

Single premium 15.81 2.28 16.70 12.50

Total 133.49 64.37 353.00 172.10

61

h) Number of Policies sold No. 62,647 54,224 214,34

7

113,287

h) Sum insured in force Rs. crore 16,711 11,162 15,244 9,805

Max India Limited Investor Release January 2006

MAX SPECIALITY PRODUCTS

Substantial expansion plans approved in December 2005

– Addition of a new BOPP film manufacturing line with a capacity of 20,000

TPA.

– Addition of a new thermal lamination film line with a capacity of 120,000

KSM.

– Estimated project cost of Rs. 122 Crores – Debt-Equity mix of 1:1.

– Maintain leadership position in specialty plastic films segment.

Generates revenue of Rs. 100 Crores, and PBT of Rs. 8 Crores for first nine

months ended Dec’05.

– MaxFoil achieves revenue growth of 49% year-on-year.

100% capacity utilization – installed capacity 8,800 tons per annum.

High production yield.

Highest return on capital employed of Rs. 69 Crores – 21%, better than

competitors.

62

MAX SPECIALITY PRODUCTS

Cash Profit of Rs. 157 Crores earned for the year ended Dec’05, grows 60% year-

on-year.

Annualized First Year Premium (AFYP – new sales) value for the year ended

Dec’05 is Rs. 428 Crores, grows 100% year-on-year.

Gross premium income of Rs. 635 Crores for the year ended Dec’05, grows 85%

year-on-year over previous year’s Rs. 343 Crores.

Unit Linked products contribute 45% of total sales of the Company for the year

ended Dec’05.

– Top quartile investment performance by MNYL’s Unit Linked fund last year.

Sum assured in force as at Dec’05 end over Rs. 235 billion ($ 5.2 billion).

MAX NEW YORK LIFE INSURANCE

607,652 individual policies in force. New policies sold during the year ended

Dec’05 at 360,798, grows 68% year-on-year over 214,347 policies sold in the

corresponding previous year period.

Overall Persistency rate of 75% as of Dec’05 end against 83% as of Dec’04 end.

Persistency rate is 80% for agency sales and 63% for sales through other

distribution channels.

Agency force as at Dec’05 end at 12,575 agents grows 82% year-onyear. 5,667

net agents have been added in the year ended Dec’05. Number of agents in

Agency channel at 10,753 and in rural channel at 1,822. MAX NEW YORK LIFE

INSURANCE

63

Average case size per agent at Rs. 15699 grows 28% over Rs. 12240 for the

corresponding previous year.

Average case rate per agent per month is at 1.84 for the year ended Dec’05

against 1.76 for the previous year.

MNYL maintains high agent productivity – Breaks into the top 50 global list of

MDRT (Million Dollar Round Table). The Company has 126 advisors qualifying

for MDRT for 2005.

– Ranked No. 1 in annualized first year premium (AFYP) per agent per month and

Case Rate per agent.

Geographic coverage increases to 48 offices from 31 offices in Dec’04

– Future plans to cover 52 offices.

– Strengthen, build and grow Pan India presence.

MAX NEW YORK LIFE INSURANCE

Key Business Driver Unit Quarter Ended Year Ended YOY

Growth

Mar-05 Mar-04 Dec-04

a) Sales Value (Annualized

first year premium)

Rs.

Crores

121.04 76.22 427.86 214.39 100%

b) Average case size per

agent

Rs. 16,594 13,554 15,699 12,240 28%

c) Case rate per agent per

month

No. 2.29 2.14 1.84 1.76 5%

d) Number of agents No. 12,575 6,908 12,575 6,908 82%

e) Net agents added No. 1,908 353 5,667 1,838

f) Overall persistency rate % 75.20 82.90 75.20 82.90

g) Gross written premium

income

Rs.

Crores

64

First year premium 116.83 72.08 308.56 191.44 61%

Renewal premium 85.66 54.24 265.58 134.95 97%

Single premium 20.66 5.14 60.72 16.84 261%

h) Sum insured in force Rs.

Crores

23,524 15,244 23,524 15,244 54%

65

QUESTIONNARE

MAX NEW YORK LIFE INSURANCE COMPANY LIMITED

12th Floor, DLF Square, Jacaranda Marg, DLF City Phase II, Gurgaon-122002

FINANCIAL QUESTIONNARE

(Personal Covers)

Proposal no. :

Life to be Insured:

SECTION A

1 Please state your occupation

2 Are you (tick one)

a) Employed yes ( ) , no ( )

b) Self employed yes ( ) , no ( )

c) Share holding director (%of share holding) yes ( ) , no ( )

d) In partnership yes ( ) , no ( )

3 Please give details of any current policies that are with other life insurers

Insurers Sum Assured Reason for Cover Type/Term of

Policy

66

1 Please give details of Existing Policies in force for Life or Type/Term of Policy

Disability Benefits

Insurers Sum Assured Reason for Cover Type/Term of

Policy

2 Please state Earned Income in the last tax year (for self employed persons, state

personal earnings as assessed for income tax after deduction of allowable

business expenses.)

3 Please estimate the value of your Personal Assets and Liabilities.

Assets Liabilities

Property Mortgages

Investments Loans

Unquoted equities Others(please

specify)

Others(please

specify)

Total Total

4 Number and Age of Dependents

67

8 What is the reason for applying for this policy

(Please tick the appropriate one)

a) Family Protection ( )

b) Personal Protection ( )

c) Private Residential Loan Cover ( )

d) Others (please specify) ( )

SECTION B

Please state:

1) Reason for Loan

2) Name of Lender

3) Name(S) of Borrower(S)

4) Amount of Loan

5) Term of Loan

6) Interest Rate

7) Repayment method (e.g. interest only, capital and interest)

I hereby declare and agree that the above particulars and answers are complete and true,

that I have not held back any relevant facts or details, and that the answers to

questionnaire will form part of the application for the desired insurance on my life.

Signature of Life to be Insured DATE:

68

QUESTIONNAIRE OF AGENTS

Q. 1 Motivating factor which affects agent of Max New York Life

Insurance?

Money

Recognition

Assertion with an organization

Influenced by others success

Had free time

Q. 2 What factor should be considered while communicating with

potential customers?

Patience

Communication

Relation building

Persistence

Hardworking

Q. 3 What percentage of customers are satisfied with the service of Max New York Life Insurance? Comfortable

Note comfortable

Q. 4 What percentage of customers are influenced by the agent?

Influenced

Not influenced

did not attend

Q. 5 What percentage of customers are satisfied by the training

programme of the agent?

Satisfied

Unsatisfied

69

BIBLIOGRAPHY

1. Books

Mishra.M.N ,Modern Concept of Insurance, Year 1999

IC-02, IC-33 Insurance Institute Of India

Kothari C.R , Resarch Methodolgy

Gupta.S.L, Marketing Service

Life Insurance Volume 1

- ICFAI Press

2. Newspapers and magazines:

Insurance Chronical by ICFAI, Edn. June-2008

Economic times, Edn. May-2008

Times of India, Edn. 23, June-2008

3. Websites

www.maxnewyorklife.com

www.maxindia.com

www.newyorklife.com

70