Directorate of Distance Education

Swami Vivekanand Subharti University

A Project Report on

DYNAMIC OF AGENCY RECRUITMENT

(Bharti AXA Life Insurance)

Directorate of Distance Education

Swami Vivekanand Subharti University
Meerut

Submitted for partial fulfillment for award of the degree in

Master in Business Administration

BY STUDENT Under the Supervision

Name- Name of the guide
Enrollment No.-
Batch-

1
 Directorate of Distance Education
Swami Vivekanand Subharti University

Certificate

This is to Certify that Name of student has carried out the Project
work presented in this entitled Title of Project. under my
supervision and merits the award of Master in Business Administration
from Swami Vivekanand Subharti University. The Project embodies
result of original work and studies carried out by Student himself/herself
and the contents of the Project do not form the basis for the award of any
other degree to the candidate or to anyone else.

Signature of the Signature of the

Student Guide

Name of the Name of the Guide

Student-Enrollment Designation:
no.-Address- Address:
2
Sign. Of Student
 PREFACE

In this age of neck to neck competition, there is much importance given

to practical knowledge. The theorical knowledge is not sufficient to
understand the boundless field of business management.

Today every person wants to be a master in the field they are in. The
practical training is a life of management student. In modern world the
importance of management is increasing day by day. Industrial training
provide a student sufficient knowledge to develop an education to
connect theory and practical.

So to fulfill our purpose I have done training at BHARTI AXA LIFE

INSURANCE
 ACKNOWLEDGEMENT

It is my great pleasure to present this report before you. I sincerely would

like to show my gratitude towards all those persons who have helped me
throughout my project work

I am heartily thankful to Mr. Samson Pinto, Company guide, Bharti

Axa Life lnsurance Ltd., Ahmedabad for giving me his valuable
guidance for preparing this report. He has been an exceptional mentor
during these two months of SIP. It has been a great learning experience of
being a trainee under him.

I would like to express my special thanks to all the another official who
has helped me a lot during this SIP. Their critical advices helped me to
make this report more effective.

Moreover, I thanks to prof. ABHAY RAJA who guided me before and

after the industrial training. He gave me great support to prepare this
project, too. And all who directly or indirectly helped me in preparing this
report.
 INDEX

1. Sectors Profile
2. Company Profile
3. Executive Training
4. Introduction to IRDA ACT
5. Introduction Insurance Advisor
6. Executive Task Assigned & Achieved
7. Methodology
8. Analysis of performance v/s Target
9. SWOT Analysis
10. Suggestion
11. Limitation
12. Questionnaire
13. Conclusion
14. Bibliography
Sectors
Profile
 INDEX

i. Introduction Insurance Sector

ii. Brief History
iii. Insurance Sector in India
iv. Scenario Insurance Industry in India
v. Contribution to GDP
vi. Status of Insurance Industry
vii. Insurance Sector Before Privatization
viii. Insurance Sector After Privatization
ix. Future of Insurance Sector
x. Life Insurance
 INTRODUCTION TO INSURANCE SECTOR

In India, the concept of insurance was never given a serious thought, as

compared to other countries. Life insurance premium to Gross Domestic
Product (GDP) ratio is a mere 1.4% as compared to a healthier rate of 8%
amongst other developing countries. The reason being lack of awareness
and opportunities combined with poor state of services provided.

Presently in India, the insurance sector is nationalized; Life Insurance

Corporation of India (LIC) and General Insurance Company (GIC) render
services along with its 4 subsidiaries. While LIC provides life insurance,
GIC is concerned with non life insurance like - motor, marine, fire, health
and personal accident insurance.

LIC has been one of the pioneering organizations in India, which ushered
in the use of information technology in their business on a very large
scale to deliver more value and satisfaction to the policyholders. LIC has
fully computerized most of its branches all over India. Metropolitan Area
Network (MAN) has enabled policyholders to pay premiums or to get
their status report, surrender value quotation and loan quotation online.
The Zonal Offices and MAN centers are connected through a Wide Area
Network (WAN). Interactive Voice Response Systems have been made
functional in a number of centers all over the country.

The insurance industry in our country is on the threshold of a new era of

rapid expansion. A more competitive environment is expected to emerge
with new private participants being allowed to enter the insurance
industry. The need for private sector participation in this sector is justified
on the basis of enhancing the efficiency of operations, achieving a greater
density and penetration of life insurance in the country and for a greater
mobilization of long-term savings for long gestation infrastructure
projects. In the wake of emerging competition, LIC, with its more than
four decades of experience and wide reach, is equipped to face the
challenges emanating from the entry of new players. Insurance is a
federal subject in India. The primary legislation that deals with insurance
business in India is:

Insurance Act, 1938, Insurance Regulatory & Development Authority

Act, Composition of Authority under IRDA Act, 1999
 BRIEF HISTORY

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 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 were 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 breath of the country.
After the liberalization the entrance of foreign players has added to the
competition in the market.
 INSURANCE SECTOR IN INDIA
The insurance sector in India has witnessed almost a 360-degree turn over
a period of almost two centuries. It has come a full circle from being an
open competitive market to nationalization and back to a liberalized
market again.

DEVELOPMENT OF INSURANCE IN INDIA

The business of life insurance in India started 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. Despite all these the insurance market is
currently underdeveloped in India. This is mainly because of the
following reasons.

The large-scale of operations, public sector bureaucracies and

cumbersome procedures.
The highest paid employees of the nationalized insurance companies
are characterized by abysmal productivity, utter ignorance of the
 basic principles of the insurance business, endemic corruption, gross
indiscipline and sheer laziness.
Dominating the inevitably weak management of the nationalized
insurance companies, the militant and strongly unionized employees
of the nationalized monopoly insurance companies have transformed
Indian insurance from volume-driven into class-based business.
 SCENARIO OF INSURANCE INDUSTRY IN INDIA

India with its large population does provide an immense potential for the
insurance industry to flourish. Below given are some of the statistics
pertaining to Indian insurance Industry.

INDIA AT A GLANCE:
Population: 1 Billion
Economy: 5th largest in the world in terms of Purchasing
Power Parity (PPP)
GDP growth Rate: Over 6% per year on an average for the
last decade
Savings Rate: Around 26% of GDP
Estimated middle class population: 300 Million
Insured population: 70 million only
Estimated business (2008): $6.6 Billion

This characteristic of their business makes insurance companies the

biggest investors in long-gestation infrastructure development projects
in all developed and aspiring nations.

The insurance sector in India has come up a full circle from being an
open competitive market to nationalization and back to a liberalized
market again. Tracing the developments in the Indian insurance sector
reveals the 360-degree turn witnessed over a period of almost two
centuries.

By any yardstick, India, with about 200 million middle class

households, presents a huge untapped potential for players in the
insurance industry. Saturation of markets in many developed economies
has made the Indian market even more attractive for global insurance
majors. The following table reflects the low percentage and per capita
penetration of insurance in India compared to other developed and
developing countries. With the per capita income in India expected to
grow at over 6% for the next 10 years and with improvement in
awareness levels, the demand for insurance is expected to grow at an
attractive rate in India.
 CONTRIBUTION TO GDP

Insurance sectors contribution to GDP of different countries are as

follow:,
Contribution to GDP
Countries
(Premium as % of GDP)
UK 12.71
Japan 8.70
US 4,48
South Africa 14.04
Australia 6.04
South Korea 9.89
India 1.77
China 1.12
Malaysia 2.13
Indonesia 0.54
Brazil 0.36

Status of Indian Insurance Sector

The insurance industry in India is estimated to be of US $ 66-70

million & is expected to grow to US $ 377 million by 2005. With the
opening of this sector it was felt that LIC would lose its hold on the
Indian market. But LIC still continues to dominate the market with
its strong 800,000 task force. Its incremental market where is 97% &
is growing at a pace of 13%. In fact, some of its agents are the
members of MDRT (Million Dollar Round Table). The growth of
LIC can also be attributed to its presence in the US, UK where it
functions as a corporate agent. Amongst private life insurers ICICI
Prudential topped the list & in non-life insurers TATA-AIG has
emerged stronger followed by Reliance General.

Insurance in India before 2000 meant only LIC (Life Insurance

Corporation) & GIC (General Insurance Corporation). These two
 players signified the entire insurance sector in India. No doubt they
were an amalgamation of as many as 351 private insurance
companies i.e. LIC was formed by nationalizing 245 private
insurance firms in 1956 & GIC by nationalizing 106 firms in 1970.

INSURANCE SECTOR BEFORE PRIVATIZATION

The Indian Insurance sector before privatization was based on the

following factors:

Simple products.
Lower penetration & more direct business due to lack of
intermediaries.
Though the domestic savings in India is 25% only 5 per cent of it is
insured. The Gross Insurance Premium in India is as low as 0.3%
compared to Japan which is 31%, European Union =25%, Canada =
1.3%. Which is 51st in the world?
But with the Vajpayee government coming to power in 2000 for a
brief period, the way for privatization of insurance sector was paved.
& lobe hold, now we have as many as 26 private players in this field
i.e. 13 life-insurers & 13 non-life insurers. The reinsures function
under the umbrella of GIC & are required to reinsure 30% of their
business with it. GIC has allowed Indian exporters to secure liability
insurance from outside the country, which has facilitated its entry
into SAARC.
In various segments of Indian Insurance industry, health care
presents a huge potential. The total expenditure on health in India is
6 per cent of the GDP. The government spending is less than 25%
compared to 30-40% of developed countries. The health insurance
 industry in India can be valued at more than 90,000 core rupees. This
means that in a population of 1 billion only 2340 million people are
insured. It is estimated that this number will grow to 650 million by
2005.
The opening up of this sector has led to heightened activity. To
increase penetration both national & private players are now using
conventional means.
However, both the private & national players are reluctant to
actively participate in the motor insurance segment, as the losses in
this sector are more than 100%. Moreover the motor insurance
premium is as low as 2.5 per cent of the vehicle cost compared to
international standard of 6 per cent.
The privatization of insurance sector in India has encouraged the
government to go in for more such moves. The track record of LIC
has shown that even national players can function in a competitive
environment & still dominate the market.
Why Private Insurance companies came to India?

In India, the laws & practices have changed significantly, since the
1950s. The amendments made in 1952, to the Insurance Act, 1938, did
away with the system of Principal agents, Special agents & chief agents,
who were till then permitted to procure proposals from the market for
insurance companies. Restrictions were also imposed on managing
agencies, as well as on the nature of remunerations that could be paid to
agents.
As at the end of 1998, only the following organizations were transacting
life insurance business in India.
Life Insurance Corporation of India (L.I.C.)
Postal Life Insurance (P.L.I)
 LIC came into being on 1st September, 1956 as a result of the nationalization of
life insurance business.
LIC was hardly able to cover 10-15% of the population even after its 40 years
of existence in market

All others who were transacting life insurance business in India were
prevented from doing so by the Nationalization Act of 1956, & all their
business was taken over by the L.I.C. It is expected that there could be
significant changes in the following years; if & when new rules are
enacted, enabling more private companies to transact life insurance
business in India. LIC came into being on 1 st September, 1956 as a result
of the nationalization of life insurance business. It transacts business
throughout India & also in the U.K., Mauritius, Fiji & Bahrain.

LIC of India was the only player in the market from 1956 & even after 40
years of existence it was not possible for them to cover all the population
for life insurance. They were hardly able to cover 10-15% of the
population even after having so many branches & employees. So for
covering each & every individual under insurance, government allowed
private players to get into this business in 1999.

Now in all there are 17 players in Life insurance business including LIC
& they are
1. Bajaj Allianz Life Insurance Co. Ltd.
2. Birla Sun Life Insurance Co. Ltd. (BSLI)
3. HDFC Standard Life Insurance Co. Ltd. (HDFC STD LIFE)
4. ICICI Prudential Life Insurance Co. Ltd. (ICICI PRU)
5. ING Vysya Life Insurance Co. Ltd. (ING VYSYA)
6. Max New York Life Insurance Co. Ltd. (MNYL)
7. MetLife India Insurance Co. Pvt. Ltd. (METLIFE)
8. Kotak Mahindra Old Mutual Life Insurance Co. Ltd.
9. SBI Life Insurance Co. Ltd. (SBI LIFE)
10. TATA AIG Life Insurance Co. Ltd. (TATA AIG)
11. Reliance Life Insurance Company Ltd.
12. Aviva Life Insurance Co. Pvt. Ltd. (AVIVA)
13. Sahara India Life Insurance Co. Ltd. (SAHARA LIFE)
14. Shriram Life Insurance Co. Ltd (SHRIRAM LIFE)
15. Bharti AXA Life Insurance Co. Ltd. (BHARTI AXA)
16. Future General India Life Insurance Co. Ltd.
17. IDBI Fortis Life Insurance Company

What were these private players supposed to do?

All these private players were focusing on two things:

Geographical Expansion
Capacity Building
Geographical Expansion :
First of all the private players were concentration on the reach. They
opened number of branches in the country so that they can compete with
the insurance giant LIC. Because insurance is such a cake, more the
persons
Capacity Building:
In service sector when we are talking about capacity building we are not
talking about procuring sophisticated equipments /machines but about
manpower. So in insurance sector the capacity building i.e. recruiting
personnel is done in two ways: a) Recruiting employees i.e. Sales
Manager /Sales officer b) Recruiting Life Insurance Advisors.
Insurance Industry After Privatization

Reforms have marked the entry of many of the global insurance majors
into the Indian market in the form of joint ventures with Indian
companies, which have responded to the competition in an admirable
fashion by launching new products and improving service standards. In
India there are 17 players in insurance sector. One is LIC and others are
as below:

Date of Reg.
Name of the company
1 23.10.2000 HDFC Standard Life Insurance Company Ltd.
2 15.11.2000 Max New York Life Insurance Co. Ltd.
3 24.11.2000 ICICI Prudential Life Insurance Company Ltd.
4 10.01.2001 Kotak Mahindra Old Mutual Life Insurance Ltd.
5 31.01.2001 Birla Sun Life Insurance Company Ltd.
6 23.10.2001 Reliance Life Insurance Company Ltd.
7 30.03.2001 Tata AIG Life Insurance Company Ltd.
8 02.08.2001 ING Vysya Life Insurance Company Ltd.
9 03.08.2001 Bajaj Allianz Life Insurance Company Ltd.
10 06.08.2001 Metlife India Insurance Company Pvt. Ltd.
11 14.05.2002 Aviva Life Insurance Co. India Pvt. Ltd.
12 06.02.2004 Sahara India Insurance Company Ltd.
13 30.07.2006 Bharti AXA Life Insurance Co. Ltd.
14 3.01.2002 Shriram Life Insurance Co. Ltd
15 4.09.2007 Future General India Life Insurance Co. Ltd.
16 30.03.2001 SBI Life Insurance Company Ltd
17 19.12.2007 IDBI Fortis Life Insurance Company
 MARKET SHARE OF LIFE INSURANCE PREMIUM
COLLECTION

Sr.No. Company Name 2006-07 2007-08

1 HDFC Standard Life Insurance Company
1220 2201
Ltd
2 Max New York Life Insurance Co. Ltd. 752 1280
3 ICICI Prudential Life Insurance Company
3925 6643
Ltd.
4 Kotak Mahindra Old Mutual Life
499 943
Insurance Ltd
5 Birla Sun Life Insurance Company Ltd. 699 1708
6 Reliance Life Insurance Company Ltd 689 1820
7 Tata AIG Life Insurance Company Ltd. 518 788
8 ING Vysya Life Insurance Company
418 656
Private Ltd.
9 Bajaj Allianz Life Insurance Company
3027 5568
Ltd.
10 Aviva Life Insurance Co. India Pvt. Ltd 656 980
11 Sahara India Insurance company Ltd 19 71
12 Bharti Axa Life insurance 8 105
13 Shriram Life Insurance Co. Ltd 87 124
14 SBI Life insurance 1198 2531
15 Met life insurance 302 764
16 Future Generali 00 0.41
17 IDBI Fortis Life 00 4.36
18 LIC 23899 23583
Graphical Presentation of this data is as below;

Market Sherefor primium Collaction of HDFC Standard Life Insurance

Company Ltd
Insu.Co.2006-07 Max New York Life Insurance
Co. Ltd.
ICICI Prudential Life Insurance
Company Ltd.
Kotak Mahindra Old Mutual
3% 2% Life Insurance Ltd
Birla Sun Life Insurance
10% Company Ltd.
1% Reliance Life Insurance
2% Company Ltd
Tata AIG Life Insurance
2% Company Ltd.
ING Vysya Life Insurance
1% Company PrivateLtd.
Bajaj Allianz Life Insurance
1% Company Ltd.
Aviva Life Insurance Co. India
Pvt. Ltd
8% Sahara India Insurance
company Ltd
Bharti Axa Life insurance
63% 2% Shriram Life Insurance Co. Ltd
0%
3% (SHRIRAM LIFE)
SBI Life insurance
1%
0%
Met life insurance

Future Generali

IDBI Fortis Life

LIC
 HDFC Standard Life Insurance
Market Shere for Primium collaction Company Ltd
Max New York Life Insurance Co.
of Insu.Co.in 2007-08 Ltd.
ICICI Prudential Life Insurance
Company Ltd.
Kotak Mahindra Old Mutual Life
Insurance Ltd
Birla Sun Life Insurance Company
4% 3% Ltd.
Reliance Life Insurance Company
Ltd
Tata AIG Life Insurance Company
13%
Ltd.
ING Vysya Life Insurance
Company PrivateLtd.
Bajaj Allianz Life Insurance
2% Company Ltd.
Aviva Life Insurance Co. India Pvt.
47% 3% Ltd
Sahara India Insurance company
4% Ltd
Bharti Axa Life insurance
2%
Shriram Life Insurance Co. Ltd
1%
(SHRIRAM LIFE)
SBI Life insurance
11%
Met life insurance
0% 2%
5%
0% Future Generali
0%
0% IDBI Fortis Life
2%
0% LIC
 FUTURE OF INSURANCE SECTOR

Job opportunities are likely to increase manifold. The number of

people working in the insurance sector in India is roughly the same as
in the UK with a population that is 1/7 Indias; the US with a
population the size of India has nearly 4 times the number. In the
emerging markets, the picture is no less encouraging. In South Korea,
the number of full time employees more than doubled over a ten-year
period. Thailand added 50 per cent more jobs in four years.

The liberalization of the insurance sector promises several new jobs

opportunities for those employed in the finance sector that are
equipped with degrees in finance. Finance professionals who had
witnessed a slump in the job market would be much-relieved lot to
hear about the privatization of the insurance sector.

There could be a huge inflow of funds into the country. Given the
industrys huge requirement of start-up capital, the initial years after
opening up are bound to see a strong inflow of foreign capital.
Moreover, given that the breakeven, typically, come much later than
in the case of other sectors, odds are those first remittances of
dividend will not happen before a good 10-15 years.

Apart from pure re-insurance activities, which is providing insurance

protection, a revolution will come in service related fields like
training, seminars, workshop, know how transfer regarding risk
assessment & rating, risk inspection, risk management & devising new
policy cover, etc. also, with more player in market, there will be
 significant increase in advertising, brand building, & keep pricing not
ridiculous pricing & this will whole lot of ancillary industries.

Substantial shift in the distribution of insurance in India is likely to

take place. Many of these changes will echo international trends.
Worldwide, insurance product move along a continuum from pure
service products to pure commodity products. Initially, insurance is
seen as a complex product with high advice & service component.
Buyers prefer a face-to-face interaction & place a high premium on
brand names & reliability.

As product become simple & awareness increases, they become off-

the-shelf, commodity products. Seller move to remote channels such
as the telephone or direct mail. Various intermediaries, not necessarily
insurance companies, sell insurance. In UK for example retailer Marks
& Spencer now sell insurance products. In some countries like
Netherlands & Japan, insurance is marketed using post offices
distribution channels. At this point, buyers look for low price. Brand
loyalty could shift from the insurer to the seller.

In other markets, notably Europe, this has resulted in banc assurance:

banks entering the insurance business. The Netherlands led with
financial services firms providing an entire range of products
including bank accounts, motor, home & life insurance, & pensions.
Other European markets have followed suit. In France over half of all
life insurance sales are made through banks. In the UK, almost 95% of
banks & building societies are distributing insurance products today.
 In India too, banks hope to maximize expensive existing networks by
selling a range of products. Various seminars & conferences on banc
assurance are taking place & many bankers have clearly shown their
inclination to enter insurance market by leveraging their strengths in
the areas of areas of brand image, distribution network, & face to face
contact with the clients & telemarketing coupled with advanced
information technology systems. The

Mergers of Citibank with Travelers in USA & of Winterthur, the

largest Swiss Co. with Credit Suisse are recent examples of the
phenomenon likely to sweep India too.

Insurers in India should also explore distribution through non-

financial organizations. For example, insurance for consumer items
such as refrigerators can be offered at the point of sale. This
piggybank on an existing distribution channel & increases the
likelihood of insurance sales. Alliances with manufacturers of retailers
of consumer goods will be possible. With increasing competition, they
are wooing customers with various incentives, of which insurance can
be one.

Another potential channel that reduces the need for an owned

distribution network is worksite marketing. Insurers will be able to
market pensions, health insurance & even other general covers
through employers to their employees. These products may be
purchased by the employer or simply marketed at the workplace with
the employers co-operation.
 The major elements that will be Critical in shaping the future of the
insurance market can be broadly outlined as:

Distribution
Competition
Building Trust & Customer Confidence
Product innovation
Health Insurance
Training & Education
Information Technology
 LIFE INSURANCE

A small, happy family husband, wife and two cute kids. One bread
winner and four mouth to be fed. Things are doing well, BUT.... What
next if something goes wrong with bread winner?????? Life insurance is
a contract payment of some money to the person assured on the
happening of the event issued against. Usually the specified date at
periodic intervals or on unfortunate death, if any occurs earlier.

The Head or the breadwinner of the family generally supports the

family for their basic needs, such as, food, clothing & shelter, by bringing
income at a regular interval. So long as he or she lives & the income is
received steadily, the family is secure; but untimely death or disability of
that person puts the family in a very difficult situation, and sometimes in
stark poverty. Uncertainty of death is inherent in human life.

It is the uncertainty that is the risk, which gives rise to the necessity
for some form of protection against the financial loss arising from death.
Insurance substitutes this uncertainty by certainty.

The primary purpose of Life Insurance is the protection of the

family. Insurance in its various forms protects against such misfortunes
by having the losses of the unfortunate few paid by the contribution of the
many that are exposed to the same risk. This is the essence of insurance-
the sharing of losses and substitution of certainty for uncertainty.
 HISTORY LIFE INSURANCE

Almost 4,500 years ago, in the ancient land of Babylonia, traders

used to bear risk of the caravan trade by giving loans that had to be
later repaid with interest when the goods arrived safely. In 2100 BC,
the Code of Hammurabi granted legal status to the practice. That,
perhaps, was how insurance made its beginning.

Life insurance had its origins in ancient Rome, where citizens formed
burial clubs that would meet the funeral expenses of its members as
well as help survivors by making some payments.

The first .

Insurance as we know it today owes its existence to 17th century

England. In fact, it began taking shape in 1688 at a rather
interesting place called Lloyd's Coffee House in London, where
merchants, ship-owners and underwriters met to discuss and
transact business. By the end of the 18th century, Lloyd's had
brewed enough business to become one of the first modern
insurance companies.

Insurance and Myth...

Back to the 17th century, in 1693, astronomer Edmond Halley

constructed the first mortality table to provide a link between the
 life insurance premium and the average life spans based on
statistical laws of mortality and compound interest. In 1756, Joseph
Dodson reworked the table, linking premium rate to age

The first stock companies to get into the business of insurance were
chartered in England in 1720. The year 1735 saw the birth of the
first insurance company in the American colonies in Charleston,
SC.

In 1759, the Presbyterian Synod of Philadelphia sponsored the first

life insurance corporation in America for the benefit of ministers
and their dependents.

However, it was after 1840 that life insurance really took off in a
big way. The trigger: reducing opposition from religious groups.

The growing years...

The 19th century saw huge developments in the field of insurance,

with newer products being devised to meet the growing Needs of
urbanization and industrialization.

In 1835, the infamous New York fire drew people's attention to the
need to provide for sudden and large losses. Two years later,
Massachusetts became the first state to require companies by law
to maintain such reserves. The great Chicago fire of 1871 further
emphasized how fires can cause huge losses in densely populated
modern cities. The practice of reinsurance, wherein the risks are
spread among several companies, was devised specifically for such
situations.
There were more offshoots of the process of industrialization. In
1897, the British government passed the Workmen's Compensation
Act, which made it mandatory for a company to insure its
employees against industrial accidents.

With the advent of the automobile, public liability insurance, this

first made its appearance in the 1880s, gained importance and
acceptance.

In the 19th century, many societies were founded to insure the life
and health of their members, while fraternal orders provided low-
cost, members-only insurance.

Even today, such fraternal orders continue to provide insurance

coverage to members as do most labour organizations. Many
employers sponsor group insurance policies for their employees,
providing not just life insurance, but sickness and accident benefits
and old-age pensions. Employees contribute a certain percentage of
the premium for these policies.
 WHY LIFE INSURANCE?

In this entire world, people live and people die. No one is immortal.
Everybody who borne has to die, it is the rule. We all know it, but
human beings do not think much about it, infect we do not want to
think about it. Everyone in the world is very optimistic about his life.
No one knows when he/she is going to die and fortunately it is right
also. We all know our Date-of-birth, but we dont know our date-of
Death. Here the man is very possessive about his life and wants to live
more and more in what so ever condition is. He wants to live till ripe
old age. He wants to do very last for his parents and watch his children
stand on their feet.
But, what if fate cuts life shorts? Who would pay for his childrens
education, their marriage? Ensures life continuity for them? What if
sudden disability or illness puts us out of action? Who would pay the
mounting household bills? Have we ever thought of it? If these
adversities occur, are we equipped to face the situation?
Let us look at the entire concept from a different way. During our life
time we are supposed to deal with three probabilities and two
priorities as shown next page:

Childrens
Education Wealth
And Marriage Creation
 Dying too soon Living Death Living too long

FIGURE 1.1 Priorities and Probabilities of a Human Life

As shown in the figure a person has got three probabilities Dying

too soon, Living death and Living too long and two probabilities
Childrens Education and Marriage and Wealth Creation. We look in
to each of them one after another.

Dying Too Soon:

As just discussed above that everybody KNOWS about it but NO one

FEELS about it. We all know about uncertainty of our life but we still are so
optimistic about it. Todays stressful and hectic life style increases its
uncertainty. It is found that only 3 out of 4 people reach age of 60* and we
always consider ourselves among rest of the 3. A persons family will need
his/her income to maintain the same lifestyle.
Dont we want them to be happy, not only as long as WE live but as
long as THEY live?
* Statistical Survey of India

Living Death:

6 out of 10 people suffer a life-threatening illness before they reach the

age of 60.
Critical illness or disability
can shatter your dreams for
your loved ones. Not only
you suffer but you also have
to watch your family suffer.
When unfortunate event
occurs, your income should
not stop.

Your Childrens Bright Future:

Dont we know that education and marriage require a lot of money?

There are certain times in a persons life when he/she would want his
love to be available to his/her children in form of hard cash.

This is one area where you dont want to compromise, isnt it? You are
the source of your childrens happiness-protect it!
Wealth Creation:

Dont you want a house of your own? A comfortable bank

balance?
All of lifes comforts, be it a car or a vacation
 Life Insurance Jeene Ki Azaadi

Risk-Cover

Peace of Tax
Mind Benefits

Office Forced
Service Savings

CORE

Pre and
Post Sales Return
Service

Liquidity Safety

To answer these questions, we have to plan prior for the uncertainties of

our life and the planning will result in the answer.
In short we can say that the total service package of life insurance is as in
above diagram.
Company
Profile
What Is Bharti Axa?

Bharti Axa Life Insurance is collaboration between Bharti Enterprises

and AXA Group.

Bharti AXA Life Insurance is a joint venture between Bharti, one of

Indias 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".

VALUE AND VISION

Vision and Values of Bharti Axa Life Insurance is as follow:

Vision

To be a leader and the preferred company for financial protection and

wealth management in India.
 Values

Professionalism
Innovation
Team Spirit
Pragmatism
Integrity

About the Promoters

Bharti Enterprises

It is one of Indias leading business groups with interests in telecom, agri.

business, insurance and retail. Bharti has been a pioneering force in the
telecom sector with many firsts and innovations to its credit. Bharti Airtel
Limited, a group company, is one of Indias leading private sector
providers of telecommunications services with an aggregate of 60 million
customers, spanning mobile, fixed line, broadband and enterprise
services. Bharti Airtel was ranked amongst the best performing
companies in the world in the Business Week IT 100 list 2007. Bharti
Teletech is the countrys largest manufacturer and exporter of telephone
terminals. Bharti has a joint venture with ELRO Holdings India Ltd.
FieldFresh Foods Pvt. Ltd - for global distribution of fresh fruits and
vegetables. Bharti also has a joint venture - Bharti AXA Life Insurance
Company Ltd. - with AXA, world leader in financial protection and
wealth management

AXA

AXA Group is a worldwide leader in Financial Protection. AXA's

operations are diverse geographically, with major operations in Western
Europe, North America and the Asia/Pacific area. AXA had Euro 1,315
billion in assets under management as of December 31, 2006. For full
year 2006, IFRS revenues amounted to Euro 79 billion, IFRS underlying
earnings amounted to Euro 4,010 million and IFRS adjusted earnings to
Euro 5,140 million.

AXA Asia Pacific Holdings Ltd (AXA APH) is listed on the Australian
stock exchange and is 52.3% owned by AXA SA. AXA APH is
responsible for AXA SAs life insurance and wealth management
businesses in the Asia-Pacific region. It has operations in Australia, New
Zealand, Hong Kong, Singapore, Indonesia, Philippines, Thailand, China,
India and Malaysia. AXA APH had A$106.4 billion in total funds under
management and administration at 30 June 2007 and reported profit after
tax before non-recurring items of A$374.0 million for the six months
ended 30 June 2007
 Distribution

Bharti AXA has one of the largest distribution networks amongst private
life insurers in India. As of March 31, 2007 the company has over 934
offices across the country and over 10,016 advisors. Distribution strategy
of Bharti AXA is as follow:

Distribution Strategy of Bharti AXA

Tied Agency Bancassurance & Alliances

Bancassurance
20%
Corporate
Agency/Brokers
10%
Direct Marketing

Agency Force

70%
 PRODUCT LINE

Bharati AXA Life Insurance Co. Ltd., Product Line is as follow:

Pure Protection Protection, Saving Wealth

&Wealth Creation Creation
and
Protection
Traditional Secure Confident Save Confident
ULIP Future Confident Wealth
Confident
Future Confident ll Invest
Confident
Aspire Life Dream Life
Pension

Structure of sales department

Bharati AXA Life Insurance Company Ltd.s sales department structure

is as follow;

Regional Manager

Branch Sales Manager

Territory Manager

Sales Manager

Asst. Sales Manager

Senior Manager
Unit Manager

Advisors
 Corporate structure.

CORPORATE STRUCTURE

TIED
AGENCY ALTERNATE
DISTRIBUTION

VICE PRESIDENT
COURNTRY HEAD

REGIONAL MANAGER
RELATIONSHIP
BRANCH SALES MANAGER
MANAGER

SALES
MANAGER
SALES ASSI SALES
MANAGER MANGER

UNIT BANCASSURNCE CORPORATE

MANAGER AGENCY

FINANCIAL SERVICE TEAM

LEADER
..

TRAINESS CUSTOMER
SERVICE
REPRESENT
 Executive
Training
(DYNAMICS OF AGENCY RECRUITMENT)
Meaning of Agency recruitment

Agency recruitment is all about recruiting financial advisor for the

company. The financial advisor is the person who can guide the
people in making proper investments regarding their
life

Now the question comes is that how can he/she be the advisor of
the company ???????

Financial Advisor

Financial advisor is the person who has been issued the government
authorized IRDA license which is valid for three years and in those 3
years he/she can tap into an unlimited income and reinvent their life.

As a Life Advisor a persons role would go beyond selling policies.

His/her role would be to explain life insurance and its benefits to
potential customers and help them decide which plan suits them best
after analyzing their financial needs. Hence, life insurance offers one
with an opportunity for:

An exciting / challenging career.

Flexible work hours.
Unlimited income.
Regular income for years till the policies sold by one is in force.
 SUPPORT AND BENEFITS

As a Life Advisor with Bharti Axa Life Insurance one would enjoy the
following benefits:

1.Enriching training program: An intensive training program before one

commences his/her new career. This would equip one with all the
information and knowledge about life insurance, its benefits and our
products. This would help one to perform his/her job better and meet
his/her goals. One would also enjoy the benefits of continuous training
and mentoring programs that are designed to update one, apart from
enhancing ones selling skills

2.Mentoring: Training and support from the Company to meet ones

goals. Opportunity to learn from industry professionals.

3. Flexibility: Decide ones own working hours and earning goals.

4. Satisfaction: One will help people manage their assets and plan their
financial security, and experience deep satisfaction from making a
positive difference in others lives. One acts as a strategist in annuities,
business insurance, estate planning and personal investment, providing
both short and long term solutions to financial risks.
5. Freedom:Continue with your present job occupation if you so desire
and treat this as a parallel source of income. This allows you time to
decide if you want to take the job of a Life Advisor as a full time activity.

6. Earnings Entitlement to a percentage of the premium as commission

till the time the policies sold by you are in force.
7. Attractive additional benefits for high-performers: Palmtops,
Planners, Leather portfolio bags, Offsite conferences, Foreign trips and
Sales promotional schemes.
 Learning From the Executive Training

Provides an opportunity to apply the concepts learn t in real life

situations.
It sensitizes us about nuances of work place by the time-bound
projects assigned by the company.
It creates awareness about the strengths & weaknesses in the work
environment
It provides a platform to develop a network while OJT (On-the-job-
Training), which would be useful in enhancing career prospectus.
Know the day-to-day functions of the company.
It provides a unique opportunity to get exposed to corporate culture,
professional experience & professional behavior & putting the
theoretical concepts learnt in the classroom for developing managerial
skills.
To gain a deeper understanding of the work culture, deadlines,
pressure etc. of an organization.
It gives a flavor of teamwork, organization culture, team dynamics,
result orientation, organizational pressures, complexities in achieving
the desired results etc.
It provides direct exposure to the execution & support functions of the
departments.
It provides a good scope for developing necessary managerial skills &
positiveattitude
Introduction to IRDA Act
Mission:

To protect the interests of the policyholders, to regulate, promote &

ensure orderly growth of the insurance industry & for matters connected
therewith or incidental thereto.
After liberalization of the insurance sector in 1999, private players have
entered both life & non-life business in India. The Insurance Regulatory
& Development Authority (IRDA) was constituted in April 2000, as an
autonomous body to regulate & develop the business of insurance &
reinsurance in the country in terms of the IRDA Act 1999.

Duties, Powers & Functions Of IRDA :

Licensing & regulating the insurance sector by acting as an

independent & regulatory body.
Specifying requisite qualifications, code of conduct & practical
training for insurance intermediaries & agents.
Protecting the interest of the policyholders in matters concerning
assigning of policy, settlement of insurance claims etc.
Regulating investment of funds by insurance companies.
Calling for information from undertaking, conducting enquiries &
investigations including audit of insurers & other organizations
connected with the insurance business.
Regulating maintenance of margins of solvency of the insurer.
Adjudication of disputes between insurers & intermediaries.
Supervising the functioning of the Tariff Advisory Committee.
 Introduction Insurance Advisor

CRITERIA FOR SELECTION

Criteria for the selection of the Financial Advisor are as follow;

Age: 18 or above for both Male and Female

Educational Qualification required:
o Rural Area*: 10th Pass
o Urban Area*: 12th Pass
* Areas are bifurcated according to the population.
For getting license to work as an agent of any company a person must
complete 100 hours training and pass exam of Indian Institute of
Insurance (III). If a person is already holding license for General
Insurance than he will have to complete only 50 hours training.
All the above criteria are common for all the companies, they have to
follow it. In practice, because of competitive environment many
companies decide their own criteria apart from all above. Different
criteria used by companies are shown in the following table:
 At least Living Netwo High Net Married Age
Gradu in rk / Income and grou
ate Varan Societ (HNI)*gr have p
Person asi for y oup depende 25-
at least group nts 50
3 yrs yrs
KLI 1
ICICI -
Prudenti
al2
LIC - - - -

Birla - - -
Sun life
Bajaj - - -
Allianz 3
ING - - - - -
Vysya4
Bharti -
Axa

Aviva 6 NA

TABLE 5.2 Criteria for Selecting Agents by different Companies.

 FUNCTIONS OF THE AGENTS

Life insurances agent has the unique role of such a person, who enjoys
the trust of two parties - the prospect and the insurer - simultaneously
in the same transaction.

To simplify, functions of a life insurance agent could be divided into

two parts, viz.

'Pre-sale functions';

'Post-sale functions'

Function Before Sales:

Contact prospects

Study their insurance needs

Completion of formalities for proposal of new insurance viz,

Filling of form
Arranging for Medical Examination
Collection proofs of age and income
Any other information required by the underwriters

Function After Sales:

Ensure payment of renewal premiums.

Assist policyholder for nomination / or change thereof.

Assist the policyholder in case he wants to get loan against the

policy assignment.
Assist the policyholder or the claimant to comply with the
requirement for getting timely settlement of claims.
The Target customers of the company are :
 Housewives
Students
Businessman
Brokers
Retired persons

BHARTI AXA LIFE INSURANCE, Private leader also take into

consideration most of the criteria. They also focus on quality rather
than quality. Further, they also opt to recruit LIC agents. Logic behind
this may be that person wont require the training (Elimination of
Training Cost), moreover his experience and Established network can
be encased easily. Thus, BHARTI AXA has also adopted competitive
strategy because the LA is a major source of business.

Executive Task Assigned & Task Achieved

Week Target Achievement

1 1 0
2 1 1
3 2 1
4 2 1
5 2 2
6 3 2
7 3 2
8 3 3
Graphical Representation of The Task Assigned and Achieved

Task assigned and Task achieved

Week Target Achievement

9
8
8
7
7
6
6
5
5
4
4
3 3 3 33
3
2 2 2 22 2 2
2
11 11 1 1
1 0
0
1 2 3 4 5 6 7 8
METHODOLOGY
METHODLOGY

Strategies applied for achieving the task assigned

Cold Calling:

Cold calling means to approach the customers with out taking prior
appointments. I have done lots of cold calling as I visited different shops
and malls I got a great experience as I interacted with different kind of
peoples. Even I learned lots of things regarding convincing the customers.

Role Plays:

Role play is a kind of play or say drama

which is been presented in front of a group of peoples and that is even in
rural areas where people dont understand the face to face interaction or
any another explanation. Role play is done basically in local language and
we are planning to do the same as our role play is all set to do.

Data Collection:
My third strategy is to collect data as many as possible from different
sources. So for this data collection I have visited different colleges and
even to different banks to get the data of retired people. I went to colleges
to get the data of the graduate students who would the good prospect for
our company.

Canopy:
Canopy is the kind of activity in which we do arrange a small
Business Opportunity Presentation. We select particular area and in
this area we give invitations to the people residing in this area and
than we arrange the presentation. We did our canopy in the areas
like Navarangpura, Gurukul, Vijay Cross Road and tried to cover
as many areas as possible.

SWOT
Analysis
 STRENGTHS

The strengths of BHARTI AXA are:

Offers greater relationships and more face to face contacts with the
customers.

Cross-selling ability of its highly trained agents.

BHARTI AXA has marketing, research and development and the

competing products

Ability to serve multiple segments

Higher market share growth in private sector Life insurance

companies

Adaptable management structure

Multiple product lines

Higher premium growth

Increasing network in semi urban and rural markets

WEAKNESSES

The weaknesses for BHARTI AXA are:

Higher cost for insurer and consumer because of high commission

rates.

Strong Competing brands of other players with almost the same

features

Presence of other players in multiple segment

The Direct Marketing and other promotional efforts done by other

players increases the competition
 Lower believability in BHARTI AXA brand than Life Insurance
Corporation

Low coverage in Semi-urban and Rural market Segments

 OPPORTUNITIES

Focus on high net worth individuals who prefer relationship over

price

Continually look for new sales opportunities

High market growth provides opportunity for the company to

increase their role in increasing Premium collections.

Large number of prospective customers has provided opportunity

for the company to increase their operation to wider customer base.

Higher awareness of insurance products attracts customers to use

insurance services and products

Insurance companies are becoming more and more self-regulated

operationally.

Because of the large customer based, the company can have the
benefit of economies of scale in providing services.

Transformation of people across countries increases efficiency and

effectively in the companys operation.

Speeding up of the technological adoption in insurance companies

has provided opportunity for them to provide services to a larger
customer base at lower cost.

Collaboration with supplier of back office and front office

technological development has increase the quality and effectively
of the operation.

Increasing computer literacy and quality of education has increased

the efficiency of operation through advanced technology.

The move towards retail customers has access the banks to the
rural population.

Tie up with other banks to increase ATM networks has lowered the
operational cost of the company.
 Higher foreign investment in insurance business has increased the
technological development, branch expansion and wider network
abilities.

Foreign companies also merge with other banks to increase the

networks and customer services within the nation and
internationally.

Population is becoming ageing which may hamper the effectively

of providing insurance business
 THREATS

Large number of Insurance companies has increased the rivalry in

the industry.

Lower switching cost for customers can be a threat for the

company to convert other companys customers to its products.

Standardization of insurance products and services has lowered the

profit margins for the company.

A higher premium to the agents is one of the biggest cost

disadvantages to the company.

The legal regulation from IRDA may affect particular company

negatively.

The scams of co-operative banks have affected the image of private

companies in the mind of the people, which may affect the image
of private insurance companies negatively.

Higher inflation rate can increase the cost for the company in
providing services
 SUGGESTIONS

I personally believe that BHARTI AXA requires promoting their

very strongly as in day on day the competitive companies are
increasing and to be in the race it has to promote its products
continuously. Their Brand awareness specifically in Life
Insurance is high compare to competitors. They should
aggressively promote on media like Television, newspaper like
Times of India and Economics Times.

BHARTI AXA should expand their distribution network in Semi

Rural and Rural areas to target market having huge potential.

Their Motivation Strategy for Life Advisors is very effective

during Training and even after training; they should stick to it and
even try for innovative ways.

Build trust upon customers through services and transparency in

investment and other policy.

Focus on marketing strategy which can appeal mass in chunk.

 LIMITATION

Generating Database:
I have faced lots of problem in generating data base as I have used different
sources to generate it, e.g. I visited different colleges to generate data of fresher
students and even visited to different call center to get the data base of the
customers but the problem I faced was they didnt provided me the data as they
told me that it is confidential.

Appointments at improper timings:

My second limitation was the appointments at improper timings as the

customers call us at any of their convenience time and it can be in the early
morning or it can be in the late night also.

High Fees:

To be an advisor in BHARTI AXA the fees is Rs. 825 so this is quite a huge
amount as compare to the competitors, because in L.I.C it is 450 Rs, in MAX
LIFE it is 500 so when a customers get ready to be advisor he basically stuck to
the fees.
Quality Customers:

What BHARTI AXA ask from is to recruit quality advisors, they to

maintain the Q Score but it is very difficult to get that quality customers.
 QUESTIONAIRE

Questionnaire used for survey is as follow;

Dear Respondent,
We are conducting this research to measure
ethnocentrism level of Insurance Companies. Our objective behind this
study is to find our some concrete outcomes for ethnocentrism. Which
help the management students. By filling-up this questionnaire you can
help us in transformation of our efforts in to worth findings. Whatever
data you have to provide it is purely confidential and we have to use this
information for our academic purpose only.

Qualifying Questions:

Please tick against the following questions.

Name:___________________________________________

Q.1 Gender:
A) Male _______ B) Female ________

Q.2 Age:
A) Below 30 _____ C) 40-50 _______
B) 30-40 _____ D) Above 50 _______

Q.3 Marital Status

A) Married _______ B) Unmarried _

Q.4 Occupation:
A) Financial Investors ________
B) Students ________
C) CA ________
D) Tax Consultant ________
E) Housewife ________
F) Teachers _______
G) LIC Agents _______
H) Advocates _______
Q.5What kind of business would you like to do?

A) Insurance _________
B) Investment/stock market _________
C) Multilevel marketing _________
D) Dealership _________
E) Other _________

Q.6 What Criteria do you consider for selecting a business?

A) Very low investment _______

B) Low risk & high return _______
C) Flexible working hours _______
D) Support & guidance based business _______
E) Business under reputed brand name _______

Q.7 How many hours would you like to spend on a part time business?

A) Less than 2 hours ________

B) 2-4 hours ________
C) More than 4 hours ________

Q.8 Your expected income from part time business?

A) Less than 5000 ________

B) 5000-10000 ________
C) More than 10000 ________

Q.9 What skill do you have which you consider will be an assets in
BHARTI AXA

A) Relationship skill ________

B) Communication skill ________
C) Leadership ________
D) Convincing Power ________
E) Any other Please Specify ________

Q.10 What motivate you to enter the field of selling (Please rank order
them in order to perform your performance i.e.1,2,3,4,5)

A) Opportunity to earn more money ________

 B) Desire to be ones own boss ________
C) Desire to meet people ________
D Dislike of office jobs _______
E)Desire to build life long relationship ________

Q.11 Do you or your family member has taken any life insurance?
A) YES B) NO

If YES, did you take insurance through

A) Insurance agent ________
B) Some ones recommendation ________
C) Own interest ________

Q.12 Are you self employed or salaried?

A) Self employed ________ B) Salaried _________

Q.13 How did you learn about this opportunity?

A) News paper ________

B) Friends ________
C) Magazine ________
D) Any other ________
 CONCLUSION

Entry of Private players in Insurance Industry has changed the entire

scenario of the Industry. Industry has shown Revolution of 360* starting
from 1956. Private players have challenged the LIC and compelled to
face the competition. This cut-throat competition has been a boon for
customer. He has been more informed and getting better services.
Negligence to the Insurance is decreasing day by day. Thus, total scenario
of the Industry has changed from as it was in 1956 a Monopoly Market.

On account of increased competition, companies have to compete to grab

the market. Tied channel is perhaps the best alternative to reach
maximum target customers. So to have best results companies are
required to have best people, who can work for the efficiently and give
best results. So, as a result now a days companies have become more
choosy in recruiting agents.

Effective Sales required to be carried out in a way starting from

Prospecting and Qualifying to Follow-up and Maintenance. Each step in
effective selling process is required to be taken care. In BHARTI AXA,
LAs are trained in such a manner that they are able to carry effective sales
process. Sales Managers do them lot of help in this context. They use
Need-Satisfaction approach (Mostly) and also Formulated approach for
this and it works
BIBLIOGRAPHY

Books referred

"Insurance Vision 2000", The Insurance Times, Calcutta.

Cooper Donald & Schindler Pamela, " Business Research
Methods", Sixth
Edition, New Delhi, Me. Graw Hills, 1999.
Kotler Philip, "Marketing Management", Eleventh Edition, New
Delhi, 2006.

Websites

www.Bharti Axa life insurance.com

www.irdaindia.org
www.irda.orq.com
www.indiainfoline.com