A Project Study Report On Training Undertaken at

Study of Advisors Perception towards Life Insurance Market in Kota

Submitted in partial fulfillment for the Award of degree of Master of Business Administration
From University of Kota, Kota (RAJ.) Academic Session 2008-2010

Submitted By: Sunil Kumar Jain MBA Part III

Submitted To:Amit Sharma TertiaryManager

MODI INSTITUTE OF MANAGEMENT & TECHNOLOGY, KOTA (Approved By AICTE, New Delhi & Affiliated to Rajasthan Technical University, Kota)

Modi Education Complex, Dadabari, Kota 324009 Tel No. : 91-744-2504169, 2505421, Fax: 91-744-2391072

PREFACE
Success comes with knowledge & knowledge is comes with training. To excel in an any field practical training is an integral part to imply theoretical studies to a practical approach it makes the individual to the actual practical conditions. Which could have been impossible to be tough in a classroom. A trainee learnt dealing with the worker and management- working environment along with operational skills. Insurance ranks as one of the most important industry in any part of the world. It is also an industry where competitors drive excellence. This is why the entry in India of foreign insurers, as minority partners in domestic joint ventures, has bought the hope that market will reach a new level. I have tried to do an analytical study on advisors perception towards life insurance market in Kota. In this study I tried to find out those facts, which do matter for a advisor for doing this job in insurance sector.

Sunil Kumar Jain

MBA Part- III

ACKNOWLEDGMENT
It gives me immense pleasure and a sense of honor to express my feeling of gratitude to all those who have helped me in the successful competition of the present project. First and foremost I express my deep sense of thankfulness to Mr. Amit Sharma, Tertiary Manager in Reliance for his valuable co-operation and guidance in undertaking this work. My warm acknowledgment is also due to all staff members of Reliance Kota, who took keen interest in extending necessary co-operation at various stages during the study. I cant refrain my humble thanks to Er. K.C. Vijay (Director, Modi Institute Of Management & Technology,Kota) and the faculty of MIMT In end, I would like to thank to each of them who directly or indirectly helped in completion of the project.

Sunil Kumar Jain

MBA Part- III

EXECUTIVE SUMMARY
One of the most important reasons for me to select this project was the wide areas of activities which were covered under this project. Insurance sector is one of the fastest growing industries of today. The chance to work in such a promising sector that to with the market leader like Reliance was a wonderful opportunity for me.

In first part of this report I have tried to give a detailed outline about what exactly insurance sector is all about. Its history, current business environment, the governing authority i.e. IRDA (Insurance Regulatory and Development Authority) and of course my company Reliance Life Insurance Company Ltd.

The second part of this report gives out the detailed information about the activities that I carried out in this project which are as follows: Recruiting Insurance Advisors for Reliance Life Insurance from various traditional sources. Identifying the new source of Recruitment for Future Recruitments giving information about different plans and benefits of rides of Reliance Life Insurance. Conducting a research for advisors/ agents of various insurance companies.

For the purpose of Agency Recruitment I had to personally meet and explain the business opportunity offered by the reliance Life Insurance to people who were identified as most suitable for the job. This interaction was a very enriching experience.

For the purpose of research I met to the advisors/ agents of the various insurance companies. In this work I had chance to know that what advisors/ agents of different insurance companies think about their company product and market.

DECLARATION
I hereby declare that the present report entitled Study of Advisors Perception towards Life Insurance Market in Kota is bevel on my original work and indebtedness to other work / Publication has been duly acknowledged at relevant place.

Submitted By: Sunil Kumar Jain MBA III Sem

INDEX
Chapter No. 1 Contents Introduction to insurance 2. Introduction to insurance History of Insurance Necessity of Life Insurance Benefits (Advantages) of life insurance Market players Composition of Authority by IRDA Act, 1999.

Basic Objectives of IRDA. Company Details About Reliance Life buys AMP Sanmar Group About Reliance Capital Limited. About Reliance Life Insurance Co. Ltd.

3. 4.

BOD Product Details Different Plans The Advisors / Agents About the Advisors Professional requirements of agents. Characteristics of an Advisors Benefit of an Advisors Be an Advisors Skill building by Special Training Programme

(RACE) Research Methodology Scope of the study Objectives Research Methodology Analysis & Interpretations Conclusions Suggestions 6

7 8

Limitations Bibliography Appendix

(Introduction to Insurance)

INTRODUCTION OF INSURANCE
All the human beings on the earth know that they will die in future but they dont want to die. They want to fulfill all the dreams, which they had thought, but there are times when all these dreams cant come true. Death is inevitable and yet we live our lives obvious to reality that may strike- when we have no idea. And when it happens all the dreams come crashing down. In the words of D.S. Hansell Insurance may be defined as social device providing financial compensation for the effects of misfortune, the payment being made from the accumulated contributions of all the parties participating in the scheme. Life insurance is the only tool to secure our life in future. It also provides a safe guard to the uncertainty of our life. Life Insurance is the cheapest investment tool in which we can earn more in a short period of time. Life insurance is meant to protect our loved ones and us in future. The function of insurance is to protect you against losses you cant afford. This is done by transferring the risks of a person, business, or organizationthe Insuredto an insurance company, or insurerThe insurer then reimburses the insured for covered lossesi.e., amount of money, called a premium, to the insurer to transfer the risk. The insurer pools all its premium into a large fund and when a policyholder has a loss. The insurer draws funds from the pool to pay for the loss life is full of unexpected events that can create large financial losses. For example wherever you drive, it is possible that you may have a costly accident. Risk affects you by causing worry about potential loss and how to deal with the consequences. Insurance reduces anxiety over possible loss and absorbs the financial brunt of its consequences.

India has traditionally been a high savings oriented country being on par with the thrifty Japan. Insurance sector in the United States of America is as big in size as the banking industry there. This gives us an idea of how important the sector is Insurance sector channelises the savings of the people to long-term investments. In India where infrastructure is said to be of critical importance, this sector will bring the nations own money for the nation. The Global Life Insurance market stands at $ 521.2 billion while non-life insurance market is placed at $ 922.4 Billion. India takes the 23rd position with US$9.333 billion annual premium collections and a meager 0.41% share. Out of one billion people in India only 35 million people are covered by insurance. Indian insurance market is set to touch S25 billion by 2010 on the assumption of a 7 percent real annual growth in GDP. In 3 years time we would expect the 10 % of the population to be under some sort of an insurance cover. This assuming a premium of Rs. 5000 on an average amounts to 100 million x Rs. 5000 = Rs. 500 bn. This has made the sector the hottest one in India after IT. With social security to the public at large being the agenda for opening the sector, the role of the regulator becomes all the more serious and one that would be carefully watched at every step.

10

1.2

HISTORY OF LIFE INSURANCE

Insurance in India has started without any regulation in the Nineteenth

century was a typical story of a colonial era. A few British Insurance Companies dominating the market serving mostly large urban centers. After the1 independence, it took a dramatic turn. Insurance was nationalized, first the life insurance companies were nationalized in 1956, and then the general insurance business was nationalized in 1972 and in 1999 private insurance companies have been allowed into the business of insurance with a maximum of 26% of foreign holding.

CONCEPT OF INSURANCE
Basically insurance is a device to share the losses of few, by transferring a portion of the loss to the insurance company in exchange for a certain cost. This means that a lot of people who think they may suffer a loss, each put in a little money to cover financial costs for those among them who actually sustain the loss. Obviously, since there is a cost you dont insure anything or everything, you will cover only those things that would cause a substantial financial burden unexpectedly on you, if you had to replace them on your own.

Hence, insurance works

on the concept of risk sharing, which divides risk a

among may people. For example, all of you run the risk of having your car stolen. However the past may tell us that only of your cars will actually be stolen this year. Therefore you may all get together and decided to each pay a small amount that will go to the unlucky person (could be you) will actually may have his car stolen.

11

HISTORICAL PERSPENCIVE: A French proverb says: Deeper you look into the history; further will be your vision. So before we strategize, let us have a quick look into the history. Insurance is some form is as old as historical society. So-called bottomry contracts were know to merchants of Babylon as early as 4000-3000 BC and was well understood in ancient Greece as early as the 4th century BC. Under a bottomry contract, loans were granted to merchants will the provision that if the shipment was lost at sea the loan did not have to be repaid.

The interest on the loan covered the insurance risk. Ancient Roman law recognized the bottomry contract in which an article of agreement was drawn up and funds were deposited with a money changer.. In Rome there were also burial societies that paid. The insurance contract also among other maritime national in commercial contact with Greece. In China, merchants who had to travel on the dangerous Yangtze River spread their goods on several ships, so if a ship wet down, no one person would lose all of his goods. All these established the basic idea of insurance.

Other types of causality insurance: Auto Workers compensation Crime and vandalism. These may appear technical and confusing. So let us go trough some of the basic terminology and concepts insurance companies use in their business. When we talk about insurance we are primarily concerned with insurable items. To be insurance the following criteria must be met: 1. There must be a large number of persons available for insurance with a similar potential for loss-the law of large number. 2. Loss must be definite (death, car damaged in an accident). 3. Loss must be accidental in nature (unexpected and beyond the control of the insured). 4. Loss must barge enough to cause a financial burden. 12

5. The cost of insurance must be affordable. The insurance cost should be traction of the value of the item. 6. Loss must be calculable; a monetary amount must be determined for the loss.

Colonel rule in India provided great fillip to the insurance in India its contents given below: -

INSURANCE UNDER THE BRITISH RAJ

Life insurance in the modern form was first set up in India through a British company in 1818 followed by the Bombay assurance Company operated in India but did not ensure the lives of India but did not insure the lives of India. Some of the companies that started later did provide insurance for Indians. But they were treated as Substandard and therefore had to pay an extra premium of 20% or more. The first company that had policies that could be thought by Indians with fair value was the Bombay Mutual Life Assurance Society starting in 1871. The first general insurance company Triton Insurance Company Limited, was established in 1850. it was owned and operated by the British, the first indigenous general insurance company limited set up in Bombay in 1907. By 1938, the insurance market in India was buzzing with 176 companies (both life and non life). However, the industry was plagued by fraud. Hence a comprehensive set of regulations was put in place to stem this problem. By 1956, there were 154 Indian insurance companies, 16 nonIndian insurance companies and 75 provident societies that were issuing life insurance policies. Most of these policies were centered in the cities (especially around big cities like Bombay, Calcutta, Delhi and Madras). In 1956, the then Finance Minister S.D. Deshmukh announced nationalization the life insurance business.

13

SOME

OF

THE

IMPORTANT

MILESTONES

IN

THE

INSURANCE BUSINESS IN INDIA ARE:

1912: The Indian Life Insurance Companies Act enacted as the first 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 insuring public. consolidated and amended by the insurance act with the objective of protecting the interest of the 1956: 245 Indian and Foreign insurers and provident societies taken over by the Central Government and Nationalized LIC formed an Act of Parliament viz LIC Act. 1993: Setting up of Malhotra Committee. 1994: Recommendations of Malhotra Committee. 1995: Setting up of Mukherhjee Committee. 1996: Setting up of (Interim) Insurance regulatory Authority (IRA) recommendations of the IRDA. 1997: Mukherjee Committee report submitted but not made public. 1997: The government gives greater autonomy to LIC, GIC and its subsidiaries with regard to the reconstructing of Boards and flexibility in investment norms aimed at channeling funds to the infrastructure. 1998: The Cabinet decides to allow 40% foreign equity in private insurance companies 26 % to foreign companies and 14 % to NRIs OCB and FIIs. 1999: The standing committee headed by Murali Deora Decides that foreign equity in private insurance should be limited to 26%. The IRA bill is renamed the Insurance Regulatory and Development Authority (IRDA) bill. 1999: Cabinet clears IRDA bill. 2000: President gives assent to the IRDA bill.

14

1.3 NECESITY OF LIFE INSURANCE:

Risk and uncertainties are part of life great adventure- accident, illness, theft, natural disaster- theyre all built into the working of the universe, waiting to happen. Insurance then is mans answer to the vagaries of life. If you cannot beat man-made and natural calamities, well, at least be prepared for them and their aftermath. Insurance is a contract between two parties- the insurer (the insurance company) and the insured (the person or entity seeking the cover)-wherein the insurer agrees to pay the insured for financial losses arising out of any unforeseen events in return for a regular payment of Premium These unforeseen events are defined as Risk and that is why insurance is called a risk cover. Hence, insurance is essentially the means to financially compensate for losses that life throws at people- corporate and otherwise.

1.4

BENEFITS OF LIFE INSURANCE:

Superior to any other savings plan

Unlike any other savings plan a life insurance policy affords full protection against risk of death. In the event of death of a policyholder, the insurance company makes available the full sum assured to the policyholders near and dear ones. In comparison, any other savings plan would amount to the total savings accumulated till date. If the death occurs prematurely, such savings can be much lesser than the sum assured. Evidently, the potential financial loss to the family of the policyholder is sizable.

15

 Encourages and forces thrift:

A savings deposit can easily be withdrawn. The payment of life insurance premiums, however, is considered sacrosanct and is viewed with the same seriousness as the payment of interest on a mortgage. Thus, a life insurance policy in effect brings about compulsory savings.

Easy settlement and protection against creditor

A life insurance policy is the only financial instrument the proceeds of which can be protected against the claim of a creditor of the assured by effecting a valid assignment of the policy.

Administrating the legacy for Beneficiaries

Speculative or unwise expenses can quickly cause the proceeds to be squandered. Several policies have foreseen this possibility and provide for payments over a period of years or in a combination of installments and lump sump amounts.

Ready Marketability and Suitability for Quick Borrowing

A life insurance policy can after a certain time period (generally three years) be surrendered for a cash value. The policy is also acceptable as a security for commercial loan, for example, a student loan. It is particularly advisable for housing loans when an acceptable LIC policy may also cause the lending institution to give loan at lower interest rates.

Disability Benefits
Death is not only hazard that is insured; many policies also include disability benefits. Typically, these provide for waiver of future premiums and payment of monthly installments spread over certain time period.

Accidental Death Benefits

Many policies can also provide for an extra sum to be paid (typically equal to the sum assured) if death occurs a result of accident.

16

 Tax Relief
Under the Indian Income tax Act; the following tax relief is availablea) b) 20% of the premium paid can be deducted from your income tax liability. 100% of the premium paid is deductible from your total taxable income. Where these benefits are factored in it is found that most policies offer returns that are comparable or even better than other saving modes such as PPF, NSC etc. Moreover, the cost of insurance is a very negligible.

1.5 THE MARKET PLAYERS

As of now there are 14 players in Indian Insurance Market, who have made their registration for Life Insurance Business with IRDA (Insurance Regulatory & Development Authority) plus there are some major players like reliance who wish to join this sector in following years. The standard patter for all the companies joining this market is of a join venture between an Indian company (around 75 %) and a Foreign Insurance Company (around 25%). The main purpose of this sort of arrangements is that the Indian Company is having the basic systems, infrastructure and distribution network for spreading the insurance products in India. And the foreign partner bring in with it, the experience, Know- how and R & D of insurance products, in which it ahs been dealing for long time through out the world. The names of all the companies are as follows. 1. Life Corporation of India (LIC) 2. HDFC Standard Life Insurance Company Ltd. (23/10/2000) 3. Max New York Life Insurance Co. Ltd. (15/11/2000) 4. ICICI Prudential Life Insurance Co. Ltd. (24/11/2000) 5. Kotak Mahindra Old Mutual Life Insurance Ltd. (10/1/2001) 6. Birla Sun Life Insurance Co. Ltd. (31/1/2001) 7. Tata AIG Life Insurance Co. Ltd. (12/2/2001)

17

8. SBI Life Insurance Co. Ltd. (30/3/2001) 9. ING Vysya Life Insurance Co. Ltd. (2/8/2001) 10. Bajaj Allianz Life Insurance Co. Ltd. (3/8/2001) 11. Metlife India Insurance Co. Ltd. (3/1/2001) 12. Aviva Life Insurance Co. Ltd. (14/5/2002) 13. Sahara India insurance Co. Ltd. (6/2/2004) 14. Reliance Life Insurance Co. Ltd. (4/10/2005)

1.6

INSURANCE

REGULATORY

AND

DEVELOPMENT

AUTHORITY
When in government decided to privatize insurance sector in 1999, strong need of a Regulatory Authority was felt. This was in the backdrop of experience of investors who had been robbed before through various financial scams such as stock exchange frauds, chit funds, plantation investments etc. thus IRDA (Insurance Regulatory and Development Authority) was born.

Composition of Authority under IRDA Act, 1999

As per the section 4 of IRDA Act 1999, Insurance Regulatory and Development Authority (IRDA, which was constituted by an act of parliament) specify the composition of Authority. The Authority is a ten-member team consisting of A Chairman; Five whole- time members; Four part- time members,

(All appointed by Government of India.)

18

The Basics Objectives of IRDA are:

To protect the interest of and secure fair treatment to policyholders: To bring about speedy and orderly growth of the insurance industry (including annuity and super annuation payments), for the benefit of the common man long term funds for accelerating growth of economy. To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates. To ensure that insurance customers receive precise, clear and correct information about products and services make them aware of their responsibilities and duties in this regard. To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery; To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players. To take action where such standards are inadequate or ineffectively enforced; To bring about optimum amount of self- regulation in day-to-day working of the industry consistent with the requirements of prudential regulation.

19

(Introduction to Company)

20

Introduction to Company
2.1 ABOUT RELIANCE LIFE BUYS AMP SANMAR GROUP
The Chennai based Sanmar Group today announced the sale of its interest in AMP Sanmar Life Insurance Company to Reliance Life Insurance, a subsidiary of Reliance Capital Limited (RCL). AMP Sanman Life Insurance Company is a joint venture of AMP, Australia and Sanmar Group. Headquartered in Channai, it as over 90 offices across the country, 9000 agents. The decision to sell the company was taken consequent to AMPs intention to exit the insurance business in India. The consideration for the deal has not been disclosed. Asked about this the Sanmar Group Chairman Mr. N. Sankar, told business line that AMP had requested to keep the consideration confidential because of regulatory requirements in Australia. He added that Sanmars stake in AMP Sanmar life was through & investment companies of the group, which in turn are wolly owned subsidiaries of the group holding company Sanman Holding Ltd. Taking over AMP Sanmal Life Insurance will get Reliance Life a readymade infrastructure and portfolio. AMP Sanmar offers a comprehensive range of life insurance products. AMP is a leading international financial services group with over 150 years with core business in insurance, asset management & financial planning.

2.2

About Reliance Capital Limited:

Reliance Capital is one of the Indian leading private sector financial

services companies and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in proprietary investments, private equity and other activities in financial services. RCL is a Non-Banking Financial Company (NBFC)

21

registered with the Reserve Bank of India under section US-IA of the Reserve Bank of India Act, 1934. Reliance Capital sees immense potential in the rapidly growing financial services sector in India & aims to become a dominant player in this industry & other fully integrated financial services RLI in another step forward for R.C.L. to offer RLI is another step forward for R.C.L. to offer need based Life Insurance Solution to individuals and corporate.

2.3

About Reliance Life Insurance Co. Ltd.

Type Headquarter Industry Products : : : : Private Limited Company Chennai (India) Life Insurance Individual & group insurance plans 1st August 2005.

Anil Ambani group & AMP Sanmar

Reliance Life to get aggressive IRDAs recognition 2nd February 2006. Reliance Life Insurance gets ISO 9001-2000 certification- 28th March 2007. Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of Indias leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth Reliance life insurance is another step forward for Reliance Capital limited to offer need based life insurance solution to individuals and corporate in India. Reliance Life Insurance is an associate company of Reliance Capital Limited, which along with its associates has acquired 100% shares in AMP Sanmar Life insurance Co. Ltd. in August 2005. taking over AMP Sanmar Life provided Reliance Life Insurance a readymade infrastructure and a portfolio.

22

It is the fastest growing life insurance company in India, private insurance players in the country on the back of a widespread & rapidly growing branch network. RLI rapidly has pan presence and a range of products catering to individual as well as corporate needs. A total of 16 products covering saving protection & investment requirements. As is evident from the growth of 380% in new business premium last years, the move from the 12th to 5th position, over the past one year with an increase in the number of branches from 118 to 339 and increase in the number of employees from 2943 to 3802. The sales force is much stronger with an increase in advisors from 2231 to 95557 and third party distribution have increased from 62 to 79.Three new products have been launched till date and many more are yet to come and there will be no looking back. A grand beginning only promises a greater achievement with the passage of time. The company acquired 100 per cent shareholding in AMP Sanmar Life Insurance Company in August 2005. Taking over AMP Sanmar Life provided Reliance Life Insurance a readymade infrastructure and a portfolio. AMP Sanmar Life Insurance was a joint venture between AMP, Australia and the Sanmar Group. Headquartered in Chennai, AMP Sanmar had over 90 offices across the country, 9,000 agents.

23

RLI would strive hard to achieve the following goals:

Emerge as transnational life insurance of global scale and standard. Achieve impeccable reputation & credentials through best business profiles. Vision : Empowering every one live their dreams. Mission: Create unmatched value for everyone through dependable, effective, transparent, profitable life insurance and pension plans. Guiding Principles: Customer care &n satisfaction. Corporate Governance Creativity & Innovation Competitiveness.

There new products have been launched tall date and many more are yet to come and there will be no looking back. A grand beginning only promises a greater achievement with the passage of time.

2.4 Board of Director:

CEO CGO CMO COO Mr. P. Nandagopal Mr. Rajesh Bahi Mr. Rohit Gaurav Muli Mr. K.V. Srinivasan

Vice President (Group Infrastructure)- Mr. K. Suresh Babu Appointed Actuary Chief Investment Office Head HR - Ms. Pournima Gupte Mr. R. Ranharajan

Ms. Maneesha Thakur.

24

(PRODUCTS DETAILS)

25

PRODUCT PROFILE
3.1 Different Plans:
Products are individual & group insurance plans life insurance policy is contract between the policyholder and the life insurance company. Since every contract is governed by certain conditions, which are mentioned in the agreement, a life insurance policy is also governed by conditions that are mentioned in the policy document. Our insurance policy comes laden with many conditionsExplanatory (do not effect the benefit under the policy) Restrictive (which reduce the scope of the coverage under the policy Eg. Suicid, war, proof of age etc. That conditions need to pay due attention to while opting for following plans:

1-

Reliance Money Guarantee Plans:

Unit linked insurance plan. Offers to safeguard your returns through the return shield option. Option to switch between plans through the exchange option. Three pre packaged investment fund options to choose from.

Basic Age of entry Age of maturity Policy term Sum assured

Minimum Maximum 30 days 50 yrs. Last birthday 18 yrs. Last birthday 80 yrs. Last birthday 10 yrs. 30 yrs. Annualized premium for half the policy term.

Minimum Regularly Premium: Yearly Half

26

Quarterl

Monthly

Regular Premium Option Minimum top up amount

Rs.

Yearly Rs. 5,000

y Rs. 2500

Rs. 1000

10,000 Rs. 2500 under all policies

Reliance Market Return Plans:

Unit linked life insurance plan. Choose from four different investments funds and choose to switch between them. Option to pay regular as well as single premium and top- ups. Package our policy with accidental riders.

Basic Age of entry Age of maturity Policy term

Minimum 30 days 18 yrs. Last birthday 5 yrs.

Maximum 65 yrs. Last birthday 80 yrs. Last birthday 40 yrs.

Minimum Regular Premium: Yearly Regular Premium Option Minimum top up amount Rs. Half Yearly Rs. 5,000 Quarterl y Rs. 2500 Monthly Rs. 1000

10,000 Rs. 25,000 under all policies

Minimum Sum assured:

Regular Premium: Annualized premium for 5 yrs. Or annualized premium for half the policy term, whichever is higher. Single premium: 125% premium of the single premium.

27

Maximum Sum Assured

No limit (Rs. 5,00,000 for age up to 12 years.)

3-

Reliance Golden Years Plans:

A Unit linked pension product with a vesting age between 45 yrs. To 70 yrs. Choose from tour different investments funds and choose to switch between them. Option to pay regular, single as well as top- up premium. Tax free commutation up to one third of fund value at vesting age.

4-

Reliance Golden Years Plan Plus:

Unit linked pension plan with vesting age between 45 and 64 years. Four investments four options to choose them. Option to switch between funds. Option to propone your vesting age. Sum assured plus fund value is payable to the beneficiary on death.

5-

Traditional Plans:
Other traditional plans are Reliance cash flow plan, Reliance child plan,

Reliance special fundowment plan etc.

28

(THE ADVISORS/ AGENTS)

4.1

INSURANCE ADVISORS
Person who sells insurance policies for a single insurance company, in

return for a commission is called ADVISOR.

29

Insurance advisors are the bridge or the channel partners between the policyholder and insurance company. They make the base for the insurance company. In other words, it can be said that advisors are those people in the organization who can give business to the company. They are the representatives of an insurance company who sells insurance. An insurance advisor locates prospective insurance customers determines the insurance needs of each customer, and assists the customer in applying for insurance. Typically, an insurance advisor will deliver the policy when the application is approved, will collect the initial premium and will provide customer service to policy owners. An advisor is also called a field underwriter or a life underwriter.

4.2

Professionals requirements of advisors:

Candidate should satisfy 5 out above 7 requirements to appear in test. (Pre- Recruitment Examination) Aged between 25 & above. Education Qualification- Graduate Resident in the area for 3 yrs or more. pre

4.3
1. 2.

Advisor must have following characteristics:

Communication Ability: Clearly express oneself in formal and informal settings. Inter Personal Skills: Listening effectively, maintaining emotional control, presenting effective counter arguments without criticizing or threating.

3. 4.

Market Understanding: This includes ability to assess both the breadth & depth of potential markets. Goal and achievement Motivation: Ability to set long & short term goals, channels ones own effect towards achieving them. This includes completing tasks that have been started.

30

5.

Time Management, Administrative ability, Independence/ self reliance, Technical Knowledge.

4.4

Benefits for an Advisor:

There are some reasons and parameters to be an advisor of the

insurance company which are mentioned below: a) Money: Money is the biggest reason to join as an advisor in a life insurance company. Only in this industry you can invest minimum and earn maximum. There is no limit for earning in this industry. b) Estate Creation: In this industry, the advisors are also paid commission till the maturity of the policy. Moreover, advisor is also paid renewal commission every year and this renewal commission helps the advisor to build an estate. It means a policy that is sold today will pay the advisors may be more than 10 to 15 years. It means each year you will get more and create an estate for advisors like house, car, childrens future etc. c) Status: Advisors secure the life of the human beings. They give advise to their client where to invest money and where not. So advisors become specialist in the investment field. It means advisors will get status by helping the human beings by a proper guidance.

d) Prestige: Company will give the advisors foreign trips, gifts and many more things. It also provides advisors a club membership. These all will give the advisors prestige and a unique position in the society.

31

e) Honor: Reliance Life Insurance provides motivational factors to the advisors. It gives a target to the advisors and if advisors reach this target, RLI l will give them a trophy, a certificate and incentives in the meeting of the company. Advisors can also become the member of MDRT and the Reliance Life Insurance will honour such advisors. f) Widen Social Circle: Life insurance is the business of contracts. As the time passes in this business more people will know and recognize the advisors. In this way, the advisors can widen their social circle in a strategic manner. g) Mitigate Human Hardship: When advisors come into the life insurance business, they dont sell only policy to the people but they provide safety against the uncertainty of the life. They help the people in peace of mind, freedom from the troubles and help them support themselves. h) Contribute to the nation: Each policy sold by the advisors will help the nation to increase the funds that go towards developing the country, for improving economy, improve standard of living and nature the upcoming industries.

4.5

Be an Advisor:

Being a Reliance Life Insurance advisor can be enriching and exciting career option. Its an opportunity to associate with an industry tender, be in touch with the latest and finest insurance practices from around the globe, and grow both personality and professionally.

32

Here are some of the benefits of being an Reliance life Insurance Advisor: Unlimited earning potential. Clear career path. All round support through exclusive advertising, your own in house consultant and world class training. A comprehensive benefit package. To be part of world class team. Be your own Boss. Flexible working environment. Promotion opportunity.

4.6

Skill Building by RACE

RLI provides a special 100 hour training programme that advisors

undergo for procurement of their insurance selling license from IRDA. This special training programme called RACE (Reliance Academy of Competence Enhancement) to add to their ability in their journey towards becoming fullfledged financial planning advisors. The objective of this programme is to develop certified and professional financial advisors who can import value- added services to our customers. The induction training, through a consultative approach aims at detailing the basics of life insurance, Reliance Life Insurance products and a reliance Life insurance way of selling. The programme also covers all the under writing and business process. Post- induction, the foundation levels continuous learning session build on these areas by enabling our advisors to overcome issues faced .

33

(RESEARCH METHODOLOGY)

5.1

SCOPE OF THE STUDY

The whole study was basically on the collection of data from primary

sources. For collection of primary data a survey was conducted in various markets.

34

Methodology has been extensively discussed under the heading given below on the following pages: Research Design Collection of Data Sampling scheme.

(i)

Research Design:
The Research design is a pattern or outline of a research projects

work. It is a statement of only the essential elements of a study,those that provide the basic guidline for the detail of project. The present study being conducted followed a descriptive research design. It produce a picture of the phenomemon decision maker is interested. Design of descriptive studies includes the nature and source of data,the nature of the expected result and the analytical method.

(ii)

Source of Data:

Primary Data: The primary data has been collected by survey method. This is or the most economical, efficient and effective way of collecting the data. It yields a wide range of information on various characters like attitude, opinion, behaviour etc. Primary data was collected through questionnaire. Secondary Data: The secondary data has been collected by websites, brochures, journals, Magazines etc. Preparing a suitable data collection method: In this project it was found that a questionnaire was the best method of obtaining the relevant data. A survey was found to be most appropriate to serve the objective already prepared. The research carried out through the market survey was conclusive and descriptive in nature.

(iii)

Sampling Scheme:

In this project random sampling was the appropriate method. A sampling design is a definite plan determined before any data actually collected for obtaining representative result.

35

1-

Type of Universe : The first step in developing any sampling design is to clearly define set of objects, technically called the universe.

2-

Sampling Size : (15 each from five insurance companies.) (i) (ii) (iii) (iv) (v) Reliance ICICI Pru. Bajaj Allinz SBI LIC 15 15 15 15 15

Tool : Questionnaire Sample size is the total number of respondent included in the sample assuming them to be true representative of the population. In my survey, I have chosen a sample size of 75 respondents as an appropriate sample size. I tried to contact only those persons who could give unbiased and representative information.

5.2
123455-

Objectives:
To know about advisors perception towards insurance fields. To know about advisors perception towards their respective insurance company. To know about advisors working pattern. To know about advisors satisfaction regarding commission. To know about motivational and de- motivational factors for advisors. To find out grow fact of insurance agents regarding their career prospects.

5.3

Research Methodology:
Nature of Data Area of Research Sample Size : : : Primary Data Kota 75 advisors/ agents

36

Sampling Procedure Data collection Method Research Instrument Research Design

: : : :

Convenience Sampling Questionnaire & Interview Questionnaire Descriptive

5.4 Analysis and interpretation:

How long have you been with the company.

60% 50% 40% 30% 20% 10% 0%

55%

30% 15%

< 8 month

8 to 12 month >12 months

Interpretation: 55% of them are working from less than 8 month and 30% are working between 8-12 months. From this we can understand that from last some time insurance market is in boom so more and more persons are joining it.

What about your recruitment process.

37

90 80 NO O F EMPLO YEE 70 60 50 40 30 20 10 0 SOPHASTICAL SUITABLE

Interpretation: 83 % of the agent say about the recruitment process is sophistical. And rest of say suitable.

This job is taken as a part time or full time.

38

80 70 NO O F EMPLO YEE 60 50 40 30 20 10 0 FULL TIME PART TIME Series1

Interpretation:

68% of Advisors having this job as a part time. It shows that they are also involved in some other job/service/business. But 32% people are believe in full time but put full output towards the organization.

How many days are devoted for this work in a week.

39

50% 40% 30% 20% 10% 0%

47% 33%

12%

8%

1 day

2-3 days

4-5 days

whole week

Interpretation: 80% of advisors are devoting 1-3 days in a week.

What is your joining age. 50%

40% 30% 20% 10% 0% below 20 yrs. 10%

60%

55%

25%

0% between 2035 yrs.

40

between 35- above 50 yrs. 50 yrs.

Interpretation:

55% of advisors have a joining age between 20- 35 yrs. No one advisor joins above 50 years.

Which is the most selling product.

41

70 60 NO O F EMPLO YEE 50 40 30 20 10 0 ULIP PLAN TRADIATIONAL PLAN OTHER PLAN

Interpretation

86% of advisors are agreed that ULIP plans are most selling plans because it gives highest return as well as risk cover to the customers.

42

Which factor motivates you the most.

80 70 NO O F EMPLO YEE 60 50 40 30 20 10 0 COMMISSION MANAGER'S SUPPORT CONTESTS

Interpretation Their commission motivates 82% of advisors and they are least motivated by managers support & contests.

43

Which factor motivates the customers the most to invest in insurance.

50% 40% 30% 20% 10% 0%

43%

21% 11%

25%

tax saving

returns

investment

risk cover

Interpretation 21% of customer are motivated by their returns, 43% of customers are motivated by their tax saving, 11% of customer are motivated by investment, 25% of customer are motivated by risk cover.

44

Do you show the allocation charge & fund management charge to the customers.

60 50 NO O F EMPLO YEE 40 30 20 10 0 ALWAYS NEVER DEPAND

Interpretation 50% of advisors show the allocation charge & fund manager charge. It shows that they tell every thing to the customer relating to the product.

45

Have you got benefits of a special training programme, RACE (Reliance Academy of competence Enhancement )

70 60 NO O F EMPLO YEE 50 40 30 20 10 0 YES NO

Interpretation 65% advisors have had the benefits of RACE (Reliance Academy of competence Enhancement)

46

47

6.1 CONCLUSION
12345Ulip is the most selling plan. 55% of advisors have been with the company since 8 months so it is a fastest growing corporation in India. 23% of advisors are dissatisfied with their commissions and they would change their company if provided with good options. Mostly, customers are motivated by tax saving. 68% of advisors are doing this work as a part time job and 80% of the advisors are devoting less than and equal to 3 days a week for this work. 6Commission motivates advisors the most and the demotivating factors are formalities. Unachieved targets, unsystematic training and best motivational factors are managerial support & contests. 789Mostly person joins as advisors at the age of 20-30 years. Mostly advisors have a proper time management between their both jobs (Part time & Full time) Some advisors (35%) could not attend RACE programme because of inconvenient time of training programme.

48

6.2 SUGGESTIONS
123Formalities should be reduces as much as possible at the time of recruitment. Advisors should provide enough chances for promotion. Proper training should be provided to advisors. When new plans are introduces and training should be organized in some shifts so that 95% of advisors could attend it. 456Commission should be increased. Feedback should be taken time to time from advisors by personal meeting. Company should be intimating renewal premium information to the customer.

6.3 LIMITATIONS OF THE STUDY

The research area was restricted only within the Kota city. This may not reflect the exact position of the total market. Sample size was also so less, limitation of time means and resource forced for small size. Questionnaire includes 16 question, which affects the mentality of respondents that is time consuming. Time constraint. Money Constraint. It is a human tendency or it is a mental state of mind that whenever they are being observed, interviewed by unknown person they behave artificially as hesitate to disclosing the facts. This is common problem while conducting the survey. This human behavior may distort the result.

49

50

References
1.. 2.. 3.. 4.. 5.. 6.. 7.. www.reliancelife.co.in www.reliancecapital.co.in www.irda.co.in Brushers Magazine like Life First, Insurance Agents(Life & General) etc. Advisor recruitment form. Investment news.

51

(APPENDICES)

52

Questionnaire
Name: Age: Qualification: Annual Income: Sex:
Q.1 How long have you been with the company? (a) <8 month (b) 8 to 12 month (c) >12 months [ ]

Q.2 What about your recruitment process? (a)Sophistical (b)Suitable [ ]

Q.3 This job is taken as a part time or full time ? (a)Full time (b) Part time [ ]

Q.4 How many days are devoted for this work in a week? (a)1 day (b) 2-3 days (c) 4-5 days (d) Whole week Q.6 What was your joining age? (a)Below 20 Yrs. (b) Between 20-35 Yrs. (c)Bet. 35-50 yrs. (d)Above 50 Yrs. [ ] Q.7. Which is the most selling product? (a)ULIP (b)Traditional plan (c) other [ ] [ ]

Q.8 Which factor motivates you the most?

53

(a) Commission (b) Managers support (c) Contests Q.9 Which factor motivates the customers the most to invest in insurance? (a) Returns (b) Tax saving (c) Investment (d) Risk cover

[ ]

[ ]

Q.10 Do you show the allocation charge & fund management charge to their customers? (a) [ ] Always (b) Never (c) Depend

Q.11 Are you satisfied with your commission? (a) Yes (b) No [ ]

Q.13 Have you got benefits of a special training programme, RACE? (a) Yes [ ] (b) No

54