backup of icici hr
TRANSCRIPT
“RECRUITMENT OF ADVISORS IN ICICI
PRUDENTIAL LIFE INSURANCE ”
1
Submitted to :
Jagannath International Management School
ACKNOWLEDGEMENT
This project has been prepared after lots of analysis and efforts. I gratefully
acknowledge with due courtesy the sources consulted in the preparation of
this project. I express my sincere gratitude to Mr. Devendra Gupta
(Regional Manager – HR) KCO for giving me an opportunity to work at
KCO in the HR department. I am thankful to his valuable guidance, advice,
critical reviews, acknowledgment and association throughout the
preparation of this report.
No work is complete in itself without credits being given to the persons
who help in achieving a desired task. I feel privileged to thank all those
people who have directly or indirectly contributed to the completion of this
project on (topic)
2
Executive Summary
The objective of this project was to assist ICICI Prudential Life Insurance in
expanding their channel by recruiting Tied Agents/ Advisors for the company. For the
company to successfully continue its operations, it needs to undergo change to get
new business and to get new ideas. Moreover insurance is such a growing sector that
it has full potential to have new customers. So it is very essential to have new people
in the system, which can add new customers to the company.
This was achieved through a five-pronged effort. The first objective of the study was
to look for different segments of the people. The second objective of the project was
to analyze the person to find whether he is fit for doing insurance. The third objective
of the project was to finally introduce some people in the system by recruiting them as
advisors of the company.
The research methodology consisted of secondary data, which was collected from
different colleges, Tata Press Yellow Pages etc and personal interview with people
in Delhi.
3
Objectives of the study
Main Objective :
Recruitment of Advisors for the company.
Sub Objective :
1. To understand the cl ientele profi le
2. To expand the channel base of Priority Circle
3. To provide an enabling environment to foster growth and learning for
advisors.
4
RESEARCH
METHODOLOGY
This is an endeavor to locate right kind of people possessing the right kind of skills
to become successful financial consultants. The study also tries to find out the kind
of people and skills that would further enhance the insurance business. ICICI
Prudential insurance business aims at recruiting those who have entrepreneurial
skills and necessary drive to survive and flourish in the present competitive and
ever increasing insurance industry.
The universe of study was limited to Delhi. The universe was divided in different
segments. The process of segmentation was primarily aimed at simplifying the
universe into smaller parts so each segment can be handled according to its unique
features. These segments were as follows:
Students
1. B.Com and MBA pass outs
2. Students perusing CA, MFC.
Enterprising Women
1. Hobby class operators
2. Beauty Saloon owners
3. Fashion boutiques
4. Kitty Party groups
5. Agents of direct Selling.
5
Property Dealers
Commission Agents
CA’s, Advocates and other Tax Consultants.
VRS Scheme holders/ Retired Members
The research methodology is discussed in detail later. However, the following is
the summary of the same.
STUDENTS
Research methodology: Mail + Call activity
Data Source: colleges and respective institutions.
ENTERPRISING WOMEN
Research Methodology: Telecalling
Data source: Personal contacts + Local Directories
PROPERTY DEALERS
Research Methodology: Telemarketing
Data source: Yellow pages + Local newspaper.
CA’s, INCOME TAX CONSULTANTS AND ADVOCATES
Research Methodology: Personal Contact
Data Source: Yellow Pages.
6
LIMITATIONS OF THE
STUDY
1. Area covered was confined to some regions only.
2. People were reluctant to join this job as it doesn’t provide any fixed salary.
3. People perceived this profession as a low status profession.
4. Availability of data to contact people was a problem.
5. Due to the presence of large number of LIC agents, people refused to become
advisors of any company as according to them there exits a huge competition.
6. Insurance business itself doesn’t enjoy a good reputation in the society.
7. The candidates like CA’s, Advocates and Tax consultants could not arrange a
meeting with ASM in spite of their interest.
7
MEANING OF INSURANCE
Insurance or assurance is device for indemnifying or guaranteeing an
individual against loss. Reimbursement is made from a fund to which
many individuals exposed to the same risk have contributed certain
specified amounts, called premiums. Payment for an individual loss,
divided among many, does not fall heavily upon the actual loser. The
essence of the contract of insurance, called a policy, is mutuality.
The entity that is transferring the risk — which may be an individual or
association of any type, including a government or government agency —
is called the "insured". The entity accepting the risk is called the
"insurer". The agreement between the two by which the risk is transferred
is called the "policy": this is a legal contract that sets out exactly the
terms and conditions of the coverage. The fee paid by the insured to the
insurer for assuming the risk is called the "premium". This is usually
determined by the insurer to fund estimated future claims paid,
administrative costs, and profit .
For example, let us assume that a couple buys a home costing $ 100,000.
Knowing that the loss of their home would bring them financial ruin,
they acquire insurance coverage in the form of a homeowner's policy.
That policy will pay them the cost of replacing or repairing their home in
the event of a catastrophe. The insurance company charges them a
premium of $1,000 a year. Risk of loss has been transferred from the
homeowners to the insurance company.
8
The major operations of an insurance company are underwriting, the
determination of which risks the insurer can take on; and rate making, the
decisions regarding necessary prices for such risks. The underwriter is
responsible for guarding against adverse selection, wherein there is
excessive coverage of high risk candidates in proportion to the coverage
of low risk candidates. In preventing adverse selection, the underwriter
must consider physical, psychological, and moral hazards in relation to
applicants. Physical hazards include those dangers which surround the
individual or property, jeopardizing the well-being of the insured. The
amount of the premium is determined by the operation of the law of
averages as calculated by actuaries. By investing premium payments in a
wide range of revenue-producing projects, insurance companies have
become major suppliers of capital, and they rank among the nation's
largest institutional investors.
9
COMMON TYPES OF INSURANCE
Life insurance , originally conceived to protect a man's family when his
death left them without income, has developed into a variety of policy
plans.
In a “whole life” policy, fixed premiums are paid throughout the
insured's lifetime; this accumulated amount, augmented by
compound interest, is paid to a beneficiary in a lump sum upon
the insured's death; the benefit is paid even if the insured had
terminated the policy.
Under “universal life,” the insured can vary the amount and
timing of the premiums; the funds compound to create the death
benefit.
With “variable life,” the fixed premiums are invested in a
portfolio (with earning reinvested), and the death benefit is based
on the performance of the investment.
In “term life,” coverage is for a specified time period (e.g., 5–10
years); such plans do not build up value during the term. Annuity
policies, which pay the insured a yearly income after a certain
age, have also been developed. In the 1990s, life insurance
companies began to allow early payouts to terminally ill patients.
Fire insurance usually includes damage from lightning; other
insurance against the elements includes hail, tornado, flood, and drought.
10
Automobile insurance includes not only insurance against fire and theft
but also compensation for damage to the car and for personal injury to
the victim of an accident (liability insurance); many car owners,
however, carry only partial insurance. In many states liability insurance
is compulsory, and a number of states have instituted so-called no-fault
insurance plans, whereby automobile accident victims receive
compensation without having to initiate a liability lawsuit, except in
special cases. Bonding, or fidelity insurance, is designed to protect an
employer against dishonesty or default on the part of an employee.
Title insurance is aimed at protecting purchasers of real estate from
loss by reason of defective title.
Credit insurance safeguards businesses against loss from the failure of
customers to meet their obligations.
Marine insurance protects shipping companies against the loss of a ship
or its cargo, as well as many other items, and so-called inland marine
insurance covers a vast miscellany of items, including tourist baggage,
express and parcel-post packages, truck cargoes, goods in transit, and
even bridges and tunnels. In recent years, the insurance industry has
broadened to guard against almost any conceivable risk; companies like
Lloyd's will insure a dancer's legs, a pianist's fingers, or an outdoor event
against loss from rain on a specified day.
11
Insurance in brief:
Insurance is a method of spreading & transfer of risk.
Losses of unfortunate few are shared by and spread over to many exposed to
same risk.
Assets created by the owner in expectation of future needs or benefits have
value.
Loss of assets for any reasons deprives the owner of the expected benefits.
Insurance in this context is a mechanism that helps to reduce the adverse
consequences due to loss of assets.
12
THE INSURANCE INDUSTRY
The insurance industry forms an integral part of the global f inancial market, with
insurance companies being signif icant insti tutional investors. In recent
decades, the insurance sector, l ike other f inancial services, has grown in
economic importance. This is through direct contributions to gross domestic
product (GDP) via increased levels of employment within the sector; and
indirectly through higher levels of r isk transfer and f inancial intermediation.
Expanding further on this issue, i t must be remembered that the insurance
industry’s primary function is to supply individuals and businesses with
coverage against specif ied contingencies.
Insurance companies, therefore, engage in underwrit ing, managing, and
f inancing r isks. According to Sigma (2001) the largest insurance sectors are to
be found in the U.S. and Japan, which together generates more than f i f ty
percent of global premium income; fol lowed by the UK, Germany, France and
Italy. Furthermore, during the last four decades the global insurance sector has
on average outpaced global economic growth. Between 1984 and 2001, the
global insurance industry grew at an overall rate of 483.6 percent (roughly
comprising of 664.8 percent from the l i fe insurance sector, and 334.3 percent
from the non- l i fe sector. The l i fe insurance sector, has continued to grow at a
fast rate.
13
THE GLOBAL INSURANCE
INDUSTRY
The insurance industry forms an integral part of the global financial
market, with insurance companies being significant institutional
investors. In recent decades, the insurance sector, like other financial
services, has grown in economic importance. This is through direct
contributions to gross domestic product (GDP) via increased levels of
employment within the sector; and indirectly through higher levels of
risk transfer and financial intermediation.
Expanding further on this issue, it must be remembered that the insurance
industry’s primary function is to supply individuals and businesses with
coverage against specified contingencies.
Insurance companies, therefore, engage in underwriting, managing, and financing
risks. According to Sigma (2001) the largest insurance sectors are to be found in the
U.S. and Japan, which together generates more than fifty percent of global premium
income; followed by the UK, Germany, France and Italy. Furthermore, during the last
four decades the global insurance sector has on average outpaced global economic
growth. Between 1984 and 2001, the global insurance industry grew at an overall rate
of 483.6 percent (roughly comprising of 664.8 percent from the life insurance sector,
and 334.3 percent from the non-life sector. Over the last few years, growth in the
global non-life insurance market has significantly slowed down and has only grown in
line with general economic growth (Sigma, 2001). This is in contrast to the life
insurance sector, which has continued to grow at a fast rate. Sigma (2002a) estimates
14
this to be in the region of 5.4 percent worldwide since 2000. Measured in total
premiums, OECD countries accounted for 95.52 percent and 93.99 percent of the life
insurance business, and 91.19 percent and 92.50 percent of non-life insurance
premium volume in 1994 and 2001, respectively.
Outside of the OECD, a more recent development since the early nineties
has been the ability of the emerging markets to strengthen their global
market share in the life insurance segment, with growth rates often
reaching double-digit figures. Furthermore, insurance markets within the
OECD countries have faced falling premium income, reduced capital
market yields and low interest rates, all of which has put insurers under
some pressure (Sigma, 2002a). Also, the growing importance of the
insurance industry in emerging markets is reflected in growing insurance
density and insurance penetration of the non-OECD insurance markets
(Sigma, 1996, 2001). Nevertheless, and despite these developments,
emerging markets still have some way to go before matching the relative
sizes and importance that the insurance industry has in industrialized
countries.
15
THE DETERMINANTS OF INSURANCE DEMAND
The theoretical and empirical research to date has suggested that, on
average, an overwhelming positive relationship between financial
development and economic growth is evident and that a well-developed
financial sector contributes to economic growth. However, on a single
country-by-country basis, Ward and Zurbruegg (2000) have shown that
differences in the causal relationship between insurance market
development and economic growth are apparent. Research efforts have,
therefore, moved onto understanding the factors that encourage the
development of financial institutions. By identifying the determinants
that encourage insurance demand, policymakers are able to aid financial
development, thereby positively influencing economic growth. These
determinants that have been empirically tested can be grouped under
three broad subheadings; economic, political / legal, and social factors.
To further explore exactly how these factors influence insurance demand,
they are each considered in turn below.
Economic factors
First, it is important to highlight that the relative importance of an
insurance market within a country is likely to depend upon economic
development, since with a greater rate of economic growth the
consumption of insurance products should increase. Indeed, early
findings highlighted that the demand for life insurance is positively
correlated with income, see Yaari (1965), Hakansson (1969), Fortune
16
(1973), Fisher (1973), and Lewis (1989). These results are also
confirmed by the more recent cross-country based studies of Beenstock et
al. (1986), Truett and Truett (1990), and Browne and Kim (1993).
When analyzing the impact of national income on non-life insurance
demand, Beenstock. (1988) indicate a positive relationship exists
between national income in industrialized countries and spending on
property-liability insurance. Browne et al. (2000) extend these findings
when analyzing motor vehicle and liability insurance in OECD countries,
and do not only show that a positive and statistically significant
relationship can be found between premium density and income, but also
that income has a more pronounced effect on motor vehicle insurance,
than on general liability insurance consumption. Esho et al. (2003) also
test the impact of national income on property and casualty insurance by
analyzing data from developed and developing nations between 1984 to
1998. Again, they detect a strong positive relationship between national
income and non-life insurance demand. The World Bank confirms these
findings and states that non-life insurance can be regarded as a normal
good implying that insurance demand rises as income increases (Lester,
September 2002). Despite these findings, insurance penetration in some
countries differs from the international average.
17
Role of insurance in economic development
Investments are necessary for Economic development.
Life Insurance plays a major role in mobilization of public savings.
Savings out of life insurance funds are utilized in investments for growth.
Looking for general insurance business industry trade would be seriously
handicap in the absence of insurance cover relating to fire and
engineering risk.
Social factors
Insurance can also be seen as a product that is valued subjectively by its
consumer. In fact Hofstede (1995) points out that the level of insurance
within an economy depends on the national culture and the willingness of
individuals to use insurance as a means of dealing with risk. It is not
surprising that Douglas and Wildavsky (1982) show that the demand for
life insurance in a country may be affected by the unique culture of the
country to the extent that culture affects the degree of risk aversion.
Moreover, Schlesinger (1981) reveals that an optimal insurance decision
is directly related to the level of risk aversion of the insured person and
shows, following Pratt (1964) and Szipiro (1985), that the more risk
adverse an individual is the higher the amount insured.This is in line with
the work by Outreville (1996), which emphasizes that education promotes
an understanding of risk and hence aids insurance demand.
18
INSURANCE MARKET IN INDIA
The history of life insurance in India dates back to 1818 when it was
conceived as a means to provide for English Widows. Interestingly in
those days a higher premium was charged for Indian lives than the non-
Indian lives, as Indian lives were considered more risky for coverage.
The Bombay Mutual Life Insurance Society started its business in 1870.
It was the first company to charge same premium for both Indian and
non-Indian lives. The Oriental Assurance Company was established in
1880. The first general insurance company- Tital Insurance Company
Limited was established in 1850. Till the end of nineteenth century
insurance business was almost entirely in the hands of overseas
companies.
Insurance regulation formally began in India with the passing of the Life
Insurance Companies Act of 1912 and the provident fund Act of 1912.
Several frauds during 20's and 30's sullied insurance business in India.
By 1938 there were 176 insurance companies. The first comprehensive
legislation was introduced with the Insurance Act of 1938 that provided
strict State Control over insurance business. The insurance business grew
at a faster pace after independence. Indian companies strengthened their
hold on this business but despite the growth that was witnessed,
insurance remained an urban phenomenon.
The Government of India in 1956, brought together over 240 private life
insurers and provident societies under one nationalized monopoly
19
corporation and LIC was born. Nationalization was justified on the
grounds that it would create much-needed funds for rapid
industrialization. This was in conformity with the Government's chosen
path of State lead planning and development.
The (non-life) insurance business, however, continued to thrive with the
private sector till 1972. Their operations were restricted to organized
trade and industry in large cities. The insurance sector in India has come
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 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. An independent consulting
company, The Monitor Group has estimated that the life insurance market
will grow from Rs.218 billion in 1998 to Rs.1003 billion by 2008 (a
compounded annual growth of 16.5%)
20
WINDS OF CHANGE
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. Some of the key names are AIG, New York Life, Allianz,
Prudential, Standard Life, Sun Life Canada and Old Mutual.
The entry of new players has rejuvenated the erstwhile monopoly player
LIC, which has responded to the competition in an admirable fashion by
launching new products and improving service standards
The following are the key winds of change brought about by
privatization.
Market Expansion: There has been an overall expansion in the
market. This has been possible due to improved awareness levels
thanks to the large number of advertising campaigns launched by all
the players. The scope for expansion is still unlimited as virtually all
the players are concentrating on large cities and towns - except by LIC
to an extent there was no significant attempt to tap the rural markets
New Product Offerings: There has been a plethora of new and
innovative products offered by the new players, mainly from the stable
of their international partners. Customers have tremendous choice
from a large variety of products from pure term (risk) insurance to
unit-linked investment products. Customers are offered unbundled
21
products with a variety of benefits as riders from
which they can choose. More customers are buying products and
services based on their true needs and not just traditional money-back
policies, which is not considered very appropriate for long-term
protection and savings. However, there are still some key new
products yet to be introduced - e.g. health products.
Customer Service: Not unexpectedly, this was one area that
witnessed the most significant change with the entry of new players.
There is an attempt to bring in international best practices in service
and operational efficiency through use of latest technologies. Advice
and need based selling is emerging through much better trained sales
force and advisors. There is improvement in response and turnaround
times in specific areas such as delivery of first policy receipt, policy
document, premium notice, final maturity payment, settlement of
claims etc. However, there is a long way to go and various customer
surveys indicate that the standards are still below customer
expectation levels
Channels of Distribution: Till two years back, the only mode of
distribution of life insurance products was through Agents. While
agents continue to be the predominant distribution channel, today a
number of innovative alternative channels are being offered to
consumers. Some of them are bank assurance, brokers, the internet and
direct marketing. Though it is too early to predict, the wide spread of
bank branch network in India could lead to bank assurance emerging
as a significant distribution mechanism.
22
Why Do I Need Life Insurance?
You need life insurance in order to ensure that your loved ones can cope financially
with your loss. That's the bottom line.
The reasoning behind life insurance is most evident when you consider sole
breadwinners, but applies to everyone who has dependents, even stay-at-home
spouses. If you (as the stay-at-home spouse) were to suddenly die, your family would
have to find other ways to: ensure care of children; get the family home cleaned;
handle dry cleaning and laundry; do grocery shopping; and many other tasks which
you currently handle. While your services appear to be 'low cost' because no one is
paying you directly, if your family has to replace you with paid help you will quickly
see your 'value'.
23
FACTS OF LIFE INSURANCE INDUSTRY
Life insurance premium accounts for 72% of the total premium collection
in India as against the global average of 59%.
About LIC
• In 2001 LIC sold close to 20 million new Individual Policies
• In year 2000 the turnover of LIC was worth Rs. 261 Billion
• LIC has close to 2048 branches, 100 divisions and 7 zonal offices
Market Potential
• The size of the Insurance market is 31.2 Crores which makes it one
of the hottest destination for any company
• While 5 crores people have a capacity to pay an annual premium of
Rs 10000 per annum, 10 crores people have a capacity to pay Rs
7000 per annum , and another 15 crores people have a capacity to
pay Rs 3500 per annum
No. Of Players
• Before nationalization of Insurance in 1956, there were 254 life
Insurers and 106 general insurers to serve the population of 36
crores in India
• UK has more than 500 insurance companies to serve a population of
6 crores
24
• USA has over 2200 insurance companies to
serve a population of 26 Crores
• Even Japan has 90 Insurance Companies to serve its population of
12 Crores
Emerging Trends
• The Non life market was the size of Rs 10000 crores last year with
a potential of growing up to at least Rs 45000 Crores provided it
develops the way it is expected to develop.
• As on date the total insured losses arising out of unfortunate
incident of Sept 11 in WTC is on date $42-43 Billion
The Industry
• The growth rate of the insurance sector is about 10% which is
expected to go up to 12%
• Before opening up the growth rate was 14% which means there is a
dip of 4.5% which could be traced to the prevailing economic
recession
• The per capita insurance premium in India is just US $ 8 which is
less then even Malaysia which is US $144
Current trends and strategies
• Growth of the pension market today: groups as well as individual.
• Emerging health insurance market with third party administrators
(TPAs) trying to make a place for them selves as and when the
regulations are in place
25
• New types of products –Unit linked single
premium-becoming popular.
Current trends and strategies
• New distribution channels are evolving and public will have greater
choice even in the matter of point of purchase.
• Distribution and servicing are becoming more technology intensive
and closely regulated.
• Insurers are trying to distinguish their products but only time and
experience will tell.
Emerging trends
• People are slowly moving from purely savings oriented products to
products that offer higher degree of life cover.
• The realization that insurance is basically about protection. So far
insurance has been widely understood by the market as another tax
saving oriented investment option
• There are several products becoming available in the market that
are suited to the life style of the people.
• There is a lot of scope for tailor made products depending upon the
need of the customer.
Bank assurance
• Insurance products distributed through the bank counters all over
the country can bring vast improvement in the insurance coverage
in the quickest possible time
26
• Banks today are the most credible agencies
(However Banks also do have to go for Bankers’ Blanket
Insurance!!!)
• The public has immense faith in them
• Regulators keep a tight vigil over them
• Millions of bank staff are highly educated and trained Banks can
accept lower commissions, and the benefit goes on to the consumer
by charging a lower premium rate
• Half of insurance policies sold in Europe is through banks
Insurance and IT
Key areas where differentiation is considered critical for the future of the
insurance companies include the following:
• Product Development
• Back Office
• Customer Service
• Distribution
27
LIFE INSURANCE MARKET IN INDIA
Many may not be aware that the life insurance industry of India is as old
as it is in any other part of the world. The first Indian life insurance
company was the Oriental Life Insurance Company, which was started in
India in 1818 at Kolkata. A number of players (over 250 in life and about
100 in non-life) mainly with regional focus flourished all across the
country.
However, the Government of India, concerned by the unethical standards
adopted by some players against the consumers, nationalized the industry
in two phases in 1956 (life) and in 1972 (non-life). The insurance
business of the country was then brought under two public sector
companies, Life Insurance Corporation of India (LIC) and General
Insurance Corporation of India (GIC).
In line with the economic reforms that were ushered in India in early
nineties, the Government set up a Committee on Reforms (popularly
called the Malhotra Committee) in April 1993 to suggest reforms in the
insurance sector. The Committee recommended throwing open the sector
to private players to usher in competition and bring more choice to the
consumer. The objective was to improve the penetration of insurance as a
percentage of GDP, which remains low in India even compared to some
developing countries in Asia.
28
Reforms were initiated with the passage of Insurance Regulatory and
Development Authority (IRDA) Bill in 1999.
IRDA was set up as an independent regulatory authority, which has put in
place regulations in line with global norms. So far in the private sector,
12 life insurance companies and 9 general insurance companies have
been registered
29
Insurance Regulatory and Development
Authority (IRDA) ACT, 1999
Prior to 1999 the there were only two players in the market
Life insurance corporation of India (LIC)
General Insurance Corporation (GIC)
Then to protect the interests of the policyholders, to regulate, promote
and ensure orderly growth of the insurance industry, IRDA was set up.
After this the private players started entering the market.
This is a corporate body established for the purpose and objects as set out
in explanation to the title.
The authority replaces “Controller” under insurance act 1938.
It states that if authority is superseded by central govt. the insurance may
be appointed till such time as “Authority” is reconstituted.
Constitution of IRDA
The insurance regulatory and development authority consist of the
following members.
1. Chairperson
30
2. Less than five whole time members
3. Less than four part time members.
Member should be person of ability, integrity & standing.
They Should have experience in the field of :
1. Life Insurance
2. General Insurance
3. Actuarial science.
4. Finance
5. Economics
6. Law
7. Accountancy
8. Administration
Chairperson, members, officers and other employees of
authority shall be public servants.
Functions of IRDA :
To issue certificate of registration, renew, withdraw,
suspend or cancel such registration.
To protect the interest of policyholders/insured in the
matter of insurance contract with the insurance company.
31
To specify requisite
qualification, code of conduct and training for insurance intermediaries and
agents.
To specify code of conduct for surveyors /loss assessors.
To promote efficiency in the conduct of insurance
business
To promote and regulate professional organizations
connected with the insurance and reinsurance business.
To undertake inspection, conduct enquiries and
investigations including audit of insurers and insurance intermediaries.
To control and regulate the rates terms and conditions to
be offered by the insurer regarding general insurance business not so controlled
by tariff advisory committee under section 604 of Insurance act, 1938.
To regulate investment of funds by the insurance
companies.
32
Life Insurance Industry in the year 2000-2001 had 16 new entrants,
namely:
S. No Reg.
Number
Date of Reg. Name of the Company
1 101 23.10.2000 HDFC Standard Life Insurance
Company Ltd.
2 104 15.11.2000 Max New York Life Insurance Co. Ltd.
3 105 24.11.2000 ICICI Prudential Life Insurance
Company Ltd.
4 107 10.01.2001 Kotak Mahindra Old Mutual Life
Insurance Limited
5 109 31.01.2001 Birla Sun Life Insurance Company Ltd.
6 110 12.02.2001 Tata AIG Life Insurance Company Ltd.
7 111 30.03.2001 SBI Life Insurance Company Limited .
8 114 02.08.2001 ING Vysya Life Insurance Company
Private Limited
9 116 03.08.2001 Bajaj Allianz Life Insurance Company
Limited
10 117 06.08.2001 Metlife India Insurance Company.
33
Yr: 2001-2002: (From 1st Jan 2001 to Dec. 2002) Life Insurance Industry in this year, so far has 3 new entrants; namely
S.No. Registration
Number
Date of Reg. Name of the Company
1 121 03.01.2002 AMP Sanmar Life Insurance
Company Limited.
2 122 14.05.2002 Aviva Life Insurance Co. India
Pvt. Ltd.
Yr: 2003-2004: (From 1st Jan 2003 till Date)
Life Insurance Industry in this year, so far has 1 new entrants;
namely
S.No Registration
Number
Date of Reg. Name of the Company
1 127 06.02.2004 Sahara India Insurance Co. Ltd.
34
Life Insurance Corporation of India Act, 1956
Life insurance business was nationalized in India with effect from 19 th January
1956.
The life insurance business of 154 Indian Life offices constituted by 16 non-Indian
insurers operation in India and 75 provident societies was taken over by the
Government of India.
LIC of India Act was passed by the parliament on 18th june1956 and it came into
effect from 1st July1956.
35
ABOUT ICICI PRUDENTIAL
Incorporated on July 20, 2000 it is a 74:26, joint venture between ICICI
and Prudential plc of U.K. In November 2000, ICICI Prudential Life
Insurance was granted Certification of Registration for carrying out life
insurance business by the Insurance Regulatory & Development
Authority of India. The Company issued its first policy on December 12,
2000.
ICICI Prudential Life Insurance Company is a joint venture between
ICICI Bank, a premier financial powerhouse and Prudential plc, a leading
international financial services group headquartered in the United
Kingdom. ICICI Prudential was amongst the first private sector insurance
companies to begin operations in December 2000 after receiving approval
from Insurance Regulatory Development Authority (IRDA).
ICICI Prudential's equity base stands at Rs. 9.25 billion with ICICI Bank
and Prudential plc holding 74% and 26% stake respectively. In the
financial year ended March 31, 2005, the company garnered Rs 1584
crores of new business premium for a total sum assured of Rs 13,780
crores and wrote nearly 615,000 policies. The company has a network of
about 56,000 advisors; as well as 7-banc assurance and 150 corporate
agent tie-ups. For the past four years, ICICI Prudential has retained its
position as the No. 1 private life insurer in the country, with a wide
36
range of flexible products that meet the needs of the Indian customer at
every step in life.
ICICI Prudential Life Insurance's new business has grown 77% in '04-05 to cross Rs
1,000 crores, with annualized new business premium of Rs 1,256 crores. The
company's total received premium, which includes renewal premium, has crossed Rs
2,363 crores for '04-05.
In the year 2004-05, 80% of the premium has been generated from unit-
linked plans, with nearly 40% of the premium collections going into
equity. Indian policyholders have been increasingly opting for unit-
linked plans, which offer higher exposure to equities, ever since lower
interest rates have forced insurers to cut bonuses on traditional policies.
In contrast, the private life insurance agent force has grown by leaps and
bounds. The need for higher geographical penetration has seen insurance
companies recruiting aggressively. At last count, they added up to a
massive 1,50,000. ICICI PruLife topped the list among the private
players, which had close to 50,000 agents, while Bajaj Allianz had
30,000 agents. At least six of the 11 private life insurance players had an
agent force of 10,000 and plus.
This included Tata AIG, Max New York, HDFC Standard and Birla Sun
Life. All these insurance companies have allocated large amounts of
fresh capital to build the agent network across major cities in the past
few years.
37
Our vision:
To make ICICI Prudential the dominant Life and Pensions player built on trust by
world-class people and service.
This we hope to achieve by:
Understanding the needs of customers and offering them superior products and
service
Leveraging technology to service customers quickly, efficiently and
conveniently
Developing and implementing superior risk management and investment
strategies to offer sustainable and stable returns to our policyholders
Providing an enabling environment to foster growth and learning for our
employees
And above all, building transparency in all our dealings.
The success of the company will be founded in its unflinching commitment to 5 core
values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of
the values describe what the company stands for, the qualities of our people and the
way we work. .
We do believe that we are on the threshold of an exciting new opportunity, where we
can play a significant role in redefining and reshaping the sector. Given the quality of
our parentage and the commitment of our team, there are no limits to our growth.
38
Promoters
ICICI and Prudential came together in 1993 to form Prudential ICICI
Asset Management Company, which has today emerged as one of the
leading mutual funds in India. The two companies bring together two of
the strongest financial service brands in Asia, known for their
professionalism, excellent quality of service and long term commitment
to YOU. Riding on the success of this relationship, the two companies
joined hands once more in 2000, to form ICICI Prudential Life Insurance,
with a commitment to provide leading-edge life insurance solutions.
ICICI Bank has 74% stake in the company, and Prudential plc has 26%.
ICICI Bank (NYSE:IBN) is India’s second largest bank with an asset
base of Rs. 106812 crores. ICICI Bank provides a broad spectrum of
financial services to individuals and companies. This includes mortgages,
car and personal loans, credit and debit cards, corporate and agricultural
finance. The Bank services a growing customer base of more than 7
million customer accounts and 5 million bondholders’ accounts through a
multi-channel access network. This includes about 450 branches and
extension counters, 1675 ATMs, call centres and Internet banking. ICICI
Bank posted a net profit of Rs.1, 206 crores for the year ended March 31,
2003. ICICI Bank is the only Indian company to be rated above the
country rating by the international rating agency Moody’s and the only
Indian company to be awarded an investment grade international credit
39
rating. The Bank enjoys the highest AAA (or
equivalent) rating from all leading Indian rating agencies.
Established in 1848, Prudential plc is a leading international financial
services company in the UK, with around US$250 billion funds under
management and more than 16 million customers worldwide. Prudential
has brought to market an integrated range of financial services products
that now includes life assurance, pensions, mutual funds, banking,
investment management and general insurance. In Asia, Prudential is
Auk’s largest life insurance company with a vast network of 22 life and
mutual fund operations in twelve countries - China, Hong Kong, India,
Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan,
Thailand and Vietnam. Since 1923, Prudential has championed customer-
centric products and services, supported by over 60,000 staff and agents
across the region.
Fact sheet
ICICI Prudential Life Insurance Company is a joint venture between
ICICI Bank, a premier financial powerhouse, and Prudential plc, a
leading international financial services group headquartered in the United
Kingdom. ICICI Prudential was amongst the first private sector insurance
companies to begin operations in December 2000 after receiving approval
from Insurance Regulatory Development Authority (IRDA).
ICICI Prudential’s equity base stands at Rs. 925 crores with ICICI Bank
and Prudential plc holding 74% and 26% stake respectively. In the period
40
April-December 2004, the company garnered Rs
860 crores of new business premium for a total sum assured of over Rs
7,360 crores and wrote nearly 345,000 policies. Today the company is the
No.1 private life insurer in the country.
Distribution
ICICI Prudential has one of the largest distribution networks amongst
private life insurers in India, having commenced operations in 69 cities
and towns in India. These are: Agra, Ahmedabad, Ajmer, Allahabad,
Amritsar, Aurangabad, Bangalore, Bareilly, Bhatinda, Bhopal,
Bhubhaneshwar, Calicut, Chandigarh, Chennai, Coimbatore, Dehradun,
Durgapur, Faridabad, Goa, Guntur, Gurgaon, Guwahati, Gwalior,
Hyderabad, Hubli, Indore, Jaipur, Jalandhar, Jamnagar, Jamshedpur,
Jodhpur, Kanpur, Karnal, Kochi, Kolkata, Kolhapur, Kota, Kottayam,
Lucknow, Ludhiana, Madurai, Mangalore, Meerut, Mumbai, Mysore,
Nagpur, Nasik, Noida, New Delhi, Patiala, Pune, Raipur, Rajkot, Ranchi,
Rourkela, Salem, Siliguri, Surat, Thane, Thrissur, Trichy, Trivandrum,
Udaipur, Vadodara, Vapi, Varanasi, Vashi, Vijayawada and Vizag.
The company has seven bank assurance tie-ups, having agreements with
ICICI Bank, Federal Bank, South Indian Bank, Bank of India, Lord
Krishna Bank and some co-operative banks, as well as over 160 corporate
agents and brokers. It has also tied up with organizations like Dhan for
distribution of Salaam Zindagi, a policy for the socially and
economically underprivileged sections of society.
41
Distribution Channels
Till date insurance agents still remain the main source through which the
insurance products are sold. The concept is very well established in the country
like India. But still the increasing use of other sources is imperative. It therefore
makes sense that the well-balanced alternative channel of distribution. At
present the distribution channels that are available in the market are:
Direct selling
Corporate agents
Group Selling
Brokers and corporative Societies
Banc assurance
ABOUT THE PROMOTERS
ICICI Bank is India's second-largest bank with total assets of about
Rs.112,024 crore and a network of about 450 branches and offices and
about 1750 ATMs. It offers a wide range of banking products and
financial services to corporate and retail customers through a variety of
delivery channels and through its specialized subsidiaries and affiliates
in the areas of investment banking, life and non-life insurance, venture
capital, asset management and information technology. ICICI Bank
posted a net profit of Rs.1, 637 crores for the year ended March 31, 2004.
ICICI Bank's equity shares are listed in India on stock exchanges at
Chennai, Delhi, Kolkata and Vadodara, the Stock Exchange, Mumbai and
the National Stock Exchange of India Limited and its American
42
Depositary Receipts (ADRs) are listed on the New York Stock Exchange
(NYSE).
Established in London in 1848, Prudential plc, through its businesses in
the UK and Europe, the US and Asia, provides retail financial services
products and services to more than 16 million customers, policyholder
and unit holders worldwide. As of June 30, 2004, the company had over
US$300 billion in funds under management. Prudential has brought to
market an integrated range of financial services products that now
includes life assurance, pensions, mutual funds, banking, investment
management and general insurance. In Asia, Prudential is the leading
European life insurance company with a vast network of 24 life and
mutual fund operations in twelve countries - China, Hong Kong, India,
Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan,
Thailand and Vietnam.
43
ORGANISATION STRUC
44
Binay Agarw
alBIU
PRODUCTS AND SERVICES SNAPSHOT
Insurance Solutions for Individuals
ICICI Prudential Life Insurance offers a range of innovative, customer-
centric products that meet the needs of customers at every life stage. Its
20 products can be enhanced with up to 6 riders, to create a customized
solution for each policyholder.
Savings Solutions
SecurePlus is a transparent and feature-packed savings plan that
offers 3 levels of protection.
CashPlus is a transparent, feature-packed savings plan that offers 3
levels of protection as well as liquidity options.
Save n Protect is a traditional endowment savings plan that offers
life protection along with adequate returns.
CashBak is an anticipated endowment policy ideal for meeting
milestone expenses like a child’s marriage, expenses for a child’s
higher education or purchase of an asset.
LifeTime & LifeTime II offer customers the flexibility and control
to customize the policy to meet the changing needs at different life
stages. Each offers 4 fund options Preserver, Protector, Balancer
and Maximiser.
45
LifeLink II is a single premium Market Linked Insurance Plan that
combines life insurance cover with the opportunity to stay invested
in the stock market.
Premier Life is a limited premium-paying plan that offers
customers life insurance cover till the age of 75.
InvestShield Life is a Market Linked plan that provides capital
guarantee on the invested premiums and declared bonus interest.
InvestShield Cash is a Market Linked plan that provides capital
guarantee on the invested premiums and declared bonus interest
along with flexible liquidity options.
InvestShield Gold is a Market Linked plan that provides capital
guarantee on the invested premiums and declared bonus interest
along with limited premium payment terms.
Protection Solutions
LifeGuard is a protection plan, which offers life cover at very low cost.
It is available in 3 options level term assurance, level term assurance
with return of premium and single premium.
Child Plans
SmartKid education plans provide guaranteed educational benefits to a
child along with life insurance cover for the parent who purchases the
policy. The policy is designed to provide money at important milestones
in the child’s life. SmartKid plans are also available in unit-linked form
both single premium and regular premium.
46
Retirement Solutions
ForeverLife is a retirement product targeted at individuals in their
thirties.
SecurePlus Pension is a flexible pension plan that allows one to
select between 3 levels of cover.
Market-linked retirement products
LifeTime Pension II is a regular premium market-linked pension
plan
LifeLink Pension II is a single premium market-linked pension
plan.
InvestShield Pension is a regular premium pension plan with a
capital guarantee on the investible premium and declared bonuses.
ICICI Prudential also launched Salaam Zindagi , a social sector group
insurance policy targeted at the economically underprivileged sections of
the society.
Group Insurance Solutions
ICICI Prudential also offers Group Insurance Solutions for companies
seeking to enhance benefits to their employees.
ICICI Pru Group Gratuity Plan: ICICI Pru’s group gratuity plan helps
employers fund their statutory gratuity obligation in a scientific manner.
The plan can also be customized to structure schemes that can provide
benefits beyond the statutory obligations.
47
ICICI Pru Group Superannuation Plan: ICICI Pru offers a flexible
defined contribution superannuating scheme to provide a retirement kitty
for each member of the group. Employees have the option of choosing
from various annuity options or opting for a partial commutation of the
annuity at the time of retirement.
ICICI Pru Group Term Plan: ICICI Pru’s flexible group term solution
helps provide affordable cover to members of a group. The cover could
be uniform or based on designation/rank or a multiple of salary. The
benefit under the policy is paid to the beneficiary nominated by the
member on his/her death.
Flexible Rider Options
ICICI Pru Life offers flexible riders, which can be added to the basic
policy at a marginal cost, depending on the specific needs of the
customer.
Accident & disability benefit: If death occurs as the result of an
accident during the term of the policy, the beneficiary receives an
additional amount equal to the sum assured under the policy. If the
death occurs while traveling in an authorized mass transport
vehicle, the beneficiary will be entitled to twice the sum assured as
additional benefit.
Accident Benefit: This rider option pays the sum assured under the
rider on death due to accident.
48
Critical Illness Benefit: protects the insured
against financial loss in the event of 9 specified critical illnesses.
Benefits are payable to the insured for medical expenses prior to
death.
Major Surgical Assistance Benefit: provides financial supports in
the event of medical emergencies, ensuring benefits are payable to
the life assured for medical expenses incurred for surgical
procedures. Cover is offered against 43 surgical procedures.
Income Benefit: This rider pays the 10% of the sum assured to the
nominee every year, till maturity, in the event of the death of the
life assured. It is available on SmarKid, SecurePlus and CashPlus
Waiver of Premium: In case of total and permanent disability due
to an accident, the premiums are waived till maturity. This rider is
available with SecurePlus and CashPlus.
SERVICE STANDARDS
Six sigma
ICICI prudential realized early on that quality could be a significant
differentia with respect to the competition. Hence it launched a six-sigma
initiative as a quality measurement tool to understand and fulfill
customer needs, set industry benchmarks and make its operations salable
with a focus on customers and costs.
49
Through Six sigma there has been a continuous focus on the customer,
which fits in ideally with a focus on the customer, which fits in ideally
with ICICI Prudential’s customer centric approach.
Investment philosophy
Their investment philosophy aims to proactively achieve superior risk-
adjusted returns on our funds under management. The focus is on
ensuring long-term safety, Stability and profitability of portfolio.
The framework to achieve this objective is based on sound investment
process and controls coupled with a rigorous and sophisticated risk
management strategy. There is clearly articulated asset allocation
strategy depending on risk characteristics of corresponding liability.
Portfolio management is a function o extensive research and is based on
data and reasoning. Debt investments target a judicious mix of credit and
interest rate risk. Investments in equity target long term appreciation and
follow a value oriented investment style.
Information technology
At ICICI Prudential, the strategic use of technology provides the
consumer with value –added services. There is a robust system, which is
employed as the backbone of the company. Initiatives have been taken to
provide complete CRM solutions so that the consumer can access
complete information on the policies online, from accessing payment
details to sending in the premium. Channel partners can manage their
50
entire business on the web through premium alerts, client diaries and
premium calculators.
The following companies have the following market share of the insurance
industry.
NAME OF THE PLAYER MARKET SHARE (%)
LIC 82.3
ICICI PRUDENTIAL 5.63
BIRLA SUNLIFE 2.56
BAJAJ ALLIANZ 2.03
SBI LIFE 1.80
HDFC STANDARDLIFE 1.36
TATA AIG 1.29
MAX NEW YORK 0.90
AVIVA 0.79
OM KOTAK MAHINDRA 0.51
ING VYASA 0.37
AMP SANMAR 0.26
METLIFE 0.21
51
The market share was distributed among the private players. Though LIC still holds 82.3% of the insurance sector, the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC’s market share has decreased from 95%(2002-2003) to 81%(2004-05).
52
ICICI PRUDENTIAL PRIORITY CIRCLE
THE PRIORITY CIRCLE
Priority circle is an opportunity to diversify the business and widen the
gamut of services and solutions offered to the clients. One can now
enhance the business with capital investment and yet earn high returns.
Step into the arena of private life insurance, one of the most dynamic
industries today with Priority Circle of ICICI prudential life insurance
company ltd, the leader in today’s private life insurance industry.
The vast reach
91 branches spread over 61 locations
A committed team of tied and corporate agents, brokers, banks and
call centre executives
An advisor force of more than 46000 agents.
Tie ups with India’s leading banks like ICICI bank, Bank of India,
federal bank and south Indian bank ICICI prudential customers enjoy the
privilege of approaching the company as per their convenience. Its vast
reach across India places the company far ahead of its pears.
The pleasant experience service
The company maintains its undisputed leadership by proactively
achieving superior risk adjusted returns on its funds. The prime focus is
on ensuring long-term safety, profitability, stability of the portfolio.
53
Quality service at ICICI Pru is not an isolated function but a practice.
From people and products to process at every stage of the policy, it is an
experience for the customers so everyone’s a customer service associate
including you.
THE ADVISORS FORTE
An advisor at ICICI Prudential is one of the main strengths of the
company. It’s a partnership that results in unlimited growth opportunity
with the company.
THE ROLE
To identify prospective customers, provide tailor-made solutions to cater
to their individual needs, conduct regular reviews to keep customers on
track and last but not the least, achieve targets.
THE BENEFIT
A premium product portfolio that caters to a wide range of financial
needs, excellent back-end support, attractive returns and benefits, round
the clock customer service and extensive training for that edge over the
competition
THE ADVANTAGE
No start up capital, no supervisor, flexible working environment and an
unlimited earning potential.
54
ICICI PRUDENTIAL PRIORITY CIRCLE CONTROL
STRUCTURE
The control structure of ICICI Prudential Priority Circle goes like this:
As a whole till Zonal Head the levels are same in all sectors of ICICI but
after that when comes the Territory Manager, the unique levels of
Priority Circle begins.
55
HIMALAYAS AND PENINSULA
SALES HEAD
ZONAL HEAD
TERRITORY MANAGER
COUNTRY HEAD
MANAGER – PRIORITY CLIENTS
Under the Country Head come 2 regions:
1. Peninsula
2. Himalayas
Under those come their respective Sales Head, Zonal Head, Territory
Manager, and Manager – Priority Clients.
Management Team:
Country Head (CEO) : Mrs. Shikha Sharma.
Himalayas Sales Head : Mr. Chander Chalani.
Zonal Head : Mr. Vikas Seth.
Territory Manager : Mr. Sumeet Sahni.
Manager – Priority Clients : Mr. Anuj Pawra.
The MPC’s are not allowed to sell insurance directly, but they have to go
through the advisors under them.
The advisors under the MPC’s are the High Network Individuals, which
bring business. They are selected by the MPC’s by completing certain
formalities.
The person has to pay Rs. 1500/- for becoming an Advisor. That person is
given 9 days intensive training in which he is also given product details.
56
After the training is over the person has to give an
examination named as IC 33 taken by Insurance Regulatory and
Development Authority.
Once the person clears his examination a code is generated in his name.
The person now becomes an Advisor and is ready to bring business.
57
NATURE OF JOB AS A TRAINEE
At priority circle, the nature of the job included recruitment of the
channel members who were further assigned to solicit insurance. The
database was prepared, which had the names of selected people across
Delhi. They were invited to the office for the first meet with the
manager- priority clients. The MPC’s job is to explain the course of
action followed to join the business.
After the first meet if the prospect is satisfied he is given a document
called ‘market 100’ to explore his contacts which would help him grow
his business. The prospect fills the document and brings it to the office.
The MPC scrutinizes the document. The next step is to meet the territory
manager who would judge the prospect whether he is capable to do the
job or not. If the territory manager is satisfied, then the person fills other
formalities like form, age proof and other documents and is ready to
receive the training.
The lead trainer of the branch conducts the training for about 9 days,
following which an exam is held. After clearing the exam the IRDA
license is given, post, which the advisor is ready to sell insurance and do
financial consulting for his clients.
58
Characteristics of a good Insurance advisor
These were some of the qualities that we searched in a person who could be an asset
to the company and could give business .It is not necessary to have good academic
background but a good salesman should have the following qualities:
He should be speedy, needy and greedy.
He should be presentable.
He should have good communication skills.
He should be ready to serve with a good smiling face.
At ICICI Priority circle, the aim is to achieve Production Growth through
RECRUITMENT. Part of this growth is accomplished by improving the
productivity of the existing Agency members. However, bringing
sufficient numbers of high quality new producers into the sales
organization each year is a must. The main focus thus remains
recruitment of HNI (High Network Individuals) Clients.
Recruitment is the prospecting, identification and training of advisors so
as to enable him to do business, post licensing.
Broadly recruitment can be identified as a 5-step process:
1. The SEARCH for talent2. To ENGAGE the prospective Advisor3. The EVALUATION of potential Advisor4. The CONFIRMATION of intent5. The LICENSING of Advisors
59
60
SEARCH FOR TALENT
In this stage we need to identify the advisors we need to recruit to
become a successful team. We need to clearly understand the profile we
are looking out for. The search must be continuous and systematic – just
like prospecting for sales. We must search among several sources on a
regular basis.
The sources were divided into different segments for a more systematic
and focused approach. These were:
The first segment to be taken under study was that of students with some commerce
background.
The segment is further sub-grouped as follows:
1. Pass out B.Com students
2. Students pursuing C.A
3. Students of M.F.C
4. Pass out students of MBA.
Our main selling point for this segment was that these students have some finance
knowledge. We gave them a career opportunity as they could be promoted as a unit
manager as soon as they meet the required target.
The required information of such students was collected from there respective
institutions. Those students whose response was positive were called in the premises
61
of ICICI Prudential for an informal interview where they
were told about the job and the opportunities involved.
The second segment was that of enterprising women.
The segment was further divided into sub groups, which were as follows.
1. Hobby classes operators.
2. Beauty Saloon owners.
3. Fashion boutiques.
4. Kitty party groups.
5. Agents of direct selling products like Tupperware, Avon.
Our main Point in approaching them was that these women already had a well-
established network in their respective fields and hence in a position to exploit them
further. If they are aware of the opportunities and are ready to take risk then they just
needed to tap the market that is already there for them.
To locate this segment of prospective financial consultant we used our personal
contacts.
The women who were positive were then told about the company’s project of locating
financial consultant.
The third segment of property dealers, commission agents, retired members from
banking industry.
62
The method of research was telemarketing.
Under Telemarketing, a telephone call was made to the targeted person wherein the
intention was to make the person aware of the objectives under study. For this purpose
we tried to allure the target customers to become an agent.
However the call must be made keeping this in mind a few things such as:
1. The intended person must have time to listen to us.
2. We must not offend them in any way.
3. We should be considerate enough to respect the value of their time and must not
waste his time in unnecessary Jargons.
4. Care must b taken while introducing main subject , so that we are able to arouse
interest .
5. the person should feel important rather than irate customer.
The last segment was of CA’s, Income Tax Consultants and Advocates.
The data source of this segment was through Yellow Pages. We adopted the
method of direct interview after taking appointments on phone.
63
Firstly we called up people and explained them about the work profile .If we
found them interested, an appointment was fixed with the MPC. The Manager
clearly explains the business opportunity and studies the prospective candidates
profile. Candidates another round of screening was done by Unit Manager with
his respective ASM (channel development) and they short listed the most
capable candidates. Capability doesn’t mean that the person should have some
specific qualifications. Capability meant that the chosen candidates must have
at least interpersonal skills and should be keen enough to learn during training
process. He must also realize the importance of marketing in the field. We
preferred people with finance background as it becomes easier for them to
understand the insurance industry.
The second round of selection was consisted of an informal interview with the
candidate. There were main three purpose of this:
1. To reinforce the purpose of study i.e. selecting the right kind of people.
2. To make the candidates aware of growing opportunities in this line of work
and make them aware about the developments in the insurance industry.
3.To make the candidates understand about nominal investment on their part, as
they already infrastructure and resources and increasing returns.
The selected candidate has to fill an application form along with the fees of
Rs.1500 which includes Rs.450 as license fees which is issued by IRDA and
Government of India ,rest includes the examination fees.
64
ENGAGE
Engage is highlighting the positive sides of the business opportunity with
ICICI Prudential.
FISRST MEETING
The first meeting is the face-to-face interaction between the manager and
the prospective Advisor.
The manager should set up an appointment for at least 30-45 minutes.
During the meeting the manager should cover:
About the company The opportunity of Life Insurance Business
The manger must get the advisor to fill the Advisor Profile during this
meeting. It will give the manager a greater in depth of prospective
advisor as a person, not his financials but him as an individual with his
own dreams, goals and aspirations.
Before finishing, he manger should ensure that the individual has a
complete understanding of the advisors profession. The manger should
collect information about the prospective advisor’s family, current
earning stream and his inclination towards Life Insurance as a business
opportunity.
65
The manger should seek a second appointment with
the prospect if possible, invite him to the branch for the second meeting
and schedule a meeting with the Territory Manager.
TOOLS
Recruitment PresenterA tool to sell “ Advisor “ as a business opportunity to the prospective candidates.
Business Opportunity PresentationAt the branch level, the managers may get together an invite a group of
prospective advisors to the office. The Senior Manager on the business
opportunity will then make a formal presentation. It is a very effective tool and
you will be able to convince a greater number of advisors with this activity.
Branch VisitThe branch visit should give him the feel of the ‘ Priority Circle ‘ Concept and
create interest in Insurance Advisor- as a career with ICICI Prudential.
EVALUATION
Evaluation is assessing the prospective advisor’s potential, inclination and ability to do business. Managers need to ensure that they have the right kind of profile interested to be a part of their team.
66
PREFERRRED QUALITIES
Passion to succeed
Result oriented
Well networked
Communication Skills
Need for Money
Need for Recognition / Achievement
Committed and Hardworking
TOOLS
It is a psychometric Testing Tool used to understand the psychographics
characteristics of your prospective advisors to evaluate if they match with
requirements for getting selected as an ICICI Prudential advisor. It evaluates them
on the following parameter:
Dominance
Influence
Stability
Compliance
67
CONFIRMATION
Confirmation is the advisor making a final decision to join us as an advisor.
The procedure requires complete documentation by the prospective advisor.
Document Requirements:
1. ICICI Pru Application form
2. IRDA form v A
3. Age Proof to substantiate age stated on Application form. (accepted list of age
proofs is provided in Annexure 2 )
4. Address Proof to substantiate the communication address provided on the
application form. (Accepted list of address proofs is provided in Annexure 2)
5. Education Proof to fulfill IRDA requirement that the candidate has passed at
least 12th std. Or equivalent. (Accepted list of qualification proofs is provided in
Annexure 2). In case of who are qualified to attend a shorter duration of
training the accepted list of qualifications / institutes is provided in Annexure 6.
6. Applicable Examination Form
7. 6 photographs
8. DD for Rs. 1000 favoring- ICICI Prudential Life Insurance Co. Ltd, payable at
Mumbai.
9. License Agreement duly signed by the advisor.
On receiving the completed applications, the manager does a quick scrutiny of the documents.
68
TRAINING BATCH SIZE ESTIMATION
The minimum batch size for a full time batch is 15 and for a part time batch is
20.
Depending on the number of completed applications received form Monday to
Thursday; the manger will determine the training batch size.
No split cases will be considered while determining the batch size.
69
LICENSING / TRAINING PERIOD
Licensing is the final step in recruitment of the advisor.
Training is conducted in the last stage. The prospective should complete 100 hours of
their training.
At ICICI Prudential, we understand the importance of training in a
dynamic business environment. The advisors go through both generic and
specific, professional programs that help them remain well informed and
knowledgeable about the company’s products in the market. There is a
further focus on soft skills such as communication, managing long-term
relationships and selling skills, which are very relevant in a service-
driven industry like life insurance.
State of the art infrastructure training facilities coupled with an excellent faculty,
guarantee an exceptional learning environment. For advisors who might be occupied
with their daily business/professional routines, ICICI Prudential also offers convenient
training options such as online and self-learning are also provided by the organization.
A 17-day training schedule covers the mandatory IRDA training requirements and
ICICI Prudential product-training module. Revision session ensure that the candidates
thoroughly understand the course contents and are well prepared for the licensing
70
examination. Theoretical training is interspersed with practical appointment settings
with potential customers, giving advisors a feel of how their business will work from
the very first day. All through, the Unit Manager and the management provide
continuous support to the advisors in achieving independence towards garnering
business.
After the training they have to undergo online examination conducted by IRDA, after
qualifying the examination they get a certificate from RNIS (Ritu Nanda institute of
insurance)
Types of training
The selected candidates were given a option to select the type of training depending
upon their comfort and convenience. There were two types of training available.
Online Training
In this type of training the person has to complete his IRDA training for 100 hours on
the internet. After that he is required to attend the six days product training manually.
So the person who is busy with his job this training is quite suitable for them.
71
Manual training
In this type training he has to complete both the product training and the IRDA
training manually. So he has to attend the continuous training for fifteen days. This
training is suitable for the person who is ready to take out his fifteen days. During the
manual training, the company provides free lunch.
72
THE EXAM
Upon completing the training the candidate is eligible to appear either for an online
(internet) exam or a manual (paper based) exam, based on the guidelines issued by
IRDA for that city.
The exam slots should be booked such that the exam is scheduled no later than 4 days
from the date of completion of the training.
After the prospective advisor has taken the exam an his result are obtained and he has
cleared them, the company handovers a ‘WELCOME KIT’ to the candidates
comprising of:
1. Welcome letter
2. Laminated identity card
3. Copy of the agency agreement
4. IRDA License
5. Bank Account introductory letter
6. 100 visiting cards (from the branch)
7. Commission Booklet
8. Reward and recognition booklet
9. ICICI Prupartner Email ID and Password
10. Pin mailer to access ICICI Prudential websites.
73
ANALYSIS AND FINDINGS
The main purpose of the study was to locate the right kind of people possessing the
right mix of interpersonal and marketing skills. The research process helped in
locating such people.
After obtaining the positive response from the various selected segment another round
of screening was done. The research helped in locating the interested people. Now the
company had to select the most capable one. Capability does not mean people having
specific Qualifications, capability means that the chosen candidates must at least
possess interpersonal skills and should be keen enough to learn during the training
process. He/She must also realize the importance of marketing industry.
74
The research results were as follows:
Students
Sample size: 75
Positive responses: 19
Candidates Selected: 2
In the complete segment, we had a good response. We contacted passed out
students who were unemployed. The screening process was intentionally
designed to be a little difficult, as they have to move into the hierarchy of the
company after meeting the targets. This was the reason behind the selection of
only two candidates.
75
Enterprising Women
Sample size: 25
Positive Responses: 10
Candidates selected: Nil
In this segment there was good response in the sense that there were many
positive candidates, though none was selected. The main reason was that in
spite of their interest, they lacked in decision-making skills. It was found that
their husband took all their decisions. The company wanted their consultants to
be decision makers not decision takers. Hence there was no financial consultant
taken from this segment.
76
Property Dealers
Sample Size: 35
Positive response: 9
Candidates selected: 2
In spite of contacting so many property dealers only two were converted. The
reason for this was that property dealers are not good at keeping appointments.
It was difficult to personally contact even those who were interested. Hence it
was a time consuming process and many were dropped because they could not
give time to company’s representative. Moreover, the nature of work in
property dealing is unpredictable. Some time there are no deals while there may
be times that a big party makes a deal. Therefore only those dealers who
understand the risk were selected.
77
Commission Agents
People Contacted: 7
Positive Response: Nil
This segment was dropped because there were no positive responses. The
reason for this was that all the commission agents were engaged in the selling
of the products of other insurance companies.
Retired Members / VRS holders
People contacted: 23
Positive Responses: 5
Candidate Selected: 1
The response from this segment was moderate but only one candidate was
converted. The reason was that such people were neither energetic nor
enthusiastic to work despite of having the knowledge of the industry.
78
CA’s, Tax Consultants, Advocates
People Contacted: 5
Positive Response: 2
Candidates Selected: 2
The response from this segment was the best of all. There were a couple of
reasons for that. First of all, all these candidates were contacted on the basis of
references. Secondly, these people are risk takers. They are willing to enter into
new ventures and also have the kind of resources that are useful for insurance.
79
SWOT ANALYSIS
STRENGTHS:
1. No. 1 Private Player in the insurance industry in India.
2. Life Insurance linked with Investments
3. Tax benefits
4. Security against loans
5. Helps in future planning and provides financial consultancy.
6. Covers risk.
WEAKNESS:
1. Negativity relating insurance and ‘Agents’.
2. No fixed Salary.
OPPURTUNITIES:
1. High Network Individuals (HNI)
2. A clear career path
3. All round support through exclusive advertising, own in house consultant, and
world-class training.
4. A comprehensive benefit package.
80
THREATS:
1. Dynamic environment
2. Increasing Competition
3. Non-creativity
4. An Unfocused approach
5. Complacency and arrogance
81
CONCLUSION
ICICI Prudential is the No.1 private insurance company, so people are more
attracted towards it. The only thing required by the company is to give a stable
career and more benefits. Due to LIC, people have a negative mindset towards
the word ‘Agent’ as well as the insurance industry in general. But ICICI
prudential through its pinnacle program and other facilities is providing a very
bright career to the youth. There is lack of information about this career;
therefore, the company needs to capitalize on this opportunity by providing the
right kind of information to people and present it in a right light.
The results of the study can be concluded as follows:
The segment of students gave a good response but due to hard screening only
two were converted.
The segment of enterprising women was not that responsive and hence was
unsuitable for the job of financial consultant.
The segment of commission agents was again not responsive and no consultant
was obtained.
The segment of retired members did not possess that energy that was required.
So, the conversions were less.
The segment of CA’s and advocates was the most responsive probably due to
the fact that the candidates were very few and located primarily from
recommendations.
82
From the results we can conclude that the selection model of ICICI Prudential Life
Insurance Company for the purpose of selecting the right profile of the distribution
channel is very comprehensive and fulfills the objective optimally.
Such selection process would help in:
Reducing Attrition
No or Minimum advertising
Training of consultants
The training module of the company involves:
The better understanding of the product provided by the company.
Regular interaction between Unit Managers and the consultants.
Discussions on the changes occurring in the industry
Training the consultants on how to access the needs and requirements of the
customers.
Giving Incentives in the form of competition among consultants and
memberships.
83
RECOMMENDATIONS
Agents are the lifeblood of the insurance industry’s distribution channel. They are the
main forces that bring business to the company. Unless and until the agents are
qualified and have the caliber to understand the current market scenario, they cannot
remain long in the business. Hence, an optimally selected sales force is the need of the
hour, for an industry like insurance.
The following are the recommendations to the company:
1. There should be weekend batches of training for the people who cannot take
their full six days of the week from their busy schedule.
2. Anything can click in this line of work and hence the company should evaluate
the candidates subjectively.
3. Advertisements should be given in the newspapers so that number of people
interested in such an opportunity increases.
4. Various MBA institutes should be targeted to get people with good marketing
as well as interpersonal skills.
5. There should be some fixed salary with some fixed targets.
84
BIBLIOGRAPHY
1. www.iciciprulife.com
2. www.financialexpress.com
3. www.insuranceguide.com
4. www.economictimes.com
5. www.google.com
6. www.askjeeves.com
7. ICICI Prudential Training Modules
8. ICICI Prudential Brochures
85