CONTENTS

Sr.No.

CONTENTS PageNo.

1. INTRODUCTION TO LIFE INSURANCE AGENTS

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a) Meaning of Insurance Agent 1

b) Life Insurance Business 1

2. RESEARCH METHODOLOGY9

a) Objective Of Study 9

b) Research Methodology 9

c) Sources of Study 9

d) Limitations of study 11

3. COMPANY’S PROFILE 12

4. DATA ANALYSIS & INTERPRETATION 42

5. FINDINGS & SUGGESTIONS 48

CONCLUSION

1

BIBLIOGRAPHY

INTRODUCTION TO INSURANCE AGENT’S

INSURANCE is such a method which provides security and protection against financial loss

upto some limit. It is a means of shifting the risks to insurer in consideration of a nominal cost

called premium.

a) “INSURANCE AGENT” means an insurance agent licensed under section 42 who recieves

or agrees to receive paymet by way of commission or other remuneration in consideration of his

soliciting or procuring insurance business including business relating to the continuance, renewal

or revival of policies.

The insurance sector is of considerable importance to every developing economy; it inculcates

the savings habit, which in turn generates long-term invest able funds for infrastructure building.

The nature of insurance business ensures constant inflow of funds - the payout is staggered and

contingency related – thereby making it readily available for investment on infrastructure

building. An insurance policy protects the buyer at some cost against financial loss arising from a

specified a risk. Different situation and different people require different mix of risk – cost

combinations. Insurance company thereby offers schemes of different kinds which not only

protect the person from any risk but also invest their money in the market, and thus ensure the

return on their investment cum insurance plans . These Plans are called ULIP or United Liked

Insurance Plans. For selling and convincing their various plans to their customers the insurance

firms make use of varied distribution channel.

b) Life Insurance Business: “Life Insurance Business” means the business of effecting

contracts of insurance upon human life, including any contract whereby the payment of money is

assured on death (except, death by accident only) or the happening of any contingency dependent

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on human life, and any contract which is subject to payment of premiums for a term dependent

on human life and shall be deemed to include-

1. The granting of disability and double or triple indemnity accident benefits, if so provided

in the contract of insurance.

2. The granting of annuities upon human life, and

3. The granting of superannuation allowances and annuities payable out of any fund

applicable solely to the relief and maintenance of persons engaged or who have been

engaged in any particular profession, trade or employment or of the dependents of such

persons.

c) Distribution Channel In Life Insurance:

Till date, only 20% of the total insurable population of India is covered under various life

insurance schemes, the penetration rates of health and other non-life insurances in India is also

well below the international level. To tap the rest of the 80% of the insurable population in India,

the insurance organization needs a huge and varied Distribution channel to sell the varied plans

to the people . Distribution accounts for the largest element in insurers’ costs and impact the

profitability. Distribution capabilities of any firm effects the product design in insurance due to

the huge feed back from the customer.

Distribution channel strength have a direct impact on the organization’s image . Highly

professional and integrated distribution channel of any firm increases the credibility and

reliability of the product of the firm in the market.

Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to

the private sector and snapping up the new innovative products on offer. Now the insurance

policies are not only the life saving and tax saving device but it has more to offer to the customer

in the form of Investment in the market. Now the policies are the combinations of the Life

Insurance and the Investment and there by these are known as Unit Linked Insurance Plans or in

short ULIPS. Now the agents are not only the Life Insuracne agents , they are the professional

advisor also. Now they are called the Financial Advisor’s who advice their customers to invest

their money in the appropriate policy which suits the needs of their customers. For selling and

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providing highly technical knowledge about the product the insurance industry has to make use

of its highly dedicated and knowledgeable distribution channel.

Earlier the agents were the only and the primary interface of insuring lives of the people and

these agents were the sole distribution channel of the Life Insurance Organization .

But with the liberalizing Indian community and the advent of the foreign company’s in India;

brought the alternative channel of distribution. With the help of these alternative channels these

private firms has penetrated the market to the great extent. Innovative products, smart marketing,

and aggressive distribution have enabled fledgling private insurance companies to sign up Indian

customers faster than anyone expected. Due to its varied distribution channel the private

insurance player in 2007-2008 these organization’s has taken over the 25%(approx) of the

market share in India and the LIC had came down to 75% from its market share of 87.04 % in

2006-2007.

There are three main channel of distribution. Which are :

1. Tied Channel (Financial Advisors and Sales Managers)

2. Corporate Agents ; &

3. Bancassurance

Out of its these distribution channel the private insurer have capture most of the market with its

Tied channel. This is also can be proved from the figures of the number of advisors employed

till date in Jalandhar has gone up to 14500 plus, who on an average of 12 policies a year sells

more than 174000 policies in a one year; in Jalandhar only. The number of Financial Advisors

recruited by these Private life insurer in different year are given in the following table.

Table 1: Number of Licenses granted to the advisors :

2007-2008 2006-2007 2005-2006 2004-2005 2003-2004

ALLIANZ BAJAJ . 80217 32680 36742 14202 4347

TATA AIG LIFE 19348 17779 33076 15559 7038AMP SANMAR Life 14293 5013 6424 1608 484

BIRLA SUN LIFE 11913 5475 13207 6314 2009

AVIVA LIFE 9204 3819 5044 1870

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HDFC life 16717 10356 19209 11312 3214

ICICI PRU 44489 29930 46818 23953 10861

ING VYSYA 14043 7720 11832 3,914 1135

LIC 472076 353773 62758037 479186 442680

MAX NEW YORK 12549 6998 10308 5770 2620

METLIFE INDIA 8343 3374 3196 1463 417 KOTAK MAHINDRA 7374 2976 6736 3785 1348

SBI LIFE 5112 2175 4281 2224 719SAHARA INDIA LIFE 81 0 0 0 0

SHRIRAM LIFE 5937 0 0 0 0

Sub Total 721696 482068 62954910 571160 476872

Due to their huge work force of Financial Advisors the ICICI PRU have claimed 27.7% , Bajaj

Allianz have 22.0%, SBI have 8.8 % , HDFC life have claimed over 8.0% of the retail insurance

in India . The market share in the private retail market in life insurance in India as on April 2007

is shown in the following pie chart.

The market share private insurance organization as on April 2008 was :

Fig 1.1 Source: IRDA , Weighted new business premiums for individual business.

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d) International Recognition Of Agents:

1)About MDRT:

The Million Dollar Round Table, abbreviated MDRT is a trade association formed in 1927 to

help insurance salespeople and financial advisors improve their business practices and increase

sales. MDRT is the esteemed pool of advisors who had achieved the yearly goal of collecting the

premium of about 27,14,400 in Indian Rupees OR earned the commission of about 6,78,000 at

the end of each financial year. The amount may vary from country to country in their respective

currency. MDRT membership is a coveted career milestone. It indicates achievement and brings

deserved recognition for the individual. For many, MDRT opens the door to a new world of

knowledge, motivation and professionalism.

2) About COT:

Court of the Table members distinguish themselves within the industry through their superior

performance by producing at a level three times that of MDRT membership requirements.

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Achieving membership in MDRT’s Court of the Table is a career milestone attained only by

those who have demonstrated exceptional professional knowledge, client service and ethical

conduct. Each year, more than 3,500 MDRT members qualify for the Court of the Table. For

becoming the esteemed member of this club the agent have to collect the premium of 81,43,200

in Indian Rupees OR have to earn the commission of Rs 20,35,800 at the end of financial year.

This amount can differ from county to country in their respective currency.

3) About TOT:

Top Of the Table is last and the highest that any advisor can go. These agents are the actual super

achievers in the field of the insurance. An agent qualify for the TOT when he/she collect the

premium of about Rs 162,86,400 OR have earned the commission of Rs 40,71,600 which is

almost six times of what the MDRT collect or earn. This amount can be different from country to

country in their respective currency.

MDRT commission requirement of INDIA and some of the neighboring countries are given in

the table below. The amount given with in the table Is in the currency of the respective country.

Conversion factors have no relationship to currency exchange rates and are used only to

standardize MDRT processing.

TABLE 2: 2008 MDRT COMMISSION REQUIREMENTS

COUNTRY

MDRT Qualifying Membership Commission

Court of the Table Commission

Top of the Table Commission

Commission Conversion

India678,600 2,035,800 4,071,600 8.2958

China 149,400 448,200 896,400 1.8264

Pakistan913,600 2,740,800 5,481,600 11.1687

Bangladesh993,100 2,979,300 5,958,600 12.1405

Sri Lanka1,486,600 4,459,800 8,919,600 18.1735

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Nepal777,500 2,332,500 4,665,000 9.5048

Following are monthly goals in Indian rupees to keep you on track for the 2008 Million Dollar

Round Table, Court of the Table and Top of the Table.

TABLE 3: Month wise Commission for MDRT, COT and TOT

Month MDRT

commission

MDRT

premium

COT

commission

COT

premium

TOT

commission

TOT

premium

January 56,550 226,200 169,650 678,600 339,300 1,357,200

February 113,100 452,400 339,300 1,357,200 678,600 2,714,400

March 169,650 678,600 508,950 2,035,800 1,017,900 4,071,600

April 226,200 904,800 678,600 2,714,400 1,357,200 5,228,800

May 282,750 1,131,000 848,250 3,393,000 1,696,5006,786,000

June 339,300 1,357,200 1,017,900 4,071,600 2,035,800 8,143,200

July 395,850 1,583,400 1,187,550 4,750,200 2,375,100 9,500,400

August 452,400 1,809,600 1,357,200 5,428,800 2,714,400 10,857,600

September 508,950 2,035,800 1,526,850 6,107,400 3,053,700 12,214,800

October 565,500 2,262,000 1,696,500 6,786,000 3,393,000 13,572,000

November 622,050 2,488,200 1,866,150 7,464,600 3,732,300 14,929,200

December 678,600 2,714,400 2,035,800 8,143,200 4,071,600 16,286,400

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e) Training & Examination Of The Fi nancial Advisor’s:

According to the rule and regulation given by IRDA an FA has to go through the theoretical

training for about minimum of 100 hrs to be completed in all most time period of 18 to 19 days.

During the training they are provide about the knowledge about the market and the basics of the

insurance .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. Just before the two days before the examination the probable are given the revision

session through the crash course of Two days. Revision session ensure that the candidates

thoroughly understand the course contents and are well prepared for the licensing examination.

This licencing examination is called ‘Pre-Recruitment Examination for Life Insurance Agents’.

The Insurance Organization at Jalandhar goes for In-house training or Out source their training.

For Example the LIC, METLIFE, KOTAK MAHINDRA etc goes for in house training and

recruit almost 750 FA’s in a year, but the private insurance organization like ICICI, BIRLA

SUNLIFE,MAX NEWYORK etc. outsource the training to the institutes recognized by the

IRDA and affiliated to the Insurance Institutes of India (I.I.I). At Jalandhar the training is

outsourced to the Dream Weaver institute,V2A institute, Federal institutes . The in house

training about the product is also provided to these agents in the various agency of these

Insurance organizations. Apart from the this recommended training of 100 hrs the Financial

Advisors are also given the product training to the FA’S by these insurance organization at there

own agencies.

f) Eligibility For Examination:

Any Financial Advisor can be a part timer or a full timer agent. Minimum qualification set by

IRDA for being an FA in Urban and Semi Urban area must be that he/she must be of minimum

18 year of age and must posses the minimum qualification of Plus Two standard. And for the

person belonging to the rural area he/she must have attain the minimum age of 18 year plus he/

she must have the minimum qualification of 10th standard. But most of the private Insurance

Organization has their own preference of appointing FA’s. For instant; METLIFE prefer the

person who is married and of age 25 and above, because the person at this age is more

responsible to his profession.

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g) Motivational Factors for a Life Insurance Agent:

Life Insurance agents have to work without assistant and have to set targets and time for their

own work. So it is needed to motivate them so which can help them in keep in working for the

common cause of the company. All the life insurance companies at Jalandhar have their own

method of motivating their Agents and during the whole process they help in building the career

for the Agents. At these insurance organisation the Financial Advisors are motivated by various

remuneration and paid bonuses for earning the specific premium for the organization. Financial

Advisors are constantly recognized and rewarded for their performance. Numerous competitions

throughout the year promote healthy competition amongst agents and recognition for their

efforts..

Depending on the level of business the agent achieves in a year, he or she is rewarded by the pre

set bonuses by the company.

RESEARCH METHODOLOGY

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a) Objective of study

1) To know the penetration of the various Life Insurance Organization in Jalandhar.

2) To know the extra benefits that any Financial Advisor or Agent is provided in the

various insurance Organization.

3) To know the career opportunity for the advisors in there organization.

4) To know the Scope for Financial Advisors in the present scenario of competition in the

Jalandhar.

5) To suggest the method to increase the strength of Financial Advisors in MetLife jalandhar

b) Research Methedology

In Jalandhar the number of policies sold in different years has increased with the increase

in the number of the Financial Advisors. The organization having the largest number of work

force of financial advisors sells larger number of policies in a year.

The present study is the attempt to analyze the benefits and the career opportunity of the

Insurance agents in Jalandhar and what is the effect of strength of Financial Advisors on the

business of any Insurance Organization operating in Jalandhar.

c) Sources of study

The study is based on the Secondary data collected from the various organizations in

Jalandhar. The data is confidential in nature and is not published in any of the website and in any

of the news papers. The data thus here within is collected by using various links in the other

organizations in Jalandhar. For measuring the effect of Financial Advisors on the policies

figures I have made use of the technique of Correlation. The number of policies sold and the total

numbers of advisor from year 2001 to 2007 is collected. Correlation among the number of agents

and the number of policies sold is calculated by using the formula of Karl Pearson’s coffecient of

correlation. The positive value of the correlation indicates that the number of agents will affect

the number of policies sold in a year and thus the company will have greater penetration in the

market. The correlation is calculated for only those organization whose working period in

Jalandhar is at least of two years.

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But these policies sold are from all channel of distribution, thus we can not say that the data is

fully correlated. Hence for measuring the significance of this correlation value is tested by using

t-Test. Hence the Null Hypothesis is set that the correlation coefficient of the population is zero.

The value of the ‘t’ is compared with the table value at 5% of significance. If the calculated

value is less then the table value we will accept the null hypothesis of uncorrelated population.

Following Formula are being used for the calculations:

1) Correlation ( r )= (∑x y)/N Sx Sy

Where; Sx =Standard Deviation of series X

Sy = Standard Deviation of series Y

x = (X - mean value of series X)

Y = (Y - mean value of series Y)

N = Numbers of pairs of Observations

r = Correlation Coefficient.

______

2) t-Test = Ryx √ (n-2)

√ (1- Ryx²)

Where; Ryx = Coefficient of the correlation between X and Y

(n-2) = Degree of Freedom.

d) Limitations of study

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1) The Data about the financial Advisors and number of policies in a year for various

organization is not available in the print or any other media. It is taken from the various

sources in the organization in the insurance organization at Jalandhar.

2) Most of the companies have just started their business in Jalandhar, so the data collected was

of only few months theirfor their correlation can not be calculated.

3) Information about the recruitment and the benefits of some of the insurance organization was

not available to the full extent.

4) The information about the benefits and career opportunity has to be gathered by personal

interaction by the officials of Insurance Organization.

5) The general public is unaware about the MetLife in the region

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COMPANIES PROFILE

MetLife PVT. LTD. : For 137 years, MetLife has been insuring the lives of the people. 

MetLife’s success is based on our long history of social responsibility, strong leadership, sound

investments, and innovative products and services. The origins of Metropolitan Life Insurance

Company (MetLife) go back to 1863, when a group of New York City businessmen raised

$100,000 to found the National Union Life and Limb Insurance Company. MetLife was the

company who insured the lives of million of soldiers of America and UK in Second World War.

It was the only company to settle all the claims of insured person who lost their lives during

September 11 attack on twin Tower in America.

In 1909, MetLife Vice President Haley Fiske announced that "insurance, not merely as a

business proposition, but as a social program" would be the future policy of the company. The

vision of MetLife is, “To provide financial freedom for every one.”

METLIFE covers millions of the people worldwide and pays out billions of dollars to policy

holders. MetLife is one of the fortune five hundred company’s and as on 2007 METLIFE is at

37th position with revenue of 53,275.0$ million and profit of $ 6,293.0 million. As a testament

to its position of the leadership, MetLife insures 88 companies of the FORTUNE 100

COMAPIES. It has a large global market in more than 12 countries. In 2006, MetLife appointed

""C. Robert (Rob) Henrikson"" chairman of the board of directors, president and ""chief

executive officer"" of MetLife, Inc. Henrikson was appointed ""CEO"" on March 1, 2006 and

chairman of the board on April 25, 2006.

MetLife is undisputed leader of the insurance industry, insuring every fifth man, woman, and

child in the United States and Canada. On the way it supported the country and the community in

many ways. For example,

In 1931 MetLife provided the outside capital to build Rockefeller Center.

lent money to construct the Empire State Building in 1929, and virtually saved this

project from bankruptcy.

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During World War II, the company placed more than 51 percent of its total assets

in war bonds, and was the largest single private contributor to the Allied cause.

The company served its customers, communities and employees during the

difficult time after the 9/11 attacks.

a) Major Achievements:

In 1980, The company completes the largest single building purchase (Pan Am

Building) in history.

In 1998, The board of directors authorizes demutualization.

In 2000, Metropolitan Life Insurance Company (MetLife) launches the seventh

largest IPO ever held in the United States

In 2001, MetLife was the first insurance company to establish a financial holding

company with a nationally chartered bank. Leveraging its unparalleled

distribution channels, MetLife entered the retail-banking arena with the launch of

MetLife Bank.

In 2005, Working Mother magazine honored MetLife by naming the company

one of the "100 Best Companies for Working Mothers," for the seventh

consecutive year.

In early 2006, MetLife was also named to the National Association for Female

Executives’ annual list of Top 30 Companies for Executive Women.

b) MET LIFE INDIA:

It got registered on August 6th ,2001 with IRDA. In India, MetLife India was incorporated on

August 6th 2001, and aims to differentiate itself through customized need based selling, simple

and innovative products, and technology-backed service experience, to tread its path to build

financial freedom for everyone. MetLife India has it’s head office at Basavanagudi, Banglore

and is headed by M.D Mr. Rajesh Relan. MetLife in India has its presence in 72 major cities and

have 90 offices in these cities. MetLife India has the strong work force of 25000 Financial

15

Advisors in India and is set to reach up to 30,000 by the end of this year. Beside this MetLife

India has the Bancassurance distribution channel and has tie-ups with Axis bank (UTI Bank),

Jammu & Kashmir Bank, Dhanalaxmi Bank and Karnataka Bank, Bank of Punjab to offer its

range products to the customers of these banks. In addition to these institutions the company has

partners which are corporate agents and brokers like Karvy Consultant Ltd, Mini Muthhoottu

Financiaries Ltd , Hexagon Indurance Servicies Pvt Ltd, Geogit Commodities Pvt Ltd and MLM

Consulting Pvt. Ltd. are few of the corporate partner in India.

c) Services:

The Company serves group benefit products and Individual benefit products. International

segment serves these products to groups and individual in the Asia/Pacific region, Europe, and

Latin America. The company's reinsurance business operates as Reinsurance Group of America,

but serves customers around the world. In India out of total lives covered by metlife , 80% of

lives are covered under group policies that provide 10% of the premium income. Metlife India

covers 40,000 employees of IBM under a group cover and the Bussiness giants like SATYAM,

ORACLE , BANK OF AMERICA,PANTALOONS,GAS AUTHORITY OF INDIA LTD,

CENTURION BANK OF PUNJAB,J&K BANK,HCL TECHNOLOGIES are also some of the

clients of group policies.

d) Products Offered by MetLife In India :

Met life has a great variety of products, ranging from Life insurance, Long Term Care Insurance

and retirement plans. These product are both traditional and ULIP plans which offers customer

both; life insurance and return on there investment. The List of these product is given below:

Table 6 : List of Product as on 08-08-2007

Financial Year Name of Insurer Name of the Product

2001-02Met Life India Insurance Co. Pvt. Ltd. Met 100 (Non-Par)

2001-02Met Life India Insurance Co. Pvt. Ltd. Met Shanti

2001-02Met Life India Insurance Co. Pvt. Ltd. Met Sukh

2005-06 Met Life India Insurance Met Sukh

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Co. Pvt. Ltd.

2002-03Met Life India Insurance Co. Pvt. Ltd.

Single Pay - Mortgage Protection Plan - Non Participating

2002-03Met Life India Insurance Co. Pvt. Ltd. Met Junior

2002-03Met Life India Insurance Co. Pvt. Ltd. Met Junior MB

2002-03Met Life India Insurance Co. Pvt. Ltd. Met Mortgage Protector

2002-03Met Life India Insurance Co. Pvt. Ltd. Met Platinum - Par Endowment

2002-03Met Life India Insurance Co. Pvt. Ltd. Met Gold - Par Endowment

2002-03Met Life India Insurance Co. Pvt. Ltd. Met Junior - Par Endowment

2002-03Met Life India Insurance Co. Pvt. Ltd. Met 100 Gold - Par WL

2002-03Met Life India Insurance Co. Pvt. Ltd. Met 100 Platinum - Par WL

2002-03Met Life India Insurance Co. Pvt. Ltd. Met Group YRT

2003-04Met Life India Insurance Co. Pvt. Ltd. Met Group Life

2002-03Met Life India Insurance Co. Pvt. Ltd. Met Gold - Non Par Endowment

2002-03Met Life India Insurance Co. Pvt. Ltd. Met Platinum - Non Par Endowment

2003-04Met Life India Insurance Co. Pvt. Ltd. Met Bhavishya

2003-04Met Life India Insurance Co. Pvt. Ltd. Met Suvidha (Par)

2003-04Met Life India Insurance Co. Pvt. Ltd. Met Suvidha (Non-Par)

2003-04Met Life India Insurance Co. Pvt. Ltd. Met Pension (Par)

2003-04Met Life India Insurance Co. Pvt. Ltd. Met Suraksha

2003-04Met Life India Insurance Co. Pvt. Ltd. Met Suraksha TROP

2004-05Met Life India Insurance Co. Pvt. Ltd. Met Saral

2004-05Met Life India Insurance Co. Pvt. Ltd. Met Gratuity

2004-05Met Life India Insurance Co. Pvt. Ltd. Met Ultimate

2004-05Met Life India Insurance Co. Pvt. Ltd. Met Family Income Plan

2004-05Met Life India Insurance Co. Pvt. Ltd. Met Smart

2004-05Met Life India Insurance Co. Pvt. Ltd. Met Advantage

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2005-06Met Life India Insurance Co. Pvt. Ltd. Met Credit Life

2006-07Met Life India Insurance Co. Pvt. Ltd. Non Par - Immediate Annuity

2006-07Met Life India Insurance Co. Pvt. Ltd. Met Smart Plus

2006-07Met Life India Insurance Co. Pvt. Ltd. Met Smart Premier

2006-07Met Life India Insurance Co. Pvt. Ltd. Met Advantage Plus

2006-07Met Life India Insurance Co. Pvt. Ltd. Met Smart Plus - Single Pay

2006-07Met Life India Insurance Co. Pvt. Ltd. Met Smart Premier - Single Pay

2006-07Met Life India Insurance Co. Pvt. Ltd. Met Ultimate Plus

2006-07Met Life India Insurance Co. Pvt. Ltd. Met Ultimate Premier

2007-08Met Life India Insurance Co. Pvt. Ltd. Met Easy

e) Future plans:

1) MetLife India has a goal of 5 million customers by 2010, and has aggressive growth plans of

100 per cent year-on-year growth for the next 2-3 years.

2) The company plans to expand its agency and office networks to enable the growth in India.

3) It also plans to expand by setting up bases in not only metropolitan cities, but also Class B and

Class C cities and parts of rural India.

4) MetLife International plans to increase its stake in the Indian subsidiary MetLife India, by

infusing capital to the tune of US$ 100 million over the next 5 years, as it sees huge potential for

growth in India. It also plans to capture a market share of 5 per cent in the Indian insurance

sector.

f) History of MET LIFE Financial Advisors :

In 1868, the company decided to focus on the life insurance business. A new company was

chartered to sell "ordinary" insurance to the middle class. The founders chose the name because

they had been most successful in New York City, or the "Metropolitan" District.

In 1879, MetLife President Joseph F. Knapp turned his attention to England, where "industrial"

or "workingmen's" insurance programs were widely successful. MetLife imported English agents

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to train the agency force in America . The MetLife agent became an important person in the lives

of these striving families. Manuals instructed agents to call at a home at the same time each week

to ensure familiarity and contact. In the process of collecting premiums, insurance agents

listened to the problems, concerns, and hopes of their clients. So successful was this approach

that by 1909, MetLife became the nation's largest life insurer in terms of insurance in force, a

leadership position we continue to hold today in North America.

MetLife’s Financial advisors build financial freedom for thousands of individuals across the

country, allowing them to relax, enjoy. They have the desire to help others, have a genuine sense

of caring for their customers and above all have an immense passion for learning and exceeding.

In India MetLife have the strong work force of 25000 financial Advisors. MetLife India started if

operation at the end of December 2006 and in this short period of 8 months , now it has the force

of about 350 licensed Financial Advisors and which are increasing day by day. To start a career

as a Financial Advisor with the MetLife India, it is not necessary to have a financial background.

Rather it is necessary to possess the desire to help others, project a genuine sense of caring, and

have a passion for learning. Success is based on the ability to be entrepreneurial and build and

nurture long-term relationships. MetLife’s portfolio gives you the tools you need in today’s

highly competitive marketplace to meet your clients’ changing financial needs.

g) Training At Met Life JALANDHAR:

METLIFE Jalandhar training program focuses on developing skills, knowledge and

competencies through a high-quality curriculum, and allows you to gain the experience you need

to succeed in an insurance career. The program is divided into several components

IRDA exam and licencing.

Classroom training on knowledge and skills.

In-agency on-the-job training.

Career Skill Training (CST) is a course that trains the advisor to write the exam to obtain the

IRDA license, while simultaneously integrating the additional skills that differentiate a MetLife

Advisor from the others in the industry. The pre recruitment training which provide the basic

knowledge of insurance to the candidates are given at Dream Weaver , Model

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Town ,Jalandhar .FA’S will also learn about the activities associated with this career, including

skills in prospecting, target marketing, need-based selling and customer service Once FA’S have

finished their initial training FA’S are provided all type of support and resources to help them to

achieve the path toward greater professional achievement and success. Classes, self-study

courses, and the attainment of professional designations will always be an important part of your

ongoing training. Product and sales training Is provided by strong and highly experienced trainer

at the MetLife branch in Jalandhar. During the pitching and targeting the sales the Financial

Advisors are provided help and support by the Sales Managers of his area.

h) Career Path Of Financial Advisors at METLIFE:

As a MetLife Advisor in an insurance career, an FA have the choice of building his/her own

practice for advising his customers. The achivers are given absorbed at the post of Sales

Manager in the company which help him in developing his managerial skills to manage his own

team of advisors. Therefore, he/she decide on what career path he/she want to follow, and then

put in the necessary efforts to achieve your goals.

i) Benefits Of being METLIFE’S Financial Advisor:

1. Rewards And Recognition:

The unique characteristic of this career is that there is no limit to earnings. FA’S earnings are

determined by his own efforts and results. For an example, if he/she sell 50 policies and

generate a business of Rs 5 lakh, he/she will earn Rs 1.5 lakh at a commission rate of 30% on an

average . Or, if generates a business of Rs 30 lakh, he/she will earn Rs 6 lakhs, at 30% on an

average commission rates.

As at METLIFE the new recruited FA’S who achieve the set standards earliest are rewarded by

the Trigger Reward, Silver Eagle and Golden Eagle respectively. And are rewarded by Extra

30.000 to 40,000.Further they can also become a member of various clubs such as the Debut

Star Club, Ace’s Club, SOS (Seed of Strength) etc. Each of these clubs have specific

performance criteria for qualification and members of these clubs are entitled to attend Leader’s

20

and President conference held at exotic international and domestic locations each year. Advisors

can also qualify for the renowned MDRT (Million Dollar Round Table), COT (Court of The

Table) and TOT (Top of the Table) exclusive international insurance advisors club. MetLife

Jalandhar has 1 MDRT who is further set his target to achieve the status of COT and TOT.

MetLife Financial Advisor can also Play the role of End To End Vendor (E2E) and can help in

recruiting the financial advisor. For this effort he is paid 2500 Rs for every successful

recruitment.

2. Professional Recognition :

To keep Financial Advisor’s motivation at a high level, MetLife have a challenging and

exciting Rewards & Recognition program throughout the year, which rewards FA’S over and

above his commissions. Contests, conferences and benefits at various levels enable him to

realize his true potential, and inspire him to scale greater heights. Each year, sales leaders who

meet challenging company standards receive impressive awards and invitations to MetLife’s

prestigious conferences, within India and abroad. At these meetings, achievers receive

recognition for their superior performance in the presence of their families and peers.

3.Support:

Work Space Support- MetLife provide telephones and computers to help FA set

appointments, conduct your business and analyze your performance.

Marketing and sales Support- To assist with sales procedures, MetLife have several

tools to aid smooth implementation.

Managerial Guidance- With the guidance and support of MetLife’s highly experienced

managers, FA find several opportunities to build and service your customer base.

21

The Reward and Recognition Stages can be shown as :

FIGURE 2.1

TABLE 7: Benefits of Being METLIFE’S Financial Advisor:

Commission 30 % to 40 %

Career

Exceptional Performer are absorb at the

regular employee at the post of Sales

Manager in the organization

Contest Are held weekly, monthly and in festive

season. Contest are also held at the policy

level. And the winner are rewarded with

bags , handy cams , gold coin and vacation

22

TRIGGER REWARD

RAPID FIRE

RAPID FIRE CHAMP

SILVER EAGLE AWARD

GOLDEN EAGLE AWARD

LEADER’S CONFERENCE

MDRT

TOT

PRESIDENT CONFERENCE

COT

to the exotic places.

Extra Benefits

Are Paid 30,000 to 40,000 for achieving

early targets after licensing.

Are paid Rs 2500 for recruiting Financial

Advisor.

Training Training module is provided free of cost .

Work support

Financial Advisor are given office space

and phone and computer for use.

Team of agency manager is always ready

to help and support the financial advisors.

TABLE 8: REQUISITE OF FA:

Probable Agent Profile

He/ She can be any person citizen of India

having his/her business, shop or

unemployed. He/She must be able to

devote the time to the customers 24X 7 X

365 Hrs.

Minimum Qualification Plus Two OR any of the Higher

Qualification for the candidate from urban

areas.

Class 10th certificate if he/she belong to

the Rural Area.

Date of Birth Proof 10th standard certificates

ID and Residence Proof Copy of Ration card /License/Passport for

urban area candidate.

Proof from the serpanch of the village in

written , for the candidate of rural area.

23

Passport size Photographs 5

Fees Rs 700

OTHER LEADING INSURANCE COMPANIES

a) LIFE INSURANCE CORPORATION (LIC):

The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and

the Life Insurance Corporation of India was created on 1st September, 1956, with the objective

of spreading life insurance much more widely and in particular to the rural areas with a view to

reach all insurable persons in the country, providing them adequate financial cover at a

reasonable cost. Today LIC functions with 2048 fully computerized branch offices, 100

divisional offices, 7 zonal offices and the Corporate office. LIC’s Wide Area Network covers

100 divisional offices and connects all the branches through a Metro Area Network. LIC has tied

up with some Banks and Service providers to offer on-line premium collection facility in

selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer

convenience. LIC continue to dominate the insurance sector even in the Liberalized Indian

Economy .The market share of the LIC is about 75%.

In Jalandhar LIC is has the biggest network of financial Advisors among all the Insurance

Players in the city . LIC Jalandhar has the mammoth force of 6600 Financial Advisors and had

recruited about 750 Financial Advisors in 2006-2007.

1. Training and Career:

LIC strictly follows the rule and regulations framed by the IRDA for the recrutitment and the

training of the Agents. In Jalandhar LIC have ther own training facility at there own agency .

LIC Jalandhar have there own training staff who provide the basic and the product training to

24

the Agents . A 17-18 day training schedule covers the mandatory IRDA training requirements

and LIC product-training module. The agents get full support from their Development Officers

and as a career LIC Jalandhar get absorbed in the management if they perform exceptionally

well.

2. Rewards And Recognition:

LIC Jalandhar agents are constantly recognized and rewarded for their performance. LIC agent

get s the commission about 14% to 40% depending upon the policy .Numerous competitions all

year round promote healthy competition amongst agents and recognition for their efforts.

Depending on the level of business the agent achieves in a year, he or she can become a member

of various clubs such as the Corporate Club, the Chairman’s club, etc. Each of these clubs

have specific performance criteria for qualification and members of these clubs are entitled to

attend seminars held at exotic international and domestic locations each year. Advisors can also

qualify for the renowned MDRT (Million Dollar Round Table), an exclusive international

insurance advisors club.

TABLE 09: Requirement and Requisites of becoming the LIC Financial Advisors/Agent’s:

Probable Agent Profile

He/ She can be any person citizen of India

having his/her business, shop or unemployed

Minimum Qualification Plus Two OR any of the Higher

Qualification .

Date of Birth Proof 10th standard certificates

ID and Residence Proof Copy of Ration card /License/Passport

Passport size Photographs 5

Fees Rs 350

b) ICICI Prudential Life Insurance :

25

ICICI Prudential Life Insurance Company Limited, a company incorporated under the

Companies Act, 1956 and licensed under and in terms of the Insurance Act, 1938 and the

Insurance Regulatory and Development Authority Act, 1999 to carry out the business of life

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

premier financial powerhouse, and Prudential, 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 capital stands at Rs.

20.60 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. In

Jalandhar ICICI PRDEMTIAL started in 2001.

1. Training And Career :

ICICI PRUDENTIAL’S financial advisors are given basic training of the Insurance and the

market in the DREAM WEAVER Institute, Model Town Jalandhar. After the basic training of

100 hrs, they are given Product training in the various branches of the ICICI Jalandhar. The

advisors are provided the course books on recruitment. The advisors who perform exceptionally

well are absorbed in the ICICI as the regular employee.

2. Financial Advisors in ICICI:

ICICI Prudential has one of the largest distribution networks amongst private life insurers in

India. As of March 31, 2007 the company has over 580 offices across the country and

over 234,000 advisors. Out of these huge workforce of advisors; ICICI have the strength of

almost 2500 Financial Advisors in Jalandhar alone. This makes it the second largest player of

Insurance sector in Jalandhar after LIC and gives it the edge over other private life insurance

players in Jalandhar. ICICI Jalandhar due to its huge large force of advisors earn the highest

premium than any other branches of ICICI in India, this is the fact that ICICI Jalandhar alone has

got 10 MDRT members.

In Jalandhar the FA’s of ICICI enjoys all the benefits that there counterparts does in the other

part of the country. The financial Advisors are paid almost the commission of 20% to 40% for

various endowment and investment plans. Except of this healthy commission they are also get

extra remuneration depending upon their achievements of targets predetermined by the company.

ICICI also help FA’S by providing them the financial help to cover their expenses of petrol and

26

mobile bills. Beside this the ICICI motivates there financial Advisors by holding various contest

for there Financial Advisors. These contests are launched on after every third month on the

festive seasons. For Example ICICI in Jalandhar has launched FREEDOM FESTIVAL to

celebrate the 60Th Independence day of the country . In this contest on achieving the various

targets the FA’S are given various gifts and prizes depending upon which slab did the premium

collected by the Financial Advisors falls. ICICI PRUDENTIAL financial advisors are also paid

1600 Rs for the recruitment of an additional Advisor.

Table 10 :Benefits of Being ICICI PRUDENTIAL Financial Advisor :

Commission 18% to 40 %

CareerExceptional Performer are absorb at the

regular employee in the organization

Contest

Are held weekly, monthly and in festive

season. And the winner are given bags ,

handy cams and vacation to the exotic places.

Extra BenefitsAre paid for expenses for petrol, mobile. Are

paid Rs 1600 for recruitment of FA.

Training Training module is provided free of cost .

Work supportTeam of agency manager is always ready to

help and support the financial advisors.

Table11 :Requirement and Requisites of becoming the ICICI PRUDENTIAL Financial

Advisors/Agent’s:

27

Probable Agent Profile

He/ She can be any person citizen of India

having his/her business, shop or unemployed.

He/She must be able to devote the time to the

customers 24X7 Hrs.

Minimum Qualification Plus Two OR any of the Higher

Qualification .

Date of Birth Proof 10th standard certificates

ID and Residence Proof Copy of Ration card /License/Passport

Passport size Photographs 8

Fees Rs 1000

c) Bajaj Allianz General Insurance Company Limited:

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

and Allianz AG of Germany. Allianz AG, is one of the world's largest insurance companies, and

Bajaj Auto, one of the biggest 2 and 3 wheeler manufacturers in the world.. Bajaj Allianz

General Insurance received the Insurance Regulatory and Development Authority (IRDA)

certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business

including Health Insurance business in India. The. Bajaj Auto holds 74% and the remaining 26%

is held by Allianz, AG, Germany. Bajaj Allianz has a pan-India presence of office network in

over 500 towns of the country and is aided with a strong and trained Agency network of over

90000 Insurance Consultants with 511 MRDT qualifiers in the calendar year 2006-2007.

1. Financial Advisors of BajajAllianz Life Insurance :

Bajaj Allianz started its operation in Jalandhar in mid of 2005 and till date they had made 1100

Financial Advisors in Jalandhar .Which makes it the third largest organization in terms of the

strength of Financial Advisors at Jalandhar. Bajaj Allianz recruit the Advisors from every section

of the society.

The recruitment procedure is according the guide lines of the IRDA, and the Financial Advisors

are given the commission of about 20% to 40% on its different plans and policies. Besides that

they enjoy the Membership and reorganization of the various elite clubs depending upon their

performance. Bajaj Allianz outsource its training of financial advisors to the Dream Weaver and

provides the in house training of products to the advisors.

28

Table 12:Benefits of BAJAJ ALLIANZ Financial Advisor :

Commission 20% to 40%

CareerExceptional Performer are absorb at the

regular employee in the organization

Extra Benefits Are paid for expenses for petrol, mobile.

Work supportTeam of agency manager is always ready

to help and support the financial advisors.

Contest Are held on monthly and half yearly basis .

Table13:Requirement and Requisites of becoming the BAJAJ ALLIANZ LIFE Financial

Advisors/Agent’s:

Probable Agent Profile

He/ She can be any person citizen of India

having his/her business, shop or

unemployed.

Minimum Qualification Plus Two OR any of the Higher

Qualification.

Date of Birth Proof 10th standard certificates

ID and Residence Proof Copy of Ration card /License/Passport

Passport size Photographs 6

Fees Rs 850

d) Kotak Mahindra Old Mutual Life Insurance:

29

It is a 76:24 joint venture between Kotak Mahindra Bank Ltd. and Old Mutual plc. Kotak

Mahindra Old Mutual Life Insurance is one of the fastest growing insurance companies in India

and has shown remarkable growth since its inception in 2001.

Old Mutual, a company with 160 years experience in life insurance, is an international financial

services group listed on the London Stock Exchange and included in the FTSE 100 list of

companies, with assets under management worth $ 400 Billion as on 30th June, 2006. For

customers, this joint venture translates into a company that combines international expertise with

the understanding of the local market. Kotak Mahindra strated its business at the beginning of

2006. Kotak life success fully recruited the force of 450 financial advisors in the first year of it’s

operations in Jalandhar.

1. Training of Financial Advisors and career:

Kotak Mahindra provides the training to its Financial Advisors in there own facility in Prime

Tower Jalandhar. It has the dedicate team of Sales manager and training staff who provide both

basic and product training to its advisors. Kotak Mahindra also carry own the special session to

train their advisors. All the study material is provided to the advisors by the Kotak Mahindra

Life. Any one who is dedicated and wants to excel in his life is welcomed at Kotak Mahindra.

Just like others insurance organization the Kotak Mahindra’s financial Advisors also aim for

becoming the part of MDRT’S club. The advisors who have the minimum qualification and had

achieved the desired performance level are given chance to be the team of the regular employee

of Kotak Mahindra and can lead the team of 10 to 15 financial advisors. After getting the license

the financial advisors get 500 Rs for referring and successful recruitments of the new advisor.

Table 14:Benefits of Being KOTAK MAHINDRA LIFE”S Financial Advisor :

Commission18% to 22% on ULIP and 40 % on

traditional plans

Career Achievers are given chance to be the part of

30

regular sales force in organization and lead

the team of 10 to 15 advisors.

Contest

Are held weekly, monthly . Certain rewards

like music systems , handy cams , vacations

are give ;depending upon the achievement

of various slabs .

Extra Benefits

Are paid for expenses for petrol, mobile.

Are paid Rs 500 for referring and on

successful recruitment of FA.

TrainingIn house training and study material is

provided by the organization.

Table15:Requirement and Requisites of becoming the KOTAK MAHINDRA LIFE”S

Financial Advisors/Agent’s:

Probable Agent Profile

He/ She can be any person citizen of India

having his/her business, shop or

unemployed, private teacher etc.

He/She must be able to devote the time to

the customers 24X7 Hrs.

Minimum Qualification Plus Two OR any of the Higher

Qualification .

Date of Birth Proof 10th standard certificates

ID and Residence Proof Copy of Ration card /License/Passport

Passport size Photographs 8

31

Fees Rs 1000

e) Reliance Life :

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance -

Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s 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 asset management and mutual

funds, stock broking, life and general insurance, proprietary investments, private equity and other

activities in financial services. Agents are called as advisors in RLI., Advisors occupy a

intermediary position and are remunerated appropriately according to the business generated.

Advisorship in RLI means tremendous growth and empowerment in terms of knowledge,

personality development and wealth. Training at Jalandhar is given at Dream Weaver. The

advisors are paid extra for their expences in mobile and petrol. The Advisor also gets chance to

take part in the contest in which they can win LCD TV , Lap Top and even trip to abroad.Some

benefits of being the advisor at Reliance Life Insurance are

Table 16: Benefits of Financial Advisor of Reliance Life :

Commission 18% to 30 %

Contest

Are held daily, weekly, monthly . Certain

rewards like lap top , LCD TV, gold coin,

trip to abroad.

Extra Benefits Are paid for expenses for petrol, mobile.

TrainingIn house training and study material is

provided by the organization.

32

Table17: Requirement and Requisites of becoming the RELIANCE LIFE INSURANCE’S

Financial Advisors/Agent’s:

Probable Agent Profile

He/ She can be any person citizen of India

having his/her business, shop or

unemployed, private teacher etc.

Minimum Qualification Plus Two OR any of the Higher

Qualification .

Date of Birth Proof 10th standard certificates

ID and Residence Proof Copy of Ration card /License/Passport

Passport size Photographs 9 PP

Fees DD of Rs 500 in Favour of “Reliance Life

Insurance Co. Pvt .Ltd” Payable at

Chennai.

f) Tata AIG Life Insurance :

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed

by the Tata Group and American International Group, Inc. (AIG). Tata AIG Life combines the

Tata Group’s pre-eminent leadership position in India and AIG’s global presence as the world’s

leading international insurance and financial services organization. The Tata Group holds 74 per

cent stake in the insurance venture with AIG holding the balance 26 percent. Tata AIG Life

provides insurance solutions to individuals and corporates. Tata AIG Life Insurance Company

was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001.

1. Advisors at TATA AIG Life Insurance:

Tata AIG just like other life insurance organization recruit the Advisors having varied profiles.

They are recruited and trained as per the guide lines of IRDA. TATA AIG have its own system

of selecting the right person for the Advisor. The probable person Is first counseled by the

33

Agency Manager and then he/she has to go through the aptitude test, which the probable has to

give at the spot. After than he /she is approved to be eligible for the training of the FA. TATA

AIG advisors are given 100hrs training at NIS Sparta Institute in Jalandhar and the necessary

product training is given at the agency it self.

2 Career path of Financial Advisor at TATA AIG Life Insurance:

Tata AIG agent enjoy the member ship off all the esteemed clubs depending upon the

achievement of the desired premium goals he achieve , beside the membership of these clubs

Tata AIG offer the unique career opportunity Programme to there advisors. It is the only

company in India to offer this Programme. This Programme depends upon networking. The

advisor can start hi own business without investing any money. Tata AIG provide them to

become the Business Associate and recruit the team of 20 advisors under him and the average

potential remuneration per month can be up to Rs 50,000.

From Business Associate level onward, he can hire as many agen the wants and get Rs 2000 per

agent recruited and Rs 1500 per month for training. After he had recruited the team of 20

advisor under him he can become the SR. Business Associate and can keep two business

associate under him. After this he can also become Manager Business Associate and can keep a

team of 2 SR. Business Associate under him.

The Career path of the Advisor can be shown as:

Fig: 2.2

Table18:Benefits of Being TATA-AIG LIFE’S Financial Advisor :

Commission18% to 22% on ULIP and 40 % on

traditional plans

Career Advisor can work as Business Associate

34

Advisor

Bussiness Associate

Senior Bussiness Associate

Manager Bussiness Associate

and can lead a team of 15-20 advisors ,and

after that he can become SBA,MBA in

successive steps.

Contest

Are held monthly. Certain rewards like

bags ,music system and paid vacations are

given; depending upon the achievement of

various slabs .

Extra Benefits

Are given Rs 2000 for successful recruiting

the advisor and are given Rs 1500 for

training of these advisors.

TrainingIn house product training and study

material is provided by the organization.

Table19:Requirement and Requisites of becoming the TATA-AIG LIFE’S Financial

Advisors/Agent’s:

Probable Agent Profile

He/ She can be any person; citizen of India

having his/her business, shop or

unemployed, private teacher etc.

Minimum Qualification Plus Two OR any of the Higher

Qualification .

Date of Birth Proof 10th standard certificates

35

ID and Residence Proof Copy of Ration card /License/Passport/Pan

card

Passport size Photographs 5

Fees DD of Rs 250, in favors of “Tata-AIG Life

Insurance Co. Pvt. Ltd”. Payable at

Jalandhar.

In Jalandhar the number of policies sold in different years has increased with the increase in the

number of the Financial Advisors. The organization having the largest number of work force of

financial advisors sells larger number of policies in a year.

So the hypothesis is that :

Number of policies sold by any Insurance organization in any a year is directly proportional to its Number of its Financial Advisors in that year.

INSURANCE INDUSTRY IN INDIA

Life Insurance in its modern form came to India from England in the year 1818. Oriental Life

Insurance Company started by Europeans in Calcutta was the first life insurance company on

Indian Soil. All the insurance companies established during that period were brought up with the

purpose of looking after the needs of European community and Indian natives were not being

insured by these companies. However, later with the efforts of eminent people like Babu

Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives

36

were being treated as sub-standard lives and heavy extra premiums were being charged on them.

Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company

in the year 1870, and covered Indian lives at normal rates.

The brief history of Insurance in India with some of it’s milestones in the life insurance

business in India are:

1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its

business

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate

the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect

statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the

objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over by the central

government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act,

1956, with a capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the

Triton Insurance Company Ltd., the first general insurance company established in the

year 1850 in Calcutta by the British.

Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all

classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a

code of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency

margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the

general insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies viz. the National

Insurance Company Ltd., the New India Assurance Company Ltd., the

Oriental Insurance Company Ltd. and the United India Insurance Company

37

Ltd. GIC incorporated as a company.

Among the emerging economies, India is one of the least insured countries, but the potential for

further growth is phenomenal. The demand for insurance is likely to increase with rising per

capital incomes, rising literacy rates and increase of the service sectors. After Korean and

Taiwanese insurance sectors were liberalized, the Korean market has grown 3 times faster than

GDP and Taiwan the rate of growth has been almost 4 times than that of its GDP. Further,

opening of the sector to private firms has and will further foster competition, innovation and

variety of products. It will also generate greater awareness on the need for buying insurance as a

service and not merely for tax exemption, which is currently done.

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.

Insurance is one sector whose contribution to GDP is quite significant. Post independence, the

Indian Government nationalized the private life insurance companies with a view to raise funds

for the infrastructure developments, which lagged behind pathetically. Insurance is a Rs. 400

billion business in India’s and together with banking services adds about 7% to India’s gross

domestic product (GDP) gross premium collection is about 2 percent of GDP and growing

between 15 and 20 percent per annum. India also has highest number of life insurance policies in

force in the world.

Yet more than three fourth of India’s insurance population has no life insurance cover the

penetration of insurance is very low in India the following indices support this contention. While

per capita insurance premium in developed countries is very high, it is quite low in India per

capital insurance premium in India in 1999 was only $8 while it was $ 4800 for Japan, $ 1000

for Republic of Korea, $ 887 for Singapore, $ 823 for Hong Kong and $ 144 for Malaysia. The

insurance Premium as a Percentage ofGDP was 14% for Japan, 13% for south Africa, 12% for

Korea, 9% for UK and less than 2% in India in 1999 Similarly the insurance Premium as a

percentage of Gross Domestic saving (GDS) was 52% for U.K, 35% for other European and

American countries ,it was only 9% for India in 1999 The share of India in the World market in

terms of Gross insurance premium is again very 1000. For instance, While Japan has 31%,

38

European Union 25% ., South Africa 2.3%, Canada 1.7% share of the global insurance premium,

it is only 0.3% for India.

The insurance premium in India accounted for a mere 2% of GDP as against the world average

of 7.8% and G-7 average of 9.2% during 90s. The insurance premium as a percentage of savings

in India is 5.95% as compared to 52.5% in UK. The nationalised insurance companies could

barely unearth the vast potential of the Indian population since the policies lacked flexibility and

the Indian life insurance products are not linked to the contemporary investment avenues.

a) Global investors prefer Indian insurance markets:

Multinational insurers are keenly watching the transformation of the Indian insurance sector,

mainly because the domestic markets have become saturated for the respective insurer.

International insurers capture a significant part of their business from their multinational

operations only. UK’s largest life and non-life insurers acquired 40% to 60% of their total

premium from their multinational operations. The foreign investors are finding the Indian market

more attractive because even a small share of a growing market looks lucrative. For example, the

Korean insurance market, the 30th largest market in the world premium volume in 1971 obtained

the 6th position in 1996, the reason being its multinational operations.

The other reason as to why the global insurers are interested in investing their funds is the nature

of the Indian markets. Generally insurance companies operate on the principle of spreading.

Spreading the area of operations over a wide geographical area would eliminate sudden dips in

earnings due to the unexpected risk spread. Sigma Report presented by the world’s second

largest reinsurer Swiss Re on global insurance, reports complete saturation of international

market.

b) Effects Of Global Insurance

1.More job opportunities: Opening of the insurance sector to the foreign investors has led to a

renaissance in the Indian economy. Job opportunities show bright signals. The people working in

insurance sector in India are approximately the same as in the UK, which has 1/7th of Indian

population. There is the new concept of bancassurance that has paved the way for more job

opportunities in the financial sector. There would be demand for specialists in the area of

marketing, finance and human resource management apart from the demand for technical

expertise from professionals in the field of underwriting and claims management subjects.

39

2.Inflow of foreign capital: There would be huge inflow of funds into the country with foreign

capital splurging in the Indian insurance companies as start up capital.

3.Indigenous reinsurance: Even the reinsurance sector looks for opulence with global players

like Swiss Re and Munich Re keen on entering into the insurance industry in India. While there

will be a deep fall in the outward reinsurance, India would receive inflow of funds from the

neighbouring countries. If the legislative support offers a congenial atmosphere, a la Llyods in

India is not far off.

4.Technology transfer: Apart from the above monetary aspects, there would also be a

revolution in the transfer of technologies and knowledge from the global participants in the fields

of training, risk management, underwriting, introduction of new policies etc. With more

participants in the market, there would be healthy competition with increased advertisement

expenditure for brand building. There would be scientific pricing methods.

5.Wide distribution channel: The channel of distribution is widened once the products offered

are many. For instance, the seller himself at the point of sale itself can offer insurance for durable

consumer items such as a television or a refrigerator. In such cases, the non-financial sectors also

join in distributing the insurance products and benefit mutually.

The opening up of the market for private players has encouraged international insurance giants to

enter the Indian market through the medium of joint ventures with Indian promoters. However,

the foreign promoters' equity in an Indian insurance company is limited by law to 26%. The

market has attracted participants from across the globe. A rich tapestry of foreign promoters

from U.K., U.S.A., Canada, France, Germany, Netherlands, South Africa, Australia have

descended on the Indian scene. All these promoters have probably sought to re-establish

themselves in the Indian market where they had a presence prior to the nationalization of the

industry.

These companies have varied and rich experience in insurance underwriting and administration

and by joining hands with the Indian promoters have brought to Indian insurance market new

management techniques and practices, underwriting standards, risk analysis and risk

management techniques - all of which will indeed strengthen the Indian insurance market and

afford the Indian customers risk covers at competitive costs.

40

The participation from the Indian promoters point of view has also been rewarding. The

insurance market has attracted financial institutions, big industrial establishments etc., to enter

the insurance sector. Participation of banks and other financial institutions in the floatation of

insurance companies is also subject to clearance from the industry regulator viz., Reserve Bank

of India or National Housing Bank.

c) The Insurance Regulatory and Development Authority:

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in

Parliament in December 1999. The IRDA since its incorporation as a statutory body in April

2000 has fastidiously stuck to its schedule of framing regulations and registering the private

sector insurance companies. The other decisions taken simultaneously to provide the supporting

systems to the insurance sector and in particular the life insurance companies was the launch of

the IRDA’s online service for issue and renewal of licenses to agents. The approval of

institutions for imparting training to agents has also ensured that the insurance companies would

have a trained workforce of insurance agents in place to sell their products, which are expected

to be introduced by early next year.

Since being set up as an independent statutory body the IRDA has put in a framework of

globally compatible regulations. In the private sector 12 life insurance and 6 general insurance

companies have been registered.

In the liberalised insurance era, we have 15 life insurance players apart from the public sector

Life Insurance Corporation of India and 9 general insurance companies apart from the 4 state

owned companies viz. The United India Insurance, New India Assurance, Oriental Insurance,

National Insurance Company. The private insurers have already proved their success by way of

performance during the current financial year by way of 71% growth in the premium income.

TABLE 4: The list off all these Life Insurance companies are given as:

S.No. Name of the Company

1 HDFC Standard Life Insurance Company Ltd.

2 Max New York Life Insurance Co. Ltd.

3 ICICI Prudential Life Insurance Company Ltd.

4 Kotak Mahindra Old Mutual Life Insurance Limited

41

5 Birla Sun Life Insurance Company Ltd.

6 Tata AIG Life Insurance Company Ltd.

7 SBI Life Insurance Company Limited .

8 ING Vysya Life Insurance Company Private Limited

9 Bajaj Allianz Life Insurance Company Limited

10 Metlife India Insurance Company Pvt. Ltd.

11 AMP Sanmar Life Insurance Company Limited.

12 Aviva Life Insurance Co. India Pvt. Ltd.

13 Sahara Life Insurance Co. Pvt. Ltd.

14 Shiriram Life Insurance Co. Pvt .Ltd.

15 Bharati –AXA – Life Insurance Co. Pvt. Ltd.

TABLE 5: GENERAL INSURER:

S.No. Name of the Company

1 Royal Sundaram Alliance Insurance Company

Limited

2 Reliance General Insurance Company Limited.

3 IFFCO Tokio General Insurance Co. Ltd

4 TATA AIG General Insurance Company Ltd.

5 Bajaj Allianz General Insurance Company Limited

6 ICICI Lombard General Insurance Company Limited.

42

d) Mission statement of IRDA

• 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

superannuation payments), for the benefit of the common man, and to provide long term

funds for accelerating growth of the 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 and 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.

e) Limitations:

1) The Data about the financial Advisors and number of policies in a year for various

organization is not available in the print or any other media. It is taken from the various sources

in the organization in the insurance organization at Jalandhar.

43

2) Most of the companies have just started their business in Jalandhar, so the data collected was

of only few months theirfor their correlation can not be calculated.

3)Information about the recruitment and the benefits of some of the insurance organization was

not available to the full extent.

4)The information about the benefits and career opportunity has to be gathered by personal

interaction by the officials of Insurance Organization.

5) The general public is unaware about the MetLife in the region

DATA ANALYSIS & INTERPRETATION

TABLE 20: NUMBER OF AGENTS AT JALANDHAR

INSURER 2002-03 2003-04 2004-05 2005-06 2006-07

2007-

2008

HDFC STANDARD

LIFE 0 350 553 630 729 857

SBI LIFE INSURANCE 0 0 0 0 175 250

ICICI PRUDENTIAL 604 1137 1465 1695 2045 2500

BAJAJ ALLIANZ LIFE 0 0 0 390 830 1100

44

METLIFE INDIA 0 0 0 0 0 350

Max New york Life 0 0 0 0 0 0

Tata AIG 0 0 0 0 0 160

Reliance Life 0 0 0 190 440 600

Birla Sunlife 0 0 0 0 390 700

AVIVA 0 0 0 0 180 550

ING Vysya 0 0 0 0 160 550

Kotak Mahindra 0 0 0 0 270 450

LIC 2385 3286 4175 5065 5850 6600

TABLE 21: NUMBER OF POLICIES SOLD IN JALANDHAR

INSURER 2002-03 2003-04 2004-05 2005-06 2006-07

2007-

2008

HDFC STANDARD

LIFE 0 6650 8848 12600 16038 17997

SBI LIFE

INSURANCE 0 0 0 0 3500 5125

ICICI PRUDENTIAL 15704 28425 33695 35595 47035 47500

BAJAJ ALLIANZ

LIFE 0 0 0 9280 22410 24200

METLIFE INDIA 0 0 0 0 0 4856

Max New york Life 0 0 0 0 0 0

Tata AIG 0 0 0 0 0 0

Reliance Life 0 0 0 4326 7920 11400

Birla Sunlife 0 0 0 0 2152 15645

AVIVA 0 0 0 0 2580 10450

ING Vysya 0 0 0 0 2430 9900

45

Kotak Mahindra 0 0 0 0 9016 10760

LIC 71680 85436 96025 101300 111150 138600

5.2 Correlation and test of hypothesis:

TABLE 22: Correlation for HDFC LIFE :

HDFC LIFE

2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

NO. OF AGENTS (X) 0 350 553 630 729 857

NO. OF POLICIES(Y) 0 6650 8848 12600 16038 17997

COFFICIENT OF CORRELATION = 0.978166

For sample size of 6 the value of t = 12.41969 and t0.05 = 2.920, which is quite higher than the

table value hence the hypothesis is rejected. Hence it is likely that the numbers of agent are

correlated to the number of policies sold in Jalandhar.

TABLE 23: Correlation for SBI LIFE

SBI LIFE INSURANCE

2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

NO. OF AGENTS (X) 0 0 0 0 175 250

NO. OF POLICIES(Y) 0 0 0 0 3500 5125

COFFICIENT OF CORRELATION = 0.999903

For sample size of 6 the value of t = 143.66 and t0.05 = 2.920 , which is quite higher than the table

value hence the hypothesis is rejected . Hence it is likely that the number of agent are correlated

to the number of policies sold in Jalandar.

TABLE 24: Correlation for ICICI PRUDENTIAL LIFE

ICICI PRUDENTIAL

2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

46

NO. OF AGENTS (X) 604 1137 1465 1695 2045 2500

NO. OF POLICIES(Y) 15704 28425 33695 35595 47035 47500

COFFICIENT OF CORRELATION = 0.974179

For sample size of 6 the value of t = 80629 and t0.05 = 2.920 , which is quite higher than the table

value hence the hypothesis is rejected . Hence it is likely that the number of agent are correlated

to the number of policies sold in Jalandar.

TABLE 25: Correlation for BAJAJ ALLIANZ LIFE

BAJAJ ALLIANZ LIFE

2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

NO. OF AGENTS (X) 0 0 0 390 830 1100

NO. OF POLICIES(Y) 0 0 0 9280 22410 24200

COFFICIENT OF CORRELATION = 0.989928

For sample size of 6 the value of t = 13.23 and t0.05 = 2.920 , which is quite higher than the table

value hence the hypothesis is rejected . Hence it is likely that the number of agent are correlated

to the number of policies sold in Jalandar.

TABLE 26: CORRELATION OF RELIANCE LIFE

Reliance Life

2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

NO. OF AGENTS (X) 0 0 0 190 440 600

NO. OF POLICIES(Y) 0 0 0 4326 7920 11400

COFFICIENT OF CORRELATION = 0.997226

47

For sample size of 6 the value of t = 26.79 and t0.05 = 2.920 , which is quite higher than the table

value hence the hypothesis is rejected . Hence it is likely that the number of agent are correlated

to the number of policies sold in Jalandar.

TABLE 27: CORRELATION OF BIRLA SUN LIFE

BIRLA SUN LIFE

2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

NO. OF AGENTS (X) 0 0 0 0 390 700

NO. OF POLICIES(Y) 0 0 0 0 2152 15645

COFFICIENT OF CORRELATION = 0.915845

For sample size of 6 the value of t = 4.56 and t0.05 = 2.920 , which is quite higher than the table

value hence the hypothesis is rejected . Hence it is likely that the number of agent are correlated

to the number of policies sold in Jalandar.

TABLE 28: CORRELATION OF AVIVA LIFE INSURANCE

AVIVA LIFE

2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

NO. OF AGENTS (X) 0 0 0 0 180 550

NO. OF POLICIES(Y) 0 0 0 0 2580 10450

COFFICIENT OF CORRELATION = 0.996693

For sample size of 6 the value of t = 24.52 and t0.05 = 2.920 , which is quite higher than the table

value hence the hypothesis is rejected . Hence it is likely that the number of agent are correlated

to the number of policies sold in Jalandar.

TABLE 29: CORRELATION OF ING VYSAYA LIFE

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ING VYSAYA

2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

NO. OF AGENTS (X) 0 0 0 0 160 550

NO. OF POLICIES(Y) 0 0 0 0 2430 9900

COFFICIENT OF CORRELATION = 0.998935

For sample size of 6 the value of t = 43.29 and t0.05 = 2.920 , which is quite higher than the table

value hence the hypothesis is rejected . Hence it is likely that the number of agent are correlated

to the number of policies sold in Jalandar.

TABLE 30: CORRELATION OF KOTAK MAHINDRA LIFE

KOTAK MAHINDRA

LIFE

2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

NO. OF AGENTS (X) 0 0 0 0 270 450

NO. OF POLICIES(Y) 0 0 0 0 9016 10760

COFFICIENT OF CORRELATION = 0.982092

For sample size of 6 the value of t = 10.42 and t0.05 = 2.920 , which is quite higher than the table

value hence the hypothesis is rejected . Hence it is likely that the number of agent are correlated

to the number of policies sold in Jalandar.

TABLE 31: CORRELATION OF LIC

LIC

2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

NO. OF AGENTS (X) 2385 3286 4175 5065 5850 6600

NO. OF POLICIES(Y) 71680 85436 96025 101300 111150 138600

COFFICIENT OF CORRELATION

= 0.962179

49

For sample size of 6 the value of t = 7.06 and t0.05 = 2.920 , which is quite higher than the table

value hence the hypothesis is rejected . Hence it is likely that the number of agent are correlated

to the number of policies sold in Jalandhar.

From all the calculation done above and test for significance it is clear that the Insurance

organization having will have greater penetration in the market. Hence the LIC had greater

penetration in Jalandhar than any other company.

FINDINGS AND SUGGESTIONS

1) Tata-AIG has introduced the concept of NETWORKING which not only give a chance for the

career development to the advisors but also increases the strength of advisors in the organization.

MetLife Jalandhar if possible should follow the same concept to increase the number of its

financial advisors.

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2) The fees taken by some of the insurance companies in Jalandhar is comparatively lower than the

MetLife. This is causing the desirable person to join those organizations. MetLife Jalandhar must

also try to implement certain schemes, so that to increase the possibilities of person to join

MetLife.

3) The organization like ICICI and Reliance etc. are giving their Advisors for their expenses on

Petrol and Mobile charges. MetLife should also try to provide similar compensation to the

advisors to attract them.

4) For attracting the new comers and to increase the strength of its Financial Advisors; MetLife can

organize the Business Opportunity Programme in the Private Schools and Other private

institutes.

5) MetLife can organize promotional activity in the various teaching institute to raise aware ness

about Life Insurance and MetLife.

6) Jalandhar has the lots of Travel Agents and Immigration offices, MetLife can make them their

agents to tap the NRI as their customers.

7) ICICI emerge as the second largest after LIC and holds the commanding position among the

private players and have 10 MDRT member.

8)There is need of more alternative distribution channels to tap more market in

Jalandhar. Many of the insurance organizations are providing the office space and their

infrastructure to their Financial Advisors.

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CONCLUSION

1. The strength of the agents In any organization affects the business

of the

Insurance organization in Jalandhar.

2. LIC shows the maximum penetration, with the huge force 6600 Financial Advisors. It

also have 25 MDRT member.

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3. New entrant like METLIFE has increased the competition in the market due to its

innovative policies for the cuwtomer and for its Advisors. It is evident from the fact that in a

short span of just 8 months in Jalandhar it has given 1 MDRT.

4. Better career opportunities and extra benefit given by the Insurance Organization for

recruitment; plays important role in attracting desiring candidates to take agency.

5. There is need of more alternative distribution channels to tap more market in

Jalandhar.

6. Many of the insurance organizations are providing the office space and their

infrastructure to their Financial Advisors.

7. Every kind of support and training facilities are provided time to time to the advisors.

8. Different contest give chance to the financial advisor to earn extra over and above their

commission.

9. Private players are paying healthier commission to their advisors.

10. Financial Advisors are also playing the role of End to End Vendor and their by help the

organization to increase their strength of Advisors.

11. Financial Advisors are getting more professional day by day; it is due to the various

training Programme which are being given to them by their respective organization.

12. Jalandhar has the huge potential for investment. Because Jalandhar alone has all the big

player of insurance in the market and all of these together has given 41 MDRT’S.

These Financial Advisors are the real producers for any Insurance Organizations

53

BIBLIOGRAPHY

References to books:

Examination Book (2007), Pre-Recruitment Examination for Insurance Agent,

Insurance Institute of India, Mumbai.

Kothari.C.R (2007), Research Methodology, New Age Publisher, Delhi.

Gupta.S.P (2006), Statistical Method, Sultan Publisher, New Delhi.

54

References to Articles:

Bhaskaran. D. (2007), “ Insurance Umbrella Size To Double , Says Industry”, Indian

Express, New Delhi.

Chavan. Vijay. (2006), “Channeling The Future”, Mastek ,USA.

Malhotra. R.N. (1994), “Insurance India”, New Delhi.

Oza. Arman.(2006), “ Importance Of Delivery system” , IRDA, Mumbai.

Vishwanathan. S. (2006), “Role of Distribution Channel”, IRDA, Mumbai, India.

Zabik.J.Joseph (2006), “Agents In Paradise, Producers View on Conferences and

Sales Contests”, LIMRA International, Connecticut, USA.

References to web Pages:

http://www.avivaindia.com/

https://www.birlasunlife.com

http://www.domain-b.com/industry/associations/irda

http://www.gii.in/Insurance/Life_Insurance

http://www.hdfcinsurance.com/aboutus/aboutus.asp

http://www.icicipru.com

http://www.insuremagic.com/Content/Articles/Life

http://www.irda.org/annual

http://www.kotakmahindra.com

http://www. lifeinsurance council.org

https://www.limra.com/Default.aspx

www.ingvysyalife.com

http://www.maxnewyork.com/

http://www.metlife.co.in

http://us.rediff.com/money/2004/may

http://www.reliancelife.com

http://www.researchandmarkets.com/reportinfo

https://www.tataaig.com

http://timesofindia.indiatimes.com/articleshow

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