nakul verma
TRANSCRIPT
RAJIV ACADEMY FOR TECHNOLOGY & MANAGEMENT
SUMMER TRANING PROJECT REPORT
OnCHANNEL DEVELOPMENT
FORMAX NEW YORK LIFE INSURANCE COMPANY LTD.
Submitted for the Partial fulfillment towards the award of the degree in MASTER OF BUSINESS ADMINISTRATION
OfU P Technical University, Lucknow
Submitted By Under the Guidance ofVINOD KUMAR Mr. Anil KumarRoll Number: 0817370101 Department of Management Session – 2009-10
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PREFACE
In its broadest sense summer training project report is necessary to make the
students of business school familiar with the industrial environment prevailing in
the world. To be competitive and work aggressive, students need to know the
policies, procedures and the trends going on in the present industrial world.
The business of insurance is related to the protection of economic values of
assets. The assets would have been created through the efforts of the owner, in
the expectation that, either through the income generated there from or some
other output, some of his needs would be met. If asset gets lost earlier, being
destroyed or made non-functional, through an accident or other unfortunate event,
the owner and those deriving benefits there from suffer. Insurance is a mechanism
that helps to reduce such adverse consequences.
Insurance plays a major role in different perspective. For economic development,
investments are necessary. Investments are made out of savings. A life insurance
company is a major instrument for the mobilization of savings of people,
particularly from the middle and lower income groups. These savings are
channeled in to the investments for economic growth. In order to amenable to
statistical predictions, insurance risks must be handled on a large scale.
All organization face changes in their environment with resultant changes in their
markets and in the ability to satisfy their markets. Each organization is faced with
new marketing problems and opportunities in their existing and potential market.
Marketing decision makers cope with these challenges in a variety of ways. The
marketer’s is being required to forecast, forecast the risk and uncertainness in
their own way, supported by market research.
Man on earth can entirely eliminate knows no method but scientific method can
minimize the element of uncertainties that can result from lack of information
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without orientation. Market research is a process of collecting information about
who, why, and how of actual and potential consumers in a particular market. The
main purpose of market research is the ability to continually foresee both in the
long and short term. This report is the outcome of summer training report at MAX
NEW YORK LIFE INSURANCE COMPANY LTD.
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ACKNOWLEDGEMENT
At the onset I must bow down in reverence to the almighty that blessed us with the
understanding & prevalence that is needed in this kind of project report.
With great pleasure I express my heartiest thanks toDr. Meenu Gupta ( Director –
RATM,) Mr. Vikas Jain (PC – M.B.A. Deptt.). I would like to extend my sincere
thanks to Name of Report Guide [Lecturer – Deptt. of Management Studies],
without whose unrelated support and guidance, this project would just not have
been possible. I am very thankful for his invaluable guidance, support, and affable
& friendly nature. He/She guided me at each and every stage of project.
I am equally indebted to my friends who always inspired and motivated me to do
something better through out this project.
At last I would like to extend my sincere thanks to all the respondents to whom I
visited for giving their support and valuable information, which helps me in
completing my project work.
VINOD KUMAR
M.B.A. III SemRoll No0817370101
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STUDENT’S DECLARATION
I, VINOD KUMAR, hereby declare that this work entitled “Max New York
Life,Insurance” is the result of summer training under taken. The findings and
conclusions expressed in this report are genuine, authentic and are for academic
purpose. Any resemblance to earlier research work is purely coincidental.
VINOD KUMAR
M.B.A III Sem
Roll No. 0817370101
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CERTIFICATATE OF ORIGIN
This is to certify that Mr. VINOD KUMAR S\O SHRI GYANCHAND a student of
Master of Business Administration (2008-2010),RAJIV ACADEMY FOR
TECHNOLOGY & MANAGEMENT MATHURA has worked in the Max New York
Life Insurance Company Ltd., under the able guidance and supervision of
Mr.Shikhar, MANAGER SALES, Max New York Life and Mr. Jitender Kumar ,
Manager, Max New York Life.
The period for which he was on training was for 8 weeks, starting from 1 June of
July to 31.
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TO WHOMSOEVER IT MAY CONCERN
This is to certify that Mr.Vinod kumar S/o, Sh. Gyanchand
Roll No 0817370101 student of MBA III Semester (Batch
2008-2010) of this institution has done summer training
project report titled CHANNEL DEVELOPMENT FOR MAX NEW
YORK LIFE INSURANCE COMPANY LTD.
The project has been prepared and submitted by the above
named in partial fulfilment of the Master of Business
Administration degree Programme (MBA) as per the
requirement of U. P. Technical University, Lucknow.
Date : Place : Mathura Director
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TABLE OF CONTENTS
Preface………………………………………………………………………… iAcknowledgement……………………………………………… ii
Student’s Declaration……………..……………………………………iii
Certificate …………………….………………………………………………iv
1.0 Introduction to the Topic.………………………………………………….. 00
2.0 Introduction to the Organization/Industry………………………………… 00
3.0 Objectives of the Study……………………………………………………. 00
4.0 Scope of the Study………………………………………………………… 00
5.0 Literature Review………………………………………………………...... 00
6.0 Research Methodology…………………………………………………… 00
6.1 Universe of the study…………………………….…………………… 006.2 Sample Size…………………………………………….………........... 006.3 Sampling Method…………………………………………….……….. 006.4 Tools for Data Collection……………………………………..………. 00
7.0 Data Analysis & Interpretation……………………………………………. 00
8.0 Findings…………………………………………………………………….. 00
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9.0 Recommendations & Suggestions………………………………………. 00
10.0 Conclusion…...…………………………………………………………… 00
10.1 Limitations of the Study……………………………………………..…… 00
10.2 Scope for further research………………………………………………. 00
Bibliography…………………………………………………………………...... i
Appendix [Questionnaire]……………………………………………………... iii
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LIST OF TABLES
S. No.
TABLE No.
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REFRENCE DETAILS
LIST OF CHARTS
S. No.
TABLE No.
PAGE No.
REFRENCE DETAILS
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INTRODUCTION
A well development and evolved insurance sector is needed for economic
development as it is provides long term funds for infrastructure development and
the same time strengthen the risk taking ability.
Life insurance is also now being regarded as a versatile financial planning tool in
India. India being a country having a huge population of around one billion people
with only 33.2% of the insurance population in India possessing life insurance. The
country has a vast potential that has been left untapped till now.
Therefore, what this has led to is the flooding of life insurance market with a
number of private players which in collaboration with recognized foreign
companies promises to deliver the best of services at the least price. All these
companies are trying to grasp the maximum of market share in life insurance
sector. For that they are developing a channel i.e. recruiting world-class insurance
advisors/agents who sell their products or policies. Who are these advisor/agents?
Who can become an advisor/agent? How they are recruited in MAX NEW YORK
LIFE INSURANCE COMPANY? How much they can earn as an insurance
advisor/agent? , these are some questions we have tried to answer in the project.
This report is trying to give the detail about recruitment and selection process of
the life insurance advisors. Thus by going through the report one will get to know
about the life insurance and recruitment and selection process of life
advisors/agents in MNYL.
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3.1 OBJECTIVE OF STUDY
To understand how to develop a channel of people who will work for selling
of products of company.
To understand the procedure of selection and recruitment of insurance
advisors/agents.
To find the suitable person for the recruitment as an insurance advisor.
To know about life insurance, its benefits and need.
To find out possible advantages of insurance advisors in MNYL.
INDUSTRIAL PROFILE
We live in a risky world. Forces, largely outside our control, that threaten our
financial well being, constantly surround us. Thus, every one among us will
experience different types of risks
Risk is defined as uncertainty concerning the occurrence of a loss. We measure
the presence or absence of risk by assigning probability values as p=1 or p=0.
Where there is no risk, probability of risk p=0 and vise versa.
Risk is a burden not only to the individual but to society as well. Thus, methods for
meeting the problem of risk are developed and insurance is one the method. Now
a question arises – what do you mean by insurance?
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INSURANCE
Insurance is a contract between two parties whereby one party called insurer
undertakes in exchange for a fixed sum called premium, to pay the other party
happening of a certain event.
Insurance is a protection against a financial loss arising on the happening of an
unexpected event. Insurance Companies collect premium to provide for this
protection. A loss is paid of this premium collected from the insuring public. The
insurance companies act as a trustee to the amount collected through premium.The
business of insurance is related to the protection of the economic value of assets. The
asset would have been created through the efforts of the owner, in the expectation
that, either through the income generated there from or some other output, some of
his needs would be met. However, if the asset gets lost earlier, being destroyed or
made non-functional, through an accident or other unfortunate event, the owner and
those deriving benefits there from suffer. Insurance is a mechanism that helps to
reduce such adverse consequence.The business of insurance done by insurance
companies (called insurers) is to bring together persons with common interests
(sharing the same risks) collecting the share or contribution (called premium) from all
of them, and paying out compensations (called claims) to those who suffer
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TYPE OF INSURANCE
THERE ARE TWO TYPE OF INSURANCE:-
Life insurance
Non-life insurance or General insurance
These insurance are provided both by government and private insurance
companies. Now, what an insurance company is?
The IRDA Act, 1999 amending the Insurance Act, 1938 in Section 2 sub-section
7(a) state:
“Indian Insurance Company means any Insurer being a company-
(a) which is formed and registered under Companies Act, 1956(1 of 1956);
(b) in which aggregate holding of equity shares by a foreign company either
by itself or through its subsidiary companies or its nominees do not
exceed twenty six percent paid up equity capital of such Indian
Insurance Company;
whose sole purpose is to carry on life insurance business or general
insurance business or re-insurance business.”
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The important activities of a life insurance company are:-
a) Procuring from prospective buyers proposals to grant life insurance cover;
b) Checking up and specifying the terms of acceptance called Understanding;
c) Issue contractual documents called policy incorporating various terms and
condition;
d) Provide after sales services including payment of money as per contract;
e) Conducting other supporting activities like, investment of funds, carrying out
solvency measures, finalization of accounts, getting or causing audit of
accounts, actuarial valuation including updating mortality tables; and
f) Developing new products, sales promotion activities including publicity,
training of its personal (Sales/ administration).
LIFE INSURANCE 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 General insurance
business in India, on the other hand, can trace its roots to the Triton (Tital)
Insurance Company Limited, the first general insurance company established in
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the year 1850 in Calcutta by the British. 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 corporation and Life Insurance
Corporation (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 continued to thrive with the private sector till
1972. Their operations were restricted to organized trade and industry in large
cities. The general insurance industry was nationalized in 1972. With this, nearly
107 insurers were amalgamated and grouped into four companies- National
Insurance Company, New India Assurance Company, Oriental Insurance
Company and United India Insurance Company.
These were subsidiaries of the General Insurance Company (GIC).
Life insurance business in India was nationalized with effect from 1st September,
1958. From this date, the life insurance business transacted by 154 Indian life
insurers, the Indian business of 16 foreign insurers and 75 provident societies was
taken over by Government of India Act, 1956, passed by the Parliament on 18-6-
56. The Life Insurance Corporation of India (LIC) which had been established
w.e.f. 19-5-1956 as a body corporate having perpetual succession and common
seal with power to acquire, hold and dispose property and to sue and be sued in
its name.Under Section 30 of the Act, from the appointment date i.e. 1-9-56, LIC
acquired the exclusive privilege of carrying on life insurance business in India and
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the certificate of registration granted to any insurer under the Insurance Act, 1938
ceased to have effect from the said date.
Now the above, provision of section 30 have been altered by insertion of Section
30A consequent to the enactment of the IRDA Act, 1999. As a result the exclusive
privilege given to the LIC has been withdrawn.
The Government of India liberalized the insurance sector in March 2000 with the
passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting
all entry restrictions for private players and allowing foreign players to enter the
market with some limits on direct foreign ownership. Under the current guidelines,
there is a 26 percent equity capital for foreign partners in an insurance company.
There is a proposal to increase this limit to 49 percent.
The opening up of the sector is likely to lead to greater spread and deepening of
insurance in India and this may also include restructuring and revitalizing of the
public sector companies. In the private sector 14 life insurance companies have
been registered. A host of private Insurance companies operating in both life and
non-life segments have started selling their insurance policies since 2001.
HOW LIFE INSURANCE WORKS
There are three parties in a life insurance transaction; the insurer, the insured, and
theowner of the policy (policyholder), although the owner and the insured are often
the sameperson. For example, if John Smith buys a policy on his own life, he is
both the ownerand the insured. But if Mary Smith, his wife, buys a policy on John's
life, she is theowner and he is the insured. Another important person involved is
the beneficiary.The beneficiary is the person or persons who will receive the policy
proceeds upon thedeath of the insured. The beneficiary is not a party to the policy,
but is designated by theowner, who may change the beneficiary unless the policy
has an irrevocable beneficiarydesignation. With an irrevocable beneficiary, that
beneficiary must agree to changes inbeneficiary, policy assignment, or borrowing
of cash value.
THE GROWING POTENTIAL
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Reforms have marked the entry of the many of the global majors into the Indian
market in the forms of joint venture with Indian companies. Some of the key
names are OLD MUTUAL, AIG, NEWYORK LIFE, ALLIANZ, PRUDENTIAL,
STANDARD LIFE, SUN LIFE. The entry of new private players has rejuvenated
the erstwhile monopoly player LIC, which has respondent to the competition in an
admirable fashion by launching new products and improving service standards.
FACTORS THAT BROUGHT WINDS OF CHANGE DUE TO
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 of 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 but the private companies
are also targeting the untapped rural market.
PRODUCT OF NEW 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 products with
a variety of benefits as riders from which they can choose. More customers are
buying products and services based on the true needs and not just traditional
money-back policies, which is not considered very appropriate for long-term
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protection and savings. However, there are still some key new products yet to be
introduced.
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
practice 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 banc assurance, brokers, Internet and direct marketing. Though
it is too early to predict, the wide spread of bank branch network in India could
lead to banc assurance emerging as a significant distribution mechanism.
If any one analyses the history of the growth of insurance since reforms, it is
marked by all- round growth of all players. More or less all players (including the
market leader LIC) have aggressively recruited and trained advisors, appointed
agents, launched new products, improved customer service standards and
revamped/expanded their distribution networks. If at all there are major difference
between players it was only in time lag in launching of service. Every player will
like the customers to believe that its service standards are the best or that its
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agents are the most informed and ethical, but it is debatable whether there are any
significant differences. In other words, each company is trying to be “everything to
everybody”.
Our argument is that the strategy of being everything to everybody is risky. Some
players justify the above strategy on the basis that the Indian market is huge and it
can accommodate everybody. Still, in a market where it is difficult to distinguish
one self sufficiently on services or on any other parameter to be able to change a
premium, it will lead to unmitigated price competition to the detriment of all players.
One may achieve sales turnover, but margins and profitability will suffer severely.
In the insurance industry where large amounts of capital are required, this is risky.
While there is room for a few scale players with a finger in every pie, it is profitable
for other players to focus on different segments to survive and thrive in a multi-firm
open environment. While each company has to choose its own unique positioning
on its unique strengths, the below-mentioned generic positioning alternatives
appear worth considering. Needless to say the positioning choices discussed here
are not mutually exclusive and can be overlapping.
STRATEGIC ALTERNATIVES
If any one analyses the history of the growth of insurance since reforms, it is
marked by all- round growth of all players. More or less all players (including the
market leader LIC) have aggressively recruited and trained advisors, appointed
agents, launched new products, improved customer service standards and
revamped/expanded their distribution networks. If at all there are major difference
between players it was only in time lag in launching of service. Every player will
like the customers to believe that its service standards are the best or that its
agents are the most informed and ethical, but it is debatable whether there are any
significant differences. In other words, each company is trying to be “everything to
everybody”.
Our argument is that the strategy of being everything to everybody is risky. Some
players justify the above strategy on the basis that the Indian market is huge and it
can accommodate everybody. Still, in a market where it is difficult to distinguish
one self sufficiently on services or on any other parameter to be able to change a
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premium, it will lead to unmitigated price competition to the detriment of all players.
One may achieve sales turnover, but margins and profitability will suffer severely.
In the insurance industry where large amounts of capital are required, this is risky.
While there is room for a few scale players with a finger in every pie, it is profitable
for other players to focus on different segments to survive and thrive in a multi-firm
open environment. While each company has to choose its own unique positioning
on its unique strengths, the below-mentioned generic positioning alternatives
appear worth considering. Needless to say the positioning choices discussed here
are not mutually exclusive and can be overlapping.
VARIETY-BASED POSITIONING
This type of positioning is based on varieties in products and services rather than
customer segments. It is a sensible strategy for those companies who have
distinctive advantages or strengths in offering certain products and services. In the
insurance industry too, it is possible to achieve a unique position by focusing on
certain category of products. Through its superior fund management capabilities,
the insurance company can deliver better returns in investment-linked products
and thereby carve for itself a leadership position in this segment.
Then there is the entire category of pension products, which is widely touted to
have immense growth potential in India due to imminent pension reforms. It is
possible to achieve a profitable positioning by focusing and excelling in only
pension products
NEED-BASED POSITIONING
This is the most commonly understood positioning and is based on the differing
needs of different groups of consumers. This can be done successfully if a
company has a unique strength to serve a group of customer needs than others.
The insurance needs of customers vary significantly for different groups of
customers. The insurance needs of young family with small children will be quite
different from that of a family in which the income-earner is close to retirement.
However, in India most of the life insurance companies have a wide variety of
products tailored for different customer needs and there is no company focusing
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on a particular customer need. An example would be a life insurance company
that focuses only on High Net-worth Individuals (HNIs). The needs of HNIs would
be quite different from those of general consumer and would require an entirely
different mix right from the type of products offered and the way they are
distributed, to the promotion methods emplo
ACCESS-BASED POSITIONING
Positioning of customers can also be done by the way they are accessible. That is
different group of customers may be accessible in different ways even through
they may have similar needs. Access is typically a function of customer geography
or customer scale. There is excellent opportunity in the insurance industry to
employ access-based
positioning by targeting the rural insurance sector. The rural market for life
insurance is very different from the urban sector in term of needs, income level
and distribution, penetration of media and so on. Contrary to common perception it
is a big opportunity as emphasized repeatedly by such eminent strategists like
C.K.Prahlad. Rural market can be highly profitable position if one is able to
carefully plan and tailor an entire set of low-cost activities of advertising,
distribution and product design etc. to successfully exploit the potential.
NEED FOR LIFE INSURANCE
As life insurance became more established, it was realized what a useful tool it
was for a number of situations, including –
a) Temporary needs/ threat
The original purpose of life insurance remains an important element, namely
providing for replacement of income on death etc. Typically the case of the
breadwinner dying an early death.
b) Regular Saving
Providing for ones family and oneself, as a medium to long-term exercise (through
a series of regular payment of premiums). This has become more relevant in
recent times as people seek financial independence from their family.
c) Investment
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Put simply, the building up of savings while safeguarding it from the
ravages of inflation. Unlike regular saving products, investment products are
traditionally lump sum investment, where the individual makes a one-time
payment.
d) Retirement
Provision for one’s own later years becomes increasingly necessary,
especially in a changing cultural and social environment. One can buy a suitable
insurance policy, which will provide periodical payments in one’s old age.
Generally identified as the problem of living too long.
ADVANTAGE OF LIFE INSURANCE
(1) IT SUPERIOR TO A TRADITIONAL SAVING VEHICLE
As well as providing a secure vehicle to build up savings etc, it provides
peace of mind to the policyholder. In the event of untimely death, of say the
main earner in the family, the policy will pay out the guaranteed sum
assured, which is likely to be significantly more than the total premiums
paid. With more traditional savings vehicles, such as fixed deposits, the
only return would be the amount invested plus any interest accrued.
(2) IT ENCOURAGES SAVING AND FORCES THRIFT
Once an insurance contract has been entered into, the insured has an
obligation to continue paying premiums, until the end of the term of the
policy; otherwise the policy will lapse. In other words, it becomes
compulsory for the insured to save regularly and spend wisely. In contrast
savings held in a deposit account can be accessed or stopped easily.
(3) IT PROVIDES EASY SETTLEMENT AND PROTECTION AGAINST
CREDITORS
Once a person is appointed for receiving the benefits (nomination) or a
transfer of rights is made (assignment), a claim under the life insurance
contract can be settled easily. In addition, creditors have no rights to any
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monies paid out by the insurer, where the policy is written under trust.
Under the Married Women’s Property Act (M.W.P Act), the money available
from the policy forms a kind of trust which cannot be attached by judgment
creditors.
(4) IT HELPS TO ACHIEVE THE PURPOSE OF THE LIFE ASSURED
If someone receives a large sum of money, it is possible that they may
spend the money unwisely or in a speculative way. To overcome this, the
person taking the policy can instruct the insurer that the claim amount is
given in installments.
(5) IT CAN BE ENCASHED AND FACILITATES QUICK BORROWING:
Some contracts may allow the policy to be surrendered for a cash amount,
if a policyholder is not in a position to pay the premium. A loan, from certain
policies, can be taken for a temporary period to tide over the difficult. Some
lending institutions will accept a life insurance policy as collateral for a
personal or commercial loan.
(6) TAX RELIEF
The policyholder obtains Income Tax rebated by paying the insurance
premium. The specified forms of saving which enjoy a tax rebate, under
section 88 of the Income Tax Act, include Life Insurance Premiums and
contributions to a recognized Provident Fund etc., section 10 (10D) & other
sub-sections of Section 80 of the Income Tax Act.
OF LIFE INSURANCE SPECIAL FEATURES
An individual can save a part of his income in various ways. But taking an
insurance policy has certain additional advantages for which it is considered
superior to other type of savings.
It is superior to a traditional saving vehicle.
It encourages saving and forces thrift.
It provides easy settlement and protection against creditors.
It helps to achieve the purpose of Life Assured.
It can be encashed and facilities quick borrowing.
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Tax Relief
Acts as a Social Security Tool.
Helps in Economic Developmen
LIFE INSURANCE PRODUCTS
1. TERM INSURANCE
Such a policy plan cover per a specified period or term only, and may also be
describe as temporary insurance .the policy benefit is only payable if:
a. The insured person died during the specified period, or term; and time
b. The policy is valid (in force) at the time of death
This form of cover us an exception to the general rule that a life insurance always
results in a claim. Indeed, in the great maturity of the cases, term insurance runs
their course without a claim. For this reason, it is the cheapest form of cover
available (but, of course, it limitation must be understood)
In theory, the term could be for any period of time, even a few hours to cover an
aircraft flight, for example. In practice it is rare to find a term insurance for a period
of less then one year. A term insurance policy is therefore a pure risk cover for a
specified period of time. This means the sum assured is payable only is the policy
holder dies with the policy term for instance, if a person buys Rs. 2 lacks policy for
fifteen year, his family is entitled to the money if he dies within the fifteen year
period.
So, there is no element of saving or investment in such as policy. It is a 100% risk
cover. Its simply means that a person pay certain premium to protect his family
against his sudden death.
LEVEL TERM INSURANCE
This policy plan is perhaps the most popular term insurance. It involves a level
(unchanging) premium and benefit through out the policy period. In the event of
death during the terms, the sum assured of the policy is payable. If the term is for
more than one year, the renewal premium is the same each year.
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Popular largely because of its simplicity, this is as useful answer to all temporary
need which neither increases nor decreases to any significant extent over the
period of tine involved (perhaps a loan which is not being repaid by installments).
RENEWABLE/CONVERTIBLE TERM INSURANCE
RENEWABLE TERM INSURANCE: The key point in this type of term insurance is
that the right to renew the policy without submitting fresh evidence of insurability
(health) and the premium for the further period is increase to reflect the increase
age of the life insured. (The new premium is based on the attained age)
As there is no under writing when the plans is renewed, the risk to the insurer will
increase as and when policies are renewed. Because of this, most insurers apply
certain limitations on the policy, such as
a. Renewals may only be for equal or smaller sums assured.
b. The number of renewals permitted may be restricted (e.g three times)
c. Premium rates may be higher than for non-renewable polices.
CONVERTIBLE TERM INSURANCE: Such a plan includes a conversion privilege,
permanent (non term-typically an endowment) plan without evidence of which
gives the proposer the right to convert (change) the policy to a insurability (health).
If this privilege is exercised, the premium for the new plan must be the standard
rate for such a plan and the attained age (actual age on conversion of policy) of
the life insured.
Again, because there is no underwriting in conversion, the insurer will again
typically apply certain restrictions.
a. Conversion may not be possible beyond a certain age (say 55 or 65).
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b. Conversion may not be possible after the policy has been enforced for say
50% of its specified term (or a specified number of years).
c. The sum assured of the new plan will be limited to that for the term
insurance (probably less after the terms policy has been in force for some
specified time
TERM ASSURANCE WITH RETURN OF PREMIUMS
Under term assurance plan, um assured is payable in the event of death of the life
assured during the selected term and the premiums collected are not refunded.
However, a variation of this plan can be devised by refunding all the premiums
collected if the life assured survives the term.
2. ENDOWMENT POLICY
benefits The most popular plan of life insurance, which is a very fine combination
of term assurance and endowment in equal amounts, is the endowment policy. An
endowment plans provide for the payment of the sum assured at the end of a
specified term or earlier death. Should the insured person survive the term, the
policy is said to mature. Thus, a claim may arise under such a plan either by death
or by maturity. A pure endowment is policy is therefore a form of financial saving,
whereby the person covered remains alive beyond the tenure of the policy, he gets
back the sum assured with some other investments
In addition to the basic policy, insurers offer various benefits such as double
endowment and marriage\education endowment plans. The cost of such policy is
slightly higher but worth its value.
(III) 28
DOUBLE ENDOWMENT PLAN:
Double endowment plans provide for double the sum assured, on survival and an
amount equal to sum assured on death.
MONEY BACK PLAN:
It is a combination of whole life and endowment type plans. Money back plans are
of special interest to proposers who want periodical payments in which a
percentage of sum assured is paid to the life assured as a survival benefit on
surviving 5yrs, 10yrs, 15yrs or 20yrs depending on the term initially chosen. In the
event of death, within the term full sum assured is paid without deducting survival
benefit already paid. However no loans are granted under this plan. The money
back plan is a typical example of an interest sensitive product where a lump sum is
paid periodically without affecting the amount of insurance cover.
3. WHOLE LIFE POLICY
The premiums under this plan are payable from the date of commencement to
death of the date of the life assured, and the sum assured is payable by the
insurer on death. There are, however, minor variation of this product where
insurers accept premiums only upto the age of 80 to 85
And in certain other cases the premiums are payable for a selected terms (limited
payment whole life policy)
CONVERTIBLE WHOLE LIFE POLICY:
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This is basically Whole Life Policy with limited period of payment of premiums. The
policyholder has a option to convert the into an endowment assurance generally
on expiry of five years. It is useful to a person:
a. Of moderate salary when the plan is first purchased.
b. Requires life cover over a long period.
c. Who may wish to switch to a saving plan at some point in the future
ANNUITIES
Annuities start where life insurance ends. It is called the reverse of life insurance.
In annuity contracts, a person agrees to pay to the insurer a specified capital
amount in lump sum or in installments in returns for a promise from the insurer to
make a series of payment to him so long as he lives. Theoretically, under a life
insurance contract, the insurer starts paying upon the death of the insured and
under an annuity contract, the insurer stops paying upon death of the annuitant.
In actual practice however, there are many variation of the annuity contribution.
The risk that is sought to be covered under annuity contracts is of living too long.
Annuity may be defined as a series of periodic payment to an annuitant (the
person receiving the benefit), for life on other agreed terms or conditions, in
returns for a single payment or series of payments (consideration account).
Annuity fall into three category- Immediate Annuity, Annuity Due and Deferred
Annuity:
a. Immediate Annuity: It is purchased with a single premium called
purchases price. The annuity payment start immediate after the expiry of
the designated period namely a month, quarter, a half-year or a year from
the date of purchase.
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b. Annuity Due: The annuity installments are paid at the beginning of the
term/ period instead of being paid at the end of the term.
c. Defers Annuity: The installment (payment to the annuitant) payment
commences at some specified age or time of the annuitant. This type of
annuity can be funded by either a single payment or a series of regular
paymnt
4. UNIT LINKED PLAN
Unit Linked Plans are fundamentally different from with or without profit plans.
The value of the plans (the amount paid on death or maturity) is directly link
with the value of the fund. A unit could be define as a function of the fund,
which the unit holder joints. It has face value, say Rs. 10 per unit.
IT OFFERS INDIVIDUAL &GROUP INSURANCE SOLUTION
INSURANCE SOLUTIONS FOR INDIVIDUALS
Max New York Life offers a range of innovative, customer-centric products that
meet the needs of customers at every life stage. Its 27 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.
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SAVINGPROTECT 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 offer 4 fund options ? Preserver, Protector, Balancer and Maximiser.
LIFELINK II is a single premium Market Linked Insurance Plan which
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 three options.
(a) Level term assurance,
(b) Level term assurance with return of premium
© Single premium.
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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.
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.
GROUP INSURANCE SOLUTIONS
Max New York Life also offers Group Insurance Solutions for companies seeking
to enhance benefits to their employees.
MAX NEW YORK LIFE GRATUITY PLAN: Max New York Life 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.
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MAX NEW YORK LIFE SUPERANNUATION PLAN: Max New York Life
offers a flexible defined contribution superannuation 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.
MAX NEW YORK LIFE TERM PLAN: Max New York Life 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.
1 FLEXIBLE RIDER OPTIONS
Max New York 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.
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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 support 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
ROLE OF INSURANCE IN DEVELOPMENT OF THE ECONOMY
Every rupee invested in life insurance contributes in three ways to the
development of the economy.
Firstly, it relieves those insuring from the worry and anxiety they may have about
how they or their family would meet the cost of certain events, such as the
marriage of the children, the premature death of the main income provider or
maintaining a regular income in their retirement. If an individual is free from these
worries he can perform better in his job.
i. Secondly, it directs people’s savings. The insurer invests these funds in
various business enterprises, government bonds, loans to public and private
projects including infrastructure and socially orientated projects. Thus the
insurance premium provides the much needed funds for the development of
the nation’s economy
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ii. Thirdly, these savings act as an anti inflationary force in the nation’s financial
structure. Inflation happens when prices of good go up. One of the causes is
when a lot of buying takes place, due to the spending of a major portion of
income by people. Savings in insurance reduce buying, as people will have
less money to spend.
THE INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY
BACKGROUND
A faster development and wider impact of the insurance industry were to be
achieved through a process of insurance reforms resulting in the liberalization of
the market and in the passage of the Insurance Regulatory and Development
Authority (IRDA) Act, 1999. The reforms procedures recognized simultaneously
the need for development of the sector in addition to the traditional concept of
regulation and thus conferred on the Authority the obligation to develop the sector
as well.
MISSION STATEMENT
THE IRDA MAIN MISSION WAS STATED AS FOLLOWS:
To protect the interest of and secure fair treatment to policyholders:
To bring about speedy and orderly growth of the insurance industry, for the
benefit of the common man, and to provide long terms 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:
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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 grievances 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;
IRDA POWERES AND FUNCTIONS
Subject to the provisions of IRDA Act (1990), IRDA will: regulate, promote and
ensure orderly growth of the insurance business and re-insurance business, which
will include the following main functions (excerpts):
Issue to the applicant a certificate of registration, renew, modify, withdraw,
suspend or cancel such registration;
Protection of the interest of the policy holders in matters concerning
assigning off policy, nomination by policy holders, insurable interest,
settlement of insurance claim, surrender value of policy and others terms
and conditions of contracts of insurance;
Specifying requisite qualifications, code of conduct and practical training for
intermediary or insurance intermediaries and agents.
Promoting and regulation professional organizations connected with the
insurance and re-insurance business;
rLevying fees and other charges for carrying out the purposes of the Act;
Calling for information from, undertaking inspection of, conducting enquiries
and investigations including audit of the insurers, intermediaries, insurance
intermediaries and other organizations connected with the insurance
business;
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Specifying the percentage of life insurance and general insurance business
to be undertaken by the insurer in the rural or social secto.
How is Insurance Marketing Different from Other Trades?
Insurance is a contingent product whose utility is tested only in the event of
an accident or a disaster.
It always has a negative connotation in the mind of the buyer—it deals with
losses to the buyer.
It is a product of future delivery and and subject to benefit realization only
on the occurrence of the contingent event.
It is a technical product that has a lot of legal jargon and with numerous
legal principles peculiar to it making it difficult to comprehend.
It is a contingent financial promise made by the security provider and its
benefit can be realized only after fulfilling a number of stipulations, often,
unexplained at the time of commencement of contract.
It is a product or service that has to be resold annually to the same buyer
and hence personal relationship and mutual trust are essential.
As with all service products it has limitations, whose import is highlighted
only after the event. The fine print in the policy assumes a big role in the
event of a claim.
Both the contractual parties have passive roles unless an unfortunate claim
event of a claim.
There is no emotional or psychological satisfaction in the purchase of
insurance. It is a sense of relief.
Since claim amounts vary substantially both the contractual parties are
wary of each other’s interest , motives and actions.
Experience of each customer is highly individualized with no standards to
judge the performance and reputation of an insurer.
Moral hazard on either side plays an important role in claim negotiation
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Product innovations to keep abreast of changes in technology, political,
economic, and social spheres provide a far wider market.
In other trades and business , unlike in insurance, the benefits of purchase
are immediately realized and often the products are tangible and sensoraly
experienced.
IMPACT OF LIBERALIZATION
The introduction of private players in the industry has added to the colors in the
dull industry. The initiatives taken by the private players are very competitive and
have given immense competition to the on time monopoly of the market LIC. Since
the advent of the private players in the market the industry has seen new and
innovative steps taken by the players in this sector. The new players have
improved the service quality of the insurance. As a result LIC down the years have
seen the declining phase in its career.
CURRENT SCENARIO OF THE INDUSTRY
India with about 200 million middle class household shows a huge untapped
potential for players in the insurance industry. Saturation of markets in many
developed economics has made the Indian market even more attractive for global
insurance majors. The insurance sector in India has come to a position of very
high potential and competitiveness in the market.
Innovative products and aggressive distribution have become the say of the day.
Indians, have always seen life insurance as a tax saving device, are now suddenly
turning to the private sector that are providing them new products and variety for
their choice. Life insurance industry is waiting for a big growth as many Indian and
foreign companies are waiting in the line for the green signal to start their
operations. The Indian consumer should be ready now because the market is
going to give them an array of products, different in price, features and benefits.
(III) 39
How the customer is going to make his choice will determine the future of the
industry.
The private insurance players have significantly improving their market share
when compared to 50 years Old Corporation (i.e.LIC).
The life insurance industry grew by 52 per cent year-on-year till February as top
three players Life Insurance Corporation, ICICI Prudential and Bajaj Allianz
continued with their robust performance in premium income reported Economic
Times. (10-04-06)
The debut of Sriram Life saw the number of players going up to 15, who together
collected Rs 26,286 crore in premium in the first 11-months of 2005-06, according
to data compiled by Insurance Regulatory and Development Authority.
LIC continued with its recent high growth rate of over 40 per cent to mop up Rs
18,834 crore in first year premium by selling 2.09 crore policies in April-February of
last fiscal. Though, country's largest life insurer LIC was expanding business
handsomely, its market share fell slightly to 71.65 per cent from 72.2 per cent a
month back as most of the private players are going at a faster rate.
In the private space competition has further intensified after entry of Chennai-
based Sriram Life, which collected Rs 18.76 lakh premium in its first month of
operation. The 14 private players increased their market share to 28.35 per cent
from 27.8 per cent a month ago by collecting Rs 7,451 crore in premium till
February. ICICI Prudential regained its number one position among private
insurers by logging 69 per cent growth to collect Rs 1,956 crore in premium and a
market pie of 7.44 per cent.
Bajaj Allianz Life Insurance was close behind ICICI Prudential, by clocking 292 per
cent growth in business at Rs 1,940 crore and a market share of 7.38 per cent.
HDFC Standard collected Rs 778 crore in premium income, followed by SBI Life
(Rs 512 crore), Birla Sunlife (Rs 478 crore), Tata AIG (Rs 405 crore), Max New
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York Life (363 crore), Aviva (Rs 309 crore). Kotak Mahindra Old Mutual collected
Rs 234 crore, ING Vysya Rs 200 crore, Reliance Life Rs 150 crore, Met Life Rs
107 crore and Sahara Life Rs 15 crore.
CHARACTERISTICS AND COMPOSITION- MAJOR PLAYERS
MARKET
The traditional Market- Life Insurance Corporation of India Ltd (LIC)Life Insurance
Corporation of India (LIC) was formed in September, 1956 by an Act ofParliament,
viz., Life Insurance Corporation Act, 1956, with capital contribution from
theGovernment of India. The then Finance Minister, Shri C.D. Deshmukh, while
piloting thebill, outlined the objectives of LIC thus: to conduct the business with the
utmost economy, in a spirit of trusteeship; to charge premium no higher than to
policy holders, thereby making insurance widely popular. Apart from the above
mentioned factors there was a different reason warranted by strict actuarial
considerations; to invest the funds for obtaining maximum yield for the policy
holders consistent with safety of the capital; to render prompt and efficient service
to form the LIC of India. Prior to its formation, there were around 245 life insurance
companies flourishing in India, each with its own work culture and policies. Often
there were complaints from the investors of fraud and non compliance of the
claims. In order to provide a uniform level of services, the government of India
formed the LIC. Since nationalisation, LIC has built up a vast network of 2,048
branches, 100 divisions and 7 zonal offices spread over the country. The Life
Insurance Corporation of India also transacts business abroad and has offices in
Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in
the field of insurance, namely, Ken-India Assurance Company Limited, Nairobi;
(III) 41
United Oriental Assurance Company Limited, Kuala Lumpur and Life Insurance
Corporation (International) E.C. Bahrain. The Corporation has registered a joint
venture company in 26th December, 2000 in Kathmandu, Nepal by the name of
Life Insurance Corporation (Nepal) Limited in
collaboration with Vishal Group Limited, a local industrial Group. An off-shore
company
L.I.C. (Mauritius) Off-shore Limited has also been set up in 2001 to tap the African
insurance market. The highest growth in premiums in the recent years has been in
the liability, personal accident, health and aviation segments.
POTENTIAL
There is a vast untapped potential for providing insurance cover in the housing
sector. The insurance penetration in India has measured by the ratio of premium
paid.Our GDPhas gone up from 2.71% in 2001 to 2.88% in 2003 whereas the
global average was7.83% and 8.06% respectively. In developed countries like the
United States thepenetration rate was as high as 9.61% and in Japan 10.81%.
The penetration of life insurance in India was 2.26% in 2003 against the global
averageof 4.59% and the 8.61% level attained in Japan and the 4.38% achieved in
the UnitedStates.
The non-life insurance penetration in India was only 0.62% in 2003 while it
averaged3.48 % globally. It was 2.20% in Japan and 5.23 % in the United States.
Similarly the insurance density -- ratio of premium paid to total population -- was
only16.4% in India while the global average was 496.6%. In Japan, insurance
density was 3770.9% and in the United States 3637.7%.
MERGERS AND ACQUISITIONS
This is an era of mergers and acquisitions. Private companies including MNC’s
areamalgamating the world over to get more competitive edge. Currently, the
generalinsurance industry has been opened up. The question here is that for over
two years, eight private companies have operated and has the size of the cake
expanded. We here find that this is not true. The insurers are doing enough to
raise the level of risk awareness or are they merely content to compete in the
markets organized and established. However sooner or later the private sector
(III) 42
players will have to put in place strategies aimed not at winning the existing
accounts of the public players but at diversifying markets penetration as a whole.
The private players in the future would have to turn their attention to working in the
unorganized and under served markets. What is likely to happen is that the private
players would continue to skim the profitable segments of the already organized
business in the urban areas? The time has already come for the government of
India to evaluate the performance of private companies’ visà-vis their declared
objective of opening up the industry. However it is high time for the government to
realize that importance of merging the public sector general insurance companies
into single entity. The resent scenario calls for a better performance from part of
each of the public sector insurance companies against each other; or in other
words a competition to be the best. The result what we see is the undercutting of
premium to retain or wrest business and quoting an uneconomical rate of
premium. While this allows one of the Public Sectors Company to win a business
form another in this manner. The others suffer a loss and the resultant effect is a
cannibalization with a fall in the average premium of the public sector itself. This at
many times brings advantage to the private players who grab the business
because of the unethical competition among the public players.
The purpose of having four companies all subsidiaries of General Insurance
Corporation of India (GIC)– National Insurance Company, New India Assurance
Company, Oriental Insurance Company, And The United India Insurance
Company; at the time of nationalization was to have competition among
themselves –in service and products at the same price. The service provided by
them was also equally good or bad depending on the experience of the customers.
Now with real competition coming in with most of the global insurance players
setting footprints here, it is felt that the time for merger has come and to enjoy the
benefits if the size. It is to be sated that size does matter in insurance business. All
over the world’s mergers and acquisitions in the risk-underwriting sector is
common. The benefits if the four insurance companies merge will be enormous.
The merged entity will enjoy higher underwriting and risk retention capacity;
increase in premium, reduction in reinsurance outflow, healthy solvency margins,
(III) 43
setting right the asset –liability mismatch and reduction in cost. The insurance
market thus becomes a gambling place. Had the public sector companies made
into a single entity, perhaps the total premium of the four public sector companies
in the year 2003-04 would have gone up but 25 percent. But the 21 public sector
alone is forced to underwrite the loss making motor third party liability(TPL)
insurance. The public insurance companies insured a loss of Rs 1943 crore on this
portfolio on just one year (03-04). The cumulative loss under this portfolio is
astronomical. The loss of profitable business in view of undeserved competition
among the public sector companies is hampering the subsidization of social
insurance including the motor TPL. It is thus clear that it is good for the public
sector companies to merge immediately when they are still strong, lest a merger
becomes inevitable later after the independent public sector companies fail one
after another. This does not bid well for the public sector, nor fort he insuring
public and not for the economic development either. For a progress me require
merger of strong public sector companies. Else it would render public sector
companies weak and destroy them.
MAJOR MARKET PLAYERS
Currently there are 23 Life insurance companies in the country. There is only one
public sector company LIC and the rest 22 are private sector. Although LIC has
been dominating the life Insurance business since past few years the private
players have now started to build up momentum.
MAJOR MARKET PLAYERS
PUBLIC SECTOR
Life Corporation of India
PRIVATE SECTOR
Birla Sun Life Insurance Company
HDFC- Standard Life Insurance
ICICI Prudential Life Insurance
Kotak Mahindra Old Mutual Life Insurance
Max New York Life Insurance
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Aviva Life Insurance India
ING Vysya Life Insurance
MetLife India
Bajaj Allianz Life Insurance Co.
SBI Life Insurance Company Ltd.
The TATA AIG Group
Sahara India Life Insurance Company Ltd.
Shriram Life Insurance Company Ltd.
Reliance Life Insurance
MARKET SHARE OF LIFE INSURANCE COMPANIES –
FY 2009-10
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Market Share in FY 2005-06
72%
28%
LIC
Private Players
Market Share in FY 2009-10
72%
28%
LIC
Private Players
Fig. 1
TRENDS:
This graph clearly demonstrates the present trend in the insurance sector in India. Entry of
private players is showing only one-way to go, up. LIC’s market share has dipped from
94% in FY 2006-07 to 72% in FY 2009-10.
Fig -2
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TRENDS:
This graph clearly demonstrates the present trend in the insurance sector in India. Entry of
private players is showing only one-way to go, up. LIC’s market share has different
companies which moves slow down on the next era.
Fig. 3
TRENDS:
(III) 47
This graph clearly demonstrates the present trend in the insurance sector in India.
Entry of private players is showing only one-way to go, up. LIC’s market share has
dipped from 94% in FY 2006-07 to 71.44% in FY 2009-10. On the other hand
market share of private players has rose from 6% in FY 2006-07 to 28.56% in FY
2009-10 and it is still growing. This is quite a healthy trend because the
competition will ensure better product and quality for the investors. And with the
proposal of increasing the limit of FDI the battle is going to intensify.
TRENDS:
Market Share of Private Life Insurance Players on the basis of first year premium
underwritten for the period ended January 2010:
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Market Share of Private Players
25%
26%
11%
7%
6%
6%
5%
4%
3%3%
2% 2%0%
Bajaj Allianz ICICI Prudential
HDFC Standard SBI Life
Birla Sun Life Tata Aig
Max New York Aviva
Kotak Mahindra old mutual ING Vyasya
Reliance Life Met Life
Sahara Life
This pie chart illustrates the market share of the major private players in the life
insurance sector. The biggest among them is ICICI followed by Bajaj Allianz and
others. The share of Max New York is about 5% and is growing at the rate of more
than 100% per year.
COMPANY PROFILE
MAX INDIA LTD.
Max India Limited is a multi-business corporate, driven by the spirit of enterprise,
focused on Knowledge, People and Service oriented businesses of Healthcare
and Life Insurance. Max also maintains interests in Clinical Research, IT and
Telecom Services, and Specialty Plastic Products businesses
Healthcare
Life Insurance
Clinical Research
IT & Telecom Services
Specialty Plastic Products
Healthcare, at present, is our local business, centered in and around Delhi. Life
Insurance has a national reach. Information Technology and Clinical Studies are
international in scope. Taken together, they are the 'flags' of Max:
LOCAL
-Max Healthcare
-Max Ateev
NATIONAL
-Max New York Life
INTERNATIONAL
-Neeman Medical International
-Max Ateev
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Max is a young, modern Indian corporation, with a strong capability of recognizing
opportunities ahead of their time. Max has been able to form and strengthen
international alliances with global leaders across a wide spectrum of management
activity. Max India is led by a skilled team of professional managers and is
recognized for commercially successful manufacturing and service delivery
businesses. Max has created enviable history marked by
tremendous growth in various fields and has been ranked among the "Top Two
Hundred Most Valuable Indian Companies" by Business India (October 2000).
Max's deep understanding of Indian consumer combined with a large pool of
professionals and an enterprising spirit have helped complement its relationship
with industry leaders of global stature like New York Life International LLC. of
U.S.A. With a unique experience of growing through the 'JV route' Max is proud of
the excellent relations it has with each of its partners. Max India already has
successful and enduring partnerships with some of the most respected specialist
organizations in the world, some of which are Gist Brocades of the Netherlands,
Atotech Deutschland GMBH, Germany, and Hutchinson Telecommunications Ltd.,
Hong Kong, Singapore General Hospital, Harvard Medical International Inc., USA.,
Lockheed Martin Global Telecommunications.
VISION
To be one of India's most admired corporate for service excellence and a
successful multi-business enterprise for its stakeholders i.e. customers,
shareholders, employees, JV partners, etc.
MISION
Establish niche service business in 2 areas of Healthcare, and Life Insurance.
Rank in top 3 players in each niche. Partner with "Best in Class" world leaders.
Maintain Traditional Business
NEW YORK LIFE
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New York Life Insurance Company, has been ranked at Fortune 68, in the 2005
Fortune 500 listing of companies, is one of the largest providers of life insurance
coverage in America. Founded in 1845, the Company has over US$215 billion in
assets under management.
The mission of New York Life is to maintain its superior 'financial strength', adhere
to the highest standards of 'integrity' and demonstrate 'humanity' by treating its
customers, agents and employees with compassion, consideration and respect.
New York Life Insurance Company has been among the highest rated companies
by leading independent rating agencies including - A.M. Best Company (A++),
Fitch (formerly Duff & Phelps) (AAA), Moody's Investors Service (Aa1) and
Standard & Poor's (AA+) The company has its headquarters in New York City and
has operations in the United States, Argentina, Hong Kong, SAR, India, Indonesia,
Mexico, The Philippines, South Korea, Thailand and Taiwan. The company
maintains representative offices in the People's Republic of China and Vietnam.
For the last 47 years, New York Life has had the highest number of agents
who qualify as members.
As a leader in the insurance industry, New York Life continues to bring to its
operations new management concepts, advanced technologies, new distribution
and training systems and innovative insurance products of the 'Million-Dollar
Round Table'. The MDRT is the world's most prestigious organization of insurance
sales professionals.
MAX NEW YORK LIFE INSURANCE CO. LTD.
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Max New York Life Insurance Company Ltd is a Joint Venture between New York
Life, a Fortune 100 company and Max India Limited, one of India's leading multi-
business corporations. Through its wide network of highly competent life insurance
Agent Advisors and flexible products and solutions, Max New York Life is
committed to creating a partnership for life with its customers in India.
In line with its values of financial responsibility, Max New York Life has adopted
prudent financial practices to ensure safety of policyholder's funds. It invests only
in debt instruments and meets both Indian and international disclosure norms. The
Company's paid up capital is Rs.527crore, which makes it among the highest
capitalized life insurer in India.
Max New York Life has identified Individual agents as its primary channel of
distribution. The Company places a lot of emphasis on its selection process, which
comprises four stages - screening, psychometric test, career seminar and final
interview. The agents are trained in-house to ensure optimal control on quality of
training. Max New York Life invests significantly in its training programme and
each agent is trained for 152 hours as opposed to the mandatory 100 hrs
stipulated by the IRDA before beginning to sell in the marketplace. Training is a
continuous process for agents at Max New York Life and ensures development of
skills and knowledge through a structured programme spread over 500 hours in
two years. This focus on continuous quality training has resulted in the company
having amongst the highest agent pass rate in IRDA examinations and over 126 of
its agents becoming MDRT members in 2005, which is among the highest among
the private life insurers in the country.
Max New York Life offers a suite of flexible products. It now has 22 life insurance
products and 9 options & 8 riders that can be customized to over 400 product
combinations enabling customers to choose the policy that best fits their need.
The 22 products are - Life Maker™ - Investment Plan, Life Maker™ - Pension
Plan, Whole Life Par, Level Term, Term Renewable and Convertible, Super saver
bond, Life Gain Endowment Plan, Life Pay Money Back Plan, 20 years
Endowment Plan, Life Partner Plus (Participation) Policy, Easy Life™ - Retirement
Plan, Endowment to age 60 Plan, Life Maker™ - Pension Plan, Immediate
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Annuity, Children's endowment 18 & 24, Stepping Stones™ - A Child Money Back
Plan, Amsure Bonus Builder, Amsure Future Builder, Amsure Business Builder,
Amsure Future Builder, Max Mangal Endowment plan and Max Vriksha Money
Back.
Tailoring a policy to best-suit individual requirements, even before a policy is sold,
a Personal Insurance Plan™ gives complete details of a policy with a year-on-year
summary of the
premiums to be paid, as well as the likely benefits that may accrue. Also all
policies come with a 'policy review period' offer that allows unconditional return of
the policy within 15 days from date of receipt.
The 9 Options & Riders are - Option to Participate in Progressive Bonus,
Guaranteed Insurability Option, Waiver of Premiums, Spouse Insurance, Personal
Accident Benefit, Dread Disease, Payor Benefit, Term Rider, 5 Year Term
Renewable & Convertible Rider
MISSION
Become one of the top 3 new life insurance companies
Become a national player – dominant in north India
Be the brand of first choice among all stake holders
Become the employer of choice.
Be the principal of choice for agents.
Max New York Life is a young vibrant company proud of the excellent track record
it has created for itself in a relatively short period of time. MNYL has today become
one of the most aggressive players in the Insurance services domain. A key factor
in our success has been our ability to attract some of the most talented people in
any industry.
MNYL in many ways is a lens to India. We represent rich diversity in our workforce
and this is reflected in our open work environment. Within this diversity we have
successfully created a strong emotional bond, which threads everyone together
irrespective of his or her function, location, seniority or background. This
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identification with one organization and one purpose draws its strength from our
simple and powerful Vision statement, which is to become the "Most Admired Life
Insurance Company in India".
By developing structure, systems and a workplace culture that provides
challenging jobs, rewards performance and delivers opportunities continuously,
MNYL is striving to get the best out of its most valuable asset — its people.
Our "in house culture recipe" has some of the finest ingredients going into its
making. Some of the more prominent aspects of our culture are stated
belowCustomer comes first
Do it right the first time
Bias for result oriented action
Financial strength and discipline
Clarity of purpose
International quality standards
Inclusive Meritocracy
Learning opportunities
Fun at work
Commitment to published value system
At MNYL, we endeavor to create an environment where everyone can reach their
full potential and to do their jobs effectively for our customers. We encourage
learning at all levels and career stages which support personal and professional
development. The organization provides all the right elements that you need to get
to the top with ample fun and learning opportunities as added advantage.
We believe that work is fun, when you enjoy it the most. To make work more fun,
we provide a dynamic, fast paced and flexible work environment to our people. We
nurture the relationships through celebrating our people's happiness, hobbies,
achievements, and festivals through LY Fun club, which stands for Life Youth and
Fun.
Finally it would be appropriate to say that the cornerstones for all our interactions
and behaviors are the MNYL Values and Beliefs. These are non-negotiable
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behaviors that breathe life and vigor into the Organization and its Vision. Our
values influence the way we work and interact with our colleagues; as well as the
way we serve our clients and engage with all our stakeholders. MNYL recognizes
the need for appreciation for demonstrating our core values thru behaviors. We
provide a platform in the form of Cultural Ambassador to recognize employees
demonstrating our values of Caring, Honesty, Excellence, Knowledge, Integrity,
and Teamwork.
Possibly then the best way to explain the MNYL culture would be to share our
MNYL Values and Beliefs.
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MAX NEW YORK LIFE VALUES AND BELIEFS
KNOWLEDGE
Knowledge constitutes expertise and our expertise is in helping people
protect themselves. Perfectly combining global expertise with local
knowledge, we are the Indian life insurance specialists. Max New York Life
believes that for knowledge to be of value it must be focused, current,
tested and shared.
CARING
Max New York Life is redefining the life insurance paradigm to focus on the
needs of customers. The service process is responsive, personalized,
humane and
empathetic. Every individual who represents the company is for us our
brand champion
HONESTY
Max New York Life is redefining the life insurance paradigm to focus on the
needs of customers. The service process is responsive, personalized,
humane and empathetic. Every individual who represents the company is
for us our brand champion.
EXCELLENCE
Excellence at Max New York Life implies the ability to perform at a
consistently high level. Focused on the value of continuous improvement in
people, processes and the organization, the company strives for the highest
standards of quality in every aspect of its business.
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MAX NEW YORK LIFE- GROWING PRESENCE:
No. of cities 37
No. of Offices 57
No. of Agents 13000 +
No. of Policies 8, 00,000 +
Sum assured 23,500 cr. +
Fig. 5
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ACHIEVEMENTS
MNYL is the first life insurance company in India to be awarded the ISO
9001: 2000 certification.
MNYL was among the top 25 companies to work with in India, according to
2003 Business World Magazine, “Great Workplaces In India”, MNYL was
ranked at the 20th
position. This survey is the local version of the “Great Places to Work”
survey carried out every year in 22 countries.
We were among top five most respected private life insurance companies in
India according to 2004' Business World Most Respected survey. It makes
it more special as that year insurance as a category was included for the
first time.
MDRT (MILLION DOLLAR ROUND TABLE)
The MDRT was founded by a group of dedicated agent leaders. In a sense, it may
be said that the field force of the business, despairing of company management’s
sales centric approaches in agent education and training, turned to self-organised
efforts in promoting self-education philosophy and concepts. Thinking field men
foresaw misfortune to the industry itself if the faults of the agency system were
continued. They also recognised that their plans must permeate the whole industry
to become effective and it would be necessary, therefore, to enlist the help of
home offices.
MDRT is a world wide organization of the top producers of life insurance sales. 74
nations and territories participate in it. New York Life is the no.1 in MDRT
membership 50 years in a row.
Max New York Life leads the MDRT among Indian private insurers. Max New
York Life is in top 100 MDRT global list – ranked at the 49th position. 201 Max New
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York Life agent advisors have qualified 2006 MDRT for the meeting to be held in
San Diego.
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CHANNEL DEVELOPMENT
A distribution channel is the route by which the product(or offer) prepare by which
the producer reaches the ultimate consumer. The distance between the producer
and the consumer is bridged by a channel called distribution channel.
Being a Sales Manager at means a unique career opportunity which gives the
flexibility of sharpening entrepreneurial skills by selecting and developing your own
unit, coupled with the advantage of providing a lifetime career option to people in
society. Good advisors are people with a successful track record and an insatiable
desire to earn money and recognition. They are the people who follow a
disciplined work pattern. They have a never-say-die attitude coupled with precision
planning and implementation. The key drivers of this business are quality
recruitment and a good start means getting team in shape by recruiting quality of
advisors.
Five concerns that must be constant in Sales Manager’s annual
planning are:
The SEARCH for talent
The EVALUTION of potential advisors
The ATTRACTION of advisors
The RETENTION of advisors
The PRODUCTIVITY of advisors
Any manager who attains satisfying results in these five areas will enjoy:-
Satisfying sales results
Outstanding persistency of business
Superior policy owner service capabilities
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An enviable reputation as a agency builder
A momentum which comes from the synergistic benefit of success
ABOUT LIFE INSURANCE ADVISOR
The foundation of law of agency is expressed in the maxim ‘Qui facit alium, facit
per se’ i.e. one, who act through others, acts to himself. Therefore, contracts
entered into through an agent and obligations arising from acts done by an agent,
may be enforced in the same manner and will have the same legal consequences,
as if the contracts have entered into and the acts done by the principal himself.
Selling has been described as ‘transfer of enthusiasm’. This succinct profile of the
process shows that it transcends the narrow confines of product, product
knowledge, psychology, interpersonal communications, advice and, certainly, the
transaction itself.
It pre-supposes a few things. That the transferor possesses the enthusiasm in the
first place. That the underlying product evokes that enthusiasm in him. That he has
the abilities to transmit them appropriately to a prospective customer. And that he
is part of a system that helps him stay updated and motivated in all ways–
financially, professionally and socially.
In almost all these areas, the insurance agency system in India is, to put it
flatteringly, a work in progress. It is classically over-manned and under-producing.
The massive agency force – a paradigmatic example of the 80-20 rule – is largely
under-motivated and under-guided; training, both in concept, product and the soft
selling skills, is inadequate, if not absent; and most importantly, the remuneration
and evaluation structures are skewered not towards the best and most efficient
productivity or even the best value for the customer. For all this, almost all
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personal lines insurances, including of course, life insurance, are sold through the
individual agency force.
Who are life insurance advisors or agents?
Assuming the insurance business grows at the present double-digit
rate, there will be demand for thousands of agents every year.
What are the qualities of a professional agent?
The definition given by Mr. J. R. Joshi, former LIC Chairman, is worth
quoting. According to him, there are seven essential criteria that a professional
agent should satisfy:
1. The person should take up the agency as a long-term career by conscious
choice, and should not be a dropout after some initial work.
2. He should regularly devote a substantial part of his time every day to his work.
3. He should study his work well, acquire sufficient knowledge of his work and
practice it with confidence, faith and devotion.
4. He should develop a high degree of professional integrity and character
that should give confidence to people who come in contact with him.
5. He should render continuous service to his clients and society.
6. He should derive a substantial part of his total income from his profession, and
not just a marginal portion of it.
7. He should be a self-motivated person without requiring external motivation to do
his work
A truly professional composite agent satisfies all these criteria and brings people
into the insurance system for helping themselves and others. After all, insurance is
nothing but self-help and mutual help in a structured form based upon well
developed scientific principles and practices.
An agent is the representative of an insurance company who sells different
products to its customers. Another term used for insurance agents is – advisors.
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Today, life insurance company’s advisors are known to be the backbone of the
whole system. Advisors/agents do not work on monthly payroll basis; they receive
a certain commission on the policies they sell to the clients.
For becoming an insurance advisor/agent, the person should undergo 100 hours
training according to IRDA norms, which is compulsory.
For developing a channel, company need person who will
Identify future clients
Make appointments
Conduct financial review meetings with prospects/clients
Close sale
Get referrals
Provide service to clients
These persons are called insurance advisors/agents. In case of life insurance
business, the agent, as defined in Insurance Act, 1938 as amended by IRDA Act,
1999, is the primary component of this channel. The supervisor, on any other
person, is also important to certain extent because he initiates the process of
spotting, training and motivating of the agent to proceed in the procurement of the
business.
Other intermediaries like brokers and insurance consultants are also part of this
distribution channel.
ELIGIBILITY NORMS PROVIDED BY IRDA FOR BECOMING AN INSURANCE
ADVISOR
Person should be atleast 18 years of age;
Person have completed 10+2;
Person should attained 100 hours training.
OTHER THAN THIS THE PERSON SHOULD POSSESS
Good communication skills
Relationship skills
Confidence
Self motivation
Persuasion
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Urge to be financially independent
STRATEGIES INVOLVED IN SEARCHING POTENTIAL ADVISORS
Your search for prospective advisors must be continuous and systematic – just like
prospective for sales, you must search among several sources on a regular basis
sources are broadly classified as primary source and secondary source.
PERSONAL OBSERVATION
This method is uniquely personal. It permits you to apply your own standards and
exercise your own judgment.
Always be on the alert for prospective advisor in your daily selling activities in
instinctively apprise as prospective advisors those you see, meet or sell. Stay in
circulation and meet a lot of people on a regular basis. Develop these individuals
as friends and clients, and then determine whether or not to recruit them.
PRESENT ADVISOR RECOMMENDATION
No one knows more about the kind of person you seek and the kind of
opportunities you have for the prospective advisor than the present members of
your sales organization. Moreover, they have a selfish interest in wanting their
associates to be type of person who will reflect favorably on their organization.
Many successful advisors have an ability to attract promising prospective advisors
who can and do succeed.
CLIENT REFERRALS
Clients are readily accessible source of prospective advisor and referrals.
It is safe to assume that client who has relied upon your agency to handle their
insurance is pleased with both you and your work. Since you have created a
favorable impression, the can picture themselves or others as having the same
success.
Therefore, it is mostly a matter of helping them to help you by making enquires
and asking questions designed to remind them of names of prospective advisors.
NEWSPAPER ADVERTISEMENT
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Newspaper advertising created considerable activity. It is one of the fastest ways
to get name and talk people seeking a change in employment. Consider as a
“wholesale method” of widening your range of contacts with prospective advisors.
Keep in mind that generally develops “pop-up prospects” that must be screened
carefully.
DIRECT MAIL
Mass mailing is a system if used can be a very successful tool. One system is to
send letters with reply cards on a regular basis especially to “centers of influence.”
Use list from club, church and alumni directories. The standards letter should
briefly describe the rewards of a successful insurance sales career.
8.2 CHANNEL DEVELOPMENT AT MNYL:
MNYL uses strategies like:
Personal observation.
Present advisor recommendation.
Client referrals
MNYL doesn’t follow the method of giving direct mails or giving advertisements in
newspapers.
Recruiting success formula
MNYL believes in a formula that is:
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Channels of distribution of MNYL are:
(III)
1OO CONTACTS
32 SCREENINGS
8 SELECTED
66
MNYL
AgencyBanc
assuranceAlternative Channels
CooperativeChannel
Banc assurance - This refers to establishing relationships with various banks so as
to enable sale of policies through banks. There are many options in this area with
reference to the bank’s role in selling policies. One option can be that the banks
only provide a database of their customers. Other option can be of banks getting
into an aggressive mode and directly selling policies. MNYL’s banc assurance
move is channeled through two routes. In one, it will offer customised solutions
through small banks while its strategy for the big banks will be through an equity
relationship. The company’s banc assurance model is only 3 months old and
currently, MNYL has a banc assurance relationship with Yes Bank and Thane
Janata Cooperative Bank.
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ALTERNATIVE CHANNELS:
DIRECT SALES TEAM CHANNEL - In this, the direct sales people are not
recruited as A&As & advisors but as employees of the company and they
work on a fixed and variable income pattern. This channel
includes telemarketing and an upcoming alliance with Amway called
Amsure in which Amway will be utilizing its distribution channel to sell
MNYL’s policies.
CORPORATE AGENCY – Corporate agents of Max New York
Life include:
Metro Finance Corporation, Futuristic Consultancies Ltd, Jaydev R. Patel
Insurance Agency Private Limited, Akshay Consultants, Golden Trust Multi
Services etc.
Another route is the franchisee route opted by MNYL, especially in the East.
MNYL, presently, has 9 franchisees. Max New York Life initially identified
Individual A&As as its primary channel of distribution. But now the company
is focusing on widening its distribution mix by pursuing the franchisee
model, banc assurance, rural business, direct sales force involving group
insurance and telemarketing opportunities and also corporate alliances. This
year MNYL has achieved around 77 per cent of its business from the
agency distribution system, while the alternative distribution network
contributed the balance of around 23 per cent.
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My study involves study of Agency channel as a channel of distribution. It is a
direct channel which makes it the most effective channel. In this while recruiting
you get a chance to recruit people from all walks of life. For e.g.
Upper Class - IAS officers
Politicians
Celebrities
Upper middle class – Army Retired people
Civil
Service class who are looking forward to generate more income.
MNYL adopts following strategies:
Personal observation
Present advisor recommendation.
Client referrals
MNYL doesn’t follow the method of giving direct mails or giving advertisements in
newspapers, because they believe that this activity will lead to a lot of wastage of
time.
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RECRUITING SUCCESS FORMULA
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MNYL HAS CREATED A RECRUITMENT FUNNEL:
Max New York Life has identified Individual agents as its primary channel of
distribution. The Company places a lot of emphasis on its selection process, which
comprises four stages - screening, psychometric test, career seminar and final
interview. The agents are trained in-house to ensure optimal control on quality of
training. Max New York Life invests significantly in its training programme and
each agent is trained for 152 hours as opposed to the mandatory 100 hrs
stipulated by the IRDA before beginning to sell in the marketplace. Training is a
continuous process for agents at Max New York Life and ensures development of
skills and knowledge through a structured programme spread over 500 hours in
two years. This focus on continuous quality training has resulted in the company
having amongst the highest agent pass rate in IRDA examinations and over 126 of
its agents becoming MDRT members in 2005, which is among the highest among
the private life insurers in the country. Max New York life is known for it’s in- house
training. They are taught the rule of 10 by 10 and the rule of 53. They are to
regularly maintain their yellow diary and white diary. And it is believed that
if you follow the above rules then the success is all yours. 2-3 professional full time
trainers are there for each office. Training focuses on selling skills, product
knowledge, market engagement, work habits.
EARNINGS OF THE ADVISORS ARE IN THE FORM OF:
First year commissions
Renewal commissions
Agent referral commissions
OTHER SUPPORTS ARE:
Additional business support
Training expenses reimbursement
Personal accident insurance
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OFFICIAL PROCESS FOR RECRUITMENT
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12 105 Hours of training
Class Room Training
IRDA Exam
Product Training
Issue of License
CEO’s COUNCIL MDRT
EXECUTIVE COUNCIL
PAUL COLGAN TROPHY
CENTURION
AGENT OF THE YEAR
PAID CASE, FYC, PERSISTENCY, RIDER, FEFERRAL AND CEIP LEADER
CAREER PRODUCER AWARD
CAREER SUCCESS AWARD
HI-FLIER
TEN-A-MONTHER
PREMIUM LEADER
To pass the IRDA exam a minimum of 50% marks is required. On passing the
examination a license is issued. This is a fully commission based job where a Life
Advisor in Max New York Life can earn 40% of the premium.
CAREER PROGRESSION OF LIFE ADVISOR IN
MAX NEW YORK LIFE
Fig. 8
REWARD AND RECOGNITIONS
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Member-MAX LIFE Living Legends
Galaxy
Head, Training National vice President
Financial AdvisorChief Manager (Training) Regional Vice President
Sr. Financial Consultant Trainer Branch Manager
Financial Consultant Sales Manager
Life Advisor
AVENUES
MNYL also provide career progression to its advisers. There are certain criteria to
be followed and then they can be recruited as:
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Agency associate
Associate sales manager
Sales manager
Training manager
MNYL EXPECTATIONS FROM THEIR ADVISERS ARE:
Time
Commitment
Drive
Persistence
MNYL SUPPORT TO ITS ADVISERS IS IN THE FORM OF:
Classroom and field support
Regular reviews
Coaching and mentoring
Help them in becoming independent
Help in their growth
PROCESS TO BE FOLLOWED BY ADVISORS TO BRING BUSINESS IS:
Making appointments
Conduct meeting and review financial situation
Provide customized solutions
Close sales
Delivery and service
Get referrals
RECRUITMENT OF ADVISORS IN MNYL:-
Max New York Life has a strong channel of distribution for which it identified
Individual agents. Max New York Life believe in developing a quality model i.e.
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they recruit only quality people as their insurance advisors, who work not as an
employee of the company but as a part of the company. The company put lot of
emphasis on selecting quality people. The criteria for selecting quality people is
that:-
Person should be 25 years of age, and
Minimum qualification is 10+2, but as we work on quality model so we
prefer people who have atleast graduate degree.
And the categories on which we focus are:-
Housewives
Retired people
Self employed
Person who had taken VRS
This process include four stages:-
Screening
Psychometric test
Career seminar
Final interview
1) SCREENING:-
For calling people on screening, some data is collected regarding names,
their age, occupation etc. After collecting names, quality data is grab out
from the collected data and accordingly people are called for screenings.
In screening some general questions were asks about their occupation, their
family background, their interest in this field, etc. After that, the person who
came for screening is given a booklet called P-200, in which they are
required to fill the details of the person whom they know personally and
references which they got from their relatives.
2) PSYCHOMETRIC TEST:-
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In this stage the person who come for screening is required to fill P-200 with
details of the persons whom he/she know personally or with the names of
the persons which he/she got from his/her personal contacts. After that if
the data collected by him is good, he will be eligible for final interview.
3) CAREER SEMINAR:-
Some times the person who is interested in becoming insurance advisor,
will be called to attend the seminar so that he/she is able to understand the
whole profile of the job and can solve all his/her queries. After that all the
present members of the seminar are given P-200 for collecting which is
considered as next step in their selection.
4) FINAL INTERVIEW:-
The last stage of recruitment and selection of an insurance advisor is final
interview with Branch Manager. The person is called for final interview if
he/she is successful in fulfilling the booklet called P-200 which will be
his/her target customers. And if he successful in clearing that interview,
he/she will be given 100 hours in-house training on which company spends
from their own side.
MNYL called this method of recruiting and selecting people for becoming an
insurance advisor as GOLD.
MY ROLE AND LEARNING AT MNYL
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My job at MNYL was to sell a career to people. It means we had to recruit
insurance advisors for our company. The kind of people we were looking forward
for were:
people above the age of 25 years
minimum qualification- plus 2, but we prefer people who have a graduate
degree in any field.
And the categories on which focused were:
Housewives: as they are the home-makers and when they advice you how
to manage your funds then they are highly influential.
Retired people: these are the people who have seen life therefore their
advice are also liked by people.
Voluntary retired people
Self employed people
Activities performed by us for this were:
NAME GATHERING:
Our 1st activity was name gathering. On the first day we were taught a
pen framing exercise for this. This exercise helps you in getting 50
names from one person. We were told about the categories from which
we can gather name. Figure given below depicts the same:
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Fig. 10
Firstly I was to ask to target our family. Every name was entered in the
centre box of the above figure and person’s friends, relatives, neighbor’s
names were asked. Similar exercise was done with friends and relatives.
On the first day when sir asked me to give 5 names of people whom I know
and who fulfill the criteria (as stated above), I found it very difficult but by
the end of the day I was able to collect around 40 names.
Apart from pen-framing exercise I collected names by going to local market
i.e. Atta market and sector-18 market. There I met shopkeepers and
customers. I tried to get references from them. For this I prepared a simple
questionnaire.
I went to kitty parties to tap housewives. I prepared a separate
questionnaire for them, to get the references from them.
I went to AVCC club located in sector – 37. There I met retired people who
come to the library for reading newspapers. I tried to convince them and
invited them to attend the career seminar.
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NAMES
RELATIVES FRIENDS
NEIGHBOURS CUSTOMES
DATABASE
79
I did cold calling also. I got the army directory and we called them, told them
about the career opportunity and tried to invite them for the career seminar.
from that list who are either housewives, retired people, self employed, people
who have taken VRS, CA’s, CS’s, i.e. quality people and after that inviting them.
INVITING:
Our second activity was to invite people to the career seminar. For this I had a
conversation (telephonic) with the people whose references I got from people and
invited them for the career seminar. For the conversation to be effective a script
was given to us stating that what all we have to speak, how to convince them to
meet us and how to get further references from them.
After the career seminar we used to give a project-200 booklet to them which they
were supposed to fill. In this they were asked to fill at least 100 names of the
people whom they know because advisors are asked to tap their natural market
firstly and touch the reference market later on.
INITIAL SCREENING:
I had to keep a follow up with the people who attended career seminar. I
used to call them for initial screening, with their filled P-200’s. In the initial
screening my job was to see the profile they have filled in their P-200. Then I had
to ask certain simple questions like who according to him/her is a successful sales
person. If I find the person suitable then I had to send him/her to my senior for
further screenings.
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FINDING
(a). HOUSEWIVES:
The rationale behind our approaching Housewives for a possible tie-up was their
large presence and interaction with a large number of customers. And MNYL
believes that housewives are the home makers, they manage their finances at
home very well and when they give financial advice to any one then it has a better
impact.
RESPONSE:
The efforts to establish a tie-up in this segment had a mixed response. Most of
them found it interesting and good way of earning money. But few of them were
reluctant as they believed that it would be hectic.
PROBLEMS FACED:
Though there was much interest shown by the housewives, but it was vacation
time and most of them had their vacation plans and because of this they were not
ready to join in the month of June. Some of them said that they would prefer
staying at home and some had a problem of having small kids.
(b). RETIRED PEOPLE:
The main criterion that led us to select this particular segment was that these
people have better understanding of finance and they know how to deal with
people. In this our main target was Army retired people as the past records show
that they do real good in this field. These people find it easy to win the trust of the
customer.
(III) 81
RESPONSE:
The initial response that we got from this particular sector had been good. The
people in this segment, seemed interested enough about knowing of the business
proposal. The success ratio in this segment was good.
PROBLEMS FACED:
People were not ready to attend training because of hot climate.
(c). SELF EMPLOYED:
The main selection criterion of this sector was that these people have many good
contacts. They have a better understanding of customer’s behaviors and their
needs. These people try to tap mostly the big corporate clients and they know how
to make long-term relationship with their customers. And also the fact that the
people of this segment are good at dealing customers also on one to one bases
adds to an advantage
(III) 82
RESPONSE:
The overall response of the entire sector did not seem to be very positive enough.
PROBLEMS FACED:
MNYL provides full time training and these people didn’t had time to spend on full
time training. Some of them found this diversification of their business very difficult.
1. Max New York Life needs to spend more on brand awareness,
because while talking to people we realized that they don’t even
recognize the company.
2. There is a huge opportunity in the rural sector, so Max New York Life
should expand its activities in rural sector.
3. Max New York Life should use the method of newspaper
advertisement as this will help them in tapping the market that has
remained untouched till now.
4. Apart from expanding agency channel, Max New York Life should
expand it other channels also.
5. Max New York Life’s process of picking advisors is very time
consuming. They should try to curtail the time spent on it.
(III) 83
ANALYSIS
Market Research for the project was conducted in Delhi and Ghaziabad. It is a
descriptive type of research and sampling for responses is simple random
sampling. The sample size for the research is 100 for comparative analysis and
100 for recruiting Life Advisors.
Till date the customers still believe in government sector i.e. LIC but one thing can
also be kept in mind that till 1999 LIC had a 100% market share. From the survey I
have also found out that a very people are insured and the interesting fact is that
the persons who are insured, very few know about the type of policy they have
taken.
Max New York Life has not yet come into terms with the common people. This
may be because Max New York Life is new to the market as compared to other
Insurance companies like ICICI Prudential, Allianz Bajaj etc.
While recruiting Life Advisors one very significant thing I found out that the
persons whose house hold income is in between 2-5 lakhs are or were involved in
insurance business. The persons who are below the age of 25 years were not
keen to join the
insurance sector as compared to those who are in between 25-30 years of age.
Also the persons who are in insurance business have a willingness to join the
private companies.
In the survey I have also found out the persons who are working and the students
were keen in taking on line training as compared to housewives and retired
persons.
(III) 84
SUGGESTIONS AND RECOMMENDATIONS
The insurance company has to continuously upgrade its products by
continuously assessing the changing needs of the prospects and
clients. There should be a up gradation of the employees by giving
them training from time to time and motivation with the ingredients of
professionalism like ethics, service, compliance and quality.
Better marketing activities are required, so that the awareness can
be increased specially among corporate.
More products, which give assured returns, should be there for the
investors because most of the investors ask about security part of
the policies especially during the time of slow down of the economy
and to tap the investors who at present investing in Fixed Deposit.
Better follow-up activity is required to tap the potential customers.
Tax saving scheme should be modified according to the
requirements of the investors because a lot of persons are saving to
reduce their tax liability.
The policies should be made such that it is viewed as hedging tools
to earn risk-free returns i.e. it should be considered more than just a
risk cover.
There should be other modes of training because most of the
persons are not having time so that they can take training in centers.
Moreover online training is not much fruitful.
Company should start creating their own database and give it to the
advisors so that the advisors have more option in their hand.
(III) 85
SWOT ANALYSIS OF MAX NEW YORK LIFE
STRENGTHS
Cost effective organization
Persuasiveness of customer service representative to address the
problems.
Effective customer Personal consulting for customized policy.
Perceived financial loyalty programmes.
Customized policies that cover the specific terminal disease.
WEAKNESSES
Less Brand Awareness
Time consuming ( in picking advisors)
Process Oriented( process are too lengthy)
Fewer suggestions in terms of precautionary measures for avoiding perils.
Are pulled by the engine of powerful brands like TATA AIG and Bajaj
Allianz.
OPPORTUNITIES
It can enter in the General insurance sector.
Opportunity in the rural sector as there is a under-penetrated insurance
market in rural sector.
Relative market potential in not only the rural markets but also the semi-
urban markets.
(III)
Knowledge based
being quality oriented rather than quantity oriented
Provide in- house training to advisors.
86
Better customer services like utmost promptness in issuance of the
policy, giving cheque pick up facilities and not making customers not
waiting for months.
Making more loyal customers and attracting other customers with better
service.
Competitors in the private sector
With players like SBI Life and ICICI Prudential spending lot in
advertisements, it may take away the market.
Sometimes more focus on innovative products may affect the main
fruitful products.
Stiff competitions due to new companies are entering day by day.
14. REASONS WHY YOU SHOULD JOIN US AS AN ADVISOR
REWARDING CAREER
You will help people realize their dreams by fulfilling their financial goals.
ATTRACTIVE REMUNERATION
One of the best remuneration systems in the industry that not only takes care of
your current earnings, but also guarantees an earning for future.
WORLD-CLASS TRAINING
Our multidimensional in-house training programme will make you a specialist in life
insurance sales; in fact, New York life Inaurance University certifies our training
curriculum.
INFRASTRUCTURE SUPPORT
We have created a state of art infrastructure at our branch office Noida. You have
access to the necessary tools, technology and people support.
(III)
THREATS
LIC because today also people show much faith towards LIC as
it is a public company
87
FULL RANGE OF PRODUCT AND SERVICES
We have insurance and investment oriented customized products.
A SUCCESSFUL TEAM
You will be a part of country finest team of life insurance advisor. Per advisor
earning is 4times better than industry.
INDEPENDENCE
As an advisor, you will be true entrepreneur.
SALES AND MARKETING SUPPORT.
We help advisors with innovative sales and marketing tools.
COMMITMENT TO CAREER GROWTH.
Opportunity to join management or become business associate.
BRAND NAME
Fortune 69th ranked company having insurance experience of 158 years.
For further query, please feel free to call on 9258048885
15
Identifying Your Initial Markets- Worksheets (Friends)
(III) 88
Na
me
Ag
e
Marit
al
Statu
s
Male
Or
Fem
ale
Numb
er Of
Depe
ndent
s(Chil
dren)
Occup
ation +
Type
Of
Compa
ny Or
Industr
y
Annu
al
Inco
me
Lo
cali
ty
+
Tel
ep
ho
ne
Nu
mb
ers
Rece
nt
Chan
ges
( Sala
ry
Incre
ased,
Prom
otion,
New
Hom
e,
New
Baby)
How
Well
Kno
wn
To
You
? A.
Well
B.
Acq
uain
ted
C.
Cas
ual
Vehicl
e
Owne
d If
Car,
Mentio
n
Name
(III) 89
IDENTIFYING YOUR INITIAL MARKETS- WORKSHEETS
(WORKPLACE)
Na
me
Ag
e
Marit
al
Statu
s
Male
Or
Fem
ale
Numb
er Of
Depe
ndent
s(Chil
dren)
Occup
ation +
Type
Of
Compa
ny Or
Industr
y
Annu
al
Inco
me
Lo
cali
ty
+
Tel
ep
ho
ne
Nu
mb
ers
Rece
nt
Chan
ges
( Sala
ry
Incre
ased,
Prom
otion,
New
Hom
e,
New
Baby)
How
Well
Kno
wn
To
You
? A.
Well
B.
Acq
uain
ted
C.
Cas
ual
Vehicl
e
Owne
d If
Car,
Mentio
n
Name
(III) 90
IDENTIFYING YOUR INITIAL MARKETS- WORKSHEETS
(NEIGHBOURS)
Na
me
Ag
e
Marit
al
Statu
s
Male
Or
Fem
ale
Numb
er Of
Depe
ndent
s(Chil
dren)
Occup
ation +
Type
Of
Compa
ny Or
Industr
y
Annu
al
Inco
me
Lo
cali
ty
+
Tel
ep
ho
ne
Nu
mb
ers
Rece
nt
Chan
ges
( Sala
ry
Incre
ased,
Prom
otion,
New
Hom
e,
New
Baby)
How
Well
Kno
wn
To
You
? A.
Well
B.
Acq
uain
ted
C.
Cas
ual
Vehicl
e
Owne
d If
Car,
Mentio
n
Name
(III) 91
IDENTIFYING YOUR INITIAL MARKETS- WORKSHEETS (REFERRALS
OBTAINED)
Nam
e
Ag
e
Marita
l
Status
Mal
e
Or
Fe
mal
e
Numb
er Of
Depe
ndent
s(Chil
dren)
Occup
ation +
Type
Of
Compa
ny Or
Industr
y
Annu
al
Inco
me
Lo
cali
ty
+
Tel
ep
ho
ne
Nu
mb
ers
Rece
nt
Chan
ges
( Sala
ry
Incre
ased,
Prom
otion,
New
Hom
e,
New
Baby)
How
Well
Know
n To
You?
A.
Well
B.
Acqu
ainte
d C.
Casu
al
Vehicl
e
Owne
d If
Car,
Menti
on
Name
(III) 92
IDENTIFYING YOUR INITIAL MARKETS- WORKSHEETS
(RELATIVES)
Na
me
Ag
e
Marit
al
Statu
s
Male
Or
Fem
ale
Numb
er Of
Depe
ndent
s(Chil
dren)
Occup
ation +
Type
Of
Compa
ny Or
Industr
y
Annu
al
Inco
me
Lo
cali
ty
+
Tel
ep
ho
ne
Nu
mb
ers
Rece
nt
Chan
ges
( Sala
ry
Incre
ased,
Prom
otion,
New
Hom
e,
New
Baby)
How
Well
Kno
wn
To
You
? A.
Well
B.
Acq
uain
ted
C.
Cas
ual
Vehicl
e
Owne
d If
Car,
Mentio
n
Name
(III) 93
RESEARCH METHODOLOGY & LIMITATIONS
RESEARCH DESIGN:
Research Design is the plan, structure and strategy of investigation
conceived so as to obtain answers to research questions and to control variance.
Descriptive Research
The type of research Design for this Research Project is Descriptive
Research. Under the head of the Descriptive Research this project is based on
the cross sectional studies.
The cross sectional studies are of two types:
1. Field studies
2. Surveys
This research is based on the surveys.
The complete research design is formulated with the following steps:
1. Identify and define the problem
2. Choice of Research Design
3. Determining sources of Data
4. Designing data collection Forms
5. Determining sampling design and sampling size
6. Organizing and conducting the field survey
7. Processing and analyzing the collected data
8. Interpretation and conclusion
(III) 94
FINDINGS & RECOMMENDATIONS
1. As the people think that insurance is a tool to protect their family & a tax saving device.
They are aware of the fact & realizing its, importance. There is a large potential for
insurance in India.
2. The entrance of private players will increase the competition and it would be a tough
task to secure a good position in market.
3. Since Max New York Life Insurance is leading with several companies’ policies it
should be easy for them to penetrate into the market and secure a good position if they pay
greater attention to the service part provided to their customer and thereby forming a long
and trusted relationship.
4. As seen from the survey that at present 70% of the customer are having insurance policy
out of which 87.5% of the customer are planning for new investments. So it can be a good
potential for the company and they should make an attempt to trap these customers.
5. As 43% of the customers are even ready to go for insurance if a service provider away
from their city is providing it. But inturn they should provide good products and services.
The company should try to convince these customers and get them in its favor.
(III) 95
RECOMMENDATIONS
By virtue of its connectivity and advertising strategy MAX NEWYORK LIFE
INSURANCE is successful in grabbing the highest market share in India, but
there are still some recommendations from my study point of view is that MAX
NEWYORK LIFE INSURANCE needs to make its network service more stronger
than other service providers to dominate the market in future too.
MAX NEWYORK LIFE INSURANCE should introduce cheaper recharge cards
than the other because its Competitor.
(III) 96
QUESTIONNAIRE
1. ARE YOU EMPLOYED?
YES NO
If YES, only then proceed
2. DO YOU HAVE ANY INSURANCE POLICY?
YES NO
3. WHICH INSURANCE POLICY DO YOU HAVE?
LIFE NON-LIFE BOTH
4. WHICH CO’S INSURANCE POLICY YOU PREFER THE MOST? (RANKTHEM)
a) LIC
b) ICICIPRUDENTIAL
c) SBI LIFE INSURANCE
d) ING VYSYA LIFE
e) MAX NEW YORK LIFE INSURANCE
f) TATA AIG LIFE
g) ANY OTHER ________( Specify)
5. WHAT DO YOU THINK ARE THE BENEFITS OF INSURANCE PLAN?
(RANK THEM)
a) COVER FUTURE UNCERTAINITY
(III) 97
b) TAX DEDUCTIONS
c) FUTURE INVESTMENT
d) ANY OTHER _________ (Specify)
6. WHICH FEATURE OF YOUR POLICY ATTRACTED YOU TO BUY IT?
(RANK THEM)
a) LOW PREMIUM
b) LARGER RISK COVERAGE
c) MONEY BACK GUARNTEE
d) REPUTATION OF COMPANY
e) EASY ACCESS TO AGENTS
f) ANY OTHER _________ (Specify)
7. WHAT’S YOUR PERCEPTION ABOUT INSURANCE?
(RANK THEM)
a) A SAVING TOOL
b) A TAX SAVING DEVICE
c) A TOOL TO PROTECT FUTURE
8. ARE YOU SATISFIED WITH THE POLICY?
a) SATISFIED SAVING TOOL
b) NOT SATISFIED
(III) 98
c) NOT RESPONDING
9. ARE YOU SATISFIED WITH THE SERVICE AGENT?
a) SATISFIED SAVING TOOL
b) NOT SATISFIED
c) NOT RESPONDING
10. DO YOU PAY TAXES?
YES
NO
11. WHICH IS THE BEST FORM OF INVESTMENTS?
(RANK THEM)
a) FIXED ASSETS
b) BANK DEPOSITS
c) JEWELLERY
d) SECURITIES, i.e. Bonds, MFs
e) SHARES
f) INSURANCE
12. . WHAT DO YOU INTENT TO GAIN FROM INVESTMENTS?
(III) 99
a) SAVING & RETURNS
b) SECURITY
c) TAX BENIFITS
13. WHAT’S THE RIGHT AGE TO BUY INSURANCE?
a) AFTER 25 Yrs
b) AFTER 35 Yrs
c) AFTER 45 Yrs
d) ANYTIME
14. HOW WOULD YOU RATE INDIAN INSURANCE COs?
a) RIGID PLANS
b) NON-USER FRIENDLY
c) UNSATISFATORY SREVICES
d) NON-AGGRESSIVE
e) SATISFACTORY
f) GOOD
g) VERY GOOD
15. WHAT WOULD YOU LOOK FOR IN AN INSURANCE COs?
(RANK THEM)
(III) 100
a) A TRUSTED NAME
b) FRIENDLY SERVICE & RESPONSIVENESS
c) GOOD PLANS
d) ACCESSIBILITY
16. WOULD YOU GO FOR INSURANCE IF A SERVICE PROVIDER AWAY FROM
THE CITY OFFERS
BETTER SERVICE & PRODUCTS?
a) YES
b) NO
c) UNCERTAIN
This QUESTIONNAIRE was given to ladies in the kitty parties.
Are you interested in earning Rs 25000 to Rs 35000 per month?
Yes No
If No, then can you suggest some one?
Housewife
VRS
Self – employed
Vendors or suppliers
(III) 101
Social person in your city or club
If Yes,
Name:
Address:
No of years living in this city:
Mobile no.:
Qualification:
Husband occupation: Self-employed Salaried
(III) 102
TALENT SEARCH
I am responsible for recruitment of bright talented people for Max New York Life. I
need your opinion about some things that will be a big help in my recruitment.
Name: ___________________________________ Age: ___________________
Home Address: ____________________________________________________
Occupation: __________________________ Employer: ___________________
Spouse’s Name: _______________________
Spouse’s Occupation: __________________ Employer: ___________________
Any member of kitty party?
Some housewife with previous working experience & good social life?
_______________________________________________________________
______
Any Ex banker/CA/Tax advocate/Bureaucrat?
_______________________________________________________________
______
Someone who is in direct marketing or an MLM?
Any aggressive person you met during your last party, function?
(III) 103
Someone who is in settled business and wants to expand?
Any Ex Army officer?
_______________________________________________________________
______
Any candidate you would like to recommend for insurance business/career
_______________________________________________________________
______
Thank you.
I appreciate the time you spent with me. I would like to talk to several people
unknown to me. Would you give me the names of 3 to 4 people whom I don’t
know, who might complete this same survey?
(III) 104
Name:____________________________
_
Add:______________________________
Phone:_____________________________
Age:______Occupation:_______________
Marital Status:_______________________
No. of dependent/children:_____________
Name:____________________________
_
Add:______________________________
Phone:_____________________________
Age:______Occupation:_______________
Marital Status:_______________________
No. of dependent/children:_____________
Name:____________________________
_
Add:______________________________
Phone:_____________________________
Age:______Occupation:_______________
Marital Status:_______________________
No. of dependent/children:_____________
Name:____________________________
_
Add:______________________________
Phone:_____________________________
Age:______Occupation:_______________
Marital Status:_______________________
No. of dependent/children:_____________
18. Scripts to be used:
1. Telephone Call to a Friend, Acquaintance, C of I, Former Co-Worker; ‘Hello, is
this ________________? Hi how are you today? Great! I am calling to ask you
to help a couple of people you know solve a problem. Do you have a minute to
talk? I am now working for max new york life, one of the leading life insurance
private companies of India. We are looking for bright talented people to build
careers in the existing new industry. The reason I am calling you today is that I
(III) 105
would like to arrange a time when you and I might chat for a few minutes about
how you can help me with this talent search, are you able to meet for a few
minutes next Monday morning or would you prefer Tuesday afternoon.
2. In Person Interview With Your C Of I Or Former Co-Worker.
[name] as you may re3member, I am now working for max new york life in the
area of life insurance sales [name] -__________________ max a leading
Indian enterprise has grown very rapidly as the result of some tremendous
success in the areas pf health care and life insurance. And new york life is our
partner. New york life is one of the oldest, largest and finest insurance3
companies in th us. They have had tremendous success in developing the
business in the u.s. and in many other asian countries. We are looking for
bright talented people to help us in t6his effort. The reason I am talking to you
today is that you may know someone who is not entirely happy with his or her
current job and is looking for a new opportunity. May be this is somebody who
is not making enough money or may be he has to be away from home for
long period or may be he has progressed as far as he could in his current job.
Does that remind you of somebody you know? [wait for an answer. If you get
names. Just write them down!! Don’t ask question – yet! If no names, proceed with
script as follows] [name] I am not surprised that you cannot think of anybody,
however, if you let me tell you a bit more about what we are looking for may be
that will help you. I know that the person who is most likely to be successful will
probably be about 25 years of age or older; he will probably be married; most likely
he will be a graduate3 and he should definitely have been
living is his present location for atleast a couple of years. Allow me to suggest
where you might find somebody who could be a good candidate for this wonderful
opport5unity. Let me ask you what your favourite relaxation, pastime or sport is?
What about people you often meet there? Who amongst your neighbors is a very
talented person who might like to earn more money? May be somebody you used
to go to school with;
(III) 106
perhaps somebody you worked with in a prior job? There might be a very good
sales rep who calls on you regularly.
(On getting names) Great, I really appreciate your help. I am going to call
________________ and then tell him you had some very nice things to say about
him and to invite him to come into meet us and learn more our opportunity. I’ll stay
in touch with you and keep you informed about how things go. In the meantime if
you want to call ____________ and tell him about our conversation that would
great! Thanks again!
If you are still having trouble getting a positive response, then try the following:
________ name_______ let me ask you a question; , ‘what , in your mind makes a
good salesperson? What characteristics do you think someone
needs to have to be successful in sales?’ who do you know who communicates
well? Who is a determined, pleasantly persistent salesman?
Who impresses you as an intelligent and friendly salesperson? Record names first
and then ask for details later.
3. Call to a prospective sales advisor: _____________________ hi my name is
_____________________ we have a mutual friend in
________________________________. I was recently talking to __________ and
he had some very nice things to say about you. Did you have a chance to talk with
____________ about our recent conversation? Well just to inform you, I am
responsible for recruitment for max New York life. We are an exciting joint
4. venture partnership working together in the Indian insurance industry. In fact
we were one of the very first private companies in the life insurance business.
We are now in process of expanding our sales force. Based on some of the
nice things that _______________ had to say about you, I am very interested
in meeting you and explaining our opportunity in greater details to you. Do you
think your current job will be the very last one that you will ever take? Well, it
(III) 107
would that if that right opportunity were to come along, you might be tempted to
make a career change, is that correct? Well, with that in mind, let’s meet for a
short time and I will be able to tell you much more about our opportunity. Would
it be convenient for you next Tuesday morning or would Wednesday afternoon
will be preferable?
(III) 108
CONCLUSION
Channel development or channel distribution is the process of recruiting potential
advisor for the company through an insurance sector works. Every company
whether it is a LIC, a public sector player or MNYL, ICICI prudential etc, private
sector players which work through them only.
They are the people through which an insurance company get their most of the
work and profits. There are different forms in which a channel can be developed
like:-
Agency
Bancassurance
Alternative channel
But all the insurance companies mainly work through agency model. MNYL is one
of the leading company which also work on all type of models. They concentrate
on quality people who can work for them in a long run and bring fruitful business
for them. They highly concentrate on people like:-
Housewives
Retired people
VRS people
Self employed
CA/CS
Advocates
They think that the people whom you know personally can easly provide help
whether in finding the best people to become advisor or for any business purpose.
Therefore they work only on reference data collected by pen-framing exercise.
Unlike other companies they do not provide on line training, they concentrate only
on in-house training for generating best advisors.
(III) 109
BIBLIOGRAPHY
http://www.maxindia.com/history.htm
http://www.maxindia.com/pdf/MAX-AR%20FINAL.pdf (max report)
http://www.newyorklife.com/cda/0,3254,15267,00.html (nyl achievement)
http://www.newyorklife.com/NYL2/pdf/2005_Final_financial.pdf
(international operations)
http://www.indiainfoline.com/pefi/insr/rep1.html
http://www.indiainfoline.com/bisc/insu.html
http://www.indiainfoline.com/bisc/ari/lifi.pdf
http://www.indiainfoline.com/bisc/ari/liin.pdf
http://www.capitalmarket.com/Cmedit/story25-0.asp?SNo=108003 (depicts
market share of private players)
http://www.rncos.com/Report/FM003.htm ( showed data regarding past
trends followed by LIC and private players from 2002-06)
http://www.maxindia.com/pdf/InvestorReleaseQ2FY06.pdf
(III) 110