advisors potential about insurance
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A
Project Study Report
On
Training Undertaken at
Study of AdvisorsPerception towards LifeInsurance Market in Kota
Submitted in partial fulfillment for theAward of degree of
Master of Business Administration
From University of Kota, Kota (RAJ.)
Academic Session 2008-2010
Submitted By: - Submitted To:-Sunil Kumar Jain Amit Sharma
MBA Part III TertiaryManager
MODI INSTITUTE OF MANAGEMENT & TECHNOLOGY, KOTA
(Approved By AICTE, New Delhi & Affiliated to Rajasthan Technical
University, Kota)
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Modi Education Complex, Dadabari, Kota 324009
Tel No. : 91-744-2504169, 2505421, Fax: 91-744-2391072
Success comes with knowledge & knowledge is comes with training.
To excel in an any field practical training is an integral part to imply theoretical
studies to a practical approach it makes the individual to the actual practical conditions.
Which could have been impossible to be tough in a classroom. A trainee learnt dealing
with the worker and management- working environment along with operational skills.
Insurance ranks as one of the most important industry in any part of the world.
It is also an industry where competitors drive excellence. This is why the entry in India
of foreign insurers, as minority partners in domestic joint ventures, has bought the hope
that market will reach a new level.
I have tried to do an analytical study on advisors perception towards life
insurance market in Kota. In this study I tried to find out those facts, which do matter
for a advisor for doing this job in insurance sector.
Sunil Kumar Jain
MBA Part- III
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ACKNOWLEDGMENT
It gives me immense pleasure and a sense of honor to express my feeling of gratitude to
all those who have helped me in the successful competition of the present project.
First and foremost I express my deep sense of thankfulness to Mr. Amit
Sharma, Tertiary Manager in Reliance for his valuable co-operation and guidance in
undertaking this work.
My warm acknowledgment is also due to all staff members of Reliance Kota,who took keen interest in extending necessary co-operation at various stages during the
study.
I cant refrain my humble thanks to Er. K.C. Vijay (Director, Modi Institute Of
Management & Technology,Kota) and the faculty of MIMT
In end, I would like to thank to each of them who directly or indirectly helped in
completion of the project.
Sunil Kumar Jain
MBA Part- III
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One of the most important reasons for me to select this project was the wide
areas of activities which were covered under this project. Insurance sector is one of the
fastest growing industries of today. The chance to work in such a promising sector that
to with the market leader like Reliance was a wonderful opportunity for me.
In first part of this report I have tried to give a detailed outline about what
exactly insurance sector is all about. Its history, current business environment, the
governing authority i.e. IRDA (Insurance Regulatory and Development Authority) and
of course my company Reliance Life Insurance Company Ltd.
The second part of this report gives out the detailed information about the
activities that I carried out in this project which are as follows:
Recruiting Insurance Advisors for Reliance Life Insurance from various
traditional sources.
Identifying the new source of Recruitment for Future Recruitments giving
information about different plans and benefits of rides of Reliance Life
Insurance.
Conducting a research for advisors/ agents of various insurance companies.
For the purpose of Agency Recruitment I had to personally meet and explain the
business opportunity offered by the reliance Life Insurance to people who were
identified as most suitable for the job. This interaction was a very enriching experience.
For the purpose of research I met to the advisors/ agents of the various insurance
companies. In this work I had chance to know that what advisors/ agents of different
insurance companies think about their company product and market.
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DECLARATION
I hereby declare that the present report entitled Study of Advisors
Perception towards Life InsuranceMarket in Kota is bevel on my original
work and indebtedness to other work / Publication has been duly
acknowledged at relevant place.
Submitted By:Sunil Kumar Jain
MBA III Sem
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Chapter No. Contents
1 Introduction to insurance
Introduction to insurance
History of Insurance
Necessity of Life Insurance
Benefits (Advantages) of life insurance
Market players
Composition of Authority by IRDA Act, 1999.
Basic Objectives of IRDA.2. Company Details
About Reliance Life buys AMP Sanmar Group
About Reliance Capital Limited.
About Reliance Life Insurance Co. Ltd.
BOD3. Product Details
Different Plans4. The Advisors / Agents
About the Advisors
Professional requirements of agents.
Characteristics of an Advisors
Benefit of an Advisors
Be an Advisors
Skill building by Special Training Programme
(RACE)5 Research Methodology
Scope of the study
Objectives
Research Methodology
Analysis & Interpretations
6
Conclusions Suggestions
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Limitations
7 Bibliography8 Appendix
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(Introduction to Insurance)
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INTRODUCTION OF INSURANCE
All the human beings on the earth know that they will die in future but
they dont want to die. They want to fulfill all the dreams, which they had
thought, but there are times when all these dreams cant come true.
Death is inevitable and yet we live our lives obvious to reality that may
strike- when we have no idea. And when it happens all the dreams come
crashing down.
In the words of D.S. Hansell Insurance may be defined as social
device providing financial compensation for the effects of misfortune, the
payment being made from the accumulated contributions of all the
parties participating in the scheme.
Life insurance is the only tool to secure our life in future. It also
provides a safe guard to the uncertainty of our life. Life Insurance is the
cheapest investment tool in which we can earn more in a short period of time.
Life insurance is meant to protect our loved ones and us in future. The
function of insurance is to protect you against losses you cant afford. This is
done by transferring the risks of a person, business, or organizationthe
Insuredto an insurance company, or insurerThe insurer then
reimburses the insured for covered lossesi.e., amount of money, called a
premium, to the insurer to transfer the risk. The insurer pools all its premium
into a large fund and when a policyholder has a loss. The insurer draws funds
from the pool to pay for the loss life is full of unexpected events that can
create large financial losses. For example wherever you drive, it is possible
that you may have a costly accident. Risk affects you by causing worry about
potential loss and how to deal with the consequences. Insurance reduces
anxiety over possible loss and absorbs the financial brunt of its
consequences.
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India has traditionally been a high savings oriented country being on
par with the thrifty Japan. Insurance sector in the United States of America is
as big in size as the banking industry there. This gives us an idea of how
important the sector is Insurance sector channelises the savings of the people
to long-term investments. In India where infrastructure is said to be of critical
importance, this sector will bring the nations own money for the nation.
The Global Life Insurance market stands at $ 521.2 billion while
non-life insurance market is placed at $ 922.4 Billion.
India takes the 23rd position with US$9.333 billion annual premium
collections and a meager 0.41% share.
Out of one billion people in India only 35 million people are covered by
insurance.
Indian insurance market is set to touch S25 billion by 2010 on
the assumption of a 7 percent real annual growth in GDP.
In 3 years time we would expect the 10 % of the population to be under
some sort of an insurance cover. This assuming a premium of Rs. 5000 on an
average amounts to 100 million x Rs. 5000 = Rs. 500 bn.
This has made the sector the hottest one in India after IT. With social
security to the public at large being the agenda for opening the sector, the role
of the regulator becomes all the more serious and one that would be carefully
watched at every step.
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1.2 HISTORY OF LIFE INSURANCE
Insurance in India has started without any regulation in the Nineteenth
century was a typical story of a colonial era. A few British Insurance
Companies dominating the market serving mostly large urban centers. Afterthe1 independence, it took a dramatic turn.
Insurance was nationalized, first the life insurance companies were
nationalized in 1956, and then the general insurance business was
nationalized in 1972 and in 1999 private insurance companies have been
allowed into the business of insurance with a maximum of 26% of foreign
holding.
CONCEPT OF INSURANCE
Basically insurance is a device to share the losses of few, by transferring a
portion of the loss to the insurance company in exchange for a certain cost.
This means that a lot of people who think they may suffer a loss, each put in a
little money to cover financial costs for those among them who actually
sustain the loss. Obviously, since there is a cost you dont insure anything or
everything, you will cover only those things that would cause a substantial
financial burden unexpectedly on you, if you had to replace them on your own.
Hence, insurance works on the concept of risk sharing, which divides risk a
among may people. For example, all of you run the risk of having your car
stolen. However the past may tell us that only of your cars will actually be
stolen this year. Therefore you may all get together and decided to each pay a
small amount that will go to the unlucky person (could be you) will actually
may have his car stolen.
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HISTORICAL PERSPENCIVE: -
A French proverb says: Deeper you look into the history; further will be your
vision. So before we strategize, let us have a quick look into the history.
Insurance is some form is as old as historical society.
So-called bottomry contracts were know to merchants of Babylon as early as
4000-3000 BC and was well understood in ancient Greece as early as the 4 th
century BC. Under a bottomry contract, loans were granted to merchants will
the provision that if the shipment was lost at sea the loan did not have to be
repaid.
The interest on the loan covered the insurance risk. Ancient Roman law
recognized the bottomry contract in which an article of agreement was drawn
up and funds were deposited with a money changer.. In Rome there were
also burial societies that paid. The insurance contract also among other
maritime national in commercial contact with Greece. In China, merchants
who had to travel on the dangerous Yangtze River spread their goods on
several ships, so if a ship wet down, no one person would lose all of his
goods. All these established the basic idea of insurance.
Other types of causality insurance: -
Auto
Workers compensation
Crime and vandalism.
These may appear technical and confusing. So let us go trough some of
the basic terminology and concepts insurance companies use in their
business. When we talk about insurance we are primarily concerned with
insurable items. To be insurance the following criteria must be met:
1. There must be a large number of persons available for insurance with a
similar potential for loss-the law of large number.
2. Loss must be definite (death, car damaged in an accident).
3. Loss must be accidental in nature (unexpected and beyond the control
of the insured).4. Loss must barge enough to cause a financial burden.
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5. The cost of insurance must be affordable. The insurance cost should
be traction of the value of the item.
6. Loss must be calculable; a monetary amount must be determined for
the loss.
Colonel rule in India provided great fillip to the insurance in India its contents
given below: -
INSURANCE UNDER THE BRITISH RAJ
Life insurance in the modern form was first set up in India through a
British company in 1818 followed by the Bombay assurance Company
operated in India but did not ensure the lives of India but did not insure the
lives of India. Some of the companies that started later did provide insurance
for Indians. But they were treated as Substandard and therefore had to pay
an extra premium of 20% or more. The first company that had policies that
could be thought by Indians with fair value was the Bombay Mutual Life
Assurance Society starting in 1871. The first general insurance companyTriton Insurance Company Limited, was established in 1850. it was owned
and operated by the British, the first indigenous general insurance company
limited set up in Bombay in 1907.
By 1938, the insurance market in India was buzzing with 176
companies (both life and non life). However, the industry was plagued by
fraud. Hence a comprehensive set of regulations was put in place to stem thisproblem. By 1956, there were 154 Indian insurance companies, 16 non-
Indian insurance companies and 75 provident societies that were issuing life
insurance policies.
Most of these policies were centered in the cities (especially around big
cities like Bombay, Calcutta, Delhi and Madras). In 1956, the then Finance
Minister S.D. Deshmukh announced nationalization the life insurance
business.
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SOME OF THE IMPORTANT MILESTONES IN THE
INSURANCE BUSINESS IN INDIA ARE:
1912: The Indian Life Insurance Companies Act enacted as the first to
regulate the life insurance business.
1928: The Indian insurance companies act enacted to enable the government
to collect statistical information about both life and non- life
insurance businesses.
1938: Earlier legislation consolidated and amended by the
insurance act with the objective of protecting the interest of the
insuring public.1956: 245 Indian and Foreign insurers and provident societies taken over by
the Central Government and Nationalized LIC formed an Act of
Parliament viz LIC Act.
1993: Setting up of Malhotra Committee.
1994: Recommendations of Malhotra Committee.
1995: Setting up of Mukherhjee Committee.
1996: Setting up of (Interim) Insurance regulatory Authority (IRA)
recommendations of the IRDA.
1997: Mukherjee Committee report submitted but not made public.
1997: The government gives greater autonomy to LIC, GIC and its
subsidiaries with regard to the reconstructing of Boards and
flexibility in investment norms aimed at channeling funds to the
infrastructure.
1998: The Cabinet decides to allow 40% foreign equity in private insurance
companies 26 % to foreign companies and 14 % to NRIs OCB
and FIIs.
1999: The standing committee headed by Murali Deora Decides that foreign
equity in private insurance should be limited to 26%. The IRA bill
is renamed the Insurance Regulatory and Development
Authority (IRDA) bill.
1999: Cabinet clears IRDA bill.
2000: President gives assent to the IRDA bill.
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1.3 NECESITY OF LIFE INSURANCE:
Risk and uncertainties are part of life great adventure- accident,
illness, theft, natural disaster- theyre all built into the working of the universe,waiting to happen. Insurance then is mans answer to the vagaries of life. If
you cannot beat man-made and natural calamities, well, at least be prepared
for them and their aftermath.
Insurance is a contract between two parties- the insurer (the insurance
company) and the insured (the person or entity seeking the cover)-wherein
the insurer agrees to pay the insured for financial losses arising out of any
unforeseen events in return for a regular payment of Premium
These unforeseen events are defined as Risk and that is why
insurance is called a risk cover. Hence, insurance is essentially the means to
financially compensate for losses that life throws at people- corporate and
otherwise.
1.4 BENEFITS OF LIFE INSURANCE:
Superior to any other savings plan
Unlike any other savings plan a life insurance policy affords full protection
against risk of death. In the event of death of a policyholder, the insurance
company makes available the full sum assured to the policyholders near and
dear ones. In comparison, any other savings plan would amount to the total
savings accumulated till date. If the death occurs prematurely, such savings
can be much lesser than the sum assured. Evidently, the potential financial
loss to the family of the policyholder is sizable.
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Tax Relief
Under the Indian Income tax Act; the following tax relief is available-
a) 20% of the premium paid can be deducted from your income taxliability.
b) 100% of the premium paid is deductible from your total taxable
income.
Where these benefits are factored in it is found that most policies offer
returns that are comparable or even better than other saving modes such
as PPF, NSC etc. Moreover, the cost of insurance is a very negligible.
1.5 THE MARKET PLAYERS
As of now there are 14 players in Indian Insurance Market, who have
made their registration for Life Insurance Business with IRDA (Insurance
Regulatory & Development Authority) plus there are some major players
like reliance who wish to join this sector in following years. The standard
patter for all the companies joining this market is of a join venture betweenan Indian company (around 75 %) and a Foreign Insurance Company
(around 25%). The main purpose of this sort of arrangements is that the
Indian Company is having the basic systems, infrastructure and
distribution network for spreading the insurance products in India. And the
foreign partner bring in with it, the experience, Know- how and R & D of
insurance products, in which it ahs been dealing for long time through out
the world.
The names of all the companies are as follows.
1. Life Corporation of India (LIC)
2. HDFC Standard Life Insurance Company Ltd. (23/10/2000)
3. Max New York Life Insurance Co. Ltd. (15/11/2000)
4. ICICI Prudential Life Insurance Co. Ltd. (24/11/2000)
5. Kotak Mahindra Old Mutual Life Insurance Ltd. (10/1/2001)
6. Birla Sun Life Insurance Co. Ltd. (31/1/2001)
7. Tata AIG Life Insurance Co. Ltd. (12/2/2001)
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8. SBI Life Insurance Co. Ltd. (30/3/2001)
9. ING Vysya Life Insurance Co. Ltd. (2/8/2001)
10. Bajaj Allianz Life Insurance Co. Ltd. (3/8/2001)
11. Metlife India Insurance Co. Ltd. (3/1/2001)
12. Aviva Life Insurance Co. Ltd. (14/5/2002)
13. Sahara India insurance Co. Ltd. (6/2/2004)
14. Reliance Life Insurance Co. Ltd. (4/10/2005)
1.6 INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY
When in government decided to privatize insurance sector in 1999, strong
need of a Regulatory Authority was felt. This was in the backdrop of
experience of investors who had been robbed before through various financial
scams such as stock exchange frauds, chit funds, plantation investments etc.
thus IRDA (Insurance Regulatory and Development Authority) was born.
Composition of Authority under IRDA Act, 1999
As per the section 4 of IRDA Act 1999, Insurance Regulatory and
Development Authority (IRDA, which was constituted by an act of parliament)
specify the composition of Authority. The Authority is a ten-member team
consisting of
A Chairman;
Five whole- time members;
Four part- time members,
(All appointed by Government of India.)
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The Basics Objectives of IRDA are:
To protect the interest of and secure fair treatment to policyholders:
To bring about speedy and orderly growth of the insurance industry
(including annuity and super annuation payments), for the benefit of the
common man long term funds for accelerating growth of economy.
To set, promote, monitor and enforce high standards of integrity, financial
soundness, fair dealing and competence of those it regulates.
To ensure that insurance customers receive precise, clear and correct
information about products and services make them aware of their
responsibilities and duties in this regard.
To ensure speedy settlement of genuine claims, to prevent insurance
frauds and other malpractices and put in place effective grievance
redressal machinery;
To promote fairness, transparency and orderly conduct in financial
markets dealing with insurance and build a reliable management
information system to enforce high standards of financial soundness
amongst market players.
To take action where such standards are inadequate or ineffectively
enforced;
To bring about optimum amount of self- regulation in day-to-day working of
the industry consistent with the requirements of prudential regulation.
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(Introduction to Company)
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Introduction to Company
2.1 ABOUT RELIANCE LIFE BUYS AMP SANMAR GROUPThe Chennai based Sanmar Group today announced the sale of its
interest in AMP Sanmar Life Insurance Company to Reliance Life Insurance,
a subsidiary of Reliance Capital Limited (RCL). AMP Sanman Life Insurance
Company is a joint venture of AMP, Australia and Sanmar Group.
Headquartered in Channai, it as over 90 offices across the country, 9000
agents. The decision to sell the company was taken consequent to AMPs
intention to exit the insurance business in India.
The consideration for the deal has not been disclosed. Asked about
this the Sanmar Group Chairman Mr. N. Sankar, told business line that AMP
had requested to keep the consideration confidential because of regulatory
requirements in Australia. He added that Sanmars stake in AMP Sanmar life
was through & investment companies of the group, which in turn are wolly
owned subsidiaries of the group holding company Sanman Holding Ltd.
Taking over AMP Sanmal Life Insurance will get Reliance Life a
readymade infrastructure and portfolio.
AMP Sanmar offers a comprehensive range of life insurance products.
AMP is a leading international financial services group with over 150 years
with core business in insurance, asset management & financial planning.
2.2 About Reliance Capital Limited:
Reliance Capital is one of the Indian leading private sector financial
services companies and ranks among the top 3 private sector financial
services and banking companies, in terms of net worth. Reliance Capital has
interests in proprietary investments, private equity and other activities in
financial services. RCL is a Non-Banking Financial Company (NBFC)
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registered with the Reserve Bank of India under section US-IA of the Reserve
Bank of India Act, 1934.
Reliance Capital sees immense potential in the rapidly growing
financial services sector in India & aims to become a dominant player in this
industry & other fully integrated financial services RLI in another step forward
for R.C.L. to offer RLI is another step forward for R.C.L. to offer need based
Life Insurance Solution to individuals and corporate.
2.3 About Reliance Life Insurance Co. Ltd.
Type : Private Limited Company
Headquarter : Chennai (India)
Industry : Life Insurance
Products : Individual & group insurance plans
Anil Ambani group & AMP Sanmar - 1st August 2005.
Reliance Life to get aggressive IRDAs recognition 2nd February 2006.
Reliance Life Insurance gets ISO 9001-2000 certification- 28th March 2007.
Reliance Life Insurance Company Limited is a part of Reliance Capital
Ltd. of the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of
Indias leading private sectorfinancial services companies, and ranks among
the top 3 private sector financial services and banking companies, in terms of
net worth
Reliance life insurance is another step forward for Reliance Capital
limited to offer need based life insurance solution to individuals and corporate
in India. Reliance Life Insurance is an associate company of Reliance Capital
Limited, which along with its associates has acquired 100% shares in AMP
Sanmar Life insurance Co. Ltd. in August 2005. taking over AMP Sanmar Life
provided Reliance Life Insurance a readymade infrastructure and a portfolio.
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It is the fastest growing life insurance company in India, private
insurance players in the country on the back of a widespread & rapidly
growing branch network. RLI rapidly has pan presence and a range of
products catering to individual as well as corporate needs. A total of 16
products covering saving protection & investment requirements. As is
evident from the growth of 380% in new business premium last years, the
move from the 12th to 5th position, over the past one year with an increase in
the number of branches from 118 to 339 and increase in the number of
employees from 2943 to 3802.
The sales force is much stronger with an increase in advisors from
2231 to 95557 and third party distribution have increased from 62 to 79.Three
new products have been launched till date and many more are yet to come
and there will be no looking back. A grand beginning only promises a greater
achievement with the passage of time.
The company acquired 100 per cent shareholding in AMP Sanmar Life
Insurance Company in August 2005. Taking over AMP Sanmar Life provided
Reliance Life Insurance a readymade infrastructure and a portfolio. AMPSanmar Life Insurance was a joint venture between AMP, Australia and the
Sanmar Group. Headquartered in Chennai, AMP Sanmar had over 90 offices
across the country, 9,000 agents.
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RLI would strive hard to achieve the following goals:
Emerge as transnational life insurance of global scale and standard.
Achieve impeccable reputation & credentials through best business
profiles.
Vision : Empowering every one live their dreams.
Mission: Create unmatched value for everyone through dependable,
effective, transparent, profitable life insurance and pension plans.
Guiding Principles:
- Customer care &n satisfaction.
- Corporate Governance
- Creativity & Innovation
- Competitiveness.
There new products have been launched tall date and many more are
yet to come and there will be no looking back. A grand beginning only
promises a greater achievement with the passage of time.
2.4 Board of Director:
CEO - Mr. P. Nandagopal
CGO - Mr. Rajesh Bahi
CMO - Mr. Rohit Gaurav Muli
COO - Mr. K.V. Srinivasan
Vice President (Group Infrastructure)- Mr. K. Suresh Babu
Appointed Actuary - Ms. Pournima Gupte
Chief Investment Office - Mr. R. Ranharajan
Head HR - Ms. Maneesha Thakur.
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(PRODUCTS DETAILS)
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PRODUCT PROFILE
3.1 Different Plans:
Products are individual & group insurance plans life insurance policy is
contract between the policyholder and the life insurance company. Since
every contract is governed by certain conditions, which are mentioned in the
agreement, a life insurance policy is also governed by conditions that are
mentioned in the policy document.
Our insurance policy comes laden with many conditions-
- Explanatory (do not effect the benefit under the policy)- Restrictive (which reduce the scope of the coverage under
the policy Eg. Suicid, war, proof of age etc.
That conditions need to pay due attention to while opting for following plans:
1- Reliance Money Guarantee Plans:
Unit linked insurance plan.
Offers to safeguard your returns through the return shield option.
Option to switch between plans through the exchange option.
Three pre packaged investment fund options to choose from.
Basic Minimum Maximum
Age of entry 30 days 50 yrs. Last birthdayAge of
maturity
18 yrs. Last birthday 80 yrs. Last birthday
Policy term 10 yrs. 30 yrs.Sum assured Annualized premium for half the policy
term.Minimum Regularly Premium:
Yearly Half Quarterl Monthly
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Yearly y
Regular Premium
Option
Rs.
10,000
Rs. 5,000 Rs. 2500 Rs.
1000Minimum top up
amount
Rs. 2500 under all policies
2- Reliance Market Return Plans:
Unit linked life insurance plan.
Choose from four different investments funds and choose to
switch between them. Option to pay regular as well as single premium and top- ups.
Package our policy with accidental riders.
Basic Minimum Maximum
Age of entry 30 days 65 yrs. Last birthdayAge of maturity 18 yrs. Last birthday 80 yrs. Last birthdayPolicy term 5 yrs. 40 yrs.
Minimum Regular Premium:
Yearly Half
Yearly
Quarterl
y
Monthly
Regular Premium
Option
Rs.
10,000
Rs. 5,000 Rs. 2500 Rs.
1000Minimum top up
amount
Rs. 25,000 under all policies
Minimum Sum assured:
Regular Premium: Annualized premium for 5 yrs. Or annualized premium
for half the policy term, whichever is higher.
Single premium: 125% premium of the single premium.
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Maximum Sum Assured
No limit (Rs. 5,00,000 for age up to 12 years.)
3- Reliance Golden Years Plans:
A Unit linked pension product with a vesting age between 45
yrs. To 70 yrs.
Choose from tour different investments funds and choose to
switch between them.
Option to pay regular, single as well as top- up premium.
Tax free commutation up to one third of fund value at vesting
age.
4- Reliance Golden Years Plan Plus:
Unit linked pension plan with vesting age between 45 and 64
years.
Four investments four options to choose them.
Option to switch between funds.
Option to propone your vesting age.
Sum assured plus fund value is payable to the beneficiary on
death.
5- Traditional Plans:
Other traditional plans are Reliance cash flow plan, Reliance child plan,
Reliance special fundowment plan etc.
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(THE ADVISORS/ AGENTS)
4.1 INSURANCE ADVISORS
Person who sells insurance policies for a single insurance company, in
return for a commission is called ADVISOR.
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Insurance advisors are the bridge or the channel partners between the
policyholder and insurance company. They make the base for the insurance
company. In other words, it can be said that advisors are those people in the
organization who can give business to the company.
They are the representatives of an insurance company who sells
insurance. An insurance advisor locates prospective insurance customers
determines the insurance needs of each customer, and assists the customer
in applying for insurance. Typically, an insurance advisor will deliver the policy
when the application is approved, will collect the initial premium and will
provide customer service to policy owners. An advisor is also called a field
underwriter or a life underwriter.
4.2 Professionals requirements of advisors:
Candidate should satisfy 5 out above 7 requirements to appear in pre
test. (Pre- Recruitment Examination)
Aged between 25 & above.
Education Qualification- Graduate
Resident in the area for 3 yrs or more.
4.3 Advisor must have following characteristics:
1. Communication Ability: Clearly express oneself in formal and
informal settings.2. Inter Personal Skills: Listening effectively, maintaining emotional
control, presenting effective counter arguments without criticizing or
threating.
3. Market Understanding: This includes ability to assess both the
breadth & depth of potential markets.
4. Goal and achievement Motivation: Ability to set long & short term
goals, channels ones own effect towards achieving them. This
includes completing tasks that have been started.
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5. Time Management, Administrative ability, Independence/ self reliance,
Technical Knowledge.
4.4 Benefits for an Advisor:There are some reasons and parameters to be an advisor of the
insurance company which are mentioned below:
a) Money:
Money is the biggest reason to join as an advisor in a life insurance company.
Only in this industry you can invest minimum and earn maximum. There is no
limit for earning in this industry.
b) Estate Creation:
In this industry, the advisors are also paid commission till the maturity of the
policy. Moreover, advisor is also paid renewal commission every year and this
renewal commission helps the advisor to build an estate. It means a policy
that is sold today will pay the advisors may be more than 10 to 15 years. It
means each year you will get more and create an estate for advisors like
house, car, childrens future etc.
c) Status:
Advisors secure the life of the human beings. They give advise to their client
where to invest money and where not. So advisors become specialist in the
investment field. It means advisors will get status by helping the human
beings by a proper guidance.
d) Prestige:
Company will give the advisors foreign trips, gifts and many more things. It
also provides advisors a club membership. These all will give the advisors
prestige and a unique position in the society.
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e) Honor:
Reliance Life Insurance provides motivational factors to the advisors. It gives
a target to the advisors and if advisors reach this target, RLI l will give them a
trophy, a certificate and incentives in the meeting of the company. Advisors
can also become the member of MDRT and the Reliance Life Insurance will
honour such advisors.
f) Widen Social Circle:
Life insurance is the business of contracts. As the time passes in this
business more people will know and recognize the advisors. In this way, the
advisors can widen their social circle in a strategic manner.
g) Mitigate Human Hardship:
When advisors come into the life insurance business, they dont sell only
policy to the people but they provide safety against the uncertainty of the life.
They help the people in peace of mind, freedom from the troubles and help
them support themselves.
h) Contribute to the nation:
Each policy sold by the advisors will help the nation to increase the funds that
go towards developing the country, for improving economy, improve standard
of living and nature the upcoming industries.
4.5 Be an Advisor:
Being a Reliance Life Insurance advisor can be enriching and exciting career
option. Its an opportunity to associate with an industry tender, be in touch
with the latest and finest insurance practices from around the globe, and grow
both personality and professionally.
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Here are some of the benefits of being an Reliance life Insurance
Advisor:
Unlimited earning potential.
Clear career path. All round support through exclusive advertising, your own in house
consultant and world class training.
A comprehensive benefit package.
To be part of world class team.
Be your own Boss.
Flexible working environment.
Promotion opportunity.
4.6 Skill Building by RACE
RLI provides a special 100 hour training programme that advisors
undergo for procurement of their insurance selling license from IRDA. This
special training programme called RACE (Reliance Academy of Competence
Enhancement) to add to their ability in their journey towards becoming full-
fledged financial planning advisors.
The objective of this programme is to develop certified and professional
financial advisors who can import value- added services to our customers.
The induction training, through a consultative approach aims at detailing the
basics of life insurance, Reliance Life Insurance products and a reliance Life
insurance way of selling.
The programme also covers all the under writing and business
process. Post- induction, the foundation levels continuous learning sessionbuild on these areas by enabling our advisors to overcome issues faced .
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(RESEARCH METHODOLOGY)
5.1 SCOPE OF THE STUDY
The whole study was basically on the collection of data from primary
sources. For collection of primary data a survey was conducted in various
markets.
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Methodology has been extensively discussed under the heading given
below on the following pages:
Research Design
Collection of Data Sampling scheme.
(i) Research Design:
The Research design is a pattern or outline of a research projects
work. It is a statement of only the essential elements of a study,those that
provide the basic guidline for the detail of project. The present study being
conducted followed a descriptive research design. It produce a picture ofthe phenomemon decision maker is interested. Design of descriptive studies
includes the nature and source of data,the nature of the expected result and
the analytical method.
(ii) Source of Data:
Primary Data: The primary data has been collected by survey method. This is
or the most economical, efficient and effective way of collecting the data. Ityields a wide range of information on various characters like attitude, opinion,
behaviour etc. Primary data was collected through questionnaire.
Secondary Data: The secondary data has been collected by websites,
brochures, journals, Magazines etc.
Preparing a suitable data collection method: In this project it was found
that a questionnaire was the best method of obtaining the relevant data. Asurvey was found to be most appropriate to serve the objective already
prepared. The research carried out through the market survey was conclusive
and descriptive in nature.
(iii) Sampling Scheme:
In this project random sampling was the appropriate method. A sampling
design is a definite plan determined before any data actually collected for
obtaining representative result.
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1- Type of Universe : The first step in developing any sampling
design is to clearly define set of objects, technically called
the universe.
2- Sampling Size : (15 each from five insurance companies.)
(i) Reliance - 15
(ii) ICICI Pru. - 15
(iii) Bajaj Allinz - 15
(iv) SBI - 15
(v) LIC - 15
Tool : Questionnaire
Sample size is the total number of respondent included in the sample
assuming them to be true representative of the population. In my survey, I
have chosen a sample size of 75 respondents as an appropriate sample size.
I tried to contact only those persons who could give unbiased and
representative information.
5.2 Objectives:
1- To know about advisors perception towards insurance fields.
2- To know about advisors perception towards their respective insurance
company.
3- To know about advisors working pattern.
4- To know about advisors satisfaction regarding commission.
5- To know about motivational and de- motivational factors for advisors.
5- To find out grow fact of insurance agents regarding their career
prospects.
5.3 Research Methodology:
Nature of Data : Primary Data
Area of Research : Kota
Sample Size : 75 advisors/ agents
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Sampling Procedure : Convenience Sampling
Data collection Method : Questionnaire & Interview
Research Instrument : Questionnaire
Research Design : Descriptive
5.4 Analysis and interpretation:
How long have you been with the company.
Interpretation:
55% of them are working from less than 8 month and 30% are working
between 8-12 months. From this we can understand that from last some
time insurance market is in boom so more and more persons are joining it.
What about your recruitment process.
37
55%
30%
15%
0%
10%
20%
30%
40%
50%
60%
< 8 month 8 to 12 month >12 months
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0
10
20
30
40
50
60
70
80
90
SOPHASTICAL SUITABLE
NOO
FEMPLOYE
Interpretation:
83 % of the agent say about the recruitment process is sophistical.And rest of say suitable.
This job is taken as a part time or full time.
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0
10
20
30
40
50
60
70
80
FULL TIME PART TIME
NOO
FEMPLOYE
Series1
Interpretation:
68% of Advisors having this job as a part time. It shows that they are also
involved in some other job/service/business. But 32% people are believe in
full time but put full output towards the organization.
How many days are devoted for this work in a week.
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Interpretation:
80% of advisors are devoting 1-3 days in a week.
What is your joining age.
40
47%
33%
12%8%
0%
10%
20%
30%
40%
50%
1 day 2-3 days 4-5 days whole
week
10%
55%
25%
0%0%
10%
20%
30%
40%
50%
60%
below 20 yrs. between 20-
35 yrs.
between 35-
50 yrs.
above 50 yrs.
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Interpretation:
55% of advisors have a joining age between 20- 35 yrs. No one advisor
joins above 50 years.
Which is the most selling product.
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0
10
20
30
40
50
60
70
ULIP PLAN TRADIATIONAL PLAN OTHER PLAN
NOO
FEMPLO
YE
Interpretation
86% of advisors are agreed that ULIP plans are most selling plans because
it gives
highest return as well as risk cover to the customers.
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Which factor motivates you the most.
0
10
20
30
40
50
60
70
80
COMMISSION MANAGER'S
SUPPORT
CONTESTS
NOO
FEMPLOYE
Interpretation
Their commission motivates 82% of advisors and they are least motivatedby
managers support & contests.
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Which factor motivates the customers the most to invest in insurance.
Interpretation
21% of customer are motivated by their returns, 43% of customers are
motivated by their tax saving, 11% of customer are motivated by
investment, 25% of customer are motivated by risk cover.
44
43%
21%
11%
25%
0%
10%
20%
30%
40%
50%
tax saving returns inves tment risk cover
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Do you show the allocation charge & fund management charge to thecustomers.
0
10
20
30
40
50
60
ALWAYS NEVER DEPAND
NOO
FEMPLOYE
Interpretation
50% of advisors show the allocation charge & fund manager charge. It
shows that
they tell every thing to the customer relating to the product.
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Have you got benefits of a special training programme, RACE
(Reliance Academy of competence Enhancement)
0
10
20
30
40
50
60
70
YES NO
NOO
FEMPLOYE
Interpretation
65% advisors have had the benefits of RACE (Reliance Academy of
competence Enhancement)
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6.1 CONCLUSION
1- Ulip is the most selling plan.
2- 55% of advisors have been with the company since 8 months so it
is a fastest growing corporation in India.
3- 23% of advisors are dissatisfied with their commissions and they
would change their company if provided with good options.
4- Mostly, customers are motivated by tax saving.
5- 68% of advisors are doing this work as a part time job and 80% of
the advisors are devoting less than and equal to 3 days a week for
this work.6- Commission motivates advisors the most and the demotivating
factors are formalities. Unachieved targets, unsystematic training
and best motivational factors are managerial support & contests.
7- Mostly person joins as advisors at the age of 20-30 years.
8- Mostly advisors have a proper time management between their
both jobs (Part time & Full time)
9- Some advisors (35%) could not attend RACE programme because
of inconvenient time of training programme.
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6.2 SUGGESTIONS
1- Formalities should be reduces as much as possible at the time of
recruitment.
2- Advisors should provide enough chances for promotion.
3- Proper training should be provided to advisors. When new plans are
introduces and training should be organized in some shifts so that
95% of advisors could attend it.
4- Commission should be increased.
5- Feedback should be taken time to time from advisors by personal
meeting.6- Company should be intimating renewal premium information to the
customer.
6.3 LIMITATIONS OF THE STUDY
The research area was restricted only within the Kota city. This
may not reflect the exact position of the total market.
Sample size was also so less, limitation of time means and
resource forced for small size.
Questionnaire includes 16 question, which affects the mentality
of respondents that is time consuming.
Time constraint.
Money Constraint.
It is a human tendency or it is a mental state of mind that whenever
they are being observed, interviewed by unknown person they behave
artificially as hesitate to disclosing the facts. This is common problem while
conducting the survey. This human behavior may distort the result.
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References
1.. www.reliancelife.co.in
2.. www.reliancecapital.co.in
3.. www.irda.co.in
4.. Brushers
5.. Magazine like Life First, Insurance Agents(Life &
General) etc.
6.. Advisor recruitment form.
7.. Investment news.
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http://www.reliancelife.co.in/http://www.reliancecapital.co.in/http://www.irda.co.in/http://www.reliancelife.co.in/http://www.reliancecapital.co.in/http://www.irda.co.in/ -
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(APPENDICES)
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Questionnaire
Name:
Age:
Qualification:
Annual Income:
Sex:
Q.1How long have you been with the company?
(a) 12 months [ ]
Q.2What about your recruitment process?
(a)Sophistical (b)Suitable [ ]
Q.3 This job is taken as a part time or full time ?
(a)Full time (b) Part time [ ]
Q.4 How many days are devoted for this work in a week?
(a)1 day (b) 2-3 days (c) 4-5 days (d) Whole week [ ]
Q.6 What was your joining age?
(a)Below 20 Yrs. (b) Between 20-35 Yrs. (c)Bet. 35-50 yrs. (d)Above 50Yrs.
[ ]
Q.7. Which is the most selling product?
(a)ULIP (b)Traditional plan (c) other [ ]
Q.8 Which factor motivates you the most?
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(a) Commission (b) Managers support (c) Contests [ ]
Q.9 Which factor motivates the customers the most to invest in insurance?
(a) Returns (b) Tax saving (c) Investment (d) Risk cover [ ]
Q.10 Do you show the allocation charge & fund management charge to theircustomers?
(a) Always (b) Never (c) Depend[ ]
Q.11 Are you satisfied with your commission?
(a) Yes (b) No [ ]
Q.13 Have you got benefits of a special training programme, RACE?
(a) Yes (b) No[ ]