recruitment of f.c and cost effectiveness of licensing

8/9/2019 Recruitment of f.c and Cost Effectiveness of Licensing

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A

Project ReportOn

Recruitment of FinancialConsultant &Cost effectiveness oflicensing in HDFC SLIC

At

KOLKATAPrepared By

ABHISHEK MONDALBatch 2009-11

Under the Guidance of

Mrs.Pooja Verma Mr.Ayushman ChatterjeeFaculty C.D.M

A.I.M.S, HDFC SLIC,

New Delhi KOLKATA.

As a partial fulfillment of PGPM programme


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Asia Pacific Institute OfManagement Studies

DECLARATION

I, Mr.Abhishek Mondal, hereby declare that the project report entitled RecruitmentOf Financial Consultant and cost effectiveness of licensing in HDFC

STANDARD LIFEis submitted by me, in partial fulfillment of PGPM programme

in Asia Pacific Institute Of Management Studies is the result of my own research work

in HDFC SLIC,Kolkata and it has neither been submitted nor published anywhere

before.

Place: Kolkata Abhishek Mondal

Date:

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ACKNOWLEDGEMENT

At the very outset, I would like to thank, with deep sense of gratitude, my

faculty guide Mrs. Pooja Verma, Asia Pacific Institute Of Management Studies, forhelping me to complete this project.

My sincere thanks to Mrs. Ananya Mukharjee, Area Head Chanel Devlopment,

Kolkata, for his constant encouragement.

I am highly obliged and grateful to my project guide Mr. Ayushman Chatterjee,

C.D.M, Shyambazar branch, Kolkata for giving me the opportunity to do my summer

internship under his guidance and for sparing his valuable time.

Finally, I would like to express my deep sense of gratitude to my friends, family

members, the customers and the total team members who are working in HDFC SLIC

without whose encouragement and help, this project would never been completed.

Thank you,

Abhishek Mondal

Roll No:-2K9/PGPM/A-05

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CONTENT

Executive Summary Page-5

What is insurance& purpose and need of insurance Page-6

Top ten insurance companies in India Page-7

Overview of HDFC,Max New York & ICICI Page-8-10

Page-10-13

Vision and Values of HDFC ,,

Investment Philosophy Of HDFC ,,

Products Range of HDFC Page-13-15

Marketing strategy & performance of HDFC Page-15-17

Objective Methodology and Sampling process of the study Page-18-20

All about Financial consultants Page-22

Cost of the company for giving the training to the F.C Page-23-25

Comparative study of MAX,ICICI AND HDFC Page-26-27

Sum numerical figures and findings Page-28-36

Recomendation Page-37-38

Conclusion Page-39

Limitation Page-40

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Reference Page-41

Questionnaire Page-42

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Executive summary

HDFC Standard Life Insurance Co. Ltd. is a joint venture between HDFC Ltd., India's

largest housing finance institution and Standard Life Assurance Company, Europe's

largest mutual life company. It was the first life insurance company to be granted acertificate of registration by the IRDA on the 23rd of October,2000.

Standard Life, UK was founded in 1825 and has experience of over 180 years. The

company is rated as "very strong" by Standard & Poor's (AA) and "excellent" by

Moody's (Aa2).

HDFC Standard Life's cumulative premium income, including the first year premiums

and renewal premiums is Rs. 672.3 Crores for the financial year, Apr-Nov 2005. So

far the company has covered over 11,00,000 individuals and has declared 5thconsecutive bonus in as many years for its 'with profit' policyholders.

During the summer training in HDFC SLIC in Kolkata, my project was

Recruitment of Financial Consultant and cost effectiveness of licensing in

HDFC STANDARD LIFE

The whole report helped us in understanding the insurance sector and thecompany.The analysis has also helped us gauge the actual performance of the

company with respect of its competitors which will help the company to improve its

performance.So I have concluded my project by giving certain suggestion

WHAT IS INSURANCE?

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The act, system, or business of insuring property, life, one's person, etc., against loss

or harm arising in specified contingencies, as fire, accident, death, disablement, or the

like, in consideration of a payment proportionate to the risk involved. Coverage by

contract in which one party agrees to indemnify or reimburse another for loss that

occurs under the terms of the contract.The contract itself, set forth in a written or printed agreement or policy. Any means of

guaranteeing against loss or harm.

Insurance is a concept, a technique, and an economic institution. It is a major tool of

risk management, and plays an important role in the economic, social, and political

life of all countries. Economic growth throughout

PURPOSE AND NEED OF INSURANCE:-

Asset are insured, because they are likely to be destroyed or made nonfunctional

before the expected lifetime, through accidental occurrences. Such possible

occurrences are called perils. Fire, floods, breakdowns, The risk only means that there

is a possibility of loss or damage. The damage may or may not happen. The

earthquake may occur, but the building may not have been affected at all. Insurance is

done against the possibility that they damage they happen. There has to be an

uncertainty about the risk. The word possibility implies uncertainty. Insurance is

relevant only if there are uncertainties.

Insurance dose not protect the asset. It dose not prevent its loss due to the peril. The

peril cannot be avoided through insurance. The risk can sometimes be avoided,

through better safety and damage control measures. Insurance only tries to reduce the

impact of the risk on the owner of the asset and those who depend on that asset.

Only economic consequences can be insured. If the loss is not financial, insurance

may not be possible. Example of non-economic losses are love and affection of

parents, leadership of managers, sentimental attachments to family heirlooms,

innovative and creative abilities, etc.

SO IN A SENTENCE WE CAN SAY THAT LIFE INSURANCE IS

SOMETHING WHICH COVERS THE ASSET VALUE OF SOMEBODYS

LIFE

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:TOP TEN INSURANCE COMPANIES IN INDIA:

1.) Life Insurance Corporation Of India.

2.) ICICI Prudential Life insurance Company.

3.)Bajaj Allianz General Insurance Company Limited

4.)SBI Life Insurance co. Limited

5.)Reliance Life insurance Company Limited

6.)HDFC Standard Life Insurance Company Limited

7.)Birla Sun Life Insurance Company Limited

8.)Max New York Life Insurance Company Limited

9.)Kotak Mahindra Old Mutual Life Insurance Limited

10.)Aviva Life Insurance Company Limited

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OVERVIEW

HDFC SLIC is one of the Indias leading private insurance company.

It offers a range a of individual and group insurance solution.It is joint venture

between Housing Devlopment Finance corporation Limited (HDFC Limited),Indias

leading housing finance institution and a group company of the standard Life

( Maturities Holding ) 2006 Ltd.hold 26.00% of equity in the joint venture while the

rest is hold by others.

HDFC Limited Indias premier housing finance institution has assisted more than 3.3

million families own a home,since its inception in 1977 across 24 offices in D00

cities and towns through its network. It has international offices in Dubai , London

Arbia,Oman etc. to assists NRIS and PIOS , to own a home back in India.As of in

the year 2008 it has the total wealth of Rs 95,000 crores including mortgage asset of

more than Rs. 82,800 crores. Customer service and satisfaction has been the main aim

of the organization. It has set the benchmark for Indian housing finance sector.HDFC

has undertaken a lot of consultancies abroad assisting different countries including

Egypt,Maldives,and Bangladesh in the setting up of housing finance companies.

The STANDARD LIFE GROUP has been looking after the financial need of

customers for over 180 years.It currently has a customer base of around 7 million who

rely on their company.Its investment managers currently administers 125 billion

pound in assets.It is also a leading pension provider in UK and is rated by Standard &

poors as strong with a rating of A+ and a rating of a1 by Moodys also.It was also

awarded the best pension provider in the year 2004, 2005 and 2006at the money

marketing award and it was voted a 5 star life and pension providers at the financial

adviser service award for the last ten year running. Standard life bank was awarded

the Best Flexible Mortgage Lender at the Mortgage Magazine Award s in 2006.

Recognition for the service to the sector has come from several national and

international entities including the world bank that has launched HDFC as a model

housing finance company for the developing countries .

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A BRIEF DISCUSSION ABOUT HDFC SLIC, MAX NEW

YORK LIFE INSURANCE AND ICICI PRUDENTIAL

MAX NEW YORK LIFE INSURANCE COMPANY:-

Max New York Life is a joint venture between,Max India Limited, one of Indias

leading multi business corporation and New York Life International,truly said this is

the arm of New York Life, a Fortune 100 company.In line with its vision To be themost admired life insurance company in India.It has also developed a strong

corporate governance model.

Incorporated in 2000, Max New York Life insurance company commercial operation

in 2001.In life of financial responsibility, it has adopted prudent financial practices to

ensure safety of policyholders funds. The companys paid up capital as on 30th April,

2009is Rs. 1783 crore.

Max New York life has multi channel distribution spread across the country. Agency

distribution is the primary channel complemented by primary distribution, alliancemarketing and dedicated distribution for emerging market. It use to take a lot of

emphasis on its selection procedure of the agents,which is comprise of 4 stages-

screening , psychometric test career seminar and final interview.The agent advisors

are trained in house to ensure optimal control on quality of training.It has now 87,870

agent advisor at 707 offices across 385 cities, it also has 36 referral tie up with banks,

24 partnership distribution and alliance marketing relationship each.This is the first

time such a model has been put its eye on rural marketing of insurance. The company

has 166 offices dedicated to rural areas.

Max New York offers a suit of flexible 37 products covering both life and health

insurance and 8 riders that can be customized to over 800 combinations enabling

customers to choose the policy that best fit their need.

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ICICI PRUDENTIAL LIFE INSURANCE:-

ICICI Prudential life insurance company is joint venture between ICICI bank and

Prudential PLC a leading international financial services group in the United

Kingdom. The capital infusion stands at Rs. 41.80 billion, with ICICI bank holding a

stake of 74%and prudential plc holding 26%. It began their operation in December

2000, after receiving the approval from IRDA. Today its nation wide team comprises

of 2099 branches including 1116 micro offices, over 276000 advisors and 18 bancassurance partners.

It is the first life insurance company in India to receive a National Insurer Financial

strength rating of AAA (Ind) from Fitch rating. For 3 year in arrow, ICICI prudential

has been voted as Indias most trusted private life insurer, by Economic Time- AC

Nielson, ORG Marg survey of Indias most trusted brand. As it grow their

distribution product range and customer base, we continue to tirelessly uphold our

commitment to deliver world-class financial products to the customers all over the

India.

ICICI Prudential has its capital of Rs. 4780 cores in march 2009.From 1st April, 2008

to March 31st 2009 the company has posted a growth of Rs. 13% garnering total

received premium (new business + renewal) of Rs. 15356 crores as against Rs. 13563

crores in FY 2008 and has underwritten over 9 million policies since incepetation.The

company has asset of held over Rs. 32000 crores as on March 2009.

For the past eight years , ICICI prudential has retained leadership position in the life

insurance industry with a wide range of products that meet the need of the Indian

customers at every time in their life.

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VISION AND VALUE OF HDFC SLIC

VISION:-

The most successful an admired life insurance company, which means that they are

the most trusted company, the easiest to deal with , offer the best value for money ,andset the standard in the industry .

THE MOST OBVIOUS CHOICE FOR ALL

VALUES:-

1. Integrity 4.People Care One for all & all for me

2. Innovation 5.Team work

3. Customer centric 6.Joy and simplicity

WHY HDFC Standard Life ?

STRONG PROMOTERHDFC Standard strong ,financial secure business supported by two strong and secure

promoters-HDFC Ltd and Standard Life.HDFC Ltd.s excellent brand strength

emerges from its unrelenting focus on corporate governance , high standard of ethics

and clarity of vision. Standard life is a strong financially secure business and a market

leader in the UK Life & Pensions sector.

PREFERRED AND TRUSTED BRAND

The brand has managed to set a new standard in Indian life insurance

communication space.They are the first private life insurer to break the ice

using the idea of self respect instead of death to convey our brand

proposition (sar utha ke jiyo).Today, they are one of the few brands that

customers recognize, like and prefer to do business.Moreover our tag line

sar utha ke jiyo is the most recalled campaign in its category.

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INVESTMENT PHILOSOPHY OF HDFC:-

They follow a conservative investment philosophy to ensure that our customers

money is looked after.The investment policies and a formal Investment Committeecomprising non-executive directors and the principle Officer & Executive Director

regularly monitor actions.

As a life insurance company, we understand that customers have invested their

savings with us for the long term with specific objective in their mind .Thus our

investment focus is based on the primary objective of protecting and generating good,

consistent and stable investment returns to match the investors long term objective

and expectation, irrespective of the market condition.

NEED BASED SELLING APPROACH:-

Despite of criticality of life insurance, sales in the industry has been characterized by

over reliance on tax benefits and limited advice based selling. Our eight step

structured ales process Disha however helps customer understand their latent need at

the first instance itself without focusing on product features or tax benefit. Need based

selling process, Disha the first of its kinds in the industry, looks at the whole financial

picture . Customer see a plan not piecemeal product selling.

RISK CONTROL FRAMEWORK:-

HDFC Standard life has fully implemented a risk controlled framework type ensure

that all type of risk(not just financial) are identified and measured.These are regurally

reported to the board and this ensures that the company management and the board

members are fully aware of any kind of risk and the actions taken to ensure they

mitigated.

FOCUS ON TRAINING:-

Training is an integrated part of our business strategy. Almost all employees have

undergone training to enhance their technical skill and also the soft behavioral skill to

be able to give the service standard that our company has set for itself.Besides the

mandatory that training for the financial consultant have to undergo prior to be

licensed, they have developed and implemented various training module covering

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various aspects including product knowledge selling skill objection handling and so

on.

FOCUS ON LONG TERM VALUE:-

HDFC Standard life does not focus in the business of ramping up the topline only,but

to create maximization of stakeholders value . Today they are extremely satisfiedwith the base that they have created for the long term success of this company.

STRICT COMPLAIANCE WITH REGULATIONS:-

They have initiated and implemented many new process some of which are fully

useful by IRDA and later made mandatory for the entire industry. The agents who

successfully completed their training only they are authorized by the company to sell

ULIPs.This has now been made compulsory by the IRDA for all insurance companies

under the new unit linked guidelines.

DIVARSIFIED PRODUCT PORTFOLIO:-

HDFC Standard lifes wide and diversified product portfolio help individuals meet

their various needs

Protection: Need for a sound income protection in case of your unfortunate death.

Investment: Need to ensure long term real growth of your money.

Savings: Save for the milestones and protect your savings too.

Pension: Need to save for a comfortable life post retirement.

Health: Cover for health related exigencies.

PRODUCTS:-

(A) PROTECTION PLAN

1.HDFC Team assurance plan.

2.HDFC Loan cover term assurance plan.

3.HDFC Home loan protection plan.

(B) CHILDRENS PLAN:-

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1.HDFC childrens plan

2. HDFC Unit Linked young star

3. HDFC Unit Linked Young star plus

4. HDFC Unit Linked Young Star champion.

(C) RETIREMENT PLANS:-

1. HDFC Unit linked pension II

2. HDFC Unit linked pension maximizer II

3. HDFC Immediate annuity.

(D) SAVINGS & INVESTMENT PLANS:-

1.HDFC Unit linked endowment plus II

2. HDFC Simple life.3.HDFC Unit linked enhanced life protection II

4. HDFC endowment assurance plan

5.HDFC Single premium whole of life insurance plan

6.HDFC Savings assurance plan

7. HDFC assurance plan

(E) HEALTH PLUS :-

1. HDFC Critical care plan.2. HDFC Surgi care plan.

(F)RURAL PRODUCTS:-

1. HDFC Gramin Bima Mitra Yojona.

2. HDFC Bima Bachat Yojona.

(G) SOCIAL PRODUCTS:-

HDFC Development Insurance Plan.

(H) PRODUCTS CLOSED FOR SALE:-

1. HDFC Unit linked endowment.

2. HDFC Unit linked pension.

3. HDFC unit linked endowment plus.

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4. HDFC unit linked endowment suvida.

5. HDFC unit linked young star suvida

6. HDFC unit linked young star suvida plus

7. HDFC unit linked pension plus

MARKETING STRATEGY OF HDFC SLIC :-

TV COMMERCIAL:-

Childrens Plan August 2008 Chanda mama Ad.

Life Insurance December 2008 Hide and Seek Ad.

Unit Linked Insurance Plans January 2008 Big car Ad

RADIO COMMERCIAL:-

Childrenss plan August 2008 Doctors Ad

Childrens plan Pilot AD

Pension plus October 2008 Chadi Ad

Unit linked savings plans January 2008 Big Home Ad

Unit linked savings plus January 2008 Big Car Ad

Unit linked savings plan January 2008 Ticket Ad

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PERFORMANCE OF HDFC SLIC :-

HDFC SLIC one of Indias leading private insurance company,declared its annual

result for the last financial year 31st march 2009 where its total premium income was

Rs. 5564.69 crores registering a year on-year growth of 15%.It was driven bycompanys structured sale process based on customer need and their assessments,

wide range of products portfolio and diversed distribution network.

In line with overall market condition , growth in Effective Premium Income(E.P.I) in

respect of retail business increased by 5%, growing from Rs. 2,425 d crores in 2007-

2008 to Rs. 2552 crores in 2008-2009.HDFC Standard life tracks its new business

premium on the basis of E.P.I.It is calculated by giving only a10% value to a single

premium policy and is an internationally accepted indicator of an insurance

companys performance.

Mr. Parsh Paranis, principal officer and executive director said, The financial year

2008 -2009 was a defining year with a unfolding of several unexpected events-sharp

correction in financial market and a spread of recessionary trends. These events also

had an impact on the Indian life insurance industry. However, given the uncertainty in

the overall scenario, customers have reduced their annual premium commitment on

new policies.At the same time, existing policies continued to be in force reflected in

our renal premium with a healthy growth of 34%.

Highlights of Financial Year 2008-2009

Total premium income is up by 15% at as against Rs. 4858.56 crores

5564.69 crores in FY 2007-08.

Renewal premium collected increased to Rs.2913.58 crores from RTs.

2173.19 crores in the previous year, which is a growth of 5%.

EPI in respect of retail business increased by 5% growing from Rs.

2,425 crores in 2007-08 to 2552 crores in 2008-09.

Alternate channels , including bank assurance, contributed about 45% to

the effective premium income.

Total asset under management increased to Rs. 10,595 crores ,

registering a growth of 24% over FY 2007-08

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Assets under management for the Group business have increased to Rs.

1075 crores registering a growth of 12% over FY 2007-08.

Companys products and services are now available through a network

of 595 office serving over 700 cities and towns across the country.This isfurther complemented by corporate agency, relationship with the public,

private and cooperative bank.

Strength of financial consultant reported year on year growth of 43% to

over 2,07,000 in FY 2008-09 compare to 1,45,000 last FY.

The sum assured in force for 2008-09 was Rs. 57,158 crores as

compared to Rs. 45,743 crores for the previous year.

Towards improving the quality of training imparted the company started an in house

training facility to cater to the mandatory training required to be given as for other

sales training facility to cater to be given as well as for other sales training

requirement. The company has received accreditation from the Insurance Regulatory

And Development Authority for 149 training centers housed in its branches.During

the year , HDFC Standard Life also launched a 3 months insurance and management

programme in collaboration with Manipal Education to select , train and groom

talent from across the country and ensures a ready pool of insurance trained sales

professionals for the company.

To meet the demands arising from from the companys growth, the promoters

contributed an additional Rs. 525 crores of equity to take the paid up share capital as

on March 2009 to Rs. 1796 crores.

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OBJECTIVE

My main objective of the project are as follows:-

To recruit the Financial Consultants for HDFC Standard life

Insurance Company.

To find out effectiveness of licensing cost in HDFC SLIC.

Basically these are my primary objectives during my summer internship project.Now

these are my secondary objectives of my project which are the broad view of the 2nd

point.

To find out different cost involved in licensing of the candidates :-

The cost involved is basically from two sides, one is from the candidates

side, recruitment fee and the another one is from the companys side

which is basically relates to companys cost for providing the training to

the candidates and providing other things during the time of the training.

To analyze the different cost elements of licensing:-

The cost involved in licensing includes various elements like IRDASfees, trainees cost and lunch and refreshments, all these need to be

analyzed properly so that we can find out how effective the cost is for the

company.

To compare the licensing cost with the competitors i.e Max New York

Life Insurance and ICICI PRUDENTIAL:-

Max New York and ICICI Prudential life insurance being the main

competitors of HDFC SLIC in private insurance , a comparison with them

can help us to know the actual difference between what each one of them

is offering and for which company the licensing cost is most effective.

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METHODOLOGY

Aresearch design is the framework or plan for a study which is used as a guide in

collecting and analyzing the data. It is the blue print which is very much useful in

completing the study. Therefore research design is a mandatory thing for every

research. It specifies the methods and procedures for accruing the information needed

to conduct the research effectively. It is the overall operational pattern of the project

that stipulates what information needs to be collected, from which source and by what

method. Here I have used a questioner to collect the necessary data from the managers

of other two insurance company.

IDENTIFICATION OF THE PROBLEM:-

Problem identification is very necessary. Without identifying the problem anybody

who is going to work on a certain project cant work properly,truly saying he/she cant

proceeds further. Thats why we need to understand properly what is the the problem

of our research. The study is undertaken to identify how effective the cost of licensing

of a financial consultant is in HDFC SLIC. Interviews were taken from the managers

of two other companies e.g Max New York and ICICI Prudential the two main

compititors of HDFC SLIC. The research also tries to analyze the key factors like the

charges which the company incurs for recruiting the F.Cs, what are their unrecovered

expenses if the candidates does not get a license even after the completion of the

training and how does the company recover the expenses.

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DATA SOURCE AND SAMPLIG PROCESS:-

Mainly we have to know the recruiting fees charged by the the different insurance

companies as well as HDFC SLIC for the aspiring financial consultants. This wasmainly collected from different data sources of the company, this was the secondary

data.At that time we also required to know the cost of the company for providing to

one financial consultant.To analyze this cost of licensing we required the data of

yearly recruitment in the company, number of recruits sitting for training and number

of candidates getting licensed in HDFC SLIC and for analyzing the effectiveness of

licensing cost in HDFC.Beside this we also need to compare the same thing for the

other competitors of HDFC e.g Max New York and ICICI Prudential.

For this purpose, we have collected both primary and secondary data as per my

requirement.The secondary data have been collected from HDFC SLICs own data

source and different online sources and for the primary data we have designed a set of

questionnaire to collect the first level data.

Here in this case I have taken the exploratory research technique.The main

reason behind taking exploratory research method is that the problem is not clearly

defined or we can say the problem is partially.Exploratory research often relies on

secondary researchsuch as reviewing available literature and/or data, or qualitative

approaches such as informal discussions with consumers, employees, management or

competitors.Again the data what I have used for my study are secondary one.We cansay that exploratory research has the goal of formulating the problems more precisely,

clarifying problems,gathering information etc.For this study I have made a

questionier,this was my tool for collecting the data from the managers of ICICI

PRUDENTIAL LIFE INSURANCE and MAX NEW YORK LIFE and also HDFC

SLIC.

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CHANNEL DEVLOPMENT VERTICAL

Here Ive tried to shown the main main position who are engaged in the recruitment of

the Financial Consultants in HDFC SLIC.CDM(channel development manager0

plays a very vital role in the recruitment of the F.C in HDFC SLIC.

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WHO ARE FINANCIAL CONSULTANTS?

A Financial Consultant is a person plants the investment for an individual.The F.C

helps an investor to plan out his investment properly and wisely so that that person

can get maximum benefit out of his investment.In insurance sector this term is used to

describe those people who help people to invest in different insurance policy.

ELIGIBILITY CRITERIA TO BECOME A FINANCIAL

CONSULTANT:-

To become a financial consultant a candidate need to fulfill the 3Q out of the

5Q.Those are as follows:-

1.) Educational Qualification: From 12TH Pass to above

2.) Marital Status :married/unmarried

3.) Age: Above 21

4.) Household Income: Not less than 1lakh

5.) Residential Status: N/A

DOCUMENTS REQUIRRED TO BECOME A F.C:-

To become a F.C a candidate need to submit these documents in HDFC SLIC

1.) Age Proof

2.) Educational proof

3.) Address proof

4.) Pan Card

5.) One Cancelled Cheque

6.) Eight passport size colored photo

7.) Demand Draft of Rs.825/-

After submitting the following documents the candidates has to sit for 50 hrs. training

which is spread over a period of seven days. On the completion of the training the

candidate need to be sit for an exam which is conducted by IRDA.This exam is

basically an online exam containing objective and mathematical problems.

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COST FOR THE COMPANY ON PER CANDIDATE TO

GIVE THE TRAINING IN HDFC SLIC:-

HDFC SLIC incurs a cost of Rs. 3500 per candidate for providing them the

training.This cost includes the cost of the trainer authorized by IRDA, lunch and

refreshment cost and also the examination fee for each candidate.

Now we need to analyze the different elements involved in the cost and with the help

of this we can find out that how much effective the cost of licensing is:

North and East zone South & West zone

Financial consultant

recruitment

41730 41361

Financial consultant

licensing

10481(55%) 8696(45%)

Input/output ratio 25% 23%

EPI( Rs. Cr) 57 55

EPI per active financial

consultant(Rs.)

72602 79281

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Total candidates appeared for training and exam in North and South zone= 19056

Expenses incurred by the company /candidate = Rs.3500

Total expenditure of the company =(19056 X 3500)= Rs. 66696000

Expenses recovered from per candidate= Rs. 825

IRDA examination fee= Rs. 250 this one is fixed.

Part of the recruitment fee is used for other amenities like lunch and refreshment that

is Rs. 575.

Total number of recruitment = 41370 candidates.

Total expenses recovered =(41370 X 825) =Rs. 34130250

Unrecovered expenses = (34130250- 66696000)= Rs. 32565750

Now this uncovered expense is recovered from the sale of policies by the recruited

FCs.As we can see from the above calculation that the companies EPI for this

concerned period in this region is Rs. 57 crore which is good enough to recover the

undercover cost of the company, and still making a fairly good amount of profit of

Rs.541571250.

Total candidates who appeared for training and exam from South andWest Zone= 19324Per candidate expenses incurred by the company =Rs. 3500

The total expenditure of the company= 19324X 3500= Rs. 67634000

Expenses recovered from / candidate =Rs. 825

As above mentioned that IRDA has a fixed fee of Rs. 250 for the examination and the

other expenses of Rs. 575 for the lunch and other refreshment charge.

Total number of recruitment = 41361 candidates.

Total expenses recovered = Rs.(825 X 41361) = 34122825

Unrecovered expenses =Rs.( 34122825- 67634000) =Rs. 33511175

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This unrecovered expenses also recovered from the sale of policies by the FCs.

Though from the above calculation we have found out that the company is good

enough to recover their unrecovered costs by the premium revenue sale of policies but

when we see the input / output ratio we found that in north east region only 25% of the

recruited FCs are getting licensed and in the south and west region only 23% of thecandidates are get licensed, now this rate conversion from recruitment which should

be improved so that the company can have further benefit by having more agents who

can bring more business for the company .The company also needs to find out the

reason which are responsible for this lack in getting recruits licensed.

According to my study, I can mention some of the finding of it-

Candidates may not get enough time to have their training.

Some candidates just log in themselves under some influence or any kin d of

pressure of some relative but actually, they are not at all interested in that

matter.

Some of the candidates are from the rural areas they have some problem in

understanding English and there fore they are not able to get their training

properly which in turns result in the failure of their exam.

Some candidates are not able to pass in the exam because of non preparation.

The company should look after in these matter and they should take some necessary

step to solve such kinds of problem, because at the end the company will be in the

profit if those trainees be able to pass the IRDA Exam.

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1.) ON THE BASIS OF MODES OF RECRUITMENT OF FINANCIAL

CONSULTANT

HDFC SLIC ICICI PRUDENTIAL MAX NEW YORK LIFE

RC RECRUITMENT

CONSUTANTS

RC RECRUITMENT

CONSULTANT

RC RECRUITMENT

CONSULTANTS

PROJECT TRAINEE PROJECT TRAINEES PROJECT TRAINEES

E2E REFERAL MARKET

INFERENCE:-

In HDFC SLIC among the four-recruitment process of financial consultant the process

Recruitment consultant is the most popular one.

Again in case of ICICI Prudential the process RC is the most popular one.

In case of Max New York life the process RC is the most popular one for the

recruitment of financial consultant.

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2.) ON THE BASUS OF QUALIFYING SCOURE:-

BASIS HDFC SLIC ICICI

PRUDENTIAL

MAX NEW YORK

LIFE

INSURANCE

EducationalQualification

Graduate Graduate 10+2

Martial Status Married Married Unmarried

Age 25 to 60 years 25 to 60 25 to 35 -1 point

More than 35-2

points

Residential Status Residing in the

same city for more

than 3-5 years

Same as HDFC Staying in the same

city- 5years -2

points

Household Income Should be at least 3

lacs

Same as HDFC n/a

Gender N/A N/A Male-1 point

Female-2 points

INFERENCE:-

In case of ICICI Prudential, each and every candidate needs to fulfill all the five

condition to become a financial consultant in that organization.

In case of Max New York Life insurance the candidate has to achieve the target no of

9 points if he/she wants to be a financial consultant in that organization.

In case of HDFC SLIC they have their 5Q model any candidate if he/she wants to be a

financial consultant he/she has to fulfill at least 3Q.

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3.) ON THE BASIS OF CHARGES FOR RECRUITMENT:-

In case of Max New York Life insurance, they take only Rs.1000 from each

candidate and this 1000 comprise of IRDA fees and other refreshment fees for 15 days

of training for the trainees.

In case of ICICI Prudential they take only Rs. 500 from each candidate, it also

comprise of IRDA fees and other fees.

In case of HDFC SLIC they take Rs. 825.This fees is divided into two parts i.e Rs.

525 for the IRDA license and the other Rs. 300 for the lunch and other refreshment

cost which is provided for the candidates during the time period of the training.

4.) ON THE BASIS OF TRAINING PROVIDED

In case of HDFC SLIC it provides a compulsory training of 50 hours for each and

every candidate who wants to be a financial consultant and training can either be

online or offline, spread over 7 days.

In case of ICICI PRUDENTIAL training is not mandatory.

In case of Max New York Life training is compulsory, which is of 100 hrs. and spread

over a period of 15 days.

5.) ON THE BASIS OF FINANCIAL CONSULTANTS RECRUITMENT RER

MONTH OF A SINGLE BATCH:-


INSURANCE

73 97 30

INFERENCE:-

In HDFC SLIC the number of recruitment is moderately good. It is neither too high

like as ICICI Prudential nor too low as Max New York life.So by observing this we

can say that the company has a very good chance of further growth of recruitment.

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In case of ICICI Prudential the number of recruitment is very high.We can say that the

probable reason behind this high recruitment can be the low cost of recruitment

charges and also there the training is not mandatory. If we the rules of F.C recruitment

we can say that they are trying to increase the number of F.C not the quality of their

F.Cs,and this is not good at all.

In case of Max NEW York the number of recruitment is too low,the reason behind this

is the high recruitment fee and also the very long training schedule. But on the other

hand we can see that Max is focusing on the quality of their financial consultants

which is very good for the company,because in the recent years Max is growing its

business very aggressively.

6.) ON THE BASIS OF LICENSING:-


41 63 16

The licensing number of HDFC SLIC is showing that out of 73 people recruited per

month 56.16% candidate is getting their license.

In case of ICICI Prudential the licensing percentage is 64.94% which is pretty good in

comparison with Max and HDFC.

In case of Max New York Life the licensing percentage is 53.33%,they recruited 30

people in a month & out of 3candidate 16 is getting their license.This is very close to

the HDFC,but still Max is lagging behind to ICICI Prudential.

7.) ON THE BASIS OF PAYOUTS TO THE RECRUITMENT

CONSULTANTS:-


Rs. 200 on recruitment and

Rs. 1300 on licensing

Rs.750 on licensing RS.2000 ON LICENSING

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INFERENCE:-

HDFC SLIC:- The payout model is very compititative and motivating for the the

RCS and the slab charges with increase in number of licensing ,the add on is that ifthe candidate is not getting licensed then also the RC get at least Rs. 200 which is not

available in Max and ICICI .But the RC will get the remaining 1300 only after his

training and gets the license ,so the RC has to make sure that his candidate receive the

training and passes the exam of IRDA.

The RC payout in ICICI Prudential is comparatively low in comparison to HDFC and

Max. The RC will get Rs. 750 in one go and that is when his candidate gets the

license.

The payout in MAX is also like as ICICI the RC will get Rs.2000 when his candidateget licensed. But this is very true that the payout in ICICI is very good in comparison

with Max and HDFC.

The table showing the recruitment cost for the company to provide training to

the candidates and the performance of the companies inters per recruitment per

month and number of licensing per month:-

Basis HDFC SLIC MAX NEWYORK LIFE

ICICIPRUDENTIAL

Recruitment fees Rs. 925 Rs.1000 Rs. 500

Number of candidates

recruited in one month

in one branch

73 30 97

Number of candidates

licensed in one month

from one branch

41 16 63

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From the above data we can derive the following

HDFC SLIC:-

Number of candidates getting recruited per month in a single batch= 73

Number of candidates getting license in of the recruited candidates =41

So the ratio is = 56.16%

Max New York Life Insurance:-

Number of candidates getting recruited per month in a single batch= 30

Number of candidates getting licensed of the recruited candidates =16


ICICI PRUDENTIAL LIFE INSURANCE:-

Number of candidate getting recruited per month in a single batch = 97

Number of candidate getting licensed of the recruited candidates = 63


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We can show the conversion rate graphically like this

n.c= % of not converted

con= %of conversion

From the above analysis we can find out that the performance of ICICI Prudential in

terms of the ratio is highest followed by HDFC and MAX.Although the other two

companies are improving their conversion rate in a very aggressive way.But if we see

the previous facts and figures we can be able to find out that different insurance

company has different selection criteria, the process is varying according to get much

more perfect Financial Consultants.

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FINDINGS

INSURANCE SECTOR:-

Generally people are not interested in joining the insurance sector

People are still unaware of the benefits of the private insurance sectors, they

still believe that LIC is the most reliable one.

The craze for becoming an agent has gone down because of the so many

insurance companies in the market and all of them aiming to increase their

agents.

Rural people are not fully aware of the commission of the agents.

In India only 5% of the women are insured

In India insurance sector covers only 28% of our economy but the banking

sector covers 70%

HFDC SLIC :-

The company is too much flexible in considering the qualifying score of its

candidates who they recruit to become financial consultants.

Presently there is no segmented approach in recruitment of Financial

Consultants but the company is also planning to introduce SGT (Segmented

growth tracker) which will focus on the recruitment.

The recruitment fee charged by the company is a bit in comparison to the other

insurance companies

HDFCs ratio of the candidates getting recruited and getting licensed is just

25% which is low in comparison of the other insurance companies.

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Though the input output ratio of the company in terms of recruitment is low,the

company is growing their as their EPI is good enough to cover up their losses in

recruitment procedure.

The activation of the recruitment consultants is very low it has been found that

in the eastern region, there are 350 recruitment consultants but only 12% of

them are actively working.

The company has very branches in the rural areas.

The companys innovative approach of introducing a CHANNEL

DEVLOPMENT VERTICAL has been proving itself very useful in increasing

the number of financial consultants.

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RECOMMENDATION

INSURANCE SECTOR

Based on the finding of our research I would like to give the following

recommendation.

Awareness among the common people should be increase towards the insurance

sector so that they can be motivated to be a part of the insurance sector. There

are many benefits which the insurance company give e.g. security, employment,

investment facility etc. We need to spread the message of the insurance sector

in every part of the society so that the common people can become a part of thissector.

In India private players are increasing day by day, but inspite of this fact any

common people is much more dependable on the LIC. They think that their

money is much more secured in LIC rather than any other private insurance

company. Because they think that one never knows that when that company file

for bankruptcy. So the private insurance companies need to build a good image

in the common people.

More women should come under the cover of the insurance sector.

It should be mandatory for all private insurance company to conduct a

workshop in the rural areas so that the rural people can also become a part of

the insurance sector.

Development of insurance sector should promoted as funds from this sector can

be utilized for the infrastructure development of the private insurance sector.

The insurance sector is covering 28% of our economy so that the governmentshould promote setting up of more insurance companies by providing some

benefit to the entrepreneurs.

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HDFC SLIC:-

According to my research these can be some of the recommendation for HDFC

SLIC:-

The company should give much more focus on the training of the candidates

and they should decrease the training cost for the candidates.

The cost for the company to provide the training to one candidate for seven

days training is Rs. 3500 which is a bit high in comparison to Max New York

life as their costing is Rs. 5200 for 15 days training. Now since this cost

comprise both the exam fee and the other fee so the company should try to

minimize the fixed cost by making more candidates is in a single training

session.

The charge of recruitment in HDFC is Rs.825 for 7 days training where as in

Max New York they charge Rs.1000 for 15v days training and there are also

other companies who charge much more less than HDFC. So we can say that

HDFC should decrease their recruitment fee so that each and every candidate

can afford the fee.

In some cases the company use their training room but most of the cases they

use to hire training room.If they continue their training in their training roomthen in that case the recruitment cost can be minimized.

It has been found from the research that the unrecovered cost of the licensing

procedure is recovered from the policies sold by the F.Cs.This is not the proper

way to recover the cost .The company should give much more focus and try to

attract the people with the help of a strong network and also by giving gifts and

other things.

The company should be much more strict in the qualifying score for thefinancial consultants. What HDFC is doing right now is the very basic criteria

for recruitment out of that if any candidate fulfill any 3 one then case they

become eligible for the Financial Consultant. It can be said that the company is

now targeting to increase their number of Financial Consultants not their

quality. So we can say that the company should pay more and more attention

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towards increasing the quality of the F.Cs. The knowledge of English should

be increase so that the candidates can easily clear the examination of IRDA.

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CONCLUSION

In this period of two months I have learnt a lot of the corporate world and alsothe insurance market a lot. In this two months I get a real corporate exposure

which teach me that this world is not abed of rose the whole way is thorny

anybody who want to survive in this world need to work very very hard.

In the time span of the project HDFC SLIC has taught me a lot of things. There

I came to know how to recruit a financial consultant, and also the cost

effectiveness of the licensing of HDFC SLIC. All the procedure of recruiting

any financial consultants.While recruiting the financial consultants Ive realizethat any work needs a commitment to complete that vey clearly.

There are many things what I really liked very much. The most interesting thing

is that WE FOLLOW 5 S, in this concept the company save paper,

electricity, water etc. This is really a very good concept which is helping the

company to reduce their cost.

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LIMITATION

Usually it is found that the number of candidates who are actually login

themselves for becoming the Financial Consultants, at the time of the training

the do not attend the training.

It was very very difficult to get the information from the managers of Max New

York Life and ICICI Prudential because the information what I needed at that

time was related to the internal data.

As my working time period was very short so the chance of biased was a verycommon thigh, because the performance of any single branch can very from

time to time. The single branchs performance cant give a very clear picture

I have actually interviewed the managers of Max New York and ICICI to know

the effectiveness of the licensing cost, but the actual fact is that there are also

other private players in the insurance market. To analyze the effectiveness of

the licensing cost very clearly we needed to collect each and every companys

data.

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REFERENCES

BOOK:-

IC -33, IRDA INSURANCE REGULATORY AND DEVLOPMENT

AUTHORITY.

WEBSIGHTS:-

www.hdfc.com

www.hdfcinsurance.com

www.maxnewyorklife.com

www.icici.com

41
http://www.hdfc.com/http://www.hdfcinsurance.com/http://www.maxnewyorklife.com/http://www.icici.com/http://www.hdfc.com/http://www.hdfcinsurance.com/http://www.maxnewyorklife.com/http://www.icici.com/


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QUESTIONIER

1.) How long have you been working with this organization?

Ans.

2.) How do you appoint your Financial consultants?

Ans. (a) through channel development (b) any other way

3.) What is the recruitment fee for the Financial Consultants in your

organization?

Ans.

4.) What kind of quality do you want your F.Cs should have

a.) Educational qualification

b.) Marital Status :

c.) Age

d.) Household Income

e.) Residential Status

Ans.

5.) Most of the cases you offer offline or online training?

Ans.

6.) For how many days and you conduct your training ?

Ans.

7.) For how many hours you conduct your training?

Ans.

recruitment of f.c and cost effectiveness of licensing

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