A PROJECT REPORT

ON

METHODOLOGY OF RECRUITMENT OF ADVISOR IN

RELIANCE LIFE INSURANCE

1

TABLE OF CONTENTS ACKNOWLEDGEMENTS EXECUTIVE SUMMARY INTRODUCTIONS.NO

PARTICULARS PAGE NO.

1. INDUSTRY PROFILE: ABOUT INSURANCE INDUSTRY WHAT IS LIFE INSURANCE LIFE INSURANCE VS OTHER SAVINGS

12-19

2. COMPANY PROFILE: ABOUT RELIANCE CORPORATE OBJECTIVE CORPORATE MISSION PLANS OFFERED BY RELIANCE

20-26

3. INTRODUCTION OF METHODOLOGY OF RECRUITMENT OF ADVISORS:

WHAT IS RECRUITMENT PURPOSE AND IMPORTANCE SOURCES

WHAT IS SELECTION ROLE AND PROCESS

27-42

4. INSURANCE ADVISOR AT RELIANCE: ROLE RESPONSIBILITY

43-44

5. CONCLUSION AND SUGGESTIONS 45-47

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EXECUTIVE SUMMARY

In today’s corporate and competitive world, I find that insurance sector has the maximum

growth and potential as compared to the other sectors. Insurance has the maximum

growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This

growth potential attracts me to enter in this sector and RELIANCE LIFE INSURANCE

has given me the opportunity to work and get experience in highly competitive and

enhancing sector.

The success story of good market share of different market organizations depends

upon the availability of the product and services near to the customer, which can

be distributed through a distribution channel. In Insurance sector, distribution

channel includes only agents or agency holders of the company. If a company like

RELIANCE LIFE INSURANCE, TATA AIG, MAX etc have adequate agents in

the market they can capture big market as compared to the other companies.

Agents are the only way for a company of Insurance sector through which

policies and benefits of the company can be explained to the customer .

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INTRODUCTION

The story of insurance is probably as old as the story of mankind.

The same instinct that prompts modern businessmen today to secure themselves

against loss and disaster existed in primitive men also. They too sought to avert

the evil consequences of fire and flood and loss of life and were willing to make

some sort of sacrifice in order to achieve security. Though the concept of

insurance is largely a development of the recent past, particularly after the

industrial era – past few centuries – yet its beginnings date back almost 6000

years.

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

Oriental Life Insurance Company started by Europeans in Calcutta was the first

life insurance company on Indian Soil. All the insurance companies established

during that period were brought up with the purpose of looking after the needs of

European community and Indian natives were not being insured by these

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companies. However, later with the efforts of eminent people like Babu Muttylal

Seal, the

foreign life insurance companies started insuring lives.But Indian lives were being

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

them.Bombay Mutual Life Assurance Society heralded the birth of first Indian life

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

Starting as Indian enterprise with highly patriotic motives, insurance companies

came into existence to carry the message of insurance and social security through

insurance to various sectors of society. Bharat Insurance Company (1896) was

also one of such companies inspired by nationalism. The Swadeshi movement of

1905-1907 gave rise to more insurance companies. The United India in Madras,

National Indian and National Insurance in Calcutta and the Co-operative

Assurance at Lahore were established in 1906.In 1907, Hindustan Co-operative

Insurance

Company took its birth in one of the rooms of the Jorasanko, house of the great

poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General

Assurance and Swadeshi Life (later Bombay Life) were

some of the companies established during the same

period.Prior to 1912 India had no legislation to

regulate insurance business.

In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act

were passed. The Life Insurance Companies Act 1912 made it necessary that the

premium rate tables and periodical valuations of companies should be certified by

an actuary. But the Act discriminated between foreign and Indian companies on

many accounts, putting the Indian companies at a disadvantage.

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The first two decades of the twentieth century saw lot of growth in insurance

business. From 44 companies with total business-in-force as Rs.22.44 crore, it

rose to 176 companies with total business-in-force as Rs.298 crore in 1938.

During the mushrooming of insurance companies many financially unsound

concerns were also floated which failed miserably. The Insurance Act 1938 was

the first legislation governing not only life

insurance but also non-life insurance to provide strict

state control over insurance business. The demand for

nationalization of life insurance industry was made

repeatedly in the past but it gathered momentum in

1944 when a bill to amend the Life Insurance Act 1938

Was introduced in the Legislative Assembly. However,

it was much later on the 19th of January 1956 that life

insurance in India was nationalized. About 154 Indian

insurance companies, 16 non-Indian companies and 75

provident were operating in India at the time of

nationalization. Nationalization was accomplished in

two stages; initially the management of the companies

was taken over by means of an Ordinance, and later,

the ownership too by means of a comprehensive bill.

The Parliament of India passed the Life Insurance

Corporation Act on the 19th of June 1956, and the Life

Insurance Corporation of India was created on 1st

September, 1956, with the objective of spreading life

insurance much more widely and in particular to the

rural areas with a view to reach all insurable persons in

the country, providing them adequate financial cover

at a reasonable cost.

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PURPOSE OF RESEARCH STUDY

SCOPE OF THE STUDY:

o I have made my research study at Reliance Life Insurance company and

hence my scope of study is limited to procedures and practices at Reliance

.

OBJECTIVES OF THE STUDY:

o To understand the process and procedure of recruitment of advisors at

reliance.

o To analyse various aspects that takes place at reliance related to

recruitment of advisors.

o To suggest fresh ways of recruitment.

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CHAPTER 1: INDUSTRY PROFILE

ABOUT INSURANCE INDUSTRY

Insurance industry records a booming growth:

The insurance industry recorded a booming growth of 35% in premium income

during 2005-06 with the 13 private sector players walking away with an

impressive 129% while the Life Insurance Corporation of India recorded a 21%

growth. Thus the market share of state behemoth’s dropped to 78% in 2004-05

from 87% a year ago.

According to ASSOCHAM Eco Pulse (AEP) Study, the

industry premium increased to Rs253.42bn in 2005-06

from Rs187.1bn in 2004-05. The LIC total premium

for the year 2005-06 amounted to Rs197.85bn as

against the Rs162.84bn during previous year.

The figures for the first two months of the fiscal 2006-07

also speak of the growing share of the private insurers.

The share of LIC for this period has further come down

to 75%, while the privatE players have grabbed over 24% share.

“With the huge potential the market has, the Government should, more seriously

look into increasing the FDI cap in the sector” said Mahendra K. Sanghi,

ASSOCHAM President.

During April-June 2005, the largest private company ICICI Prudential has

increased its share from 6.25% in 2004-05 to 7.68% in current fiscal.

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The opening up of the sector has given some of the most innovative products like

the customized insurance policies and now the unit linked policies that have

gained much of customer attention. The sector has huge potential and certain

other new and innovative areas can also be looked into for enhancing market

share and premium income, said Sanghi.

HDFC is next in the row with 2.91% market share which has increased from

1.92% last fiscal followed by TATA AIG which now shares 2% of the market

from

1.18% last fiscal. Birla Sun life’s share has dropped

From 2.45% during FY’05 to 1.76% in first two months

of FY’06. SBI life comes next with 1.72% share and has

infact dropped a few percent points from

last year.Max New York life and Aviva Life Insurance

have captured more than 1% share each from less than

1%share during FY’05. Others like ING, AMP Sanmar,

Met Life and Sahara India have less than 1% share.

The details of the market share of life insurance companies are attached. The

market share of the private players has doubled every year from 5.6% in 2002-03

to 12% in 2003-04 and close to 22% in 2004-05.

The state run insurance company has the biggest advantage of its huge network,

which the company can use to penetrate into rural market that is still lying

untapped. Another option with the life insurance companies to capture more and

more market share

could be product innovation and constantly developing

an insurance product in order to meet the ever-

changing requirements of the customer.

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Quality customer service and education can be

another area where company can differentiate itself

from other companies.

What Is Life Insurance?

Life insurance is a contract that pledges payment of an amount to the person assured

(or his nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:

The date of maturity, or Specified dates at periodic intervals, or Unfortunate

death, if it occurs earlier.

Among other things, the contract also provides for the payment of premium

periodically to the Corporation by the policyholder. Life insurance is universally

acknowledged to be an institution, which eliminates 'risk', substituting certainty

for uncertainty and comes to the timely aid of the family in the unfortunate event

of death of the breadwinner.

By and large, life insurance is civilization’s partial solution to the problems

caused by death.insurance, in short, is concerned with two hazards that

stand across the life-path of every person:That of dying

prematurely leaving a dependent family means of

support.

LIFE INSURANCE VS OTHER SAVINGS:

Contract Of Insurance:

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i) A contract of insurance is a contract of utmost good faith technically known

as uberrima fides. The doctrine of disclosing all material facts is embodied in

this important principle, which applies to all forms of insurance.

ii) At the time of taking a policy, policyholder should ensure that all questions in

the proposal form are correctly answered. Any misrepresentation, non-

disclosure or fraud in any document leading to the acceptance of the risk

would render the insurance contract null and void.

Protection:

i) Savings through life insurance guarantee full protection against risk of death

of the saver. Also, in case of demise, life insurance assures payment of the

entire amount assured (with bonuses wherever applicable) whereas in other

savings schemes,

only the amount saved (with interest) is payable.

AID TO THRIFT:

ii) Life insurance encourages 'thrift'. It allows long-term savings since payments

can be made effortlessly because of the 'easy installment' facility built into the

scheme. (Premium payment for insurance is either monthly, quarterly, half

yearly or yearly).

iii) For example: The Salary Saving Scheme popularly known as SSS, provides a

convenient method of paying premium each month by deduction from one's

salary.

iv) In this case the employer directly pays the deducted premium to LIC. The

Salary Saving Scheme is ideal for any institution or establishment subject to

specified terms and conditions.

Liquidity:

i) In case of insurance, it is easy to acquire loans on the sole security of any

policy that has acquired loan value. Besides, a life insurance policy is also

generally accepted as security, even for a commercial loan.

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Tax Relief:

ii) Life Insurance is the best way to enjoy tax deductions on income tax and

wealth tax. This is

available for amounts paid by way of premium for life insurance subject to

income tax rates in force.

iii) Assesses can also avail of provisions in the law for tax relief. In such cases the

assured in effect pays a lower premium for insurance than otherwise.

Money When You Need It:

i) A policy that has a suitable insurance plan or a combination of different plans

can be effectively used to meet certain monetary needs that may arise from

time-to-time.

ii) Children's education, start-in-life or marriage provision or even periodical

needs for cash over a stretch of time can be less stressful with the help of these

policies.

iii) Alternatively, policy money can be made available at

the time of one's retirement from service and used

for any specific purpose, such as, purchase of a

house or for other investments. Also, loans are

granted to policyholders for house building or for

purchase of flats (subject to certain conditions).

Who Can Buy A Policy?

i) Any person who has attained majority and is eligible to enter into a valid

contract can insure himself/herself and those in whom he/she has insurable

interest.

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ii) Policies can also be taken, subject to certain conditions, on the life of one's

spouse or children. While underwriting proposals, certain factors such as the

policyholder’s state of health, the proponent's income and other relevant

factors are considered by the Corporation.

CHAPTER-2,COMPANY PROFILE

COMPANY PROFILE OF RELIANCE LIFE INSURANCE:

FOUNDER

Few men in history have made as dramatic a contribution to their country’s economic

fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have

left behind a legacy that is more enduring and timeless.

As with all great pioneers, there is more than one unique way of describing the true genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud patriot, the leader of men, the architect of India’s capital markets, the champion of shareholder interest.

But the role Dhirubhai cherished most was perhaps that of India’s greatest wealth

creator. In one lifetime, he built, starting from the proverbial scratch, India’s

largest private sector enterprise.

When Dhirubhai embarked on his first business venture, he had a seed capital of

barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he

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converted this fledgling enterprise into a Rs 60,000 crore colossus—an

achievement which

earned Reliance a place on the global Fortune 500 list, the first ever Indian private

company to do so. Dhirubhai is widely regarded as the father of India’s

capital markets. In 1977, when Reliance Textile Industries Limited first went

public, the Indian stock market was a place patronised by a small club of elite

investors which dabbled in a handful of stocks.

Undaunted, Dhirubhai managed to convince a large number of first-time retail

investors to participate in the unfolding Reliance story and put their hard-earned

money in the Reliance Textile IPO, promising them, in exchange for their trust,

substantial return on their investments. It was to be the start of one of great stories

of mutual respect and reciprocal gain in the Indian markets.

Under Dhirubhai’s extraordinary vision and leadership, Reliance scripted one of

the greatest growth stories in corporate history anywhere in the world, and went

on to become India’s largest private sector enterprise.

Through out this amazing journey, Dhirubhai always kept the interests of the

ordinary shareholder uppermost in mind, in the process making millionaires out of

many of the initial investors in the Reliance

stock, and creating one of the world’s largest shareholder families.

ABOUT RELIANCE

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

Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading

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private sector financial services companies, and ranks among the top 3 private sector

financial services and banking companies, in terms of net worth. Reliance Capital has

interests in asset management and mutual funds, stock broking, life and general

insurance, proprietary investments, private equity and other activities in financial

services.

Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC)

registered with the Reserve Bank of India under section 45-IA of the Reserve

Bank of India Act, 1934.

Reliance Capital sees immense potential in the rapidly growing financial services

sector in India and aims to become a dominant player in this industry and offer

fully integrated financial services.

Reliance Life Insurance is another step forward for Reliance Capital Limited to

offer need based Life Insurance solutions to individuals and Corporates.

CORPORATE OBJECTIVE

At Reliance Life Insurance, we strongly believe that as life is different at every stage, life

insurance must offer flexibility and choice to go with that stage. We are fully prepared

and committed to guide you on insurance products and services through our well-trained

advisors, backed by competent marketing and customer services, in the best possible

way.

It is our aim to become one of the top private life insurance companies in India

and to become acornerstone of RLI integrated financial services business in

India.

CORPORATE MISSION

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“To set the standard in helping our customers manage their financial

future.”

CHAPTER3: INTRODUCTION OF

METHODOLOGY OF ADVISORS

RESEARCH METHODOLOGY

A Research Methodology defines the purpose of the research, how it proceeds, how to

measure progress and what constitute success with respect to the objectives determined

for carrying out the research study.The appropriate research design formulated is detailed

below.

Exploratory research : this kind of research has the primary objective of

development of insights into the problem. It studies the main area where the

problem lies and also tries to evaluate some appropriate courses of action.

The research methodology for the present study has been adopted to reflect these

realties and help reach the logical conclusion in an objective and scientific

manner.The present study contemplated an exploratory research.

RECRUITMENT

Recruitment is the process of finding and attracting capable applicants for

employment. The process begins when new recruits are sought and ends when their

applications are submitted. The result is a pool of candidates from which new

employees are selected.

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PURPOSE AND IMPORTANCE OF RECRUITMENT:

Increase the pool of job candidates at minimum cost.

Meet the organizations legal and social obligations regarding the composition of its

workforce.

Determine the present and future requirements of the organization in conjunction with

its personnel planning and job-analysis activities.

Evaluate the effectiveness of various recruiting techniques and sources for all types of

job applicants.

SOURCES OF RECRUITMENT

EXTERNAL INTERNAL SOURCES. SOURCES.

EMPLOYEE REFERRALS

ADVERTISEMENTS PREVIOUS APPLICANTS EMPLOYMENT EXCHANGE WALK-INS, TALK-INS CONSULTANTS

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COMPETITORS

EXTERNAL SOURCES:

1. ADVERTISEMENTS:

This constitutes a popular method of seeking recruits,

as many recruiters prefer advertisements because of

their wide reach.

Following are the various types of ads:

a) Want ads: This type of ad describes the job and the benefits, identify the

employer. They are the most familiar type of employment advertisements.

b) Blind ads: Large organizations with national reputation will seldom use

blind ads to fill lower-level positions. However, when the organization

does wish to publicize the fact that it is seeking to fill an internal position,

or it when to seeks to recruit for the position in the place of a person likely

to be displaced, a blind ad may be appropriate.

c) Self-ads: A variation to this source of recruitment is that that the

advertisements are released by the job seekers themselves. Such

advertisements describe the qualifications, experience and the areas of

interest of the advertisers.

2. EMPLOYMENT EXCHANGES:

These have been setup all over the country in

deference to the provisions of the employment

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exchange Act, 1959. The act applies to all industrial

establishments having 25 workers or more. Thus

employment exchange acts as a link between the

employers and prospective employees .

3. WALK-INS, TALK-INS:

The most common and least expensive approach for

candidates is direct applications; in which job seeker

submit unsolicited application letter or resumes.Direct

applications can also provide a pool of potential

employees to meet future needs .

From employee’s viewpoint walk-ins are preferable as

They are free from the hassles associated

with other methods of recruitment. While direct

applications are particularly effective in filling entry-

level a pools nd unskilled vacancies, some organizations

compile of potential employees from direct applications

for skilled positions.

4. CONSULTANTS :

ABC Consultants, Human Resource Consultants are some

among the numerous recruiting agencies. Consultants are

useful inasmuch as they have nation-wide contacts and

lend professionalism to the hiring process.

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5.COMPETITORS

Rival firms can be a source of recruitment. Popularly called

poaching’ or raiding this method involves identifying the

right people in rival companies. Offering them better

terms and luring them away.

There are legal and ethical issues involved in raiding rival firms for potential

candidates. From the legal point view,

employee is expected to join a new organization only after obtaining a no objection

certificate from his or her present employer. Violating this requirement shall bind the

employee to pay a few months salary to his or her present employer as a punishment.The

ethical issue is more significant than the legal one.Should an employee desert the

organization which has given training and offered him or her a job simply because

someone else offers you a few hundred rupee more as compensation? Is money

everything in life? Have loyalty and commitment lost their relevance?

MERITS OF EXTERNAL RECRUITMENT:

1. The organization will have benefit of new skills, new talent and new experiences,

if people are hired from external sources.

2. The management will be able to fulfill reservation requirement in favor of the

disadvantaged sections of the society.

3. Scope for resentment, heartburn and jealousy can be avoided by recruiting from

outside

DE -MERITS OF EXTERNAL RECRUITMENT:

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1. Better motivation and increased morale associated with promoting own

employees are lost to the organization.

2. External recruitment is costly

3. If recruitment and selection processes are not properly carried out. Chances of

right candidates being rejected (false positive error) and wrong applicant being

selected (False Negative Error) occur.

INTERNAL SOURCES:

1) EMPLOYEE REFERRALS:

This can be a good source of internal recruitment. Employees can develop good

prospects for their families and friends by acquainting them with the advantages

of a job with the company, furnishings cards of introduction, and even

encouraging them to apply. This source is usually one of the most effective

methods of recruiting because many qualified people are reached at a very low

cost to the company.

2) PREVIOUS APPLICANTS:

Although not truly an internal source, those who have previously applied for job

can be contacted by mail, a quick and inexpensive way to fill an unexpected

opening. Although ‘WALK-INS’ are likely to be more suitable for filling

unskilled and semi-skilled jobs, some professional openings can be filled by

applicants to previous jobs.

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FOLLOWING SOURCES WERE EMPLOYED AT RELIANCE LIFE INSURANCE DURING THE PROJECT:

1) BLIND ADS.2) DATABASE FROM CONSULTANTS.3) PERSONAL REFERENCES.

SELECTION

Selection is the process of differentiating between applicants in order to identify (and

hire) those with a greater likelihood of success in a job.

ROLE OF SELECTION:

The role of selection in an organization’s effectiveness is crucial for atleast, two reasons.

First, work performance depends upon individuals. The best way to improve

performance is to hire people who have willingness to work.Arguing from the employees

viewpoint,poor or inappropriate choice can be demoralizing to the individual concerned

and de-motivating to the rest of the workforce.Effective selection, therefore, assumes

greater relevance .Second, cost incurred in recruiting and hiring personnel speaks

volumes about the role of selection.

FOR EG. To prove how expensive recruitment has become. Pepsi had gone on a crash

recruitment drive. Six people from the company took over the entire Oberoi Business

Center in Mumbai for six days, 3000 applicants in response to the advertisement issued

earlier were scanned: applicants were asked to respond by fax within 100 hours: finally,

the short listed persons were flown in an and interviewed. Quite an expensive affair by

any standard.

SELECTION PROCESS

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PRELIMENARY INTERVIEW

SELECTION TEST

EMPLOYMENT INTERVIEW

REFERENCE AND BACKGROUND ANALYSIS

PHYSICAL EXAMINATIONEVALUATIONJOB OFFERSELECTION DECISION

EMPLOYMENT CONTRACT

R

E

J

E

C

T

E

D

1) PRELIMENARY INTERVIEW:

The to eliminate the unqualified job seekers based on the information supplied in their

application forms. Preliminary interview on the other hand, helps reject misfits for

reasons, which did not appear in the application forms.Purpose of preliminary interview

is more or less the same as scrutiny of applications, that is, elimination of unqualified

applications. Scrutiny enables the HR specialists

2) SELECTION TESTS:

Job seekers who pass the screening and preliminary interview are called for tests.

Different types of tests may be administered, depending upon the job and the

company. Generally, tests are used to determine the applicant’s ability, aptitude

and personality.

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S.NO TYPE OF TEST DESCRITION

1 WAB Eliciting candidate’s response to specific

questions.

2 BIB Assessing candidate’s response to the

background.

3 TAT Gauging the need for achievement and power.

4 SLC Assessing attitude towards importance of safety.

5 THOMAS PROFILING Identifying behavioral requirements for a job.

3) EMPLOYMENT INTERVIEW:

Interview is a formal, in-depth conversation conducted to evaluate the applicant’s

acceptability. It is considered to be and excellent selection device. Its popularity

stems from its flexibility.

Following are the various types of interview:

TYPE TYPE OF QUESTIONS USUAL APPLICATION

STRUCTURED A predetermined checklist of Useful for valid results,

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questions, usually asked of all

applicants.

especially when dealing

with large number of

applicants.

UNSTRUCTURED Few, if any, planned

questions. Questions are made

up during the interview.

Useful when the

interviewer tries to probe

personal details of the

candidate to analyze why

they are not right for the

job.

MIXED A combination of both

structured and unstructured

questions, which resembles

what is usually done in

practice

A realistic approach that

yields comparable answers

plus in-depth insights.

BEHAVIOURAL Questions limited to

hypothetical situations.

Evaluation is based on the

solution and approach of the

applicant.

Useful to understand

applicant’s reasoning and

analytical abilities under

modest stress.

STRESS A series of harsh, rapid-fire

questions intended to upset

the applicant.

Useful for stressful jobs,

such as handling

complaints.

s

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