PROJECT TITLE:

EFFECTIVENESS OF RECRUITMENT AND TRAINING PROGRAMS FOR SALES FORCE=A

CASE STUDY OF HDFC STANDARD LIFE.

KRITI VISHWAKARMA

DIV-B ROLL NO.- 22

INDIRA INSTITUTE OF MANAGEMENT, PUNE

YEAR: 2009-2011

3. COMPANY CERTIFICATE

4. ACKNOWLEDGEMENT

First of all I would like to thank the Management at HDFC Standard Life Insurance

Company Ltd Life Insurance co. for giving me the opportunity to do my two-month project

training in their esteemed organization. I am highly obliged to Mr. ANURAG

MAHENDRA (Channel Development Manager) for granting me to undertake my training.

I express my thanks to all Sales Managers under whose able guidance and direction, I was

able to give shape to my training. Their constant review and excellent suggestions

throughout the project are highly commendable. My heartful thanks go to all the executives

who helped me gain knowledge about the actual working and the processes involved in

various departments.

I would also like to thanks my internal guide Shri Deshpandey Sir who helped me in

making my project report.

TABLE CONTENTS AND PAGE NUMBER

Sno. TOPIC PAGE No

1. Executive Summary

2. Part I Company Profile

(a) Brief introduction of the company.

(b) History of the Company / Organization profile

3. Part II Project Overview

(a) Introduction

(b) Objectives & scope

(c) Research Methodology

(d) Data Analysis

(e) Conclusions

(f) Limitations

(g) Recommendations and Observations

4. Part III

(a) Appendix

(b) Bibliography

(c) References

(d) Glossary

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 HDFC Standard Life Insurance Company

Ltd 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 companies 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.

HDFC Standard Life insurance is the oldest life insurance company in the world. It is the

largest insurer in the UK and is the 28th largest company in the world. In India, the

company is marketing life insurance products and unit linked investment plans. From my

research at HDFC SLIC, I found that the company has a lot of competition from other

private insurers like ICICI, Aviva, Birla Sun Life and Tata AIG. It also faces competition

from LIC.

On the whole HDFC standard life insurance is a good place to work at. Every new recruit

is provided with extensive training on unit linked funds, financial instruments and the

products of HDFC. This training enables an advisor/sales manager to market the policies

better. HDFC was ranked 13 in the Best Places to Work survey. The company should try to

create awareness about itself in India. In the global market it is already very popular. With

an improvement in the sales techniques used, a fair bit of advertising and modifications to

the existing product portfolio, HDFC would be all set to capture the insurance market in

India as it has around the globe

INTRODUCTION:

HDFC Standard Life Insurance Company Limited is one of India's leading private insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Limited), India's leading housing finance institution and a Group Company of the Standard Life Plc, UK. As on February 28, 2009 HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) 2006, Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others.

OBJECTIVES:

PRIMARY OBJECTIVES:

To study about the awareness among the people for joining as agent in Life Insurance Companies.

To know the role and scope of Financial Consultant in Life Insurance Companies. To have a complete understanding of Recruitment and Selection process of FC’s in

HDFC Standard Life.

SECONDARY OBJECTIVES:

To do SWOT analysis of HDFC Standard Life. To know about different products provide by HDFC Standard Life.

LIMITATIONS:

Some of the main problems in marketing the policies are:

Large amount of competition. Other brands are well advertised and have higher recall value. LIC is considered a safer option. Face competition from banks and mutual funds. High premium policies are difficult to market. Incorrect perception about insurance. Short term plans are available only at large premium. Customers do not have risk appetite to invest in shares. Consumers don’t want to undertake medical examinations. Customers do not like their money locked up for many years. No money back plan present in the product portfolio.

RECOMMENDATIONS:

To compete effectively HDFC SLIC could launch cheaper and more reasonable products with small premiums and short policy terms (the number of year’s premium is to be paid).

The ideal premium would be between Rs. 5000 – Rs. 25000 and an ideal policy term would be 10 – 20 years.

HDFC must advertise regularly and create brand value for its products and services. Most of its competitors like Aviva, ICICI, Max, Reliance and LIC use television advertisements to promote their products.

The Indian consumer has a false perception about insurance – they feel that it would not benefit them if they do not live through the policy term.

Nowadays however, most policies are unit linked plans where a customer is benefited even if their death does not occur during the policy term.

This message should be conveyed to potential customers so that they readily invest in insurance.

Family responsibilities and high returns are the two main reasons people invest in insurance.

Optimum returns of 16 – 20 % must be provided to consumers to keep them interested in purchasing insurance.

Part I Company Profile:

BRIEF INTRODUCTION OF THE COMPANY:

HDFC Standard Life believes that establishing a strong and ethical foundation is an essential prerequisite for long-term sustainable growth. To ensure this, we have concentrated our focus on expansion of branch network, organizing an efficient and well trained sales force, and setting up appropriate systems and processes with optimum use of technology. As all these areas form the basic infrastructure for establishing the highest possible customer service standards

Our core values are drilled down to all levels of employees, as these are inviolable. We continue to promote high integrity in business practices and shun short cuts and unethical practices, as we wish to be perceived as an institution with high moral standing. Since our inception in 2000, when the Indian insurance space was opened for private participation, we have consistently focused on setting benchmarks in all aspect on insurance business. Being the first private player to be registered with the IRDA and the first to issue a policy on December 12, 2000, our differentiators are:

STRONG PROMOTER:

HDFC Standard Life is a strong, financially 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 standards 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:

Our brand has managed to set a new standard in the Indian life insurance communication space. We were 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, we are one of the few brands that customers recognize, like and prefer to do business. Moreover, our brand thought, Sar Utha Ke Jiyo, is the most recalled campaign in its category.

INVESTMENT PHILOSOPHY:

We follow a conservative investment management philosophy to ensure that our customer’s money is looked after well. The investment policies and actions are regularly monitored by a formal Investment Committee comprising non-executive directors and the Principal Officer & Executive Director. As a life insurance company, we understand that customers have invested their savings with us for the long term, with specific objectives in mind. Thus, our investment focus is based on the primary objective of protecting and generating good, consistent, and stable investment returns to match the investor’s long-term objective and return expectations, irrespective of the market condition.

NEED BASED SELLING APPROACH:

Despite the criticality of life insurance, sales in the industry have been characterized by over reliance on tax benefits and limited advice-based selling. Our eight-step structured sales process ‘Disha’ however, helps customers understand their latent needs at the first instance itself without focusing on product features or tax benefits. Need-based selling process, 'Disha', the first of its kinds in the industry, looks at the whole financial picture. Customers see a plan not piecemeal product selling.

RISK CONTROL FRAMEWORK:

HDFC Standard Life has fully implemented a risk control framework to ensure that all types of risks (not just financial) are identified and measured. These are regularly reported to the board and this ensures that the company management and board members are fully aware of any risks and the actions taken to ensure they are mitigated

FOCUS ON TRAINING:

Focus on long term value

Transparent dealing

Strict Compliance with Regulations

Diversified Product Portfolio

HDFC Standard Life’s wide and diversified product portfolio help individuals meet their various needs, they are:

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

ONE-STOP SHOP FOR EMPLOYEE- BENEFIT SOLUTIONS:

HDFC Standard Life has the most comprehensive list of products for progressive employers who wish to provide the best and most innovative employee benefit solutions to their employees. We offer different products for different needs of employers ranging from term insurance plans for pure protection to voluntary plans such as superannuation and leave encashment.

When you choose HDFC Standard Life, you choose growth for your investments and security for your employees

THEY ASSURE YOU OF: Choice of different funds

Transparent fund management

Market linked returns

Low fund management charges

Easy administration

Speedy claim settlements( as per agreed service standards)

THE GROUP PRODUCTS OFFERED TO THEIR ESTEEMED CORPORATE CLIENTS:

Group Term Insurance

Group Variable Term Insurance

Group Unit-Linked Plan - An investment solution that provides funding vehicle to manage corpuses with Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave Encashment schemes of your company Also suitable for other employee benefit schemes such as salary saving schemes and wealth management schemes

PARENTAGE

HDFC Limited

HDFC Limited, India’s premier housing finance institution has assisted more than 3.3 million families own a home, since its inception in 1977 across 2400 cities and towns through its network of over 250 offices. It has international offices in Dubai, London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRI’s and PIO’s to own a home back in India. As of December 2008, the total asset size has crossed more than Rs. 95,000 crores including the mortgage loan assets of more than Rs. 82,800 crores. The corporation has a deposit base of Rs. 17,551 crores, earning the trust of more than 9, 00,000 depositors. Customer Service and satisfaction has been the mainstay of the organization. HDFC has set benchmarks for the Indian housing finance industry. Recognition for the service to the sector has come from several national and international entities including the World Bank that has lauded HDFC as a model housing finance company for the developing countries. HDFC has undertaken a lot of consultancies abroad assisting different countries including Egypt, Maldives, and Bangladesh in the setting up of housing finance companies.

Standard Life Group (Standard Life plc and its subsidiaries)

The Standard Life Group has been looking after the financial needs of customers for over 180 years. It currently has a customer base of around 7 million people who rely on the

company for their insurance, pension, investment, banking and health-care needs. Its investment manager currently administers £125 billion in assets. It is a leading pensions provider in the UK, and is rated by Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of A1 by Moody's. Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at the Money Marketing Awards, and it was voted a 5 star life

and pension’s provider at the Financial Adviser Service Awards for the last 10 years running. The '5 Star' accolade has also been awarded to Standard Life Investments for the last 10 years, and to Standard Life Bank since its inception in 1998. Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at the Mortgage Magazine Awards in 2006.

 Founded in 1875, company supporting generation for last 179 years.

Currently over 5 m. Policy holders benefiting from the services offered.

Europe’s largest mutual life insurer.

JOINT VENTURE:

HDFC Standard Life Insurance Company Limited was one of the first companies to be

granted license by the IRDA to operate in life insurance sector. Reach of the JV player is

highly rated and been conferred with many awards. HDFC is rated ‘AAA’ by both CRISIL

and ICRA. Similarly, Standard Life is rated ‘AAA’ both by Moody’s and Standard and

Poor’s. These reflect the efficiency with which HDFC and Standard Life manage their

asset base of Rs. 15,000 Cr and Rs. 600,000 Cr. Respectively.

HDFC Standard Life Insurance Company Ltd was incorporated on 14th August 2000.

HDFC is the majority stakeholder in the insurance JV with 81.4 %stale and Standard: of as

a staple pf 18.6% Mr. Deepak Satwalekar is the MD and CEO of the venture.

HDFC Standard Life Insurance Company Ltd. Is one of India’s leading Private Life

Insurance Companies., which offers a range of individual and group insurance solutions. It

is a joint venture between Housing Development Finance Corporation Limited (HDFC

Ltd.) India’s leading housing finance institution and the Standard Life Assurance

Company, a leading provider of financial services from the United Kingdom. Both the

promoters are well known for their ethical dealings and financial strength and are thus

committed to being a long-term player in the life insurance industry- all important factors

to consider when choosing your insurer.

VISION STATEMENT:

The most successful and admired life insurance company, which mean that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry. In short-"The most obvious choice for all". 

VALUES THAT WILL BE OBSERVED WHILE WE WORK WITH HDFCSL:

INTEGRITY:-

Honest and Truthful in every action.

TRANSPARENCY:-

Stick to principles irrespective of outcome.

Be just and fair to everyone.

INNOVATION:-

Building a store house of treasures through experiences.

Looking at every product and process through fresh eyes every day.

CUSTOMER CENTRIC:-

Understand his expectations by keeping him as the centre – point.

Listen actively.

Understand customer needs and deliver solutions.

Customer interest always supreme.

PEOPLE CARE:-

Genuinely understanding the people we work with.

Guiding their development through training and support.

Helping them develop requisite skills to reach their true potential.

Know them on a personal front.

Create an environment of trust and openness.

Establish a valuable relationship with them to create a joyful working environment.

Job satisfaction.

TEAM WORK "ONE FOR ALL AND ALL FOR ONE":-

Whole team takes the ownership of the deliverables.

Consult all involved, understand and arrive at a common objective.

Co-operate and support across departmental boundaries.

Identify strengths and weaknesses accordingly allocate responsibility to achieve common objectives.

TEAM WORK:-

Together Everyone Achieves More: - TEAM

It adds joy at work place.

Team work generates synergy and provides a focused approach.

An idea or activity performed in a group has greater acceptability

"One for all and all for one".

CUSTOMER SERVICE:

HDFC Standard Life is committed to maintaining the highest level of customer service. Hence they have tried to provide you with all the information you may want to seek regarding procedures such as paying your premium, various policy servicing options, processing a claim and so on.

MY ACCOUNT- It manages and monitors your HDFCSL policies at click of a mouse.

PREMIUM PAYMENT OPTION- Discover 9 hassles free way. POLICY SERVING- Need to make any changes in Personal details or policy

details for your existing policy. LAPSATION AND REVIVAL - If you wish to revive your policy. CLAIMS- A quick guide to the list of documents. BONUS- Their 8th Successive bonus declaration. CONTACT US- Your feedback/complaints are very valuable to us. Help us serve

you better.

MANAGEMENT TEAM:

Mr. Amitabh Chaudhry is the Managing Director and Chief Executive Officer of HDFC Standard Life

Mr. Paresh Parasnis is the Executive Director and Chief Operating Officer.

Ms.Vibha Padalkar is the Chief Financial Officer of HDFC Standard Life.

Mr. Ashley Rebello is the Chief Actuary and Appointed Actuary of HDFC Standard Life.

Mr. Rebello is a Fellow of the Institute of Actuaries of India and Fellow of The Institute of Actuaries (UK).

Mr. Sharad Gangal is the General Manager HR and heads the vertical in HDFC Standard Life.

Mr.Vikram Mehta heads the Sales and Marketing function for HDFC Standard Life.

BOARD MEMBERS:

Mr. H. T. Parekh, Founder-Chairman, HDFC Ltd.

Mr. Deepak S. Parekh is the Chairman of the Company.

Mr. Keki M. Mistry is the Board of Directors of the Company.

Ms. Renu S. Karnad is the Managing Director of HDFC Limited.

Mr. David Nish is Standard Life on 1 November 2006 as Group Finance Director.

Mr. Nathan Parnaby is appointed as the Chief Executive.

Mr. Norman K. Skeoch is currently the Chief Executive in Standard Life Investments Limited.

Mr. Gautam R. Divan is a practising Chartered Accountant and is a Fellow of the Institute of Chartered Accountants of India.

Mr. Ranjan Pant is a global Management Consultant advising CEO/Boards.

ASSOCIATE COMPANIES:

HDFC Limited

HDFC Bank

HDFC Mutual Fund

HDFC Sales

HDFC ERGO General Insurance

OTHER COMPANIES:

HDFC Trustee Company Ltd.

GRUH Finance Ltd.

HDFC Developers Ltd.

HDFC Property Ventures Ltd.

HDFC Ventures Trustee Company Ltd.

HDFC Investments Ltd.

HDFC Holdings Ltd.

Credit Information Bureau (India) Ltd

HDFC Securities

BANC ASSURANCE PARTNERS:

HDFC Bank

Saraswat Bank

Indian Bank

PRODUCT(S):

HDFC Unit Linked Young Star II , Young Star Plus II , YoungStar Champion , HDFC YoungStar Super , HDFC YoungStar Supreme ,

HDFC YoungStar Super Suvidha , HDFC YoungStar Supreme Suvidha & HDFC SL YoungStar Champion Suvidha

HDFC Unit Linked Endowment II , Endowment Plus II , Endowment Winner , HDFC Endowment Super , HDFC Endowment Supreme

HDFC Endowment Super Suvidha , HDFC Endowment Supreme Suvidha &HDFC SL Endowment Champion Suvidha

HDFC Unit Linked Enhanced Life Protection II HDFC SimpliLife HDFC Group Unit Linked Plan - Version II - Option A

 & B - Non Superannuation Schemes $ HDFC Unit Linked Wealth Maximiser Plus HDFC Unit Linked Wealth Multiplier HDFC Unit Linked Endowment & Endowment Plus HDFC Unit Linked Young Star & Young Star Plus HDFC Unit Linked Endowment Suvidha & Endowment Suvidha Plus HDFC Unit Linked Young Star Suvidha & Young Star Suvidha Plus HDFC Group Unit Linked Plan - Option A & B - Non Superannuation Schemes HDFC Unit Linked Pension & Pension Plus HDFC Group Unit Linked Plan - Option A & B - Superannuation Schemes HDFC Group Unit Linked Plan - For Gratuity & Leave Encashment Schemes HDFC Group Unit Linked Plan - For Defined Benefit Superannuation Schemes @

ACCOLADES AND AWARDS:

Received CIO 'The Ingenius 100 2009' Award. Received Diamond EDGE Award 2009. Received 2008 CIO Bold 100 and CIO Security Awards. Received PCQuest Best IT Implementation Award 2008. Received Silver Abby at Goafest 2008. Received Unit Linked Savings Plan Tops Mint Best TV Ads Survey-Mar 2008. Received Deepak M Satwalekar Awarded QIMPRO Gold Standard Award 2007. Received for quote- “Sar Utha Ke Jiyo” Among India’s 60 Glorious Advertising

Moments-Jan2008.

WHY HDFC IS BETTER?

INVESTMENT RETURNS:

Investment returns and business growth provided by HDFC is validated by Bajaj

Capital. HDFC pacify the need of investors up to healthy level and make the strong

relationship with them.

FINANCIAL BACKGROUND AND EXPERIENCE:

HDFC existing in the market since 1977. It has a very handsome experience in the

field of finance because it completely involved in finance Sector only where as the

others are running in many other field also like Reliance (Petroleum, Textile,

Telecom etc.)

ETHICS AND VALUES:

HDFC is an ethical and cultural organization which prevents the false selling and

prohibits the false commitment to the customer.

SALES FORCE:

Properly trend licensed and Educated People are the strength of the company. So

that they could give the best customer service.

Huge branch network HDFC is having 450 branches in all over the country.

ONLINE ACCESSIBILITY:

It makes the process faster and makes the customer delighted.

COMPETITORS OF HDFC STANDARD LIFE:

LIC (Life Insurance Corporation of India):

LIC has an excellent money back policy which provides for periodic payments of partial survival benefits as long as the policy holder is alive.20% of the sum assured is payable after 5, 10, 15 and 20 years and the balance 40% is payable at the 20th year along with accrued bonus.

ICICI PRUDENTIAL:

ICICI Prudential is a stiff competitor for HDFC SLIC. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of India's foremost financial services companies-and Prudential plc - a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%.

ICICI Prudential is the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As we grow our distribution, product range and customer base, we continue to tirelessly uphold our commitment to deliver world-class financial solutions to customers all over India.

BIRLA SUNLIFE:

Birla Sun life Insurance Company Limited is the joint venture between the Aditya Birla Group, one of the largest business houses in India and Sun Life Financial Inc., a leading International financial services organization. It is combines with the expertise which offers a formidable protection for your future.

BAJAJ ALLIANZ:

Bajaj Allianz is a joint venture between Allianz AG with over 110 years of experience in over 70 countries and Bajaj Auto, a trusted automobile manufacturer for over 55 years in the Indian market. Together they are committed to offering you financial solutions that provide all the securities you need for your family and yourself.

TATA AIG:

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by the Tata Group and American International Group, Inc. (AIG). Tata AIG Life combines the Tata Group's pre-eminent leadership position in India and AIG's global presence as one of the world's leading international insurance and financial services organization. The Tata Group holds 74 per cent stake in the insurance venture with AIG holding the balance 26 per cent. Tata AIG Life provides insurance solutions to individuals and corporate.

SWOT ANALYSIS OF HDFC STANDARD LIFE INSURANCE:

STRENGTH:

1. Domestic image of HDFC supported by Standard life international image is strength of the company. 2. Strong and well spread network of qualified intermediaries and sales person. 3. Strong capital and reserve base. 4. The company provides customer service of the highest order. 5. Huge basket of product range which are suitable to all age and income groups. 6. Large pool of technically skilled manpower with in depth knowledge and understanding of the market. 7. The company also provides innovative products to cater to different needs of different customers.

WEAKNESS:

1. Heavy management expenses and administrative costs. 2. Low customer confidence on the private players. 3. Vertical hierarchical reporting structure with many designations and cadres leading to power politics at all levels without any exception. 4. Poor retention percentage of tied up agents.

OPPORTUNITIES:

1. Insurable population –According to ING only 10% of the population is insured, which represents around 30% of the insurable population. This suggests more than 300m people, with the potential to buy insurance, remain uninsured.2. There will be inflow of managerial and financial expertise from the world’s leading insurance markets. Further the burden of educating consumers will also be shared among many players. 3. International companies will help in building world class expertise in local market by introducing the best global practices. 4. Insurance liberalization in India is expected to result in a wider choice of major commercial insurance covers, such as fire, export credit etc.

THREATS:

1. Other private insurance companies also vying for the same uninsured population.

2. Big public sector insurance companies like LIC, National Insurance Company Ltd., Oriental Insurance Ltd., New India Assurance Co Ltd. And United India Insurance Co Ltd. People trust and go to them more.

3. Most people don’t understand the need or are not willing to take insurance policy in general.

HISTORY OF THE COMPANY / ORGANIZATION PROFILE:

INSURANCE:

Insurance can be defined as assurance for uncertainty. Insurance is about something going

wrong. Its’ often about things going right. One of the Wonders of human nature is that we

never believe anything can actually go wrong.

The insurance sector in India has come a full circle from being an open competitive market

to nationalization and back to liberalized market again. Tracking the development in Indian

insurance sector reveals the 360 degree turn witnessed over a period of almost two

centuries.

INSURANCE IN INDIA:

The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries.

A BRIEF HISTORY OF THE INSURANCE SECTOR:

The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta.

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

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act,1956, with a capital contribution of Rs. 5crores from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.

INSURANCE SECTOR REFORMS

In 1993, Malhotra Committee headed by former Finance Secretary and RBI Governor R.N. Malhotra was formed to evaluate the Indian insurance industry and recommend its future direction.

The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector.

The reforms were aimed at "creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms…"

In 1994, the committee submitted the report and some of the key recommendations included:

1. STRUCTURE

· Government stake in the insurance Companies to be brought down to 50%

· Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations.

· All the insurance companies should be given greater freedom to operate

2. COMPETITION

· Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry.

· No Company should deal in both Life and General Insurance through a single entity.

· Foreign companies may be allowed to enter the industry in collaboration with the domestic companies.

· Postal Life Insurance should be allowed to operate in the rural market.

· Only one State Level Life Insurance Company should be allowed to operate in each state

3. REGULATORY BODY

· The Insurance Act should be changed

· An Insurance Regulatory body should be set up

· Controller of Insurance (Currently a part from the Finance Ministry) should be made independent

4. INVESTMENTS

· Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%

· GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time)

5. CUSTOMER SERVICE

· LIC should pay interest on delays in payments beyond 30 days

· Insurance companies must be encouraged to set up unit linked pension plans

· Computerization of operations and updating of technology to be carried out in the Insurance industry

The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry.

Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body.

THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA):

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies.

The other decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies were the launch of the IRDA's online service for issue and renewal of licenses to agents.

The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year.

Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 12 life insurance and 6 general insurance companies have been registered.

INSURANCE COMPANIES IN INDIA:

· Aviva

· Bajaj Allianz

· Bharti Axa Life

· Birla Sun Life

· Canara HSBC OBC Life

· DLF Pramerica

· Future Generali Life

· HDFC Standard Life

· ICICI Pru

· IDBI Fortis Life

· ING Vysya

· Kotak Life Insurance

· Max New York Life

· Metlife India

· Reliance Life Insurance

· Sahara Life

· SBI Life Insurance

· Shriram Life

· Star Union Dai-ichi Life

· Tata AIG

· Aegon Religare Life

Part II

PROJECT OVERVIEW:

INTRODUCTION

FINANCIAL CONSULTANTS:

The company’s distribution strategy continues to lay emphasis on the development of the agency channel. The number of licensed Financial Consultants appointed by the company increased from over 1, 44,000 in the previous year to over 200,000 as of March 31, 2009. This positions the company well to take advantage of a larger trained sales force in the coming year. The company provides extensive and thorough training, to not only complyWith the regulatory requirements, but also to equip the financial consultants to appropriately assess the customer’s insurance needs. Towards improving the quality of training imparted, the company started an in-house training facility for the mandatory training and other sales training requirements. The company has received accreditation from the Insurance Regulatory and Development Authority for 149 training centers housed in our branches. This initiative has improved the success ratio in licensing of financial consultants. During the year the company launched ATLAS (Agent’s Training and Licensing Administration System), a workflow based system, which enables efficient processing of data for training and licensing of Financial Consultants.

WHO CAN BE THE FINANCIAL CONSULTANT?

Section 42(4) of the amended Insurance Act, 1938 states an agent to be one who is not:

A minor.

Found to be unsound mind by a court of competition jurisdiction.

Found guilty of criminal background.

Found guilty of having knowingly participated in or connived at any fraud

/dishonesty or misrepresentation against an insured.

WORK OF FINANCIAL CONSULTANT:

The FC is the interface between the customer and insurance company. The agent should be

able to accomplish the following service:

Assessing and analyzing the clients risk profile.

Finding the best product or products available in the market.

Negotiating the best deal available.

Continuity of service throughout the period of insurance.

BENEFITS OF BEING A FINANCIAL CONSULTANT ARE AS FOLLOW:

Financial consultant, the right way to start career:

As a financial consultant the role will be to identify prospective customer. You will make

presentation, as to how you can help analyses their financial needs, provide customize

financial solution to cater to their respective needs and conduct reviews on regular basis to

keep customers on thank.

Easy way to start on career:

Zero investment: There is no start-up capital. Be an own boss with a flexible working

environment, unlimited earning potential and the opportunity to be part of world class sales

team.

Flexible work timings, part time or full time: FCs can work whenever he likes and from

wherever he like, FCs can work full time depending on their convenience it’s like no other

job however, the time.

Strong Partnership:

A powerful brand – HDFC Standard Life Insurance:

We were the first private life insurance company to be granted a license by IRDA.

We have been rated by business world magazine. As Indies most respected private life

insurance company 2004.

We have grown over 130% in the last and more than 8 lakhs policy holder. HDFC standard

life insurance has one of the highest brand recalls of around 80%

PROFESSIONAL TRAINING PROGRAMS AND CONTINUID GUIDANCE:

At HDFC standard training is an inherent element of our support system for FCs. Some of

our training and support initiative are as:

IRDA Training: Online training of 100 hrs. Prepares for career as FCs and enables to pass

the IRDA examination. After the IRDA license, first step towards a successful career as a

FC.

Basic Training and Induction: Independence of work experience, this training will give

perfect knowledge about the insurance industry along with comprehensive knowledge

about the insurance along with comprehensive knowledge about HDFC SLIC Product.

Disha training: This is a professional sales skill program eased by us to one selling skills.

Those programs enable to understand customer need and provide need based insurance

solution... A huge step from an amateur to a true finance professional.

Advance Training: Once FC have settled down as a FC professional we will continuously

upgrade capability and knowledge through sophisticated training program, fit for this

dynamic world of financial products and markets.

METHODS TO CREATE PROSPECTING:

1. Cold Calling 

2. References 

3. Family and Friends 

4. Seminar selling 

5. Existing customers

6. Advertising

7. Business Card

SPECIFICATIONS OF FC’s:

The age of the FC should be in bracket of 30-60 years. The family income of the FC should be a min. of Rs.3 Lacs p.a. The FC should be a graduate or above by qualification. The FC should have spent a min of 2 years in the city of current residence. Married.

DOCUMENTS REQUIRED FOR FC’S RECRUITMENT:

Exam fees 825 for Online, 925 for offline and 400 for Re-appearing. PAN Card. Age proof and ID Proof. Address Proof. Education Proof. 6 color passport photos. NEFT form. Agency Application form. KYC Addendum. VA form. Approval from RM –

If the FC is of 30 or above 30 and Under Graduate, then approval is required. If the FC is below 30 and Graduate, then also approval is required.

Additional detail format. 1 Mail ID & Pin code is mandatory. First to approach my personal network, like all my and family contact person.

PEOPLE WHOM TO APPROACH:

House –wives Pensioners (Retired Employee) CA Stock Broker Tax Consultant Post office Agents RCM Amway People Sahara LIC Agents Mutual Fund Agents Doctors

OBJECTIVE:

Recruitment of Financial consultant (FCs) of an excellent profile and their retention

strategies and what are their benefits that company going to provided for retention of their

FCs.

What type of people are we looking for?

Committed people who have the drive, determination and ability to become

professional financial consultants.

Ability to sell a range of financial products.

What do We Expect from financial Consultant?

Devote a time and energy during training.

Sell at least 5 policies each month once after licensed with company.

We look forward to a long term mutually beneficial relationship.

Why should financial consultant choose HDFC standard life?

Brand value and the reputation of the partners (HDFC Limited) Market leader in

housing finance:

STRATEGIES:

Strategies Employed to achieve the target are as follows:-

Telecalling

Contacting the person directly (interview).

Collect references.

SOME IMPORTANT STEPS TO MAKE EFFECTIVE

TELECALLING:

Open the call in a friendly and positive way.

State the name, position and company name.

Check the prospect has time to speak.

State the reason for the call.

Clearly succinctly explain how the meeting will be benefiting the prospect.

PROCESS OF RECRUITMENT TO FC IS THE FOLLOWING:

1. Data Collection from Primary as well as Secondary Market as explained above.2. FC Recruitment through cold calling.3. Identifying whether the prospect fits our profile of “Likely Financial Consultant”-

By administering Questionnaire.4. Determining whether prospect who fit our profile are interested in becoming a FC-

By pitching to him about “becoming an FC”.5. Ensuring that the prospects who are interested are given to the branch to convert. 6. Prospect can be said to fit our profile of “Likely Financial Consultant” if: He/she matches Target Segment. He/she satisfies all Mandatory Parameters. He/she satisfies at least 1 out of 3 Optional Parameters defined. 7. Recruitment Questionnaire have to be filled by the selected people in which

following question is asked: Small Introduction Name Age Address Education Qualification Current Occupation Telephone numbers Number of family members

8. Judging the effectiveness of recruitment and selection of sales force is a very critical as every company needs quality FC to increase the profitable of the Organization.

9. After that form fill up procedure takes place then it goes to the branch office then to the head office and finally to the IRDA.

10. IRDA issued the date of training and examination of the candidates.11. Training is being done with the help of the trainees. The training is of 7 days that is

50 hrs.12. Then the Company issued the training certificate to the people who have attended

the training.13. After training the following candidates appears in the examination and have clear

it.

14. FC is selected after this and they get the license from the Company.

RESEARCH METHODOLOGY:

PROJECT DESIGN:

PRIMARY SOURCE:

Direct personal interview and an objectively framed questionnaire.

SECONDARY SOURCE:

Data is taken from published articles, papers, books and organization websites.

DATA COLLECTION COLD CALL

INTERESTED PROSPECT

DOCUMENTATION

TRAINING EXAM

LICENSING

1. DATA COLLECTION FROM PRIMARY MARKET:

First leverage my natural market- immediate contacts: friends/relatives/neighbors. Then list down names of at least 50 people or more, whom I can approach directly. Telecalling one by one all of them and take an appointment from them. Making at least 10 calls per day and meeting 4-5 people.

2. DATA COLLECTION FROM SECONDARY MARKET:

Target the key (high density) locations in city. Like in Pvt. Organization, Cultural Societies, Cafeterias, Banks. Prepare the Questionnaire and distribute it to them to reveal the information.

Questionnaire:

1. Age: Minimum 25 to 60 years. Y/N2. Married Y/N3. Income>Rs 3 lakhs p.a Y/N4. Graduate or Higher Y/N5. Has Spent >3 years in city of

Current residence Y/N

Total “Y” answers=

Approval Signature by TM (In case QSCORE<3)

Find out from the data, person’s income, and willingness to earn extra income. Filter that data and find out the person who is suitable to work for the financial

consultants. Telecalling from the filtered people and get appointment. Meeting them and explaining them the procedure of how to be a FC.

QUESTIONNAIRE:

1. Name of the respondent:2. Occupation:3. Age:4. Address:5. Contact No.:

Q1: Do you know about HDFC Standard Life?

Yes or No

Q2: Are you aware about the career in Insurance Sector?

Yes or No

Q3: Do you know about the working of Financial Consultant of “HDFC Standard Life”?

Yes or No

Q4: Do you have an idea about financial market?

Yes or No

Q5: Do you have any sales experience if yes how many years?

Yes or No

Q6: Have you been informed about the IRDA training details?

Yes or No

Q7: Are you aware of the commission structure of HDFC Standard Life?

Yes or No

Q8: Are you aware of the documents required to join as a FC?

Yes or No

Q9: Are you willing to take up the ‘Art of Financial Consulting’?

Yes or No

Thanks for giving your precious time.

SAMPLING:

Data has been collected by surveying the people like professional, unemployed students,

housewives, investment consultant, post office agents etc.

LITERATURE COLLECTED:

1. Pamphlet for recruitment of FC.2. Primary and secondary data for calling.3. FC Forms to be filled by FC.4. Policy Brochure for various Plans.5. Mandatory documents for becoming an FC.

SAMPLE SIZE:

The sample size of my project is limited to 87 only.

SAMPLE DESIGN:

Data has been presented with the help of pie charts.

DATA ANALYSIS:

WILLINGNESS TO BE FC FOR HDFC:

Yes No Total

Working employees 3 27 30

House wives 2 18 20

Students 2 13 15

Post office agents 1 11 12

Others - - 10

Total 8 87

Working Employees

yesno  

House wives

yesno

Student

yesno  

Post office agents

yesno  

Total

Working EmployeesHouse wivesStudentsPost office agents

INTERPRETATION:

It has been seen through the data analysis that willingness to be FC in case of

Working Employees, House wives, Students and Post office agents is very less.

But there are the people who are tend to do this work as a part time job.

This is the part time job so people think a little to be a FC in any Company.

CONCLUSIONS:

After collection of data interpretation is done on that basis conclusion is drawn. Conclusion

prefers government insurance company other than private insurance companies due to its

reliability. Customers are more brand oriented rather than product oriented. Customers are

less aware about the private insurance companies. Private Players in order to encase

maximum number of customers are introducing new and innovative scheme for their FC.

Customers do not feel secure with private insurance companies. Customers don’t want

commission base job.

The central problem with the insurance companies is having that they are trying to

convince customers for a product which do not have any present relevance, i.e. each

policy which the customer is going to purchase will have a future set of action and

benefits. Due to which most of the people like to invest in those securities or investment,

which will give them a fruitful return in short period of time.

Life insurance Corporation has completed more than three decades and that’s where

counts, inters of brand name, different number of policies for differed class and age group

of customers.

The Private players are on the way, but they need a lot of time investment for creating a

favorable brand image.

LIMITATIONS:

Large amount of competition. Other brands are well advertised and have higher recall value. LIC is considered a safer option. Face competition from banks and mutual funds. High premium policies are difficult to market. Incorrect perception about insurance. Interested prospects might have a lack of time and postpone Investments. Customers get defensive if you cold call. Short term plans are available only at large premium. Customers do not have risk appetite to invest in shares. Some prospects have already invested and are not interested in further investments. Consumers don’t want to undertake medical examinations. Large amount of documentation. Customers do not like their money locked up for many years. Lack of awareness about the unit linked funds in the market. No money back plan present in the product portfolio.

RECOMMENDATIONS:

Customers should be made aware of the brand name of Insurance Company

through advertisement.

The fear in the customer mind should be removed by company.

The insurance companies should try to nurture their brand name timely and

attractive facility provide to customer.

Advertise about the company and its products – it motivates individuals to purchase insurance.

Create a positive perception about insurance. Speak about the good features a plan offers like high returns, life cover, tax

benefits, indexation, and accident cover while prospecting customers.

Try to sell the product/plan which the consumer requires and not the plan where the advisors benefit is higher.

Improve the efficiency in operations. Bring out policies with small premiums payable for short periods of time – Rs.

5000 – Rs. 10000 per annum for 10 years. Attract the youth of India with higher returns on investment as returns are the

Motivating factor which influence purchase of insurance. Promote insurance in colleges and corporate houses. Promote HDFC SLIC as an Indian Company to build trust. HDFC SLIC could have a brand ambassador or a mascot to promote its services. Should have partial withdrawals from the first year onwards. Tap the rural market where there is large potential. Diversify product portfolio. Make products more straight forward – reduce complexities.

OBSERVATIONS:

Customers are less aware about the private insurance company in market.

Some customers are like to join HDFC as FCs because it is a Part-time.

Many professions like CA, tax planner want a corporate agency rather than to be a

financial consultant.

HDFC is too selective in making a FC rather than to appoint any one like LIC.

Customers don’t want to join as financial consultant because it’s on commission

basis they want job on salary basis.

Educated customers are now vending towards private insurance Companies, due to

the attractive packages and services provided by various new insurance companies.

LIC has created a brand image in 3-4 decades, due to which new insurance

companies are facing trouble in capturing market share.

If the customers are joining HDFC the segment is more of tax consultant,

investment for consultant and other people who are engaged in investment business

that is because they want to diversify their portfolio.

HDFC SLIC is having good retention strategies for their financial consultant.

Reason for not joining HDFC SLIC.

Associated with another company.

Do not have time.

Low sales.

Private Player.

Lack of awareness.

ACHIEVEMENTS:

Recruited eight financial consultants for company.

Increase in confidence level.

Got the knowledge about, how to differentiate our product form that of LIC.

Made more and more people aware about my company’s Products (Policies).

Taken some appointments for FC and got positive response with the help of my

BDM.

Part III

BIBLIOGRAPHY:

Websites referred: www.cifainsurance.com www.moneyoutlook.com www.insurance.ind.com www.hdfcinsurance.com www.google.com    Wikipedia

REFERENCES:

To obtain more information regarding present study and to subordinate it with theoretical

proof following references were made:

Books Referred:

Book of license training programme for insurance advisers by IC-33.

GLOSSARY:

HDFC- Housing Development Finance Corporation.

SLIC- Standard Life Insurance Company.

FC- Financial Consultant.

IRDA-Insurance Regulatory and Development Authority.

SDM- Sales Development Manager.

BDM- Business Development Manager

ANNEXURE: