Professional Documents
Culture Documents
ON
A
DISSERTATION
SUBMITTED IN PARTIAL FULFILMENT OF THE
REQUIREMENTS FOR THE DEGREE OF
MASTER OF BUSINESS
ADMINISTRATION
INSURANCE COMPANY”,
COMPANY is an authentic record of my own work carried for the
UNIV . No part of this dissertation has been submitted for any other degree or diploma.
My thanks are also due to the staff of HDFC. Standard life insurance,
Branch-Hoshiarpur. Next, greatly acknowledge the good wishes and co-
operation of my family and friends.
Last, but not the least, a word of praise is due to Mr. Mukesh Kumar.
Computer Centre for typing the manuscript in present form.
( Ashok Kumar )
CONTENTS PAGE
NO.
1. INTRODUCTION 1-8
♦ INSURANCE: DEFINITION
♦ INSURANCE IN INDIA
♦ A BRIEF HISTORY OO INSURANCE SECTOR
♦ INSURANCE SECTOR REFORMS
♦ MECHANISM OF INSURANCE
♦ NEED OF LIFE INSURANCE
♦ ADVANTAGE OF LIFE INSURANCE
2. IRDA 9-14
♦ INTRODUCTION
♦ POWERS AND FUNCTION
♦ PLAYER THAT IRDA WILL GOVERN
3. RESEACH METHODOLOGY-AN OVERVIEW 15-16
SAMPLE DESIGN
DATA COLLECTION METHOD
OBJECTIVE OF THE STUDY
4. INTRODUCTION OF HDFC-SLIC 17-47
♦ HDFC GROUP
♦ SUBSIDIARY COMPANIES
♦ ASSOCIATED COMPANIES
♦ HDFC STANDRAD LIFE INSURANCE COMPANIES LOCATIONS
♦ STANDARD LIFE INSURANCE
♦ ROLE OF AN INSURANCE AGENT
♦ APPOINTMENT OF FINANCIAL CONSULTANT
♦ PRE-REQUISITIES FOR SUCCESS
♦ SELLING LIFE INSURANCE
♦ PRE-APPROACH
♦ INTERVIEW/APPROACH
♦ APPROACH
♦ OBJECTION
♦ CLOSE
♦ SERVICES
♦ USEFUL IDEAS THROWN UP
♦ CERTIFIED FINANCIAL – A CARIEER IN INS. CO. LTD.
♦ AGENTS ARE CERTIFIED AS FINANCIAL CONSULTANT
♦ ROLE IN HDFC-SLIC CERTIFIED FINANCIAL CONSULTANT
♦ PRE-RECRUITMENT EXAMINATION FOR INS. AGENTS
♦ SELECTION PROCEDURE IN HDFC-SLIC
5. DATA ANALYSIS AND INTERPRETATION 48-55
♦ S.W.O.T. ANALYSIS
6. CONCLUSION & SUGGESTIONS 56-57
BIBLIOGRAPHY 58-59
ANNEXURE 60-76
Chapter I
INTRODUCTION
INSURANCE: DEFINITION
It is a promise of reimbursement in the case of loss; paid to people or companies so concerned
about hazards that they have made prepayments to an insurance company. It is basically contract
that provides compensation for specific losses in exchange for a periodic payment. An individual
contract is known as an insurance policy, and the periodic payment is known as an insurance
premium. It is a formal social device for reducing risk by transferring the risks of several individual
entities to an insurer. The insurer agrees, for a consideration, to pay for the loss in the amount
specified in the contract. It is a protection against a specific loss over a period of time that is secured
by the payment of a regularly scheduled premium.
In big bet poker, it is possible to reach a situation in which you are uncomfortable with the amount of
money you have invested in a pot. To reduce variance players will sometimes take insurance
against an unfortunate outcome, essentially selling the actual outcome of the hand for its
mathematical equity (at a slight discount). For example, if you hold a flush against a player who has
three of a kind, your equity in the pot is a percentage of the pot equal to the probability that the other
player will not fill up. If the pot is large. and you don’t want to risk coming away with nothing, you
might take insurance from somebody who has more money and would be glad to have the overlay.
Insurance is a system of exchange under contract where payments over a period of time
(premiums) entitle individuals compensation by an organization (insurance company) in the event of
loss due ;to pre-specified conditions. It is basically a mechanism for shifting a risk from a person,
business, or organization to an insurance company in exchange for payment of premiums,. The
insurance company to be responsible for covered losses.
Contractual meaning of insurance shifting the burden of pure risks through pooling to minimize
financial loss. Individuals and business insurance do not only mean insuring or safe guarding a
living being but guarding against any kind of property loss or damage making payments in the form
of premiums to an insurance company , which pays an agreed upon sum to the insured in the event
of loss. It is actually sharing the costs of the risk of incurring losses, whether for health expenses or
property and casualty losses, across a base large enough to protect any one entity against the
actual costs of an incurred loss. The costs of spreading the risk are assumed to be less than the
costs of an actual loss. The insured group or insurance company is at financial risk for assuming the
guarantee against loss for the specific instance.
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. Tracking 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
Life Insurance in its existing form came to India from the United Kingdom with the
establishment of a British firm Oriental Life Insurance Company in Calcutta in 1818 followed
by Bombay Life Assurance Company in 1823.
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 statically 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 and Act of Parliament, viz, LIC Act, 1956,
with a capital contribution of Rs. 5 Crore 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 1950 in
Calcutta by the British.
• 1907: The Indian Mercantile Insurance Ltd. Set up, the first company to transact all
classes of general insurance business.
• 1957: General Insurance Council, a wing of the insurance Association of India,
frames a code of conduct for ensuring fair conduct and sound business practices.
• 1968: The Insurance Act amended to regulate investments and set minimum
solvency margins and the Tariff Advisory Committee set up.
• 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized
the general insurance business in India with effect from 1st January, 1973.
Investments
Customer Service
MECHANISM OF INSURANCE
shape of premiums and create a fund out of which the losses are
paid.
suddenly.
breadwinner.
winner.
death of breadwinner.
and provides relief to the family in the event of the death of retirement
among the policy holder. As per the provisions Indian Income Tax
more established, it was realized what a useful tool it was for a number
of situations, including -
winner. We can also meet our temporary or future needs with the
b) Regular Savings-:
Providing for one's family and oneself , as a medium to long term
c) Investment-:
future needs and to provide for risk cover. There are many
us high return with minimum level of risk. ULIP plans are the new
d) Retirement:
amount of funds available at any time will not be more than the
The Insurance Regulatory and Development Authority was established on 19th April, 2000
under Insurance
Regulatory and
Development
Authority Act,
1999 with its
headquarter at New Delhi. The Authority has changed its headquarters to
Hyderabad in December 2001. The Audit of the accounts of the Authority has been entrusted
under Section 19 (2) of the Comptroller & Auditor General" (Duties, Power & Conditions of
Service) Act, 1971. The Authority was to consist of a Chairman, five full time Members and four
Part-time Members. As on date the Authority has one chairman, two full time and four part time
members. There is an Insurance Advisory Committee, which helps the Authority in making its
Rules and Regulations for proper discharge of its activities.
MISSION OF IRDA
To protect the interests of the policyholders, to regulate, promote and ensure orderly growth of
the insurance industry and for matters connected therewith or incidental thereto.
SOURCES OF RECEIPTS
During 2001-02, the Authority's receipts were Rs.42.17 crores as against its expenditure of
Rs.5.89 crores. The receipts mainly consisted of fees received from various Insurance
companies operating in India on account of their Registration and Renewal charges.
FUNDS
The funds of the authority are being retained by itself despite directions of the Ministry to house
the funds in Public Account of India as non-interest bearing funds. As on 31st March 2002, the
Authority continues to house its funds amounting to Rs. 57.42 Crore in interest bearing deposits
of banks and other financial institutions.
The table below is the list of the likely players in the Indian insurance sector, apart from
Reliance, who has applied for both Life and Non-Life insurance license; all have gone in with a
foreign partner. The idea is that the foreign partner will bring in expertise of global nature with
products that are India specific. And the Indian partner will bring in the distribution network and
more significantly the required 74% of the equity.
Life Insurance Non-Life Insurance
INSURANCE COMPANIES
IRDA has so far granted registration to 12 private life insurance companies and 9 general
insurance companies. If the existing public sector insurance companies are included, there are
currently 13 insurance companies in the life side and 13 companies operating in general
insurance business. General Insurance Corporation has been approved as the "Indian
reinsures" for underwriting only reinsurance business. Particulars of the life insurance
companies and general insurance companies including their web address are given below:
Public Sector
Private Sector
GENERAL INSURERS
Public Sector
Private Sector
5. Bajaj Allianz General Insurance Co. Limited www.bajajallianz.co.in
REINSURER
• IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide fro:
policy proposal documents in easily understandable language; claims procedure in both life and
non-life; setting up of grievance redressal machinery; speedy settlement of claims; and
policyholder’s servicing. The Regulation also provides for payment of interest by insurers for the
delay in settlement of claim.
• The insurers are required to maintain solvency margins so that they are in a position to
meet their obligations towards policyholders with regard to payment of claims.
• It is obligatory on the part of the insurance companies to disclose Cleary the benefits,
terms and conditions under the policy. The advertisements issued by the insurers should not
mislead the insuring public.
• The authority takes up with the insurers any complaint received from the policyholders
in connection with services provided by them under the insurance contract.
Chapter III
RESEARCH
METHODOLOGY
RESEARCH METHODOLOGY-AN OVERVIEW
A systematic Research reduces the uncertainly in the decision making process management.
Properly conducted marketing research is an indispensable tool for top mgt. in marketing decision.
Marketing Research is defined as systematic design, collection analysis and reporting of data and
findings relevant to a specific marketing situation facing the company.
In order to conduct a useful and objective marketing research. A research methodology has to be
adopted, became only then the studies conducted can be properly elaborated & commented up.
So, I have to conduct Research in fur sub groups.
Sample design
Data Collection Method
Data Analysis
1. Sample Design
In the SAMPLING PLAN the basic and important question is WHO IS TO BE SURVEYED? Since it is
not possible to question every Person in the market, the only one of the best alternative is to resort to
SAMPLING TEACHNIQUE and is also true for the present study as well. I was conducting RANDOM
SURVEY.
A. SAMPLE SIZE=90
Primary Data
Secondary Data
For the purpose of the study, primary data is collected by direct personal interview and in the
secondary data; I collect Data from the magazines, internet & etc.
Data Analysis
After the data collection it is time for Data Tabulation. The data is tabulated properly so as to
interpret it with a view to arrive at logical and meaningful comprehensible.
One of the important feature of this study is the to recruit the Financial Consultant. So, I make
use of charts, tables etc with a view to present data punctually, precisely and to make the study
more interesting and early comprehensible.
To know what the people think about the Financial Consultant in the insurance
sector.
To know about the views of people regarding various in insurance companies.
To know the main consideration of the people while joining as the Financial
Consultant.
To study the Recruitment Procedure for the appointment of Financial
Consultant.
To study the recruitment policy and practices of HDFC Standard life
Insurance.
To study recruit process of insurance agents.
Chapter IV
HDFC-SLIC
SUBSIDIARY COMPANIES:
HDFC STANDARD LIFE INSURANCE
HDFC Standard Life Insurance Company is a joint venture between India’s largest housing
finance provider, HDFC, and the Europe’s largest mutual life assurance company, the Standard
Life Assurance Company (U.K.).
STANDARD LIFE
POLICY
The company was incorporated on 14th August 2000 under the name of the HDFC Standard
Life Insurance Company Limited. On the 23rd of October 2000, HDFC Standard Life was the only
life company to be granted a certificate of registration.
HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns
18.6. Given Standard Life’s exiting investment in the HDFC Group, this is the maximum
investment allowed under current regulations.
Incorporated in 1977 with a share capital of Rs. 10 Crores. HDFC has since emerged as the
largest residential mortgage finance institution in the country. The net worth of the corporation is
Rs. 28,000 Crores, HDFC manager’s assets.
Standard Life is Europe’s largest mutual life insurance company and specializes in a wide range
of other services like health care. Pension and annuities market with a global presence. The
company has Assets under management at US$ 119 billion.
After the proposal results into a policy, it is the interest of the life assured, the agent and the insurer
that the business is conserved and it continues, without a lapse, till it result in to a claim. Therefore,
the agent has to:-
Remain in
contact with the policyholders and ensure that renewal premiums are paid on time.
Take care that
nomination is made under the policy and is changed under circumstances.
Provides help to
the claimants to complete necessary forms and comply with other requirements relating
to claim settlement.
The agent has also to assist the policyholder in situation like – the policyholder needs loan
under the policy or wants to make an assignment. Providing services such as these help the
agent in strengthening bonds of relationship with the policyholders.
Appointment of Financial Consultant
1. This Agreement
shall come into force on the date of the license to act an insurance agent.
2. The Company
hereby appoints the Agent as Financial Consultant of the Company.
3. To the extent not
provided herein, the appointment of the financial consultant shall be governed by the
provisions of the Applicable Law as govern the appointment and functioning of
insurance agents.
4. The Financial
Consultant shall at all times fulfill the minimum performance requirements in terms of
new business, premium income, number of proposals, number of lives insured or on
any other relevant count stipulated by the Company from time to time. (Hereinafter to as
the “Minimum Performance Requirements”). It shall be opened to the Company to
stipules the minimum Performance Requirements or a specified period or period or to
specify the Insurance Product or Products which the Financial Consultant Shall solicit
and procure or the Company.
5. With prejudice to
the generality of the application of the provisions Applicable Law, the Financial
Consultant shall scrupulously follow, adhere to and comply with the code to conduct
prescribed by the Insurance Regulatory and Development Authority (Licensing to
Insurance Agents) Regulations, 2000(hereinafter referred to as the “Code of conduct”)
as through the said Code of Conduct has been set out in and forms part of this
agreement.
a. The Financial
Consultant shall not allow offer to allow, either directly or indirectly, as an inducement,
to a prospect or a policyholder, to take out or renew or continue a policy, any rebate to
the premium payable under the policy or to the commissions payable to him; nor shall
be offered any other rates, advantages, terms or conditions than those offered by the
company.
b. The Financial
Consultant shall be wholly responsible for the accuracy, truthfulness and completeness
of the information furnished in the Agent’s Confidential Report submitted by him with the
proposal or otherwise made available to the company.
c. The Financial
Consultant shall, promptly and in any Caesar not later than the times stipulated by the
company in that behalf transmit to the concerned office of the company all proposals for
the insurance and all other document procured or received by or called for from him.
d. The Financial
Consultant shall not accept any money, in case, demand draft or in any other manner,
from a prospect or a policyholder in relation to a proposal for insurance or under a
policy or revival a policy and in all cases of tender of any money by 3 prospect or a
policyholder direct him to the appropriate office of the Company for payment or advise
him of the permissible modes of payment of the company. Without prejudice to the
provisions of any other clause in this Agreement providing for indemnified during the
period this Agreement is in force and at any time thereafter or not, of the provisions of
this clause.
e. The Financial
Consultant shall attend all meetings, conferences and briefings conducted by or on
behalf of the company to acquaint the sales force with the Insurance Products, business
plans and policies to the company to acquaint the sales force with the insurance
Products, business plans and policies to the Company and any other matter of
relevance to them of which reasonable notice has been given to the Financial
Consultant.
f. Where the Financial Consultant intends to bring out or publish any material in any
form or through any medium, concerning the company, its business or its Financial
Consultant shall obtain prior written approval of the company. Further, he shall observe
and comply with the provisions of the Insurance Regulatory and Development Authority
(Insurance Advertisements and Disclosure) Regulations, 2000.
g. The Financial
Consultant shall solicit and procure life insurance business for the company and
discharge his obligations under this Agreement in accordance with the Company’s
corporate objectives with particular regard to the Company’s image and standing in the
industry and in the community.
h. The Financial
Consultant shall observe, follow and comply with all the directions and instructions
given by the company from time to time, either generally or with particular reference to
the Financial Consultant.
i. The Financial Consultant shall familiarize himself with the applicable law as in force
from time to time and which has a bearing on the obligations as an insurance agent;
provided that in the event of any change in the Applicable Law resulting in a dilution or
abrogation of his obligations under this Agreement, to the extent not provided
otherwise, the Financial Consultant shall continue to be bound by the obligations as
were existent prior to such changes, unless expressly approved in writing by the
company.
PREREQUISITES FOR SUCCESS
An agent has to be familiar with the following so that he may perform his role well.
• Various plans offered by his manner, their benefits and restrictions.
• Office procedures for various matter as also the forms and documents required
An insurance agent is an agent of the prospect also. At time the prospect requires advice on
certain matter from a person whom he considers knowledgeable and whom he can trust. To;
come up to the expectation of his prospects, the agent must be familiar with the:-
• Other Financial instruments, suitable for savings and investment, available in the
market and their benefits and advantages.
• Law, particulars, the taxations aspects relating to these instruments.
As many instruments are available in the market, it is difficult for the agent to master the details
of all. If an agent, who does not have the necessary knowledge, gives answers on the basis of
guesswork or hearsay, it will be non-professional. It is a better course if the agent admits that he
does not have a ready answer and would come with complete detail the next day.
Getting this information is called “Qualifying”. A qualified prospectus is the target person for
insurance sales.
The salesman should try to collect as much information as possible about family, income,
interest, hobbies etc of the prospect. It is necessary to keep a record of this information. It is
called inventory of prospectus. He should also formulate the types of plans to be offered.
After prospectus is ‘qualified’ the salesman meets him. A sales takes place when a prospect
buys a product. In between this simple transaction, the salesman has to take along the
prospectus with through the well-defined steps, which are not separate and exclusive but
blended into one integrated process. There are no hared and fast rules in blending these steps
together at various stages to obtain the desired results. These steps are:-
Pre-approach
Interview / approach
Approach
Objections
PRE-APPROACH
Pre-approach is what a salesman does between the time a prospect is chosen and the time he
meets him in person.
A. Preparation is needed as to
What to offered
When and where to meet
Whether a reference is required
B. For the above preparation basic information if income, health, habits, family
history, interest, saving capacity, etc of the prospect will be required. This information
will have to be gathered from different source. A personal call on the prospect may also
be requires to persuade him in taking a positive decision.
C. This will help him have fruitful talk. It also enables them to come to the quickly
without waste of time. Preparing a presentation is the best line of action. It helps make
an organized discussion.
D. As proposal for insurance has not yet been made, ‘pre-approach’ call should be
used for suggesting proposals unless the discussion develops further and leads to the
agent completing the proposals paper and collecting cheque.
E. Brief letter or cards can be sent for introducing oneself and informing to call in a
short time. This will lead to creating a congenial atmosphere. In order to make the
approach more effective, the salesman should have some key words in mind for
opening sentences.
F. It is also necessary to keep all the requirements ready for effecting a sale. You
should have your tools –all the relevant forms, calculations, charts, pamphlets,
brochures etc. – ready to strike when the iron is hot.
G. It is advisable to make a written proposal which has the following advantages:
• Neither the agent nor the proposal misses any detail
• More lasting impression is created
• Prospect can take his own time to understand it.
• Once can stop at any point, clarify it and continue the discussion
thereafter without losing the track.
H. When you visit a prospect, you should look your best, wearing a smile.
INTERVIEW APPROACH
This is a stage when the salesman and the prospect are face to face. There is direct interaction
between the two. Inform the prospect that you are calling on him for life insurance – there is no
need to feel hesitant or defensive. The agent should carry a firm conviction in his mind that
insurance provides financial security to the prospect and his family. The agent must have
rehearsed well so as to start his talk in a manner that arouses interest otherwise no attention will
be paid to his proposals.
In order to have a favorable hearing and his acceptability, the salesman should give due
consideration to:
The time of approach/ interview
The Place and the method of greeting
It is here that stories can AROUSE THE CURIOSITY of the prospect.
• The importance of the selected time and place lies in the fact where the prospect
does not resent presence of the salesman. The prospect is not preoccupied and
he is not disturbed.
Generally, meeting in office, or certain morning and evening hours at home are not likely by the
prospects. As such it sis always advisable to fix the time and place at pre-approach stage.
• A single interview is not likely to bring he desired result. Sometimes the home
work done at pre-approach stage may prove to be different from he actual
situation. This being the first contact, at least a favorable impression should be
created in the mind of the prospect.
• If the prospect is a referred lead, a direct reference of the reference can be made
and it can be made clear you sell insurance. (Such reference can result in
endless chain.)
• During interviews a sales story can be more effective because it conveys the
idea and information necessary to arouse prospect’s interest in a short time.
A planned and duly rehearsed presentation with proper sequence of ideas is vital in the art of
persuasion. The purpose of selling interview is to enhance the interest in the plan of insurance.
The next step is to:
a. Uncover the need
b. Emphasize upon the need and
c. Accentuate the need
Approach
It means the presence of the salesman with prospect at a convenient place and appointed time
so that the two can talk freely.
A. The agent should follow some rules during the
interview such as:-
• Talk to the point- do not talk more than necessary
• Make conversion interactive – ask question that make the prospect talk
• Arouse curiosity in the mind of the prospect so tat he asks questions
• For their clarifications
• Listen to the prospect carefully
• Do not interrupt, contradict or argue
• Make the talk interesting through pictorial presentation
• Agent’s advice should be in the best interest of the prospect – it should not be in the
interest of the agent.
OBJECTION
These will arise during the course of interview. These can be considered as resistance to buy, or
the steps towards convincing the prospect or symptoms of the real cause for not buying which
has to be uncovered.
When the prospect has been qualified, it is the duty of the salesman to remove the dust of
objections, on the thoughts of the prospects to give him clarity. Objection denotes the fact that
the prospect is not fully convinced as to buy insurance. Almost every insured person has risen
on or more objections in the beginning.
The salesman’s attitude has to be that if this man is not given insurance at present, he will regret
this decision in future. He has to take it as a mission to provide insurance cover to all such
qualified prospectus.
Objections give an opportunity to salesman to know as to how the prospectus think; and
handling of the objection help him improve his skills and confidence I himself.
• So we can say that objection come naturally in the way of sales process and it is the
persuasive skill and apt handling by the salesman that gives positive results.
• However, if there is a tough prospect and it is getting hard to crack, it is best to
conclude keeping the doors open for the future approach.
objections:
Agree with the prospect: Do not contradict him if you want him to listen to you.
This way he will feel relaxed.
Restate the objection: He fill feel that you have understood him properly. It
conveys respect to him and makes him happier.
Introduce a new though: which interest him and appeals to him and helps him
move away from the earlier thought of objection to new thought of acceptance.
There are scores of objections relating to need, belief, health, another earning member, value of
future returns, leaving everything to God, Financial hardships etc. the varieties of such
objections fall in following three categories:-
1. FANCIED BUT NOT REAL
For example: ‘Premium is high’, ‘Claims are not paid’, and ‘Religion does not permit’. These are
based on super-ficial beliefs, and can be met with repeating the presentation process and
emphasizing the need and playing upon the emotions of fear of consequence; it is the skill in the
salesmanship that works here.
2. STRONGER THAN FAMCIED BUT NOT QUITE REAL:
Examples are “I cannot afford”, “Loss will not occur”, “My wife can support the family”. Most of
the objections fall under this category. Here the prospectus sure of what he is saying. He has to
be encouraged to talk. He has to be brought out of himself. Be a good listener and try to cover
more and more topics. Find out which topic has made him emotional. Catch him here without
letting him feel that he has been trapped. This makes you work easily.
3. THE REAL ONES:
These are mainly:-
i. Absence of need.
ii. Inability to pay. In such cases do not persist. Leave them alone for the time being.
Catch up with them if future the condition changes for the goods.
CLOSE
It is stage, which is arrived at when the prospect makes a decision to buy.
The process needs motivation, the psyche of the prospect has to be shaken so as to arouse his
emotions to act.
SERVICE
It is the stage, which comes after the purchase has been made by the prefect. Now the prospect
has become the customer. He is carrying the belief that the product he has purchased will give
him the promised satisfaction.
It is the duty of the salesman to check, if the customer’s experience endorses these beliefs. If
so, then the salesman’s image and integrity improves in the eyes of the customer. Insurance is
an intangible product. It is not like TV or refrigerator or any other tangible product which, if they
do not perform satisfactorily, can be changed. Insurance promises to perform only at the critical
event. If the product fails to fulfill its objective at the proper time, the credibility and integrity of
the salesman suffer seriously.
Life insurance is a long term contract and the sales person should keep proper record of all
insured persons.
He should visit then whenever the next premium falls due and help them for its regular
deposits.
Change in nomination, address etc. should be got done promptly.
In case of financial difficulties he can help in obtaining loan.
Keeping in touch is the ‘MANTRA’. This rekindles faith in the mind of the insured.
Such visit is always welcome. Even if the policy has not been sold by the salesman, it
can be checked and serviced by him. Such an act will not only open the doors of the
customer wider for the salesman but will also help him getting good leads also. But in some
cases errors can occur.
Here are some reasons why and insurance contract may fail to e perform as expected:
a) Failure on part of the policyholder to fulfill the obligation on his part before the
happening of the event, e.g.
1. Non-payment of premium
2. Non-submission of age-proof etc.
b) Failure in arranging for proof of title such as:
1. Nomination
2. Assignment etc.
In such case, some legal requirements arise and disputes may also come up between the
claimants. This causes in-ordinate delay in claim settlement. A good salesman does not allow
the title for claim to remain open or vague.
c) Sometimes company’s records show some defects although the policyholder has fulfilled all
requirements. The salesman should check the office records and if any minor defects are
found, these should be corrected in time. His concern about the customer as well as towards
the company will enhanced his image both in the eyes of customers and office.
d) In insurance we have read about the principle of ‘Utmost Good Faith’ and of the parties being
‘Ad-Idem’ i.e. of the same mind. Sometimes the information given at the time of insurance if
found to be materially different from the actual position after the claim arises. These facts are
normally related to health or personal history of the life assured. Such a situation cannot be
corrected retrospectively and there is every likelihood of the claim being denied due to
suppression of a fact material to the assessment of risk. Such difference of statement of
facts attracts warranty resulting in the denial of the claim or a payment of some ex-gratia
amount on humanitarian ground.
e) Service call is like periodic check up so a s to remove any defect and is always welcome. A
contact with the policy holder means reviewing of:
Any change in circumstances
Whether any further insurance is required.
The obligations under the policy are being fulfilled.
Renewal receipt are being obtained in time and
Nomination, assignment or any changed in address are in order.
During a service call it becomes very easy to sell other insurance if there is an occasion for it. All
the other stages of the selling process do not have any meaning with a satisfied customer.
Wherever a new product is purchased by a person, the close circle friends of the customer give
their own opinions and comments favorable or otherwise about it. Some such opinion can create
doubts in his mind. During the service call the salesman can become aware of such doubts. He
can use this opportunity by speaking about the purpose for which this purchase was made.
Such a discussion will strengthen the ties between them.
• It reassures the customer that for any dealing with the office, a dependable person
is always with them.
Ultimately, good servicing in recommending his friends to the salesman whom the latter can
approach easily for insurance.
• The continuity of such referred leads 4results into a beneficial cycle. The prospects
list grows – more prospects, more business, more service, more prospects and the
cycle goes on.
• Such customer generally value service and they do not ask for rebates. This gives
the salesman a differential competitive advantage. Good service fosters strong which
are difficult to break by any other salesman. His status in the market rises and
resistance reduces.
ETHICAL BEHAVIOUR
Recent happening have put a question mark on the prosperities in business. Top companies of
the world were found cheating through false accounts and dishonest audit certification. Bank
funds have been misused. Officials have used authority for their personal benefit. People, whom
the community has trusted to do their tasks-has belied them.
People trust insurance agent. Policy holders hand over their small savings to insurers and trust
that funds will be made available to them or to their dependents in their later year. Propriety and
ethics are at the root of the business of insurance.
Unethical behavior of an agent involves placing his own personal interest above the interest of
his prospects. Code of conduct for Agent is laid down by IRDA in Agent’s regulations. It contains
many clauses. Compliance with all these clauses will be automatic if the agent keeps interest of
the prospect uppermost in his mind.
Problems come up when agent gives more attention to the commission that would get from the
policy rather than the benefits to the prospects.
Some agent feel that they are doing a service to the policyholders in getting insurance cover by
advising them not to reveal certain adverse information in the proposal form for fear of the
underwriter calling additional requirements. In fact they are doing harm to hi. If there is an early
claim, it may be repudiated by the insurer. Prospect’s family will be the loser. Stories may
circulate that the insurance companies do not pay claims. Given below are a few situations
some of the characteristics of a good ethical behavior of an agent:
Placing client’s interest uppermost in his mind.
All personal and business information pertaining to the client mentioned by him in the
proposal form, to be kept secret.
To disclose all fact – benefits and restrictions – to the client to enable him to make the
decision after getting full information.
I. This is one of the few professions where the employee gets to choose his own
timings for working
II. This is one of the few professions where the employee gets to choose the
customers which he wishes to serve.
III. This is one of the few professions where there is unlimited opportunity to earn-
there is no upper limit.
IV. This is the only profession where there are definite benefits derived for today’s
work for the next 10-40 years.
V. This is the only profession which gives up to 40% gross margin without any
capital investment in the business.
VI. This is a profession which bestows upon the person the status of an “expert” –
hence he can derive satisfaction form the fact that hundreds of people actually benefit
form his advice, thereby generating tremendous goodwill.
BACKGROUND
This idea was chosen as it uppermost on most of the BM’s minds as one of the most important
issues concerning their jobs at work. At most of the branches, the traditional routes of recruiting
FC’s (Advertising in mainline newspapers and scouting for FCs through traditional databases
like CAS, Stock Exchanges, Post Offices, etc., are dying up.
The points that were thrown up that could effectively tackle this resistance were
1. This is one of the few professions where the employee gets to choose his own
timings for working.
2. This is one of the few professions where the employee gets to choose the
customers which he wishes to serve.
3. This is one of the few professions where there is unlimited opportunity to earn. -
There is no upper limit.
4. This is the ONLY profession which gives up to 40% gross margin without any
capital investment in the business.
5. This is the ONLY profession where there are definite benefits derived for today’s
work for the next 10-40years.
6. This is a profession which bestows upon the person the status of an “expert” –hence
he can derive satisfaction from the fact that hundreds of people actually benefit from his
advice, thereby generating tremendous goodwill.
approval.
This could be done through
i. Presentations to opinion leaders-club members/residential societies/placement
consultants.
ii. Generating positive endorsements by opinion leaders about this vocation.
ADVISOR ROLE
To provide ongoing Financial advice for his/her clients:
Identify future clients:
• Making appointments
• Conduct Financial review meetings with prospects/ clients
• Close sale
• Get referrals
• Provide service to clients
WORKING ENVIRNOMENT
• To be part of world class sales team
• Work form your own office and residence
• Work fulltime and part time
• Earn commission, bonus & incentives
• No upper limits on earnings
YOUR OPPORTUNITY
• No start up capital required
• Flexible working environment
• Be your own boss
• Unlimited earning potential
• To be part of world class team
YOUR POSSESS
• Confidence
• Self motivation
• Persuasion
• Urge to be financially independent
• Relationship skills
Attractive
Attractive
Payments
Payments &&
Strong
Strong Superior
Superior
Reputation
Reputation Products
Products
WeWeare
are
partners
partnersinin
your growth
your growth
and
and
prosperity
prosperity
High
HighQuality
Quality
Management
Management Extensive
Extensive
Support
Support Training
Training
Excellent
Excellent
Customer
Customer
Service
Service
‘CERTIFIED Financial Consultant’ –A CAREER IN INSURANCE
COMPANY LIMITED
Chosen to be a Financial Consultant with HDFC Standard Life
Insurance Company Limited
HDFC Standard Life Insurance Company Limited is a joint venture between HDFC, India’s
largest housing financial institution and Standard Life Assurance Company, Europe’s largest
mutual life company. HDFC and Standard Life are Companies with tremendous financial
strength as endorsed by credit rating agencies. Both enjoy an excellent reputation in terms of
goodwill and efficient customer service. Sales training imparted to our consultants will be based
on the finest international practices. HDFC manages Rs. 21450 crores in assets and Standard
Life manages US$121 billion in assets.
Both the promoters are well known for their ethical dealings, their Financial strength and their
commitment to be a long term player in the life insurance industry—all important factors to
consider when choosing your insurer
Agents as Certified Financial Consultant
People associate agents as middle-men, between the customer and the company. We see our
representatives as much more than this. We see our representatives as professional and skilled
advisors who are able to recommend the best solutions based upon the individual customer’s
needs. Furthermore, with the imminent entry of new players and products in the market, we
believe products will become more complex, and customer expectations of financial advisors will
increase. The need for a consultant who will provide a customer-centric solution in insurance is
inevitable. Given this environment we believe that the successful advisor/agents will have to
assume the responsibility of a “Certified Financial Consultant”. The title Consultant therefore
reflects the image we wish to develop and advocate in the market.
Role in HDFC SL ‘Certified Financial Consultant
He/she would analyze the customers’ financial requirements and recommend appropriate life
insurance and pension solution, so that the customer is able to meet his/her Financial objectives
in the most optimum manner. He/she shall provide support to customers on an ongoing basis.
Making a Financial Consultant
The company would support you by providing the required training and regular coaching. We
also provide information in the form of sales aids etc. so that you are able to provide the best
service to customers. One of the principal responsibilities of our Business Development
Manager (BDM) is to insure that each Financial Consultant is supported at all times.
Career with HDFC SLIC as a Certified Financial Consultant
This is one of the few professions where the employee gets to choose his own timings for
working. This is one of the few professions where the employee gets to choose the customers
which he wishes to serve.
This is one of the few professions where there is unlimited opportunity to earn—there is no
upper limit. This is only profession where there are definite benefits derived for today’s work for
the next 10-40 years. This is only profession which gives up to 40% gross margin without any
capital investment in the business. This is a profession which bestows upon the person the
status of an “expert” –hence he can derive satisfaction from the fact that hundreds of people
actually benefit from his advice, thereby generating tremendous goodwill.
Pre-recruitment examination for Insurance Agents
Name of the Examinations
This examination is called pre-recruitment examination for Insurance Agents. It is administered
separately for Life Insurance Agents and Generals Insurance Agents, manually by the Institute
and electronically by authorized ‘On-Line’ Examination Institutes. The examinations are called
as follows:
i. Pre-recruitment Examination for Life Insurance Agents, and
ii. Pre-recruitment Examination for General Insurance Agents,
Eligibility (IRDA MANDATORY)
18+years of age/10+2 passed
Willing to undergo 100 hrs. IRDA mandatory training
Has no agency with any Life Insurance Company
According to regulation 5 of the Regulations, the person desiring to obtain or renew a license to
act as an agent is required to:
1. Complete from an approved institution, at least, one hundred hours’ practical training in
life or general insurance business, as the case may be, which may be spread over three to
four weeks, where such person is seeking license for the first time to act as insurance agent
and
2. Complete from an approved institution, at least one hundred fifty hours’ practical
training in life and general insurance business, which may be spread over six to eight weeks,
where such applicant is seeking license for the first time to act as a composite insurance
agent.
A person taking examination is required to satisfy the requirements of regulations 4 & 5 of the
regulations, as explained above.
Eligibility (Preferred by HDFC-Standard Life Insurance Co. Ltd.
Candidate referred should score high in values and ethics and should be a match with
HDFC SL Values.
Ambitious, self motivated, should be able commit time and wants to make serious
money.
The referred should preferably not be from a 9 to 5 job or else should be in a position
to dedicate at least 5 to 6 hours per day as an FC.
Overall Purpose of the Role
To sell the products of the company in a professional ethical manner.
To set, monitor and achieve sales targets for self.
To positively promote the company’s brand, its mission, aims and values.
Required Knowledge & Skills
Product range and features market-industry, competitors
Company Sales Process
Company Organization Structure
Sales Skills
Selection procedure in HDFC SLIC
Following are the steps taken in the selection process:
• Filling of the Agency Application form
• Selection Test and Initial screening by BDM
• Interview by Branch/Resident Manager with the help of the Business Development
Manager.
• Acceptance of training cum Performance deposit.
• Recommendation for IRDA training.
Chapter V
DATA ANALYSIS AND INTERPRETATION
AWARENESS OF INSURANCE COMPANIES
20
15
10
90
ICICIPRU(90%)
BAJAJ ALLIANZ(80%)
HDFC SLIC(75%)
OM KOATAK M OHINDRA(10%)
75 M AX NEW YORK LIFE(15%)
SBI LFIE INSURANCE(20%)
80
BANNER/POS
TERS(2%)
13%
FRIENDS(90
%)
13%
WHAT ATTRIBUTES ATTRACT A PERSON TO WORK AS Financial Consultant
P ART TIME
JOB(60%)
0%
E XTRA
INCOME(40%)
28%
32%
FLEXIBLE
C AREER(35)
WORK FORM
OWN OFFIC E OR
RESIDE NCE(10%)
5%
19%
TO BE PART OF
WORLD CLASS
16% S ALES
TEAM(70%)
S lice 6
What % of the particulars attract financial
Standing and
goodwill of
company(90%)
Product range
of
company(35%)
0%
0%
Advertisement
13% being given by
13% the
17% company(10%)
57%
Services being
given by the
company(80%)
Communicatio
n and
knowledge of
the
representative
s(10%)
Return of
bonus declared
by
company(32%)
PERCENTAGE OF PERSONS KNOW
ABOUT HDFC SLIC
YES(80%)
NO(20%)
TOTAL NO. OF FINANCIAL
CONSULTANT RECRUITED
CONTECT
PERSONS(90
%)
RECRUITED
FC(15%)
DO YOU HAVE ANY SALES
EXPERIENCE
40%
YES(60%)
NO(40%)
60%
S.W.O.T ANALYSIS
Strengths:
Strong tie-up
With HDFC being major Housing Financial Institution and Standard Life being major player in
insurance Sector.
Brand Equity
HDFC being major brand in India and Standard Life being major brand worldwide.
Strong Network
• HDFC’s Strong presence and awareness in the Indian Market.
• Huge Customer Database
Weaknesses:
Conclusion,
Findings &
SUGGESTIONS
Conclusion
HDFC Standard Life Insurance is a part of HDFC group which is related with Home Loan, Car
Loan, Mutual Funds, and Banking Sector etc. HDFC Standard Life Insurance is a first private
insurance company. HDFC Standard life Insurance is a joint venture between HDFC and
Standard Life Insurance. HDFC Standard life Insurance company offers agency with maximum
benefit. No doubt LIC is the major player in Insurance companies as it was in India from last fifty
years but with the upcoming of other insurance companies, people are getting aware and
conscious while selecting any agency. HDFC Standard Life Insurance provides many benefits
for their agents like Good commission on policies. Insurance agent is an important component of
distribution channel for life insurance products. He is required to procure new insurance
business in a manner consistent with the interest of the policyholders and his company. It is the
interest of the life assured, the insurer and the agent that the business is conserved without
lapse and for that the agent has to remain in contact with the life assured, render proper service
and help at the time of claim. Through knowledge about the company’s products and office
procedures are the pre-requisites for success of an agent. The agent is also a financial advisor
of the prospect and, therefore, must be familiar with other financial instruments and law relating
to tax matters. Selling process includes six main steps: pre-approach, approach, interview,
objections, motivation and closing. A prospect decides to buy because he has a need, he finds
a product for need, and price is commensurate with the satisfaction he wants. For life insurance,
need arousal becomes necessary. A life insurance contract may fail to perform as expected.
The reasons for such a failure may be: failure on the part of the policyholder, failure in arranging
for proof of title, defective records of the insurance company and breach of utmost food faith.
Agent’s role is significant in avoiding such a failure. Servicing the policy is an important as
selling it. Service means continuity of contacts with the customer to ensure that the performance
of the product is in conformity with the expectations of the customer. Keeping in touch by way of
service calls also helps further selling.
SUGGESTIONS
• The people in the rural areas should be taped and brought under the life policies.
• More and more advertising should be used to tap the customers. More awareness campaign
should be under taken so that people can relay on the company.
• Life insurance policies should be made compulsory to all the earning individual.
• Short term policies should be advertised heavily as it is still unknown area from most of the
people.
• Services should be improved procedure to get life insurance policy should be made easily
assessable.
• More and more of bonus and extra benefit should be given.
• Investment plans should be made to as suitable to individual need.
• Investment plans suitable to eh female population (female child) should be brought in the market
with minimum premium and additional benefit.
• As from the research the premium following in the segment of Rs.2500 to Rs. 5000 should be
encouraged. Policies having premium of less than 2500 can be increased or additional features can
be added to this segment of policy.
• Life insurance should be customized as the requirement of the customer.
• More and more benefits should be added to children segment since they are the most untapped
segment. Secondly, policy should be designed in such a way that they cover both major as well the
minor in a single policy.
• Benefits from the investment in insurance should be increased as compare to provident fund.
• Financial Consultant should be provided training so that they are updated about the latest trends
and policies in the company.
Bibliography
Kanika Mishra,(2009) Life insurance Underwriting, (New Delhi : Deep & Deep
Publications).
M.S. Mishra,(2004) Insurance Principal & practices (S. Chand & Co. Ltd)
R.K. Sharma (2007), Banking and Insurance (New Delhi : Kalyani Publ.)
Websites
www.hdfc.standardlife.com
www.irda.com
www.google.com
Questionnaire for Door-to-Door Activity for FC Recruitment
Process to be followed:-
Telephone number(preferably
Not pp)
Females, Age:25-45, Doesn’t already have a life Experience in
selling,
Graduate/postgraduate Insurance agency,
Single-income
Has social contacts base of
family,
Not pp)
Note: Prospect can be said to fit our profile of “likely Financial Consultant” if
Recruitment Questionnaire
In order to determine whether the prospect falls within the above profile, we administer a
Recruitment Questionnaire as given below
10th pass:
10+2/ stream:
Graduate/stream:
Salaried:
Self-employed:
Student (specify):
Question 2(Age), 3(Gender) and 5(Education Qualifications) will help you determine the Target
Segment that the prospect falls under. In case the prospect does not fall under any of the 3
Segments, then he/she is not suitable.
Question 7(telephone numbers), 8(no life insurance Agency) and 9 (social contact base>50) are
Mandatory Targeting Parameters. In case the prospect does not satisfy these parameters,
then he/she is not suitable.
Dear Sir/Madam, I am going a project for HDFC Standard Life is a JV between HDFC LTD.
India’s largest housing finance company and standard Life Policy, Europe’s largest mutual life
company and standard life Plc, and is one of the India’s leading new life insurance companies.
HDFC Standard Life Insurance is looking for Financial Consultant
(At this stage, the trainee can give the prospect a copy of the FC recruitment newspaper
insert.)
Based on the information that you have given me, you could become one of HDFC Standard
Life FCs. Please note that there are other stages in the recruitment process. Would you be
interested in meeting up with a business Development Manager of HDFC Standard Life who will
give you further details about this opportunity to earn some additional income?
Yes, I am interested in knowing more about becoming a Financial Consultant for HDFC
Standard Life Insurance. I wish to meet up with a Business Development Manager of HDFC
Standard Life Insurance to understand more about this opportunity to earn some additional
income.
Signature of Prospect:
FORM IRDA-AGENTS-VA
AN INSURANCE AGENT
To
Department of Licensing,
New Delhi.
Dear Sirs,
2. I hereby declare that particulars given below are true and that
the license for which I apply will be used only by myself for
[ ]
House No. :[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Street:[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
[ ]
Town:[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ [] [ ][ ][ ]
[ ]
District:[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][
][ ]
State : [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][
][ ]
Pin Code:[ ][ ][ ][ ][ ][ ]
(6) If you ever held a Licence, state No. and date of expiry,
(1) If you apply for licence to work for a life insurer, state 1, for
[ ]
(8) If you are an applicant from a rural place, state 1, in the box.
[ ]
[ ]
[ ]
[ ]
(Day- Month-Year)
(11) Give particulars of Practical Training completed from an
approved institution.
] [ ][ ][ ][ ][ ][ ]
[ ][ ] [ ][ ][ ][ ][ ] ]
(Day- Month-Year)
competent jurisdiction;
competent jurisdiction;
ORM IRDA-AGENTS-VB
(SEE REGULATION 3)
NEW DELHI
LICENCE NO. [ ][ ][ ][ ] [ ][ ][ ][ ] [ ] [ ]
LICENCE TO ACT AS AN INSURANCE AGENT UNDER PART II OF
Street:[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Town:[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ []
District:[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
State : [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Pin Code:[ ][ ][ ][ ][ ][ ]
Having paid the prescribed fee and having made the necessary
insurer*/both*.
Place
Designated Person:
him in this behalf, the signature of the licence holder and the
IDENTITY CARD-:
Every Insurance Agent holds an Identity card. And it is the duty of the
FORM IRDA-AGENTS-VZ
(See Regulation 3)
Father's/Husband's Name:
signature
[ ][ ]-[ ][ ]-[ ][ ]