DECLARATION

I, Santosh Kumar Verma hereby declare that the Summer Training Report entitled Peoples
Perception and Awareness concerning PENSION PLANS in NEW DELHI submitted in
partial fulfillment of the requirement for the Two Year Post Graduate Diploma in
management (IRM) is collected by my own effort and it is true and real up to my knowledge
is concerned.

Place:
Date

Preface
Now days in this dynamic era Insurance is coming as an important tool
for reducing the effect of uncertainty and risks. It becomes an integral
part and indispensable part of human life. There are various types of
Insurance Plans to provide protection from loss and uncertainties. The
Pension Plans is an important one of them.
So is a great opportunity for me to study on Peoples Perception and
awareness concerning Pension Plans in New Delhi. The purpose of
this research is to know awareness and importance among peoples
regarding Pension Plans in New Delhi.

Santosh Kumar Verma

PGDM (IRM) 01/16
SMS

ACKNOWLEDGEMENT
As a project trainee in SBI Life Life Insurance Co. I have been assigned the job of
recruiting financial advisor. So I have undergone a short-term training by the company and
about the recruitment process and the various products of the company. Recruitment refers
to the various segment of the society. So I went to the market and searched people from
different profile to recruit them as Life Advisor in SBI Life Life Insurance Co. As per the
company philosophy and values a Life Advisor must posses the following three vital thingsTime, Attitude and Confidence.
Now what is more important to now be who is a financial advisor, how important is he to a
company, what recruitment is and what are the sources of recruiting financial advisor.
The life, pension and investment industry has undergone dramatic changes over the past
decade. Longer life expectancy and the desire to retire before state pension age have
increased public awareness of financial services markets. These changes have created a
marketplace where customers are more discerning and regulatory requirements more
stringent.
The emphasis is switching away from 'selling' towards providing quality advice. This is
partly due to an increased percentage of individuals sitting industry-recognized
exams such as the Certificate in Financial Planning (formerly the FPC).

ACKNOLEDGEMENT

Research Report is a combined effort including this one also, so I would

like to thank to all who have helped me completion of this report
purposeful.
I am cardinally grateful to Pro. Mukund Lal Sir, Director General of
SMS for providing me this opportunity to bring up my talent.
I also want to thank to Mr. Amit Sharma, Unit Manager in SBI LIFE
Insurance Co.Ltd. (Sales Dept.), Mr.Satyendra Pratap Singh my mentor
and Mr. Alok Kumar, coordinator PGDM (IRM) assisting me in
completion of this survey.
Further I would like to thanks to all of my Teachers, Staff Members,
Library Members, and Friends for their valuable support and advices
which helps me a lot to completing this survey purposeful.
From:

TABLE OF CONTENTS

SEQUENCE

PG. No

1. Company Profile
* Introduction
* Location
* Organizational structure
* Management style turnover
* Product and market competitors
* Strategies
* Various product lines
* Financial analysis
* SWOT.
2. Indian Scenario
3. Research Objective
4. Research Methodology
5. Analysis and findings
6. Conclusion
Suggestion

7.

8. Limitation
Bibliography
Annexure

9.
10.

INTRODUCTION
History of Insurance: at a glance
Life Insurance in its modern form came to India from England in the year
1818. Oriental Life Insurance Company started by Europeans in Calcutta was the
first life insurance company on Indian Soil. All the insurance companies established
during that period were brought up with the purpose of looking after the needs of
European community and Indian natives were not being insured by these companies.
However, later with the efforts of eminent people like Babu Muttylal Seal, the
foreign life insurance companies started insuring Indian lives. But Indian lives were
being treated as sub-standard lives and heavy extra premiums were being charged on
them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life
insurance company in the year 1870, and covered Indian lives at normal rates.
Starting as Indian enterprise with highly patriotic motives, insurance companies
came into existence to carry the message of insurance and social security through
insurance to various sectors of society. Bharat Insurance Company (1896) was also
one of such companies inspired by nationalism. The Swadeshi movement of 19051907 gave rise to more insurance companies. The United India in Madras, National
Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore
were established in 1906. In 1907, Hindustan Co-operative Insurance Company took
its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath
Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life
(later Bombay Life) were some of the companies established during the same period.
Prior to 1912 India had no legislation to regulate insurance business. In the year
1912, the Life Insurance Companies Act, and the Provident Fund Act were passed.
The Life Insurance Companies Act, 1912 made it necessary that the premium rate
tables and periodical valuations of companies should be certified by an actuary. But
the Act discriminated between foreign and Indian companies on many accounts,
putting the Indian companies at a disadvantage.
6

The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to
176 companies with total business-in-force as Rs.298 crore in 1938. During the
mushrooming of insurance companies many financially unsound concerns were also
floated which failed miserably. The Insurance Act 1938 was the first legislation
governing not only life insurance but also non-life insurance to provide strict state
control over insurance business. The demand for nationalization of life insurance
industry was made repeatedly in the past but it gathered momentum in 1944 when a
bill to amend the Life Insurance Act 1938 was introduced in the Legislative
Assembly.
However, it was much later on the 19th of January, 1956, that life insurance in India
was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75
provident were operating in India at the time of nationalization.
Nationalization was accomplished in two stages; initially the management of the
companies was taken over by means of an Ordinance, and later, the ownership too by
means of a comprehensive bill. The Parliament of India passed the Life Insurance
Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was
created on 1st September, 1956, with the objective of spreading life insurance much more
widely and in particular to the rural areas with a view to reach all insurable persons in the
country, providing them adequate financial cover at a reasonable cost.

Some of the important milestones in the life insurance

business in India are:
1818: Oriental Life Insurance Company, the first life insurance company on Indian soil
started functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company
started its business.

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 are 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. 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 1850
in Calcutta by the British.

Some of the important milestones in the general insurance

business in India are:
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 (Nationalisation) Act, 1972 nationalised the
general insurance business in India with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies viz. the National
Insurance

Company

Ltd.,

the

New

India

Assurance

Company

Ltd.,

the

Oriental Insurance Company

Ltd. and the United India Insurance Company

Ltd. GIC incorporated as a company.

Indian Insurance industry:

Indian Insurance comprised mainly two Players.
1. Life Insurer: the important are.
Life Insurance Corporation of India (LIC)
HDFC Standard Life Insurance Company Ltd.
Max New York Life Insurance Co. Ltd.
ICICI Prudential Life Insurance Company Ltd.
Kotak Mahindra Old Mutual Life Insurance Limited
Birla Sun Life Insurance Company Ltd.
Tata AIG Life Insurance Company Ltd.
SBI Life Insurance Company Limited
ING Vysya Life Insurance Company Private Limited
Bajaj Allianz Life Insurance Company Limited
Metlife India Insurance Company Pvt. Ltd.
Sahara India Insurance Company Ltd.
Aviva Life Insurance Co. India Pvt. Ltd.

2. General Insurer
General Insurance Corporation of India (GIC) GIC has four subsidiary companies namely:
The Oriental Insurance Company Limited.
The New India Assurance Company Limited.
National Insurance Company Limited.
United India Insurance Company Limited.
Royal Sundaram Alliance Insurance Company Limited
Reliance General Insurance Company Limited.
IFFCO Tokio General Insurance Co. Ltd
TATA AIG General Insurance Company Ltd.
Bajaj Allianz General Insurance Company Limited
ICICI Lombard General Insurance Company Limited.
Cholamandalam General Insurance Company Ltd.
Export Credit Guarantee Corporation Ltd.
HDFC-Chubb General Insurance Co. Ltd.

10

Introduction
SBI LIFE a joint venture between

74%

26%

SBI Life Insurance is a joint venture between the State Bank of India and Cardiff SA of France.
SBI Life Insurance is registered with an authorized capital of Rs 1000 core and a paid up
capital of Rs 350 carore. SBI owns 74% of the total capital and Cardiff the remaining 26%.
State Bank of India enjoys the largest banking franchise in India. Along with its 7 Associate
Banks, SBI Group has the unrivalled strength of over 14,000 branches across the country, the
largest in the world.
Cardif is a wholly owned subsidiary of BNP Paribas, which is The Euro Zones leading Bank.
BNP is one of the oldest foreign banks with a presence in India dating back to 1860. It has 9
branches in the metros and other major towns in the country.
Cardif is a vibrant insurance company specializing in personal lines such as long-term savings,
protection products and creditor insurance. Cardif has also been a pioneer in the art of selling
insurance products through commercial banks in France and 29 more countries.
SBI Life Insurances mission is to emerge as the leading company offering a comprehensive
range of Life Insurance and pension products at competitive prices, ensuring high standards of
customer service and world class operating efficiency. The company plans to make the
insurance buying process quick, simple and based on well-informed judgment.
In 2004, SBI Life Insurance became the first company amongst private insurance players to
cover 30 lacks lives. The company expects to carve a niche in the Indian insurance market
through extensive product innovation and aims to provide the highest standards of customer
service through a technological interface. To facilitate this, call centers have been already
installed and help lines will be installed and customers will have access to their accounts
through the Internet or through SBI branches.
The company proposes to make available ready liquidity to its Life Insurance policies by way
of loans at SBI counters. This will make Life Insurance a liquid asset in the financial portfolio
of households.
11

SBI Life Insurance is uniquely placed as a pioneer to usher bank assurance into India. The
company hopes to extensively utilize the SBI Group as a platform for cross-selling insurance
products along with its numerous banking product packages such as housing loans, personal
loans and credit cards. SBIs access to over 100 million accounts provides a vibrant base to
build insurance selling across every region and economic strata in the country.
SBI Life has a unique multi-distribution model encompassing Bancassurance, Agency and
Group Corporate.
SBI Life extensively leverages the SBI Group as a platform for cross-selling insurance
products along with its numerous banking product packages such as housing loans and
personal loans. SBIs access to over 100 million accounts across the country provides a vibrant
base for insurance penetration across every region and economic strata in the country ensuring
true financial inclusion.
Agency Channel, comprising of the most productive force of more than 20,000 Insurance
Advisors, offers door to door insurance solutions to customers.

Why SBI Life: 5 reasons to select SBI Life as your preferred insurance
company.
Customer Satisfaction - many of our customers who have bought an insurance policy
with us have bought a second one!
Financially sound with over a 100 years of banking experience, when you trusted us
with your money, why would you trust somebody else with your protection needs.
Affordability
Easy to buy (accessibility)
Trust & reliability.
With us youre sure!

Achievements of SBI Life insurance corporation ltd.

SBI LIFE AIMS TO TRIPLE ITS GROWTH WITH PROFITS IN FY 0708
April 30, 2007
Records Impressive Performance in FY 06 -07:
Grows New Business Premium by 210%
Continues Profitable Operations
Leads Private Life Insurance Companies in Lives Covered: 64.9 Lacks
Lives.

SBI Life set to establish dominance in Pension market by leveraging its

extensive distribution network and a strong Product Portfolio
February 15, 2007
In line with its overall goal of emerging as a dominant player in the Indian Pension Market,
SBI Life has strengthened its pension product portfolio further. As a key initiative in this
direction, SBI Life today announced the launch of Unit Plus II Pension product.

SBI Life set to maintain its leadership in Group Lives coverage

12

January 03, 2007

Enhances capital base by infusing Rs. 75 crore to support growth plans, unveils Horizon II
Pension Plan, becomes the fastest growing life insurance company by clocking new premium
growth of 264% (YTD).

Big Bucks: Inv. Guide - Securing tomorrow

The Economic Times
October 30, 2006
Unit-Linked insurance plans (Ulips) are the most talked-about products in the insurance
industry these days. The buoyancy in the stock market has generated a lot of interest in equities
and related products. Investors not interested in equities could either take a look at debt-based
Ulips or traditional insurance
Products like endowment plans. ET Investor's Guide looks at an endowment policy, the SBI
Life Insurance - Sudarshan.
(Rutu Chhabria)

Interview of the Week - S Krishnamurthy: The need for retirement planning

assumes great importance
The Financial Express - FE Investor
October 29, 2006
The life insurance sector is buzzing in India, more players are entering and existing players are
trying to consolidate their stand in the highly competitive market. S Krishnamurthy, CEO and
MD, SBI Life Insurance Company spoke with Nikhil Walavalkar of The Financial Express on
the emerging trends in the business and SBI Life's strategies. Excerpts:

Premium-guaranteed plan will bleed you

DNA Money
October 28, 2006
It makes more sense to go for a term plan with no survival benefit
MUMBAI: God and devil, they say, is in the detail. And Shalin Saxena was just finding that
out. A little bit of research had told him that premium-guaranteed term insurance plans just did
not make sense.
(Vivek Kaul)

Big Bucks: Inv. Guide - In a league of its own

The Economic Times
October 16, 2006
Horizon II is the latest unit-linked insurance plan (ULIP) offered by SBI Life. It has a distinct
feature of automatic asset allocation, under which, as the policy approaches maturity, the
amount invested in equities is gradually reduced and put into money market and bond funds;
thereby reducing portfolio risk with the passage of time.
(Aniruddha Ghosh)

13

SBI Life on Expansion Spree

The Hindu Business Line
September 7, 2006
SBI Life Insurance is on an expansion blaze in Tamil Nadu. Its Agency Channel has plans to
strengthen its operations in Nagercoil, Salem, Erode, Vellore and Pondicherry aimed at making
deeper inroads to harness the potential in the State, according to Sr. Vice-President- Retail and
Corporate Agency, Mr. Rajiv Gupta. He said a target of over Rs 1,000 crore of total premiums
has been set for
FY 06-07 and Tamil Nadu, which already had five branches, is expected to contribute over 20
per cent to the total business during this year.

Mission codename to help SBI Life on bank assurance Code-named projects

in SBI branches the strategy
DNA - Daily News and Analysis
September 23, 2006
As the mad rush of life insurance companies to garner handsome premiums through
bancassurance continue, SBI Life seems to be leveraging heavily on State Bank of India (SBI)
and its associate banks. Almost 85% of the new bancassurance business of SBI Life comes
from the SBI Group.

(Nandini Goswami)

Bancassurance Model Pays Off For SBI Life

Hindu Business Line
August 7, 2006
To hike its capital base by Rs 100 crore in H2
As the MD and CEO of SBI Life the first private life insurance company to break even
since privatization Mr. S. Krishnamurthy has proved his detractors wrong about the viability
of the bancassurance model. Bancassurance has been cost-effective and helped the company
make profits for the first time.

(Radhika Menon)

SBI Life to Open more branches In Eastern Region

Hindu Business Line
August 9, 2006
SBI Life Insurance, a subsidiary of State Bank of India, has set a target of achieving a business
premium of Rs 2,500 crore in this fiscal by launching innovative products, opening more
number of branches and increasing its sales force, the company's Managing Director, Mr. S.
Krishnamurthy, said here on Tuesday.

14

Money & Banking - SBI Life to line up new products

The Financial Express
August 9, 2006
SBI Life is expanding its business and network with an aim to become the top life insurance
company among the private players in next two years. The company is now ranked fourth
amongst its private peers in terms of business premium income.

SBI Life Insurance for aggressive expansion

Pioneer
August 10, 2006
State Bank of India, the largest public sector bank of India, is all set to become the largest life
insurance company as well. Opened just four years ago SBI Life Insurance is now the country's
third largest life insurance company in terms of premium, mobilizing Rs 29.74 crore in the
fiscal year 2005-06 and first in terms of lives covered, covering more than 1.13 lakh lives. In
total more than 3.71 lives have been covered in the State with premium collections of more
than Rs 110 crore.

(Diptiman Chakraborty) Bhubaneswar

Markets - Protection but no money back

The Financial Express
August 13, 2006
Uncertainties in life have increased by manifold and so has the demand for an insurance cover.
However, the choice for an insurance plan depends on different requirements of an individual.

(Teena Jain)

Personal Finance Corner - Endowment plans or ULIPs?

The Financial Express
August 20, 2006
When it comes to insurance as an investment tool 'Young India' likes to go in for unit linked
insurance plans (ULIPs) over traditional endowment plans. Why? The reason is simple. For
riding on the strong markets performance over the last three years, ULIPs have given better
returns over endowment plans.

(Teena Jain)
SBI's network is a huge plus'
Business Standard
25 August, 2006
Falaknaaz Syed SBI Life Insurance Company is the first among the 14 life insurance
companies in the private sector to post a net profit in 2005-06. In a free-wheeling interview
with Falaknaaz Syed, the five-year old company's Managing Director and CEO S
Krishnamurthy spoke on its future plans. Excerpts: There are life insurance players much more
aggressive than you and they have still not been able to break even....
Our success is largely on our channel strategy and product strategy.
15

SBI Life to Increase branch Network

Hindu Business Line
July 9, 2006
SBI Life Insurance plans to expand its presence in the country by increasing its branch
network from 61 to 150 by the end of the current year. With this, the company will have a
presence in 113 cities up from 53 where it is present today.

SBI Life to foray into pensions ULIPs

Deccan Chronicle
July 11, 2006
Hyderabad, July 10: SBI Life Insurance Company Limited, a joint venture by State Bank of
India and Cardif SA of France, will be increasing its focus on the pensions and corporate
insurance segments, launching unit-linked plans for pensioners and for employees of the
corporate sector, Mr. S. Krishnamurthy, managing director and chief executive officer of the
company, said on Monday.

SBI Life to focus on pensions, insurance

Asian Age
July 11, 2006
Hyderabad, July 10: SBI Life Insurance Company Limited, a joint venture by State Bank of
India and Cardif SA of France, will be increasing its focus on the pensions and corporate
insurance segments, launching unit-linked plans for

SBI Life tops private insurance list

Oct 26, 2004
Private sector insurance company, SBI Life Insurance has emerged the single largest group
policy seller among private players by capturing as much as 10 per cent of the total market till
August 2004.
In the last five months the company has doubled its stake, which managed a five per cent,
share till April 2004. Life Insurance Corporation has seen its share in the segment decline to 70
per cent from 72 per cent in the same period.
The SBI joint venture sold 2.65 lakh lives under its group single and non-single policies of
which around two lakh were single and 65,000 from non-single policies.
The company's total premium till August, 2004, towards individual single and non-single
policies stood at Rs 1,185 crore and Rs 4,389 crore respectively accounting for 2.73 lakh and
73.85 lakh policies. Group single and non-single premium accounted for Rs 1,399 crore and Rs
128 crore of premium collection.
Total Individual premium and group premium was Rs 5,572 crore and Rs 1,527 crore
respectively against Rs 3,54,6 crore and Rs 788 crore in previous period.
16

Number of lives covered by the industry under the various group schemes was 25.85 lakh
during the period ended August 2004. Tata AIG with 1.29 lakh lives accounted for 5.02 per
cent while MetLife with 84,501 lives accounted for 3.27 per cent.
LIC's Premium under Varisth Pension Bima Yojana during the period ended April - July 2004
was Rs 1,072 crore towards 54,740 policies.
The life insurance industry as a whole underwrote new business premium of Rs 1,580 crore
during August 2004, taking the cumulative premium underwritten during the current year to Rs
7,101 crore.
LIC underwrote Rs 5,84,4 crore of premiums up to August 2004, which translated into an
82.30 per cent market share, followed by ICICI Prudential and Birla Sunlife with market share
5.63 per cent and 2.56 per cent respectively.
Nominee
SBI Life: Closer to the customer
SBI Life implemented a system to conduct transactions over the Internet and make relevant
information accessible to employees, business partners and customers while driving profits at
the same time
"Unlike many industry players, at SBI Life, the core system across all lines of business enables
us to track the complete relationship with each customer"

"Unlike many industry players, at SBI Life,

the core system across all lines of business enables us
to track the complete relationship with each customer"
Murali G
Senior VP & IT Head
SBI Life Insurance

SBI Life Insurance is a joint venture between the State Bank of India and Cardif SA of France.
To start with, the company wanted to have a multi-distribution approach and get sales through
the banks, the traditional agency force, and a Bancassurance distribution platform. SBI Life
was also planning to equip the bank branches to sell insurance and increase IT usage.
Says G Murali, Senior VP & IT Head, SBI Life, Leveraging the strategic role of technology is
core to the operations of every life insurer from lead generation to policy servicing to claims
handling. The key IT drivers for a life insurance company are new product developments, new
17

distribution channels, new regulatory requirements and typical issues ranging from sales
tracking to customer services.
Cross-selling is a viable option, but reaching the customer cost-effectively is more important.
Companies need to create synergies through shared databases, and selectively mine the
customer databases and a very strong 24x7 technology backbone. Life insurance companies
also need to manage the cost and complexity of multiple channels while switching the least
profitable clients to automatic channels for low-value-added transactions.
SBI Life approaches corporate and self-help groups to address the insurance cover needs of
these specific groups through its highly customer-focused group insurance initiatives. The
requirement is to infuse insight into the sales and service divisions, and transform data into
leads. Moreover, consumers are developing and becoming more demanding, and SBI Life
intends to be available wherever and whenever the customer needs it.
SBI Life wanted a single IT architecture enabling multiple portals enterprise-wide. The
objective was to allow for single sign-on for all applications and secure authorization based on
a unified user profile. SBI Life required personalized experience for leveraging the rules
engine and entitlements, and secure access to content, applications and Web services.
Today, they transact over the Internet and make relevant information easily accessible to
employees, business partners and customers, while driving profits in the process. SBI Life used
an inside-out approach of implementation.

They have a common enterprise-wide application interface, and their basic business
transactions are on the browser, leading to lesser training and overall cost.
Unlike many of the newer industry players who have different systems for each line of
business, at SBI Life the core is a system across all lines of business which enables us to track
the complete relationship with each customer, says Murali.

Implementation in a nutshell Company SBI Life Insurance Project completed August 2004
Aim of the implementation of an IT system in SBI Life that takes into account cross-selling,
and improves the relationship with the customer.

18

Major benefits
An infrastructure that can support broad information integration for the enterprise portal,
relational databases, business intelligence, and enterprise content management applications
Unified portal creation and administration across the enterprise.
A Web services-based service oriented architecture that delivers Web services and the ability
to unlock existing assets as re-usable Web services.
Projects that were previously shelved due to high integration costs can now come off the shelf
and show immediate ROI Products and technologies used.
Onlinesbilife.com is implemented on BEA Weblogic Platform 8.1 with Oracle 9.1 as a
backend.
Tuxedo acts as a middleware to integrate the Web-based application with the Indigo engine.
The core insurance engine is Indigo; the entire business logic from processing the proposal to
policy issuance and policy servicing resides in Indigo.
Behavior tracking of user, group and profile management based on LDAP, RDBMS, legacy
or a combination
Rules management for segmentation, content selection and entitlement at the Port let or page
level.
Web flow and pipeline MVC architecture.
Support for CSS-based skins and multi-channel portals.
Broadband Internet connectivity to a central server from all over the country.
Security is addressed with Nortel/Alteon switch and Checkpoint network Security software.
Strategy, architecture, design and implementation was done by SBI Life's IT team.
E-business infrastructure software was undertaken by BEA Systems.
Software design and development was done by Satyam.
Security was handled by Nortel and Check Point.

IT implementation
The project was initiated in April 2004, and the initial roll-out was completed by August 2004.
After the initial roll-out, when it was a centralized business structure (with 20 branches), the
19

portal is continuously being customized, adapted and upgraded to support the business
transition and adopt fast decentralization of operational processes including automated
underwriting for all non-medical proposals done at over 70 branches.
SBI Life has implemented an Internet-centric IT system with browser-based front-office and
back-office systems, channel management, policy product details, online premium calculator
and facility for group insurance customers to view their individual savings status on the Web.
The organization has the facility to pay premiums through credit cards, Net banking, standing
instructions, etc. This is fully integrated with the core systems through industry standards such
as XML, EDI, etc. The project links the portals users to the enterprises digital assets, and
gives users a single, personalized point of access to multiple types of information from any
device, wired or wireless. Comments Murali, Continuous and consistent training, and timely
distribution of updated content form the corner-stone of any insurance firm. All this implies
pulling together information in many different formats from many different databases and
applications, which means the effective use of a portal.

Business benefits
This project has helped SBI Life in tapping new markets, reducing IT maintenance costs,
simplifying channel management, and enhancing customer experience. Operationally, it has
tightly integrated applications, bringing together enterprise applications, digitized content, Web
sites, e-mail, workflow integration and extensive search capabilities, besides reducing cost and
time-to-market.
SBI Life is pleased with this IT initiative, and is planning to open services to partners from its
portal. It is also moving to rolling out departmental business portals addressing its specific
needs, integration with mobility devices using WAP, SMS etc., integration with new Open
Source tools, and provisioning to allow compliance with new regulatory requirements such as
ACCORD.
Concludes Murali, In technology they are planning to have service level agreement
monitoring and management, end-to-end auditing, policy-based management, and distributed
fault management and alerting.
20

SBI LOCATION OF OFFICES:

SBI has a huge network of offices for providing service related to Insurance all over
the country.

21

Location
Registered office:
State Bank Bhavan, Madam Cama Road, Nariman Point
Mumbai -400021
Corporate Office:
Turner Morrison Bldg, GN Vaidya Marg Fort,
Mumbai- 400023

Summer training office location

Branch office:
SBI LIFE INSURANCE CO LTD. Krishna Apra Business Square, D 5th Floor
Neta Ji Subhash Place
Pitampura New Delhi 110034

22

Organizational structure

23

OGANISTIONAL STRUCYURE OF AGENCY CHANNEL

M
MDD&&CEO
CEO
U.
U.S.S.ROY
ROY

COUNTRY
COUNTRYHEAD
HEAD
RAJEEV
RAJEEVGUPTA
GUPTA

R.
R.S.S.M.
M.

DEVASHISH
DEVASHISHVERMA
VERMA

A.
A.S.S.M.
M.
S.S.BATTCHARY
BATTCHARY

D.
D.S.S.M.
M.
ATUL
ATULSHARMA
SHARMA

B.
B.S.S.M.
M.
ATUL
ATULSHRMA
SHRMA

A.
A.B.
B.S.S.M.
M.

U.
U.M.
M.
AMIT
AMITSHRMA
SHRMA

A.
A.M.
M.
Agency
Agencymanager
manager

INSURANCE
INSURANCEADVISOR
ADVISOR

D.S.M. (Mr. ATUL SHRMA)

3 branch control.
B.S.M. (ATUL SHRMA)
Own branch reining
A.B.S.M. (ATUL SHRMA)
8 managers team +own team of advisors team

24

T.T.M.
M.
Territory
Territorymanger
manger

INSURANCE
INSURANCEADVISOR
ADVISOR

Management Style
MANAGEMENT STYLE

FINANCE & ACCOUNTS

INVESTMENT

ACTUARY

IT

HR

MARKETING

OPERATIONS

NEW BUSINESS

UDNERWRITING

CLAIMS

POLICY SERVICING
ISSUE & PROBLEM SOLVING

25

Distribution channels of SBI Life Insurance

SBI Life

Bancassurance

Agency

Insurance Agents

Corporate
Agents

Credit
Life

Corporate
Group

Brokers

Insurance Agents:
Insurance agents are those individual persons who work for one particular
insurance company.
An insurance agent cannot work for more than one particular at one point of time.

Corporate Group:
Targeting Corporate for Gratuity and Group Pension products.

Agency Channel:
Agency channel have the most productive and active force of more than 25,000
Advisor. Our approach is to provide door-to-door need-based insurance solution to
customers after taking into account protection and wealth creation needs. Agency
channel has grown more than 300% over the last year and contributed more than
45% to the companys new business premium collection.

26

TURNOVER
SBI LIFE AIMS TO TRIPLE ITS GROWTH WITH PROFITS IN FY 0708

April 30, 2007

Records Impressive Performance in FY 06 -07:
Grows New Business Premium by 210%
Continues Profitable Operations
Leads Private Life Insurance Companies in Lives Covered: 64.9 Lacs lives.
Mumbai, April 30, 2007: SBI Life Insurance Company Limited, which enjoys the
Unique distinction of being the first private sector life insurance company in India
to make profit, today announced an impressive 210% growth of new business
premium and 88% jump its Net Profit for FY 06-07.
Highlights: FY 2006 -07:
New Business Premium: Rs.2,5666.08 corers (210%)
Net Profit

: Rs.3.83 corers (88%)

No of life in Portfolio

: 6,497,884(55%)

Total Premium

: Rs.2,928.49 crores (172%)

The total premium increased to Rs. 2928.49 crores, up 172%

from the corresponding premium of Rs. 1075.32 crores last
year.
Bancassurance made remarkable growth of 106% and
contributed to over 39% of the total premium of the company.

27

Group corporate with a whopping growth of 262%, contributed

to 17% of the total premium.
SBI life ranks 3rd in term of first year premium collection and
enjoys market share of 12% among private sector life insurance
companies.(IRDA data for period April 06-feb.2007)

28

PRODUCT & MARKET

29

Types of Products

Individual
Products

Group
Products

Keyman

Group
Gratuity Paln

Sudarshan

Life long
Pension

Edu Shield
Money Back

Group Term
Insurance

Scholor II
Shield

Specialized
Term Insurance

Sanjeevan

Swarnaganga

Setubandhan

Super Suraksha

Swadhan

30

2.1

SBI Life Insurance

Rajendra K Halemane
Senior Agency Manager, SBI LIFE INSURANCE CO.LTD.
SBI LIFE INSURANCE CO.LTD.
confidential
confidential
http://toostep.com/profile/rajendra-k-...
MANGALORE, India
SBI Life Insurance Company Limited is a joint venture between the State
Bank of India and BNP Paribas Assurance. SBI Life Insurance is registered with
an authorized capital of Rs 2000 crores and a Paid-up capital of Rs 1000 Crores.
SBI owns 74% of the total capital and BNP Paribas Assurance the remaining
26%.
State Bank of India enjoys the largest banking franchise in India. Along
with its 7 Associate Banks, SBI Group has the unrivalled strength of over
14,500 branches across the country, arguably the largest in the world.
BNP Paribas Assurance is the life and property & casualty insurance unit
of BNP Paribas - Euro Zones leading Bank. BNP Paribas, part of the worlds

31

top 6 group of banks by market value and a European leader in global banking
and financial services, is one of the oldest foreign banks with a presence in
India dating back to 1860. BNP Paribas Assurance is the fourth largest life
insurance company in France, and a worldwide leader in Creditor insurance
products offering protection to over 50 million clients. BNP Paribas Assurance
operates in 41 countries mainly through the banc assurance and partnership
model.
SBI Life has a unique multi-distribution model encompassing Banc
assurance, Agency and Group Corporate. SBI Life extensively leverages the
SBI Group as a platform for cross-selling insurance products along with its
numerous banking product packages such as housing loans and personal loans.
SBI access to over 100 million accounts across the country provides a vibrant
base for insurance penetration across every region and economic strata in the
country ensuring true financial inclusion.
SBI Life extensively leverages the State Bank Group relationship as a
platform for cross-selling insurance products along with its numerous banking
product packages such as housing loans and personal loans.
SBI Life Insurance has crafted its name by providing quality insurance
services to its wide range of customers. Its ISO 9001:2000 certification speaks
for its quality. SBI Life Insurance has also been assigned iAAA rating by the
ICRA for its highest claims paying ability. In 2007, it became the first Indian
life insurer to get AAA rating from CRISIL. In the next year, Outlook Money
NDTV Profit adjudged it as the 'Best Life Insurer - 2008'. In 2009, SBI Life
Insurance achieved the unique distinction to emerge as the global top in terms of
Million Dollar Round Table (MDRT) members with 2,677 members.
SBI Life Insurance became the first Life Insurer in India to make profits in the

32

financial year 2005-06. It maintained the same record in the next year as well.
In 2007-08, a survey by 'Brand Equity' rated SBI Life as 'he Most Trusted
Private Life Insurer' In the same year, the company achieved CMMI Level 3
certification to become the first Indian insurer to have that.
2.1.1 Mission
To emerge as the leading company offering a comprehensive range of
life insurance and pension products at competitive prices, ensuring high
standards of customer satisfaction and world class operating efficiency, and
become a model life insurance company in India in the post liberalization
period.
2.1.2 Values
Trustworthiness
Ambition
Innovation
Dynamism
Excellence

33

What is a Life Adviser?

A life adviser is a broker or intermediary authorized to sell or advise on the
policies of life insurance and financial products, such as unit trusts. Typical
examples of companies which employ financial advisers are banks, insurance
and life companies, general brokers, estate agents and building societies. Life
Advice is given in the following areas:
Direct sales
Tied sales
Independent financial advice
Banc assurance sales
Advisers in direct and tied sales are only permitted to sell their own
company's products, whereas independent financial advisers (IFAs) sell a
variety of different products from different suppliers. The latter role is diverse
as you are more likely to be exposed to a wider variety of people, situations
and competitors.
The ability to build effective relationships with clients and colleagues holds
the key to success as do first-class communication and commercial awareness
skills. A financial adviser fined their contacts through networking, cold
calling, referrals, advertising and publicity, database marketing and through
face-to-face contact. The role of Life Adviser usually revolves around targets.
The sales aspect has taken a more advisory route. Legislation now stipulates
that every quote produced must include a breakdown of how the client's
money is to be spent. This includes the percentage allocated to the financial
sales adviser.

34

Generally, there are three routes that the Life Adviser can take: he or she can
work on a self-employed, commission-only or salary plus bonus basis. An
IFA with five years' plus experience working in London and the South East
could reasonably expect to earn as much as 55,000 per year.
Professional qualifications
The changes within the industry, and the rigid regulatory bodies that have
clamped down on practices have meant that it is now longer as easy to get
into the industry as it was previously. The Certificate in Financial
Planning provides a broad-based grounding in the financial services market,
covering regulatory aspects, products, fact-finds and giving advice.
A typical career path for a young professional interested in a career in
financial advice is to both start on the administration side and move into a
trainee sales role. Once becoming a fully-fledged financial adviser in a
specialized area such as direct sales, tied sales or banc assurance, and having
completed two or three years as a professional, you may want to recommend
all products. You would then become an IFA and your career path could take
on a managerial position or you could go into partnership.
The key messages emanating from industry professionals are as follows:
Be flexible and open-minded
Be prepared to put in the hours for exams
The first few years are long and hard - you must persevere
Maintain a sense of humor throughout
After knowing about the Life Advisor let see what is recruitment and
various sources of recruitment.

35

Recruitment is the process of attracting qualified applicants for a

specific job. The process begins when applications are brought in and ends
when the same is finished. The result is a pool of applicants, from where the
appropriate candidate can be selected.
Recruitment is the process of attracting prospective employees and
stimulating them for applying job in organization recruitment is the process
of hiring the right kinds of candidates on the right job.

36

The recruitment process flowchart that we have gone through in our

project period

GETTING KNOWLEDGE ABOUT THE COMPANY AND RECRUITMENT

PROCESS
GETTING KNOWLEDGE ABOUT BENEFIT OF LIFE ADVISOR
GETTING KNOWLEDGE ABOUT DOING THE SALES CALL
SEGMENTING THE MARKET
TARGETING THE MARKET
PROCESS OF CAPCTURING ELEGABLE CANDIDATE
FILLING OF I.S.F. FORM
SHORTLISTING ON THE BASIC OF Q SCORE
CONDUCT AN INTERVIEW
BOP PRESENTATION
FILLING OF COMPULSORY IRDA /NAAF FORM
THREE DAYS IRDA REFRESHER TRAINING
CONDUCTION OF EXAMINATION
TWO DAYS PRODUCT TRAINING

37

GETTING KNOWLEDGE ABOUT THE COMPANY AND

RECRUITMENT PROCESS
For any good start a proper knowledge of the subject is require same was the
case here, on the very first day we were given the Basic idea about the
company, following three day all the requisite knowledge were given which a
fresher requires, thereafter we were clubbed in a team of five and a manager
was assigned for each team our manager Mr. Sudhansu Shekhar Sundaray
(Business Manager) a very knowledgeable persona and one of the senior
member in SBI Life gave us the complete idea about how to approach a
prospective candidate

PROCESS OF CAREER GROWTH OF LIFE ADVISOR

As we were assigned to recruit life advisors, the very first thing that we
required was knowledge about benefits and opportunity because to motivate a
prospective candidate to become an Advisor, we need to convenience the
Advisor about the opportunity and carrier growth in SBI Life.
Benefit

Commission
Renewal Commission
Bonus
Quarterly gifts
ACER club membership facility
MDRT
Promotion factor for an agent
Domestic and International Conventions

Opportunity/

38

Advisor require no capital investment

They can chose there own working hour according to there convenience.
They are there own boss.
Unlimited earning potential
Represent a strong trusted brand.

CAREER GROWTH

Commission: The commission is generated whenever an agent sells a life

insurance to the customers. The percentage of the commission differs from the
type of products the agent sells. The various commissions that is generated from
different policy are as follows:
Wealth Confident

24000 of 10% = 2400

Future Confident

12000 of 22% = 2640

Save Confident

7000 of 22% = 1540

Aspire Life

18000 of 31% = 5580

Spot Surakhya

12000 of 24% = 2880

Bright Star

15000 of 30% = 4500

Dream life Pension Plan

12000 of 7.5% = 900

Renewal Commission: Each and every time a policy gets renewed, the agent
gets the renewal commission. It is less than that of the commission and differs
from policy to policy which it sells to the customers.

39

Bonus: - Some of the policy during its growth accumulates some bonus e.g.
some of the money back plans. This gives extra benefits to the customers in
terms of money and the agent in terms of bonus. An extra benefit which SBI
Life gives to its agent. No other life insurance company gives this benefit to its
advisors. Performance Linked Bonus(PLB)is counted quarterly. In the 1st quarter
i.e in Jan, Feb and Mar, if the commission is generated Rs.20,000 then the agent
is able to get 30% of it that is 6000 as the PLB. Similarly the agents get
commission after each three month gap and an yearly bonus of 10% to 40%
depending upon his performance.
Quarterly Gift:-It is also an extra benefit that is given to the advisors based on
the performance. This is a motivational factor for the advisor because these
small things motivate the advisor to perform better and compete among other
fellow advisors. The gift varies from melamine dining set to microwave, AC,
laptop, mobile phone .etc.
Acer club membership:-This is an extra facility which the company provides to
its agent. In this facility the Company provides four different membership group
i.e; BRONZE, SILVER, GOLD, PLATINUM On the basis of the performance
the Agent is assigned to this group starting from Bronze, the day the Advisor
manages to get in the elite group of ACER club he is insured with a Life
coverage of 1 to 3 lakhs. It also provides medical facility to his wife in case of
delivery to an amount of 30,000 to 45,000, 45,000 in case of caesarian baby.
Which gives a feeling of relief for the advisors working in SBI Life Life
Insurance?
MDRT:- The MDRT is a member-driven, international network of the world's
best insurance and investment services professionals / advisors who deliver to
their clients the highest standards of ethics, knowledge, service and
productivity. With membership from 479 companies in 78 countries, MDRT

40

represents the top 1% of financial professionals. AIG, Prudential, Mass Mutual,

AXA, New York Life and Northwestern Mutual are just a few of the different
companies represented. The MDRT promotes the 'Whole Person Concept' to
help members have a balanced, meaningful and successful life through a focus
on health, family, spirituality, education, financials, community service and
career.
Promotion factor for an agent:-The Advisor of SBI Life has a chance to be
promoted to the post of AM (Agency Manager) called the Avenues or can be a
part of the Agency Associates.
The promotion factors are as follows: Number of policies- The minimum number of policies an agent should do
to be promoted is36. This acts as one of the promotional factor for an
agent.
Tenure- Tenure is nothing but the time factor an agent is given to achieve
his/her target. The different time factors an agent given by MNYL are
12months.
Adjusted AFYP- AFYP is otherwise known as Annual First Year
Premium. It is calculated on the single premium and fixed deposits at the
rate of 10%. The targeted adjusted AFYP for the promotion is 5 lakhs.
Graduate- Another important factor for the promotion is that the agents
minimum qualification should be graduation.
Domestic and International Conventions:-A better performer is send to different
international conventions to share there ideas and skills with the fellow member
working in different countries. In the process the Agents gets an opportunity to
tour around the world on company expense.
41

42

OPPORTUNITY
Advisor requires no capital investment:- For starting any business we require a
huge infrastructure but here in SBI Life the Advisors do not require any capital
investment other than RS. 825 IRDA examination fees, which is very nominal
and on return the Advisors get free phone calling facility, Xerox facility etc.
They can choose there own working hour according to there convenience:Advisor are free to work in there convenient hours because the advisors
working here comes from different profession like Doctor, Engineer, Student,
Medical Representative, contractor etc.
They are there own boss:- There is no boss to give you target rather you are
your own boss and can work according to your pleasure and earning
requirement.
Unlimited earning potential:- As the payment is made on commission basis so
there is no limit to earning. A person working hard can go to any limit with
reward and recognition in extra.

43

FINANCIAL MANAGEMENT OF MONEY INPUT

Once we had the knowledge of benefits and opportunities of advisor in SBI Life
life insurance we were given training as to how to go around in the market for
making sales call .so were given a lot of idea by our manager Mr. Sudhansu
Sekhar Sundaray .This idea includes market survey, door to door survey, putting
around canopy in different prime location of Bhubaneswar.
A market segment consists of a group of customers who share a similar set of
needs and wants. The market does not create the segments; the marketers task
is to identify the segments and decide which one to target. And for insurance
company we segmented market into following different groups.
Geographical region:- we segmented Bhubaneswar into five segment i.e;
East Bhubaneswar, West Bhubaneswar, North Bhubaneswar, South and
Central Bhubaneswar.
Demographic age:- we segmented the entire population of Bhubaneswar
into following three categories on the basis of demographic age i.e; 18 to
20 age group, 25 to 40 age groups and above 40.
Family life cycle:- we segmented the entire population of Bhubaneswar
into following three categories on the basis of family life cycle i.e;
Single, Married, Retired/VRS Optee.
Gender:- :- we segmented the entire population of Bhubaneswar into
following two categories on the basis of two categories i.e; Male and
Female

44

 Income:- :- we segmented the entire population of Bhubaneswar into

following three categories on the basis income below 2 lakhs,2 to 5
lakhs, more than 5 lakhs.
Occupation:- :- we segmented the entire population of Bhubaneswar into
following six categories on the basis of there occupation like Student,
Government employee, Private Employee, House Wife, Self employed
and Unemployed.
Education:- :- we segmented the entire population of Bhubaneswar into
following three categories on the basis of there education which is 10 th or
12th standard, Graduate, Post Graduate and above.
Social class:- :- we segmented the entire population of Bhubaneswar into
following three categories on the basis of social status that is Lower
class, Middle class and Upper class.
Once the firm has identified its market-segment it looks for Targeting and for
insurance company Targeting the most prospective candidate requires
segmenting of market into :Needs based Segmentation:- This is the most preferred and positive target
segment of insurance company because most positive result comes from this
segment targeting, like
Extra income need
Job need
Carrier need

45

ROLE OF UNIT MANAGERS

In fulfilling his obligations under the Agreement, Advisor shall scrupulously
adhere to, follow and be bound by the Statutory provisions governing life
insurance Advisors and more particularly the code of conduct contained therein,
as in force from time to time. Without prejudice to the generalify of the
obligations of the Advisor to SBI Life Life Insurance, the Advisor shall:
a. Faithfully and diligently promote the business of SBI Life Life Insurace;
b. Ensure that any representation made and information provided is
accurate;
c. Act diligently and carefully in providing any advice and ensure that such
advice is based on thorough analysis and take into account available
alternatives;
d. Ensure that any advice is reasonable in view of the customers
circumstances;
e. Not admit any liability or make any false, misleading, deceptive or
reckless statement to the customer in respect of life insurance generally
or any particular product of SBI Life Life Insurance;
f. Solicit proposals for insurance for SBI Life Life Insurance as SBI Life
Life Insurance may from time to time determine during the term of this
Agreement;
g. Service the needs and requirements of customer introduced by self or
assigned by SBI Life life Insurance;
h. Meet the validation specified by SBI Life Life insurance including
production and persistency;
i. Attend all training, meetings and seminars arranged or required by SBI
Life Life Insurance and perform such other duties as requested by SBI
Life Life Insurance;
j. Begin soliciting proposals for various insurance products at dates set by
SBI Life Life Insurance;
k. Be fully responsible and accountable for all its acts and omissions;

46

l. Obtain, maintain, renew and keep renewed the prescribed licences issued
by the IRDA and any other licence, approval or permission required of it
for fulfilling the obligations of an Advisor at all times during the term of
this agreemet;
m. At all times during te term of this Agreement, act within the scope of
such licences, approvals and permissions and any applicable legislation
ad in consonance with the corporate image and objectives of SBI Life
Life Insurance. The Advisor shall promptly notify SBI Life Life
Insurance of the loss of any suc licence, approval or permission by it or
by its certified persons;
n. Submit to SBI Life Life Insurance within the period of time specified by
SBI Life Life Insurance in writing from time to time, all proposals and
initial premiums, for products solicited by Adviosr and in any case
within the time specified by 64VB(4) of the Insurance Act, 1938 or any
other statutory provisions applicable thereto. The Advisor shall remit to
SBI Life Life Insurance all monies collected in trust immediately and
without any deduction whatsoever.
o. Observe and be bound by the Statutory provisions, SBI Life Life Insurance Instructions
including Advisor manual, benefit illustration policy, cash
acceptance policy, market conduct guidelines, prevention of
money laundering policy, the compliance manual and the code of
conduct that may be issued by SBI Life Life Insurance, in writing,
from time to time relating to the conduct of the business;
Monitoring, supervision and performance standards of the
business and sales practices used in relation to SBI Life Life
Insurance products that may be issued by SBI Life Life Insurance,
in writing, from time to time;
p. Promptly deliver to SBI Life Life Insurance in good order and condition
when demanded all records, rate books, documents, manuals, computers
(hardware and software relating in any way to the life insurance business
47

of SBI Life Life Insurance and which were received from SBI Life Life
Insurance, including those that have been specifically entrusted to the
Advisor pursuant to this Agreement. Advisor here by acknowledges that
such good, tangible and otherwise, and the exclusive property of SBI
Life Life Insurance;
q. Maintain and observe at all times the strictest secrecy and confidentiality,
concerning the business of SBI Life Life Insurance or of Policyholders
or proposers of Life Insurance or persons or companies from time to time
dealing with SBI Life Life Insurance at any time, either while the
Agreement is in force or subsequent to its termination;
r. Bear all expenses incurred in the performance of duties under this
Agreement unless otherwise specifically agreed to in writing by SBI Life
Life Insurance;
s. Promptly disclose to SBI Life Life Insurance every fact and
circumstance within his knowledge relevant to the acceptance of the risk
of business by SBI Life Life Insurance and shall promptly and accurately
relate to SBI Life Life Insurance every fact disclosed to him relevant to
the acceptance of such risk or business howsoever the Advisor is aware
of such matter;
t. Promptly notify SBI Life Life Insurance of receipt by it or service on it
of any complaint, demand, notice or claim made or to be made under a
policy howsoever the advisor is aware of such matter.
u. Record and reolve, within the standard turn around time of 7days from
receipt, all the complaints and requests/inquiries received from
customers of Advisor and statutory/regulatory bodies and forward a
report of the complaints, requests and inquiries of the past week with the
relevant documentation containing details like Date of Complaint, Policy
older Name, Advisor name and Code No., MOA Name and No., Nature
of Complaint, Date of Complaint Forwarded to the concerned function
for resolution, Status (Resolved /Pending), Resolution date to SBI Life

48

Life Insurance at the specified email address on every Thursday of the

next week.
v. Ensure that a strong needs analysis is carried out for every prospect
during the sales process;
w. Ensure strict adherence to the prevention of Money laundering and
Terrorist Financing Policy of SBI Life Life Insurance, the prevention of
Money Laundering Act, 2002, Rules thereunder and the IRDA Anti
Money Laundering (AML) guidelines and modification thereto and
employ adequate know Your Customer (KYC) standards as prescribed
therein;
x. In the event of finding any adverse or suspicious change on the standing,
integrity or reputation of the customer/policyholder, Advisor should
promptly disclose the same to the Principal compliance officer of SBI
Life Life Insurance in change of Anti Money Laundering programme. In
the event Advisor fails to comply with this provision and/or exposes SBI
Life Life Insurance to AML related risks, SBI Life Life Insurance shall
be entitled to terminate this Agreement with all attendant consequences
to the Advisor;
y. Act as a fiduciary, in good faith and I the best interests of SBI Life Life
Insurance at all times during the continuance of this Agreement; and
z. Declare his adherence to the code of sales and Business Conduct in the
format prescribed in Schedule A.

TRAINING AND COACHING OF ADVISORS

Refresher training is the basic given to the trainee advisors about what is
insurance, types of insurance, present scenario of life insurance in India and
scope and career growth in insurance with legal ideas related to insurance.
As per provisions of IRDA Act for training of life advisors (effective from 31 st
October 2004).

49

i.

The applicant shall have to undergo at least 100 hours practical training in
life or general insurance business which may be spread over three to four
weeks, where such applicant is seeking license for the first time to act as an
insurance agent.

ii.

The training duration should be minimum 18 working days excluding

Sundays and holidays.

iii.

No product training/market survey should be included into this hundred 100

hours training. The product training, if any, to be given by the insurance
company should be over and above the minimum training hours prescribed
by the Authority

iv.

The attendance record of the trainees should be maintained at the Institute

for necessary inspection at any given point of time.

v.

In case of short-fall of attendance, extra class may be permitted but the extra
hours may be specified separately with proper attendance and details of
faculty.

vi.

Every Institute should have at least one qualified permanent faculty who is
an Associate or Fellow from the Insurance Institute of India for each stream
i.e. for Life and Non-Life.

vii.

The attendance register of the faculty members should be maintained at the

training institutes.

viii.

The record of the payment made to faculty should be maintained at the

training institute i.e. batch-wise payment detail should be maintained.

ix.

The faculty should provide details of the other Institutes with whom they
have been empanelled as part-time/guest faculty.
50

x.

Register should be maintained at the training institute giving details of

batches completed, strength of the each batch, number of candidates
decertified, name of the sponsored insurer and details of faculty who
imparted the training with dates.

xi.
xii.

The seating capacity of each class-room should not exceed 40.

The fresh accreditation will be given on need basis after assessing the needs
of the particular city/town.

xiii.

The initial approval will be for a period of 3 years and consideration of

further renewal up to 3 years would depend on the satisfactory compliance of
requirements of accreditation.

xiv.

The insurance companies would regularly send their officials to oversee the
proper conduct of the training at the institutes and would not sponsor
candidates to those institutes that are not maintaining the required standards
of and facilities for the training.

xv.

The training institute must display the certificate of accreditation to impart

training issued by the Authority at the training institute.

xvi.

The Institute should not allow a franchisee to conduct courses on its behalf
even if the faculty is that of the Institute. The Institute should conduct the
training on its own premises or hired premises with proper infrastructure.

xvii.

No marketing fee/consultancy fee payment is permitted for getting the

training batches.

xviii.

It will be the responsibility of the Insurance Company to check the status of

the institute before sponsoring any candidates for training.

51

xix.

In case of mofussil areas or the cities where there are no accredited institutes
and an insurance company intends to appoint agents, it will be the
responsibility of the insurance company to conduct training.

xx.

The Institutes must keep with them one set of records of the training at the
place where the training is being imparted.

xxi.

The Institute should confine its activities only to the place/city for which it
has been given the approval. No training outside the said place/city is
permitted.

xxii.

The Institutes must submit a copy of the lease deed/rent agreement at the
time of seeking fresh accreditation/renewal/change of address of the
institute.

xxiii.

On successful completion of training the candidates get COT i.e. the

Completion of Training Certificate by SBI Life.

SALES & MARKETING

Key Milestones
A) Financial Year 08-09:
Bagged the coveted personal finance award-Outlook Money
NDTV Profit best Life Insurer 2008.

52

 Ranked among global top three in terms of number of Million

Dollar Round Table (MDRT) members.
CRISIL has reaffirmed its highest financial rating AAA/Stable to
SBI Life. In 2007 SBI Life became the first life insurer in India to
receive this rating from CRISIL, countrys leading rating agency.
Recently ICRA, has assigned iAAA rating indicating highest
claims paying ability to SBI Life Insurance.
Retains ISO 9001:2000 certificate for superior claim settlement
process.

B) Financial Year 07-08:

Rated as the The Most Trusted Private Life Insurer according to a
survey conducted by Brand Equity in association with AC Nielsen
ORG-MARG and the Economic Times Intelligence Bureau.
Became first life insurer in India to receive the highest financial
rating AAA from CRISIL, the countrys best known rating agency
in 2007.
Ranked amongst global top five life insurance companies in the
number of MDRT members.
Forayed into micro insurance with the launch of Grameen Shakti
in Bhubaneshwar, Orissa for the economically underprivileged
sections of society.

53

 Received ISO 9001: 2000 certification for superior claim

settlement process.
Became the only domestic life insurer to achieve CMMI Level 3
certification

for

IT

processes

and

software

development

capabilities.

C) Financial Year 06-07:

Second consecutive year of profitability.
Leads Private Life Insurance Companies in Lives covered : 6.49
Million lives covered.

D) Financial Year 05-06:

Becomes the first Life Insurer to make profits.

FINANCIAL UNDERWRITINGS
Horizon- II
SBI Life - Horizon II is a unique, non participating Unit Linked Insurance
Plan in Indian Insurance Industry, where you need not to be a financial market
expert. This plan offers the flexibility of Unit Linked Plan along with Automatic

54

Asset Allocation which provides relatively higher returns on your money where
as increasing death bench.
Twin benefit of insurance cover and market linked returns profits
provides higher security to Hassle-free investment management of funds from
inception to maturity, Automatic Asset Allocation of funds, automatic
rebalancing of funds at yearly intervals, free of cost higher protection, to meet
your family financial needs.
It is a unique, non-participating Unit Linked Insurance Plan. As per the
plan and term chosen by you, SBI Life will invest the net premium amount into
each of the funds mentioned.

Maha Anand
SBI Life - Maha Anand is a simple & convenient unit linked plan, which
provides you insurance cover without any medicals.
Life begins afresh when you become a parent and when the child takes
that first step towards you, the moment is filled with cheer, enthusiasm never
felt before. This moment marks a new beginning in the childs life and theres
no looking back after that. The child keeps growing and so are his dreams,
aspirations which always aim to reach horizon and you want your child achieve
his/her dreams. But at the same time as a proud parent you also want to secure
their future against rising cost of education and other necessities.
Key Features Twin benefit of market linked returns and insurance cover
Simple Joining Process - No medical examination required

55

 Option to pay premium, as low as Rs 500 p.m.

Choice of 3 fund options to choose from
Flexibility

to

increase

your

investments,

through Top-up

Investment
Flexibility through Switching and Redirection Options
Liquidity through partial withdrawals
Attractive Tax benefits under the Income Tax Act, 1961

Unit Plus- II
We at SBI Life understand the basic needs for pension plan and give you
financial strength to maintain your life style even after the retirement. SBI Life Unit Plus II Pension plan makes sure that you have regular income after you
retire and also helps you to maintain your standard of living.
This is a unit linked pension plan wherein the policyholder chooses an
investment period from 5 to 52 years for a vesting age between 50 to 70 years.
You can choose to pay either single premium or pay regular premium for the
entire policy term. Your contributions are invested into 5 fund options as per
your choice.

Unit Plus Child Plan

We at SBI LIFE understand you better and hence have developed SBI
Life - Unit Plus Child Plan to suit you and your needs best. This Plan is meant

56

for parents in the age group of 18-57 having a child between the age group of 015 years.
Key Features Market related returns to match increasing cost of education
Peace of Mind by giving you triple benefits
Loyalty units to celebrate your child reaching 18 years
New Investment Fund (Equity Optimizer Fund) in addition to
existing funds.
Pay Premium for a limited period and reap benefits over a long
time.
Flexible plan which adapts to your changing needs as and when
you want.

Pension plan
We at SBI Life understand the basic needs for pension plan and give you
financial strength to maintain your life style even after the retirement. SBI Life Unit Plus II Pension plan makes sure that you have regular income after you
retire and also helps you to maintain your standard of living.
This is a unit linked pension plan wherein the policyholder chooses an
investment period from 5 to 52 years for a vesting age between 50 to 70 years.
You can choose to pay either single premium or pay regular premium for the
entire policy term. Your contributions are invested into 5 fund option.

57

Key Features Choice to invest & control four different funds as per your risk
appetite
Choice to invest & control four different funds as per your risk
appetite.
Flexibility to choose between two options
Pure Pension
Pension cum Life Cover
No medical required for Pure Pension, automatic acceptance
facility
Flexibility to increase regular contribution
Top up payments: any amount, anytime
Customize your plan by adding riders
15 days free look period

Smart ULIP
In the current volatile market scenario you need a plan which not only
protects your investment, but also enables you to get market related returns. SBI
Life - Smart ULIP is the perfect answer to your need, and will give you not only
Guarantee on select NAVs during the first seven years, but also gives you the
added attraction of participating in the market upside.

58

Key Features Guarantee of the highest of select NAVs, during the first seven
years on maturity.
Investment cum Insurance plan giving market related returns
Convenience through shorter premium paying term, giving you a
choice between two premium paying terms (PPT)
Power of more- Guaranteed Maturity NAV, continues beyond the
premium payment term.
Innovation structured investment fund-Flexi protect Fund
Hassle free plan- we manage your investment, giving you
maximum

opportunity

for

growth

while

protecting

your

investments against adverse market conditions.

Attractive Tax benefits under the Income Tax Act, 1961
Health Products
Financial planning is incomplete without planning health insurance. Due
to todays hectic lifestyle, improper diet, lack of exercise we are at higher risk of
contingencies of untimely serious illnesses. Sudden health problems could have
deep hole in your pockets. Medical science has advanced by leaps and bounds
in the last few decades. Theres a definite need to cover for health insurance to
reduce the financial burden.
SBI Life Insurance features both individual and group products like:
1. Unit Linked Products- this is a single non participating product group that
meets both the financial as well as insurance needs.
59

2. Pension Products- these comprehensive plans help to meet your post

retirement financial needs.
3. Pure Protection Products- nobody can predict future. So, any time anything
can shatter ones dreams. Pure Protection Products help to keep one safe and
secure during these trouble times.
SBI Life also offers some protection cum savings products and money
back scheme products. SBI also has products for brokers. These products take
inspiration from the endeavors of various industries and make your life easy.

UNDERWRITING
a. Advisor

understands that in acting on behalf of SBI Life

Life

Insurance, Advisor shall only be acting in accordance with tha statutory

provisions and in accordance with the terms of this agreement.
b. Advisor shall indemnify and undertake to pay to SBI Life Life
Insurance an amount equivalent to, and hold SBI Life Life Insurance
harmless Against, all losses without limitation, damages, claims,

60

demands, expenses and other liabilities including advocate fees incurred

by SBI Life Life Insurance as a result of any faradism dishonest,
misconduct or any breach or non-observance of any of the terms and
conditions of this Agreement or any neglect, failure or refusal to provide
services by the Advisor including any representation made or act carried
out by the advisor which is not authorized under this agreement.

PROCESS OF INSURANCE OPERATION

a.

Without prejudice to the other express terms and conditions of this

Agreement and all and any implied rights of SBI Life Life Insurance after the
termination of this Agreement, the Advisor shall not:
Use for his own benefit or the benefit of any other person; or
Disclose to any person; or

61

 Through any failure to exercise all due care and diligence, cause or
permit any unauthorized disclosure of any trade secrets or confidential
information of or relating to SBI Life Life Insurance which he may have
received, used or obtained during the term of this Agreement. Any such
trade secrets and confidential information shall at all times remain the
property of SBI Life Life Insurance.

b. For the purposes of this clause, trade secrets and/or confidential

information shall include, but not be limited to, lists of and information
concerning customers, Policyholders, employees, Advisors and agency
managers of SBI Life life Insurance, information relating to the working
of any product, process, invention, improvement or development carried
on or used by SBI Life Life Insurance, information relating to research
projects, know-how, prices, rates, discounts, mark-ups, business
strategies, marketing, tenders and any price sensitive information
concerning SBI Life Life Insurance. For the avoidance of doubt, the
obligation of confidentiality in this clause extends to trade secrets and
confidential information howsoever stored, whether in hard copy
documents, records or computer programs.

c. Access to SBI Life Life Insurance computer resources, electronic data

and the like may be given to and shall be utilized by the Advisor only for
the purpose of carrying out the duties embodied in the Agreement.

d. The forgoing provisions on confidentiality and non-disclosure also apply

to employees of both the parties to this Agreement and the sad parties

62

assume liability for the breach or violation in any manner by their

employees.
MEANING & DEFINITION
The life insurance contract embodies an agreement in which broadly
stated, the insurer undertakes to pay a stipulated sum upon the death of the
insurer to a designated beneficiary.

--- J.H.MAGEE

Life insurance contract may be defined whereby the insurer, in

consideration of premium paid either installment, undertakes to pay an annuity
on the death of the insured of a certain number of years.

--- R.S.SHARMA

A contract of life assurance is that in which one party agrees to pay a

given sum on the happening of a particular event contingent upon the duration
of human life in consideration of immediate payment of a smaller sum by
another.

---

BUNYONS LAW
Insurance industry is a booming sector. The business of insurance is related to
the protection of the economic value of asset. Every asset has a value. The asset
would have been created through the efforts of the owner, in the expectation
that, either through the income generated there from or some other output, some
of his needs would be met. There is a normally expected life time for the asset
during which time it is expected to perform. Insurance is a mechanism that
helps to reduce such as adverse consequences.

WHAT IS INSURANCE?
Basic aim of the insurance plan satisfies the following objectives:-

63

 Protection of economic value of assets.

Mechanism to reduce impact of adverse events on value generating
assets.
Types of insurance
Insurance is generally classified into three main categories:
1. Life Insurance.
2. Health Insurance.
3. General Insurance.
To get insurance an individual or an organization can approach to Insurance
Company directly, through Insurance agent of the concerned company or
through intermediaries.

Life insurance or life assurance is a contract between the policy owner and the
insurer, where the insurer agrees to pay a sum of money upon the occurrence of
the insured individual's or individuals' death or other event, such as terminal
illness or critical illness. In return, the policy owner agrees to pay a stipulated
amount called a premium at regular intervals or in lump sums. There may be
designs in some countries where bills and death expenses plus catering for after
funeral expenses should be included in Policy Premium.

64

Life Insurance Sector in India

Significant channel for
household savings into
capital formation
GDP
penetration of
4.1%
Statutory
requirements
to provide
reach to rural
areas

Life Insurance

Total Assets Under

Management of Life Insurance
Cos. as on March 31, 2008- Rs.
8,50,000 crores

NEED OF LIFE INSURANCE

65

2nd largest
financial service
in India after
banking
Total number of
lives insured
and on books as
on March 31,
2008- 22 Crs

. The functions of Insurance can be bifurcated into two parts:

1.Primary Functions
2.Secondary Functions
3. Other Functions
The primary functions of insurance include the following:
Provide Protection - The primary function of insurance is to provide protection
against future risk, accidents and uncertainty. Insurance cannot check the
happening of the risk, but can certainly provide for the losses of risk. Insurance
is actually a protection against economic loss, by sharing the risk with others.
Collective bearing of risk - Insurance is a device to share the financial loss of
few among many others. Insurance is a mean by which few losses are shared
among larger number of people. All the insured contribute the premiums
towards a fund and out of which the persons exposed to a particular risk is paid.
Assessment of risk - Insurance determines the probable volume of risk by
evaluating various factors that give rise to risk. Risk is the basis for determining
the premium rate also.
Provide Certainty - Insurance is a device, which helps to change from
uncertainty to certainty. Insurance is device whereby the uncertain risks may be
made more certain.
The secondary functions of insurance include the following:
Prevention of Losses - Insurance cautions individuals and businessmen to
adopt suitable device to prevent unfortunate consequences of risk by observing
safety instructions; installation of automatic sparkler or alarm systems, etc.
Prevention of losses causes lesser payment to the assured by the insurer and this
66

will encourage for more savings by way of premium. Reduced rate of premiums
stimulate for more business and better protection to the insured.
Small capital to cover larger risks - Insurance relieves the businessmen from
security investments, by paying small amount of premium against larger risks
and

uncertainty.

Contributes towards the development of larger industries - Insurance

provides development opportunity to those larger industries having more risks
in their setting up. Even the financial institutions may be prepared to give credit
to sick industrial units which have insured their assets including plant and
machinery.
The other functions of insurance include the following:
Means of savings and investment - Insurance serves as savings and
investment, insurance is a compulsory way of savings and it restricts the
unnecessary expenses by the insured's For the purpose of availing income-tax
exemptions also, people invest in insurance.
Source of earning foreign exchange - Insurance is an international business.
The country can earn foreign exchange by way of issue of marine insurance
policies and various other ways.
Risk Free trade - Insurance promotes exports insurance, which makes the
foreign trade risk free with the help of different types of policies under marine
insurance cover.

Profitability

67

SBI Life Insurance , a leading private life insurer, announced a profit of Rs.114
Crores, for the quarter ended June 2010, registering an impressive profit growth
of 195% over the corresponding period last year. The total premium of the
company grew by 9.5% to Rs. 1,707 Crores during the period. The new
business premium collected, during the first quarter, stands at Crores. Rapidly
expanding its presence, the company has introduced 118 branches, recruited 830
employees

and

added

over

5,000

Insurance

Advisors.

Commenting on the results, Mr.M.N Rao, MD & CEO of SBI Life Insurance
said We will focus on building capacity through branch expansion, manpower
recruitment and inducting Insurance Advisors so that we are able to serve
customers across geographies. Holistically enhancing our performance that
balances profitability and growth will remain a key business driver. Our unique
multi-distribution model coupled with SBIs strong brand equity has been an
enabler of sustained all round business performance.

SBI Lifes Assets under Management grew by 65%, over the corresponding
period last year, to Rs 30,082 Crore as on 30th June 2010 stands. The company
continues to have the lowest expense to GWP (Gross Written Premium) ratio in
industry

of

9.18%.

As per the latest IRDA report, June 2010, the company has a market share of
14.4% among private life insurers and a total market share of 3.83%.
Retaining the ISO 9001:2000 Certification for superior claim process and
reaffirmation of ICRAs iAAA rating are some of the key distinctions achieved
by the company during the last financial year.

68

About SBI Life Insurance Co. Ltd:

SBI Life Insurance is a joint venture between State Bank of India and BNP
Paribas Assurance SBI owns 74% of the total capital and BNP Paribas
Assurance the remaining 26%. SBI Life Insurance has an authorized capital of
Rs. 2,000 crore and a paid up capital of Rs 1,000 crores. State Bank of India
enjoys the largest banking franchise in India.
Along with its 6 Associate Banks, State Bank Group has the unrivalled strength
of over 16,000 branches across the country, arguably the largest in the world.
BNP Paribas is the 1st largest French company and ranks 5th in the banking
industry worldwide. It is 6th most valuable international banking brand as per
Brand Finance 2008.
BNP Paribas Assurance is the insurance arm of BNP Paribas - Euro Zones
leading Bank. BNP Paribas, part of the worlds top 10 groups of banks by market
value and part of Europe top 3 banking companies, is one of the oldest foreign
banks with a presence in India dating back to 1860. BNP Paribas Assurance is
the fourth largest life insurance company in France, and a worldwide leader in
Creditor insurance products offering protection to over 50 million clients. BNP
Paribas Assurance operates in 41 countries mainly through the bancassurance
and partnership model.
SBI Life Insurances mission is to emerge as the leading company offering a
comprehensive range of Life Insurance and pension products at competitive
prices, ensuring high standards of customer service and world class operating
efficiency.
SBI Life has a unique multi-distribution model encompassing vibrant
69

Bancassurance, Retail Agency, Institutional Alliances and Corporate Solutions

distribution channels. SBI Life extensively leverages the State Bank Group
relationship as a platform for cross-selling insurance products along with its
numerous banking product packages such as housing loans and personal loans.
SBIs access to over 100 million accounts across the country provides a vibrant
base for insurance penetration across every region and economic strata in the
country, thus ensuring true financial inclusion. Agency Channel, comprising
of the most productive force of over 68,000 Insurance Advisors, offers door to
door insurance solutions to customers
SBI LIFE Insurance has become the first Indian life insurer to top the list of
companies whose agents have qualified for the Million Dollar Round Table
(MDRT) a club of insurance agents worldwide who have generated life
premiums

of

over

$1

million

(Rs

4.9

crore)

in

year.

With 2,677 MDRT members in CY2008, SBI Life has pipped its Asian peerSamsung Life, which held the number one slot for two consecutive years. The
Indian company, a joint venture of the country's largest bank SBI and Cardif
of France has steadily improved its ranking moving from 5th in 2006 to 3rd
in

2007

and

the

topper

in

CY2008.

"Our global ranking is a testimony to the robustness of Indian financial services

market despite the prevailing global downturn and the vast potential of Indian
life insurance industry. Providing quality service and need-based solutions to
our customers will be our toppriority," said MN Rao, SBI Life's newlyappointed MD & CEO.

70

MDRT, an association of insurance advisors or agents was founded in 1927. The

membership to the MDRT is calculated on the basis of commission earned and
premium collected. To qualify in CY2008, each agent had to earn a minimum
commission of Rs 7.59 lakh with minimum premium collection of Rs 30.36
lakh. It is estimated that less than 1% of the world's insurance advisory force is
able

to

make

the

grade

to

be

part

of

MDRT.

Interestingly enough of the 2,677 MDRTs that SBI Life produced in CY2008
1,010 MDRTs came from the bancassurance stream. The number of SBI Life
agents who have become MDRT members has been on the rise, going from 801
advisors in CY2006 to more than doubling to 1,662 advisors in 2007. In 2007,
the company also had as many as 324 bancassurance advisors who made the
MDRT grade.

71