Amity Global Business Review

30

February

Quality Advisors: Their Recruitment among the Private

Life Insurance Sector in India
Gaurav Singh & Ajai Prakash
In India, life insurance is considered to be the push sale product. The high degree of sales push is evident
from the fact that in most cases it is the insurers employees or agents, who approach the customer
to sell the product. Life insurers are striving to design imaginative products so as to ensure long-term
commitment from the policyholders. In the process there is a need for the insurance advisors to play
a key role in identifying the needs of the prospect and sell insurance so that long-term retention of
customers is established.
Key Words: Life Insurance and Quality Advisors

Introduction

In todays rapidly changing business environment,

organizations have to respond quickly against the
requirements of people. In the competitive scenario it has
become a challenge for each company to adopt practices
that would help the organizations to stand in the market.
The competitiveness of an organization is measured
through the quality of products & services offered to the
customers that are unique from others. Insurance is a
contract between two parties whereby one party called
insurer undertakes in exchange for a fixed sum called
premiums, to pay the other party called insured a fixed
amount of money on the happening of a certain event.
Insurance may be described as a social device to reduce
or eliminate risk of life and property.
Insurance is a basic form of risk management
which provides protection against possible loss
to life or physical assets. Person who seeks protection
against such loss is termed as insured, and company that
promises to honor claim, in case such loss is actually
incurred by insured, is termed as Insurer. Life insurance
is an intangible product and hence it is important for
the agent to be able to provide comfort with pre and
post sales services. A quality financial advice can help
customers in many ways. The agents gives advice
to the customers based on:

Understanding the life stage needs of the customers.

A realistic picture of the customers financial future

or risk.

Information on how to manage the risk.

Information that will help the customers to consider

the financial options.

Life Insurance Market in India:

The Life Insurance market in India is an

underdeveloped market that was only tapped by
the state owned LIC till the entry of private insurers.
The penetration of life insurance products was 19
percent of the total 400 million of the insurable
population. The state owned LIC sold insurance as
a tax instrument, not as a product giving protection.
With the entry of the private insurers the rules of
the game have changed.
This has resulted in a sharp growth in the life
insurance market, which still has huge untapped
potential. Also, with economic advancement, India
is moving from a static to a dynamic situation in
which several changes are taking place in industry,
social life, political situation etc. which gives birth
to new categories of risk which have to be covered.
The total life insurance premium gained by the
public and private sector organizations from April
2006-07 to April 2010-11 are given below in the
Table 1.1:

Table 1.1: Total Life Insurance Premium

(Figures in Crore)
Insurer

2006-07

2007-08

2008-09

2009-10

2010-11

PUBLIC (LIC)

127822.84

149789.99

157288.04

186077.31

203473.40

ING VYSYA

707.20

1158.87

1442.28

1642.65

1708.95

HDFC STANDARD

2855.87

4858.56

5564.69

7005.10

9004.17

BIRLA SUNLIFE

1776.71

3272.19

4577.59

5505.66

5677.07

ICICI PRUDENTIAL

7912.99

13561.06

15356.22

16528.75

17880.63

Gaurav Singh &

Ajai Prakash

2012

31

KOTAK MAHINDRA

971.51

1691.14

2343.19

2868.05

2975.51

TATA AIG

1367.18

2046.35

2747.50

3493.78

3985.22

SBI LIFE

2928.49

5622.14

7212.10

10104.03

12911.64

BAJAJ ALLIANZ

4302.74

9725.31

10624.52

11419.71

9609.95

MAX NEWYORK

1500.28

2714.60

3857.26

4860.54

5812.63

MET LIFE

492.71

1159.54

1996.64

2536.01

2508.17

RELIANCE

1004.66

3225.44

4932.54

6604.90

6571.15

AVIVA

1147.23

1891.88

1992.87

2378.01

2345.17

SAHARA

51.00

143.49

206.47

250.59

243.41

SHRIRAM LIFE

181.17

358.05

436.17

611.27

821.52

BHARTI AXA

7.78

118.41

360.41

669.73

792.02

FUTURE GERNERALI

2.49

152.60

541.51

726.16

IDBI FORTIS

11.9049

318.97

571.12

811.00

CANARA HSBC

296.41

842.45

1531.86

AEGON RELIGARE

3.37

165.65

388.61

DLF PRAMERICA

31.21

38.44

95.04

STAR UNION DAI-ICHI

50.19

530.37

933.31

INDIA FIRST

201.60

798.43

PRIVATE SECTOR (TOTAL)

28253.00

51561.42

64497.43

79369.94

88131.60

GRAND TOTAL

156075.84

201351.41

221785.47

265447.25

291604.99

* Source: IRDA Annual Report April 2006-07 to 2010-11.

Insurance has been always a matter of solicitation even though many people would like to believe that it is a
matter of persuasion. The life insurance market in India is undergoing a lot of changes that may eventually
lead to how consumers will purchase life insurance. Low financial literacy and poor access to financial
services in India pose a problem in penetration of
and Family has to be measured before giving any
the right kind of life insurance products- more in
advice to the customers. Insurers can develop tools
terms of the right mix of savings and protection.
that can be used to measure a customer profile by
This is combined with the fact that consumers
feeding in some basic data. This will enable the agent
lack understanding of the true purpose of the life
advisor to understand and offer products that will
insurance. Consumers are not clued in about their
fit the customers. The number of insurance agents
life stage needs, and the product solutions suitable
working among the public and private sector are as
for such needs. The merits of agent advisors are as
follows, which is shown in Table 1.2:
follows:
Table 1.2: Details of Insurance Agents of Life
They usually enjoy personal credibility with customInsurers as at June, 2011.
ers.

They provide various pre-sales and post-sales services to customers.

Insurer

As on 1st As on 30th
April 2011 June 2011

Due to personal contact, agents can provide valuable

feedback about the need and expectations of consumers. This help insurer to develop new products.

Aegon Religare

10861

9197

Aviva

23219

23024

Bajaj Allianz

189667

158935

Bharti Axa

15210

15195

Birla Sunlife

144573

140839

Canara HSBC

However, there cannot be a one package that suits

all. Each customer will have different needs, even
if they have some common factors. Hence, each
parameter, such as Age, Dependents, Background

Amity Global Business Review

32

DLF Pramerica

5199

5691

Edelweiss

28

Future Generali

52666

56051

HDFC Std.

136009

135531

ICICI Pru.

190407

131580

IDBI Federal

7882

7979

India First

296

517

ING Vysya

34957

35545

Kotak Mahindra

38269

27767

Max NewYork

43542

40521

Metlife

28840

31130

Reliance Life

189433

177747

Sahara

14180

14234

SBI Life

79628

79636

Shriram

10139

9932

Star Union

128

313

Tata AIG

87223

72113

Private Total

1302328

1173505

LIC

1337064

1306185

Industry Total

2639392

2479690

* Reference: IRDA journal/September 2011.

Literature Review:

Insurance is a form of contract or agreement under

which one party agrees in return for a consideration
to pay an agreed amount of money to another party
to good for a loss, damage, or injury, to something of
value in which the insured has a pecuniary interest
as a result of some uncertain event Sahoo and
Das (2009). Insurance advisors play an important
role in widening the insurance market. Advisors
are supposed to be the first person to meet the
prospective buyers of insurance, need to be well
trained and fully equipped with the knowledge
about the product. Every insurance advisor shall:

Identify himself and the insurance company of

whom he/she is an advisor.

Disclose his license to the prospect on demand.

Disseminate the requisite information in respect to

insurance products offered for sale by his insurer
and take into account the needs of the prospect while
recommending a specific plan.

It has been observed that insurance advisors should

constantly monitor the level of satisfaction among
his/her customer to keep themselves close to the

February

customers for fulfilling their needs. Perceived

services quality has a significant effect on the
attitude towards obtaining insurance. Moreover, the
degree of success in the implementation of enterprise
mobilization in the life insurance industry is positively
correlated to the management performance of external
aspects like providing increased customer satisfaction
(Arora and Stoner, 1996).
Customer satisfaction and the salespersons relation
orientation significantly influences the future
business opportunities and as the salespersons
relation orientation significantly influences the future
business opportunities and as the salespersons are
able to enhance their relationships with the clients,
clients are more satisfied and are more willing to
trust, and thus secure the long-term demand for the
services (Tam and Wong, 2001).
A study done by Xumei Zhang at. el. (2007) has found
that worrying about future, economical conditions,
cognition about life insurance and adventure
activities preference have significant positive effect
on the intention of purchasing life insurance. An
economical condition also has significant positive
effect on the premium of purchasing life insurance;
health status has significant negative effect on the
premium of purchasing life insurance.
Truett and Truett (1990) studied the impact of
education on insurance. He found out that an
increase in the number of educated people in
a country may be associated directly with a
greater recognition of various types of products
offered by life insurance companies, leading to
higher level of demand. Browne and Kim (1993)
studied the positive influence of education on life
insurance demand through its effect on the period
of dependency. He concluded that individuals
educated over longer period forgo the opportunity
of full-time employment, and extend their reliance
on the income stream of other working members of
the family, increasing the demand for policies. It can
also be proposed that these effects are exacerbated
by the income effect of education.
Beck and Webb (2003) also studied the positive
impact of education on life insurance. He concluded
that a better understanding of the benefits of riskmanagement and long-term savings may encourage
risk aversion. Hwang and Gao (2003) studied several
reasons to explain why life insurance consumption

 Ajai Prakash
Gaurav Singh &

2012

33

should rise with income. Firstly, there is no reason

to believe that insurance is anything other than
a normal good, in the sense that consumption is
rising in income.
Research Objectives: The main objectives of the
research are as follows:

To identify the effective segment of respondents,

which could be recruited as a life insurance agent?

To find the reason behind individual segments decision in joining as agent or advisor of any private life
insurance company.

Research Methodology

The data for the study was collected from the

respondents who were engaged in different
occupations, which includes Housewives, Students,
Teachers, Private Service Employees, Businessmen
and Doctors. Respondents were approached with
a structured questionnaire and were requested to
participate in the study. As the population to be
covered for the study was very large, representative
samples of 100 respondents belonging to different
categories/occupations of Lucknow (U.P) were
taken.
Analysis and Findings: The analysis for the research
paper has been divided into two different segments.
First segment shows the number of the respondents
on the basis of i) Occupation, ii) Age Group and
iii) Geographic Segmentation. Whereas, the second
segment includes the relationship between the
demographic profile of the respondents with the
different variables such as: i) Not happy with
their current job/financial situation, ii) Need for
supplementary source of income and iii) Preference
for supplementary source of income.

Interpretation: From the above given data we conclude

that majority (46) of the respondents belong to 36-45
years of Age-group, who plays an active role in acting as
an insurance advisor or an agent. 29 respondents belong
to 26-35 years of Age group, 18 respondents belong to
46-55 years of Age-group and 07 respondents belong to
18-25 years of Age group.
ii) On the basis of Occupation:
Occupation

No. of Respondents

Housewives

16

Students

11

Teachers

13

Pvt. Service

21

Businessmen

35

Doctors

04

Total

100

Segment I (Demographic Profile):

i) On the basis of Age Group:
Age Group

No. of Respondents

18-25

07

26-35

29

36-45

46

46-55

18

Total

100

Interpretation: From the above given data we

conclude that majority (35) of the respondents
belong to businessmen, who plays an active role in
acting as an insurance advisor or an agent. 21 out of
100 respondents belong to the Employees working

Amity Global Business Review

34

February

in the Private sector, 16 were Housewifes, 13 were

teachers, 11 were students and 04 were doctors.
iii)

On the basis of Geographic Segmentation:

Region

No. of Respondents

Urban

86

Semi-Urban

14

Total

100

Fig. 1.4 Happy with their current Job/Financial

situation
Interpretation

Interpretation: From the above given data we

conclude that majority (86) of the respondents
belongs to the Urban area, who plays an active role
in acting as an insurance advisor or an agent and
remaining 14 respondents belong to the semi-urban
area or the rural area.
Segment II:
1. Occupation with Happy with current job/
financial situation.
Occupation

Happy with current job/ Total

financial situation.
Yes

No

Teachers

13

Doctors

04

Pvt.-service

14

21

Businessmen

21

14

35

Students

11

House wife

16

Total

80

20

100

From the above figures, on the basis of occupation,

we conclude that 9 teachers out of 13, 14 employees
working in private sector out of 21 and 14 businessmen out of 35 says No, which means that they are
not happy with their job/financial situation, so they
can be recruited as a financial advisor in private life
Insurance sector.

On the other hand 3 doctors out of 4, 6 students out

of 11 and 9 housewives out of 16 says Yes, which
means that they are happy with their job/financial
situation, so they can not be recruited as a financial
advisor in private life Insurance sector.

2. Occupation with Need for supplementary

Income
Occupation

Need for supplementary Total

income
Yes

May be

No

11

Doctors

Pvt.-service

19

Businessmen

27

Students

House wife

10

TOTAL

77

20

Teachers
100

100

Gaurav Singh &

Ajai Prakash

2012

35

Fig. 1.6: Preference for Supplementary Income

Interpretation

Fig. 1.5 Need for Supplementary Income

3) Occupation with the Preference for
Supplementary Income:
Occupation

Preference
for Total
supplementary income.

From the above graph/figures, on the basis of occupation, we conclude that 11 teachers out of 13, 19
employees working in private sector out of 21, 27
businessmen out of 35 and 10 housewives out of 16
says Yes, which means that they need supplementary source of income, so they can be recruited as a
financial advisor/agent in private life insurance sector.

From the above graph/figures, on the basis of occupation, we conclude that 21 businessmen out of 35,
12 employees working in private sector out of 21 and
6 housewives out of 16 shows preference for supplementary source of income via becoming insurance
agent/advisor, so they can be recruited as a financial
advisor/agent in private life insurance sector.

Age group Happy with current Total

job/financial situation.
Yes

No

18-25

Housewives

16

26-35

22

Students

11

36-45

11

35

Teachers

13

46-55

12

Total

29

71

Pvt. Service

12

21

Businessmen

21

35

Doctors

Total

48

27

18

100

100

4) Age group with Happy with current job/financial

situation.

Where: A= As a life insurance agent, B=Multilevel

Marketing, C= Part time business, D= Tuitions,
E= Others

Fig. 1.7: Happy with their Current Job/Financial

Position

Amity Global Business Review

36

5) Age Group with Need for Supplementary

Income
Age group

Need for supplementary Total

Income
Yes

May be No

18-25

26-35

20

36-45

41

46-56

12

Total

77

19

February

36-45

31

46-56

11

Total

62

19

14

100

Where: A= As a life insurance agent, B=Multilevel

Marketing,C= Part time business, D= Tuitions,
E= Others

100

Fig. 1.9 Preference for Supplementary Income

Interpretation:

Fig. 1.8: Need for Supplementary Income

Interpretation:

From the above given table, on the basis of age

group, we conclude that 35 respondents belonging to
36-45 years age group out of 46 and 22 respondents
belonging to 26-35 years age group out of 29 says
No, which means that they are not happy with their
current job/financial situation, so they can be a positive segment, which can be recruited as a financial
advisor/agent in private life insurance sector.
From the above given table, on the basis of age group,
we conclude that 41 respondents belonging to 36-45
years age group out of 46 and 20 respondents belonging to 26-35 years age group out of 29 says Yes,
which means that they need supplementary source
of income, so they can be recruited as a financial advisor/agent in private life insurance sector.

6) Age Group with Preference for Supplementary

income:
A g
Group

e Preference for supplementary Total

income
A

18-25

26-35

17

From the above given table, on the basis of age

group, we conclude that 31 respondents belonging
to 36-45 years age group out of 46, 17 respondents
belonging to 26-35 years age group out of 29 and 11
respondents belonging to 46-55 years age group out
of 18 shows preference for supplementary source of
income via becoming insurance agent/ advisor, so
they can be recruited as a financial advisor/agent in
private life insurance sector.

7) Geographic Basis with Happy With Current

Job/Financial Situation.
Region

Happy with current Total

job/financial situation.
Yes

No

Sub-Urban

11

Urban

16

70

Total

19

81

100

Gaurav Singh &

Ajai Prakash

2012

37

Fig. 1.10: Happy With Their Current Job/

Financial Situation
8) Geographic Basis with Need for supplementary
Income
Region

Need for supplementary Total

Income
Yes

M a y No
be

Sub-Urban

10

Urban

70

10

Total

80

12

100
Fig. 1.12: Preference for Supplementary Income
Interpretation:

From the above given three different tables, when

evaluated on the basis of geographic segmentation
i.e. Sub-urban and Urban towards: i) Happy with
their current job/financial situation, ii) Need for
supplementary source of Income and iii) Preference
for supplementary source of income, majority of the
respondents belonging to Urban area has shown
interest in becoming insurance advisor/agent also
they had shown interest in earning supplementary
income, so they can be motivated and recruited as an
advisor/agent among the private insurance sector.

Conclusion
Fig. 1.11: Need for Supplementary Income
9) Geographic Basis with Preference for
supplementary income
Region

Preference
for Total
supplementary income
A

Sub-Urban

Urban

53

21

Total

61

12

24

100

Where: A= As a life insurance agent, B=Multilevel

Marketing, C= Part time business, D= Tuitions,
E= Others

It is believed that it is a tough task to find

out a quality prospect for insurance advisors
recruitment, as every individual has its limited
contact base. Insurance advisors play an important
role in widening the insurance market. Advisors
are supposed to be the first person to meet the
prospective buyers of insurance, need to be well
trained and fully equipped with the knowledge
about the product.

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38

Amity Global Business Review

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