This action might not be possible to undo. Are you sure you want to continue?
STUDY OF RECRUITMENT PROCESS OF HDFC-SLIC AND RECURITMENT OF THE FINANCIAL CONSULTANT (HDFC-SLIC) BADDI (H.P)
A Training Report Submitted In the partial Fulfillment of the Requirement of the Degree of “Masters of Business Administration” YEAR 2007-08 Submitted To: Punjab Technical University Jalandhar Submitted By: ABHISHEK TESSU Roll No. 632222313
RIMT- Institute of Management & Computer Technology, Mandi Gobindgarh
“If words are considered as symbol of Approval and Taken of appreciation then let the words play the heralding role of expressing my sincere gratitude and thanks”. Any accomplishment requires the effort of many people and this work is no different. I am indebted to MR. TEJPARKASH THAKUR (Sales Development Manager), HDFC Standard Life Insurance, BADDI (H.P) but for whose guidance and patience I would have not been able to accomplish this task. I also owe a great thanks to him for providing me an opportunity to go through summer training, and providing me this golden opportunity to be a part of the said esteemed company and letting me work on this project. I also owe a great thanks to all the staff members of CHANDIGARH branch of HDFC Standard Life Insurance, who helped me in the best possible way to complete this summer training and this report. ABHISHEK TESSU
Risks and uncertainties are part of life's great adventure- accidents, illness, theft, Natural disasters- they are all built into working of the universe waiting to happen. So far that there is a solution - insurance and to provide with the knowledge of this insurance benefits to the customers, the HDFC standard life insurance co. plays an important role in this field. To overcome these risks and uncertainties this project describes about various insurance plans. How these companies provide benefits to policy holders is well explained in this project. Now a day a lot is being done to create awareness among the insuring Public about the need and importance of insurance in the field of human being. .In this direction IRDA has planned to create awareness through electronic and print media. This project basically describes the products of HDFC-SLIC.
• • • • • • • • • • o • • •
ACKNOWLEDGEMENT PREFACE INTRODUCTION INSURANCE: DEFINITION INSURANCE IN India A BRIEF HISTORY OF INSURANCE SECTOR INSURANCE SECTOR REFORMS IRDA INSURANCE COMPANIES LIC BENEFITS OF INSURANCE ELIGIBILITY TO BUY A POLICY HDFC-SLIC INTRODUCTION OF HDFC CO. LTD. o o HDFC GROUP SUBSIDIARY COMPANIES HDFC STANDARD LIFE INSURANCE HDFC DEVELOPMENT LIMITED HDFC INVESTED LIMITED ASSOCIATED COMPANIES
HDFC STANDARD LIFE o o PARTNERSHIP MISSION
THE RETAIL SALES HIERARCHY OF HDFC STANDARD LIFE INS.
HDFC STANDARD LIFE INS. CO. PROFILE ROLE OF AN INSURANCE AGENT o o o o o o o INTRODUCTION APPOINTMENT OF FINANCIAL CONSULTANT PRE-REQUISITIES FOR SUCCESS SELLING LIFE INSURANCE PRE-APPROACH INTERVIEW/APPROACH APPROACH
• • • • • • •
USEFUL IDEAS THROWN UP CERTIFIED FINANCIAL – A CARIEER IN INS. CO. LTD. AGENTS ARE CERTIFIED AS FINANCIAL CONSULTANT ROLE IN HDFC-SL CERTIFIED FINANCIAL CONSULTANT PRE-RECRUITMENT EXAMINATION FOR INS. AGENTS SELECTION PROCEDURE IN HDFC-SLIC RESEACH METHODOLOGY-AN OVERVIEW o o o SAMPLE DESIGN DATA COLLECTION METHOD DATA ANALOGY
• • • • • • •
OBJECTIVE OF THE STUDY QUESTIONNAIRE FOR DOOR-TO-DOOR ACTIVITY FOR FINANCIAL
CONSULTANT RECRUITMENT DATA ANALYSIS AND FINDINGS S.W.O.T. ANALYSIS SUGGESTIONS SUMMARY BIBLIOGRAPHY
Insurance is basically risk management device. The losses to assets resulting from natural calamities like fire; flood, earthquake, accident etc. are met out of the common pool contributed by large number of persons who are exposed to similar risks. This contribution of many is used to pay the looses suffered by unfortunate few. However the basic principle is that loss should occur as a result of natural calamities or unexpected events, which are beyond the human control. Secondly insured person should not make any gains out of insurance. It is natural to think of insurance of physical assets such as motor car insurance or fire insurance but often be forget that creator all these assets is the human being whose effort have gone along way in building up to assets. In that scene human life is a unique income generating assets. Unlike physical assets, which decrease with the passage of time, the individual become more experienced and mature as he advances in age. This raises his earning capacity and the purpose of life insurance is to protect the income to individual and provide financial security to his family, which is dependent on his income in the event of his pre-mature death. The individual also himself also needs financial security for the old age or on his becoming permanently disabled when his income will stop. Insurance also has an element of saving in certain cases. Insurance is rupees 400 billion business in India and yet its spread in the country is relatively thin. Insurance as a concept has not being able to make headway in India. Presently LIC enjoys a monopoly in Life Insurance business while GIC enjoys it in general insurance business. There has been very little option before the customer to decide the insurer. A successful passage of the
IRA bill has clear the way of private sector operators in collaboration with their overseas partners. It is likely to bring in a more professional and focused approach. More over the foreign players would bring sophisticated actuarial techniques with them, which would facilitate the insurer to effectively price the product. It is very important that the trained marketing professionals who are able to communicate specific features of the policy should sell the policy. In the next millennium all these activities would play a crucial role in the overall development and maturity of the insurance industry.
DEFINITION GENERAL DEFINITION: In the words of John Magee, “Insurance is a plan by which large numbers of people associate themselves and transfers to the shoulders of all risks that attach to individuals” FUNDAMENTAL DEFINITION: In the words of D S Hansell, “Insurance may be defined as a social device providing financial compensation for the effects of misfortune, the payments being made from the accumulated contributions of all participating in the scheme.”
INSURANCE IN INDIA
The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracking the developments in the Indian Insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries.
A BRIEF HISTORY OF THE INSURANCE SECTOR Life Insurance in its existing form came to India from the United Kingdom with the establishment of a British firm Oriental Life Insurance Company in Calcutta in 1818 followed by Bombay Life Assurance Company in 1823. Some of the important milestones in the life insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statically information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by and Act of Parliament, viz, LIC Act, 1956, with a capital contribution of Rs. 5 Crore from the Government of India.
The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1950 in Calcutta by the British. 1907: 1957: The Indian Mercantile Insurance Ltd. Set up, the first company to General Insurance Council, a wing of the insurance Association of transact all classes of general insurance business. India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1 st January, 1973.
INSURANCE SECTOR REFORMS
In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complimenting the reforms initiated in the financial sector. The reforms were aimed at “creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms”. In 1999, the committee submitted the report and some of the key recommendations included: Structure
Government stake in the insurance Companies to be brought down to 50% Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurances companies should be given greater freedom to operate. Competition
Private Companies with a minimum paid up capital of Rs. 1 bn should be allowed to enter the industry. No Company should deal in both Life and General Insurance through a Foreign companies may be allowed to enter the industry in collaboration Postal Life Insurance should be allowed to operate in the rural market. Only one State Level Life Company should be allowed to operate in state. single entity. with the domestic companies. each
Regulatory Body The Insurance Act should be changed An Insurance Regulatory body should be set up Controller of Insurance (Currently a part from the Finance Ministry) should be made independent. Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50% GIC and its subsidiaries are not to hold more than 5% in any company( there current holdings to be brought down to this level over a period of time) Customer Service LIC should pay interest on delays in payments
beyond 30 days
Insurance companies must be encouraged to Computerization of operations and updating of
set up unit linked pension plans technology to be carried out in the insurance industry.
INSURANCE REGULATORY DEVELOPMENT AUTHORITY (IRDA)
The Insurance Regulatory and Development Authority was established on 19th April, 2000 under Insurance Regulatory and Development Authority Act, 1999 with its headquarter at New Delhi. The Authority has changed its headquarters to Hyderabad in December 2001. The Audit of the accounts of the Authority has been entrusted under Section 19 (2) of the Comptroller & Auditor General" (Duties, Power & Conditions of Service) Act, 1971. The Authority was to consist of a Chairman, five full time Members and four Part-time Members. As on date the Authority has one chairman, two full time and four part time members. There is an Insurance Advisory Committee, which helps the Authority in making its Rules and Regulations for proper discharge of its activities. MISSION OF IRDA
To protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto.
POWERS AND FUNCTIONS:
The main powers and functions of the Authority are as under: Protect the interest of and secure fair treatment to policyholders; Bring about speedy and orderly growth of the insurance industry (including annuity and superannuation payments), for the benefit of the common man, and to provide long term funds for accelerating growth of the economy; Set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates; Ensure that insurance customers receive precise, clear and correct information about products and services and make them aware of their responsibilities and duties in this regard; Ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery; Promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players; Take action where such 'standards are inadequate or ineffectively enforced; Bring about optimum amount of self-regulations in day to day working of the industry consistent with the requirements of prudential regulation. SOURCES OF RECEIPTS During 2001-02, the Authority's receipts were Rs.42.17 crores as against its expenditure of Rs.5.89 crores. The receipts mainly consisted of fees received
from various Insurance companies operating in India on account of their Registration and Renewal charges. FUNDS The funds of the authority are being retained by itself despite directions of the Ministry to house the funds in Public Account of India as non-interest bearing funds. As on 31st March 2002, the Authority continues to house its funds amounting to Rs. 57.42 Crore in interest bearing deposits of banks and other financial institutions.
PLAYERS THAT IRDA WILL GOVERN
The table below is the list of the likely players in the Indian insurance sector, apart from Reliance, who has applied for both Life and Non-Life insurance license; all have gone in with a foreign partner. The idea is that the foreign partner will bring in expertise of global nature with products that are India specific. And the Indian partner will bring in the distribution network and more significantly the required 74% of the equity.
Life Insurance Reliance Life Insurance Kotak Mahindra-Old Mutual Max India—New York Life Prudential—ICICI HDFC—Standard Life Aditya Birla—Sun Life Insurance C K Birla—Zurich Insurance Hindustan Times—Commercial Union Centurion Bank—Canada Life
Non-Life Insurance Reliance General Insurance ICICI—Lombard Insurance Wadia—Commercial Union Cholamandalam—Axa M A Chidambaram—MetLife Sanmar Group—GIO Tata Teleservices—AIG 20th Century Finance—Guardian Group Punjab of National Bank, Vijaya Fire and
Bank, Allahabad Bank, and Bank India—Yasuda Marine. IFFCO—Tokyo Fire & Marine Sundaram Finance—Royal & Sun Alliance Bank of Baroda & Punjab National Bank— Foreign partner
Vyasa Bank—ING Apollo Hospitals—Aetna
IRDA has so far granted registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are included, there are currently 13 insurance companies in the life side and 13 companies operating in general insurance business. General Insurance Corporation has been approved as the "Indian reinsures" for underwriting only reinsurance business. Particulars of the life insurance companies and general insurance companies including their web address are given below:
LIFE INSURERS Public Sector
1. Life Insurance Corporation of India Private Sector
2. Allianz Bajaj Life Insurance Company www.allianzbajaj.co.in Limited 3. Birla Sun-Life Insurance Company www.birlasunlife.com Limited 4. HDFC Standard Life Insurance Co. www.hdfcinsurance.com Limited 5. ICICI Prudential Life Insurance Co. Limited 6. ING Vysya Life Insurance Company Limited 7. Max New York Life Insurance Co. Limited 8. MetLife Insurance Company Limited 9. Om Kotak Mahindra Life Insurance Co. Ltd. 10. SBI Life Insurance Company www.sbilife.co.in www.metlife.com www.omkotakmahnidra.com www.maxnewyorklife.com www.ingvysayalife.com www.iciciprulife.com
Limited 11. TATA AIG Life Insurance Company Limited 12. AMP Sanmar Assurance Company Limited 13. Dabur CGU Life Insurance Co. Pvt. Limited GENERAL INSURERS Public Sector 1. National Insurance Company Limited www.nationalinsuranceindia.com www.avivaindia.com www.ampsanmar.com www.tata-aig.com
2. New India Assurance Company Limited
3. Oriental Insurance Company Limited 4. United India Insurance Company Limited Private Sector 5. Bajaj Allianz General Insurance Co. Limited 6. ICICI Lombard General Insurance Co. Ltd. 7. IFFCO-Tokyo General Insurance Co. Ltd. 8. Reliance General Insurance Co. Limited 9. Royal Sundaram Alliance Insurance Co. Ltd. 10. TATA AIG General Insurance Co. Limited 11. Cholamandalam General Insurance Co. Ltd. 12. Export Credit Guarantee
Corporation 13. HDFC Chubb General Insurance Co. Ltd. REINSURER 1. General Insurance Corporation of www.gicindia.com
Life insurance in India made its debut well over 100 years ago. In our country, which is one of the most populated in the world, the prominence of insurance is not as widely understood, as it ought to be. What follows is an attempt to acquaint readers with some of the concepts of life insurance, with special reference to LIC. It should, however, be clearly understood that the following content is by no means an exhaustive description of the terms and conditions of an LIC policy or its benefits or privileges.
Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against. The contract is valid for payment of the insured amount during: The date of maturity, or Specified dates at periodic intervals, or Unfortunate death, if it occurs earlier.
Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event Of death of the breadwinner By and large, life insurance is civilization’s partial solution to the problems 19
caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person: That of dying prematurely leaves a dependent family to fend for itself. That of living till old age without visible means of support.
BENEFITS OF LIFE INSURANCE
Contract of Insurance: A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms of insurance. At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void. Protection: Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable. Aid to Thrift: Life insurance encourages 'thrift'. It allows long-term savings since payments can be made effortlessly because of the 'easy installment' facility built into the
scheme. (Premium payment for insurance is monthly, quarterly, half yearly or yearly). For example: The Salary Saving Scheme popularly known as SSS provides a convenient method of paying premium each month by deduction from one’s salary. In this case employer directly pays the deducted premium to LIC. The Salary Saving Scheme is ideal for any institution or establishment subject to specified terms and conditions. Liquidity: In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan. Tax Relief: Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance subject to income tax rates in force. Assesses can also avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for insurance than otherwise. Money When You Need It: A policy that has a suitable insurance plan or a combination of different plans can be effectively used to meet certain monetary needs that may arise from time-to-time. Children's education, start-in-life or marriage provision or even periodical needs for cash over a stretch of time can be less stressful with the help of these policies. Alternatively, policy money can be made available at the time of one's retirement from service and used for any specific purpose, such as, purchase of a house or for other
investments. Also, loans are granted to policyholders for house building or for purchase of flats (subject to certain con Contract of Insurance: A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms of insurance. At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void. Protection: Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable. Aid to Thrift: Life insurance encourages 'thrift'. It allows long-term savings since payments can be made effortlessly because of the 'easy installment' facility built into the scheme. (Premium payment for insurance is monthly, quarterly, half yearly or yearly). For example: The Salary Saving Scheme popularly known as SSS provides a convenient method of paying premium each month by deduction from one’s salary. In this case employer directly pays the deducted premium to LIC. The Salary Saving Scheme is ideal for any institution or establishment subject to specified terms and conditions.
Liquidity: In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan. Tax Relief: Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance subject to income tax rates in force. Assesses can also avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for insurance than otherwise. Money When You Need It: A policy that has a suitable insurance plan or a combination of different plans can be effectively used to meet certain monetary needs that may arise from time-totime. Children's education, start-in-life or marriage provision or even periodical needs for cash over a stretch of time can be less stressful with the help of these policies. Alternatively, policy money can be made available at the time of one's retirement from service and used for any specific purpose, such as, purchase of a house or for other investments. Also, loans are grantditions).
ELIGIBILITY TO BUY A POLICY
Any person who has attained majority and is eligible to enter into a valid contract can insure himself/herself and those in whom he/she has insurable interest. Policies can also be taken, subject to certain conditions, on the life of one's spouse or children. While underwriting proposals, certain factors such as the policyholder’s state of health, the proponent's income and other relevant factors are considered by the Corporation.
INTRODUCTION TO HDFC-SLIC
THE HDFC GROUP HDFC commenced operations as a mortgage bank; it raised large wholesale resources (domestic and international) and lent primarily to individual households. In mid 1991, HDFC entered the retail deposit market by offering savings and investment opportunities to households. Incorporated in 1977 with a share capital of Rs. 10 Crores, HDFC has since emerged as the largest residential mortgage finance institution in the country. The corporation has had a series of share issues raising its capital to Rs. 120 Crores. The net worth of the corporation is Rs. 28,000 Crores. SUBSIDIARY COMPANIES:
HDFC STANDARD LIFE INSURANCE HDFC Standard Life Insurance Company is a joint venture between India’s largest housing finance provider, HDFC, and the Europe’s largest mutual life assurance company, the Standard Life Assurance Company (U.K.). HDFC DEVELOPERS LIMITED HDFC promoted a wholly owned subsidiary company; HDFC Developers Limited, to undertake housing projects on a selected basis in various regions of the country. HDFC Developers Limited has also undertaken a number of projects for
the office premises of the corporation. It is also being engages as a consultant to a number of residential and commercial projects.
HDFC Investments Limited
HDFC promoted a wholly owned subsidiary company; HDFC Investments Limited (HIL), to undertake investments in stocks, shares, debentures, and other securities. The Reserve Bank of India under the category of investment Company has registered HIL as a Non-Banking Insurance Company (NBFC). HIL was set-up with an intention of being the investment arm of HDFC. HDFC Realty Limited HDFC Holding Limited HDFC Asset Management Company Limited HDFC Trustee Company Limited HDFC Finance Limited
ASSOCIATES COMPANIES HDFC has broadened its service range by entering into strategic associations with some of the best organizations, both Indian and international, which include: HDFC Bank Limited: Initially promoted in strategic alliance with NatWest Group, UK. With Nat West diver sting it’s holding. HDFC Bank has signed a MoU for strategic business collaboration with the Chase Manhattan Bank. Chase Capital Partners through their various investment funds in India have acquired 15% in HDFC Bank. The Housing Developing Finance Corporation and HDFC Bank have promoted HDFC SECURITIES LIMITED. HDFC Securities has already acquired BSE and NSE membership.
Infrastructure Leasing and Financial Services Limited: Co-promoted jointly with the Unit Trust of India and Central Bank of India. Maruti Countrywide Auto Financial Service Limited: In Alliance with Maruti Udyog Limited and GE Capital India Limited. Colliers Jardine India Property Service Limited: Co-promoted jointly with infrastructure leasing and Financial Services Limited and Colliers Jardine Asia Pacific Limited. GRUH Finance Limited: Established with support from the international Finance Corporation, the Aga Khan Fund for Economic Development and Government of Gujarat. SBI Home Finance Limited: Co-promoted jointly with SBI Capital Markets Limited. Can Fin Homes Limited: Co-promoted jointly with Canara Bank and Asian Development Bank. GIC Housing Finance Limited: Co-promoted jointly with the General Insurance Corporation.
HDFC STANDARD LIFE
The Partnership: HDFC and Standard Life first came together for a possible joint venture, to enter the Life Insurance market, in January 1995. At the outset it was clear that both companies shared similar values and beliefs and a strong relationship quickly formed. In October 1995 the companies signed a 3 year joint venture agreement. Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the relationship. The next three years were filled with uncertainty, due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture. In October 1998, the joint venture agreement was renewed and additional resource made available. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India. Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in January 2000 an expert team from the UK joined a hand picked team from HDFC to form the core project team, based in Mumbai. Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC Bank. In a further development Standard Life agreed to participate in the Asset Management Company promoted by HDFC to enter the mutual fund market. The Mutual Fund was launched on 20th July 2000. The company was incorporated on 14th August 2000 under the name: HDFC Standard Life Insurance Company Limited.
Their ambition from as far back as October 1995 was to be the first private company to re-enter the life insurance market in India. On the 23rd of October 2000, this ambition was realized when HDFC Standard Life was the only life company to be granted a certificate of registration. HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6%. HDFC and Standard Life have a long and close relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance companies in India are measured. HDFC Standard Life Insurance Company has been signed on by Blue Star to provide insurance cover to its 1,805 employees across India and overseas. HDFC Standard Life Insurance is one of the leading players in the group insurance segment of the life insurance business. Its group business has grown significantly since inception and now covers over 25,000 lives, across the entire industry spectrum including software, FMCG, pharmaceuticals, banking, consultancy, BPOs, retailing, and consumer electronics. Mission: To be the top new Life Insurance company in the market. It does not just mean being the largest or the most productive company in the market, rather it is a combination of several things like1. Customer service of the highest order 2. Value for money for customers 3. Professionalism in carrying out business 4. Innovative products to cater to different needs of different customers 5. Use of technology to improve service standards
6. Increasing market share
Incorporation of HDFC standard Life Insurance Company Limited
The company was incorporated on 14th August 2000 under the name of the HDFC Standard Life Insurance Company Limited. On the 23rd of October 2000, HDFC Standard Life was the only life company to be granted a certificate of registration. HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6. Given Standard Life’s exiting investment in the HDFC Group, this is the maximum investment allowed under current regulations.
The Retail Sales Hierarchy of HDFC Standard Life Insurance
Head Retail Sales
Assistant Sales Manager
Business Development Manager
Sales Development Manager
Certificate Financial Consultants 32
HFDC Standard Life Insurance
Incorporated in 1977 with a share capital of Rs. 10 Crores. HDFC has since emerged as the largest residential mortgage finance institution in the country. The net worth of the corporation is Rs. 28,000 Crores, HDFC manager’s assets.
Standard Life is Europe’s largest mutual life insurance company and specializes in a wide range of other services like health care. Pension and annuities market with a global presence. The company has Assets under management at US$ 119 billion.
ROLE OF FINANCIAL CONSULTANTS
INTRODUCTION Insurance companies may designate their agent as consultants, advisors or by any other name. A person requires license under Insurance Act to be able to functions as an insurance agent. An insurance agent is an important component of distribution channel for life insurance business. He is required to solicit and procure new insurance business in a manner consistent with interests of the policyholders and his insurance company. To achieve this, he is required: Meet prospect, analyze their financial needs, and persuade them to buy a product, which provides solution. Arrange completion of all essential requirement for the underwriter viz. filling of proposal form, collection of premium, medical examination, age proof of income (if required) or other medical reports. After the proposal results into a policy, it is the interest of the life assured, the agent and the insurer that the business is conserved and it continues, without a lapse, till it result in to a claim. Therefore, the agent has to:Remain in
contact with the policyholders and ensure that renewal premiums are paid on
circumstances. requirements relating to claim settlement.
that nomination is made under the policy and is changed under Provides
help to the claimants to complete necessary forms and comply with other The agent has also to assist the policyholder in situation like – the policyholder needs loan under the policy or wants to make an assignment. Providing services such as these help the agent in strengthening bonds of relationship with the policyholders.
Appointment of Financial Consultant
1. This Agreement shall come into force on the date of the license to act an insurance agent. 2. The Company hereby appoints the Agent as Financial Consultant of the Company. 3. To the extent not provided herein, the appointment of the financial consultant shall be governed by the provisions of the Applicable Law as govern the appointment and functioning of insurance agents. 4. The Financial Consultant shall at all times fulfill the minimum performance requirements in terms of new business, premium income, number of proposals, number of lives insured or on any other relevant count stipulated by the Company from time to time. (Hereinafter to as the “Minimum Performance Requirements”). It shall be opened to the Company to stipules the minimum Performance Requirements or a specified period or period or to specify the Insurance Product or Products which the Financial Consultant Shall solicit and procure or the Company.
5. With prejudice to the generality of the application of the provisions Applicable Law, the Financial Consultant shall scrupulously follow, adhere to and comply with the code to conduct prescribed by the Insurance Regulatory and Development Authority (Licensing to Insurance Agents) Regulations, 2000(hereinafter referred to as the “Code of conduct”) as through the said Code of Conduct has been set out in and forms part of this agreement. a. The Financial Consultant shall not allow offer to allow, either directly or indirectly, as an inducement, to a prospect or a policyholder, to take out or renew or continue a policy, any rebate to the premium payable under the policy or to the commissions payable to him; nor shall be offered any other rates, advantages, terms or conditions than those offered by the company. b. The Financial Consultant shall be wholly responsible for the accuracy, truthfulness and completeness of the information furnished in the Agent’s Confidential Report submitted by him with the proposal or otherwise made available to the company. c. The Financial Consultant shall, promptly and in any Caesar not later than the times stipulated by the company in that behalf transmit to the concerned office of the company all proposals for the insurance and all other document procured or received by or called for from him. d. The Financial Consultant shall not accept any money, in case, demand draft or in any other manner, from a prospect or a policyholder in relation to a proposal for insurance or under a policy or revival a policy and in all cases of tender of any money by 3 prospect or a policyholder direct him to the appropriate office of the Company for payment or advise him of the permissible modes of payment of the company. Without prejudice to the provisions of any other clause in this Agreement providing for indemnified during the period this Agreement is in force and at any time thereafter or not, of the provisions of this clause.
e. The Financial Consultant shall attend all meetings, conferences and briefings conducted by or on behalf of the company to acquaint the sales force with the Insurance Products, business plans and policies to the company to acquaint the sales force with the insurance Products, business plans and policies to the Company and any other matter of relevance to them of which reasonable notice has been given to the Financial Consultant. f. Where the Financial Consultant intends to bring out or publish any material in any form or through any medium, concerning the company, its business or its Financial Consultant shall obtain prior written approval of the company. Further, he shall observe and comply with the provisions of the Insurance Regulatory and Development Authority (Insurance Advertisements and Disclosure) Regulations, 2000. g. The Financial Consultant shall solicit and procure life insurance business for the company and discharge his obligations under this Agreement in accordance with the Company’s corporate objectives with particular regard to the Company’s image and standing in the industry and in the community. h. The Financial Consultant shall observe, follow and comply with all the directions and instructions given by the company from time to time, either generally or with particular reference to the Financial Consultant. i. The Financial Consultant shall familiarize himself with the applicable law as in force from time to time and which has a bearing on the obligations as an insurance agent; provided that in the event of any change in the Applicable Law resulting in a dilution or abrogation of his obligations under this Agreement, to the extent not provided otherwise, the Financial Consultant shall continue to be bound by the obligations as were existent prior to such changes, unless expressly approved in writing by the company.
PREREQUISITES FOR SUCCESS
An agent has to be familiar with the following so that he may perform his role well. plans offered by his manner, their benefits and restrictions. Office procedures for various matter as also the forms and documents required An insurance agent is an agent of the prospect also. At time the prospect requires advice on certain matter from a person whom he considers knowledgeable and whom he can trust. To; come up to the expectation of his prospects, the agent must be familiar with the: Other Financial instruments, suitable for savings and investment, available in the market and their benefits and advantages. Law, particulars, the taxations aspects relating to these instruments. As many instruments are available in the market, it is difficult for the agent to master the details of all. If an agent, who does not have the necessary knowledge, gives answers on the basis of guesswork or hearsay, it will be nonprofessional. It is a better course if the agent admits that he does not have a ready answer and would come with complete detail the next day. Various
SELLING LIFE INSURANCE
First step is to prepare a regularly growing list of prospects. A prospect is a person who can be approached for insurance ‘Prospecting’ is the process of finding more and more potential customers (i.e. prospectus). Sources of Prospecting are: Friends, acquaintances, neighbors etc. Newspapers, bulletins, directories etc. Social, official and religious meeting etc. Other Specific Sources are: Nests: Business houses, factories, schools, hotels, colleges, offices etc. Centers of Influence: Leaders, elders, teachers, Panchayat members, professional, astrologers etc. Referred Lead: Through existing customers—a chain Orphaned policyholders Claimants: Helps in settling claims. Cold Canvassing: Finding prospects amongst strangers. Next step for the agent is to ‘quality’ these names. A qualified “PROSPECT” is one who 39
a. has a need for insurance b. has a capacity to pay c. is approachable and d. is acceptable to insurer (i.e. has an insurability) Getting this information is called “Qualifying”. A qualified prospectus is the target person for insurance sales. The salesman should try to collect as much information as possible about family, income, interest, hobbies etc of the prospect. It is necessary to keep a record of this information. It is called inventory of prospectus. He should also formulate the types of plans to be offered. After prospectus is ‘qualified’ the salesman meets him. A sales takes place when a prospect buys a product. In between this simple transaction, the salesman has to take along the prospectus with through the well-defined steps, which are not separate and exclusive but blended into one integrated process. There are no hared and fast rules in blending these steps together at various stages to obtain the desired results. These steps are: Pre-approach Interview / approach Approach Objections PRE-APPROACH Pre-approach is what a salesman does between the time a prospect is chosen and the time he meets him in person. A. Preparation is needed as to What to offered When and where to meet Whether a reference is required B. For the above preparation basic information if income, health, habits, family history, interest, saving capacity, etc of the prospect will be required. 40
This information will have to be gathered from different source. A personal call on the prospect may also be requires to persuade him in taking a positive decision. C. This will help him have fruitful talk. It also enables them to come to the quickly without waste of time. Preparing a presentation is the best line of action. It helps make an organized discussion. D. As proposal for insurance has not yet been made, ‘pre-approach’ call should be used for suggesting proposals unless the discussion develops further and leads to the agent completing the proposals paper and collecting cheque. E. Brief letter or cards can be sent for introducing oneself and informing to call in a short time. This will lead to creating a congenial atmosphere. In order to make the approach more effective, the salesman should have some key words in mind for opening sentences. F. It is also necessary to keep all the requirements ready for effecting a sale. You should have your tools –all the relevant forms, calculations, charts, pamphlets, brochures etc. – ready to strike when the iron is hot. G. It is advisable to make a written proposal which has the following advantages: • • • • Neither the agent nor the proposal misses any detail More lasting impression is created Prospect can take his own time to understand it. Once can stop at any point, clarify it and continue the discussion H. When you visit a prospect, you should look your best, wearing a smile. INTERVIEW APPROACH This is a stage when the salesman and the prospect are face to face. There is direct interaction between the two. Inform the prospect that you are calling on him for life insurance – there is no need to feel hesitant or defensive. The agent should carry a firm conviction in his mind that insurance provides financial 41
thereafter without losing the track.
security to the prospect and his family. The agent must have rehearsed well so as to start his talk in a manner that arouses interest otherwise no attention will be paid to his proposals. In order to have a favorable hearing and his acceptability, the salesman should give due consideration to: The time of approach/ interview The Place and the method of greeting
It is here that stories can AROUSE THE CURIOSITY of the prospect. The importance of the selected time and place lies in the fact where the prospect does not resent presence of the salesman. The prospect is not preoccupied and he is not disturbed. Generally, meeting in office, or certain morning and evening hours at home are not likely by the prospects. As such it sis always advisable to fix the time and place at pre-approach stage. A single interview is not likely to bring he desired result. Sometimes the home work done at pre-approach stage may prove to be different from he actual situation. This being the first contact, at least a favorable impression should be created in the mind of the prospect. If the prospect is a referred lead, a direct reference of the reference can be made and it can be made clear you sell insurance. (Such reference can result in endless chain.) During interviews a sales story can be more effective because it conveys the idea and information necessary to arouse prospect’s interest in a short time. A planned and duly rehearsed presentation with proper sequence of ideas is vital in the art of persuasion. The purpose of selling interview is to enhance the interest in the plan of insurance. The next step is to: a. b. c. Uncover the need Emphasize upon the need and Accentuate the need 42
Approach It means the presence of the salesman with prospect at a convenient place and appointed time so that the two can talk freely. A. The agent should follow some rules during the interview such as:•Talk to the point- do not talk more than necessary •Make conversion interactive – ask question that make the prospect talk •Arouse curiosity in the mind of the prospect so tat he asks questions •For their clarifications • Listen to the prospect carefully •Do not interrupt, contradict or argue •Make the talk interesting through pictorial presentation • Agent’s advice should be in the best interest of the prospect – it should not be in the interest of the agent. B. When the talks begins and the interview starts A well prepared presentation is quite useful and true life stories relating to what insurance has done are more effective. These arouse the curiosity and interest of the prospect and help him arrived at the decision. The sequence is which ideas are presented is very significant in the art of persuasion. Take care, that is not only you who is interviewing the prospect but vice-versa, it is also true. You have to be ready with all the answers that can satisfy the prospect. It is the interview that is being sold. If you are able to sell the interviews that is being sold. If you are able to sell the interview which also means selling yourself ‘CLOSE OF THE SALE’ is very close. Planned presentation also covers inquire about the earliest insurance and or other saving plans. While appreciating this, the salesman should be able to find snags in such programmes and make the prospect to realize the need for its cover up. Then
the presence is plan and shows how it can fully meet such needs. And finally it is accepted by the prospect.
IDEAS TO MOTIVATE A GOOD CANDIDATE TO BECOME FINANCIAL CONSULTANT
The typical reasons for opposition / reluctance form prospective FCs is: They look down upon becoming “commission-based” wage-earners. The points that were thrown up that could effectively tackle this resistance were: i) This is one of the few professions where the employee gets to choose his own timings for working ii) This is one of the few professions where the employee gets to choose the customers which he wishes to serve. iii) This is one of the few professions where there is unlimited opportunity to earn- there is no upper limit. iv) This is the only profession where there are definite benefits derived for today’s work for the next 10-40 years. v) This is the only profession which gives up to 40% gross margin without any capital investment in the business. 44
vi) This is a profession which bestows upon the person the status of an “expert” – hence he can derive satisfaction form the fact that hundreds of people actually benefit form his advice, thereby generating tremendous goodwill. 2. Alternate channel for prospective good Insurance Salesman There would still be good people out there who do not agree to become commission-based FCs. The solution here could be to set up an in-house distribution subsidiary which • • will have contract-based employees working full time on their rolls these employees will draw a package which will have a fixed component (salary/ stipend/fixed allowance) and a variable component linked to each proposal (commission – e.g. half that of an FC) • • There would need to be clear exit clauses over time to ensure that the company does not end up endlessly investing in unproductive resources. There could be an option where these employees over time build confidence and move to the fully –variable FC model 3. Make efforts to get this vocation public recognition and approval This could be done enough Presentations to opinion leaders – club members/ residential societies/ placements consultants Generating positive endorsements by opinion leaders about this vocation
ALTERNATIVE IDEAS TO RECRUIT GOOD FINANCIAL CONSULTANTS
BACKGROUND This idea was chosen as it uppermost on most of the BM’s minds as one of the most important issues concerning their jobs at work. At most of the branches, the traditional routes of recruiting FC’s (Advertising in mainline newspapers and scouting for FCs through traditional databases like CAS, Stock Exchanges, Post Offices, etc., are dying up. Problems faced by the BM were Not able to enough good FCs through these traditional routes/ in these traditional segments. Difficult to excite/ motivate good FCs to join us when they find them (as good candidates reluctant to take up commission-based jobs.) The objective of the exercise was to throw up new ideas which could then be implemented if found useful.
USEFUL IDEAS THROWN UP
A. Alternative routes to locate prospective Financial Consultants
I.A Targeting New segments for prospective FCs The new segments that the brainstorming session threw up were:i. Members of multilevel Marketing chains (Amway’s, Modicare, Tupperware, Aviance, etc.)They have good contact bases. ii. Secretaries/Chairmen of Housing Societies- these are local opinion leaders. iii. Secretaries/Chairmen of local community groups- these are local opinion leaders iv. Accounts/HR/Purchase personnel in companies-these are opinion leaders/ inhouse tax experts v. Ration Shop/Karyana Shops merchants-these are local opinion leaders vi. Partners/Employees of DSAs/DMAs-they have good contract bases. vii. Placement Consultants-they have good database viii. Leading Members of Clubs like Rotary, Lions, Jaycee, etc.—local opinion leaders. ix. Leading members of trade unions—opinion leaders x. Student leaders in Universities—opinion leaders 47
xi. Medical representatives—they have good contact bases xii. Socially—active Housewives(located through mahilla samitis/kitty parties)— opinion leaders, have good contact bases xiii. Family members of employees in the IT department—opinion leaders xiv. STD booth owners—have good contact bases xv. Employees in telecom companies—good contact bases xvi. Hoteliers/Caterers –good contact bases xvii. LPG dealers – good contact bases xviii. Bank tellers—good contact bases xix. Doctors—opinion leaders, good contact bases xx. Company employees—brand ambassadors/exerts xxi. People in Financial trouble (locate NPAs of housing loan companies)—alternate vocation for these people xxii. Relatives of Sarpanches/-Gram Sewaks/Agri Samiti Members (for rural FCs)— local opinion leaders. xxiii. Members of NGOs/ Social activists (for rural FCs –local opinion leaders have good contact bases. xxiv. Sales staff/distributors of Fertilizer companies (for rural FCs) have good contacts bases. xxv. Family members of postal staff (for rural FCs)—local opinion leaders. I.B Product specific FCs Our current FC is a “general” expert, who needs to satisfy over time the needs of an 18 year old to 60 years old. This could be one of the barriers in locating good FCs. An interesting thought that came up is that we could have FCs who is specialized in product lines and these FCs could have different profiles. FCs who specialize in selling Pensions i. ii. A person who sells deposits/Postal Products has conduct base in the older age group
employees in co-operative banks (which give higher FD rates for senior citizens) FCs who specializes in selling LCTA/Term i. ii. iii. a person who sells liabilities/home loans real estate agents/employees in real estate firms has a contact base in the younger age group FCs who specializes in selling SPWL i. A person who sells other investment products like mutual funds, etc. ii. iii. stock brokers/ sub-brokers Has an investment – savvy contact base.
I.C Referral Programmes i. ii. Incentives FC get FCs programmes. Incentives Employee get FC Programmes iii. Incentives “other brand ambassador (like group company customers)” get FC programme I.D Education programmes i. ii. “Every family/society should have an Insurance Expert”—Using forums like GBMs of residential societies to propagate this idea “Every company should have an insurance expert” – Using forums like cafeterias/canteens of companies to propagate this idea 2. Ideas to motivate good candidates to become Insurance salesman 2. A the pitch to be taken for prospective FCs
The typical reasons for opposition/reluctance from prospective FCs are: i. They look down upon becoming “commission-based” wage-earners ii. They think a job means-being a full-time employee on the rolls of a companyhence a less lucrative offer but which has the “security” of being on the rolls attracts them more iii. Insurance selling is difficult. The points that were thrown up that could effectively tackle this resistance were 1. This is one of the few professions where the employee gets to choose his own timings for working. 2. This is one of the few professions where the employee gets to choose the customers which he wishes to serve. 3. This is one of the few professions where there is unlimited opportunity to earn. - There is no upper limit. 4. This is the ONLY profession which gives up to 40% gross margin without any capital investment in the business. 5. This is the ONLY profession where there are definite benefits derived for today’s work for the next 10-40years. 6. This is a profession which bestows upon the person the status of an “expert” –hence he can derive satisfaction from the fact that hundreds of people actually benefit from his advice, thereby generating tremendous goodwill. 2. B Alternative channel for prospective good Insurance Salesman There would still be good people out there who do not agree to become commission-based FCs. The solution here could be to set up an in-house distribution subsidiary which will have contract-based employees working full time on their rolls these employees will draw a package which will have a fixed component( salary/stipend/fixed allowance) and a variable component linked to each proposal(commission-eg.half that of an FC)
There would need to be clear exit clauses over time to ensure that the company does not end up endlessly investing in unproductive resource. There could be an option where these employees over time build confidence and move to the fully-variable FC model. 2. C Make efforts to get this vocation public recognition and approval. This could be done through i. ii. Presentations to opinion leaders-club members/residential societies/placement consultants. Generating positive endorsements by opinion leaders about this vocation.
• To provide ongoing Financial advice for his/her clients: o Making appointments o o o o • Conduct Financial review meetings with prospects/ clients Close sale Get referrals Provide service to clients Identify future clients:
Follows internal sales and reporting system WORKING ENVIRNOMENT o To be part of world class sales team o Work form your own office and residence
o Work fulltime and part time o Earn commission, bonus & incentives o No upper limits on earnings YOUR OPPORTUNITY No start up capital required Flexible working environment Be your own boss Unlimited earning potential To be part of world class team YOUR POSSESS o o o o o Confidence Self motivation Persuasion Urge to be financially independent Relationship skills
CERTIFIED Financial Consultant’ –A CAREER IN INSURANCE COMPANY LIMITED
HDFC Standard Life Insurance Company Limited is a joint venture between HDFC, India’s largest housing financial institution and Standard Life Assurance Company, Europe’s largest mutual life company. HDFC and Standard Life are Companies with tremendous financial strength as endorsed by credit rating agencies. Both enjoy an excellent reputation in terms of goodwill and efficient customer service. Sales training imparted to our consultants will be based on the finest international practices. HDFC manages Rs. 21450 crores in assets and Standard Life manages US$121 billion in assets.
Both the promoters are well known for their ethical dealings, their Financial strength and their commitment to be a long term player in the life insurance industry—all important factors to consider when choosing your insurer
Agents as Certified Financial Consultant
People associate agents as middle-men, between the customer and the company. We see our representatives as much more than this. We see our representatives as professional and skilled advisors who are able to recommend the best solutions based upon the individual customer’s needs. Furthermore, with the imminent entry of new players and products in the market, we believe products will become more complex, and customer expectations of financial advisors will increase. The need for a consultant who will provide a customercentric solution in insurance is inevitable. Given this environment we believe that 53
the successful advisor/agents will have to assume the responsibility of a “Certified Financial Consultant”. The title Consultant therefore reflects the image we wish to develop and advocate in the market.
Role in HDFC SL ‘Certified Financial Consultant
He/she would analyze the customers’ financial requirements and recommend appropriate life insurance and pension solution, so that the customer is able to meet his/her Financial objectives in the most optimum manner. He/she shall provide support to customers on an ongoing basis.
Making a Financial Consultant
The company would support you by providing the required training and regular coaching. We also provide information in the form of sales aids etc. so that you are able to provide the best service to customers. One of the principal responsibilities of our Business Development Manager (BDM) is to insure that each Financial Consultant is supported at all times.
Career with HDFC SL as a Certified Financial Consultant
This is one of the few professions where the employee gets to choose his own timings for working. This is one of the few professions where the employee gets to choose the customers which he wishes to serve. This is one of the few professions where there is unlimited opportunity to earn— there is no upper limit. This is only profession where there are definite benefits derived for today’s work for the next 10-40 years. This is only profession which gives up to 40% gross margin without any capital investment in the business. This is a profession which bestows upon the person the status of an “expert” – hence he can derive satisfaction from the fact that hundreds of people actually benefit from his advice, thereby generating tremendous goodwill.
Pre-recruitment examination for financial consultant
This examination is called pre-recruitment examination for Insurance Agents. It is administered separately for Life Insurance Agents and Generals Insurance Agents, manually by the Institute and electronically by authorized ‘On-Line’ Examination Institutes. The examinations are called as follows: i. ii. Pre-recruitment Examination for Life Insurance Agents, and Pre-recruitment Examination for General Insurance Agents,
18+years of age/10+2 passed Willing to undergo 100 hrs. IRDA mandatory training Has no agency with any Life Insurance Company According to regulation 5 of the Regulations, the person desiring to obtain or renew a license to act as an agent is required to: 1. Complete from an approved institution, at least, one hundred hours’ practical training in life or general insurance business, as the case may be, which may be spread over three to four weeks, where such person is seeking license for the first time to act as insurance agent and 2. Complete from an approved institution, at least one hundred fifty hours’ practical training in life and general insurance business, which may be spread over six to eight weeks, where such applicant is seeking license for the first time to act as a composite insurance agent. A person taking examination is required to satisfy the requirements of regulations 4 & 5 of the regulations, as explained above.
Eligibility (Preferred by HDFC-Standard Life Insurance Co. Ltd.
Candidate referred should score high in values and ethics and should be a match with HDFC SL Values. Ambitious, self motivated, should be able commit time and wants to make serious money. The referred should preferably not be from a 9 to 5 job or else should be in a position to dedicate at least 5 to 6 hours per day as an FC.
Overall Purpose of the Role
To sell the products of the company in a professional ethical manner . To set, monitor and achieve sales targets for self. To positively promote the company’s brand, its mission, aims and values.
Required Knowledge & Skills
Product range and features market-industry, competitors Company Sales Process Company Organization Structure Sales Skills
Selection procedure in HDFC SLIC
Filling of the Agency Application form Selection Test Initial screening by BDM Interview by Branch/Resident Manager with the help of the Business Development Manager. Acceptance of training cum Performance deposit. Recommendation for IRDA training.
A systematic Research reduces the uncertainly in the decision making process management. Properly conducted marketing research is an indispensable tool for top mgt. in marketing decision. Marketing Research is defined as systematic design, collection analysis and reporting of data and findings relevant to a specific marketing situation facing the company. In order to conduct a useful and objective marketing research. A research methodology has to be adopted, became only then the studies conducted can be properly elaborated & commented up.
So, I have to conduct Research in fur sub groups. Sample design Data Collection Method Data Analysis
1. Sample Design In the SAMPLING PLAN the basic and important question is WHO IS TO BE SURVEYED? Since it is not possible to question every Person in the market, the only one of the best alternative is to resort to SAMPLING TEACHNIQUE and is also true for the present study as well. I was conducting RANDOM SURVEY. A. SAMPLE SIZE=100 B. SAMPLING TECHNIQUE=Convenience Sampling
2. Data Collection Method After the sample has been selected, next step is to collect data, which is vital step since the accuracy of data collected defends upon the DATA COLLECTION METHOD. So, I have chosen two types of Data Collection Method. There are: Primary Data Secondary Data
For the purpose of the study, primary data is collected by direct personal interview and in the secondary data; I collect Data from the magazines, internet & etc.
Data Analysis After the data collection it is time for Data Tabulation. The data is tabulated properly so as to interpret it with a view to arrive at logical and meaningful comprehensible. One of the important feature of this study is the to recruit the Financial Consultant. So, I make use of charts, tables etc with a view to present data punctually, precisely and to make the study more interesting and early comprehensible.
OBJECTIVE OF THE STUDY
• • To know about the habit of people in the region of BADDI(H.P) To know what the people think about the Financial Consultant in the insurance sector. • To know about the views of people regarding various in insurance companies.
To know the main consideration of the people while joining as the Financial Consultant.
Awareness about the new incentive schemes provided to the Financial Consultant.
• • •
Position of the insurance company in the mind of people. To know about the competition regarding various insurance companies To find out the position of the company in the market.
PROCESS TO BE FOLLOWED FOR FC RECURITMENT
Identifying areas to conduct survey so that we can get maximum of “Likely Financial Consultant”. Identifying whether the prospect fits our profile of “Likely Financial Consultant”-by administering Questionnaire.
Ensuring that the prospects who are interested are given to the branch to convert.
Optional Parameter s
Males, Age:25-35, HSC/ GRADUATE
Does not already have a life insurance agency, Has social
Experience in selling, Single-
contact base of more than 50 people, has a telephone number (preferably not pp)
income family, Number of
dependents Males, Age:35-55, Graduate/Postgraduate Doesn’t already have a life Insurance agency, SingleHas social contacts base of More than50 people, has a Telephone number(preferably Not pp) Doesn’t already have a life Insurance agency, SingleHas social contacts base of income income family, Number of Experience in selling,
dependents Females, Age:25-45, Graduate/postgraduate Experience in selling,
More than50 people, has a Telephone number(preferably Not pp)
family, Number of
dependents Note: Prospect can be said to fit our profile of “likely Financial Consultant” if 1. He/she matches Target Segment 2. He/she satisfies all Mandatory Parameters 3. He/she satisfies at least 1 out of the 3 optional parameters defined.
DATA ANALYSIS AND FINDINGS
Q1- Any there insurance companies’ which you are aware?
PARTICULAR ICICI BAJAJ ALLIANZ
RESPONSE 20 5
LIC BIRLA PLUS HDFC-SLIC
60 5 10
70 60 50 40 30 20 10 0 ICICI BAJAJ LIC BIRLA HDFCSLIC Series1
Q2-What is the main source from which persons know about companies?
PARTICULAR NEWSPAPER ADVERTISEMENT MEGAZINE FRIENDS & PEER GROUPS
RESPONSE 23 47 12 18
50 45 40 35 30 25 20 15 10 5 0
T EN NE R AP E M EG AZ I ND S M $
NE W SP
Q3-What attributes attracts a person to work as a financial consultant?
PARTICULAR PART TIME JOB EXTRA INCOME WORK FROM OWN OFFICE TO BE A PART OF WORLD SALES
AD VE R
RESPONSE 37 26 13 24
40 35 30 25 20 15 10 5 0 PART TIME EXTRA INCOME OWN OFFICE WORLD SALES Series1
Q4-What respondents see while becomes financial consultant?
PARTICULAR GOODWILL OF COMPANY ADVERTISEMENT GIVEN BY COMPANY BETTER COMMISSION
RESPONSE 56 23 21
60 50 40 30 20 10 0 GOODWILL ADVERTISEMENT COMMISSION Series1
Q5- Do you know HDFC-SLIC?
PARTICULAR YES NO
RESPONSE 38 62
Q6- Do you currently have an agency for any life insurance company?
PARTICULAR YES NO
RESPONSE 23 77
Q7- Do you have any selling experience?
PARTICULAR YES NO
RESPONSE 13 87
Strong tie-up Strengths:
With HDFC being major Housing Financial Institution and Standard Life being major player in insurance Sector.
HDFC being major brand in India and Standard Life being major brand worldwide.
• • HDFC’s Strong presence and awareness in the Indian Market. Huge Customer Database
Low customer awareness Less promotion
32 Crore uninsured population Network building Targeting the rural segment
LIC and other aggressive new entrants.
The people in the rural areas should be taped and brought under the life policies. More and more advertising should be used to tap the customers. More awareness campaign should be under taken so that people can relay on the company.
• • • • • • •
Life insurance policies should be made compulsory to all the earning individual. Short term policies should be advertised heavily as it is still unknown area from most of the people. Services should be improved procedure to get life insurance policy should be made easily assessable. More and more of bonus and extra benefit should be given. Investment plans should be made to as suitable to individual need. Investment plans suitable to eh female population (female child) should be brought in the market with minimum premium and additional benefit. As from the research the premium following in the segment of Rs.2500 to Rs. 5000 should be encouraged. Policies having premium of less than 2500 can be increased or additional features can be added to this segment of policy.
Life insurance should be customized as the requirement of the customer. More and more benefits should be added to children segment since they are the
most untapped segment. Secondly, policy should be designed in such a way that they cover both major as well the minor in a single policy. • • Benefits from the investment in insurance should be increased as compare to Financial Consultant should be provided training so that they are updated about provident fund. the latest trends and policies in the company.
agent is an important component of distribution channel for life
insurance products. He is required to procure new insurance business in a manner consistent with the interest of the policyholders and his company.
It is the interest of the life assured, the insurer and the agent that the business
is conserved without lapse and for that the agent has to remain in contact with the life assured, render proper service and help at the time of claim.
Through knowledge about the company’s products and office procedures are
the pre-requisites for success of an agent. The agent is also a financial advisor of the prospect and, therefore, must be familiar with other financial instruments and law relating to tax matters.
Selling process includes six main steps: pre-approach, approach, interview,
objections, motivation and closing.
prospect decides to buy because he has a need, he finds a product for
need, and price is commensurate with the satisfaction he wants. For life insurance, need arousal becomes necessary.
life insurance contract may fail to perform as expected. The reasons for
such a failure may be: failure on the part of the policyholder, failure in arranging for proof of title, defective records of the insurance company and breach of utmost food faith. Agent’s role is significant in avoiding such a failure.
Servicing the policy is an important as selling it. Service means continuity of
contacts with the customer to ensure that the performance of the product is in conformity with the expectations of the customer. Keeping in touch by way of service calls also helps further selling.
www.hdfc.standardlife.com www.licindia.com www.irda.com www.google.com
STUDY OF RECRUITMENT PROCESS OF HDFC SLIC AND RECRUITMENT OF THE FINANCIAL CONSULTANT =============================================================
Name: Age: Occupation: Phone No. : Address:
What is your Educational Qualification? (please tick appropriate) 10th pass:
b. 10+2/ stream: c. Graduate/stream: d. Post Graduate (specify): 2) What is your current Occupation? (please tick) a. Salaried: b. c. Self-employed: Student (specify):
3) Any there insurance companies’ which you are aware? a. b. c. d. e. ICICI HDFC-SLIC BAJAJ ALLIANZ LIC BIRLA PLUS
4) What is the main source from which persons know about companies? a. b. c. d. News paper Advertisement Magazine Friends & peer groups
5) What attributes attracts a person to work as a financial consultant? a. b. c. d. Part time job Extra income Work from own office and residence To be a part of world sales
6) What respondents see while becomes financial consultant? a. b. c. Goodwill of the company Advertisement given by the company Better commission
7) Do you know HDFC-SLIC? a. b. Yes No
8) Do you currently have an agency for any life insurance company? a. b. c. Yes No If yes, which company?
9) Do you have any selling experience? a. Yes b. No 10) Any suggestion recommended by you? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------[We thank you for your kind cooperation, valuable inputs and time] RIMT-IMCT, MANDI GOBINDGARH ================================