PROJECT REPORT ON

³Study of Recruitment and Retention strategies adopted by different life insurance companies for their Agents / Financial Consultants / Agent Advisors´

PREPARED BY
RUCHA ARUN MOGHE

STUDENT OF
B.M.S. (BACHELOR OF MANAGEMENT STUDIES) 2009-2010

SUBMITED TO
UNIVERSITY OF MUMBAI &

B. H. BAING COLLEGE, SHIPOSHI

Declaration
I hereby declare that the work embodied in this project titled ³Study of Recruitment and Retention Strategies adopted by different Life Insurance Companies for their Agents / Financial Consultants/ Agent Advisors´ is my own contribution to project work carried out under the guidance of Mrs. S. S. Vaidya. This project work has not been submitted for any other degree. Where ever reference have been made it is has been clearly indicated as such and included in references and bibliography.

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Acknowledgement
It is worthwhile to enclose my sincerest thanks to all the persons who have helped me directly or indirectly during c ompletion of the Project Report in successful manner. Firstly, I express my sincere gratitude to Mr. M. V. Thakurdesai for granting me permission to do this project. Then, I am very much thankful to our course co-coordinator, Prof. V. N. Athalye for his encouragement and full fledge support in the completion of this project. I also express my sincere thanks and sense of gratitude to my project guide Prof. S. S. Vaidya for her valuable guidance and suggestions at every stage right from choosing the topic to the completion of project. I express my sincere thanks and deep sense of gratitude to Mr. Gaurav Dalvi for arranging our live project at HDFC Standards Life Insurance Company, Vashi branch. I also express my sincere gratitude to the management of HDFC Stan dard Life Insurance company for the kind permission to undergo on implant visit in their company (Vashi branch). Finally, I also express my sincere thanks to Mr. Fayyaz Ahmad Sales Development Manager (SDM) of HDFC Standard Life Insurance Company, Vashi branch for helping me in completion of this project work.

Life Insurance Corporation of India. Inadequate information regarding the work of Agents/ Financial consultants / Agent Advisors by recruitment consultant is the main reason for high rate of attrition in insurance industry. Singapore etc. While doing a live project at HDFC Standards Life Insurance Company. To find the reasons. . to analyses the actual recruitment and retention process in Life Insurance Companies and how far this process confirm to the purpose underlying the operational aspect of the industry. After analysis I came to the conclusion that some defects in recruitment process are the reason of high attrition. Also liberalization of insurance sector has provided huge self employment opportunities. I analyzed recruitment process of three different companies viz.Executive Summary Insurance sector in India is booming but not to level comparative with the developed economics such as Japan. The study is proposed to find out a process that will help insurance companies to keep its attrition rate minimum. This project work is a sincere attempt to collect the information stating the various reasons for attrition and suggests the useful measures for retention. In this study. HDFC Standards Life Insurance Company and Max New York Life Insurance Company. T he HDFC Standards Life Insurance Company as well as other life insurance companies are facing this problem. the main objective of the study is kept as. Vashi branch I observed that sales Development Managers were facing some serious problems regarding retention of their financial consultants.

1 2 3 4 5 6 7 8 9 10 11 12 Introduction Industry Analysis Company Analysis Research objectives Research Methodology Data collection and Tabulation Analysis of data and Finding Conclusions and recommendation Appendix Bibliography . Contents Page no.Index Sr. No.

1 Retention and Attrition strategies of life Insurance corporation of India 4.1 Life Insurance Corporation of India 3.3 Max New York Life Insurance Company 4 Recruitment 4.2 HDFC Standard Life Insurance Company 4.3 Max New York Life Insurance company .2 HDFC Standard Life Insurance Company 3.3 3.

Private companies find it difficult to compete aga inst the dominant LIC of India. Tracking the development in Indian Insurance Sector revels 360 degree turn witnessed over a period of almost two centuries. Special attaint ion needs to be given for their retention in their respective companies. But the common problem of LIC as well as private life insurance companies is to retain their Agents/FCs/AAs. Agents/FCs/AAs who enthusiastically spurred by dreams of working at ones own hours. The industry is facing a serious problem regarding the shifting of jobs at top level management as well as at agency force of company. Agents/FCs/AAs have the potential to create a good as well as bad image of the company. getting full reward for the hard work and other such motivational spiel meet reality soon enough. . Ever since the liberalization of life insurance sector is done private companies are facing many problems to create their firm existence in the market.Introduction The Insurance sector in India has come a full circle from being an open market to nationalization and back to liberalized market again.

The business of life insurance in its existing form started in India in the year 1818 with the establishment of Oriental Life Insurance Company in Calcutta. 1912 : The Indian Life Insurance Act enacted as first statue to regulate the life insurance business. 5 crore from the government of India. . 1938: Earlier legislation were consolidated and amended to the insurance Act with the objective of protecting the interests of the insuring public. Some of the important milestones in the life insurance business in India are. It is often about things going right. And after the liberalization of Indian economy the Life Insurance market has now opened for private players. 1928: The Indian Insurance Companies Act enacted to enable government to collect statistical information about life and non life insurance business. Due to several frauds in late 18 th century sullied insurance business in India as a result one nationalized company viz. µLIC¶ came into existence. As we know Indian Insurance sector was an open competitive market. 1956 : 245 Indian and forei gn insurance and provident societies were took over by the central government and nationalized LIC was formed by an act of parliament viz. 1956 with a capital contribution of Rs.Industry Analysis Insurance can be defined as. Insurance is about something going wrong. One of the wonders of human nature is that we never believe anything can actually go wrong. 1870 : Bombay Mutual Life Insurance Society the first Indian Life Insurance Company started its business. ³assurance for uncertainty´. LIC Act.

Section 27A of Insurance Act Stipulates that life insurance companies required to invest 75% of its accretions through a controlled fund in mandated government securities. . Bottlenecks / Government Regulation The IRDA Bill proposes tough solvency margins for private insurance firms. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously such to its schedule of framin g regulations and registering private sector Insurance companies. construction and acquisitioning of immovable assets besides sanctioning of loans to policy holders. 200 crores for reinsurance firms. The other decisions taken simultaneously to provide supporting systems to the insurance sector in particular the life insurance companies were the launch of the IRDA online service for issue and renewal of license of agents. Life Insurance Company may invest the remainin g 25% in private corporate sector. a 26% capital on foreign equity and a minimum capital of 100 crores for life and general insurance and Rs. This stipulations imposed on the insurance companies had resulted in lack of flexibility in the optimization of risk and portfolio.Insurance Regulatory and Development Authority (IRDA) Reforms in the insurance sector were initiated with the passing of the IRDA Bill in parliament in December 1999.

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a leading international financial service group head quarter in the United Kingdom.000 advisors as well as 7 bank assurance tie ups. ICICI prudential was amongst the first private sector insurance company that came into existence in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA) ICICI Prudential equity base 74% and 26% stake respectively. Bajaj Auto Ltd. The company has a network of over 50. 8000 crores. Bajaj Group is the largest manufactures of two wheelers and three wheelers in India and one of the largest in the world. The flagship company of Rs.Major private players in India 1) ICICI Prudential : ICICI prudential Life Insurance company is a joint venture between ICICI bank a premier financial powerhouse and Prudential. Today ICICI Prudential has emerged as No. It has joined hands with Allianz to provide the Indian consumer with a different option in terms of Life Insurance products.1 private life insurer in the country with a wide range of flexible products that meet the needs of the customer at every step in life. 3) HDFC Standard Life : . 2) Bajaj Allianz : A house hold name in India teams up with a global conglomerate. Bajaj Auto has a strong brand image and locality synonymous with quality and customer focus with over 15.000 employees.

Japan. The United States. Indonesia. 4) Birla Sun Life Insurance Company Limited: Birla Sun life Insurance is the joint venture of Aditya Birla group and Sun Life Financial of Canada to enter in Indian Insurance sector .K. Today the Sun Life Financial Group of companies and partners are represented globally in Canada. The Philippines. Malaysia and Egypt to name a few. and Europe¶s largest mutual life insurance company The Standard Life Assurance Company (U.) HDFC standard life insurance company limited is the firs t private sector life insurance company to be granted a license by IRDA. The Aditya Birla group multinational conglomerate has over 75 business units in India and overseas with operations in Canada. Philippines. Thailand. India and Bermuda . USA. Indonesia.HDFC Ltd.HDFC Standard Life Insurance Company is a joint venture between India¶s largest housing finance provider . UK.

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1 private life insurance is ICICI prudential with 13. The No. .3% of total share where as HDFC SLIC has managed to earn only 4.4%.7% of total market share. Birla.1%. From the above chart.Market Share of Different Players LIC ICICI Prudential Bajaj Allainz Birla Sun Life Reliance Life Max New York Life OM Kotak AVIVA TATA AIG Other Even after li erali ati n and entry of private player in insurance sector. 3. and MNYL have 3. Sunlife.4% and 2. Reliance life. The top 5 life insurance companies in India control 85% of market share while the remaining dozen are still struggling to set up their operation.4% of market share respectively. one can say that private companies are still struggling to capture maximum market share. Bajaj Allianz contributes to 10. t e majority of market is shared by LIC of India.

Kapil Mehta is the MD & CEO of DLF Pramerica life insurance Ltd. Before joining DPLI Kapil was senior vice president of Business development and strategic planning at another life insurance company. feels secure and enriched. Vision : At DLF Prameria.New Entrant in the Industry DLF Pramerica Life Insurance co. Kapil has been associated with this venture since 2006. and prudential International Insurance holdings Ltd. Ltd. our vision is to ensure that eve ry life we touch. The combination at the strength of DLF brand and PFI¶s insurance expertise provide the strangest possible foundation for DPLI to succeed in the rapidly growing Indian life Insurance market. . Mission : We shall be a guide and a mentor to people so that they are able to make the most informed insurance decision to meet their life goal. It is a joint venture between DLF Ltd.

. 15.277 million Dun Bradstreet (India 500). LIC had 5 zonal offices. 2005 posting healthy growth rate of 16.32.951 million) as well as Net profit 2. LIC ranks no. 33 divisional offices and 212 branch offices. The parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956 and the life insurance corporation of India was created on 1 st September. apart from its corporate offices in the year 1956.Company Analysis Life Insurance Corporation of India. It has a network of over 2000 (2048) branches and more than 9 lakhs agents. LIC has crossed the milestone of issuing 1. 1956 with much the objective of spreading life insurance more widely and in particular to the rural areas with a view to reach all insurable persons in the country providing them adequate financial cover at a reasonable cost. Over 53 years.66.67% over the corresponding period of the previous year.47.955 new policies by 15 th Oct. 1 in the list of top 500 companies on the basis of net worth (Rs.01. LIC has become a household name for providing securit y for a life time and is synonymous to life insurance in India.

Kidwai. . Venkatsubrameniann (chairman & MD Export Import Bank of India) 9. Soornad Ragashekheran 10. C. Shri Monis R. Thomos Mathew ( MD . Shri. G.LIC) 5. Dr.) 7. of India. Shri. Vigayan. T. Yogesh Lohiya (chairmen MD . S. Chaturvedi (additional secretary department of f inancial services. LIC of India) 8.S. Shri. Ministry of finance Govt.From then to now LIC has crossed many milestones and set unprecedented performance records in various aspects at life insurance business. Dasgupta (MD LIC) 6. (chairman) 2. Mehrotra (MD LIC) 4. Shri DK 3. Shri A. Shri. Key members to the corporation 1. K. Shri T.

He joined HDFC Ltd in a senior management position in 1978. .856 crores and new business premium income at Rs 1. Key players : Mr. Oman and Qatar HDFC is the largest housing company in India for the last 27 years. Parikh is the chairman of the company. He is also the executive chairmen of Housing Development Finance Corporation Ltd. HDFC has since emerged as the largest residential mortgage finance institution in the country. In 1985 and was appointed as its executive chairmen in 1993. He is a fellow of institute of Chartered Accountants (England and Wales). 2.). 2007 stood Rs. Satawalekar obtained a bachelor degree in Technology from the Indian Institute of Technology (IIT) Bombay and a master degree in Business Administration from the American University Washington DC.2007 HDFC operates through 450 loca tions through out the country with its corporate head quarters in Mumbai India HDFC also has on International office in Dubai UAE with service associates in Kuwait. Satawalekar is the managing director and CEO at the HDFC SLIC since November 2000 prior to this he was the MD of HDFC Ltd. Since 1993 Mr. The corporation has had a series of share issue raising its cap ital to Rs. 19 crores The gross premium income for the year ending March 3. Mr.000 lives year ending March 31.77. 10 crores.HDFC Standard Life Insurance Company LTD. Deepak S.624 crores The company has covered over 8. HDFC was incorporated in 1977 with a share capital at Rs. Deepak M. (HDFC Ltd. He was inducted as a whole time director of HDFC Ltd.

6 %.This reflect the efficiency with which HDFC and Standard Life manage their asset base of Rs.4% stake and Standard Life of as a stake of 18.Standard Life : Standard Life is Europe¶s largest mutual life assurance company. SNAPSHOT :  Founded in 1875. Reach of the players is highly rated and been conferred with many awards. Mr.600. HDFC Standard Life Insurance Company Ltd. HDFC is rated µAAA¶ by booth µCRICIL¶ and µICRA¶ similarly standard is rated µAAA¶ both by Moody¶s and Standard and Poor¶s . Deepak Satawalekar is the MD and CEO of the Venture.000 crore and Rs. . Standard Life which has been in the life insurance business for the past 175 years in a modern company surviving quite a few changes since selling its first policy in 1825. Standard Life currently has assets exceeding over 70 billion under its management and has the distinction of being accorded ³AAA´ rating consequently for the six years by Standard and Poor.  Europe¶s largest mutual life insurer. Joint Venture : HDFC Standard Life Insurance Company Ltd. was one of the first companies to be granted license by IRDA to operate in life insurance sector. the company expanded in the 19 th century from Kits Original Edinburgh premises opening offices in other towns and acquitting other similar business.  Currently over 5 million policy holders benefiting from the service offered. company supporting generations for last 179 years. 15. was incorporated on 14 th August 2000 HDFC is the majority stakeholder in the insurance joint venture with 81.000 crocre respec tively.

learning. The company has 133 offices dedicated to rural areas. Max New York invests significantly in its training programme and each agent is trained for around 100 hours as opposed to the mandatory 50 hours stipulated by the IRDA before beginning to sell in the market place. bank assurance.000 Agent Advisors and more than 800 own employed sales force at 712 offices across 389 cities.Max New York Life Insurance Max New York Life Insurance Company Ltd. In line with its values of financial responsibility Max New York life has multi channel distribution spread across the country. Agency distribution is the primary channel complemented by partnership. Max New York started commercial operation in 2001. The company currently has around 93. This focus on continuous quality training has resulted in the company having amongst the highest agent pass rate in IRDA examination and the agents have highest productivity among pri vate life insurance companies. In line with is vision to be the most admired Life insurance Company in India. international arm of New York Life a fortune 100 company has positioned itself on the quality platform. knowledge. Training is a continuous process for Agents at Max New York Life and ensures development of skills and knowledge through a structured programme spread over 400 hours in two years. distribution. integrity and team work incorporated in 2000. The company also has 36 referred tie ups with banks. one of India¶s leading multi business corporation and New York Life International. . 24 partnership distributions and alliance marketing relationships each. is a joint centre between Max India Limited. it has a strong corporate governance model based on the core values of excellence honesty. alliance marketing and dedicated distribution for emerging markets.

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Okhla.110020. Theodore A Maths President & COO Max New York Life Insurance Company Overview It is an ISO 9001: 2000 certified Company The company has recently partnered Symbiosis Institute of Business Management to launch Post Graduate Diploma in Business Management with Specialization in Life Insurance.VC MNYLIC Ltd.Max India ltd Gary R. Anuroop µTony¶ Singh. Max House 3 rd Floor 1 Dr. It promises an atmosphere of run Career growth and earning opportunities for its employees.MD And CEO Max New York Life Insurance Co.SNAPSHOT Date of Establishment Address 2000 Max New York Life Insurance Company Ltd. Bannett. New Delhi. Jha Marg. India Key persons Analgit Singh Chairman . Ltd. It Believes in enhancing the potential of its employees organizationto influence change in the .

Recruitment and Retention strategies of 1. LIC of India. 2. HDFC Standard life. 3. Max New York Life Insurance Company.

Recruitment
Recruitment means to estimate the available vacancies and to make suitable arrangements for their selection and appointment. In the recruitment process; the available vacancies are given wide publicity and suitable candidates are encouraged to submit application; in order to have a pool of eligible candidates for scientific selection.

In recruitment process ; information is collected from interested candi date for different sources of recruitment such as news paper advertisement, employment exchanges internal promotion etc. are used. In the recruitment process a pool of eligible and interested candidates is created for the selection of most suitable candidates. Recruitment represents the first contact that a company makes with potential employees. An Agent is not an employee of the company but their recruitment should be given equal importance as that of employees of a company.

Who can be an Agent of Life Insurance Company?

Section 42 (4) of the amended Insurance Act, 1938 states an agent is one who is noty A minor y Found to be unsound mind by a Court of Jurisdiction y Found guilty of criminal background

An urban Agent must be 12th standard passed and rural agent must be 10 th standard passed.

in ordinary procedure for recruiting candidates is described in following diagram. Start List of prospective candidates Contacting NO Interested? YES Interview with SDM Short listing End Interested? NO End YES Training programme NOT CLEARED IC-33 ? Exam CLEARED Contract with company Reappear End .

Once the training is over the candidates undergo IC -33 examination conducted by IRDA. But Max New York Life Insurance Company follows a complex process of recruitment as shown in the figure . The list of prospective candidates may include nature market of people who personally contact RCs and SDMs to become an agent relatives and references collected from them. After contacting all prospective candidates those who are interested to become an agent undergo initial screening by Sales Development Managers and selected candidates undergo a training programme of 50 hours as compel led by IRDA. These people follow the steps shown in the figure. clearance at this examination leads candidates to make a contract with the sponsoring company.For the Recruitment of agents the target is given to the Recruitment Consultants (RCs) and Sales Development Managers (SDMs). HDFC as well as LIC follows the same process for the recruitment of Financial Consultants/ Agents.

Start Name Gathering in P200 Short listing Contacting NO Interested? YES Initial Screening NAT Career Seminar & P200 NO Interested? End YES Career interview FCS End IC-33 ? NOT CLEARD Reappear CLEARD Contract with MNYL End .

In initial screening. Contacting Candidates are called either as nominator or p rospective Agents and meeting is fixed with them according to the convenience of both party. In case of score less than 3 special zonal head approval is required. Here script plays very important role in fixing appointment with the prospect. Every candidates is required to get at least 3 point in eligibility model of the company. traits for a sales person and his present and past experience of his job are questione d. 4. Initial Screening Initial screening is taken if candidates are found eligible to 4 points model. 3. 2. Five point system Age 25 and over Graduate Married Lived in city more than 5 years NAT Score 1 point 1 point 1 point 1 point 1 point (if passed) . a sales manager first gives introduction about the company. Then several questions such as his family background his natural market.1. Name gathering in P 200 Name gathering in P 200 consists of people who you know from natural market and references from their sources. Only eligible candidates are considered for the next process. The eligibility standard for Agent Advisor selection grouped as follows. Short listing Candidates are short listed from the P 200 as per the eligibility criteria drawn by the company. As a management trainee were given a task to gather 200 names.

Short listing Candidates are short listed from the P 200 as per the eligibility criteria drawn by the company. Every candidates is required to get at least 3 point in eligibility model of the company. Contacting Candidates are called either as nominator or prospective Agents and meeting is fixed with them according to the conven ience of both party. 7. Then several questions such as his family background his natural market. Five point system Age 25 and over Graduate Married Lived in city more than 5 years NAT Score 1 point 1 point 1 point 1 point 1 point (if passed) . traits for a sales person and his present and past experience of his job are questioned. 8. 6. Name gathering in P 200 Name gathering in P 200 consists of people who you know from natural market and references from their sources. Only eligible candidates are considered for the next process. Initial Screening Initial screening is taken if candidates are found eligible to 4 points model. In case of score less than 3 special zonal head approval is required. As a management trainee were given a task to gather 200 names. In initial screening. a sales manager first gives introdu ction about the company. The eligibility standard for Agent Advisor selection grouped as follows.5. Here script plays very important role in fixing appointment with the prospect.

Thi s process helps the company to keep its attrition rate to minimum. 12. Passing score is 50% 10.9. he is selected to attend Training and development programmed. The objective of such tedious process is to recruit only competent intelligent and loyal Agent Advisors. It candidates market is found worth. 11.Due to such complex process at Recruitment it is not so easy to become an Agent Advisor at Max New York Life Insurance Company. Career Interview P200 is evaluated in career interview. Contract All successful candidates having legal license of IRDA are cont racted with MNYL . NAT Numbering Ability Test is taken. . FCS All the selected candidates are required to attend 22 day training session for receiving the license from IRDA to become an Agent Advisor.

RETAINTION .

Planning and evaluation can be defined as provision of benefit facilities given to employees of the company so that they wont leave the company. y As the performance of an agent improves he receives some additional benefits like certificate of an organization. Retention Strategies mainly include 1) Motivation of policy Companies provide very attractive commission structure for their agents. visiting card of his name etc. The commission rates vary from 20% to 40% on paid premium in the first year of policy. A cup or mug with agents own name printed on it. Private as well as government life insurance companies emphasize on providing better facilities to their agents in order to retain them in the organization. Employees tend to leave organization for various reasons like better salary package job dissatisfaction unhealthy working environment. In case of agency work force of Insurance company. additional monetary benefits apart from commission. Apart from the commission other motivational efforts play a significant role in retaining agents in the organization. y At initial level agents feel motivated by some non -monetary benefits like a pen set with companies logo on it. agent leave them because their job is commission based and not salary based. . trophies.Retention It is very difficult to retain people in sectors like BPO (Business Process Outsourcing) and IT but it is worst in case of Insurance industry conservatives estimates put the attrition rate of 35% to 40% in insurance industry.

37 Lacks Gold Premier club + Foreign trip family Membership of such club is a symbol of status for agent and helps companies to retain their agents. Diary Silver club benefits + 50. 3) Establishing good relation with agents. The potential agents are also offered a salary based job in the company.5 Lacks Silver plus club+ foreign trip 4) gold premier club Rs.1.g. Category of club 1) Silver club 2) Silver plus club Monetary benefits Rs.y Even letter heads mobile bill reimbursement facility provision of soft loan and laptops are given to the agents. The jobs offered are of Sale Development Manager Post or Unit Manager Post.000 accidental insurance 3) gold club Rs. 19 Lacks Gold club benefit + Fees for children¶s education 5) Platinum Club Rs.5 Lacks Non-monetary benefits Pen set. 3. .5 Lacks Rs. y Different contest are arranged at every branch of the c ompany on monthly. y Agent whose performance is outstanding gets a membership for that year of different clubs formed by insurance companies for e. 9. quarterly and yearly basis so as to motivate agents to perform well. 2) Job on company¶s pay roll.

But the retention policies need to be revised continuously in order to maintain its effectiveness. Outdated strategies would not help to retain agents. As the overall life style changes the retention policies must also be changed accordingly. .Sale development Manager take special efforts to inculcate the company¶s core values into every agents mind. SDM convince agents that the company is one big family and he (agent) is a part of it. It helps a company to retain their agents without much efforts.

ATTRITION .

Mr. Even meeting the minimum requirement of bringing in two viable insurance proposals every month proves daunting. Agrees Mr. Says the attrition rate is about 35% in the first year of recruitment.000/When the rejection starts and the doors start getting banged in the face new agents confront failure the drop out begin. Most of these who deep out are non -performers. 1 laky for some others it is as low as Rs. For some companies the target in terms of sum assured is Rs. friends and neighbors is exhausted the climb for an agent is uphill. 10. But little has changed in the basic nature of the business insurance still needs to be sold to a reluctant popu lation. Rahul Sinha vice Precident (Marketing) of Kota k Mahindra Old Mutual Life Insurance Company and says last year the attrition rate was much worse than 30% it has been a cause for worry and we are trying was our best to stem it. getting full reward for the hard work and other such motivational spiel meet reality soon enough. . Lalit Kumar Dash Executive Director (marketing) LIC.Attrition One might have heard of high job attrition of between 15% and 20% in software sector but even these pale in comparison to the kind of turnover that the insurance industry witness with its agency force conservative estimates put the attrition rates at 35 to 40% The opening up of the sector five years ago provided insurance agents with new opportunity and an image makeover as life insurance advisors. Most Agents or advisors who join insurance company enthusiastically spurred by dreams of working at one¶s own hours. This goes down to about 18% by the 4 th year. Once the initial list of potential customers such as close relatives.

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Attrition the concept In the best of world¶s employees would love their jobs. The way the industry is projected and speed at which the companies are expanding has major part in attrition. hate their co-workers. Reasons for attrition It is not easy to find out as to what contributes and who has the control on the attrition of employees. The reasons for attrition are varied in nature. Some common reasons for attrition are- 1) Organizational matters . But then there is a real world and in the real world employees do leave either because they want more money. hate the working conditions. Defining attrition rate The rate of shrinkage in size or number. like their coworkers work hard for their employers get paid well for their work have ample chances for advancement and flexible schedules they could attained to personal or family needs when necessary and never leave. Various studies conducted indicate that everyone is contributing to the prevailing attrition. resignation or death etc. want a change or because their spouse gets a dream job in another state so what does that entire turnover cost ? And what employees are likely to have highest turnover ? Who is likely to stay the longest? Defining Attrition A reduction in the number of employees takes place through retirement. Attrition does not happen for one or two reasons.

1) Lack of Information regarding the job of life insurance agents Recruitment Consultants (RCs) to achieve their target of recruitment contact number of people and recruit them without giv ing sufficient information about the job they are supposed to perform for the company. good treatment from the superiors. Some extended reasons for highe st attrition rate in insurance industry are given below. Employees look for freedom. work culture. 2) Working Environment Working Environment is the most important cause of attrition. friendly approach from one and all and good motivation In absence of such environment employees leave the organization.The employees always assesses the management values. Employees of the organization expect a friendly and learning environment. There are always ups and downs in the business plans. Also lack of job satisfaction is the reason for resignation of employees. work practice and credibility of the organization The Indian companies do have difficulty in getting the business and retain it for a long time. 4) Salary and other benefits Moving from one job to another for higher salary. good encouragement. Non availability of the campaigns makes people to quickly move out of the organization. . 3) Job Matters The job today brings lot of pressure and stress. better positions and better benefits are the most important reasons for attrition. The employees often leave organization due to this reason.

colleagues etc. Health is another aspect which contributes for attrition. 3) Saturation of natural Market The natural market consists of family. 5) Personal Reasons The personal reasons are many and only few are visible to us. They are wide from getting married to relocation for health or family reasons. The next important personal reason is going for higher education. When people are not having a full time job.2) It is a part time job Financial Consultants or Agents are not the employees on company¶s payroll. they work for the company but after getting a job of full time they tend to ignore their work as an agent and this finally results into termination of their license. 4) Lack of support by Sales Development Manager (SDMs) Some agents even if they are willing to get business for the company due to lack of motivation and support by their Sales Development manager cannot meet company¶s expectation leading to termination of license by IRDA. friend. Once this list is over agents find it difficult to fulfill the company¶s expectations. .

Research Objectives .

2) The study is aimed at understanding the working of Agents/FCs/AA. 3) The Study is also meant for providing reasonable solutions to th e problem after analysis of the recruitment and retention strategies of different life insurance companies. .Research Objectives 1) The objective of study is to analyze the recruitment and retention process Life Insurance Companies.

Research Methodology .

. Research methodology has following steps - Step 1. Research methodology means the method carried out to study the problem it shows the type of the sample design used. Thus when we talk of the research methodology we not only talk about research method but also context of our research study and explain why we are using a particular method or techniques and why we are not using other so that research results are capable of being evaluated by the researcher himself or by others. A research is carried out by different methodology which has their own pros and cons. To organize and conduct fieldwork. To process and analyze the collected data. Step 5. Research Methodology is a way to solve research problems along with the logistic behind them. The extent of precision achieved and the method used for handling any special problems during the course of the study. its size and the procedure used to dew. To prepare research report. Step 4. To determine sample size and sample design.Research Methodology Research can be defined as a systematic effort to gain knowledge. Step 7. To design data collection form (questionna ire). Step 2. Step 3. Step 6. Step 8. To decide the objective of the study To design research design To determine the source of data.

There are types of data sources. In order to study the characteristics and variables. cross sectional analysis was conducted by using field survey method in the process of field survey a questionnaire was developed and circulated among respondents which formed the basis for entire research. Step 2. There are three type of research design system. Descriptive research is to find an efficient sales force of Agents / Financial Consultants / Agent Advisors. To determine the sources of data. To decide the research design. The objective of the study as stated in the previous chapter were finalized so as to initiate the survey for the study. Data sources are the collection of fresh hand data to obtain results. . Step 3. structure strategy of an investigation conceived so as to obtain answers to research questions and control variance. Primary data Primary data is that which is collected fresh and thus happen to be original in character.Explanation Step 1. Among the above mentioned types descriptive research desi gn has been chosen. To decide the objective of the study to be carried out. y Explanatory Research y Descriptive Research y Casual Research. What is research design? Research design is a plan.

post office agents etc. To design data collection. Reasons for selecting primary data In terms of primary data structure questionnaire was prepared to interview the professionals. investment consultants. As far as the data collection method for this project is concerned. designing the data collection forms or survey form is applicable to the project. This method was chosen because . There are two types of mode to collect the data. Also the secondary data proved to be helping in framing up the industry scenario and also the relevant topics in the entire project report. Analysis clearly reflected the views and preference regarding the perception of the people towards joining life insurance companies. house wives. The method selected was survey method. in Thane. A survey can be conducted byy Personal interview y Telephonic interview Amongst the above methods personal interview method was selected and conducted to gather information to detail. Step 4. y Observation method y Survey method.Secondary data Secondary data is any data which have been gathered earlier for some other purpose. Among the above mentioned types. students. Vasai and Ratnagiri location. primary data was used for the study and analysis of the objective of this project.

1) When you think of insurance which company name comes first to Your mind? Ans : Q.2) Which other companies are you aware of ? Ans : Q.4) Do you know about the working of an agent of any life insurance company ? Ans : (a) Yes (b) No (c) Insufficient Information. Q.3) Do you know about life insurance companies? Ans : (a) Yes (b) No Q.e. Formulation of Questionnaire Q. colleagues if any «««.) (Mention in appropriate numbers.along with the study of project¶s primary objective i. study of people was achieved. etc. family.5) Do you currently have an agency of any life insurance Company? Ans : (a) Yes (b) No Q.6) What would be the size of your social contact base who know you by your name? (E.g. : Friend.) Ans : Q. relative.7) How many members of your family are dependent on the income earner of the family? .

8) Do you have an idea about financial market? Ans : (a) Yes (b) No Q.9) Do you have any sales experience? If yes. unemployed students. investment consultants. post office agents. sample size sample size specification- 200 respondents which include professionals. of how many years? Ans : (a) Yes ( ) (b) No ( ) card.10) Do you have experience in selling financial product? E. of how many years? Ans : (a) Yes (b) No Q.g. credit insurance etc? If yes. house wives.11) What do you think? In today¶s scenario life insurance is NEED. .Q. WANT AND DEMAND? Ans : Q. Q.12) In which of the financial market you have invested your money? Ans : (a) Share (b) Mutual Fund (c) Insurance Q.13) Are you interested in getting the opportunity of ear ning some additional income as being Agent of any life insurance company? Why? Ans : (a) Yes (b) No Setp 5 : To determine sample design.

50 respondents at vasai (semi ± urban area) and 50 respondents at Ratnagiri (rural area) in order to compar e the difference in these areas.The distribution of this sample size was decided to be as 100 respondents at Thane (Urban area). .

Field Methodology The methodology adopted in the field to collect the data represented diagrammatically below. Segmentation of people Filling up questionnaire Meeting with people .

Data collection And Tabulation .

DATA COLLECTION AND TABULATION In order to determine the willingness of respondents to become an Agent. the data was collected from Thane. investment consultants and post office agents etc. students. Vasai and Ratnagiri regions. Are you interested in getting the opportunity of earring some additional income as being Agent FC/AA of any life insurance company. Q. Financial Consultant or Agent Advisor for LIC. This data was treated for Analysis and interpretation. OCCUPATIONAL CLASSIFICATION Response Respondents Yes No Professionals Working employees House wives Students Post office agents Investment consultants Total 9 12 42 37 11 14 125 5 12 24 21 4 6 75 . house wives. HDFC Standard Life or Max New York Life Insurance Company. All the respondents were classified under parameters like professionals.

Total Respondentes 37. 35.5% at respondents some respondents were already agents of one or the other life insurance company.Yes 64.50% Yes 62.50% N From the above pie-chart one can say that about 62.5% of respondents are willing to become agent at a life insurance company from remaining 37.72% Index .28% .No Professionals   .

44% . Professors of which 64.No Working Employees. ¡ N . Doctors.A.72% were not interested in becoming an agent of any life insurance company. mainly because their base of personal contact is good.28% These respondents included C.Profe ional 35.72% Yes 64..Yes 44.28% were willing to become an agent. Index 55.55% . Amongst these respondents 35.

44% i. Only 44.No ¢ .36% Index .Working Em loyee 44. 36.Yes 63.e. One can say this from their response shown in the pie-chart.56% N Working employees lack desire to become an agent.63% . 12 respondent out of 27 working employees were willing to become an agent of a life insurance company whereas 15 respondents were not interested in such job.44% Yes 55.

Index 36.36% at house wives had very less information about the whole insurance sector.20% .No Student¶s ¥ N ¤£ .79% .63% The awareness amongst students regarding a working at an agent was very impressive 63.37% Y 64.36.63% at total house wives are willing to earn some money of their own by becoming an agent of a life insurance company remaining 36.Yes 63.79% House wives 63.

79% of student respondents showed their willingness.Yes 73.No Post offi e agents § ¦ N .66% Index .20% at students were not interest to become an agent of any insurance company. 0% Yes 63.Students 36. To become an agents of a life insurance company but 36.33% . 26.80% The awareness amongst students about a working of an agent is very good. 69.

No Investment consultants ¨ N .Post office agents 26.33% to become an agents was shown by post office agents from these percent of willing respondents about 60% referred to become an agent of LIC.33% The highest response of 73.67% Yes 73. 30% Index .Yes 70% .

Investment Consultant 70 14 of 20 investment consultants wanted to become an agent and thinks it as a complementary career to their regular Remaining 30% of respondents were investment consultancy only and didn¶t prefer to become an agent of a life insurance company.  ©  Yes 30 .

 N .No Male male 28.Yes 71.42% Index .57% of male respondents were ready to become an agent of a life insurance company and only 28.Demographical classification Response Respondents Male Female Total Yes No Total 68 57 125 27 48 75 95 105 200 28.58% 71.42% of male respondents were not interested in the proposal.57% .42% Yes 71.

Those women who were willing to become an agents majority of women were house.Index 45.28% No The percentage of willing and unwilling female respondents was almost equal.28% .71% . House wives have ample at time to spend for such jobs.72% Yes 54.No Female 45. This is mainly because working have very less time to spend on jobs like insurance agents. .Yes 54.

No Thane Thane 0% 70%   Yes N .Geographical Classification Response Respondents Thane (50 respondents) Vasai (100 respondents) Ratnagiri (50 respondents) Yes No 35 67 23 15 33 27 30% Index .Yes 70% .

Out of 50 respondents at Thane city 70% i.e.  N . 35 respondents showed the willingness to become an agent at a life insurance company and is respondents were not interested in becoming an agent of a life insurance company. 33% Index . becoming an agent of a life insurance company is the most preferred one we can say this because out o f100 respondents of vasai Taluka 67 respondents were willing to become an agent of a life insurance company.Yes 67% .No Vasai Vasai 33% Yes 67% Even though there are various options available for earning money in urban and semi-urban areas.

Majority of respondents have never even heard about any other life insurance company apart from LIC and most of the respondents were not eligible as prescribed by IRDA   Y .Yes .No Ratnagiri Ratnagiri 46% 54% N People in Ratnagiri are less aware about the working of a life insurance agent.Index 54% 46% . Only 46%respondents at Ratnagiri district showed their willingness to become an agent.

Findings .

Educated respondents prefer HDFC Standard Life insurance company because the recruitment process of HDFC Standard Life is less complex than MNYL insurance and has better image as FC rather than being an Agent of LIC.FINDINGS 1. Tax planner etc wanted agency rather than to be an agent of an insurance company. Working women are less interested because at home and office. 6. Those respondents who didn¶t want to become an insurance agent. new insurance companies are facing trouble i n capturing market share. due to the attractive packages and services provided by various new insurance companies. Instead of commission based job. Educated respondents are now vending towards private insurance companies. mainly because it is on commission based remuneration activity. Respondents are less aware of the private insurance companies that exist in the market. 4. 3. Some respondents ware willing to become an agent of life insurance company. 2. Some professionals like CA. 5. 7. LIC has created a brand in 3-4 decades. respondents preferred a salary based job. . 8. MNYL is too selective in recruiting AA than to appoint any one like LIC. 9. due to which. just because it is a part time job.

House wives. especially well educated house wives are able to give enough time and therefore they are willing to become an insurance agent. .10.

Conclusions .

Insurance companies are trying to convince customers for a product which does not have any present relevance i. analysis and interpretation was made. . Due to which most of the people like to invest in those securities or inve stments. 3. but they need lot of time investment for creating a favorable brand image. The private players are on their way. Those conclusions are: 1. Respondents still prefer government insurance company rather than private insurance company due to its reliability. 4. which the customer is going to purchase.CONCLUSIONS After collection of data. on which conclusions are drawn. will have a future set of action and benefits. Rural respondents of Ratnagiri are less aware of private insurance companies and working of their agents than respondents of Thane and Vasai. which will give them a fruitful return within short period. 2. each policy. Respondents are more brand oriented rather than product oriented.e. Respondents are less aware about private insurance companies.

Suggestions .

Insurance companies should make clear all the details of job of an agent before recruiting them. 5. so as to design a viable agent retention strategy of the company. People should be made aware of the brand name of insurance company through advertisement. using aggressive methods of marketing. .SUGGESTIONS 1. Traditional method may include variou s cultural programmes like µHarikatha¶ or µPuppetry shows¶ etc. 2. µMelas¶. 4. Private companies should use traditional ways of promotion in rural locations. Latest communication facilities are lacking in some parts of Ratnagiri district. Private companies should try to nurture their brand name by providing timely and attractive facilities to the people. 3. 7. which are also called as µJatra¶ in the Maharashtra state can be used for creating awareness of life insurance companies among rural people. The fear in peoples¶ mind should be remove d by company. Agents¶ feedback must be studied scientifically and continuously as their wants and needs change continuously. 6.

Appendix .

6. .Max New York Life HDFC ± Housing Development Financial Corporation SL ± Standard Life. 8. FCS ± Fundamental career Seminar 11. SDM ± Sales Development Manager LIC FCs ± AAs ± Life Insurance Corporation of India Financial Consultants Agent Advisors MNYL . FPS ± Five Point System NAT ± Numbering Ability Test 10. 3.Appendix Abbreviations 1. 2. 4. 7. 9. IRDA ± Insurance Regulatory and Development Authority. 5.

irda.hdfcltd.mnyl.com www. 2.lic. Webliography 1. 2.com www. ± Human Resource Management ± By Kale and Ahmad. 4. www.com www.com . IC 33. 3.Bibliography 1.

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