I, Santosh Kumar Verma hereby declare that the Summer Training Report entitled “Peoples Perception and Awareness concerning “PENSION PLANS” in NEW DELHI submitted in partial fulfillment of the requirement for the Two Year Post Graduate Diploma in management (IRM) is collected by my own effort and it is true and real up to my knowledge is concerned.
Now days in this dynamic era Insurance is coming as an important tool for reducing the effect of uncertainty and risks. It becomes an integral part and indispensable part of human life. There are various types of Insurance Plans to provide protection from loss and uncertainties. The Pension Plans is an important one of them. So is a great opportunity for me to study on “Peoples Perception and awareness concerning “Pension Plans” in New Delhi. The purpose of this research is to know awareness and importance among peoples regarding “Pension Plans” in New Delhi.
Santosh Kumar Verma PGDM (IRM) 01/16 SMS
As a project trainee in SBI Life Life Insurance Co. I have been assigned the job of recruiting financial advisor. So I have undergone a short-term training by the company and about the recruitment process and the various products of the company. Recruitment refers to the various segment of the society. So I went to the market and searched people from different profile to recruit them as Life Advisor in SBI Life Life Insurance Co. As per the company philosophy and values a Life Advisor must posses the following three vital things- Time, Attitude and Confidence. Now what is more important to now be who is a financial advisor, how important is he to a company, what recruitment is and what are the sources of recruiting financial advisor. The life, pension and investment industry has undergone dramatic changes over the past decade. Longer life expectancy and the desire to retire before state pension age have increased public awareness of financial services markets. These changes have created a marketplace where customers are more discerning and regulatory requirements more stringent. The emphasis is switching away from 'selling' towards providing quality advice. This is partly due to an increased percentage of individuals sitting industry-recognized exams such as the Certificate in Financial Planning (formerly the FPC).
Research Report is a combined effort including this one also, so I would like to thank to all who have helped me completion of this report purposeful. I am cardinally grateful to Pro. Mukund Lal Sir, Director General of SMS for providing me this opportunity to bring up my talent. I also want to thank to Mr. Amit Sharma, Unit Manager in SBI LIFE Insurance Co.Ltd. (Sales Dept.), Mr.Satyendra Pratap Singh my mentor and Mr. Alok Kumar, coordinator PGDM (IRM) assisting me in completion of this survey. Further I would like to thanks to all of my Teachers, Staff Members, Library Members, and Friends for their valuable support and advices which helps me a lot to completing this survey purposeful. From:
TABLE OF CONTENTS
1. Company Profile * Introduction * Location * Organizational structure * Management style turnover * Product and market competitors * Strategies * Various product lines * Financial analysis * SWOT. 2. Indian Scenario 3. Research Objective 4. Research Methodology 5. Analysis and findings 6. Conclusion Suggestion 8. Limitation Bibliography Annexure
7. 9. 10.
INTRODUCTION History of Insurance: at a glance
Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 19051907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost.
Some of the important milestones in the life insurance business in India are:
1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.
Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies’ viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the
Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.
Indian Insurance industry:
Indian Insurance comprised mainly two Players. 1. Life Insurer: the important are. Life Insurance Corporation of India (LIC) HDFC Standard Life Insurance Company Ltd. Max New York Life Insurance Co. Ltd. ICICI Prudential Life Insurance Company Ltd. Kotak Mahindra Old Mutual Life Insurance Limited Birla Sun Life Insurance Company Ltd. Tata AIG Life Insurance Company Ltd. SBI Life Insurance Company Limited ING Vysya Life Insurance Company Private Limited Bajaj Allianz Life Insurance Company Limited Metlife India Insurance Company Pvt. Ltd. Sahara India Insurance Company Ltd. Aviva Life Insurance Co. India Pvt. Ltd.
2. General Insurer
General Insurance Corporation of India (GIC) GIC has four subsidiary companies namely: • The Oriental Insurance Company Limited. • The New India Assurance Company Limited. • National Insurance Company Limited. • United India Insurance Company Limited. Royal Sundaram Alliance Insurance Company Limited Reliance General Insurance Company Limited. IFFCO Tokio General Insurance Co. Ltd TATA AIG General Insurance Company Ltd. Bajaj Allianz General Insurance Company Limited ICICI Lombard General Insurance Company Limited. Cholamandalam General Insurance Company Ltd. Export Credit Guarantee Corporation Ltd. HDFC-Chubb General Insurance Co. Ltd.
SBI LIFE – a joint venture between
SBI Life Insurance is a joint venture between the State Bank of India and Cardiff SA of France. SBI Life Insurance is registered with an authorized capital of Rs 1000 core and a paid up capital of Rs 350 carore. SBI owns 74% of the total capital and Cardiff the remaining 26%. State Bank of India enjoys the largest banking franchise in India. Along with its 7 Associate Banks, SBI Group has the unrivalled strength of over 14,000 branches across the country, the largest in the world. Cardif is a wholly owned subsidiary of BNP Paribas, which is The Euro Zone’s leading Bank. BNP is one of the oldest foreign banks with a presence in India dating back to 1860. It has 9 branches in the metros and other major towns in the country. Cardif is a vibrant insurance company specializing in personal lines such as long-term savings, protection products and creditor insurance. Cardif has also been a pioneer in the art of selling insurance products through commercial banks in France and 29 more countries. SBI Life Insurance’s mission is to emerge as the leading company offering a comprehensive range of Life Insurance and pension products at competitive prices, ensuring high standards of customer service and world class operating efficiency. The company plans to make the insurance buying process quick, simple and based on well-informed judgment. In 2004, SBI Life Insurance became the first company amongst private insurance players to cover 30 lacks lives. The company expects to carve a niche in the Indian insurance market through extensive product innovation and aims to provide the highest standards of customer service through a technological interface. To facilitate this, call centers have been already installed and help lines will be installed and customers will have access to their accounts through the Internet or through SBI branches. The company proposes to make available ready liquidity to its Life Insurance policies by way of loans at SBI counters. This will make Life Insurance a liquid asset in the financial portfolio of households.
SBI Life Insurance is uniquely placed as a pioneer to usher bank assurance into India. The company hopes to extensively utilize the SBI Group as a platform for cross-selling insurance products along with its numerous banking product packages such as housing loans, personal loans and credit cards. SBI’s access to over 100 million accounts provides a vibrant base to build insurance selling across every region and economic strata in the country. SBI Life has a unique multi-distribution model encompassing Bancassurance, Agency and Group Corporate. SBI Life extensively leverages the SBI Group as a platform for cross-selling insurance products along with its numerous banking product packages such as housing loans and personal loans. SBI’s access to over 100 million accounts across the country provides a vibrant base for insurance penetration across every region and economic strata in the country ensuring true financial inclusion. Agency Channel, comprising of the most productive force of more than 20,000 Insurance Advisors, offers door to door insurance solutions to customers.
Why SBI Life: 5 reasons to select SBI Life as your preferred insurance company.
Customer Satisfaction - many of our customers who have bought an insurance policy with us have bought a second one! Financially sound with over a 100 years of banking experience, when you trusted us with your money, why would you trust somebody else with your protection needs. Affordability Easy to buy (accessibility) Trust & reliability. With us you’re sure!
Achievements of SBI Life insurance corporation ltd.
SBI LIFE AIMS TO TRIPLE ITS GROWTH WITH PROFITS IN FY 07–08 April 30, 2007 Records Impressive Performance in FY 06 -07: Grows New Business Premium by 210% Continues Profitable Operations Leads Private Life Insurance Companies in Lives Covered: 64.9 Lacks Lives.
SBI Life set to establish dominance in Pension market by leveraging its extensive distribution network and a strong Product Portfolio
February 15, 2007 In line with its overall goal of emerging as a dominant player in the Indian Pension Market, SBI Life has strengthened its pension product portfolio further. As a key initiative in this direction, SBI Life today announced the launch of Unit Plus II Pension product.
SBI Life set to maintain its leadership in Group Lives coverage
January 03, 2007 Enhances capital base by infusing Rs. 75 crore to support growth plans, unveils Horizon II Pension Plan, becomes the fastest growing life insurance company by clocking new premium growth of 264% (YTD).
Big Bucks: Inv. Guide - Securing tomorrow
The Economic Times October 30, 2006 Unit-Linked insurance plans (Ulips) are the most talked-about products in the insurance industry these days. The buoyancy in the stock market has generated a lot of interest in equities and related products. Investors not interested in equities could either take a look at debt-based Ulips or traditional insurance Products like endowment plans. ET Investor's Guide looks at an endowment policy, the SBI Life Insurance - Sudarshan. (Rutu Chhabria)
Interview of the Week - S Krishnamurthy: ‘The need for retirement planning assumes great importance’
The Financial Express - FE Investor October 29, 2006 The life insurance sector is buzzing in India, more players are entering and existing players are trying to consolidate their stand in the highly competitive market. S Krishnamurthy, CEO and MD, SBI Life Insurance Company spoke with Nikhil Walavalkar of The Financial Express on the emerging trends in the business and SBI Life's strategies. Excerpts:
Premium-guaranteed plan will bleed you
DNA Money October 28, 2006 It makes more sense to go for a term plan with no survival benefit MUMBAI: God and devil, they say, is in the detail. And Shalin Saxena was just finding that out. A little bit of research had told him that premium-guaranteed term insurance plans just did not make sense. (Vivek Kaul)
Big Bucks: Inv. Guide - In a league of its own
The Economic Times October 16, 2006 Horizon II is the latest unit-linked insurance plan (ULIP) offered by SBI Life. It has a distinct feature of automatic asset allocation, under which, as the policy approaches maturity, the amount invested in equities is gradually reduced and put into money market and bond funds; thereby reducing portfolio risk with the passage of time. (Aniruddha Ghosh)
SBI Life on Expansion Spree
The Hindu Business Line September 7, 2006 SBI Life Insurance is on an expansion blaze in Tamil Nadu. Its Agency Channel has plans to strengthen its operations in Nagercoil, Salem, Erode, Vellore and Pondicherry aimed at making deeper inroads to harness the potential in the State, according to Sr. Vice-President- Retail and Corporate Agency, Mr. Rajiv Gupta. He said a target of over Rs 1,000 crore of total premiums has been set for FY 06-07 and Tamil Nadu, which already had five branches, is expected to contribute over 20 per cent to the total business during this year.
Mission codename to help SBI Life on bank assurance Code-named projects in SBI branches the strategy
DNA - Daily News and Analysis September 23, 2006 As the mad rush of life insurance companies to garner handsome premiums through bancassurance continue, SBI Life seems to be leveraging heavily on State Bank of India (SBI) and its associate banks. Almost 85% of the new bancassurance business of SBI Life comes from the SBI Group.
Bancassurance Model Pays Off For SBI Life
Hindu Business Line August 7, 2006 To hike its capital base by Rs 100 crore in H2 As the MD and CEO of SBI Life — the first private life insurance company to break even since privatization — Mr. S. Krishnamurthy has proved his detractors wrong about the viability of the bancassurance model. Bancassurance has been cost-effective and helped the company make profits for the first time.
SBI Life to Open more branches In Eastern Region
Hindu Business Line August 9, 2006 SBI Life Insurance, a subsidiary of State Bank of India, has set a target of achieving a business premium of Rs 2,500 crore in this fiscal by launching innovative products, opening more number of branches and increasing its sales force, the company's Managing Director, Mr. S. Krishnamurthy, said here on Tuesday.
Money & Banking - SBI Life to line up new products
The Financial Express August 9, 2006 SBI Life is expanding its business and network with an aim to become the top life insurance company among the private players in next two years. The company is now ranked fourth amongst its private peers in terms of business premium income.
SBI Life Insurance for aggressive expansion
Pioneer August 10, 2006 State Bank of India, the largest public sector bank of India, is all set to become the largest life insurance company as well. Opened just four years ago SBI Life Insurance is now the country's third largest life insurance company in terms of premium, mobilizing Rs 29.74 crore in the fiscal year 2005-06 and first in terms of lives covered, covering more than 1.13 lakh lives. In total more than 3.71 lives have been covered in the State with premium collections of more than Rs 110 crore.
(Diptiman Chakraborty) Bhubaneswar
Markets - Protection but no money back
The Financial Express August 13, 2006 Uncertainties in life have increased by manifold and so has the demand for an insurance cover. However, the choice for an insurance plan depends on different requirements of an individual.
Personal Finance Corner - Endowment plans or ULIPs?
The Financial Express August 20, 2006 When it comes to insurance as an investment tool 'Young India' likes to go in for unit linked insurance plans (ULIPs) over traditional endowment plans. Why? The reason is simple. For riding on the strong markets performance over the last three years, ULIPs have given better returns over endowment plans.
(Teena Jain) SBI's network is a huge plus'
Business Standard 25 August, 2006 Falaknaaz Syed SBI Life Insurance Company is the first among the 14 life insurance companies in the private sector to post a net profit in 2005-06. In a free-wheeling interview with Falaknaaz Syed, the five-year old company's Managing Director and CEO S Krishnamurthy spoke on its future plans. Excerpts: There are life insurance players much more aggressive than you and they have still not been able to break even.... Our success is largely on our channel strategy and product strategy.
SBI Life to Increase branch Network
Hindu Business Line July 9, 2006 SBI Life Insurance plans to expand its presence in the country by increasing its branch network from 61 to 150 by the end of the current year. With this, the company will have a presence in 113 cities up from 53 where it is present today.
SBI Life to foray into pensions ULIPs
Deccan Chronicle July 11, 2006 Hyderabad, July 10: SBI Life Insurance Company Limited, a joint venture by State Bank of India and Cardif SA of France, will be increasing its focus on the pensions and corporate insurance segments, launching unit-linked plans for pensioners and for employees of the corporate sector, Mr. S. Krishnamurthy, managing director and chief executive officer of the company, said on Monday.
SBI Life to focus on pensions, insurance
Asian Age July 11, 2006 Hyderabad, July 10: SBI Life Insurance Company Limited, a joint venture by State Bank of India and Cardif SA of France, will be increasing its focus on the pensions and corporate insurance segments, launching unit-linked plans for
SBI Life tops private insurance list
Oct 26, 2004 Private sector insurance company, SBI Life Insurance has emerged the single largest group policy seller among private players by capturing as much as 10 per cent of the total market till August 2004. In the last five months the company has doubled its stake, which managed a five per cent, share till April 2004. Life Insurance Corporation has seen its share in the segment decline to 70 per cent from 72 per cent in the same period. The SBI joint venture sold 2.65 lakh lives under its group single and non-single policies of which around two lakh were single and 65,000 from non-single policies. The company's total premium till August, 2004, towards individual single and non-single policies stood at Rs 1,185 crore and Rs 4,389 crore respectively accounting for 2.73 lakh and 73.85 lakh policies. Group single and non-single premium accounted for Rs 1,399 crore and Rs 128 crore of premium collection. Total Individual premium and group premium was Rs 5,572 crore and Rs 1,527 crore respectively against Rs 3,54,6 crore and Rs 788 crore in previous period.
Number of lives covered by the industry under the various group schemes was 25.85 lakh during the period ended August 2004. Tata AIG with 1.29 lakh lives accounted for 5.02 per cent while MetLife with 84,501 lives accounted for 3.27 per cent. LIC's Premium under Varisth Pension Bima Yojana during the period ended April - July 2004 was Rs 1,072 crore towards 54,740 policies. The life insurance industry as a whole underwrote new business premium of Rs 1,580 crore during August 2004, taking the cumulative premium underwritten during the current year to Rs 7,101 crore. LIC underwrote Rs 5,84,4 crore of premiums up to August 2004, which translated into an 82.30 per cent market share, followed by ICICI Prudential and Birla Sunlife with market share 5.63 per cent and 2.56 per cent respectively. Nominee SBI Life: Closer to the customer SBI Life implemented a system to conduct transactions over the Internet and make relevant information accessible to employees, business partners and customers while driving profits at the same time "Unlike many industry players, at SBI Life, the core system across all lines of business enables us to track the complete relationship with each customer"
"Unlike many industry players, at SBI Life, the core system across all lines of business enables us to track the complete relationship with each customer" Murali G Senior VP & IT Head SBI Life Insurance
SBI Life Insurance is a joint venture between the State Bank of India and Cardif SA of France. To start with, the company wanted to have a multi-distribution approach and get sales through the banks, the traditional agency force, and a Bancassurance distribution platform. SBI Life was also planning to equip the bank branches to sell insurance and increase IT usage. Says G Murali, Senior VP & IT Head, SBI Life, “Leveraging the strategic role of technology is core to the operations of every life insurer from lead generation to policy servicing to claims handling. The key IT drivers for a life insurance company are new product developments, new
distribution channels, new regulatory requirements and typical issues ranging from sales tracking to customer services.” Cross-selling is a viable option, but reaching the customer cost-effectively is more important. Companies need to create synergies through shared databases, and selectively mine the customer databases and a very strong 24x7 technology backbone. Life insurance companies also need to manage the cost and complexity of multiple channels while switching the least profitable clients to automatic channels for low-value-added transactions. SBI Life approaches corporate and self-help groups to address the insurance cover needs of these specific groups through its highly customer-focused group insurance initiatives. The requirement is to infuse insight into the sales and service divisions, and transform data into leads. Moreover, consumers are developing and becoming more demanding, and SBI Life intends to be available wherever and whenever the customer needs it. SBI Life wanted a single IT architecture enabling multiple portals enterprise-wide. The objective was to allow for single sign-on for all applications and secure authorization based on a unified user profile. SBI Life required personalized experience for leveraging the rules engine and entitlements, and secure access to content, applications and Web services. Today, they transact over the Internet and make relevant information easily accessible to employees, business partners and customers, while driving profits in the process. SBI Life used an inside-out approach of implementation.
They have a common enterprise-wide application interface, and their basic business transactions are on the browser, leading to lesser training and overall cost. “Unlike many of the newer industry players who have different systems for each line of business, at SBI Life the core is a system across all lines of business which enables us to track the complete relationship with each customer,” says Murali.
Implementation in a nutshell Company SBI Life Insurance Project completed August 2004 Aim of the implementation of an IT system in SBI Life that takes into account cross-selling, and improves the relationship with the customer.
• An infrastructure that can support broad information integration for the enterprise portal, relational databases, business intelligence, and enterprise content management applications • Unified portal creation and administration across the enterprise. • A Web services-based service oriented architecture that delivers Web services and the ability to unlock existing assets as re-usable Web services. • Projects that were previously shelved due to high integration costs can now come off the shelf and show immediate ROI Products and technologies used. • Onlinesbilife.com is implemented on BEA Weblogic Platform 8.1 with Oracle 9.1 as a backend. • Tuxedo acts as a middleware to integrate the Web-based application with the Indigo engine. • The core insurance engine is Indigo; the entire business logic from processing the proposal to policy issuance and policy servicing resides in Indigo. • Behavior tracking of user, group and profile management based on LDAP, RDBMS, legacy or a combination • Rules management for segmentation, content selection and entitlement at the Port let or page level. • Web flow and pipeline MVC architecture. • Support for CSS-based skins and multi-channel portals. • Broadband Internet connectivity to a central server from all over the country. • Security is addressed with Nortel/Alteon switch and Checkpoint network Security software. • Strategy, architecture, design and implementation was done by SBI Life's IT team. • E-business infrastructure software was undertaken by BEA Systems. • Software design and development was done by Satyam. • Security was handled by Nortel and Check Point.
The project was initiated in April 2004, and the initial roll-out was completed by August 2004. After the initial roll-out, when it was a centralized business structure (with 20 branches), the portal is continuously being customized, adapted and upgraded to support the business transition and adopt fast decentralization of operational processes including automated underwriting for all non-medical proposals done at over 70 branches. SBI Life has implemented an Internet-centric IT system with browser-based front-office and back-office systems, channel management, policy product details, online premium calculator and facility for group insurance customers to view their individual savings status on the Web. The organization has the facility to pay premiums through credit cards, Net banking, standing instructions, etc. This is fully integrated with the core systems through industry standards such as XML, EDI, etc. The project links the portal’s users to the enterprise’s digital assets, and gives users a single, personalized point of access to multiple types of information from any device, wired or wireless. Comments Murali, “Continuous and consistent training, and timely distribution of updated content form the corner-stone of any insurance firm. All this implies pulling together information in many different formats from many different databases and applications, which means the effective use of a portal.”
This project has helped SBI Life in tapping new markets, reducing IT maintenance costs, simplifying channel management, and enhancing customer experience. Operationally, it has tightly integrated applications, bringing together enterprise applications, digitized content, Web sites, e-mail, workflow integration and extensive search capabilities, besides reducing cost and time-to-market. SBI Life is pleased with this IT initiative, and is planning to open services to partners from its portal. It is also moving to rolling out departmental business portals addressing its specific needs, integration with mobility devices using WAP, SMS etc., integration with new Open Source tools, and provisioning to allow compliance with new regulatory requirements such as ACCORD.
Concludes Murali, “In technology they are planning to have service level agreement monitoring and management, end-to-end auditing, policy-based management, and distributed fault management and alerting.”
SBI LOCATION OF OFFICES:
SBI has a huge network of offices for providing service related to Insurance all over the country.
Registered office: State Bank Bhavan, Madam Cama Road, Nariman Point Mumbai -400021 Corporate Office: Turner Morrison Bldg, GN Vaidya Marg Fort, Mumbai- 400023
Summer training office location
SBI LIFE INSURANCE CO LTD. Krishna Apra Business Square, D 5th Floor Neta Ji Subhash Place Pitampura New Delhi 110034
C o m m er c
OGANISTIONAL STRUCYURE OF AGENCY CHANNEL
M D & CEO U. S. ROY
COUNTRY HEAD RAJEEV GUPTA
R. S. M.
A. S. M. S. BATTCHARY
D. S. M. ATUL SHARMA
B. S. M. ATUL SHRMA
A. B. S. M.
U. M. AMIT SHRMA
A. M. Agency manager
T. M. Territory manger
D.S.M. (Mr. ATUL SHRMA) 3 branch control. B.S.M. (ATUL SHRMA) Own branch reining A.B.S.M. (ATUL SHRMA) 8 managers team +own team of advisors team
FINANCE & ACCOUNTS
POLICY SERVICING ISSUE & PROBLEM SOLVING
Distribution channels of SBI Life Insurance
Insurance agents are those individual persons who work for one particular insurance company. An insurance agent cannot work for more than one particular at one point of time.
Targeting Corporate for Gratuity and Group Pension products.
Agency channel have the most productive and active force of more than 25,000 Advisor. Our approach is to provide door-to-door need-based insurance solution to customers after taking into account protection and wealth creation needs. Agency channel has grown more than 300% over the last year and contributed more than 45% to the company’s new business premium collection.
SBI LIFE AIMS TO TRIPLE ITS GROWTH WITH PROFITS IN FY 07–08
April 30, 2007 Records Impressive Performance in FY 06 -07: Grows New Business Premium by 210% Continues Profitable Operations Leads Private Life Insurance Companies in Lives Covered: 64.9 Lacs lives. Mumbai, April 30, 2007: SBI Life Insurance Company Limited, which enjoys the Unique distinction of being the first private sector life insurance company in India to make profit, today announced an impressive 210% growth of new business premium and 88% jump its Net Profit for FY 06-07. Highlights: FY 2006 -07: New Business Premium: Rs.2,5666.08 corers (210%) Net Profit No of life in Portfolio Total Premium : Rs.3.83 corers (88%) : 6,497,884(55%) : Rs.2,928.49 crores (172%)
The total premium increased to Rs. 2928.49 crores, up 172% from the corresponding premium of Rs. 1075.32 crores last year. Bancassurance made remarkable growth of 106% and contributed to over 39% of the total premium of the company.
Group corporate with a whopping growth of 262%, contributed to 17% of the total premium.
SBI life ranks 3rd in term of first year premium collection and
enjoys market share of 12% among private sector life insurance companies.(IRDA data for period April 06-feb.2007)
PRODUCT & MARKET
Types of Products
Keyman Sudarshan Edu Shield Money Back Scholor II Shield Sanjeevan Setubandhan Swadhan Specialized Term Insurance Swarnaganga Super Suraksha Group Gratuity Paln Life long Pension Group Term Insurance
Types of Products
Keyman Sudarshan Edu Shield Money Back Scholor II Shield Sanjeevan Setubandhan Swadhan Specialized Term Insurance Swarnaganga Super Suraksha Group Gratuity Paln Life long Pension Group Term Insurance
SBI Life Insurance
Rajendra K Halemane Senior Agency Manager, SBI LIFE INSURANCE CO.LTD. SBI LIFE INSURANCE CO.LTD. confidential confidential http://toostep.com/profile/rajendra-k-... MANGALORE, India SBI Life Insurance Company Limited is a joint venture between the State Bank of India and BNP Paribas Assurance. SBI Life Insurance is registered with an authorized capital of Rs 2000 crores and a Paid-up capital of Rs 1000 Crores. SBI owns 74% of the total capital and BNP Paribas Assurance the remaining 26%. State Bank of India enjoys the largest banking franchise in India. Along with its 7 Associate Banks, SBI Group has the unrivalled strength of over 14,500 branches across the country, arguably the largest in the world. BNP Paribas Assurance is the life and property & casualty insurance unit of BNP Paribas - Euro Zone’s leading Bank. BNP Paribas, part of the world’s top 6 group of banks by market value and a European leader in global banking and financial services, is one of the oldest foreign banks with a presence in India dating back to 1860. BNP Paribas Assurance is the fourth largest life insurance company in France, and a worldwide leader in Creditor insurance products offering protection to over 50 million clients. BNP Paribas Assurance
operates in 41 countries mainly through the banc assurance and partnership model. SBI Life has a unique multi-distribution model encompassing Banc assurance, Agency and Group Corporate. SBI Life extensively leverages the SBI Group as a platform for cross-selling insurance products along with its numerous banking product packages such as housing loans and personal loans. SBI access to over 100 million accounts across the country provides a vibrant base for insurance penetration across every region and economic strata in the country ensuring true financial inclusion. SBI Life extensively leverages the State Bank Group relationship as a platform for cross-selling insurance products along with its numerous banking product packages such as housing loans and personal loans. SBI Life Insurance has crafted its name by providing quality insurance services to its wide range of customers. Its ISO 9001:2000 certification speaks for its quality. SBI Life Insurance has also been assigned iAAA rating by the ICRA for its highest claims paying ability. In 2007, it became the first Indian life insurer to get AAA rating from CRISIL. In the next year, Outlook Money NDTV Profit adjudged it as the 'Best Life Insurer - 2008'. In 2009, SBI Life Insurance achieved the unique distinction to emerge as the global top in terms of Million Dollar Round Table (MDRT) members with 2,677 members. SBI Life Insurance became the first Life Insurer in India to make profits in the financial year 2005-06. It maintained the same record in the next year as well. In 2007-08, a survey by 'Brand Equity' rated SBI Life as 'he Most Trusted Private Life Insurer' In the same year, the company achieved CMMI Level 3 certification to become the first Indian insurer to have that. 2.1.1 Mission
“To emerge as the leading company offering a comprehensive range of life insurance and pension products at competitive prices, ensuring high standards of customer satisfaction and world class operating efficiency, and become a model life insurance company in India in the post liberalization period.” 2.1.2 Values • Trustworthiness • Ambition • Innovation • Dynamism • Excellence
What is a Life Adviser? A life adviser is a broker or intermediary authorized to sell or advise on the policies of life insurance and financial products, such as unit trusts. Typical examples of companies which employ financial advisers are banks, insurance and life companies, general brokers, estate agents and building societies. Life Advice is given in the following areas: Direct sales Tied sales Independent financial advice Banc assurance sales Advisers in direct and tied sales are only permitted to sell their own company's products, whereas independent financial advisers (IFAs) sell a variety of different products from different suppliers. The latter role is diverse as you are more likely to be exposed to a wider variety of people, situations and competitors. The ability to build effective relationships with clients and colleagues holds the key to success as do first-class communication and commercial awareness skills. A financial adviser fined their contacts through networking, cold calling, referrals, advertising and publicity, database marketing and through face-to-face contact. The role of Life Adviser usually revolves around targets. The sales aspect has taken a more advisory route. Legislation now stipulates that every quote produced must include a breakdown of how the client's money is to be spent. This includes the percentage allocated to the financial sales adviser.
Generally, there are three routes that the Life Adviser can take: he or she can work on a self-employed, commission-only or salary plus bonus basis. An IFA with five years' plus experience working in London and the South East could reasonably expect to earn as much as £55,000 per year. Professional qualifications The changes within the industry, and the rigid regulatory bodies that have clamped down on practices have meant that it is now longer as easy to get into the industry as it was previously. The Certificate in Financial Planning provides a broad-based grounding in the financial services market, covering regulatory aspects, products, fact-finds and giving advice. A typical career path for a young professional interested in a career in financial advice is to both start on the administration side and move into a trainee sales role. Once becoming a fully-fledged financial adviser in a specialized area such as direct sales, tied sales or banc assurance, and having completed two or three years as a professional, you may want to recommend all products. You would then become an IFA and your career path could take on a managerial position or you could go into partnership. The key messages emanating from industry professionals are as follows: Be flexible and open-minded Be prepared to put in the hours for exams The first few years are long and hard - you must persevere Maintain a sense of humor throughout After knowing about the Life Advisor let see what is recruitment and various sources of recruitment.
Recruitment is the process of attracting qualified applicants for a specific job. The process begins when applications are brought in and ends when the same is finished. The result is a pool of applicants, from where the appropriate candidate can be selected. Recruitment is the process of attracting prospective employees and stimulating them for applying job in organization recruitment is the process of hiring the right kinds of candidates on the right job.
The recruitment process flowchart that we have gone through in our project period
GETTING KNOWLEDGE ABOUT THE COMPANY AND RECRUITMENT PROCESS GETTING KNOWLEDGE ABOUT BENEFIT OF LIFE ADVISOR GETTING KNOWLEDGE ABOUT DOING THE SALES CALL SEGMENTING THE MARKET TARGETING THE MARKET PROCESS OF CAPCTURING ELEGABLE CANDIDATE FILLING OF I.S.F. FORM SHORTLISTING ON THE BASIC OF ‘Q’ SCORE CONDUCT AN INTERVIEW BOP PRESENTATION FILLING OF COMPULSORY IRDA /NAAF FORM THREE DAYS IRDA REFRESHER TRAINING CONDUCTION OF EXAMINATION TWO DAYS PRODUCT TRAINING
GETTING KNOWLEDGE ABOUT THE COMPANY AND RECRUITMENT PROCESS For any good start a proper knowledge of the subject is require same was the case here, on the very first day we were given the Basic idea about the company, following three day all the requisite knowledge were given which a fresher requires, thereafter we were clubbed in a team of five and a manager was assigned for each team our manager Mr. Sudhansu Shekhar Sundaray (Business Manager) a very knowledgeable persona and one of the senior member in SBI Life gave us the complete idea about how to approach a prospective candidate
PROCESS OF CAREER GROWTH OF LIFE ADVISOR As we were assigned to recruit life advisors, the very first thing that we required was knowledge about benefits and opportunity because to motivate a prospective candidate to become an Advisor, we need to convenience the Advisor about the opportunity and carrier growth in SBI Life. Benefit • Commission • Renewal Commission • Bonus • Quarterly gifts • ACER club membership facility
• MDRT • Promotion factor for an agent • Domestic and International Conventions Opportunity/ • Advisor require no capital investment • They can chose there own working hour according to there convenience. • They are there own boss. • Unlimited earning potential • Represent a strong trusted brand.
Commission: The commission is generated whenever an agent sells a life insurance to the customers. The percentage of the commission differs from the type of products the agent sells. The various commissions that is generated from different policy are as follows: • Wealth Confident • Future Confident • Save Confident • Aspire Life
24000 of 10% = 2400 12000 of 22% = 2640 7000 of 22% = 1540 18000 of 31% = 5580
• Spot Surakhya • Bright Star • Dream life Pension Plan
12000 of 24% = 2880 15000 of 30% = 4500 12000 of 7.5% = 900
Renewal Commission: Each and every time a policy gets renewed, the agent gets the renewal commission. It is less than that of the commission and differs from policy to policy which it sells to the customers. Bonus: - Some of the policy during its growth accumulates some bonus e.g. some of the money back plans. This gives extra benefits to the customers in terms of money and the agent in terms of bonus. An extra benefit which SBI Life gives to its agent. No other life insurance company gives this benefit to its advisors. Performance Linked Bonus(PLB)is counted quarterly. In the 1st quarter i.e in Jan, Feb and Mar, if the commission is generated Rs.20,000 then the agent is able to get 30% of it that is 6000 as the PLB. Similarly the agents get commission after each three month gap and an yearly bonus of 10% to 40% depending upon his performance. Quarterly Gift:-It is also an extra benefit that is given to the advisors based on the performance. This is a motivational factor for the advisor because these small things motivate the advisor to perform better and compete among other fellow advisors. The gift varies from melamine dining set to microwave, AC, laptop, mobile phone .etc. Acer club membership:-This is an extra facility which the company provides to its agent. In this facility the Company provides four different membership group i.e; BRONZE, SILVER, GOLD, PLATINUM On the basis of the performance the Agent is assigned to this group starting from Bronze, the day the Advisor manages to get in the elite group of ACER club he is insured with a Life coverage of 1 to 3 lakhs. It also provides medical facility to his wife in case of
delivery to an amount of 30,000 to 45,000, 45,000 in case of caesarian baby. Which gives a feeling of relief for the advisors working in SBI Life Life Insurance? MDRT:- The MDRT is a member-driven, international network of the world's best insurance and investment services professionals / advisors who deliver to their clients the highest standards of ethics, knowledge, service and productivity. With membership from 479 companies in 78 countries, MDRT represents the top 1% of financial professionals. AIG, Prudential, Mass Mutual, AXA, New York Life and Northwestern Mutual are just a few of the different companies represented. The MDRT promotes the 'Whole Person Concept' to help members have a balanced, meaningful and successful life through a focus on health, family, spirituality, education, financials, community service and career. Promotion factor for an agent:-The Advisor of SBI Life has a chance to be promoted to the post of AM (Agency Manager) called the Avenues or can be a part of the Agency Associates. The promotion factors are as follows:• Number of policies- The minimum number of policies an agent should do to be promoted is36. This acts as one of the promotional factor for an agent. • Tenure- Tenure is nothing but the time factor an agent is given to achieve his/her target. The different time factors an agent given by MNYL are 12months. • Adjusted AFYP- AFYP is otherwise known as Annual First Year Premium. It is calculated on the single premium and fixed deposits at the rate of 10%. The targeted adjusted AFYP for the promotion is 5 lakhs.
• Graduate- Another important factor for the promotion is that the agent’s minimum qualification should be graduation. Domestic and International Conventions:-A better performer is send to different international conventions to share there ideas and skills with the fellow member working in different countries. In the process the Agents gets an opportunity to tour around the world on company expense.
OPPORTUNITY Advisor requires no capital investment:- For starting any business we require a huge infrastructure but here in SBI Life the Advisors do not require any capital investment other than RS. 825 IRDA examination fees, which is very nominal and on return the Advisors get free phone calling facility, Xerox facility etc. They can choose there own working hour according to there convenience:Advisor are free to work in there convenient hours because the advisors working here comes from different profession like Doctor, Engineer, Student, Medical Representative, contractor etc. They are there own boss:- There is no boss to give you target rather you are your own boss and can work according to your pleasure and earning requirement. Unlimited earning potential:- As the payment is made on commission basis so there is no limit to earning. A person working hard can go to any limit with reward and recognition in extra.
FINANCIAL MANAGEMENT OF MONEY INPUT
Once we had the knowledge of benefits and opportunities of advisor in SBI Life life insurance we were given training as to how to go around in the market for making sales call .so were given a lot of idea by our manager Mr. Sudhansu Sekhar Sundaray .This idea includes market survey, door to door survey, putting around canopy in different prime location of Bhubaneswar. A market segment consists of a group of customers who share a similar set of needs and wants. The market does not create the segments; the marketer’s task is to identify the segments and decide which one to target. And for insurance company we segmented market into following different groups. • Geographical region:- we segmented Bhubaneswar into five segment i.e; East Bhubaneswar, West Bhubaneswar, North Bhubaneswar, South and Central Bhubaneswar. • Demographic age:- we segmented the entire population of Bhubaneswar into following three categories on the basis of demographic age i.e; 18 to 20 age group, 25 to 40 age groups and above 40. • Family life cycle:- we segmented the entire population of Bhubaneswar into following three categories on the basis of family life cycle i.e; Single, Married, Retired/VRS Optee. • Gender:- :- we segmented the entire population of Bhubaneswar into following two categories on the basis of two categories i.e; Male and Female
• Income:- :- we segmented the entire population of Bhubaneswar into following three categories on the basis income below 2 lakhs,2 to 5 lakhs, more than 5 lakhs. • Occupation:- :- we segmented the entire population of Bhubaneswar into following six categories on the basis of there occupation like Student, Government employee, Private Employee, House Wife, Self employed and Unemployed.
• Education:- :- we segmented the entire population of Bhubaneswar into
following three categories on the basis of there education which is 10th or 12th standard, Graduate, Post Graduate and above. • Social class:- :- we segmented the entire population of Bhubaneswar into following three categories on the basis of social status that is Lower class, Middle class and Upper class. Once the firm has identified its market-segment it looks for Targeting and for insurance company Targeting the most prospective candidate requires segmenting of market into :Needs based Segmentation:- This is the most preferred and positive target segment of insurance company because most positive result comes from this segment targeting, like • Extra income need • Job need • Carrier need
ROLE OF UNIT MANAGERS In fulfilling his obligations under the Agreement, Advisor shall scrupulously adhere to, follow and be bound by the Statutory provisions governing life insurance Advisors and more particularly the code of conduct contained therein, as in force from time to time. Without prejudice to the generalify of the obligations of the Advisor to SBI Life Life Insurance, the Advisor shall: a. Faithfully and diligently promote the business of SBI Life Life Insurace; b. Ensure that any representation made and information provided is accurate; c. Act diligently and carefully in providing any advice and ensure that such advice is based on thorough analysis and take into account available alternatives; d. Ensure that any advice is reasonable in view of the customer’s circumstances; e. Not admit any liability or make any false, misleading, deceptive or reckless statement to the customer in respect of life insurance generally or any particular product of SBI Life Life Insurance; f. Solicit proposals for insurance for SBI Life Life Insurance as SBI Life Life Insurance may from time to time determine during the term of this Agreement; g. Service the needs and requirements of customer introduced by self or assigned by SBI Life life Insurance; h. Meet the validation specified by SBI Life Life insurance including production and persistency;
i. Attend all training, meetings and seminars arranged or required by SBI Life Life Insurance and perform such other duties as requested by SBI Life Life Insurance; j. Begin soliciting proposals for various insurance products at dates set by SBI Life Life Insurance; k. Be fully responsible and accountable for all its acts and omissions; l. Obtain, maintain, renew and keep renewed the prescribed licences issued by the IRDA and any other licence, approval or permission required of it for fulfilling the obligations of an Advisor at all times during the term of this agreemet; m. At all times during te term of this Agreement, act within the scope of such licences, approvals and permissions and any applicable legislation ad in consonance with the corporate image and objectives of SBI Life Life Insurance. The Advisor shall promptly notify SBI Life Life Insurance of the loss of any suc licence, approval or permission by it or by its certified persons; n. Submit to SBI Life Life Insurance within the period of time specified by SBI Life Life Insurance in writing from time to time, all proposals and initial premiums, for products solicited by Adviosr and in any case within the time specified by 64VB(4) of the Insurance Act, 1938 or any other statutory provisions applicable thereto. The Advisor shall remit to SBI Life Life Insurance all monies collected in trust immediately and without any deduction whatsoever. o. Observe and be bound by the-
• Statutory provisions, SBI Life Life Insurance Instructions including Advisor manual, benefit illustration policy, cash acceptance policy, market conduct guidelines, prevention of money laundering policy, the compliance manual and the code of conduct that may be issued by SBI Life Life Insurance, in writing, from time to time relating to the conduct of the business; • Monitoring, supervision and performance standards of the business and sales practices used in relation to SBI Life Life Insurance products that may be issued by SBI Life Life Insurance, in writing, from time to time; p. Promptly deliver to SBI Life Life Insurance in good order and condition when demanded all records, rate books, documents, manuals, computers (hardware and software relating in any way to the life insurance business of SBI Life Life Insurance and which were received from SBI Life Life Insurance, including those that have been specifically entrusted to the Advisor pursuant to this Agreement. Advisor here by acknowledges that such good, tangible and otherwise, and the exclusive property of SBI Life Life Insurance; q. Maintain and observe at all times the strictest secrecy and confidentiality, concerning the business of SBI Life Life Insurance or of Policyholders or proposers of Life Insurance or persons or companies from time to time dealing with SBI Life Life Insurance at any time, either while the Agreement is in force or subsequent to its termination; r. Bear all expenses incurred in the performance of duties under this Agreement unless otherwise specifically agreed to in writing by SBI Life Life Insurance;
s. Promptly disclose to SBI Life Life Insurance every fact and circumstance within his knowledge relevant to the acceptance of the risk of business by SBI Life Life Insurance and shall promptly and accurately relate to SBI Life Life Insurance every fact disclosed to him relevant to the acceptance of such risk or business howsoever the Advisor is aware of such matter; t. Promptly notify SBI Life Life Insurance of receipt by it or service on it of any complaint, demand, notice or claim made or to be made under a policy howsoever the advisor is aware of such matter. u. Record and reolve, within the standard turn around time of 7days from receipt, all the complaints and requests/inquiries received from customers of Advisor and statutory/regulatory bodies and forward a report of the complaints, requests and inquiries of the past week with the relevant documentation containing details like Date of Complaint, Policy older Name, Advisor name and Code No., MOA Name and No., Nature of Complaint, Date of Complaint Forwarded to the concerned function for resolution, Status (Resolved /Pending), Resolution date to SBI Life Life Insurance at the specified email address on every Thursday of the next week. v. Ensure that a strong needs analysis is carried out for every prospect during the sales process; w.Ensure strict adherence to the prevention of Money laundering and Terrorist Financing Policy of SBI Life Life Insurance, the prevention of Money Laundering Act, 2002, Rules thereunder and the IRDA Anti Money Laundering (‘AML’) guidelines and modification thereto and employ adequate know Your Customer (‘KYC’) standards as prescribed therein;
x. In the event of finding any adverse or suspicious change on the standing, integrity or reputation of the customer/policyholder, Advisor should promptly disclose the same to the Principal compliance officer of SBI Life Life Insurance in change of Anti Money Laundering programme. In the event Advisor fails to comply with this provision and/or exposes SBI Life Life Insurance to AML related risks, SBI Life Life Insurance shall be entitled to terminate this Agreement with all attendant consequences to the Advisor; y. Act as a fiduciary, in good faith and I the best interests of SBI Life Life Insurance at all times during the continuance of this Agreement; and z. Declare his adherence to the code of sales and Business Conduct in the format prescribed in Schedule ‘A’.
TRAINING AND COACHING OF ADVISORS Refresher training is the basic given to the trainee advisors about what is insurance, types of insurance, present scenario of life insurance in India and scope and career growth in insurance with legal ideas related to insurance. As per provisions of IRDA Act for training of life advisors (effective from 31st October 2004). The applicant shall have to undergo at least 100 hours’ practical training in life or general insurance business which may be spread over three to four weeks, where such applicant is seeking license for the first time to act as an insurance agent. The training duration should be minimum 18 working days excluding Sundays and holidays.
No product training/market survey should be included into this hundred 100 hours training. The product training, if any, to be given by the insurance company should be over and above the minimum training hours prescribed by the Authority The attendance record of the trainees should be maintained at the Institute for necessary inspection at any given point of time. In case of short-fall of attendance, extra class may be permitted but the extra hours may be specified separately with proper attendance and details of faculty. Every Institute should have at least one qualified permanent faculty who is an Associate or Fellow from the Insurance Institute of India for each stream i.e. for Life and Non-Life. The attendance register of the faculty members should be maintained at the training institutes. The record of the payment made to faculty should be maintained at the training institute i.e. batch-wise payment detail should be maintained. The faculty should provide details of the other Institutes with whom they have been empanelled as part-time/guest faculty. Register should be maintained at the training institute giving details of batches completed, strength of the each batch, number of candidates decertified, name of the sponsored insurer and details of faculty who imparted the training with dates. The seating capacity of each class-room should not exceed 40.
The fresh accreditation will be given on need basis after assessing the needs of the particular city/town. The initial approval will be for a period of 3 years and consideration of further renewal up to 3 years would depend on the satisfactory compliance of requirements of accreditation. The insurance companies would regularly send their officials to oversee the proper conduct of the training at the institutes and would not sponsor candidates to those institutes that are not maintaining the required standards of and facilities for the training. The training institute must display the certificate of accreditation to impart training issued by the Authority at the training institute. The Institute should not allow a franchisee to conduct courses on its behalf even if the faculty is that of the Institute. The Institute should conduct the training on its own premises or hired premises with proper infrastructure. No marketing fee/consultancy fee payment is permitted for getting the training batches. It will be the responsibility of the Insurance Company to check the status of the institute before sponsoring any candidates for training. In case of mofussil areas or the cities where there are no accredited institutes and an insurance company intends to appoint agents, it will be the responsibility of the insurance company to conduct training. The Institutes must keep with them one set of records of the training at the place where the training is being imparted.
The Institute should confine its activities only to the place/city for which it has been given the approval. permitted. The Institutes must submit a copy of the lease deed/rent agreement at the time of seeking fresh accreditation/renewal/change of address of the institute. On successful completion of training the candidates get COT i.e. the Completion of Training Certificate by SBI Life. No training outside the said place/city is
SALES & MARKETING Key Milestones A) Financial Year 08-09: • Bagged the coveted personal finance award-Outlook Money NDTV Profit “best Life Insurer 2008”. • Ranked among global top three in terms of number of Million Dollar Round Table (MDRT) members. • CRISIL has reaffirmed its highest financial rating AAA/Stable to SBI Life. In 2007 SBI Life became the first life insurer in India to receive this rating from CRISIL, country’s leading rating agency. • Recently ICRA, has assigned iAAA rating indicating highest claims paying ability to SBI Life Insurance.
• Retains ISO 9001:2000 certificate for superior claim settlement process.
B) Financial Year 07-08: • Rated as the ‘The Most Trusted Private Life Insurer’ according to a survey conducted by Brand Equity in association with AC Nielsen ORG-MARG and the Economic Times Intelligence Bureau. • Became first life insurer in India to receive the highest financial rating ‘AAA’ from CRISIL, the country’s best known rating agency in 2007. • Ranked amongst global top five life insurance companies in the number of MDRT members. • Forayed into micro insurance with the launch of ‘Grameen Shakti’ in Bhubaneshwar, Orissa for the economically underprivileged sections of society. • Received ISO 9001: 2000 certification for superior claim settlement process. • Became the only domestic life insurer to achieve CMMI Level 3 certification capabilities. for IT processes and software development
C) Financial Year 06-07: • Second consecutive year of profitability.
• Leads Private Life Insurance Companies in Lives covered : 6.49 Million lives covered.
D) Financial Year 05-06: • Becomes the first Life Insurer to make profits.
FINANCIAL UNDERWRITINGS Horizon- II SBI Life - Horizon II is a unique, non participating Unit Linked Insurance Plan in Indian Insurance Industry, where you need not to be a financial market expert. This plan offers the flexibility of Unit Linked Plan along with Automatic Asset Allocation which provides relatively higher returns on your money where as increasing death bench. Twin benefit of insurance cover and market linked returns profits provides higher security to Hassle-free investment management of funds from inception to maturity, Automatic Asset Allocation of funds, automatic rebalancing of funds at yearly intervals, free of cost higher protection, to meet your family financial needs. It is a unique, non-participating Unit Linked Insurance Plan. As per the plan and term chosen by you, SBI Life will invest the net premium amount into each of the funds mentioned.
Maha Anand SBI Life - Maha Anand is a simple & convenient unit linked plan, which provides you insurance cover without any medicals. Life begins afresh when you become a parent and when the child takes that first step towards you, the moment is filled with cheer, enthusiasm never felt before. This moment marks a new beginning in the child’s life and there’s no looking back after that. The child keeps growing and so are his dreams, aspirations which always aim to reach horizon and you want your child achieve his/her dreams. But at the same time as a proud parent you also want to secure their future against rising cost of education and other necessities. Key Features• Twin benefit of market linked returns and insurance cover • Simple Joining Process - No medical examination required • Option to pay premium, as low as Rs 500 p.m. • Choice of 3 fund options to choose from • Flexibility to increase your investments, through Top-up Investment • Flexibility through Switching and Redirection Options • Liquidity through partial withdrawal’s • Attractive Tax benefits under the Income Tax Act, 1961
Unit Plus- II We at SBI Life understand the basic needs for pension plan and give you financial strength to maintain your life style even after the retirement. SBI Life Unit Plus II Pension plan makes sure that you have regular income after you retire and also helps you to maintain your standard of living. This is a unit linked pension plan wherein the policyholder chooses an investment period from 5 to 52 years for a vesting age between 50 to 70 years. You can choose to pay either single premium or pay regular premium for the entire policy term. Your contributions are invested into 5 fund options as per your choice.
Unit Plus Child Plan We at SBI LIFE understand you better and hence have developed SBI Life - Unit Plus Child Plan to suit you and your needs best. This Plan is meant for parents in the age group of 18-57 having a child between the age group of 015 years. Key Features• Market related returns to match increasing cost of education • Peace of Mind by giving you triple benefits • Loyalty units to celebrate your child reaching 18 years • New Investment Fund (Equity Optimizer Fund) in addition to existing funds.
• Pay Premium for a limited period and reap benefits over a long time. • Flexible plan which adapts to your changing needs as and when you want.
Pension plan We at SBI Life understand the basic needs for pension plan and give you financial strength to maintain your life style even after the retirement. SBI Life Unit Plus II Pension plan makes sure that you have regular income after you retire and also helps you to maintain your standard of living. This is a unit linked pension plan wherein the policyholder chooses an investment period from 5 to 52 years for a vesting age between 50 to 70 years. You can choose to pay either single premium or pay regular premium for the entire policy term. Your contributions are invested into 5 fund option. Key Features• Choice to invest & control four different funds as per your risk appetite • Choice to invest & control four different funds as per your risk appetite. • Flexibility to choose between two options • Pure Pension • Pension cum Life Cover
• No medical required for Pure Pension, automatic acceptance facility • Flexibility to increase regular contribution • Top up payments: any amount, anytime • Customize your plan by adding riders • 15 days free look period
Smart ULIP In the current volatile market scenario you need a plan which not only protects your investment, but also enables you to get market related returns. SBI Life - Smart ULIP is the perfect answer to your need, and will give you not only Guarantee on select NAVs during the first seven years, but also gives you the added attraction of participating in the market upside. Key Features• Guarantee of the highest of select NAVs, during the first seven years on maturity. • Investment cum Insurance plan giving market related returns • Convenience through shorter premium paying term, giving you a choice between two premium paying terms (PPT) • Power of more- Guaranteed Maturity NAV, continues beyond the premium payment term. • Innovation structured investment fund-‘Flexi protect Fund’
• Hassle free plan- we manage your investment, giving you maximum opportunity for growth while protecting your investments against adverse market conditions. • Attractive Tax benefits under the Income Tax Act, 1961 Health Products Financial planning is incomplete without planning health insurance. Due to today’s hectic lifestyle, improper diet, lack of exercise we are at higher risk of contingencies of untimely serious illnesses. Sudden health problems could have deep hole in your pockets. Medical science has advanced by leaps and bounds in the last few decades. There’s a definite need to cover for health insurance to reduce the financial burden. SBI Life Insurance features both individual and group products like: 1. Unit Linked Products- this is a single non participating product group that meets both the financial as well as insurance needs. 2. Pension Products- these comprehensive plans help to meet your post retirement financial needs. 3. Pure Protection Products- nobody can predict future. So, any time anything can shatter one’s dreams. Pure Protection Products help to keep one safe and secure during these trouble times. SBI Life also offers some protection cum savings products and money back scheme products. SBI also has products for brokers. These products take inspiration from the endeavors of various industries and make your life easy.
UNDERWRITING a. Advisor understands that in acting on behalf of SBI Life Life
Insurance, Advisor shall only be acting in accordance with tha statutory provisions and in accordance with the terms of this agreement. b. Advisor shall indemnify and undertake to pay to SBI Life Life Insurance an amount equivalent to, and hold SBI Life Life Insurance harmless Against, all losses without limitation, damages, claims, demands, expenses and other liabilities including advocate fees incurred by SBI Life Life Insurance as a result of any faradism dishonest, misconduct or any breach or non-observance of any of the terms and conditions of this Agreement or any neglect, failure or refusal to provide services by the Advisor including any representation made or act carried out by the advisor which is not authorized under this agreement.
PROCESS OF INSURANCE OPERATION
Without prejudice to the other express terms and conditions of this
Agreement and all and any implied rights of SBI Life Life Insurance after the termination of this Agreement, the Advisor shall not: • Use for his own benefit or the benefit of any other person; or • Disclose to any person; or • Through any failure to exercise all due care and diligence, cause or permit any unauthorized disclosure of any trade secrets or confidential information of or relating to SBI Life Life Insurance which he may have received, used or obtained during the term of this Agreement. Any such trade secrets and confidential information shall at all times remain the property of SBI Life Life Insurance.
b. For the purposes of this clause, trade secrets and/or confidential
information shall include, but not be limited to, lists of and information concerning customers, Policyholders, employees, Advisors and agency
managers of SBI Life life Insurance, information relating to the working of any product, process, invention, improvement or development carried on or used by SBI Life Life Insurance, information relating to research projects, know-how, prices, rates, discounts, mark-ups, business strategies, marketing, tenders and any price sensitive information concerning SBI Life Life Insurance. For the avoidance of doubt, the obligation of confidentiality in this clause extends to trade secrets and confidential information howsoever stored, whether in hard copy documents, records or computer programs.
c. Access to SBI Life Life Insurance computer resources, electronic data
and the like may be given to and shall be utilized by the Advisor only for the purpose of carrying out the duties embodied in the Agreement.
d. The forgoing provisions on confidentiality and non-disclosure also apply
to employees of both the parties to this Agreement and the sad parties assume liability for the breach or violation in any manner by their employees. MEANING & DEFINITION “The life insurance contract embodies an agreement in which broadly stated, the insurer undertakes to pay a stipulated sum upon the death of the insurer to a designated beneficiary.” --- J.H.MAGEE
“Life insurance contract may be defined whereby the insurer, in consideration of premium paid either installment, undertakes to pay an annuity on the death of the insured of a certain number of years.” --- R.S.SHARMA
“A contract of life assurance is that in which one party agrees to pay a given sum on the happening of a particular event contingent upon the duration of human life in consideration of immediate payment of a smaller sum by another.” BUNYON’S LAW Insurance industry is a booming sector. The business of insurance is related to the protection of the economic value of asset. Every asset has a value. The asset would have been created through the efforts of the owner, in the expectation that, either through the income generated there from or some other output, some of his needs would be met. There is a normally expected life time for the asset during which time it is expected to perform. Insurance is a mechanism that helps to reduce such as adverse consequences. ---
WHAT IS INSURANCE? Basic aim of the insurance plan satisfies the following objectives:• Protection of economic value of assets. • Mechanism to reduce impact of adverse events on value generating assets. Types of insurance Insurance is generally classified into three main categories: 1. Life Insurance. 2. Health Insurance. 3. General Insurance.
To get insurance an individual or an organization can approach to Insurance Company directly, through Insurance agent of the concerned company or through intermediaries.
Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount called a premium at regular intervals or in lump sums. There may be designs in some countries where bills and death expenses plus catering for after funeral expenses should be included in Policy Premium.
Life Insurance Sector in India
Significant channel for household savings into capital formation GDP penetration of 4.1% Statutory requirements to provide reach to rural areas 2nd largest financial service in India after banking
Total number of lives insured and on books as on March 31, 2008- 22 Crs
Total Assets Under Management of Life Insurance Cos. as on March 31, 2008- Rs. 8,50,000 crores
NEED OF LIFE INSURANCE . The functions of Insurance can be bifurcated into two parts: 1.Primary Functions 2.Secondary Functions 3. Other Functions The primary functions of insurance include the following: Provide Protection - The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. Collective bearing of risk - Insurance is a device to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid.
Assessment of risk - Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also. Provide Certainty - Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain. The secondary functions of insurance include the following: Prevention of Losses - Insurance cautions individuals and businessmen to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc. Prevention of losses causes lesser payment to the assured by the insurer and this will encourage for more savings by way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured. Small capital to cover larger risks - Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty.
Contributes towards the development of larger industries - Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery. The other functions of insurance include the following: Means of savings and investment - Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the
unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance. Source of earning foreign exchange - Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways. Risk Free trade - Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover.
SBI Life Insurance , a leading private life insurer, announced a profit of Rs.114 Crores, for the quarter ended June 2010, registering an impressive profit growth of 195% over the corresponding period last year. The total premium of the company grew by 9.5% to Rs. 1,707 Crores during the period. The new business premium collected, during the first quarter, stands at Crores. Rapidly expanding its presence, the company has introduced 118 branches, recruited 830 employees and added over 5,000 Insurance Advisors.
Commenting on the results, Mr.M.N Rao, MD & CEO of SBI Life Insurance said “We will focus on building capacity through branch expansion, manpower recruitment and inducting Insurance Advisors so that we are able to serve customers across geographies. Holistically enhancing our performance that balances profitability and growth will remain a key business driver. Our unique multi-distribution model coupled with SBI’s strong brand equity has been an enabler of sustained all round business performance.”
SBI Life’s Assets under Management grew by 65%, over the corresponding period last year, to Rs 30,082 Crore as on 30th June 2010 stands. The company continues to have the lowest expense to GWP (Gross Written Premium) ratio in industry of 9.18%.
As per the latest IRDA report, June 2010, the company has a market share of 14.4% among private life insurers and a total market share of 3.83%. Retaining the ISO 9001:2000 Certification for superior claim process and reaffirmation of ICRA’s iAAA rating are some of the key distinctions achieved by the company during the last financial year.
About SBI Life Insurance Co. Ltd: SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Assurance SBI owns 74% of the total capital and BNP Paribas Assurance the remaining 26%. SBI Life Insurance has an authorized capital of Rs. 2,000 crore and a paid up capital of Rs 1,000 crores. State Bank of India enjoys the largest banking franchise in India. Along with its 6 Associate Banks, State Bank Group has the unrivalled strength of over 16,000 branches across the country, arguably the largest in the world. BNP Paribas is the 1st largest French company and ranks 5th in the banking industry worldwide. It is 6th most valuable international banking brand as per Brand Finance 2008. BNP Paribas Assurance is the insurance arm of BNP Paribas - Euro Zone’s leading Bank. BNP Paribas, part of the worlds top 10 groups of banks by market value and part of Europe top 3 banking companies, is one of the oldest foreign
banks with a presence in India dating back to 1860. BNP Paribas Assurance is the fourth largest life insurance company in France, and a worldwide leader in Creditor insurance products offering protection to over 50 million clients. BNP Paribas Assurance operates in 41 countries mainly through the bancassurance and partnership model. SBI Life Insurance’s mission is to emerge as the leading company offering a comprehensive range of Life Insurance and pension products at competitive prices, ensuring high standards of customer service and world class operating efficiency. SBI Life has a unique multi-distribution model encompassing vibrant Bancassurance, Retail Agency, Institutional Alliances and Corporate Solutions distribution channels. SBI Life extensively leverages the State Bank Group relationship as a platform for cross-selling insurance products along with its numerous banking product packages such as housing loans and personal loans. SBI’s access to over 100 million accounts across the country provides a vibrant base for insurance penetration across every region and economic strata in the country, thus ensuring true financial inclusion. Agency Channel, comprising of the most productive force of over 68,000 Insurance Advisors, offers door to door insurance solutions to customers SBI LIFE Insurance has become the first Indian life insurer to top the list of companies whose agents have qualified for the Million Dollar Round Table (MDRT) — a club of insurance agents worldwide who have generated life premiums of over $1 million (Rs 4.9 crore) in a year.
With 2,677 MDRT members in CY2008, SBI Life has pipped its Asian peer-
Samsung Life, which held the number one slot for two consecutive years. The Indian company, a joint venture of the country's largest bank — SBI and Cardif of France — has steadily improved its ranking moving from 5th in 2006 to 3rd in 2007 and the topper in CY2008.
"Our global ranking is a testimony to the robustness of Indian financial services market despite the prevailing global downturn and the vast potential of Indian life insurance industry. Providing quality service and need-based solutions to our customers will be our toppriority," said MN Rao, SBI Life's newlyappointed MD & CEO. MDRT, an association of insurance advisors or agents was founded in 1927. The membership to the MDRT is calculated on the basis of commission earned and premium collected. To qualify in CY2008, each agent had to earn a minimum commission of Rs 7.59 lakh with minimum premium collection of Rs 30.36 lakh. It is estimated that less than 1% of the world's insurance advisory force is able to make the grade to be a part of MDRT.
Interestingly enough of the 2,677 MDRTs that SBI Life produced in CY2008 1,010 MDRTs came from the bancassurance stream. The number of SBI Life agents who have become MDRT members has been on the rise, going from 801 advisors in CY2006 to more than doubling to 1,662 advisors in 2007. In 2007, the company also had as many as 324 bancassurance advisors who made the MDRT grade.