Recruitment of Tied Agents in Aviva Life Insurance a Project Report Is

Recruitment of Tied Agents in Aviva Life Insurance A Project report Is Submitted in the partial fulfillment of the requirement for the Master degree of Business Administration

Submitted To: Submitted By AVIVA Neha

ACKNOWLEDGEMENTACKNOWLEDGEMENT

I hereby express my gratitude to Mr. ROHIT PARVANDA (S.R.U. Manager, Business Development), Aviva Life Insurance Co. India Ltd., for providing me with an opportunity to work in this organization. I also thank him for his valuable inputs in my project and for also giving me an insight into the actual working of the company.

I express my indebtedness and gratitude to my company project guide Mr. Sudeep Kumar (Sr. Sales Manager, Aviva Life Insurance Co. India Ltd.) for his constant support and encouragement throughout the execution of the project, without him this project would not have been possible.

I wish to thanks Mr. T.R. Ramchandran (C.E.O & Managing Director.) and my project guide Mr. Sudeep Kumar (Sr. Sales Manager) for giving me support and guidance throughout the project and without whose generosity this project would have been difficult for me to complete.

(NEHA)

EXECUTIVE SUMMARY

Executive Summary

The objective of this project was to assist Aviva Life Insurance in expanding their channel by recruiting Tied Agents for the company. For the company to successfully continue its operations, it needs to undergo change to get new business and to get new ideas. Moreover insurance is such a growing sector that it has full potential to have new customers. So it is very essential to have new people in the system, which can add new customers to the company.

This was achieved through three-pronged efforts. The first objective of the study was to look for different segments of the people. The second objective of the project was to analyze the person to find whether he is fit for doing insurance. The third objective of the project was to finally introduce some people in the system by recruiting them as advisors of the company.

The research methodology consisted of secondary data, which was collected from different colleges, Yellow Pages etc and personal interview with people in HISAR, HANSI and near by areas. The data collected is attached at the end of the report.

I would like to thank my mentor who provided me the opportunity to become the advisor for the company, which will give me lots of experience and help me in future.

CONTENTS S.NO CONTENTS PAGE NO. 1. Introduction 6 1.1 -Purpose of study 6 1.2 -Objectives Of the Study 7 2. Research Methodology 8 2.1 -Data collection 10 2.2 -Analysis of data collected 11 3. Industry Profile 12 3.1 -Introduction 13 3.2 -Development of Insurance in India 15 3.3 -Privatization 16 3.4 -Classification 17 3.5 -IRDA 20 4. Company Profile 24 4.1 -Introduction 25 4.2 -Vision 27 4.3 -Distribution 28 4.4 -Structure 29 4.5 -Products 30 5. Recruitment Process 41 5.1 -Project Introduction 42 5.2 -Recruitment Process 43 5.3 -Types Of Training 49

6. Data Analysis 50 7. Comparison of all Insurance Co 57 7.1 -Market share 58 7.2 -Premium collected 60 7.3 -No. Of policies sold 62 8. Summary & main findings 64 9. Limitations 67 10. Recommendations 68 11. Annexure - Bibliography 70

1. INTRODUCTION

Insurance is the method of spreading and transfer of risks. Losses of unfortunate few are shared by and spread our to many exposed to the same risk. Assets created by the owner in expectation of future needs or benefits have a value. Loss of assets for any reason deprives the owner of the expected benefit. Insurance in the context is a mechanism.

Insurance may be of two types – Insurance of assets and insurance of human life. As far as insurance of human life is concerned it is an income generating assets, which can be lost at an early death or disabilities caused by accidents.

Earlier there was only one insurance company in the public sector i.e. Life Insurance Corporation of India Ltd. But after liberalization the insurance sector has also been opened for private players. Now there are many private players in the Life Insurance Sector.

The success of every organization depends upon the employees working in it. That’s why these days all the organizations are very cautious regarding the recruitment of people in their company.

Recruitment means the appointment of quality people with competent skills and knowledge suitable for the job. These recruited people add to the work force of the organization.

There are some basic principals involved in getting the recruitment done successfully and consistently. The philosophy of high standards and a success syndrome is the central point of maintaining high standards and the presence of a successful advisor always attracts more of the same.

Also there should be an atmosphere of success in the organization. As a result of a good atmosphere there is a natural inclination to become a part of the winning sales organization.

To attract the good people to join the organization the work should have an attraction power it’s rightly said that Work at developing your attraction power strive to be the kind of person you want others to be.

It is to be reminded that there is no large, ready supply of high potential candidate who are disconnected with their Present jobs

7 happen in individual’s jobs, their lives family background, which can cause them to become prospects for the new job.

1.1 PURPOSE OF STUDY

In the present scenario Insurance is the fastest growing sector with a lit of potential as very less market of insurance have been captured till yet. This sector has a very wide future prospect and aviva being highly reputed attracted me the most.

In the insurance sector, it is the advisor that carries the flag of the company in the market; they bear the brunt in the field. They represent the company in the market to the customers, so nobody can deny the importance of Advisors in the whole system.

They provide the company with the business and help their respective SM to achieve their targets. So SM has to be really careful while recruiting their advisors. The most important responsibility is to achieve the First P or Production growth it’s what saying in the business requires of an aviva life insurance Manager. Part of this growth is accomplished by improving the productivity of the existing agency manager. However, bringing sufficient

8 numbers of high- quality new product in to your sales organization each year is an absolute must.

1.2 Objectives of the study

Considering the importance of the tied agents in the field of advising ASM and re4cruiters in aviva life insurance Ltd, the main objective of study are delineated below:

I. An attempt has been made to study the recruitment procedure adopted by aviva during the study period. II. To examine the causes responsible for the joining or not joining as tied agents in the company. III. To study the standing of aviva in relation to other insurance companies on the basis of: -  Market share  Premium collected  Number of policies sold

2. Research Methodology

This is an endeavor to locate right kind of people possessing the right kind of skills to become successful financial consultants. The study also tries to find out the kind of people and skills that would further enhance the insurance business. Aviva life insurance business aims at recruiting those who have entrepreneurial skills and necessary drive to survive and flourish in the present competitive and ever increasing insurance industry. The universe of study was limited to Hisar, Hansi and near by areas. The universe was divided in different segments. The process of segmentation was primarily aimed at simplifying the universe into smaller parts so each segment can be handled according to its unique features. These segments were as follows:

• Students 1. B.Com and MBA pass outs 2. Students pursuing CA,.

• Enterprising Women 1. Hobby class operators 2. Beauty Saloon owners 3. Fashion boutiques 4. Kitty Party groups 5. Agents of direct Selling.

• Property Dealers, Commission Agents, retired members from Banks.

• Financers and other loan giving institutions

• CA’s, Advocates and other Tax Consultants.

2.1 DATA COLLECTION

For the purpose of recruitment of advisors and comparison of aviva with other companies, both published and unpublished data have been used. For this purpose various journals, magazines, books, broachers and annual reports of aviva n other related companies have also been used. Sources of collected for the various segments given as under: -

STUDENTS Research methodology: Mail + Call activity Data Source: colleges and respective institutions.

ENTERPRISING WOMEN Research Methodology: Telecalling Data source: Personal contacts + classified section of HT City.

PROPERTY DEALERS Research Methodology: Telemarketing Data source: Yellow pages + Local newspaper.

FINANCERS AND OTHER LOAN GIVING INSTITUTIONS Research Methodology: Personal Contact Data Source: People’s References and through Local Newspapers

CA’s, INCOME TAX CONSULTANTS AND ADVOCATES Research Methodology: Personal Contact Data Source: Yellow Pages.

2.2 ANALYSIS OF DATA COLLECTED

.For the analysis of data the following given techniques have been used:-

I. Financial analysis techniques Checking increase or decrease in amounts, percentage changes and ratio analysis.

II. Statistical analysis technique Simple analysis is done on the basis of the collected sample and according to that graphs, tables and pie charts are made which are showing the comparison and various reasons behind the deviation and the quality of advisor.

III. Sampling techniques: I used random sampling technique, in which I take the sample of the advisors from the total population of the advisors in Hisar branch.

Insurance Industry profile

3.1 Insurance: An Introduction

Insurance

• Insurance is a method of spreading & transfer of risk.

• Losses of unfortunate few are shared by and spread over to many exposed to same risk.

• Assets created by the owner in expectation of future needs or benefits have value.

• Loss of assets for any reasons deprives the owner of the expected benefits.

• Insurance in this context is a mechanism that helps to reduce the adverse consequences due to loss of assets.

Purpose and need of insurance

• Assets are likely to be destroyed or made non-functional due to perils like fire, floods, breakdowns and earthquake.

• Damage to assets caused by any perils is the risk that assets are exposed to.

• Insurance become relevant only if there are uncertainties of events leading to loss.

• We can say that human life is an income generating assets which can be lost on early death or disabilities caused by accidents.

• Insurance doesn’t protect the asset but only compensates the economic or financial loss.

Role of insurance in economic development

• Investments are necessary for Economic development.

• Life Insurance plays a major role in mobilization of public savings.

• Savings out of life insurance funds are utilized in investments for growth.

• Looking for general insurance business industry trade would be seriously handicap in the absence of insurance cover relating to fire and engineering risk.

3.2 Development of Insurance in India

A thriving insurance sector is of vital importance to every modern economy. First because it encourages the savings habit, second because it provides a safety net to rural and urban enterprises and productive individuals. And perhaps most importantly it generates long-term investible funds for infrastructure building. The nature of the insurance business is such that the cash inflow of insurance companies is constant while the payout is deferred and contingency related.

This characteristic of their business makes insurance companies the biggest investors in long-gestation infrastructure development projects in all developed and aspiring nations. This is the most compelling reason why private sector (and foreign)

16 companies, which will spread the insurance habit in the societal and consumer interest, are urgently required in this vital sector of the economy.

Per capita insurance premium in India is a mere US$ 6, one of the lowest in the world. In South Korea, the corresponding figure is US$1,338, in USA it is $ 2250 and in UK it is $1589.

Insurance premium in India accounts for a mere 2 per cent of GDP compared to the world average of 7.8 per cent and G-7 average of 9.2 per cent.

Insurance premium as a percentage of savings is barely 5.95 per cent in India compared to 52.5 per cent in the UK.

3.3 Need for Global Integration

Recent economic liberalization started few years ago have started bringing in new investments from global giants and the government was hard pressed to facilitate global integration by lowering trade barriers for the free flow of technology, intellectual and financial capital. Additionally, reforms are essential if the Indian economy is to achieve and sustain a growth rate of 7 to 8 per cent per annum. Reaching a faster growth path also implies attracting foreign direct investment inflows of $ 10 Billion every year, up from the current level of $ 3 to $ 3.5 Billion. Thus liberalization of insurance creates an environment for the generation of long term contractual funds for infrastructural investments.

3.4 Privatization: Start Up Strategy

Potential private entrants therefore expect to score in the areas of customer service, speed and flexibility. They point out that their entry will mean better products and choice for the consumer. Critics counter that the benefit will be slim, because new players will concentrate on affluent, urban customers as foreign banks did until recently.

This might seem a logical strategy from the point of view of new players. Start-up costs-such as those of setting up a conventional distribution network-are large and high-end niches offer better returns. However, in the long run 'middle-market' offers the greatest potential as in terms of it is the second largest market in the world. This may still be an urban market but goes beyond the affluent segment.

Insurance, even more than banking, is a volume game. A very exclusive approach is unlikely to provide meaningful numbers. Therefore, private insurers would be best served by a middle-market approach, targeting customer segments that are currently untapped.

3.5 Classification of insurance

Life is full of uncertainty. Trials and tribulations abound in each and every aspect of life .No one can truly predict or even estimate what the future has in store for him. Life offers no guarantee by itself; expect the incidences of death and taxation.

The lack of security present throughout life can be overcome partially through insurance. Insurance can never replace or repair a loss. But the monetary value offered by insurance helps in adjusting to new circumstances.

Despite offering the innumerable options and immense scope insurance can be classified into four major categories.

• Insurance of a person • Insurance of property • Insurance of interest. • Insurance of liability.

Insurance of person

Under the preview of this class of insurance the risk associated with human life in general can be covered up to the limit specified. The person can insure his or her life and his health against any unplanned contingencies.

The event of his death his dependents will be reimbursed with the full amount that he was insured for. Or if the insured person meets with the accident or suffers from any illness that cripples him forever he will be compensated with complete sum assured. Any way he may not be able to lead a normal life again.

Insurance of property

Everyone posses material value in the form of tangible assets. Assets can be in the form of the landed estate or a vehicle, share holdings or plane old paper money. Since tangible property has a physical shape or consistency it is subject to many risk ranging from fire allied perils to theft and property. An individual’s lifetime of hard work can be wiped out in a blink of an eye.

But if a person judiciously invest in insurance for his property prior to any unexpected contingency the he will be suitably compensated for his loss as soon as the extend of damage is ascertained.

Insurance of interest

Every individual has to discharge certain specific duties. Everyone is expected to maintain a standard of conduct but then it is an intrinsic part of human nature to err. None is infallible and no one will ever be. Owing to an occasional error or omission committed by us, our clients or customers might suffer a loss. In turn we might have to pay those damages for compensation out of our own personal resources.

However, if our chosen professional qualifies for insurance of interest . Then our insurance policy will be more than sufficient in arranging the funds and court formalities that might ensue aftermath of legal libel.

Insurance of liability

Every person has to regulate his actions and behavior so as not to cause injury or damage to other people and their property. Every one is personally liable for his or her action.

If due to lack of control over his actions or prejudice behavior, a person incurs any liability then has to provide compensation out of his personnel resources. Liabilities, Legal, Civil or Criminal can have severe repercussions on social standing and prestige besides the financial status.

3.5 Insurance Regulatory and Development Authority (IRDA) ACT, 1999

• This is a corporate body established for the purpose and objects as set out in explanation to the title. • The authority replaces “Controller” under insurance act 1938. • It states that if authority is superseded by central govt. the insurance may be appointed till such time as “Authority” is reconstituted.

Constitution of IRDA

• The insurance regulatory and development authority consist of the following members.

1. Chairperson 2. Less than five whole time members 3. Less than four part time members.

• Member should be person of ability, integrity & standing.

• They Should have experience in the field of

1. Life Insurance 2. General Insurance 3. Actuarial science. 4. Finance 5. Economics 6. Law 7. Accountancy 8. Administration

• Chairperson, members, officers and other employees of authority shall be public servants.

Functions of IRDA

• To issue certificate of registration, renew, withdraw, suspend or cancel such registration.

• To protect the interest of policyholders/insured in the matter of insurance contract with the insurance company. • To specify requisite qualification, code of conduct and training for insuranc intermediaries and agents. • To specify code of conduct for surveyors /loss assessors.

• To promote efficiency in the conduct of insurance business

• To promote and regulate professional organizations connected with the insurance and reinsurance business.

• To undertake inspection, conduct enquiries and investigations including audit of insurers and insurance intermediaries.

• To control and regulate the rates terms and conditions to be offered by the insurer regarding general insurance business not so controlled by tariff advisory committee under section 604 of Insurance act,1938.

• To regulate investment of funds by the insurance companies.

• To adjudicate dispute between insurers and intermediaries of insurance

Life Insurance Corporation of India Act, 1956

• Life insurance business was nationalized in India with effect from 19th January 1956.

• The life insurance business of 154 Indian Life offices constituted by 16 non-Indian insurers operation in India and 75 provident societies was taken over by the Government of India. COMPANY PROFILE

4.1 AVIVA LIFE INSURANCE COMPANY –

An introduction

AVIVA Life Insurance Company is a joint venture between Dabur and Aviva. Aviva life insurance was amongst the first private sector insurance companies to begin operations in 6 December 2002 after receiving approval from Insurance Regulatory Development Authority (IRDA).

Aviva life insurance’ equity base stands at Rs. 9.25 billion with Dabur Aviva life insurance co. ltd. and Prudential plc holding 74% and 26% stake respectively. In the financial year ended March 31, 2007, the company garnered Rs 1584 crore of new business premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies. The company has a network of about 56,000 advisors; as well as 7 bancassurance and 150 corporate agent tie-ups. For the past four years, Aviva life insurance has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step.

Aviva Life Insurance's new business has grown 77% in '06-07 to cross Rs 1,000 crore, with annualized new business premium of Rs 1,256 crore. The company's total received premium, which includes renewal premium, has crossed Rs 2,363 crore for '06-07.

In the year 2006-07, 80% of the premium has been generated from unit- linked plans, with nearly 40% of the premium collections going into equity. Indian policyholders have been increasingly opting for unit-linked plans that offer higher exposure to equities, ever since lower interest rates have forced insurers to cut bonuses on traditional policies.

In contrast, the private life insurance agent force has grown by leaps and bounds. The need for higher geographical penetration has seen insurance companies recruiting aggressively. At last count, they added up to a massive 1,50,000. Aviva Life topped the list among the private players, which had close to 50,000 agents, while Bajaj Allianz had 30,000 agents. At least six of the 11 private life insurance players had an agent force of 10,000 and plus.

This included Tata AIG, Max New York, HDFC Standard and Birla Sun Life. All these insurance companies have allocated large amounts of fresh capital to build the agent network across major cities in the past few years.

4.2 VISION OF AVIVA LIFE INSURANCE

To make Aviva life insurance the dominant Life and Pensions player built on trust by world-class people and service.

This we hope to achieve by:

• Understanding the needs of customers and offering them superior products and service • Leveraging technology to service customers quickly, efficiently and conveniently • Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders • Providing an enabling environment to foster growth and learning for our employees • And above all, building transparency in all our dealings.

The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the values describe what the company stands for, the qualities of our people and the way we work. .

We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth.

4.3 Distribution

Aviva has one of the largest distribution networks amongst private life insurers in India, having commenced operations in 74 cities and towns in India. These are: Agra, Ahmedabad, Ajmer, Allahabad, Amritsar, Anand, Aurangabad, Bangalore, Bareilly, Bharuch, Bhatinda, Bhopal, Bhubhaneshwar, Calicut, Chandigarh, Chennai,

Coimbatore, Dehradun, Durgapur, Faridabad, Goa, Guntur, Guwhati, Gurgaon, Gwalior, Hyderabad, Hubli, Indore, Jaipur, Jalandhar, Jamnagar, Jamshedpur, Jodhpur, Kanpur, Karnal, Kochi, Kolkata, Kolhapur, Kota, Kottayam, Kozhikode, Lucknow, Ludhiana, Madurai, Mangalore, Meerut, Mehsana, Mumbai, Mysore, Nagpur, Nasik, Noida, New Delhi, Patiala, Pune, Raipur, Rajkot, Ranchi, Rourkela, Saharanpur, Salem, Shimla, Siliguri, Surat, Thane, Thrissur, Trichy, Trivandrum, Udaipur, Vadodara, Vapi, Vashi, Vijayawada and Vizag.

The company has seven banc assurance tie-ups, having agreements with aviva life insurance co.ltd., Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank and some co-operative banks, as well as over 150 corporate agents and brokers. It has also tied up with NGOs, MFIs and corporates for the distribution of rural policies and organizations like Dhan for distribution of Salaam Zindagi, a policy for the socially and economically underprivileged sections of society.

Aviva has recruited and trained about 56,000 insurance advisors to interface with and advise customers. Further, it leverages its state-of-the-art IT infrastructure to provide superior quality of service to customers.

4.4 Organization Structure

Zonal Manager

Deputy Branch Branch Manager Deputy Branch Manager Manager

Senior Sales Manager Sales Manager (Sales)

A.S.M A.S.M A.S.M Manager Manager Manager

Advisor Advisor Advisor F.P.A F.P.A F.P.A

4.5 PRODUCTS

Insurance Solutions for Individual

Aviva Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its 27 products can be enhanced with up to 6 riders, to create a customized solution for each policyholder.

Savings Solutions

• Life Line is a transparent and feature-packed savings plan that offers 3 levels of protection. • Sachin Century is a transparent, feature-packed savings plan that offers 3 levels of protection as well as liquidity options. • Dhanvariddi is a traditional endowment savings plan that offers life protection along with adequate returns. • Young Scholar is an anticipated endowment policy ideal for meeting milestone expenses like a child?s marriage, expenses for a child?s higher education or purchase of an asset. • Sachin Century ulip offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 4 fund options? Preserver, Protector, Balancer and Maximiser. • Life Bond is a single premium Market Linked Insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market • Life Shield Plus is a limited premium-paying plan that offers customers life insurance cover till the age of 75.

Protection Solutions

• Life Shield Plus is a protection plan, which offers life cover at very low cost. It is available in 3 options? Level term assurance, level term assurance with return of premium and single premium.

Child Plans

• Little Master education plans provide guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the child?s life. SmartKid plans are also available in unit-linked form? Both single premium and regular premium.

Retirement Solutions

• Pension Elite is a retirement product targeted at individuals in their thirties.

• Pension Elite Plus is a flexible pension plan that allows one to select between 3 levels of cover.

Market-linked retirement products

• Pension Elite is a regular premium market-linked pension plan .

• Pension Elite Plus is a regular premium pension plan with a capital guarantee on the investible premium and declared bonuses.

Aviva also launched? Live Life Khul Ke? A social sector group insurance policy targeted at the economically underprivileged sections of the society.

Flexible Rider Options

Aviva Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer.

• Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the sum assured under the policy. If the death occurs while traveling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit.

• Accident Benefit: This rider option pays the sum assured under the rider on death due to accident.

• Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death.

• Major Surgical Assistance Benefit: provides financial supports in the event of medical emergencies, ensuring benefits are payable to the life assured for medical expenses incurred for surgical procedures. Cover is offered against 43 surgical procedures.

• Income Benefit: This rider pays the 10% of the sum assured to the nominee every year, till maturity, in the event of the death of the life assured. It is available on SmarKid, SecurePlus and CashPlus.

Waiver of Premium: In case of total and permanent disability due to an accident, the premiums are waived till maturity. This rider is available with SecurePlus and CashPlus

ABOUT THE PROMOTERS

AVIVA Life insurace co. ltd. is India’s second-largest Co.with total assets of about Rs.112,024 crore and a network of about 450 branches. It offers a wide range of corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment life and non-life insurance, Aviva life insurace co. ltd. posted a net profit of Rs.1,637 crore for the year ended March 31, 2009.

Established in London in 1848, through its businesses in the UK and Europe, the US and Asia, provides retail financial services products and services to more than 16 million customers, policyholder and unit holders worldwide. As of June 30, 2006, the company had over US$300 billion in funds under management. Aviva has brought to market an integrated range of financial services products that now includes life Insurance, pensions, investment management and term insurance. In Asia, Aviva is the leading European life insurance company with a vast network of 24 life operations in twelve countries - China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.

Impact of Liberalization

The introduction of private players in the industry has added to the colors in the dull industry. The initiatives taken by the private players are very competitive and have given immense competition to the time monopoly of the market LIC. Since the advent of the private players in the market the industry has seen new and innovative strengths taken by the players in this sector. The new players has improved the service quality of the insurance as the result LIC down the years have seen the declining phase in the carrier. The market share was distributed among the private players. Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near

future. LIC’s market share has decreased from 81 %( 2007-2008) to 73 %( 2008-09). The following companies have the rest of the market share of the insurance industry.

Distribution Channels

Till date insurance agents still remain the main source through which the insurance products are sold. The concept is very well established in the country like India. But still the increasing use of other sources is imperative. It therefore makes sense that the well balanced alternative channel of distribution.

At present the distribution channels that are available in the market are:

• Direct selling • Corporate agents • Group Selling • Brokers and corporative Societies • Bancassurance

RECRUITMENT PROCESS

5.1 Project introduction

The project was to recruit the insurance advisors. The targets were provided By the company and we had to meet them .In the first two weeks we were given introduction of the company and the various products rendered by it. We were trained about the various pitching techniques depending upon different segments of people. After learning the pitching techniques, we started collecting data from various colleges, employment exchanges.

Characteristics of a good Insurance advisor

These were some of the qualities that we searched in a person who could be an asset to the company and could give business .It is not necessary to have good academic background but a good salesman should have the following qualities: • He should be speedy, needy and greedy. • He should be presentable. • He should have good communication skills. • He should be ready to serve with a good smiling face.

5.2 Recruitment Process

The distribution channel of Aviva is consisting of two types of agents:

• Corporate Agents

• Individual Agents

The former is known as corporate insurance agency while the later is called as Retail Agency. In the corporate Agency the insurance work is given to a company and these company further employees Agents. It is a sort of an indirect agency system. On the other hand the company directly employee’s individual agents and no intermediary is there.

The project we undertook our study concentrates on the selection of individual agents and the research therefore is done for that purpose only.

The first segment to be taken under study was that of students with some commerce background.

The segment is further sub-grouped as follows:

1. Pass out B.Com students and graduates 2. Students pursuing C.A 3. Pass out students of MBA.

Our main selling point for this segment was that these students have some finance knowledge. We gave them a career opportunity as they could be promoted as a unit manager as soon as they meet the required target.

The required information of such students was collected from there respective institutions. Those students whose response was positive were called in the premises of Aviva for an informal interview where they were told about the job and the opportunities involves.

The second segment was that of enterprising women.

The segment was further divided into sub groups, which were as follows. 1. Hobby classes operators. 2. Beauty Saloon owners. 3. Fashion boutiques. 4. Kitty party groups.

5. Agents of direct selling products like Tupperware, Avon.

Our main Point in approaching them was that these women already had a well- established network in their respective fields and hence in a position to exploite them further. If they are aware of the opportunities and are ready to take risk then they just needed to tap the market that is already there for them.

To locate this segment of prospective financial consultant we used our personnel contacts and the Classified section of HT City.. For example we went into our relationships and found out references from them. The women who were positive were then told about the company’s project of locating financial consultant.

The third segment of property dealers, commission agents, retired members from banking industry.

The method of research was telemarketing.

Under Telemarketing, a telephone call was made to the targeted person wherein the intention was to make the person aware of the objectives under study. For this purpose we tried to allure the target customers to become an agent. However the call must be made keeping this in mind a few things such as:

1. The intended person must have time to listen to us .

2. We must not offend them in any way.

3. We should be considerate enough to respect the value of their time and must not waste his time in unnecessary Jargons.

4. Care must be taken while introducing main subject, so that we are able to arouse interest.

5. The person should feel important rather than irate customer.

The fourth segment was of financiers and loan giving institutions.

The data sources of this segment were through people’s references and through local newspapers. We adopted the method of direct interview with the person. This involved a brief interaction between the targeted person and us.

The last segment was of CA’s, Income Tax Consultants and Advocates.

The data source of this segment was through Yellow Pages. We adopted the method of direct interview after taking appointments on phone.

Firstly we called up people and explained them about the work profile .If we found them interested, another round of screening was done by Unit Manager with his respective ASM (Business development) and they short listed the most

capable candidates. Capability doesn’t mean that the person should have some specific qualifications. Capability meant that the chosen candidates must have at least interpersonal skills and should be keen enough to learn during training process. He must also realize the importance of marketing in the field. We preferred people with finance background as it becomes easier for them to understand the insurance industry.

The second round of selection was consisted of an informal interview with the candidate. There were main three purpose of this:

1. To reinforce the purpose of study i.e. selecting the right kind of people.

2. To make the candidates aware of growing opportunities in this line of work and make them aware about the developments in the insurance industry.

3. To make the candidates understand about nominal investment on their part, as they already infrastructure and resources and increasing returns.

The selected candidate has to fill an application form along with the fees of Rs.1200, which includes Rs.450 as license fees, which is issued by IRDA and Government of India, rest includes the examination fees.

Types of training

The selected candidates were given a option to select the type of training depending upon their comfort and convenience. There were two types of training available.

Online Training

In this type of training the person has to complete his IRDA training for 100 hours on the Internet. After that he is required to attend the six days product training manually. So the person who is busy with his job this training is quite suitable for them.

Manual training

In this type training he has to complete both the product training and the IRDA training manually. So he has to attend the continuous training for fifteen days. This training is suitable for the person who is ready to take out his fifteen days.

During the manual training, the company provides free lunch.

DATA ANALYSIS

6. ANALYSIS AND FINDINGS

The main purpose was to locate the right kind of people possessing the right mix of interpersonal and marketing skills. The research process helped in locating such people. After obtaining the positive response from the various selected segment another round of screening was done. The research helped in locating the interested people. Now the company has to select the most capable one. Capability does not need that the people should have some specific Qualifications. The capability meant that the chosen candidates must at least possess interpersonal skills and

45 should be keen enough to learn during the training process. He must also realize the importance of marketing industry.

The research results were as follows:

Students Sample size: 75 Positive responses: 19 Candidates Selected: 3 In the complete segment, we had a good response. We contacted passed out students who were unemployed. The screening process was intentionally designed, very hard, as they have to move into the hierarchy of the company after meeting the targets. This was the reason why only three students were selected.

Sample Size Positive responses selected

Pie chart showing the response of students

Enterprising Women

Sample size: 25 Positive Responses: 10 Candidates selected:3 In the complete segment there was good response in the sense that there were many positive candidates, there was none selected. The main reason was that in spite of their interest, they lacked initiative in the decision-making. It was found that their husband took all their decisions. The company wanted their consultants to be decision maker not decision takers. Hence there was no financial consultant taken from this segment.

PIE CHART SHOWING RESPONSE OF ENTERPRISE WOMEN

sample size

positive response

Candidate Selected

Property Dealers Sample Size: 35 Positive response: 9 Candidates selected: 2

In spite of contacting so many property dealers only two were converted. The reason was this was that property dealers require a lot of chasing, chasing in the sense that those who were interested were hard to have a personal contact with. Hence it was a time consuming process and many were dropped because they could not give time to company’s representative. Moreover, the nature of work in property dealing is unpredictable. Some time there are no deals while there may be times that a big party made a deal. Therefore only those dealers who understand the risk were selected.

2 9 Negative responses Positive responses Candidates selected 26

Pie chart showing the response of Property dealers

Commission Agents Sample Size: 7 Positive Response: Nil

This segment was dropped because there were no positive responses. The reason for this was that all the commission agents were engaged in the selling of the products of other insurance companies.

Retired Members of Banking industry Sample Size: 35 Positive Responses: 15 Candidate Selected: 4

The response from this segment was moderate but only one candidate was converted. The reason was that such people were neither energetic nor enthusiastic to work despite of having the knowledge of the industry.

Negative responses Positive responses Candidate selected

Pie chart showing the response of Retired member of industry Financiers, CA’s, Tax Consultants, Advocates

Sample Size: 5 Positive Response: 2 Candidates Selected: 2

The response from this segment was the best of all. There were a couple of reasons for that. First of all; all these candidates were contacted on the basis of references. Secondly, these people are risk

50 takers. They are willing to enter into new ventures and also have the kind of resources that are useful for the insurance.

2 Negative 3 Responses Positive Responses Candidates selected

Pie chart showing the response of CA’s, Tax Financiers, Consultants, Advocates

Comparison of all the

Life Insurance Companies

On the Basis Of:

• Market Share • Premium Collected • No. Of Policies sold.

7.1 On the bases of market share:

Following given is the percent share of market of various insurance companies: Percent share of market

NAME OF THE PLAYER MARKET SHARE (%)

LIC 82.3

AVIVA 7.63

BIRLA SUNLIFE 2.56

BAJAJ ALLIANZ 2.03

SBI LIFE 1.80

HDFC STANDARDLIFE 1.36

TATA AIG 1.29

MAX NEW YORK 0.90

ICICI PRUDENTIAL 5.63

OM KOTAK MAHINDRA 0.51

ING VYASA 0.37

AMP SANMAR 0.26

METLIFE 0.21

Graph showing percent of market share

LIC 90

80 AVIVA

70 BIRLA 60 SUNLIFE

BAJAJ 50 ALLIANZ

40 SBI LIFE

30 HDFC 20 STANDARDLIF E 10 TATA AIG

0 MARKET SHARE(%) MAX NEW YORK

AVIVA

7.2 On the Basis of Premium Collected:

The life Insurance industry underwrote a premium of Rs.8,13,014.01 lakh during the month of March 2005, taking the cumulative premium underwritten during the current year 2004-05 to Rs.25,34,287.67 lakh. The #1 private Life Insurance Company contributed Rs.1, 58,408 (6.25 %) followed by Bajaj Allianz which contributed Rs.86, 001.80 lakh(3.39%).

Amount of premium collected by diff. companies

Name of the company Premium collected (2008- 09) AVIVA 86001.80 ING Vysya 28162.46 AMP Sanmar 9118.44 SBI Life 48293.56 Tata AIG 30022.07 HDFC Standard Life 48615.08 ICICI Prudential 158408.46 Birla Sun life 62128.31 Bajaj Allianz 19229.27 Kotak Mahindra 37475.21 Max New York 22469.01 Met Life 5603.71 Sahara Life 167.09

Bajaj Allianz

160000 ING Vysya

140000 AMP Sanmar

SBI Life 120000

Tata AIG 100000 HDFC 80000 Standard Life ICICI Prudential 60000 Birla Sun life

40000 AVIVA

20000 Kotak Mahindra 0 Max New York Premium collected (2004- 05) Met Life

Sahara Life

Graph showing the premium collected by diff. companies

7.3 On the basis of No. Of Policies Sold:

Aviva firmly holds the number one position by selling 614673 policies in the year 2004-05 followed by Tata AIG (228894 policies).

No of policies sold by diff. companies

Name of the company Policies Sold in 2008-09 Bajaj Allianz 28819 ING Vysya 111141 AMP Sanmar 35268 SBI Life 129974 Tata AIG 228894 HDFC Standard Life 206320 ICICI Prudential 83209 Birla SunLife 198370 AVIVA 614673 Kotak Mahindra 63468 Max New York 216671 Met Life 46682 Sahara Life 10214

SUMMARY & MAIN FINDINGS OF THE STUDY

8. SUMMARY

Aviva is the top most private insurance company, so people are more attracted towards it. The only thing required by the company is to give career and the benefits provided by the company. The people are taking this career as LIC agent only. But Aviva through its pinnacle program and other facilities is providing a very bright career to the youth. There is a lack of information about this career therefore the company needs to capitalize on this opportunity by providing information to the people.

The results of the study can be concluded as follows:

• The segment of students gave a good response but due to hard screening only three were converted. • The segment of enterprising women was not that responsive and hence was unsuitable for the job of financial consultant. • The segment of commission agents was again not responsive and not consultant was obtained. • The segment of retired members of the banking industry did not possess that energy that was required. So, the conversions were less.

• The segment of CA’s and advocates was the most responsive probably due to the fact that the candidates were very few and located primarily from recommendations.

From the results we can conclude that the selection model of Aviva Life Insurance Company for the purpose of selecting the right profile of the distribution channel is very comprehensive and fulfills the objective optimally.

Such selection process would help in: • Reducing Attrition • No or Minimum advertising • Training of consultants

The training module of the company involves: • The better understanding of the product provided by the company. • Regular interaction between Unit Managers and the consultants. • Discussions on the changes occurring in the industry • Training the consultants on how to access the needs and requirements of the customers. • Giving Incentives in the form of competition among consultants and memberships.

9. LIMITATIONS OF THE STUDY

1. Area covered was confined to some regions only.

2. People were reluctant to join this job, as it doesn’t provide any fixed salary.

3. People perceived this profession as a low status profession.

4. Availability of data to contact people was a problem.

5. Due to the presence of large number of LIC agents, people refused to become advisors of any company as according to them there exits a huge competition.

6. Insurance business itself doesn’t enjoy a good reputation in the society.

7. The candidates like CA’s, Advocates and Tax consultants could not arrange a meeting with ASM in spite of their interest.

RECOMMENDATIONS

10. Recommendations

Agents are the lifeblood of the insurance industry’s distribution channel. They are the main forces that bring business to the company. Unless and until the agents are qualified and have the caliber to understand the current market scenario, they cannot remain long in the business. Hence, an optimally selected sales force is the need for the hour, for the industry like insurance.

The following are the recommendations to the company:

1. There should be weekend batches of training for the people who cannot take their full six days of the week from their busy schedule. 2. Anything can click in this line of work and hence the company should evaluate the candidates subjectively. 3. Advertisements should be given in newspapers so that number people should come for the interview.

4. Various MBA institutes should be targeted to get people with good marketing as well as interpersonal skills. 5. There should be some fixed salary with some fixed targets.

11. BIBLOGRAPHY

1. www.financialexpress.com 2. www.insuranceguide.com 3. www.irdaindia.com 4. www.google.com 5. www. Insuremagic.com 6. www.indiacore.com

7. Flippo; Recruitment and hiring; Personal Management; M-graw- Hill international editions; 1984; P: 141-165 8. Debi.S. Saini, Saini A.khan; Human resource management and Corporate strategy; Human resource management – perspective for New era; Response book; 2000; P: 135-156 9. P.C.Tripathi; Procurement of personnel; Personnel management & Industrial relations; Sultan Chand; 1978; P: 126-168 10 . K. Aswathappa ; Recruitment ; Human resource & Personnel Management; Tata Mc.Graw hill; 1997; P: 122-148

11. Mishra M.N; Insurance Principal & Practice; S. Chand & Co.; Lmt. ; Ram Nagar ; New Delhi. 12. Khan M.Y.; Financial Services; Tata Mc Graw hill Publishing Co. Ltd.; New Delhi.