A SUMMER PROJECT REPORTA SUMMER PROJECT REPORT

ON

RECRUITMENT OF ADVISORS IN ICICI

PRUDENTIAL LIFE INSURANCE

Submitted in the partial fulfillment of degree of

Bachelor of Business Administration (Banking &insurance)

(2010- 2013)

Under the guidance of:

MS. BINDU VASHISTH

Assistant Professor, FIMT

Submitted by:

AKSHAYA PREM

Enrollment No.: 01090101810

BBA(B&I) 5rd Semester

FFAIRFIELDAIRFIELD INSTITUTEINSTITUTE OFOF MANAGEMENTMANAGEMENT ANDAND TECHNOLOGYTECHNOLOGY

Affiliated to Guru Gobind Singh Indraprastha University, Delhi.Affiliated to Guru Gobind Singh Indraprastha University, Delhi.

Kapashera, New Delhi- 110037 Kapashera, New Delhi- 110037

Table of Contents

Page nos.

     Student declaration....................................................................................i

   Certificate by the guide..............................................................................ii

Certificate by company..............................................................................iii

Acknowledgement.....................................................................................iv

Chapter-1                

Research Objectives of the study...............................................................2

Research Methodology of the study...........................................................3

    Limitation...................................................................................................5

Chapter-2 

Introduction..................................................................................7

Chapter -3                                       

Company Profile .......................................................................................9

Chapter -4  

Data analysis and interpretation ..............................................................40

Chapter -5

Findings...................................................................................................48

Chapter-6    

Suggestion................................................................................................50

Chapter -7

Conclusion................................................................................................52

    Bibliography ..........................................................................................53 

Annexure..................................................................................................54

 

 

 

 

 

 

 

 

 

 

STUDENT DECLARATION

I hereby declare that the project entitled “Recruitment of Advisors in ICICI prudential life

insurance” under the guidance of “Ms. Bindu Vashisth” submitted in the partial fulfillment

of degree of Bachelor of Business Administration (Banking & Insurance) from “Fairfield

Institute of Management and Technology, affiliated from GGSIPU New Delhi”. This is my

original work and this project work has not formed the basis for the award of any Degree to

the best of my Knowledge. 

Name: Akshaya Prem

Enrolment No: 01090101810

Place: New Delhi

Date:

                                  

i

Certificate by the Guide

This is to certify that project title “Recruitment of Advisors in ICICI prudential life

insurance” is the original work of Akshaya Prem student of BBA 5 th semester and has been

duly completed her project under my guidance and supervision up to my satisfactory level.

This work has been done in partial fulfillment of the requirement for the award of the degree

of Bachelor of Business Administration from Fairfield Institute of Management and

Technology, GGSIPU and has not been submitted anywhere in any other university for the

award of any degree.

 

Bindu Vashisth

Senior Assistant Professor

Management Department

FIMT

  

ii

Acknowledgement

It is pleasure to acknowledge many people who knowingly and unwittingly helped me, to

complete my project. First of all let me praise god for all the blessings, which carried me

through all those years. 

I am particularly indebted to Director Mr. R.K Garg Singh of the Fairfield Institute of

Management and Technology which inculcated in me utmost respect for human values and

groomed me up in the field of software technology to take on the challenges of the

competitive world. 

First and foremost, I would like to express my regards to Ms. Bindu Vashisth for her

constant encouragement and support. I would also like to express my immense gratitude

towards my guide for providing the invaluable knowledge, guidance, encouragement

extended during the completion of this project. 

Last but not the least; I am grateful to my parents, my sister, my brother, my friends and my

guide for their moral support and encouragement during the entire period of time

Signature of the student

iii

CHAPTER-1

Research Objectives of the study

Research Methodology of the study

Limitation

1

OBJECTIVES OF THE STUDY

Main Objective:

To study the Recruitment of Advisor policies for ICICI prudential life insurance.

Sub Objective:

• To understand the clientele profile

• To study the recruitment, selection and training process of the advisors.

• To study about the various products offered by the company.

• To provide an enabling environment to foster growth and learning for advisors.

• To expand the channel base of Priority Circle.

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. ICICI Prudential

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 Delhi. 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 perusing CA, MFC.

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

CA’s, Advocates and other Tax Consultants.

VRS Scheme holders/ Retired Members

The research methodology is discussed in detail later. However, the following is the

summary of the same.

3

Students:

Research methodology: Mail + Call activity

Data Source: colleges and respective institutions.

Enterprising women:

Research Methodology: Telecalling

Data source: Personal contacts + Local Directories

Property dealers:

Research Methodology: Telemarketing

Data source: Yellow pages + Local newspaper.

CA’s, income tax consultants and advocates:

Research Methodology: Personal Contact

Data Source: Yellow Pages.

4

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 exists 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.

5

CHAPTER-2

Introduction

INTRODUCTION

The objective of this project was to assist ICICI Prudential Life Insurance in expanding their

channel by recruiting Advisors for the company. For the company to successfully continue its

6

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.

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, Tata Press Yellow Pages etc and personal interview with people in Delhi.

7

CHAPTER-3

Company profile

Company vision

Service standard

ICICI prudential priority circle

Meaning of insurance

The insurance industry

The global insurance

COMPANY PROFILE

Incorporated on July 20, 2000 it is a 74:26, joint venture between ICICI and Prudential plc

of U.K. In November 2000, ICICI Prudential Life Insurance was granted Certification of

Registration for carrying out life insurance Business by the Insurance Regulatory &

8

Development Authority of India. The Company issued its f first policy on December 12,

2000.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier

financial powerhouse and prudential plc, a leading international financial services group

headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector

insurance companies to begin operations in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA).

ICICI Prudential's equity base stands at Rs. 9.25 billion with ICICI Bank and Prudential plc

holding 74% and 26% stake respectively. In the financial year ended March 31, 2005, 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-banc assurance and 150 corporate agent tie-ups. For the past four years,

ICICI Prudential 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 in

life.ICICI Prudential Life Insurance's new business has grown 77% in '04-05 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 '04-05.

In the year 2004-05, 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, which 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. ICICI PruLife 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.

9

COMPANY’S VISION

To make ICICI Prudential the dominant Life and Pensions player built on trust by world-class

people and service.

10

The company hopes to achieve this 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 their policyholders

Providing an enabling environment to foster growth and learning for their employees

And above all, building transparency in all their dealings.

The success of the company will be founded in its unflinching commitment to 5 core

values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the value

describes what the company stands for, the qualities of their people and the way they work. .

They do believe that they are on the threshold of an exciting new opportunity, where they can

play a significant role in redefining and reshaping the sector. Given the quality of their

parentage and the commitment of their team, there are no limits to their growth.

Promoters

ICICI and Prudential came together in 1993 to form Prudential ICICI Asset Management

Company, which has today emerged as one of the leading mutual funds in India. The two

companies bring together two of the strongest financial service brands in Asia, known for

their professionalism, excellent quality of service and long term commitment to YOU. Riding

on the success of this relationship, the two companies joined hands once more in 2000, to

form ICICI Prudential Life Insurance, with a commitment to provide leading-edge life

insurance solutions.

ICICI Bank has 74% stake in the company, and Prudential plc has 26%.

ICICI Bank (NYSE:IBN) is India’s second largest bank with an asset base of Rs. 106812

crore. ICICI Bank provides a broad spectrum of financial services to individuals and

companies. This includes mortgages, car and personal loans, credit and debit cards, corporate

and agricultural finance. The Bank services a growing customer base of more than 7 million

customer accounts and 5 million bondholders’ accounts through a multi-channel access

network. This includes about 450 branches and extension counters, 1675 ATMs, call centres

and Internet banking. ICICI Bank posted a net profit of Rs.1, 206 crore for the year ended

March 31, 2003. ICICI Bank is the only Indian company to be rated above the country rating

11

by the international rating agency Moody’s and the only Indian company to be awarded an

investment grade international credit rating. The Bank enjoys the highest AAA (or

equivalent) rating from all leading Indian rating agencies.

Established in 1848, Prudential plc is a leading international financial services company

in the UK, with around US$250 billion funds under management and more than 16 million

customers worldwide. Prudential has brought to market an integrated range of financial

services products that now includes life assurance, pensions, mutual funds, banking,

investment management and general insurance.

About the promoters

ICICI Bank is India's second-largest bank with total assets of about Rs.112,024 crore and

a network of about 450 branches and offices and about 1750 ATMs. It offers a wide range

of banking products and financial services to corporate and retail customers through a

variety of delivery channels and through its specialized subsidiaries and affiliates in the

areas of investment banking, life and non-life insurance, venture capital, asset

management and information technology. ICICI Bank posted a net profit of Rs.1, 637 crore

for the year ended March 31, 2004. ICICI Bank's equity shares are listed in India on stock

exchanges at Chennai, Delhi, Kolkata and Vadodara, the Stock Exchange, Mumbai and the

National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are

listed on the New York Stock Exchange (NYSE).

Established in London in 1848, Prudential plc, 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, 2004, the

company had over US$300 billion in funds under management. Prudential has brought to

market an integrated range of financial services products that now includes life assurance,

pensions, mutual funds, banking, investment management and general insurance. In Asia,

Prudential is the leading European life insurance company with a vast network of 24 life and

mutual fund operations in twelve countries - China, Hong Kong, India, Indonesia, Japan,

Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.

Distribution

12

ICICI Prudential has one of the largest distribution networks amongst private life insurers in

India, having commenced operations in 69 cities and towns in India. These are: Agra,

Ahmedabad, Ajmer, Allahabad, Amritsar, Aurangabad, Bangalore, Bareilly, Bhatinda,

Bhopal, Bhubhaneshwar, Calicut, Chandigarh, Chennai, Coimbatore, Dehradun, Durgapur,

Faridabad, Goa, Guntur, Gurgaon, Guwahati, Gwalior, Hyderabad, Hubli, Indore, Jaipur,

Jalandhar, Jamnagar, Jamshedpur, Jodhpur, Kanpur, Karnal, Kochi, Kolkata, Kolhapur, Kota,

Kottayam, Lucknow, Ludhiana, Madurai, Mangalore, Meerut, Mumbai, Mysore, Nagpur,

Nasik, Noida, New Delhi, Patiala, Pune, Raipur, Rajkot, Ranchi, Rourkela, Salem, Siliguri,

Surat, Thane, Thrissur, Trichy, Trivandrum, Udaipur, Vadodara, Vapi, Varanasi, Vashi,

Vijayawada and Vizag.

The company has seven bank assurance tie-ups, having agreements with ICICI Bank, Federal

Bank, South Indian Bank, Bank of India, Lord Krishna Bank and some co-operative banks, as

well as over 160 corporate agents and brokers. It has also tied up with organizations like

Dhan for distribution of Salaam Zindagi, a policy for the socially and economically

underprivileged sections of society.

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

Bank assurance

SERVICE STANDARDS

Six Sigma

ICICI prudential realized early on that quality could be a significant differential with respect

to the competition. Hence it launched a six-sigma initiative as a quality measurement tool to

13

understand and fulfill customer needs, set industry benchmarks and make its operations

salable with a focus on customers and costs.

Through Six sigma there has been a continuous focus on the customer, which fits in ideally

with a focus on the customer, which fits in ideally with ICICI Prudential’s customer centric

approach.

Investment Philosophy

Their investment philosophy aims to proactively achieve superior risk-adjusted returns on our

funds under management. The focus is on ensuring long-term safety, Stability and

profitability of portfolio.

The framework to achieve this objective is based on sound investment process and controls

coupled with a rigorous and sophisticated risk management strategy. There is clearly

articulated asset allocation strategy depending on risk characteristics of corresponding

liability.

Portfolio management is a function of extensive research and is based on data and reasoning.

Debt investments target a judicious mix of credit and interest rate risk. Investments in equity

target long term appreciation and follow a value oriented investment style.

Information Technology

At ICICI Prudential, the strategic use of technology provides the consumer with value –added

services. There is a robust system, which is employed as the backbone of the company.

Initiatives have been taken so that the consumer can access complete information on the

policies online, from accessing payment details to sending in the premium.

The following companies have the following market share of the insurance industry:

NAME OF THE PLAYER MARKET SHARE (%)

14

LIC 82.3

ICICI PRUDENTIAL 5.63

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

AVIVA 0.79

OM KOTAK MAHINDRA 0.51

ING VYASA 0.37

AMP SANMAR 0.26

METLIFE 0.21

15

The market share was distributed among the private players. Though LIC still holds 82.3% of

the insurance sector, the upcoming natures of these private players are enough to give more

competition to LIC in the near future.

16

ICICI PRUDENTIAL PRIORITY CIRCLE

The Priority Circle

Priority circle is an opportunity to diversify the business and widen the gamut of services and

solutions offered to the clients. One can now enhance the business with capital investment

and yet earn high returns. Step into the arena of private life insurance, one of the most

dynamic industries today with Priority Circle of ICICI prudential life insurance company ltd,

the leader in today’s private life insurance industry.

Tie ups with India’s leading banks like ICICI bank, Bank of India, federal bank and south

Indian bank ICICI prudential customers enjoy the privilege of approaching the company as

per their convenience. Its vast reach across India places the company far ahead of its pears.

The company maintains its undisputed leadership by proactively achieving superior risk

adjusted returns on its funds. The prime focus is on ensuring long-term safety, profitability,

stability of the portfolio.

The Advisors Forte

An advisor at ICICI Prudential is one of the main strengths of the company. It’s a partnership

that results in unlimited growth opportunity with the company.

The role

To identify prospective customers, provide tailor-made solutions to cater to their individual

needs, conduct regular reviews to keep customers on track and last but not the least, achieve

targets.

The benefit

A premium product portfolio that caters to a wide range of financial needs, excellent back-

end support, attractive returns and benefits, round the clock customer service and extensive

training for that edge over the competition

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MEANING OF INSURANCE

Insurance or assurance is device for indemnifying or guaranteeing an individual against

loss. Reimbursement is made from a fund to which many individuals exposed to the same

risk have contributed certain specified amounts, called premiums. Payment for an individual

loss, divided among many, does not fall heavily upon the actual loser. The essence of the

contract of insurance, called a policy, is mutuality.

The entity that is transferring the risk — which may be an individual or association of any

type, including a government or government agency — is called the "insured". The entity

accepting the risk is called the "insurer". The agreement between the two by which the risk is

transferred is called the "policy": this is a legal contract that sets out exactly the terms and

conditions of the coverage. The fee paid by the insured to the insurer for assuming the risk is

called the "premium". This is usually determined by the insurer to fund estimated future

claims paid, administrative costs, and profit.

For example, let us assume that a couple buys a home costing $ 100,000. Knowing that the

loss of their home would bring them financial ruin, they acquire insurance coverage in the

form of a homeowner's policy. That policy will pay them the cost of replacing or repairing

their home in the event of a catastrophe. The insurance company charges them a premium of

$1,000 a year. Risk of loss has been transferred from the homeowners to the insurance

company.

The major operations of an insurance company are underwriting, the determination of which

risks the insurer can take on; and rate making, the decisions regarding necessary prices for

such risks. The underwriter is responsible for guarding against adverse selection, wherein

there is excessive coverage of high risk candidates in proportion to the coverage of low risk

candidates. In preventing adverse selection, the underwriter must consider physical,

psychological, and moral hazards in relation to applicants. Physical hazards include those

dangers which surround the individual or property, jeopardizing the well-being of the insured.

The amount of the premium is determined by the operation of the law of averages as

calculated by actuaries.

18

The insurance industry

The insurance industry forms an integral part of the global financial market, with insurance

companies being significant institutional investors. In recent decades, the insurance sector,

like other financial services, has grown in economic importance. This is through direct

contributions to gross domestic product (GDP) via increased levels of employment within the

sector; and indirectly through higher levels of risk transfer and financial intermediation.

Expanding further on this issue, it must be remembered that the insurance industry’s primary

function is to supply individuals and businesses with coverage against specified

contingencies.

Insurance companies, therefore, engage in underwriting, managing, and financing risks.

According to Sigma (2001) the largest insurance sectors are to be found in the U.S. and

Japan, which together generates more than fifty percent of global premium income; followed

by the UK, Germany, France and Italy. Furthermore, during the last four decades the global

insurance sector has on average outpaced global economic growth. Between 1984 and 2001,

the global insurance industry grew at an overall rate of 483.6 percent (roughly comprising of

664.8 percent from the life insurance sector, and 334.3 percent from the non-life sector. The

life insurance sector, has continued to grow at a fast rate.

The global insurance industry

The insurance industry forms an integral part of the global financial market, with insurance

companies being significant institutional investors. In recent decades, the insurance sector,

like other financial services, has grown in economic importance. This is through direct

contributions to gross domestic product (GDP) via increased levels of employment within the

sector; and indirectly through higher levels of risk transfer and financial intermediation.

Expanding further on this issue, it must be remembered that the insurance industry’s primary

function is to supply individuals and businesses with coverage against specified

contingencies.

Insurance companies, therefore, engage in underwriting, managing, and financing risks.

According to Sigma (2001) the largest insurance sectors are to be found in the U.S. and

19

Japan, which together generates more than fifty percent of global premium income; followed

by the UK, Germany, France and Italy. Furthermore, during the last four decades the global

insurance sector has on average outpaced global economic growth. Between 1984 and 2001,

the global insurance industry grew at an overall rate of 483.6 percent (roughly comprising of

664.8 percent from the life insurance sector, and 334.3 percent from the non-life sector. Over

the last few years, growth in the global non-life insurance market has significantly slowed

down and has only grown in line with general economic growth (Sigma, 2001). This is in

contrast to the life insurance sector, which has continued to grow at a fast rate. Sigma

(2002a) estimates

this to be in the region of 5.4 percent worldwide since 2000. Measured in total premiums,

OECD countries accounted for 95.52 percent and 93.99 percent of the life insurance business,

and 91.19 percent and 92.50 percent of non-life insurance premium volume in 1994 and

2001, respectively.

Outside of the OECD, a more recent development since the early nineties has been the ability

of the emerging markets to strengthen their global market share in the life insurance segment,

with growth rates often reaching double-digit figures. Furthermore, insurance markets within

the OECD countries have faced falling premium income, reduced capital market yields and

low interest rates, all of which has put insurers under some pressure (Sigma, 2002a). Also,

the growing importance of the insurance industry in emerging markets is reflected in growing

insurance density and insurance penetration of the non-OECD insurance markets (Sigma,

1996, 2001). Nevertheless, and despite these developments, emerging markets still have some

way to go before matching the relative sizes and importance that the insurance industry has in

industrialized countries.

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.

20

Social factors

Insurance can also be seen as a product that is valued subjectively by its consumer. In fact

Hofstede (1995) points out that the level of insurance within an economy depends on the

national culture and the willingness of individuals to use insurance as a means of dealing with

risk. It is not surprising that Douglas and Wildavsky (1982) show that the demand for life

insurance in a country may be affected by the unique culture of the country to the extent that

culture affects the degree of risk aversion. Moreover, Schlesinger (1981) reveals that an

optimal insurance decision is directly related to the level of risk aversion of the insured

person and shows, following Pratt (1964) and Szipiro (1985), that the more risk adverse an

individual is the higher the amount insured.This is in line with the work by Outreville (1996),

which emphasizes that education promotes an understanding of risk and hence aids insurance

demand.

Insurance market in INDIA

The history of life insurance in India dates back to 1818 when it was conceived as a means to

provide for English Widows. Interestingly in those days a higher premium was charged for

Indian lives than the non-Indian lives, as Indian lives were considered more risky for

coverage.

The Bombay Mutual Life Insurance Society started its business in 1870. It was the first

company to charge same premium for both Indian and non-Indian lives. The Oriental

Assurance Company was established in 1880. The first general insurance company- Tital

Insurance Company Limited was established in 1850. Till the end of nineteenth century

insurance business was almost entirely in the hands of overseas companies.

Insurance regulation formally began in India with the passing of the Life Insurance

Companies Act of 1912 and the provident fund Act of 1912. Several frauds during 20's and

30's sullied insurance business in India. By 1938 there were 176 insurance companies. The

first comprehensive legislation was introduced with the Insurance Act of 1938 that provided

strict State Control over insurance business. The insurance business grew at a faster pace

after independence. Indian companies strengthened their hold on this business but despite the

growth that was witnessed, insurance remained an urban phenomenon.

21

The Government of India in 1956, brought together over 240 private life insurers and

provident societies under one nationalized monopoly

corporation and LIC was born. Nationalization was justified on the grounds that it would

create much-needed funds for rapid industrialization. This was in conformity with the

Government's chosen path of State lead planning and development.

The (non-life) insurance business, however, continued to thrive with the private sector till

1972. Their operations were restricted to organized trade and industry in large cities. The

insurance sector in India has come a full circle from being an open competitive market to

nationalization and back to a liberalized market again. Tracing the developments in the Indian

insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries.

By any yardstick, India, with about 200 million middle class households, presents a huge

untapped potential for players in the insurance industry. Saturation of markets in many

developed economies has made the Indian market even more attractive for global insurance

majors with the per capita income in India expected to grow at over 6% for the next 10 years

and with improvement in awareness levels, the demand for insurance is expected to grow at

an attractive rate in India. An independent consulting company, The Monitor Group has

estimated that the life insurance market will grow from Rs.218 billion in 1998 to Rs.1003

billion by 2008 (a compounded annual growth of 16.5%).

22

LIFE INSURANCE MARKET IN INDIA

Many may not be aware that the life insurance industry of India is as old as it is in any other

part of the world. The first Indian life insurance company was the Oriental Life Insurance

Company, which was started in India in 1818 at Kolkata. A number of players (over 250 in

life and about 100 in non-life) mainly with regional focus flourished all across the country.

However, the Government of India, concerned by the unethical standards adopted by some

players against the consumers, nationalized the industry in two phases in 1956 (life) and in

1972 (non-life). The insurance business of the country was then brought under two public

sector companies, Life Insurance Corporation of India (LIC) and General Insurance

Corporation of India (GIC).

In line with the economic reforms that were ushered in India in early nineties, the

Government set up a Committee on Reforms (popularly called the Malhotra Committee) in

April 1993 to suggest reforms in the insurance sector. The Committee recommended

throwing open the sector to private players to usher in competition and bring more choice to

the consumer. The objective was to improve the penetration of insurance as a percentage of

GDP, which remains low in India even compared to some developing countries in Asia.

Reforms were initiated with the passage of Insurance Regulatory and Development Authority

(IRDA) Bill in 1999.

IRDA was set up as an independent regulatory authority, which has put in place regulations

in line with global norms. So far in the private sector, 12 life insurance companies and 9

general insurance companies have been registered

23

Why Do We Need Life Insurance?

We need life insurance in order to ensure that your loved ones can cope financially with your

loss. That's the bottom line.

The reasoning behind life insurance is most evident when you consider sole breadwinners,

but applies to everyone who has dependents, even stay-at-home spouses. If you (as the stay-

at-home spouse) were to suddenly die, your family would have to find other ways to: ensure

care of children; get the family home cleaned; handle dry cleaning and laundry; do grocery

shopping; and many other tasks which you currently handle. While your services appear to be

'low cost' because no one is paying you directly, if your family has to replace you with paid

help you will quickly see your 'value'.

Facts of life insurance industry

Life insurance premium accounts for 72% of the total premium collection in India as against

the global average of 59%.About LIC in 2001 LIC sold close to 20 million new Individual

Policies in year 2000 the turnover of LIC was worth Rs. 261 Billion. LIC has close to 2048

branches, 100 divisions and 7 zonal offices market Potential.

24

The size of the Insurance market is 31.2 Crore which makes it one of the hottest destination

for any company while 5 crore people have a capacity to pay an annual premium of Rs 10000

per annum, 10 crore people have a capacity to pay Rs 7000 per annum , and another 15 crore

people have a capacity to pay Rs 3500 per annum.

No. Of Players

Before nationalization of Insurance in 1956, there were 254 life Insurers and 106 general

insurers to serve the population of 36 crore in India

UK has more than 500 insurance companies to serve a population of 6 crore

USA has over 2200 insurance companies to serve a population of 26 Crore

Even Japan has 90 Insurance Companies to serve its population of 12 Crore

The Industry

The growth rate of the insurance sector is about 10% which is expected to go up to 12%

Before opening up the growth rate was 14% which means there is a dip of 4.5% which could

be traced to the prevailing economic recession .The per capita insurance premium in India is

just US $ 8 which is less than even Malaysia which is US $144 growth of the pension market

today: groups as well as individual.

Emerging health insurance market with third party administrators (TPAs) trying to make a

place for themselves as and when the regulations are in place

New types of products –Unit linked single premium-becoming popular.

Current trends and strategies

New distribution channels are evolving and public will have greater choice even in the matter

of point of purchase. Distribution and servicing are becoming more technology intensive and

closely regulated. Insurers are trying to distinguish their products but only time and

experience will tell.

Emerging trends

People are slowly moving from purely savings oriented products to products that offer higher

degree of life cover. The realization that insurance is basically about protection . So far

insurance has been widely understood by the market as another tax saving oriented

investment option. There are several products becoming available in the market that are

25

suited to the life style of the people. There is a lot of scope for tailor made products

depending upon the need of the customer.

Bank assurance

Insurance products distributed through the bank counters all over the country can bring vast

improvement in the insurance coverage in the quickest possible time banks today are the most

credible agencies .The public has immense faith in them regulators keep a tight vigil over

them millions of bank staff are highly educated and trained Banks can accept lower

commissions, and the benefit goes on to the consumer by charging a lower premium rate

Half of insurance policies sold in Europe is through banks.

Insurance and IT

Key areas where differentiation is considered critical for the future of the insurance

companies include the following:

Product Development

Back Office

Customer Service

Distribution

26

REGULATORY REGIME

After the release of the Malhotra Committee report in 1994, changes in the insurance industry

appeared imminent. Unfortunately, changes in the central government slowed down the

process. The dramatic climax came on 7 December 1999 when the government finally passed

the Insurance Regulatory and Development Authority (IRDA) Act. This Act repealed the

monopoly conferred to the Life Insurance Corporation in 1956 and to the General Insurance

Corporation in 1972. The authority created by the Act is called the Insurance Regulatory and

Development Authority (IRDA).

The table below summarizes some of the milestones of India’s regulation industry:

27

28

RECRUITMENT PROCESS

The recruitment and selection is the major function of the human resource department

and recruitment process is the first step towards creating the competitive strength and

the strategic advantage for the organizations. Recruitment process involves a

systematic procedure from sourcing the candidates to arranging and conducting the

interviews and requires many resources and time.

The recruitment process begins with the human resource department receiving

requisitions for recruitment from any department of the company. These contain:

Preparing the job description and person specification.

Locating and developing the sources of required number and type of employees

(Advertising etc).

Short-listing and identifying the prospective employee with required characteristics.

Arranging the interviews with the selected candidates.

Conducting the interview and decision making

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1. Identify vacancy

2. Prepare job description and person specification

3. Advertising the vacancy

4. Managing the response

5. Short-listing

6. Arrange interviews

7. Conducting interview and decision making

The recruitment process is immediately followed by the selection process i.e. the final

interviews and the decision making, conveying the decision and the appointment formalities.

JOB PROFILE

30

At priority circle, the nature of the job included recruitment of the channel members who

were further assigned to solicit insurance. The database was prepared, which had the names

of selected people across Delhi. They were invited to the office for the first meet with the

manager- priority clients. The MPC’s job is to explain the course of action followed to join

the business.

After the first meet if the prospect is satisfied he is given a document called ‘market 100’ to

explore his contacts which would help him grow his business. The prospect fills the

document and brings it to the office. The MPC scrutinizes the document. The next step is to

meet the territory manager who would judge the prospect whether he is capable to do the job

or not. If the territory manager is satisfied, then the person fills other formalities like form,

age proof and other documents and is ready to receive the training.

The lead trainer of the branch conducts the training for about 9 days, following which an

exam is held. After clearing the exam the IRDA license is given, post, which the advisor is

ready to sell insurance and do financial consulting for his clients.

Characteristics of 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.

At ICICI Priority circle, the aim is to achieve Production Growth through recruitment. Part of

this growth is accomplished by improving the productivity of the existing Agency members.

However, bringing sufficient numbers of high quality new producers into the sales

organization each year is a must. The main focus thus remains recruitment of HNI (High

Network Individuals) Clients.

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Recruitment is the prospecting, identification and training of advisors so as to enable him to

do business, post licensing.

Broadly recruitment can be identified as a 5-step process:

• Search for talent

• Engage the prospective advisor

• Evaluation of potential advisor

• Confirmation of intent

• Licensing of advisors

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SEARCH FOR TALENT

In this stage we need to identify the advisors we need to recruit to become a successful team.

We need to clearly understand the profile we are looking out for. The search must be

Continuous and systematic – just like prospecting for sales. We must search among several

Sources on a regular basis.

The sources were divided into different segments for a more systematic and focused

approach. These were:

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

background. The segment is further sub-grouped as follows:

a) Pass out B.Com students

b) Students pursuing C.A

c) Students of M.F.C

d) 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 ICICI Prudential

for an informal interview where they were told about the job and the opportunities involved.

2. The second segment was that of enterprising women. The segment was further divided

into sub groups, which were as follows.

a) Hobby classes operators.

b) Beauty Saloon owners.

c) Fashion boutiques.

d) Kitty party groups.

e) 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 exploit 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.

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To locate this segment of prospective financial consultant we used our personal contacts.

The women who were positive were then told about the company’s project of locating

financial consultant.

3. 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:

a) The intended person must have time to listen to us.

b) We must not offend them in any way.

c) We should be considerate enough to respect the value of their time and must not waste his

time in unnecessary Jargons.

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

e) The person should feel important rather than irate customer.

4. 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.

a) Firstly we called up people and explained them about the work profile .If we found them

interested, an appointment was fixed with the MPC. The Manager clearly explains the

business opportunity and studies the prospective candidates profile. Candidates another

round of screening was done by Unit Manager with his respective ASM (channel

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

34

preferred people with finance background as it becomes easier for them to understand the

insurance industry.

b) The second round of selection was consisted of an informal interview with the candidate.

There were main three purpose of this:

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

ii) To make the candidates aware of growing opportunities in this line of work and

make them aware about the developments in the insurance industry.

iii) 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.1500 which

includes Rs.450 as license fees which is issued by IRDA and Government of India ,rest

includes the examination fees.

35

TOOLS

Recruitment Presenter

A tool to sell “Advisor” as a business opportunity to the prospective candidates.

Business Opportunity Presentation

At the branch level, the managers may get together an invite a group of prospective advisors

to the office. The Senior Manager on the business opportunity will then make a formal

presentation. It is a very effective tool and you will be able to convince a greater number of

advisors with this activity.

Branch Visit

The branch visit should give him the feel of the “Priority Circle” Concept and create interest

in Insurance Advisor- as a career with ICICI Prudential.

Preferred qualities

• Passion to succeed

• Result oriented

• Well networked

• Communication Skills

• Need for Money

• Need for Recognition / Achievement

• Committed and Hardworking

Training batch size estimation

The minimum batch size for a full time batch is 15 and for a part time batch is 20.

Depending on the number of completed applications received from Monday to Thursday; the

manger will determine the training batch size numbers split cases will be considered while

determining the batch size.

Licensing / training period

Licensing is the final step in recruitment of the advisor. Training is conducted in the last

stage. The prospective should complete 100 hours of their training. At ICICI Prudential, we

36

understand the importance of training in a dynamic business environment. The advisors go

through both generic and specific, professional programs that help them remain well

informed and knowledgeable about the company’s products in the market. There is a further

focus on soft skills such as communication, managing long-term relationships and selling

skills, which are very relevant in a service-driven industry like life insurance.

State of the art infrastructure training facilities coupled with an excellent faculty, guarantee

an exceptional learning environment. For advisors who might be occupied with their daily

business/professional routines, ICICI Prudential also offers convenient training options such

as online and self-learning are also provided by the organization.

 

A 17-day training schedule covers the mandatory IRDA training requirements and ICICI

Prudential product-training module. Revision session ensure that the candidates thoroughly

understand the course contents and are well prepared for the licensing examination.

Theoretical training is interspersed with practical appointment settings with potential

customers, giving advisors a feel of how their business will work from the very first day. All

through, the Unit Manager and the management provide continuous support to the advisors in

achieving independence towards garnering business.

After the training they have to undergo online examination conducted by IRDA, after

qualifying the examination they get a certificate from RNIS (Ritu Nanda institute of

insurance)

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.

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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.

The exam

Upon completing the training the candidate is eligible to appear either for an online (internet)

exam or a manual (paper based) exam, based on the guidelines issued by IRDA for that city.

The exam slots should be booked such that the exam is scheduled no later than 4 days from

the date of completion of the training.

After the prospective advisor has taken the exam and his result are obtained and he has

cleared them, the company handovers a ‘WELCOME KIT’ to the candidates comprising of:

• Welcome letter

• Laminated identity card

• Copy of the agency agreement

• IRDA License

• Bank Account introductory letter

• 100 visiting cards (from the branch)

• Commission Booklet

• Reward and recognition booklet

• ICICI Pru partner Email ID and Password

• Pin mailer to access ICICI Prudential websites.

38

CHAPTER – 4 Data Analysis and Interpretation

39

DATA ANALYSIS AND INTERPRETATION

The main purpose of the study 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

had to select the most capable one. Capability does not mean people having specific

Qualifications, capability means that the chosen candidates must at least possess interpersonal

skills and should be keen enough to learn during the training process. She/he must also

realize the importance of the project.

40

The research results were as follows:

Students:

Sample size: 75

Positive responses: 19

Candidates Selected: 2

In the complete segment, we had a good response. We contacted passed out students who

were unemployed. The screening process was intentionally designed to be a little difficult, as

they have to move into the hierarchy of the company after meeting the targets. This was the

reason behind the selection of only two

41

Enterprising Women

Sample size: 25

Positive Responses: 10

Candidates selected: Nil

In this segment there was good response in the sense that there were many positive

candidates, though none was selected. The main reason was that in spite of their

interest, they lacked in decision-making skills. It was found that their husband took all

their decisions. The company wanted their consultants to be decision makers not

decision takers. Hence there was no financial consultant taken from this segment.

42

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

for this was that property dealers are not good at keeping appointments. It was

difficult to personally contact even those who were interested. 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

makes a deal. Therefore only those dealers who understand the risk were selected.

Commission Agents

43

People Contacted: 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 / VRS holders

People contacted: 23

Positive Responses: 5

Candidate Selected: 1

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.

44

CA’s, Tax Consultants, Advocates

People Contacted: 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 thesse candidates were contacted on the basis of references.

Secondly, these people are risk takers. They are willing to enter into new ventures and

also have the kind of resources that are useful for insurance.

45

SWOT ANALYSIS

STRENGTHS:

1. No. 1 Private Player in the insurance industry in India.

2. Life Insurance linked with Investments

3. Tax benefits

4. Security against loans

5. Helps in future planning and provides financial consultancy.

6. Covers risk.

WEAKNESS:

1. Negativity relating insurance and ‘Agents’.

2. No fixed Salary.

OPPURTUNITIES:

1. High Network Individuals (HNI)

2. A clear career path

3. All round support through exclusive advertising, own in house consultant, and world-

class training.

4. A comprehensive benefit package.

THREATS:

1. Dynamic environment

2. Increasing Competition

3. Non-creativity

4. An Unfocused approach

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CHAPTER-5 Findings

47

FINDINGS

The findings are based on the survey undertaken and interview of individuals and I came

across that although the training process was beneficial but they still lack confidence in this

business and mostly take it as part time business. The other findings are summarized as

follows:

People don’t show interest in trainings.

People can have only one license which also restricts them to become an agent.

People don’t afford the training period.

People are not interested to invest Rs.1000 for an agent’s job.

People like to have a fixed salary job.

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CHAPTER – 6 Suggestions

49

SSUGGESTIONS

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 of the hour, for an 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 the newspapers so that number of people interested

in such an opportunity increases.

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.

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CHAPTER – 7 Conclusion

Bibliography

Questionnaires

51

CONCLUSION

ICICI Prudential is the No.1 private insurance company, so people are more attracted towards

it. The only thing required by the company is to give a stable career and more benefits. Due

to LIC, people have a negative mindset towards the word ‘Agent’ as well as the insurance

industry in general. But ICICI prudential through its pinnacle program and other facilities is

providing a very bright career to the youth. There is lack of information about this career;

therefore, the company needs to capitalize on this opportunity by providing the right kind of

information to people and present it in a bright.

The results of the study can be concluded as follows:

The segment of students gave a good response but due to hard screening only two

were converted.

The segment of enterprising women was not that responsive and hence consultant was

obtained.

The segment of retired members did not possess that energy that was required. So, the

conversions were less.

From the results we can conclude that the selection model of ICICI Prudential 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.

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BIBLIOGRAPHY

Books:

o Gupta P.K, (2004), Insurance and Risk Management, Himalya

Publishing House

o M.N. Mishra, (2006), Principles and Practices of Insurance,

S.Chand & Co. (Lt.Ed.)

o Tripathy, N.P., (2008), Insurance: Theory & Practice, Prentice

Hall of India.

o Practice of Life Insurance (I.C.02), Insurance Institute of India, Mumbai.

Websites:

o www.iciciprulife.com

o www.bima.com

o www.wikipedia.org

o www.insuranceguide.com

o www.financialepress.com

53

QUESTIONNAIRE

1. Name :

2. Age :

3. Sex : Male Female

4. Occupation

Government Employee

Private employee

Student

Others

5. Are you satisfied with the training provided to you?

Yes

No

6. Do you think insurance agent business is career oriented?

Yes

No

7. How will you rate ICICI’S training program?

Excellent

Good

Fair

Poor

8. Were you able to acquire skills from training?

Yes

54

No

9. Given a chance would you like to make extra money from other

business?

Yes

No

55