retention new

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Index

Sr.No. Contents Page no.

1 Introduction

2 Industry Analysis

3

Company Analysis

3.1 Life Insurance Corporation of

India

3.2 HDFC Standard Life Insurance

Company

3.3 Max e! "or# Life InsuranceCompany

$ %ecruitment

&

%etention strate'ies of ()

1. life Insurance corporation of

India

2. HDFC Standard Life Insurance

Company

3. Max e! "or# Life Insurancecompany


2/40

*

Attrition strate'ies of ()

1. life Insurance corporation of

India

2 . HDFC Standard Life Insurance

Company

3. Max e! "or# Life Insurance

company

+ Conclusions and recommendation

, -i lio'rap/y


3/40

1)Introduction

0/e Insurance sector in India /as come a full circle from

ein' an open mar#et to nationali ation and ac# to li erali ed

mar#et a'ain. 0rac#in' t/e de elopment in Indian InsuranceSector re els 3* de'ree turn !itnessed o er a period of almost

t!o centuries.

4 er since t/e li erali ation of life insurance sector is done

pri ate companies are facin' many pro lems to create t/eir 5rm

existence in t/e mar#et.

6ri ate companies 5nd it di7cult to compete a'ainst t/e

dominant LIC of India. -ut t/e common pro lem of LIC as !ell as

pri ate life insurance companies is to retain t/eir A'ents8FCs8AAs.

A'ents8FCs8AAs /a e t/e potential to create a 'ood as !ell

as ad ima'e of t/e company. A'ents8FCs8AAs !/o

ent/usiastically spurred y dreams of !or#in' at ones o!n /ours9'ettin' full re!ard for t/e /ard !or# and ot/er suc/ moti ational

spiel meet reality soon enou'/.


4/40

0/e industry is facin' a serious pro lem re'ardin' t/e

s/iftin' of :o s at top le el mana'ement as !ell as at a'ency

force of company. Special attaint ion needs to e 'i en for t/eir

retention in t/eir respecti e companies.


5/40

2)Industry Analysis

Insurance can e de5ned as9 ;assurance for uncertainty


6/40

1@2,( 0/e Indian Insurance Companies Act enacted to ena le

'o ernment

to collect statistical information a out life and non life

insurance

usiness.

1@3,( 4arlier le'islation !ere consolidated and amended to

t/e insurance Act !it/ t/e o :ecti e of protectin' t/e

interests of t/e insurin' pu lic.

1@&* ( 2$& Indian and forei'n insurance and pro ident societies

!ere too#

o er y t/e central 'o ernment and nationali ed LIC !as

formed y

an act of parliament i . LIC Act9 1@&* !it/ a capital

contri ution of %s. & crore from t/e 'o ernment of India.


7/40

Insurance Regulatory and Development

Aut ority !IRDA)

%eforms in t/e insurance sector !ere initiated !it/ t/e

passin' of t/e I%DA -ill in parliament in Decem er 1@@@. 0/e

I%DA since its incorporation as a statutory ody in April 2 /as

fastidiously suc/ to its sc/edule of framin' re'ulations and

re'isterin' pri ate sector Insurance companies.

0/e ot/er decisions ta#en simultaneously to pro ide

supportin' systems to t/e insurance sector in particular t/e life

insurance companies !ere t/e launc/ of t/e I%DA online ser ice

for issue and rene!al of license of a'ents.

"ottlenec#s $ %overnment Regulation

0/e I%DA -ill proposes tou'/ sol ency mar'ins for pri ate

insurance 5rms9 a 2* capital on forei'n eBuity and a minimum

capital of 1 crores for life and 'eneral insurance and %s. 2

crores for reinsurance 5rms. Section 2+A of Insurance Act

Stipulates t/at life insurance companies reBuired to in est +& of

its accretions t/rou'/ a controlled fund in mandated 'o ernment

securities. Life Insurance Company may in est t/e remainin' 2&

in pri ate corporate sector9 construction and acBuisitionin' of


8/40

immo a le assets esides sanctionin' of loans to policy /olders.

0/is stipulations imposed on t/e insurance companies /ad

resulted in lac# of exi ility in t/e optimi ation of ris# and

portfolio.

&a'or private players in India

1) ICICI Prudential (

ICICI prudential Life Insurance company is a :oint enture

et!een ICICI an# a premier 5nancial po!er/ouse and

6rudential9 a leadin' international 5nancial ser ice 'roup /ead

Buarter in t/e nited Ein'dom. ICICI prudential !as amon'st t/e

5rst pri ate sector insurance company t/at came into existence in

Decem er 2 after recei in' appro al from Insurance

%e'ulatory De elopment Aut/ority I%DAG

ICICI 6rudential eBuity ase +$ and 2* sta#e

respecti ely.

0/e company /as a net!or# of o er & 9 ad isors as !ell

as + an# assurance tie ups. 0oday ICICI 6rudential /as emer'edas o.1 pri ate life insurer in t/e country !it/ a !ide ran'e of

exi le products t/at meet t/e needs of t/e customer at e ery

step in life.


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2) "a'a' Allian (

A /ouse /old name in India teams up !it/ a 'lo alcon'lomerate. -a:a: Auto Ltd. 0/e a's/ip company of %s. ,

crores. -a:a: roup is t/e lar'est manufactures of t!o !/eelers

and t/ree !/eelers in India and one of t/e lar'est in t/e !orld.

-a:a: Auto /as a stron' rand ima'e and locality

synonymous !it/ Buality and customer focus !it/ o er 1&9

employees. It /as :oined /ands !it/ Allian to pro ide t/e Indian

consumer !it/ a di erent option in terms of Life Insurance

products.

*) +D,C Standard -i e (

HDFC Standard Life Insurance Company is a :oint enture

et!een India?s lar'est /ousin' 5nance pro ider) HDFC Ltd. and

4urope?s lar'est mutual life insurance company 0/e Standard Life

Assurance Company .E.GHDFC standard life insurance company limited is t/e 5rst

pri ate sector life insurance company to e 'ranted a license y

I%DA.


10/40

/) "irla Sun -i e Insurance Company -imited(

-irla Sun life Insurance is t/e :oint enture of Aditya -irla

'roup and Sun Life Financial of Canada to enter in Indian

Insurance sector. 0/e Aditya -irla 'roup multinational

con'lomerate /as o er +& usiness units in India and o erseas

!it/ operations in Canada9 SA9 E9 0/ailand9 Indonesia9

6/ilippines9 Malaysia and 4'ypt to name a fe!. 0oday t/e Sun LifeFinancial roup of companies and partners are represented

'lo ally in Canada9 0/e nited States9 0/e 6/ilippines9 Japan9

Indonesia9 India and -ermuda


11/40

&ar#et S are o Di0erent Players

LIC ICICI 6rudential -a:a: Allain -irla Sun Life

%eliance Life Max e! "or# Life =M Eota# AKIKA

0A0A AI =t/er


12/40

4 en after li erali ation and entry of pri ate player in

insurance sector9 t/e ma:ority of mar#et is s/ared y LIC of India.

0/e o.1 pri ate life insurance is ICICI prudential !it/ 13.+ of

total mar#et s/are. -a:a: Allian contri utes to 1 .3 of totals/are !/ere as HDFC SLIC /as mana'ed to earn only $.1 . From

t/e a o e c/art9 one can say t/at pri ate companies are still

stru''lin' to capture maximum mar#et s/are. -irla9 Sunlife9

%eliance life9 and M "L /a e 3.$ 9 3.$ and 2.$ of mar#et

s/are respecti ely.

0/e top & life insurance companies in India control ,& of

mar#et s/are !/ile t/e remainin' do en are still stru''lin' to set

up t/eir operation.


13/40

Ne ntrant in t e Industry

D-, Pramerica -i e Insurance co. -td.

Eapil Me/ta is t/e MD C4= of DLF 6ramerica life insurance

Ltd. Eapil /as een associated !it/ t/is enture since 2 *.

-efore :oinin' D6LI Eapil !as senior ice president of -usiness

de elopment and strate'ic plannin' at anot/er life insurance

company.

It is a :oint enture et!een DLF Ltd. and prudential

International Insurance /oldin's Ltd.

0/e com ination at t/e stren't/ of DLF rand and 6FI?s

insurance expertise pro ide t/e stran'est possi le foundation for

D6LI to succeed in t/e rapidly 'ro!in' Indian life Insurance

mar#et.

3ision ( At DLF 6rameria9 our ision is to ensure t/at e ery life

!e

touc/9 feels secure and enric/ed.

&ission ( e s/all e a 'uide and a mentor to people so

t/at t/ey are


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a le to ma#e t/e most informed insurance decision to

meet

t/eir life 'oal.

3G Company Analysis

-i e Insurance Corporation o India .

0/e parliament of India passed t/e Life Insurance

Corporation Act on t/e 1@ t/ of June 1@&* and t/e life insurance

corporation of India !as created on 1 st Septem er9 1@&* !it/

muc/ t/e o :ecti e of spreadin' life insurance more !idely and

in particular to t/e rural areas !it/ a ie! to reac/ all insura le

persons in t/e country pro idin' t/em adeBuate 5nancial co er at

a reasona le cost.

LIC /ad & onal o7ces9 33 di isional o7ces and 212 ranc/

o7ces9 apart from its corporate o7ces in t/e year 1@&*.

It /as a net!or# of o er 2 2 $,G ranc/es and more

t/an @ la#/s a'ents.


15/40

= er &3 years9 LIC /as ecome a /ouse/old name for

pro idin' security for a life time and is synonymous to life

insurance in India.

LIC ran#s no. 1 in t/e list of top & companies on t/e asis

of net !ort/ %s. 1&9$+9@&1 millionG as !ell as et pro5t 29**92++

million Dun -radstreet India & G.

LIC /as crossed t/e milestone of issuin' 19 19329@&& ne!

policies y 1& t/ =ct9 2 & postin' /ealt/y 'ro!t/ rate of 1*.*+

o er t/e correspondin' period of t/e pre ious year.

From t/en to no! LIC /as crossed many milestones and set

unprecedented performance records in arious aspects at life

insurance usiness.

4ey mem5ers to t e corporation

1. S/ri 0.S. Ki'ayan. c/airmanG

2. S/ri DE


16/40

3. Me/rotra MD LICG

$. S/ri. 0/omos Mat/e! MD ) LICG

&. S/ri A. E. Das'upta MD LICG

*. S/ri. . S. C/atur edi additional secretary department of 5nancial ser ices9 Ministry of 5nance o t. of India.G

+. S/ri. "o'es/ Lo/iya c/airmen MD 9 LIC of IndiaG

,. S/ri. 0. C. Ken#atsu rameniann c/airman MD 4xportImport -an# of IndiaG

@. Dr. Soornad %a'as/e#/eran

1 .S/ri Monis %. Eid!ai.


17/40

+D,C Standard -i e Insurance Company -6D.

HDFC !as incorporated in 1@++ !it/ a s/are capital at %s. 1crores9 HDFC /as since emer'ed as t/e lar'est residential

mort'a'e 5nance institution in t/e country. 0/e corporation /as

/ad a series of s/are issue raisin' its capital to %s. 1@ crores 0/e

'ross premium income for t/e year endin' Marc/ 39 2 + stood

%s. 29,&* crores and ne! usiness premium income at %s 19*2$

crores 0/e company /as co ered o er ,9++9 li es year endin'

Marc/ 3192 +

HDFC operates t/rou'/ $& locations t/rou'/ out t/e country

!it/ its corporate /ead Buarters in Mum ai India HDFC also /as

on International o7ce in Du ai A4 !it/ ser ice associates in

Eu!ait9 =man and Natar HDFC is t/e lar'est /ousin' company in

India for t/e last 2+ years.

4ey players (

Mr. Deepa# S. 6ari#/ is t/e c/airman of t/e company. He is

also t/e executi e c/airmen of Housin' De elopment Finance

Corporation Ltd. HDFC Ltd.G. He :oined HDFC Ltd in a seniormana'ement position in 1@+,. He !as inducted as a !/ole time

director of HDFC Ltd. In 1@,& and !as appointed as its executi e

c/airmen in 1@@3. He is a fello! of institute of C/artered

Accountants 4n'land and alesG.


18/40

Mr. Deepa# M. Sata!ale#ar is t/e mana'in' director and C4=

at t/e HDFC SLIC since o em er 2 prior to t/is /e !as t/e

MD of HDFC Ltd. Since 1@@3 Mr. Sata!ale#ar o tained a ac/elor

de'ree in 0ec/nolo'y from t/e Indian Institute of 0ec/nolo'y II0G-om ay and a master de'ree in -usiness Administration from t/e

American ni ersity as/in'ton DC.


19/40

Standard -i e (

Standard Life is 4urope?s lar'est mutual life assurance

company. Standard Life !/ic/ /as een in t/e life insurance

usiness for t/e past 1+& years in a modern company sur i in'

Buite a fe! c/an'es since sellin' its 5rst policy in 1,2&9 t/e

company expanded in t/e 1@ t/ century from Eits =ri'inal

4din ur'/ premises openin' o7ces in ot/er to!ns and acBuittin'

ot/er similar usiness.

Standard Life currently /as assets exceedin' o er + illion

under its mana'ement and /as t/e distinction of ein' accorded

;AAA< ratin' conseBuently for t/e six years y Standard and 6oor.

SNAPS+76 (

Founded in 1,+&9 company supportin' 'enerations for last

1+@ years.

Currently o er & million policy /olders ene5tin' from t/e

ser ice o ered.

4urope?s lar'est mutual life insurer.

8oint 3enture (

HDFC Standard Life Insurance Company Ltd. !as one of t/e

5rst companies to e 'ranted license y I%DA to operate in life

insurance sector. %eac/ of t/e players is /i'/ly rated and een


20/40

conferred !it/ many a!ards. HDFC is rated >AAA? y oot/

>C%ICIL? and >IC%A? similarly standard is rated >AAA? ot/ y

Moody?s and Standard and 6oor?s .0/is re ect t/e e7ciency !it/

!/ic/ HDFC and Standard Life mana'e t/eir asset ase of %s.1&9 crore and %s.* 9 crore respecti ely.

HDFC Standard Life Insurance Company Ltd. !as

incorporated on 1$ t/ Au'ust 2 HDFC is t/e ma:ority

sta#e/older in t/e insurance :oint enture !it/ ,1.$ sta#e and

Standard Life of as a sta#e of 1,.* . Mr. Deepa# Sata!ale#ar is

t/e MD and C4= of t/e Kenture.


21/40

&ax Ne 9or# -i e Insurance

Max e! "or# Life Insurance Company Ltd. is a :oint centreet!een Max India Limited9 one of India?s leadin' multi usiness

corporation and e! "or# Life International9 international arm of

e! "or# Life a fortune 1 company /as positioned itself on t/e

Buality platform. In line !it/ is ision to e t/e most admired Life

insurance Company in India9 it /as a stron' corporate 'o ernance

model ased on t/e core alues of excellence /onesty9#no!led'e9 learnin'9 inte'rity and team !or# incorporated in

2 . Max e! "or# started commercial operation in 2 1. In line

!it/ its alues of 5nancial responsi ility Max e! "or# life /as

multi c/annel distri ution spread across t/e country. A'ency

distri ution is t/e primary c/annel complemented y partners/ip9

distri ution9 an# assurance9 alliance mar#etin' and dedicated

distri ution for emer'in' mar#ets.

0/e company currently /as around @39 A'ent Ad isors

and more t/an , o!n employed sales force at +12 o7ces

across 3,@ cities. 0/e company also /as 3* referred tie ups !it/

an#s9 2$ partners/ip distri utions and alliance mar#etin'relations/ips eac/. 0/e company /as 133 o7ces dedicated to

rural areas. Max e! "or# in ests si'ni5cantly in its trainin'

pro'ram and eac/ a'ent is trained for around 1 /ours as

opposed to t/e mandatory & /ours stipulated y t/e I%DA efore


22/40

e'innin' to sell in t/e mar#et place. 0rainin' is a continuous

process for A'ents at Max e! "or# Life and ensures de elopment

of s#ills and #no!led'e t/rou'/ a structured pro'ram spread o er

$ /ours in t!o years. 0/is focus on continuous Buality trainin'/as resulted in t/e company /a in' amon'st t/e /i'/est a'ent

pass rate in I%DA examination and t/e a'ents /a e /i'/est

producti ity amon' pri ate life insurance companies.

SNAPS+76

Date of 4sta lis/ment 2

Address Max e! "or# Life Insurance

Company Ltd. Max House 3 rd Floor 1

Dr. J/a Mar'9 =#/la9e! Del/i) 11 2 9 India

Eey persons Anal'it Sin'/ C/airman 9Max India ltd

ary

%. -annett) MD And C4=

Max e! "or# Life Insurance

Co. Ltd. Anuroop >0ony? Sin'/) KC

M "LIC Ltd. 0/eodore A Mat/s


23/40

6resident C== Max e! "or# Life

Insurance Company

= er ie! It is an IS= @ 1( 2 certi5ed

Company

0/e company /as recently

partnered

Sym iosis Institute of -usiness

Mana'ement to launc/ 6ost raduate

Diploma in -usiness Mana'ement !it/

Speciali ation in Life Insurance. It

promises an atmosp/ere of run Career

'ro!t/ and earnin' opportunities for its

employees. It -elie es in en/ancin' t/epotential of its employees to in uence

c/an'e in t/e or'ani ation)


24/40

Recruitment and Retentionstrategies o

1. -IC o India.

2. +D,C Standard li e.

3. &ax Ne 9or# -i e Insurance


25/40

Recruitment

%ecruitment means to estimate t/e a aila le acancies andto ma#e suita le arran'ements for t/eir selection and

appointment. In t/e recruitment processO t/e a aila le acancies

are 'i en !ide pu licity and suita le candidates are encoura'ed

to su mit applicationO in order to /a e a pool of eli'i le

candidates for scienti5c selection.

In recruitment process O information is collected from

interested candidate for di erent sources of recruitment suc/ as

ne!s paper ad ertisement9 employment exc/an'es internal

promotion etc. are used. In t/e recruitment process a pool of

eli'i le and interested candidates is created for t/e selection of

most suita le candidates. %ecruitment represents t/e 5rst contact

t/at a company ma#es !it/ potential employees. An A'ent is not

an employee of t/e company ut t/eir recruitment s/ould e

'i en eBual importance as t/at of employees of a company.

: o can 5e an Agent o -i e Insurance Company;

Section $2 $G of t/e amended Insurance Act9 1@3, states an

a'ent is one !/o is not)

A minor


26/40

Found to e unsound mind y a Court of Jurisdiction

Found 'uilty of criminal ac#'round

An ur an A'ent must e 12 t/ standard passed and rural a'ent

must e 1 t/ standard passed.

For t/e %ecruitment of a'ents t/e tar'et is 'i en to t/e

%ecruitment Consultants %CsG and Sales De elopment Mana'ers

SDMsG.

0/ese people follo! t/e steps s/o!n in t/e 5'ure. 0/e list of

prospecti e candidates may include nature mar#et of people !/o

personally contact %Cs and SDMs to ecome an a'ent relati es

and references collected from t/em.

After contactin' all prospecti e candidates t/ose !/o are

interested to ecome an a'ent under'o initial screenin' y Sales

De elopment Mana'ers and selected candidates under'o a

trainin' pro'ramme of & /ours as compelled y I%DA.

=nce t/e trainin' is o er t/e candidates under'o IC)33

examination conducted y I%DA9 clearance at t/is examination


27/40

leads candidates to ma#e a contract !it/ t/e sponsorin'

company.

HDFC as !ell as LIC follo!s t/e same process for t/e

recruitment of Financial Consultants8 A'ents.

-ut Max e! "or# Life Insurance Company follo!s a complex

process of recruitment as s/o!n in t/e 5'ure

1. Name gat ering in P 2


28/40

con enience of ot/ party. Here script plays ery important

role in 5xin' appointment !it/ t/e prospect.

/. Initial Screening

Initial screenin' is ta#en if candidates are found eli'i le to $

points model. In initial screenin'9 a sales mana'er 5rst 'i es

introduction a out t/e company. 0/en se eral Buestions

suc/ as /is family ac#'round /is natural mar#et9 traits for a

sales person and /is present and past experience of /is :o

are Buestioned. 4 ery candidates is reBuired to 'et at least 3

point in eli'i ility model of t/e company. 0/e eli'i ility

standard for A'ent Ad isor selection 'rouped as follo!s. In

case of score less t/an 3 special onal /ead appro al is

reBuired.

,ive point system

A'e 2& and o er 1 pointraduate 1 point

Married 1 point

Li ed in city more t/an &

years

1 point

A0 Score 1 point if passedG

=. Name gat ering in P 2


29/40

a mana'ement trainee !ere 'i en a tas# to 'at/er 2

names.

>. S ort listing

Candidates are s/ort listed from t/e 6 2 as per t/e

eli'i ility criteria dra!n y t/e company. =nly eli'i le

candidates are considered for t/e next process.

?. Contacting

Candidates are called eit/er as nominator or prospecti e

A'ents and meetin' is 5xed !it/ t/em accordin' to t/e

con enience of ot/ party. Here script plays ery important

role in 5xin' appointment !it/ t/e prospect.

@. NA6

um erin' A ility 0est is ta#en. 6assin' score is &

@. Career Intervie

62 is e aluated in career inter ie!. It candidates mar#et is

found !ort/9 /e is selected to attend 0rainin' and

de elopment pro'rammed.

1


30/40

All t/e selected candidates are reBuired to attend 22 day

trainin' session for recei in' t/e license from I%DA to

ecome an A'ent Ad isor.

11.Contract

All successful candidates /a in' le'al license of I%DA are

contracted !it/ M "L .Due to suc/ complex process at

%ecruitment it is not so easy to ecome an A'ent Ad isor at

Max e! "or# Life Insurance Company. 0/e o :ecti e of

suc/ tedious process is to recruit only competent intelli'ent

and loyal A'ent Ad isors. 0/is process /elps t/e company to

#eep its attrition rate to minimum.


31/40

It is ery di7cult to retain people in sectors li#e -6= -usiness

6rocess =utsourcin'G and I0 ut it is !orst in case of Insurance

industry conser ati es estimates put t/e attrition rate of 3& to

$ in insurance industry.

4mployees tend to lea e or'ani ation for arious reasons li#eetter salary pac#a'e :o dissatisfaction un/ealt/y !or#in'

en ironment.

In case of a'ency !or# force of Insurance company9 a'ent

lea e t/em ecause t/eir :o is commission ased and not salary

ased.

6ri ate as !ell as 'o ernment life insurance companies

emp/asi e

on pro idin' etter facilities to t/eir a'ents in order to retain

t/em in t/e or'ani ation.

6lannin' and e aluation can e de5ned as pro ision of

ene5t

facilities 'i en to employees of t/e company so t/at t/ey !ont

lea e t/e company.

Retention


32/40

Retention Strategies mainly include

1G Moti ation of policy

Companies pro ide ery attracti e commission structure for

t/eir a'ents. 0/e commission rates ary from 2 to $ on

paid premium in t/e 5rst year of policy. Apart from t/e

commission ot/er moti ational e orts play a si'ni5cant role

in retainin' a'ents in t/e or'ani ation.

At initial le el a'ents feel moti ated y some non)monetary

ene5ts li#e a pen set !it/ companies lo'o on it9 A cup or

mu' !it/ a'ents o!n name printed on it9 isitin' card of /is

name etc.

As t/e performance of an a'ent impro es /e recei es some

additional ene5ts li#e certi5cate of an or'ani ation9

trop/ies9 additional monetary ene5ts apart from

commission.

4 en letter /eads mo ile ill reim ursement facility pro ision

of soft loan and laptops are 'i en to t/e a'ents.

Di erent contest are arran'ed at e ery ranc/ of t/e

company on mont/ly9 Buarterly and yearly asis so as to

moti ate a'ents to perform !ell.

A'ent !/ose performance is outstandin' 'ets a mem ers/ip

for t/at year of di erent clu s formed y insurance

companies for e.'.

Cate'ory of clu Monetary ene5ts on)monetary


33/40

ene5ts

1G Sil er clu %s.1.& Lac#s 6en set9 Diary

2G Sil er plus clu %s. 3.& Lac#s Sil er clu ene5ts

P & 9

accidental

insurance

3G 'old clu %s. @.& Lac#s Sil er plus clu P

forei'n trip

$G 'old premier

clu

%s. 1@ Lac#s old clu ene5t P

Fees for c/ildren?s

education

&G 6latinum Clu %s. 3+ Lac#s old 6remier clu

P Forei'n trip

family

Mem ers/ip of suc/ clu is a sym ol of status for a'ent and

/elps companies to retain t/eir a'ents.

2G Jo on company?s pay roll.

0/e potential a'ents are also o ered a salary ased :o in

t/e company. 0/e :o s o ered are of Sale De elopment

Mana'er 6ost or nit Mana'er 6ost.3G 4sta lis/in' 'ood relation !it/ a'ents.Sale

de elopment Mana'er ta#e special e orts to inculcate t/e

company?s core alues into e ery a'ents mind. SDM con ince

a'ents t/at t/e company is one i' family and /e a'entG is a


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part of it. It /elps a company to retain t/eir a'ents !it/out muc/

e orts.

-ut t/e retention policies need to e re ised continuously in

order to maintain its e ecti eness. =utdated strate'ies !ould not/elp to retain a'ents. As t/e o erall life style c/an'es t/e

retention policies must also e c/an'ed accordin'ly.

=ne mi'/t /a e /eard of /i'/ :o attrition of et!een 1&

and 2 in soft!are sector ut e en t/ese pale in comparison to

t/e #ind of turno er t/at t/e insurance industry !itness !it/ its

a'ency force conser ati e estimates put t/e attrition rates at 3&

to $

0/e openin' up of t/e sector 5 e years a'o pro ided

insurance a'ents !it/ ne! opportunity and an ima'e ma#eo er

as life insurance ad isors.

-ut little /as c/an'ed in t/e asic nature of t/e usiness

insurance still needs to e sold to a reluctant population.

Most A'ents or ad isors !/o :oin insurance company

ent/usiastically spurred y dreams of !or#in' at one?s o!n /ours9'ettin' full re!ard for t/e /ard !or# and ot/er suc/ moti ational

spiel meet reality soon enou'/.

Attrition


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=nce t/e initial list of potential customers suc/ as close

relati es9 friends and nei'/ ors is ex/austed t/e clim for an

a'ent is up/ill.

4 en meetin' t/e minimum reBuirement of rin'in' in t!o

ia le insurance proposals e ery mont/ pro es dauntin'. For

some companies t/e tar'et in terms of sum assured is %s. 1 la#/

for some ot/ers it is as lo! as %s. 1 9 8)

/en t/e re:ection starts and t/e doors start 'ettin' an'ed

in t/e face ne! a'ents confront failure t/e drop out e'in.

Mr. Lalit Eumar Das/ 4xecuti e Director mar#etin'G LIC9

Says t/e attrition rate is a out 3& in t/e 5rst year of

recruitment. 0/is 'oes do!n to a out 1, y t/e $ t/ year. Most of

t/ese !/o deep out are non)performers.

A'rees Mr. %a/ul Sin/a ice 6recident Mar#etin'G of Eota#

Ma/indra =ld Mutual Life Insurance Company and says last year

t/e attrition rate !as muc/ !orse t/an 3 it /as een a cause

for !orry and !e are tryin' !as our est to stem it.


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Attrition t e concept

In t/e est of !orld?s employees !ould lo e t/eir :o s9 li#e

t/eir co)!or#ers !or# /ard for t/eir employers 'et paid !ell for

t/eir !or# /a e ample c/ances for ad ancement and exi le

sc/edules t/ey could attained to personal or family needs !/en

necessary and ne er lea e.

-ut t/en t/ere is a real !orld and in t/e real !orld

employees do lea e eit/er ecause t/ey !ant more money9 /ate

t/e !or#in' conditions9 /ate t/eir co)!or#ers9 !ant a c/an'e or

ecause t/eir spouse 'ets a dream :o in anot/er state so !/at

does t/at entire turno er cost Q And !/at employees are li#ely to

/a e /i'/est turno er Q /o is li#ely to stay t/e lon'estQ

De ning Attrition

A reduction in t/e num er of employees ta#es place

t/rou'/ retirement9 resi'nation or deat/ etc.

Reasons or attrition

It is not easy to 5nd out as to !/at contri utes and !/o /as

t/e control on t/e attrition of employees. Karious studies

conducted indicate t/at e eryone is contri utin' to t/e pre ailin'

attrition. Attrition does not /appen for one or t!o reasons. 0/e


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!ay t/e industry is pro:ected and speed at !/ic/ t/e companies

are expandin' /as ma:or part in attrition.

0/e reasons for attrition are aried in nature. Some common

reasons for attrition are)

1) 7rgani ational matters

0/e employees al!ays assesses t/e mana'ement alues9

!or# culture9 !or# practice and credi ility of t/e or'ani ation 0/e

Indian companies do /a e di7culty in 'ettin' t/e usiness and

retain it for a lon' time. 0/ere are al!ays ups and do!ns in t/e

usiness plans. on a aila ility of t/e campai'ns ma#es people to

Buic#ly mo e out of t/e or'ani ation.

2) :or#ing nvironment

or#in' 4n ironment is t/e most important cause of

attrition. 4mployees of t/e or'ani ation expect a friendly and

learnin' en ironment. 4mployees loo# for freedom9 'ood

treatment from t/e superiors9 'ood encoura'ement9 friendly

approac/ from one and all and 'ood moti ation In a sence of

suc/ en ironment employees lea e t/e or'ani ation.

*) 8o5 &atters


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0/e :o today rin's lot of pressure and stress. 0/e

employees often lea e or'ani ation due to t/is reason. Also lac#

of :o satisfaction is t/e reason for resi'nation of employees.

/) Salary and ot er 5ene ts

Mo in' from one :o to anot/er for /i'/er salary9 etter

positions and etter ene5ts are t/e most important reasons for

attrition.Some extended reasons for /i'/est attrition rate in

insurance industry are 'i en elo!.

1) -ac# o In ormation regarding t e 'o5 o li e insurance

agents

%ecruitment Consultants %CsG to ac/ie e t/eir tar'et of

recruitment contact num er of people and recruit t/em !it/out

'i in' su7cient information a out t/e :o t/ey are supposed to

perform for t/e company.

2) It is a part time 'o5

Financial Consultants or A'ents are not t/e employees on

company?s payroll. /en people are not /a in' a full time :o 9

t/ey !or# for t/e company ut after 'ettin' a :o of full time t/ey

tend to i'nore t/eir !or# as an a'ent and t/is 5nally results into

termination of t/eir license.


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*) Saturation o natural &ar#et

0/e natural mar#et consists of family9 friend9 collea'ues etc.

=nce t/is list is o er a'ents 5nd it di7cult to ful5ll t/e company?s

expectations.

/) -ac# o support 5y Sales Development &anager !SD&s)

Some a'ents e en if t/ey are !illin' to 'et usiness for t/e

company due to lac# of moti ation and support y t/eir Sales

De elopment mana'er cannot meet company?s expectation

leadin' to termination of license y I%DA.

=) Personal Reasons

0/e personal reasons are many and only fe! are isi le to

us. 0/ey are !ide from 'ettin' married to relocation for /ealt/ or

family reasons. 0/e next important personal reason is 'oin' for

/i'/er education. Healt/ is anot/er aspect !/ic/ contri utes for

attrition.


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retention new

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