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ON
CHANNEL DEVELOPMENT IN RELIANCE LIFEINSURANCE
Prepared and Presented to:
Under The Guidance Of :
Companys Guide:- Faculty Guide:-
Rahul Srivastava Swati Priya
(Sr. Sales Manager)
(Submitted in the partial fulfillment for the award of the degree ofMaster Of Business Administration from G.B Technical University,
Session-2009-2011)
Submitted By :-
BIPIN SINGH
Roll No. 0914170013(MBA III Sem.)
Sagar Institute Of Technology & Management Barabanki .
(2009-2011)
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CERTIFICATE BY INDUSTRY GUIDE
This is certify that BIPIN SINGH student of MBA II Year, SAGAR INSTITUTE OF
TECHNOLOGY & MANAGEMENT BARABANKI, has undergone a research
report on CHANNEL DEVELOPMENT IN RELIANCE LIFE INSURANCEand
has submitted a report the based same as mandatory requirement of the degree of
Master of business Administration, U.P Technical University Lucknow.
Date. Sr. Sales Manager
(Rahul srivastava)
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PREFACE
The business of insurance is related to the protection of economic value
of assets . The assets would have been created through the efforts of the
owner , in the expectation that , e i ther through the income generated
there from the some other output, some of his needs would be met. If
assets get lost earlier, being destroyed or made non-functional, through
an accident or other unfor tunate event , the owner and those der iving
benefi ts there f rom suf fer. Insurance i s a mechanism tha t he lps to
reduce such adverse consequences.
Insurance plays a major role in di fferent perspective. For economic
development inves tments are necessary . Inves tments are made out of
s av ings . A l if e i ns ur ance company i s a maj or i nves tmen t f or t he
mobil izat ion of saving of people, part icularly f rom the middle and
lower income groups. These savings are channeled in to the investments
for economic growth. In order to amenable to s tat i s t ical predict ions ,
insurance risks must be handled on a large scale.
All organization face change in their environment with resultant change
i n t he ir mar ke ts and i n t he abi li ty t o s at is fy t he ir mar ke ts . Each
organization is faced with new marketing problems and opportunities in
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their exis t ing and potent ial market . Market ing decis ion makers cope
with these challenges in a variety of ways.
ACKNOWLEDGEMENT
This is to express my heartiest gratitude towards all those who helped and inspired me
to complete my project report.
I feel immense pleasure in submitting my summer training project report.
I am highly thankful to my Director Prof. J.K.Johari SITM Barabanki for his
support and encouragement that he provided me during the tenure of the project
report.
I am also thankful to my H.O.D Mr. K.K.Mishra Associate Prof. (H.O.D) of MBA
and to my faculty guide Ms. Swati Priya for their kind and constant support and
guidance.
At the end I would like to mention about the constant motivation and help that I
received from my family, teachers, friends and batch mates for completing my project
report.
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( BIPIN SINGH)
EXCUTIVE SUMMARY
Topic :- CHANNEL DEVELOPMENT IN RELIANCE LIFE INSURANCE.
Objective:-
At Reliance Life Insurance, we strongly believe that as life is different at every stage,
life insurance must offer flexibility and choice to go with that stage. We are fully
prepared and committed to guide you on insurance products and services through our
well-trained advisors, backed by competent marketing and customer services, in the
best possible way.
It is our aim to become one of the top private life insurance companies in India
and to become a cornerstone of RLI integrated financial services business in
India.
RESEARCH METHODOLOGY
METHODS OF COLLECTING DATA:
The method of data collected was personal interaction, telephonic interview,
observations of the existing appraisal system of Reliance life insurance
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The data so far collected or provided is secondary as total tele-calling was done on an
already existing data for financial planning and to become company s certified
financial consultant. But directories are also used to find out the contacts.
TYPE OF DATA COLLECTED
There are One types of data used. They are primary Data.
Primary data is defined as data that is collected from original sources for a specific
purpose. Secondary data is data collected from indirect sources.
DATA COLLECTION METHOD:-
Survey
PRIMARY SOURCES
These include the survey or direct communication with employees and questionnaire
method, telephonic interview as well as the personal interview methods of data
collection.
RESEARCH DESIGN:-
Exploratory Research.
SAMPLING METHODOLOGY
Sampling Technique:
Initially, a rough draft was prepared keeping in mind the objective of the research. A
pilot study was done in order to know the accuracy of the Questionnaire. The final
Questionnaire was arrived only after certain important changes were done. Thus my
sampling came out to be judgmental and convenient
Sample design:-
Universe
Sampling Unit:
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The respondents who were asked to fill out questionnaires are the sampling units.
These comprise of employees of MNCs, Govt.Employees, Self Employed etc.
Sample size:
The sample size was restricted to only 100, which comprised of mainly people from
different regions of Lucknow due to time constraints.
Sampling Area :
The area of the research was Lucknow, India.
CONCLUSION
Over the next five years the Life Insurance Sector would change as it will
undoubtedly be substantially larger than it is at present and rate of returns will vary
according to the fall and rise in the market like it happened recently when market just
was going up and up that the Sensex even touched 20000 and when it fell it even went
to 15000 so this variation will always be there no doubt. But it is really a difficult task
to get clients for insurance but not impossible too if done in a systematic way and with
proper attention and sincerity.
Moreover, the success of marketing also depends on the way you interact with the
customers and how frequently you can convince the customer by getting into their
mind. Tele-calling no doubt is helpful if further process is done with sincerity but it
must be effective in itself too like if a person is out of the town he resides in then just
take time to call again later so as not to disturb him.
Another thing is that you must talk to them being friendly so that they won t think that
you are wasting their time and many other things should be kept in mind while talking
to the customers means one must know business ethics and techniques, etiquettes no
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doubt required. Try and go for indirect marketing for insurance as it becomes easy to
develop contacts if you are having references.
Yes, the very important thing is to have the good customer relations and keep .
CONTENT
I. Preface 3
II. Acknowledgement 4
III. Objective of study 5
IV. Introduction of study 9
V. Research Methodology 6
Research variable
Research design
Sample and Sampling Size
VI. Company Profile: 10
Reliance Insurance 10
Project Profile 40
Research Methodology 57
Data Analysis 61
VII. Data Representation, Analysis & Interpretations 62
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VIII. Results 74
IX. Limitations 76
X. Suggestions 77
XI. Conclusion 79
XII. Annexure 80
XIII. Bibliography 83
CHAPTER 1
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COMPANY PROFILE OF RELIANCE LIFE INSURANCE:-
Chairman's Profile:
Regarded as one of the foremost corporate leaders of contemporary India, Shri Anil
Dhirubhai Ambani is the chairman of all listed companies of the Reliance ADA
Group, namely, Reliance Communications, Reliance Capital, Reliance Energy,
Reliance Natural Resources and Reliance Power. He is also Chairman of the Board of
Governors of Dhirubhai Ambani Institute of Information and Communication
Technology, Gandhi Nagar, Gujarat. Till recently, he also held the post of Vice
Chairman and Managing Director in Reliance Industries Limited (RIL), India's largest
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private sector enterprise. Anil Dhirubhai Ambani joined Reliance in 1983 as Co-Chief
Executive Officer, and was centrally involved in every aspect of the company's
management.
If we look for examples to prove this quote then we can find many but there is none
like that of Reliance Money. The company which is today known as the largest
financial service provider of India.
Reliance Capital has interests in asset management and mutual funds, life and general
insurance, private equity and proprietary investments, stock broking,
depository services, distribution of financial products, consumer finance and other
activities in financial services. Reliance Mutual Fund is India's no.1 Mutual Fund.
Reliance Life Insurance is India's fastest growing life insurance company and among
the top 4 private sector insurers. Reliance General Insurance is India's fastest growing
general insurance company and the top 3 private
Sector insurers.
Few men in history have made as dramatic a contribution to their countrys economic
fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left
behind a legacy that is more enduring and timeless.
As with all great pioneers, there is more than one unique way of describing the
true genius of Dhirubhai: The corporate visionary, the unmatched strategist, the
proud patriot, the leader of men, the architect of Indias capital markets, the
champion of shareholder interest.
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But the role Dhirubhai cherished most was perhaps that of Indias greatest
wealth creator. In one lifetime, he built, starting from the proverbial scratch,
Indias largest private sector enterprise.
When Dhirubhai embarked on his first business venture, he had a seed capital
of barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he
converted this fledgling enterprise into an Rs 60,000 crore colossusan
achievement which earned Reliance a place on the global Fortune 500 list, the first
ever Indian private company to do so.
Dhirubhai is widely regarded as the father of Indias capital markets. In 1977,
when Reliance Textile Industries Limited first went public, the Indian stock
market was a place patronized by a small club of elite investors which dabbled
in a handful of stocks.
Undaunted, Dhirubhai managed to convince a large number of first-time retail
investors to participate in the unfolding Reliance story and put their hard-earned
money in the Reliance Textile IPO, promising them, in exchange for their trust,
substantial return on their investments. It was to be the start of one of great stories
of mutual respect and reciprocal gain in the Indian markets.
Under Dhirubhais extraordinary vision and leadership, Reliance scripted one
of the greatest growth stories in corporate history anywhere in the world, and went
on to become Indias largest private sector enterprise.
Throughout this amazing journey, Dhirubhai always kept the interests of the
ordinary shareholder uppermost in mind, in the process making millionaires out of
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many of the initial investors in the Reliance stock, and creating one of the worlds
largest shareholder families.
ABOUT RELIANCE:-
Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the
Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of Indias leading
private sector financial services companies, and ranks among the top 3 private sector
financial services and banking companies, in terms of net worth. Reliance Capital has
interests in asset management and mutual funds, stock broking, life and general
insurance, proprietary investments, private equity and other activities in financial
services.
Reliance Capital Limited (RCL) is a Non-Banking Financial Company
(NBFC) registered with the Reserve Bank of India under section 45-IA of the
Reserve Bank of India Act, 1934.
Reliance Capital sees immense potential in the rapidly growing financial
services sector in India and aims to become a dominant player in this industry and
offer fully integrated financial services. Reliance Life Insurance is another step
forward for Reliance Capital Limited to offer need based Life Insurance solutions
to individuals and Corporate.
MARKETING STRATREGIES OF THE COMPANY:-
SOME OF THE STRATEGIES ADOPTED BY RELIANCE LIFE INSURANCE
COMPANY:-
Reliance Life Insurance plans to tap Reliance Communications' 2.5-crore .Telephony
subscriber base to market its products. The company is considering a series of options
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to leverage its relationship with Reliance Communications. However, a joint product
or a co-branded solution would require approval from the Insurance Regulatory and
Development Authority Customers of R World, the information and entertainment
portal of
Reliance Communications would also be able to pay premiums through a bank
account, provided the bank is listed on the network. Reliance Life Insurance officials,
however, offered no comment when asked whether there would be an arrangement for
payment of commission to Reliance Communications. As an alternative channel for
distribution, insurance companies usually tie up with banks. In the case of banc
assurance, where there is a corporate agency tie-up, the commission could range from
5 per cent to 40 per cent
of first-year premium depending on the commission loaded on to the product at the
time of registration with IRDA.
INSURANCE:-
Insurance is basically a sharing device, a tool for managing risk. The losses to assets
caused by unexpected contingencies like fire, earthquake, accidents, etc. are met out
of a common pool contributed by a large number of persons who are exposed to
similar risk. This contribution is known as premium, is used to pay the losses suffered
by the unfortunate few. The concept of insurance is based on certain principals.
1. The contingency of the insured event should be fortuitous in nature, i.e. beyond
human control.
2. The insured should not make any profit out of it.
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It requires a large number of insured to make the principal of insurance work, based
on law of profitability.
Business of insurance is related to the protection of the economic value of assets. The
asset would have been created through the efforts of the owner, in the expectation
that, either through the income generated there from or some other output, some of his
needs would be met. However, if the asset gets lost earlier, being destroyed or made
non-functional, through an accident or other unfortunate event, the owner and those
deriving benefits there from suffer.
The business of insurance done by insurance companies (called insurers) is to bring
together persons with common interests (sharing the same risks) collecting the share
or contribution (called premium) from all of them, and paying out compensations
(called claims) to those who suffer.
PURPOSE AND NEED OF INSURANCE
Assets are insured, because they are likely to be destroyed, through accidental
occurrences. Such possible occurrences are called perils, Fire, floods, breakdown,
lightning, earthquakes, etc, are perils. If such perils can cause damage to the asset, we
say that the asset is exposed to that risk. Perils are the events. Risks are the
consequential losses or damages. The risk to a owner of a building, because of the
peril of an earthquake, may be a few lakhs or few crores of rupees, depending on the
cost of the building and the contents in it.
The risk only means that there is a possibility of loss or damage. The damage may or
may not happen. Insurance is relevant only if there are uncertainties. If there is no
uncertainty about the occurrence of an event, it cannot be insured against. In the case
of a human being, death is certain, but the time of death is uncertain, In the case of a
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person who is terminally ill, the time of death is not uncertain, though not exactly
known. He cannot be insured.
Insurance does not protect the asset. It does not prevent its loss due to the peril. The
peril cannot be avoided through insurance. The peril can sometimes be avoided,
through better safety and damage control management. Insurance only tries to reduce
the impact of the risk and the owner of the assets and those who depend on that asset.
It only compensates the losses and that too, not fully.
Only economic consequences can be insured. If the loss is not financial, insurance
may not be possible. Examples of non economic losses are love and affection of
parents, leadership of managers, sentimental attachments to family heirlooms,
innovative and creative abilities, etc.
CONTRACT OF LIFE INSURANCE
Life insurance contract is an agreement that the insurer will pay a sum of money,
called the sum assured, on the happening of a specified event, usually the death of the
assured or his survival to the end of the specific term. On the other hand, the assured
will pay an immediate smaller payment or a series of regular smaller payments, called
premium.
There are two important legal aspects of life insurance worth nothing.
UTMOST GOOD FAITH: A life insurance contract is not just a contract of good
faith, which any commercial transaction is, but it is a contract of utmost good faith.
Since one party to the contract, the assured, knows all the facts which the other party,
the insurer, cannot know despite reasonable efforts. There is a positive duty on the
former to voluntarily disclose, accurately and fully, all facts material to the risk being
proposed. A fact is considered material if it would influence the judgment of a prudent
insurer in deciding whether to insure a particular risk, or the terms on which to insure
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it. For instance the existing of other life insurance policies is a material fact. The
impact of unlimited duty to; disclose is mitigated to some extent by sec. 45 of
insurance act. Which requires the following to be proved by the insurer in order to
avoid the contract
1 That a material fact was either misrepresented or not disclosed by the policy
holder.
2 That such a misrepresentation or non disclosure by the policy holder was in his
knowledge.
3 That it was done fraudulently
INSURABLE INTEREST: It is the relationship of the insured with the subject
matter (assured) which is recognized in law and gives a legal right to insure that
person. Thus a person is presumed to have unlimited insurable interest in his own life.
There are other presumptions of insurable interest, for example a person having
insurable interest on the life of his or her spouse. A parent is also presumed to be
having insurable interest on the life of her child. Except those, insurable interest is
limited to the financial loss a person might suffer due to the loss of the subject matter.
Thus insurable interest of the creditor on the life of the debtor will be limited to the
outstanding loan and interest thereon.
TYPES OF INSURANCE
Life insurance
Non-life insurance or General insurance
These insurance are provided both by government and private insurance companies.
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The IRDA Act, 1999 amending the Insurance Act, 1938 in Section 2 sub-section 7(a)
state:
Indian Insurance Company means any Insurer being a company-
(a) which is formed and registered under Companies Act, 1956(1 of 1956);
(b) in which aggregate holding of equity shares by a foreign company either
by itself or through its subsidiary companies or its nominees do not exceed
26% paid up equity capital of such Indian Insurance Company;
whose sole purpose is to carry on life insurance business or general insurance
business or re-insurance business.
The important activities of a life insurance company are:-
a) Procuring from prospective buyers proposals to grant life insurance cover;
b) Checking up and specifying the terms of acceptance called Understanding;
c) Issue contractual documents called policy incorporating various terms and
condition;
d) Provide after sales services including payment of money as per contract;
e) Conducting other supporting activities like, investment of funds, carrying out
solvency measures, finalization of accounts, getting or causing audit of
accounts, actuarial valuation including updating mortality tables; and
f) Developing new products, sales promotion activities including publicity,
training of its personal (Sales/ administration).
ROLE OF INSURANCE IN DEVELOPMENT OF THE ECONOMY
Every rupee invested in life insurance contributes in three ways to the
development of the economy.
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Firstly, it relieves those insuring from the worry and anxiety they may have
about how they or their family would meet the cost of certain events, such as
the marriage of the children, the premature death of the main income
provider or maintaining a regular income in their retirement. If an individual
is free from these worries he can perform better in his job.
i. Secondly, it directs peoples savings. The insurer invests these funds
in various business enterprises, government bonds, loans to public and
private projects including infrastructure and socially orientated
projects. Thus the insurance premium provides the much needed funds
for the development of the nations economy.
ii . Thirdly, these savings act as an anti inflationary force in the nations
financial structure. Inflation happens when prices of good go up. One
iii. of the causes is when a lot of buying takes place, due to the spending
of a major portion of income by people. Savings in insurance reduce
buying, as people will have less money to spend.
NEED FOR LIFE INSURANCE
Life is unpredictable. But in face of adversity, our responsibilities towards our parents,
children and loved ones need not be compromised. Insurance planning equips you to
smooth out the uncertainties and adversities that life might send your way, so that the
best that life has to offer, secure in the knowledge that your beloved ones are well
provided for.
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As life insurance became more established, it was realized what a useful tool it was
for a number of situations, including
a) Temporary needs/ threat
The original purpose of life insurance remains an important element, namely
providing for replacement of income on death etc., typically the case of the
breadwinner dying an early death.
b) Regular Saving
Providing for ones family and oneself, as a medium to long-term exercise
(through a series of regular payment of premiums). This has become more
relevant in recent times as people seek financial independence from their
family.
c) Investment
Put simply, the building up of savings while safeguarding it from the ravages
of inflation. Unlike regular saving products, investment products are
traditionally lump sum investment, where the individual makes a one-time
payment.
d) Retirement
Provision for ones own later years becomes increasingly necessary, especially in a
changing cultural and social environment. One can buy a suitable insurance policy,
which will provide periodical payments in ones old age, generally identified as the
problem of living too long.
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ADVANTAGE OF LIFE INSURANCE
(1) It is superior to the traditional saving Instruments.
As well as providing a secure vehicle to build up savings etc, it provides peace of
mind to the policyholder. In the event of untimely death, of say the main earner in the
family, the policy will pay out the guaranteed sum assured, which is likely to be
significantly more than the total premiums paid. With more traditional savings
instruments, such as fixed deposits, the only return would be the amount invested plus
any interest accrued.
(2) It encourages saving and forces thrift.
Once an insurance contract has been entered into, the insured has an obligation to
continue paying premiums, until the end of the term of the policy; otherwise the
policy will lapse. In other words, it becomes compulsory for the insured to
save regularly and spend wisely. In contrast savings held in a deposit account can be
accessed or stopped easily.
(3) It provides easy settlement and protection against creditors.
Once a person is appointed for receiving the benefits (nomination) or a transfer of
rights is made (assignment), a claim under the life insurance contract can be settled
easily. In addition, creditors have no rights to any monies paid out by the insurer,
where the policy is written under trust. Under the Married Womens Property Act
(M.W.P Act), the money available from the policy forms a kind of trust which cannot
be attached by judgment creditors.
(4) It helps to achieve the purpose of the Life Assured.
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If someone receives a large sum of money, it is possible that they may spend the
money unwisely or in a speculative way. To overcome this, the person taking the
policy can instruct the insurer that the claim amount is given in installments.
(5) It can be enchased and facilitates quick borrowing.
Some contracts may allow the policy to be surrendered for a cash amount, if a
policyholder is not in a position to pay the premium. A loan, from certain policies, can
be taken for a temporary period to tide over the difficult. Some lending institutions
will accept a life insurance policy as collateral for a personal or commercial loan.
(6) Tax Relief
The policyholder obtains Income Tax rebated by paying the insurance premium. The
specified forms of saving which enjoy a tax rebate, include Life Insurance Premiums
and contributions to a recognized Provident Fund etc., section 10 (10D) & other sub-
sections of Section 80C of the Income Tax Act 1961.
WHAT DOES LIFE INSURANCE HAVE TO OFFER?
Life insurance is many different things to many different people. For some, it is a
premium to be paid on time. For others it offers liquidity since cash can be borrowed
when needed. For the investment-minded, it denotes a constantly growing capital
account and numerous other benefits.
The contractual guarantee is the promise to pay, backed by one of the oldest and most
stably regulated financial industry operating in the Indian sub-continent today.
1) Insurance Buys Time and Money
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People like to refer to life insurance as time insurance, the reason being that life
insurance proceeds are paid to the insured's beneficiaries in case of death. The money
proffered by life insurance helps buy time to adjust to the change of circumstances.
Insurance provides large amounts of cash that will keep the lifestyle for the survivors
the way it was before the insured's death.
2) Insurance Offers Peace of Mind
For the person who buys an insurance policy, it offers absolute and complete peace of
mind. He or she knows that the decision made by him will provide sound benefits in
the future, whether or not the individual may live to see it.
3) Multiple Applications
The future is uncertain for each and every one. No one knows how long he or she will
live. The investment benefit is paid to the insured's beneficiaries after his death or it
can be used during the life as well. Life insurance policy owners can turn to the cash
value of the policy in case of a financial emergency when all avenues are either
blocked or denied.
4) Enduring Elasticity
Since life insurance is flexible enough to serve several needs, the insured can keep
several long-term goals in mind once he or she invests in the insurance plan. The cash
value of the policy can be allocated towards augmenting the monthly income during
the retirement years. Leisure years should be turned into pleasure years. Permanent
life insurance is designed on the concepts of long-term flexibility.
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5) Financial Security
The insurance policy offers contractual guarantees to people looking for peace of
mind when they buy life insurance. Life insurance offers complete financial security.
The purchase of life insurance demonstrates concern for a family's future financial
well being.
6) Regard for Family
The purchase of life insurance clearly displays care and concern for the people the
policy owner loves.
7) Insurance is Safer
No financial institution can do what life insurance does. No industry can back its
products with reserves and surplus as sound as those of the insurance industry.
proof of strength and safety that insurance companies have ensured even under the
most adverse of conditions is a matter of pride for the entire insurance industry. For
generation after generation, life insurance has been acclaimed as the very benchmark
of security against which the other industries are measured.
OPPORTUNITIES FOR INSURANCE COMPANIES
In the now open sector on insurance, the following is what I feel will determine the
success of the company in particular and the industry in general:
A change in the attitude of the population
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Indians have always been wary of employing their hard-earned money in a venture
that will pay them on their death. Insurance has always been used as a Tax saving
tool. No more, no less. It is depend upon the Financial Consultant to educate the
people to secure/insure their future against any unknown calamity and make a shield
around their families and businesses.
An open and transparent environment created under the IRDA.
The reason for this being on the top of our understanding is that when ever we
have seen any sector open up in India there are always grey areas and unsure
policies. These are not exactly what any player, be it Indian or foreign, looks for.
It creates an air of uncertainty in all the decision making process. Insurance as a
sector requires players who are strong financially and are willing to wait for
returns. Their confidence can be bolstered only if there is an open and a
transparent policy guidelines. This will also help the consumers feel safe that the
regulatory is an active one and cares to do everything possible to keep things
under control and help the insurance environment grow maturely.
A well-established distribution network.
To cater to the largest democracy in the world is by no means a cakewalk. Insurance
profits are directly related to number of insured and this is in turn related to the reach.
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Trained professionals to build and sell the product.
It is said that the insurance agent (Financial Consultant) is the best salesman in the
world. He makes you pay, regularly, an amount promising to pay back only on your
death. Thus the players will require an excellent sales team to sell their products in the
now competitive environment.
Encouragement of new and better products and letting the hackneyed ones die out.
This will itself ensure the market grows. And that every class/society gets a product
that best suits them.
SWOT ANALYSIS OF INSURANCE INDUSTRY
STRENGTH;-
1. Best returns with the added advantage of 100% life insurance coverage.
2. Good option for new investors into the market as all the money is invested
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by best fund managers so with less knowledge also they can earn good
returns.
3. Best commission charges paid to the agents which vary from 12% to 40%
which is much higher as compared to mutual funds i.e. , only 22.5%.
WEAKNESS:-
1. RELIANCE LIFE INSURANCE could not able to match LIC in remote areas
services.
2. Misleading facts given by Financial Consultant about the returns of ULIPs.
3. Hidden charges taken by the companies.
4. Less Promotional Campaigns.
OPPORTUNITY:-
1. 80 percent of Indian population is still under insured. So there is a big
opportunity for insurance companies.
2. As the stock market can be under the mark any time so it can bring loss to the
investors but as in ULIPs there is proper mixture of debt securities and Equity
so the loss is incurred during dark trading days also.
3. Unit-linked products are exempted from tax and they provide life insurance.
4. Increasing consumer awareness about Insurance and its use.
THREAT:-
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1. Cannibalism within the industry by providing misleading figures to the investors.
2. Govt.s instability has a long term repercussions affecting companys policies and
its growth.
LIFE INSURANCE 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 General insurance
business in India, on the other hand, can trace its roots to the Triton Insurance
Company Limited, the first general insurance company established in the year 1850 in
Calcutta by the British. 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
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their hold on this business but despite the growth that was witnessed, insurance
remained an urban phenomenon.
The Government of India in 1956, brought together over 240 private life insurers and
provident societies under one nationalized monopoly corporation and Life Insurance
Corporation (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 continued to thrive with the private sector till 1972.
Their operations were restricted to organized trade and industry in
large cities. The general insurance industry was nationalized in 1972. With this, nearly
107 insurers were amalgamated and grouped into four companies- National Insurance
Company, New India Assurance Company, Oriental Insurance Company and United
India Insurance Company.
These were subsidiaries of the General Insurance Company (GIC).
Life insurance business in India was nationalized with effect from 1 st September,
1958. From this date, the life insurance business transacted by 154 Indian life insurers,
the Indian business of 16 foreign insurers and 75 provident societies was
taken over by Government of India Act, 1956, passed by the Parliament on 18-6-56.
The Life Insurance Corporation of India (LIC) which had been established i.e. 19-5-
1956 as a body corporate having perpetual succession and common seal with power to
acquire, hold and dispose property and to sue and be sued in its name.
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Under Section 30 of the Act, from the appointment date i.e. 1-9-56, LIC acquired the
exclusive privilege of carrying on life insurance business in India and the certificate of
registration granted to any insurer under the Insurance Act, 1938 ceased to have effect
from the said date.
Now the above, provision of section 30 have been altered by insertion of Section 30A
consequent to the enactment of the IRDA Act, 1999. As a result the exclusive
privilege given to the LIC has been withdrawn.
The Government of India liberalized the insurance sector in March 2000 with the
passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting
all entry restrictions for private players and allowing foreign players to enter the
market with some limits on direct foreign ownership. Under the current guidelines,
there is a 26 percent equity capital for foreign partners in an insurance company.
There is a proposal to increase this limit to 49 percent.
The opening up of the sector is likely to lead to greater spread and deepening of
insurance in India and this may also include restructuring and revitalizing of the
public sector companies. In the private sector 14 life insurance companies have been
registered. A host of private Insurance companies operating in both life and non-life
segments have started selling their insurance policies since 2001.
THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
(IRDA)BACKGROUND
A faster development and wider impact of the insurance industry were to be achieved
through a process of insurance reforms resulting in the liberalization of the market and
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in the passage of the Insurance Regulatory and Development Authority (IRDA) Act,
1999. The reforms procedures recognized simultaneously the need for development of
the sector in addition to the traditional concept of regulation and thus conferred on the
Authority the obligation to develop the sector as well.
MISSION STATEMENT
The IRDA main mission was stated as follows:
To protect the interest of and secure fair treatment to policyholders:
To bring about speedy and orderly growth of the insurance industry, for the
benefit of the common man, and to provide long terms funds for accelerating
growth of the economy;
To set, promote, monitor and enforce high standards of integrity, financial
soundness, fair dealing and competence of those it regulates:
To ensure that insurance customers receive precise, clear and correct
information about products and services and make them aware of their
responsibilities and duties in this regard;
To ensure speedy settlement of genuine claims, to prevent insurance frauds
and other malpractices and put in place effective grievances redressed
machinery;
To promote fairness, transparency and orderly conduct in financial markets
dealing with insurance and build a reliable management information system to
enforce high standards of financial soundness amongst market players;
IRDA POWERS AND FUNCTIONS
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Subject to the provisions of IRDA Act (1990), IRDA will: regulate, promote and
ensure orderly growth of the insurance business and re-insurance business, which
will include the following main functions (excerpts):
Issue to the applicant a certificate of registration, renew, modify, withdraw,
suspend or cancel such registration;
Protection of the interest of the policy holders in matters concerning assigning
off policy, nomination by policy holders, insurable interest, settlement of
insurance claim, surrender value of policy and others terms and conditions of
contracts of insurance;
Specifying requisite qualifications, code of conduct and practical training for
intermediary or insurance intermediaries and agents.
Promoting and regulation professional organizations connected with the
insurance and re-insurance business;
Levying fees and other charges for carrying out the purposes of the Act;
Calling for information from, undertaking inspection of, conducting enquiries
and investigations including audit of the insurers, intermediaries, insurance
intermediaries and other organizations connected with the insurance business;
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Specifying the percentage of life insurance and general insurance business to
be undertaken by the insurer in the rural or social sector.
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 on time monopoly of the market LIC. Since the
advent of the private players in the market the industry has seen new and innovative
steps taken by the players in this sector. The new players have improved the service
quality of the insurance. As a result LIC down the years have seen the declining phase
in its career.
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 market share has
decreased from 95% (2002-03) to 81 %( 2004-05).The following companies has the
rest of the market share of the insurance industry
SPECIAL PROVISIONS
The Income Tax Act and Life Insurance policies
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Under Section 10(10D), any sum received under a Life Insurance policy (not being a
Key Man policy) is also exempt from taxation. But it is wise to remember that
Pensions received from Annuity plans are not exempted from Income Tax.
Section 80C provides a deduction up to Rs.1,00,000/- to an individual
assesses for any amount paid as a premium.
POLICYHOLDERS GRIEVANCES
Policyholders may have complaints against insurers either in respect of their policies
or their claims. As per Regulations for Protection of policyholders interests, 2002,
every insurer should have in place, a grievance redressal system to address the
complaints of policyholders. The IRDA has a Grievance Redressal Cell which plays a
facilitative role by taking up complaints against insurers with the respective
companies for speedy resolution. The IRDA however does not adjudicate on
complaints.
INDIAN INSURANCE INDUSTRY
Insurance industry, as on 1.4.2000, comprised mainly two players:
Life Insurers:
Life Insurance Corporation of India (LIC)
General Insurers:
General Insurance Corporation of India (GIC)
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GIC had four subsidiary companies, namely (with effect from Dec'2000, these
subsidiaries have been de-linked from the parent company and made as independent
insurance companies.
1. The Oriental Insurance Company Limited
2. The New India Assurance Company Limited,
3. National Insurance Company Limited
4. United India Insurance Company Limited.
Yr: 2000-2001: (From 2nd April '2000 to 31st December'2001)
Insurance Industry in the year 2000-2001 had 16 new entrants, namely:
Life Insurers:
S.No. Reg.
Number
Date of Reg. Name of the Company
1 101 23.10.2000 HDFC Standard Life Insurance Company
Ltd.
2 104 15.11.2000 Reliance insurance Insurance Co. Ltd.
3 105 24.11.2000 Reliance Life Insurance Company Ltd.
4 107 10.01.2001 Kotak Mahindra Old Mutual Life Insurance
Limited
5 109 31.01.2001 Reliance Insurance Company Ltd.
6 110 12.02.2001 Tata AIG Life Insurance Company Ltd.
7 111 30.03.2001 SBI Life Insurance Company Limited.
8 114 02.08.2001 ING Vysya Life Insurance Company
Private Limited
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9 116 03.08.2001 Bajaj Allianz Life Insurance Company
Limited
General Insurers :
S.No. Registration
Number
Date of
Registration
Name of the Company
1 102 23.10.2000 Royal Sundaram Alliance
Insurance Company Limited
2 103 23.10.2000 Reliance General Insurance
Company Limited.
3 106 04.12.2000 IFFCO Tokyo General
Insurance Co. Ltd
4 108 22.01.2001 TATA AIG General
Insurance Company Ltd.
5 113 02.05.2001 Bajaj Allianz General
Insurance Company Limited
6 115 03.08.2001 ICICI Lombard General
Insurance Company Limited.
Yr: 2001-2002 : (From 1st Jan 2001 to Dec. 2002)
Insurance Industry in this year, so far has 5new entrants; namely
Life Insurers:
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S.No. Reg.
Number
Date of Reg. Name of the Company
1 121 03.01.2002 AMP Sanmar Life Insurance Company
Limited.
2 122 14.05.2002 Aviva Life Insurance Co. India Pvt. Ltd.
General Insurers :
S.No. Registration
Number
Date of
Registration
Name of the Company
1 123 15.07.2002 Cholamandalam General
Insurance Company Ltd.
2. 124 27.08.2002 Export Credit Guarantee
Corporation Ltd.
3. 125 27.08.2002 HDFC-Chubb General
Insurance Co. Ltd.
Yr: 2003-2004: (From 1st Jan 2003 till Date)
Insurance Industry in this year, so far has 1new entrants; namely
Life Insurers:
S.No. Registration
Number
Name of the Company
1 127 Sahara India Insurance Company Ltd.
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Yr: 2004-2005:
Insurance Industry in this year, so far has 1new entrants; namely
Life Insurers:
S.No. Registration
Number
Date of Reg. Name of the Company
1 128 17.11.2005 Shriram Life Insurance Company
Ltd.
PROTECTION OF THE INTEREST OF POLICY HOLDERS
IRDA has the responsibility of protecting the interest of insurance policyholders.
Towards achieving this objective, the Authority has taken the following steps:
IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide
for: policy proposal documents in easily understandable language; claims
procedure in both life and non-life; setting up of grievance redressal machinery;
speedy settlement of claims; and policyholders' servicing. The Regulation also
provides for payment of interest by insurers for the delay in settlement of claim.
The insurers are required to maintain solvency margins so that they are in a position to
meet their obligations towards policyholders with regard to payment of claims.
It is obligatory on the part of the insurance companies to disclose clearly the benefits,
terms and conditions under the policy. The advertisements issued by the insurers
should not mislead the insuring public.
All insurers are required to set up proper grievance redress machinery in their head
office and at their other offices.
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The Authority takes up with the insurers any complaint received from the
policyholders in connection with services provided by them under the insurance
contract.
MARKET SHARE ANALYSIS:-
PARTICULARS 2004-05 2005-06 2006-07
LIC 87.7 71.04 71.44
PRIVATE PLAYERS 12.3 28.96 28.56
growth in market share of private
players
87.7
71.04
12.3
28.96
0
10
20
30
40
50
60
70
80
90
100
2004-05 2005-06
years
market
share(%
LIC
Pvt. Players
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CHAPTER 2
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Channel Development:
Channel development is basically to convince the potential customer to become
advisors. Now these advisors will convince some other people and that how channel is
made. Now the channel development involves a recruitment & selection process,
which a person has to undergo in order to become an advisor.
Reliance insurance has identified individual agents as its primary channel of
distribution. The Company places a lot of emphasis on its selection process. The agent
advisors are trained in-house to ensure optimal control on quality of training.
Reliance insurance invests significantly in its training programme and each agent is
trained for 152 hours as opposed to the mandatory 100 hours stipulated by the IRDA
before beginning to sell in the marketplace. Training is a continuous process for
agents at Reliance insurance and ensures development of skills and knowledge
through a structured programme spread over 500 hours in two years. This focus on
continuous quality training has resulted in the company having amongst the highest
agent pass rate in IRDA examinations and the agents have the highest productivity
among private life insurers. 201 agent advisors have qualified for the Million Dollar
Round Table (MDRT) membership in 2005. MDRT is an exclusive congregation of
the worlds top selling insurance agents and is internationally recognized as the
standard of excellence in the life insurance business.
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Having set a best in class agency distribution model in place, the company is
spearheading a major thrust into additional distribution channels to further grow its
business. The company is using a five-pronged strategy to pursue alternative channels
of distribution. These include the franchisee model, rural business, direct sales force
involving group insurance and telemarketing opportunities, banc assurance and
corporate alliances.
Recruitment and selection of insurance advisors
As we know that Recruitment involves seeking and attracting a pool of people, from
which qualified candidates for the job vacancies can be chosen. Recruitment sets out
the necessary stages to clarify what kind of person is required, where he/she might be
found and how to make right choice.
Recruitment of life insurance agent is also a very impressive criterion because in this
process we need to recruit and select those persons who bear some special
characteristics, which are very necessary to sell insurance. Life insurance is an
intangible product and it needs insurance advisors who are having tremendous skills
to sell an intangible product.
The key to good selection is preparation. So many people are found of their ability to
pick a good sales person and so often, that person is good but not at the particular job
which needs to be done. It is vital to be clear about what job needs doing and what
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kind of person would do it best; and then to find that person. Once the plan has been
decided, the choice of candidate should be made carefully.
The effectiveness of the unit manager is dependent to great extent on the effectiveness
of the team of advisors supporting him, because an advisors works under a unit
manager. So it is very important to recruit a very good team of life insurance advisors
who can give their best to increase the effectiveness and the profit of the company.
RELIANCE give very much stress on it and to recruit only those
people as a life insurance advisor who is having some key skills specifies by the
company.
Further we will show the recruitment and selection procedure of life insurance
advisors in Reliance insurance company ltd, and try to analyze whether it is the best
process of recruitment or company can do certain new modifications to enhance their
recruitment processor for the increment of companys effectiveness. From the next
page, we will see the recruitment and selection procedure of life insurance advisors.
BE AN ADVISOR:
Being an insurance advisor aspire to provide state of the art customer services and
opportunities and venues for enterprising people to grow and prosper.
Backed by latest technology, they will offer their customers:-
1. Complete and diversified product portfolio.
2. Faster and more accurate service.
3. Multi channel distribution system.
4. High quality financial advisers.
Eligibility norms provided by IRDA for becoming an insurance advisor
1. Person should be at least 18 years of age;
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2. Person have completed 10+2;
3. Person should attain 100 hours training.
Other than this the person should possess
1. Good communication skills
2. Relationship skills
3. Confidence
4. Self motivation
5. Persuasion
6. Urge to be financially independent
BEING AN ADVISOR WITH RELIANCE INSURANCE
Being a Reliance Insurance advisor can be an enriching and exciting career option.
Its an opportunity to associate with an industry leader, be in touch with the latest and
finest insurance practices from around the globe, and grow both personally and
professionally.
Here are some of the benefits of being a Reliance Insurance Advisor:
o Unlimited earning potential .
o A clear career path .
o All round support through exclusive advertising, your own in-house
consultant, and world-class training .
o A comprehensive benefit package.
What does it take to be a Reliance Insurance advisor?
At Reliance Insurance, we believe that our Advisors are our ambassadors to the
customers. They are a key source of business for the organization, and are the
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continuing link with our clients. That is why, we take a lot of care in recruiting and
developing our advisor force, so that we continue to set higher standards of quality in
service and salesmanship. To cater to the needs of the knowledge-oriented
marketplace, we look for graduates who are service-oriented, good communicators
and enjoy meeting new people. Prior sales experience is an added benefit.
Some of the qualities we seek are:
1. self- motivation
2. a master communicator
3. a go-getter
4. a graduate
TRAINING
At Reliance Insurance, we understand the importance of training in a dynamic
business environment. Our advisors go through both generic and specific, professional
programs that help them remain well-informed and knowledgeable about the
companys 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, Reliance Insurance also offers
convenient training options such as online and self-learning are also provided by the
organization.
An 18-day training schedule covers the mandatory IRDA training requirements and
Reliance Insurance product-training module. Revision session ensure that the
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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 Agency Manager and the management provide continuous
support to the advisors in achieving independence towards garnering business.
CAREER
At Reliance Insurance, career development is emphasized upon from the very day the
advisor joins the system. Though individual meetings with his or her manager, the
advisor can discuss various issues related to business development and career
enhancement. Expectations from the organization in terms of chalking a career in the
insurance industry are also discussed.
OPPORTUNITIES FOR BEING AN ADVISOR
To be a part of world class sales team
Work from your office or residence
Work fulltime or part time
Earn commission, bonuses and incentives
Flexible career
Unlimited earning potential
ROLE OF AN ADVISOR
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An insurance advisor plays an important role. He is link between the insurance
company on the one hand and the prospect on the other hand. He has to understand the
life insurance needs of the prospect and offer to meet them by providing insurance
solution in the form of companys product. In your role an insurance advisor, unless
you are convinced of your self-worth, you may not be effective in your professional
pursuit. The question arises whether an insurance advisor is a professional like a
doctor, a lawyer or a chartered accountant. There are four basic requirements for any
vocation to be called a profession:
It requires acquisition of expertise on the part of its practitioner and also its
updating.
There has to be customer-orientation, so that the focus of the professional is on
satisfying the needs of the customer and his own needs get satisfied if the
customer is satisfied.
Certain of ethics in dealing with clients, fellow-professionals, etc, have to be
observed.
The vocation should be noble in that it contributes to the society.
THE REQUISITES OF A TIDE AGENCY/ADVISOR IN RELIANCE
1. One copy of date of birth proof (10 th mark sheet).
2. One copy of 12th class/graduation mark sheet.
3. One residence proof.
4. 8 passport size photographs.
5. PAN Card.
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ADVISOR QUALITY PARAMETER
We have to identify right kind of quality people to be advisors with ICICI PRU. For
this purpose I targeted the following sets of people:
1. CA, CS, ICWA
2. DOCTORS
3. LAWYERS
4. TAX CONS
5. MARKETING EXECUTIVES OF DIFFERENT BANKS
6. UNEMPLOYED
7. RETIRED PEOPLE
8. HOUSE WIVES
9. LOCAL POLITICIANS
TECHNIQUES USED IN RECRUITMENT
To approach the above mentioned people I used the following methods:
1. PROSPECTING: I decided to do prospecting in front of the BANKS AND
FINANCIAL INSTITUTIONS as a large number of marketing executives visit
these places throughout the day. I used to meet these people and offer them to
join the INDIAS leading PVT. Sector group ICICI as FINANCIAL
ADVISORS. I got the maximum recruitments through prospecting. The best
thing about prospecting was that at the end of the day I used to have more than
100 references to call for the next day.
2. COLD CALLING : It was also a very successful technique in recruitment of
advisors. Though the conversion rate was very low but I got very potential
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advisors through cold calling. I used business directories, yellow pages,
telephone directories, news papers for the same purpose.
3. TAKING REFRENCES : Taking references is very essential in the insurance
business as this business is based on contacts. I took references from the
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4. following:
5. PAMPHLET DISTRIBUTION: I distributed pamphlets at Railway Stations,
Bus Stops, busy red lights, highlighting the advantages of being an advisor
with RELIANCE INSURANCE. I got a good response and call backs and was
able to find some good prospects through this procedure.
CORPORATE MISSION
To set the standard in helping our customers manage their financial future.
NAMES
RELATIVESFRIEND
S
NEIGHBOURSCUSTOME
S
DATABASE
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BELOW ARE FEW OF THE PLANS THAT ARE OFFERED BY RELIANCE LIFE
INSURANCE
INSURANCE PLANS AVAILABLE
1. Products (Individual Plans)
Savings (Endowment)
2. Reliance Endowment Plan
(formerly Divya Shree)
3. Reliance Special Endowment Plan
(formerly Subha Shree)
4. Reliance Cash Flow Plan
(formerly Dhana Shree)
5. Reliance Child Plan
(formerly Yuva Shree)
6. Reliance Whole Life Plan
(formerly Nithya Shree)
Pensions
7. Reliance Golden Years Plan
(formerly Bhagya Shree)
Investments
8. Reliance Market Return Plan
(formerly Kanaka Shree)
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9. Risk / Protection
10. Reliance Term Plan
(formerly Raksha Shree)
Products (Group / Corporate Plans)
11. Risk (Protection)
Reliance Group Term Assurance Policy
(formerly Group Term Assurance Policy)
Reliance EDLI Scheme
(formerly EDLI Scheme)
12. Pensions
a. Reliance Group Gratuity Policy
(formerly Group Gratuity Policy)
b. Reliance Group Superannuation Policy
(formerly Group Superannuation Policy)
13. Reliance Money Guarantee Plan
Tax Benefits
INCOME TAX
SECTION
GROSS ANNUAL
SALARY
HOW MUCH TAX
CAN YOU SAVE?
RELIANCE LIFE
INSURUANCE PLAN
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Sec. 80C Across All income
Slabs
Upto Rs. 33,990
saved on
investment of
Rs. 1,00,000.
All the life insurance
plans.
Sec. 80 CCC Across all income
slabs.
Upto Rs. 33,990
saved on
Investment of
Rs.1,00,000.
All the pension plans.
Sec. 80 D Across all income
slabs
Upto Rs. 3,399
saved on
Investment of
Rs. 10,000.
All the health insurance
riders available with the
conventional plans.
TOTAL SAVINGS
POSSIBLERs37,389
Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under
Sec. 80 D, calculated for a male with gross annual income
exceeding Rs. 10,00,000.
2.3 Reliance Policies
(1) Reliance Children Plans
What could make you happier than knowing, that your child's future is secure?
Nothing, we suppose. Which is why, Reliance Life Insurance brings to you Reliance
Sec. 10 (10)D Under Sec. 10(10D), the benefits you receive are completely tax-free,
subject to the conditions laid down therein.
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Secure Child Plan, a unit-linked Insurance Plan, that gives you the freedom to enjoy
today with your child, because his tomorrow is in safe hands.
Do you see your child becoming a trailblazer?
Will they create the ultimate symphony or give sports a new dimension?
Our children may just be the ones to end the arms race and wipe out poverty from
the face of the Earth. But for them to be able to aim for the skies, YOU NEED TO
ACT NOW!
Introducing Reliance Secure Child Plan - a unique life insurance cum savings plan.
secure the future of your child.
Key FeaturesInsurance cover on the life of child
Your child is completely protected - we will continue to pay the
premiums even if you are not alive
Life time income to child in the event of disability
Return Shield option to protect your investment returns
Liquidity in the form of partial withdrawals
Capital guarantee available on maturity and on death of the child for
basic and top-up premiums
Option to package with Accidental Death and Total and Permanent
Disablement Rider, Critical Conditions Rider and Term Life Insurance
Benefit Rider.
(2)Reliance Health + Wealth Policy
UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT
PORTFOLIO IS BORNE BY THE POLICYHOLDER.
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There are times when late working hours take precedence over your health check-ups.
And there are times when a visit to the doctor seems more important than dividends
on your shares. In the rat race to make money, we often forget to take care of
ourselves.
We understand this predicament. Here is a plan that will ensure that your wealth keeps
increasing constantly and yet your health does not take a backseat. The Reliance
Wealth Health Plan. A plan that gives you the benefits of wealth & health.
Life changes. And as it does, so do your priorities. After all, the circumstances of your
life can determine the type of health coverage you need.
India has made rapid strides in the health sector. Since Independence, life expectancy
has gone up markedly and survival rates have also increased, still critical health issues
remain. Infectious diseases continue to claim a large number of lives.
Reliance Wealth + Health Plan, a health insurance plan underwritten by Reliance Life
Insurance Company Limited, is designed to work in conjunction with contributions
towards savings.
Key FeatureA Unit Linked plan with Unique Savings ComponentTwin benefit of market linked return and health protectionChoose from two different plan optionsFlexibility to take care of your familys healthFlexibility to switch between funds / plan optionsOption to pay Top-ups
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(3) Reliance Pension Policy
UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT
PORTFOLIO IS BORNE BY THE POLICYHOLDER.
Retirement means different things to different people, while some want to relax and
take a trip around the world, some want to start up a venture of their own, and pursue
a dream harnessed for years. The power to make your autumn years special lies only
with you. The Reliance Super Golden Years Plan gives you the power and the right
kind of solution - A retirement plan that allows you to save systematically and
generate the much-needed corpus to make your olden years look golden.
Key Features
Invest systematically and secure your golden yearsA flexible unit-linked pension product that is different from traditional life
insurance products with Vesting Age between 45 & 70 yearsEight different investment funds to choose fromFlexibility to switch between fundsOption to pay Regular, Single as well as Top-up premiumsFlexibility to advance / extend your Vesting AgeTax free commutation up to one third of Fund Value at Vesting Age
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(4) Reliance Whole life insurance policy
Youve always loved your family. As a loving person you want to be rest assured that
they will be happy, even if something were to happen to you. With Reliance Whole
Life Plan you can be sure that your family will receive that timely financial support
they need.
Go ahead, live your today to the fullest, without a worry about tomorrow.
CHAPTER 3
Key Features
Insurance protection till age 85
Choice of extending your insurance coverage till age 99Convenient Premium Payment TermWealth creation through bonus additionsMore value for your money by way of High Sum Assured Rebate Get Sum
Assured plus Bonuses in case of your unfortunate deathOption to add two Riders Critical Illness and Accidental Death Benefit and
Total and Permanent Disablement RiderPolicy Loan available after three full years premium payment
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RE SEARCH DESIGN
INTRODUCTION:-
A Research Design is the framework or plan for a study which is
used as a guide in col lecting and analyzi ng the data collected. It is the
blue print that is followed in comp leting the stud y. The basic objective
of research cannot be attained without a proper research design. It
spec ifies the methods and procedures for acquir ing the information
needed to conduct the research effectiv ely. It is the overall
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operational patte rn of the project that stip ulates what information
needs tobe collected, from which sources and by what methods.
OBJECTIVES OF STUDY
The main purpose of the training is to get the corporate exposure so as to know that
how the work is done in the company so as to bridge the gap between the academic
institution and corporate world.
It exposes us to technical skills that how the tele-calling is done to get
appointments and helping us to acquire social skills by drawing us into the contact
with real professionals.
It is a vehicle for introducing us to real-life situation, which cannot be
stimulated in classroom.
To know how the recruitment of the financial consultants is done.
To know how one can do personal financial planning.
To know the mindset of the customers about insurance their reactions and
many more.
The research design is of exploratory type as it tries to explore the customers
perception to make a reasonable comparison between the two companies.
NON-PROBABILITY:
EXPLORATORY & DISCRIPTIVE EXPERIMENTAL RESEARCH
The research is primarily both exploratory as well as descriptive in nature.
The sources of information are both primary & secondary.
A well-structured questionnaire was prepared and personal interviews
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were conducted to collect the customers perception and buying behavior,
through this questionnaire.
RESEARCH METHODOLOGY
METHODS OF COLLECTING DATA:
The method of data collected was personal interaction, telephonic interview,
observations of the existing appraisal system of Reliance life insurance
The data so far collected or provided is secondary as total tele-calling was done on an
already existing data for financial planning and to become company s certified
financial consultant. But directories are also used to find out the contacts.
TYPE OF DATA COLLECTED
There are two types of data used. They are primary and secondary data.
Primary data is defined as data that is collected from original sources for a specific
purpose. Secondary data is data collected from indirect sources.
PRIMARY SOURCES
These include the survey or direct communication with employees and questionnaire
method, telephonic interview as well as the personal interview methods of data
collection.
SECONDARY SOURCES
These include books, the internet, company brochures, product brochures, the
company website, newspaper articles etc.
SAMPLING METHODOLOGY
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Sampling Technique:
Initially, a rough draft was prepared keeping in mind the objective of the research. A
pilot study was done in order to know the accuracy of the Questionnaire. The final
Questionnaire was arrived only after certain important changes were done. Thus my
sampling came out to be judgmental and convenient
Sampling Unit:
The respondents who were asked to fill out questionnaires are the sampling units.
These comprise of employees of MNCs, Govt.Employees, Self Employed etc.
Sample size:
The sample size was restricted to only 100, which comprised of mainly people from
different regions of Lucknow due to time constraints.
Sampling Area :
The area of the research was Lucknow, India.
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CHAPTER 4
DATA ANALYSIS
Selection and Placement of Insurance Advisors
A selection system is a set of successive screens at any of which an applicant may be
dropped from further consideration. The process of selection of insurance advisors
differs from companies to companies depending upon the requirement. In RELIANCE
the applicant goes through various stages, the chances of selection get better as more
and more stages are cleared.
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Selection procedure: The following selection procedure is used by for the selection of
life insurance advisor in Reliance insurance company.
o Preliminary interview: In this interview the applicant have face-to-face
interaction with the respective Unit Manager and clear out all queries and
doubts about job. After this interview session, the prospects give his
conformation whether he is interesting to join the organization or not.
o Formal application: After the confirmation of the prospects the next step is to
filling up of application form with the submission of all necessary documents
that are listed below:
--Birth certificate (10 th class passing certificate, driving license,
etc)
--Address proof (ration card, voter card, telephone bill, etc)
--6 passport size color photographs
--Highest qualification certificates (mark sheet)
--A demand draft of Rs. 610 on the favor of Reliance
insurance.
After checking the form and all documents the operations department give its
confirmation that the prospects is genuine and is subject for further process.
o Declaration of date of training and venue: After the previous step, operation
department give the details about the details about training date and about the
venue of the training. The training is a necessary part of the selection
procedure. This training is under the curriculum of Insurance Regulatory And
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Development Authority (IRDA). The duration is 100 hours and it can be get
in one ways:
Full time training (10;00 AM to 05;00 PM)
o Testing: After completing the training conducted by IRDA, a test is conducted
on the same venue. This test is taken based on the training and contains the
syllabus, which is prescribed by the IRDA. The test and previous training is
necessary for every body that wants to become an insurance advisor.
o Issue of license: After passing out the test conducted by IRDA, a license is
issued from the IRDA. This license is the proof for the insurance advisor and
an advisor can start his work just after getting this license. Getting the license
is the last step in selection process.
o Assignment to the Unit Manager: The following advisor is assigned to a unit
manager to whom he has to report about his work and about any query
concerning about insurance and about the company.
The above are the following steps which are use to select an insurance
advisors/agents. The license issued by the IRDA is the only authorized power. This
gives the person a right to do insurance. This license is supported to renew after every
three years.
ANALYSIS AND INTERPRETATION:
Q.1 From which insurance company are you insured?
CHART 1:
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Analysis:-
60 people of the respondents are more or less with their LIC policy.
14 people of the respondents are more or less with their Reliance policy.
10 people of the respondents are more or less with their HDFC POLICY
In this case all of those who have taken a policy have responded.
Q.2 GENDER CLASSIFICATION OF SURVEYED RESPONDENTS
CHART 2:
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Analysis:
Total number of male respondents 60
Total number of female respondents 40
Q.3 CUSTOMER PROFILE OF SURVEYED RESPONDENTS
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Analysis:
43% of the respondents are working professionals,
23% are students and 18% are into business. Therefore the target market
would be working individuals in the age group of 18 25 years having
surplus income, interested in good returns on their investment and saving
income tax.
Q.4 INSURED PERCENTAGE
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Chart 4:
ARE
13%
87 % of respondents were insured on own life and on life of their family
members.
So we had 13 % of potential customers to approach.
Q.5 POPULAR LIFE INSURANCE PLANS
CHART 5 :
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Analysis:
Money back Policies have been most popular and also the endowment
plans.
As people today are more aware about financial planning, so people of the
age 30 years have planned for their Retirement now.
ULIPs are fast gaining popularity as they provide investment
benefit with Insurance.
Q.6 ARE YOU AWARE ABOUT FINANCIAL PLANNING ?
TYPE OF PLAN
29%
23%
28%
20% MONEY BACK
ENDOWMENT
PENSION PLAN
ULIPs
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98%
NOOFPEOP
LE
D
F
Analysis
98% of the respondents were aware about Financial Planning
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Q.7 CONSUMER WILLINGNESS TO SPEND ON LIFE INSURANCE PREMIUM.
Analysis:
41% of the respondents would be willing to spend between Rs. 10001 Rs.
25000 for life insurance. 27 % would be willing to spend between Rs. 6001
Rs. 10000 per annum. Only 15% would be willing to spend more than Rs.
25000 per annum as life insurance premium.. Hence to capture a larger part of
the market the company could introduce more reasonable plans with lesser
premium payable per annum.
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Q.8 FACTORS THAT MOTIVATE RESPONDENTS TO PURCHASE
INSURANCE
Analysis:
33% of the respondents purchase life insurance to secure their families
33% take life insurance to get high returns
17% purchase insurance on the advice of their friends
13% purchase insurance because of the influence of advertisements. They can
invest their money in the equity market, debt market, money market or a
combination of these. The debt and money markets usually have low risk
attached whereas the equity market is a high risk investment option.
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Q9. MINIMUM EXPECTED RETURN ON INVESTMENT
Analysis:
18% of the respondents would like 16 20% returns,
17% would like returns between 21 25% and 17% would like returns of 11
15% on their investments. Therefore the average return on investment should
be at least 16 20 %.
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Q.10 DATA GIVES PEOPLES PERCEPTION ON APPROPRIATE AGE
FOR BUYING INSURANCE?
Analysis:
29% of the respondents are with the view that insurance
should be bought after the age of 25 years.
10% of the respondents are with the view that insurance should
be bought after the age of 35 years.
Whereas, 60 of the respondents are with the view that buying
of insurance do not have any thing to do with age i.e. there is no age
limitations. It can be purchased any time according the
need.
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FINDINGS
From the above analysis it can be concluded that the competition is very tough even in
the procurement and retention of potential advisors (in the channel development
process). Reliance is the market leader in the life insurance market of private players
and data show that it is giving stiff competition to Reliance Insurance Company.
1. As the people think that insurance is a tool to protect their family & a tax saving
device. They are aware of the fact & realizing its, importance. The company should
try to expand & build up its infrastructure because there is a large potential for
insurance in India.
2. Company should come up with its more branches in India. With the objective and
goals to meet the demands & expectations of the public.
Because the entrance of private players will increase the competition and it would be a
tough task to secure a good position in market.
3. Since Reliance Life Insurance is leading with several companies policies it should
be easy for them to penetrate into the market and secure a good position if they pay
greater attention to the service part provided to their customer and thereby forming a
long and trusted relationship.
4 .As seen from the survey that at present 70% of the customer are having insurance
policy out of which 87.5% of the customer are planning for new investments. So it can
be a good p