SUMMER TRAINING PROJECT REPORT

Submitted in partial fulfillment of the requirement of Bachelors of Business Administration (MBA) Guru Jambheshwar University, Hisar

RECRUITMENT & LICENSING OG LIFE ADVISORS OF BHARTI AXA LIFE INSURANCE

Training Supervisor: Name Designation University

Submitted By: Name Batch Enrollment No.

SESSION 2006 2009 GURU JAMBHESHWAR UNIVERSITY HISAR 125001

PREFACE
Why is insurance necessary? The question contains the answer within itself. After all, life is fraught with tensions and apprehensions regarding the future and what it holds for the individual. Despite all the planning and preparation one might make, no one can accurately guarantee or predict how or when death might result and the circumstances that might ensue in its aftermath. None of us know what is going to happen to us in the future but what we do know is that accidents happen. This is the simple idea that the insurance industry is founded on. Insurance is vital to a free enterprise economy. It protects society from the consequences of financial loss from death, accidents, sicknesses, damage to property, and injury caused to others. The person seeking to transfer risk, the insured (policyholder), pays a relatively small amount, the premium, to an insurance company, the insurer, which issues an insurance policy in which the insurer agrees to reimburse the insured for any losses covered by the policy. Insurance is the process of spreading the risk of economic loss among as many as possible subject to the same kind of risk and is based on the laws of probability (chance of a given outcome happening) and large numbers (enables the laws of probability to work).There are many perils (causes of loss) that society faces, some natural (e.g., earthquakes, hurricanes, tornados, flood, drought), some human (e.g., arson, theft, fraud, vandalism, contamination, pollution, terrorism), and some economic(e.g., expropriation, inflation, obsolescence, depressions/recessions). Insurers are able to provide coverage for virtually any predictable loss. This project "Recruitment & Licensing of Life Advisors" aims to know about the recruitment practices adopted by the Bharti AXA Life Insurance for Life Advisors and the satisfaction level of the Life Advisors. For these near about 160 persons from Delhi were being interviewed using structured and a detailed questionnaire. Responses received from persons were analyzed to come to a set of conclusions & suggestions. Implementation of Six Sigma in the Insurance sector also discussed.

ACKNOWLEDGEMENT
During the course of studies one has to undergo the training, which is considered to be the stepping-stone on a move made towards ones Professional career. I wish to express my gratitude to the following professionals of Bharti Life AXA Life Insurance who were instrumental in providing me this training related to Recruitment & Licensing of Life Advisors at Bharti AXA Life Insurance. My special thanks to Mr. _________________ (Manager Sales) for his invaluable support and guidance during training period and supervising my work very earnestly. Also, I would also like to thank all the life advisors and staff of the branch who helped me by providing assistance in making my project.

NAME

TABLE OF CONTENTS
Preface Acknowledgment Chapter 1: Introduction 1.1 Overview of the Industry 1.2 Profile of the Organisation 1.3 Problems of the Organization 1.4 Competition Information 1.5 S.W.O.T. Analysis of the Organization Chapter 2: Objective & Methodology 2.1 Significance 2.2 Managerial usefulness of the study 2.3 Objectives 2.4 Scope of the Study 2.5 Methodology Chapter 3: Conceptual Discussion Chapter 4: Data Analysis Chapter 5: Findings & Recommendations Conclusion Annexure Bibliography ii iii 1-18 1 7 14 14 17 19-22 19 20 20 22 21 23-54 55-59 60-61 62 63-71 72

Chapter 1.0 INTRODUCTION

1.1 OVERVIEW OF INDUSTRY
With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It's a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the country's GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. Yet, nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This it is an indicator that growth potential for the insurance sector is immense. A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and at the same time strengthens the risk taking ability. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain economic growth of the country. Insurance is a federal subject in India. There are two legislations that govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999. In India, insurance is generally considered as a tax-saving device instead of its other implied long term financial benefits. Indian people are prone to investing in properties and gold followed by bank deposits. They selectively invest in shares also but the percentage is very small. Even to this day, Life Insurance Corporation of India dominates Indian insurance sector. With the entry of private sector players backed by foreign expertise, Indian insurance market has become more vibrant. Historical Perspective

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 riskier 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 (Tital) 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 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).

Indian federal government considers insurance as one of major sources of funds for infrastructure development. The government has identified the following as major thrust areas: Timely and reliable statistical data and information about policies and markets to instill a degree of credibility; A code of good practices based on international best practices to raise the standard of Indian insurance sector; Strengthening of supervision and regulation; Market participation in decision-making; High solvency standard' and Developing alternative channels.

Till end of 1999-2000 fiscal years, two state-run insurance companies, namely, Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) were the monopoly insurance (both life and non-life) providers in India. Under GIC there were four subsidiaries-- National Insurance Company Ltd, Oriental Insurance Company Ltd, New India Assurance Company Ltd, and United India Assurance Company Ltd. In fiscal 2000-01, the Indian federal government lifted all entry restrictions for private sector investors. Foreign investment insurance market was also allowed with 26 percent cap. GIC was converted into India's national reinsure from December, 2000 and all the subsidiaries working under the GIC umbrella were restructured as independent insurance companies. Indian Parliament has cleared a Bill on July 30, 2002 de-linking the four subsidiaries from GIC. A separate Bill has been approved by Parliament to allow brokers, cooperatives and intermediaries in the sector. Currently insurance companies- both private and public-- have to cede 20 percent of its reinsurance with GIC. GIC is planning to increase re-insurance premium by 20 percent which works out at Rs 3000 cr. GIC is actively considering entry into overseas markets including West Asia, South-east Asia and SAARC region. Insurance Sector Reforms

In 1993, Malhotra Committee- headed by former Finance Secretary and RBI Governor R.N. Malhotra- was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms. In 1994, the committee submitted the report and some of the key recommendations included: i) Structure Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate. ii) Competition Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the sector. No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Postal Life Insurance should be allowed to operate in the rural market. Only one State Level Life Insurance Company should be allowed to operate in each state. iii) Regulatory Body The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance- a part of the Finance Ministry- should be made independent iv) Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company (there current holdings to be brought down to this level over a period of time)

v) Customer Service LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the insurance industry The committee emphasized that in order to improve the customer services and increase the coverage of insurance policies, industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body- The Insurance Regulatory and Development Authority. Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. The other decision taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products. Present Scenario 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 cap 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 12 life insurance and 8 general 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. Non-Life Insurance Market In December 2000, the GIC subsidiaries were restructured as independent insurance companies. At the same time, GIC was converted into a national re-insurer. In July 2002, Parliament passed a bill, de-linking the four subsidiaries from GIC. Presently there are 12 general insurance companies with 4 public sector companies and 8 private insurers. Although the public sector companies still dominate the general insurance business, the private players are slowly gaining a foothold. According to estimates, private insurance companies have a 10 percent share of the market, up from 4 percent in 2001. In the first half of 2002, the private companies booked premiums worth Rs 6.34 billion. Most of the new entrants reported losses in the first year of their operation in 2001. Insurance, like project finance, is extended by a consortium. Normally one insurer takes the lead, shouldering about 40-50 per cent of the risk and receiving a proportionate percentage of the premium. The other companies share the remaining risk and premium. The policies are renewed usually on an annual basis through the invitation of bids. Of late, with IPP projects fizzling out, the insurance companies are turning once again to old hands such as NTPC, NHPC and BSES for business. Re-insurance Business The balance risk is re-insured with other insurers. In effect, therefore, re-insurance is insurer's insurance. It forms the backbone of the insurance business. It helps to provide a better spread of risk in the international market, allows primary insurers to accept risks beyond their capacity settle accumulated losses arising from catastrophic

events and still maintain their financial stability. Life Insurance Market The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were under- insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed. The growing popularity of the private insurers shows in other ways. They are coining money in new niches that they have introduced. The state owned companies still dominate segments like endowments and money back policies. But in the annuity or pension products business, the private insurers have already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percent of the customers. With an annual growth rate of 15-20% and the largest number of life insurance policies in force, the potential of the Indian insurance industry is huge. Total value of the Indian insurance market (2004-05) is estimated at Rs. 450 billion (US$10 billion). According to government sources, the insurance and banking services' contribution to the country's gross domestic product (GDP) is 7% out of which the gross premium collection forms a significant part. The funds available with the state-owned Life Insurance Corporation (LIC) for investments are 8% of GDP. The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place with the ending of government monopoly and 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. Though the focus of this market research report is on the potential growth on the Indian Insurance Sector, it also talks about the market size, market segmentation, and key developments in the market after 1999. The report gives an instant overview of

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the Indian non-life insurance market, and covers fire, marine, and other non-life insurance. The data is supplied in both graphical and tabular format for ease of interpretation and analysis. This report also provides company profiles of the major private insurance companies.

1.2 PROFILE OF THE ORGANIZATION

Bharti AXA Life Insurance is a joint venture between Bharti, one of Indias leading business groups with interests in telecom, agri business and retail, and AXA, world leader in financial protection and wealth management. The joint venture company has a 74% stake from Bharti and 26% stake of AXA. The company launched national operations in December 2006. Today, Bharti AXA Life Insurance have over 5200 employees across over 12 states in the country. Bharti AXA Life Insurance business philosophy is built around the promise of making people "Life Confident". As the company expand their presence across the country to cater to customers / clients insurance and wealth management needs with their product and service offerings, Bharti AXA Life Insurance continue to bring 'life confidence' to customers spread across India. Whatever your plans in life, you can be confident that Bharti AXA Life will offer the right financial solutions to help you achieve them. Vision of the Bharti AXA Life Insurance To be a leader and the preferred company for financial protection and wealth management in India Values of the Bharti AXA Life Insurance Professionalism Innovation Team Spirit Pragmatism

 Integrity Strategy of the Bharti AXA Life Insurance To achieve a top 5 market position in India through a multi-distribution, multiproduct platform. To adapt AXA's best practice blueprints as a sound platform for profitable growth. To leverage Bharti's local knowledge, infrastructure and customer base. To deliver high levels of shareholder return. To build long term value with our business partners by enhancing the proposition to their customers. To be the employer of choice to attract and retain the best talent in India. To be recognised as being close and qualified by our customers. Strategic differentiators of Bharti AXA Life Insurance Strong partner Bharti - provides access to customer base of more than 20 million. Multi channel execution capability. Current Asia product range which is a strong match to products sold to the mass and mass affluent. Global scale providing cost effective and speedy re-use of systems, products and business capability. Strong AXA and Bharti brands which can be leveraged to attract and retain a high quality management team.

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Promoters of Bharti AXA Life Insurance Bharti Enterprises Bharti Enterprises is one of Indias leading business groups with interests in telecom, agri business, insurance and retail. Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit. Bharti Airtel Limited, a group company, is one of Indias leading private sector providers of telecommunications services with an aggregate of 60 million customers, spanning mobile, fixed line, broadband and enterprise services. Bharti Airtel was ranked amongst the best performing companies in the world in the BusinessWeek IT 100 list 2007. Bharti Teletech is the countrys largest manufacturer and exporter of telephone terminals. Bharti has a joint venture with ELRo Holdings India Ltd. FieldFresh Foods Pvt. Ltd - for global distribution of fresh fruits and vegetables. Bharti also has a joint venture - Bharti AXA Life Insurance Company Ltd. - with AXA, world leader in financial protection and wealth management. Bharti has recently forayed into the retail business under a company called Bharti Retail Pvt. Ltd. It also has a joint venture Bharti Wal-Mart Private Limited with Wal-Mart, for wholesale cashand-carry and back-end supply chain management operations. AXA AXA Group is a worldwide leader in Financial Protection. AXA's operations are diverse geographically, with major operations in Western Europe, North America and the Asia/Pacific area. AXA had Euro 1,315 billion in assets under management as of December 31, 2006. For full year 2006, IFRS revenues amounted to Euro 79 billion, IFRS underlying earnings amounted to Euro 4,010 million and IFRS adjusted earnings to Euro 5,140 million. The AXA ordinary share is listed and trades under the symbol AXA on the Paris Stock Exchange. The AXA American Depository Share is also listed on the NYSE under the ticker symbol AXA. AXA Asia Pacific Holdings AXA Asia Pacific Holdings Ltd (AXA APH) is listed on the Australian stock

exchange and is 52.3% owned by AXA SA. AXA APH is responsible for AXA SAs life insurance and wealth management businesses in the Asia-Pacific region. It has operations in Australia, New Zealand, Hong Kong, Singapore, Indonesia, Philippines, Thailand, China, India and Malaysia. AXA APH had A$106.4 billion in total funds under management and administration at 30 June 2007 and reported a profit after tax before non-recurring items of A$374.0 million for the six months ended 30 June 2007. Product From Bharti AXA Life Insurance The Customer would like to live their life and prepare for the future with complete confidence at Bharti AXA Life Insurance, design solutions that will protect them and their family and help customer realise their dreams. Bharti AXA Life Insurance endeavour is to bring to customer products and services that help customer lead a confident life. Individual Plans Bharti AXA Dream Life Pension A Unit Linked Pension Product Dream Life Pension, Bharti AXA Life Insurances unique pension product ensures that your retirement life is your Dream Life. Live your Dreams! Be Life Confident.! Bharti AXA Life AspireLife Unit Linked Endowment Product. Aspire Life helps you create a pool of wealth to meet your long-term needs, while also providing you adequate protection in case the need arises. Bharti AXA Life InvestConfident Unit Linked Single Premium Product. You have always strived hard to achieve the best for you and your loved ones, so

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when it comes to making an investment decision, we know that you would expect the best from it too. Bharti AXA Life WealthConfident A unit-linked investment cum protection policy. Your wealth, your status ensures that you get preferential status wherever you go. So why shouldn't your money get the same? Bharti AXA Life FutureConfident A unit-linked policy which offers comprehensive protection along with wealth creation in the long term. Bharti AXA Life FutureConfident II A unit-linked product which offers enhanced protection along with wealth creation in the long term. Bharti AXA Life SaveConfident Traditional money back insurance product for long term savings. Your changing lifestages decide your financial milestone planning. When you foresee intermittent financial requirements in the years to come, like regular expenses related to your childs education, liquidity becomes a key aspect of your planning along with long term savings, and protection for your family. Bharti AXA Life SecureConfident A Long Term Life Insurance. All of us desire to maximise the happiness for our family at all times, irrespective of the circumstances. The thought of unfortunate events befalling us may cause us anxiety about providing a secured happiness to our loved ones.

Group Plans: Bharti AXA Life Mortgage Credit Shield Mortgage Credit Shield is a Group Product that provides coverage to people who have availed of a Mortgage\ Home loan\ Home equity loan from an Institution/Bank. Bharti AXA Life Credit Shield Credit Shield is a Group Product that provides coverage to people who have availed of a loan for 1 to 5 years from Group Policyholder. Career at Bharti AXA Life Insurance The vision of Bharti AXA Life Insurance Company Limited is to become the preferred life insurance company in India. This vision extends to our recruitment philosophy as well. Both the Bharti Group in India and AXA globally enjoy the status of being a very employee focused organization. At Bharti AXA Life Insurance, they are determined to achieve their vision through talent who are empowered, focused on customer service, and champions of strategic and operational excellence. The guiding Human Resources principles at Bharti AXA are:

Clearly define scope of responsibilities and empower people to deliver. Provide people with the means to develop their competencies. Consider individual training and development a priority investment. Build organizations that are conducive to teamwork and that involve everyone. Promote ongoing dialogue between managers and the people who report to them.

Make cultural difference a key source of strength.

Bharti AXA Values

Team Spirit Integrity 17

Innovation Pragmatism Professionalism

What makes Bharti AXA a good place to work of Life Advisors Career Bandwidth

As a Life Advisor at Bharti AXA, there is only one way to grow. And that's by meeting and exceeding your targets.

As a good performer, you stand to get promoted from Bronze to Diamond Club and enjoy special remuneration benefits.

As a Life Advisor, you can get appointed as an Agency Manager within a span of just 9 months to 1 year.

As a Life Advisor, you also get to participate in various business related projects and committees.

Compensation

As a Life Advisor, you have the opportunity to create attractive earnings for the first year and for the long term through payouts on renewals collection. Higher the business you generate in the first year, higher the income you stand to earn year after year. You need to of course make sure that the policy is live.

Get rewarded through Best in Class Rewards and Recognition programs including overseas conventions.

Support

All Bharti AXA branches have HR services for support on all matters related to compensation and career so you can redress your concerns immediately.

State-of-the-art Distribution Training support. Comprehensive marketing support in terms of brochures, illustrations etc.

Best in Class Sales Management Support for on the job training and business closure.

Infrastructure & Technology support through dedicated Life Advisor's bay equipped with telephones, computers and internet at Bharti AXA premises.

Customer Service and operations support.

1.3 PROBLEMS OF THE ORGANIZATION

Bharti AXA Life Insurance faces tough competition from LIC, ICICI, Reliance Life Insurance, Aviva Life Insurance, Birla Sunlife, and other leaders in the industry. The organization needs to work hard in order to stay competitive.

1.4 COMPETITORS INFORMATION

Life Insurance Corporation of India Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC became so popular in India that common people understand insurance means LIC. The Central office of LIC is at Mumbai and seven zonal offices at Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Kanpur and Bhopal. There are 100 divisional offices in important cities and 2,048 branches offices . More than 5.59 Lakh at active agents spread over the country. It has also offices at abroad in Fiji, Mauritius and United Kingdom for business transaction. LIC is associated with joint ventures abroad with several companies in the field of insurance. Aviva Life Insurance Aviva plc was launched in 1st July 2002 as a new name for CGNU plc. A world leader in financial services, the group has 300-year pedigree. Aviva brings together 50 trading names and enables the group to harness the benefits of its size and

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international capabilities as the seventh largest insurer in the world. Its main activities are long-term savings, fund management and general insurance. The group has 56,000 employees serving 30 million customers worldwide. HDFC - Standard Life Insurance HDFC Standard Life Insurance Company is a joint venture between India's largest housing finance provider, HDFC and Europe's largest mutual life assurance company .The Standard Life Assurance Company (U. K). Standard Life, UK, founded in 1825, has been at the forefront of the UK insurance industry for 175 years by combining sound financial judgment with integrity and reliability. It is the Largest Mutual Life company in Europe and has total assets of Rs. 5, 50,000 crore. Depends on the product, like on savings 20-40% Ist year premium. on investment 2% on pension 7.5% Birla Sun Life Insurance Birla Sun Life Insurance is the coming together of the Aditya Birla group and Sun Life Financial of Canada to enter the Indian insurance sector. The Aditya Birla Group, a multinational conglomerate has over 75 business units in India and overseas with operations in Canada, USA, UK, Thailand, Indonesia, Philippines, Malaysia and Egypt to name a few. Foreign Partner: Sun Life Assurance, Sun Life Financials primary insurance business, has excellent ratings with the world's top rating agencies. ICICI Prudential Life Insurance ICICI Prudential Life Insurance is a joint venture between the ICICI Group and Prudential PLC, of the UK. ICICI started off its operations in 1955 with providing finance for industrial development, and since then it has diversified into housing finance, consumer finance, mutual funds to being a Virtual Universal Bank and its latest venture Life Insurance. Bajaj Allianz Life Insurance Bajaj Allianz Life Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. ING Vysya Life Insurance ING, the worlds second largest life insurance company together with Vysya Bank, one of Indias leading private sector banks, forms ING Vysya Life Insurance. ING Vysya Life Insurance Company

Limited, a part of the ING Group the worlds largest financial services provider* entered the private life insurance industry in India in September 2001. Headquartered at Bangalore, ING Vysya Life is currently present in over 232 cities and has a network of more than 265 branches, 369 sales teams, staffed by over 7,696 employees and over 56,333 advisors, serving more than 676,086 customers. MetLife India The Metropolitan Life Insurance Company is the number one insurer in the U.S. It is helping build financial independence for its customers. MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors. MetLife is one of the fastest growing life insurance companies in the country. It serves its customers by offering a range of innovative products to individuals and group customers at more than 600 locations through its bank partners and company-owned offices. Tata AIG Life Insurance Tata AIG Life Insurance Company Limited and Tata AIG General Insurance Company Limited (collectively 'Tata AIG') are joint ventures of the Tata Group and American International Group, Inc. (AIG). Tata AIG combines the strength and integrity of the Tata Group with AIG's international expertise and financial strength. Reliance Life Insurance Reliance Life Insurance is an associate company of Reliance Capital Ltd., a part of 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.

1.5 S.W.O.T. ANALYSIS OF THE ORGANIZATION:

Strengths Bharti AXA Life Insurance provides world-class training for Life Advisor. Availability of various products for different segments of the society. Motivation is also given to Life Advisor for attending the training.

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 Co-operative Sales Manager to whom the Life Advisor can consult anytime. Motivation of Life Advisor by distributing gifts and giving awards and recognitions Work and culture in Bharti AXA Life Insurance is very friendly. Weaknesses Bharti AXA Life Insurance does not have any provision for online training like HDFC & KOTAK. Training period consists of 100 hours, which is too long and thus difficult for some people to attend regularly. The company has no alternative as it is ruled framed by IRDA. Opportunity Huge market is literally untapped, out of estimated 320 millions insurable markets only 20% of the population is insured. Insurance penetration significantly below international standards Health insurance and pension schemes, an estimated market potential of approximately $15 billion. Well developed banking system enabling banc assurance. An acceptance of unit-linked products on the back of a well developed mutual fund market. Health insurance is relatively limited. There has been a lack of interest in this area and the IRDA is keen to stimulate this.

Threats Players like Bajaj Allianz and Birla Sun life with low premium for the similar plans. Entry of many other private companies with equally strong experience and financial strength of foreign partners making the competition difficult and saturating the urban markets. Current Govt. policies do not encourage gross domestic savings. If the tax liability of the service class rises, the customer will have little money to invest. LIC networking Tax relief is long term a big question mark. Equity boom luring investors to invest in stock market.

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Chapter 2.0 OBJECTIVE & METHODOLOGY

2.1 SIGNIFICANCE
The Indian life insurance industry is rapidly evolving and has emerged as one of the fastest developing emerging markets for life insurance in the world. The industry has become fiercely competitive with the entry of the private sector companies, including major multinational insurers, after sector deregulation. It has opened up a range of untapped opportunities for the new entrants into the industry, as the potential market for buyers is high since India has a low insurance penetration and high growth rates. Also, India has traditionally been a high savings oriented country with a large middle class that can afford to buy life, health, and disability insurance as well as pension plan products. Just the middle-income segment of the population is estimated at 31.2 crores (312 million). The following are other key features of the industry in India: In 2005-06, the life insurance sector grew by 41%, while in terms of new business premium income the sector recorded a growth of 35%. Within just 5 years of deregulation in the industry, the private life insurers have been able to garner an impressive 28.6% of the market and in the process the companies have recorded phenomenal business growth rates. Indias share of the worlds life insurance business has doubled within 5 years since liberalization, raising Indias global ranking to 17 in 2006 from 20 in 2000. From 0.5% of the worlds life insurance business in 2000, India today accounts for 1.02% of the worlds premium reflecting that the insurance business in India has more than doubled within just 5 years. In 2003, life insurance density (i.e., premium per capita) was just US$12.9 as against the global density of US$267.1. An average Indian spends US$22.7 a year on buying life insurance as

against a world average of US$299.5. Indias ranking in per capita spending on insurance is 78, a ranking that puts it far behind countries such as Namibia, Tunisia and Morocco. Life insurance penetration (i.e., premium as percentage of GDP) in India was 2.26% as against the global penetration level of 4.59 %. Nonetheless, insurance as a business is growing faster than Indias gross domestic product. Life insurance premiums, which accounted for 1.77% of the countrys GDP in 2000, contributed 2.53% to the GDP for the 2005-06 fiscal year. An expert group of the Confederation of Indian Industry (CII) has projected that in the next 10 years by 2016, the size of the Indian insurance market will grow to Rs 145,000 crores. This translates into an average annual growth of over 19.6%. CII expects an exponential growth in the pension business which is projected to rise at 29% per annum, effectively translating into an expansion of over 12 times over a period of 10 years by 2016. The premium business from pension schemes is projected to grow by 22.5% within the same period.

2.2 MANAGERIAL USEFULNESS OF THE STUDY

Bharti AXA Life Insurance has made a place for itself in the Insurance sector. The study of its recruitment & licensing of life advisors will give a crucial idea behind the success of the company and the facets of marketing that made the success possible.

2.3 OBJECTIVES
The main aim of the project is to study the recruitment & licensing of life advisors at Bharti AXA Life Insurance More specifically the objectives of the project are: To generate leads for Life Advisor recruitment. 25

 To identify the appropriate target segment to increase company distribution network. To get an overview about the Insurance Industry in India.

2.4 SCOPE OF THE STUDY

The study will be limited to Bharti AXA Life Insurance and will be limited to the Delhi only. The information will be based on the companys website and literature provided by the company. A study will help me to understand to know about the recruitment practices adopted by the Bharti AXA Life Insurance for life advisors and the satisfaction level of the life advisors.

2.5 METHODOLOGY
In order that work is done in a systematic way, the project is carried in accordance with the proposed methodology. 1. Detailed understanding of the opportunities offered by the Bharti AXA Life Insurance, this helped to get better of opportunities as a Life Advisor. This was done through reading and understanding of the literature provided by the companies search engines, websites, reference books and course material provided by the institute. This was an important phase of the project as in depth knowledge of the life advisor helped in a questionnaire required for the project, as this was the next step for carrying the project. 2. The detailed market survey conducted through questionnaires provided by the company Bharti AXA Life Insurance itself. It gives me a deep insight toward the opportunities, strengths etc. of the recruitment of agent advisors. A questionnaire about the rating scale regarding the job as an life advisor:1. Flexibility of time

2. Extra potential income 3. Rewards and recognition 4. Financial security 5. World class training Tools and techniques for data collection Tools and techniques for data collection as follows: Primary data collection: Primary data was through interview with the persons through detailed questionnaire.

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Secondary source of data collection: Various Internet sites, magazines were searched in order to find information useful for completion of this project. Out of the persons surveyed, one very interesting thing came out that the housewives and the voluntary retired person are very keen to join this job as Life Advisors because it offers a lot with no nonsense approach. It can offer them extra potential income as they can earn more than 1000 on a single policy. Limitations: The project study is limited to Delhi alone. The respondents may be biased. Thus, rational analysis may not be possible. Scope of the project is limited to only recruitment of the life advisors so very little exposure to the sales of the products offered by Bharti AXA Life Insurance.

Chapter 3.0 CONCEPTUAL DISCUSSION

3.1 HISTORY OF INSURANCE IN INDIA

Insurance in India has its history dating back till 1818, when Oriental Life Insurance Company was started by Europeans in Kolkata to cater to the needs of European community. Pre-independent era in India saw discrimination among the life of foreigners and Indians with higher premiums being charged for the latter. It was only in the year 1870, Bombay Mutual Life Assurance Society, the first Indian insurance company covered Indian lives at normal rates. At the dawn of the twentieth century, insurance companies started mushrooming up. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were

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passed to regulate the insurance business. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary The insurance sector went through a full circle of phases from being unregulated to completely regulated and then currently being partly deregulated. It is governed by a number of acts, with the first one being the Insurance Act, 1938 The Insurance Act, 1938 was the first legislation governing all forms of insurance to provide strict state control over insurance business. Life insurance in India was completely nationalized, through the Life Insurance Corporation Act, 1956. There were 245 insurance companies of both Indian and foreign origin in 1956. Nationalization was accomplished by the govt. acquisition of the management of the companies. The Life Insurance Corporation of India was created on 1st September, 1956. The Govt. of India, then introduced the Insurance Regulatory and Development Authority Act in 1999, thereby de-regulating the insurance sector and allowing private companies into the insurance. Further, foreign investment was also allowed and capped at 26% holding in the Indian insurance companies The Indian Life Insurance industry is rapidly evolving and growing. It recorded the second highest growth in Asia in 2000-01, posting an inflation- adjusted growth rate of 21.3%. This is more than double the worlds growth rate of 9%. The total Indian insurance market is currently valued at Rs.67500 crores with the life insurance sector accounting for 80% of the market at Rs.54000 crores. The insurance sector in India has gone through a number of phases and changes, particularly in the recent years when the government of India in 1999 opened up the insurance sector by allowing pvt. Companies to solicit insurance and also allowing FDI upto 26%. The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.

3.2 INSURANCE SECTOR REFORMS

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognising that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms In 1994, the committee submitted the report and some of the key recommendations included: i) Structure Government stake in the insurance Companies to be brought down to 50%. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations.

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All the insurance companies should be given greater freedom to operate. ii) Competition Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry. No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Postal Life Insurance should be allowed to operate in the rural market. Only one State Level Life Insurance Company should be allowed to operate in each state. iii) Regulatory Body The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance (Currently a part from the Finance Ministry) should be made independent. iv) Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time). v) Customer Service LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans.

Computerization of operations and updating of technology to be carried out in the insurance industry. The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body.

3.3 THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA)

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDAs online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 16 life insurance and companies have been registered. The industry in India has become fiercely competitive with the entry of several new private companies, including major multinational insurers, after the deregulation of the sector. It has opened up a range of untapped opportunities for the new entrants

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into the industry, as the potential market for buyers is high since the emerging market in India has a low insurance penetration and high growth rates.

3.4 IMPORTANCE OF LIFE INSURANCE

Life Insurance is of great importance to individuals, groups, business community and general public. Some of the main benefits of life insurance are given below: Protection Against Untimely Death Life insurance provides protection to the dependents of the life insured and the family of the assured in case of his untimely death. The dependents or family members get a fixed sum of money in case of death of the assured. Saving For Old Age After retirement the earning capacity of a person reduces. Life insurance enables a person to enjoy peace of mind and a sense of security in his/her old age. Promotion Of Savings Life insurance encourages people to save money compulsorily. When a life policy is taken, the assured is to pay premiums regularly to keep the policy in force and he cannot get back the premiums, only surrender value can be returned to him. In case of surrender of policy, the policyholder gets the surrendered value only after the expiry of duration of the policy. Initiates Investments Life Insurance Corporation encourages and mobilizes the public savings and channelises the same in various investments for the economic development of the country. Life insurance is an important tool for the mobilization and investment of small savings. Credit Worthiness Life insurance policy can be used as a security to raise loans. It improves the credit

worthiness of business. Social Security Life insurance is important for the society as a whole also. Life insurance enables a person to provide for education and marriage of children and for construction of house. It helps a person to make financial base for future. Tax Benefit Under the Income Tax Act, premium paid is allowed as a deduction from the total income under section 80C.

3.5 CONSUMER AWARENESS: INSURANCE SECTOR

IRDA's regulatory initiatives have set the stage for a new era in functioning of the Insurance Companies. Life insurance always involves two beneficiaries (consumers), namely, those who are designated to benefit in the event of death of the 'insured', and also, and this is highly important, the premium payer himself while he is living. The protective influence of life insurance extends to the insured himself enabling him to live more efficiently and fully than otherwise be the case. When Insurance companies start with the 'beneficiary' in the modern life insurance as the center of thinking, the line of thought moves out in the direction of an ever widening circle. The thought process gives rise to a host of economic, social, psychological, legal, actuarial and financial implications of great magnitude. Only by emphasizing the potential needs of "beneficiaries", by fostering a keen sense of responsibility on the part of the family heads for the welfare of their dependents, by developing effective procedures for translating family love and affection into practical financial plans, and by using motivation techniques built on beneficiary relationships could the institution of life insurance ever attain the stature and achievement required to make life insurance a more effective instrument for safeguarding the interest of beneficiaries. Legislators and regulators all over have evidenced their concern for the beneficiaries 35

and the latter's confidence in life insurance as a practical means of furthering the social welfare. Courts have evidenced similar beliefs in their numerous decisions. Every life insurance policy must some day be measured against the job that it must perform for "beneficiaries". THE trouble is that if it is not measured until it becomes a claim and then falls short of doing the job, there is nothing that can be done to remedy the situation. Therefore, the important role of the intermediaries (Agents, Brokers etc). A skilled and competent intermediary must be able to take men in their imagination into the future to be able to foresee the risk and by proper planning lessen the impact of financial consequences. The primary service they offer should be prescriptive through recommending suitable plans.

3.6 PRODUCT AND SERVICE COMBINED

Because life insurance should be purchased to meet 'beneficiaries' financial needs, it is essential to look beyond the policy as a product and consider their personal situation. Service includes selling the right policy to fill the policy owner's need, making sure the policy owner understands the transaction fully, arranging ownership and beneficiary designation as required. Thus the product and the service are very much interwoven. In the light of these factors, it is understandable that a number of life insurance industry organizations abroad, specially in USA and Canada are continuously engaged in special research projects with a view to understanding better the service function. Improvements in the nature and quality of service to beneficiaries/policy owners should follow when the industry has a clearer understanding of what services policy owners require and how they are best rendered. Important as life insurance is today, its real progress is yet to come, largely through the national education system - collegiate level education as well as public education. Our time-honoured professions use colleges and universities as allies for the effective initial preparation of their practitioners and to provide opportunity for continued study. It has to be so with insurance subject as well which is a relative newcomer on our socio-economic scene. Insurance and financial counseling as a vocation and profession could advance and acquire stature and dignity in direct proportion to the education received and success achieved by those in the business and with the public.

Also Public education in insurance represents a "great selling / teaching movement" to spread the beneficial influence of the concept of life insurance into millions of our homes and business enterprises. Public education should be designed to prepare the buying public for ready and willing acceptance of the professional service of the intermediaries. In fact, this should be the first and most important step taken in the process of developing marketing methodology and marketing orientation. It is true that the life insurance business has tended to describe as a duality, a combination of protection and savings account, what is really the unity of permanent life insurance. Insurance companieshave not communicated with sufficient clarity that the savings like features of life insurance are a by-product of the reserves necessary for long term or life time protection, and that without them the protection runs out when the need might be greatest. Need for regulatory mechanism is recognized as Insurance is effected with public interest in view of the large numbers involved. As a contract necessarily embodying a host of legal details, and specially imbalance of bargaining power of the insured (Asymmetrical information) insurance invites regulatory oversight to adequately protect the insurance consuming public. (beneficiaries) No element of insurance business deals more closely with the insurance consuming public than insurance intermediaries(Agents, brokers and others) Most of the major problems and issues confronting the life insurance business are market oriented. Questionable market conduct and misleading sales practices on a widespread basis could emerge as a major issue. Related closely to these issues are : 1. How should industry foster thinking on risk with a view to building up a body of thinkers and a body of literature, which shall be the beginning of more adequate recognition of the subject influencing our actions? 2. What kind of men and women should be selected to solicit etc., insurance? What kind of persons to direct the life insurance marketing programme? It is true that Insurance companies have not perfected the techniques of selecting

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and recruiting, and managing retention of agents to keep turnover within limits that would be optimum for the economics of the business and for the satisfaction of all the individuals involved. Insurance industry is in transition and passing through an era of discontinuity. Competitiveness demands a commitment to truth and willingness to confront brutal facts of reality. need to cultivate and use "truth tellers" - people on whom Insurance companies can rely to "call them the way they see them". Insurance companies need "unfiltered feedback".

3.7 THE POTENTIAL OF THE LIFE INSURANCE INDUSTRY

If we have a glimpse of the global life insurance scenario, we find that while the growth has either plateaued or turned negative in the developed countries, it has shown a great potential in the emerging markets. India in particular has revealed a buoyant market which has grown at a CAGR of 23% since the opening up of the sector Global competitiveness presupposes first successfully competing in the local markets and thereafter expanding into the global markets. The prerequisites of global competitiveness are, developing world class products that meet the aspirations of the global customer, delivering service to match his rising expectations and managing costs to remain competitive and sustain growth. This will require technology and developing world-class competencies in the workforce. Insurance contracts are basically long term contracts and succeeding in the long term requires a rigorous asset/liability management in an uncertain business environment where interest rates are demonstrating tremendous volatility. This demands vast expertise in risk management and it becomes imperative for an insurance company to groom and develop a skillful cadre of risk managers. The looming threat of terrorism which has itself become global, deadly diseases like AIDS and potential ones which could emerge from the mutation of Avian flu virus demand a paradigm shift in risk management and a consequent departure from conventional mortality investigations. Further, natural disasters like the recent earthquake in J&K and earlier tsunami, and hurricanes like Katarina and Rita pose unending challenges to our actuarial skills.

In the light of these sensitivities regulation will have to play a significant role and regulatory issues like the solvency margin will continue to be critical to the growth of the industry. This will be a continuing challenge for the new players who are on a growth path and will be one of the important long term considerations. Market share is a double-edged issue, while a falling market share becomes a survival concern in a stagnant market, it is not a major concern in a growing market provided a company manages a sustainable rate of growth. And, let me add, that the potential for insurance is Vast in India. Today, the total insurance penetration i.e premiums as a percent of GDP is about 2.88 in India against a world average of 8.06. This shows the potential for growth of the insurance industry and provides a great opportunity to all the players in this sector. In the changing paradigms of business management in the twenty first century, corporate social responsibility emerging as a major issue and as this subject is debated globally, it is likely to emerge a guiding principle for corporates in the future. There is a pressing social need to provide insurance to the poor. IRDA has already imposed rural and social obligations on all insurance companies and rightly so. However, there are huge weaker sections who cannot avail of conventional insurance and their need for security becomes our corporate responsibility. I may add in all humility that LIC through its managed social security schemes has provided cover to about 1 core such families. Yet, this is only 20% of the total of 5 crore plus such families. Thus insurers have to come up with schemes that are socially meaningful and an alternative to state provided social security schemes. The issues here are many. The insurance companies have to work in close liaison with the central and state governments so that target groups are identified and they agree to fund a portion of the premia. Here implementation is the key and all insurance companies should come together to create a greater awareness and see it as a means of fulfilling their corporate social responsibility. IRDA is already seized of this issue and is already working on regulation for microinsurance. The success of micro insurance programmes will depend on creatively designing demand driven products along with client-friendly collection and delivery mechanisms. However, the ultimate success of such programmes will depend on the commitment and passion with which they are implemented. 39

It is high time we recognized the rights of the customer and changed out attitude. Customers will be guided by two important considerations: price and quality of the service. While a high level of service is required, for the buyers price is extremely important. Customers are keen to understand what they are buying, why they are buying and what they are getting for their money. This growth in customer sophistication poses problems for insurers. The profit margin, if any will be squeezed, as we shall have to provide services which customers would demand in short all have to be more efficient. Information technology is transforming industry more than anything else. It will do so at an accelerating pace. We can now have access to plenty of information, data and statistics. But it does not help us unless we know how to analyse it. It is the analytical power that can lead us to the creation of new products. Our customers can take the initiative and communicate with various players and with each other. Insurance business is completely driven by knowledge and technology. The business of selling insurance products requires assessing the profile of the customer and designing the right product. The process is facilitated by database and data warehousing. Product innovation is an ongoing process for us insurers but ultimately it is the customer that has to be focused upon. Customer centricity has to be the watchword for all of us. Detariffication is an issue that concerns the non-life insurance industry which is still much regulated. While it will be in keeping with the spirit of reforms in the insurance sector by tuning the premia with the actual market price, detariffication may not be popular. Detariffication, for example, in the area of motor insurance may lead to a hiking of premium rates, an issue the industry will have to grapple with. Before I conclude I would like to place emphasis on an issue which is going to become very critical for corporates in the future. This is the issue of ethics in business. Today's globalized business environment is marked by high-intensity competition leading to merciless markets. In the face of such competitive pressures there is always a temptation to take shortcuts to success. A seductive urge to abandon ethics in the practice of management for shortsighted gains. Yet there are also enough cases, Enron and WorldCom to quote a few that have demonstrated beyond doubt the dangers of

straying from ethical business practices. In fact to quote marketing Guru Philip Kotler, Business success and continually satisfying customers and stakeholders are intimately tied to adoption and implementation of high standards of business and marketing conduct. The most admired companies in the world abide by a code of serving people's interest, not only their own. Thus the company's bottom line cannot be the sole criteria of corporate performance. Ethical issues have to be dealt with in major aspects of its business. This imposes a heavy responsibility on the CEO to not only be an ethical role-model but also appear to be seen as one. He has to create the right perceptions in the people's minds through highly visible acts and deeds that high standards of business propriety are not only paramount, but the foundation of corporate decision making process. Examples of integrity at the top get a powerful of gravity and begin to flow down the line becoming all pervasive in the organisation. Hence, the CEO becomes the fountainhead of a cultural change leading to the transformation of a business entity into a mighty ethical organization Let me once again state that there has been a judicious selection of issues and the deliberations should see a number of ideas getting generated by the distinguished panel of speakers. I have only endeavoured to touch upon some of the issues proposed to be discussed today and tomorrow.

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3.8 ROLE OF LIFE ADVISORS: MORE THAN LINK BETWEEN CUSTOMER & COMPANY
The year that has gone by was an exceedingly good year for the insurance market. The first year premium underwritten by life insurers in 2006-07 registered a healthy growth of 30% which is second only to 104% growth recorded in 2001-2002. This increase comes on a 10% growth registered in 2005-2006. While the growth registered in 2001-2002 could not be sustained, it would be possible to maintain last year's growth rate in the current year also. The non life industry recorded a growth of 12% which is at the same level as that registered in 2005-2006. The main driver of growth in the life segment is the Unit Linked products; In the case of non-life insurance, the motor and health insurance portfolios have been expanding rapidly. Inspite of an impressive growth in the life premium, there has been a decline of 8% in the number of policies issued. The decline is primarily attributable to the drop in the number of policies issued by the LIC though it registered a 22% increase in premium. The reasons for this decline in policies require to be examined in detail. In the case of general insurance, out of a total increase in premium of Rs.l900 crores in 2004-05 over last year, motor and health account for Rs. 1500 crores. In view of the large increases in these portfolios a proper management of the portfolios is critical to sustain the level of growth. The expanding market demands a large agency force. The insurers have, therefore, been recruiting agency force on a continuous basis. As the end of March 2005, there are 20 lakh individual agents and 4711 Corporate Agents. A significant development noticed last year is the arrangements entered into between the insurers and Commercial Banks for marketing the contracts either as Corporate Agents or on referral basis providing data base to the insurers. The demand for tied agency force has lead to a situation where the resources of the Institutes providing training have been stretched and a number of irregularities in imparting training have come to the notice of the Authority. The inspections by the Authority of these institutes have revealed a number of areas where improvements were called for. It was noticed that some of the Institutes did not have the infrastructure to

conduct classes and the faculty was drawn on an adhoc basis and the courses conducted in a short span as a result of which many of the agents did not receive adequate training. It was also noticed that the licensed training institutes allowed franchisees to conduct training on their behalf which was irregular. The insurers, in their anxiety to recruit agents, did not pay any attention to the type of training imparted. The Authority had, during 2004, streamlined the system of training and impressed on the insurers the need for greater attention being paid to the training of their agency force. The revised guidelines were issued after extensive consultations with the stakeholders and it is hoped that this effort would result in improving the quality of the agency force. The Authority is keen that the agency force should be properly equipped as the insurance products are no longer simple and the agent should be able to assess the requirements and advise on the appropriate policy. The Authority has also been in close contact with the Insurance Institute of India for streamlining the examination system as instances have been noticed where the sanctity of the examination process was sought to be compromised by a few interested parties. The CEOs of the insurance companies were requested to advise their marketing staff to exercise vigilance and ensure that the examination process was in no way compromised. There is no doubt that the Chief Executive Officers of the Insurance Companies are as much interested in procuring the services of qualified people as advisors as companies are in ensuring that only trained workforce enter the insurance market for canvassing sale of policies. Since there is convergence of views on this crucial issue there is no reason why, together, they cannot improve the training and examination standards for insurance agents. The time has come for them to make a concerted effort at improving the quality of the insurance agents. The institution of corporate agents was a new experiment started by the Authority to facilitate sale of insurance policies through existing institutions which are in contact with a large section of the population in the discharge of their normal activities. The Authority has come across cases where corporate agents have resorted to use of introducers or finders or sub agents who, in fact, sold the contracts and the corporate agent passed on varying levels of commission to them. Since insurance contracts are technical in nature, the Regulations issued by the Authority stipulated that the 43

canvassing should be done only by specified persons "who are qualified to be Agents". With a view to streamlining the system of licensing of corporate agents, the Authority issued a set of instructions to be followed by the insurers while issuing licenses to corporate agents. An attempt was also made to remove some of the aberrations that have crept into the sale of group insurance policies. The Authority believes that unless appropriate standards are set and followed by the insurers and the intermediaries, there is distinct possibility of the insurance market getting distorted which would affect the interests of the insured as well as the insurer. One would like to see a healthy growth of the market even if it means moderate growth of the market. No one want the long term interests of the market to be sacrificed at the altar of immediate gains in premium. Absence of data has been a hurdle in general insurance for taking any major initiatives. Companies have been working on collection of data in both motor and health portfolios for the last two years. The efforts made last year in identifying the sources of data and the manner in which it is stored and how it could be retrieved has met with some success. A pilot study undertaken with data collected in a few Divisional Offices in and around Mumbai has thrown up some interesting possibilities. It is noticed that data is available in electronic form in various stand alone computers and it could be accessed by writing a simple programme. But the data that is available shows that in terms of classification there are inadequacies. These can be addressed and future records could be built up by removing the existing imperfections. It is also possible to clean up the data by going to original records in select cases and build up a representative sample. With a little more effort it should be possible to build up the whole record by verifying basic records at least in respect of third party liabilities. It is hoped that in a couple of months authorities should have credible data on motor insurance for at least two years. A similar exercise was also conducted on health insurance data by collecting records from the TPAs. The information in respect of 2 million policies has been collected and it is being checked for internal consistency. The experiments at data collection in both motor and health have helped us in understanding the manner in which data is managed at the operational level and interaction with the public sector insurers indicates that it should be possible to improve the quality of data with a little effort on the part of the insurers.

Inspite of the constraints inherent in a tariff regime, economy have witnessed a significant growth in the number of applicants for grant of broker's license. Insurance companies have sought to enlarge the opportunities for the brokers to operate in the market by increasing the threshold limit at which the discount in premium is allowed for contracts concluded directly with the insurers with out intermediation by brokers. They also believe that this would facilitate the entry of brokers in general insurance market so that they gain enough experience to be of assistance to the insured when complete de-tariffing takes place. The broking community should realize that they have a major role to play in enlarging the market through innovative packaging and by creating new products. In the areas where they are already operating they should ask themselves the question whether they have been able to provide value added service to their clients. There has been a persistent demand for freeing the general insurance market from the rigidities inherent in a regime where tariffs are prescribed by an outside agency. It has been argued that tariffs and free market do not go together and the insurers should be able to determine what risks they are prepared to underwrite and the rate at which they would underwrite the risk. It was also pointed out that the present system of having tariffs in some risks and free rates for others is leading to distortions in pricing as the insurers are underwriting risks not covered by tariff at throwaway prices in order to gain access to lucrative fire and engineering covers which are covered by tariff. The Authority recognizes that the consumer would normally stand to gain when there is a free market. They are also convinced that de-tariffing is an essential pre-requisite for the healthy growth of the market. It has to be, however, recognized that absence of data and lack of experience in underwriting could upset the market with adverse consequences for the insurer as well as the insured. The Authority has, therefore, laid stress on the need for an orderly transition from the present tariff market to free market. While agreeing with the suggestion of the insurers for removing the tariff a clear road map to be followed has been given to make the transition as smooth as possible. In a market free of tariffs, any responsible insurer should have in place infernal

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capabilities to do underwriting, have rating support and develop policy terms and conditions which would pass scrutiny by any judicial body. The companies feel that the function of underwriting and rating of insurance business should be independent of the business development function. Companies would like to ensure that sound underwriting principles are not sacrificed for gaining access to business. Just as actuaries are in short supply, so are people who have specialized in underwriting. They have to be recruited and properly trained. The road map provides a year's time to the insurers to identify the right kind of people and place them in appropriate positions to undertake this work when the tariff regime is replaced by free tariffs on 1st January, 2007. The Authority has suggested that so far as policy terms and conditions arc concerned, the insurers may adopt the existing conditions. However, where the insurer wishes to modify the terms the approval of the Authority would be required. In respect of risks which are rated on the basis of international market terms, they may continue to be governed by the terms and conditions acceptable to the insurer. The General Insurance Council which consists of all the general insurers has considered the road map and they seem to be convinced that they would be able to adhere to the road map laid out by the Authority. There was some apprehension about motor tariff and all the insurers have stressed the need for detariffing motor premium along with the rest. IRDA see no difficulty in agreeing to this suggestion. However, they would like to ensure that no vehicle which has a valid registration and has permission to ply on the road goes without a proper insurance cover. Authorities have, therefore, suggested creation of a Declined Motor Insurance Pool. It is understood that the General Insurance Council has created two sub-committees to monitor the preparedness of insurers to meet the challenges of a detariffed regime and to work out the modalities for creation of the Declined Motor Insurance Pool. CII have tried to briefly outline the developments that have taken place in the insurance market in the last one year. Companies have come a long way in the road to deepen the insurance market. The overall growth has shown positive signs. Global players are interested in this market. There is vast untapped potential with a major portion of household savings parked in the Banking sector .

The economy itself is growing consistently at a high rate with inflation in check. The Government is making a major effort at improving infrastructure through publicprivate partnership. Insurance industry has a major role to play in nurturing this partnership and in providing the required resources to sustain investments in infrastructure. There is no doubt that the insurers would not be found wanting in this effort at transforming the Indian economy.

3.9 HOW TO BECOME LIFE ADVISOR

In India, ever since the insurance industry has opened up, opportunities for insurance companies have become limitless. To tap this opportunity, they require insurance agents because agents are one of the most significant modes of bringing in muchneeded business to the company. At Bharti AXA Life Insurance, you will not merely be an life advisor you will be a Financial Advisor. You will have an important role to play because you have to give valuable advice to prospective customers about their financial planning. Opportunities for Life Advisors Make a good profit without a heavy investment. Enjoy the benefit of residual income. Maintain flexible work hours. Earn attractive commissions. Participate in exciting recognition programs. Associate with Bharti AXA Life Insurance - One of the strongest brands of the country. Capitalize on the growing Insurance market. Become a full time sales manager. Benefits Available for Life Advisors

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Apart from being remunerated well, Advisors get a lot of recognition and can win awards by participating in the monthly, quarterly, half yearly, yearly business competition. These business reviews can fetch foreign tours and travel free of cost. Easy way to globe trot is to become an advisors with Bharti AXA Life Insurance. Become an Life Advisor to really see the benefits. It is told that "seeing is believing '. We are ahead and we say "experiencing is believing" are you ready to experiment.

Who can become an Life Advisor? Person, that is an individual, or a firm, company formed under companies act an become an agent. What is an Examining Body? It is an institution, which conducts pre-recruitment test for the insurance agents and recognized by the Insurance Regulatory and Development Authority. Can I become a Life Advisor? Yes you can, if you are 12th standard or equivalent in urban areas. Otherwise 10th or equivalent in rural areas. 18 years old and should have completed 50 hours training. How much fee should I pay? Fees payable to issue the license to act as an life advisor is 500/- only. How long is the license valid? The licence is valid for 3 years and after that it is renewed based on renewal training of 25 hours and the fees payable is Rs.1000/-. Is there anything I need to know before becoming an life advisor? Yes, that is Code of conduct. It gives the do's and dont's of business after becoming an life advisor. MDRT (Million Dollar Round Table) The Million Dollar Round Table, abbreviated MDRT is a trade association formed in 1927 to help insurance sales people and financial advisors improve their business practices and increase sales. The name comes from the fact that the founders had each logged sales of more than $1,000,000 in the year the organization was formed. They focus on improving technical knowledge and selling ability as well as maintaining ethical standards in an oft-maligned industry. Their programs and philosophies are one of the early forbears and focus on personal and professional development of their members, while enforcing a strict code of ethics. 49

MDRT promotes the "Whole Person" (formerly "Whole Man") concept, which was first presented to MDRT by the philosopher Mortimer Adler. According to Adler, "Whole Persons are engaged in a lifetime quest to achieve balance and congruity in all aspects of their lives and continually seek to develop their full human potential." The seven areas balanced by a "Whole Person" are family, health, education, career, and service, financial and spiritual. Criteria for MDRT, COT, TOT for the year 2008 in Rupees MDRT Premium Commission Life Advisor Nature of Work Most people have their first contact with an insurance company through an insurance sales agent. These workers help individuals, families, and businesses select insurance policies that provide the best protection for their lives, health, and property. Insurance sales agents, commonly referred to as producers in the insurance industry, sell one or more types of insurance, such as property and casualty, life, health, disability, and long-term care. Property and casualty insurance agents sell policies that protect individuals and businesses from financial loss resulting from automobile accidents, fire, theft, storms, and other events that can damage property. For businesses, property and casualty insurance can also cover injured workers compensation, product liability claims, or medical malpractice claims. Life insurance agents specialize in selling policies that pay beneficiaries when a policyholder dies. Depending on the policyholders circumstances, a cash-value policy can be designed to provide retirement income, funds for the education of children, or other benefits as well. Life insurance agents also sell annuities that promise a retirement income. Health insurance agents sell health insurance policies that cover the costs of medical care and loss of income due to illness or injury. They also may sell dental insurance and short-term and long-term-disability insurance 3,036,400 759,100 COT 9,109,200 2,277,300 TOT 18,218,400 4,554,600

policies. Agents may specialize in any one of these product areas, or function as generalists, providing multiple products to a single customer. An increasing number of insurance sales agents are offering comprehensive financial planning services to their clients. These services include retirement planning, estate planning, and assistance in setting up pension plans for businesses. As a result, many insurance agents are involved in cross-selling or total account development. Besides offering insurance, these agents may become licensed to sell mutual funds, variable annuities, and other securities. This practice is most common with life insurance agents who already sell annuities, but many property and casualty agents also sell financial products. Insurance sales agents also prepare reports, maintain records, and seek out new clients. In the event that policy holders experience a loss, agents help them settle their insurance claims. Increasingly, some agents are also offering their clients financial analysis or advice on how to minimize risk. Insurance sales agents working exclusively for one insurance company are referred to as captive agents. Independent insurance agents, or brokers, represent several companies and match insurance policies for their clients with the company that offers the best rate and coverage. Technology has greatly affected the insurance business, making it much more efficient and giving the agent the ability to take on more clients. Agents computers are now linked directly to insurance carriers via the Internet, making the tasks of obtaining price quotes and processing applications and service requests faster and easier. Computers also allow agents to be better informed about new products that the insurance carriers may be offering. The growing use of the Internet in the insurance industry has altered the relationship between agent and client. Agents formerly used to devote much of their time to marketing and selling products to new clients. Now, clients are increasingly obtaining insurance quotes from a companys Web site and then contacting the company directly to purchase policies. This interaction gives the client a more active role in selecting their policy, while reducing the amount of time agents spend actively seeking new clients. Insurance sales agents also obtain many new accounts through 51

referrals, so it is important that they maintain regular contact with their clients to ensure that the clients financial needs are being met. Developing a satisfied clientele that will recommend an agents services to other potential customers is a key to success for agents. Increasing competition in the insurance industry has spurred carriers and agents to find new ways to keep their clients satisfied. One solution is to increase the use of call centers, which usually are accessible to clients 24 hours a day, 7 days a week. Insurance carriers and sales agents also are hiring customer service representatives to handle routine tasks such as answering questions, making changes in policies, processing claims, and selling more products to clients. The opportunity to cross-sell new products to clients will help agents businesses grow. The use of call centers also allows agents to concentrate their efforts on seeking out new clients and maintaining relationships with old ones. Work Environment Insurance sales agents working as captive agents are usually based in small offices, from which they contact clients and provide information on the policies they sell. Independent insurance agents, or brokers, may work in offices of varying sizes, depending on the size of the agency. However, much of their time may be spent outside their offices, traveling locally to meet with clients, close sales, or investigate claims. Agents usually determine their own hours of work and often schedule evening and weekend appointments for the convenience of clients. Some sales agents may meet with clients during business hours and then spend evenings doing paperwork and preparing presentations to prospective clients. Although most agents work a 40-hour week, some work 60 hours a week or longer. Training, Other Qualifications, and Advancement Every sales agent involved in the solicitation, selling, or negotiation of insurance must have a State issued license. Licensure requirements vary by State but typically require some insurance-related coursework and the passing of several exams. Although some agents are hired right out of college, many are hired by insurance companies as customer service representatives and are later promoted to sales agent.

Education and Training For insurance sales agent jobs, many companies and independent agencies prefer to hire college graduates especially those who have majored in business or economics. High school graduates may be hired if they have proven sales ability or have been successful in other types of work. College training can help agents grasp the technical aspects of insurance policies as well as the industry fundamentals and operational procedures of selling insurance. Many colleges and universities offer courses in insurance, and a few schools offer a bachelors degree in the field. College courses in finance, mathematics, accounting, economics, business law, marketing, and business administration enable insurance sales agents to understand how social and economic conditions relate to the insurance industry. Courses in psychology, sociology, and public speaking can prove useful in improving sales techniques. In addition, familiarity with computers and popular software packages has become very important because computers provide instantaneous information on a wide variety of financial products and greatly improve agents efficiency. Agents learn many of their job duties on the job from other agents. Many employers have their new agents shadow an experienced agent for a period of time. This allows the agent to learn how to conduct their business, how the agency interacts with clients, and how to write policies. Employers also are placing greater emphasis on continuing professional education as the diversity of financial products sold by insurance agents increases. It is important for insurance agents to keep up to date on issues concerning clients. Changes in tax laws, government benefits programs, and other State and Federal regulations can affect the insurance needs of clients and the way in which agents conduct business. Agents can enhance their selling skills and broaden their knowledge of insurance and other financial services by taking courses at colleges and universities and by attending institutes, conferences, and seminars sponsored by insurance organizations. Licensure Insurance sales agents must obtain a license in the States where they plan to work.

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Separate licenses are required for agents to sell life and health insurance and property and casualty insurance. In most States, licenses are issued only to applicants who complete specified prelicensing courses and who pass State examinations covering insurance fundamentals and State insurance laws. The insurance industry is increasingly moving toward uniform State licensing standards and reciprocal licensing, allowing agents who earn a license in one State to become licensed in other States more easily. Most State licensing authorities also have mandatory continuing education requirements focusing on insurance laws, consumer protection, ethics, and the technical details of various insurance policies. As the demand for financial products and financial planning increases, many insurance agents, especially those involved in life insurance, are choosing to gain the proper licensing and certification to sell securities and other financial products. Doing so, however, requires substantial study and passing an additional examinationeither the Series 6 or Series 7 licensing exam, both of which are administered by the National Association of Securities Dealers (NASD). The Series 6 exam is for individuals who wish to sell only mutual funds and variable annuities, whereas the Series 7 exam is the main NASD series license that qualifies agents as general securities sales representatives. Other qualifications Previous experience in sales or insurance jobs can be very useful in becoming an insurance sales agent. In fact, many entrants to insurance sales agent jobs transfer from other sales related occupations, such as customer service representative positions. In selling commercial insurance, technical experience in a particular field can help sell policies to those in the same profession. As a result, new agents tend to be older than entrants in many other occupations. Insurance sales agents should be flexible, enthusiastic, confident, disciplined, hard working, and willing to solve problems. They should communicate effectively and inspire customer confidence. Because they usually work without supervision, sales agents must be able to plan their time well and have the initiative to locate new clients. Certification and Advancement

A number of organizations offer professional designation programs that certify agents expertise in specialties such as life, health, and property and casualty insurance, as well as financial consulting. For example, The National Alliance for Education and Research offers a wide variety of courses in health, life and property, and casualty insurance for independent insurance agents. Although voluntary, such programs assure clients and employers that an agent has a thorough understanding of the relevant specialty. Agents are usually required to complete a specified number of hours of continuing education to retain their designation. In the area of financial planning, many agents find it worthwhile to demonstrate competency by earning the certified financial planner or chartered financial consultant designation. The Certified Financial Planner credential, issued by the Certified Financial Planner Board of Standards, requires relevant experience, completion of education requirements, passing a comprehensive examination, and adherence to an enforceable code of ethics. The exam tests the candidates knowledge of the financial planning process, insurance and risk management, employee benefits planning, taxes and retirement planning, and investment and estate planning. The Chartered Financial Consultant (ChFC) and the Chartered Life Underwriter (CLU) designations, issued by the American College in Bryn Mawr, Pennsylvania, typically require professional experience and the completion of an eight-course program of study. Many property and casualty insurance agents obtain the Chartered Property Casualty Underwriter (CPCU) designation, offered by the American Institute for Chartered Property Casualty Underwriter. The majority of professional designations in insurance have continuing education requirements. An insurance sales agent who shows ability and leadership may become a sales manager in a local office. A few advance to agency managerial or executive positions. However, many who have built up a good clientele prefer to remain in sales work. Someparticularly in the property and casualty fieldestablish their own independent agencies or brokerage firms. Employment nsurance sales agents held about 436,000 jobs in 2006. Almost 50 percent of insurance sales agents work for insurance agencies and brokerages. About 23 percent 55

work directly for insurance carriers. Although most insurance agents specialize in life and health insurance or property and casualty insurance, a growing number of multiline agents sell all lines of insurance. A small number of agents work for banks and securities brokerages as a result of the increasing integration of the finance and insurance industries. Approximately 26 percent of insurance sales agents are self employed. Insurance sales agents are employed throughout the country, but most work in or near large urban centers. Some are employed in the headquarters of insurance companies, but the majority work out of local offices or independent agencies. Job Prospects Multilingual agents should have good job prospects because they can serve a wider range of customers. Additionally, insurance language tends to be quite technical, so agents who have a firm understanding of relevant technical and legal terms will also be desirable to employers. Many beginning agents fail to earn enough from commissions to meet their income goals and eventually transfer to other careers. Many job openings are likely to result from the need to replace agents who leave the occupation or retire, as a large number of agents are expected to retire over the next decade. Agents may face increased competition from traditional securities brokers and bankers as they begin to sell insurance policies. Insurance sales agents will need to expand the products and services they offer as consolidation increases among insurance companies, banks, and brokerage firms and as demands increase from clients for more comprehensive financial planning. Independent agents who incorporate new technology into their existing businesses will remain competitive. Agents who use the Internet to market their products will reach a broader client base and expand their business. Agents who offer better customer service also will remain competitive. Carriers and agencies are increasingly using call centers in an effort to offer better service to customers because they provide greater access to clients policies and more prompt services. Most individuals and businesses consider insurance a necessity, regardless of

economic conditions, so agents are not likely to face unemployment because of a recession. Earnings The median annual earnings of wage and salary insurance sales agents were $43,870 in May 2006. The middle 50 percent earned between $31,640 and $69,180. The lowest 10 percent had earnings of $24,600 or less, while the highest 10 percent earned more than $115,090. Median annual earnings in May 2006 in the two industries employing the largest number of insurance sales agents were $46,210 for insurance carriers, and $42,950 for agencies, brokerages, and other insurance related activities. Many independent agents are paid by commission only, whereas sales workers who are employees of an agency or an insurance carrier may be paid in one of three ways: salary only, salary plus commission, or salary plus bonus. In general, commissions are the most common form of compensation, especially for experienced agents. The amount of the commission depends on the type and amount of insurance sold and on whether the transaction is a new policy or a renewal. Bonuses usually are awarded when agents meet their sales goals or when an agency meets its profit goals. Some agents involved with financial planning receive a fee for their services, rather than a commission. Company-paid benefits to insurance sales agents usually include continuing education, training to qualify for licensing, group insurance plans, office space, and clerical support services. Some companies also may pay for automobile and transportation expenses, attendance at conventions and meetings, promotion and marketing expenses, and retirement plans. Independent agents working for insurance agencies receive fewer benefits, but their commissions may be higher to help them pay for marketing and other expenses.

3.10 SIX SIGMA AND THE INSURANCE SECTOR

Six Sigma focuses on eliminating defects through measurement and process analysis. This is based on philosophy that all organizations need ways to measure those things that they value. Motorola developed six Sigma in 1980s. Since then GE, AlliedSignal, Sony, Honda, Raytheon, Maytag, Texas Instruments, Canon, Hitachi, Lockheed

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Martin, Polaroid, and others have successfully used it. The Insurance industry has experienced mixed results with Six Sigma over the years. Some companies have reported remarkable improvements as a result pf Six Sigma efforts, while others say that Six Sigma took on a life of its own and they didnt present a positive benefits versus cost. Six Sigma was developed in the manufacturing arena, so translating its principles to a service related sector is tricky. Organizations that are considering Six Sigma must be certain that they are implementing Six Sigma for the right reasons and that they are ready for Six Sigma. Why should an organization choose to undertake Six Sigma? An organization considering Six Sigma must be willing to commit a long time quality improvement strategy. Embedded in Six Sigma are many proven quality techniques that will, without doubt, lead to short term improvements. The greatest benefits of Six Sigma, however, are its ability to create sustainable performance over a period of time. Every company, at the end of the day, wants two things: excellent financial performance and extremely high levels of customer satisfaction. Many, if not most, companies measure their level of success in these areas by outcome reporting alone. Thats great if the outcomes of what you want to be. But what if they are not? Without a way to measure the steps that lead to the out come, you are left to managing by opinion. Six Sigma, on the other hand, creates on going disciplines focused on high level of performance. It requires that your organization isolate and measure the metrics that will lead you to the desired results. Though these stringent measurements, you will know be able to see where critical failures are occurring in process and alleviate them. As you systematically do this, outcome data rises to the desired levels. While this takes time, incremental improvement of core process will occur along the way. In addition, the Six Sigma focus on process measurement is not dependent on the cycle of technological investment /development / rollout. This helps companies

free themselves from the use of technology as all-purpose panacea. Is your organization ready for Six Sigma? Before committing to Six Sigma, it is important to consider your organization has the patience and the capital necessary to see the process through to completion (and therefore reaped the ultimate benefits). In order to envision the cost of Six Sigma you should have an understanding of the minimum infrastructure necessary for conducting successful Six Sigma projects. Successful Six-Sigma implementation requires high level of executive sponsor (CEO or COO) and a leadership council of individuals (such as business units heads) who act as champions of individual projects. In addition, a full time co coordinator (such as the heads of the quality assurance) is necessary to see the Six Sigma operational team members on a daily basis. The Six Sigma operational team requires the greatest commitments of resources. This should be the fully dedicated team comprised of the best and the brightest high potential individuals from the area, or areas, of your organization in which you intend to implement Six Sigma. The operational team is responsible for the actual implementation of the various stages of Six Sigma. Losing the best and the brightest from their current roles is difficult. But consider the benefit of the Six Sigma operational team relentlessly questioning and analyzing processes, and informing senior management of changes that need to be made. This pushes those higher in the organization to reexamine the ways in which they do business, which undoubtedly will yield significant measurable benefits. Other internal subject matter expertise (such as Information Technology, Finance etc) should be made available to the Six Sigma operational team as required. An outside consultant who will provide just-in-time training to the Six Sigma operational team as they work there away through their first Six Sigma project(s) customarily provides initial Six Sigma training. The consultant involvement should take from between eight to twelve months depending upon the project or projects selected and the progress of the operational team.

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Six Sigma is not inexpensive to implement, but it doesnt have to be expensive either. Six Sigma can be rolled-out on an incremental basis by isolating key processes or key business opportunities rather than attempting a total transformation to Six Sigma. This will allow you to established a few quick wins without as great a financial commitment, which does much to galvanize the longer-term commitment necessary from your organization to reap the maximum Six Sigma Benefits. After the cost of Six Sigma is considered, the matter of corporate patience should be addressed. The companies that can derive the greatest benefits from Six Sigma are generally those that have attempted one or more unsuccessful quality initiatives in the past. There are usually two basic reasons that quality initiatives fail. Either the initiatives were poorly designed or the organization didnt have the patience to continue the efforts. Six Sigmas success in an organization is largely dependant upon differentiating these efforts from past initiatives that yielded questionable results. The design of Six Sigma has proven to be sound when implemented properly, you can, and must, be confident in the Six Sigma process and honor the phases of the process as well as the disciplines embedded within each phase. Each phase should be given adequate time to be completed. A general guidelines as to the timeline that you might expect, based on the phases of Six Sigma, is as follows: Define phase: Measure phase: Analyze phase: Improve phase: Control phase: 5-7 weeks 8-10 weeks 5-7weeks 8-15 weeks 5-7 weeks

These estimates vary based on scope of the project you are undertaking. Remember that it is best to limit the scope of your initial projects by isolating key process or key

business opportunities rather that attempting a total transformation to Six Sigma. At the end of each phase it is recommended that a tollgate meeting take place. A tollgate meeting consists of presentation by the Six Sigma operational team of their findings in regards to the phase that they have just completed. The findings are presented to the executive sponsor and the leadership council. This allows discussion and decision-making at critical intervals in the process. Kicking it off the right way is crucial. Once you have decided to introduce Six Sigma to your organization, proper communication from your CEO or COO in the early stages, and on continuing basis, is extremely important in order to position Six Sigma for success. In addition to clearly stating that your organization is committed to Six Sigma and to the process it requires, it must be understood that, while opinions are encouraged, non-conformance can be fatal. A high-touch, high-visibility kick off is recommended to set the tone and expectations (not only to the direct reports of the CEO or COO, but to all involved in the process). Be patient while Six Sigma is working. The executive leadership of any organization implementing Six Sigma should be prepared to hear things that they dont want, or expect, to hear. The beauty of Six Sigma is that it uncovers what you need to know, not just what you what to know. Candor from the Operational team should be encouraged. The team should also be encouraged to return feedback and thoughts on out-of-scope issues they come across as well. While the Operational Team should be cautioned to resist the temptation of curing out-of-scope issues, they should be encouraged to identify and document these tangent issues for consideration as future Six Sigma projects. Overall it is very important for leadership allow the Operational team to find their way. Their course should only be corrected when critical. Too much control prevents the team from exploring potential answers that leadership may not have considered. Equally important is being supportive and getting out of the way while the team is 61

focused on the facts. What can Six Sigma deliver to your organization? Even when implemented incrementally, Six Sigma will recalibrate a companys focus on customers. Not only will an organization be able to say that it is customer focused, it can tangibly prove it. Six Sigma will result in improved measurements of core processes, such that you will be measuring the right things at the right time. Through Six Sigma the organization will become highly focused on deviation rather than average performance. Average will become a bad word; in that, with averages, one never knows how bad the outliners can bewhile these outliners are what your customers see. Six Sigma will also change the decisions making process. A new standard will be set in delivering factual evidence before entertaining change. In any organization using Six Sigma properly, managing by opinion will become a thing of past. 3.11 LIFE INSURANCE MARKETING MIX The set of controllable tactical tools product, price, promotion, and place (4 Ps) that the firm blends to produce the response it wants, in the target markets. In the insurance sector one additional P is included as Policy servicing in the marketing mix. Product It is the first element; product is the sum total of physical, social and pschycological benefits. Bharti AXA Life Insurance main product is whole life policy and ULIPS. Apart fro whole life policies, endowment insurance, money back plans Bharti AXA Life has several other plans for children, senior citizen, women. Its service standard is very high, and that gives it an extra edge. Price Price is the valuation based upon the product by the offered. In the case of Life Insurance, premium is the price, which the person seeking insurance pays to LIC for the purchase of the insurance policy. It deals with price competition.

Place Distributional channel policy bis another integral part of the life insurance marketing mix. Its all about the delivery of the products at the right place at the right time. In Bharti AXA Life Insurance, the online module is designed and the life advisors are present across India .The banc assurance have several major tie ups with the banks. Promotion The business enterprise should inform the customers about its customers and persuade them to buy. It covers methods of communicating with consumers through personal selling, advertising, publicity, sales promotion etc. Calendar, diaries, and several other miscellaneous items are also given by time to time to the policyholders as a token of gifts. Policy Servicing Customer satisfaction predominates the success of an enterprise. To serve the customers, Bharti AXA Life Insurance provide 24/7 toll free number.

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Chapter 4.0
22%

DATA ANALYSIS &31% INTERPRETATION

No. of Respondents: 160 1. Flexibility of time in the job: 47% In the survey, majority of persons feel that there is flexibility in the timing in this particular job. It can provide them an added benefit of doing two jobs vis--vis. Life Agent have to inform the concerning Sales Manager only when any deal cuts. So its a Average Satisfied big reason why housewives Not satisfied retired people preferred this profile. and voluntary Pie chart showing the satisfaction rate of the people interested in this job profile:-

FIGURE 4.1

19% 2. Extra Potential Income: Everyone who is graduated is eligible to sit in the insurance exams for registration and 19% he/she is eligible if one clears the exams. So it can easily touted as the best 62% opportunity for one to earn extra potential income. But this quality is more suited to housewives and VRS equipped persons. Pie charts showing rate of persons opined about the extra income they can earn as an agent advisor. Average Satisfied Not satisfied

FIGURE 4.2

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3. Reward and Recognition: 20% A lot of reward and recognition is happened 40% through the achievements as an agent advisor. Million dollar round table (MDRT) conferences held every year and Bharti AXA Life Insurance is the top most company in India as it produces most MDRT certified agents. This is a very much related to interested candidates as its a 40% motivational thing. Pie chart showing interest level of people regarding rewards and recognition:Error: Reference source not found Average Satisfied Not satisfied

FIGURE 4.3

4. Financial Security: 19% Financial security is the one of the most crucial part every job .On this part, people are hesitant, as one would get the money if one issued a policy. So this is a little bit crucial factor of an agent advisor. I have got answers according to the expectations. 19% Majorities are the person who has rated it averaging. 62% Out of the person surveyed, 62% are the person who found this factor as an average one. Satisfier and non-satisfier are on the same rate.

Average

Satisfied

Not satisfied

FIGURE 4.4

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10% 5. World Class training: 30%

Bharti AXA Life Insurance is upcoming life insurance company. But it has worldclass trainers to train the staff. Their training is the best training ever in the life insurance industry and this is the reason why their agent channel is the most 60% profitable. So most of the person surveyed satisfied with the training standards. Pie charts showing the ratings of world class training:Average Satisfied Not satisfied

FIGURE 4.5

Chapter 5.0 FINDINGS & RECOMMENDATION

5.1 FINDINGS These 8 weeks at Bharti AXA Life Insurance has enabled me to learn a lot. I came to know what exactly it means & takes to be in the market, to convince people & to work hard. I learned a lot during this time. Some of the findings of my project are as follows: It is important to create awareness about the insurance sector & its liberalization because even now people know only about LIC & also dont have much faith in the private insurance players. Since Bharti AXA Life Insurance is a brand name among people so it is an advantage for Bharti AXA Life Insurance in making a good position in the market. People dont want to choose this profession because of distributing the commission with the client. Employed people dont find time because of their busy schedule. Training centers are limited so it is difficult for people who stay away from these places to commute. When we talk about popularity no doubt that LIC is on the top but Bharti AXA Life Insurance is No.5 among the private players. People are sometimes rude & unapproachable that it makes it difficult to communicate with them. People still have inhibitions about private players in insurance After conducting the survey, the thrust for the recruitment of the agent lies in those people who is a housewife or a voluntarily retired people. These are the persons who

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need extra income and who can give time for this job profile. At last I can identify these two, housewives and voluntarily retired person makes the market for the recruitment of life advisors.

5.2 RECOMMENDATIONS This study will help the organization to identify the faults and gaps in life advisors recruitment process. Through this study organization will be able to weed out the unproductive activities, which reduces the efficiency of the employees and quality of service to the customer. Following could be the positive outcomes from the study of such processes: To increase the increase the job satisfaction level of the life advisor of the company should concentrate 'mainly on the commission, incentive and reward structure rather then the motivation session and joint field visit. Ideal life advisor should be a married male of the age group or 31 to 40 or single female of the age group 26 to 30 years. Bharti AXA Life Insurance should try to allure experienced insurance agents to sell their product. Educational qualification is not a factor of being an effective life advisor. Reduce time spends in the office. Weed out the inefficient processes in the recruitments of life advisor. Reduce duplication of efforts. Improve productivity. Create proper manpower plan. How will we know if the study is a success? Following can be the indicators, which can replicate that the study has resulted in positive outcome: Reduction in turnaround time: If the total time taken for recruitment of agents office is reduce considerably and

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proper control can be implemented over the movement of documents. Improvement in accuracy level: If the organization can successfully follow the laid down targets with reduction in the errors of the workflow process and can satisfy the customers with the quality service.

Chapter 6.0 CONCLUSION

The project has various facets and the tenure in my SIP has been the best part in my life as there were moments of happiness, sorrow and stress. At the end the winner is True Manager and one who has control on his emotions. I have learned to live the hard way and I came to know my strength and weaknesses. It was really valuable for me as I got a project, which could test my skills in various areas, and this helped me a lot to decide the field I am most confident and successful. The Indian Insurance Industry has suddenly witnessed a major boom. Being a globalize market, the customer seeks and demand world-class products. In global market everything is bench marked and compared. The market for Insurance business is found vast; the potential policyholders are in a very good number. And their needs and requirements are not identical. The market share of life insurance business is comparatively superior to general insurance business. Free markets and globalization have increased competition in the changed scenario, life insurance business has to reengineer its approaches and strategies on quality basis. So, the study on life insurance business with the reference to quality becomes more important, this quality-based strategy called as service sigma. Six sigma is a management philosophy. It is a customer based approach realizing the defects are expensive. It is considered to be a way or path to achieve strategic business results. Fewer defects in the operation means lower costs and improved customer loyalty. It is not a single activity, it is a continuous process.

The project revolves round the above-mentioned approach with a right kind of mix of technical and marketing aspects of life insurance industry. I would like to conclude my report with a wish that all employees of Bharti AXA Life Insurance would remember me for days to come and with all due respect like to again thank Mr. Savan Rai Khullar, Branch Manager for giving me an opportunity to serve the company and giving me days which have been the most learning for me.

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ANNEXURES

QUESTIONNAIRE
PERSONAL PROFILE: Name:_______________________________________________________________ Address:_____________________________________________________________ Telephone No (Resi.):_________________________Off:______________________ Sex: Male Female

EMPLOYMENT DETAILS: Name of the Company:__________________________________________________ Nature of Business:___________________________ Designation:_______________ Annual income:________________________________________________________ Q.1 Flexibility of time. Average Satisfied Not Satisfied Q.2 Extra potential income. Average Satisfied Not Satisfied Q.3 Rewards and recognition. Average Satisfied Not Satisfied

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Q.4 Financial security. Average Satisfied Not Satisfied Q.5 World class training. Average Satisfied Not Satisfied

Thank you

GENERAL QUESTIONS
What is the procedure to change the Address / Contact information? The policy holder can send a request for change in Address / Contact details, through a policy service request form which should be duly completed and signed by him/her. If there is a change in contact details, the STD code along with the contact number should be mentioned on the policy request form. What is the procedure to change the Name? The policy holder can send a request for change in Name, through a policy service request form which should be duly completed and signed by him/her. In addition, we would require any one of the following documents (as applicable)

Standard age proof (for minor changes) Copy of marriage certificate, mentioning old name and new name Gazette notification and the copy of affidavit submitted for the notification to be issued in case the name is changed through gazette notification

What is the procedure to change the mode of payment? The policy holder can send a request for change of Mode of payment, through a policy service request form which should be duly completed and signed by him/her. In addition, we would require any one of the following documents in case of Auto payment methods (ECS and SI to Credit Card) For ECS: A mandate form and an original or copy of a cancelled cheque For SI to CC: A copy of the front and reverse of the credit card for SI to CC Points to remember:

Mode change request should be received at least 15 days before due date For cases where the mode needs to be changed to monthly mode, submitting an ECS/SI to CC mandate form along with the request is mandatory. 77

What is the procedure to change premium payment method? The policy holder can send a request for change of premium payment method, through a policy service request form which should be duly completed and signed by the policy holder. In addition, we would require any one of the following documents in case of Auto payment methods (ECS and SI to Credit Card) For ECS: A mandate form and an original or copy of a cancelled cheque For SI to CC: A copy of the front and reverse of the credit card for SI to CC Points to be remember:

Method change request should be submitted at least 30 days in advance from the due date, for it to be effected.

If two successive payments / instructions in case of monthly premium payment mode or any one payment / instruction in case of quarterly / half yearly / yearly premium payment mode is not received / honoured, the Company reserves the right to automatically cancel/withdraw the facility of ECS / SI to CC.

What do we mean by Assignment of an Insurance policy? Assignment of a life insurance policy means the act of transferring the rights of property in the policy from one person to another. The person who transfers his right is called the "assignor" and the person to whom the right is transferred is called the "assignee" There are two types of assignments:

Conditional Assignment whereby on the happening of a specified event which does not depend on the will of the assignor, the assignment will be suspended or revoked wholly or in part.

Absolute Assignment whereby all the rights, title and interest which the assignor has in the policy passes on to the assignee without reversion to the

assignor or his estate in any event. How can I avail the facility to assign a policy? The policy holder can send a request for an assignment by completing the below mentioned document and submitting the same to the nearest branch.

Assignment form duly filled and signed by assignor, assignee and witnessed. Original policy bond

What is the procedure to request for a change in nomination? The policy holder can send a request for a change of nominee by completing the below mentioned document and submitting the same to the nearest branch.

The nomination form duly filled, signed and witnessed.

What is the procedure to have a duplicate policy issued in case the original has been misplaced? The policyholder would require to inform the company in writing and request for a duplicate policy bond, along with the following requirements:

Indemnity bond on stamp paper of adequate value Stamp charges @ 20 paise per Rs.1000 sum assured

What do you mean by switch of funds? Switch is a facility available only in Unit Linked policies allowing the Policyholder to change the investment pattern by moving from one Investment Fund/s to another among the Investment Funds offered under the underlying product of the Company. How can I avail the facility of switching between funds? The policy holder can avail this facility by sending a Switch of funds request form duly signed by him/her. Note:

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Four switches are free in a policy year A charge of Rs 100/- will be levied on any additional switch. This charge is subject to change but shall not exceed Rs.300/-.

Switch of funds will be effected at a Unit Price declared on the date the Switch application is received and accepted by the Company before 3.00 p.m. and on the next day's Unit Price declared if the application is received and accepted at the Company after 3.00 p.m.

PRESS RELEASES
The seven most recent press releases issued by Bharti AXA Life below: 1. Bharti AXA life insurance launches its 100th branch (July 31, 2008) Bharti AXA Life Insurance Company today (July 31) announced the launch of its 100th branch in India, at Delhi. The company is also launching operations in Ghaziabad and Faridabad today to strengthen their branch network in Northern India. Bharti AXA Life launched national operations in December 2006 at Mumbai, as a mass market player with a multi-channel distribution strategy. Today, the company has presence in large and small cities and towns alike, through its widespread branch and distribution network. The multi-channel distribution spread of Bharti AXA Life comprises agents, corporate agents and brokers, bancassurance and telcassurance. Speaking on the occasion, Nitin Chopra, CEO of Bharti AXA Life Insurance Company stated, ``I am delighted to be launching our 100th branch within 19 months of commencing national operations. We hope to expand our network in India to over 200 branches by December 2008, making our geographical expansion plans one of the most aggressive in the Indian life insurance industry.`` Bharti AXA Life Insurance Company is a joint venture between Bharti Enterprises and AXA, world leader in financial protection and wealth management. The joint venture company has a 74% stake from Bharti and 26% stake of AXA Asia Pacific Holdings. 2. Bharti AXA Life Insurance launches operations in Goa (March 18, 2008) Bharti AXA Life Insurance Company Limited, the private life insurance joint venture between Bharti Enterprises and AXA Group, today announced the launch of their operations in Goa by launching their first branch in Panjim. 3 Bharti AXA Life launches operations in Jamshedpur (February 14, 2008) 81

Bharti AXA Life Insurance Company Limited, the private life insurance joint venture between Bharti Enterprises and AXA Group, today announced the launch of its operations in Jamshedpur. The Company launched its first Jharkhand branch in Ranchi yesterday. 4. Bharti AXA Life launches operations in Jharkhand (February 13, 2008) Bharti AXA Life Insurance Company Limited, the private life insurance joint venture between Bharti Enterprises and AXA Group, today announced the launch of its operations in Jharkhand, with its first branch office in Ranchi. 5. Bharti AXA Life opens third branch in Kerala (February 11, 2008) Bharti AXA Life Insurance Company Limited, the private life insurance joint venture between Bharti Enterprises and AXA Group, today announced the launch of its operations in Trivandrum. This is the third branch launch for the company in Kerala, after Calicut and Kochi. 6. Bharti AXA Life launches operations in Nagpur (February 08, 2008) Bharti AXA Life Insurance Company Limited, the private life insurance joint venture between Bharti Enterprises and AXA Group, today announced the launch of its operations in Nagpur. This is the fifth branch of the company in Maharashtra, after Mumbai, Pune, Aurangabad and Nasik. 7. Bharti AXA to focus on retirement products (Jan 18, 2008) Bharti Axa Life Insurance, a joint venture between Bharti Enterprises and Axa of France, will focus on introducing retirement products. Unlike other life insurers, the company believes that retirement products are expected to receive a major boost in the years to come.

We are planning to introduce more retirement products from the Axas platform, which are long term in nature and will ensure the customers a safe and secured retired life, said V Srinivasan, chief financial officer, Bharti Axa. Addressing a select press briefing here on Thursday, he said: We believe that our new products will offer a perfect retirement planning proposition to suit Indian customers needs, much along the lines of the recent findings of Axa Life on the Indian insurance market. We are looking at exploiting the Axas product lineup which is long-term in nature and ensures the customers to run a happy retired life without chaning their lifestyle, he said adding we continue to innovate new products to suit the Indian customers post-retirement life. A recent Axa Life research pointed out that Indians find life insurance the most suitable retirement planning tool, followed by bank deposits. The Indians start planning for retirement late, but believe that their living standards will improve or at least remain the same after retirement. Around 56% of the working population surveyed said that they have not started preparing for retirement and they cite 52 years as the expected age to start planning, he added. This portrays the need for a retirement planning solution that not just rewards early beginners but also allows them to increase their quantum of investments with increasing income levels, thus helping them create a larger retirement kitty and this becomes necessary objective of efficient retirement planning. Srinivasan, who was here to announce the launch of its new retirement product Dream Life Pension, said the product has unique accumulator feature which enables policyholders to increase their premiums with increasing income, thereby helping them build a larger kitty that beats eroding factors like inflation and allows for a good standard of living even after retirement.

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BIBLIOGRAPHY
Books G.C. Beri, Marketing Research, 2nd Edition, 1999, Tata Mc Graw-Hill Publishing Company Limited, New Delhi. Philip Kotler, Marketing Management: the Millennium Edition, Prentice Hall of India Private Limited, New Delhi. Magazines & Trade Journals Business World Bharti AXA Life Insurance - Internal Magazine Pamphlets & Catalogues Product Brochures

Internet www.bharti-axalif.com www.investopedia.com www.irda.org www.google.com