Effectiveness Of Training Program For Advisors Of Icici Pru

TABLE OF CONTENTS Page No. List of Tables & Illustrations

7

Abbreviations

8

Executive Summary

9

Chapter 1- Introduction

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1.1 Theory and concept

11

1.2 Literature Review

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Chapter 2 -Research methodology

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2.1 Objectives

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2.2 Limitations

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2.3 Sources of Data Collection

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2.4 Sampling Procedure

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2.5 Primary Data Collection

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2.6 Operationalization of the Variables

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2.7 Five Point Rating Scale

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Chapter 3 - Industry Profile

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3.1 Origin of Life Insurance

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3.2 Origin of Life Insurance in India

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3.3 Indian Insurance Market – History

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3.4 Insurance Market – Present

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Chapter 4 - Company Profile

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4.1 Overview of the company

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4.2 Promoters

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4.3 Products 4.4 Awards

28 33

4.5 Board of Directors

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4.6 Management Team

37

4.7 Hierarchical Structure

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Chapter 5 - Training in ICICI Prudential

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5.1 Training Objectives in Insurance sector

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5.2 Training Programs for Advisors

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5.3 Incentive Schemes for Advisors

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5.4 Reasons for choosing career in insurance

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5.5 Reasons for joining ICICI Prudential

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Chapter 6 - Training Components

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6.1 Training Inputs – V1

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6.2 Role of Trainer – V2

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6.3 Facilities at venue –V3

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6.4 Relevance to job – V4

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6.5 Overall evaluation – V5

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Chapter 7 - Interrelationships among training components

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7.1 Correlation matrix between the variables

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7.2 Satisfactory aspects of training program – V6

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7.3 Improvements suggested by respondents – V7

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Chapter 8 – Conclusions

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Appendices

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References

60

2

LIST OF TABLES Table No.

Title

1

Page No.

Rating Scales and their interpretation 19

2

GP Membership Scheme

3

Feedback on Training Inputs

44

46 4

Feedback on Role of Trainer 47

5

Correlation analysis matrix 51

LIST OF ILLUSTRATIONS Number

Title

Page No.

1

Mission of ICICI Prudential 24

2

Segments of ICICI 26

3

Value of Life Insurance 29

4

Hierarchical Structure of ICICI 38

3

5

Hierarchical Structure of Training Department

6

39 Reasons for career in insurance

45 7

Reasons for joining ICICI Prudential 45

8

Feedback on Training Inputs 47

9

Feedback on Role of Trainer 48

10

Satisfaction with facilities at venue 49

11

Feedback on relevance to job 49

12

Feedback on overall training program 50

ABBREVIATIONS ADRs

American Depository Receipts

ATM

Automated Teller Machines

FDI

Foreign Direct Investment

GP

Grand Perks

HDFC

Housing Development and Finance Corporation

HR

Human Resources

4

ICICI

Industrial Credit and Investment Corporation of India

IRDA

Insurance Regulatory and Development Authority

JV

Joint Ventures

MDRT

Million Dollar Round Table

MFIs

Micro Finance Institutions

NCFM

National Stock Exchange Certification

NGOs

Non Governmental Organizations

NYSE

New York Stock Exchange

OST C

Oriental Staff Training College

EXECUTIVE SUMMARY This project on “training effectiveness for advisors” in insurance industry has been undertaken in ICICI Prudential, Hyderabad and Secunderabad branches. This project attempts to understand the objectives of training programs of insurance companies. A detailed study of the training programs conducted by ICICI Prudential for its financial advisors has been made. The main objective is to understand the impact of the training programs on the performance levels of the financial advisors

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ICICI Prudential is currently No.1 private life insurer in the country. It has one of the largest distribution networks amongst private life insurers in the country. This has generated curiosity in me to know how far training programs have improved the employee’s job performance. An attempt has been made to understand the effectiveness of training programs at entry level, i.e., for advisors has been made here. For, the advisor/ agent are the public face of the insurance company and make the most enduring impact on the customer. The study involved both primary and secondary sources for collecting information. The secondary sources include company’s website, books, journals, insurance magazines, HR reviews, articles on internet etc.The primary data was collected with the help of a structured questionnaire administered to 25 advisors who were selected through simple random sampling technique. The data has been analyzed by assigning scores to the responses given by the advisors and with the help of a correlation matrix between different variables, the conclusions have been arrived at. The observations made during the data analysis have been represented with the help of pie charts and bar diagrams.

Finally, the conclusion part discusses about the major findings of the study and the various measures to be taken by the ICICI Prudential to improve its training programs for advisors. The advisors were not satisfied with the duration of the training program since they were already in regular employment with some or the other company. They wanted the timings to be re – scheduled. However, ICICI Prudential has been taking care to take note of such problems and constantly trying to update the knowledge and skills of the advisors.

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CHAPTER 1 INTRODUCTION 1.1 Theory and Concept

“It is our people who make the difference where it matters most…” (Tesco 2002)

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“This is a global success story made possible by the quality and determination of over 100,000 people worldwide.”

(Vodafone 2002)

“…we believe that competitive advantage is achieved through our people…” (Kellogg 2002)

Every organization requires competent employees for the successful functioning of its various departments. To ensure that the staff works efficiently and effectively, the organization has to continuously evaluate their performance and bridge any performance gaps by providing appropriate training to them. For, it is the people who ‘make or mar’ an organization. Traditionally, the training policy in an organization focused on enhancing the productivity and effectiveness of the employees so that the medium term and long term strategies of the organization could be successfully fulfilled. Since up gradation of skills and knowledge has direct relevance to performance, training policy till date was desired to have

linkages with other HR systems and policies like performance appraisal, career planning, rewards and promotion as decided by the management. With the ushering in of Globalization and Liberalization since early 1990s, there has been a sea change in our business processes, and our corporate practices forcing organizations to mould themselves to the new era of competition, where they have to

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compete not at local or national level but at international level. This necessitates huge investments in the training programs for providing the requisite skill set to the staff. The ultimate aim of any training program is to achieve:

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Continuous Improvement

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Change-in-Attitude

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Cost Saving

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Total Productivity

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Scope for development

When organization has invested in some training, how do we know if it has a success? Our gut feeling might be that skills and practice have improved. But in what ways and by how much has it improved, and did organization get value of money? Answers to these questions can be found by doing evaluation. The evaluation of training forms the remaining part of the training cycle which starts with the identification of training needs, establishing objectives and continues through to the design and delivery of the training course itself.

It is the function of evaluation to assess whether the learning objectives originally identified have been satisfied and any deficiency rectified. It is part of a continuing management process consisting of planning, implementation and evaluation; ideally with each following the other in a continuous cycle until successful completion of the activity.

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Evaluation process must start before training has begun and continue throughout the whole learning process. Donald Kirkpatrick developed four level models to assess training effectiveness. According to him, evaluation always begins with level first and should move through other levels in sequence. Reaction Level: The purpose is to measure the individual’s reaction to the training activity. The benefit of Reaction level evaluation is to improve Training and Development activity efficiency and effectiveness. Learning Level: The basic purpose is to measure the learning transfer achieved by the training and development activity. Another purpose is to determine to what extent the individual increased their knowledge, skills and changed their attitudes by applying quantitative or qualitative assessment methods. Behavior Level: The basic purpose is to measure changes in behavior of the individual as a result of the training and development activity and how well the enhancement of knowledge, skill, attitudes has prepared them for their role. Result Level: The purpose is to measure the contribution of training and development to the achievement of the business/operational goals.

There are three possible opportunities to undertake an evaluation: Pre Training Evaluation: it is a method of judging the worth of a program before the program activities begin. The objective of this evaluation is (a) To determine the

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appropriateness of the context of training activity and (b) To help in defining relevant training objectives. Context and Input Evaluation: is a method of judging the worth of a program while the program activities are happening. The objectives of this evaluation are (a) To assess a training course or workshop as it progress (b) To find out the extent of program implementation and (c) To determine improvement and adjustments needed to attain the training objectives. Post Training Evaluation: is method of judging the worth of a program at the end of the program activities. The focus is on the outcome. It tries to judge whether the transfer of training to the job has taken place or not. The onus to decide on the effectiveness of the training program should primarily be on the employee and through his performance and quality of output, the organization should form impressions. The employee undergoing training therefore should demonstrate the additional skills and competence at his workplace to enable the organization to value it and to realize the value such efforts add to the organization in achieving its goals and objectives and to frame and practice relevant HR policies and processes.

1.2 Literature Review As customer relationship plays a major role in the insurance business, adequate training has to be provided to the employees to understand the customer needs and

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communicate the suitable product details according to their requirements. A company will be successful if the intermediaries interacting with the customers have a sound knowledge of the products available and are able to convey the same to the end users. Insurance expert Dale S Beach defined training as “the organized procedure by which the employees learn knowledge and skills for a definite purpose.” The organization has to conduct training programs to educate the staff about the various products available, to improve their communication skills and also to equip them to handle different types of customers. Liberalization and privatization of the insurance sector have resulted in a competitive market. Insurance companies require smart and skilled personnel to compete with their rivals in the market. The companies should impart necessary knowledge and skills to the employees by conducting training programs, seminars, conferences and workshops. The HDFC Standard Life Insurance Company imparts knowledge on insurance and other related business process through Management Trainees Program. The Oriental Staff Training College ( OSTC ) is the training center for Oriental Insurance Company. As a part of on-the-job training, companies are tying with training institutions to upgrade the employee knowledge on the latest technology and novel techniques in the industry to improve his performance. Strong academia-industry partnerships are also witnessed. United India Insurance Company in partnership with Dr. Ambedkar Law University in Tamil Nadu provides a post graduate diploma course in general insurance law

and practice. A survey reveals that the training sensitivity among the private insurers stands at 3 on the scale of 0 to 5, where 0 represents not sensitive and 5 represents highly sensitive. A study of the Indian insurance sector by McKinsey & Co., the global consultancy firm, says a mere 25-30% of the life insurance agents have the acceptable level

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of training and sales standards set by their companies. The study further says there is not much to differentiate between those advisors who have spent more than two years in a company and new recruits without any sales experience. Definitely, this is a sad reflection on the quality of training imparted to the agents!!!! The focus of the training during the last decade has shifted from ‘training for survival’ to ‘training for success’. Training, therefore, has to serve as a vehicle for change. To satisfy the curiosity of agents, the faculty members will have to become real coaches and not mere cheerleaders. The training system has to develop wings to fly towards greater heights. All this is possible only when the organizations evaluate the effectiveness of the existing training programs on performance improvement of the employees and thereafter make suitable changes in the training policy to bridge the performance gaps in the employees.

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CHAPTER 2 RESEARCH METHODOLOGY 2.1 Objectives The primary objective of the study is to analyze the effectiveness of training programs conducted for advisors in terms of their performance with special emphasis on ICICI Prudential. The scope of the study encompasses – To understand the objectives of the training programs of insurance companies. To study the content and methodology of ICICI Prudential’s training programs for advisors. To analyze trainees feedback on the training programs To recommend feasible improvements in the training programs conducted by ICICI Prudential for advisors

2.2 Limitations The study is confined to ICICI Prudential, Hyderabad branch only Sampling errors might have occurred There was a difficulty in getting responses from the advisors as some of them refused to respond making excuse of lack of time The responses of the advisors may not be genuine. The questions included in the questionnaire may not be comprehensive.

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2.3 Sources of Data Collection The relevant data was collected from both primary sources and secondary sources. The starting point of my information gathering has been the secondary sources such as internet, books, journals and so on . First, I made a study of the training objectives of the insurance companies to train its personnel through secondary sources such as internet, insurance magazines, and journals and so on. Then I gathered information about the training programs conducted for advisors by ICICI Prudential by interacting with some of the advisors already working for the company.

2.4 Sampling Procedure A sample of 25 advisors is selected for the study, using simple random sampling procedure. The focus of study was on advisors who were trained in the recent past. So, the sample was drawn from among the advisors who were working for ICICI Prudential since last 1 – 2 months.

2.5 Primary Data Collection Data was collected through an interview schedule, consisting of both open ended and closed ended questions. The schedule covered parameters like training methodology, trainer feedback, overall effectiveness of training program, relevance of training program etc. Most of the interviews were conducted over telephones since these advisors need not report to any branch regularly. Most of the times, they were found to be in the field searching for prospective customers. The approximate time taken for each interview was 10 minutes

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2.6 Operationalization of Variables All the variables were grouped into 7 categories and assigned symbols as follows: V1 – training inputs, V2 – role of trainer , V3- facilities at venue, V4- relevance of training program for job, V5- overall evaluation of training program, V6- most satisfactory aspects of training program, V7- improvements suggested by respondents.

2.7 Five Point Rating Scale The ratings that the respondents had to assign for different variables (V1, V2, V3, V4, V5) are categorized as follows:

Table 1: Rating Scales and interpretation Ratings

Interpretation

1

Poor, Not at all relevant, No

2

Below average, Not that much relevant, Yes

3

Average, Not sure

4

Above average, Relevant

5

Excellent, Highly relevant

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CHAPTER 3 INDUSTRY PROFILE 3.1 Origin of Life Insurance Life insurance was born in England when the first policy providing temporary cover for a period of 12 months was issued as early as 1583 A.D. The Amicable Society started granting fluctuating sum on death since 1705 and a fixed sum since 1757. With the development of mortality tables, life insurance acquired a scientific character. The Equitable Society founded in 1762 was the first society established on scientific basis.

3.2 Origin of Life Insurance in India In India, after the failure of 2 British companies, the European and the Albert in 1870, which attempted writing business on Indian lives, first Indian life assurance company was formed in the same year called Bombay Mutual Assurance Society Ltd. It was followed by Oriental life assurance Company limited in 1874, Bharat in 1896 and Empire of India in 1897. The idea of insurance was born out of a desire of the people to share the loss of an individual by many. Originally, it was restricted to other forms of life insurance. It started with marine insurance where the losses on account of perils of the sea were shared by all who were engaged in trade. References to some forms of insurance have been found in the codes of Hammurabi Manu.

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The Swadeshi movement of 1905 provided impetus to the formation of several companies such as the “Hindustan Cooperative”, the ‘United India’, the ‘Bombay life’, the ‘National’. Further in the wake of freedom movement, number of companies such as the ‘New India’, the ‘Jupiter’, and the ‘Lakshmi’ emerged. The government began to exercise certain measure of control on insurance business by passing ‘Insurance Act’ in 1912. In order to control the investment of funds, expenditure and management, a comprehensive Act was passed known as ‘Insurance Act 1938’. To control the affairs, the office of controller of insurance was established. The Act was amended extensively in 1950.

3.3 Indian Insurance Market – History Insurance has a long history in India. Life insurance in its current form was introduced in 1818 when Oriental Life Insurance Company began its operations in India. General insurance was however a late entrant in 1850 when Triton insurance company set up its base in Kolkata. History of insurance in India can be bifurcated into 3 eras: a) Pre Nationalization

b) Nationalization

c) Post Nationalization

Life insurance was the first to be nationalized in 1956. Life Insurance Corporation of India was formed by consolidating the operations of various life insurance companies. General Insurance followed suit and was nationalized in 1973. General Insurance Corporation of India was set up as the controlling body with New India, United India, National and Oriental as its subsidiaries. The process of opening up of the insurance sector

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was initiated against the background of Economic Reform Process which commenced from 1991. For this purpose, Malhotra Committee was formed which submitted report in 1994 and Insurance Regulatory Development Act (IRDA) was passed in 1999. Subsequently, Indian Insurance was opened for private companies which began operations since 2001.

3.4 Indian Insurance Market – History For years now, private players have been active in the liberalized environment. The insurance market has witnessed dynamic changes which include presence of a fairly large number of insurers both life and non life segment. Most of the private insurance companies have formed joint venture partnering well recognized foreign players across the globe. There are now 29 insurance companies operating in the Indian market – 15 private life insurers, 9 private non-life insurers and 6 public sector companies (see Appendix). With many more joint ventures in the offing, the insurance industry in India today stands at cross roads as competition intensifies and companies prepare survival strategies in a de-tariffed scenario. There is pressure from both within the country and outside on the Government to increase the Foreign Direct Investment (FDI) limit from the current 26% to 49% which would help JV partners to bring in funds for expansion.

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CHAPTER 4 COMPANY PROFILE 4.1 Overview of ICICI Prudential ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of India's foremost financial services companies-and Prudential plc - a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 37.72 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. The company began its operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Today, their nation-wide team comprises of over 955 branches in addition to 1,033 micro-offices, over 261,000 advisors; and 20 banc assurance partners. ICICI Prudential was the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As the company widens its distribution, product range and customer base, it continues to tirelessly uphold its commitment to deliver world-class financial solutions to customers all over India.

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Figure 1: Mission of ICICI Prudential

ICICI Prudential Life is all about……

Hea

lth

Total Protectio n

Life

h alt

We

We cover you at every step in Life

The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the values describes what the company stands for, the qualities of people and the way they work. Company believes that it is on the threshold of an exciting new opportunity, where it can play a significant role in redefining and reshaping the sector. Given the quality of parentage and the commitment of its team, there are no limits to its growth.

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The VISION of the company is “To make the company the dominant Life and Pensions player built on trust by worldclass people and service.”

The company proposes to achieve its vision by:

•

Understanding the needs of the customers and offering them superior products and services.

•

Leveraging technology to service customers quickly, efficiently and conveniently.

•

Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to the policy holders.

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Providing and enabling environment to foster growth and learning for the employees.

•

Building transparency in all dealings. Every member of the ICICI Prudential team is committed to 5 core values:

Integrity, Customer First, Boundaryless, Ownership, and Passion. These values shine forth in all they do, and have become the keystones of company’s success.

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4.2 Promoters ICICI Bank The World Bank, Government of India and representatives of the private sector founded ICICI in 1955 to encourage and assist industrial development and investment in India. ICICI Bank is India’s second-largest bank with total assets of about Rs.112, 024 Crore and a network of about 450 branches and offices and about 1750 ATMs. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital, asset management and information technology. ICICI Bank posted a net profit of Rs.1637 Crore for the year ended March 31, 2004. ICICI Bank’s equity shares are listed in India on stock exchanges at Chennai, Delhi, Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). The Various segment of ICICI are Figure 2: Segments of ICICI

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Prudential Plc Established in London in 1848, Prudential plc, through its businesses in the UK and Europe, the US and Asia, provides retail financial services products and services to more than 16 million customers, policyholder and unit holders worldwide. As of June 30, 2004, the company had over US$300 billion in funds under management. Prudential has brought to market an integrated range of financial services products that now includes life assurance, pensions, mutual funds, banking, investment management and general insurance. In Asia, Prudential is the leading European life insurance company with a vast network of 24 life and mutual fund operations in twelve countries - China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. The company has six Bancassurance tie-ups, having agreements with ICICI Bank, Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank and some cooperative banks, as well as over 150 corporate agents and brokers. It has also tied up with NGOs, MFIs and corporates for the distribution of rural policies and organizations like Dhan for distribution of Salaam Zindagi, a policy for the socially and economically underprivileged sections of society. ICICI Prudential has recruited and trained about 2,14,000 insurance advisors to interface with and advise customers. Further, it leverages its state-of-the-art IT infrastructure to provide superior quality of service to customers.

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Figure 2 : Value of Life Insurance

Value of benefit

But the value of Life Insurance... life cover

Insurance Stock market Bond

Death

Maturity

Time Period

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

SecurePlus is a transparent and feature-packed savings plan that offers 3 levels of protection.

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•

Cash Plus is a transparent, feature-packed savings plan that offers 3 levels of protection as well as liquidity options.

•

Save n Protect is a traditional endowment savings plan that offers life protection along with adequate returns.

•

Cash Bank is an anticipated endowment policy ideal for meeting milestone expenses like a child’s marriage, expenses for a child’s higher education or purchase of an asset.

•

LifeTime & LifeTime II offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 4 fund optionsPreserver, Protector, Balancer and Maximiser.

•

LifeLink II is a single premium Market Linked Insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market.

•

Premier Life is a limited premium paying plan that offers customers life insurance cover till the age of 75.

•

InvestShield Life is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest.

•

InvestShield Cash is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest along with flexible liquidity options.

•

InvestShield Gold is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest along with limited premium payment terms.

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Protection Solutions •

Lifeguard is a protection plan, which offers life cover at very low cost. It is available in 3 options- level term assurance, level term assurance with return of premium and single premium.

Child Plans •

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

Retirement Solutions •

Forever Life is a retirement product targeted at individuals in their thirties.

•

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

Market-linked retirement products •

LifeTime Pension II is a regular premium market-linked pension plan

•

Life Link Pension II is a single premium market-linked pension plan.

•

Invest Shield Pension is a regular premium pension plan with a capital guarantee on the investible premium and declared bonuses.

ICICI Prudential also launched- Salaam Zindagi, a social sector group insurance policy targeted at the economically underprivileged sections of the society.

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Group Insurance Solutions ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees. •

ICICI Pru Group Gratuity Plan: ICICI Pru’s group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations.

•

ICICI Pru Group Superannuation Plan: ICICI Pru offers a flexible defined contribution superannuation scheme to provide a retirement kitty for each member of the group. Employees have the option of choosing from various annuity options or opting for a partial commutation of the annuity at the time of retirement.

•

ICICI Pru Group Term Plan: ICICI Pru’s flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death.

Flexible Rider Options ICICI Pru Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer. •

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

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transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit. •

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

•

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

•

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

•

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

•

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

Keyman Insurance Plans A keyman is an individual who directly affects the profitability and the continuity of a business and whose absence may have an adverse effect on the health and continuity of the business. Keyman insurance is a life insurance policy taken by the company on the life of such a key person.

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The objective of the Keyman insurance is to provide the company with money so that the financial losses to the company can be protected, in absence of the Keyman. The aim is to indemnify the company of these losses and to allow business continuity. All premiums paid for securing a Keyman life insurance policy are treated as business expenditure u/s 37 (1). Rural Plans ICICI PruLife Rural Products are designed to meet the needs of the rural consumers. These products offer the following features: 1. Low and Affordable Premiums 2. Life Cover 3. Savings Option 4. Hassle free procedure. Mutual Funds A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them.

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4.4 Awards

ICICI Prudential Life won the ICICI Group Marketing Excellence Award 2008 in three key categories for its marketing initiatives

ICICI Prudential Life was awarded the INDY’s Award for Excellence in Mass Communication in the category of Most Creative Advertisement-Television

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India's Most Customer Responsive Insurance Company Avaya Global Connect - Economic Times Customer Responsiveness Awards, 2007

Ms. Shikha Sharma, MD & CEO, ICICI Prudential Life Insurance was adjudged the Entrepreneur of the Year-Manager at the Ernst and Young Entrepreneur Awards 2007

Ms. Shikha Sharma, MD & CEO, ICICI Prudential Life Insurance was awarded the Outstanding Businesswoman of the Year at CNBC TV18's India Business Leader Awards 2007

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ICICI Prudential Life Insurance won the award for the Best Life Insurer-Runner up at the Outlook Money & NDTV Profit Awards 2007

ICICI Prudential Life’s, retirement solutions campaign for the year 2006-07 was awarded the Bronze Effy trophy in the services category.It also won the Brand Equity Bravery Award 2007, instituted by Ad club. ICICI Prudential Life’s website, www.iciciprulife.com was awarded the best website among private life insurers at the Web 18 and Frost & Sullivan Genius of the Web Awards 2007 for commendable work in the online.

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4.5 Board of Directors The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad. Mr. K.V. Kamath, Chairman Ms. Kalpana Morparia, Vice Chairperson Ms. Chanda Kochhar, Director Mr. Barry Stowe, Director Mr. H.T. Phong, Director Prof. Marti G. Subrahmanyam, Director Mr. Mahesh Prasad Modi, Director Ms. Rama Bijapurkar, Director Mr. Keki Dadiseth, Director Ms. Shikha Sharma, Managing Director Mr. N.S. Kannan, Executive Director Mr. Bhargav Dasgupta, Executive Director

4.6 Management Team The ICICI Prudential Life Insurance Company Limited Management team comprises reputed people from the finance industry both from India and abroad. Ms. Shikha Sharma, Managing Director & CEO Mr. N. S. Kannan, Executive Director Mr. Bhargav Dasgupta, Executive Director Ms. Anita Pai, Executive Vice President – Customer Service & Technology

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Dr. Avijit Chatterjee, Appointed Actuary Mr. Puneet Nanda, Executive Vice President & Chief Investment Officer

4.7 Hierarchical Structure of ICICI Prudential Hyderabad and Secunderabad branches Figure 4 :

Branch sales manager Sales manager (1) Assistant sales manager (2)

Unit manager (10) Advisors (20-30)

Tied Agency is the largest distribution channel of ICICI Prudential, comprising a large advisor force that targets various customer segments. The strength of tied agency lies in an aggressive strategy of expanding and procuring quality business. With focus on sales & people development, tied agency has emerged as a robust, predictable and sustainable business model.

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In Hyderabad and Secunderabad , there are 6 branches and 5 spokes. In each branch, there will be around 10 unit managers, 2 assistant sales managers and 1 sales manager.

Generally the advisors works under the leadership of unit manager, who motivate them in every step by providing training and guidance to them, usually each unit manager have 20 to 30 advisors under them.

Figure 5: Hierarchy Structure of Training Department

Training Head

Training Managers Associate training manager (2) Branch manager Consultant Trainers (Freelancers)

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CHAPTER 5 TRAINING AT ICICI PRUDENTIAL One of the objectives of the present study is to understand the objectives of training programs for advisors in insurance industry in general and then to make a study of the training program conducted in ICICI Prudential.

5.1 Training objectives in insurance sector In insurance sector, the need to be well trained assumes gigantic proportions. A unique feature as regards insurance is that it is not merely sufficient to have a properly trained workforce; there is a need to spread the message of insurance among the populace. The above, to a great extent, depend on the knowledge ability of the distribution personnel on account of the interface that they are required to maintain with all the prospects. The best of advertisements and other forms of spreading message would be no substitute for a job well done by the intermediary. The advisor/ agent are the public face of the insurance company and make the most enduring impact on the customer. The prospective policyholders today need professional inputs from intermediaries whom they can trust and respect. Therefore, the undeclared objective behind training the advisors is their professionalization, making them capable of ‘good’ selling and thus ultimately benefitting the customer. Need analysis, features

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and benefits, objection handling and closing skills are the key components of quality insurance sales training.

The opening up of the sector has given a boost to the training industry. Acute shortage of trained and expert professionals has spurred the corporate houses to adopt the strategy of tying up with educational institutions and overcome the dearth of skilled insurance professionals in this highly competitive market. A case in point is ICICI Prudential. The company has joined hands with some training/ educational institutions to start customized courses.

5.2 Training Program for Advisors Advisors are the people who are not the employees of the ICICI prudential, but works as commission agents. Becoming an advisor is a part time job offer which can be taken up by any person above the age of 18 years and who has passed 12th or higher secondary, wherein the person can utilize his/her contacts for making a different high source of income. They can be associated either full time or part time as per their requirements. There are unlimited career paths and opportunities for income & growth for deserving candidates. The training program is conducted at all the branches of the company. Each batch consists of minimum of 12 – 17 candidates. The training program consists of following components: CAREER ORIENTATION PROGRAM – 4 hrs.

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The candidates are provided with information about prospects for Indian economy, insurance industry in general and ICICI Prudential in particular. They are also briefed on prospects and career growth of an advisor.

ADVISOR INDUCTION PROGRAM ( AIP ) – 4 days The candidates are imparted with product knowledge, process knowledge and about the company. REFRESHER TRAINING I.R.D.A training of 50 hours duration (i.e., 7 hours per day for 7 days period) is mandatory. The course comprises of different modules which are detailed below: Module 1: Chapters: 1. Introduction to Insurance 2. Fundamental Principles of Life Insurance 3. Life Insurance Products Module 2: Chapters: 4. Options, Guarantees and Riders 5. Computation of Premiums / Bonuses Module 3:

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Chapters: 6. Insurance Documents 7. Claims 8. Organization - Distribution Channels 9. Group Insurance and Superannuation Schemes / Pension Plans

Module 4: Chapters: 10. Rural Market 11. Financial Planning and Taxation 12. Legislative and Regulatory Matters 13. Functions of the Agent Module 5: Chapters: 14. Fundamental of the Agency Law and Agency Commission Structure 15. Insurance Salesmanship and Selling Techniques Test The student has to undergo a test at the end of the program. On successful completion of the test, the student will become an IRDA (Insurance Regulatory and Development Authority) Certified Insurance Agent.

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The advisors are also advised to complete Financial Markets Beginners Module of NCFM (National Stock Exchange Certification) examination since the company is now offering ULIPS or Unit Linked Investment Plans which offer both life cover as well as scope for savings or investments options as the customer desires.

5.3 Incentive Schemes for Advisors The advisors generally receive a premium of 12 % - 15% on the premium amount in the case of life insurance products and in the case of health insurance products; they are paid commission up to 35% of the premium amount. If the advisor achieves a target of Rs.30 lakhs in a period of one year, he /she will become member of Million Dollar Round Table (MDRT). The benefits derived from this membership is that the advisors would get one free laptop , invitations to participate in National Conventions, family trips , international star clubs membership and so on. Apart from this, there is Grand Perk (GP) membership which would entitle them to various benefits. The different kinds of GP membership are given below: Table 2: GP MEMBERSHIP SCHEME Premium Amount Achieved

Type of Membership

(in lakhs) 1.5 3.5 10 22 40

SILVER SILVER PLUS GOLD GOLD PREMIERE PLATINUM

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For Gold, Gold Premiere and Platinum members, the company offers free LUTC ( Life Underwriter Training Council) Fellowship.

5.4 Reasons for choosing career in insurance industry This was an open-ended question for which multiple responses were received from the respondents. All the responses were grouped into 5 categories and the percentage of respondents who opted for each was calculated as depicted below: Figure 6: Reasons for career in insurance

11% 23%

extra source of income no initial investment

28%

9%

flexible working hours no boundary limits good social relations

29%

5.5 Reasons for joining ICICI Prudential Figure 7: Reason for joining ICICI Prudential

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CHAPTER 6 TRAINING COMPONENTS 6.1 Training Inputs – V1 There are 7 sub – variables under V1 such as: course structure, course content, duration of training program, training hand outs and aids, quality of exercise, training coordination & organization and communication of training objectives clearly. A five point rating scale was used to gather the responses from the advisors. The ratings given for each sub – variable by each respondent is combined to get a total score for that respondent. If a respondent gives rating of 1 to the entire 7 sub – variables, the total score for that respondent would be 1* 7 = 7. Similarly, if a respondent gives rating of 5 to all, then total score for V1 would be 5* 7 = 35. Therefore, if we calculate the total scores given by each respondent in the same manner, the scores would vary from 7 to 35. Taking the total score into consideration, all the scores obtained were again categorized into 3 and the frequency obtained is given below:

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Table 3: Feedback on training inputs Category POOR (7 – 16) AVERAGE ( 17- 26) EXCELLENT(27 -35)

Frequency 0 10 15

Percentage 40 60

Figure 8: Feedback on Training Inputs POOR 16-7 AVERAGE 17-26 EXCELLENT 27-35

16 14 12 10 8 6 4 2 0

16-7

17-26

27-35

POOR

AVERAGE

EXCELLENT

6.2 Role of Trainer There are 5 sub – variables in V2 such as: Subject knowledge/ conceptual clarity, Trainer created & maintained environment for learning, Trainers training skills & competence, Presentation methodology and Guidance & support. Applying the same procedure as for V1, we get the range of scores as 5 to 25. The respondents are then categorized into 3 groups as:

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Table 4: Feedback on the role of trainer Category POOR (5 – 11) AVERAGE ( 12- 18) EXCELLENT(19 -25)

Frequency 0 0 25

Percentage 100

Figure 9 : Feedback on the role of trainer

25 20 15 10 5 0

5 to 11

12 to 18

POOR

AVERAGE

19 to 25 EXCELLENT

6.3 Facilities at the venue The responses for V3 were obtained in the form of “yes” or “no”. The score assigned for “no” response was ‘2’ and for “yes” was ‘1’. 20 out of 25 advisors interviewed found the facilities provided by the company at the venue as satisfactory. In other words, 80% of the respondents were satisfied with the facilities provided at the venue.

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Figure 10: Satisfaction with facilities at venue

20%

yes no

80%

6.4 Relevance to the job A 5 point rating scale was used to gather responses from the advisors which ranged from 1 for ‘not at all relevant’ to 5 for ‘highly relevant’. Of all the respondents, 92% felt that the training programs conducted for them were highly relevant while only 8% were not sure. Figure 11: Feedback on relevance to job

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6.5 Overall evaluation of training program As in the case of V1 and V2, here also same 5 point rating scale was used. Almost all of the respondents have given highest rating to the training program as a whole. 15 respondents gave ‘above average’ rating and 10 gave ‘excellent’ rating with respect to overall evaluation of the training program.

Figure 12: Feedback on overall training program

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V1 V2 V3 V4 V5

V1 1 0.89 0.46 0.52 0.79

V2

V3

V4

V5

1 0.52 0.58 0.95

1 0.25 0.44

1 0.54

1

CHAPTER 7 INTERRELATIONSHIP AMONG TRAINING COMPONENTS 7.1 Correlation analysis matrix A correlation matrix has been drawn taking all the above five variables into consideration, i.e., V1, V2, V3, V4 and V5, to understand the interrelationship among these variables.

Table 5 : Correlation matrix between the variables V1 – Training Inputs

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As could be seen from the intercorrelation matrix above, the training inputs are significantly and positively correlated with all the other variables – roles of the trainer, facilities at venue, relevance of the program and the overall evaluation of the training program. These significant relationships are obvious since training inputs form the core part of any training program. They are designed on the basis of training needs assessment made by the HR department of the organization. A positive correlation is found between training inputs and roles of the trainer (r 1,2 = 0.89). This implies that the training inputs and trainer’s style of imparting the training program go hand- in – hand. Depending on the course structure & content, the time allocated for each module and the facilities provided at the venue, the trainer adopts suitable methods to create environment for learning.

On the other hand, the least correlation has been found among training inputs and the facilities provided at the venue by the organization (r1,3 = 0.46). This proves that the facilities available at the venue have no much significance for the advisors. They are more concerned about the way the training program has been designed and imparted. Generally, there has to be a significant correlation between training inputs and the relevance of the program to the job profile and the same has been found in the study also (r1,4 = 0.52). For, the course structure & content is designed by taking the skills, knowledge and attitudes required for effective performance of the job into consideration. The basic purpose of providing training is to make the advisors capable of ‘good selling’. Further, a significant correlation (r1,5 = 0.79) between the training inputs and the overall evaluation of the training program by the advisors can also be seen in the matrix. That is, if the advisors feel the training inputs are above average, they give similar rating for the

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program as a whole. This shows that training inputs forms a crucial component for overall success of the program.

V2 – Role of the trainer Table

shows that trainer’s subject knowledge and training skills have emerged as the most

significant variable in relation to the overall evaluation of the training program (r2,5 = 0.95 ). In case of many training programs, it has been found that there is no impact on the productivity of the employees even though the training inputs have been of very high quality. This is because little do they realize that training is conducted so that employees can implement the knowledge in their day- to-day work by developing requisite skills. Trainers should not only impart knowledge but show to the participants a route map of how to convert this gained knowledge into a skill over a period of time. But then many trainers are not clear

how to convert the knowledge into a skill. These trainers concentrate more on the tools or methods of the training rather than this conversion. This has been the major reason for failure of several training programs. The significant relationship between trainer’s role and relevance of program to the job (r2,4= 0.58) proves the same. Generally, the trainer’s teaching style and the creation of environment for learning depends on the access to the various facilities available at the venue. For example, provision of audiovisual aids can facilitate two way participation, quick revisit to material for clarifying a point, offer entertainment etc. The positive and significant relationship between trainer’s role and facilities at venue (r2,3 = 0.52) drives home the same point.

V3 – Facilities at venue

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This variable does not have much significant relationship with the relevance of the program to job and the overall evaluation of the training program (r3,4 = 0.25 , r3,5 = 0.44). this shows that even if proper facilities are not provided at the venue, if the training inputs and the trainer’s communication skills are good, the training program could be a success. Herzberg has propounded that the presence of hygiene factors can only prevent dissatisfaction but cannot lead to satisfaction. Similarly, facilities at venue being hygiene factor , the satisfaction with it does not motivate employees to improve their performance. They can at best facilitate creating an environment for learning.

V4 – Relevance to job It is quite obvious that if the training program is found to be relevant to the job, the training program will also be rated highly. This, however, depends to a great extent on how the training knowledge is imparted by the trainer and converted to skills required for job.

7.2 Satisfactory aspects of training program This was an open-ended question for which multiple responses were given by the advisors. The various responses can be categorized into three broad areas: course material, training facilities and trainer’s knowledge and skills. As already discussed in Chapter 6, the advisors rated the trainer’s role as excellent. Most of them were quite satisfied with the way the training was imparted. They found the trainers to be responsive and approachable whenever they required any guidance and support.

7.3 Improvements suggested by the Advisors The focus of the study was on advisors who received entry level training in last one to two months. Many were already employed in different areas and this career formed an additional

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source of income for them. They are finding it difficult to manage time for both their regular work and training classes. Hence, the advisors feel that if possible, the duration of the training program has to be reduced or it should be imparted through distance mode. The course structure and schedule were found to be satisfactory but the advisors feel that the technical language used in the material should be simplified. This would help them in explaining the products in simple language to the customers.

CHAPTER 8 CONCLUSION ICICI Prudential, being No.1 private player in life insurance in the country with the largest distribution network, has made efforts to update its training programs to keep pace with the fast changing world. In a highly competitive market, such continuous efforts are necessary to be ahead of competitors. The major findings with respect to the training program for advisors conducted by ICICI Prudential are – •

The advisors have chosen career in insurance to earn additional income and have quick career growth.

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•

The advisors have joined ICICI Prudential mostly through references

•

The course content is all encompassing, i.e., it covers a study of all aspects of life insurance , an overview about economy and introduction to various products of the company and the unique features of each.

•

The training aids and handouts were found to be of high quality

•

The conceptual knowledge and presentation skills of the trainers are rated to be excellent.

•

The training program is conducted at all the branches and the facilities provided were considered to be satisfactory.

•

The advisors had a problem with the duration of the training program and the technical language of the material

The suggestions that can be made to improve the training program for advisors are – •

The duration of the training program could be reduced.

•

The training program should be conducted during weekends so that the advisors can concentrate properly.

•

The training program could be imparted through distance mode or online mode.

•

Besides in technical language, the concepts should be explained in simple language or local language also which a layman can understand. This would help the advisors to interact in a better way with the customers.

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•

Knowledge about one’s products and also that of the competitors should be provided to the advisors so that they can handle customer queries well and develop good selling skills.

•

The techniques to promote the brand awareness of ICICI Prudential should be included in the course.

ICICI Prudential should concentrate more on the training programs conducted for the advisors. For, they are the ones who not only sell the company’s products but also create and maintain brand image among the customers. Constant assessment of the advisor’s skills in order to upgrade them would go a long way in achieving success in this dynamic industry.

APPENDICES LIST OF LIFE INSURERS IN INDIA 1. Bajaj Allianz Life Insurance Company Limited 2. Birla Sun Life Insurance Co. Ltd 3. HDFC Standard Life Insurance Co. Ltd 4. ICICI Prudential Life Insurance Co. Ltd 5. ING Vysya Life Insurance Company Ltd.

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6. Life Insurance Corporation of India 7. Max New York Life Insurance Co. Ltd 8. Met Life India Insurance Company Pvt. Ltd. 9. Kotak Mahindra Old Mutual Life Insurance Limited 10. SBI Life Insurance Co. Ltd 11. Tata AIG Life Insurance Company Limited 12. Reliance Life Insurance Company Limited. 13. Aviva Life Insurance Co. India Pvt. Ltd. 14. Sahara India Life Insurance Co, Ltd. 15. Shriram Life Insurance Co, Ltd. 16. Bharti AXA Life Insurance Company Ltd. 17. Future Generali Life Insurance Company Ltd. 18. IDBI Fortis Life Insurance Company Ltd. 19. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd

QUESTIONNAIRE 1. What prompted you to choose a career in insurance industry? 2. What motivated you to join ICICI PRUDENTIAL? 3. Rate the following: (On Scale of 1 to 5: 1-poor, 2- below average, 3- average, 4-above average, 5- excellent ) A) Course structure B) Course Content

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C) Duration of training program D) Handouts & Training aids E) Quality of exercise F) Training coordination & organization G) Communication of training objectives clearly

4. Trainer Feedback A) Subject knowledge/ conceptual clarity B) Trainer created & maintained environment for Learning C) Trainers training skills & competence D) Presentation methodology E) Guidance & support

5. Were the facilities provided at the venue adequate? Yes

No

6. What did you like the best about the program?

7. What could have been done better?

8. What is your overall evaluation of the training program? (Rate on scale of 1 to 5)

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9. Do you think this training program is relevant to your job profile? (tick appropriate one) Highly relevant Relevant Not sure Not that much relevant Not at all relevant

10. Any other comments/ suggestions___________________________________________ _______________________________________________________________________

REFERENCES WEBSITES 1. www.iciciprulife.com 2. www.ficci.com 3. www.citehr.com 4. http://www.pdfcoke.com/word/full/3825168?access_key=key-wthi0bc71r4yqzime4e

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5. http://www.pdfcoke.com/doc/4369879/ICICI-PRULIFE STUDY?from_email_friend_send=1

MAGAZINE Insurance chronicle, Vol-VII, Issue-XI, November 2007

BOOKS 1. Cheng, Patrick Low Kim. “Training Success: understanding the learning and training essentials.” Hyderabad , ICFAI University Press, 2005 2. Goldstein, Irwin.L. “Training in Organizations.” Thomas Wadsworth, 2001 3. Raju,P.V.L. “Training: Needs and Evaluation”( ed.), Hyderabad , ICFAI University Press, 2005 4. Reddy, Dr.B.Rathan. “Effective HR Training and Development Strategy.” Himalaya Publishing House, 2007 5. Reddy, Sumathi. “Training and Development: Perspectives from Service Sector” (ed.), Hyderabad , ICFAI University Press, 2007

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